1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) [NAME REDACTED] ) ISCR Case No. 16-00090 ) Applicant for Security Clearance ) Appearances For Government: Tovah Minster, Esq., Department Counsel For Applicant: Pro se ______________ Decision ______________ BORGSTROM, Eric H., Administrative Judge: Applicant did not mitigate the security concerns about his financial problems. Eligibility for access to classified information is denied. Statement of the Case On April 4, 2016, the Department of Defense (DOD) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline F (financial considerations).1 Applicant responded to the SOR on June 17, 2016, and he elected a decision on the written record in lieu of a hearing. On July 11, 2016, Department Counsel submitted her file of relevant material (FORM) and provided a complete copy to Applicant. Applicant received the FORM on August 22, 2016. He was afforded an opportunity to respond within 30 days of its receipt and to file objections and submit material to refute, extenuate, or mitigate the security concerns. Applicant did not respond to the FORM. The case was assigned to me on June 2, 2017. 1 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 implemented by the DOD on September 1, 2006. 2 Procedural Issues On September 7, 2017, I issued an order informing both parties that although the SOR referenced the adjudicative guidelines implemented by the DOD on September 1, 2006, I would be applying the revised adjudicative guidelines (AG) effective as of June 8, 2017, pursuant to Security Executive Agent Directive 4 (SEAD 4). I also permitted the parties to supplement the record with additional evidence and argument. Both parties received my order. Applicant submitted one document, Applicant Exhibit (AE) A, which was admitted into evidence without objection.2 In the FORM, Department Counsel references FORM Items 1-5.3 FORM Item 3 is an unauthenticated summary of an interview with a government investigator conducted on September 21, 2012. In the FORM, Department Counsel advised Applicant that he could object to FORM Item 3 and it would not be admitted, or that he could make corrections, additions, deletions, and update the document to make it accurate. Applicant was informed that his failure to respond to the FORM or to raise any objections could be constituted as a waiver, and the evidence would be considered by me. Applicant did not respond to the FORM or file any objections. Given Department Counsel’s advisement and Applicant’s work experience, I find his waiver to be knowing and intelligent.4 FORM Items 2-5 are admitted into evidence as Government Exhibits (GE) 2-5, without objection. Findings of Fact The SOR alleges two federal tax liens and 16 delinquent debts. Applicant admitted the two tax liens (SOR ¶¶ 1.a.-1.b.) and one debt (SOR ¶ 1.c.), and he denied the remaining 15 debts (SOR ¶¶ 1.d.-1.r.). After a thorough and careful review of the pleadings and exhibits, I make the following findings of fact: Applicant is 46 years old. He graduated from high school in 1990. He served on active duty in the U.S. military from March 1997 to December 1998, when he received a general discharge. He has been employed full time as a technician for a DOD contractor since February 2012, and his security clearance application (SCA) lists that he has been consistently employed full time since 2006. He has never been married, and he has a 10- year-old child.5 In 2011, two federal tax liens were filed against Applicant for $64,376 (SOR ¶ 1.a.) and $5,539 (SOR ¶ 1.b.). For tax year 2005, Applicant did not have any taxes withheld 2 Hearing Exhibit I. 3 FORM Item 1 consists of the SOR and Applicant’s answer, which are pleadings and are included in the administrative record. 4 See ISCR Case No. 15-05252 at 3 (App. Bd. Apr. 13, 2016) (Applicant’s waiver of the authentication element must be knowing and intelligent.). See ISCR Case No. 12-10810 at 2 (App. Bd. Jul. 12, 2016) (“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.”) 5 GE 2-3. 3 from his pay, and he did not set aside sufficient funds. He subsequently failed to file his income tax returns for tax years 2006 and 2007. Applicant has provided no documentary evidence of any payments or debt-resolution efforts as to these two federal tax liens.6 Applicant’s two credit reports establish the 16 alleged debts, which became delinquent between November 2007 and November 2014: SOR ¶ Creditor Balance Evidence 1.c. Past-due rent $1,279 GE 4 1.d. Medical collection $63 GE 5 1.e. Credit card $7,386 GE 5 1.f. Collection $469 GE 5 1.g. Utility $91 GE 5 1.h. Utility $77 GE 5 1.i. Utility $165 GE 5 1.j. Credit card $437 GE 5 1.k. Utility $144 GE 5 1.l. Medical collection $99 GE 5 1.m. Collection $1,498 GE 5 1.n. Utility $688 GE 5 1.o. Overdrawn account $415 GE 5 1.p. Utility $374 GE 5 1.q. Repossessed vehicle $31,350 GE 5 1.r. Collection $431 GE 5 Applicant claims to have filed Chapter 13 bankruptcy in January 2017 and to have been making payments in accordance with the repayment plan; however, he has not provided any documentary evidence to support these claims. There is no documentary evidence as to which debts were included under the bankruptcy plan and what payments have been made. There is no documentary evidence of other debt-resolution efforts by Applicant as to these 16 debts.7 Applicant attributed his federal tax liens to his own “poor tax management.” He further explained that his delinquent debts were caused by his own poor financial decisions and his fiancée’s unemployment; however, he provided no further details as to the length of her unemployment.8 Policies When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines. In addition to brief 6 Response to SOR; GE 2-5. 