ISCR Case No. 21-035741

___________ ___________ DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 21-035741 ) Applicant for Security Clearance ) Appearances For Government: Aubrey M. De Angelis, Esq., Department Counsel For Applicant: Pro se 05/06/2022

HARVEY, Mark, Administrative Judge: Applicant failed to make sufficient progress resolving several debts listed on the statement of reasons (SOR). Guideline F (financial considerations) security concerns are not mitigated, and eligibility for access to classified information is denied. Statement of the Case On May 21, 2020, Applicant completed her Questionnaires for Investigations Processing or security clearance application (SCA). (Government Exhibit (GE) 1) On May 28, 2021, the Department of Defense (DOD) Consolidated Adjudications Facility (CAF) issued a statement of reasons (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), as amended; 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. (Hearing Exhibit (HE) 2) 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. 1 The DOHA database incorrectly indicates the case number is “20-03574.”

Specifically, the SOR set forth security concerns arising under Guideline F. (HE 2) On June 9, 2021, Applicant provided her response to the SOR, and she requested a hearing. (HE 3) On October 29, 2021, Department Counsel was ready to proceed. On November 12, 2021, the case was assigned to me. On November 29, 2021, the Defense Office of Hearings and Appeals issued a Notice setting the hearing date for January 13, 2022. (Id.) Her hearing was held as scheduled in the vicinity of Arlington, Virginia using the DOD Microsoft Teams video teleconference system. (Id.) During the hearing, Department Counsel offered nine exhibits; Applicant did not offer any exhibits; and all proffered exhibits were admitted into evidence without objection. (Tr. 12, 15-18; GE 1-GE 9) DOHA received a copy of the transcript on January 24, 2022. The first suspense for providing post-hearing documents was February 15, 2022, and it was subsequently extended to April 15, 2022. (Tr. 42, 45; HE 4) No post-hearing documents were received. Some details were excluded to protect Applicant’s right to privacy. Specific information is available in the cited exhibits and transcript.

In Applicant’s SOR response, she admitted the allegations in SOR ¶¶ 1.a, 1.b, 1.i, and 1.j. (HE 3) She denied the other SOR allegations. She also provided mitigating information. (Id.) Her admissions are accepted as findings of fact. Applicant is a 39-year-old multi-operations security specialist who has worked for a defense contractor since May 2014. (Tr. 6, 19; GE 1) In 2001, she graduated from high school. (Tr. 7) She received two associate’s degrees in 2006 and 2010. (GE 9 at 2-3) In 2012, she received a bachelor’s degree with a major in social welfare. (Tr. 7) She has never married, and she does not have any children. (Tr. 7) She served on active duty in the Navy from 2001 to 2005, and in the Active Reserve until 2010 or 2011. (Tr. 8) She received a general discharge under honorable conditions because she was unable to complete the physical fitness assessment. (Tr. 8; GE 2) When she left the Navy, she was a petty office second class (E-5). (Tr. 8) Her Navy rating was Avionics Technician. (Tr. 8) Financial Considerations In 2008, Applicant was working for a large defense contractor in security, and in 2009, she was going to begin working in a position that required a security clearance, and she did not receive an overtime-security position because of financial issues. (Tr. 21) Her financial problem in 2009 was due to the purchase of a new car, student loans, unemployment, underemployment and “irresponsible spending.” (Tr. 22) In 2017, Applicant was arrested for driving under the influence of alcohol (DUI). (Tr. 40; GE 2 at 5) In 2018, she pleaded guilty to reckless driving, and the DUI was dismissed. (Tr. 40; GE 2 at 5) The cost for her attorney, fees, fines, and costs related to the reckless driving offense totaled about $8,000 to $10,000. (Tr. 40) Her monthly vehicle insurance costs

