1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) --- ) ISCR Case No. 16-01626 ) Applicant for Security Clearance ) Appearances For Government: Nicole A. Smith, Esquire, Department Counsel For Applicant: Pro se ______________ Decision ______________ GALES, Robert Robinson, Administrative Judge: Applicant mitigated the security concerns regarding foreign influence and financial considerations. Eligibility for a security clearance and access to classified information is granted. Statement of the Case On May 21, 2014, Applicant applied for a security clearance and submitted an Electronic Questionnaire for Investigations Processing (e-QIP) version of a Security Clearance Application.1 On July 27, 2016, the Department of Defense (DOD) Consolidated Adjudications Facility (CAF) issued a Statement of Reasons (SOR) to him, under Executive Order 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended and modified; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended and modified (Directive); and the Adjudicative Guidelines for Determining Eligibility For Access to Classified Information (December 29, 2005) applicable to all adjudications and other determinations made under the Directive, effective September 1, 2006.2 The SOR 1 Item 3 (e-QIP, dated May 21, 2014). 2 alleged security concerns under Guideline B (Foreign Influence) and Guideline F (Financial Considerations) and detailed reasons why the DOD adjudicators were unable to find that it is clearly consistent with the national interest to grant or continue a security clearance for Applicant. The SOR recommended referral to an administrative judge to determine whether a clearance should be granted, continued, denied, or revoked. It is unclear when Applicant received the SOR, as there is no receipt in the case file. In a sworn statement, dated August 15, 2016, Applicant responded to the SOR and elected to have his case decided on the written record in lieu of a hearing.3 A complete copy of the Government’s file of relevant material (FORM) was mailed to Applicant by the Defense Office of Hearings and Appeals (DOHA) on September 16, 2016, and he was afforded an opportunity, within a period of 30 days after receipt of the FORM, to file objections and submit material in refutation, extenuation, or mitigation. In addition to the FORM, Applicant was furnished a copy of the Directive as well as the previous Adjudicative Guidelines applicable to his case. Applicant received the FORM on September 22, 2016. Applicant’s response was due on October 22, 2016, but to date, no response has been received. The case was assigned to me on June 2, 2017. Rulings on Procedure Department Counsel requested that I take administrative notice of certain enumerated facts pertaining to the Republic of the Philippines (Philippines) appearing in four U.S. Government publications which were identified, but only fragments of extracts of those publications were attached to the request. Facts are proper for administrative notice when they are easily verifiable by an authorized source and relevant and material to the case. In this instance, the Government relied on source information regarding the Philippines in publications of the U.S. Department of State.4 After weighing the reliability of the source documentation and assessing the relevancy and materiality of the facts proposed by the Government, pursuant to Rule 201, Federal Rules of Evidence, I take administrative notice of certain facts,5 as set forth below under the Philippines subsection. 2 Effective June 8, 2017, by Directive 4 of the Security Executive Agent (SEAD 4), dated December 10, 2016, National Security Adjudicative Guidelines (AG) for all covered individuals who require initial or continued eligibility for access to classified information or eligibility to hold a sensitive position, were established to supersede all previously issued national security adjudicative criteria or guidelines. Accordingly, those guidelines previously implemented on September 1, 2006, under which this security clearance review case was initiated, no longer apply. In comparing the two versions, there is no substantial difference that might have a negative effect on Applicant in this case. 3 Item 2 (Answer to the SOR, dated August 15, 2016). 4 U.S. Department of State, Bureau of Democracy, Human Rights, and Labor, Country Reports on Human Rights Practices for 2014 - Philippines, undated; U.S. Department of State, Bureau of Consular Affairs, Country Information: Philippines, dated September 16, 2015; U.S. Department of State, Bureau of Counterterrorism, East Asia and Pacific Overview, Country Reports on Terrorism, undated; U.S. Department of State, Bureau of Consular Affairs, Philippines Travel Warning, dated October 21, 2015. 