1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 16-02722 ) Applicant for Security Clearance ) Appearances For Government: Rhett Petcher, Esq., Department Counsel For Applicant: Pro se __________ Decision __________ TUIDER, Robert, Administrative Judge: Applicant mitigated security concerns regarding Guideline E (personal conduct), but failed to mitigate security concerns regarding Guideline F (financial considerations). Clearance is denied. Statement of the Case On August 21, 2015, Applicant submitted a Questionnaire for National Security Positions (SF-86). On November 18, 2016, the Department of Defense Consolidated Adjudications Facility (DOD CAF) issued a Statement of Reasons (SOR) to Applicant, under Executive Order (Exec. Or.) 10865, Safeguarding Classified Information within Industry, dated February 20, 1960, as amended; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (Directive), dated January 2, 1992, as amended; and the adjudicative guidelines (AG), which became effective on September 1, 2006. While this case was pending a decision, the Director of National Intelligence issued Security Executive Agent Directive 4, National Security Adjudicative Guidelines 2 for Determining Eligibility for Access to Classified Information or Eligibility to Hold a Sensitive Position (AGs), which he made applicable to all covered individuals who require initial or continued eligibility for access to classified information or eligibility to hold a sensitive position. The new AGs supersede the September 1, 2006 AGs and are effective “for all covered individuals” on or after June 8, 2017. Accordingly, I have evaluated Applicant’s security clearance eligibility under the new AGs, as required.1 The SOR alleged security concerns under Guidelines F and E. The SOR detailed reasons why DOD CAF was unable to find that it is clearly consistent with the national interest to grant or continue a security clearance for Applicant. On January 11, 2017, Applicant answered the SOR and elected to have his case decided on the written record in lieu of a hearing. A complete copy of the file of relevant material (FORM), dated February 9, 2017, was provided to him by letter that same day. Applicant received the FORM on February 17, 2017. He was afforded a period of 30 days to file objections and submit material in refutation, extenuation, or mitigation. Applicant submitted additional information within the 30-day period.2 On October 1, 2017, the case was assigned to me. Findings of Fact Applicant admitted SOR ¶¶ 1.a through 1.e, with explanations; and denied SOR ¶ 2.a, with explanations. His admissions are incorporated herein as findings of fact. Additional findings of fact follow. Background Information3 Applicant is a 49-year-old marine inspector employed by a defense contractor since June 2015. He seeks a security clearance in conjunction with his current employment. Applicant graduated from high school in June 1986. He attended college part- time from January 2008 to June 2011, but stopped attending classes before he earned a degree. Applicant married in October 1998 and divorced in September 2010. He has a 14-year-old son from that marriage and pays his former wife $507 in monthly child support. Applicant served in the U.S. Navy from September 1986 to September 2006, and retired with an honorable discharge. 1 The new AGs are available at http://ogc.osd.mil/doha/SEAD4 20170608.pdf. 2 Applicant’s post-FORM submission was marked as Item 6, and received into evidence. 3 The limited background information regarding Applicant was derived from the FORM and was the most current information available. 3 Financial Considerations Applicant’s SOR alleges five delinquent debts totaling $21,760. (SOR ¶¶ 1.a – l.e) These allegations are established through Applicant’s admissions and the Government’s exhibits. (Items 1 – 5) Applicant stated in his SOR answer that during the timeframe of 2007 to 2010, he “went through a horrible divorce which at times left me battling to pay off overdue bills and credit accounts by myself.” (Item 1) He also reported four periods of unemployment on his August 2015 SF-86: (1) January 2015 to June 2015: (2) August 2014 to November 2014; (3) June 2013 to January 2014; and (4) August 2011 to March 2012. (Item 2) Department Counsel discussed the shortcomings of Applicant’s SOR answer in his FORM, to include the lack of evidence documenting any efforts to resolve his debts, particularly since he began his current employment. Applicant made assurances during his October 2, 2015 Office of Personnel Management Personal Subject Interview (OPM PSI) that he would resolve or attempt to address his delinquent debts. He reiterated the same claim in his January 11, 2017 SOR answer. (Items 1, 3) Applicant submitted documentation in his FORM response that debts 1.c – charged-off department store account for $347; and 1.e – cell phone collection account for $417, have been settled and paid. Debts 1.c and 1.e are resolved. The remaining three larger SOR debts totaling $20,996 remain unaddressed. (Item 6) Applicant did not submit evidence of financial counseling, a budget, or character evidence. Personal Conduct When Applicant completed his August 21, 2015 SF-86, he failed to list any of his delinquent debts, as required. He denied that he intentionally omitted his debts, claiming that he believed each debt was outside the seven-year reporting period. He did, however, acknowledge each of the debts either was in collections or charged-off within the requisite period. In reviewing Applicant’s October 2015 OPM PSI, I note that he also failed to list other information or provided incorrect information on his SF-86 such as incorrect contact information or not listing his father. Applicant stated that he served 20 years in the Navy and was aware of the consequences of intentionally falsifying documents such as a SF-86. (Items 1, 2, 3, and 6) Policies The U.S. Supreme Court has recognized the substantial discretion of the Executive Branch in regulating access to information pertaining to national security emphasizing, “no 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 4 applicant’s 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, Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960), as amended. 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, these guidelines are applied 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, 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 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 “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See Exec. Or. 10865 § 7. See also Executive Order 12968 (Aug. 2, 1995), § 3.1. Thus, nothing in this Decision should be construed to suggest that I have based this decision, in whole or in part, on any express or implied determination about applicant’s allegiance, loyalty, or patriotism. It 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. 