DATE: September 16, 2003

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

Applicant for Security Clearance

ISCR Case No. 02-12291

DECISION OF ADMINISTRATIVE JUDGE

ROBERT ROBINSON GALES

APPEARANCES

FOR GOVERNMENT

Juan J. Rivera, Esquire, Department Counsel

FOR APPLICANT

Pro Se

SYNOPSIS

Sixty-year-old Applicant's finances deteriorated rapidly when he was confronted with a series of health issues (illness and death of his wife and father-in-law, as well as his own illness) which strained his finances and ability to pay his bills. Applicant's Chapter 13 bankruptcy was dismissed in an unsuccessful effort to resolve his financial delinquencies, but his other efforts are looked upon as positive, for he managed to remain current on some bills, entered into payment agreements on others, and actually paid off still other bills. He has mitigated the concerns by the evidence developed herein, and questions and doubts as to his security eligibility and suitability have been satisfied. Clearance is granted.

STATEMENT OF THE CASE

On May 12, 2003, the Defense Office of Hearings and Appeals (DOHA), pursuant to Executive Order 10865, Safeguarding Classified Information Within Industry, dated February 20, 1960, as amended and modified, and Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (Directive), dated January 2, 1992, as amended and modified, issued a Statement of Reasons (SOR) to Applicant which detailed reasons why DOHA could not make the preliminary affirmative finding under the Directive that it is clearly consistent with the national interest to grant or continue a security clearance for Applicant, and recommended referral to an Administrative Judge to determine whether a clearance should be granted, continued, denied, or revoked.

In a sworn written statement, dated June 9, 2003, Applicant responded to the allegations set forth in the SOR, and requested a hearing. The case was initially assigned to another Administrative Judge on July 25, 2003, but due to caseload considerations, was reassigned to, and received by, this Administrative Judge on August 6, 2003. A notice of hearing was issued on August 6, 2003, and the hearing was held before me on August 19, 2003. During the course of the hearing, five Government exhibits, and 12 Applicant exhibits, and the testimony of one Applicant witness (the Applicant), were received. One additional Applicant exhibit, in multiple parts, was received within the post-hearing period granted, without objection by the Department Counsel. The transcript (Tr.) was received on August 29, 2003.

Applicant has admitted most of the factual allegations pertaining to financial matters under Guideline F (subparagraphs 1.a. through 1.e., 1.g., and 1.h.). Those admissions are incorporated herein as findings of fact. He denied the remaining allegations (subparagraphs 1.f. and 1.i.). The Department Counsel subsequently conceded allegation 1.i. was no longer correct, and that the account in question had been satisfied.

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 a 60-year-old employee of a defense contractor seeking to obtain a security clearance.

Applicant's financial situation until October 1994 was unremarkable and basically stable. ⁽¹⁾ He worked as a security officer, with full medical benefits, until he decided to open his own craft shop with his wife. ⁽²⁾ Unfortunately for Applicant, when he commenced his small business he neglected to continue his medical insurance, ⁽³⁾ and that inaction resulted in substantial financial difficulties, as discussed further below. Applicant's father-in-law had come to live with them in early 1994 because his health was rapidly deteriorating and Applicant's wife could take care of him. ⁽⁴⁾ However, in January 1995, Applicant's wife became ill. She died in April 1995. ⁽⁵⁾ As a result, the responsibility for his father-in-law's care fell to Applicant. When the burden became too much, Applicant placed his father-in-law in a nursing home. ⁽⁶⁾ Applicant's father-in-law passed away two months later.

