1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) [Redacted] ) ISCR Case No. 16-01326 ) Applicant for Security Clearance ) Appearances For Government: Jeff A. Nagel, Esq., Department Counsel For Applicant: Pro se ______________ Decision ______________ FOREMAN, LeRoy F., Administrative Judge: This case involves security concerns raised under Guideline F (Financial Considerations). Eligibility for access to classified information is granted. Statement of the Case Applicant submitted a security clearance application (SCA) on February 17, 2015. On August 1, 2016, the Department of Defense (DOD) sent her a Statement of Reasons (SOR) alleging security concerns under Guideline F. The DOD acted under Executive Order (Exec. Or.) 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 by DOD on September 1, 2006.1 1 Security Executive Agent Directive 4 (SEAD 4) was issued on December 10, 2016, revising the 2006 adjudicative guidelines. The SEAD 4 guidelines apply to all adjudicative decisions issued on or after June 8, 2017. My decision is based on the guidelines in SEAD 4, referred to in this decision as “AG.” The changes resulting from issuance of SEAD 4 did not affect my decision in this case. 2 Applicant answered the SOR on October 11, 2016, and requested a decision on the record without a hearing. Department Counsel submitted the Government’s written case on November 7, 2016. On November 8, 2016, a complete copy of the file of relevant material (FORM) was sent to Applicant, who was given an opportunity to file objections and submit material to refute, extenuate, or mitigate the Government’s evidence. She received the FORM on November 14, 2016, and did not respond. The case was assigned to me on September 7, 2017. The FORM included Item 3, a summary of a personal subject interview (PSI) conducted on March 26, 2015. The PSI was not authenticated as required by Directive ¶ E3.1.20. Department Counsel informed Applicant that she was entitled to comment on the accuracy of the PSI summary; make any corrections, additions, deletions or updates; or object to consideration of the PSI on the ground that it was not authenticated. I conclude that Applicant waived any objection to Item 3 by failing to respond to the FORM. Although pro se applicants are not expected to act like lawyers, they are expected to take timely and reasonable steps to protect their rights under the Directive. ISCR Case No. 12-10810 at 2 (App. Bd. Jul. 12, 2016). Findings of Fact2 Applicant is a 57-year-old consulting configuration analyst employed by defense contractors since July 1980. (Item 3 at 4.) She earned a bachelor’s degree in June 1995. (Item 3 at 4.) She married in May 2000 and divorced in June 2006. She married her current spouse in July 2011, after cohabiting with him since December 2008. (Item 3 at 5.) She has no children. She has held a security clearance for more than 30 years. (Item 3 at 5.) The SOR alleges three delinquent debts: a $17,689 debt charged off in January 2010 (SOR ¶ 1.a); a charge account referred for collection of $10,490 in January 2010 (SOR ¶ 1.b); and an installment account referred for collection of $6,139 in September 2009 (SOR ¶ 1.c). The alleged debts are reflected in a credit report from May 2015 (FORM Item 4). The credit report reflects that Applicant disputed the debt alleged in SOR ¶ 1.c. She denied all three allegations in her answer to the SOR. Applicant disclosed six delinquent debts in her SCA and during the March 2015 PSI. She stated that two debts, for $11,000 and $10,500, were forgiven and that she received IRS Form 1099s and paid taxes on the forgiven debts. Four of the debts disclosed in the SCA were unresolved at the time of the PSI, and one of them, a charged- off debt for $17,689, is alleged in SOR ¶ 1.a. The other three debts listed in her SCA were not reflected as delinquent in the May 2015 credit report. During the PSI, Applicant was confronted with two additional unresolved debts, which were reflected in the May 2015 credit report and alleged in SOR ¶¶ 1.b and 1.c. 2 Applicant’s personal information is extracted from her security clearance application (FORM Item 2) unless otherwise indicated by a parenthetical citation to the record. 3 In Applicant’s answer to the SOR, she submitted a credit report from September 2016, which did not reflect the debts alleged in SOR ¶¶ 1.a and 1.c. A credit report from November 2016, included in the FORM as Item 5, also did not reflect the debts in SOR ¶¶ 1.a and 1.c. However, all three credit reports in the record reflected the debt alleged in SOR ¶ 1.b. The absence of the debt alleged in SOR ¶ 1.a in the September 2016 credit report indicates that it was resolved. It would not have “aged off” the credit report under the Fair Credit Reporting Act (FCRA) because it was charged off in January 2010, less than seven years before the date of the credit report.3. The May 2015 credit report reflected that Applicant disputed the debt alleged in SOR ¶ 1.c, and the absence of this debt in the September 2016 credit report indicates that the dispute was resolved in Applicant’s favor. This debt also would not have “aged off” under the FCRA, because more than seven years had not elapsed since it was referred for collection in September 2009. Applicant provided no evidence of payments, payment agreements, or other resolution of the debt alleged in SOR ¶ 1.b. In the PSI, Applicant attributed her financial problems to her husband’s injury in a motorcycle accident in August 2009, which left him unable to work as a self-employed barber until 2010, when he started to rebuild his business. As of the date of the PSI, he still had not been able to generate the level of income he enjoyed before his injury. (Item 3 at 10.) Although they did not marry until July 2011, they bought a home together in December 2008. (Item 3 at 5.) She stated that she attempted to resolve her financial problems with a credit counselor, but she could not afford the monthly payment required consolidate her debts. She provided no documentation and no further information about credit counseling. The September 2016 credit report reflected that Applicant’s monthly $2,187 payments on her home mortgage loan were current. It reflected that she had nine open credit-card accounts that were current and a line of credit that was current. Policies “[N]o 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 applicants 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 § 2. 