ISCR Case No. 19-03336

DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS

In the matter of: )

)

)

ISCR Case No. 19-03336

) Applicant for Security Clearance )

For Government: Aubrey M. De Angelis, Esq., Department Counsel For Applicant: Pro se

06/17/2020 ___________

___________

HARVEY, Mark, Administrative Judge:

Applicant did not provide sufficient information about his efforts or inability to resolve eight of ten delinquent debts alleged in the statement of reasons (SOR) totaling $18,004. Guideline F (financial considerations) security concerns are not mitigated. Eligibility for access to classified information is denied.

Statement of the Case

On April 3, 2019, Applicant completed and signed a Questionnaire for National Security Position (SF 86) or security clearance application (SCA). (Item 4). On January 28, 2020, the Department of Defense (DOD) Consolidated Adjudications Facility (CAF) issued an SOR to Applicant under Executive Order (Exec. Or.) 10865, Safeguarding Classified Information within Industry, February 20, 1960; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (Directive), January 2, 1992; and Security Executive Agent Directive 4, establishing in Appendix A the National Security Adjudicative Guidelines for Determining Eligibility for Access to Classified Information or Eligibility to Hold a Sensitive Position (AGs), effective June 8, 2017. (Item 1)

The SOR detailed reasons why the DOD CAF did not find under the Directive that it is clearly consistent with the interests of national security 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. Specifically, the SOR set forth security concerns arising under Guideline F. (Item 1)

On February 28, 2020, Applicant provided his response to the SOR, and he requested a decision without a hearing. (Item 3) Department Counsel provided an undated File of Relevant Material (FORM). On April 23, 2020, Applicant was served with a copy of the FORM. Applicant’s response, if any, was due on May 23, 2020. No response was received. On June 11, 2020, the case was assigned to me.

Some details were excluded to protect Applicant’s right to privacy. Specific information is available in the cited exhibits and transcript. ISCR and ADP decisions and the Directive are available at https://ogc.osd.mil/doha/isp.html.

In Applicant’s SOR response, he admitted all of the SOR allegations. (Item 3) He did not provide any supporting documentation about the status of delinquent debts in his SOR response. He also provided extenuating and mitigating information. (Id.) Applicant’s admissions are accepted as findings of fact. Additional findings follow.

Applicant is 42 years old, and he has been employed as a truck driver since August 2007. (Item 4 at 7, 12-15) He has not served in the military. (Id. at 17) He attended high school from 1994 to 1996; however, he did not receive a high school diploma. (Item 5 at 1) In 2016, he married, and in 2017, he divorced. (Item 4 at 19) His children were born in 2002, 2013, and 2017. (Id. at 26-27) There is no evidence of workplace misconduct, abuse of alcohol, use of illegal drugs, or criminal conduct. He did not provide copies of performance evaluations or character references.

Financial Considerations

The SOR alleges ten delinquent debts totaling $32,717 as follows:

SOR ¶ 1.a is a judgment entered against Applicant in August 2018 for $13,849. In his SOR response, he said he is paying $150 monthly to address this debt. In the summary of Applicant’s June 20, 2019 Office of Personnel Management (OPM) personal subject interview (PSI), he said the vehicle was repossessed, and he will be making $150 monthly payments until August 2024. (Item 5 at 2) Applicant’s April 2, 2020 credit report, the most recent credit report of record, indicates the current balance is $11,128. (Item 7 at 2) He is credited with mitigating this debt because he has an established payment plan addressing this debt.

SOR ¶ 1.b is a judgment entered against Applicant in June 2019 for $7,161. Applicant and his spouse co-signed for this debt, which relates to purchase of a vehicle. (Item 3) In Applicant’s June 20, 2019 OPM PSI, Applicant said the debt resulted from a repossessed vehicle in 2017. (Item 5 at 3) Applicant and his spouse were divorced in 2017, and she did not make payments. (Item 3) Applicant discussed payment

arrangements with the creditor; however, no payment arrangements have been established. (Id.)

SOR ¶ 1.c is a child support debt for $5,266, and SOR ¶ 1.e is a child support debt for $864. As for the debt in SOR ¶ 1.c, Applicant “waited a year for DNA testing.” (Item 3) Child support accrued beginning the date his third child was born. (Id.) After parentage was established, an arrearage payment was added to his monthly child support payment, and the payment is made directly from his monthly income. (Id.) In Applicant’s June 20, 2019 OPM PSI, he said that he was paying child support for three children. (Item 5 at 2) Around September 2017, he fell behind on payments for two of his children while he was changing jobs. (Id.) Applicant was unsure about the amount of his child support arrearage. (Id.) Applicant’s April 2, 2020 credit report, the most recent credit report of record, indicates three child support accounts, and only one of them was delinquent for $4,758. (Item 7 at 4-5) Applicant is credited with mitigating the debt in SOR ¶ 1.e ($864) because his credit report indicates it is not delinquent.

