1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) --- ) ADP Case No. 17-02381 ) Applicant for Public Trust Position ) Appearances For Government: Michelle Tilford, Esquire, Department Counsel For Applicant: Pro se ______________ Decision ______________ GALES, Robert Robinson, Administrative Judge: Applicant failed to mitigate the trustworthiness concerns regarding financial considerations. Eligibility to occupy a public trust position is denied. Statement of the Case On August 28, 2016, Applicant applied for a public trust position and submitted an Electronic Questionnaire for Investigations Processing (e-QIP). On October 30, 2017, the Department of Defense (DOD) Consolidated Adjudications Facility (CAF) issued a Statement of Reasons (SOR) to her, under DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended and modified (Directive); and Directive 4 of the Security Executive Agent (SEAD 4), National Security Adjudicative Guidelines (December 10, 2016) (AG), for all covered individuals who require initial or continued eligibility for access to classified information or eligibility to hold a sensitive position, effective June 8, 2017. The SOR alleged trustworthiness concerns under Guideline F (Financial Considerations), and detailed reasons why the DOD CAF was unable to make an affirmative finding under the Directive that it is clearly consistent with the national interest 02/05/2019 2 to grant Applicant’s eligibility for occupying a public trust position to support a contract with the DOD. The SOR recommended referral to an administrative judge to determine whether such eligibility should be granted, continued, denied, or revoked. It is unclear when Applicant received the SOR as there is no receipt in the case file. In a sworn statement, dated February 15, 2018, Applicant responded to the SOR and elected to have her case decided on the written record in lieu of a hearing. A complete copy of the Government’s file of relevant material (FORM) was mailed to Applicant by the Defense Office of Hearings and Appeals (DOHA) on October 26, 2018, and she was afforded an opportunity to file objections and submit material in refutation, extenuation, or mitigation. In addition to the FORM, Applicant was furnished a copy of the Directive as well as the Adjudicative Guidelines applicable to his case. Applicant received the FORM on November 11, 2018. Applicant’s response was due within 30 days of the receipt of the FORM. Applicant apparently chose not to respond to the FORM, for as of January 17, 2019, she had not done so. The case was assigned to me on January 30, 2019. Findings of Fact In her Answer to the SOR, Applicant admitted with comments some of the factual allegations in the SOR (SOR ¶¶ 1.b., 1.e., 1.f., and 1.h.). She denied with comments the remaining allegations, and she claimed that SOR ¶¶ 1.a. and 1.g. were identical. Applicant’s admissions and comments are incorporated herein as findings of fact. After a complete and thorough review of the evidence in the record, and upon due consideration of same, I make the following additional findings of fact: Applicant is 33 years old. It is unclear what her current employment status is for the records indicate that she is a teacher-assistant with a local county school system (as of October 2016) during the day; and an unspecified type of employee of a local health center (as of September 2016) during the evenings; or an employee or employee- candidate (at least since April 2018) with an unspecified position in a local military hospital. It is unclear when she graduated from high school, for she indicated to an investigator from the U.S. Office of Personnel Management (OPM) in April 2017 that she had graduated more than ten years earlier. She received a certification in massage therapy in October 2005. Applicant has never served with the U.S. military. She has never held a security clearance, and it is unclear if she ever held a position of public trust. Applicant has never married, but she has been cohabitating since September 2007. She has five children, born in 2003 (residing with the child’s father), 2009, 2010, 2013, and 2015. 3 Financial Considerations1 It is unclear when Applicant’s financial difficulties first arose. Applicant attributed her financial problems to several different factors: 1) according to her e-QIP entries, in March 2013, because she was disappointed with her job, expecting a baby, and having migraine headaches, she decided to quit the job she had held since March 2006, and “take care of [her] health and stay at home with [her] children;” 2) she remained unemployed until February 2014, as a “stay at home mom;” 3) she was again unemployed from June 2014 until September 2014; 4) she loaned her brother’s significant-other an unspecified amount to catch up on their bills, but the money was never paid back; 5) her fiancé and she made poor job decisions that did not work out; 6) her son’s father refused to furnish her with insurance information to resolve a medical bill; 7) when she was unable to pay her property taxes in 2015, her tax refund was applied to the debt; and 8) she had poor money management and financial decision-making.2 During her OPM