1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 16-01413 ) Applicant for Security Clearance ) Appearances For Government: Caroline E. Heintzelman, Esq., Department Counsel For Applicant: Pro se ______________ Decision ______________ LOUGHRAN, Edward W., Administrative Judge: Applicant did not mitigate the personal conduct and financial considerations security concerns. Eligibility for access to classified information is denied. Statement of the Case On September 3, 2016, the Department of Defense (DOD) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guidelines E (personal conduct) and F (financial considerations). Applicant responded to the SOR on October 3, 2016, and elected to have the case decided on the written record in lieu of a hearing. The Government’s written case was submitted on October 26, 2016. A complete copy of the file of relevant material (FORM) was provided to Applicant, who was afforded an opportunity to file objections and submit material to refute, extenuate, or mitigate the security concerns. Applicant received the FORM on December 7, 2016. As of January 27, 2017, he had not responded. The case was assigned to me on October 1, 2017. The Government exhibits included in the FORM are admitted in evidence. 2 Findings of Fact Applicant is a 37-year-old employee of a defense contractor. He has worked for his current employer since 2003. He has a bachelor’s degree, which was awarded in 2002, and a master’s degree, which was awarded in 2007. He married in 2001 and divorced in 2008. He has two minor children.1 Applicant stopped paying his first and second mortgage loans sometime between 2010 and 2012. A credit report from April 2016 listed the first mortgage loan as $92,332 past due with a balance of $163,920. The second mortgage loan was listed as $21,190 past due with a $40,980 balance. He attributed the failure to pay the mortgage loans to his divorce, daycare expenses, and child support. He was still living in the home when he submitted his Questionnaire for National Security Positions (SF 86) in September 2015.2 Applicant was arrested for driving with an open container of alcohol and driving under the influence (DUI) in 2011. The case was resolved through probation before judgment (PBJ). It is unclear how the arrest and charges affected his finances. Applicant went on a short trip to a foreign country as a tourist in 2013.3 Applicant wrote in his response to the SOR that the first mortgage loan had a zero balance due to a September 2016 foreclosure. He did not submit any supporting documentation. He also wrote that he was working with the holder of the second mortgage loan to set up a payment plan. Because he did not respond to the FORM, little is known about what, if any, actions Applicant has taken to address the second mortgage loan.4 SOR ¶ 1.c alleges a $4 delinquent debt. Applicant stated that he was unaware of the debt; he worked with the creditor to resolve it; and the debt has been removed from his credit report.5 Applicant submitted SF 86s in 2005, 2010, and September 2015.6 On the 2015 SF 86, he answered “Yes” to the following financial questions under Section 26: 1 Item 3. 2 Items 2, 4-6. 3 Items 3, 6. The SOR did not allege that Applicant was arrested for open container and DUI. Any matter that was not alleged in the SOR will not be used for disqualification purposes. It may be considered for the effect on Applicant’s finances, when assessing his credibility, in the application of mitigating conditions, and during the whole-person analysis. 4 Item 2. 5 Item 2. 6 Items 3, 7, 8. 3 In the past seven (7) years, you had bills or debts turned over to a collection agency? (Include financial obligations for which you were the sole debtor, as well as those for which you were a cosignor or guarantor). In the past seven (7) years, you have been over 120 days delinquent on any debt not previously entered? (Include financial obligations for which you were the sole debtor, as well as those for which you were a cosignor or guarantor). Applicant reported a $375 debt that was settled and paid in September 2015. Applicant answered “No” to the remaining financial questions under Section 26, which included the following: Other than previously listed, are there any other instances of the following occurrences: In the past seven (7) years, you defaulted on any type of loan. (Include financial obligations for which you were the sole debtor, as well as those for which you were a cosignor or guarantor). In the past seven (7) years, you have been over 120 days delinquent on any debt not previously entered? (Include financial obligations for which you were the sole debtor, as well as those for which you were a cosignor or guarantor).7 You are currently over 120 days delinquent on any debt? (Include financial obligations for which you were the sole debtor, as well as those for which you were a cosignor or guarantor).8 Applicant did not report his first and second mortgage loans, which had been delinquent for several years. He was interviewed for his background investigation in October 2015. He discussed his defaulted mortgage loan. He thought he owed about $116,000 on the loan. He stated that he did not list the defaulted mortgage loan on the SF 86 because of an oversight.9 He wrote in response to SOR ¶ 2.a (falsification allegation): I accept. I was in the process of applying for mortgage relief. However mortgage was sold several times and finally sold at foreclosure. I was not aware of 1.b (second mortgage loan), [and] 1.c ($4 debt). 7 The SOR did not allege that Applicant falsified this question. 8 The SOR did not allege that Applicant falsified this question. 9 Item 5. 