1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) REDACTED ) ISCR Case No. 16-00618 ) Applicant for Security Clearance ) Appearances For Government: Nicole A. Smith, Esq., Department Counsel For Applicant: Pro se ______________ Decision ______________ MENDEZ, Francisco, Administrative Judge: Applicant presented sufficient evidence to mitigate security concerns raised by his past financial problems. Clearance is granted. Statement of the Case On June 21, 2016, the Department of Defense (DoD) Consolidated Adjudications Facility (CAF) sent Applicant a Statement of Reasons (SOR) alleging security concerns under the financial considerations guideline. Applicant answered the SOR and requested a hearing (Answer).1 On April 12, 2017, a date mutually agreed to by the parties, the hearing was held. Applicant testified at the hearing and the exhibits offered by the parties were admitted into the administrative record.2 The hearing transcript (Tr.) was received on April 20, 2017, and the record closed on May 5, 2017. 1 The SOR was amended to correct the spelling of Applicant’s name. 2 Government Exhibits 1 – 4; Applicant’s Exhibits A – D. Applicant’s relevancy objection to Exhibit 4 was overruled, but considered in assessing the weight to give the exhibit. Correspondence, the notice of hearing, and case management order are attached to the record as Appellate Exhibits I – III. 2 Findings of Fact3 Applicant, 34, enlisted in the U.S. Marine Corps shortly after September 11, 2001. He served in the military from 2002 to 2009, deploying once to a foreign country for 10 months in support of the Global War on Terror. He held a security clearance while in the military and received an honorable discharge. Applicant married a then-foreign national in 2007. With the benefit of hindsight, Applicant now recognizes that he was reckless with his spending during their relatively short-lived (eight-year) marriage. He bought his ex-wife a car, but when she lost her job in 2009, he was unable to make the monthly payments on the car and pay the other household expenses on his income alone. The car was repossessed and, after it was sold at auction, a deficiency balance of approximately $7,000 remained. Applicant also used a credit card to purchase corrective eye surgery (LASIK) for his ex-wife. When he became unemployed in about May 2011, Applicant was unable to make the minimum monthly payments on the credit card and his other debts. The credit card debt for medical services totaling nearly $6,000 and the $7,000 deficiency balance for the repossessed car are the debts referenced in SOR 1.a and 1.d, and remain unresolved. From approximately May to November 2011, Applicant was unemployed. He was then only able to get low-paying, short-term temporary contract work for the next 18 months before again finding himself unemployed from May to September 2013. He and his ex-wife moved in with her family to save on living expenses. They separated and eventually divorced in May 2015. A month after the divorce, in June 2016, Applicant was hired by his current employer. He had been working for the company for about six months as a temporary contract employee before being hired as a permanent employee. He submitted a security clearance application in connection with his job. He self-reported his major delinquent debt, notably, the credit card debt (SOR 1.a) and the deficiency balance for the repossessed car (SOR 1.d). During a follow-on interview, Applicant discussed his debts and overall financial situation with a security clearance investigator. In 2015, Applicant decided to take control of his finances. He obtained financial counseling through his credit union in conjunction with receiving a debt consolidation loan. He provided documentation from the credit union showing that he repaid the nearly $5,000 debt consolidation loan through 16 monthly payments. (Exhibit D) He was unable to include the debts listed in SOR 1.a and 1.d in his debt consolidation plan with the credit union because of their high outstanding balances. In 2016, Applicant obtained additional financial counseling through a well-known and respected private credit counseling source. He submitted documentation showing that he paid additional debts outside the debt consolidation program. One of these debts was the $1,400 debt referenced in SOR 1.e. (Exhibit A) This was one of the many marital debts that Applicant addressed and resolved after becoming gainfully employed. 3 The information herein is generally extracted from Applicant’s security clearance application (Exhibit 1), security clearance interview (Exhibit 2), Tr. 7, 19-37, and the cited portions of the record. 3 Applicant also addressed his student loans, which became delinquent when he was unemployed. A recent student loan statement reflects a $0 past-due balance. (Exhibit C) Applicant is now eligible for his company’s tuition reimbursement program, which, together with the benefits he receives through the G.I. Bill, will allow him to satisfy his student loan debt. He attended college at night while working full time. As of the hearing, he was on track to earn his associate’s degree in industrial engineering in Spring 2017. Applicant earns a yearly salary of approximately $36,000. He has addressed and resolved all his past-due debts, except for the debts listed in SOR 1.a and 1.d. His credit score has increased to 625, which is generally considered fair. (Exhibit B) Law, Policies, and Regulations This case is decided under Executive Order (E.O.) 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) implemented on June 8, 2017, through Security Executive Agent Directive 4 (SEAD-4).4 “[N]o one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). Instead, persons are only eligible for access to classified information “upon a finding that it is clearly consistent with the national interest” to authorize such access. E.O. 10865 § 2. When evaluating an applicant’s eligibility for a security clearance, an administrative judge must consider the adjudicative guidelines. In addition to brief introductory explanations, the guidelines list potentially disqualifying and mitigating conditions. The guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, an administrative judge applies the guidelines in a commonsense manner, considering all available and reliable information, in arriving at a fair and impartial decision. AG ¶ 2. Department Counsel must present evidence to establish controverted facts alleged in the SOR. Directive ¶ E3.1.14.5 Applicants are responsible for presenting “witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by the applicant or proven . . . and has the ultimate burden of persuasion as to obtaining a favorable clearance decision.” Directive ¶ E3.1.15. Administrative Judges must remain fair and impartial, and conduct all hearings in a timely and orderly manner. Judges must carefully balance the needs for the expedient resolution of a case with the demands of due process. Therefore, an administrative judge 4 ISCR Case No. 02-00305 at 3 (App. Bd. Feb. 12, 2003) (security clearance decisions must be based on current DoD policy and standards). 