DATE: March 29, 2007
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SSN: -----------
Applicant for Security Clearance
DECISION OF ADMINISTRATIVE JUDGE
JOAN CATON ANTHONY
APPEARANCES
FOR GOVERNMENT
John Bayard Glendon, Esq., Department Counsel
Gina Marine, Esq., Department Counsel
Caroline Jeffreys, Esq., Department Counsel
FOR APPLICANT
Lisa A. Prager, Esq., Joshua A. Holzer, Esq.
SYNOPSIS
In April 1996, Applicant was personally named in a civil court action charging him, one other person, and the company he owned with fraud against the U.S. government. Applicant was subsequently dropped from the civil court action, and his company settled out of court for $1,000,000. In 2001, Applicant executed a SF-86 and denied having been a party to any public record civil court action in the previous seven years. Applicant admitted his answer on the SF-86 was false but denied it was intentional. Applicant's denial was not credible, and he failed to mitigate security concerns under Guideline E, Personal Conduct. Clearance is denied.
The Defense Office of Hearings and Appeals (DOHA) declined to grant or continue a security clearance for Applicant. On December 15, 2005, under the applicable Executive Order (1) and Department of Defense Directive, (2) DOHA issued a Statement of Reasons (SOR), detailing the basis for its decision-security concerns raised under Guideline E (Personal Conduct) of the Directive. Applicant requested a hearing before an administrative judge and filed an answer to the SOR on February 2, 2006. On March 2, 2006, the case was assigned to me. A hearing was set for April 19, 2006. On April 17, 2006, at the request of the parties, I continued the hearing so they might interview two potential witnesses. On August 9, 2006, I convened a hearing to consider whether it is clearly consistent with the national interest to grant or continue a security clearance for Applicant. The Government presented one witness and offered 14 exhibits (Ex.), identified as Ex. 1 through 14, which were admitted to the record without objection. Applicant testified on his own behalf and offered three exhibits, which were marked as Applicant's Ex. A, B, C. Exhibit A was admitted to the record without objection. Department Counsel objected to the admission of Ex. B and Ex. C, pursuant to Directive ¶ E3.1.13., Enclosure 3, Additional Procedural Guidance, because he had not received them until a short time before the hearing began, and he had been unable therefore to review and assess them. I admitted Exs. B and C and continued the hearing to allow Department Counsel time to review the documents.
When the hearing reconvened on September 12, 2006, Applicant introduced five exhibits, which were marked as Ex. D through H and admitted into evidence without objection. Applicant also moved to include in the record information, provided by a Defense Security Service (DSS) agent who did not interview Applicant, regarding DSS investigation and interview procedures. (3) I denied Applicant's motion (Tr. II. 26-42.) On September 13, 2006, Applicant's counsel requested, by e-mail, with copy to Department Counsel, that I reconsider my decision. (Exhibit K.) I did not respond to Applicant's e-mail. I reviewed my ruling and did not change it. At the conclusion of Applicant's closing argument, the Government offered rebuttal and proffered a rebuttal witness, a former Special Agent of the Defense Security Service (4), who was on assignment and unavailable to testify for approximately one month. Over Applicant's objection, I continued the hearing so the rebuttal witness could appear.
When the hearing resumed on October 11, 2006, Applicant moved to open the hearing record to receive an additional exhibit, identified as Ex. I. The Government objected to the admission of the Exhibit pursuant to Directive ¶ E3.1.13, Enclosure 3, and because, as an edited and redacted excerpt from Applicant's business diary for the last week of September 2004 and the first 8 days of October 2004, it violated the rule of completeness as embodied in FRE 106. I overruled the Government's objection and allowed Applicant to provide testimony to lay a foundation for the Exhibit's relevance and materiality. Applicant's Exhibit I was then admitted into evidence.
On August 18, 2006, DOHA received the transcript of the August 9, 2006 hearing (Tr. I). DOHA did not record the date it received the transcript of the September 12, 2006 hearing. (TR. II.) On October 17, 2006, DOHA received the transcript of the October 11, 2006 proceeding. (Tr. III).
