1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 16-03438 ) Applicant for Security Clearance ) Appearances For Government: David Hayes, Esquire, Department Counsel For Applicant: Pro se ______________ Decision ______________ RICCIARDELLO, Carol G., Administrative Judge: Applicant failed to mitigate the security concerns under Guideline F, financial considerations. Applicant’s eligibility for access to classified information is denied. Statement of the Case On December 22, 2016, the Department of Defense Consolidated Adjudications Facility (DOD CAF) issued to Applicant a Statement of Reasons (SOR) detailing security concerns under Guideline F, financial considerations. 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 (AG) effective within the DOD on September 1, 2006. On June 8, 2017, new AGs were implemented and are effective for decisions issued after that date.1 1 I considered the previous AG, effective September 1, 2006, as well as the new AG, effective June 8, 2017. My decision would be the same if the case was considered under the previous AG. 2 Applicant answered the SOR on January 30, 2016, and requested a hearing before an administrative judge. The case was assigned to me on May 1, 2017. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on May 4, 2017. I convened the hearing as scheduled on June 7, 2017. The Government offered exhibits (GE) 1 through 4. Applicant testified and offered Applicant Exhibits (AE) A through E. There were no objections to any exhibits offered and all were admitted into evidence. DOHA received the hearing transcript on June 15, 2017. Findings of Fact Applicant denied the allegations in SOR ¶¶ 1.a, 1.f, 1.g, 1.h, and 1.m. He admitted the remaining SOR allegations. After a thorough and careful review of the pleadings, exhibits, and testimony, I make the following findings of fact. Applicant is 46 years old. He attended technical school in 1992. He was married from 1991 to 2000 and from 2003 to 2012. He has children ages 24, 21, 19, and 13 years old. He has joint custody of his youngest child.2 Applicant has worked for his current employer, a federal contractor, since January 2015. He was unemployed from October 2014 to January 2015. He indicated on his security clearance application (SCA) that he quit his job in October 2014 where he had worked since June 2014, after being told he would be fired. He was unemployed from February 2014 to June 2014; May 2013 to September 2013; and January 2006 to January 2007.3 In Applicant’s February 2015 security clearance application (SCA), he disclosed he had a delinquent medical debt for $5,000 that he was unable to pay because of unemployment. He disclosed “payment plans being established.”4 Applicant testified that he never established a payment plan because he learned the claim was not filed correctly.5 As part of a background investigation, Applicant was interviewed by a government investigator in August 2016. He attributed his financial difficulties to his divorce, lack of health insurance, and periods of unemployment. During his interview, he explained that now that he was employed, he was capable of meeting his current and future financial obligations. He planned to pay all of his outstanding debts. He acknowledged during the interview that he was responsible for the medical debts alleged in SOR ¶¶ 1.b through 1.g, and 1.i through 1.l. In his January 2017 answer to the SOR regarding the allegations in ¶¶ 1.b, 1.c, 1.d, 1.e, 1.i, 1.j, 1.k, and 1.l, he stated: 2 Tr. 19-22. 3 Tr. 23; GE 1. 4 GE 1. 5 Tr. 58-59; GE 1. 3 “I am in the process of determining the validity of charges, insurance payment information and allegation of charges and will have the information at the time of the In- person hearing with the Administrative Judge.” Many of the medical debts alleged in the SOR have been in a delinquent status since at least 2013 and some longer. All debts on the SOR are confirmed by credit reports from March 2015 and September 2016. Applicant testified since his divorce in 2012, he has moved four times and changed insurance companies. When he was unemployed, he was unable to pay for health insurance and did not pay his medical bills. He explained that when he changed insurance companies the medical claims were not transferred. He would get the bill and it would not be from the correct insurance company, and he would call and get it transferred to the correct one. He stated that he knew he had delinquent medical bills, but was unaware of the extent. He explained that once a debt goes to collection, it is difficult to find the specific creditor, and it is a time consuming process.6 On May 24, 2017, Applicant entered into an agreement with a credit counseling service to address some of his delinquent debts. The debts included in the contract are SOR ¶¶ 1.a ($2,430), 1.b ($215), 1.e ($459), 1.g ($714), and another delinquent debt that is not alleged in the SOR ($624). He made his first payment of $101 in June 2017. He testified the plan was not