1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) [Name Redacted] ) ISCR Case No. 16-00586 ) ) Applicant for Security Clearance ) Appearances For Government: Daniel F. Crowley, Esquire, Department Counsel For Applicant: Pro se ______________ Decision ______________ HOGAN, Erin C., Administrative Judge: On August 21, 2016, the Department of Defense Consolidated Adjudications Facility (DOD CAF) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline F, Financial Considerations, and Guideline E, Personal Conduct. The action was initially 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 amended (Directive); and the adjudicative guidelines (AG) implemented within the Department of Defense on September 1, 2006. On June 8, 2017, the AGs were updated and cancelled the AGs effective September 1, 2006. This decision will be decided based on the new AGs effective on June 8, 2017. If I were to consider this case under the AGs effective September 1, 2006, it would result in the same outcome. On September 13, 2016, Applicant answered the SOR and requested a decision on the record. Department Counsel issued a File of Relevant Material (FORM) on September 26, 2016. Applicant timely responded to the FORM and provided additional documents. His response to the FORM and attached documents are admitted as Item 7. Department Counsel indicated no objection to Applicant’s Response to FORM on 2 April 20, 2017. (Item 8) On November 7, 2016, the FORM was forwarded to the Hearing Office and assigned to me on July 21, 2017. Based upon a review of the pleadings, exhibits, and testimony, eligibility for access to classified information is granted. Findings of Fact In his response to the SOR, Applicant admits the allegations in SOR ¶¶ 1.b, 1.c, and 1.k. He denies the remaining allegations. (Item 2) Applicant is an employee of a DOD contractor seeking to maintain a security clearance. He has worked for his current employer since April 2011. He has some college credit. He is married and has three daughters, ages 20, 15, and 11. (Item 3) On January 31, 2014, Applicant submitted an Electronic Questionnaire for Investigation Processing (e-QIP). In response to Section 26 – Delinquency Involving Routine Accounts, Applicant listed a $2,800 medical bill that was paid in full on January 24, 2014. He did not list any other delinquent debts. A subsequent background investigation revealed the following delinquent accounts: a $328 cable television account placed for collection (SOR ¶ 1.a: Item 6 at 2); a $172 medical account (SOR ¶ 1.b: Item 6 at 2); a $172 medical account (SOR ¶ 1.c: Item 6 at 2); a $26,432 second mortgage account placed for collection (SOR ¶ 1.d: Item 4 at 7; Item 6 at 3); a $990 past-due account with a total balance of $6,119 (SOR ¶ 1.e: Item 4 at 4); a $550 medical account placed for collection (SOR ¶ 1.f: Item 4 at 5); a $19 medical account placed for collection (SOR ¶ 1.g: Item 4 at 5); a $6,120 account placed for collection (SOR ¶ 1.h: Item 4 at 5); a $51 medical account placed for collection (SOR ¶ 1.i: Item 4 at 8); a $156 medical account placed for collection (SOR ¶ 1.j: Item 4 at 8); and a $379 account placed for collection (SOR ¶ 1.k: Item 4 at 8). In his answer to the SOR, Applicant indicated that he was unemployed from October 2015 to July 2016. Once he found full-time employment, he was able to start resolving his debts. The status of the debts are: SOR ¶ 1.a: $328 cable television account: Applicant denies this debt. He claims the debt was paid on October 25, 2016. He was waiting for a receipt. A February 3, 2016, credit report indicates a collection account, but does not list a past-due amount. (Item 6 at 2; Item 7 at 10) SOR ¶ 1.b: $172 medical account: Paid on March 31, 2015. (Item 7 at 9) SOR ¶ 1.c: $172 medical account: Paid on June 3, 2015 (Item 7 at 9) SOR ¶ 1.d: a $26,432 account that was placed for collection in January 2014. During his background investigation interview, Applicant stated that he believed this was a second mortgage that was refinanced with the first mortgage. The debt is no longer listed on the February 3, 2016 credit report. (Item 5 at 2; Item 6) 3 SOR ¶ 1.e: $6,119 account that was past due in the amount of $990: Applicant denies this debt. He did not recognize the debt during his background investigation interview. The debt is not shown in the February 2016 credit report. It is noted that a judgment with a similar balance ($6,248) is listed as satisfied. It is not unusual for these debts to be sold to other collection firms. (Item 5 at 2; Item 6 at 3) SOR ¶ 1.f: $550 medical collection account: Applicant denies this account. It was not listed on the February 2016 credit report. (Item 6; Item 7 at 9) SOR ¶ 1.g: $19 medical collection account: Applicant denies this account. It was not listed on his February 2016 credit report. (Item 6; Item 7 at 9) SOR ¶ 1.h: $6,120 mortgage account: Applicant denies. He claims that all mortgages were to transferred to the current mortgage lender. In Response to the FORM, he is in contact with mortgagor to inquire why they were not paid when he refinanced his mortgage in 2010. Applicant agreed to open the account and will make payments until the debt is researched and there is a conclusion as to its status. He claimed he was sending further documentation after the deadline for responding to the FORM. It appears that no documents were received. (Answer to SOR; Item 7 at 1) SOR ¶ 1.i and SOR ¶ 1.j: $51 and $156 medical collection accounts: Applicant denies these accounts. The accounts were not listed on the February 2016 credit report. (Item 6; Item 7 at 9) SOR ¶ 1.k: $379 medical collection account: Applicant admits this account. It is listed as paid on the February 2016 credit report. (Item 6 at 2) The February 2016 credit report lists two paid cell phone accounts, a $6,100 financial account that is listed as paid, a satisfied judgment in the amount of $6,248, and two medical satisfied judgments in the amounts of $834 and $996. He was also past due on two credit card accounts not alleged in the SOR in the amounts of $54 and $58. I find the past-due amounts to be too small to raise a concern. (Item 6) Applicant states that he is working on resolving his delinquencies now that he is employed. He states his wife had surgery in 2013 that resulted in numerous medical bills. Applicant states that he spoke at length with the interviewer conducting his background investigation interview about his delinquent debts. He did not intend to answer “No” to section 26 of the security clearance questionnaire. It was an honest mistake. He did not intend to deceive anyone and sincerely regrets this mistake. It is noted that he listed several delinquent medical accounts in response to questions in section 26 on his security clearance application dated January 31, 2014. (Item 2; Item 3, section 26; Item 5; Item 7 at 1) 4 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 when determining 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 ¶ 2(c), the entire process is a conscientious scrutiny of a number of variables known as the “whole-person concept.” The administrative judge must consider all available, reliable information about the person, past and present, favorable and unfavorable, in making a decision. The protection of the national security is the paramount consideration. AG ¶ 2(b) requires that “[a]ny doubt concerning personnel being considered for national security eligibility will be resolved in favor of the national security.” 