1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) [NAME REDACTED] ) ISCR Case No. 16-01445 ) Applicant for Security Clearance ) Appearances For Government: Carroll Connelley, Esq., Department Counsel For Applicant: Pro se ______________ Decision ______________ BORGSTROM, Eric H., Administrative Judge: Applicant did not mitigate the security concerns about his financial problems. Eligibility for access to classified information is denied. Statement of the Case On November 4, 2016, the Department of Defense (DOD) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline F (financial considerations).1 Applicant responded to the SOR and requested a hearing before an administrative judge. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing, scheduling the hearing for May 17, 2017. Applicant did not appear as scheduled, so the hearing was rescheduled and convened on May 18, 2017. Government Exhibits (GE) 1-5 were admitted without objection. Applicant testified and did not present 1 The action was taken under Executive Order (EO) 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. Security Executive Agent Directive 4 (SEAD 4), 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. 2 any documents. The record closed on June 2, 2017, without any further submissions from either party. I received the hearing transcript (Tr.) on June 1, 2017. Procedural Issues On May 11, 2017, I issued an order informing both parties that although the SOR referenced the adjudicative guidelines implemented by the DOD on September 1, 2006, I would be applying the revised adjudicative guidelines (AG) effective as of June 8, 2017, pursuant to SEAD 4. The parties acknowledged receipt of my order and raised no objection.2 At hearing, Department Counsel withdrew the SOR ¶¶ 1.a. and 1.e. Applicant did not object, and these allegations are found for Applicant.3 Findings of Fact The SOR alleges one repossessed vehicle (SOR ¶ 1.b.) and four collection accounts (SOR ¶¶ 1.c., 1.d., 1.f., and 1.g.). Applicant admitted all five debts. After a thorough and careful review of the pleadings and exhibits, I make the following findings of fact: Applicant is 57 years old. From November 2000 to May 2014, he was employed full time as a computer analyst for a private corporation. He was unemployed from May 2014 to November 2014. Since November 2014, he has been employed full time for a DOD contractor. He is not married, and he does not have any children. He resides with his mother, and he splits the mortgage and utilities with her.4 Applicant’s admissions and the three credit reports establish the five alleged debts, which became delinquent between June 2012 and October 2014. The largest delinquent debt (SOR ¶ 1.b.) was for a vehicle purchased in April 2013 and repossessed in about October 2013. Applicant claimed that he had applied for a 401k loan to resolve some of the debts; however, there is no documentary evidence of this action or of any debt- resolution efforts.5 Applicant attributed his financial problems to several circumstances. In July 2012, he took an $18,000 loan from his retirement account to assist his mother in the purchase of a house. This loan reduced his bi-weekly paycheck by approximately $135 and hindered his ability to pay his vehicle loan. In May 2013, he had knee surgery, which cost approximately $2,000 in out-of-pocket expenses. In May 2014, Applicant was laid off from 2 Hearing Exhibit (HE) I; Tr. 6-8. 3 Tr. 11-12. 4 GE 1-2; Tr. 23. 5 Response to SOR; GE 2-5; Tr. 24. 3 his longtime employer. Applicant also attributed his financial problems to procrastination and financial irresponsibility.6 Policies When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines. In addition to brief introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which are to be used 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, 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(c), 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 national security eligibility will be resolved in favor of the national security.” 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. Section 7 of EO 10865 provides that adverse 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 or sensitive information). 6 GE 2; Tr. 21-22, 27-28, 36 4 Analysis Guideline F, Financial Considerations The security concern for financial considerations is set out in AG ¶ 18: 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. 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 risk of having to engage in illegal acts to generate funds. The guideline notes several conditions that could raise security concerns under AG ¶ 19. The following are potentially applicable in this case: (a) inability or unwillingness to satisfy debts; and (c) a history of not meeting financial obligations. Applicant’s five delinquent debts total approximately $38,567. These debts became delinquent between 2012 and 2014. The Government produced substantial evidence to raise the disqualifying conditions in AG ¶¶ 19(a) and 19(c).7 Conditions that could mitigate the 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; (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 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; and 7 Directive ¶ E3.1.15. See ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 2005) (An applicant has the burden of proving a mitigating condition, and the burden of disproving it never shifts to the Government.). 5 (d) the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts. Applicant’s delinquent debts were incurred between 2012 and 2014. Although he has been gainfully employed full time since November 2014, there is no documentary evidence of any debt-resolution efforts. Moreover, there is no evidence that Applicant’s issues of financial irresponsibility are unlikely to recur. AG ¶ 20(a) does not apply. The application of AG ¶ 20(b) requires both that (1) Applicant’s financial indebtedness resulted from circumstances largely beyond his control, and (2) Applicant acted responsibly under the circumstances. Applicant’s financial problems were partially attributed to his 2013 surgery and his 2014 unemployment. These events constitute circumstances beyond his control in the context of AG ¶ 20(b). AG ¶ 20(b) also requires that an applicant act responsibly under the circumstances. Notwithstanding some circumstances beyond his control, there is no documentary evidence of a debt-resolution plan or steps taken in furtherance of such a plan, particularly in light of Applicant’s employment since November 2014. AG ¶ 20(b) does not apply. Applicant has not received any financial counseling. There is no evidence of Applicant’s monthly income and expenses with scheduled debt repayments to permit me to conclude that his financial situation is under control. AG ¶ 20(c) does not apply. The concept of good faith Arequires a showing that a person acts in a way that shows reasonableness, prudence, honesty, and adherence to duty or obligation.”8 As discussed above, this is no evidence of any debt-resolution efforts. AG ¶ 20(d) does not apply. Applicant’s surgery and unemployment contributed to his financial problems. Nonetheless, there is no documentary evidence of any debt-resolution efforts or evidence showing financial responsibility. I find that Applicant did not mitigate the financial considerations security concerns. 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 8 See ISCR Case No. 08-12184 at 10 (App. Bd. Jan. 7, 2010) (Good-faith effort to resolve debts must be evidenced by a meaningful track record of repayment). 6 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 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 and the factors in AG ¶ 2(d) in this whole-person analysis. Applicant attributed his financial problems to some circumstances beyond his control, but also to his own procrastination and irresponsibility. There is no evidence of debt-resolution efforts or that Applicant has taken steps to become more financially responsible. I conclude Applicant did not mitigate 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: AGAINST APPLICANT Subparagraph 1.a.: For Applicant Subparagraphs 1.b.-1.d.: Against Applicant Subparagraph 1.e.: For Applicant Subparagraphs 1.f.-1.g. Against Applicant. Conclusion In light of all of the circumstances presented by the record in this case, it is not clearly consistent with the interests of national security to grant Applicant eligibility for a security clearance. 9 Eligibility for access to classified information is denied. ________________________ Eric H. Borgstrom Administrative Judge 9 See SEAD 4, Appendix A, ¶¶ 1(d) and 2(c).