1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 16-01147 ) Applicant for Security Clearance ) Appearances For Government: Andrea M. Corrales, Esq., Department Counsel For Applicant: Pro se ___________ Decision ___________ HARVEY, Mark, Administrative Judge: Applicant’s statement of reasons (SOR) alleges, and the record establishes Applicant has seven delinquent debts totaling $23,360. He did not provide sufficient evidence of resolution of financial issues or inability to make greater progress. Financial considerations security concerns are not mitigated. Eligibility for access to classified information is denied. Statement of the Case On June 9, 2015, Applicant completed and signed a Questionnaire for National Security Positions (SF 86) or security clearance application (SCA). (Government Exhibit (GE 1)) On June 24, 2016, the Department of Defense (DOD) Consolidated Adjudications Facility (CAF) issued an SOR to Applicant under Executive Order (Exec. Or.) 10865, Safeguarding Classified Information within Industry, February 20, 1960; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (Directive), January 2, 1992; and the Adjudicative Guidelines for Determining Eligibility for Access to Classified Information, which became effective on September 1, 2006 (Sept. 1, 2006 AGs). The SOR detailed reasons why the DOD CAF did not find under the Directive that it is clearly consistent with the interests of national security to grant or continue a security clearance for him, and recommended referral to an administrative judge to determine 2 whether a clearance should be granted, continued, denied, or revoked. Specifically, the SOR set forth security concerns arising under the financial considerations guideline. On August 9, 2016, Applicant responded to the SOR, and he requested a hearing. On September 13, 2016, Department Counsel was prepared to proceed. On January 10, 2017, the case was assigned to me. On February 27, 2017, the Defense Office of Hearings and Appeals issued a notice setting the hearing for March 14, 2017. The hearing was held as scheduled. Applicant waived his right to 15 days of notice of the date, time, and location of his hearing. (Tr. 12-13) Department Counsel offered three exhibits into evidence; Applicant offered five exhibits into evidence; and all exhibits were admitted without objection. (Transcript (Tr.) 14-18; GE 1-3; Applicant Exhibit (AE) A-E) On March 22, 2017, DOHA received a transcript of the hearing. On May 15, 2017, Applicant provided eight exhibits, which were admitted without objection. (Tr. 52; AE F-M) 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 Sept. 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 Findings of Fact2 In Applicant’s SOR response, he admitted all SOR allegations. He also provided extenuating and mitigating information. Applicant’s admissions are accepted as findings of fact. Additional findings of fact follow. Applicant is a 59-year-old senior quality assurance engineer who has been working for a defense contractor since 2002. (Tr. 5, 20) He held a security clearance in the 1990s and from 2005 to present. (Tr. 21) There is no evidence of security violations. In 1977, he graduated from high school. (Tr. 5) In 1986, he received a bachelor’s degree, and in 1992, he received a master’s degree in industrial technology. (Tr. 6) He served in the Navy from 1976 to 1981, and he received an honorable discharge. (Tr. 6) When he left active service, he was a petty officer second class (E-5). (Tr. 7) In 1977, he married, and his two children are ages 37 and 38. (Tr. 7) Financial Considerations Applicant attributed his financial problems to his spouse’s illness, which affected his finances beginning in April 2011. (Tr. 22, 25) He had excellent credit before his 1 Application of the AGs that were in effect as of the issuance of the SOR would not change my decision in this case. The new AGs are available at http://ogc.osd.mil/doha/5220-6 R20170608.pdf. 2 Some details were excluded to protect Applicant’s right to privacy. Specific information is available in the cited exhibits. 3 spouse’s illness. (Tr. 50) She was not working for three or four months. (Tr. 22) She was earning $45,000 to $50,000 each year before April 2011. (Tr. 23) She returned to the workforce in July or August 2011. (Tr. 23) About two years ago, she started working as an independent contractor out of Applicant’s home. (Tr. 24) Her current annual income is about $25,000 to $30,000. (Tr. 24) Applicant has medical insurance; however, his deductible is high. (Tr. 25) SOR ¶ 1.a alleges a mortgage account that went to foreclosure in 2012. Applicant allowed family members to live in his home with the mortgage while he lived in another home. (Tr. 26-27) When his spouse became ill in April 2011, he fell about $2,500 behind on his mortgage. (Tr. 27) The mortgage was about $88,000; the fair market value was about $125,000; and the mortgage company accepted a deed in lieu of foreclosure. (Tr. 28; AE E at 9; AE G) SOR ¶¶ 1.b, 1.d, and 1.h allege three bank credit card debts for $6,568, $2,958, and $9,638. The three debts became delinquent in 2011. (Tr. 30) Applicant provided a receipt showing payment of $113 in June 2011 to address the debt in SOR ¶ 1.d, and the amount owed at that time was $1,609. (AE C; AE E at 12) He made three or four payments on one of the debts in 2011; he did not remember the amount of the payments; he did not have records of payments; he believed the creditor violated the verbal agreement he had with the creditor; and the creditor continued to claim he owed the full amount of the debt. (Tr. 30-32) He decided not to make payments or pay these three debts because he did not believe the escalating fees and interest charges were fair. (Tr. 32-33) He did not attempt to make a written settlement agreement with two of the creditors. (Tr. 33) He wanted to wait for the creditors to sue him, and then the judge could decide the amount of the debt. (Tr. 33, 47, 51) Then when the four-year state statute of limitations elapsed, he recognized that he could not be legally compelled to pay the debts. (Tr. 33; AE F; AE L) SOR ¶ 1.c alleges a charged-off debt for $3,163. Applicant co-signed on this debt with his daughter. (Tr. 34-35) The debt became delinquent in 2011. (Tr. 35) He acknowledged he was responsible for this debt, and he did not take any action to pay it. (Tr. 35) He believed his daughter would take care of this debt. (Tr. 36) SOR ¶ 1.e alleges a charged-off bank debt for $1,893. In 2005, Applicant obtained a loan for his daughter to purchase a vehicle. (Tr. 36) In 2011, payments to the creditor stopped. (Tr. 36) His daughter became divorced. (Tr. 50) The vehicle was repossessed. (Tr. 37) In 2015, Applicant received an IRS Form 1099C discharging him from responsibility for paying this debt. (Tr. 37; AE H) Applicant paid taxes on the released debt. (Tr. 37-38; AE B) SOR ¶ 1.f alleges a medical debt for $261. Applicant was billed for ambulance transportation in 2015. (Tr. 38) He said he made some payments; he changed banks; and the automatic payments lapsed. (Tr. 38) He has not paid this debt; however, he did plan to pay it. (Tr. 39) He was focused on family and work for the past year. (Tr. 39) 4 SOR ¶ 1.g alleges a utility debt placed for collection for $259. The debt became delinquent in 2011 and went to collections in 2012. (Tr. 40) Applicant has not done anything to resolve this debt. (Tr. 40) SOR ¶ 1.i alleges a telecommunication debt placed for collection for $513. This debt became delinquent in 2011. (Tr. 40) In May 2011, he paid the creditor $148, and the amount due was $295. (AE D) He asked the company to terminate the account; however, services continued. (Tr. 41) He said he did not make any payments. (Tr. 41) Applicant uses a budget. (Tr. 43-44; AE A) He has about $110,000 in his 401(k) account. (Tr. 44) In 2015, Applicant and his spouse’s adjusted gross income was $167,050. (AE B) In 2015, he purchased two vehicles, and he financed $42,000 for one and $22,000 for the other. (Tr. 45) His two vehicle loans are either current or paid. (AE J) About two years ago, he purchased a home for about $210,000, and he financed the purchase of a boat in 2014 or 2015. (Tr. 46) He does not currently use any credit cards for his personal expenses. (Tr. 51) He noted that several of the SOR debts do not appear on his current credit report. (AE E) Character Evidence A senior manager has known Applicant for 14 years and supervised him for 4 years.3 A retired senior manager has known Applicant for 15 years. Another manager has known Applicant for 13 years. A customer lauded his attention to detail and professionalism. His supervisors described Applicant as honest, reliable, responsible, professional, diligent, and trustworthy. He has an excellent reputation in his industry, and he received superb employee evaluations. (AE B; AE M) Policies The U.S. Supreme Court has recognized the substantial discretion of the Executive Branch in regulating access to information pertaining to national security emphasizing, “no 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 applicant’s 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, Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960), as amended. 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, these guidelines are applied in conjunction with an evaluation of the whole person. An administrative judge’s 3 The three character-reference letters and email from a customer are the sources for the information in his paragraph. (AE B) 5 overarching adjudicative goal is a fair, impartial, and commonsense decision. An administrative judge must consider all available, 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 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 “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See Exec. Or. 10865 § 7. Thus, nothing in this decision should be construed to suggest that it is based, in whole or in part, on any express or implied determination about applicant’s allegiance, loyalty, or patriotism. It 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. 