4 Applicant may not have known about the $4 debt, and it had been so long since he paid the mortgage loans, that he may have forgotten that there were two loans. However, after considering all the evidence, including Applicant’s age, education, experience, and the straightforward nature of the question, I find that Applicant intentionally falsified the SF 86 when he failed to report his defaulted first mortgage loan. Policies This case is adjudicated 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), which became effective on June 8, 2017. When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines. In addition to brief 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(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, 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 5 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 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. The guideline notes several conditions that could raise security concerns under AG ¶ 19. The following are potentially applicable 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 was unable or unwilling to pay his mortgage loans. The evidence is sufficient to raise the above disqualifying conditions. SOR ¶ 1.c alleges a $4 delinquent debt. Applicant stated that he was unaware of the debt; he worked with the creditor to resolve it; and the debt has been removed from his credit report. That debt does not rise to the level of a security concern. SOR ¶ 1.c is concluded for Applicant. 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 6 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 a good-faith effort to repay overdue creditors or otherwise resolve debts. Applicant attributed the failure to pay the mortgage loans to his divorce, daycare expenses, and child support. It is unclear how the 2011 open container arrest and DUI charges affected his finances, and he went on a short trip to a foreign country as a tourist in 2013. He continued to live in the house for years without paying the mortgage loans. He stated, without documentation, that the first mortgage loan had a zero balance due to a September 2016 foreclosure, and that he was working with the holder of the second mortgage loan to set up a payment plan. Because he did not respond to the FORM, little is known about what, if any, actions Applicant has taken to address the second mortgage loan. There is insufficient evidence for a determination that Applicant’s financial problems will be resolved within a reasonable period. I am unable to find that he acted responsibly under the circumstances or that he made a good-faith effort to pay his debts. His financial issues are recent and ongoing. They continue to cast doubt on his current reliability, trustworthiness, and good judgment. AG ¶¶ 20(a), 20(c), and 20(d) are not applicable. AG ¶ 20(b) is partially applicable. I find that financial considerations concerns remain despite the presence of some mitigation. Guideline E, Personal Conduct The security concern for personal conduct is set out in AG ¶ 15, as follows: 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 or sensitive information. Of special interest is any failure to cooperate or provide truthful and candid answers during national security clearance investigative or adjudicative processes. 7 AG ¶ 16 describes conditions that could raise a security concern and may be disqualifying. The following disqualifying condition is potentially applicable: (a) deliberate omission, concealment, or falsification of relevant facts from any personnel security questionnaire, personal history statement, or similar form used to conduct investigations, determine employment qualifications, award benefits or status, determine national security eligibility or trustworthiness, or award fiduciary responsibilities. Applicant intentionally falsified his September 2015 SF 86 when he failed to report his defaulted first mortgage loan. AG ¶ 16(a) is applicable. AG ¶ 17 provides conditions that could mitigate security concerns. The following are potentially applicable: (a) the individual made prompt, good-faith efforts to correct the omission, concealment, or falsification before being confronted with the facts; (b) the refusal or failure to cooperate, omission, or concealment was caused or significantly contributed to by advice of legal counsel or of a person with professional responsibilities for advising or instructing the individual specifically concerning security processes. Upon being made aware of the requirement to cooperate or provide the information, the individual cooperated fully and truthfully; (c) the offense is so minor, or so much time has passed, or the behavior is so infrequent, or it happened under such unique circumstances that it is unlikely to recur and does not cast doubt on the individual's reliability, trustworthiness, or good judgment; (d) the individual has acknowledged the behavior and obtained counseling to change the behavior or taken other positive steps to alleviate the stressors, circumstances, or factors that contributed to untrustworthy, unreliable, or other inappropriate behavior, and such behavior is unlikely to recur; and (e) the individual has taken positive steps to reduce or eliminate vulnerability to exploitation, manipulation, or duress. Applicant discussed his defaulted mortgage loan when he was interviewed for his background investigation in October 2015. However, having determined that Applicant intentionally provided false information on the SF 86, I have also determined that his explanation to the investigator that the omission was unintentional was also false. Personal conduct security concerns are not mitigated. 8 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 surrounding this case. I have incorporated my comments under Guidelines E and F in my whole-person analysis. I also considered Applicant’s long work history. However, he has unresolved financial problems, and he intentionally provided false information about his finances on an SF 86. Overall, the record evidence leaves me with questions and doubts about Applicant’s eligibility and suitability for a security clearance. I conclude Applicant did not mitigate the personal conduct and 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.b: Against Applicant Subparagraph 1.c: For Applicant Paragraph 2, Guideline E: Against Applicant Subparagraph 2.a: Against Applicant 9 Conclusion In light of all of the circumstances presented by the record in this case, it is not clearly consistent with the national interest to grant Applicant eligibility for a security clearance. Eligibility for access to classified information is denied. ________________________ Edward W. Loughran Administrative Judge