ISCR Case No. 16-01623.h1

DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS

In the matter of: ) ) -------------------------------------- ) ADP Case No. 16-01623 ) ) Applicant for Public Trust Position

For Government: Mary Margaret Foreman, Esq., Department Counsel For Applicant: Pro se

04/21/2017 ______________

______________

LEONARD, Michael H., Administrative Judge:

Applicant contests the Defense Department’s intent to deny her eligibility for a public trust position. She did not meet her burden to present sufficient evidence to explain, extenuate, or mitigate the trustworthiness concern stemming from her history of financial problems, which is ongoing. 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 September 15, 2015. Thereafter, on June 6, 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), detailing a trustworthiness concern under Guideline F for financial considerations. The SOR is similar to a complaint. The action was taken under Department of Defense Directive 5220.6, Defense Industrial Personnel Security Review Program (Jan. 2, 1992), as amended (Directive); Department of Defense Regulation 5200.2-R, Personnel Security Program (Jan. 1987), as amended (Regulation); and the adjudicative guidelines (AG) implemented by the DOD on September 1, 2006.1 She answered the SOR by admitting the allegations, and she requested a hearing.

The case was assigned to me on August 23, 2016. The hearing was held as scheduled on November 9, 2016. Department Counsel offered Exhibits 1-4, and they were admitted. Applicant testified on her own behalf and offered no exhibits. The record was kept open to allow Applicant to present documentation, and she made a timely submission of a police report and a monthly budget. Those matters are admitted, without objections, as Exhibits A and B. The transcript of hearing (Tr.) was received on November 17, 2016.

Applicant is a 42-year-old authorizations and referral coordinator for a health- care contractor to the Defense Department. She has worked for this company since October 2015. She is seeking to obtain eligibility to occupy a position of public trust for her job responsibilities. Eligibility is necessary because her job involves access to sensitive but unclassified information, which may include personally identifiable information (PII).2

The SOR alleges a history of financial problems, which Applicant does not dispute. In particular, the SOR alleges 20 unpaid delinquent debts in amounts ranging from $36 to $7,997 for about $15,952 in total. Nine of the debts are medical collection accounts for about $2,221 in total. The other 11 debts consist of collection or charged- off accounts. The SOR allegations are established by Applicant’s admissions and explanations as well as credit reports from October 2015 and October 2016.3

At the hearing, Applicant acknowledged that the 20 delinquent debts were still unpaid, none of the debts were in a repayment plan, none of the debts were settled, and none of the debts were cancelled or forgiven by the creditor.4 She attributed her inability to satisfy the debts to the actions of a former cohabitant. The best evidence on this point is the police report, which indicates that in August 2016 she accused her former boyfriend of stealing her 2015 federal income tax refund check for $6,293 and her 2015 state income tax refund check for $1,021.5 The police investigation included an interview of Applicant and her former boyfriend. The police concluded that Applicant’s allegations did not constitute a criminal matter, cancelled the probable cause pick-up or arrest of her former boyfriend, and concluded that the dispute between Applicant and her former boyfriend was a civil matter.

Applicant earns about $17 an hour, and she expects her gross income for 2016 will be in excess of $35,000.6 She had about $60 in a checking account, $5 in a savings account, and about $1,300 in a 401(k) account.7 She stated that she is current with her recurring monthly bills for living expenses.8 Her monthly budget reflects a positive net cash flow of about $321, which is available for repayment of her unpaid delinquent debts.9 Her recurring monthly bills include $61 and $27 payments for student loans, which have an estimated balance of $40,000.10 She wants to repay her delinquent debts, but acknowledged that she is not in a position to contact creditors and make repayment arrangements.11

Under Guideline F for financial considerations,12 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 a [person’s] reliability, trustworthiness, and ability to protect [sensitive] information.13

The concern is broader than the possibility that a person might knowingly compromise 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 sensitive information.

In analyzing the facts of this case, I considered the following disqualifying and mitigating conditions: AG ¶ 19(a) inability or unwillingness to satisfy debts;

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

AG ¶ 20(b) the conditions that resulted in the financial problems were largely beyond the person’s control (e.g., loss of employment, a business downturn, unexpected medical emergency, or a death, divorce, or separation), and the [person] acted responsibly under the circumstances;

AG ¶ 20(c) [t]here are clear indications that the problem is being resolved or is under control; and

AG ¶ 20(d) the [person] initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.

The evidence supports a conclusion that Applicant has a problematic financial history sufficient to raise a security concern under Guideline F. With that said, I have given little weight to the nine unpaid medical collection accounts for $2,221. It is presumed that her medical debt was incurred for necessary medical care or treatment as opposed to frivolous or irresponsible spending. Medical debt is unlike other types of debt, because it is often unplanned, unexpected, and can add hundreds if not thousands of dollars in debt in a short period. Here, Applicant does not have an unreasonable amount of unpaid medical debt. Accordingly, the allegations in SOR ¶¶ 1.g, 1.i, 1.l, 1.m, 1.n, 1.p, 1.r, 1.s, and 1.t are decided for Applicant.

The same cannot be said for the 11 unpaid collection or charged-off accounts. Undoubtedly, her ability to repay her delinquent debts was hindered by the loss of her income tax refund checks, which were circumstances beyond her control. Still, those circumstances are a relatively recent development as compared with the delinquent debts that have been in existence for some time. Moreover, she does not have a realistic plan in place to address the 11 unpaid collection or charged-off accounts, nor is there any evidence showing that she can adhere to such a plan. At this point in time, unfortunately, the totality of facts and circumstances show that she has not acted in good faith to address the delinquent accounts, and there are not clear indications that the problem is being resolved or is under control. In contrary, her financial problems are ongoing and likely to continue. Her ongoing financial problems cannot be fully mitigated under AG ¶¶ 20(b), (c) or (d).

Applicant’s history of financial problems creates doubt about her reliability, trustworthiness, good judgment, and ability to protect sensitive 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 gave due consideration to the whole-person concept. For all these reasons, I conclude Applicant did not meet her ultimate burden of persuasion to show that it is clearly consistent with the national interest to grant her eligibility for a public trust position.

The formal findings on the SOR allegations are:

Paragraph 1, Guideline F: For Applicant

Subparagraphs 1.a – 1.f: Against Applicant Subparagraph 1.g: For Applicant Subparagraph 1.h: Against Applicant Subparagraph 1.i: For Applicant Subparagraph 1.j – 1.k: Against Applicant Subparagraph 1.l – 1.n: For Applicant Subparagraph 1.o: Against Applicant Subparagraph 1.p: For Applicant Subparagraph 1.q: Against Applicant Subparagraph 1.r – 1.t: For Applicant

In light of the record as a whole, it is not clearly consistent with the interests of national security to grant Applicant eligibility for access to sensitive information.

Michael H. Leonard Administrative Judge

1 The AG were published in the Federal Register and codified in 32 C.F.R. § 154, Appendix H (2006). The AG replace the guidelines in Enclosure 2 to the Directive. 2 PII means information that can be used on its own or with other information to identify, contact, or locate a single person, or to identify an individual in context. 3 Answer to SOR; Exhibits 2, 3, and 4. 4 Tr. 29-31. 5 Exhibit A. 6 Tr. 27-28. 7 Tr. 48, 43. 8 Tr. 50-51. 9 Exhibit B. 10 Tr. 40-42. 11 Tr. 45. 12 AG ¶¶ 18, 19, and 20 (setting forth the concern and the disqualifying and mitigating conditions). 13 AG ¶ 18.