ISCR Case No. 19-00108

DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS

In the matter of: )

)

)

ISCR Case No. 19-00108

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) Applicant for Security Clearance )

For Government: Tara Karoian, Esq., Department Counsel For Applicant: Pro se

September 30, 2019 ______________

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CEFOLA, Richard A., Administrative Judge:

Statement of the Case

On March 18, 2019, in accordance with DoD Directive 5220.6, as amended (Directive), the Department of Defense issued Applicant a Statement of Reasons (SOR) alleging facts that raise security concerns under Guideline F. The SOR further informed Applicant that, based on information available to the government, DoD adjudicators could not make the preliminary affirmative finding it is clearly consistent with the national interest to grant or continue Applicant’s security clearance.

Applicant answered the SOR on April 25, 2019, and requested a hearing before an administrative judge. (Answer.) The case was assigned to me on June 5, 2019. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on June 11, 2019, scheduling the hearing for July 9, 2019. The hearing was convened as scheduled. The Government offered Exhibits (GXs) 1 through 6, which were admitted into evidence. Applicant testified on his own behalf. The record was left open until September 9, 2019, for receipt of additional documentation. On September 9, 2019, Applicant submitted documents, which I marked Applicant’s Exhibit (AppX) A and

admitted into evidence. DOHA received the transcript of the hearing (TR) on July 22, 2019.

Applicant admitted all the allegations in the SOR, however allegation 1.b. was withdrawn by the Government. (TR at page 37 line 2 to page 38 line 17.) After a thorough and careful review of the pleadings, exhibits, and testimony, I make the following findings of fact.

Applicant is a 62-year-old employee of a defense contractor. (TR at page 13 line 24 to page 15 line 5, and GX 1 at page 5.) He has been employed with the defense contractor for about “one and a half years.” Applicant retired from the U.S. Navy after 20 years of honorable service. (TR at page 12 line 23 to page 13 line 21.) He has held a security clearance, on and off, since about 1982. (TR at page 14 lines 11–15.) He is married, and attributes much of the alleged medical debt to his wife having “Breast Cancer and . . . severe Asthma.” (TR at page 18 line 21 to page 20 line 17.) However, despite the admitted past-due indebtedness, Applicant took “out $12,000.00 out of . . . [his] 401K that . . . [he] spent . . . from March through April [of this year] on various things [a brand new stereo system]” and “a vacation in June [of this year].” (TR at page 33 line 11 to page 34 line 23.)

Guideline F - Financial Considerations

1.a. Applicant admits that he owes Creditor A about $62,032 for past-due school loans. He avers that he is making monthly payments of $416 towards this admitted debt; but despite having two months to do so, Applicant has submitted nothing in support of this averment. (TR at page 23 line 20 to page 27 line 8.) This allegation is found against Applicant.

1.b. As noted above, this allegation was withdrawn by the Government.

1.c. and 1.o. Applicant admits that he owes Creditor C about $312 for past-due medical debts, but has submitted nothing further in this regard. These allegations are found against Applicant.

1.d. Applicant admits that he owes Creditor D about $60 for a past-due medical debt, but has submitted nothing further in this regard. This allegation is found against Applicant.

1.e. Applicant admits that he owes Creditor E about $365 for a past-due medical debt, but has submitted nothing further in this regard. This allegation is found against Applicant.

1.f.~1.l. Applicant admits that he owes Creditor F about $2,612 for past-due medical debts. He avers that he is making monthly payments of $250 towards this admitted debt; but despite having two months to do so, Applicant has submitted nothing

in support of this averment. (TR at page 27 line 9 to page 28 line 15.) These allegations are found against Applicant.

1.m. Applicant admits that he owes Creditor M about $182 for a past-due medical debt, but has submitted nothing further in this regard. This allegation is found against Applicant.

1.n. Applicant admits that he owes Creditor N about $92 for a past-due medical debt, but has submitted nothing further in this regard. (TR at page 22 lines 1–20.) This allegation is found against Applicant.

1.o. This allegation has already been discussed, above.

1.p. Applicant admits that he owes Creditor P about $339 for a past-due medical debt, but has submitted nothing further in this regard. This allegation is found against Applicant.

1.q. Applicant admits that he owes Creditor Q about $287 for a past-due medical debt, but has submitted nothing further in this regard. (TR at page 22 lines 1–7.) This allegation is found against Applicant.

1.r. Applicant admits that he owes Creditor R about $453 for a past-due medical debt, but has submitted nothing further in this regard. This allegation is found against Applicant.

1.s. Applicant admits that he owes Creditor S about $339 for a past-due debt, but has submitted nothing further in this regard. (TR at page 22 lines 1–7, and at page 23 line 8–16.) This allegation is found against Applicant.