5 Administrative or official notice is the appropriate type of notice used for administrative proceedings. See McLeod v. Immigration and Naturalization Service, 802 F.2d 89, 93 n.4 (3d Cir. 1986); ISCR Case No. 05-11292 at 4 n.1 (App. Bd. Apr. 12, 2007); ISCR Case No. 02-24875 at 2 (App. Bd. Oct. 12, 2006) (citing ISCR Case No. 02-18668 at 3 (App. Bd. Feb. 10, 2004)). The most common basis for administrative notice at ISCR proceedings is to notice facts 3 Findings of Fact In his Answer to the SOR, Applicant admitted, with comments, all of the factual allegations pertaining to foreign influence (¶¶ 1.a. and 1.b.) and financial considerations (¶¶ 2.a. through 2.c.) of the SOR. Applicant’s admissions and comments are incorporated herein as findings of fact. After a complete and thorough review of the evidence in the record, and upon due consideration of same, I make the following additional findings of fact: Applicant is a 55-year-old employee of a defense contractor. He has been an overseas satellite technician and site lead with the company since September 2004. He is a June 1980 high school graduate. Applicant enlisted in the U.S. Air Force in December 1979, and he served on active duty until October 2004, at which time he was honorably retired as a technical sergeant (E-6). He was granted a top-secret security clearance in June 2009. Applicant was married in January 1982 and divorced in November 1992. He has one son from that marriage (born in 1985). Applicant remarried in May 2008. He has a daughter (born in November 2013) from his current marriage. His wife also has a son (born in January 2003). Foreign Influence Applicant is a native-born U.S. citizen whose parents and siblings are native-born U.S. citizens and residents. His son was born overseas while Applicant was stationed overseas, but he is a U.S. citizen as well, having also served in the U.S. military. Applicant’s wife was born in the Philippines of Philippine citizen-residents, and although she and Applicant are married, he is unable to have her permanently join him at his overseas military station until she is issued a Permanent Resident Card (Green Card). He is currently in the process of obtaining a “family-join visa” for his wife and children to join him at his overseas station, but it requires coordination from his sponsor company and the immigration office of the nation where he is located. His wife’s son (Applicant’s stepson) is a Philippine citizen-resident, and Applicant’s daughter is a dual U.S.-Philippine resident. Both children reside with their mother. His wife’s relationship with her parents is distant and strained, and she has not spoken with, or seen, them since 2010 or 2011. Applicant’s wife was an entertainer, but she now raises pigs and rents stalls for that purpose. Applicant sends her rent money. Applicant speaks with his wife several times per week by telephone, and because of their ages, he may speak with the children by telephone between weekly and monthly. Applicant’s wife has had no relationship with the Philippine government or its military or intelligence services. Likewise, there is no evidence that she has ever been approached or threatened by a terrorist or anyone affiliated with the Philippine government, its military, or intelligence services. Applicant that are either well known or from government reports. See Stein, Administrative Law, Section 25.01 (Bender & Co. 2006) (listing fifteen types of facts for administrative notice). Requests for administrative notice may utilize authoritative information or sources from the internet. See, e.g. Hamdan v. Rumsfeld, 548 U.S. 557 (2006) (citing internet sources for numerous documents). In this instance, although Department Counsel has selected only certain pages of facts appearing in the identified publications, I have not limited myself to only those facts, but have considered the publications in their entirety. 4 noted that he is “still a patriot and will defend our country no matter of the country [his] wife is from.” The Philippines The Philippines is a multi-party constitutional republic with a bicameral legislature. The United States recognized the Philippines as an independent state and established relations in 1946. The United States has designated the Philippines as a major non-NATO ally, and there are close and abiding security ties between the two nations, based on strong historical and cultural links and a shared commitment to democracy and human rights. The Manila Declaration of 2011 reaffirmed the 1951 U.S.-Philippines Mutual Defense Treaty as the foundation for a robust, balanced, and responsive security partnership. The United States is among the Philippines’ top trading partners, and it traditionally has been the Philippines’ largest foreign investor. The United States and the Philippines have a bilateral trade and investment framework and a tax treaty. Philippine imports from the United States include raw and semi-processed materials for the manufacture of semiconductors, electronics and electrical machinery, transport equipment, cereals, and cereal preparations. Philippine national elections have been generally free and fair, but independent observers have noted widespread vote buying, and dynastic political families have monopolized elective offices at the national and local level. The most significant human rights problems are extrajudicial killings, enforced disappearances undertaken