DATE: September 30, 2003

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SSN: -----------

Applicant for Security Clearance

DECISION OF ADMINISTRATIVE JUDGE

MATTHEW E. MALONE

APPEARANCES

FOR GOVERNMENT

Nygina T. Mills, Esquire, Department Counsel

FOR APPLICANT

Jason C. Crump, Esquire

SYNOPSIS

Applicant accrued approximately $10,700.00 in delinquent debts from 1988 through at least 2002 due in large part to a long period of unemployment after a workplace injury and irregular workmen's compensation payments. In 1999, all but $3,994.00 of her debts were discharged through bankruptcy. While Applicant's current financial management practices are less than ideal, she once again has steady income, is living within her means, and her remaining debts are not so onerous as to be of security significance. Clearance is granted.

STATEMENT OF THE CASE

On February 28, 2003 the Defense Office of Hearings and Appeals (DOHA) issued a Statement of Reasons (SOR) alleging facts in Applicant's background which raise security concerns under Guideline F (Financial Considerations). The SOR informed Applicant that, based on information available to the Government, DOHA adjudicators could not make a preliminary affirmative finding that it is clearly consistent with the national interest to grant or continue Applicant's security clearance. ⁽¹⁾

On April 9, 2003, Applicant answered the SOR (Answer) and requested a hearing. The case was assigned to me on May 16, 2003. On June 2, 2003, DOHA issued a Notice of Hearing setting this case to be heard on June 18, 2003. All parties appeared as scheduled and the government presented six exhibits (GE 1 through 6). Applicant relied on five exhibits (AE A through E), on her own testimony and on that of one other witness. DOHA received the transcript (Tr) on June 25, 2003.

FINDINGS OF FACT

After a thorough review of the pleadings, transcript, and exhibits, I make the following additional findings of fact:

Applicant is 60-years-old. She worked at a bakery for over 20 years and retired in 1988. Around the time of her retirement, she also experienced a debilitating injury to her wrists requiring corrective surgery. This entitled her to monthly workmen's compensation payments of about $1,300.00 in addition to her monthly retirement income of $343.00. Before leaving the bakery, Applicant earned about $2,180.00 gross each month. Applicant currently earns about $2,000.00 gross pay each month plus her retirement pay. ⁽²⁾

Applicant was unemployed due to her injury from May 1988 until September 1994, when she obtained work with a contractor that specialized in hiring persons with physical problems. This contractor assigned Applicant to work at a DoD facility doing custodial and low-level administrative jobs. She performed her duties extremely well and earned the praise of her superiors, but was removed from that site pending the outcome of her security clearance adjudication. ⁽³⁾

After leaving the bakery in 1988, Applicant had trouble paying several credit card accounts she had opened while still employed. Her difficulty stemmed from her overall reduction in pay and from the irregular payment of her workman's compensation benefits. Applicant would send money to her creditors when she could, but decided in 1998 to file a Chapter 7 bankruptcy petition. In March 1999, she was discharged of $6,941.00 in delinquent debts. ⁽⁴⁾

The SOR attributes to Applicant $6,510.00 in delinquent debt. However, two debts totaling $2,516.00 alleged in subparagraphs 1.a and 1.e were discharged in the aforementioned bankruptcy action. Further, the record does not support Applicant's claim the debts listed in SOR subparagraphs 1.b, 1.c, and 1.d were also discharged in bankruptcy. Therefore, she still owes the remaining $3,994.00 in delinquent debts listed in the SOR.

Applicant supports herself, her adult daughter and a minor grandchild They moved in with Applicant when the daughter's marriage broke up and she was enduring medical problems. ⁽⁵⁾ Applicant receives no monetary contribution from her daughter for household expenses. Applicant's daughter and grandchild expect to move out, but Applicant does not know when this will happen. ⁽⁶⁾

The delinquent debt listed in SOR subparagraph 1.f is a mobile phone account Applicant set-up for her daughter. Applicant's daughter should repay the account, but Applicant accepts that the account is ultimately her responsibility. This account remains unpaid. ⁽⁷⁾

In January 2003, Applicant made her first payment of $286.00 to the creditor listed in SOR subparagraph 1.c under a "check-by-phone" repayment plan. After being interviewed during her background investigation in July 2001, Applicant was surprised to learn this debt was active. She thought she had paid the debt several years ago, but looked into the matter after the interview. ⁽⁸⁾

Applicant appears to lack a sophisticated understanding of personal finances, but lives well within her modest means nonetheless. She has rented the same house for 22 years and what little money she has left over each month goes to her church. She has no credit cards or ongoing loan obligations.

POLICIES

The Directive sets forth adjudicative guidelines ⁽⁹⁾ to be considered in evaluating an Applicant's suitability for access to classified information. The Administrative Judge must take into account both disqualifying and mitigating conditions under each adjudicative issue applicable to the facts and circumstances of each case. Each decision must also reflect a fair and impartial common sense consideration of the factors listed in Section 6.3 of the Directive. The presence or absence of a disqualifying or mitigating condition is not determinative of a conclusion for or against an Applicant. However, specific applicable guidelines should be followed whenever a case can be measured against them as they represent policy guidance governing the grant or denial of access to classified information. Having considered the record evidence as a whole, I conclude Guideline F (Financial Considerations) is the relevant adjudicative guideline to be applied here.