SOR ¶ 1.d is a telecommunications debt placed for collection for $3,109, and SOR ¶ 1.g is a debt placed for collection for $679. Applicant said he had not made any arrangements for these debts because of paying off other debts. He promised to take care of these debts. (Item 3)

SOR ¶ 1.f is a debt placed for collection for $435. In Applicant’s June 20, 2019 OPM PSI, Applicant said this credit card debt went to collections in 2014. (Item 5 at 3) Applicant discussed payment arrangements with the creditor; however, no payment arrangements have been established. (Item 3)

SOR ¶ 1.h is a debt placed for collection for $632. Applicant discussed payment arrangements with the creditor, and the creditor said he could establish payment arrangements when he could afford to do so. (Item 3)

SOR ¶ 1.i is a debt placed for collection for $425. This debt resulted from a broken lease when Applicant was traveling for work. (Item 3) Applicant discussed payment arrangements with the creditor, and he said he would make payment arrangements when he could afford to do so. (Id.)

SOR ¶ 1.j is a debt placed for collection for $297. In Applicant’s June 20, 2019 OPM PSI, Applicant said the debt resulted when his vehicle was towed during repossession. (Item 5 at 5) Applicant said he would make payment arrangements to pay this debt when he can afford to do so. (Item 3)

In his SOR response, Applicant concluded, “I believe I am trying my best, to [the extent] which my funds will allow [and] to take care of all [of] my debt. All the debt will be taken care of, it just takes time.” (Item 3)

In the FORM, Department Counsel noted the absence of corroborating or supporting documentation of resolution of the SOR debts. Aside from Applicant’s uncorroborated statements and the most recent credit report, there is no documentary

evidence that Applicant paid, arranged to pay, settled, compromised, or otherwise resolved any of the SOR debts. The record lacks corroborating or substantiating documentation and detailed explanations of the causes for his financial problems and other mitigating information. The FORM informed Applicant that he had 30 days from the receipt of the FORM “in which to submit a documentary response setting forth objections, rebuttal, extenuation, mitigation, or explanation, as appropriate. If you do not file any objections or submit any additional information . . . your case will be assigned to an Administrative Judge for a determination based solely” on the evidence set forth in this FORM. (FORM at 6 (emphasis added)) He did not respond to the FORM.

The U.S. Supreme Court has recognized the substantial discretion of the Executive Branch in regulating access to information pertaining to national security emphasizing, “no 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 have access to such information.” Id. at 527. The President has authorized the Secretary of Defense or his designee to grant applicant’s eligibility for access to classified information “only upon a finding that it is clearly consistent with the national interest to do so.” Exec. Or. 10865, Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960), as amended.

Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the adjudicative guidelines. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, these guidelines are applied in conjunction with an evaluation of the whole person. An administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. An administrative judge must consider all available, reliable information about the person, past and present, favorable and unfavorable.

The Government reposes a high degree of trust and confidence in persons with access to classified information. This relationship transcends normal duty hours and endures throughout off-duty hours. Decisions include, by necessity, consideration of the possible risk the applicant may deliberately or inadvertently fail to safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation about potential, rather than actual, risk of compromise of classified information. Clearance decisions must be “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See Exec. Or. 10865 § 7. Thus, nothing in this decision should be construed to suggest that it is based, in whole or in part, on any express or implied determination about applicant’s allegiance, loyalty, or patriotism. It is merely an indication the applicant has not met the strict guidelines the President, Secretary of Defense, and Director of National Intelligence 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 may disqualify the applicant from

being eligible for access to classified information. The Government has the burden of establishing controverted facts alleged in the SOR. See Egan, 484 U.S. at 531. “Substantial evidence” is “more than a scintilla but less than a preponderance.” See v. Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994). The guidelines presume a nexus or rational connection between proven conduct under any of the criteria listed therein 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. 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 (App. Bd. Dec. 19, 2002). The burden of disproving a mitigating condition never shifts to the Government. See ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 2005). “[S]ecurity clearance determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531; see AG ¶ 2(b).

Financial Considerations

AG ¶ 18 articulates the security concern for financial problems:

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 Appeal Board explained the scope and rationale for the financial considerations security concern in ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012) (citation omitted) as follows:

This concern is broader than the possibility that an applicant might knowingly compromise classified information in order to raise money in satisfaction of his or her debts. Rather, it requires a Judge to examine the totality of an applicant’s financial history and circumstances. The Judge must consider pertinent evidence regarding the applicant’s self-control, judgment, and other qualities essential to protecting the national secrets as

well as the vulnerabilities inherent in the circumstances. The Directive presumes a nexus between proven conduct under any of the Guidelines and an applicant’s security eligibility.

