ISCR Case No. 21-00740

DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: )

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ISCR Case No. 21-00740

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Applicant for Security Clearance ) Appearances For Government: John Lynch, Esq., Department Counsel For Applicant: Pro se 10/12/2023

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______________ MURPHY, Braden M., Administrative Judge: Applicant rebutted foreign influence security concerns about his connections to Ukraine through a now-former girlfriend. He did not provide enough information to mitigate financial considerations security concerns about his unfiled tax returns, state and federal income tax debt, past-due federal student loans, and other debts. Applicant’s eligibility for access to classified information is denied. Statement of the Case Applicant submitted a security clearance application (SCA) on September 20, 2020. On December 8, 2021, the Defense Counterintelligence and Security Agency Consolidated Adjudication Facility (CAF) issued him a Statement of Reasons (SOR) detailing security concerns under Guideline F, financial considerations and Guideline B, foreign influence. The CAF took this action under Executive Order (Exec. Or.) 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review

Program (January 2, 1992), as amended (Directive); and Security Executive Agent Directive 4, National Security Adjudicative Guidelines (AG), effective June 8, 2017. Applicant answered the SOR on December 10, 2021, and requested a hearing before an administrative judge from the Defense Office of Hearings and Appeals. (DOHA). The case was assigned to me on April 18, 2023. DOHA issued a notice on May 10, 2023, scheduling the hearing for June 22, 2023. The hearing convened as scheduled. Department Counsel offered Government Exhibits (GE) 1-6, along with materials for administrative notice. Applicant testified and submitted Applicant’s Exhibits (AE) A and B. All exhibits were admitted without objection. I held the record open until July 6, 2023, to enable Applicant the opportunity to submit additional information. (Tr. 112) On June 23, 2023, he timely submitted an e- mail (AE C) and two screenshots regarding his taxes (AE D and AE E), which were marked and admitted without objection. He submitted no further documents before the record closed. DOHA received the hearing transcript (Tr.) on July 7, 2023. Administrative Notice Department Counsel requested that I take administrative notice (AN) of certain facts about Ukraine. The supporting documentation is marked as AN I. The facts cited by Department Counsel in AN I are hereby adopted in full and incorporated by reference into the Findings of Fact, below. Where appropriate, I take administrative notice of updated facts, consistent with my obligation to make assessments based on timely information in cases involving foreign influence. ISCR Case No. 05-11292 at 4 (App. Bd. Apr. 12, 2007) (“Decisions in Guideline B cases should be made to the greatest extent possible in the context of current political conditions in the country at issue.”) With that guidance, I take administrative notice of the fact that, at this writing, the war between Ukraine and Russia is ongoing. Amendments to the Statement of Reasons At the start of the hearing, Department Counsel moved to amend the SOR by correcting the dollar amount owed in SOR ¶ 1.f from $434 to $282. He also withdrew SOR ¶ 1.g. The amendments were accepted without objection. (Tr. 12-14)

Applicant admitted all the Guideline F allegations (SOR ¶¶ 1.a-1.p) without further comment. He denied the sole Guideline B allegation (SOR ¶ 2.a) with a brief explanation. His admissions are incorporated into the findings of fact. After a thorough and careful review of the pleadings and exhibits submitted, I make the following findings of fact.