3 Under the Fair Credit Reporting Act, a credit report may not list accounts placed for collection, charged off debts, or civil judgments that antedate the credit report by more than seven years, or until the statute of limitations has run, whichever is longer. The exceptions to this prohibition do not apply to this debt. 10 U.S.C. § 1681c. 4 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, an administrative judge applies these guidelines 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 and 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 that 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 made “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” Exec. Or. 10865 § 7. Thus, a decision to deny a security clearance is merely an indication the applicant has not met the strict guidelines the President and the Secretary of Defense 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. 92-1106 at 3, 1993 WL 545051 at *3 (App. Bd. Oct. 7, 1993). 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 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. Sep. 22, 2005). An applicant “has the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue his security clearance.” ISCR Case No. 01- 20700 at 3 (App. Bd. Dec. 19, 2002). “[S]ecurity clearance determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531. 5 Analysis Guideline F, Financial Considerations The security concern under this guideline 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. . . . This concern is broader than the possibility that a person might knowingly compromise classified information to raise money. It encompasses concerns about a person’s self-control, judgment, and other qualities essential to protecting classified information. A person who is financially irresponsible may also be irresponsible, unconcerned, or negligent in handling and safeguarding classified information. See ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012). Applicant’s May 2015 credit report and the summary of the PSI establish three disqualifying conditions under this guideline: AG ¶ 19(a) (“inability to satisfy debts”); AG ¶ 19(b) (“unwillingness to satisfy debts regardless of the ability to do so”); and AG ¶ 19(c) (“a history of not meeting financial obligations.”). The following mitigating conditions are potentially relevant: 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(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; 6 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) is not established. Applicant’s debts are not yet fully resolved. They were numerous and were not incurred under circumstances making them unlikely to recur. AG ¶ 20(b) is established for the debts alleged in SOR ¶¶ 1.a and 1.c. Applicant’s husband’s injury and inability to work were conditions largely beyond her control. She has acted responsibly regarding several delinquent debts that were not alleged in the SOR by contacting her creditors and successfully resolving them. She consulted with a credit counselor but could not afford the payments on the plan suggested by the counselor. She has remained current on her home mortgage loan payments and all her open credit-card accounts. However, she presented no evidence of responsible conduct regarding the debt alleged in SOR ¶ 1.b. AG ¶ 20(c) is not established. Applicant provided no evidence that the counseling she received was provided by “a legitimate and credible source.” AG ¶ 20(d) is established. A security clearance adjudication is not a debt-collection process, and the adjudicative guidelines do not require that an individual make payments on all delinquent debts simultaneously, pay the debts alleged in the SOR first, or establish resolution of every debt alleged in the SOR. An applicant needs only to establish a plan to resolve financial problems and take significant actions to implement the plan. See ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008). Applicant began resolving her delinquent debts before she submitted her SCA in February 2015. She disclosed six delinquent debts in her SCA and had resolved two of them by the time of the PSI in March 2015. Only three delinquent debts were reflected in the May 2015 credit report, and one of them was disputed. Her most recent credit report from November 2016 reflected only one unresolved debt. There is no evidence that she intentionally avoided dealing with her creditors, hoping that the debts would eventually fall off her credit record. See ISCR Case No. 99-9020 at 5-6 (App. Bd. Jun. 4, 2001) (Merely waiting for a debt to drop off a credit report by the passage of time is not a factor in an applicant’s favor). The evidence reflects a credible and reasonable plan and significant actions to implement it. After considering Applicant’s many years of employment by defense contractors while holding a security clearance and her systematic resolution of her 7 delinquent debts, I am confident that she will resolve the debt alleged in SOR ¶ 1.b as soon as she is financially able.4 AG ¶ 20(e) is established for the debt alleged in SOR ¶ 1.c. There is no evidence that she disputed the debts alleged in SOR ¶¶ 1.a and 1.b. Whole-Person Concept 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. In applying the whole- person concept, an administrative judge must evaluate an applicant’s eligibility for a security clearance by considering the totality of the applicant’s conduct and all relevant circumstances and applying the adjudicative factors in AG ¶ 2(d).5 I have incorporated my comments under Guideline F in my whole-person analysis and applied the adjudicative factors in AG ¶ 2(d). I have considered that Applicant has worked for defense contractors and held a security clearance for many years. She was open and candid about her financial problems throughout the security clearance process. She has made significant progress in regaining financial stability. Applicant’s long record of employment while holding a security clearance and her resolution of all but one delinquent debt make it unlikely that she will trigger the concern in AG ¶ 18 about a “greater risk of having to engage in illegal or otherwise questionable acts to general funds.” After weighing the disqualifying and mitigating conditions under Guideline F, and evaluating all the evidence in the context of the whole person, I conclude Applicant has mitigated the security concerns raised by her delinquent debts. Formal Findings I make the following formal findings on the allegations in the SOR: Paragraph 1, Guideline F (Financial Considerations): FOR APPLICANT Subparagraphs 1.a-1.c: For Applicant 4 Administrative judges do not have authority to grant conditional clearances. ISCR Case No. 01-24328, 2003 WL 21979745 at *2 (App. Bd. May 23, 2003). However, if Applicant fails to continue on her path of responsible conduct, her failure may prompt reconsideration of her suitability for holding a security clearance. See ISCR Case No. 10-06943 at 4 (App. Bd. Feb. 17, 2012). 5 The factors are: (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 Conclusion I conclude that it is clearly consistent with the national security interests of the United States to continue Applicant’s eligibility for access to classified information. Clearance is granted. LeRoy F. Foreman Administrative Judge