ISCR Case No. 16-01585.h1

DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS

In the matter of: ) ) ------------------------------------------------ ) ISCR Case No. 16-01585 ) ) Applicant for Security Clearance

For Government: Andre M. Gregorian, Esq., Department Counsel For Applicant: Pro se

07/07/2017 ______________

______________

LEONARD, Michael H., Administrative Judge:

Applicant contests the Defense Department’s intent to deny his eligibility for access to classified information. He failed to present sufficient evidence to explain, extenuate, or mitigate the security concern stemming from an unpaid judgment for $28,567, filed in June 2008, based on a delinquent credit card account. He did not present sufficient documentation to establish that he contacted the creditor who received the judgment and made arrangements to pay or settle what he owes. Accordingly, this case is decided against Applicant.

Statement of the Case

Applicant completed and submitted a Questionnaire for National Security Positions (SF 86 format) on February 5, 2015.1 This document is commonly known as a security clearance application. Thereafter, on June 8, 2016, after reviewing the application and the information gathered during a background investigation, the Department of Defense Consolidated Adjudications Facility, Fort Meade, Maryland, sent Applicant a statement of reasons (SOR), explaining it was unable to find that it was clearly consistent with the national interest to grant him eligibility for access to classified information. The SOR is similar to a complaint. It detailed the factual reasons for the action under the security guideline known as Guideline F for financial considerations.

Applicant answered the SOR on June 26, 2016. His response consisted of a one- page memorandum; he admitted the single factual allegation; and he requested a decision based on the written record in lieu of a hearing. His response did not include supporting documentation.

On August 4, 2016, Department Counsel submitted all relevant and material information that could be adduced at a hearing. The file of relevant material (FORM) consists of Department Counsel’s written brief and supporting documentation, some of which are identified as evidentiary exhibits in this decision. The FORM was mailed to Applicant, who received it August 23, 2016. He timely replied on September 6, 2016, with a one-page memorandum without supporting documentation. The case was assigned to me July 3, 2017.

Department Counsel’s FORM includes Exhibit 3, which is a report of investigation (ROI) summarizing Applicant’s interview that took place during the April 2015 background investigation. The ROI is not authenticated by a witness, which is required under ¶ E3.1.20 of the Directive.2 The Directive provides no exception to the authentication requirement. Indeed, the authentication requirement is the exception to the general rule that prohibits consideration of an ROI.

Department Counsel’s written brief includes a footnote advising Applicant that the summary was not authenticated and that failure to object may constitute a waiver of the authentication requirement. In his response to the FORM, Applicant objected to the ROI based on lack of authentication. The objection is sustained. Accordingly, given the lack of an authenticating witness, I have not considered the ROI in reaching my decision.

Applicant is a 58-year-old employee who requires a security clearance for his employment as a federal contractor. He has worked as a painter for a company doing business in the defense industry since 2003. He married in 1990 and divorced in 2001. He married for the second time in 2008. He has a 20-year-old son. In his February 2015 security clearance application, Applicant disclosed that he had an unpaid $28,567 judgment stemming from a credit card account. He explained that he was unable to pay due to his divorce and the account was overcharged by his former spouse. He further stated that the judgment was due to be removed from his credit report in May 2015.3

A March 2015 credit report, which was obtained during the background investigation, also establishes the unpaid judgment.4 The credit report shows that the unpaid $28,567 judgment was filed in June 2008, and the judgment creditor is a large, well-known bank that does business in the credit card industry. The credit report also reflects a single paid collection account and 11 accounts (some open and some closed) that are paid as agreed and in good standing. In other words, the unpaid judgment is the only derogatory item currently on Applicant’s credit report.

In his June 2016 answer to the SOR, Applicant admitted responsibility for the unpaid judgment. He stated that he intended to pay the judgment in full upon sale of his property, which he was in the process of preparing to put on the market for sale. He further stated that he lives within his financial means; that he is an upstanding tax- paying citizen; and that he does not have a felony conviction. He attributed the unpaid judgment to his first marriage, but accepted responsibility for it. In his August 2016 response to the FORM, he stated that there was no documentation of any payment arrangements for the judgment because he was told (by the judgment creditor, presumably) that the judgment had to be paid in full and he was not informed of other payment options. Accordingly, there is no documentation in the record to establish that the judgment was paid, settled, in a payment arrangement, cancelled, forgiven, vacated, satisfied, or otherwise resolved.

Law and Policies

This case is adjudicated under Executive Order (E.O.) 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the National Security Adjudicative Guidelines for Determining Eligibility for Access to Classified Information or Eligibility to Hold a Sensitive Position (AG), effective June 8, 2017.5 It is well-established law that no one has a right to a security clearance.6 As noted by the Supreme Court in Department of the Navy v. Egan, “the clearly consistent standard indicates that security clearance determinations should err, if they must, on the side of denials.”7 Under Egan, Executive Order 10865, and the Directive, any doubt about whether an applicant should be allowed access to classified information will be resolved in favor of protecting national security.