On October 24, 2006, Applicant proffered evidence that questioned the accuracy of the testimony of the Government's rebuttal witness and filed a motion to supplement the record. On November 13, 2006, the Government filed an answer to Applicant's motion. Included with the Government's answer was an affidavit from the rebuttal witness clarifying and correcting her testimony of October 11, 2006. The Government did not object to Applicant's motion to supplement the record with the admission of the proffered evidence. On November 22, 2006, I participated in a telephone conference with the parties and informed them that Applicant's motion was granted, and the proffered evidence was admitted to the record as Applicant's Ex. J.
The SOR contains two allegations of disqualifying conduct under Guideline E, Personal Conduct, of the Directive. In his answer to the SOR, Applicant admitted the allegation at ¶ 1.a., that he and the company he owned were named in a U.S. District Court civil action, filed by the United States Attorney's Office on about April 3, 1996, alleging fraud against the U.S. government, that he was subsequently dropped from the suit, and that his company settled the case for $1,000,000. Applicant also admitted the allegation at SOR ¶ 1.b., that he falsified his answer to Question 40 on a security clearance application (SF-86) he executed on May 10, 2001 by denying that in the previous seven years he had been a party to any public record civil court actions not listed elsewhere on his SF-86. Applicant denied the falsification of his answer to Question 40 was deliberate and offered mitigating circumstances. Applicant's admissions are included herein as findings of fact.
At the time of his hearing, Applicant, a naturalized U.S. citizen, was 60 years old. He is married and the father of two daughters. (Ex. 1.)
Applicant, an engineer by profession, holds a bachelor of science degree, a master of science degree in electrical engineering, a master of science degree in science and administration, and a Ph.D. He has held a security clearance since approximately 1975. His security worthiness was reinvestigated in 1985, 1994/1995, and 2001. (Tr. II, 44-47.)
After receiving his Ph.D., Applicant worked for a defense contractor for about four years, and then, in about 1979, he and a partner established their own business as a government contractor. The business provided engineering design and integration and included the assembly of space-launched vehicles. In 1991, Applicant bought out his partner and became president, chief executive officer, and owner of the capital stock. (Tr. II, 45; Ex.3 at 3; Ex. 4 at 2; Ex. 8 at 2.)
In April 1996, the U.S. Government, on behalf of the Departments of Defense and Transportation and the National Aeronautics and Space Administration, sued Applicant's company, Applicant, and a vice-president of Applicant's company, individually and as officers, under the False Claims Act, alleging fraud in over-billing approximately $600,000 on government contracts. In November 1996, Applicant and the vice-president were dismissed from the suit. The suit was amended to include only allegations of fraud against the company for over-billing $418,000. In 1997, Applicant's company paid the Government $1,000,000 to settle the suit. (Ex. 2 at 1-2; Ex. 3 at 2; Ex. 8 at 3-5; Ex. B; Ex. C.)
In May 2001 Applicant sold his company for $110,000,000. His profit from the sale of the company was $90,000,000. Applicant became a group president within the purchasing company. (Ex. 8 at 1-2)
Also in May 2001, Applicant's security clearance was up for periodic review, and he was required to file an up-dated SF-86. To comply with this requirement, he provided his administrative assistant with a copy of the SF-86 he had completed in 1994/1995 and directed her to up-date the form, paying special attention to listing his foreign travel, both business and personal, since 1995. Question 40 on the SF-86 reads as follows: "Public Record Civil Court Actions. In the last 7 years, have you been a party to any public record civil court actions not listed elsewhere on this form?" (Ex. 1.)
The employee completed Applicant's SF-86 as instructed and gave it to him. On May 10, 2001, Applicant reviewed the SF-86, and specifically reviewed his answer to Question 40. He concluded that Question 40 did not apply to the civil suit that named him as a party in 1996. In reaching this conclusion, he relied upon his own judgment and did not consult with his facility security officer or other knowledgeable person. (Tr. II, 160-161.) He then certified, with his signature, that his statements on the form were true, complete, and correct to the best of his knowledge and belief and were made in good faith. He also acknowledged with his signature that he understood that a knowing and willful false statement on the SF-86 could be punished by fine or imprisonment, pursuant to section 1001 of Title 18, United States Code. (Ex. 1; Tr. II, 46-49, 53, 155-162.)
