1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 16-01781 ) Applicant for Security Clearance ) Appearances For Government: Mary Margaret Foreman, Esq., Department Counsel For Applicant: Pro se ______________ Decision ______________ CREAN, Thomas M., Administrative Judge: Applicant provided sufficient evidence to mitigate security concerns for financial considerations under Guideline F. Eligibility for access to classified information is granted. Statement of the Case On February 13, 2015, Applicant submitted an Electronic Questionnaire for Investigations Processing (e-QIP) to obtain a security clearance required for employment with a defense contractor. (Item 3) Applicant was interviewed by a security investigator from the Office of Personnel Management (OPM) on September 23, 2015. (PSI) After considering the information from the PSI, the Department of Defense (DOD) could not make the affirmative findings required to issue a security clearance. On June 13, 2016, DOD issued a Statement of Reasons (SOR) to Applicant detailing security concerns for financial considerations under Guideline F. (Item 1) The action was taken under Executive Order 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as 2 amended (Directive); and the adjudicative guidelines (AG) effective in the DOD on September 1, 2006. Applicant answered the SOR on July 5, 2016. He admitted two of the alleged delinquent debts (SOR 1.a, and 1.b), and denied the third (SOR 1.c). In his answer to the SOR, Applicant stated he made payments on the debt at SOR 1.a since February 2015, and he had paid the debt at SOR 1.b. He also noted that the creditor for the debt at SOR 1.c cancelled the debt and provided him a tax form 1099-C, which he claimed as income on his 2015 tax return. He requested that the matter be decided on the written record. (Item 2) Department Counsel submitted the Government’s written case on September 1, 2016. (Item 7) Applicant received a complete file of relevant material (FORM) on September 9, 2016, and he was provided the opportunity to file objections and to submit material to refute, extenuate, or mitigate the disqualifying conditions. Applicant did not file a response to the FORM. I was assigned the case on August 8, 2017. While this case was pending a decision, the Director of National Intelligence issued Security Executive Agent Directive 4, establishing National Security Adjudicative Guidelines for Determining Eligibility for access to Classified Information or Eligibility to Hold a Sensitive Position (AGs) which he made applicable to all covered individuals who require initial or continued eligibility for access to classified information or eligibility to hold a sensitive position. The new AGs supersede the September 1, 2006 AGs and are effective “for all covered individuals” on or after June 8, 2017. Accordingly, I have evaluated Applicant’s security clearance eligibility under the new AGs.1 Procedural Issues Applicant was advised in the FORM that the summary of the Personal Subject Interview (PSI) with an OPM investigator (Item 4) was not authenticated and could not be considered over his objection. He was further advised that he could make any corrections, additions, or deletions to the summary to make it clear and accurate, and could object to the admission of the summary as not authenticated by a Government witness. He was additionally advised that if no objection was raised to the summary, the administrative judge could determine that he waived any objection to the admissibility of the PSI summary. Applicant did not respond to the FORM, so he did not raise any objection to consideration of the PSI. Since there is no objection by Applicant, I considered information in the PSI in my decision. Findings of Fact After thoroughly reviewing the case file, I make the following findings of fact. Applicant is 29 years old. He graduated from high school in January 2007. While attending high school, Applicant also attended a technical school. He received a certificate in database administration from the technical school in May 2006. Applicant 1 I considered Applicant’s case under both the September 1, 2006 AGs, and the June 8, 2017 AGs. My decision would be the same under both AGs. 3 took courses from one on-line school from July 2007 until May 2008, and from another on-line school from July 2008 until June 2013. He did not receive a degree from either on-line school. Applicant never married but has two children that he supports. Applicant has been gainfully employed in a technical career field since February 2007, and as a senior support technician since January 2015. (Item 3, e-QIP, dated February 13, 2013; Item 4, PSI, dated September 23, 2015) The SOR alleges, and a credit reports (Item 5, dated February 25, 2015; Item 6, dated April 19, 2016) confirms the following delinquent debts for Applicant: a student loan in collection for $7,516 (SOR 1.a); a medical account in collection for $216 (SOR 1.b); and a student loan charged off for $49,117 (SOR 1.c). Applicant listed these debts on his e-QIP and discussed them with the security investigator in the PSI. He admitted the debts in his answer to the SOR. The student loan at SOR 1.a was opened in September 2014. Applicant has been making payments on the loan since February 2015. His balance on the debt in June 2016, when he responded to the SOR was $3,516.86. This debt is being resolved. (Item 2, Statement, dated June 10, 2016) Applicant paid the medical debt at SOR 1.b in full on June 30, 2016. Applicant saved the funds to make the payment, but had to wait until the creditor notified him of the exact amount owed. As soon as he knew the exact amount, he paid the debt. (Item 2, Letter, dated June 30, 2016) Applicant received a student loan for his first on-line program in September 2007 for $49,117. The loan should have been deferred while Applicant was still in school. The creditor did not know that Applicant was taking courses at a different school. Applicant was not notified that the creditor started a collection action. Applicant received a notice from the creditor in 2014 that the loan was cancelled, and a tax form 1099-C was issued. Applicant contacted the creditor to determine the status of the student loan. The creditor was not able to accept any payments on the loan since the loan no longer existed. Applicant included the amount on the 1099-C in his tax year 2015 tax return. (Item 2, Notice, dated December 31, 2014) Policies When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines (AG). In addition to brief introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which must be considered 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 ¶ 4 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 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. 