95-0611 at 2 (App. Bd. May 2, 1996). 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 ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue his security clearance.” ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002). The burden of disproving a mitigating condition never shifts to the Government. See ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 2005). “[S]ecurity clearance determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531; see AG ¶ 2(b). Analysis Financial Considerations AG ¶ 18 articulates the security concern for financial problems: 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. . . . An individual who is financially 6 overextended is at greater risk of having to engage in illegal or otherwise questionable acts to generate funds. . . . The Appeal Board explained the scope and rationale for the financial considerations security concern in ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012) (citation omitted) as follows: This concern is broader than the possibility that an applicant might knowingly compromise classified information in order to raise money in satisfaction of his or her debts. Rather, it requires a Judge to examine the totality of an applicant’s financial history and circumstances. The Judge must consider pertinent evidence regarding the applicant’s self-control, judgment, and other qualities essential to protecting the national secrets as well as the vulnerabilities inherent in the circumstances. The Directive presumes a nexus between proven conduct under any of the Guidelines and an applicant’s security eligibility. AG ¶ 19 includes three disqualifying conditions that could raise a security concern and may be disqualifying in this case: “(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.” In ISCR Case No. 08-12184 at 7 (App. Bd. Jan. 7, 2010), the Appeal Board explained: It is well-settled that adverse information from a credit report can normally meet the substantial evidence standard and the government’s obligations under [Directive] ¶ E3.1.14 for pertinent allegations. At that point, the burden shifts to applicant to establish either that [he or] she is not responsible for the debt or that matters in mitigation apply. (internal citation omitted). Applicant’s history of delinquent debt is documented in his credit reports, SOR response, and hearing. The record establishes the disqualifying conditions in AG ¶¶ 19(a), 19(b), and 19(c) requiring additional inquiry about the possible applicability of mitigating conditions. Five financial considerations mitigating conditions under AG ¶ 20 are potentially applicable in this case: (a) the behavior happened so long ago,4 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; 4 A debt that became delinquent several years ago is still considered recent because “an applicant’s ongoing, unpaid debts evidence a continuing course of conduct and, therefore, can be viewed as recent for purposes of the Guideline F mitigating conditions.” ISCR Case No. 15-06532 at 3 (App. Bd. February 16, 2017) (citing ISCR Case No. 15-01690 at 2 (App. Bd. Sep. 13, 2016)). 7 (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; (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; (d) the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts;5 and (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 DOHA Appeal Board concisely explained Applicant’s responsibility for proving the applicability of mitigating conditions as follows: Once a concern arises regarding an Applicant’s security clearance eligibility, there is a strong presumption against the grant or maintenance of a security clearance. See Dorfmont v. Brown, 913 F. 2d 1399, 1401 (9th Cir. 1990), cert. denied, 499 U.S. 905 (1991). After the Government presents evidence raising security concerns, the burden shifts to the applicant to rebut or mitigate those concerns. See Directive ¶ E3.1.15. The standard applicable in security clearance decisions is that articulated in Egan, supra. “Any doubt concerning personnel being considered for access to classified information will be resolved in favor of the national security.” Directive, Enclosure 2 ¶ 2(b). ISCR Case No. 10-04641 at 4 (App. Bd. Sept. 24, 2013). 