DATE: June 23, 2005

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

Applicant for Security Clearance

DECISION OF ADMINISTRATIVE JUDGE

ROBERT ROBINSON GALES

APPEARANCES

FOR GOVERNMENT

Kathryn Antigone Trowbridge, Esquire, Department Counsel

FOR APPLICANT

Steven P. Sherick, Esquire

Adam N. Bleier, Esquire

SYNOPSIS

Thirty-six-year-old Applicant has a history of financial delinquencies caused by his initial irresponsibility as well as a variety of unfavorable and unfortunate circumstances during the period 1994-97. A number of accounts became delinquent and were eventually closed by creditors, charged off, or sent to collection. While he made some superficial attempts to address some accounts, the evidence supports the conclusion that he paid little, if any, attention to his debts and merely ignored them over an extended period. His lengthy period of inaction until November 2004 when he went to CCCS to start a payment agreement--months after he received his Statement of Reasons--raises grave questions and doubts about his security eligibility and suitability. Clearance is denied.

STATEMENT OF THE CASE

On August 31, 2004, 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. The SOR 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 November 12, 2004, Applicant responded to the allegations in the SOR and requested a hearing. The case was initially assigned to another administrative judge on January 11, 2005, but was reassigned to me on February 17, 2005. A notice of hearing was issued on February 25, 2005, and I convened the hearing, as scheduled, on March 15, 2005. During the hearing, 11 government exhibits, 10 Applicant exhibits, and Applicant's testimony, were received. The transcript (Tr.) was received on March 24, 2005.

Applicant admitted nearly all of the factual allegations pertaining to financial matters under Guideline F (subparagraphs 1.b., and 1.d. through 1.m.). Those admissions are incorporated herein as findings of fact. He denied the remaining allegations (subparagraphs 1.a. and 1.c.).

After a complete and thorough review of the evidence in the record, I make the following additional findings of fact:

Applicant is a 36-year-old employee of a defense contractor. He seeks a security clearance, the level of which has not been divulged. He was previously granted a SECRET clearance in 1990-91. ⁽¹⁾

Applicant served on active duty with the U.S. Air Force as an avionics technician from December 1991 until March 2001. ⁽²⁾ While in the Air Force, he met, and in July 1992, married his wife, who was also serving on active duty. ⁽³⁾ At some point subsequent to their marriage, Applicant's wife failed a test that was critical to her job, and as a result, she was involuntarily discharged. ⁽⁴⁾

He had acquired no personal debt prior to his marriage, and continuing until his wife was discharged in 1994. ⁽⁵⁾ A variety of circumstances took place in 1994 and shortly thereafter that led to the accumulation of debt, including: his wife's unemployment; his father's death and attendant funeral expenses in 1994; ⁽⁶⁾ the birth of his son in 1995; ⁽⁷⁾ his mother-in-law's death in 1995; ⁽⁸⁾ his wife's unpaid extended maternity leave in 1995 (due to postpartum depression); ⁽⁹⁾ the 1996 demise of his sister and his undertaking of the care of his mentally handicapped adult nephew; ⁽¹⁰⁾ periodic estrangement from his wife; and his wife's major credit card purchases. ⁽¹¹⁾ He and his wife separated in the Spring of 1997 ⁽¹²⁾ and divorced in October 1999. ⁽¹³⁾ Around the time of the divorce, and without notice, she and their son left the state. ⁽¹⁴⁾ He incurred additional expenses in hiring a detective to track them down. ⁽¹⁵⁾ Although they were to share custody of their son, she eventually relinquished physical custody, and he now has physical custody of their son. ⁽¹⁶⁾

Although Applicant initially contended his financial problems commenced in approximately May or June 1997, ⁽¹⁷⁾ he would now have me believe they commenced five years earlier. ⁽¹⁸⁾ Regardless of the actual onset of financial difficulties, shortly after he separated from active duty, he was in substantial debt and unable to keep up with his monthly payments. ⁽¹⁹⁾

While on active duty, Applicant earned a monthly net salary of about $2,400.00. ⁽²⁰⁾ Although he had brief periods of unemployment following his discharge, in November 2001 he obtained a position as a field technician with his current employer. ⁽²¹⁾ In June 2002, his monthly net income was $2,000.00, ⁽²²⁾ and by November 2004, it had risen to $3,268.00. ⁽²³⁾ His approximate current annual salary is over $41,000.00. ⁽²⁴⁾ He has been offered another position within the same company at an overseas location, with an expected annual salary of $78,000.00, plus housing allowance. ⁽²⁵⁾