Applicant is 44 years old. His marriage, from 2005 to 2019, ended in divorce and produced no children. He has two children from earlier relationships, a daughter (24) and a son in college (19). A daughter from a current relationship was born in November 2022, as discussed below. (Tr. 31-32, 50-52; AE B) Applicant earned an associate degree in 2013. His most recent period of unemployment was in 2011 or 2012. He has held a variety of jobs since then, mostly in his field of electronics. He began working for his current employer, a defense contractor, in September 2020. He earns about $128,000 annually. (GE 1; Tr. 55, 58, 61, 67-71, 122) Guideline B On his September 2020 SCA, Applicant disclosed a relationship with a woman from Ukraine. He noted that he had proposed marriage and that the woman was employed by the Ukrainian army, working in food service on a military base. (GE 1) (Guideline B, SOR ¶ 2.a) In his Answer to the SOR, Applicant reported that their relationship ended in March 2021. He also said he began a relationship with a woman in the U.S. in late July 2021 and they began cohabitating by the end of 2021. They now have a daughter, born in November 2022, and he is happy with his new life. (AE B; Tr. 31-32, 50-52) His cohabitant also has two teenagers. (Tr. 71) She works as a registered nurse. (Tr. 104) Applicant said he met the Ukrainian woman on a dating website in July 2019. He visited her in October 2019, and they began dating long-distance. They had daily contact through a social media application. He visited her again in July 2020, and again twice between November 2020 and January 2021. She worked on a Ukrainian military base and lived nearby. He stayed at her home when she went to work. During the July 2020 visit, they vacationed together, with her children, at a beach on the Black Sea. He also proposed marriage. He last saw her in January 2021, and he ended the relationship two months later, in March 2021. He testified that they have had no further contact, and he is not aware of her whereabouts. Applicant reported his contacts with his Ukrainian girlfriend to his company security officials and filled out appropriate security paperwork. (Answer; Tr. 50-51, 71-79) He asserted that if she were coerced to try to get information from him, any such efforts would be met by “a wall.” (Tr. 125) Ukraine I have read and considered the administratively noticed facts set forth in AN I concerning Ukraine, and they are adopted in full and incorporated by reference into the Findings of Fact. The only allegation concerning Applicant’s connections to Ukraine that makes those facts relevant here is SOR ¶ 2.a, a former girlfriend of Applicant’s, a citizen and resident of Ukraine and an employee of the Ukrainian military. Applicant ended the relationship in March 2021 and said they have had no further contact. Applicant has also had a child with a woman in the United States, born in November 2022, and they are now cohabitating. Given the ongoing war between Ukraine and Russia, there is an obvious foreign influence security concern involving Ukraine. However, Applicant has no

current or recent connections to Ukraine, or with his ex-girlfriend, to suggest a current ongoing security concern due to that connection. I therefore see little reason to discuss the facts in AN I about Ukraine any further. Guideline F Applicant disclosed tax issues and other debts on his September 2020 SCA. He cited his divorce as a cause for the debts. (GE 1 at 36-41, 44) He discussed his finances in background interviews conducted a month later. (GE 2 at 8-11) Applicant testified that most of his debts were accrued during his marriage. His wife was responsible for filing their tax returns, and he learned after their divorce that she had not done so. They would typically file joint returns. (Tr. 36-39, 55-57) The SOR concerns allegations of late-filed federal income tax returns (SOR ¶ 1.a), past-due federal income taxes (SOR ¶¶ 1.b-1.e), state income taxes (SOR ¶¶ 1.f, 1.g), federal student loans (SOR ¶¶ 1.l-1.o), and consumer debts (SOR ¶¶ 1.h-1.k, 1.p). SOR ¶ 1.a concerns late-filed federal income tax returns for tax years (TY) 2017, 2018, and 2019. Applicant reported on an interrogatory response to DOHA that he filed the returns in July 2021 but was not on a payment plan. (GE 2 at 5-7; Tr. 57, 79-80) Applicant also owes past-due federal income taxes for these years. This includes $3,249 for TY 2016 (SOR ¶ 1.b); $4,919 for TY 2017 (SOR ¶ 1.c), $5,951 for TY 2018 (SOR ¶ 1.d); and $7,329 for TY 2019 (SOR ¶ 1.e). Applicant’s IRS account transcript for TY 2017, provided with his interrogatory response in 2021, shows no return filed. (GE 2 at 26) He indicated that he filed a paper copy of his TY 2017 federal return in July 2021, on the same date as his TY 2018 and TY 2019 returns, but a copy of that return was not included with GE 2. He said he was waiting for confirmation that the IRS had accepted it. (GE 2 at 6-7) He indicated that he owed $4,919. (GE 2 at 5) (SOR ¶ 1.c) Post-hearing documentation for TY 2017 from the IRS says Applicant’s “information is not available at this time.” (AE C) This suggests they have no return on file from Applicant for TY 2017. Applicant filed his TY 2018 federal tax return in July 2021. He owed $5,951 (GE 2 at 23) (SOR ¶ 1.d) Post-hearing documentation for TY 2018 from the IRS shows a balance of about $3,514, and he said after the hearing that the amount is $3,556. (AE C, AE D) Applicant filed his TY 2019 federal income tax return in July 2021. He owed $7,329. (GE 2 at 20) (SOR ¶ 1.e) Post-hearing documentation for TY 2019 from the IRS shows a balance of about $7,600. (AE D) Applicant filed his TY 2020 federal income tax return in July 2021. He was issued a refund of $1,732. (GE 2 at 17; AE D) He said he filed his TY 2021 and TY 2022

