1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 16-00300 ) Applicant for Security Clearance ) Appearances For Government: Carroll Connelley, Esq., Department Counsel For Applicant: Sheldon I. Cohen, Esq. ______________ Decision ______________ MURPHY, Braden M., Administrative Judge: Applicant mitigated the financial considerations security concerns. Eligibility for access to classified information is granted. Statement of the Case On June 10, 2016, the Department of Defense (DOD) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline F, financial considerations. The action was taken under Executive Order (Exec. Or.) 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the adjudicative guidelines implemented by the DOD on September 1, 2006. On December 10, 2016, the Director of National Intelligence issued new National Security Adjudicative Guidelines (AG). The new AGs are effective June 8, 2017 for all decisions after that date, and they supersede the AGs that Applicant received with the 2 SOR. Any changes resulting from the implementation of the new AGs did not affect my decision in this case.1 Applicant answered the SOR on July 7, 2016 and requested a hearing. The case was assigned to me on April 10, 2017. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on May 3, 2017, scheduling the hearing for June 1, 2017, with the agreement of both parties.2 The hearing was convened as scheduled. Government Exhibits (GE) 1-3 were admitted in evidence without objection. Applicant testified and submitted Applicant’s Exhibit (AE) A, which was admitted without objection. I held the record open until June 16, 2017, to enable Applicant to submit additional information. DOHA received the hearing transcript (Tr.) on June 12, 2017. On June 7, 2017, Applicant retained legal counsel. Counsel sought additional time to submit documentation, and also to re-open the hearing. On June 8, 2017, Department Counsel filed a response in which he objected to renewing the hearing for lack of good cause shown. He did not object to providing Applicant additional time to submit documents.3 I held the record open until July 14, 2017, and deferred my ruling on the need for a new hearing until I had reviewed Applicant’s new documents.4 On July 12, 2017, Applicant submitted AE B through AE H, along with a supporting brief. AE B through AE H are admitted without objection. I informed the parties on July 20, 2017 that the record was closed.5 Findings of Fact Applicant admitted all the delinquent debts alleged in the SOR, with explanations. His admissions and other comments are incorporated into the findings of fact. After a thorough and careful review of the pleadings and exhibits submitted, I make the following findings of fact. Applicant is 55 years old. He was married between 1981 and 1996, and also between 1998 and 2009. He remarried in 2011. He has two grown children from his first marriage. After high school, he served honorably for 12 years in the Marine Corps (1980-92), holding a top secret clearance. Since 2004, Applicant has worked as an 1 I provided Applicant a copy of the new AGs at the start of the hearing, (Tr. 11-14), and to his counsel after he entered appearance. (HE IV). 2 The pre-hearing e-mail correspondence between myself and the parties concerning jurisdiction, scheduling and documents for the hearing is in the record and marked as Hearing Exhibit I (HE I); and the government’s discovery letter is marked as HE II. 3 HE III. 4 HE IV. 5 HE V. 3 engineer in the defense industry, with a secret clearance. (Tr. 9, 10, 22-23, 26-27; GE 1, AE G, AE H). Applicant submitted a security clearance application (SCA) in March 2015. He used a current credit report as a reference in answering financial questions. He disclosed several delinquent debts, including most of the debts in the SOR. (Tr. 37-38, GE 1) The five debts alleged in the SOR total about $13,951. All the debts in the SOR are located on Applicant’s credit reports from July 2016 and April 2015 (GE 2, GE 3). For SOR ¶ 1.b – 1.e, Applicant stated, in part, “I admit that I properly and correctly disclosed this [debt] on my SF-86 . . .”6 Applicant testified that his second wife had mental health issues and was a spendthrift. In late November 2009, he returned from a business trip to find her gone and the house stripped of furniture. He testified that he later heard from her father that she had filed for bankruptcy. He also hired a lawyer to contest many of her debts. (Tr. 33-34, 48-52, 62) SOR ¶¶ 1.b ($6,829) and 1.c ($5,970) are credit card debts, both reported to the same collection agency. The accounts became delinquent in 2009-2010, around the time, or after, Applicant’s marriage ended.7 Applicant reported the debts on his SCA because they were on his credit report, but also believed they were old accounts belonging to his second wife. He believed he had settled ¶ 1.c for $2,500 several years ago. Applicant’s hearing testimony