1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 16-00612 ) ) Applicant for Security Clearance ) Appearances For Government: Aubrey De Angelis, Esq., Department Counsel For Applicant: Pro se ______________ Decision ______________ WHITE, David M., Administrative Judge: Applicant incurred more than $17,000 in delinquent debt over the past nine years, some of which he has been unable or unwilling to repay. He failed to demonstrate a workable plan to resolve his financial issues, or progress toward implementing one. Resulting security concerns were not mitigated. Based upon a review of the testimony, pleadings and exhibits, national security eligibility is denied. History of Case On September 21, 2015, Applicant submitted an Electronic Questionnaire for Investigations Processing (e-QIP). On July 13, 2016, the Department of Defense Consolidated Adjudications Facility (DoD CAF) issued Applicant a Statement of Reasons (SOR) alleging security concerns under Guideline F (Financial Considerations). 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 2 Program (January 2, 1992), as amended (Directive); and the adjudicative guidelines effective within the DoD after September 1, 2006. Applicant answered the SOR in writing on August 8, 2016 (Answer), and requested a hearing before an administrative judge. The Defense Office of Hearings and Appeals (DOHA) assigned the case to another administrative judge on October 11, 2016, the reassigned it to me on October 20, 2016. I granted Applicant’s request for a continuance on November 19, 2016, and DOHA issued a Notice of Hearing on April 27, 2017, setting the hearing for May 15, 2017. On that date, Department Counsel offered Government Exhibits (GE) 1 through 5 into evidence. Applicant testified, but offered no documents into evidence during the hearing. All exhibits were admitted without objection. I granted Applicant’s request to leave the record open until June 5, 2017, to permit submission of additional evidence. Applicant timely submitted documentary exhibits, which were marked Applicant Exhibits (AE) A and B, and admitted without objection. DOHA received the hearing transcript (Tr.) on May 23, 2017. The SOR in this case was issued under the adjudicative guidelines that came into effect within the DoD on September 1, 2006. Security Executive Agent Directive (SEAD) 4, National Security Adjudicative Guidelines, implemented new adjudicative guidelines that came into effect on June 8, 2017. All national security eligibility determinations issued on or after June 8, 2017, are to be decided using the new National Security Adjudicative Guidelines for Determining Eligibility for Access to Classified Information or Eligibility to Hold a Sensitive Position (AG), as promulgated in Appendix A of SEAD 4. I considered the previous adjudicative guidelines, as well as the new AG, in adjudicating Applicant’s national security eligibility. This decision is issued pursuant to, and cites, the new AG; but my decision would be the same under either set of guidelines. Findings of Fact Applicant is employed as an electrician by a Federal contractor, and is applying for a security clearance in connection with that work. The SOR alleged 17 delinquent debts, totaling $17,398. Applicant denied the allegations in SOR ¶¶ 1.c, 1.d, 1.e, 1.g, and 1.k, which he said were incurred by his former girlfriend using a power of attorney that he gave her. He admitted the remaining debts, with some explanations. (Answer.) Applicant’s admissions are incorporated in the findings below. Applicant is 54 years old. His 22-year marriage ended in divorce in June 2008, and he has three adult children. He has no previous military or Federal government service, and this is his first application for a security clearance. He was unemployed for about a year during 2010 and 2011 after voluntarily leaving an overseas job, and for three shorter periods between other jobs since then, but has otherwise been employed since at least 2004. (Answer; GE 1; Tr. 38-40, 57.) SOR ¶¶ 1.a, 1.b, 1.c, 1.h, 1.p, and 1.q alleged six delinquent debts totaling $8,656. Applicant’s evidence and the record credit reports document that these debts 3 were paid during May 2017, August 2016, January 2017, March 2015, April 2013, and May 2011, respectively. (AE A; GE 4 at 1; GE 5 at 1, 4, 5; Tr. 37-47.) Applicant recently engaged the services of a credit counseling and credit management firm to assist him with disputing or settling the debts that he claimed were, or might have been, incurred by his former girlfriend using a general power of attorney that he granted to her to handle their household finances while he was working overseas. She abused that power of attorney to sell many of his assets and incur debts in his name. He has referred six of the debts, alleged in SOR ¶¶ 1.d, 1.e, 1.f, 1.g, 1.k, and 1.o, which total $2,190, to this firm for resolution assistance. He said that he would set aside sufficient funds for them to resolve any debts that they are unable to successfully dispute, including several new delinquencies that appear on his most recent credit report. These debts are not resolved, but Applicant has taken preliminary steps to address them. (AE B; GE 5; Tr. 40-44, 49-51, 53-54, 57.) The remaining five delinquent debts, alleged in SOR ¶¶ 1.i, 1.j, 1.l, 1.m, and 1.n, comprise three unpaid medical bills from June 2011, January 2012, and March 2012; an unpaid 2008 rental debt owed to a former landlord; and unpaid fees to an attorney