interview, she added: 9) her fiancé was trying to run a self- employed business as a wedding disc jockey, but the business failed and they were left in a difficult financial situation.3 In her Answer to the SOR, she added: 10) she had insufficient funds to keep her mortgage payments current; 11) she was unaware that her fiancé was intercepting the mail associated with their home mortgage; and 12) she was unaware that her fiancé was not making the monthly payments on the car loan for which she had cosigned.4 Applicant’s credit reports included additional information. In 2012 there was a judgment filed against her for $316, which was paid in April 2013; and the mortgage on her house was chronically late, between 30 and 120 days past due, as early as 2010.5 The SOR identified eight purportedly continuing delinquent debts totaling $14,287 that had been placed for collection, charged off, or gone to foreclosure (not including the unspecified unpaid mortgage balance on a home mortgage that was foreclosed), as reflected by the September 2016 credit report or the April 2017 credit report. While Applicant contended that several of the accounts were on repayment plans and were being paid, or were already paid off, with some exceptions, she failed to submit meaningful documentation from her creditors, such as copies of those plans or receipts, to support her own handwritten notes that certain agreements had been reached. As for the other accounts, she claimed that she would make either continuing payments or start 1 General source information pertaining to the financial issues discussed below can be found in the following exhibits: Item 3 (e-QIP, dated August 28, 2016); Item 5 (Combined Experian, TransUnion, and Equifax Credit Report, dated September 9, 2016); Item 4 (Experian Credit Report, dated April 3, 2017; Item 6 (Enhanced Subject Interview, dated April 12, 2017); and Item 2 (Applicant’s Answer to the SOR, dated February 15, 2018). 2 Item 3, supra note 1, at 13-16, 37-41. 3 Item 6, supra note 1, at 4-5. 4 Item 2, supra note 1, at 1-2. 5 Item 5, supra note 1, at 5; Item 4, supra note 1, at 12. 4 making payments in February 2018, when she anticipated receiving a refund from the Internal Revenue Service (IRS).6 Applicant’s delinquent accounts are as follows: a telephone account with an unpaid balance of $231 that was eventually settled for less than the full balance with two payments of $67 in April 2017 (SOR ¶ 1.a.);7 an individual home mortgage, originally in the amount of $115,995, that was foreclosed in May 2015 when the credit grantor reclaimed collateral to settle the mortgage (SOR ¶ 1.b.);8 a joint automobile loan for $13,987, of which $10,601 was charged off, and Applicant has made no effort to resolve (SOR ¶ 1.c.);9 a satellite television account with an unpaid balance of $778 that was purportedly settled for $428, and a payment of that amount in April 2017, but for which there is no documentation to support Applicant’s contention that there was a settlement (SOR ¶ 1.d.);10 and an unspecified type of account with an unpaid balance of $1,089 for which Applicant purportedly entered into a payment arrangement calling for a $282 payment in February 2018, and Applicant’s promise to pay the remainder upon receipt of her income tax refund in late February 2018, but for which there is no documentation to support the existence of a repayment arrangement or subsequent payments (SOR ¶ 1.e.).11 In addition, there are a medical account with an unpaid balance of $728 for which Applicant purportedly entered into a payment arrangement calling for a $5 payment in January 2018, and Applicant’s promise to either continuing paying that amount each month or pay the remainder upon receipt of her income tax refund in late February 2018, but for which there is no documentation to support the existence of a repayment arrangement or subsequent payments (SOR ¶ 1.f.);12 a cable television account with an 6 It should be noted that the Appeal Board has indicated that promises to pay off delinquent debts in the future are not a substitute for a track record of paying debts in a timely manner and otherwise acting in a financially responsible manner. ISCR Case No. 07-13041 at 4 (App. Bd. Sep. 19, 2008) (citing ISCR Case No. 99-0012 at 3 (App. Bd. Dec. 1, 1999)). 7 Item 5, supra note 1, at 6; Item 4, supra note 1, at 11; Item 2, supra note 1, at 1; Item 2 (Atch. 1 – Account Withdrawals, undated); Item 2 (Atch. 1 – Extract of Experian Credit Report, dated January 16, 2018), at 11. 8 Item 5, supra note 1, at 6; Item 4, supra note 1, at 12; Item 2, supra note 1, at 1; Item 2 (Atch. 2 – Extract of Experian Credit Report), supra note 7, at 12. 9 Item 5, supra note 1, at 7; Item 4, supra note 1, at 14; Item 2, supra note 1, at 1; Item 2 (Atch. 3 – Extract of Experian Credit Report), supra note 7, at 14. 10 Item 4, supra note 1, at 15; Item 2, supra note 1, at 1-2; Item 2 (Atch. 4 – Account Withdrawals, undated), supra note 7, at 4. 11 Item 5, supra note 1, at 9; Item 4, supra note 1, at 16; Item 2, supra note 1, at 2; Item 2 (Atch. 5 – Customer Receipt, dated February 12, 2018). 