$150. (Tr. 40) Her annual pay has been about $82,000 for the past three years. (Tr. 19- 20) The SOR ¶ 1.i alleges Applicant’s security clearance was revoked in 2017 because of her finances. Her delinquent debts in 2015 to 2016 resulted when her sister and her niece moved in with Applicant, and then her sister lost her job. (Tr. 23-24) She was also moved to a different position at work, and her income was reduced. (GE 9 at 3) On May 15, 2015, she submitted an SCA, and on November 28, 2016, the DOD CAF issued an SOR alleging security concerns under Guideline F. On October 26, 2017, an administrative judge issued a decision denying Applicant’s security clearance. See ISCR Case No. 16-01155 (A.J. Oct. 26, 2017). The administrative judge said: Applicant admitted each of the 12 SOR allegations, including: a mortgage- loan account that was $3,995 past due with a total balance of $176,697 (SOR ¶ 1.a), a $8,751 charged-off auto-loan account that was placed for collection by a creditor who was later granted a $12,373 court judgment (SOR ¶¶ 1.b and 1.k), five credit-card accounts in charge-off or collection status totaling $10,765 (SOR ¶¶ 1.c, 1.e, 1.f., 1.g., and 1.i), a $10,653 federal student-loan account (SOR ¶ 1.d) and two medical accounts totaling $946 (SOR ¶¶ 1.h and 1.j) in collection status. The debts alleged in SOR ¶¶ 1.h through 1.j have been resolved. Wage garnishments were issued against Applicant to collect the auto-loan and the student-loan debts, in December 2014 and November 2015, respectively. In her SOR answer, Applicant averred, without providing any corroborating documentary evidence, that the garnishment for the auto-loan debt would be satisfied in February 2017, and the student-loan debt in March 2017. One of Applicant’s federal tax refunds was intercepted to collect the student-loan debt. Another wage garnishment was issued and satisfied in September 2014 to collect a $463 delinquent debt owed for an unspecified delinquent account (SOR ¶ 1.l). In her SOR answer, Applicant claimed, without providing any corroborating documentary evidence, that she was “on track with a repayment plan” to get caught up with her mortgage-loan payments, that she was adhering to the terms of the payment plans she arranged to resolve the debts alleged in SOR ¶¶ 1.e. and 1.g (the latter of which she expected would be completed in approximately March 2017). She intended to negotiate payment plans to resolve the debts alleged in SOR ¶¶ 1.c and 1.f, and to pay the debt alleged in SOR ¶ 1.i in December 2016. Id. at 2-3 (footnotes omitted). Applicant’s SOR alleges eight delinquent debts totaling $39,561 as follows: SOR ¶ 1.a alleges Applicant’s $162,193 mortgage was past due in the amount of $9,032. In 2012, she purchased her residence. (Tr. 25) Her foundation settled, and she

needed about $35,000 for repairs. (Tr. 27) In her August 10, 2020 Office of Personnel Management (OPM) interview, she said she was behind about $3,000 on her mortgage, and she was working on a loan modification. (GE 2 at 7) Her October 29, 2021 credit report indicates her date of last activity was July 2019, and the past-due amount is $29,137. (GE 6 at 5) She said she stopped making payments for about one year. (Tr. 38) She made one payment in a mortgage rehabilitation process in which she has to make two more payments, and then, the past-due amount is scheduled to be rolled into a new mortgage at a low interest rate. (Tr. 25-26) Her mortgage payment will be $1,245, which is the same amount as before the mortgage rehabilitation. (Tr. 27) She said she could provide the documentation explaining the mortgage rehabilitation. (Tr. 28) She believes the fair market value of her home is about $354,000, and she intends to sell it early in 2022 without correcting the foundation problem. (Tr. 38) SOR ¶ 1.b alleges Applicant has a charged-off vehicle loan for $12,509. Applicant said she was making $250 monthly payments to address the debt. (Tr. 29) She did not provide documentation showing her monthly payments or the current status of the debt. SOR ¶ 1.c alleges a medical debt placed for collection for $1,044 and ¶ 1.d alleges a charged-off bank debt for $982. Applicant said both debts were paid, and she could provide documentation showing payment. (Tr. 30-31) However, she did not provide post- hearing documentation showing payment. SOR ¶ 1.e alleges a charged-off store debt for $534. Applicant said the debt was paid in 2016 or 2017. (Tr. 31) Applicant’s July 21, 2020 credit report shows a last activity date of February 2016, and a status of settled for less than full balance. (GE 5 at 7) This debt is resolved. (Tr. 43) SOR ¶ 1.f alleges an account placed for collection for $7,868. Applicant said this signature loan was paid through a garnishment in 2015. (Tr. 32) Applicant’s October 29, 2021 credit report sh

ows a date of last activity of March 2015 and a zero balance. (GE 6 at 5) This debt is resolved. (Tr. 43) SOR ¶¶ 1.g and 1.h allege two federal student loans placed for collection for $2,495 and $5,097. Applicant said her student loans were paid through a garnishment. (Tr. 32) Applicant’s October 29, 2021 credit report only includes one student loan for $6,068. (GE 6 at 4) The past due amount is $0, and the status is “pays account as agreed.” (Id.) She stopped making payments on her student loan due to the COVID-19 forbearance. (Tr. 33) In March 2020, as a result of the COVID-19 pandemic, the Department of Education placed federal student loans in forbearance. On December 22, 2021, the Department of Education extended the student loan payment pause through May 1, 2022. The pause includes the following relief measures for eligible loans: a suspension of loan payments; a 0% interest rate; and stopped collections on defaulted loans. See Federal Student Aid website, https://studentaid.gov/announcements- events/covid-19. These debts are resolved or being resolved. SOR ¶ 1.j alleges Applicant was denied a sensitive federal position because of financial issues in 2009. Applicant admitted SOR ¶ 1.j.