Because of the expenses generated and time lost caring for his wife and father-in-law during that year, Applicant was unable to attend to his business. As a result, he devoted the next two years trying to get the business back on track to enable him to pay the accumulated bills. Experiencing little success, in November 1997, Applicant sought the protection of bankruptcy and filed a voluntary petition under Chapter 13 of the Bankruptcy Code. ⁽⁷⁾ He filed for protection as an individual rather than as a business. ⁽⁸⁾ At the time of the filing, Applicant was already four mortgage payments behind, and was about to lose his residence to foreclosure. ⁽⁹⁾ Under the 1^st Chapter 13 plan, Applicant was to pay the trustee $980.00 per month for 60 months. ⁽¹⁰⁾ In March 1998, the plan was amended and Applicant was to pay the trustee $1,027.00 per months for 60 months. ⁽¹¹⁾ In May 1998, a 2^nd Chapter 13 Plan was established, mandating payments to the trustee of $910.00 per month for 60 months. ⁽¹²⁾ By October 1998, Applicant was already $900.00 in arrears under the plan. ⁽¹³⁾ Finally, in December 1998, because Applicant had failed to make the first payment due under the Joint Stipulation, the case was dismissed. ⁽¹⁴⁾

In June 2000, Applicant underwent quadruple bypass heart surgery, and was out of work for three months. ⁽¹⁵⁾ The illness and surgery generated additional medical bills, and the post-operative recuperation period further delayed his efforts in setting his financial affairs in order.

A number of Applicant's financial liabilities were identified in his failed bankruptcy effort, including delinquent accounts referred to in the SOR. Those delinquent accounts with security significance, according to the Government, are set forth below.

One debt, in the amount of $1,374.00 owed to a credit financing company (more fully identified in subparagraph 1.b. of the SOR) was, according to a Report of Credit, dated February 19, 2002, ⁽¹⁶⁾ an individual account opened in May 1997 and eventually charged off as a bad debt. ⁽¹⁷⁾ Applicant has offered a variety of scenarios regarding this debt. In March 2002, he contended the account was "involved" in his bankruptcy and had a zero balance. ⁽¹⁸⁾ The 2002 Report of Credit reflects a past due balance of $1,374.00. ⁽¹⁹⁾ In his Response to SOR, in June 2003, he contended the account was his father-in-law's credit card which he was authorized to use, but admitted the account had been charged off. ⁽²⁰⁾ During the hearing, Applicant initially could not recall the account, but acknowledged it was his debt. ⁽²¹⁾ He also indicated he had tried to pay the debt but was told by the creditor the account had been charged off and payments by Applicant were fruitless. ⁽²²⁾ He subsequently contended he had paid the creditor $117.00 as part of his bankruptcy during the latter part of 1998, but was unhappy because there was no mention of that fact in the Report of Credit. ⁽²³⁾ Finally, Applicant came full circle and, in August 2003, as part of his authorized post-hearing submission, indicated he had entered into an agreement with the creditor to pay between $25.00 and $50.00 per month, by money order or cashier's check, to resolve the account. The creditor declined to send him any written confirmation of the agreement until the payments have been made. ⁽²⁴⁾ Applicant has offered no evidence that an initial payment has been made under the agreement. Nevertheless, I find that while Applicant had not previously paid off the account, as he had contended at one point, he has entered into a payment arrangement with the creditor to resolve this outstanding financial obligation.

Another debt, in the amount of $5,331.00 owed to a national bank credit card (more fully identified in subparagraph 1.c. of the SOR) was, according to the Report of Credit, a joint account opened in April 1994 and eventually charged off as a bad debt. ⁽²⁵⁾ Applicant has again offered a variety of similar scenarios regarding this debt. In March 2002, he contended the account was "involved" in his bankruptcy and had a zero balance. ⁽²⁶⁾ The 2002 Report of Credit reflects a past due balance of $5,331.00. ⁽²⁷⁾ In his Response to SOR, in June 2003, he admitted the account had been charged off, and contended it had a zero balance as of October 1998. ⁽²⁸⁾ During the hearing, Applicant initially could not recall the account, but acknowledged it was his debt. ⁽²⁹⁾ He also indicated he had tried to pay the debt but was told by the creditor the account had been charged off and payments by Applicant were fruitless. ⁽³⁰⁾ Finally, in August 2003, as part of his authorized post-hearing submission, Applicant indicated he had attempted to enter into payment negotiations with the creditor but was advised the account had been placed in their profit and loss for the year in question and was no longer on their books. ⁽³¹⁾ Accordingly, I find that while Applicant had not previously paid off the account or resolved it under his bankruptcy as he had contended, he has initiated a good-faith effort to repay this outstanding financial obligation, despite the refusal of the creditor to accept any payments.

