1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 16-02162 ) Applicant for Security Clearance ) Appearances For Government: Caroline E. Heintzelman, Esq., Department Counsel For Applicant: Pro se ______________ Decision ______________ DAM, Shari, Administrative Judge: Applicant failed to mitigate the alleged financial and personal conduct security concerns. National security eligibility for access to classified information is denied. Statement of the Case On September 6, 2016, the Department of Defense Consolidated Adjudications Facility (DOD CAF) issued to Applicant a Statement of Reasons (SOR), detailing security concerns under Guideline F, Financial Considerations, and Guideline E, Personal Conduct. The action was taken 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) effective within the DOD for SORs issued after September 1, 2006.1 1I considered the previous AG, effective September 1, 2006, as well as the new AG, effective June 8, 2017. Although this decision is issued pursuant to the new AG, my decision would be the same under either set of guidelines. 2 On November 11, 2016, Applicant answered the SOR (Answer), and requested a hearing. On February 13, 2017, the Department of Defense Office of Hearings and Appeals (DOHA) assigned Applicant’s case to me. On May 2, 2017, DOHA issued a Notice of Hearing, scheduling the hearing for May 16, 2017. At the hearing, Department Counsel offered Government Exhibits (GE) 1 through 4. Applicant testified and offered Applicant Exhibits (AE) A through O. All exhibits were admitted.2 DOHA received the hearing transcript (Tr.) on May 24, 2017. The record remained open until June 16, 2017, to give Applicant an opportunity to submit additional information. He timely submitted documents, which I marked as AE P through AE T, and admitted into evidence without an objection from Department Counsel. Findings of Fact Applicant is 40 years old and married for the second time since 2007. He has four children with his first wife to whom he was married from 2001 to 2009. He has custody of his children, ages 15, 14, 11, and 9. He does not receive child support, although his former wife is legally required to pay it. Applicant recently started attending college. (Tr. 28-29.) He started working for his current employer, a defense contractor, in February 2014. (GE 1.) He has been steadily employed for the past 10 years. (Tr. 31.) Applicant attributed his inability to pay delinquent debts to his medical condition and his wife’s unemployment from January to October 2016. He has a medical condition, which causes him to frequently go to the emergency room. Many of the alleged debts are bills from those visits during three years when he did not have medical insurance. Some of the bills are family members’ medical bills. (Tr. 33-35.) (Tr. 44.) Based on credit bureau reports (CBR) from December 2016 and February 2016, the SOR alleged 49 debts, of which 41 are unpaid medical bills. The debts became delinquent between 2011 and 2016, and total about $32,000. (GE 2, GE 3.) In May 2017, Applicant paid the state tax liens alleged in SOR ¶¶ 1.a ($216) and 1.b ($158). (AE B, AE C.) In June 2017, he paid the debt alleged in SOR ¶ 1.vv ($55.).(AE R.) He has not paid or resolved any of the other 46 debts. (Tr. 43-45.) He had not taken steps to resolve the delinquent debts prior to the hearing. He said it was difficult to pay the debts and ongoing expenses because his wife had been unemployed. (Tr. 57.) He filed his 2014 and 2016 federal and state income tax returns, but not his 2015.3 He intends to file them when he receives tax documents from his previous employer. (Tr. 42.) 2 Applicant made some minor corrections to his personal interview. (GE 2.) Those changes are referenced in the transcript and on the exhibit. (Tr. 12 through 19.) 3 The SOR did not allege Applicant’s failure to file 2015 income tax returns or failure to disclose that information in his January 2016 SCA. Hence, those facts will not be considered in the analysis of disqualifying conditions, but may be considered in the analyses of mitigating conditions and whole-person concept, and in evaluating Applicant’s credibility. 