1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ---------------------------------- ) ADP Case No. 16-00026 ) Applicant for Public Trust Position ) Appearances For Government: Charles Hale, Esq., Department Counsel For Applicant: Pro se ______________ Decision ______________ LEONARD, Michael H., Administrative Judge: Applicant contests the Defense Department’s intent to deny or revoke her eligibility for a public trust position. She did not present sufficient evidence to explain, extenuate, or mitigate the concern stemming from her history of financial problems, which is ongoing. Accordingly, this case is decided against Applicant. Statement of the Case Applicant completed and submitted a Questionnaire for National Security Positions (SF 86 format) on May 20, 2015. Thereafter, on June 2, 2016, after reviewing the application and the information gathered during a background investigation, the Department of Defense Consolidated Adjudications Facility, Fort Meade, Maryland, sent Applicant a statement of reasons (SOR), detailing a trustworthiness concern under Guideline F for financial considerations. The SOR is similar to a complaint. She answered the SOR on June 29, 2016; her responses to the various factual allegations were mixed; and she requested a hearing. The case was assigned to me on September 13, 2016. The hearing was held as scheduled on December 8, 2016. Department Counsel offered Exhibits 1-4, and they 2 were admitted. Applicant testified on her own behalf and offered Exhibits A-C, and they were admitted. The hearing transcript (Tr.) was received on December 14, 2016. The record was kept open until December 30, 2016, to provide Applicant an opportunity to submit additional documentation. She made a timely submission via e- mail on December 30th. Those matters are made part of the record, without objection, as Exhibit D. Findings of Fact Applicant is a 39-year-old resolution-team leader for a health-care contractor to the Defense Department. She has worked for the same company since 2002. She submitted letters of recommendation from family members attesting to her reliability, trustworthiness, and good judgment.1 She has a good record of employment.2 She requires eligibility to occupy a position of public trust for her job responsibilities. Eligibility is necessary because her job involves access to sensitive but unclassified information. She has never married, but she lived with a cohabitant during part of 2011. In her May 2015 SF 86, Applicant disclosed a number of delinquent accounts.3 During her September 2015 background investigation, Applicant provided additional information about the delinquent accounts and her financial situation.4 The SOR alleges a history of financial problems consisting of the following items: (1) a 2005-2006 Chapter 7 bankruptcy case ending in discharge; (2) eight student loans in collection for a total of about $23,000; (3) one charged-off account for $365; and (4) eight collection accounts for a total of about $5,220.5 The SOR allegations are established by substantial evidence consisting of Applicant’s admissions, testimony, and documentary evidence.6 Applicant attributed the Chapter 7 bankruptcy to several fraudulent accounts on her credit report as well as her own consumer debt.7 She attributed her current financial difficulties to a number of circumstances: (1) problems with her pay in 2014 that resulted in an increase in taxes; (2) a health problem in 2015 that resulted in additional expenses; (3) a bad relationship with a cohabitant in 2011 (4) a cousin who stole about 1 Exhibit A. 2 Tr. 32; Exhibit B. 3 Exhibit 1. 4 Exhibit 2. 5 The SOR alleges these matters in ¶¶ 1.a – 1.j and 1.s – 1.z; there are no allegations made in ¶¶ 1.k – 1.r. 6 Exhibits 2-4. 7 Tr. 35 -36. 3 $352 from her; and (5) a brother who was released from prison and lived with her for about 10 months in 2015-2016 before she asked him to leave.8 Applicant presented post-hearing documentation showing that her student loan accounts were placed in forbearance in August 2016 and loan payments will resume in April or July 2017.9 It appears her monthly payment will be about $125. Applicant addressed the charged-off account and collection accounts during the hearing.10 She stated some were settled, some were disputed, and some she contacted the creditors without success. She presented no documentation showing that any of the nine delinquent accounts were paid, settled, in a payment arrangement, in dispute, cancelled, forgiven, or otherwise resolved. Applicant’s annual gross income is about $52,000.11 She bought a home in 2011, and she was one month past due with the mortgage loan at the time of the hearing.12 She stated that she had no money in the bank and was living paycheck to paycheck.13 She