Another debt, in the amount of $3,548.00 owed to a national home improvement company (more fully identified in subparagraph 1.d. of the SOR) was, according to the Report of Credit, a shared account opened in October 1993 and eventually charged off as a bad debt. ⁽³²⁾ Once again, Applicant has offered a variety of similar scenarios regarding this debt. In March 2002, he contended the account was "involved" in his bankruptcy and had a zero balance. ⁽³³⁾ The 2002 Report of Credit reflects a past due balance of $3,548.00. ⁽³⁴⁾ In his Response to SOR, in June 2003, he admitted the account had been charged off, and contended it had been cleared off his credit report. ⁽³⁵⁾ During the hearing, Applicant stated the account belonged to his-father-in-law but acknowledged having the authority to charge items to the account. ⁽³⁶⁾ He indicated he would have paid off the account but was not able to do so because of the circumstances of his financial situation. ⁽³⁷⁾ In August 2003, as part of his authorized post-hearing submission, Applicant indicated he had attempted to enter into payment negotiations with the creditor but was advised the account had a zero balance and there was no way payments could be credited to it. ⁽³⁸⁾ Accordingly, I find that while Applicant had not previously paid off the account or resolved it under his bankruptcy as he had contended, he has initiated a good-faith effort to repay this outstanding financial obligation, despite the refusal of the creditor to accept any payments.

Another debt, in the amount of $1,537.00 owed to a leasing company (more fully identified in subparagraph 1.e. of the SOR) was, according to the Report of Credit, an individual account opened in July 1997 and eventually charged off as a bad debt. ⁽³⁹⁾ Once again, Applicant has offered a variety of similar scenarios regarding this debt. In March 2002, he contended the account was "involved" in his bankruptcy and had a zero balance. ⁽⁴⁰⁾ The 2002 Report of Credit reflects a past due balance of $1,537.00. ⁽⁴¹⁾ In his Response to SOR, in June 2003, he admitted the account had been charged off, and contended he had sued the creditor for harassment and was awarded a settlement, the specifics of which were not described. ⁽⁴²⁾ During the hearing, Applicant stated he had attempted to return items to the creditor because his business had failed and he could no longer use them, but the creditor refused and started harassing him. ⁽⁴³⁾ In August 2003, as part of his authorized post-hearing submission, Applicant indicated he had attempted to enter into payment negotiations with the creditor but was advised the account was closed and payments could be accepted. ⁽⁴⁴⁾ Accordingly, I find that while Applicant had not previously paid off the account or resolved it under his bankruptcy as he had contended, he has initiated a good-faith effort to repay this outstanding financial obligation, despite the refusal of the creditor to accept any payments.

Another debt, in the amount of $889.00 purportedly owed to a bank credit card (more fully identified in subparagraph 1.f. of the SOR) was, according to the Report of Credit, an individual account opened in September 1999 and eventually charged off as a bad debt. ⁽⁴⁵⁾ In this instance, Applicant has been consistently denying responsibility for the debt, contending he was the victim of identity theft when a tenant in the residence he was renting out stole his unsolicited credit card from the mail. ⁽⁴⁶⁾ Despite his protestations, the 2002 Report of Credit reflects a past due balance of $889.00. ⁽⁴⁷⁾ In February 2002, Applicant reported the matter, disputed the charges, and attempted to have it resolved. ⁽⁴⁸⁾ There is no evidence to rebut Applicant's contentions. Accordingly, I find that Applicant was not responsible for this debt arising out of a stolen credit card, and he has initiated a good-faith effort to resolve this matter long before the SOR was issued.