that came due in April 2015. The total SOR-alleged amount due on these debts was $6,552. However, Applicant’s most recent record credit report reflects increased balances owed on the three medical debts, so the most current documented total due on these accounts is $7,084. Applicant documented no payments to resolve these debts, although he claimed that he paid around $400 to the former landlord to reduce that debt. (Answer; GE 3; GE 5; Tr. 47-50.) Three current and former supervisors with whom Applicant has worked overseas wrote letters describing him as a dependable, reliable, honest, and trustworthy individual who can be depended upon to accomplish assigned projects. Applicant’s descriptions of his debts, in his Answer and during his testimony, did not demonstrate a grasp of the overall status, or responsible management, of his financial obligations. His testimony, however, was forthright and credible. (AE B; Tr. 37-51.) Policies When evaluating an applicant’s suitability for national security eligibility, the administrative judge must consider the adjudicative guidelines. In addition to brief introductory explanations for each guideline, the adjudicative guidelines (AG) list potentially disqualifying conditions and mitigating conditions, which are to be used in evaluating an applicant’s national security eligibility. 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 4 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. I have not drawn inferences based on mere speculation or conjecture. Directive ¶ E3.1.14 requires the Government to present evidence to establish controverted facts alleged in the SOR. Directive ¶ E3.1.15 says that an “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 national security eligibility 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 or sensitive information. Finally, as emphasized in Section 7 of Executive Order 10865, “[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 Executive Order 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 personal security concern such as excessive gambling, mental 5 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. 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. Applicant incurred 17 delinquent debts, totaling more than $17,000, over the past nine years. He resolved three of those debts before the SOR was issued, and three others since that time. However, more than $9,000 in delinquent debt remains, for which he demonstrated neither progress toward resolution nor a basis for dispute. These facts establish prima facie support for the foregoing disqualifying conditions, and shift the burden to Applicant to mitigate the resulting security concerns. The guideline includes five conditions in AG ¶ 20 that could mitigate the security concerns arising from Applicant’s alleged financial difficulties: (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, or 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. 6 Applicant continues to owe more than $9,000 to 11 creditors for debts incurred over the past decade. His longest period of unemployment during that period followed his voluntary decision to leave overseas employment in 2010; and he knowingly, albeit unwisely, gave a general power of attorney to his former girlfriend who used it to lawfully incur many unpaid debts in his name. Applicant has resolved six of the SOR-alleged debts, but also incurred several more recent delinquencies. He did not demonstrate a legitimate basis to dispute his responsibility for any of these debts. Accordingly, Applicant failed to establish complete mitigation of security concerns arising from his financial irresponsibility under any of these conditions. He repaid six formerly delinquent debts so, other than issues raised by the historical pattern that they demonstrate, resulting security concerns were mitigated concerning those debts. 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 applicable 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 mature adult, who is accountable for his decisions that led to substantial debt he has been unable or unwilling to repay. He continues to owe more than $9,000 in delinquent debt that he accumulated over the past nine years and either could not, or chose not to, repay. Past and current supervisors provided strong character references. However, there is insufficient evidence of rehabilitation or a track record of compliance with debt- resolution agreements, and the potential for pressure, exploitation, or duress remains substantial. Overall, the evidence creates significant doubt as to Applicant’s eligibility and suitability for a security clearance. He failed to meet his burden to mitigate the security concerns arising under the guideline for financial considerations. 7 Formal Findings Formal findings for or against Applicant on the allegations set forth in the SOR, as required by ¶ E3.1.25 of the Directive, are: Paragraph 1, Guideline F: AGAINST APPLICANT Subparagraphs 1.a through 1.c: For Applicant Subparagraphs 1.d through 1.g: Against Applicant Subparagraph 1.h: For Applicant Subparagraphs 1.i through 1.o: Against Applicant Subparagraphs 1.p and 1.q: For Applicant Conclusion In light of all of the circumstances presented by the record in this case, it is not clearly consistent with the interests of national security to grant Applicant eligibility for a security clearance. National security eligibility for access to classified information is denied. DAVID M. WHITE Administrative Judge