by security forces and vigilante groups, a weak and overburdened criminal justice system, widespread official corruption and abuse of power, and impunity from prosecution for human rights abuses. Other human rights problems include prisoner and detainee torture and abuse by security forces, violence and harassment against human rights activists by security forces, warrantless arrests, lengthy pretrial detentions, poor prison conditions, killings and harassment of journalists, violence against women, abuse and sexual exploitation of children, and trafficking in persons. Muslim separatists, communist insurgencies, and terrorist organizations are active in the Philippines: and they have killed Philippine security forces, local government officials, and other civilians. Through joint U.S. – Philippine cooperation, the ability of these various groups to operate in the Philippines has been constrained but not eliminated. Counterterrorism cooperation between the Philippines and the United States continued to improve in 2014. Terrorist groups were unable to conduct major attacks compared to previous years due to continuous pressure from Philippine counterterrorism and law enforcement efforts. Nevertheless, in 2014, there were numerous attacks with small arms and improvised explosive devices, kidnappings for ransom, and extortion efforts by suspected terrorist groups. Gangs of kidnappers have targeted foreigners, including Filipino-Americans. The U.S. State Department has recommended that all U.S. citizens defer non-essential travel to certain areas in the Philippines due to the high threat of kidnappings in those areas, and other violent activities of terrorist and insurgent groups. The Philippine government has recognized the potential threat posed by radicalized Philippine citizens supporting the Islamic State in Iraq and the Levant (ISIL). 5 In July 2014, the Philippine president’s anti-terrorism council convened an ad hoc emergency technical working group focusing on persons of interest. The working group tightened passport issuance, increased immigration screening, and increased monitoring of ISIL-related activity. There is no evidence to reflect that the Philippines engages in economic espionage or military intelligence activity directed toward the United States. Financial Considerations6 The SOR identified two delinquent debts totaling $447 that had been placed for collection, as reflected by his March 2015 credit report. In addition, there is an allegation that Applicant failed to file his federal income tax returns for the tax years 2004 through 2013 as required. Applicant reported in his e-QIP that he had not filed his federal income tax returns for those tax years (SOR ¶ 2.a.) and that the Internal Revenue Service (IRS) had placed a lien on his home and bank accounts. He explained his situation to the IRS – that he was working overseas and had not yet returned to the United States permanently – and the IRS removed the tax lien. Applicant contended that the IRS indicated that he has two benefits while working overseas: (1) he is not required to file his income tax returns until he returns to the United States permanently, and then, he has two months thereafter to file his returns; and (2) there is an overseas tax exemption up to a certain amount. Although he had not yet returned to the United States, the IRS suggested that it might be in his best interest to file his returns as soon as possible.7 Applicant failed to submit documents to support his contentions that, according to the IRS, he is entitled to filing extensions as a taxpayer who is working overseas. There are two medical accounts with unpaid balances of $242 (SOR ¶ 2.b.) and $205 (SOR ¶ 2.c.) that were placed for collection. Applicant thought both charges had previously been paid, but he was apparently in error. On August 10, 2016, Applicant paid the creditor $448.53 to resolve both delinquencies.8 The accounts have been resolved. Applicant did not submit a Personal Financial Statement to reflect his net monthly income; monthly expenses; or any monthly remainder that might be available for discretionary spending or savings. There is no evidence of a budget. There is no evidence of any “financial” counseling in the traditional sense, but there is evidence that Applicant received guidance from the IRS with regard to the filing of his federal income tax returns. Nevertheless, there is also no evidence of any other delinquent accounts as Applicant 6 General source information pertaining to the financial accounts discussed below can be found in the following exhibits: Item 3, supra note 31; Item 2, supra note 3; Item 5 (Equifax Credit Report, dated March 31, 2016); Item 4 (Personal Subject Interview, dated January 31, 2016). 7 Item 2, supra note 3. 