AG ¶ 19 includes two disqualifying conditions that could raise a security concern and may be disqualifying in this case: “(a) inability to satisfy debts”; and “(c) a history of not meeting financial obligations.” In ISCR Case No. 08-12184 at 7 (App. Bd. Jan. 7, 2010), the Appeal Board explained:

It is well-settled that adverse information from a credit report can normally meet the substantial evidence standard and the government’s obligations under [Directive] ¶ E3.1.14 for pertinent allegations. At that point, the burden shifts to applicant to establish either that [he or] she is not responsible for the debt or that matters in mitigation apply.

(internal citation omitted). The record establishes the disqualifying conditions in AG ¶¶ 19(a) and 19(c) requiring additional inquiry about the possible applicability of mitigating conditions.

Five financial considerations mitigating conditions under AG ¶ 20 are potentially applicable in this case:

(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;

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

(e) the individual has a reasonable basis to dispute the legitimacy of the past-due debt which is the cause of the problem and provides documented proof to substantiate the basis of the dispute or provides evidence of actions to resolve the issue.

In ISCR Case No. 10-04641 at 4 (App. Bd. Sept. 24, 2013), the DOHA Appeal Board concisely explained Applicant’s responsibility for proving the applicability of mitigating conditions as follows:

Once a concern arises regarding an Applicant’s security clearance eligibility, there is a strong presumption against the grant or maintenance of a security clearance. See Dorfmont v. Brown, 913 F. 2d 1399, 1401 (9th Cir. 1990), cert. denied, 499 U.S. 905 (1991). After the Government presents evidence raising security concerns, the burden shifts to the applicant to rebut or mitigate those concerns. See Directive ¶ E3.1.15. The standard applicable in security clearance decisions is that articulated in Egan, supra. “Any doubt concerning personnel being considered for access to classified information will be resolved in favor of the national security.” Directive, Enclosure 2 ¶ 2(b).

The SOR alleges ten delinquent debts totaling $32,717. Circumstances beyond his control adversely affected his finances including divorce, failure of his former spouse to make payments on some debts, and concern about whether he was responsible for child support for one child. However, he did not show that he acted responsibly under the circumstances. “Even if Applicant’s financial difficulties initially arose, in whole or in part, due to circumstances outside his [or her] control, the Judge could still consider whether Applicant has since acted in a reasonable manner when dealing with those financial difficulties.” ISCR Case No. 05-11366 at 4 n.9 (App. Bd. Jan. 12, 2007) (citing ISCR Case No. 99-0462 at 4 (App. Bd. May 25, 2000); ISCR Case No. 99-0012 at 4 (App. Bd. Dec. 1, 1999); ISCR Case No. 03-13096 at 4 (App. Bd. Nov. 29, 2005)). A component is whether he or she maintained contact with creditors and attempted to negotiate partial payments to keep debts current. Applicant did not provide documentary evidence that he maintained contact with creditors and attempted to negotiate partial payments to keep debts current.

SOR ¶ 1.a is a judgment entered against Applicant in August 2018 for $13,849. This debt resulted from repossession of a vehicle. He made $150 monthly payments, and he will be making $150 monthly payments until August 2024. According to his April 2, 2020 credit report, the current balance is $11,128. His April 2, 2020 credit report shows his resolution of his SOR ¶ 1.e child support debt for $864. He is credited with mitigating SOR ¶¶ 1.a and 1.e. He has reduced his delinquent child support debt in SOR ¶ 1.c from $5,266 to $4,758; however, he has not mitigated this debt because he did not establish a good reason for the delinquency. The prudent, responsible approach would have been to set aside funds in the event the DNA test showed Applicant was the parent of his third child, or to expedite the DNA test or both. He did not prove he acted prudently and responsibly in regard to his child support responsibilities because he did not prove he was unable to more rapidly reduce his child-support arrearage.

A debt that became delinquent several years ago is still considered recent because “an applicant’s ongoing, unpaid debts evidence a continuing course of conduct and, therefore, can be viewed as recent for purposes of the Guideline F mitigating conditions.”

ISCR Case No. 15-06532 at 3 (App. Bd. Feb. 16, 2017) (citing ISCR Case No. 15-01690 at 2 (App. Bd. Sept. 13, 2016)).

Several of Applicant’s delinquent debts may have been either charged off or dropped from his credit report or both. “[T]hat some debts have dropped off his credit report is not meaningful evidence of debt resolution.” ISCR Case No. 14-05803 at 3 (App. Bd. July 7, 2016) (citing ISCR Case No. 14-03612 at 3 (App. Bd. Aug. 25, 2015)). The Fair Credit Reporting Act requires removal of most negative financial items from a credit report seven years from the first date of delinquency or the debt becoming collection barred because of a state statute of limitations, whichever is longer. See Title 15 U.S.C. § 1681c. See Federal Trade Commission website, Summary of Fair Credit Reporting Act Updates at Section 605, https://www.consumer.ftc.gov/articles/pdf-0111-fair-credit- reporting-act.pdf. Debts may be dropped from a credit report upon dispute when creditors believe the debt is not going to be paid, a creditor fails to timely respond to a credit reporting company’s request for information or when the debt has been charged off.