5 The Appeal Board has previously explained what constitutes a “good faith” effort to repay overdue creditors or otherwise resolve debts: In order to qualify for application of [the “good faith” mitigating condition], an applicant must present evidence showing either a good-faith effort to repay overdue creditors or some other good-faith action aimed at resolving the applicant’s debts. The Directive does not define the term “good-faith.” However, the Board has indicated that the concept of good- faith “requires a showing that a person acts in a way that shows reasonableness, prudence, honesty, and adherence to duty or obligation.” Accordingly, an applicant must do more than merely show that he or she relied on a legally available option (such as bankruptcy) in order to claim the benefit of [the “good faith” mitigating condition]. (internal citation and footnote omitted) ISCR Case No. 02-30304 at 3 (App. Bd. Apr. 20, 2004) (quoting ISCR Case No. 99-9020 at 5-6 (App. Bd. June 4, 2001)). 8 None of the mitigating conditions fully apply; however, Applicant disclosed some circumstances beyond his control that adversely affected his finances. Applicant’s spouse was unable to work for several months in 2011, and then when she returned to the workforce her pay was reduced. Applicant provided the deed to his residence in lieu of foreclosure, and his delinquent mortgage debt is resolved. He received an IRS Form 1099C, indicating his debt owed to one creditor was cancelled. Applicant is credited with mitigating the debts in SOR ¶¶ 1.a and 1.e. “[T]hat some debts have dropped off his credit report is not meaningful evidence of debt resolution.” ISCR Case No. 14-05803 at 3 (App. Bd. July 7, 2016) (citing ISCR Case No. 14-03612 at 3 (App. Bd. Aug. 25, 2015)). The Fair Credit Reporting Act requires removal of most negative financial items from a credit report seven years from the first date of delinquency or the debt becoming collection barred because of a state statute of limitations, whichever is longer.6 Debts may be dropped from a credit report upon dispute when creditors believe the debt is not going to be paid, when the debt has been charged off, or when the creditor fails to timely authenticate the debt. All states have statutes of limitations upon collectability of credit card debts, which range from three to six years. The South Carolina Court of Appeals succinctly explained the societal and judicial value of application of the statute of limitations: Statutes of limitations embody important public policy considerations in that they stimulate activity, punish negligence and promote repose by giving security and stability to human affairs. The cornerstone policy consideration underlying statutes of limitations is the laudable goal of law to promote and achieve finality in litigation. Significantly, statutes of limitations provide potential defendants with certainty that after a set period of time, they will not be ha[iled] into court to defend time-barred claims. Moreover, limitations periods discourage plaintiffs from sitting on their rights. Statutes of limitations are, indeed, fundamental to our judicial system. Carolina Marine Handling, Inc. v. Lasch, 363 S.C. 169, 175-76, 609 S.E.2d 548, 552 (S.C. Ct. App. 2005) (internal quotation marks and citations omitted). As a general statement, under the Appeal Board’s jurisprudence, debts that are beyond the statute of limitations for collections cannot be mitigated solely because they are not collectable.7 6Title 15 U.S.C. § 1681c. See Federal Trade Commission website, Summary of Fair Credit Reporting Act Updates at Section 605, https://www.consumer.ftc.gov/articles/pdf-0111-fair-credit-reporting- act.pdf. 7The statute of limitations clearly and unequivocally ends an Applicant’s legal responsibility to pay the creditor after the passage of a certain amount of time, as specified in state law. In a series of decisions the Appeal Board has rejected the statute of limitations for debts generated through contracts, which is the law in all 50 states, as automatically mitigating financial considerations concerns under AG ¶ 20(d). See ISCR Case No. 08-01122 at 4 (App. Bd. Feb. 9, 2009); ISCR Case No. 07-08049 at 5 (App. Bd. Jul. 22, 2008); ADP Case No. 07-13041 at 5 (App. Bd. Sep. 19, 2008); ISCR Case No. 07-11814 at 2 (App. Bd. Dec. 29, 2008) ADP Case No. 06-14616 at 3 (App. Bd. Oct. 18, 2007) (stating, “reliance upon legal defenses such as the statute of limitations does not necessarily demonstrate prudence, honesty, and reliability; therefore, such reliance is of diminished probative value in resolving trustworthiness concerns arising out 9 Recently, the DOHA Appeal Board reinforced its position on statutes of limitations not mitigating financial considerations concerns stating: In this case, the Judge noted that Applicant explained that he did not owe any of the alleged debts because they had either been deleted from his credit report or soon would be deleted, and he also relied on a state statute of limitations to absolve himself of debts. The Appeal Board has long recognized that debts