implemented until May 2017 because it took time to go through his credit report and insurance company to verify debts.7 Applicant testified that the debt in SOR ¶ 1.a ($2,430) is for a lease that was signed by his son. He was put on notice about the debt during his background interview and agreed he owed the debt, but stated it was for an outstanding medical bill. The creditor advised Applicant that he had cosigned the lease. It is listed as a joint debt on his credit reports. He denies he cosigned it, but he agreed to pay the debt. His son has agreed to give Applicant $100 a month to pay the debt, and his son has made one payment. This debt has been delinquent since 2012.8 Applicant stated that in March 2017, he contacted the creditors for the debts alleged in the SOR to determine the validity of the debts and to determine the amounts he owed. If the creditor failed to respond, he stated he added them to a list that he will pay, if they ever respond. He disputed the debts in SOR ¶¶ 1.c, 1.f, and 1.i, and they were removed from his credit reports. He paid the debt in SOR ¶ 1.h ($141) and provided a supporting document. The credit reports he provided confirm his statements and the debts above are resolved. He also stated that some of the medical debts could belong to his ex-wife, but he was not certain.9 6 Tr. 25, 32-40. 7 Tr. 29-32, 35-37, 42-43. 8 Tr. 25-30; AE A. 9 Tr. 36-41, 44-48; AE B, C, D, E, F. 4 Applicant acknowledged he owed the debt in SOR ¶ 1.d ($154), and it is not resolved. Applicant testified that the debts in in SOR ¶ 1.j ($8,259), 1.k ($18,433), and 1.l ($1,641) are legitimate debts. He is waiting to see what his insurance will play, but also indicated that he believed he would owe at least $2,000 for copayments on the debt in SOR ¶ 1.k. He disputed the utility bill in SOR ¶ 1.m ($78) and intended to resolve it in the next week.10 Applicant did not have supporting insurance documents regarding his medical claims. Applicant stated that he intended to resolve the delinquent debts he owed, and his bills are current. He owns two vehicles and his loans are current ($687 and $280). He received financial counseling through a phone interview from the credit counseling service in approximately May 2017, which helped him make a budget. The only person he provides support for is his 13-year-old child.11 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 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, 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(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 access to classified information will be resolved in favor of 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. Likewise, I have not drawn inferences grounded on mere speculation or conjecture. Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, an “applicant is responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by applicant or proven by Department Counsel and has the ultimate burden of persuasion to obtain a favorable security decision.” 10 Tr. 46-50. 11 Tr. 51-61; AE D. 5 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 or sensitive 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. 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. Affluence that cannot be explained by known sources of income is also a security concern insofar as it may result from criminal activity, including espionage. This concern is broader than the possibility that an individual might knowingly compromise classified information in order to raise money. It encompasses concerns about an individual’s self-control, judgment, and other qualities essential to protecting classified information. An individual who is financially irresponsible may also be irresponsible, unconcerned, or negligent in handing and safeguarding classified information.12 12 See ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012). 6 The guideline notes several conditions that could raise security concerns. I have considered all of the disqualifying conditions under AG & 19, and the following are potentially applicable: (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. Applicant has unresolved delinquent debts that began accumulating in approximately 2012 that he was unable or unwilling to resolve. The above disqualifying conditions apply. The guideline also includes conditions that could mitigate security concerns arising from financial difficulties. The following mitigating conditions under AG ¶ 20 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 counselling 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; 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. Applicant attributed his financial problems to periods of unemployment, lack of health insurance, and a divorce. He has been gainfully employed since January 2015. He was put on notice when he completed his SCA in February 2015 that financial issues could be a security concern. In August 2016, he was interviewed by a 7 government investigator and acknowledged