In June 2002, Applicant acknowledged his financial difficulties were caused by his irresponsibility. ⁽²⁶⁾ He also vowed to repay all of his debts, ⁽²⁷⁾ which at that time were identified as 10 debts which were delinquent, past due, charged off, or in collection, totaling about $20,863.00. ⁽²⁸⁾ He was not making any payments towards those debts. ⁽²⁹⁾ In August 2003, he reported he had spoken with a bankruptcy attorney regarding a possible Chapter 7 bankruptcy filing as well as a representative of the Consumer Credit Counseling Service (CCCS) to weigh his options. ⁽³⁰⁾ In January 2004, he had 10 debts totaling $24,982.00. ⁽³¹⁾ He was still not making any payments towards those debts. ⁽³²⁾ By November 2004--three months after the SOR was issued--his indebtedness was about $21,124.96, ⁽³³⁾ plus finance charges and accruing interest. He entered into a debt management agreement with CCCS. ⁽³⁴⁾ Although the agreement called for the initial deposit to CCCS in the amount of $732.00 to be made on November 15, 2004, ⁽³⁵⁾ Applicant decided to postpone the payment for one month. ⁽³⁶⁾ Applicant's initial payment of $800.00 was delayed until January 24, 2005. ⁽³⁷⁾ The agreement called for future monthly payments of $669.00 until all of his identified debts were satisfied. ⁽³⁸⁾

The SOR identifies 13 delinquent accounts totaling approximately $27,218.00. Those accounts, and their current status, are described below:

Despite credit report entries pertaining to most of the delinquent accounts as "individual" accounts in his name, Applicant consistently refers to them as "joint" accounts rather than individual accounts. Likewise, most of the balances have been attributed to the activities of his ex-wife before they were divorced as well as accrued interest. Because of a fraud-related banking problem, Applicant's bank account was depleted and he fell a few months behind in his automobile finance payments two months prior to the hearing, but he was able to bring the account current with a balloon payment of $2,000.00. ⁽⁸⁵⁾

During the period of time Applicant and his fiancée were estranged, Applicant continued paying for some of her bills such as her automobile insurance. ⁽⁸⁶⁾ They have since reconciled.

While the quality of Applicant's work performance has not been described, two friends who were subordinates of his while in the U.S. Air Force, as well as his fiancée, have characterized him as a hard-working person who is trustworthy and honest.

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, 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 that the issuance of the clearance is "clearly consistent with the interests of national security," ⁽⁸⁷⁾ 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 draw only those conclusions that are reasonable, logical and based on the evidence contained in the record. Likewise, I avoid 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:

The government has established its case under Guideline F. As indicated above, because of Applicant's initial irresponsibility and well as a variety of unfavorable and unfortunate circumstances during the period 1994-97, Applicant's bills began to increase. A number of accounts became delinquent and were eventually closed by creditors, charged off, or sent to collection. Despite his contentions that he tried to maintain those accounts in a current status, there is little evidence to support those contentions. To the contrary, while he made some superficial attempts to address some accounts, the evidence supports the conclusion that he paid little, if any, attention to his debts and merely ignored them over an extended period.

As far back as June 2002, Applicant acknowledged his financial difficulties were caused by his irresponsibility, and vowed to repay all of his debts, which at that time were identified as 10 debts totaling about $20,863.00. Subsequent inquiries revealed additional debts along with what appear to be empty promises to pay as well as unsupported contentions that some payments have been made. Consulting with a bankruptcy attorney prior to August 2003 and speaking with CCCS in January 2004 still resulted in inaction regarding actual debt resolution. The issuance of the SOR in late August 2004 failed to motivate meaningful efforts until November 2004. During the hearing, Applicant provided his CCCS agreement to pay off his delinquencies, but his actions only commenced in December 2004 with further promises to continue in the future. As argued by Department Counsel, perfection is not required, but progress is. Applicant's failure to take meaningful action to satisfy his outstanding financial obligations in 2002, 2003, or early 2004 gives rise to Financial Considerations Disqualifying Condition (FC DC) E2.A6.1.2.1. (history of not meeting financial obligations); and FC DC E2.A6.1.2.3. (inability or unwillingness to satisfy debts).

Applicant has argued the applicability of certain Financial Considerations Mitigating Conditions (FC MC) which, in my estimation, do not apply to the evidence developed herein. FC MC E2.A6.1.3.1. (the behavior was not recent) does not apply because, while the basic debts may have been generated during the 1990s, the behavior in not attempting to satisfy them continued until December 2004. Because of the absence of timely meaningful efforts by Applicant to resolve his outstanding financial obligations, this matter does not come within FC MC E2.A6.1.3.6. (the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts). His vacillation over a substantial period of time as to how to resolve his financial dilemma, with no action being taken, simply indicates promises made but not kept. To his credit, it appears that Applicant may have finally come to terms with his delinquent debts, but in this instance, after at least 7 years of inaction, and possibly as many as 12 such years, the plan commencing in December 2004 is too new and untested.