Applicant was contacted by a DSS agent and interviewed on April 24, 2002 about the SF-86 he had signed and certified in May 2001. The DSS agent testified it was his common practice always to use a subject interview form when interviewing security clearance applicants. He stated the form he used to interview Applicant followed the format and content of the SF-86, thus ensuring that he would structure the interview to include all sections and questions on the SF-86. (Tr. I, 46-47; Ex. 13.) He said it was his common practice to open a subject interview by handing the individual his SF-86. He then asked the individual to review the SF-86 and to make any notations, changes, or additions to the document. The agent did not suggest his interview with Applicant differed from his common practice. (Tr. I at 54-56.)
Applicant testified the interview was short and lasted 20 or 30 minutes. The agent reported the interview lasted about 50 minutes. The agent asked Applicant about his travel, both personal and business, that was listed on the 2001 SF-86. Applicant reported to the agent that he had not listed the deaths of his parents-in-law, and he provided that information. (5) He reported he had inadvertently omitted the names and other relevant information about three of his sisters from the SF-86, and he gave that information to the agent. (Tr. I at 58; Tr. II, 49-52; Ex. 9 at 3.)
Applicant stated he looked at his SF-86 again at the time of the interview with the DSS agent and had misgivings about his answer to Question 40. He testified he discussed his misgivings with the DSS agent and told him he had been named in the 1996 lawsuit. (Tr II, 52-54, 129-130.) The agent stated Applicant did not advise him of the civil lawsuit. He said that if Applicant had discussed the civil lawsuit with him, he would have prepared a statement about the lawsuit for Applicant to sign. He also stated that his report of investigation would list all discrepancies and previously unlisted information. He reviewed the report of investigation he wrote after interviewing Applicant and stated: "It indicates that nothing major was uncovered during my questioning of the subject, and therefore it was a clean interview." The agent's written summary of the subject interview reads: "On 24 Apr 02 [Applicant] was interviewed as part of a Periodic Reinvestigation. The interview required 50 minutes and focused on the accuracy and completeness of Subject's security forms. No other new information or discrepancies were developed." (Tr. I, 56-64; Ex. 9 at 3.)
Approximately 2 ½ years later, on October 1, 2004, Applicant was interviewed by a second DSS special agent. The meeting took place in Applicant's office. The DSS agent said the October 1 meeting took approximately four hours. Applicant said the interview lasted for a maximum of one hour. The agent began the interview by asking Applicant if he had been involved in any civil lawsuits in the last seven years. The special agent testified that Applicant was initially evasive and not forthcoming in his answers to her questions. He did not tell the special agent he had disclosed information about his involvement in the civil lawsuit to another DSS special agent in April 2002. (Tr. II, 136, 138; Tr. III, 24-32.) At the conclusion of the meeting, Applicant and the special agent agreed to meet again in one week to review a written statement, prepared by the special agent, describing what they had discussed at the October 1 meeting.
On October 8, 2004, the special agent came to Applicant's office. She brought with her a written statement of approximately 6-7 pages, which she gave to Applicant for his review. The special agent testified that Applicant edited the document three times. He stated he did not change the subject matter of the statement but did make some minor grammatical changes and corrections. The special agent stated that Applicant's editorial changes reduced the length of the document by about two pages. Each time a new iteration of the statement was printed, Applicant left his office and went down the hall to retrieve it from a printer. (Tr. II, 140-141; Tr. III, 29-31.) The special agent testified that Applicant added two paragraphs at the end of the statement, explaining to her that he felt the statement wasn't a good overall representation of him. In the final two paragraphs of the statement, Applicant apologized for not listing the law suit in his security paperwork. He said he understood he should have provided this information. He also stated he did not believe he had ever conducted himself in an unethical or unprofessional manner. (Tr. III, 31-32; Ex. 9 at 4-5.)
