1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 16-00665 ) Applicant for Security Clearance ) Appearances For Government: Charles C. Hale, Esq., Department Counsel For Applicant: Pro se ______________ Decision ______________ RICCIARDELLO, Carol G., Administrative Judge: Applicant mitigated the security concerns under Guidelines G, alcohol consumption, J, criminal conduct, and E, personal conduct, but failed to mitigate the security concerns under Guideline F, financial considerations. Eligibility for access to classified information is denied. Statement of the Case On August 29, 2016, the Department of Defense Consolidated Adjudications Facility (DOD CAF) issued to Applicant a Statement of Reasons (SOR) detailing security concerns under Guidelines F, financial considerations, G, alcohol consumption, J, criminal conduct, and 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 on September 1, 2006. On June 2 8, 2017, new AG were implemented and are effective for decisions issued after that date.1 Applicant answered the SOR on September 11, 2016, and elected to have his case decided on the written record in lieu of a hearing. Department Counsel submitted the Government’s file of relevant material (FORM). Applicant received it on October 26, 2016. The Government’s evidence is identified as Items 1 through 8. Applicant was afforded an opportunity to file objections and submit material in refutation, extenuation, or mitigation within 30 days of receipt of the FORM. Applicant did not object to the Government’s evidence or provide additional material. Items 1 through 8 are admitted into evidence. The case was assigned to me on August 23, 2017. Findings of Fact Applicant admitted the allegations in the SOR. After a thorough and careful review of the pleadings and exhibits submitted, I make the following findings of fact. Applicant is 49 years old. He has a college degree. He has worked for his current employer, a federal contractor, since 2001. He married in 1992 and divorced in 1997. He remarried the same year and was widowed in 2012. Applicant has at least six adult children.2 Applicant filed Chapter 13 bankruptcy in June 1997. It was dismissed in January 1998 for failure to make plan payments. In Applicant’s October 2001 sworn statement to a government investigator, he attributed the bankruptcy to his divorce. He stated he included three debts in his bankruptcy: his mortgage, a real estate loan, and a car loan. He filed bankruptcy to prevent his home from being foreclosed. He was eight months past due on the mortgage.3 Applicant had other delinquent debts in 1997. Some he disputed and others he agreed he owed, but they were already listed as bad debts, and he was aware they would be removed from his credit report after seven years. In his 2001 sworn statement he said, “I would be willing to pay them if my job were threatened because I was not granted a security clearance as a result of not intending to satisfy my past bad debts.” He further stated 4 He also stated he intended to use credit more wisely in the future.5 1 I considered the previous AG, effective September 1, 2006, as well as the new AG, effective June 8, 2017. My decision would be the same if the case was considered under the previous AG. 2 Item 3. On Applicant’s security clearance application (SCA) he disclosed he has six children. In his background interview he stated he had nine children. 3 Items 2, 7. 4 Item 7. 5 Item 7. 3 that he did not intend to get into a “bad credit situation again through creating bad debts in the future.”7 He planned to pay his debts in a timely manner.8 In May 2012, Applicant’s second wife passed away after a long illness. During his interview with a government investigator in October 2015, he disclosed that he owed money to the Internal Revenue Service (IRS) for 2011 taxes, and he was on a payment plan. He said he sent the IRS a request to have his 2012 tax debt of $3,012 added to this payment plan. He stated he filed an extension for his 2013 tax return, but then forgot to file it before the extension expired. He indicated that he had not made the required deduction changes when his wife passed away and his children became adults. He said that he had filed his 2014 tax return and his refund was applied to his tax debt. He indicated that he had a new payment plan with the IRS to make monthly payments of $300.9 In Applicant’s answer to the SOR, he admitted he failed to timely file his federal tax returns for 2012, 2013, and 2014, and that he owed approximately $22,857 for tax years 2009, 2011, 2012 and 2013. He stated that at one point he had an installment agreement to pay his taxes, but did not complete its terms. He was able to arrange a new installment agreement that required him to pay $323 a month. Applicant admitted SOR ¶ 1.c, which alleged that he was also indebted to the federal government for tax year 2015 ($1,774). His answer said that he had requested an extension and would pay the full amount in October 2016.10 IRS documents dated May 2016 show that taxes are owed for 2011, 2012, and 2013. A document was not provided for tax year 2009. The IRS record for tax year 2014 shows the return was filed in October 2015. It does not show that a request for an extension was filed. There was no federal tax owed for 2014. The IRS record for tax year 2015 shows an extension was filed.11 A January 2016 letter from the IRS to Applicant shows that he contacted them earlier that month requesting an installment agreement. The tax periods included in the installment agreement are 2009, 2011, 2012, and 2013, and the amount owed as of February 2016 was $23,456.12 The IRS agreed to an installment of agreement of $323 paid monthly. Applicant provided a copy of proof of payment for December 2015. No additional documentation was provided to show Applicant has made consistent 7 Item 7. 