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 as to 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 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. Section 7 of Executive Order 10865 provides that decisions shall be “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive information). 5 Analysis 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 information. Financial distress can also be cause 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 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 disqualifying conditions that could raise security concerns. I find AG &19(a) (an inability to satisfy debts) and AG &19(c) (a history of not meeting financial obligations) apply to Applicant’s case. Applicant encountered financial problems over the past several years resulting in several delinquent accounts. An individual who is financially irresponsible may also be irresponsible, unconcerned, or careless in their obligations to protect classified information. Behaving irresponsibly in one aspect of life provides an indication of how a person may behave in other aspects of life. A person’s relationship with his creditors is a private matter until evidence is uncovered demonstrating an inability or unwillingness to pay debts under agreed terms. 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 not required to be debt free, but is required to manage his finances in such a way as to meet his financial obligations. The Government’s substantial evidence and Applicant’s admissions raise security concerns under Guideline F. The burden shifted to Applicant to produce evidence to rebut, explain, extenuate, or mitigate the security concerns. (Directive ¶E3.1.15) An applicant has the burden of proving a mitigating condition, and the burden of disproving it never shifts to the Government. (See ISCR Case No. 02-31154 at 5 (App. Bd. Sept. 22, 2005)) The guideline also includes examples of conditions that could mitigate security concerns arising from financial difficulties. The following mitigating conditions potentially apply: 6 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); AG & 20(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); AG & 20(d) (the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts); and AG ¶ 20(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). AG & 20(a) and AG ¶ 20(b) apply because Applicant’s financial problems occurred under unusual circumstances and are unlikely to recur. Circumstances beyond Applicant’s control contributed to the financial problems. Most of the debts are medical accounts related to Applicant’s wife’s surgery in 2013. Applicant was also unemployed for nine months between October 2015 and July 2016. He is doing his best to pay off his delinquent debts. The February 2016 credit report shows that several delinquent accounts have been paid and his mortgage is current. Applicant acted responsibly under the circumstances. AG & 20(d) applies. Applicant provided proof that his mortgage account is now current. He took the initiative to resolve his debts. His good-faith efforts and adherence to payment plans resulted in him resolving several accounts including accounts that were not alleged in the SOR. AG ¶ 20(e) applies with respect to the debt alleged in SOR ¶ 1.h. Applicant is in the process of disputing this account because he believes it was paid as a result of his mortgage modification in 2010. He is waiting for the outcome, but agreed to make payments pending the outcome of the dispute. Guideline E: Personal Conduct The concern under Personal Conduct is that 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. The following will normally result in an unfavorable national 7 security eligibility determination, security clearance action, or cancellation of further processing for national security eligibility: (a) refusal, or failure without reasonable cause, to undergo or cooperate with security processing, including but not limited to meeting with a security investigator for subject interview, completing security forms or releases, cooperation with medical or psychological evaluation, or polygraph examination, if authorized and required; and (b) refusal to provide full, frank, and truthful answers to lawful questions of investigators, security officials, or other official representatives in connection with a personnel security or trustworthiness determination. Under AG ¶ 16, the following could potentially raise a security concern in Applicant’s 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. I find that Applicant’s omissions of his delinquent debts on his security clearance application were not deliberate. In response to section 26, he listed delinquent medical accounts which were the majority of his debts. He was under the impression that his larger mortgage-related accounts alleged in SOR ¶¶ 1.d, and 1.h were combined with his current mortgage after he refinanced the mortgage in 2010. I also note that Applicant discussed all of his delinquent accounts with an investigator conducting his background investigation about a month after he completed his security clearance application. The Personal Conduct concern is found for Applicant. 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(a): (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. 8 Under AG ¶ 2(c), the ultimate determination of whether to grant eligibility for a security clearance must be an overall commonsense judgment based upon careful consideration of the guidelines and the whole-person concept. Applicant encountered problems because of his wife’s surgery and a period of unemployment. Once he became employed full time, he took the initiative and began resolving his debts. He has resolved several delinquent accounts both alleged and not alleged in the SOR. He and his wife are current on their mortgage payments. He is disputing an account that should have been combined with his mortgage when it was refinanced in 2010. Applicant still has some remaining financial issues, but the February 2016 credit report and Applicant’s actions towards resolving his delinquent accounts mitigated the concerns raised under financial considerations. 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.k: For Applicant Paragraph 2, Guideline E: FOR APPLICANT Subparagraph 2.a: For Applicant Conclusion In light of all of the circumstances presented by the record in this case, it is clearly consistent with the national security to grant Applicant eligibility for a security clearance. Eligibility for access to classified information is granted. _________________ ERIN C. HOGAN Administrative Judge