5 See also ISCR Case No. 15-05565 (App. Bd. Aug. 2, 2017) (favorable decision reversed because Department Counsel failed to present evidence to substantiate allegation that was denied by applicant); ISCR Case No. 14-05986 (App. Bd. May 26, 2017) (rejecting Department Counsel’s argument that an adverse decision can be based solely on non-alleged conduct). 4 will ensure that an applicant: (a) receives fair notice of the issues, (b) has a reasonable opportunity to address those issues, and (c) is not subjected to unfair surprise. Directive, ¶ E3.1.10; ISCR Case No. 12-01266 at 3 (App. Bd. Apr. 4, 2014). In evaluating the evidence, a judge applies a “substantial evidence” standard, which is something less than a preponderance of the evidence. Specifically, substantial evidence is defined as “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion in light of all the contrary evidence in the same record.” Directive, ¶ E3.1.32.1. Any doubt raised by the evidence must be resolved in favor of the national security. AG ¶ 2(b). See also SEAD-4, ¶ E.4. Additionally, the Supreme Court has held that responsible officials making “security clearance determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531. 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. 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 an 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. Analysis Guideline F, Financial Considerations Applicant married at a relatively young age and made imprudent financial decisions while married. He took concrete action to put his financial house in order starting in 2015. He obtained financial counseling, repaid a number of the debts that had become delinquent when he was unemployed and underemployed from 2011 to 2013, and responsibly addressed his student loans. However, his past negative financial history and inability to pay the debts listed in SOR 1.a and 1.d raise the Guideline F security concern, which is explained at 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. . . . Guideline F is not limited to a consideration of whether a person with financial issues might be tempted to compromise classified information or engage in other illegality to pay their debts. It also addresses the extent to which the circumstances giving rise to 5 financial issues cast doubt upon a person’s judgment, self-control, and other qualities that are essential to protecting classified information.6 In assessing Applicant’s case, I considered all the Guideline F disqualifying and mitigating conditions, including the following: AG ¶ 19(a): inability to satisfy debts; AG ¶ 19(c): a history of not meeting financial obligations; 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 . . . 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; and AG ¶ 20(d): the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts. Applicant’s financial problems were, in part, due to his attempt to lavish his former wife with gifts that he could not afford. He turned to credit cards and loans to pay for the gifts. When he became unemployed, he was unable to pay the debts and his financial situation spiraled out of control until he secured full-time employment about two years ago and started taking action to reign in his finances. A security clearance adjudication is not meant to serve as a means to punish an applicant for past poor financial decisions. Furthermore, persons applying for a security clearance are not required to be debt free, nor are they required to resolve all past-due debts simultaneously or even resolve the delinquent debts listed on the SOR first. Instead, they are expected to present documentation to refute, explain, or mitigate security concerns raised by their financial circumstances, to include the accumulation of delinquent debt. They also bear the burden of showing that they manage their present finances in a manner expected of those granted access to classified information.7 Here, Applicant demonstrated that his past financial problems do not cast doubt on his current judgment, reliability, trustworthiness, and ability to handle and safeguard 6 ISCR Case No. 11-05365 at 3 (App. Bd. May. 1, 2012). 7 ISCR Case 07-10310 at 2 (App. Bd. Jul. 30, 2008). 6 classified information. Even before getting hired by his current employer as a permanent employee in June 2016, Applicant obtained financial counseling and started taking the necessary steps to address and resolve his debts. Of note, he repaid a number of his debts through a debt consolidation plan, satisfied other debts outside the plan, and addressed his student loans ($0 past-due balance). He has not incurred other delinquent debt since being hired by his employer. In short, Applicant demonstrated that he currently handles his personal financial obligations in a responsible manner and, though his financial situation may not be perfect, his finances no longer raise a security concern. Overall, the record evidence leaves me with no questions or doubts about Applicant’s present eligibility for a security clearance.8 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 (Financial Considerations): FOR APPLICANT Subparagraphs 1.a – 1.e: For Applicant Conclusion In light of the record evidence, it is clearly consistent with the interest of national security to grant Applicant eligibility for access to classified information. Applicant’s request for a security clearance is granted. ____________________ Francisco Mendez Administrative Judge 8 Specifically, I find that the mitigating conditions listed in AG ¶¶ 20(a) through 20(d) apply and, together with the other favorable record evidence (post-9/11 military service), mitigate the Guideline F concerns.