was consistent with what he reported on his SCA. (Tr. 35-37, 39, GE 1). When he received the SOR, he contacted the collection agency. He received a settlement offer but chose not to pursue it, since he believed he was not responsible for the debts. (Tr. 43) Despite his belief that the accounts were his ex-wife’s debts, they are listed on his credit bureau report as “individual” accounts.8 He initially testified that this was an accounting error, but later acknowledged he would have to pay the accounts if they were listed as his. (Tr. 51, 59) The original creditor for ¶ 1.b is a bank where Applicant still has an account, and an ATM/debit card that he uses. (Tr. 61) He denied having an account with the original creditor bank for SOR ¶ 1.c. (Tr. 63) Applicant paid both SOR ¶¶ 1.b and 1.c after the hearing. (AE B, C, D).9 SOR ¶¶ 1.a ($251) and 1.e ($186) are collection debts to the same cable company. Applicant admitted the debts in his answer, though he thought one might be a 6 Answer. 7 GE 2 at 2, GE 3 at 10. 8 GE 3 at 10. 9 Applicant settled SOR ¶ 1.b for $4,097 and settled SOR ¶ 1.c for $3,582. (AE B, C, D). 4 duplicate.10 He testified that the debts concerned a router or modem that he thought he returned but was not properly credited for. He believes he paid the debts. He testified he has not had an account with this company since 2011. (Tr. 28-31, 56, 59) SOR ¶ 1.d ($715) is a past-due medical bill. Applicant disclosed the bill on his SCA. He went to the emergency room and the treating physician was not an “in-plan” doctor, so his insurance company refused to pay. Applicant challenged the bill through his insurance company. Having learned that the bill was on his credit report, he testified that he paid the bill last summer. (Tr. 31-33, 57-58; GE 3) In May 2017, Applicant accepted a new job in the defense industry. His salary increased from $147,000 to $172,000. He and his wife have a combined net monthly income of about $10,000. Applicant has not been through credit counseling. (Tr. 25, 66, 71) Applicant and his wife own their home and are current on their $2,400 monthly mortgage. Other than the debts in the SOR, Applicant stated he had no other debts beyond a car payment. His monthly finances are stable and he lives within his means. (Tr. 69-71; AE E, AE F) Applicant provided three letters of recommendation. His references have all known him professionally for many years. They attest to his integrity, work ethic, dedication to excellence, and commitment. (AE A) Policies It is well established that no one has a right to a security clearance.11 As noted by the Supreme Court in Department of the Navy v. Egan, “the clearly consistent standard indicates that security determinations should err, if they must, on the side of denials.”12 The adjudicative guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, administrative judges apply the guidelines in conjunction with the factors listed in the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶ 2(a), the entire process is a conscientious scrutiny of a number of variables known as the “whole-person concept.” The administrative judge must consider all available, reliable information about the person, past and present, favorable and unfavorable, in making a decision. The protection of the national security is the paramount consideration. AG ¶ 2(b) requires that “[a]ny doubt concerning personnel being considered for access to classified information will be resolved in favor of national security.” 10 SOR ¶¶ 1.a and 1.b are both listed separately on GE 2 and GE 3. The accounts were opened at different times. They do not appear to be duplicate accounts. 11 Department of the Navy v. Egan, 484 U.S. 518, 528 (1988) (“it should be obvious that no one has a ‘right’ to a security clearance”). 12 484 U.S. at 531. 5 Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, the applicant is responsible for presenting “witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by the applicant or proven by Department Counsel.” The applicant has the ultimate burden of persuasion to obtain a favorable security decision. A person who seeks access to classified information enters into a fiduciary relationship with the Government predicated upon trust and confidence. This relationship transcends normal duty hours and endures throughout off-duty hours. The Government reposes a high degree of trust and confidence in individuals to whom it grants access to classified information. Decisions include, by necessity, consideration of the possible risk the applicant may deliberately or inadvertently fail to safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation of potential, rather than actual, risk of compromise of classified information. Analysis Guideline F, Financial Considerations The security concern for financial considerations is set out in AG ¶ 18: Failure 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. . . . The guideline