1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 16-02686 ) Applicant for Security Clearance ) Appearances For Government: Pamela Benson, Esq., Department Counsel For Applicant: Pro se ___________ Decision ___________ HARVEY, Mark, Administrative Judge: Applicant’s statement of reasons (SOR) alleges eight delinquent debts totaling $28,439. He paid three debts totaling about $1,000, and his five student loan debts totaling $27,479 debts are in a payment plan. He has established his financial responsibility. Financial considerations security concerns are mitigated. He credibly stated that he thought his student loans were deferred, and he forgot to include his delinquent SOR debts on his June 18, 2015 Questionnaire for National Security Positions (SF 86) or security clearance application (SCA). Personal conduct security concerns are mitigated. Eligibility for access to classified information is granted. Statement of the Case On June 18, 2015, Applicant completed and signed his SCA. (Government Exhibit (GE) 1) On January 3, 2017, the Department of Defense (DOD) Consolidated Adjudications Facility (CAF) issued an SOR to Applicant under Executive Order (Exec. Or.) 10865, Safeguarding Classified Information within Industry, February 20, 1960; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (Directive), January 2, 1992; and the Adjudicative Guidelines for Determining Eligibility for Access to Classified Information, effective on September 1, 2006 (Sept. 1, 2006 AGs). The SOR detailed reasons why the DOD CAF did not find under the Directive that it is clearly consistent with the interests of national security to grant or continue a security clearance for him, and recommended referral to an administrative judge to determine 2 whether a clearance should be granted, continued, denied, or revoked. (Hearing Exhibit (HE) 2) Specifically, the SOR set forth security concerns arising under the financial considerations and personal conduct guidelines. (HE 2) On January 26, 2017, Applicant responded to the SOR, and he requested a hearing. (HE 3) On March 31, 2017, Department Counsel was ready to proceed. On May 5, 2017, the case was assigned to me. On May 31, 2017, the Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing, setting the hearing for June 7, 2017. (HE 1) Applicant waived his right to 15 days of notice of the date, time, and location of his hearing. (Tr. 12-13) Applicant’s hearing was held as scheduled using video teleconference. During the hearing, Department Counsel offered five exhibits; there were no objections; and all proffered exhibits were admitted into evidence. (Tr. 16-17; GE 1-5) On June 16, 2017, DOHA received a copy of the hearing transcript. After his hearing, Applicant provided six exhibits, which were admitted without objection. (Applicant Exhibits (AE) A-F) While this case was pending a decision, the Director of National Intelligence (DNI) issued Security Executive Agent Directive 4, establishing in Appendix A the 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 Sept. 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 Findings of Fact2 Applicant’s SOR response admitted the allegations in SOR ¶¶ 1.a through 1.h, and he presented extenuating and mitigating information. (HE 3) Applicant’s admissions are accepted as findings of fact. Additional findings of fact follow. Applicant is a 34-year-old network administrator, and he has performed network security duties for a DOD contractor for four years.3 (Tr. 5, 7, 19) In 2002, he received a General Educational Development (GED) diploma. (Tr. 5-6) He attended college for seven years, and in 2015, he received an associate’s degree in network systems administration. (Tr. 6) He served in the U.S. Army Reserve from 2003 to present, and he 1 Application of the AGs that were in effect as of the issuance of the SOR would not change my decision in this case. The new AGs are available at http://ogc.osd.mil/doha/5220-6 R20170608.pdf. 2 Some details were excluded to protect Applicant’s right to privacy. Specific information is available in the cited exhibits. 3 Unless stated otherwise, the source for the facts in this paragraph are Applicant’s June 18, 2015 Questionnaire for National Security Positions (SF 86) or security clearance application (SCA). (GE 1) 3 is a staff sergeant. (Tr. 8; AE F) His military occupational specialty (MOS) is network systems administrator. (Tr. 8) He has been deployed to Afghanistan twice and to Iraq once. (Tr. 8) In 2008, he married, and in 2009, he divorced. (Tr. 6) In 2010, he married, and he has an eight-year-old child and step-children who are ages 11 and 13. (Tr. 7) Financial Considerations Applicant’s financial problems were caused by his unemployment in 2010, his divorce, and his spouse’s unemployment. (Tr. 21, 32) He served in Afghanistan from July 2010 to June 2011. (AE B) He was unable to make payments on some of his debts. (Tr. 21) His current annual salary is $64,000. (Tr. 19) The status of his eight SOR debts totaling $28,439 is as follows: SOR ¶¶ 1.a, 1.b, 1.c, 1.e, and 1.f allege five delinquent student loan debts for $9,635; $6,885, $5,372; $421; and $5,166. In March 2017, the five student loan debts were consolidated. (Tr. 25) His monthly payment is $647, and on June 27, 2017, the creditor for the consolidated student loan wrote that his payment plan is current. (Tr. 25; AE A) After he makes payments for 12 months, the Army Reserve will pay $10,000 towards his student loan under the tuition assistance program. (Tr. 26) SOR ¶ 1.d alleges Applicant owes a delinquent debt for $664. The creditor advised Applicant that the debt was paid in full on January 28, 2016, and the creditor’s records do not show that Applicant owes any debt. (AE C) SOR ¶¶ 1.g and 1.h allege delinquent medical debts for $193 and $103. Applicant said the two debts are paid. (Tr. 27) Applicant’s March 21, 2017 credit report does not list these two medical debts. (GE 4) Applicant has not had financial counseling. (Tr. 31) He uses a budget, and his income is sufficient to pay his expenses, including his student loan payments. (Tr. 33) His spouse was unemployed at the time of his hearing. (Tr. 31) Her annual pay was $52,000 before she lost her employment. (Tr. 32) On July 24, 2017, she became employed at an annual salary of $60,000. (AE F) Applicant’s March 21, 2017 credit report indicates 23 accounts are paid as agreed, current, or have a zero balance. (GE 4) The only delinquent account listed in this credit report is the debt in SOR ¶ 1.d. (GE 4) Personal Conduct Applicant’s June 18, 2015 SCA asked: (1) is he currently delinquent on any federal debt; (2) is he currently over 120 days delinquent on any debt; and (3) in the past seven years has he had bills or debts turned over to a collection agency. (GE 1) Applicant responded, no, to these questions. (GE 1) He explained that he forgot about or did not think about his delinquent debts at the time he completed his SCA. (Tr. 29) 4 After his hearing, Applicant elaborated on why he did not disclose his delinquent debts on his SCA as follows: When completing my [SCA] I was unaware that my loans had defaulted. I was under the impression that they were still in a deferred status. I know that is not a reason to not report them but they were not forefront in my mind when filling out the form. I waited [un]till the last minute to complete the [SCA] because I was at a stressful point in my life. Because I waited [un]till the last minute I accepted a lot of information that had already been input from the previous time, since most things were the same as the first time I completed it. I skipped over the student loans because they were not on my mind during the time I was filling out the form and they were not part of the information from the previous time I filled it out and if they were they did not show up that way in the form. I was not in any way trying to hide the fact that I owed the money nor was I trying to avoid paying the money. (AE D) When an Office of Personnel Management (OPM) investigator was interviewing Applicant, he volunteered that he had received two written warnings from his employer for taking a cell phone into a sensitive compartmented information facility or SCIF; however, he did not volunteer information about his delinquent debts to the OPM investigator. (Tr. 30-31) He explained that the warnings were on his mind and his finances were not on his mind. (Tr. 31) Character Evidence Applicant’s company commander lauded Applicant’s duty performance as follows: [Applicant] is a bright and personable individual with an outstanding work ethic. He is highly self-motivated and well capable of achieving any goal he sets his mind to. He is the standard and example for not only Soldiers under his charge, but those that out rank him as well. [Applicant] welcomes leadership opportunities and meets his deadlines on time. I see [him] as invaluable to our unit and put more trust and responsibility in him than others far more senior to him. (AE E) Applicant has received the following awards: Afghanistan Campaign Medal with Campaign Star; NATO Afghanistan Service Medal; Joint Service Achievement Medal; Army Achievement Medal; Meritorious Unit Commendation (2nd Award); Army Good Conduct Medal; Army Reserve Components Achievement Medal (2nd Award); National Defense Service Medal; Global War on Terrorism Expeditionary Medal; Global War on Terrorism Service Medal; Iraq Campaign Medal with Campaign Star; Army Service Ribbon; Overseas Service Ribbon (3rd Award); Armed Forces Reserve Medal with M Device; Combat Action Badge; Driver and Mechanic Badge with Driver Wheeled Vehicle Clasp; and Driver and Mechanic Badge with Mechanic Badge with Mechanic Clasp. (AE B) 5 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.” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). 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.” Id. at 527. The President has authorized the Secretary of Defense or his designee to grant applicant’s eligibility for access to classified information “only upon a finding that it is clearly consistent with the national interest to do so.” Exec. Or. 10865. Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the adjudicative guidelines. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, these guidelines are applied in conjunction with an evaluation of the whole person. An administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. An administrative judge must consider all available, reliable information about the person, past and present, favorable and unfavorable. The Government reposes a high degree of trust and confidence in persons with access to classified information. This relationship transcends normal duty hours and endures throughout off-duty hours. Decisions include, by necessity, consideration of the possible risk the applicant may deliberately or inadvertently fail to safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation about potential, rather than actual, risk of compromise of classified information. Clearance decisions must be “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See Exec. Or. 10865 § 7. Thus, nothing in this decision should be construed to suggest that it is based, in whole or in part, on any express or implied determination about applicant’s allegiance, loyalty, or patriotism. It is merely an indication the applicant has not met the strict guidelines the President, Secretary of Defense, and DNI have established for issuing a clearance. Initially, the Government must establish, by substantial evidence, conditions in the personal or professional history of the applicant that may disqualify the applicant from being eligible for access to classified information. The Government has the burden of establishing controverted facts alleged in the SOR. See Egan, 484 U.S. at 531. “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). The guidelines presume a nexus or rational connection between proven conduct under any of the criteria listed therein and an applicant’s security suitability. See ISCR Case No. 95-0611 at 2 (App. Bd. May 2, 1996). Once the Government establishes a disqualifying condition by substantial evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the facts. Directive ¶ E3.1.15. An applicant “has the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue his security clearance.” 