ISCR Case No. 22-02047

______________ ______________ DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 22-02047 ) ) Applicant for Security Clearance ) Appearances For Government: Andrew Henderson, Esq., Department Counsel For Applicant: Pro se September 15, 2023

CEFOLA, Richard A., Administrative Judge: Statement of the Case On November 7, 2022, in accordance with DoD Directive 5220.6, as amended (Directive), the Department of Defense issued Applicant a Statement of Reasons (SOR) alleging facts that raise security concerns under Guidelines F and E. The SOR further informed Applicant that, based on information available to the Government, DoD adjudicators could not make the preliminary affirmative finding it is clearly consistent with the national interest to grant or continue Applicant’s security clearance. Applicant answered the SOR on January 11, 2023, and requested a hearing before an administrative judge. (Answer.) The case was assigned to me on April 7, 2023. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on April 13, 2023, scheduling the hearing for June 1, 2023. The hearing was convened as scheduled. The Government offered Exhibits (GXs) 1 through 9, which were admitted into evidence. Applicant testified on his own behalf. The record was left open for nearly two months until July 28, 2023, for receipt of additional documentation.

Guideline F - Financial Considerations

Applicant offered no additional exhibits, but only a closing argument. DOHA received the transcript of the hearing (TR) on June 9, 2023.

In his Answer, Applicant admitted to all the allegations in the SORwith explanations. After a thorough and careful review of the pleadings, exhibits, and testimony, I make the following findings of fact. Applicant is a 69-year-old employee of a defense contractor. He has been employed with the defense contractor since July of 2020. Applicant is separated from his spouse and has no children. He is retired from the U.S. Army. (TR at page 15 line 16 to page 20 line 12, and GX 1 at pages 7, 11 14 and 16.) Applicant attributes his admitted financial difficulties to a failed business. 2.a. Applicant admits a past-due debt to Creditor A in the amount of about $24,603. He attributes this debt to his failed business; but at his hearing, he was informed by the undersigned, in no uncertain terms, that this was also a personal debt that appears on his February 2023 credit report. (TR at page 27 line 5 to page 35 line 13, at page 50 line 12 to page 55 line 25, and GX 9 at page 5.) Despite having nearly two months to do so, Applicant has submitted nothing further, other than argument, regarding this past-due debt. 2.b. Applicant admits a past-due debt to Creditor B in the amount of about $11,881. He again attributes this debt to his failed business; but at his hearing, he was informed, in no uncertain terms, that this was also a personal debt that appears on his May 2022 credit report. (TR at page 43 lines 3–20, at page 50 line 12 to page 55 line 25, and GX 8 at page 2.) Despite having nearly two months to do so, Applicant has submitted nothing further, other than argument, regarding this past-due debt. 2.c. Applicant admits a past-due debt to Creditor C in the amount of about $8,478. He attributes this debt to his failed business; but at his hearing, he was informed, in no uncertain terms, that this was also a personal debt that appears on his February 2023 credit report. (TR at page 43 line 21 to page 45 line 1, at page 50 line 12 to page 55 line 25, and GX 9 at page 4.) Despite having nearly two months to do so, Applicant has submitted nothing further, other than argument, regarding this past-due debt.

Guideline E - Personal Conduct 1.a. On his September 2020 e-QIP, Applicant answered “No” to “Section 26 – Delinquency Involving Routine Accounts . . . In the last seven (7) years, have you had any accounts or credit card suspended, charged off . . .” (GX 1 at pages 36–37.) Applicant testified credibly that he thought the three past-due debts, noted above, were business debts and not his personal debts. As such, Applicant answered “No” to the posited question. (TR at page 50 lines 6–9.)

When evaluating an applicant’s national security eligibility, the administrative judge must consider the adjudicative guidelines (AG). In addition to brief introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which are to be used in evaluating an applicant’s national security eligibility. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, administrative judges apply the guidelines in conjunction with the factors listed in AG ¶ 2 describing the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶ 2(a), the entire process is a conscientious scrutiny of a number of variables known as the whole-person concept. The administrative judge must consider all available, reliable information about the person, past and present, favorable and unfavorable, in making a decision. The protection of the national security is the paramount consideration. AG ¶ 2(b) requires that “[a]ny doubt concerning personnel being considered for national security eligibility will be resolved in favor of the national security.” In reaching this decision, I have drawn only those conclusions that are reasonable, logical, and based on the evidence contained in the record. Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Directive ¶ E3.1.15 states the “applicant is responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by the applicant or proven by Department Counsel, and has the ultimate burden of persuasion as to obtaining a favorable clearance decision.” A person who applies for access to classified information seeks to enter into a fiduciary relationship with the Government predicated upon trust and confidence. This relationship transcends normal duty hours and endures throughout off-duty hours. The Government reposes a high degree of trust and confidence in individuals to whom it grants access to classified information. Decisions include, by necessity, consideration of the possible risk the applicant may deliberately or inadvertently fail to protect or safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation as to potential, rather than actual, risk of compromise of classified information.