12 Item 5, supra note 1, at 9; Item 4, supra note 1, at 17; Item 2, supra note 1, at 2; Item 2 (Atch. 6 – Transaction Receipt, dated January 23, 2018). 5 unpaid balance of $318 that Applicant claims is identical to her telephone account, for which there is no documentation to support her claim that the two different creditors are the same company, and there is no evidence to indicate that any contacts with the creditor have been made or any payments to the creditor have been made (SOR ¶ 1.g.);13 and an unspecified type of account with an unpaid balance of $542 for which Applicant purportedly entered into a settlement arrangement calling for a $326 payment upon receipt of her income tax refund in February 2018, but for which there is no documentation to support the existence of a settlement arrangement or any payments (SOR ¶ 1.h.).14 There is no evidence that Applicant has ever received financial counseling. There is no evidence of a budget. Applicant did not explain what corrective actions she has taken over an extensive period to avoid the pitfalls or other factors that she identified as the ones that caused her financial difficulties. She offered no explanation for her failure to make attempts to resolve her accounts before she was interviewed by the OPM investigator on February 12, 2017 – the same day she made her initial modest payments to her creditors. Furthermore, there is no Personal Financial Statement to reflect her net monthly income, monthly expenses, or any remainder available for discretionary use or savings. There is no evidence to indicate that Applicant’s financial situation is now under control. 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 [position of public trust].”15 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. DOD contractor personnel are afforded the right to the procedures contained in the Directive before any final unfavorable access determination may be made.16 When evaluating an applicant’s suitability for a public trust position, the administrative judge must consider the guidelines in SEAD 4. In addition to brief introductory explanations for each guideline, the guidelines list potentially disqualifying conditions and mitigating conditions, which are used in evaluating an applicant’s eligibility for a public trust position. 13 Item 5, supra note 1, at 9; Item 4, supra note 1, at 18; Item 2, supra note 1, at 2. 14 Item 5, supra note 1, at 9; Item 2, supra note 1, at 2. 15 Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). 16 It should be noted that a memorandum from the Deputy Under Secretary of Defense for Counterintelligence and Security, Adjudication of Trustworthiness Cases, dated November 19, 2004, covers the handling of trustworthiness cases under the Directive. The memorandum directed the Defense Office of Hearings and Appeals (DOHA) to continue to utilize the Directive in ADP contractor cases for trustworthiness determinations. 6 An administrative judge need not view the guidelines as inflexible, ironclad rules of law. Instead, acknowledging the complexities of human behavior, these guidelines are applied in conjunction with the factors listed in the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and common sense decision. 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 meaningful decision. In the decision-making process, facts must be established by “substantial evidence.”17 The Government initially has the burden of producing evidence to establish a potentially disqualifying condition under the Directive, and has the burden of establishing controverted facts alleged in the SOR. Once the Government has produced substantial evidence of a disqualifying condition, under Directive ¶ E3.1.15, the applicant has the burden of persuasion to present evidence in refutation, explanation, extenuation or mitigation, sufficient to overcome the doubts raised by the Government’s case. The burden of disproving a mitigating condition never shifts to the Government.18 A person who seeks access to sensitive 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 as well. It is because of this special relationship that the Government must be able to repose a high degree of trust and confidence in those individuals to whom it grants access to sensitive information. Decisions include, by necessity, consideration of the possible risk the applicant may deliberately or inadvertently fail to safeguard sensitive information. Such decisions entail a certain degree of legally permissible extrapolation as to potential, rather than actual, risk of compromise of sensitive information. Furthermore, security clearance determinations, and by inference, public trust determinations, should err, if they must, on the side of denials.19 In reaching this decision, I have drawn only those conclusions that are reasonable, logical, and based on the evidence contained in the record. Likewise, I have avoided drawing inferences grounded on mere speculation or conjecture. Analysis Guideline F, Financial Considerations The trustworthiness concern relating to the guideline for Financial Considerations is set out in AG ¶ 18: 17 “Substantial evidence [is] such relevant evidence as a reasonable mind might accept as adequate to support a conclusion in light of all contrary evidence in the record.” ISCR Case No. 04-11463 at 2 (App. Bd. Aug. 4, 2006) (citing Directive ¶ E3.1.32.1). “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). 