Applicant has also argued his "behavior," not otherwise described except as to the nature of the financial difficulties, was "largely involuntary." The variety of circumstances that took place in 1994-99 were not unique to Applicant. Life happens, but to attribute the costs of living, pregnancy, medical care, and dying to involuntariness is disingenuous. While we incur financial obligations for a variety of reasons, the failure to make any timely efforts to resolve those obligations, even in difficult times, is not involuntary. The evidence does, however, support the limited application of FC 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). As noted above, a number of circumstances, such as those described arose during 1994-99. The existence of such circumstances may explain difficulties in resolving delinquent financial obligations in the short term, but it does not justify long term inaction on Applicant's part to set up a payment plan with his creditors before November 2004.

The evidence also supports the limited application of FC MC E2.A6.1.3.4 (the person has received or is receiving counseling for the problem and there are clear indications that the problem is being resolved or is under control). It appears that Applicant has received counseling from CCCS, and he is on his way to resolving his problem, although it is far from being under control. Nevertheless, under these circumstances, Applicant has failed to mitigate or overcome the government's case, for the evidence leaves me with grave questions and doubts as to Applicant's continued security eligibility and suitability. Accordingly, allegations 1.a. through 1.m. of the SOR are concluded against Applicant.

For the reasons stated, I conclude Applicant is not 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: AGAINST THE APPLICANT

Subparagraph 1.a.: Against the Applicant

Subparagraph 1.b.: Against the Applicant

Subparagraph 1.c.: Against the Applicant

Subparagraph 1.d.: Against the Applicant

Subparagraph 1.e.: Against the Applicant

Subparagraph 1.f.: Against the Applicant

Subparagraph 1.g.: Against the Applicant

Subparagraph 1.h.: Against the Applicant

Subparagraph 1.i.: Against the Applicant

Subparagraph 1.j.: Against the Applicant

Subparagraph 1.k.: Against the Applicant

Subparagraph 1.l.: Against the Applicant

Subparagraph 1.m.: Against the Applicant

In light of all the circumstances presented by the record in this case, it is not clearly consistent with the national interest to grant or continue a security clearance for Applicant. Clearance is denied.

1. The evidence is unclear as to when Applicant was granted his earlier clearance. He claimed he was granted a clearance in December 1990. Government Exhibit 3 (Security Clearance Application (SF 86), dated April 17, 2000), at 8-9. He also claimed he was granted a clearance in April 1991. Government Exhibit 2 (SF 86), dated May 2, 2002), at 8-9.

2. Government Exhibit 2, at 3-5.

3. Tr. at 97; Applicant Exhibit F (Marriage Record, dated July 6, 1992).

4. Tr. at 98-99.

5. Tr., at 99.

6. Applicant Exhibit J (Bench Memorandum, dated March 15, 2005) at 2.

7. Tr. at 101.

8. Tr. at 102.

9. Tr. at 101.

10. Tr. at 103

11. Tr. at 101-02.

12. Tr. at 106.

13. Applicant Exhibit G (Judgment of Divorce, dated October 26, 1999) at 1.

14. Tr. at 107.

15. Tr. at 108.

16. Tr. at 110.

17. Government Exhibit 4 (Statement, dated June 18, 2002) at 1.

18. Applicant Exhibit J (Bench Memorandum, dated March 15, 2005) at 2.

19. Id. at 4.

20. Id.

21. Government Exhibit 2, supra, at 3.

22. Government Exhibit 4, supra, at 4.

23. Applicant Exhibit H (Client Budget, dated November 11, 2004).

24. Tr. at 118.

25. Tr. at 119.

26. Government Exhibit 4, supra, at 1.

27. Id.

28. Id. at 5.

29. Id.

30. Government Exhibit 5 (Answers to Interrogatories, dated August 14, 2003) at 6.

31. Government Exhibit 6 (Answers to Interrogatories, dated February 13, 2004) at 7.

32. Id.

33. Applicant Exhibit H (Client Action Plan, dated November 11, 2004) at 1-2.

34. Applicant Exhibit H (CCCS Debt Management Agreement, dated November 11, 2004).

35. Id.

36. Id.

37. Applicant Exhibit I (CCCS Account Statement, dated February 12, 2005).

38. Applicant Exhibit H, supra, at 1.

39. Government Exhibit 8 (TRW-Experian Report of Credit, dated May 9, 2002) at 4; Government Exhibit 4, supra, at 4.

40. Government Exhibit 6, supra, at 7.

41. Tr. at 33. However, see Applicant's response to interrogatories in August 2003 where he acknowledged an outstanding balance of $1,595.00 as of February 2003. Government Exhibit 5, supra, at 2.