8 Transaction History, dated August 10, 2016, Attachment C to Applicant’s Response to the FORM; Equifax Credit Report Extracts, undated, Attachment B to Applicant’s Response to the FORM. 6 has resolved his two minor previously delinquent accounts. While there remains some question in the mind of the Government as to his requirements for filing his federal income tax returns because he is overseas, given the anticipated income tax exemptions, there is no evidence of any other income tax deficiencies. It appears that Applicant’s finances are under control. Policies The U.S. Supreme Court has recognized the substantial discretion of the Executive Branch in regulating access to information pertaining to national security emphasizing, “no one has a ‘right’ to a security clearance.”9 As Commander in Chief, the President has the authority to control access to information bearing on national security and to determine whether an individual is sufficiently trustworthy to have access to such information. The President has authorized the Secretary of Defense or his designee to grant an applicant eligibility for access to classified information “only upon a finding that it is clearly consistent with the national interest to do so.”10 When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the guidelines in SEAD 4. In addition to brief introductory explanations for each guideline, the guidelines list potentially disqualifying conditions and mitigating conditions, which are used in evaluating an applicant’s eligibility for access to classified information. An administrative judge need not view the guidelines as inflexible, ironclad rules of law. Instead, acknowledging 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. 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 meaningful decision. In the decision-making process, facts must be established by “substantial evidence.”11 The Government initially has the burden of producing evidence to establish a potentially disqualifying condition under the Directive, and has the burden of establishing controverted facts alleged in the SOR. Once the Government has produced substantial evidence of a disqualifying condition, under Directive ¶ E3.1.15, the applicant has the burden of persuasion to present evidence in refutation, explanation, extenuation 9 Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). 10 Exec. Or. 10865, Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960), as amended and modified. 11 “Substantial evidence [is] such relevant evidence as a reasonable mind might accept as adequate to support a conclusion in light of all contrary evidence in the record.” ISCR Case No. 04-11463 at 2 (App. Bd. Aug. 4, 2006) (citing Directive ¶ E3.1.32.1). “Substantial evidence” is “more than a scintilla but less than a preponderance.” See v. Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994). 7 or mitigation, sufficient to overcome the doubts raised by the Government’s case. The burden of disproving a mitigating condition never shifts to the Government.12 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 as well. It is because of this special relationship that the Government must be able to repose a high degree of trust and confidence in those 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 as to potential, rather than actual, risk of compromise of classified information. Furthermore, “security clearance determinations should err, if they must, on the side of denials.”13 Clearance decisions must be “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.”14 Thus, nothing in this decision should be construed to suggest that I have based this decision, in whole or in part, on any express or implied determination as to Applicant’s allegiance, loyalty, or patriotism. It is merely an indication the Applicant has or has not met the strict guidelines the President and the Secretary of Defense have established for issuing a clearance. 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 avoided drawing inferences grounded on mere speculation or conjecture. Analysis Guideline B, Foreign Influence The security concern relating to the guideline for Foreign Influence is set out in AG ¶ 6. Foreign contacts and interests, including, but not limited to, business, financial, and property interests, are a national security concern if they result in divided allegiance. They may also be a national security concern if they create circumstances in which the individual may be manipulated or induced to help a foreign person, group, organization, or government in a way inconsistent with U.S. interests or otherwise made vulnerable to pressure or coercion by any foreign interest. Assessment of foreign contacts and interests should consider the country in which the foreign contact or interest is located, including, but not limited to, considerations such as whether it is known to target U.S. citizens to obtain classified or sensitive information or is associated with a risk of terrorism. 12 See ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 2005). 13 Egan, 484 U.S. at 531. 14 See Exec. Or. 10865 § 7. 