DATE: January 31, 2007
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SSN: -----------
Applicant for Security Clearance
DECISION OF ADMINISTRATIVE JUDGE
HENRY LAZZARO
APPEARANCES
FOR GOVERNMENT
Candace Le'i, Esquire, Department Counsel
FOR APPLICANT
Pro Se
SYNOPSIS
Applicant has failed to mitigate his history of financial irresponsibility. Clearance is denied.
STATEMENT OF THE CASE
On June 19, 2006, the Defense Office of Hearings and Appeals (DOHA) issued a Statement of Reasons (SOR) to Applicant stating it was unable to find it is clearly consistent with the national interest to grant or continue a security clearance for Applicant. (1) The SOR, which is in essence the administrative complaint, alleges a security concern under Guideline F (financial considerations). Applicant submitted a response to the SOR, dated August 1, 2006, admitted all SOR allegations, and requested a hearing.
The case was assigned to another administrative judge on August 8, 2006, and reassigned to me on October 13, 2006, to be heard with other cases I had scheduled for hearings in the same region. A notice of hearing was issued on October 31, 2006, scheduling the hearing for November 28, 2006. The hearing was conducted as scheduled. The government submitted seven documentary exhibits that were marked as Government Exhibits (GE) 1-7, and admitted into the record without objection. Applicant testified and submitted 25 documentary exhibits that were marked as Applicant's Exhibits (AE) 1-25, and admitted into the record without objection. The transcript was received by DOHA on December 8, 2006.
FINDINGS OF FACT
After a thorough review of the pleadings, exhibits, and testimony, I make the following findings of fact.
Applicant is 39 years old, and has been employed by a defense contractor since July 2003. Hired as a systems engineer, he was promoted to deputy program manager in June 2006. In a security clearance application he submitted in January 2004, he reported he had previously been employed by a federal contractor as a management analyst from May 2001 until July 2003. However, he testified he was unemployed from late-April 2003 until June 2003. (Tr. 50). He was unemployed from October 2000 until May 2001, and was employed continuously by two different employers from July 1998 until October 2000.
Applicant served in the Army National Guard from April 1984 until August 1985, and attained the rank of private first class. He served in the Navy from August 1985 until July 1998, and attained the rank of petty officer first class. He currently receives $1,396.00 a month disability pay from the military. Applicant was awarded a bachelor's degree in information technology in June 2003, and a master's degree in management and technology in June 2006.
Applicant was married in May 1988, separated from that wife in March 1996, and obtained a divorce from her in February 1997. He has no children from that marriage, and that wife is now deceased. Applicant has been remarried since April 1998. He has a 12-year-old stepdaughter and a seven-year-old son from this marriage.
SOR subparagraph 1.a alleges a collection account in the amount of $1,168.00. Applicant testified this account became delinquent while he was unemployed in 2000-01. Applicant reports that no payment has been made on the account and it remains owing because the creditor could not verify the existence of the debt.
Subparagraph 1.b alleges a delinquent account owing in the amount of $1,565.00. Applicant claims this account became delinquent while he was unemployed in 2000-01, and that no payment has been made on the account because the creditor could not locate any information about the account within their system.
Subparagraph 1.c alleges a delinquent account in the amount of $1,668.00. Applicant claims this account became delinquent due to an oversight after his daughter quit and then rejoined a karate class that was also being attended by his son. He claims the account is now being satisfied through payments to a consumer credit counseling service. However, he did not submit any documentary proof of payment.
Subparagraph 1.d alleges a delinquent debt owing in the approximate amount of $1,000.00. Applicant claims this account became delinquent while he was unemployed in 2000-01, and he has now repaid all but $201.00 of the debt. In support of this claim, Applicant submitted a letter addressed to the creditor, dated July 28, 2006, only the front side of a check made payable to the creditor in the amount of $201.00, and certified mail receipts that fail to establish the letter and/or check were actually mailed. (AE 7)
Subparagraph 1.e alleges a collection account owing in the amount of $3732.00. Applicant claims this account became delinquent during one of his periods of unemployment. He testified he attempted to include this debt in a repayment plan he established with a consumer credit counseling service, but the creditor would not accept payment through the service. He also testified he intends to pay this account in full from the proceeds of a large monetary gift he is to receive from his father-in-law in December 2006.
Subparagraph 1.f alleges a delinquent debt owing in the amount of $14,375.00 that arose from a federally insured house foreclosure. Applicant attributes this debt to his ex-wife's failure to make mortgage payments on the family home she retained following their 1997 divorce. He testified the government seized his last income tax refund and applied it to this debt and the balance owing in now approximately $12,000.00. Applicant submitted two letters from this creditor. Both were dated July 21, 2006, contained different claim numbers, but listed the same address for the property in question. One lists a payoff figure, as of July 30, 2006, in the amount of $14,206.64. (AE 9) The second lists a payoff figure, also as of July 30, 2006, in the amount of $14,805.32. (AE 19) Applicant testified he is in the process of attempting to set up a repayment plan with this creditor through the consumer credit counseling service and also that this debt will be paid in full from the grant he is to receive from his father-in-law in December 2006.
Subparagraph 1.g alleges a delinquent debt owing in the amount of $8,146.00 that arose from the voluntary repossession of a leased automobile. Applicant claims he was unable to afford the payments on the car because of his 1997 divorce, a military deployment that occurred at about the same time, and his unwillingness to leave the vehicle in a storage lot provided for the use of deployed Sailors on a military base because he was afraid it would be vandalized. He has not made any payment on this account and testified the creditor could no longer find him in their system.
