1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 16-01547 ) Applicant for Security Clearance ) Appearances For Government: David Hayes, Esq., Department Counsel For Applicant: Pro se ______________ Decision ______________ GARCIA, Candace Le’i, Administrative Judge: Applicant mitigated the financial considerations security concerns. Eligibility for access to classified information is granted. Statement of the Case On September 7, 2016, the Department of Defense (DOD) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline F (financial considerations). The action was taken under Executive Order (Exec. Or.) 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).1 1 I decided this case using the AG implemented by DOD on June 8, 2017. However, I also considered this case under the previous AG implemented on September 1, 2006, and my conclusions are the same using either set of AG. 2 Applicant responded to the SOR on November 1, 2016, and requested a hearing before an administrative judge. The case was assigned to me on April 27, 2017. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on May 8, 2017, scheduling the hearing for June 14, 2017. I convened the hearing as scheduled. The Government’s exhibit list was appended to the record as Hearing Exhibit (HE) 1. Government Exhibits (GE) 1 through 3 were admitted in evidence without objection. Applicant testified and submitted Applicant’s Exhibits (AE) A through D, which were admitted in evidence without objection. At Applicant’s request and with no objection from the Government, I left the record open until June 28, 2017. Applicant timely provided documentation that I admitted as AE E through I without objection. DOHA received the hearing transcript (Tr.) on June 27, 2017. Findings of Fact Applicant admitted the allegations in SOR ¶¶ 1.c to 1.g and denied SOR ¶¶ 1.a and 1.b. He is 52 years old and he has worked as a defense contractor for his current employer since April 2015. He served honorably in the U.S. Marine Corps Reserve from 1983 to 1989. He obtained a bachelor’s degree in 2000. He worked in law enforcement for almost 24 years and retired in May 2012. He worked as a postal employee from October 2013 until he obtained his current job. He was married from 1989 to January 2013, and he has two adult children. He provides occasional financial assistance to one child who is in college. He has never held a DOD security clearance.2 The SOR alleges a delinquent student loan of $49,202, a judgment entered against Applicant in 2015 for $2,839, two delinquent debts totaling $4,455, and three medical debts totaling $45. The SOR allegations are established by Applicant’s admissions and the credit reports from May 2015 and March 2016.3 Applicant’s financial problems started when his ex-wife lost her job in 2009. The consequent stress on the marriage led to their divorce in 2013. While his ex-wife obtained a job in 2012 and is currently employed, Applicant stated that she has refused to assist with resolving the outstanding debts incurred during their marriage. He indicated that his ex-wife has filed for bankruptcy.4 The student loan in SOR ¶ 1.a comprises the largest of Applicant’s delinquent debts. Applicant stated that he cosigned a $20,000 loan for his ex-wife after she became unemployed in 2009, to support her desire to pursue a certification in her field. The credit reports reflect an individual loan account of $27,268 opened in December 2007, and an outstanding balance of $49,202 as of the March 2016 credit report. The 2 Applicant’s SOR response; Tr. at 24-62; GE 1; AE A-C. 3 Applicant’s SOR response; Tr. at 24-62; GE 1-3; AE A, D-I. 4 Tr. at 24-62; GE 1; AE A. 3 June 2013 divorce decree provides for the allocation of responsibility between Applicant and his ex-wife in reference to their student loans. The decree states the following: As for debts, there are two student loan debts due and owing to Sally Mae for which both parties are obligated. The loan for Wife’s education totals $37,000.00 and the loan for Husband’s is $18,000.00. Each party owes $27,500.00 on these student loans. The parties should attempt to negotiate down the balances due and owing on the student loans, or at least refinance the interest due. Wife is to pay on her loan. Husband is to pay-off his loan and then contribute an approximate $9,500 to Wife balance for his share of the combined loan balance. As a result of the above terms, Applicant understood that he was to first pay his student loan before paying his responsibility of $9,500 towards his ex-wife’s student loan. Applicant stated that he has been paying $150 monthly towards his student loan since at least 2013, and the balance is currently $15,000.5 Applicant stated that he was unaware his ex-wife had not been paying her student loan until he received the SOR. He was also unaware if his ex-wife was required to pay her student loan during their marriage, but indicated that they agreed she was responsible for it. He stated that he telephoned the creditor on several occasions between June 2013 and early 2017 to attempt to negotiate the balance, as ordered in the divorce decree, but the creditor was either unwilling to do so or was being unresponsive. He intends to hire an attorney to assist him with resolving this student loan, though he has limited financial means to do as he suffered a pay cut after he received the SOR in September 2016. He intends to pay his responsibility of $9,500 towards this student loan, as ordered in the divorce decree, and understands that he bears some responsibility for this student loan.6 SOR ¶ 1.b is a delinquent charge account of $3,681, opened during Applicant’s marriage. While he has not had any contact with the creditor, Applicant stated that he believes this debt should no longer be listed on his credit reports. He stated that the account was closed after he disputed it with the credit reporting agencies in late 2016. Applicant stated that when he recently attempted to log into this account, the account was reflected as closed. He provided an undated account summary for this debt, which reflects the balance information as unavailable. Applicant intends to negotiate and resolve this debt.7 SOR ¶ 1.c is a delinquent telephone account of $774, opened during Applicant’s marriage. Applicant stated that he paid this account in the fall of 2016. He indicated that he still has a telephone account with the same creditor for which he is current, and that 5 Tr. at 24-62; GE 1-3; AE A, G. 6 SOR; Tr. at 24-62; GE 1-3; AE A, G. 7 Tr. at 24-62; GE 1-3; AE F, H, I. 4 the correspondence he received from this creditor does not reflect his agreement to pay the account on a monthly basis.8 SOR ¶¶ 1.d, 1.e, and 1.f consist of three delinquent medical