remain relevant for security clearance purposes even if they are no longer enforceable due to the running of the statute of limitations or cannot be legally listed on a credit report due to the passage of time. See e.g., ISCR Case No. 03-04779 at 4 (App. Bd. Jul. 20, 2005) and ISCR Case No. 03-20327 at 6 (App. Bd. Oct 26, 2006).8 We also have held that reliance on a state’s statute of limitations does not constitute a good-faith effort to resolve financial difficulties and is of limited mitigative value. ADP Case No. 06-18900 at 5 (App. Bd. Jun. 6, 2008) (citing ISCR Case No. 03-04779 at 4 (App. Bd. Jul. 20, 2005) and ISCR Case No. 01- 09691 at 2-3 (App. Bd. Mar. 27, 2003)). ISCR Case No. 15-01208 at 3 (App. Bd. Aug. 26, 2016). Applicant relied upon the four-year statute of limitations in his state of residence as his rationale for not paying some of his SOR creditors.9 He realized that those debts were not collectible after four years elapsed with no payments; however, those debts, of financial problems. See, e.g., ISCR Case No. 03-20327 at 4 (App. Bd. Oct. 26, 2006).”). This opinion does not assert that the statute of limitations provides any mitigation under Guideline F; however, this aspect of Applicant’s financial situation is a circumstance that may explain Applicant’s failure to take more timely and aggressive actions to resolve his delinquent debts. The Appeal Board has not defined how long after the statute of limitations expires an Applicant must wait before receiving a fresh start similar to that received when debts are discharged under Chapter 7 of the Bankruptcy Code. 8Compare ISCR Case No. 12-04806 (App. Bd. Jul. 3, 2014) (holding anti-deficiency act barred collection of first mortgage debt and the debt was mitigated). In that case, Applicant corroborated efforts to settle a charged-off second mortgage debt. Also, that Applicant had received financial counseling. Ultimately, the Board affirmed the Judge’s favorable decision. 9 See Tex. Civ. Prac. & Rem. Code §§ 16.004(c) and 16.051 (statute of limitations for contracts); 16.004(a)(3) (statute of limitations for debts); Cont’l Casualty Co. v. Dr. Pepper Bottling Co. of Tex., 416 F.Supp. 2d 497, 505-507 (W.D. Tex. 2006); Facility Ins. Corp. v. Employers Ins. of Wausau, 357 F.3d 508, 513-514 (5th Cir. 2004) (discussing statute of limitations for open or revolving accounts). Debts barred by a state statute of limitations are legally uncollectible. However, payments on his debts could have reinstated them, ending the statute of limitations defense to collection. See Stine v. Stewart, 80 S.W.3d 586, 591, 45 Tex. Sup.J. 966 (Tex. 2002). The reduction in the magnitude and number of debts that creditors can legally enforce because of the application of a state statute of limitations reduces the potential vulnerability to improper financial inducements, and the degree that a debtor is “financially overextended,” is also reduced. However, it does not negate the debtor’s past conduct in which he or she failed to take more aggressive actions to resolve his delinquent debts. 10 even the ones removed from his credit report, remain unresolved for security clearance purposes.10 Applicant did not provide enough details about what he did to address his SOR debts over the last five years. Aside from proof of a $113 payment to one SOR creditor in May 2011, and a $148 payment to another SOR creditor in May 2011, he did not provide sufficient documentation relating to the SOR debts in ¶¶ 1.b, 1.c, 1.d, and 1.f through 1.i: (1) proof of payments, such as checking account statements, photocopies of checks, or a letter from the creditor proving that he paid or made any payments to the creditors; (2) correspondence to or from the creditors to establish maintenance of contact;11 (3) credible debt disputes indicating he did not believe he was responsible for the debts and why he held such a belief; (4) more evidence of attempts to negotiate payment plans, such as settlement offers or agreements to show that he was attempting to resolve these debts; or (5) other evidence of progress or resolution. Applicant failed to establish mitigation under AG ¶ 20(e) because he did not provide documented proof to substantiate the existence, basis, or the result of any debt disputes. There is insufficient evidence about why Applicant was unable to make greater progress resolving his SOR debts. There is insufficient assurance that his financial problems are being resolved, are under control, and will not recur in the future. Under all the circumstances, he failed to establish that financial considerations security concerns are mitigated. 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 the 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; 10The Appeal Board has indicated that promises to pay off delinquent debts in the future are not a substitute for a track record of paying debts in a timely manner and otherwise acting in a financially responsible manner. ISCR Case No. 07-13041 at 4 (App. Bd. Sept. 19, 2008) (citing ISCR Case No. 99- 0012 at 3 (App. Bd. Dec. 1, 1999)). 