1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) [Redacted] ) ISCR Case No. 16-01125 ) Applicant for Security Clearance ) Appearances For Government: Daniel F. Crowley, Esq., Department Counsel For Applicant: Pro se ______________ Decision ______________ FOREMAN, LeRoy F., Administrative Judge: This case involves security concerns raised under Guideline F (Financial Considerations). Eligibility for access to classified information is denied. Statement of the Case Applicant submitted a security clearance application on August 26, 2015. On June 27, 2016, the Department of Defense (DOD) sent her a Statement of Reasons (SOR) alleging security concerns under Guideline F. The DOD acted under Executive Order (Exec. Or.) 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, 1992), as amended (Directive); and the adjudicative guidelines (AG) implemented by DOD on September 1, 2006.1 1 Security Executive Agent Directive 4 (SEAD 4), was issued on December 10, 2016, revising the 2006 adjudicative guidelines. The SEAD 4 guidelines apply to all adjudicative decisions issued on or after June 8, 2017. My decision is based on the guidelines in SEAD 4, referred to in this decision as “AG.” The changes resulting from issuance of SEAD 4 did not affect my decision in this case. 2 Applicant answered the SOR on August 10, 2016, and requested a decision on the record without a hearing. Department Counsel submitted the Government’s written case on September 7, 2016. A complete copy of the file of relevant material (FORM) was sent to Applicant, who was given an opportunity to file objections and submit material to refute, extenuate, or mitigate the Government’s evidence. She received the FORM on September 14, 2016, and did not respond. The case was assigned to me on July 1, 2017. The FORM contained six items, including Item 3, a summary of a personal subject interview (PSI) conducted on March 26, 2015. The PSI was not authenticated as required by Directive ¶ E3.1.20. In the FORM, Department Counsel informed Applicant that she was entitled to comment on the accuracy of the PSI summary; make any corrections, additions, deletions or updates; or object to consideration of the PSI on the ground that it was not authenticated. I conclude that she waived any objections to the PSI summary by failing to respond to the FORM. Although pro se applicants are not expected to act like lawyers, they are expected to take timely and reasonable steps to protect their rights under the Directive. ISCR Case No. 12-10810 at 2 (App. Bd. Jul. 12, 2016). Findings of Fact2 In her answer to the SOR, Applicant admitted the allegations in SOR ¶¶ 1.a, 1.b, and 1.d-1.h. She denied the allegations in SOR ¶¶ 1.c and 1.i. Her admissions are incorporated in my findings of fact. Applicant is a 40-year-old employee of a defense contractor. She was unemployed when she submitted her SCA, having been laid off in July 2014 due to a reduction in force by her previous employer, but she has since found employment by another defense contractor. She has held a security clearance since about August 2010. Applicant married in January 1993 and divorced in August 1994. She married her current spouse in October 2002. She has a 23-year-old daughter from her first marriage and a 14-year-old daughter and 12-year-old son from her current marriage. She attended a community college and received an associate’s degree in December 2001. The SOR alleges nine delinquent debts totaling about $41,700, which are reflected in credit reports from September 2015 (Item 4) and January 2016 (Item 6). All the debts alleged in the SOR became delinquent after Applicant was laid off, except for the medical debt alleged in SOR ¶ 1.i, on which the last activity was in October 2010. In August 2014, Applicant hired a debt-relief law firm, and she has made monthly $1,000 payments to the firm since that time. In her answer to the SOR, she stated that the debts alleged in SOR ¶¶ 1.a, 1.b, and 1.d-1.h were being managed by the law firm, 2 Applicant’s personal information is extracted from her security clearance application (GX 1) unless otherwise indicated by a parenthetical citation to the record. 