Section 7 of Executive Order (EO) 10865 provides that adverse decisions shall be “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive information).

Guideline F - Financial Considerations The security concern relating to the guideline for Financial Considerations is set out in AG ¶ 18: Failure to live within one's means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual's reliability, trustworthiness, and ability to protect classified or sensitive information. Financial distress can also be caused or exacerbated by, and thus can be a possible indicator of, other issues of personnel security concern such as excessive gambling, mental health conditions, substance misuse, or alcohol abuse or dependence. An individual who is financially overextended is at greater risk of having to engage in illegal or otherwise questionable acts to generate funds. Affluence that cannot be explained by known sources of income is also a security concern insofar as it may result from criminal activity, including espionage. The guideline notes several conditions that could raise security concerns under AG ¶ 19. Three are potentially applicable in this case: (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. Applicant has about $44,962 in charged-off past-due debts, that he acknowledged at his hearing as his personal debts. The evidence is sufficient to raise these disqualifying conditions. AG ¶ 20 provides conditions that could mitigate security concerns. I considered all of the mitigating conditions under AG ¶ 20 including: (a) the behavior happened so long ago, was so infrequent, or occurred under such circumstances that it is unlikely to recur and does not cast doubt on the individual's current reliability, trustworthiness, or good judgment; and

(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. Although Applicant can attribute his financial difficulties to the loss of his business, his financial problems are ongoing. He has done nothing to address his delinquencies. He has not demonstrated that future financial problems are unlikely. Mitigation under AG ¶ 20 has not been established. Financial Considerations is found against Applicant. Guideline E - Personal Conduct The security concern relating to the guideline for Personal Conduct is set out in AG ¶ 15: Conduct involving questionable judgment, lack of candor, dishonesty, or unwillingness to comply with rules and regulations can raise questions about an individual's reliability, trustworthiness, and ability to protect classified or sensitive information. Of special interest is any failure to cooperate or provide truthful and candid answers during national security investigative or adjudicative processes. The following will normally result in an unfavorable national security eligibility determination, security clearance action, or cancellation of further processing for national security eligibility: (a) refusal, or failure without reasonable cause, to undergo or cooperate with security processing, including but not limited to meeting with a security investigator for subject interview, completing security forms or releases, cooperation with medical or psychological evaluation, or polygraph examination, if authorized and required; and (b) refusal to provide full, frank, and truthful answers to lawful questions of investigators, security officials, or other official representatives in connection with a personnel security or trustworthiness determination. The guideline notes several conditions that could raise security concerns under AG ¶ 16. One is potentially applicable in this case: (a) deliberate omission, concealment, or falsification of relevant facts from any personnel security questionnaire, personal history statement, or similar form used to conduct investigations, determine employment qualifications, award benefits or status, determine national security eligibility or trustworthiness, or award fiduciary responsibilities.

In September of 2020, Applicant mistakenly thought that his past-due business debts were not his individual responsibility. As his mistaken characterization of his debts was not deliberate, I find the evidence does not raise this disqualifying conditions. Personal Conduct is found for Applicant.

Under the whole-person concept, the administrative judge must evaluate an applicant’s eligibility for a security clearance by considering the totality of the applicant’s conduct and all relevant circumstances. The administrative judge should consider the nine adjudicative process factors listed at AG ¶ 2(d): (1) the nature, extent, and seriousness of the conduct; (2) the circumstances surrounding the conduct, to include knowledgeable participation; (3) the frequency and recency of the conduct; (4) the individual’s age and maturity at the time of the conduct; (5) the extent to which participation is voluntary; (6) the presence or absence of rehabilitation and other permanent behavioral changes; (7) the motivation for the conduct; (8) the potential for pressure, coercion, exploitation, or duress; and (9) the likelihood of continuation or recurrence. Under AG ¶ 2(c), the ultimate determination of whether to grant eligibility for a security clearance must be an overall commonsense judgment based upon careful consideration of the guidelines and the whole-person concept. I considered the potentially disqualifying and mitigating conditions in light of all facts and circumstances surrounding this case. I have incorporated my comments under Guidelines F and E in my whole-person analysis. Overall, the record evidence leaves me with questions and doubts as to Applicant’s eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant failed to mitigate the Financial Considerations security concern.

Formal findings for or against Applicant on the allegations set forth in the SOR, as required by ¶ E3.1.25 of the Directive, are: Paragraph 1, Guideline E: FOR APPLICANT Subparagraph 1.a: For Applicant Paragraph 2, Guideline F: AGAINST APPLICANT Subparagraphs 2.a.~2.c: Against Applicant

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In light of all of the circumstances presented by the record in this case, it is not clearly consistent with the national interest to grant Applicant national security eligibility for a security clearance. Eligibility for access to classified information is denied. Richard A. Cefola Administrative Judge