3 Post-hearing, Applicant enrolled in a debt consolidation program. He included ten of the SOR alleged debts into that program. They total $20,620. He agreed to make monthly payments of $330 until the debts are paid. (AE Q, AE T.) He intends to begin paying other alleged debts as money becomes available. He also started a medical flex spending plan that will help decrease out-of-pocket medical bills. (AE Q.) Applicant earns about $70,500 annually. His wife earns about $500 a week. He submitted a budget that he and his wife drafted a couple weeks prior to the hearing. After paying expenses, including rent and the $330 debt reduction payment, he has about $2,000 remaining at the end of the month. (Tr. 40, 60; AE S.) He has not participated in credit or budget counseling until recently, when he enrolled in the debt program in June 2017. (Tr. 39.) Applicant did not disclose any delinquent debts in the security clearance application (SCA) that he submitted in January 2016. (GE 1.) He said he knew he had them at the time, and thought he had disclosed some. He was in a hurry to complete the SCA and became frustrated with the software program. He found it difficult to correct answers. He was not embarrassed to disclose them. (Tr. 61-66.) He did not disclose his unfiled 2015 income tax returns. (GE 1.) Applicant submitted his 2016 performance evaluation. He received a composite score of 3.2 out of 5.0. His supervisor stated that Applicant “takes his responsibilities seriously and has demonstrated full accountability for his choices.” (AE N.) His son wrote a loving and complimentary letter about his father. (AE M.) He received an Outstanding Employee award for the second quarter of 2015. (AE O.) Policies When evaluating an applicant’s national security eligibility, the administrative judge must consider the adjudicative guidelines. In addition to brief introductory explanations for each guideline, the AG 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, these guidelines are applied in conjunction with the factors listed in AG ¶ 2 describing 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 applicable guidelines in the context 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 4 eligibility will be resolved in favor of the 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. Likewise, I have avoided drawing inferences grounded on mere speculation or conjecture. Directive ¶ E3.1.14 requires the Government to present evidence to establish controverted facts alleged in the SOR. According to Directive ¶ E3.1.15, “[t]he 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, and has the ultimate burden of persuasion as to obtaining a favorable clearance decision.” A person applying for access to classified information seeks to enter 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 national security eligibility. Decisions include, by necessity, consideration of the possible risk the applicant may deliberately or inadvertently fail to protect or 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. Finally, as emphasized in Section 7 of EO 10865 provides: “[a]ny determination under this order adverse to an applicant shall be a determination in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive information.) Analysis Guideline F: Financial Considerations The security concerns relating to the guideline for financial considerations are set out in AG ¶ 18, which reads in pertinent part: 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. 5 AG ¶ 19 describes three conditions that could raise security concerns and may be disqualifying in this case: (a) inability to satisfy debts; (b) unwillingness to satisfy debts regardless of the ability to do so; and (c) a history of not meeting financial obligations. Beginning in 2011, Applicant accumulated delinquent debts that he has been unable or unwilling to resolve. The evidence raises the above security concerns, thereby shifting the burden to Applicant to rebut, extenuate, or mitigate those concerns. The guideline includes five conditions in AG ¶ 20 that could mitigate security concerns arising from financial problems: (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; (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; 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. Forty-six of the alleged delinquent debts are ongoing, unresolved, and continue to cast doubt on Applicant’s reliability. AG ¶ 20 (a) does not apply. Applicant attributed his numerous unpaid medical bills to the lack of medical insurance for several years, and his wife’s unemployment for most of 2016. Those circumstances were beyond Applicant’s control. However, there is insufficient evidence to establish full mitigation under AG ¶ 6 20(b) because Applicant did not document actions he took to responsibly manage his obligations while they were accumulating. A month after the hearing, Applicant entered into a debt consolidation program that includes some credit or financial counseling. However, there are no clear indications that his SOR-alleged debts are under control. The evidence does not establish full mitigation under AG ¶ 20(c). Applicant paid three debts, which showed some good-faith effort to resolve the debts alleged in SOR ¶¶ 1.b, 1.c, and 1.vv. AG ¶ 20(d) applies to those debts. Applicant recently entered into a payment plan for 10 debts, but has not yet established a record of making payments on that plan. The majority of the debts