he had numerous delinquent debts. In his January 2017 answer to the SOR, he indicated he was actively pursuing resolution of the debts. Applicant disputed some debts, and they have been removed from his credit report. Shortly before his hearing, he entered into an agreement with a credit counseling service and four of the SOR debts on a payment plan. He made one payment. The remaining debts are not yet resolved. Although employed since January 2015, Applicant did not provide evidence of action he took to resolve any of his delinquent debts before he received the SOR. Most of the debts are over four years old and many remain unresolved. I find the evidence is insufficient to conclude that his behavior is unlikely to recur. His behavior casts doubt on her current reliability, trustworthiness, and good judgment. AG ¶ 20(a) does not apply. Applicant’s unemployment, lack of health insurance, and 2012 divorce were beyond his control. For the full application of AG ¶ 20(b), Applicant must have acted responsibly under the circumstances. His actions to address his delinquent debts did not occur until after he received the SOR. The payment plan to resolve four of the SOR debts did not occur until late May 2017. He has made only one payment into the payment plan. Others debts that he agrees are legitimate have not been resolved. Although he stated he is waiting for the insurance company to provide information so he can resolve the other debts, these debts became delinquent in approximately 2013. There is insufficient evidence to show that he has acted responsibly in addressing his delinquent debts. AG ¶ 20(b) partially applies. There is some evidence Applicant received financial counseling and that he is resolving some of his delinquent debts. I understand his contact with creditors was done via telephone, and I believe he has contacted some creditors in an attempt to resolve his medical debts. However, most of the debts have been delinquent for almost four years. Despite being aware of the security implications, he has delayed in addressing them, and the largest debts are not resolved. Applicant has made only one payment of $101 toward repayment of his delinquent debts, which did not occur until June 2017. At this juncture, I am unable to conclude that his financial problems are under control. AG ¶ 20(c) has some applicability. It is too early to conclude that Applicant is adhering to a good-faith effort to repay overdue creditors in SOR ¶ 1.a, 1.b, 1.e, and 1.g because he has only made one payment on the plan with the credit counseling service. He has not provided evidence of any other payments made towards his remaining debts, even a small debt for utilities. AG ¶ 20(d) applies to the debt he resolved in SOR ¶ 1.h. It does not apply to any other debts. Applicant disputed some debts on his credit report and they were removed. He provided documentary evidence regarding those debts. AG ¶ 20(e) applies to the debts in SOR ¶¶ 1.c, 1.f, and 1.i because they are no longer on his credit report. He does not dispute the legitimacy of the debts in SOR ¶¶1.d, 1.j, 1.k, and 1.l, but is waiting for his insurance company to provide him information about his potential share of the amount owed. AG ¶ 20(e) does not apply to these debts. 8 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. 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 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 46 years old. He had periods of unemployment, lack of health insurance, and a divorce that negatively affected his finances. However, he has been steadily employed since January 2015. He was aware of medical debts that he failed to pay while unemployed and failed to take any meaningful action to resolve the delinquent debts until after he received the SOR. Many of these debts are more than four years old. Although, he has a payment plan to address four debts, he has only made one payment, and the largest debts remain unresolved. The evidence is insufficient to conclude that once employed, Applicant began responsibly addressing his delinquencies. He does not have a reliable financial track record. His conduct raises questions about his judgment, reliability, and trustworthiness. Overall, the record evidence leaves me with serious questions and doubts about Applicant’s eligibility and suitability for a security clearance. For all these reasons, I conclude he failed to mitigate the security concerns arising under Guideline F, financial considerations. 9 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.b: Against Applicant Subparagraph 1.c: For Applicant Subparagraphs 1.d-1.e: Against Applicant Subparagraph 1.f: For Applicant Subparagraph 1.g: Against Applicant Subparagraphs 1.h-1.i: For Applicant Subparagraphs 1.j-1.m: 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 security to grant Applicant a security clearance. Eligibility for access to classified information is denied. _____________________________ Carol G. Ricciardello Administrative Judge