1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 18-01182 ) Applicant for Security Clearance ) Appearances For Government: Dave F. Hayes, Esq., Department Counsel For Applicant: Pro se __________ Decision __________ RIVERA, Juan J., Administrative Judge: Applicant’s evidence is insufficient to demonstrate financial responsibility, or that his financial problems are being resolved. The financial considerations security concerns are not mitigated. Clearance is denied. Statement of the Case Applicant submitted a security clearance application (SCA) on February 9, 2017. He was interviewed by a government investigator on August 21, 2017. After reviewing the information gathered during the background investigation, the Department of Defense (DOD) issued a Statement of Reasons (SOR) on June 26, 2018, alleging security concerns under Guideline F (financial considerations). Applicant answered the SOR on July 2, 2018, and requested a decision based on the written record in lieu of a hearing. A copy of the Government’s file of relevant material (FORM), containing the evidence supporting the security concerns, was provided to Applicant by letter dated August 2, 2018. Applicant received the FORM on August 10, 2018. He was granted a period of 30 days after receipt of the FORM to submit any objections to the FORM and 2 to provide material to refute, extenuate, and mitigate the concerns. Applicant did not respond to the FORM. The case was assigned to me on November 28, 2018. Absent any objections, I admitted and considered the Government’s proposed evidence. Procedural Issue In the FORM, Department Counsel advised Applicant that the FORM included an unauthenticated summary of interview with a government background investigator on August 31, 2017. (FORM, Item 3) Applicant was informed he could object to the summary of his interview, and it would not be admitted or considered, or that he could make corrections, additions, deletions, and update the document to make it accurate. Applicant was informed that his failure to respond to the FORM or to raise any objections could be construed as a waiver and the proposed FORM evidence would be considered. Applicant did not respond to the FORM. I admitted the FORM’s proffered evidence and considered it. Findings of Fact In his SOR answer, Applicant admitted the eight SOR financial allegations (¶¶ 1.a through 1.h). He also submitted comments in mitigation and explanation. His admissions are incorporated herein as findings of fact. After a thorough review of the record evidence, I make the following additional findings of fact: Applicant is 44 years old. He graduated from high school in 1992, and shortly thereafter enlisted in the U.S. Navy. He honorably served on active duty between 1992 and 2012, and retired after 20 years of service. While in the Navy, Applicant possessed a clearance at the top-secret level with access to sensitive compartmented information (SCI). He married in 1996, and was widowed in 2009. He disclosed having no children. Following his retirement, Applicant took six months off to rest and travel. He was unemployed between June and December 2012. He has been consistently employed with different federal contractors since then. His current employer, a federal contractor, hired Applicant in August 2016, and is sponsoring his clearance. Apparently, Applicant’s clearance was continued after he retired. He is seeking the continuation of his clearance. In response to Section 26 (Financial Record) of his 2017 SCA, Applicant disclosed he had financial problems, which resulted from him providing financial help to his family. He provided no additional information or any documentary evidence to clarify or demonstrate the breadth and extent of his financial help. Applicant stated that he filed for Chapter 13 bankruptcy in 2016, because he was having difficulty making ends meet. He was financially overwhelmed helping his family and had to file for bankruptcy to resolve his financial problems. Although Applicant had numerous accounts charged-off, in collection, or delinquent, Applicant failed to disclose them in his 2017 SCA. He claimed he believed 3 that since the accounts were included in the bankruptcy filing, he did not have to list the individual delinquent accounts in his SCA. Applicant was confronted by a government investigator about his delinquent accounts during his August 2017 interview (FORM, Item 3), including a delinquent mortgage and the seven accounts alleged in the SOR. Applicant stated that all the accounts were included in the bankruptcy filing and they were being paid through the bankruptcy. He indicated he had been making payments to the bankruptcy trustee since September 2016. The bankruptcy was dismissed because of lack of payments to the trustee in about September 2017. Applicant presented no documentary evidence of his efforts to contact his creditors, to pay his delinquent debts, or to establish payment agreements, either before he filed for bankruptcy or after the bankruptcy was dismissed. In his SOR answer, Applicant claimed that he obtained a mortgage modification and had made two payments in accordance with the mortgage rehabilitation provisions. He presented no documentary evidence to support his claims. Moreover, he presented no evidence concerning his current financial situation (monthly income, living expenses, and debt payments). He presented no evidence to show he participated in financial counseling (other than that required to file bankruptcy), or that he is following a working budget. Policies The SOR was issued 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 (Directive) (January 2, 1992), as amended; and the National Security Adjudicative Guidelines for Determining Eligibility for Access to Classified Information or Eligibility to Hold a Sensitive Position (AGs), applicable to all adjudicative decisions issued on or after June 8, 2017. Eligibility for access to classified information may be granted “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. The U.S. Supreme Court has recognized the substantial discretion of the Executive Branch in regulating access to information