1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 16-02779 ) Applicant for Security Clearance ) Appearances For Government: Julie R. Mendez, Esq., Department Counsel For Applicant: Pro se ______________ Decision ______________ MURPHY, Braden M., Administrative Judge: Applicant did not provide sufficient information about her efforts and intentions to mitigate the financial considerations security concerns. Eligibility for access to classified information is denied. Statement of the Case On October 11, 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 implemented by the DoD on September 1, 2006. Applicant answered the SOR on November 12, 2016, and requested a decision on the administrative record, in lieu of a hearing. On December 12, 2016, Department Counsel submitted the Government’s File of Relevant Material (FORM), including documents identified as Items 1 through 6. Applicant received the FORM on December 2 15, 2016. She 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 and 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 Security Executive Agent Directive 4 (SEAD 4), National Security Adjudicative Guidelines (AG). These AGs apply to all adjudicative decisions issued on or after June 8, 2017, and they supersede the AGs that Applicant received with the SOR.1 Any changes resulting from the issuance of new Adjudicative Guidelines did not affect my decision in this case. Findings of Fact Applicant admitted SOR ¶¶ 1.a-1.h and SOR ¶¶ 1.j-1.l. She denied SOR ¶ 1.i. She provided a narrative explanation, but no documents. Her admissions are incorporated into the findings of fact. After a thorough and careful review of the pleadings and exhibits submitted, I make the following findings of fact. Applicant is a 31-year-old employee of a defense contractor. Married since 2008, she and her husband have two children, ages four and eight. She graduated from college in 2007, and earned a master’s degree and teaching certificate in 2009. From 2009 to 2014, she held a variety of jobs in the fields of childcare and education. She left her last such position in June 2014, when she moved with her family to a new state. (Item 4) Applicant was then unemployed until October 2014, when she was hired for her current position as an administrative assistant for a defense contractor. She submitted a security clearance application in February 2015. She has never held a security clearance. The SOR concerns 12 delinquent debts, totaling $94,740. The bulk of her debts ($84,737) are past-due student loans: SOR ¶¶ 1.a ($40,611), 1.b (a federal loan for $39,964), and 1.c ($4,162). SOR ¶¶ 1.d, 1.e and 1.f are past-due medical accounts, totaling $868. SOR ¶¶ 1.g ($1,587) and 1.h ($1,323) are debts in collection to the same creditor. SOR ¶ 1.i is a judgment to a bank for $1,027. SOR ¶ 1.j is a medical $234 debt in collection. SOR ¶ 1.k is a $4,242 past-due debt to a state university. SOR ¶ 1.l is a $722 debt that is in collection to a credit union. The SOR debts are listed on Applicant’s credit reports from June 2016 and February 2015. In addition, an interrogatory response from Applicant (Item 6) includes another June 2016 credit report.2 1 The new AGs are available on the DOHA website at http://ogc.osd.mil/doha/DIRECTIVE%202017.pdf. 2 SOR ¶¶ 1.a through 1.f are found on Item 4. SOR ¶¶ 1.a, 1.b, 1.d, 1.e, and 1.g through 1.l are found on Item 5. The credit report that is part of Item 6 also lists SOR ¶¶ 1.a, 1.b, 1.c, 1.d and 1.e. 3 With her interrogatory response, Applicant also included a personal financial statement. She indicated that she and her husband have a combined monthly net income of about $4,843. She estimated that they have monthly expenses of about $4,057. Listed debts included a $25,000 car (and a $700 car payment) and student loans totaling $68,577. She did not indicate that she was making any payments on her student loans. (Item 6) Applicant admitted all the SOR debts but for ¶ 1.i. For that debt, she asserted that the bank told her that account had been closed. Applicant provided no documents with her answer to the SOR concerning any debt alleged. She only provided a narrative explanation of her financial circumstances. Applicant indicated that she had no available paperwork or documentation to submit because of several moves. Her non-education debt was incurred many years ago when she and her husband were not making enough money to make ends meet. She attempted to go into forbearance on her student loans but could not keep up with the payments. She believed that her parents were paying on some of her student loans, but she later learned they were only paying one of them. (Item 2) Applicant indicated that she pursued financial counseling through her husband’s job. She indicated that she took a specific financial counseling class and indicated that their “spending has changed dramatically.” She and her husband no longer spend beyond their means. (Item 2). Applicant did not respond to the FORM, so there is no more recent information available about her current finances, any debt payments, or how she intends to address her debts going forward. Policies 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 ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under ¶ 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. 4 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. 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. . . . The guideline sets forth several conditions that could raise security concerns under AG ¶ 19. The following are potentially applicable in this case: (a) inability to satisfy debts; and (c) a history of not meeting financial obligations. Applicant has numerous delinquent student loans and other unresolved debts. AG ¶¶ 19(a) and (c) apply. Conditions that could mitigate 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 financial counseling for the problem from a legitimate and credible source, such as a non-profit credit 5 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 did not provide sufficient evidence that any of the mitigating AGs should apply. She did not assert that her financial delinquencies were due to a circumstance beyond her control. She stated only that her non-education debts are several years old, and occurred at a time when she and her husband were not able to make ends meet. Applicant indicated that she participated in financial counseling and that it had a positive effect on the family’s spending. However, she did not provide sufficient evidence that her finances have improved so as to indicate that her debts are being resolved or are under control. She provided no documentation to indicate that she “initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve” her debts. Her debts are ongoing. She did not establish that they occurred under circumstances that are unlikely to recur, or that they do not continue to cast doubt on her current reliability, trustworthiness, or good judgment. Of particular concern is Applicant’s student loan debt (both federal and private) which remains both significant and delinquent. Applicant did not set forth a reasonable plan for resolving these debts, or the others in the SOR. Nor has she shown that she has taken any steps towards implementing such a plan, by establishing payment agreements with her creditors, and then following up on them. AG ¶¶ 20(a), 20(b), 20 (c) and 20(d) do 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 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. 6 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. Applicant did not provide sufficient evidence that she has a reasonable plan to repay her significant delinquent debts. Because Applicant requested a determination on the record without a hearing, I had no opportunity to evaluate her credibility based on demeanor.3 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 Subparagraphs 1.a-1.l: Against Applicant Conclusion In light of all of the circumstances presented by the record in this case, it is not clearly consistent with the national security interest of the United States to grant Applicant eligibility for access to classified information. Eligibility for access to classified information is denied. ________________________ Braden M. Murphy Administrative Judge 3 ISCR Case No. 01-12350 at 3-4 (App. Bd. Jul. 23, 2003).