8 Item 7. 9 Items 2, 3, 4. 10 Item 2. 11 Item 8. 12 The total amount owed for each individual year was not provided. 4 payments to the IRS. Applicant did not provide evidence that he paid the 2015 tax debt alleged in SOR ¶ 1.c. Applicant completed interrogatories in June 2016. With regard to his financial problems, he stated: During this time period, I was dealing with a lot of health issues with my wife. She passed away 5/16/2012. This also caused my tax liability situation to change. In addition, several of my children grew up, moved out and that affected things too. I just didn’t think about adjusting my W-4. I think I finally have it close to where my yearly tax liability will be small or negative.13 In his SOR answer, Applicant admitted he owed the debts alleged in SOR ¶¶ 1.d through 1.i (totaling approximately $9,497). During his 2015 background interview, he said the debts in SOR ¶¶ 1.d, 1.e, and 1.f were due to his wife’s medical issues and death. He was unaware of the debts in SOR ¶¶ 1.g, 1.h and 1.i, but would pay them. In his answer to the SOR, he stated the debts in SOR ¶¶ 1.d, 1.e, and 1.f occurred right after his wife passed away, and he had a lot of expenses and failed to take care of these. He stated he would pay these debts. He did not provide proof of payment. With regard to the debts in SOR ¶¶ 1.g, 1.h and 1.i, he stated these debts were due to his wife’s illness that he apparently had not paid. He was unaware of them until the security process began. He stated he would contact the creditors to resolve the debts. He did not provide proof he has taken action to resolve any of debts. Applicant’s admissions and credit reports from October 2016 and October 2015 corroborate the alleged debts.14 In December 2012, Applicant was charged with public intoxication. He stated this happened shortly after his wife passed away. He was grieving and not handling matters responsibly. He did not go to court. He paid the fine and the matter was resolved.15 In November 2014, Applicant was arrested and charged with driving while intoxicated (DWI). He was at a sports bar and was later arrested. He had consumed two to three drinks and did not believe he was intoxicated. He refused to take a breathalyzer. The charge was reduced to obstruction of highway. In September 2015, he pleaded guilty to the reduced charge. He was fined; ordered to perform 40 hours of community service; and placed on probation for 18 months, which was to expire in March 2017. He provided documents to show he paid the fine and completed the 13 Item 8. 14 Items 4, 8. 15 Items 2, 3, 4, 8. 5 community service. In his June 2016 interrogatories, Applicant stated he is not currently drinking alcohol.16 Policies When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the AG. In addition to brief introductory explanations for each guideline, the AG list potentially disqualifying conditions and mitigating conditions, which are 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 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. Likewise, I have avoided drawing inferences grounded on mere speculation or conjecture. Under Directive ¶ E3.1.14 the Government must present evidence to establish controverted facts alleged in the SOR. Directive ¶ E3.1.15 states that an “applicant is responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by applicant or proven by Department Counsel, and 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 that an applicant may deliberately or inadvertently fail to 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 EO 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 16 Items 2, 3, 4, 8, 9. 6 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 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 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. AG ¶ 19 provides conditions that could raise security concerns. The following are potentially applicable: (a) inability to satisfy debts; (b) unwillingness to satisfy debts regardless of the ability to do so; (c) a history of not meeting financial obligations; and (f) failure to file or fraudulently filing annual Federal, state, or local income tax returns or failure to pay annual Federal, state, or local income tax returns. Applicant’s has numerous unresolved delinquent debts dating from at least 2011. He failed to timely file federal income tax returns for 2012, 2013, and 2014. He owes approximately $23,000 of federal income taxes for several tax years. He filed Chapter 13 bankruptcy in 1997, and it was dismissed in January 1998 for failing to make payments. There is sufficient evidence to support the application of the above disqualifying conditions. 