1   DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 16-01048 ) Applicant for Security Clearance ) Appearances For Government: Benjamin R. Dorsey, Esq., Department Counsel For Applicant: Pro se ______________ Decision ______________ MURPHY, Braden M., Administrative Judge: Applicant did not provide sufficient evidence to mitigate the security concerns under Guideline F, financial considerations. Applicant’s eligibility for continued access to classified information is denied. Statement of the Case On July 26, 2016, the Department of Defense (DOD) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline F, financial considerations. The action was taken under Executive Order (Exec. Or.) 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 effective within the DOD for SORs issued after September 1, 2006. Applicant answered the SOR on August 26, 2016, and elected to have his case decided on the written record in lieu of a hearing. On September 22, 2016, Department 2   Counsel submitted the Government’s file of relevant material (FORM), including documents identified as Items 1 through 6. Applicant received the FORM on December 18, 2016. He was afforded an opportunity to file objections and submit material in refutation, extenuation, or mitigation. Applicant did not respond to the FORM, and did not object to the Government’s evidence. The SOR and the answer (Items 1 & 2) are the pleadings in the case. Items 3 through 6 are admitted into evidence without objection. The case was assigned to me on October 1, 2017. On December 10, 2016, the Director of National Intelligence issued new National Security Adjudicative Guidelines (AG). The new AGs became effective June 8, 2017 for all decisions after that date, and they supersede the AGs that Applicant received with the SOR.1 Any changes resulting from the implementation of the new AGs did not affect my decision in this case. Findings of Fact Applicant admitted all the debts alleged in the SOR (¶¶ 1.a – 1.n). I have incorporated his admissions and other comments into the findings of fact. After a thorough and careful review of the pleadings and exhibits, I make the following findings of fact. Applicant is 34 years old. After graduating from high school in 2001, he enlisted in the U.S. Army. He served honorably on active duty from 2001 to 2007, and then joined the Army National Guard, where he served honorably from 2007 to 2010. He is close to earning his college degree. He married in 2010 and has a six-year old-son. (Item 3) However, as of 2016, when he answered the SOR, he was in the midst of a divorce. Applicant has worked as an engineer for various federal contractors since October 2010. He has worked for his current employer since April 2012. He was previously granted a security clearance in 2001, when he was in the Army, and in 2008, when he was in the National Guard. (Item 3) Applicant submitted his most recent security clearance application (SCA) in March 2013. His background investigation included a Mach 2013 credit report, and a personal subject interview, conducted in April 2013. (Items 3, 4, 5) The Government’s evidence also includes a more recent credit report from March 2016. (Item 6) The SOR alleged 14 delinquent debts. SOR ¶1.a is Applicant’s mortgage, which is alleged to be in foreclosure, with $24,624 past due, and a total loan balance of $322,151. SOR ¶ 1.b is a $43,724 student loan account, with $2,769 past due. SOR ¶ 1.c is a $31,500 charged-off debt to a bank. SOR ¶ 1.d concerns an account placed for collection due to a $15,000 returned check. SOR ¶ 1.e is an account that is $2,008 past due, with a total balance of $13,415. SOR ¶ 1.f is a credit card account that is $975 past due, with 1 The new AGs are available on the DOHA website at http://ogc.osd.mil/doha/DIRECTIVE%202017.pdf. 3   a total balance of $7,369. SOR ¶ 1.g is an account in collection for $2,353. SOR ¶ 1.g is a retail credit card account that is $144 past due, with a balance of $2,349. SOR ¶ 1.i is a $2,210 charged-off credit card. SOR ¶ 1.j is a credit card account that is $129 past due, with a balance of $1,190. SOR ¶ 1.k is a $445 department store credit card account. SOR ¶ 1.l is an account that has been charged off, with no balance alleged. SOR ¶¶ 1.m ($2,802) and 1.n ($14,451) are judgments issued against Applicant in 2015 for medical expenses. All the debts alleged in the SOR are detailed in Applicant’s March 2016 credit report. They all became delinquent between December 2013 and November 2015. (Item 6) In his answer to the SOR, Applicant indicated that his mortgage had foreclosed, and would be settled at the sale, with $40,000 equity. (¶ 1.a). He indicated that his student loan (¶ 1.b) was in deferment. He indicated that he had reached a payment agreement for the $15,000 returned check (¶ 1.d). He asserted that SOR ¶ 1.g had been paid. He provided no corroborating documentation for any of his actions. (Item 2) Applicant also provided a lengthy narrative explanation. He indicated that his wife was diagnosed with cancer, requiring surgery and numerous rounds of chemotherapy with resulting complications. This strained both their family finances and their marriage. (Item 2) Applicant also explained that, “In [an] effort to pay our debts, and in a poorly placed attempt to remove the stress[,] I gambled very often to try to get ahead. This in concert with the chemotherapy ended my marriage.” His wife has filed for divorce. (Item 2) Applicant indicated he attended Gambler’s Anonymous, through two different groups. He also sought out a financial planner. He offered no details about either type of counseling, such as timeframe, frequency, treatment plan, or any prognosis. He provided no corroborating documentation. (Item 2) Applicant also discussed his gambling habit during his background interview, after the investigation revealed that he made large cash deposits and withdrawals (all greater than $10,000) mostly at banks or ATM machines in a city widely known for its casinos. In his interview, Applicant acknowledged taking large amounts of money out of his bank account for gambling, since he knew that doing so would get him better perks. (Item 4) Applicant indicated in his interview that his gambling had not led to financial problems. At the time, this may have been true, since his March 2013 credit report indicated no delinquent debts. (Item 5) All of his SOR delinquencies came later, between late 2013 and 2015. (Item 6) Applicant indicated in his answer that he is a service-connected disabled veteran, who is proud of his service both in the military and as a defense contractor. He recognized 4   that his debts are significant, but that he intends to work to resolve them. He stated that he is not a security risk, and would not do anything to bring harm to or otherwise threaten, national security. (Item 2) In his answer, Applicant did not provide specific financial information (documented or otherwise) about his current monthly income, expenses or assets. Applicant did not provide any more recent information or documents since he did not respond to the Government’s FORM. Policies It is well established that no one has a right to a security clearance.2 As noted by the Supreme Court in Department of the Navy v. Egan, “the clearly consistent standard indicates that security determinations should err, if they must, on the side of denials.”3 The adjudicative 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(a), 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, 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. 