Another two debts, in the amounts of $3,714.00 and $384.00 owed to a healthcare provider (more fully identified in subparagraphs 1.g. and 1.h. of the SOR) were, according to the Report of Credit, accounts opened on an unspecified dates and referred to a collection agency in October 2000 and August 2001 respectively, as unpaid. ⁽⁴⁹⁾ Applicant has been consistently contending he had previously entered into payment arrangements with the collection agency and has been routinely making scheduled payments under the agreements. ⁽⁵⁰⁾ The 2002 Report of Credit reflects past due balances of $3,714.00 and $384.00. ⁽⁵¹⁾ In his Response to SOR, in June 2003, he submitted a receipt from the collection agency reflecting a recent payment of $50.00 on the larger of the two accounts, and an unpaid balance for both accounts as $3,423.50. ⁽⁵²⁾ Additional receipts from the collection agency, as well as photocopies of numerous checks themselves, reflect payments on these two accounts as far back as December 11, 2000--well before the issuance of the SOR. ⁽⁵³⁾ The most recent receipt, dated July 31, 2003, reflects a combined balance for both accounts as $3,273.50. ⁽⁵⁴⁾ Accordingly, I find that Applicant has initiated a good-faith effort to repay these two outstanding financial obligations well before the issuance of the SOR.

Another debt, in the amount of $85.00 owed to a telephone company (more fully identified in subparagraph 1.i. of the SOR) was, according to the Report of Credit, an account opened on an unspecified date and referred to a collection agency in March 2001, as unpaid. ⁽⁵⁵⁾ In March 2002, Applicant claimed he had paid off the account and furnished the special agent of the Defense Security Service (DSS) who was interviewing him with a document to support his contentions. ⁽⁵⁶⁾ The document was either overlooked or ignored. In his Response to SOR, in June 2003, Applicant again submitted the document--a letter from the creditor or a collection agency on behalf of the creditor--which stated the debt had been paid off in January 2002, long before the SOR was issued. ⁽⁵⁷⁾ During the hearing, the Department Counsel conceded the account had been satisfied. ⁽⁵⁸⁾ Accordingly, I find that Applicant had previously paid off the account.

Applicant has been employed as a security officer with a government contractor since May 2000. The quality of his performance, according to supervisors and co-workers, is outstanding.

Enclosure 2 of the Directive sets forth adjudicative guidelines which must be considered in the evaluation of security suitability. In addition to brief introductory explanations for each guideline, the adjudicative guidelines are divided into those that may be considered in deciding whether to deny or revoke an individual's eligibility for access to classified information (Disqualifying Conditions) and those that may be considered in deciding whether to grant an individual's eligibility for access to classified information (Mitigating Conditions).

An Administrative Judge need not view the adjudicative guidelines as inflexible ironclad rules of law. Instead, acknowledging the complexities of human behavior, these guidelines, when applied in conjunction with the factors set forth in the Adjudicative Process provision in Section E2.2., Enclosure 2, of the Directive, are intended to assist the Administrative Judge in reaching fair and impartial common sense decisions.

Because the entire process is a conscientious scrutiny of a number of variables known as the "whole person concept," all available, reliable information about the person, past and present, favorable and unfavorable, should be considered in making a meaningful decision. The Adjudicative Process factors which an Administrative Judge should consider are: (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 voluntariness of participation; (6) the presence or absence of rehabilitation and other pertinent 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.

Based upon a consideration of the evidence as a whole, I find the following adjudicative guideline most pertinent to an evaluation of the facts of this case:

Guideline F - Financial Considerations: An individual who is financially overextended is at risk of having to engage in illegal acts to generate funds. Unexplained affluence is often linked to proceeds from financially profitable criminal acts.

Conditions that could raise a security concern and may be disqualifying, as well as those which could mitigate security concerns, pertaining to this adjudicative guideline are set forth and discussed in the Conclusions section below.

Since the protection of the national security is the paramount consideration, the final decision in each case must be arrived at by applying the standard the issuance of the clearance is "clearly consistent with the interests of national security," ⁽⁵⁹⁾ or "clearly consistent with the national interest." For the purposes herein, despite the different language in each, I have concluded both standards are one and the same. 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.

In the decision-making process, the burden of producing evidence initially falls on the Government to establish a case which demonstrates, in accordance with the Directive, it is not clearly consistent with the national interest to grant or continue an applicant's access to classified information. If the Government meets its burden, the heavy burden of persuasion then falls upon the applicant to present evidence in refutation, explanation, extenuation or mitigation sufficient to overcome the doubts raised by the Government's case, and to ultimately demonstrate it is clearly consistent with the national interest to grant or continue the applicant's clearance.