federal and state returns and was due refunds. He said that the IRS has kept his refund money to address his earlier tax debt. He said he asked about a payment plan with the IRS, but they would not discuss one until all of his past-due returns have been filed and accepted. (Tr. 37-41, 57, 81, 82) He has had an accountant to help prepare his taxes for several years. (Tr. 85-86) Applicant testified that he received a letter from the IRS indicating that he owed $3,556 in total past-due taxes as of April 2023, but he clarified after the hearing that this figure is for TY 2018. (AE C) He plans to pay off his taxes by the end of May 2024. (Tr. 36-37, 40-41) The letter from the IRS is not in the record. Applicant also owed $282 in past-due state income taxes for TY 2016 and 2017 (SOR ¶ 1.f, as amended). (GE 2 at 6, GE 2 at 29-30; Tr. 82-83). Post-hearing documentation shows no state tax balance owed. (Tr. 39; AE E) He said he has filed all of his state tax returns from TY 2017 through TY 2022. He typically receives state income tax refunds of less than $200. (Tr. 83-84) SOR ¶¶ 1.l-1.o concern past-due federal student loans with the U.S. Department of Education (USDOE), totaling about $13,546. (GE 3, GE 4, GE 5) Applicant does not dispute the status of his student loans. He incurred them in 2013. He could not afford to address his student loans after his divorce, when he assumed responsibility for all household bills. The credit reports show the most recent payment was in July 2017. (GE 6; Tr. 94-95) He is aware that they have been in deferred status due to the COVID pandemic since March 2020, but that repayment is soon to resume. The loans were past due when the pandemic began. (Tr. 46-49) Applicant has not contacted the creditor to establish a payment plan or to update his address. He is unaware of the monthly amount he will be expected to pay. (Tr. 94-97) SOR ¶ 1.h ($1,594) is a consumer account that has been charged off. (GE 3, GE 4, GE 5) The debt is for a small off-road vehicle that Applicant uses for hunting. The vehicle was repossessed, and then he reacquired it and assumed the debt. The debt was settled and resolved in 2021, and now shows a zero balance. (Tr. 42-43, 86-91) The account shows a charge-off amount of $403. (GE 5 at 2) The same account now lists a zero balance on a more recent credit report. (GE 6 at 3) This account is resolved. SOR ¶ 1.i ($2,674) is a consumer account reported for collection by a bank. (GE 3, GE 4, GE 5) Applicant is not aware of an account with this bank at this collection agency. He will investigate the matter and if he can pay it, he will do so. (Tr. 43-44, 91) SOR ¶ 1.j ($1,726) is a past-due consumer account that has been reported for collection. (GE 3, GE 4, GE 5) Applicant has been resolving this debt with regular payments. (GE 6) At the time the record closed, he had about $1,000 left to pay, and he expected to resolve this debt by September 2023. (Tr. 29-30, 44-45, 93; AE A) This debt is being resolved.

SOR ¶ 1.k ($6,187) is a consumer credit account that has been charged off by a bank. (GE 5) A recent credit report now lists the account as $8,224 past due with a total balance of $9,722. (GE 6; Tr. 93-94) Applicant has contacted the creditor and was informed that they want full payment, without a payment plan. He plans to take a loan out from his 401k pension plan to address the debt, however, he wants to address smaller debts first. (Tr. 45-46) SOR ¶ 1.p ($895 past due, $1,283 total balance) is a consumer account. (GE 4) Applicant testified that the account has been paid. A recent credit report shows a zero balance. (GE 6; Tr. 49-50, 97-98) This account is resolved. Applicant has no other delinquent debts or extravagant expenses. He drives a truck with several hundred thousand miles on it. He took a trip to a European country in fall 2021. (Tr. 58-61, 71, 98-107, 121, 123-124) He does not keep a budget but recognizes that he probably should. (Tr. 104) He said he intends to pay his past-due taxes by May 2024 and will attempt to work out repayment of any remaining debts. (Tr. 108, 110) Applicant asserted that he is not a security risk. He loves his job and the culture of the company. He is discreet about what he does at work. He tries not to incur new debt. He has no alcohol-related driving offenses or traffic tickets and does not do drugs. (Tr. 36, 58-64)