6 ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002). The burden of disproving a mitigating condition never shifts to the Government. See ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 2005). “[S]ecurity clearance determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531; see AG ¶ 2(b). Analysis Financial Considerations AG ¶ 18 articulates the security concern for financial problems: 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. . . . An individual who is financially overextended is at greater risk of having to engage in illegal or otherwise questionable acts to generate funds. . . . The Appeal Board explained the scope and rationale for the financial considerations security concern in ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012) (citation omitted) as follows: This concern is broader than the possibility that an applicant might knowingly compromise classified information in order to raise money in satisfaction of his or her debts. Rather, it requires a Judge to examine the totality of an applicant’s financial history and circumstances. The Judge must consider pertinent evidence regarding the applicant’s self-control, judgment, and other qualities essential to protecting the national secrets as well as the vulnerabilities inherent in the circumstances. The Directive presumes a nexus between proven conduct under any of the Guidelines and an applicant’s security eligibility. AG ¶ 19 includes three disqualifying conditions that could raise a security concern 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.” In ISCR Case No. 08-12184 at 7 (App. Bd. Jan. 7, 2010), the Appeal Board explained: It is well-settled that adverse information from a credit report can normally meet the substantial evidence standard and the government’s obligations under [Directive] ¶ E3.1.14 for pertinent allegations. At that point, the burden shifts to applicant to establish either that [he or] she is not responsible for the debt or that matters in mitigation apply. (internal citation omitted). Applicant’s history of delinquent debt is documented in his credit reports, OPM PSI, SOR response, and hearing record. The record establishes the 7 disqualifying conditions in AG ¶¶ 19(a), 19(b), and 19(c), requiring additional inquiry about the possible applicability of mitigating conditions. Five financial considerations mitigating conditions under AG ¶ 20 are potentially applicable in this case: (a) the behavior happened so long ago,4 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;5 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. 4 A debt that became delinquent several years ago is still considered recent because “an applicant’s ongoing, unpaid debts evidence a continuing course of conduct and, therefore, can be viewed as recent for purposes of the Guideline F mitigating conditions.” ISCR Case No. 15-06532 at 3 (App. Bd. February 16, 2017) (citing ISCR Case No. 15-01690 at 2 (App. Bd. Sep. 13, 2016)). 5 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) 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)). 8 The DOHA Appeal Board concisely explained Applicant’s responsibility for proving the applicability of mitigating conditions as follows: Once a concern arises regarding an Applicant’s security clearance eligibility, there is a strong presumption against the grant or maintenance of a security clearance. See Dorfmont v. Brown, 913 F. 2d 1399, 1401 (9th Cir. 1990), cert. denied, 499 U.S. 905 (1991). After the Government presents evidence raising security concerns, the burden shifts to the applicant to rebut or mitigate those concerns. See Directive ¶ E3.1.15. The standard applicable in security clearance decisions is that articulated in Egan, supra. “Any doubt concerning personnel being considered for access to classified information will be resolved in favor of the national security.” Directive, Enclosure 2 ¶ 2(b). ISCR Case No. 10-04641 at 4 (App. Bd. Sept. 24, 2013). Applicant’s finances were adversely affected by divorce, unemployment, his spouse’s unemployment, and deployment. Applicant’s SOR alleges eight delinquent debts totaling $28,439. He paid three SOR debts totaling about $1,000, and five delinquent student loan debts totaling $27,479 debts are in a payment plan. There is no evidence of financial counseling. AG ¶ 20(a), 20(b), and 20(d) apply. Based on Applicant’s track record of paying or resolving his debts, future new delinquent debt “is unlikely to recur and does not cast doubt on [Applicant’s] current reliability, trustworthiness, or good judgment,” and “there are clear indications that the problem is being resolved or is under control.” His payments of his debts showed good faith. He has sufficient income to keep his debts in current status and to continue making progress paying his remaining debts. I am confident that Applicant will conscientiously endeavor to maintain his financial responsibility. His efforts are sufficient to mitigate financial considerations security concerns. Personal Conduct AG ¶ 15 explains why personal conduct is a security concern stating: 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 one 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 . . . used to conduct investigations, . . . 