1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 16-03964 ) Applicant for Security Clearance ) Appearances For Government: Chris Morin, Esq., Department Counsel For Applicant: Pro se ______________ Decision ______________ HEINTZELMAN, Caroline E., Administrative Judge: This case involves security concerns raised under Guideline F (Financial Considerations). Applicant failed to mitigate security concerns raised by his unresolved delinquent debts. Eligibility for access to classified information is denied. History of the Case Applicant submitted a security clearance application on November 11, 2014. On January 31, 2017, the Department of Defense (DOD) issued a Statement of Reasons (SOR) alleging security concerns under Guideline F. The DOD CAF acted 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) implemented by the DOD on September 1, 2006 (2006 AG). Applicant answered the SOR on February 14, 2017, and requested a decision on the record without a hearing (answer). On March 13, 2017, a complete copy of the File of Relevant Material (FORM), containing six Items, was mailed to Applicant. It was received by him on March 22, 2017. The FORM notified Applicant that he had an opportunity to file objections and submit material in refutation, extenuation, or mitigation within 30 days of 2 his receipt of the FORM. Applicant did not respond to the FORM. Hence, Items 1 through 6 are admitted into evidence without objection. The case was assigned to me on May 10, 2018. On June 8, 2017, the DOD implemented new AG (2017 AG).1 Accordingly, I have applied the 2017 AG.2 However, I have also considered the 2006 AG, because they were in effect on the date the SOR was issued. I conclude that my decision would have been the same under either version. Findings of Fact3 Applicant is 41 years old and works as an ammunition stock supervisor for a defense contractor. He has worked for his employer since November 2014, and requires a clearance for employment. He has been married since 1999, and he and his wife have three children. Applicant received his associate’s degree in 2004. He served in the U.S. Marine Corps from 1996 to 2009 and in the U.S. Army from 2009 to December 2013. He received honorable discharges from both services (Item 1). Applicant filed for Chapter 13 bankruptcy protection in March 2005, and the filing was dismissed in May 2005. In June 2005, he filed for Chapter 7 bankruptcy protection, and his debts were discharged in September 2005. His assets totaled over $16,000 and his liabilities totaled over $102,000 (Item 6). The debts listed in SOR ¶¶ 1.c. through 1.o. total $23,799. Applicant admitted owing all of the debts, except for those alleged in SOR ¶¶ 1.d. and 1.f. In his answer to the SOR, he claimed the debt in SOR ¶ 1.d. was resolved when his vehicle was sold. Applicant claimed he is not responsible for the medical debt in SOR ¶ 1.f., because it was related to an injury that occurred at a school function, and the school should have paid the medical bill (Item 2). All of these debts appear in his credit reports (Items 4 and 5). Applicant disclosed he was unemployed for three months when he left the U.S. Army in December 2013, and he was subsequently underemployed for an undisclosed period (Item 3 at 13 and 38). He provided no explanation as to why he filed for bankruptcy in 2005 or why he currently has thirteen delinquent debts, including a tax lien from State 1 On December 10, 2016, the Security Executive Agent issued Directive 4 (SEAD-4), establishing a “single, common adjudicative criteria for all covered individuals who require initial or continued eligibility for access to classified information or eligibility to hold a sensitive position.” (SEAD-4 ¶ B, Purpose) The SEAD-4 became effective on June 8, 2017. (SEAD-4 ¶ F, Effective Date) The National Security Adjudicative Guidelines (AG), which are found at Appendix A to SEAD-4, apply to determine eligibility for initial or continued access to classified national security information. (SEAD-4 ¶ C, Applicability) 2 ISCR Case No. 02-00305 at 3 (App. Bd. Feb. 12, 2003) (security clearance decisions must be based on current DOD policy and standards). 3 Applicant’s personal information is extracted from his security application (Item 3) unless otherwise indicated by a parenthetical citation to the record. 3 A. He submitted no evidence of financial counseling, or budget information from which to analyze his future solvency potential. Policies “[N]o one has a ‘right’ to a security clearance.”4 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.”5 The President has authorized the Secretary of Defense or his designee to grant applicants eligibility for access to classified information “only upon a finding that it is clearly consistent with the national interest to do so.”6 Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the AG. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, an administrative judge applies these guidelines 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 and 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 that 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 made “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.”7 Thus, a decision to deny a security clearance is merely an indication the applicant has not met the strict guidelines the President and the Secretary of Defense have established for national security eligibility. 