8 The guideline notes several conditions that could raise security concerns under AG ¶ 7: (a) contact, regardless of method, with a foreign family member, business or professional associate, friend, or other person who is a citizen of or resident in a foreign country if that contact creates a heightened risk of foreign exploitation, inducement, manipulation, pressure, or coercion; and (b) connections to a foreign person, group, government, or country that create a potential conflict of interest between the individual's obligation to protect classified or sensitive information or technology and the individual's desire to help a foreign person, group, or country by providing that information or technology. Applicant’s wife, young daughter, and teenage stepson reside in the Philippines. When foreign family ties are involved, the totality of an applicant’s family ties to a foreign country as well as each individual family member must be analyzed.15 If only one relative lives in a foreign country, and an applicant has contacts with that relative, this factor alone is sufficient to create the potential for foreign influence and could potentially result in the compromise of classified information.16 The mere possession of close family ties with a person in a foreign country is not, as a matter of law, disqualifying under Guideline B. Moreover, Guideline B is not limited to countries hostile to the United States.17 Furthermore, “even friendly countries can have profound disagreements with the United States over matters they view as important to their vital interests or national security.”18 Friendly nations have engaged in espionage against the United States, especially in the economic, scientific, and technical fields. Nevertheless, the nature of a nation’s government, its relationship with the United States, and its human rights record are relevant in assessing the likelihood that an applicant’s family members are vulnerable to government coercion. The risk of coercion, persuasion, or duress is significantly greater if the foreign country has an authoritarian government, a family member is associated with or dependent upon the government, or the country is known to conduct intelligence operations against the United States. In considering the nature of the government, an administrative judge must also consider any terrorist activity in the country at issue.19 15 ISCR Case No. 01-22693 at 7 (App. Bd. Sep. 22, 2003). 16 See ISCR Case No. 03-02382 at 5 (App. Bd. Feb. 15, 2006); ISCR Case No. 99-0424 at 12 (App. Bd. Feb. 8, 2001). 17 ISCR Case No. 02-11570 at 5 (App. Bd. May 19, 2004) (“The United States has a compelling interest in protecting and safeguarding classified information from any person, organization, or country that is not authorized to have access to it, regardless of whether that person, organization, or country has interests inimical to those of the United States.”). 18 ISCR Case No. 00-00317 at 6 (App. Bd. Mar. 29, 2002). 19 See ISCR Case No. 02-26130 at 3 (App. Bd. Dec. 7, 2006). 9 In this instance, as noted above, there is no evidence to reflect that the Philippines engages in economic espionage or military intelligence activity directed toward the United States, but there is evidence of terrorist activities within areas of the country. The activities of those insurgent and terrorist groups, the risks of kidnappings by gangs, and the danger of radicalized ISIL sympathizers in the Philippines are sufficient to establish a “heightened risk” – a risk that is greater than the normal risk inherent in having a family member living under a foreign government. AG ¶¶ 7(a) and 7(b) have been established. The guideline also includes examples of conditions that could mitigate security concerns arising from foreign influence under AG ¶ 8: (a) the nature of the relationships with foreign persons, the country in which these persons are located, or the positions or activities of those persons in that country are such that it is unlikely the individual will be placed in a position of having to choose between the interests of a foreign individual, group, organization, or government and the interests of the United States; and (b) there is no conflict of interest, either because the individual's sense of loyalty or obligation to the foreign person, or allegiance to the group, government, or country is so minimal, or the individual has such deep and longstanding relationships and loyalties in the United States, that the individual can be expected to resolve any conflict of interest in favor of the U.S. interest. AG ¶¶ 8(a) and 8(b) apply. Applicant’s ties to the United States run deep. He was born in the United States of native-born U.S. citizens, attended school in the United States, and was honorably retired from service with the U.S. Air Force. He has held a top-secret security clearance since June 2009. His son served in the U.S. military. Applicant’s only relationship with the Philippines is through his wife, daughter, and stepson. He sends her rent money. He is currently in the process of obtaining a “family- join visa” for his wife and children to join him at his overseas station, but it requires coordination from his sponsor company and the immigration office of the nation where he is located. Applicant’s wife has had no relationship with the Philippine government or its military or intelligence services. There