1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 16-00481 ) Applicant for Security Clearance ) Appearances For Government: Tovah Minster, Esq., Department Counsel For Applicant: Pro se ______________ Decision ______________ CREAN, Thomas M., Administrative Judge: Applicant did not provide sufficient documentation to mitigate security concerns for financial considerations under Guideline F. Eligibility for access to classified information is denied. Statement of the Case On February 18, 2015, Applicant submitted an Electronic Questionnaire for Investigations Processing (e-QIP) to retain a security clearance required for employment with a defense contractor. (Item 2) A security investigator from the Office of Personnel Management (OPM) interviewed Applicant on October 31, 2015. (Item 3) After reviewing the results of the OPM investigation, the Department of Defense (DOD) could not make the affirmative findings required to issue a security clearance. On June 7, 2016, DOD issued a Statement of Reasons (SOR) to Applicant detailing security concerns for financial considerations under Guideline F. (Item 1) The action was taken under Executive Order 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 2 1992), as amended (Directive); and the adjudicative guidelines (AG) effective in the DOD on September 1, 2006. Applicant answered the SOR on July 11, 2016, admitting the 11 allegations of delinquent debt and a Chapter 7 bankruptcy under Guideline F. He elected to have the matter decided on the written record. (Item 1) Department Counsel submitted the Government’s written case on July 28, 2016. (Item 7) Applicant received a complete file of relevant material (FORM) on August 3, 2016. He was provided the opportunity to file objections and to submit material to refute, extenuate, or mitigate the disqualifying conditions. Applicant did not respond to the FORM. I was assigned the case on July 1, 2017. While this case was pending a decision, the Director of National Intelligence issued Security Executive Agent Directive 4, establishing National Security Adjudicative Guidelines for Determining Eligibility for access to Classified Information or Eligibility to Hold a Sensitive Position (AGs) which he made applicable to all covered individuals who require initial or continued eligibility for access to classified information or eligibility to hold a sensitive position. The new AGs supersede the September 1, 2006 AGs and are effective “for all covered individuals” on or after June 8, 2017. Accordingly, I have evaluated Applicant’s security clearance eligibility under the new AGs.1 Procedural Issues Applicant was advised in the FORM that the summary of the Personal Subject Interview (PSI) with an OPM investigator (Item 3) was not authenticated and could not be considered over his objection. He was further advised that he could make any corrections, additions, or deletions to the summary to make it clear and accurate, and could object to the admission of the summary as not authenticated by a Government witness. He was additionally advised that if no objection was raised to the summary, the Administrative Judge could determine that he waived any objection to the admissibility of the PSI summary. Applicant did not respond to the FORM, so he did not raise any objection to consideration of the PSI. Since there is no objection by Applicant, I will consider information in the PSI in my decision. Findings of Fact After thoroughly reviewing the case file, I make the following findings of fact. Applicant is 37 years old. He graduated from high school in June 1999, and served ten years on active duty in the Navy from January 2000 to November 2010. He received an honorable discharge as a petty officer second class when as he left the Navy. Applicant married in June 2001 and has three children and a stepchild. Since his discharge from active duty in January 2001, he has worked for various DOD contractors as an aircraft mechanic and technician. He has been employed by his present DOD contractor employer since September 2014. He received eligibility for access to classified 1 I considered Applicant’s case under both the September 1, 2006 AGs, and the June 8, 2017 AGs. My decision would be the same under both AGs. 3 information in February 2005,-and has held a security clearance since then. (Item 2, e- QIP, dated February 18, 2015; Item 3, PSI, dated October 31, 2015). The SOR alleges, and credit reports (Item 4, dated February 11, 2016; Item 5, dated March 6, 2015) confirm the following delinquent debts for Applicant: three credit card debts used to purchase personal items in collection to different creditors for $4,837 (SOR 1.a), $4,105 (SOR 1.b), $1,044 (SOR 1.c); a telephone debt in collection for $469 (SOR 1.d); a medical debt in collection for $125 (SOR 1.e); four communication debts in collection for $119 (SOR 1.f) $95 (SOR 1.g), and $95 (SOR 1.h) $1,152 ( SOR 1.k); a judgment for $1,005 for past due rent from 2010 (SOR 1.i); a medical debt in collection for $138 (SOR 1.l). Also listed is a Chapter 7 bankruptcy action that was filed in December 2008 with debts discharged in April 2009. (SOR 1.j) The total amount of delinquent debt is approximately $13,000. When Applicant’s debts were discharged by bankruptcy in April 2009, more than $200,000 of debts were discharged. Applicant admitted all the delinquent debts in the SOR. On the e-QIP, Applicant noted the repossession of three vehicles. The repossession debts were not included in the SOR. In the PSI, Applicant noted the delinquent debts but provided no details about the debts. He thought some debts may be included in the bankruptcy, but he did not provide any information to verify that those debts may be included in the bankruptcy. It should be noted that the SOR debts were incurred in 2011 and 2012, after the bankruptcy was discharged in 2009. The only potential explanation for his delinquent debts offered by Applicant was that he and his wife were having problems keeping up with their debts Applicant did not provide any documents to reflect payment of debts or efforts to resolve the debts. He did not present any documents to show that he contacted creditors to make payment or settlement arrangements. He did not provide any evidence of efforts to pay, settle, compromise, dispute, or otherwise resolve any of the delinquent debts. Policies When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines (AG). In addition to brief introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which must be considered in evaluating an applicant’s eligibility for access to classified information. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, these guidelines are applied 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, 4 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 national security eligibility will be resolved in favor of the national security.” In reaching this decision, I have drawn only those conclusions that are reasonable, logical, and based on the evidence contained in the record. 