3 and she submitted a statement from the law firm reflecting that it is managing 20 debts, of which 13 were “open” and seven were paid in full as of July 11, 2016. Two debts to the creditor alleged in SOR ¶ 1.a had been paid in full, but it is not clear whether the debt alleged in SOR ¶ 1.a has been resolved, because the account numbers reflected on the statement from the law firm do not match the account number for the debt alleged in SOR ¶ 1.a. The debt alleged in SOR ¶ 1.b is reflected on the law firm’s statement as paid in full, and the debts alleged in SOR ¶¶ 1.e and 1.f are reflected as open and unresolved. The law firm’s statement reflects six delinquent debts to the creditor alleged in SOR ¶ 1.d, one debt to the creditor alleged in SOR ¶ 1.g, and one debt to the creditor alleged in SOR ¶ 1.h, but the account numbers on the statement do not match the account numbers for the debts alleged in SOR ¶¶ 1.d, 1.g, and 1.h. Five creditors are listed on the law firm’s statement that are not alleged in the SOR. Applicant denied the debt alleged in SOR ¶ 1.c, stating that the account was in her husband’s name. The September 2015 credit report reflects that she is an authorized user in this account. (Item 4 at 7.) As such, she is not legally liable for this debt. Applicant denied the medical debt alleged in SOR ¶ 1.i, stating that she was unaware of any medical debts in her name and had not received any bills or notices from a medical creditor. She stated that she was unable to contact the medical provider because no provider’s name is reflected on the credit reports. However, the September credit report reflects a mailing address for the collection agency. There is no evidence reflecting that Applicant or her law firm has disputed this debt with the collection agency or the credit bureaus. From the limited information in the record, it appears that Applicant’s law firm provides debt-negotiation services, but there is no evidence that it provides financial counseling to its clients. There is no evidence in the record regarding Applicant’s current income and expenses. Policies “[N]o one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). As Commander in Chief, the President has the authority to “control access to information bearing on national security and to determine whether an individual is sufficiently trustworthy to have access to such information.” Id. at 527. The President has authorized the Secretary of Defense or his designee to grant applicants eligibility for access to classified information “only upon a finding that it is clearly consistent with the national interest to do so.” Exec. Or. 10865 § 2. Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the adjudicative guidelines. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, an administrative judge 4 applies these guidelines in conjunction with an evaluation of the whole person. An administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. An administrative judge must consider all available and reliable information about the person, past and present, favorable and unfavorable. The Government reposes a high degree of trust and confidence in persons with access to classified information. This relationship transcends normal duty hours and endures throughout off-duty hours. Decisions include, by necessity, consideration of the possible risk that the applicant may deliberately or inadvertently fail to safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation about potential, rather than actual, risk of compromise of classified information. Clearance decisions must be made “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” Exec. Or. 10865 § 7. Thus, a decision to deny a security clearance is merely an indication the applicant has not met the strict guidelines the President and the Secretary of Defense have established for issuing a clearance. Initially, the Government must establish, by substantial evidence, conditions in the personal or professional history of the applicant that may disqualify the applicant from being eligible for access to classified information. The Government has the burden of establishing controverted facts alleged in the SOR. See Egan, 484 U.S. at 531. “Substantial evidence” is “more than a scintilla but less than a preponderance.” See v. Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994). The guidelines presume a nexus or rational connection between proven conduct under any of the criteria listed therein and an applicant’s security suitability. See ISCR Case No. 92-1106 at 3, 1993 WL 545051 at *3 (App. Bd. Oct. 7, 1993). Once the Government establishes a disqualifying condition by substantial evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the facts. Directive ¶ E3.1.15. An applicant has the burden of proving a mitigating condition, and the burden of disproving it never shifts to the Government. See ISCR Case No. 02- 31154 at 5 (App. Bd. Sep. 22, 2005). Applicants have the ultimate burden of demonstrating their suitability for being granted a security clearance. ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002). “[S]ecurity clearance determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531; see AG ¶ 2(b). 