2 Department of the Navy v. Egan, 484 U.S. 518, 528 (1988) (“it should be obvious that no one has a ‘right’ to a security clearance”). 3 484 U.S. at 531. 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 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 an individual might knowingly compromise classified information in order to raise money. It encompasses concerns about an individual’s self-control, judgment, and other qualities essential to protecting classified information. An individual who is financially irresponsible may also be irresponsible, unconcerned, or negligent in handing and safeguarding classified information.4 AG ¶ 19 provides conditions that could rise security concerns. Disqualifying conditions AG ¶¶ 19(a): “inability to satisfy debts”; and 19(c): “a history of not meeting financial obligations” are applicable, given the record evidence of Applicant’s delinquent debts. An exception to this is SOR ¶ 1.l. Notwithstanding Applicant’s admission to this charged-off debt, no balance due is noted on Item 6 for this account, nor is one alleged in the SOR. The Government did not establish that SOR ¶ 1.l is an ongoing debt, so I resolve it in Applicant’s favor. Given the facts of this case, one other disqualifying condition merits discussion: (h) borrowing money or engaging in significant financial transactions to fund gambling or pay gambling debts. Applicant’s admitted conduct included withdrawing large sums of money at casinos and gambling in a misguided attempt to pay his debts (as well as to relieve stress). Since gambling is not specifically alleged in the SOR, however, AG ¶ 19(h) does not apply. 4 See ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012). 6   However, it may be properly considered in addressing potentially applicable mitigating conditions, discussed below. The financial considerations 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; and (d) the individual initiated and is adhering to good-faith effort to repay overdue creditors or otherwise resolve debts. Applicant’s wife was diagnosed with cancer several years ago. The resulting ordeal she and her husband endured took a significant toll on both their finances and their marriage. This was unquestionably a circumstance beyond Applicant’s control. The first prong of AG ¶ 20(b) therefore applies. For full application of ¶ 20(b), however, Applicant must establish that he acted responsibly under the circumstances. By Applicant’s own admission, his actions were not responsible. Applicant’s 2013 interview summary strongly suggests that he had a serious gambling problem at that time, though he did not realize it. Applicant withdrew, and deposited, large sums of money so he could have access to those funds at casinos (either to gamble, or to gain access to better casino perks). Later, after his wife’s diagnosis, Applicant turned to gambling both to relieve stress, and in an effort to pay his debts. This effort was not successful, since his SOR debts remain outstanding. Whether his debts worsened as a result of his gambling is almost beside the point. His actions were not responsible, and AG ¶ 20(b) does not apply. AG ¶ 20(a) also does not apply. Applicant’s financial problems are due both to his wife’s illness and to his gambling problem. Applicant has a long-term gambling habit that got out of control. He indicated that he has attended Gambler’s Anonymous, but he provided few details. His debts are significant and ongoing. Applicant has not established 7   that “his 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(a) does not apply. Likewise, he has not established that AG ¶ 20(c) applies, either to his debts or to his gambling problem. Applicant indicates that he is pursuing financial counseling, but he provides no details to establish the counselor’s bona fides as a legitimate resource. Gambler’s Anonymous is a recognized, reputable organization, but Applicant did not provide sufficient detail about his participation to warrant much consideration in mitigation. He has not established that there are clear indications that either his debts or his gambling are being resolved or are under control. AG ¶ 20(c) does not apply. Applicant indicated that some of his debts are being paid, but he provided no supporting documentation. Further, while he recognized the significance of his delinquencies, and indicated an intention to resolve them, he has yet to outline, let alone put in place, a plan to do so. Nor did he establish any track record of steady payments or other evidence of financial stability to show that he “initiated and is adhering to good-faith effort to repay overdue creditors or otherwise resolve debts” as required. AG ¶ 20(d) does not apply. 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(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(a), 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 surrounding this case. I have incorporated my comments under Guideline F in my whole-person analysis. Because Applicant requested a determination on the record without a hearing, I had no opportunity to evaluate his credibility based on 8   demeanor.5 I credit Applicant’s honorable service to the country, both in and out of uniform. His wife’s diagnosis began an ordeal which has clearly had lasting impact on himself and on his family. But Applicant also has a serious gambling problem, and lots of unresolved debts. Before he can again be trusted with access to classified information, he must take serious steps to put both problems behind him. At this point, he has not shown enough evidence that he has done so. Overall, the record evidence leaves me with questions and doubts as to Applicant’s eligibility and suitability for a security clearance. 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 Subparagraph 1.a-1.k: Against Applicant Subparagraph 1.l. For Applicant Subparagraph 1.m-1.n: 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 access to classified information. Eligibility for continued access to classified information is denied. _____________________________ Braden M. Murphy Administrative Judge 5 ISCR Case No. 01-12350 at 3-4 (App. Bd. Jul. 23, 2003).