ISCR Case No. 22-01957

DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: Applicant for Security Clearance ) ) ) ) ) ISCR Case No. 22-01957 Appearances For Government: Erin P. Thompson, Esquire, Department Counsel For Applicant: Pro se 08/30/2023

GALES, Robert Robinson, Administrative Judge: Applicant failed to mitigate the security concerns regarding financial considerations. Eligibility for access to classified information is denied. Statement of the Case On May 13, 2021, Applicant applied for a security clearance and submitted a Questionnaire for National Security Positions (SF 86). On December 12, 2022, the Defense Counterintelligence and Security Agency (DCSA) Consolidated Adjudications Facility (CAF), now renamed the DCSA Consolidated Adjudications Services (DOD CAS) formerly known as the Department of Defense (DOD) CAF, issued a Statement of Reasons (SOR) to him under Executive Order (Exec. Or.) 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended and modified; DoD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended and modified (Directive); and Directive 4 of the Security Executive Agent (SEAD 4), National Security Adjudicative Guidelines (December 10, 2016) (AG), effective June 8, 2017.

The SOR alleged security concerns under Guideline F (Financial Considerations) and detailed reasons why the DOD CAS adjudicators were unable to find that it is clearly consistent with the national interest to grant or continue a security clearance for Applicant. The SOR recommended referral to an administrative judge to determine whether a clearance should be granted, continued, denied, or revoked. On December 19, 2023, Applicant responded to the SOR and elected to have his case decided on the written record in lieu of a hearing (Item 2). A complete copy of the Government’s file of relevant material (FORM) was mailed to Applicant by the Defense Office of Hearings and Appeals (DOHA) on April 28, 2023, and he was afforded an opportunity after receipt of the FORM to file objections and submit material in refutation, extenuation, or mitigation. In addition to the FORM, Applicant was furnished a copy of the Directive as well as the Adjudication Guidelines applicable to his case. Applicant received the FORM on May 5, 2023. His response was due on June 4, 2023. Applicant chose not to respond to the FORM, for as of June 21, 2023, no response had been received. The case was assigned to me on August 1, 2023, and there was still no response to the FORM.

In his response to the SOR, Applicant admitted, without comments, all the SOR allegations pertaining to financial considerations (SOR ¶¶ 1.a. through 1.f.). Background Applicant is a 30-year-old employee of a defense contractor. He has been serving as a production planning associate since March 2018. He previously worked for other employers in a variety of short-term (generally less than 12 months each) positions as an interior installer (October 2012 – March 2018). He was unemployed during brief periods in 2012, 2014, and 2017. He is a 2011 high school graduate. He has never served with the U.S. military. He was granted a secret clearance in 2011 and 2019. He was married in 2017 and divorced in 2020. He has one child, born in 2016. Financial Considerations

General source information pertaining to the financial accounts discussed below can be found in the following exhibits: Item 3 (SF 86, dated May 13, 2021); Item 4 (Enhanced Subject Interview, dated January 3, 2022); Item 5 (TransUnion Credit Report, dated September 7, 2022); Item 6 (TransUnion Credit Report, dated February 17, 2022); Item 7 (Combined Experian, Equifax, and TransUnion Credit Report, dated August 5, 2021); and Item 8 (Continuous Evaluation Report (CER), dated January 11, 2021, with an attached TransUnion Credit Report, dated December 31, 2020). In his SF 86, Applicant acknowledged having some financial issues associated with five delinquent accounts. During a subsequent interview with an investigator with the U.S. Office of Personnel Management (OPM), on January 3, 2022, upon being confronted with information regarding a sixth delinquent account, he also acknowledged

having had a motor vehicle involuntarily repossessed in about 2015 or 2016. (Item 4 at 2-3) The SOR alleged the six still-delinquent accounts, totaling approximately $22,637, as set forth below: SOR ¶ 1.a. refers to an apartment lease with a delinquent balance of approximately $4,420 that was placed for collection. (Item 5 at 2; Item 6 at 2; Item 7 at 4) The financial issue arose in 2014 or 2015 when Applicant took a new job in another town and, without giving notice to the apartment management, he packed up and vacated the apartment. Since his move, he has made no effort to contact the creditor. (Item 4 at 2) The account has not been resolved. SOR ¶ 1.b. refers to a cellphone account with a delinquent balance of approximately $1,254 that was placed for collection in 2016. (Item 3 at 45-46; Item 4 at 2; Item 6 at 2; Item 7 at 4) The account has not been resolved. SOR ¶ 1.c. refers to a storage unit account with a delinquent balance of approximately $245 that was placed for collection in 2016. Applicant contended that he first became aware of the delinquency in late 2016 or early 2017 when he received a letter informing him that the unit contents had been seized for non-payment. (Item 3 at 44-45; Item 4 at 2; Item 6 at 2; Item 7 at 5) The account has not been resolved. SOR ¶ 1.d. refers to a bank-issued credit-card account with a delinquent balance of approximately $443 that was placed for collection in 2017. As of January 2022, Applicant was still receiving monthly collection letters from the collection agency. (Item 3 at 42-43; Item 4 at 2; Item 6 at 2; Item 7 at 5) The account has not been resolved. SOR ¶ 1.e. refers to a telephone account with a delinquent balance of approximately $941 that was placed for collection in 2015. (Item 3 at 41-42; Item 4 at 2; Item 7 at 5) The account has not been resolved. SOR ¶ 1.f. refers to an automobile loan account with a delinquent balance of approximately $15,334 after the vehicle was involuntarily repossessed in 2015 or 2016. Applicant failed to make any vehicle payments for about four months before waking up one day to find that the vehicle was gone. While he did contact the creditor to retrieve his possessions from the vehicle, he has made no efforts to arrange any form of payment. (Item 4 at 3; Item 6 at 3; Item 7 at 6) The account has not been resolved. Applicant explained that his ex-wife handled all financial matters and that he knew he had limited funds but was otherwise unaware of his financial status. However, most of the accounts became delinquent before he was married. He noted that some of the accounts became delinquent during periods when work was slow and he did not have sufficient funds to address them. In May 2021, he wrote that he was “just getting through [his] financial struggle.” (Item 3 at 42-44) He repeatedly stated that he has no intention of paying any of the aforementioned accounts. Instead, he is waiting for the collections to be removed from his credit report due to their respective ages. He is not