It is well established that no one has a right to a security clearance. As the Supreme Court has held, “the clearly consistent standard indicates that security determinations should err, if they must, on the side of denials.” Department of the Navy v. Egan, 484 U.S. 518, 531 (1988). The adjudicative guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, these guidelines are applied in conjunction with the factors listed in 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. Likewise, I have avoided drawing inferences grounded on mere speculation or conjecture. Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, an “applicant is

responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by applicant or proven by Department Counsel, and has the ultimate burden of persuasion as to obtaining a favorable security decision.” A person who seeks access to classified information enters 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 that an applicant may deliberately or inadvertently fail to 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.

Guideline B, Foreign Influence AG ¶ 6 expresses the security concern regarding foreign influence: Foreign contacts and interests, including, but not limited to, business, financial, and property interests, are a national security concern if they result in divided allegiance. They may also be a national security concern if they create circumstances in which the individual may be manipulated or induced to help a foreign person, group, organization, or government in a way inconsistent with U.S. interests or otherwise made vulnerable to pressure or coercion by any foreign interest. Assessment of foreign contacts and interests should consider the country in which the foreign contact or interest is located, including, but not limited to, considerations such as whether it is known to target U.S. citizens to obtain classified or classified information or is associated with a risk of terrorism. AG ¶ 7 describes conditions that could raise a security concern and may be disqualifying. I have considered all of them, and the following are potentially applicable: (a) contact, regardless of method, with a foreign family member, business or professional associate, friend, or other person who is a citizen of or resident in a foreign country if that contact creates a heightened risk of foreign exploitation, inducement, manipulation, pressure, or coercion; and (b) connections to a foreign person, group, government, or country that create a potential conflict of interest between the individual's obligation to protect classified or classified information or technology and the individual's desire to help a foreign person, group, or country by providing that information or technology.

Guideline B is not limited to countries hostile to the United States. “The United States has a compelling interest in protecting and safeguarding [classified] information from any person, organization, or country that is not authorized to have access to it, regardless of whether that person, organization, or country has interests inimical to those of the United States.” ISCR Case No. 02-11570 at 5 (App. Bd. May 19, 2004). AG ¶ 7(a) requires evidence of a “heightened risk.” The “heightened risk” required to is a relatively low standard. It denotes a risk greater than the normal risk inherent in having a family member living under a foreign government or owning property in a foreign country. The totality of Applicant’s ties to a foreign country as well as each individual tie must be considered. SOR ¶ 2.a alleges a foreign influence security concern due to Applicant’s relationship with a Ukrainian woman he met on a dating website in 2019. They began dating long-distance, he visited her in Ukraine several times, and they were briefly engaged. Applicant disclosed the relationship on his SCA. However, he ended the relationship in March 2021, and they have had no further contact. Applicant testified that any attempts to coerce him through her would meet stiff resistance. He is now cohabitating with another woman in the United States, and they have had a child. While a heightened risk is unquestionably established given the ongoing war in Ukraine, application of AG ¶¶ 7(a) and 7(b) still requires contact with or connection to a foreign person at issue. I find that Applicant has neither ongoing contact or connections with his former girlfriend and fiancée in Ukraine to suggest a current foreign influence security concern. Nether AG ¶¶ 7(a) and 7(b) apply, and foreign influence security concerns are not established. Therefore, no mitigation conditions warrant discussion. 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, security, and ability to protect classified or classified 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.

This concern is broader than the possibility that an individual might knowingly compromise classified information in order to raise money. It encompasses concerns about an individual’s self-control, judgment, and other qualities essential to protecting classified information. An individual who is financially irresponsible may also be irresponsible, unconcerned, or negligent in handing and safeguarding classified information. See ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012). AG ¶ 19 provides conditions that could raise security concerns under the financial considerations guideline. The following are potentially applicable: (a) inability to satisfy debts; (c) a history of not meeting financial obligations; (f) failure to file or fraudulently filing annual Federal, state, or local income tax returns or failure to pay annual Federal, state, or local income tax as required. Applicant has incurred several financial delinquencies in recent years. This includes federal student loans and consumer debts. As his marriage was ending, he also failed to file several years of federal income tax returns. Past-due federal tax debt resulted. AG ¶¶ 19(a), 19(c), and 19(f) apply. The following mitigating conditions under AG ¶ 20 are potentially applicable: (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, security, 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; (d) the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts; and (g) the individual has made arrangements with the appropriate tax authority to file or pay the amount owed and is in compliance with those arrangements. Some of Applicant’s financial debts and tax filing issues are attributable to the end of his marriage, in 2019. This was a circumstance beyond his control, and AG ¶ 20(b) therefore has some application. His failure to timely file federal income tax returns (TY 2017, TY 2018, and 2019) is limited to this period. Applicant prepared those