7 GE 4-5; AE A. 8 GE 2-3. 4 introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which are to be 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, administrative judges apply the guidelines 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.” 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 the applicant or proven by Department Counsel.” The applicant has the ultimate burden of persuasion to obtain 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 safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation of potential, rather than actual, risk of compromise of classified information. Section 7 of EO 10865 provides that adverse 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). Analysis Guideline F, Financial Considerations The security concern for financial considerations is set out in AG ¶ 18: Failure or inability 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 5 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 risk of having to engage in illegal acts to generate funds. The guideline notes several conditions that could raise security concerns under AG ¶ 19. The following are potentially applicable in this case: (a) inability or unwillingness to satisfy debts; (c) a history of not meeting financial obligations; and (f) failure to file or fraudulently filling annual Federal, state, or local income tax returns or failure to pay annual Federal, state, or local income tax as required. Applicant’s two federal tax liens and 16 delinquent debts total approximately $114,881. These debts became delinquent between 2007 and 2014, and they remain delinquent. The Government produced substantial evidence to raise the disqualifying conditions in AG ¶¶ 19(a), 19(c), and 19(f). Conditions that could mitigate the financial considerations security concerns are provided under AG ¶ 20. The following 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 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; and (d) the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts. Applicant’s delinquent debts have remained delinquent for several years. There is no documentary evidence that Applicant has corrected his income tax withholding. There is also no evidence of any debt-resolution efforts or evidence demonstrating Applicant’s current reliability, trustworthiness or good judgment. AG ¶ 20(a) does not apply. 6 Applicant attributed his federal tax liens to his own “poor tax management” and attributed his other financial delinquencies to his poor financial decision-making and his fiancée’s unemployment. Although his fiancée’s unemployment is a circumstance beyond his control in the context of AG ¶ 20(b), there is no documentary evidence of any debt- resolution efforts, including his purported bankruptcy filing and payments. Applicant has not demonstrated that he has acted financially responsibly. AG ¶ 20(b) does not apply. There is no evidence that Applicant has sought credit counseling. Nor is there evidence of his monthly income or expenses to establish that his financial problems are under control. AG ¶ 20(c) does not apply. The concept of good faith Arequires a showing that a person acts in a way that shows reasonableness, prudence, honesty, and adherence to duty or obligation.”9 Although Applicant has purportedly filed Chapter 13 bankruptcy, there is no documentary evidence as to which debts were included under the repayment plan and whether he has adhered to the repayment plan. AG ¶ 20(d) does not apply. Applicant has not demonstrated that he rectified the poor financial decision-making that contributed to his tax liens and delinquent debts. Furthermore, there is no documentary evidence of any debt-resolution efforts nor evidence demonstrating Applicant’s financial responsibility. I find that Applicant did not mitigate the financial considerations security concerns. 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 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. 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 the facts and circumstances 9 See ISCR Case No. 08-12184 at 10 (App. Bd. Jan. 7, 2010) (Good-faith effort to resolve debts must be evidenced by a meaningful track record of repayment). 7 surrounding this case. I have incorporated my comments under Guideline F and the factors in AG ¶ 2(d) in this whole-person analysis. Applicant incurred approximately $115,000 in federal tax liens and delinquent debts between 2007 and 2014. There is no documentary evidence of any debt-resolution efforts or that he has acted responsibly with his finances. I conclude Applicant did not mitigate the financial considerations security concerns. 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.r: Against 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.10 Eligibility for access to classified information is denied. _______________________ Eric H. Borgstrom Administrative Judge 10 See SEAD 4, Appendix A, ¶¶ 1(d) and 2(c).