11“Even if Applicant’s financial difficulties initially arose, in whole or in part, due to circumstances outside his [or her] control, the Judge could still consider whether Applicant has since acted in a reasonable manner when dealing with those financial difficulties.” ISCR Case No. 05-11366 at 4 n.9 (App. Bd. Jan. 12, 2007) (citing ISCR Case No. 99-0462 at 4 (App. Bd. May 25, 2000); ISCR Case No. 99-0012 at 4 (App. Bd. Dec. 1, 1999); ISCR Case No. 03-13096 at 4 (App. Bd. Nov. 29, 2005)). A component is whether he or she maintained contact with creditors and attempted to negotiate partial payments to keep debts current. 11 (8) the potential for pressure, coercion, exploitation, or duress; and (9) the likelihood of continuation or recurrence. Under AG ¶ 2(c), “[t]he ultimate determination” of whether to grant a security clearance “must be an overall commonsense judgment based upon careful consideration of the guidelines” and the whole-person concept. My comments under Guideline F are incorporated in my whole-person analysis. Some of the factors in AG ¶ 2(d) were addressed under that guideline but some warrant additional comment. Applicant is a 59-year-old senior quality assurance engineer who has been working for a defense contractor since 2002. He held a security clearance in the 1990s and from 2005 to present, and there is no evidence of a security violation. In 1986, he received a bachelor’s degree, and in 1992, he received a master’s degree in industrial technology. He honorably served in the Navy from 1976 to 1981. Applicant’s character evidence established his attention to detail, professionalism, honesty, reliability, responsibility, diligence, and trustworthiness. He has superb employee evaluations. Applicant had excellent credit before his spouse’s illness. She was not working for three or four months. She is earning considerably less than she was before her illness in 2011. This illness and reduction in income adversely affected Applicant’s finances. Applicant is credited with the resolution of his mortgage account through deed in lieu of foreclosure and one SOR creditor cancelled one debt. He generated a budget, his 401(k) account has $110,000 in it, and all of his recent debts, such as his mortgage, boat payment, and car payments, are current. Applicant admitted responsibility for seven delinquent SOR debts totaling $23,360. He provided insufficient corroborating or substantiating documentary evidence of payments and established payment plans for his SOR debts. He did not provide a detailed plan about how he intended to resolve all of his delinquent SOR debts. His actions show lack of financial responsibility and judgment and raise unmitigated questions about Applicant’s reliability, trustworthiness, and ability to protect classified information. See AG ¶ 18. More documented information about inability to pay debts, financial history, or documented financial progress is necessary to mitigate security concerns. It is well settled that once a concern arises regarding an applicant’s security clearance eligibility, there is a strong presumption against the grant or renewal of a security clearance. See Dorfmont, 913 F. 2d at 1401. Unmitigated financial considerations concerns lead me to conclude that grant of a security clearance to Applicant is not warranted at this time. This decision should not be construed as a determination that Applicant cannot or will not attain the state of reform necessary for award of a security clearance in the future. With more effort towards documented resolution of his past-due debts, and a track record of behavior consistent with his obligations, he may well be able to demonstrate persuasive evidence of his security clearance worthiness. I have carefully applied the law, as set forth in Egan, Exec. Or. 10865, the Directive, and the AGs, to the facts and circumstances in the context of the whole person. I conclude that financial consideration security concerns are not mitigated. It is not clearly consistent 12 with the interests of national security to grant Applicant security clearance eligibility at this time. 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 Subparagraph 1.a: For Applicant Subparagraphs 1.b through 1.d: Against Applicant Subparagraph 1.e: For Applicant Subparagraphs 1.f through 1.i: Against Applicant Conclusion In light of all of the circumstances in this case, it is not clearly consistent with the interests of national security to grant Applicant’s eligibility for a security clearance. Eligibility for access to classified information is denied. _________________________ MARK HARVEY Administrative Judge