In ISCR Case No. 06-14521 at 2 (App. Bd. Oct. 15, 2007) (internal citation omitted) (mitigating security concerns despite garnishment to pay debt because of other financial efforts), the Appeal Board explained what constitutes a “good faith” effort to repay overdue creditors or otherwise resolve debts:

In order to qualify for application of [this mitigating condition] an applicant must present evidence showing either a good faith effort to repay overdue creditors or some other good faith action aimed at resolving the applicant’s debts. The Directive does not define the term “good faith.” However, the Board has indicated that the concept of good-faith “requires a showing that a person acts in a way that shows reasonableness, prudence, honesty, and adherence to duty or obligation.” Accordingly, an applicant must do more that show that he or she relied on a legally available option (such as bankruptcy [or the statute of limitations]) in order to claim the benefit of [these mitigating conditions].

Applicant did not provide a personal financial statement or budget. He did not prove that he was unable to address or make greater progress on his eight unmitigated SOR debts. Applicant did not provide sufficient documentation relating to eight SOR debts such as: (1) proof of payments, for example, checking account statements, photocopies of checks, or a letter from the creditor proving that he paid or made any payments to the creditor; (2) correspondence to or from the creditor to establish maintenance of contact; (3) copies of credible debt disputes sent to the creditor and/or credit reporting companies indicating he did not believe he was responsible for the debt and why he held such a belief; (4) evidence of attempts to negotiate payment plans, for example, settlement offers or agreements to show that he was attempting to resolve a debt; or (5) other evidence of progress or resolution.

Applicant did not provide sufficient documentation about why he was unable to make greater documented progress resolving any of the eight debts in SOR ¶¶ 1.b through 1.d and 1.f through 1.j totaling $18,004. There is insufficient assurance that his

financial problems are being resolved. Under all the circumstances, he failed to establish mitigation of financial considerations security concerns.

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 the 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), “[t]he ultimate determination” of whether to grant a security clearance “must be an overall commonsense judgment based upon careful consideration of the guidelines” and the whole-person concept. My comments under Guideline F are incorporated in my whole-person analysis. Some of the factors in AG ¶ 2(d) were addressed under that guideline but some warrant additional comment.

Applicant is 42 years old, and he has been employed as a truck driver since August 2007. There is no evidence of workplace misconduct, abuse of alcohol, use of illegal drugs, or criminal conduct. He did not provide copies of performance evaluations or character references.

Applicant provided important mitigating information. His finances were harmed by several circumstances beyond his control. He has an established $150 monthly payment plan addressing the judgment in SOR ¶ 1.a, and he brought his child support account in SOR ¶ 1.e to current status. He mitigated the debts in SOR ¶¶ 1.a and 1.e.

The evidence against grant of a security clearance is more substantial. Applicant did not provide documentation about why he was unable to make greater documented progress resolving eight delinquent SOR debts totaling $18,004. There is no evidence of progress (payments or payment plans) in the last two years on seven delinquent SOR debts, and he did not show good faith in his handling of his child support responsibilities for his youngest child. His lack of responsible financial action raises unmitigated questions about Applicant’s reliability, trustworthiness, and ability to protect classified information. See AG ¶ 18.

It is well settled that once a concern arises regarding an applicant’s security clearance eligibility, there is a strong presumption against granting a security clearance. See Dorfmont, 913 F. 2d at 1401. “[A] favorable clearance decision means that the record

discloses no basis for doubt about an applicant’s eligibility for access to classified information.” ISCR Case No. 18-02085 at 7 (App. Bd. Jan. 3, 2020) (citing ISCR Case No.12-00270 at 3 (App. Bd. Jan. 17, 2014)). I have carefully applied the law, as set forth in Egan, Exec. Or. 10865, the Directive, the AGs, and the Appeal Board’s jurisprudence to the facts and circumstances in the context of the whole person. Applicant failed to mitigate financial considerations security concerns.

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 APPLICANT

Subparagraph 1.a:

For Applicant Subparagraphs 1.b, 1.c, and 1.d:

Against Applicant Subparagraph 1.e:

For Applicant Subparagraphs 1.f through 1.j:

Against Applicant

In light of all of the circumstances in this case, it is not clearly consistent with the interests of national security to grant Applicant eligibility for a security clearance. Eligibility for access to classified information is denied.

_________________________ Mark Harvey Administrative Judge