notes several conditions that could raise security concerns under AG ¶ 19. The following are potentially applicable in this case: (a) inability to satisfy debts; and (c) a history of not meeting financial obligations. The SOR debts are listed on Applicant’s credit reports, and he admits them, albeit with qualifications. Applicant’s delinquent debts are sufficient to raise the above disqualifying conditions. Conditions that could mitigate financial considerations security concerns are provided under AG ¶ 20. The following are potentially applicable: (a) the behavior happened so long ago, was so infrequent, or occurred under such circumstances that it is unlikely to recur and does not cast doubt on the individual’s current reliability, trustworthiness, or good judgment; 6 (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, or a death, divorce or separation, clear victimization by predatory lending practices, or identity theft), and the individual acted responsibly under the circumstances; and (d) the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts. Applicant testified that he paid SOR ¶¶ 1.a, 1.d, and 1.e. The payments are undocumented, but the debts are also small, totaling only $1,152 combined. Each of the debts also arose from a reasonable, understandable circumstance. If in fact he has not paid them, he clearly has the means to do so. I resolve these debts for Applicant. Applicant testified that he had a difficult second marriage that ended suddenly. Applicant steadfastly believed until the hearing that SOR ¶¶ 1.b and 1.c were old and were his ex-wife’s responsibility, so he did not have to pay them. His credit reports indicated otherwise, since the debts were listed as individual accounts on his credit reports. However, the debts arose around the time his second marriage ended. This was a circumstance beyond his control that impacted his finances. The first prong of AG ¶ 20(b) applies. SOR ¶¶ 1.b and 1.c have now been paid, albeit after the hearing. The timing of the payments weighs against giving Applicant full credit under AG ¶ 20(b) or AG ¶ 20(d). However, the debts were largely isolated and were several years old. His current finances are sound. He and his wife both make a good living and live with their means. Applicant is unlikely to find himself in financial difficulty again, and if he does, I believe he would act responsibly. His finances no longer cast doubt on his current judgment, trustworthiness and reliability. AG ¶ 20(a) applies. Whole-Person Concept Under the whole-person concept, the administrative judge must evaluate an applicant’s eligibility for a security clearance by considering the totality of the applicant’s conduct and all relevant circumstances. The administrative judge should consider the nine adjudicative process factors listed at AG ¶ 2(d): (1) the nature, extent, and seriousness of the conduct; (2) the circumstances surrounding the conduct, to include knowledgeable participation; (3) the frequency and recency of the conduct; (4) the individual’s age and maturity at the time of the conduct; (5) the extent to which participation is voluntary; (6) the presence or absence of rehabilitation and other permanent behavioral changes; (7) the motivation for the conduct; (8) the potential for pressure, coercion, exploitation, or duress; and (9) the likelihood of continuation or recurrence. 7 Under AG ¶ 2(a), the ultimate determination of whether to grant eligibility for a security clearance must be an overall commonsense judgment based upon careful consideration of the guidelines and the whole-person concept. I considered the potentially disqualifying and mitigating conditions in light of all the facts and circumstances surrounding this case. I have incorporated my comments under Guideline F in my whole-person analysis. I credit Applicant’s 12 years of honorable service in the U.S. Marine Corps, and his many years in the defense industry as a cleared employee. I also credit Applicant with candidly disclosing his debts on his SCA, since they appeared on his credit report, even if he believed the information was incorrect. Overall, the record evidence leaves me with no questions and doubts as to Applicant’s eligibility and suitability for a security clearance. I conclude Applicant mitigated the financial considerations security concerns. Formal Findings Formal findings for or against Applicant on the allegations set forth in the SOR, as required by section E3.1.25 of Enclosure 3 of the Directive, are: Paragraph 1, Guideline F: FOR APPLICANT Subparagraphs 1.a-1.e: For Applicant Conclusion In light of all of the circumstances presented by the record in this case, it is clearly consistent with the national security interests of the United States to grant Applicant eligibility for access to classified information. Eligibility for access to classified information is granted. ________________________ Braden M. Murphy Administrative Judge