9 determine security clearance eligibility or trustworthiness. . . .”6 Applicant’s June 18, 2015 SCA asked: (1) is he currently delinquent on any federal debt; (2) is he currently over 120 days delinquent on any debt; and (3) in the past seven years has he had bills or debts turned over to a collection agency. Applicant responded, no, to these questions. He explained that he believed his student loans were in deferment, and he forgot about or did not think about his delinquent debts at the time he completed his SCA. Applicant took seven years to receive his associate’s degree, which he received in 2015. He believed his student loans were still in deferment when he completed his SCA. His other three SOR debts total less than $1,000, and he did not remember them when he was completing his SCA. He volunteered information about his two security violations during his OPM interview, which is an indication he was not attempting to conceal derogatory information from security officials. I accept Applicant’s statement as credible that he honestly and sincerely believed his student loans were in deferment, and he did not remember that he had delinquent debts when he completed his SCA. He did not intend to deceive security officials about his delinquent debts. He has refuted the allegation that he intentionally failed to disclose his delinquent debts on his SCA. Personal conduct security concerns are mitigated. 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 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. 6 The Appeal Board has cogently explained the process for analyzing falsification cases, stating: (a) when a falsification allegation is controverted, Department Counsel has the burden of proving falsification; (b) proof of an omission, standing alone, does not establish or prove an applicant’s intent or state of mind when the omission occurred; and (c) a Judge must consider the record evidence as a whole to determine whether there is direct or circumstantial evidence concerning the applicant’s intent or state of mind at the time the omission occurred. [Moreover], it was legally permissible for the Judge to conclude Department Counsel had established a prima facie case under Guideline E and the burden of persuasion had shifted to the applicant to present evidence to explain the omission. ISCR Case No. 03-10380 at 5 (App. Bd. Jan. 6, 2006) (citing ISCR Case No. 02-23133 (App. Bd. June 9, 2004)). 10 Under AG ¶ 2(c), “[t]he 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. My comments under Guidelines F and E are incorporated in my whole-person analysis. Some of the factors in AG ¶ 2(d) were addressed under that guideline but some warrant additional comment. Applicant is a 34-year-old network administrator, and he has performed network security duties for a DOD contractor for four years. In 2015, he received an associate’s degree in network systems administration. He served in the U.S. Army Reserve from 2003 to present, and he is a staff sergeant. He has been deployed to Afghanistan twice and to Iraq once. In 2008, he married, and in 2009, he divorced. In 2010, he married, and he has an eight-year-old child and step-children who are ages 11 and 13. Applicant’s finances were adversely affected by divorce, his unemployment, his spouse’s unemployment, and deployment. Applicant’s company commander lauded his duty performance, diligence, and leadership. His company commander’s statement supports approval of his access to classified information. Applicant served 14 years in the Army Reserve, including two combat tours in Afghanistan and one combat tour in Iraq. He has received numerous awards for his Army service. Applicant’s SOR alleges eight delinquent debts totaling $28,439. He paid three SOR debts totaling about $1,000, and his five delinquent student loan debts totaling $27,479 debts are in a payment plan. His most recent credit report and his proof that the debt in SOR ¶ 1.d is paid reflect his debts are paid as agreed, are current, or have a zero balance. The Appeal Board has addressed a key element in the whole-person analysis in financial cases stating: . . . 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 has paid off each and every debt listed in the SOR. All that is required is that an applicant demonstrate that he has . . . established a plan to resolve his 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 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. ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008) (internal citations and quotation marks omitted). Applicant has established a “meaningful track record” of debt payment or 11 resolution as indicated in his credit reports. He understands what he needs to do to establish and maintain his financial responsibility. He took reasonable actions under his particular financial circumstances to address his delinquent debts. I have carefully applied the law, as set forth in Egan, Exec. Or. 10865, the Directive, and the AGs, to the facts and circumstances in the context of the whole person. I conclude that financial consideration and personal conduct security concerns are mitigated. It is clearly consistent with the interests of national security to grant Applicant security clearance eligibility. 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 through 1.h: For Applicant Paragraph 2, Guideline E: FOR APPLICANT Subparagraphs 2.a through 2.b: For Applicant Conclusion In light of all of the circumstances 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. _________________________ MARK HARVEY Administrative Judge