In the statement, Applicant speculated that his professional life was damaged by vengeful actions of a former business partner, a former consultant, and a former employee. He further speculated that these individuals provided information to federal investigators which was incorporated in the lawsuit. (Ex. 9, 2-5.)
At his hearing, Applicant stated he was confused by Question 40 but came to the conclusion and true belief that the question did not apply to him because he was dismissed from the lawsuit. (Tr. II at 128-129.) He also argued that the special agent who interviewed him in April 2002 erred in his report of investigation by concluding he could not interview Applicant's neighbors because they lived in a gated community with electronic gates. Applicant offered photographs of his neighborhood which showed open gates at individual properties. (Ex. D, E, F, G, and H.) Applicant offered a redacted portion of his business diary to rebut the second special agent's assertion that on October 1, 2004 and October 8, 2004, she interviewed him at his office. (Ex. I.) He also offered selected portions of his business telephone records to rebut the second special agent's testimony that she did not possess the office cell phone number Applicant listed in his business diary for her when he returned her call on September 28, 2004 to arrange their interview on October 1, 2004. (Applicant's otion to Supplement the Record, dated October 24, 2006, with attached Ex. J) On November 13, 2006, in its answer to Applicant's motion to supplement the record, the Government offered an affidavit, executed by the special agent, stating she had been issued a new cell phone number by her employer but was unable to determine if it had been assigned to her before or after September 28, 2004. (Government's Reply to Applicant's Motion to Supplement the Record, dated November 13, 2006.)
The Government did not produce evidence that Applicant committed a fraud. Merely being named in a lawsuit for fraud does not establish Applicant committed a fraud by substantial evidence.
"[N]o one has a 'right' to a security clearance." Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). 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 occupy a position . . . that will give that person access to such information." Id. at 527. The President has restricted eligibility for access to classified information to United States citizens "whose personal and professional history affirmatively indicates loyalty to the United States, strength of character, trustworthiness, honesty, reliability, discretion, and sound judgment, as well as freedom from conflicting allegiances and potential for coercion, and willingness and ability to abide by regulations governing the use, handling, and protection of classified information." Exec. Or. 12968, Access to Classified Information § 3.1(b) (Aug. 4, 1995). Eligibility for a security clearance is predicated upon the applicant meeting the security guidelines contained in the Directive.
Enclosure 2 of the Directive sets forth personal security guidelines, as well as the disqualifying conditions (DC) and mitigating conditions (MC) under each guideline. In evaluating the security worthiness of an applicant, the administrative judge must also assess the adjudicative process factors listed in ¶ 6.3 of the Directive. The decision to deny an individual a security clearance is not necessarily a determination as to the loyalty of the applicant. See Exec. Or. 10865 § 7. It is merely an indication that the applicant has not met the strict guidelines the President and the Secretary of Defense have established for issuing a clearance.
Initially, the Government must establish, by substantial evidence, conditions in the personal or professional history of the applicant that disqualify, or may disqualify, the applicant from being eligible for access to classified information. See Egan, 484 U.S. at 531. The Directive presumes a nexus or rational connection between proven conduct under any of the disqualifying conditions listed in the guidelines and an applicant's security suitability. See ISCR Case No. 95-0611 at 2 (App. Bd. May 2, 1996).
Once the Government establishes a disqualifying condition by substantial evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the facts. ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002); see Directive ¶ E3.1.15. An applicant "has the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue his security clearance." ISCR Case No. 01-20700 at 3.
Guideline E - Personal Conduct
Guideline E conduct involving questionable judgment, untrustworthiness, unreliability, lack of candor, or dishonesty raises security concerns because it could indicate an applicant may not properly safeguard classified information. See Directive ¶ E2.A5.1.1.