are unresolved. Applicant did not provide evidence to substantiate a reasonable basis to dispute the legitimacy of any debts. AG ¶ 20(e) does not apply. Guideline E: Personal Conduct AG ¶ 15 explains the security concerns relating to personal conduct: Conduct involving questionable judgment, lack of candor, dishonesty, or unwillingness to comply with rules and regulations can raise questions about an individual's reliability, trustworthiness, and ability to protect classified or sensitive information. Of special interest is any failure to cooperate or provide truthful and candid answers during national security investigative or adjudicative processes. AG ¶ 16 describes a condition that could raise a security concern and may be disqualifying in this case: (a) deliberate omission, concealment, or falsification of relevant facts from any personnel security questionnaire, personal history statement, or similar form used to conduct investigations, determine employment qualifications, award benefits or status, determine national security eligibility or trustworthiness, or award fiduciary responsibilities. Applicant knew he had delinquent debts when he completed his SCA, but failed to disclose them because he had difficulty working with the software program. Given the large number of debts that were delinquent at the time he submitted the SCA, his explanation for not disclosing even one debt is not credible. I find he deliberately omitted disclosing delinquent debts from his SCA. The evidence establishes the above disqualifying condition. AG ¶ 17 provides a condition that could mitigate security concerns raised under this guideline: (c) the offense is so minor, or so much time has passed, or the behavior is so infrequent, or it happened under such unique circumstances that it is 7 unlikely to recur and does not cast doubt on the individual's reliability, trustworthiness, or good judgment. There is insufficient evidence to establish mitigation under the above condition. The failure to disclose requested information is not a minor offense and casts doubt on Applicants’ reliability and judgment. Whole-Person Concept Under the whole-person concept, the administrative judge must evaluate an applicant’s national security eligibility 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. According to AG ¶ 2(c), the ultimate determination of whether to grant national security eligibility 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 pertinent facts and circumstances surrounding this case. Applicant is a 40-year-old married man, who has successfully worked for his employer since February 2014. He is a good father and has custody of his four children from a prior marriage. Since 2011, he has accumulated a large amount of delinquent debts, primarily unpaid medical bills for his care. One month after his hearing, he contacted a debt consolidation company to begin resolving ten debts through monthly payments. There is no evidence that he made his first payment into the plan. He said he would begin resolving the other debts as finances became available. He started a medical flex spending account to help decrease his medical bills and recently drafted a budget. While those recent actions demonstrate some willingness to resolve financial obligations, to-date, he has not established a record of addressing them or managing his finances. In addition to having delinquent debts, he acknowledged he has not filed federal or state tax returns for 2015. When Applicant completed a SCA in January 2016, he did not disclose any of the 49 alleged delinquent debts or his unfiled 2015 taxes. His explanation that he had difficulty with the software program and was unable to make corrections in the SCA is not credible. 8 Overall, the record evidence leaves me with substantial doubt as to Applicant’s judgment, reliability, eligibility, and suitability for a security clearance. He failed to meet his burden to mitigate the security concerns raised under the guidelines for financial considerations and personal conduct. Formal Findings Formal findings for or against Applicant on the allegations set forth in the SOR, as required by ¶ E3.1.25 of Enclosure 3 of the Directive, are: Paragraph 1, Guideline F: AGAINST APPLICANT Subparagraph: 1.a: Against Applicant Subparagraphs 1.b and 1c: For Applicant Subparagraphs 1.d through 1.uu Against Applicant Subparagraph 1.vv: For Applicant Subparagraph 1.ww: Against Applicant Paragraph 2, Guideline E: AGAINST APPLICANT Subparagraph 2.a: Against Applicant Conclusion In light of all circumstances presented by the record in this case, it is clearly not consistent with the national security to grant Applicant a security clearance. National security eligibility for access to classified information is denied. SHARI DAM Administrative Judge