is no evidence that she has ever been approached or threatened by a terrorist or anyone affiliated with the Philippine government, its military, or intelligence services. I am persuaded that Applicant’s loyalty to the United States is steadfast and undivided, and that he has “such deep and longstanding relationships and loyalties in the United States, that [he] can be expected to resolve any conflict of interest in favor of the U.S. interest.” Applicant noted that he is “still a patriot and will defend our country no matter of the country [his] wife is from.” The Government has submitted facts regarding the presence of insurgent groups, terrorists, and radicalized ISIL sympathizers operating within the borders of the Philippines that might heighten the risk for Applicant’s wife, daughter, and stepson residing in the Philippines. In such a situation, the Philippines and all its citizens become potential victims of terrorism. Through joint U.S. – Philippine cooperation, the ability of 10 these various groups to operate in the Philippines has been constrained but not eliminated. Counterterrorism cooperation between the Philippines and the United States continued to improve in 2014. Terrorist groups were unable to conduct major attacks compared to previous years due to continuous pressure from Philippine counterterrorism and law enforcement efforts. The terrorism situation is not unlike the situations in other countries that have seen acts of terrorism – France, United Kingdom, Germany, and Belgium – and yet, the “heightened risk” in those countries is considered reduced. In fact, just as U.S. law enforcement and the DOD strives to protect U.S. citizens from terrorists, incidents such as those in Fort Hood, Texas; San Bernardino, California; New York City, New York; and Dallas, Texas, have not raised the banner of “heightened risk” over the United States to suggest that it is unsafe to have family members reside here. With relatively low profile family members (a wife who rents pig stalls, a young daughter, and a teenage stepson), there is a very low potential of forcing Applicant to choose between the interests of the United States and those of the Philippines, a terrorist organization, or those family members. Guideline F, Financial Considerations The security concern relating to the guideline 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. The guideline notes several conditions that could raise security concerns under AG ¶ 19: (a) “inability to satisfy debts;” (b) “unwillingness to satisfy debts regardless of the ability to do so;” (c) “a history of not meeting financial obligations;” (e) “consistent spending beyond one's means or frivolous or irresponsible spending, which may be indicated by excessive indebtedness, significant negative cash flow, a history of late payments or of non-payment, or other negative financial indicators;” and (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.” The federal income tax return filing deadline for Applicant while he is serving in his overseas station in support of U.S. military operations which have not been disclosed in this security clearance review process is as follows: 11 [Applicant’s filing deadline for filing his income tax return, paying his tax, claiming a refund, and taking other actions with the IRS is extended in two steps] is extended for 180 days after the later of the following. [First] The last day [he was] in a combat zone, [has] qualifying service outside of the combat zone, or serve[d] in a contingency operation (or the last day the area qualifies as a combat zone or the operation qualifies as a contingency operation). . . . Second, in addition to the 180 days, [his] deadline is extended by the number of days that were left for [him] to take the action with the IRS when [he] entered a combat zone (or began performing qualifying service outside the combat zone) or began serving in a contingency operation. If [he] entered the combat zone or began serving in the contingency operation before the period of time to take the action began, [his] deadline is extended by the entire period of time [he] ha[s] to take the action. For example, [if he] had 3 ½ months (January 1– April 18, 2016) to file [his] 2015 tax return. Any days of this 3 ½ month period that were left when [he] entered the combat zone (or the entire 3 ½ months if [he] entered the combat zone by January 1, 2016) are added to the 180 days when determining the last day allowed for filing [his] 2015 tax return. Example 1. Captain Margaret Jones, a resident of Maryland, entered Saudi Arabia on December 1, 2014. She remained there through March 31, 2016, when she departed for the United States. She was not injured and did not return to the combat zone. The deadlines for filing Captain Jones' 2014, 2015, and 2016 returns are figured as follows. The 2014 tax return. The deadline is January 10, 2017. This deadline is 285 days (180 plus 105) after Captain Jones' last day in the combat zone (March 31, 2016). The 105 additional days are the number of days in the 3 ½ month filing period that were