18 See ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 2005). 19 Egan, 484 U.S. at 531. 7 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. The guideline notes several conditions that could raise trustworthiness concerns under AG ¶19: (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 has had a long-standing problem with her finances, in part because she made poor job decisions, and she exercised poor money management and financial decision-making. As a result, various accounts became delinquent, a house was foreclosed, and a vehicle was apparently repossessed. AG ¶¶ 19(a) and 19(c) have been established, but AG ¶ 19(b) has not been established. The guideline also includes examples of conditions that could mitigate trustworthiness concerns arising from financial difficulties under AG ¶ 20: (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;20 (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; 20 A debt that became delinquent several years ago is still considered recent because “an applicant’s ongoing, unpaid debts evidence a continuing course of conduct and, therefore, can be viewed as recent for purposes of the Guideline F mitigating conditions.” ISCR Case No. 15-06532 at 3 (App. Bd. Feb. 16, 2017) (citing ISCR Case No. 15-01690 at 2 (App. Bd. Sept. 13, 2016)). 8 (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.21 AG ¶ 20(b) minimally applies, but none of the remaining mitigating conditions apply. The nature, frequency, and recency of Applicant’s continuing financial difficulties make it difficult to conclude that it occurred “so long ago” or “was so infrequent,” or that it is “unlikely to recur.” While Applicant generally attributed her financial difficulties to a variety of factors, in truth, few, if any, of those factors were due to conditions that were largely beyond her control. Choosing to quit a job because of disappointment with it; becoming a “stay-at-home mom” for multiple years; lending her brother an unspecified amount to catch up on his bills, but ignoring her own bills; or assisting her fiancé with his business aspirations, were all choices made by her, not consequences imposed upon her. Applicant was interviewed by an OPM investigator on April 12, 2017 – the same day she made the first payment on any of her SOR-related debts, and under those circumstances, it is difficult to conclude that Applicant made any good-faith efforts before the interview to resolve her debts. An applicant who begins to resolve his or her financial problems only after being placed on notice that his or her eligibility for a public trust position is in jeopardy may be lacking in the judgment and self-discipline to follow rules and regulations over time or when there is no immediate threat to his or her own interests.22 There is no evidence of a budget. There is no evidence of any financial counseling. There is no evidence of disputes. Applicant offered no evidence to indicate that her financial situation is now under better control. In this instance, to date, there is minimal meaningful evidence that corrective actions have been taken by Applicant. Applicant’s 21 The Appeal Board has previously explained what constitutes a good-faith effort to repay overdue creditors or otherwise resolve debts: In order to qualify for application of [the “good-faith” mitigating condition], an applicant must present evidence showing either a good-faith effort to repay overdue creditors or some other good-faith action aimed at resolving the applicant’s debts. The Directive does not define the term “good-faith.” However, the Board has indicated that the concept of good- faith “requires a showing that a person acts in a way that shows reasonableness, prudence, honesty, and adherence to duty or obligation.” Accordingly, an applicant must do more than merely show that he or she relied on a legally available option (such as bankruptcy [or statute of limitations]) in order to claim the benefit of [the “good-faith” mitigating condition]. (internal citation and footnote omitted) ISCR Case No. 02-30304 at 3 (App. Bd. Apr. 20, 2004) (quoting ISCR Case No. 99-9020 at 5-6 (App. Bd. June 4, 2001)). 22 See, e.g., ISCR Case No. 17-01213 at 5 (App. Bd. Jun. 29, 2018); ISCR Case No. 17-00569 at 3-4 (App. Bd. Sept. 18, 2018). 