5 Analysis Guideline F, Financial Considerations The security concern under this guideline 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. Financial distress can also be caused or exacerbated by, and thus can be a possible indicator of, other issues of personnel security concern such as excessive gambling, mental health conditions, substance misuse, or alcohol abuse or dependence. An individual who is financially overextended is at greater risk of having to engage in illegal or otherwise questionable acts to generate funds . . . . Applicant’s admissions and the documentary evidence in the FORM establish three disqualifying conditions: AG ¶ 19(a) (“inability to satisfy debts”); AG ¶ 19(b) (“unwillingness to satisfy debts regardless of the ability to do so”); and AG ¶ 19(c) (“a history of not meeting financial obligations”). The following mitigating conditions are potentially relevant: 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; 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(c): the individual has received or is receiving financial counseling for the problem from a legitimate and credible source, such as a non-profit credit counseling service, and there are clear indications that the problem is being resolved or is under control; 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. 6 AG ¶¶ 20(a) and 20(c) are not established. Applicant’s delinquent debts are numerous, recent, and were not incurred under circumstances making them unlikely to recur. She has not received financial counseling within the meaning of AG ¶ 20(c) and her financial situation is not yet under control. The law firm’s statement reflects that only one of the debts alleged in the SOR has been resolved and that Applicant has more unresolved delinquent debts than are alleged in the SOR. AG ¶¶ 20(b) and 20(d) are partially established. Applicant’s loss of employment was a condition beyond her control, and she acted responsibly by hiring a law firm to assist her and making monthly $1,000 payments to the firm since August 2014. She has resolved the debt alleged in SOR ¶ 1.b, and her law firm is attempting to resolve the debts alleged in SOR ¶¶ 1.e and 1.f. However, she has not submitted evidence that the law firm is addressing the debts alleged in SOR ¶¶ 1.a, 1.d, 1.g, 1.h, and 1.i, and she has taken no actions to resolve those debts herself. AG ¶ 20(e) is not established. Although Applicant denied the medical debt alleged in SOR ¶ 1.i, she has not disputed the debt with the collection agency or the credit bureaus. Whole-Person Concept 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. Because Applicant requested a determination on the record without a hearing, I had no opportunity to evaluate her credibility and sincerity based on demeanor. See ISCR Case No. 01-12350 at 3-4 (App. Bd. Jul. 23, 2003). A security clearance adjudication is an evaluation of an individual’s judgment, reliability, and trustworthiness. It is not a debt-collection procedure. ISCR Case No. 09- 02160 (App. Bd. Jun. 21, 2010.) The adjudicative guidelines do not require that an individual make payments on all delinquent debts simultaneously, pay the debts alleged in the SOR first, or establish resolution of every debt alleged in the SOR. He or she need only establish a plan to resolve financial problems and take significant actions to implement the plan. See ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008). Applicant has taken a step in the right direction by hiring a law firm to assist her. She has a plan to resolve some of her delinquent debts, but she has not shown that the plan encompasses most of the debts alleged in the SOR. Furthermore, the law firm’s statement reflects that she has many more delinquent debts than were alleged in the SOR. She has provided no evidence indicating that she is financially able to eventually resolve all her delinquent debts. After weighing the disqualifying and mitigating conditions under Guideline F, and evaluating the evidence before me in the context of the whole person, I conclude Applicant has not carried her burden of mitigating the security concerns raised by her delinquent debts. 7 Formal Findings I make the following formal findings on the allegations in the SOR: Paragraph 1, Guideline F (Financial Considerations): AGAINST APPLICANT Subparagraph 1.a: Against Applicant Subparagraphs 1.b-1.c: For Applicant Subparagraph 1.d: Against Applicant Subparagraphs 1.e and 1.f: For Applicant Subparagraphs 1.g-1.i: Against Applicant Conclusion I conclude that it is not clearly consistent with the national security interests of the United States to grant Applicant eligibility for access to classified information. Clearance is denied. LeRoy F. Foreman Administrative Judge