stated that she has a 401(k) account with a balance of about $13,000, and she has two loans against the account with a payment of about $40 per paycheck.14 Law and Policy This case is adjudicated under Department of Defense Directive 5220.6, Defense Industrial Personnel Security Review Program (Jan. 2, 1992), as amended (Directive); and the National Security Adjudicative Guidelines for Determining Eligibility for Access to Classified Information or Eligibility to Hold a Sensitive Position (AG), effective June 8, 2017. Discussion Under Guideline F for financial considerations,15 the suitability of an applicant may be questioned or put into doubt when that applicant has a history of excessive indebtedness or financial problems or difficulties. The overall concern is: 8 Tr. 32-35, 80-83. 9 Exhibit D. 10 Tr. 58-76. 11 Tr. 88. 12 Tr. 83-84. 13 Tr. 89. 14 Tr. 89-90. 15 AG ¶¶ 18, 19, and 20 (setting forth the concern and the disqualifying and mitigating conditions). 4 Failure or inability to live within one’s means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual’s reliability, trustworthiness, and ability to protect classified or sensitive information.16 The concern is broader than the possibility that a person might knowingly compromise sensitive information to obtain money or something else of value. It encompasses concerns about a person’s self-control, judgment, and other important qualities. A person who is financially irresponsible may also be irresponsible, unconcerned, or negligent in handling and safeguarding sensitive information. In analyzing the facts of this case, I considered the following disqualifying and mitigating conditions: AG ¶ 19(a) inability to satisfy debts; AG ¶ 19(c) a history of not meeting financial obligations; AG ¶ 20(b) the conditions that resulted in the financial problem were largely beyond the person’s control (e.g., loss of employment, a business downturn, unexpected medical emergency, a death, divorce, or separation, clear victimization by predatory lending practices, or identity theft), and the individual acted responsibly under the circumstances; AG ¶ 20(d) the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts; and AG ¶ 20(e) the individual has a reasonable basis to dispute the legitimacy of the past-due debt which is the cause of the problem and provides documented proof to substantiate the basis of the dispute or provides evidence of actions to resolve the issue. The evidence supports a conclusion that Applicant has a problematic financial history sufficient to raise a concern under Guideline F. Applicant’s history of financial struggles is long-standing, dating back to the 2005-2006 Chapter 7 bankruptcy. More recently, she defaulted on multiple student loan accounts, but was able to have the accounts placed into forbearance in August 2016, after the issuance of the SOR. There is no post-forbearance track record of payment on the student loans. She has not documented any action (e.g., settlements or disputes) taken to resolve the single charged-off account or the eight collection accounts. At the hearing, Applicant described her financial situation as living paycheck to paycheck, and she was one month behind on her mortgage loan. Looking forward, it is likely that Applicant’s financial struggles will continue. 16 AG ¶ 18. 5 What’s missing here is documentation that Applicant initiated and is adhering to a good-faith effort to pay or settle what she owes to her various creditors. Without such documentation, I can only conclude that Applicant has not met her burden of production, because she did not present sufficient documentation showing she is taking affirmative steps to resolve her financial problems. This is especially so regarding the single charged-off account and the eight collection accounts, which I conclude are wholly unresolved. To conclude, Applicant’s history of financial problems creates doubt and concern about her reliability, trustworthiness, good judgment, and ability to protect sensitive information. In reaching this conclusion, I weighed the evidence as a whole and considered if the favorable evidence outweighed the unfavorable evidence or vice versa. I also gave due consideration to the whole-person concept. For all these reasons, I conclude Applicant did not present sufficient information to explain and mitigate the trustworthiness concern. Formal Findings The formal findings on the SOR allegations are: Paragraph 1, Guideline F: Against Applicant Subparagraphs 1.a-1.j: Against Applicant Subparagraphs 1.s-1.z: Against Applicant Conclusion In light of the record as a whole, it is not clearly consistent with the interests of national security to grant Applicant eligibility for access to sensitive information. Michael H. Leonard Administrative Judge