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.8 “Substantial evidence” is “more than 4 Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). 5 Egan at 527. 6 EO 10865 § 2. 7 EO 10865 § 7. 8 See Egan, 484 U.S. at 531. 4 a scintilla but less than a preponderance.”9 The guidelines presume a nexus or rational connection between proven conduct under any of the criteria listed therein and an applicant’s security suitability.10 Once the Government establishes a disqualifying condition by substantial evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the facts.11 An applicant has the burden of proving a mitigating condition, and the burden of disproving it never shifts to the Government.12 An applicant “has the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue his security clearance.”13 “[S]ecurity clearance determinations should err, if they must, on the side of denials.”14 Analysis Guideline F: Financial Considerations The concern under Guideline F 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 a person might knowingly compromise classified information to raise money. It encompasses concerns about a person’s self-control, judgment, and other qualities essential to protecting classified information. A person who is financially irresponsible may also be irresponsible, unconcerned, or negligent in handling and safeguarding classified information.15 9 See v. Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994). 10 ISCR Case No. 92-1106 at 3, 1993 WL 545051 at *3 (App. Bd. Oct. 7, 1993). 11 Directive ¶ E3.1.15. 12 ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 2005). 13 ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002). 14 Egan, 484 U.S. at 531; See also AG ¶ 2(b). 15 ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012). 5 Applicant’s admissions and his credit reports establish two disqualifying conditions under this guideline: AG ¶ 19(a) (“inability to satisfy debts”) and AG ¶ 19(c) (“a history of not meeting financial obligations). AG ¶ 20 describes conditions that could mitigate the security concerns raised in this case. Four are potentially applicable in this case: (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; (d) the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts; and (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. I considered that Applicant is not required to be debt-free in order to qualify for a security clearance.16 Applicant was unemployed and underemployed after he left the U.S. Army in December 2013; however, he did not meet his burden to establish that he acted responsibly to address his unpaid debts in a timely manner. Additionally, he failed to provide documentation showing he has resolved any debts through a good-faith effort, or successfully disputed any of the debts alleged in the SOR. His 2005 bankruptcies are indicative of a lengthy history of financial issues, which continues to the present day. Mitigation under AG ¶ 20(a), 20(b), 20(d), or 20(e) was not established. Whole-Person Concept Under AG ¶ 2(c), the ultimate determination whether the granting or continuing of national security eligibility is clearly consistent with the interests of national security must be an overall common sense judgment based upon careful consideration of the following guidelines, each of which is to be evaluated in the context of the whole person. 16 ISCR Case No. 15-02903 at 3 (App. Bd. Mar. 9, 2017) (An applicant does not have to be debt-free in order to qualify for a security clearance. Rather, all that is required is that an applicant act responsibly given his circumstances and develop a reasonable plan for repayment, accompanied by “concomitant conduct” that is, actions which evidence a serious intent to effectuate the plan). 6 An 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. I have incorporated my comments under the guideline at issue in my whole-person analysis, and I have considered the factors in AG ¶ 2(d). After weighing the disqualifying and mitigating conditions under these guidelines, and evaluating all the evidence in the context of the whole person, Applicant has not mitigated the security concerns at issue. Accordingly, Applicant has not carried his burden of showing that it is clearly consistent with the interests of national security of the United States to grant him eligibility for access to classified information. Formal Findings I make the following formal findings on the allegations in the SOR: Paragraph 1, Guideline F: AGAINST APPLICANT Subparagraphs 1.a. – 1.o.: Against Applicant Conclusion I conclude that it is not clearly consistent with the interests of national security of the United States to grant or continue Applicant’s eligibility for access to classified information. National security eligibility for access to classified information is denied. __________________________ CAROLINE E. HEINTZELMAN Administrative Judge