7 The guideline also includes conditions that could mitigate security concerns arising from financial difficulties. The following mitigating conditions under AG ¶ 20 are potentially applicable: (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; (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; and (g) the individual has made arrangements with the appropriate tax authority to file or pay the amount owed and is in compliance with those arrangements. Applicant admitted the delinquent debts alleged in the SOR and indicated they were paid or were going to be resolved. He did not provide supporting documentation to corroborate his statements. He has an installment agreement with the IRS for taxes owed for tax years 2009, 2011, 2012, and 2013. He provided proof of the agreement, and one payment. He did not provide proof that he is making consistent payments. He did not provide proof he has paid his 2015 federal tax debt. His financial issues are ongoing. Although some of Applicant’s financial problems are attributable to his wife’s death, I cannot find they are unlikely to recur because Applicant failed to provide evidence that he has paid the alleged debts stated above. His behavior casts doubt on his current reliability, trustworthiness and good judgment. AG ¶ 20(a) does not apply. Applicant attributed his financial issues to his wife’s illness and passing, and associated medical expenses. This was beyond his control. He also stated that he failed to change his tax withholding after she passed and when his children became adults. 8 This was not beyond his control. For the full application of AG ¶ 20(b), Applicant must have acted responsibly under the circumstances. Applicant failed to provide sufficient evidence that he has paid the debts alleged in the SOR, which he admitted he owed. Although it is understandable that he failed to change his W-4 after his wife passed, he failed to timely file his 2012 tax returns, which were due in April 2013. He requested an extension for his 2013 federal tax return and then forgot to file it. He did not pay his 2013 federal taxes as required, but asked the IRS to add it to his tax debt. He has not provided proof that he has paid his 2015 federal tax debt, which is not included in his installment agreement. He did not provide an explanation for failing to pay his 2009 federal taxes, which are included in his installment agreement. Applicant has not acted responsibly under the circumstances. AG ¶ 20(b) partially applies. There is no evidence Applicant has received or is receiving financial counseling. There is evidence that Applicant made one payment on the installment agreement with the IRS for taxes owed for tax years 2009, 2011, 2012, and 2013. He did not provide evidence that he has been making consistent payments on that agreement to the IRS. He did not provide evidence that he paid his 2015 federal taxes or the other debts alleged in the SOR. AG ¶ 20(g) does not apply. There is minimal evidence that his financial problems are being resolved or are under control because Applicant failed to provide documentary evidence that he has paid, or is paying his delinquent debts. AG ¶ 20(c) does not apply. The evidence is insufficient to conclude he is adhering to a good-faith effort to repay overdue creditors or resolve his delinquent debts. AG ¶ 20(d) does not apply. Applicant did not dispute any of the debts alleged in the SOR. Therefore, AG ¶ 20(e) has not been raised. Guideline G: Alcohol Consumption AG ¶ 21 expresses the security concern for alcohol consumption: Excessive alcohol consumption often leads to the exercise of questionable judgment or the failure to control impulses, and can raise questions about an individual’s reliability and trustworthiness. AG ¶ 22 describes a condition that could raise a security concern and may be disqualifying. I find the following to be potentially applicable: (a) alcohol-related incidents away from work, such as driving while under the influence, fighting, child or spouse abuse, disturbing the peace, or other incidents of concern, regardless of the frequency of the individual’s alcohol use or whether the individual has been diagnosed with alcohol use disorder. Applicant received a citation in 2012 for public intoxication, and was arrested and charged with DWI in November 2014. The above disqualifying condition applies. 9 The guideline also includes conditions that could mitigate security concerns arising from alcohol consumption. I have considered the following mitigating condition under AG ¶ 23: (a) so much time has passed, or the behavior was so infrequent, or it happened under such unusual circumstances that it is unlikely to recur or does not cast doubt on the individual’s current reliability, trustworthiness, or judgment. Applicant received a citation for public intoxication several months after his wife passed away. He admitted he was not handling things responsibly at that time. In November 2014, he was charged with DWI after drinking two to three alcohol beverages at a sports bar. He did not believe he was intoxicated and refused a breathalyzer. In 2015, the DWI charge was reduced to obstructing the highway. He pleaded guilty and was sentenced. Applicant indicated in his June 2016 interrogatory that he is not consuming alcohol. I have considered the evidence and find that a sufficient period of time has elapsed since his November 2014 offense to conclude that future alcohol- related conduct is unlikely to recur. AG ¶¶ 23(a) applies. Guideline J: Criminal Conduct The security concern for criminal conduct is set out in AG & 30: Criminal activity creates doubt about a person’s judgment, reliability, and trustworthiness. By its very nature, it calls into question a person’s ability or willingness to comply with laws, rules, and regulations. The guideline notes several conditions that could raise security concerns. I have considered all of the disqualifying conditions under AG & 31, and the following three are potentially applicable: (a) a pattern of minor offenses, any one of which on its own would be unlikely to affect a national security eligibility decision, but which in combination cast doubt on