ISCR Case No. 16-02780.h1

DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS

In the matter of: ) ) ) ISCR Case No. 16-02780 ) Applicant for Security Clearance )

For Government: Carroll J. Connelley, Esq., Department Counsel For Applicant: Pro se 10/03/2017 ______________

______________

LYNCH, Noreen A., Administrative Judge:

Applicant contests the Department of Defense’s (DOD) intent to deny his eligibility for a security clearance to work in the defense industry. Applicant did not mitigate security concerns raised by his unresolved financial issues, including a tax lien, consumer debt, and student loans. Clearance is denied.

Statement of the Case

On October 29, 2016, the DOD issued a Statement of Reasons (SOR) detailing security concerns under the financial considerations guideline.1 DOD adjudicators were unable to find that it is clearly consistent with the national interest to continue Applicant’s security clearance and recommended that the case be submitted to an administrative judge for a determination whether to revoke his security clearance.

Applicant timely answered the SOR and requested an administrative determination. Department Counsel submitted a File of Relevant Material (FORM) dated January 12, 2016. Applicant received the FORM on January 26, 2017.2 He did not submit any submissions in response to the FORM. The case was assigned to me on October 1, 2017. Based on a review of the case file, submissions, and exhibits, eligibility for access to classified information is denied.

While the case was pending decision, the Director of National Intelligence (DNI) issued Security Executive Agent Directive 4, establishing the National Security Adjudicative Guidelines (AG) applicable to all covered individuals who require initial or continued eligibility for access to classified information or eligibility to hold a sensitive position. The 2017 AG superseded the AG implemented in September 2006, and they are effective for any adjudication made on or after June 8, 2017. Accordingly, I have applied them in this case.

Applicant is 34 years old. He graduated from high school in 2001. He attended community college and a technical institute, but did not obtain a degree. He served in the United States Army from 2003 through 2008. He received a General Discharge. He was married in 2003, and divorced in 2011, and he has five minor children. Since September 2013, he has been working overseas as an electronics repair technician. He has held a security clearance since 2004. Applicant completed his most recent security clearance application in December 2016, disclosing several delinquent accounts and his federal tax lien. He noted that he was working with a lawyer and a tax service to resolve the issue.3 The ensuing investigation confirmed these details as well as other unresolved financial issues.4

Applicant’s current background investigation revealed financial problems more extensive than those he disclosed on his 2016 security clearance application. Applicant filed for Chapter 13 bankruptcy in May 2013, and it was dismissed in July 2013. He filed for Chapter 13 bankruptcy in August 2013, and it was dismissed in October 2013. (1.c and 1.d) but states that he owes no money. The debts at subparagraphs 1.j, 1.k, i. and 1.l, were either claimed to be paid, not his debt, or he simply ignored. The remaining fourteen debts at 1.b, 1e.-1.i and 1.m to 1.t He denies without explanation, offering at the end that these debts no longer appear on his credit report. The delinquent debts on the SOR, which amount to approximately $63,000, are reflected on the credit reports in the record.5

Applicant admitted the allegation in 1.a as to the 2013 federal tax lien in the amount of $16,717, but he provided no documentation supporting a payment plan. He provided no evidence of any payments or plans for the delinquent debts, including the student loans. He simply denied all the student loans. He stated that a current credit report would show that SOR items would no longer appear on a credit report. The investigation also revealed that Applicant owes state taxes. Credit card debts were noted and Applicant stated during his investigative interview, that he planned to pay the accounts in full by April 2016. In that interview, Applicant also noted that he was working with Lexington Law (a debt consolidation firm) so that he could get his financial issues in order. 6

Applicant earns approximately $6,000 every two weeks in net pay. His wife also works, and her monthly pay is about $1,400. He has about $2,000 in savings, and about $5,000 in checking.

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines. 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 eligibility for access to classified information.

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 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(d) 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. Under Directive ¶ E3.1.15, 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.” The applicant has the ultimate burden of persuasion to obtain a favorable security decision.

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. 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 safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation of potential, rather than actual, risk of compromise of classified information.

Section 7 of 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).

Financial Considerations

Applicant’s finances remain a source of concern. Failure to meet one’s 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.7 Applicant’s admissions and the credit reports establish the Government’s prima facie case that Applicant has a history of not meeting his financial obligations and that he has an inability to do so.8 Applicant presented no evidence to mitigate the concerns about his tax debt or any payment plans or payments for all the other delinquent debts.9 He also denied owing the student loans which appear on his credit report. Applicant’s financial problems are ongoing and were not caused by events beyond his control.

After a review of the record and a consideration of the whole-person factors at AG ¶ 2(d), I conclude that Applicant’s financial problems render him unsuitable for continued access to classified information at this time. This decision should not be construed as a determination that Applicant cannot or will not attain the type of financial stability necessary to reapply for national security eligibility in the future. Rather, it is recognition of the fact that financial issues have historically been a motivating factor behind acts of espionage. The award of a security clearance is not a once-in-a-lifetime occurrence, but is based on applying the factors, both disqualifying and mitigating, to the evidence presented. While a favorable decision is not warranted at this time, he may present persuasive evidence of financial rehabilitation and reform in the future.

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, Financial Considerations: AGAINST APPLICANT

Subparagraphs 1.a-1.t: Against Applicant

In light of all of the circumstances presented, it is not clearly consistent with the national interest to grant Applicant a security clearance. Eligibility for access to classified information is denied.

________________________ Noreen A. Lynch Administrative Judge

1 The DOD CAF acted under Executive Order (EO) 10865, Safeguarding Classified Information within Industry, signed by President Eisenhower on February 20, 1960, as amended; as well as DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program, dated January 2, 1992, as amended (Directive), and the Adjudicative Guidelines for Determining Eligibility for Access to Classified Information, implemented on September 1, 2006. 2 The Government submitted seven items for the record. 3 Item 2 4 Item 3. 5 Items (2-7) 6 Item 3 7 AG ¶ 18.

8 AG ¶¶ 19 (a) and (c).