ISCR Case No. 16-01042.h1

DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS

In the matter of: ) ) ) ADP Case No. 16-01042 ) ) Applicant for Public Trust Position

For Government: Gina Marine, Esq., Department Counsel For Applicant: Pro se

11/01/2017 ______________

______________

RICCIARDELLO, Carol G., Administrative Judge:

Applicant failed to mitigate the trustworthiness concerns under Guideline F, financial considerations. Eligibility for access to sensitive information is denied.

Statement of the Case

On July 1, 2016, the Department of Defense Consolidated Adjudications Facility (DOD CAF) issued a Statement of Reasons (SOR) to Applicant detailing trustworthiness concerns under Guideline F, financial considerations. The action was taken under DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG) effective within the DOD on September 1, 2006. On June 8, 2017, new AG were implemented and are effective for decisions issued after that date.1 Applicant answered the SOR on August 8, 2016, and elected to have her case decided on the written record in lieu of a hearing. Department Counsel submitted the Government’s file of relevant material (FORM). Applicant received it on October 6, 2016. She was afforded an opportunity to file objections and submit material in refutation, extenuation, or mitigation within 30 days of receipt of the FORM. The Government’s evidence is identified as Items 1 through 7. Applicant did not provide a response to the FORM, object to the Government’s evidence, or submit documents. Items 1 through 7 are admitted into evidence. The case was assigned to me on October 1, 2017.

Applicant admitted all of the SOR allegations. After a thorough and careful review of the pleadings and exhibits submitted, I make the following findings of fact.

Applicant is 48 years old. She earned a bachelor’s degree in 2009. She took additional college classes in 2009 through 2012, but did not earn a degree. She married in 1993. She and her husband have been separated at different times over the past ten years, but are currently living together. They have two children, ages 24 and 16. She has worked for her current employer since 1993.2

The SOR alleges 22 unresolved debts totaling approximately $59,150. In her answer, Applicant admitted these debts. The allegations are also supported by disclosures in Applicant’s security clearance application, credit reports from October 2015 and June 2016, and bankruptcy records. Six of the SOR-alleged debts are for student loans (¶¶ 1.a through 1.f, total balance-$35,699). She attributed her financial problems to inconsistent income contributions from her husband during periods they were separated. She also attributed the problems to assisting her mother with medical expenses from 2014 when she was ill, until she passed away in July 2016. Some of the debts alleged are for medical bills related to ongoing medical care for Applicant, others are consumer debts. Some of her delinquent debts began accumulating in 2011.3

Applicant and her husband filed Chapter 13 bankruptcy in March 2016. Under the terms of the Chapter 13 plan, they were to pay $1,700 per month for the first 2 months and then $1,775 per month for 58 months. Applicant indicated in her answer to the SOR, that $1,700 was being garnished from her husband’s wages. It is unknown why the ordered amount was not being garnished. Applicant did not provide documentary evidence to show the full amount was being garnished or paid.4

Applicant provided a copy of the bankruptcy trustee’s record that reflects that the amount paid for May 2016 and June 2016 falls short of the amount ordered to be paid. Applicant did not provide an explanation or additional records to support that they have been making consistent accurate payments to the trustee.5

A review of Applicant’s bankruptcy schedules shows that Applicant and her husband owe additional delinquent debt beyond what is alleged in the SOR.6 Included in the schedules are a debt to the Internal Revenue Service ($5,821) for unpaid taxes for tax years 2011 through 2014, a state tax lien ($74), a debt for unpaid property tax ($538), and a delinquent mortgage account. It appears from the bankruptcy record that Applicant has other student loans not alleged that are deferred.7

The bankruptcy documents also reflected a July 2016 motion to the bankruptcy court from Applicant’s mortgage lender. The motion indicated that Applicant and her husband had failed to make their mortgage payments for May, June, and July 2016, as required, and owed $3,727. The matter was settled by the court, which ordered Applicant and her husband to resume, in September 2016, their regular monthly mortgage payment of $1,242, and to cure the arrearages of $4,970, by paying $552 a month for eight months. It is unknown if they complied with the order.8

In November 2015, Applicant was interviewed by a government investigator. She told the investigator that she had student loans. She did not know the balance owed or the identity of the creditors. She had not made timely monthly payments and recently had obtained a hardship forbearance for the loans. She did not know when she would be able to pay them. She stated she rotated paying her bills because it was difficult to pay them all when they were due, and she tried to pay them in the most timely manner.9 No additional documentary evidence was provided to substantiate Applicant is in compliance with the Chapter 13 plan. Other information about her current finances was not provided.

The Deputy Under Secretary of Defense (Counterintelligence and Security) Memorandum, dated November 19, 2004, indicates trustworthiness adjudications will apply to cases forwarded to the Defense Office of Hearings and Appeals by the Defense Security Service and Office of Personnel Management. Department of Defense contractor personnel are afforded the right to the procedures contained in the Directive before any final unfavorable access determination may be made. When evaluating an applicant’s suitability for a public trust position, the administrative judge must consider the disqualifying and mitigating conditions in the AG. 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 the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶ 2(c), 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(b) requires that “[a]ny doubt concerning personnel being considered for national security eligibility will be resolved in favor of the national security.”