Applicant received a 30-minute financial-counseling session through her employer. (Tr. 24-25) She has about $14,000 in a 401(k) retirement account. (Tr. 34) In April 2021, she borrowed $5,000 from her 401(k) account to assist her sister and nephew. (Tr. 34) She has had four involuntary garnishments from her pay. One was for the signature loan in SOR ¶ 1.f; two were for student loans; and one was for a vehicle loan. (Tr. 37) All of the garnishments were completed, and those four debts are resolved.

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 [or her] 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. 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 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. Discussion of the disqualifying conditions is contained in the mitigation section, infra. The financial considerations mitigating conditions under AG ¶ 20 are as follows: (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 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). Applicant described several circumstances beyond her control, which adversely affected her finances. Funds paid to assist family members, underemployment, foundation problems for her residence, and unemployment of her sister. However, “[e]ven 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. 03-13096 at 4 (App. Bd. Nov. 29, 2005); ISCR Case No. 99-0462 at 4 (App. Bd. May 25, 2000); ISCR Case No. 99-0012 at 4 (App. Bd. Dec. 1, 1999)). Another component under AG ¶ 20(a) is whether Applicant maintained contact with creditors and attempted to negotiate partial payments to keep debts current. She did not prove that she maintained contact with several of her creditors or that she made offers to make partial payments to them. Applicant paid four debts through wage garnishments. Payment of a debt “though garnishment rather than a voluntary effort diminishes its mitigating force.” Compare ISCR Case No. 08-06058 at 4 (App. Bd. Aug. 26, 2010) with ISCR Case No. 04-07360 at 2-3 (App. Bd. Sept. 26, 2006) (payment of two of four debts through garnishment did not bar mitigation of financial considerations concerns). See also ISCR Case No. 09-05700 at 4 (App. Bd. Feb. 24, 2011) (garnished payments towards delinquent tax debts is not mitigating information in light of other factors); ISCR Case No. 08-06058 at 6 (App. Bd. Sep. 21, 2009) (remanding the case to the administrative judge and stating when addressing an Internal Revenue Service garnishment, “On its face, satisfaction of a debt through the involuntary establishment of a creditor’s garnishment is not the same as, or similar to, a good-faith initiation of repayment by the debtor.”). I have credited Applicant with mitigation of the signature loan debt in SOR ¶ 1.f and her student loan debts in SOR ¶¶ 1.g and 1.h; however, Applicant loses some mitigating credit because she did not clearly establish that she voluntarily repaid these debts. She is also credited with keeping one student loan current through voluntary payments until the federal government issued the forbearance. Applicant is credited with paying or keeping current the debts in SOR ¶¶ 1.e ($534), 1.f ($7,868), 1.g ($2,495), and ¶ 1.h ($5,097). The denial of a sensitive position in 2009 which is alleged in SOR ¶ 1.j is mitigated because it is not recent.

Several of Applicant’s SOR debts were dropped from her credit report. “[T]hat some debts have dropped off his [or her] 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. Applicant did not establish that she was unable to make more documented progress resolving her delinquent debts, especially in light of her failure to make mortgage payments over the last year. There is insufficient assurance that her financial problems are being resolved. Under all the circumstances, she 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 a 39-year-old multi-operations security specialist who has worked for a defense contractor since May 2014. In 2006 and 2010, she received two associate’s degrees. In 2012, she received a bachelor’s degree with a major in social welfare. She served on active duty in the Navy from 2001 to 2005, and in the Active Reserve until 2010 or 2011. She received a discharge under honorable conditions. When she left the Navy, she was a petty office second class. Her Navy rating was Avionics Technician.

Applicant provided important financial mitigating information. Her finances were harmed by several circumstances beyond her control. She mitigated the debts in SOR ¶¶ 1.e through 1.h, and the allegation in SOR ¶ 1.j. The evidence against grant of a security clearance is more substantial at this time. Applicant did not provide documentation about why she was unable to make greater documented progress resolving several delinquent debts. She has not made any payments on her mortgage for at least one year, except for one payment to start a mortgage modification. She did not provide proof of that mortgage payment. She is repaying a loan from her 401(k) account, and may soon have to resume payments on her student loan. She did not provide documentary evidence showing she paid or settled several debts that she said she paid. Her financial history raises unmitigated questions about her 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)). This decision should not be construed as a determination that Applicant cannot or will not attain the state of reform necessary for award of a security clearance in the future. With more effort towards documented resolution of her past-due debt, and a better track record of behavior consistent with her obligations, she may well be able to demonstrate persuasive evidence of her security clearance worthiness. 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 Subparagraphs 1.a through 1.d: Against Applicant Subparagraphs 1.e through 1.h: For Applicant Subparagraph 1.i: Against Applicant Subparagraph 1.j: For Applicant

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