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 applicant or proven by Department Counsel. . . .” The applicant has the ultimate burden of persuasion for obtaining 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. Section 7 of EO 10865 provides that decisions shall be “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified and sensitive information) Analysis Financial Considerations 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. (AG ¶ 18) An individual who is financially irresponsible may also be irresponsible, unconcerned, or careless in his obligations to protect classified information. Behaving responsibly or irresponsibly in one aspect of life provides an indication of how a person may behave in other aspects of life. A person’s relationship with his creditors is a private matter until evidence is uncovered demonstrating an inability or unwillingness to meet his financial obligations. 5 Absent evidence of strong extenuating or mitigating circumstances, an applicant with a history of serious or recurring financial difficulties is in a situation of risk inconsistent with the holding of a security clearance. An applicant is required to manage his or her finances in such a way as to meet financial obligations. Credit reports reveal, and Applicant admits, that he has delinquents debts incurred after he had debts discharged in bankruptcy. The evidence is sufficient to raise the following Financial Considerations Disqualifying Conditions security concerns under AG ¶ 19: (a) inability to satisfy debts, (b) unwillingness to satisfy debts regardless of the ability to do so; and (c) a history of not meeting financial obligations. The information raises issues about Applicant’s willingness and ability to meet his financial obligations. Once the Government has established the adverse financial issue, the Applicant has the responsibility to refute or mitigate the issue. The Applicant has not raised any information to refute or mitigate the financial security concerns. Nevertheless, I considered the following Financial Consideration Mitigating Conditions under AG ¶ 20: (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; (b) the conditions that resulted in the financial problems 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; (c) the person has received or is receiving counseling for the problem from a legitimate and credible sources, such as a non-profit credit counselling service, and there are clear indications that the problem is being resolved or is under control; and (d) the individual has initiated and is adhering to a good-faith effort to repay the overdue creditors or otherwise resolve debts. The mitigating conditions do not apply. Bankruptcy is a legal and permissible means of resolving debt. Accordingly, Applicant took a proper financial action when he filed the bankruptcy petition in 2008 with discharge of debts in 2009. However, 6 Applicant’s delinquent debts that arose after the bankruptcy are numerous, recent, and not incurred under circumstances making recurrence unlikely. The debts are mostly normal credit cards, consumer loans, and medical debts. In his response to the SOR, Applicant did not provide sufficient information to explain how and why he incurred delinquent debt. He was advised in the FORM that he needed to provide proof of payment or resolution of the debts. He has not documented his plan, if any, to resolve his financial problems and any efforts to pay and resolve his delinquent debts. He also did not provide information concerning financial counseling. Accordingly, he has not established a good-faith effort to pay his debts. Applicant has been gainfully employed since at least 2000, including military service. He seems to have the ability to resolve his delinquent debts. However, he has not acted responsibly because he has not provided information on his plans to pay his delinquent debts that arose after his 2008 bankruptcy petition. There is no clear evidence that his debt problems have been resolved. His finances are not under control. Overall, he has not provided evidence or proof that he acted with reason and responsibility towards his finances. His lack of documented actions to resolve his financial problems are a strong indication that he may not protect and safeguard classified information. In sum, Applicant did not present sufficient information to mitigate financial security concerns. Whole-Person Concept Under the whole-person concept, an administrative judge must evaluate an applicant’s eligibility for access to classified information 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. Under AG ¶ 2(c), the ultimate determination of whether to grant eligibility for access to classified information must be an overall common-sense 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 considered Applicant’s ten years of honorable service in the Navy and that he has successfully been eligible for access to classified information for over 17 years. In requesting an administrative determination, Applicant chose to rely on the written record. In so doing, he failed to supplement the 7 record with relevant and material facts regarding his financial circumstances; to adequately articulate his positions; and to provide facts to mitigate the financial security concerns. In short, the file lacks sufficient evidence provided by Applicant to establish that he paid, arranged to pay, settled, compromised, disputed, or otherwise resolved his delinquent accounts. The record lacks corroborating or substantial documents and details to explain his finances. Applicant did not demonstrate appropriate management of his finances and a consistent record of action to resolve financial issues. His lack of demonstrated financial action is a firm indication that he may not adequately safeguard classified information. Overall, the record evidence leaves me with questions and doubts concerning Applicant’s judgment, reliability, and trustworthiness. He has not established his suitability for access to classified information. For all these reasons, I conclude Applicant did not provide sufficient information to mitigate financial 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: AGAINST APPLICANT Subparagraphs 1.a - 1.i: Against Applicant Subparagraph 1.j For Applicant Subparagraphs 1.k and 1.l: Against Applicant Conclusion In light of all of the circumstances presented by the record in this case, it is not clearly consistent with the national interest to grant Applicant eligibility for access to classified information. Eligibility for access to classified information is denied. _________________ THOMAS M. CREAN Administrative Judge