BURDEN OF PROOF

A security clearance decision is intended to resolve whether it is clearly consistent with the national interest ⁽¹⁰⁾ for an Applicant to either receive or continue to have access to classified information. The Government bears the initial burden of proving, by something less than a preponderance of the evidence, controverted facts alleged in the SOR. If the government meets its burden it establishes a prima facie case that it is not clearly consistent with the national interest for the Applicant to have access to classified information. The burden then shifts to the Applicant to refute, extenuate or mitigate the Government's case. Because no one has a "right" to a security clearance, the Applicant bears a heavy burden of persuasion. ⁽¹¹⁾ A person who has access to classified information enters into a fiduciary relationship with the Government based on trust and confidence. The Government, therefore, has a compelling interest in ensuring each Applicant possesses the requisite judgement, reliability and trustworthiness of one who will protect the national interests as his or her 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. ⁽¹²⁾

CONCLUSIONS

Guideline F (Financial Considerations). A security concern arises when it is shown that a person is either unwilling or unable to manage his finances so that he avoids unreasonable delinquencies. A person who is overextended financially is at risk of engaging in illegal actions to obtain money. ⁽¹³⁾ Here, the Government has shown that Applicant accumulated approximately $10,700.00 ⁽¹⁴⁾ in bad debt between 1988 and 2002. Applicant still owes about $4,000.00 having discharged the remainder through bankruptcy in 1999. Disqualifying Condition (DC) 1 ⁽¹⁵⁾ and DC 3 ⁽¹⁶⁾ apply. By contrast, Applicant's debt problems were initially caused 15 years ago by a job-related injury and subsequent reduced and irregular income. Despite attempts to make headway in paying her debts, she continued to fall behind and eventually made the prudent decision to file for bankruptcy protection. This reduced her delinquent debt obligations significantly but did not eradicate the problem. Her remaining delinquencies amount to less than $4,000.00 and she has entered into a repayment plan for a debt she thought had been previously paid (subparagraph 1.c). Given her modest but steady income, this is a significant step in the right direction. I conclude the facts here support application of Mitigating Condition (MC) 1, ⁽¹⁷⁾ MC 3, ⁽¹⁸⁾ and MC 6. ⁽¹⁹⁾ On balance, I conclude that Applicant's remaining debt is not of such security significance that she should be disqualified from holding a clearance. This is especially true in light of the fact she has not continued to generate new debts and her inability to pay her old debts was not entirely her own doing.

I have carefully weighed all of the evidence in this case, and I have applied the aforementioned disqualifying and mitigating conditions as listed under each applicable adjudicative guideline. I have also considered the whole person concept as contemplated by the Directive in Section 6.3, and as called for by a fair and commonsense assessment of the record before me as required by Directive Section E2.2.3.

FORMAL FINDINGS

Formal findings regarding each SOR allegation as required by Directive Section E3.1.25 are as follows:

Financial Considerations (Guideline F): AGAINST THE APPLICANT

Subparagraph 1.a: For the Applicant

Subparagraph 1.b: Against the Applicant

Subparagraph 1.c: For the Applicant

Subparagraph 1.d: Against the Applicant

Subparagraph 1.e: For the Applicant

Subparagraph 1.f: Against the Applicant

Subparagraph 1.g: For the Applicant

DECISION

In light of all the circumstances presented by the record in this case, it is clearly consistent with the national interest to grant or continue a security clearance for the Applicant.

Matthew E. Malone

Administrative Judge

1. Required by Executive Order 10865, as amended, and by DoD Directive 5220.6 (Directive), as amended.

2. Tr., p. 28, 64 - 69.

3. AE D, AE E, Tr., p. 65.

4. GE 6.

5. Tr., p. 74-77.

6. Tr., p. 38.

7. AE C.

8. AE B; Tr., p. 52 - 53.

9. Directive, Enclosure 2.

10. See Department of the Navy v. Egan, 484 U.S. 518 (1988).

11. See Egan, 484 U.S. at 528, 531.

12. See Egan; Directive E2.2.2.

13. Directive, E2.A6.1.1.

14. Although the amount listed in the SOR is less than this, I have also taken into account Applicant's earlier debts addressed through bankruptcy.

15. E2.A6.1.2.1. A history of not meeting financial obligations;

16. E2.A6.1.2.3. Inability or unwillingness to satisfy debts;

17. E2.A6.1.3.1. The behavior was not recent;

18. E2.A6.1.3.3. The conditions that resulted in the behavior were largely beyond the person's control (e.g.,

loss of employment, a business downturn, unexpected medical emergency, or a death, divorce or separation);

19. E2.A6.1.3.6. The individual initiated a good-faith effort to repay overdue creditors or otherwise resolve

debts.