pertaining to national security, emphasizing that “no one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). The AGs list disqualifying and mitigating conditions for evaluating a person’s suitability for access to classified information. Any one disqualifying or mitigating condition is not, by itself, conclusive. However, the AG should be followed where a case can be measured against them, as they represent policy guidance governing access to classified information. Each decision must reflect a fair, impartial, and commonsense consideration of the whole person and the factors listed in Security Executive Agent 4 Directive (SEAD) 4, App. A ¶¶ 2(d) and 2(f). All available, reliable information about the person, past and present, favorable and unfavorable, must be considered. Security clearance decisions resolve whether it is clearly consistent with the national interest to grant or continue an applicant’s security clearance. The Government must prove, by substantial evidence, controverted facts alleged in the SOR. If it does, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the facts. The applicant bears the heavy burden of demonstrating that it is clearly consistent with the national interest to grant or continue his or her security clearance. Persons with access to classified information enter into a fiduciary relationship with the Government based on trust and confidence. Thus, the Government has a compelling interest in ensuring each applicant possesses the requisite judgment, reliability, and trustworthiness of those who must protect national interest as their own. The “clearly consistent with the national interest” standard compels resolution of any reasonable doubt about an applicant’s suitability for access in favor of the Government. “[S]ecurity clearance determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531; SEAD 4, ¶ E(4); SEAD 4, App. A, ¶¶ 1(d) and 2(b). Clearance decisions are not a determination of the loyalty of the applicant concerned. They are merely an indication that the applicant has or has not met the strict guidelines the Government has established for issuing a clearance. Analysis Financial Considerations AG ¶ 18 articulates the security concern relating to financial problems: Failure or inability 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 . . . . Applicant’s financial problems are documented in the record. He has at least seven delinquent accounts and a delinquent mortgage that he was unable to address. He filed for bankruptcy protection in 2016, which was dismissed because of lack of payments in 2017. AG ¶ 19 provides disqualifying conditions that could raise a security concern and may be disqualifying in this case: “(a) inability to satisfy debts;” and “(c) a history of not meeting financial obligations.” The record established these disqualifying 5 conditions, requiring additional inquiry about the possible applicability of mitigating conditions. The following mitigating condition under AG ¶ 20 is potentially applicable: (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. The Appeal Board concisely explained an 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. Sep. 24, 2013). The AG ¶ 20(b) financial considerations mitigating condition is not fully raised by the facts and does not mitigate the security concerns. Applicant’s financial problems started before 2015, and are ongoing and unresolved. Applicant’s financial problems could be attributed to his providing financial help to his family. Notwithstanding, he failed to submit documentary evidence to corroborate his financial help, the extent of his help, and how that has affected his ability to be responsible with his own finances. Moreover, he did not present sufficient evidence of good-faith efforts to pay his debts or that he has been financially responsible under his circumstances. Considering the evidence as a whole, Applicant’s evidence is insufficient to demonstrate financial responsibility, or that his financial problems are being resolved. The financial considerations security concerns are not mitigated. Whole-Person Concept I considered the potentially disqualifying and mitigating conditions in light of all the facts and circumstances surrounding this case, and under the whole-person concept. SEAD 4, App. A, ¶¶ 2(a) and 2(d). I have incorporated my comments under 6 Guideline F in my whole-person analysis. Some of these factors were addressed under that guideline, but some warrant additional comment. Applicant, 44, honorably served 20 years in the Navy. He has been consistently employed with federal contractors since 2012. He held a clearance in the service, which apparently has been continued to present without any issues or concerns. Notwithstanding, his evidence is insufficient to establish a track record of financial responsibility. He did not respond to the FORM. Thus, he offered no mitigating evidence, and no documents, to establish that he has resolved or is resolving his debts in a responsible manner. It is well settled that once a concern arises regarding an applicant’s security clearance eligibility, there is a strong presumption against granting a security clearance. Unmitigated financial considerations security concerns lead me to conclude that granting a security clearance to Applicant is not warranted at this time. This decision should not be construed as a determination that Applicant cannot or will not attain the state of reform necessary for award of a security clearance in the future. With more effort towards documented resolution of his delinquent debts, a healthy financial picture, and a track record of behavior consistent with his obligations, he may well be able to demonstrate persuasive evidence of his security clearance worthiness. 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.h: Against Applicant Conclusion In light of all the circumstances presented by the record in this case, it is not clearly consistent with the national security interests of the United States to continue Applicant’s eligibility for a security clearance. Clearance is denied. ____________________________ JUAN J. RIVERA Administrative Judge