The conduct alleged in ¶¶ 1.a. and 1.b. of the SOR. raises security concerns under Disqualifying Condition (DC) E2.A5.1.2.2. (6) and DC E2.A5.1.2.3. (7)
In May 2001, Applicant answered "no" to Question 40, although he knew he had been named as a party in a federal civil suit in 1996. Applicant's explanations of his action reflected ambivalence. On one hand, he said he was confused by the question and unsure about how to answer it. On the other hand, he said he concluded it was his honest belief that Question 40 did not apply to his circumstances. Applicant admitted his "no" answer was false and he should have responded "yes" and listed the particulars of the civil suit naming him as a defendant. He denied his falsification was deliberate. I conclude Applicant's denial that he deliberately falsified his answer to Question 40 lacked credibility and that DC E2.A5.1.2.2. applies.
Applicant was interviewed by a DSS special agent in April 2002. In the interview, Applicant provided several information updates regarding his foreign travel, the deaths of his in-laws, and the names and other relevant information for his three sisters who were residing in a foreign country.
There were only two people at the interview: Applicant and the DSS special agent. Applicant testified he raised the matter of his response to Question 40 and provided the special agent with specific information about the 1996 federal civil suit naming him and his company as defendants. The DSS special agent denied Applicant discussed the civil law suit with him. He pointed out that if Applicant had raised the subject, he would have questioned Applicant further and prepared a statement about the lawsuit for Applicant to sign. The record of investigation reported that "no new other information or discrepancies were developed." in the course of the interview.
Applicant was seeking to retain a security clearance he had held for nearly 30 years, and this motive weighs against him in my credibility determination. The DSS special agent was a government employee doing his job, and in that capacity he knew there is a significant penalty for providing false information. Applicant's testimony regarding what occurred at the interview contradicted that of the special agent, who testified Applicant did not reveal that he and his company had been named in a federal civil suit.
Applicant provided no evidence to rebut the presumption that the special agent, carrying out his duties properly and in good faith, testified truthfully about his interview with Applicant. I did not find Applicant's testimony credible, and I conclude that his failure to inform the investigator of his false answer to Question 40 and the civil suit naming him for fraud against the United States raises a security concern under DC E2.A5.1.2.3.
Applicant attempted to discredit the veracity of the both investigators by submitting exhibits tending to show error or inaccuracies in their investigations or in their testimony. The errors and inaccuracies raised by Applicant were non-material. (8)
There are three Mitigating Conditions (MC) that might be applicable in this case to disqualifying conditions raised under Guideline E. Falsification of a SF-86 may be mitigated if it was an isolated incident, was not recent, and the individual has subsequently provided the correct information voluntarily, MC E2.A5.1.3.2; second, if the individual made prompt, good-faith efforts to correct the falsification before being confronted with the facts, MC E2.A5.1.3.3; and third, if the individual has taken positive steps to significantly reduce or eliminate vulnerability to coercion, exploitation, or duress, MC E2.A5.1.3.5.
Applicant's failure in May 2001 to answer Question 40 truthfully on his SF-86 and supply information relating to the civil suit naming him carried over to his interview in April 2002 with the first DSS special agent. His conduct as a whole is considered. He was not forthright and candid at his hearing. The record evidence supports a conclusion that Applicant withheld relevant and material information from the special agent in the April 2002 interview. Applicant's falsification was not an isolated incident and it was recent. He did not provide the correct information voluntarily, and he did not make prompt good-faith efforts to correct the falsification before being confronted with the facts. Accordingly, neither MC E2.A5.1.3.2. nor E2.A5.1.3.3. applies.
Applicant's failure to candidly admit his falsification and failure to truthfully testify at his hearing raise doubts about his willingness to accept responsibility for his actions and his vulnerability to exploitation. He failed to show he had taken positive steps to significantly reduce or eliminate his vulnerability to coercion, exploitation, or duress, and thus MC E2.A5.1.3.5. is inapplicable.