95-0611 at 2 (App. Bd. May 2, 1996). 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 ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue her security clearance.” ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002). The burden of disproving a mitigating condition never shifts to the Government. See ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 2005). “[S]ecurity clearance determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531; see AG ¶ 2(b). 5 Analysis Financial Considerations AG ¶ 18 articulates the security concern for financial problems: 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 three disqualifying conditions that could raise a security concern and may be disqualifying 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,” Based on the information in the SOR, the record established the disqualifying conditions in AG ¶¶ 19(a), 19(b), and 19(c), requiring additional inquiry about the possible applicability of mitigating conditions. AG ¶ 20 lists five potential mitigating conditions: (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; and 6 (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. The Appeal Board concisely explained Applicant’s responsibility for proving the applicability of mitigating conditions as follows: Once a concern arises regarding an Applicant’s security clearance eligibility, there is a strong presumption against the grant or maintenance of a security clearance. See Dorfmont v. Brown, 913 F. 2d 1399, 1401 (9th Cir. 1990), cert. denied, 499 U.S. 905 (1991). After the Government presents evidence raising security concerns, the burden shifts to the applicant to rebut or mitigate those concerns. See Directive ¶ E3.1.15. The standard applicable in security clearance decisions is that articulated in Egan, supra. “Any doubt concerning personnel being considered for access to classified information will be resolved in favor of the national security.” Directive, Enclosure 2 ¶ 2(b). ISCR Case No. 10-04641 at 4 (App. Bd. Sept. 24, 2013). AG ¶ 20(d) applies to SOR ¶¶ 1.c and 1.e. With regard to the remaining three SOR debts, no mitigating conditions fully apply. In addition to evaluating the facts and applying the appropriate adjudicative factors under Guideline F, I have reviewed the record before me in the context of the whole-person factors listed in AG ¶ 2(d). Applicant has been gainfully employed for the majority of his adult life, and he is presumed to be a mature, responsible citizen. Nonetheless, without other information suggesting his long-standing financial problems are being addressed, doubts remain about his suitability for access to classified information. Protection of the national interest is the principal focus of these adjudications. Accordingly, those doubts must be resolved against the Applicant. Personal Conduct Applicant stated when he completed his SF-86 he believed his debts were outside the seven-year reporting period. I also note that he made other mistakes or failed to report required information when completing his SF-86. He discussed these shortcomings during his October 2015 OPM PSI. Applicant served 20 years in the Navy and presumably has filled out similar forms in the past. Based on the available information, it appears Applicant became confused when completing his SF-86. His lack of attention to detail cannot be imputed as a willful and deliberate attempt to undermine the investigative process. Although the information he provided regarding his financial situation on his SF-86 proved to be incorrect, as was other information, I attribute these lapses to carelessness and am satisfied that he did not deliberately and intentionally fail 7 to disclose his delinquent debts with intent to deceive.4 I find “For Applicant” in the Findings section of this decision with respect to SOR ¶ 2. In closing, Applicant chose to rely on the written record. In so doing, however, and with regard to financial considerations, he failed to submit sufficient evidence to supplement the record with relevant and material facts regarding his circumstances, articulate his position, and mitigate the financial security concerns. He failed to offer evidence of financial counseling or provide documentation regarding his past efforts to address his delinquent debt. By failing to provide such information, and in relying on an explanation lacking sufficient supporting documentation to fully establish mitigation, financial considerations security concerns remain. As noted, he successfully rebutted allegations of falsification under personal conduct concerns. I take this position based on the law, as set forth in Department of Navy v. Egan, 484 U.S. 518 (1988), my careful consideration of the whole-person factors and supporting evidence, my application of the pertinent factors under the adjudicative process, and my interpretation of my responsibilities under the adjudicative guidelines. Formal Findings The formal findings on the SOR are as follows: Paragraph 1, Guideline F: AGAINST APPLICANT Subparagraphs 1.a – 1.b: Against Applicant Subparagraph 1.c: For Applicant Subparagraph 1.d: Against Applicant Subparagraph 1.e: For Applicant Paragraph 2, Guideline E: FOR APPLICANT Subparagraph 2.a: For Applicant 4 The Appeal Board has cogently explained the process for analyzing falsification cases, stating: (a) when a falsification allegation is controverted, Department Counsel has the burden of proving falsification; (b) proof of an omission, standing alone, does not establish or prove an applicant’s intent or state of mind when the omission occurred; and (c) a Judge must consider the record evidence as a whole to determine whether there is direct or circumstantial evidence concerning the applicant’s intent or state of mind at the time the omission occurred. [Moreover], it was legally permissible for the Judge to conclude Department Counsel had established a prima facie case under Guideline E and the burden of persuasion had shifted to the applicant to present evidence to explain the omission. ISCR Case No. 03-10380 at 5 (App. Bd. Jan. 6, 2006) (citing ISCR Case No. 02-23133 (App. Bd. June 9, 2004)). 8 Conclusion In light of all of the record as a whole, it is not clearly consistent with the national interest to grant Applicant eligibility for a security clearance. Clearance is denied. _________________ ROBERT TUIDER Administrative Judge