returns, evidently with the assistance of a family accountant, in 2021, shortly after receiving the DOHA interrogatories. While it is not established by IRS documentation that his 2017 return was accepted, I believe that he prepared it in July 2021 as he did the others. His past-due tax filings are being resolved and are under control. AG ¶ 20(g) applies to these filings. Applicant’s state tax debt (SOR ¶ 1.f) is resolved, and there is no allegation (or evidence) of late-filed state tax returns. His federal tax debt, however, is ongoing. Post- hearing documentation indicates that he owes about $3,500 for TY 2018 and about $7,600 for TY 2019. Resolution of federal tax debt for TY 2016 (alleged at $3,249) and TY 2017 (alleged at $4,919) is not established. Further, Applicant is not on a payment plan to address his past-due federal income taxes. Instead, he is relying on the IRS’s recapturing of his refunds. This is not sufficient evidence of a good-faith effort to pay these debts. AG ¶¶ 20(d) and 20(g) do not apply to mitigate his past-due federal income tax debt. Applicant’s federal student loans are also unresolved. He earned his associate degree in 2013. There is no evidence of student loan payments since 2017. While this may be due, in part, to the end of his marriage, he has also been gainfully employed for several years. While his federal student loans have been in forbearance status since March 2020 due to the COVID-19 pandemic, that does not excuse his prior inaction. With student loan repayments now resuming, Applicant will have to establish a reasonable repayment plan going forward. As of now, he has not done so. AG ¶¶ 20(b) and 20(d) do not apply to his federal student loans. Applicant is resolving some of his other debts, such as SOR ¶ 1.j, now in a payment plan, and SOR ¶¶ 1.h and 1.p are resolved. AG ¶ 20(d) applies to them. Other larger debts remain, and he does not yet have a reasonable plan to address them. AG ¶ 20(b) and 20(d) therefore do not fully apply. Applicant’s debts are ongoing, so AG ¶ 20(a) does not fully apply. In particular, the ongoing past-due federal tax debt and federal student loans continue to cast doubt on his judgment, trustworthiness, and reliability. He needs to establish reasonable and responsible repayment plans for those debts (and the other remaining consumer debts) and take steps towards putting those plans into effect through a track record of steady payments.

Under the whole-person concept, the administrative judge must evaluate an applicant’s eligibility for a security determination 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(a), the ultimate determination of whether to grant eligibility for a determination of public trust 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 the facts and circumstances surrounding this case. I have incorporated my comments under Guidelines B and F in my whole-person analysis. A Guideline B security concern is not established. However, Applicant has a history of delinquent debts, particularly taxes and student loans. His debts will remain a security concern until he shows a documented track record of good-faith efforts to resolve them. This is not to say he cannot apply for a clearance again in the future when he has established financial responsibility towards his debts. But at this time, he has not met his burden of mitigating the security concern shown by his past-due student loans, tax debts, and other debts. Overall, the record evidence leaves me with questions and doubts as to Applicant’s eligibility and suitability for a security clearance. I conclude Applicant did not provide sufficient evidence to mitigate the security concerns arising under Guideline F, financial considerations.

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: FOR APPLICANT Subparagraph 1.a:

For Applicant Subparagraphs 1.b-1.e:

Against Applicant Subparagraph 1.f:

For Applicant Subparagraph 1.g:

Withdrawn Subparagraph 1.h:

For Applicant Subparagraph 1.i:

Against Applicant Subparagraph 1.j:

For Applicant Subparagraphs 1.k-1.o:

Against Applicant Subparagraph 1.p: For Applicant Paragraph 1, Guideline B: FOR APPLICANT Subparagraph 2.a: For Applicant

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In light of all of the circumstances presented, it is not clearly consistent with the national security interests of the United States to grant Applicant’s eligibility for access to classified information. Eligibility for access to classified information is denied. Braden M. Murphy Administrative Judge