accounts of $15 each with the same creditor, incurred during Applicant’s marriage. All three debts are reported on the May 2015 credit report; only SOR ¶¶ 1.d and 1.e are reported on the March 2016 credit report. Applicant stated that he paid all of his accounts with this creditor, and when he telephoned the original billing company in June 2017, he was told that they could not locate any outstanding accounts belonging to him.9 SOR ¶ 1.g is a $2,839 judgment entered against Applicant in 2015. Applicant stated that he purchased a car for his ex-wife, and the car was totaled at no fault of his ex-wife when she was involved in an accident. Applicant was responsible for the $2,000 balance on the car loan since he did not have gap insurance. He asked his ex-wife to resolve the balance with the settlement money she received, but she did not. Applicant stated that he paid $5 monthly towards the judgment from 2016 until May 2017, at which time he adjusted his pension check deductions to allot $100 monthly directly to this judgment. He provided documentation of his pension check allotment. He stated that the balance of this debt is $1,500.10 After his retirement in May 2012, Applicant supported himself with a monthly pension of $5,000. From June 2013 until he obtained work as a postal employee in October 2013, he supported himself with only half of that monthly pension, as the divorce decree ordered the other half to his ex-wife. He then suffered a pay cut at his current job in September 2016, after receipt of the SOR. He has not received financial counseling. His budget as of June 2017 reflects a monthly net remainder of $628. He intends to use this money to continue resolving his debts.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 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 8 Tr. at 24-62; GE 1-3; AE F. 9 Tr. at 24-62; GE 1-3; AE E. 10 Tr. at 24-62; GE 1-3; AE D. 11 Tr. at 24-62; GE 1; AE A, G. 5 to AG ¶ 2(a), 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 Exec. Or. 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 Exec. Or. 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 6 security concern insofar as it may result from criminal activity, including espionage. The guideline notes several conditions that could raise security concerns under AG ¶ 19. The following are potentially applicable in this case: (a) inability to satisfy debts; and (c) a history of not meeting financial obligations. Applicant was unable to pay his debts. The evidence is sufficient to raise AG ¶¶ 19(a) and 19(c) as disqualifying conditions. 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; (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. Since Applicant’s divorce in 2013, Applicant has made a good-faith effort to resolve his delinquent debts. Applicant stated that he disputed SOR ¶ 1.b and paid SOR ¶ 1.c in late 2016. He stated that when he attempted to log into his account for SOR ¶ 1.b, the account was reflected as closed, which he believes occurred as a result of his dispute. To corroborate his claim, he provided an undated account summary for SOR ¶ 1.b, which reflects an unavailable balance. He also stated that he has a telephone account with the same creditor as SOR ¶ 1.c for which he is current, and the correspondence he received regarding this debt does not reflect his agreement to pay the account monthly. He intends to continue to negotiate to resolve SOR ¶ 1.b, and remain current on his account with SOR ¶ 1.c. 7 The minor medical debt in SOR ¶ 1.f is no longer reported on Applicant’s March 2016 credit report, which corroborates Applicant’s testimony that he paid this debt. Applicant stated that he also resolved the other two minor medical debts in SOR ¶¶ 1.d and 1.e, and was told when he recently contacted the original billing company that they could not locate any outstanding accounts belonging to him. Applicant stated that he paid $5 monthly towards the judgment in SOR ¶ 1.g from 2016 until May 2017, and the current balance is $1,500. He provided documentation to corroborate his claim that he adjusted his pension check deductions in May 2017 to allot $100 monthly towards this judgment. Applicant provided a copy of his June 2013 divorce decree to corroborate his testimony that while he bears some responsibility for the student loan in SOR ¶ 1.a, he understood that he was to first pay his student loan before paying his responsibility of $9,500 towards his ex-wife’s student loan. He stated that he has been paying $150 monthly towards his student loan since at least 2013, and the balance is currently $15,000. He stated that he telephoned the creditor on several occasions between June 2013 and early 2017 to attempt to negotiate the balance of SOR ¶ 1.a, as ordered in the divorce decree, but the creditor was either unwilling to do so or was being unresponsive. He intends to hire an attorney to assist him with resolving this student loan, and to pay his responsibility of $9,500 towards this student loan. A security clearance adjudication is an evaluation of an individual’s judgment, reliability, and trustworthiness. It is not a debt-collection procedure. ISCR Case No. 09- 02160 (App. Bd. Jun. 21, 2010. The adjudicative guidelines do not require that an individual make payments on all delinquent debts simultaneously, pay the debts alleged in the SOR first, or establish resolution of ever debt alleged in the SOR. He or she need only establish a plan to resolve financial problems and take significant actions to implement the plan. See ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008). Applicant has not incurred additional delinquent debts. While Applicant has unresolved SOR debts, he has provided proof to substantiate the basis of his dispute concerning SOR ¶ 1.a, and he has demonstrated a good-faith effort and has the means to continue to resolve his remaining debts. AG ¶¶ 20(a), 20(b), 20(d), and 20(e) are applicable. 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 8 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. While Applicant has unresolved SOR debts, there is sufficient evidence that Applicant is committed to resolving them. Overall, the record evidence leaves me without questions and doubts as to Applicant’s eligibility and suitability for a security clearance. I conclude Applicant mitigated 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: For Applicant Subparagraphs 1.a - 1.g: For Applicant Conclusion In light of all of the circumstances presented by the record in this case, it is clearly consistent with the national interest to grant Applicant eligibility for a security clearance. Eligibility for access to classified information is granted. ________________________ Candace Le’i Garcia Administrative Judge