Applicant submitted numerous documents from the consumer credit management program with which he has been dealing. (AE 1) Among other things, those documents disclose: 1) he signed authorization forms with them on February 6, 2006, and again on July 17, 2006; 2) a debt repayment plan was proposed on April 21, 2006, to repay the creditors listed in SOR subparagraphs 1.b, 1.d, and 1.e; and 3) a debt repayment plan was proposed on August 1, 2006, to repay the creditors listed in SOR subparagraphs 1.c and 1.f. The documents also indicate Applicant made a payment of $208.00 on April 10, 2006, that payment was returned on April 12, 2006, he made another payment of $223.00 on April 17, 2006, an NSF fee of $15.00 was assessed on April 21, 2006, and, as of May 1, 2006, the service had $237.00 on hold and no funds available for disbursement. They also indicate Applicant agreed to begin making monthly payments of $436.00 commencing August 20, 2006. Applicant testified he made one payment to the service. (Tr. 61)
POLICIES
The Directive sets forth adjudicative guidelines to consider when evaluating a person's eligibility to hold a security clearance. Chief among them are the Disqualifying Conditions (DC) and itigating Conditions (MC) for each applicable guideline. Additionally, each clearance decision must be a fair and impartial commonsense decision based upon the relevant and material facts and circumstances, the whole person concept, and the factors listed in ¶ 6.3.1 through ¶ 6.3.6 of the Directive. Although the presence or absence of a particular condition or factor for or against clearance is not outcome determinative, the adjudicative guidelines should be followed whenever a case can be measured against this policy guidance. Considering the evidence as a whole, Guideline F, pertaining to financial considerations, with its respective DC and MC, is most relevant in this case.
BURDEN OF PROOF
The sole purpose of a security clearance decision is to decide if it is clearly consistent with the national interest to grant or continue a security clearance for an applicant. (2) The government has the burden of proving controverted facts. (3) The burden of proof in a security clearance case is something less than a preponderance of evidence, (4) although the government is required to present substantial evidence to meet its burden of proof. (5) "Substantial evidence is more than a scintilla, but less than a preponderance of the evidence." (6) Once the government has met its burden, the burden shifts to an applicant to present evidence of refutation, extenuation, or mitigation to overcome the case against him. (7) Additionally, an applicant has the ultimate burden of persuasion to obtain a favorable clearance decision. (8)
No one has a right to a security clearance (9) and "the clearly consistent standard indicates that security clearance determinations should err, if they must, on the side of denials." (10) Any reasonable doubt about whether an applicant should be allowed access to classified information must be resolved in favor of protecting national security. (11)
CONCLUSIONS
Under Guideline F, a security concern exists when a person has significant unpaid debts. An individual who is financially overextended is at risk of having to engage in illegal or unethical acts to generate funds to meet financial obligations.
The SOR alleges $31,654.00 in debt owed to seven different creditors that have been delinquent for many years. Applicant attributes all but one debt to either his 1997 divorce or one of the two periods of unemployment he experienced, the last being of approximately two months duration and occurring in 2003. He claims to have made about $800.00 in payments on one debt, but offered only questionable evidence to support a payment of $201.00 toward that debt. He also claims to have made one payment of about $400.00 to a credit management service, but offered documentation that discloses the service was holding $237.00 and nothing to indicate any disbursement was made to any creditor. Disqualifying Conditions (DC) 1: A history of not meeting financial obligations: and DC 3: Inability or unwillingness to satisfy debts apply to those debts.
The record evidence includes two statements Applicant provided that establish he has been aware of the security significance of his delinquent debt since at least September 2002. Despite that awareness and his steady employment since July 2003, he has done little if anything to repay the creditors alleged in the SOR. He testified he would satisfy all creditors from the proceeds of a grant he was to receive from his father-in-law the month following the hearing. In support of that assertion he submitted a letter, dated November 20, 2006, from a loan officer that includes the assertions that Applicant's father-in-law "will be accessing the equity of his real property to assist them" and the mortgage company "is currently assisting them in a cash-out refinance" to obtain the funds to repay their debts. (AE 12) Applicant's prior statements and past performance provide little, if any, reason to believe he will ever actually pay his delinquent creditors. Accordingly, I have considered all mitigating conditions and find none apply.
Considering all relevant and material facts and circumstances present in this case, including the whole person concept, the factors listed in ¶ 6.3.1 through ¶ 6.3.6 of the Directive, and the applicable disqualifying conditions, I find Applicant has failed to mitigate the security concern that exists in this case. He has not overcome the case against him nor satisfied his ultimate burden of persuasion. Guideline F is decided against Applicant.
FORMAL FINDINGS
SOR ¶ 1-Guideline F: Against Applicant
Subparagraphs a-g: Against Applicant
DECISION
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.
Henry Lazzaro
Administrative Judge
1. This action was taken under Executive Order 10865 and DoD Directive 5220.6, dated January 2, 1992, as amended and modified (Directive). ISCR Case No. 96-0277 (July 11, 1997) at p. 2. ISCR Case No. 97-0016 (December 31, 1997) at p. 3; Directive, Enclosure 3, Item E3.1.14. Department of the Navy v. Egan 484 U.S. 518, 531 (1988). ISCR Case No. 01-20700 (December 19, 2002) at p. 3 (citations omitted). ISCR Case No. 98-0761 (December 27, 1999) at p. 2. ISCR Case No. 94-1075 (August 10, 1995) at pp. 3-4; Directive, Enclosure 3, Item E3.1.15. ISCR Case No. 93-1390 (January 27, 1995) at pp. 7-8; Directive, Enclosure 3, Item E3.1.15. Egan, 484 U.S. at 528, 531. Id at 531. Egan, Executive Order 10865, and the Directive.