behind on any other accounts. He acknowledged that he has the ability to make payment arrangements to satisfy his “just” debts, and he does not dispute any of the delinquent accounts. (Item 4 at 2-3) In January 2022, Applicant reported a monthly net income of $4,257; and monthly expenses of $3,888 (including $520 for childcare as the custodial parent, $200 for entertainment, and $180 for cigarettes), leaving a monthly remainder of approximately $369 available for savings or spending. (Item 4 at 4)

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. The President has authorized the Secretary of Defense or his designee to grant an applicant 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 and modified.) When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the guidelines in SEAD 4. In addition to brief introductory explanations for each guideline, the guidelines list potentially disqualifying conditions and mitigating conditions, which are used in evaluating an applicant’s eligibility for access to classified information. An administrative judge need not view the guidelines as inflexible, ironclad rules of law. Instead, acknowledging 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. 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 meaningful decision. In the decision-making process, facts must be established by “substantial evidence.” “Substantial evidence [is] such relevant evidence as a reasonable mind might accept as adequate to support a conclusion in light of all contrary evidence in the record.” (ISCR Case No. 04-11463 at 2 (App. Bd. Aug. 4, 2006) (citing Directive ¶ E3.1.32.1)). “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 Government initially has the burden of producing evidence to establish a potentially disqualifying condition under the Directive and has the burden of establishing

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 as well. It is because of this special relationship that the Government must be able to repose a high degree of trust and confidence in those 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 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. Furthermore, “security clearance determinations should err, if they must, on the side of denials.” (Egan, 484 U.S. at 531)

controverted facts alleged in the SOR. Once the Government has produced substantial evidence of a disqualifying condition, under Directive ¶ E3.1.15, the applicant has the burden of persuasion to present evidence in refutation, explanation, extenuation or mitigation, sufficient to overcome the doubts raised by the Government’s case. 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).) 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 I have based this decision, in whole or in part, on any express or implied determination as to Applicant’s allegiance, loyalty, or patriotism. It is merely an indication the Applicant has or has not met the strict guidelines the President and the Secretary of Defense have established for issuing a clearance. 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.

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: (a) inability to satisfy debts; (b) unwillingness to satisfy debts regardless of the ability to do so; and (c) a history of not meeting financial obligations. The SOR alleged six delinquent debts totaling approximately 22,637. Applicant acknowledged all of those accounts and did not dispute them; admitted that he had taken no positive resolution actions regarding the accounts; and repeatedly stated that he has no intention of paying any of those creditors. Instead, he said he was simply waiting for the collections to be removed from his credit report due to their respective ages. Based on those facts, as well as his comments regarding past financial struggles and current ability to pay those accounts, it is clear that AG ¶¶ 19(a), 19(b), and 19(c) have been established. The guideline also includes examples of conditions that could mitigate security concerns arising from financial difficulties under AG ¶ 20: (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.

None of the mitigating conditions apply. Applicant noted that there had been periods when work was slow and funds were limited, but he also acknowledged that, at least since May 2021, he has funds sufficient to pay his debts. His newer accounts are reportedly current. However, he has repeatedly refused to indicate any good-faith effort to resolve his delinquent accounts – none of which he disputed – and is simply waiting for them to be removed from his credit report. There is no evidence of financial counseling. 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)). Based on the evidence, it appears that Applicant has continued to ignore his delinquent accounts for a substantial multi-year period. The overwhelming evidence leads to the conclusion that his financial problems are not under control or that he is not truly interested in resolving them. His inaction indicates that he has not acted responsibly. The Appeal Board has previously commented on such a situation: 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. An applicant who begins to resolve his or her financial problems only after being placed on notice that his or her security clearance is in jeopardy may be lacking in the judgment and self-discipline to follow rules and regulations over time or when there is no immediate threat to his or her own interests. (See, e.g., ISCR Case No. 17-01213 at 5 (App. Bd. Jun. 29, 2018); ISCR Case No. 17-00569 at 3-4 (App. Bd. Sept. 18, 2018)) In this instance, Applicant has clearly stated an intention to ignore his delinquent accounts and he is simply waiting for them to be removed from his credit report because of their age. His actions – or inaction in this regard – have complied with his stated intentions. Clearance decisions are aimed at evaluating an applicant’s judgment, reliability, and trustworthiness. They are not a debt-collection procedure. The guidelines do not require an applicant to establish resolution of every debt or issue alleged in the SOR. An applicant needs only to establish a plan to resolve financial problems and take significant actions to implement the plan. There is no requirement that an applicant immediately resolve issues or make payments on all delinquent debts simultaneously, nor is there a requirement that the debts or issues alleged in an SOR be resolved first.

