ISCR Case No. 23-00680

__________ __________ DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 23-00680 ) Applicant for Security Clearance ) Appearances For Government: Karen Moreno Sayles, Department Counsel For Applicant: Pro se 11/27/2024

WESLEY, ROGER C. Administrative Judge Based upon a review of the case file, pleadings, exhibits, and testimony, Applicant did not mitigate financial consideration concerns. Eligibility for access to classified information or to hold a sensitive position is denied. Statement of the Case On April 11, 2023, the Defense Counterintelligence and Security Agency Consolidated Adjudication Services (DCSA CAS) issued a statement of reasons (SOR) to Applicant detailing reasons why under the financial considerations guideline the DCSA CAS could not make the preliminary affirmative determination of eligibility for granting a security clearance, and recommended referral to an administrative judge to determine whether a security clearance should be granted, continued, denied, or revoked. The action was taken under Executive Order (Exec. Or.) 10865, Safeguarding Classified Information within Industry (February 20, 1960); Department of Defense (DoD) Directive 5220.6 Defense Industrial Personnel Security Clearance Review Program, (January 2, 1992) (Directive); 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.

Applicant responded to the SOR on May 3, 2023, and requested that his case be resolved on the written record without a hearing. Applicant received the FORM on September 9, 2024, and elected not to respond to the FORM. This case was assigned to me on November 18, 2024. The Government’s case consisted of 11 exhibits and were admitted without objection as Items 1-11. Applicant did not offer any post-FORM exhibits. Summary of Pleadings Under Guideline F, Applicant allegedly accumulated two delinquent debts exceeding $108,000. Allegedly, Applicant’s delinquent debts have not been resolved and remain outstanding. In Applicant’s response to the SOR, he admitted both of the allegations with explanations and clarifications. Addressing SOR ¶¶ 1.a and 1.d, he claimed the creditor closed both of its time-share locations near his home in State A with no updates as to whether the creditor has opened any new locations near his State A home. He further claimed that he is working only part-time in a remote location with no access to classified information.

Applicant is a 67-year-old employee of a defense contractor who seeks a security clearance. Allegations covered in the SOR and admitted by Applicant are incorporated and adopted as relevant and material findings. Additional findings follow. Background Applicant married in June 1987 and divorced in August 2008. (Item 2) He has two adult children from this marriage. He remarried in July 2009 and has two adult stepchildren from this marriage. He earned an associate’s degree in June 1983. (Item 2) Applicant reported no military service. (Item 2) Since August 2007, Applicant has been employed by his current employer as a system server engineer. (Item 2) Previously, he worked for other employers in various support positions. He held a security clearance briefly in June 2012. (Item 2) Applicant’s finances Between 2014 and 2016, Applicant and his spouse took out a series of timeshare loans (since consolidated into two loans) to purchase two timeshares through a national timeshare company. (Items 1-4) At the time, Applicant resided in another state and was employed as a consultant with an employer that he had been affiliated with since 1980. (Items 1-2 and 6) In 2018, Applicant informed his corporate affiliate of his plans to relocate to his current state of residence and continue his work with his company affiliate, albeit remotely with trips to his affiliate’s corporate offices as needed. (item 1)

Following up on his planned relocation, Applicant and his wife relocated to their current state of residence in 2018. With the time shares they purchased in his current state of residence, Applicant and his wife used their time share between 2015 and January 2020 approximately 10 times in those instances in which they traveled cross-country from their previous state of residence to their current state of residence. (GEs 1 and 6) When, however, they arrived in their current state of residence, they were informed by their timeshare creditor that the company was closing its timeshare location in Applicant’s state of residence. In response, Applicant and his wife found available rental homes and ceased using the resort company’s timeshare space options. (Item 3) Citing his inability to use his timeshare homes in his current state of residence, Applicant ceased paying on the timeshare loans. (GE 3) Based on his most recent credit report, he made his last payment on his timeshare loans in February 2020 and currently has delinquent past due balances on the loans in the respective amounts of $138,201 and $70,053 (with the increased delinquency balances attributable to accumulating interest on the loans). (GE 11) Past demand notices from the creditor, while acknowledged by Applicant, were never acted upon by him for lack of resources to address the loan delinquencies. (Item 3) To be sure, Applicant’s finances were adversely affected by the COVID-19 pandemic. (GE 3) In early 2020, a major customer of Applicant’s at an Air Force military base ceased placing orders with his affiliated firm following a COVID-related base shutdown. The shutdown caused a considerable loss of income for Applicant and prevented him from addressing over $80,000 in personal consumer debts. (Item 3) By October 2020, the financial losses he had amassed had become serious enough to prompt him to retain a debt relief firm. (Item 5) Under the terms of the debt relief program he enrolled in, Applicant agreed to a monthly fee of $1,235 to the debt relief firm in exchange for the firm’s assistance in settling the $82,235 in delinquent accounts he included in his debt relief plan. (Item 5) Since November 2020, Applicant was able to reduce his enrolled delinquent account balance to $28,003. (Item 5) Applicant’s timeshare delinquencies were not included in his enrolled debt relief plan and remain unresolved and outstanding. (Item 5)