Directive ¶ E3.1.14, states that the Government must present evidence to establish controverted facts alleged in the SOR. Directive ¶ E3.1.15 states that the applicant is responsible for presenting “witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by applicant or proven by Department Counsel.” The applicant has the ultimate burden of persuasion to obtain a favorable trustworthiness decision.

A person who seeks access to sensitive 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 sensitive information. Decisions include, by necessity, consideration of the possible risk the applicant may deliberately or inadvertently fail to safeguard sensitive information. Such decisions entail a certain degree of legally permissible extrapolation of potential, rather than actual, risk of compromise of sensitive information.

Guideline F: Financial Considerations

The trustworthiness concern relating to the guideline for financial considerations is set out in AG ¶ 18:

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 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 or otherwise questionable acts to generate funds. Affluence that cannot be explained by known sources of income is also a security concern insofar as it may result from criminal activity, including espionage.

AG ¶ 19 provides conditions that could raise trustworthiness concerns. The following are potentially applicable:

(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.

Applicant has numerous delinquent debts that began accumulating in 2011 and are unresolved. There is sufficient evidence to support the application of the above disqualifying conditions.

The guideline also includes conditions that could mitigate trustworthiness concerns arising from financial difficulties. The following mitigating conditions under AG ¶ 20 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, 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;

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

Applicant has numerous delinquent debts. She and her husband filed for Chapter 13 bankruptcy protection in March 2016. Applicant did not provide sufficient evidence to conclude she is in compliance with the plan. Her financial problems are recent and ongoing. AG ¶ 20(a) does not apply.

Applicant attributed her financial problems to her husband’s failure to contribute financially when they were separated. She also indicated she had medical expenses associated with her mother and herself. Specific information was not provided. These were conditions that likely were beyond her control. For the full application of AG ¶ 20(b) Applicant must provide evidence that she acted responsibly under the circumstances. It is unknown when Applicant and her husband reconciled, and when he began contributing to the household income. It is unknown what efforts were made to address the debts before they filed bankruptcy. Filing Chapter 13 bankruptcy may show that a person is attempting to responsibly address delinquent debt, but Applicant failed to provide documentation to show she is in compliance with the plan. There is insufficient evidence to show Applicant has responsibly addressed her delinquent finances. AG ¶ 20(b) has partial application.

As part of the bankruptcy proceedings, financial counseling is required. For the application of AG ¶ 20(c), Applicant must show there are clear indications that the problems is being resolved and under control. There is insufficient evidence to make such a conclusion. AG ¶ 20(c) does not apply. There is evidence that Applicant had a Chapter 13 payment plan. There is evidence that some payments were made to the plan, but not the amount ordered. Applicant did not provide additional evidence to explain the deficient payments or that she is in compliance with plan. AG ¶ 20(d) does not apply.

Under the whole-person concept, the administrative judge must evaluate an applicant’s eligibility for a trustworthiness determination by considering the totality of the applicant’s conduct and all the 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.

Under AG ¶ 2(c), the ultimate determination of whether to grant eligibility for a trustworthiness determination must be an overall commonsense judgment based upon careful consideration of the guidelines and the whole-person concept.

I considered the potentially disqualifying and mitigating conditions in light of all the 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 48 years old. She has been working since 1993. She and her husband were separated at different times during the past 10 years, and she could not rely on his income to help her with her finances. It is unknown when Applicant’s husband returned to the home. She helped her mother with her medical needs from 2014 to 2016. Applicant and her husband filed Chapter 13 bankruptcy in March 2016. The evidence is insufficient to conclude that they are in compliance with the payment plan. In addition, the bankruptcy records reflect other delinquent debts that are not alleged, including unpaid federal taxes for multiple tax years, a state tax lien, and delinquent property taxes. Applicant has numerous student loans that she also owes. She has not established a reliable financial track record. The record evidence leaves me with questions and doubts as to Applicant’s eligibility and suitability for a trustworthiness determination. For all these reasons, I conclude Applicant failed to mitigate the trustworthiness arising under Guideline F, financial considerations.

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, Guideline F: AGAINST APPLICANT

Subparagraphs 1.a-1.v: Against Applicant

In light of all of the circumstances presented by the record in this case, it is not clearly consistent with the national security to grant Applicant’s eligibility for a public trust position. Eligibility for access to sensitive information is denied.

_____________________________ Carol G. Ricciardello Administrative Judge

1 I considered the previous AG, effective September 1, 2006, as well as the new AG, effective June 8, 2017. My decision would be the same if the case was considered under the previous AG. 2 Item 3. 3 Items 1, 2, 3, 5, 6, 7. 4 Item 2. 5 Item 2 at page 10. 6 Item 7. I will not consider the additional debt or any other derogatory information for disqualifying purposes, but may consider it when making a credibility determination, in the application of mitigation, and in a whole- person analysis. 7 Some of the student loans may be the same as those alleged in the SOR. 8 Item 7. 9 Item 4.