9 actions, or inaction, under the circumstances cast doubt on his current reliability, trustworthiness, and good judgment.23 Trustworthiness decisions are aimed at evaluating an applicant’s judgment, reliability, and trustworthiness. They are not a debt-collection procedure. The guidelines do not require an applicant to establish resolution of every debt or issue alleged in the SOR. An applicant needs only to establish a plan to resolve financial problems and take significant actions to implement the plan. There is no requirement that an applicant immediately resolve issues or make payments on all delinquent debts simultaneously, nor is there a requirement that the debts or issues alleged in an SOR be resolved first. Rather, a reasonable plan and concomitant conduct may provide for the payment of such debts, or resolution of such issues, one at a time. Mere promises to pay debts in the future, especially after a multi-year delay in taking any action, without further confirmed action, are insufficient. Whole-Person Concept Under the whole-person concept, the administrative judge must evaluate an applicant’s eligibility for a position of public trust by considering the totality of the applicant’s conduct and all the circumstances. The administrative judge should consider the nine adjudicative process factors listed at SEAD 4, App. A, ¶ 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 SEAD 4, App. A, ¶ 2(c), the ultimate determination of whether to grant eligibility for a position of public trust must be an overall commonsense judgment based upon careful consideration of the guidelines and the whole-person concept. Moreover, I have evaluated the various aspects of this case in light of the totality of the record evidence and have not merely performed a piecemeal analysis.24 There is some evidence mitigating Applicant’s conduct. Applicant is 33 years old. As of late 2016, she was a teacher-assistant with a local county school system during the day, and an unspecified type of employee of a local health center during the evenings; and as of at least April 2018, an employee or employee-candidate with an unspecified position in a local military hospital. She is a high school graduate, and she has a 23 See ISCR Case No. 09-08533 at 3-4 (App. Bd. Oct. 6, 2010). 24 See U.S. v. Bottone, 365 F.2d 389, 392 (2d Cir. 1966); See also ISCR Case No. 03-22861 at 2- 3 (App. Bd. Jun. 2, 2006). 10 certification in massage therapy. In April 2017, she made some modest payments on two of her delinquent debts, and in February she made a few more modest payments. The disqualifying evidence under the whole-person concept is more substantial. Applicant essentially ignored her debts over the years, but eventually was motivated to start addressing them once she decided to apply for a new job. That motivation did not commence until she was interviewed by an OPM investigator. Her mortgage was foreclosed due to non-payment, a vehicle was apparently repossessed, and several debts are still ignored. She contended that there were repayment arrangements, but failed to submit documentation to support her contentions. She claimed that a telephone company and a cable television company were one and the same, but failed to follow through with any evidence. When she had the opportunity to present evidence of repayment arrangements and payments, with a few exceptions, she failed to do so, even after the FORM was sent to her. Considering all of the above, I am unable to reach a positive conclusion pertaining to Applicant’s eligibility for a position of public trust. The Appeal Board has addressed a key element in the whole-person analysis in financial cases stating:25 In evaluating Guideline F cases, the Board has previously noted that the concept of “meaningful track record” necessarily includes evidence of actual debt reduction through payment of debts. However, an applicant is not required, as a matter of law, to establish that he [or she] has paid off each and every debt listed in the SOR. All that is required is that an applicant demonstrate that he [or she] has “. . . established a plan to resolve his [or her] financial problems and taken significant actions to implement that plan.” The Judge can reasonably consider the entirety of an applicant’s financial situation and his [or her] actions in evaluating the extent to which that applicant’s plan for the reduction of his outstanding indebtedness is credible and realistic. See Directive ¶ E2.2(a) (“Available, reliable information about the person, past and present, favorable and unfavorable, should be considered in reaching a determination.”) There is no requirement that a plan provide for payments on all outstanding debts simultaneously. Rather, a reasonable plan (and concomitant conduct) may provide for the payment of such debts one at a time. Likewise, there is no requirement that the first debts actually paid in furtherance of a reasonable debt plan be the ones listed in the SOR. Applicant has demonstrated an extremely poor track record of debt reduction and elimination efforts, seemingly avoiding her debts until after her OPM interview. Overall, the evidence leaves me with substantial questions and doubts as to Applicant’s eligibility and suitability for a position of public trust. For all of these reasons, I conclude Applicant has failed to mitigate the trustworthiness concerns arising from her financial considerations. See SEAD 4, App. A, ¶¶ 2(d)(1) through AG 2(d)(9). 25 ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008) (internal citations omitted). 11 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 Subparagraph 1.a.: For Applicant Subparagraphs 1.b. through 1.h.: 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 interest to grant Applicant eligibility for a position of public trust to support a contract with the DOD. Eligibility is denied. ________________________ ROBERT ROBINSON GALES Administrative Judge