By virtue of the jurisprudential principles recognized by the U.S. Supreme Court in Department of the Navy v. Egan, 484 U.S. 518, 528 (1988), “no one has a ‘right’ to a security clearance.” 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. Eligibility for access to classified information may only be granted “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 AGs list guidelines to be considered by judges in the decision-making process covering DOHA cases. These guidelines take into account factors that could create a potential conflict of interest for the individual applicant, as well as considerations that could affect the individual’s reliability, trustworthiness, and ability to protect classified information. These guidelines include conditions that could raise a security concern and may be disqualifying (disqualifying conditions), if any, and all of the conditions that could mitigate security concerns, if any. These guidelines must be considered before deciding whether or not a security clearance should be granted, continued, or denied. Although, the guidelines do not require judges to place exclusive reliance on the enumerated disqualifying and mitigating conditions in the guidelines in arriving at a decision. In addition to the relevant AGs, judges must take into account the pertinent considerations for assessing extenuation and mitigation set forth in ¶ 2(a) of the AGs, which are intended to assist the judges in reaching a fair and impartial, commonsense decision based on a careful consideration of the pertinent guidelines within the context of the whole person. The adjudicative process is designed to examine a sufficient period of an applicant’s life to enable predictive judgments to be made about whether the applicant is an acceptable security risk. When evaluating an applicant’s conduct, the relevant guidelines are to be considered together with the following ¶ 2(d) factors: (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 of the conduct; (8) the potential for pressure, coercion, exploitation, or duress; and (9) the likelihood of continuation or recurrence. Viewing the issues raised and evidence as a whole, the following individual guidelines are pertinent herein: Financial Considerations The Concern: Failure or inability 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 or 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 acts or otherwise questionable acts to generate funds. . . . AG ¶ 18. Burdens of Proof 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. See also Exec. Or. 12968 (Aug. 2, 1995), § 3.1. 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).

Security concerns are raised over Applicant’s accumulation of two delinquent timeshare debts that raise trust, reliability, and judgment concerns about his current and future ability to manage his finances safely and responsibly. These concerns are addressed below.

Financial concerns Applicant’s accumulated delinquent debts warrant the application of three of the disqualifying conditions (DC) of the financial consideration guidelines. DC ¶¶ 19(a), inability to satisfy debts”; 19(b),unwillingness to satisfy debts regardless of the ability to do so”; and 19(c), “a history of not meeting financial obligations”; apply to Applicant’s situation. Applicant’s admitted debt delinquencies require no independent proof to substantiate them. See Directive 5220.6 at E3.1.1.14; McCormick on Evidence § 262 (6th ed. 2006). His admitted debt delinquencies are fully documented and create judgment issues over the management of his finances. See ISCR Case No. 03-01059 (App. Bd. Sept. 24, 2004). Financial stability in a person cleared to protect classified information is required precisely to inspire trust and confidence in the holder of a security clearance that entitles the person to access classified information. While the principal concern of a security clearance holder’s demonstrated difficulties is vulnerability to coercion and influence, judgment and trust concerns are implicit in cases involving delinquent debts. Historically, the timing of addressing and resolving debt delinquencies are critical to an assessment of an applicant’s trustworthiness, reliability, and good judgment in following rules and guidelines necessary for those seeking access to classified information or to holding a sensitive position. See ISCR Case No. 14-06808 at 3 (App. Bd. Nov. 23. 2016); ISCR Case No. 14-01894 at 5 (App. Bd. Aug. 18, 2015); ISCR Case No. 14-00221 at 2-5 (App. Bd. June 29, 2016). Without any documented evidence of Applicant’s addressing and resolving his delinquent timeshare debts with payoffs and payment plans, none of the potentially available mitigating conditions are available to Applicant. In the past, the Appeal Board has consistently imposed evidentiary burdens on applicants to provide documentation corroborating actions taken to resolve financial problems, whether the issues relate to back taxes or other debts and accounts. See ISCR Case No. 19-02593 at 4-5 (App. Bd. Oct. 18, 2021); ISCR Case No. 19-01599 at 3 (App. Bd. Jan. 20, 2020). Applicant’s expressed commitments to protecting national security, while welcomed, are not, sufficient to absolve him from continuing security concerns over his failure to provide evidence of his addressing his delinquent accounts and taking the necessary steps to stabilize his finances and otherwise address his accounts in a responsible way. See 17-04110 at 3 (Appeal Bd., Sep. 26, 2019 (citing Directive, Encl. 2, App A ¶ 18) and ISCR Case No. 17-04110 at 4 (App. Bd. Sept. 26, 2019) Whole-person assessment Whole-person assessment of Applicant’s clearance eligibility requires consideration of whether his history of accumulated delinquent accounts is fully compatible with minimum standards for holding a security clearance. While Applicant is

__________________________ entitled to credit for his work in the defense industry, his efforts are not enough at this time to overcome his repeated failures or inability to address his timeshare debts in a timely way. Overall trustworthiness, reliability, and good judgment have not been established. Based on a consideration of all of the facts and circumstances considered in this case, it is too soon to make safe predictions that Applicant will be able to undertake reasoned, good-faith efforts to mitigate the Government’s financial concerns within the foreseeable future. More time is needed for him to establish the requisite levels of stability with his finances to establish his overall eligibility for holding a security clearance. I have carefully applied the law, as set forth in Department of Navy v. Egan, 484 U.S. 518 (1988), Exec. Or. 10865, the Directive, and the AGs, to the facts and circumstances in the context of the whole person. I conclude financial considerations security concerns are not mitigated. Eligibility for access to classified information is denied.

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: Guideline F (FINANCIAL CONSIDERATIONS): AGAINST APPLICANT Subparagraphs 1.a-1.b: 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. Roger C. Wesley Administrative Judge