ISCR Case No. 17-04118.h1

DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS

In the matter of: ) ) ) ISCR Case No: 17-04118 ) ) Applicant for Security Clearance

For Government: Bryan Olmos, Esquire, Department Counsel For Applicant: Pro se

10/12/2018 ______________

______________

DAM, Shari, Administrative Judge:

Applicant failed to mitigate the financial considerations security concerns related to his history of delinquent debts. Based upon a review of the pleadings and exhibits, national security eligibility for access to classified information is denied.

On December 28, 2017, the Department of Defense (DOD) issued Applicant a Statement of Reasons (SOR), detailing security concerns under Guideline F (Financial Considerations). Applicant answered the SOR on January 12, 2018, and requested his case be decided by an administrative judge on the written record without a hearing (Answer). On February 16, 2018, Department Counsel submitted the Government’s written case. A complete copy of the File of Relevant Material (FORM), containing six Items, was mailed to Applicant and received by him on February 28, 2018. The FORM notified Applicant that he had an opportunity to file objections and submit material in refutation, extenuation, or mitigation within 30 days of receipt of the FORM. Applicant did not submit a response to the FORM or object to the Government’s evidence. Items 1 through 6 are admitted into evidence without objection. The Defense Office of Hearings and Appeals (DOHA) assigned this case to me on July 30, 2018.

Applicant admitted the 13 delinquent debts alleged in the SOR and that he filed a Chapter 7 bankruptcy in 2009. (Item 2)

Applicant is 42 years old. He graduated from high school in 1994. He is married to his second wife. He has two children. He held a clearance in the past. In 2013, he started working for his current employer, a defense contractor. (Item 3, Item 4)

On May 5, 2017, Applicant submitted a security clearance application (SCA). In it he disclosed that he had medical debts that he was disputing. During a September 2017 background interview, Applicant was confronted about the medical debts, other delinquent debts, and a 2009 Chapter 7 bankruptcy Applicant and his former wife filed. (Item 4)

Applicant acknowledged that he and his former wife spent more money than they earned in the mid-2000s, which lead to their filing a 2009 Chapter 7 bankruptcy. He thinks the bankruptcy court discharged about $50,000 in October 2009; however the bankruptcy documents indicate that the amount could have been over $60,000. He and his former spouse divorced in 2011. He said his financial situation has improved since then. (Item 3, Item 4, Item 6)

Based on Applicant’s admissions and a credit bureau report (CBR) from June 2017, the SOR alleged 13 debts that became delinquent between 2014 and 2017, and totaled over $11,049. They included unpaid credit cards, medical debts, and miscellaneous bills. In his Answer, he admitted that he has been financially irresponsible in the past, but intended to repair his credit and pay his debts. He stated that he was making payments on larger debts, and slowly resolving the others. (Item 2)

Applicant did not include any evidence confirming his assertions that he was making payments on debts or steps he has taken to resolve debts. He did not provide a current budget or other information related to his financial obligations from which to determine current financial reliability, compliance with payment agreements, or ability to maintain payments on the debts.

This case is adjudicated under Executive Order (EO) 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; DOD 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 within the DOD on June 8, 2017.

When evaluating an applicant’s suitability for national security eligibility, the administrative judge must consider the pertinent AG. In addition to brief introductory explanations of the security concern, the 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, these guidelines are applied 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. The entire process is a conscientious scrutiny of applicable guidelines in the context 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. I have not drawn inferences based on mere speculation or conjecture.

Directive ¶ E3.1.14 requires the Government to present evidence to establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, an “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 applying for national security eligibility 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 national security eligibility. 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 or sensitive information.

Guideline F: Financial Considerations

The security concerns relating to the guideline for financial considerations are set out in AG ¶ 18, which reads in pertinent part:

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 personal 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.

AG ¶ 19 describes three conditions that could raise security concerns and may be disqualifying 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.

This concern is broader than the possibility that an individual might knowingly compromise classified information in order to raise money. It encompasses concerns about an individual’s self-control, judgment, and other qualities essential to protecting classified information. An individual who is financially irresponsible may also be irresponsible, unconcerned, or negligent in handling and safeguarding classified information.1

Based on his admissions and a CBR, Applicant has a history of being unable or unwilling to meet financial obligations, which began in the mid-2000s and continues into the present. The evidence raises security concerns under the above disqualifying conditions, and shifts the burden to Applicant to rebut, extenuate, or mitigate those concerns.

The guideline includes conditions in AG ¶ 20 that could mitigate security concerns arising from Applicant’s financial problems. Four are potentially applicable: (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;

(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, or a death, divorce or separation, clear victimization by predatory lending practices, or identity theft), and the individual acted responsibly under the circumstances;

(c) the individual has received or is receiving financial counseling for the problem from a legitimate and credible source, such as a non-profit credit counseling service, and there are clear indications that the problem is being resolved or is under control; and

(d) the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts.

There is no evidence in the record to establish mitigation under any of the above mitigating conditions. The delinquent debts alleged in the SOR arose between 2014 and 2017; all 13 remain unresolved. Prior to accumulating those debts, Applicant had discharged about $60,000 of delinquent debts in a 2009 Chapter 7 bankruptcy. AG ¶ 20 (a) does not apply. Applicant attributed his delinquent debts and bankruptcy to irresponsibly managing his finances. Those were circumstances within his control. He did not provide evidence that he has attempted to responsibly manage his financial obligations. AG ¶ 20(b) does not apply. There is no evidence that he has participated in credit or financial counseling, and that his delinquent debts are being resolved and are under control. AG ¶ 20(c) does not apply. He did not provide evidence that he has made- good faith efforts to repay or resolve his debts. AG ¶ 20(d) does not apply.

Under the whole-person concept, the administrative judge must evaluate an applicant’s national security eligibility 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. According to AG ¶ 2(c), the ultimate determination of whether to grant national security eligibility must be an overall commonsense judgment based upon careful consideration of the applicable guidelines and the whole-person concept.

I considered the potentially disqualifying and mitigating conditions in light of all pertinent facts and circumstances surrounding this case. I have incorporated my comments under Guideline F in my whole-person analysis. Some of the factors in AG ¶ 2(d) were addressed under that guideline, but some warrant additional comment.

Applicant is a mature individual who began working for a defense contractor in 2013. In his May 2017 SCA, he disclosed that he had unpaid medical debts. During a September 2017 interview, he discussed his 2009 Chapter 7 bankruptcy and delinquent debts that he accumulated subsequent to that which were unresolved. In the December 2017 SOR, the Government placed him on notice that his debts and past bankruptcy raised security concerns. After reviewing his Answer to the SOR, Department Counsel notified him in the FORM that he failed to submit sufficient documentation to address the status of the debts and to mitigate the financial allegations. Despite that notice, he did not provide additional evidence to confirm that he was resolving debts as he stated in his Answer. At this time, he has failed to present sufficient evidence of mitigation, including a track record of responsibly managing debts and financial obligations. He failed to meet his burden to mitigate the security concerns arising under the guideline for financial considerations.

Formal findings for or against Applicant on the allegations set forth in the SOR, as required by ¶ E3.1.25 of Enclosure 3 of the Directive, are:

Paragraph 1, Guideline F: AGAINST APPLICANT

Subparagraphs 1.a through 1.n: 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 access to classified information. National security eligibility is denied.

SHARI DAM Administrative Judge

1 See ISCR Case No. 11-05365 at 3 (App.Bd. May 1, 2012).