A favorable clearance decision establishes eligibility of an applicant to be granted a security clearance for access to confidential, secret, or top-secret information.8 An unfavorable clearance decision (1) denies any application, (2) revokes any existing security clearance, and (3) prevents access to classified information at any level.9

There is no presumption in favor of granting, renewing, or continuing eligibility for access to classified information.10 The Government has the burden of presenting evidence to establish facts alleged in the SOR that have been controverted.11 An applicant is responsible for presenting evidence to refute, explain, extenuate, or mitigate facts that have been admitted or proven.12 In addition, an applicant has the ultimate burden of persuasion to obtain a favorable clearance decision.13

In Egan, the Supreme Court stated that the burden of proof is less than a preponderance of evidence.14 The Appeal Board has followed the Court’s reasoning, and a judge’s findings of fact are reviewed under the substantial-evidence standard.15

Under Guideline F for financial considerations, the suitability of an applicant may be questioned or put into doubt when that applicant has a history of excessive indebtedness or financial problems or difficulties. The overall concern is: 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 and regulations, all of which can raise questions about an individual’s reliability, trustworthiness, and ability to protect classified or sensitive information.16

The concern is broader than the possibility that a person might knowingly compromise classified or sensitive information to obtain money or something else of value. It encompasses concerns about a person’s self-control, judgment, and other important qualities. A person who is financially irresponsible may also be irresponsible, unconcerned, or negligent in handling and safeguarding classified information.

In analyzing the facts of this case, I considered the following disqualifying and mitigating conditions:

AG ¶ 19(a) inability to satisfy debts;

AG ¶ 19(b) unwillingness to satisfy debts regardless of ability to do so;

AG ¶ 19(c) a history of not meeting financial obligations; and

AG ¶ 20(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.

The evidence here supports a conclusion that Applicant has a problematic financial history sufficient to raise a security concern under Guideline F. He is indebted on an unpaid $28,567 judgment filed in June 2008. With the accrual of interest over the last seven years, it’s safe to say he now owes a larger sum to the judgment creditor. The judgment remains wholly unresolved, and he presented only a generalized plan, without supporting documentation, to resolve it. He attributes the judgment to his first marriage when his then spouse overcharged the underlying credit card account. I note that the divorce occurred in 2001 and the judgment was filed about seven years later in 2008. Given that circumstance, it is difficult to connect the divorce to the judgment without supporting documentation. Regardless, even if a connection were shown, Applicant has not acted responsibly under the circumstances, because he has done essentially nothing since June 2008 to resolve the judgment.

What is missing here is obvious: Documentation that Applicant initiated and is adhering to a good-faith effort to pay or settle what he owes to the judgment creditor. It’s the responsibility of the individual applicant to produce relevant documentation in support of their case. Here, Applicant has not met his burden of production because he did not present sufficient documentation showing he is making a good-faith effort to resolve the unpaid judgment.

Applicant’s history of financial problems creates doubt about his reliability, trustworthiness, good judgment, and ability to protect classified information. In reaching this conclusion, I weighed the evidence as a whole and considered if the favorable evidence outweighed the unfavorable evidence or vice versa. I also considered the whole-person concept. Accordingly, I conclude that he did not meet his ultimate burden of persuasion to show that it is clearly consistent with the national interest to grant him eligibility for access to classified information.

The formal findings on the SOR allegations are:

Paragraph 1, Guideline F: Against Applicant

Subparagraph 1.a: Against Applicant

In light of the record as a whole, it is not clearly consistent with the national interest to grant Applicant access to classified information.

Michael H. Leonard Administrative Judge

1 Exhibit 2. 2 See generally ISCR Case No. 12-10933 (App. Bd. Jun. 29, 2016) (In a concurring opinion, Judge Ra’anan notes the historical concern about reports of investigation in that they were considered by some to present a heightened problem in providing due process in security clearance cases. Judge Ra’anan raises a number of pertinent questions about using an unauthenticated ROI in a non-hearing case with a pro se applicant.). 3 As I understand the law concerning credit reports, a judgment is allowed to remain on a consumer’s credit report for seven years from the filing date. Nevertheless, generally speaking, judgments are enforceable (subject to collection) for ten years (and longer in some states) from the filing date. Also, many states allow the judgment creditor to renew, re-file, or revive the judgment before the expiration of the initial ten-year period if the judgment is not satisfied. 4 Exhibit 4. 5 The 2017 AG are available at http://ogc.osd.mil/doha. 6 Department of the Navy v. Egan, 484 U.S. 518, 528 (1988) (“it should be obvious that no one has a ‘right’ to a security clearance”); Duane v. Department of Defense, 275 F.3d 988, 994 (10th Cir. 2002) (no right to a security clearance). 7 484 U.S. at 531. 8 Directive, ¶ 3.2. 9 Directive, ¶ 3.2. 10 ISCR Case No. 02-18663 (App. Bd. Mar. 23, 2004). 11 Directive, Enclosure 3, ¶ E3.1.14. 12 Directive, Enclosure 3, ¶ E3.1.15. 13 Directive, Enclosure 3, ¶ E3.1.15. 14 Egan, 484 U.S. at 531. 15 ISCR Case No. 01-20700 (App. Bd. Dec. 19, 2002) (citations omitted). 16 AG ¶ 18.