left when she entered the combat zone (January 1 – April 15, 2015).20 These extensions apply to civilians acting under the directions of U.S. Armed Forces in a combat zone.21 Applicant contended that he was exempt from the normal income tax return filing guidelines that are generally in force for civilians residing in the United States. The Government offered no evidence that he was not exempt from those guidelines. While Applicant failed to submit documentation from the IRS to confirm the information they furnished him, and he repeated, the fact that the IRS promptly withdrew and canceled the tax lien it had previously filed, gives substantial weight to his contentions. His two minor medical delinquencies, both of which he had overlooked and thought he had paid, without substantially more, fail to rise to the level of an inability to satisfy debts or an unwillingness to satisfy debts regardless of the ability to do so. AG ¶¶ 19(a), 19(b), 19(e), and 19(f) were not established. AG ¶ 19(c) is partially established. 20 See IRS Publication 3, Armed Forces Tax Guide, at p. 29 (2016), https://www.irs.gov/pub/irs-pdf/p3.pdf. 21 See IRS Publication 3, Armed Forces Tax Guide, at p. 28 (2016), https://www.irs.gov/pub/irs-pdf/p3.pdf. See also IRS Extension of Deadlines – Combat Zone Service, Question and Answer 16, https://www.irs.gov/individuals/military/extension-of-deadlines-combat-zone-service. 12 The guideline also includes examples of conditions that could mitigate security concerns arising from financial difficulties under 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;” (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;” 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;” (d) “the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts;”22 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.” I have concluded that AG ¶¶ 20(a) and 20(d) apply, and AG ¶ 20(c) partially applies. AG ¶¶ 20(b) and 20(e) do not apply. Applicant had two minor delinquent accounts, totaling $448.53. Once he determined they were delinquent, he promptly paid them, and they were resolved. Those were the only delinquent accounts that Applicant had, and they were not the result of circumstances that were beyond his control. There is no evidence of any other financial delinquencies. Applicant’s situation with the IRS regarding the filing of his federal income tax returns arose under unusual circumstances. He spoke with an IRS representative and received guidance on his responsibilities with respect to the filing of his federal income tax returns while serving overseas. Applicant has a good employment history as well as a good financial history. Applicant continues to adhere to a good-faith effort to pay his creditors. Clearance decisions are aimed at evaluating an applicant’s judgment, reliability, and trustworthiness. They are not a debt-collection procedure. The guidelines do not require an applicant to establish resolution of each and every debt alleged in the SOR. An applicant needs only to establish a plan to resolve financial problems and take significant actions to implement the plan. There is no requirement that an applicant immediately resolve or make payments on all delinquent debts simultaneously, nor is 22 The Appeal Board has previously explained what constitutes a good-faith effort to repay overdue creditors or otherwise resolve debts: In order to qualify for application of [the “good-faith” mitigating condition], an applicant must present evidence showing either a good-faith effort to repay overdue creditors or some other good-faith action aimed at resolving the applicant’s debts. The Directive does not define the term ‘good-faith.’ However, the Board has indicated that the concept of good-faith ‘requires a showing that a person acts in a way that shows reasonableness, prudence, honesty, and adherence to duty or obligation.’ Accordingly, an applicant must do more than merely show that he or she relied on a legally available option (such as bankruptcy [or statute of limitations]) in order to claim the benefit of [the “good-faith” mitigating condition]. (internal citation and footnote omitted) ISCR Case No. 02-30304 at 3 (App. Bd. Apr. 20, 2004) (quoting ISCR Case No. 99-9020 at 5-6 (App. Bd. June 4, 2001)). 13 there a requirement that the debts alleged in an SOR be paid first. Rather, a reasonable plan and concomitant conduct may provide for the payment of such debts one at a time. There is evidence to reflect that Applicant’s financial issues are under control. Applicant acted responsibly by promptly addressing his two delinquent accounts.23 Applicant’s actions under the circumstances no longer cast doubt on his current reliability, trustworthiness, and good judgment.24 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 the circumstances. The administrative judge should consider the nine adjudicative process factors listed at SEAD 4, App. A, ¶ 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 SEAD 4, App. A, ¶ 2(c), the ultimate determination of whether to grant a security clearance must be an overall commonsense judgment based upon careful consideration of the guidelines and the whole-person concept. Moreover, I have evaluated the various aspects of this case in light of the totality of the record evidence and have not merely performed a piecemeal analysis.25 There is some evidence against mitigating Applicant’s conduct. He married a citizen of the Philippines who still resides in the Philippines with their daughter and his stepson, and there is the possibility of terrorist actions in the Philippines that might be directed at Applicant’s family members. Applicant allowed two minor medical accounts, totaling $448.53, to become delinquent. He created some controversy by not filing his federal income tax returns while he is still stationed overseas. 