Rather, a reasonable plan and concomitant conduct may provide for the payment of such debts, or resolution of such issues, one at a time. Mere promises to pay debts in the future, without further confirmed action, are insufficient. In this instance, Applicant offered specific statements regarding his refusal to address his delinquent accounts. The Appeal Board has previously explained what constitutes a good-faith effort to repay overdue creditors or otherwise resolve debts: In order to qualify for application of [the “good-faith” 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.” (internal citation and footnote omitted) ISCR Case No. 02-30304 at 3 (App. Bd. Apr. 20, 2004) (quoting ISCR Case No. 99-9020 at 5-6 (App. Bd. Jun. 4, 2001)). There is clear evidence that while Applicant has a small monthly remainder available for savings or spending, he has refused make any payments to the creditors of his delinquent accounts. Applicant’s position, under the circumstances, casts doubt on his current reliability, trustworthiness, and good judgment. See ISCR Case No. 09- 08533 at 3-4 (App. Bd. Oct. 6, 2010).

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 SEAD 4, App. A, ¶ 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 SEAD 4, App. A, ¶ 2(c), the 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. Moreover, I have evaluated the various aspects of this case in light of the totality of the record evidence and have not merely performed a piecemeal analysis. See U.S. v. Bottone, 365 F.2d

389, 392 (2d Cir. 1966); see also ISCR Case No. 03-22861 at 2-3 (App. Bd. Jun. 2, 2006). There is some evidence in favor of mitigating Applicant’s financial considerations. Applicant is a 30-year-old employee of a defense contractor. He has been serving as a production planning associate since March 2018. He was previously employed by other employers in a variety of short-term (generally less than 12 months each) positions as an interior installer (October 2012 – March 2018). He was unemployed during brief periods in 2012, 2014, and 2017. He is a 2011 high school graduate. He was granted a secret clearance in 2011 and 2019. . The disqualifying evidence under the whole-person concept is simply more substantial and compelling. There are six delinquent debts totaling approximately 22,637, including an involuntarily repossessed automobile. Those debts essentially became delinquent during the period 2014 – 2017. Applicant acknowledged all of those accounts and did not dispute them; admitted that he had taken no positive resolution actions regarding the accounts; and repeatedly stated that he has no intention of paying any of those creditors. Instead, he was simply waiting for the collections to be removed from his credit report due to their respective ages. As of the date of this decision, he has furnished no evidence to indicate any change in his position. Applicant’s actions or inaction generate lingering questions if he is currently in a better position financially than he had been, as well as continuing doubt about his current reliability, trustworthiness, and good judgment. In ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008), the Appeal Board addressed a key element in the whole-person analysis in financial cases stating: In evaluating Guideline F cases, the Board has previously noted that the concept of “meaningful track record” necessarily includes evidence of actual debt reduction through payment of debts. However, an applicant is not required, as a matter of law, to establish that he [or she] has paid off each and every debt listed in the SOR. All that is required is that an applicant demonstrate that he [or she] has “. . . established a plan to resolve his [or her] financial problems and taken significant actions to implement that plan.” The Judge can reasonably consider the entirety of an applicant’s financial situation and his [or her] actions in evaluating the extent to which that applicant’s plan for the reduction of his outstanding indebtedness is credible and realistic. See Directive ¶ E2.2(a) (“Available, reliable information about the person, past and present, favorable and unfavorable, should be considered in reaching a determination.”) There is no requirement that a plan provide for payments on all outstanding debts simultaneously. Rather, a reasonable plan (and concomitant conduct) may provide for the payment of such debts one at a time. Likewise, there is no requirement that the first debts actually paid in furtherance of a reasonable debt plan be the ones listed in the SOR.

________________________ Applicant’s track record of continued refusal to resolve his financial issues is negative and disappointing. Overall, the evidence leaves me with substantial questions and doubts as to Applicant’s eligibility and suitability for a security clearance. For all of these reasons, I conclude Applicant has failed to mitigate the security concerns arising from his financial considerations. See SEAD 4, App. A, ¶¶ 2(d) (1) through AG 2(d) (9).

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.f.: 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 eligibility for a security clearance. Eligibility for access to classified information is denied. ROBERT ROBINSON GALES Administrative Judge