the individual’s judgment, reliability, or trustworthiness; (b) evidence (including, but not limited to, a credible allegation, an admission, and matters of official record) of criminal conduct, regardless of whether the individual was formally charged, prosecuted, or convicted; and (c) individual is currently on parole or probation. Applicant received a citation in 2012 for public intoxication. In November 2014, he was arrested and charged with DWI in 2014. He pleaded guilty to the reduced 10 charge of obstructing the highway. He was placed on probation until March 2017. The above disqualifying conditions apply. The guideline also includes conditions that could mitigate security concerns arising from criminal conduct. The following mitigating conditions under AG ¶ 32 are potentially applicable: (a) so much time has elapsed since the criminal behavior happened, or it happened under such unusual circumstances, that it is unlikely to recur and does not cast doubt on the individual’s reliability, trustworthiness, or good judgment; and (d) there is evidence of successful rehabilitation; including, but not limited to, the passage of time without recurrence of criminal activity, restitution, compliance with the terms of parole or probation, job training or higher education, good employment record, or constructive community involvement. There is no evidence of additional misconduct. Applicant’s criminal conduct related to alcohol consumption, and he is no longer consuming alcohol. I believe future alcohol-related misconduct is unlikely to recur. AG ¶ 32(a) applies. Applicant completed the court-ordered community service and paid the fine associated to the November 2014 charge. AG ¶ 32(d) partially applies. Guideline E: Personal Conduct AG ¶ 15 expresses the security concern for 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 information. Of special interest is any failure to provide truthful and candid answers during the security clearance process or any other failure to cooperate with the security clearance process. Applicant’s financial considerations, alcohol consumption, and criminal conduct were addressed under the specific guidelines related to them. The same issues were cross-alleged under the personal conduct guideline. No specific personal conduct allegations were raised beyond those that were raised under the appropriate guidelines. I have previously addressed those security concerns and find that alleging them under personal conduct is redundant. This guideline is found in favor of 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 11 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. 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. I considered the potentially disqualifying and mitigating conditions in light of all facts and circumstances surrounding this case. I have incorporated my comments under Guidelines F, G, J and E in my whole-person analysis. Some of the factors in AG ¶ 2(d) were addressed under those guidelines, but some warrant additional comment. Applicant is 49 years old. He has worked for his employer since 2001. He has a history of financial problems. In 1997, he filed Chapter 13 bankruptcy due to his divorce. It was dismissed in January 1998. When he was interviewed by a government investigator in 2001, he stated he did not intend to pay some of his bad debts because he knew they would fall off his credit report, but he would pay them if his job were threatened because nonpayment would affect his security clearance eligibility. Beginning in 2011, he had difficulty paying some debts. His wife was sick and passed away in May 2012. This stressful period impacted his behavior. However, Applicant already had a tax debt owed for his 2009 federal taxes. He continued to accumulate delinquent taxes for other tax years. He was aware of his delinquent debts and stated he would address them, but failed to provide evidence that he has done so. He has an installment agreement with the IRS, but failed to show he is making consistent payments. He failed to provide proof he paid his 2015 federal taxes, which are not part of the installment agreement. Applicant has not established a reliable financial track record. Applicant’s alcohol-related criminal conduct is mitigated by the passage of time. He is not consuming alcohol. He completed the community service and paid the fine. There is no evidence of additional misconduct. All of his conduct was cross-alleged under the personal conduct guideline. I have found in his favor under that guideline. The record evidence leaves me with questions and doubts as to Applicant’s eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant failed to mitigate the security concerns arising under Guideline F, financial 12 considerations. He mitigated the security concerns under Guideline G, alcohol consumption, Guideline J, criminal conduct, and Guideline E, personal conduct. 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: AGAINST APPLICANT Subparagraphs 1.a-1.j: Against Applicant Paragraph 2, Guideline G: FOR APPLICANT Subparagraphs 2.a-2.b: For Applicant Paragraph 3, Guideline J: FOR APPLICANT Subparagraph 2.a: For Applicant Paragraph 4, Guideline E: FOR APPLICANT Subparagraph 4.a: For Applicant Conclusion In light of all of the circumstances presented by the record in this case, it is not clearly consistent with the national security to grant Applicant’s eligibility for a security clearance. Eligibility for access to classified information is denied. _____________________________ Carol G. Ricciardello Administrative Judge