23 “Even if Applicant’s financial difficulties initially arose, in whole or in part, due to circumstances outside his [or her] control, the Judge could still consider whether Applicant has since acted in a reasonable manner when dealing with those financial difficulties.” ISCR Case No. 05-11366 at 4 n.9 (App. Bd. Jan. 12, 2007) (citing ISCR Case No. 99- 0462 at 4 (App. Bd. May 25, 2000); ISCR Case No. 99-0012 at 4 (App. Bd. Dec. 1, 1999); ISCR Case No. 03-13096 at 4 (App. Bd. Nov. 29, 2005)). A component is whether he or she maintained contact with creditors and attempted to negotiate partial payments to keep debts current. 24 See ISCR Case No. 09-08533 at 3-4 (App. Bd. Oct. 6, 2010). 25 See U.S. v. Bottone, 365 F.2d 389, 392 (2d Cir. 1966); See also ISCR Case No. 03-22861 at 2-3 (App. Bd. Jun. 2, 2006). 14 The mitigating evidence under the whole-person concept is simply more substantial. There is no evidence of misuse of information technology systems, or mishandling protected information. He has been an overseas satellite technician and site lead with his employer since September 2004. Applicant honorably retired from the U.S. Air Force. He was granted a top-secret security clearance in June 2009. Upon learning that he had two delinquent accounts, Applicant promptly paid them off. He has no other delinquent accounts. With regard to his federal income tax returns, Applicant is still a civilian acting under the directions of U.S. Armed Forces at an overseas location, and he has IRS-approved extensions to file his returns. In addition to his income tax return filing extensions, Applicant also has substantial tax exemptions while working overseas. The Appeal Board has addressed a key element in the whole-person analysis in financial cases stating:26 In evaluating Guideline F cases, the Board has previously noted that the concept of “meaningful track record” necessarily includes evidence of actual debt reduction through payment of debts. However, an applicant is not required, as a matter of law, to establish that he [or she] has paid off each and every debt listed in the SOR. All that is required is that an applicant demonstrate that he [or she] has “. . . established a plan to resolve his [or her] financial problems and taken significant actions to implement that plan.” The Judge can reasonably consider the entirety of an applicant’s financial situation and his [or her] actions in evaluating the extent to which that applicant’s plan for the reduction of his outstanding indebtedness is credible and realistic. See Directive ¶ E2.2(a) (“Available, reliable information about the person, past and present, favorable and unfavorable, should be considered in reaching a determination.”) There is no requirement that a plan provide for payments on all outstanding debts simultaneously. Rather, a reasonable plan (and concomitant conduct) may provide for the payment of such debts one at a time. Likewise, there is no requirement that the first debts actually paid in furtherance of a reasonable debt plan be the ones listed in the SOR. Applicant has demonstrated a positive track record of debt reduction and elimination efforts, addressing his only two debts, and promptly resolving them. He has such deep and longstanding relationships and loyalties in the United States, that he can be expected to resolve any conflict of interest in favor of the U.S. interest. Overall, the evidence leaves me without questions and doubts as to Applicant’s eligibility and suitability for a security clearance. For all of these reasons, I conclude Applicant has mitigated the security concerns arising from his foreign influence and financial considerations. See SEAD 4, App. A, ¶¶ 2(d)(1) through 2(d)(9). 26 ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008) (internal citations omitted). 15 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 B: FOR APPLICANT Subparagraphs 1.a. and 1.b: For Applicant Paragraph 2, Guideline F: FOR APPLICANT Subparagraphs 2.a. through 2.c: For Applicant Conclusion In light of all of the circumstances presented by the record in this case, it is clearly consistent with the interests of national security to grant Applicant eligibility for a security clearance. Eligibility for access to classified information is granted. ________________________ ROBERT ROBINSON GALES Administrative Judge