A person who seeks access to classified information enters into a fiduciary relationship with the Government predicated upon trust and confidence. It is a relationship that transcends normal duty hours and endures throughout off-duty hours as well. It is because of this special relationship the Government must be able to repose a high degree of trust and confidence in those individuals to whom it grants access to classified information. Decisions under this Directive include, by necessity, consideration of the possible risk an applicant may deliberately or inadvertently fail to protect or safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation as to potential, rather than actual, risk of compromise of classified information.

One additional comment is worthy of note. Applicant's allegiance, loyalty, and patriotism are not at issue in these proceedings. Section 7 of Executive Order 10865 specifically provides industrial security clearance decisions shall be "in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned." Security clearance decisions cover many characteristics of an applicant other than allegiance, loyalty, and patriotism. Nothing in this Decision should be construed to suggest I have based this decision, in whole or in part, on any express or implied decision as to Applicant's allegiance, loyalty, or patriotism.

Upon consideration of all the facts in evidence, an assessment of the witness credibility, and after application of all appropriate legal precepts, factors, and conditions, including those described briefly above, I conclude the following with respect to each allegation set forth in the SOR:

With respect to Guideline F, the Government has established its case. Applicant's financial difficulties commenced in about 1994 through a combination of circumstances which were attributed to no fault of his own. He and his wife opened their own small business, relinquishing the medical insurance he had from his former job, and then were confronted with a series of health issues which strained their finances and ability to pay their bills. First there was his wife's illness and death, as well as his father-in-law's deteriorating health and eventual death. They took their toll, and Applicant filed for bankruptcy under Chapter 13. The payments under the bankruptcy plan proved too difficult to make and that too failed. Applicant's financial difficulties were exacerbated by his apparent misunderstanding of his bankruptcy attorney's advice. He thought the dismissal of the Chapter 13 petition discharged him from responsibility for those debts and he assumed the balances had been brought to zero. Obviously, his impression and understanding were wrong. That conduct and overall financial situation gave rise to Financial Considerations Disqualifying Condition (DC) E2.A6.1.2.1. (history of not meeting financial obligations); and DC E2.A6.1.2.3. (inability or unwillingness to satisfy debts).

Applicant has tried to handle his bills, and for many of them, has been successful. But his efforts were again stalled by his own illness. The combination of those individual events, falls within Financial Considerations Mitigating Condition (MC) 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)). However, while his bankruptcy was an unsuccessful effort to resolve his financial delinquencies, Applicant's other efforts are looked upon as positive. He managed to remain current on some bills, has entered into payment agreements on others, and has actually paid off still other bills. Those efforts, as well as his fruitless attempts to enter into payment agreements with some creditors who now refuse to accept payments because the accounts had been charged off, come within MC E2.A6.1.3.6. (the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts). Under these circumstances, I find substantial evidence of positive action on his part to resolve his outstanding debts before this security clearance review process commenced.

Applicant's current finances are presently in much better shape-a marked improvement over the way they had been prior to his period of financial difficulties. His persistent problem was primarily the result of conditions beyond his control. Under these circumstances, I believe Applicant has, through evidence of extenuation and explanation, successfully mitigated or overcome the Government's case. Accordingly, allegations 1.a. through 1.i. of the SOR are concluded in favor of Applicant.

For the reasons stated, I conclude Applicant is eligible for access to classified information.

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: FOR THE APPLICANT

Subparagraph 1.a.: For the Applicant

Subparagraph 1.b.: For the Applicant

Subparagraph 1.c.: For the Applicant

Subparagraph 1.d.: For the Applicant

Subparagraph 1.e.: For the Applicant

Subparagraph 1.f.: For the Applicant

Subparagraph 1.g.: For the Applicant

Subparagraph 1.h.: For the Applicant

Subparagraph 1.i.: For the Applicant

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 Applicant.

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