42. Government Exhibit 9 (Equifax Credit Report, dated May 12, 2004) at 3.

43. Id.; Response to SOR, dated November 12, 2004, at 1.

44. Tr. at 40.

45. Tr. at 42. Applicant denied this was for service on his cell phone and contended it was for his ex-wife's cell phone. He acknowledged the bill was his in June 2002. Government Exhibit 4, supra, at 4. See also, Government Exhibit 8, supra, at 5.

46. Government Exhibit 4, supra, at 4.

47. Tr. at 42-44, 50. There were apparently two accounts, one in his name and one in the name of his ex-wife, and there is some confusion as to which account may have been paid. In May 2002, the outstanding balance was $25.00. Government Exhibit 8, supra, at 5.

48. Government Exhibit 11 (Equifax Credit Report, dated March 10, 2005) at 1.

49. Response to SOR, supra, at 2.

50. Tr. at 51-52.

51. Tr. at 56-57.

52. Government Exhibit 11, supra, at 1.

53. Response to SOR, supra, at 2.

54. Applicant Exhibit H (Your Personal Debt Management Program, dated November 11, 2004.

55. Government Exhibit 11, supra, at 2; Government Exhibit 8, supra, at 6.

56. Response to SOR, supra, at 2.

57. Tr. at 74.

58. Government Exhibit 9, supra, at 2; Tr. at 58.

59. Response to SOR, supra, at 2.

60. Tr. at 76, 79-80.

61. Tr. at 77. The account was listed as a creditor when Applicant discussed his potential program with CCCS prior to January 2004. Government Exhibit 6, supra, at 7.

62. While the creditor was discussed in early 2004, it is not listed in the final list of creditors to fall under the program commencing in late 2004. Applicant Exhibit H (Your Personal Debt Management Program), supra.

63. Government Exhibit 7 (TRW-Experian Report of Credit, dated September 3, 2000) at 4.

64. Response to SOR, supra, at 2.

65. Tr. at 80-81.

66. Tr. at 81. The account was listed as a creditor when Applicant discussed his potential program with CCCS prior to January 2004. Government Exhibit 6, supra, at 7.

67. While the creditor was discussed in early 2004, it is not listed in the final list of creditors to fall under the program commencing in late 2004. Applicant Exhibit H (Your Personal Debt Management Program), supra.

68. Government Exhibit 11, supra, at 1; Tr. at 84.

69. Tr. at 83.

70. Tr. at 83.

71. Government Exhibit 11, supra, at 1; Tr. at 87.

72. Id.

73. Tr. at 87.

74. Tr. at 87.

75. Government Exhibit 10 (Equifax Credit Report, dated January 11, 2005) at 2; Government Exhibit 11, supra, at 2; Government Exhibit 8, supra, at 6.

76. Response to SOR, supra, at 2.

77. Applicant Exhibit H (Your Personal Debt Management Program), supra.

78. Government Exhibit 11, supra, at 2; Tr., at 91.

79. Response to SOR, supra, at 2.

80. Tr. at 91.

81. Applicant Exhibit H (Your Personal Debt Management Program), supra.

82. Government Exhibit 8, supra, at 6.

83. Response to SOR, supra note 43, at 2.

84. Tr., at 94.

85. Tr. at 128-130.

86. Tr. at 143.

87. Exec. Or. 12,968, Access to Classified Information; as implemented by Department of Defense Regulation 5200.2-R, Personnel Security Program, dated January 1987, as amended by Change 3, dated November 8, 1995, and further modified by memorandum, dated November 10, 1998. However, the Directive, as amended by Change 4, dated April 20, 1999, uses both "clearly consistent with the national interest" (Sec. 2.3.; Sec.2.5.3.; Sec. 3.2.; and Sec. 4.2.; Enclosure 3, Sec. E3.1.1.; Sec. E3.1.2.; Sec. E3.1.25.; Sec. E3.1.26.; and Sec. E3.1.27.), and "clearly consistent with the interests of national security" (Enclosure 2, Sec. E2.2.3.); and "clearly consistent with national security" (Enclosure 2, Sec. E2.2.2.)