Whole Person Analysis
Paragraph E2.2 of the Directive requires that the adjudicative process in a security clearance case not only assess conduct under the adjudicative guidelines, but it must also reflect a careful weighing of a number of variables known as the whole person concept. The factors to be considered in a whole person analysis include the nature, extent, and seriousness of the conduct (E2.2.1.1); the circumstances surrounding the conduct, to include knowledgeable participation (E2.2.1.2); the frequency and recency of the conduct (E2.2.1.3); the individual's age and maturity at the time of the conduct (E2.2.1.4.); the voluntariness of participation (E2.2.1.5.); the presence or absence of rehabilitation and other pertinent behavioral changes (E2.2.1.6); the motivation for the conduct (E2.2.1.7); the potential for pressure, coercion, exploitation, or duress (E2.2.1.8.); and, the likelihood for continuation or recurrence (E2.2.1.9)
.
Applicant is 60 years old. He is mature and highly educated. He held a security clearance for nearly 30 years, and he had completed security clearance applications several times. The record reflects he has a clear knowledge of the English language and knew what he was certifying with his signature on the SF-86 he executed and on the statement he signed and certified in the presence of an authorized investigator.
Applicant's personal conduct in certifying the truthfulness of a false statement on his May 2001 SF-86 demonstrated questionable judgment, untrustworthiness, and unreliability. While he testified he was confused about how to answer Question 40, he did not seek advice from knowledgeable responsible officials. He knew he should disclose the civil suit and deliberately chose not to do so.
I have reviewed and considered all of the evidence, and I have assessed Applicant's credibility and demeanor. After weighing the applicable Guideline E disqualifying and mitigating conditions, and after considering all relevant factors in the whole person analysis, I conclude Guideline E allegation 1.a. for Applicant and allegation 1.b. against him.
In all adjudications, the protection of our national security is the paramount concern. Security clearance decisions are not intended to assign guilt or to impose further punishment for past transgressions. Rather, the objective of the security clearance process is the fair-minded, common sense assessment of a person's trustworthiness and fitness for access to classified information. Indeed, the "whole person" concept recognizes we should view a person by the totality of his or her acts and omissions, including all disqualifying and mitigating conduct. Having done so, I conclude Applicant should not be entrusted with a security clearance. In reaching my decision, I have considered the evidence as a whole, including the appropriate factors and guidelines in Department of Defense Directive, 5220.6, as amended.
FORMAL FINDINGS
The following are my conclusions as to each allegation in the SOR:
Paragraph 1.: Guideline E: AGAINST APPLICANT
Subparagraph 1.a.: For Applicant
Subparagraph 1.b.: Against Applicant
DECISION
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 or continue a security clearance for Applicant. Clearance is denied.
Joan Caton Anthony
Administrative Judge
1. Exec. Or. 10865, Safeguarding Classified Information within Industry (Feb. 20, 1960), as amended and modified.
2. Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (Jan. 2, 1992), as amended and modified.
3. Relying on information in the record of investigation that identified the investigator's badge number, Attorneys for Applicant and the Government interviewed the DSS agent in June 2006, believing he was the agent who had interviewed Applicant in April 2002. They learned Applicant had been interviewed by another investigator, and they subsequently interviewed him. The investigator who actually interviewed Applicant appeared as a Government witness at the hearing and testified about his interview with Applicant. (Tr. II, 34-106; Ex. 9.)
4. At the time of the hearing, the witness was working as a federal investigator with another federal agency.
5. The ROI identifies the parents-in-law as carrying Applicant's surname.
6. DC E2.A5.1.2.2. reads: "The deliberate omission, concealment, or falsification of relevant and material facts from any personal security questionnaire, personal history statement, or similar form used to conduct investigations, determine employment qualifications, award benefits or status, determine security clearance eligibility or trustworthiness, or award fiduciary responsibilities."
7. DC E2.A5.1.2.3. reads: "Deliberately providing false or misleading information concerning relevant and material matters to an investigator, security official, competent medical authority, or other official representative in connection with a personnel security or trustworthiness determination."
8. As a general proposition, misconduct by a DSS investigator that does not detract from his or her credibility does not justify a clearance for the applicant being interviewed. See ISCR Case No. 02-05854 at 3. (App. Bd. April 15, 2004.)