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 applicant or proven by Department Counsel. . . .” The applicant has the ultimate burden of persuasion for obtaining 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. Analysis Financial Considerations 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 information. (AG ¶ 18). A person’s relationship with his creditors is a private matter until evidence is uncovered demonstrating an inability or unwillingness to meet their financial obligations. Absent evidence of strong extenuating or mitigating circumstances, an applicant with a history of serious or recurring financial difficulties is in a situation of risk inconsistent with the holding of a security clearance. An applicant is required to manage his or her finances in such a way as to meet financial obligations. Credit reports reveal, and Applicant admitted, that he two delinquent student loans and a delinquent medical debt. Adverse information in a credit report can normally 5 meet the substantial evidence standard to establish financial delinquency. The evidence is sufficient to raise security concerns under Financial Considerations Disqualifying Conditions AG ¶ 19(a) (inability to satisfy debts), and AG ¶ 19(c) (a history of not meeting financial obligations). Once the Government has established the adverse financial issue, the Applicant has the responsibility to refute or mitigate the issue. I considered the following Financial Consideration Mitigating Conditions 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 problems 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 financial counseling for the problem from a legitimate and credible source, such as a non-profit counseling service, and there are clear indications that the problem is being resolved or is under control; and (d) the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts. The mitigating conditions at AG ¶ 20 (a), (b), and (c) do not apply. Applicant incurred student loan debt deliberately and freely to finance his education. The student loans are numerous, recent, and not incurred under circumstances making recurrence unlikely. The financing of his education through student loans is not an unusual circumstance or beyond Applicant’s control. Applicant presented no evidence that he received financial counseling. Mitigating condition AG ¶ 20(d) does apply. Good faith means acting in a way that shows reasonableness, prudence, honesty, and adherence to duty and obligation. Applicant is not required to be debt-free nor must his plan require paying off all debts immediately or simultaneously. All that is required is that Applicant act responsibly given his circumstances. Applicant must establish that he has a reasonable plan to resolve financial problems, and that he has taken significant action to implement that plan. Applicant’s plan must show a systematic method of handling debts, and Applicant must establish a meaningful track record of debt payment. A meaningful track record of debt payment can be established by evidence of actual debt payments or reduction of debt through payment of debts. A promise to pay delinquent debts is not a substitute for a 6 track record of paying debts in a timely manner and acting in a financially responsible manner. Applicant provided adequate information that he resolved, paid, or is paying all of his delinquent debts. He has been making payments under a payment plan for the debt at SOR 1.a since February 2015. He provided adequate evidence that he paid in full the debt at SOR 1.b. He was unable to make payments on the debt at SOR 1.c because the creditor charged off the debt and issued a tax form 1099-C. Applicant followed the correct tax procedure by including the charged off amount on his tax return for 2015. There is ample evidence to establish that Applicant acted responsibly by developing payment plans an making payments on his debts. There is clear evidence that his financial problems are being resolved and his finances are under control. His reasonable and responsible actions towards his finances is a strong indication that he will protect and safeguard classified information. Whole-Person Concept Under the whole-person concept, an administrative judge must evaluate an applicant’s eligibility for access to classified information 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 access to classified information must be an overall common-sense 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. Applicant provided sufficient credible documentary information to establish that he took reasonable and responsible action to resolve his financial obligations. Applicant demonstrated appropriate management of his finances and a record of action to resolve financial issues. Overall, the record evidence leaves me without questions and doubts concerning Applicant’s judgment, reliability, and trustworthiness. He has established his suitability for access to classified information. For all these reasons, I conclude Applicant mitigated the security concerns arising from his financial situation. 7 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.c: 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 access to classified information. Eligibility for access to classified information is granted. _________________ THOMAS M. CREAN Administrative Judge