1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) [REDACTED] ) ISCR Case No. 16-00669 ) Applicant for Security Clearance ) Appearances For Government: Chris Morin, Esq., Department Counsel For Applicant: Pro se ______________ Decision ______________ MARINE, Gina L., 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 (SCA) on June 3, 2015. On June 13, 2016, the Department of Defense Consolidated Adjudications Facility (DOD CAF) sent him a Statement of Reasons (SOR) alleging security concerns under Guideline F. The DOD CAF acted 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) implemented by the DOD on September 1, 2006. Applicant answered the SOR on September 21, 2016, and requested a decision on the record without a hearing. On October 12, 2016, Department Counsel submitted the Government’s written case and sent a complete copy of the file of relevant material (FORM) to Applicant, including documents identified as Items 1 through 4. He was given an opportunity to file objections and submit material to refute, extenuate, or mitigate the Government’s evidence. He received the FORM on October 18, 2016, and did not respond. Items 1 and 2 are the pleadings in the case. Items 3 and 4 are admitted into evidence. The case was assigned to me on August 23, 2017. 2 On June 8, 2017, the DOD implemented new AG.1 Accordingly, I have applied the June 2017 AG.2 However, because the September 2006 AG were in effect on the date the FORM was completed, I have also considered the September 2006 AG. I conclude that my decision would have been the same under either version. Findings of Fact3 Applicant, age 59, married his second wife in August 2010. He divorced his first wife of 21 years in 2005. He has four adult children. Applicant received an associate’s degree in 1988. He has been steadily employed full time as a marine electrician from at least March 2006 through June 2015. Prior to that, he had been employed as a motor inspector by the same company for over 23 years. Applicant failed to file his state income tax return and pay his state income taxes of $1,500 for tax year 2014 (SOR ¶¶ 1.a and 1.b). He has seven other delinquent debts totaling $8,352 (SOR ¶¶ 1.c through 1.i).4 In his SOR Answer, Applicant denied five of those seven debts, without explanation. Applicant failed to file his 2014 state income tax return due to “neglect.”5 The record is silent as to why he failed to pay his 2014 state income taxes or his other delinquent debts. The record is also silent as to whether Applicant has sought out or received any financial counseling. In the FORM, the Government argued that Applicant had not provided any documentary evidence to establish mitigation, and advised him of the opportunity to do so in his response to the FORM. Applicant did not respond to the FORM. Policies “[N]o one has a ‘right’ to a security clearance.”6 As Commander in Chief, the President has the authority to “control access to information bearing on national security 1 On December 10, 2016, the Security Executive Agent issued Directive 4 (SEAD-4), establishing a “single, common adjudicative criteria for all covered individuals who require initial or continued eligibility for access to classified information or eligibility to hold a sensitive position.” (SEAD-4 ¶ B, Purpose). The SEAD-4 became effective on June 8, 2017 (SEAD-4 ¶ F, Effective Date). The National Security Adjudicative Guidelines (AG), which are found at Appendix A to SEAD-4, apply to determine eligibility for initial or continued access to classified national security information. (SEAD-4 ¶ C, Applicability). 2 ISCR Case No. 02-00305 at 3 (App. Bd. Feb. 12, 2003) (security clearance decisions must be based on current DOD policy and standards). 3 Unless otherwise indicated by citation to another part of the record, I extracted these facts from Applicant’s SOR answer (Item 2) and his SCA (Item 3). 4 GE 4. 5 GE 3 at p. 39. 6 Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). 3 and to determine whether an individual is sufficiently trustworthy to have access to such information.”7 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.”8 Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the AG. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, an administrative judge 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.”9 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.10 “Substantial evidence” is “more than a scintilla but less than a preponderance.”11 The guidelines presume a nexus or rational connection between proven conduct under any of the criteria listed therein and an applicant’s security suitability.12 Once the Government establishes a disqualifying condition by substantial evidence, the burden shifts to the applicant to rebut, explain, 7 Egan at 527. 8 EO 10865 § 2. 9 EO 10865 § 7. 10 See Egan, 484 U.S. at 531. 11 See v. Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994). 12 ISCR Case No. 92-1106 at 3, 1993 WL 545051 at *3 (App. Bd. Oct. 7, 1993). 4 extenuate, or mitigate the facts.13 An applicant has the burden of proving a mitigating condition, and the burden of disproving it never shifts to the Government.14 An applicant “has the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue his security clearance.”15 “[S]ecurity clearance determinations should err, if they must, on the side of denials.”16 Analysis The concern under Guideline F (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 . . . . This concern is broader than the possibility that a person might knowingly compromise classified information to raise money. It encompasses concerns about a person’s self-control, judgment, and other qualities essential to protecting classified information. A person who is financially irresponsible may also be irresponsible, unconcerned, or negligent in handling and safeguarding classified information.17 Furthermore, “[f]ailure to file income tax returns suggests that an applicant has a problem with complying with well-established government rules and systems. Voluntary compliance with such rules and systems is essential for protecting classified information.”18 Applicant’s admissions and the credit report establish three disqualifying conditions under this guideline.19 He has not provided evidence to support any of the 13 Directive ¶ E3.1.15. 14 ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 2005). 15 ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002). 16 Egan, 484 U.S. at 531; See also AG ¶ 2(b). 17 ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012). 18 ISCR Case No. 01-05340 at 3 (App. Bd. Dec. 20, 2002). 19 AG ¶ 19(a) (inability to satisfy debts); AG ¶ 19(c) (a history of not meeting financial obligations); and AG ¶ 19(f) (failure to file or fraudulently filing annual Federal, state, or local income tax returns or failure to pay annual Federal, state, or local income tax as required). 5 potentially applicable mitigating factors.20 Therefore, I conclude that Applicant has not mitigated the security concerns raised by his failure to file his state income tax return and to pay his state income taxes and other delinquent debts. In reaching this decision, I have also considered the whole-person factors at AG ¶ 2(d).21 Formal Findings I make the following formal findings on the allegations in the SOR: Paragraph 1, Guideline F (Financial Considerations): AGAINST APPLICANT Subparagraphs 1.a – 1.i: Against Applicant Conclusion I conclude that it is not clearly consistent with the national interest to continue Applicant’s eligibility for access to classified information. Clearance is denied. Gina L. Marine Administrative Judge 20 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); 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); and AG ¶ 20 (g) (the individual has made arrangements with the appropriate tax authority to file or pay the amount owed and is in compliance with those arrangements). 21 (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.