When evaluating an applicant’s national security eligibility, the administrative judge must consider the adjudicative guidelines (AG). In addition to brief introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which are to be used in evaluating an applicant’s national security eligibility.

These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, administrative judges apply the guidelines in conjunction with the factors listed in AG ¶ 2 describing the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶ 2(a), the entire process is a conscientious scrutiny of a number of variables known as the whole-person concept. The administrative judge must consider all available, reliable information about the person, past and present, favorable and unfavorable, in making a decision.

The protection of the national security is the paramount consideration. AG ¶ 2(b) requires that “[a]ny doubt concerning personnel being considered for national security eligibility will be resolved in favor of the national security.” In reaching this decision, I have drawn only those conclusions that are reasonable, logical, and based on the evidence contained in the record.

Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Directive ¶ E3.1.15 states the “applicant is responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by the applicant or proven by Department Counsel, and has the ultimate burden of persuasion as to obtaining a favorable clearance decision.”

A person who applies for access to classified information seeks to enter into a fiduciary relationship with the Government predicated upon trust and confidence. This relationship transcends normal duty hours and endures throughout off-duty hours. The Government reposes a high degree of trust and confidence in individuals to whom it grants access to classified information. Decisions include, by necessity, consideration of the possible risk the 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.

Section 7 of Executive Order (EO) 10865 provides that adverse 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.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive information).

Guideline F - Financial Considerations

The security concern relating to the guideline for Financial Considerations is set out in AG ¶ 18:

Failure to live within one's means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual's reliability, trustworthiness, and ability to protect classified or sensitive information. Financial distress can also be caused or exacerbated by, and thus can be a possible indicator of, other issues of personnel security concern such as excessive gambling, mental health conditions, substance misuse, or alcohol abuse or dependence. An individual who is financially overextended is at greater risk of having to engage in illegal or otherwise questionable acts to generate funds. Affluence that cannot be explained by known sources of income is also a security concern insofar as it may result from criminal activity, including espionage.

The guideline notes several conditions that could raise security concerns under AG ¶ 19. Four are potentially applicable in this case:

(a) inability to satisfy debts;

(b) unwillingness to satisfy debts regardless of the ability to do so;

(c) a history of not meeting financial obligations; and

(e) consistent spending beyond one's means or frivolous or irresponsible spending, which may be indicated by excessive indebtedness, significant negative cash flow, a history of late payments or of non-payment, or other negative financial indicators.

Applicant has significant past-due indebtedness, yet recently spent $12,000 on a new stereo system and a vacation. The evidence is sufficient to raise these disqualifying conditions.

AG ¶ 20 provides conditions that could mitigate security concerns. I considered all of the mitigating conditions under AG ¶ 20 including:

(a) the behavior happened so long ago, was so infrequent, or occurred under such circumstances that it is unlikely to recur and does not cast doubt on the individual's current reliability, trustworthiness, or good judgment;

(b) the conditions that resulted in the financial problem were largely beyond the person's control (e.g., loss of employment, a business downturn, unexpected medical emergency, a death, divorce or separation, clear victimization by predatory lending practices, or identity theft), and the individual acted responsibly under the circumstances;

(c) the individual has received or is receiving financial counseling for the problem from a legitimate and credible source, such as a non-profit credit counseling service, and there are clear indications that the problem is being resolved or is under control; and

(d) the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts.

Applicant’s financial problems are ongoing. He has a long history of delinquencies. He has done little to address his delinquencies. He has not demonstrated that future financial problems are unlikely. Mitigation under AG ¶ 20 has not been established. Financial Considerations is found against Applicant.

Under the whole-person concept, the administrative judge must evaluate an applicant’s eligibility for a security clearance by considering the totality of the applicant’s conduct and all relevant circumstances. The administrative judge should consider the nine adjudicative process factors listed at AG ¶ 2(d):

(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 extent to which participation is voluntary; (6) the presence or absence of rehabilitation and other permanent 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.

Under AG ¶ 2(c), the ultimate determination of whether to grant eligibility for a security clearance must be an overall commonsense judgment based upon careful consideration of the guidelines and the whole-person concept.

I considered the potentially disqualifying and mitigating conditions in light of all facts and circumstances surrounding this case. I have incorporated my comments under Guideline F in my whole-person analysis. Overall, the record evidence leaves me with questions and doubts as to Applicant’s eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant failed to mitigate the Financial Considerations security concerns.

Formal findings for or against Applicant on the allegations set forth in the SOR, as required by ¶ E3.1.25 of the Directive, are:

Paragraph 1, Guideline F:

AGAINST APPLICANT

Subparagraph 1.a:

Against Applicant

Subparagraph 1.b:

Withdrawn

Subparagraphs 1.c.~1.s.:

Against Applicant

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 Applicant national security eligibility for a security clearance. Eligibility for access to classified information is denied.

Richard A. Cefola Administrative Judge