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ISCR Case 16-01422.h1 — CASE

ISCR Case 16-01422.h1denied

Case Headnote

ISCR Case No. 16-01422.h1

deniedAug 15, 2017· Hon. Elizabeth M. Matchinski· hearing

Summary

A 45-year-old welder was denied his first Department of Defense security clearance due to concerns under Guideline E (Personal Conduct), Guideline F (Financial Considerations), and Guideline H (Drug Involvement). The applicant had a history of marijuana use from at least February 2015 to October 2015, and tested positive for marijuana in an employer-administered drug screen. Although he used marijuana legally under a state medical program until December 2016, he continued usage after stating he would not, and indicated an intent to continue use.

Additionally, the applicant had several unresolved financial delinquencies. These included a $40,176 charged-off loan, a $659 past-due utility debt, wireless phone debts of $437 and $106 (the latter in collection), a $399 electric utility debt in collection, and a $116 medical debt. The applicant failed to provide documentation demonstrating the resolution of these financial issues.

The judge found that the applicant's conduct, specifically his continued marijuana use despite assurances to the contrary and his failure to resolve significant financial delinquencies, raised substantial questions about his reliability and trustworthiness. Consequently, the security clearance was denied.

Why the Applicant Was Denied

Applicant used marijuana under a state medical marijuana program until December 2016, despite stating he would not use it in the future.
Applicant failed to provide documentation showing resolution of his financial delinquencies, which included a charged-off second mortgage and other debts.

Conditions Referenced

Disqualifying

AG ¶ 25(a)raisedSubstance Misuse
AG ¶ 25(c)raisedIllegal Possession of a Controlled Substance
AG ¶ 25(g)raisedExpressed Intent to Continue Drug Involvement

Mitigating

AG ¶ 26(b)rejectedAcknowledgment of Drug InvolvementWhile the applicant acknowledged his drug involvement, he did not establish a sufficient pattern of abstinence.

Key Rule Quoted

“The illegal use of controlled substances...can raise questions about an individual’s reliability and trustworthiness.”

Procedural Posture

SOR issuedOct 3, 2016
Answer filedNov 1, 2016
Hearing heldMar 28, 2017
Decision dateAug 15, 2017

Cite For

Denial of Security Clearance Due to Ongoing Drug Involvement Under Guideline H
Financial Considerations Impacting Security Clearance Under Guideline F
Failure to Establish a Pattern of Abstinence From Drug Use as a Mitigating Factor Under AG ¶ 26(b)

Editorial summary generated for research. Not legal advice; not a prediction. Verify against the full decision before relying on any quoted language.

Standardized Decision Profile

SEAD-4 Guideline E (Personal Conduct) · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The judge withdrew the allegations under Guideline E, indicating that there were no personal conduct concerns to adjudicate. As a result, the findings for Guideline E were not formally established, leading to a denial of the security clearance based on other guidelines.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
3.a–3.c	3 sub-charges — specific text not stated in this decision (rulings shown).	Mixed		—		—	—	—

Descriptive standardized rendering of a decided public case (Guideline E). The verbatim source decision is shown in full below.

Standardized Decision Profile

SEAD-4 Guideline F · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The judge found against the applicant on all financial allegations under Guideline F, citing unresolved debts including a charged-off loan and various utility and medical debts. The applicant's financial situation was noted to have stabilized, but he failed to provide documentation showing that his delinquencies had been resolved, leading to a denial of his security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
2.a	owed a $40,176 charged-off loan $40,176	Against Applicant	Unspecified Financial	Denied	—	—	—
2.b	a past-due utility debt of $659 $659	Against Applicant	Utility or Phone Debt	Denied	—	—	—
2.c	wireless phone debts of $437 $437	Against Applicant	Utility or Phone Debt	Denied	—	—	—
2.d	a $399 electric utility debt in collection $399	Against Applicant	Utility or Phone Debt	Denied	—	—	—
2.e	a $116 medical debt $116	Against Applicant	Medical Debt	Denied	—	—	—
2.f	a $106 wireless phone debt in collection $106	Against Applicant	Utility or Phone Debt	Denied	—	—	—

Descriptive standardized rendering of a decided public case (Guideline F). The verbatim source decision is shown in full below.

Standardized Decision Profile

SEAD-4 Guideline H (Drug Involvement) · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The judge found that the applicant used marijuana weekly from February 2015 to December 2016 under a state medical marijuana program, which is not recognized under federal law. The applicant expressed an intention to discontinue use but continued to use marijuana after denying future use, leading to concerns about reliability and trustworthiness. The judge ruled against the applicant on two allegations and for the applicant on one, resulting in a denial of the security clearance.

¶	Allegation	Finding	Substance / event	Use level	Response	Disqualifying (¶25)	Mitigating applied (¶26)	Mitigation
1.a	Applicant used marijuana with varying frequency from at least February 2015 to October 2015	Against Applicant	Marijuana	Frequent	Denied	(a) any substance misuse (c) illegal possession, cultivation, manufacture, purchase, sale, or distribution; or paraphernalia	—	—
1.b	Applicant intends to continue to use marijuana	Against Applicant	Stated Intent to Use Again	Not Applicable	Denied	(a) any substance misuse (g) expressed intent to continue, or failure to commit to discontinue	—	—
1.c	Applicant tested positive for marijuana in a drug screen administered by his current employer	For Applicant	Drug Test Failure	Not Applicable	Denied	—	—	—

Descriptive standardized rendering of a decided public case (Guideline H). The verbatim source decision is shown in full below.

Full decision

The complete, official text — footnotes and signatures included — is in the original PDF.

Decision text, by section

DEFENSE OFFICE OF HEARINGS AND APPEALS

HEARING

APPEARANCES

DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS

In the matter of: ) ) (Redacted) ) ISCR Case No. 16-01422 ) Applicant for Security Clearance )

For Government: Carroll J. Connelley, Esq., Department Counsel For Applicant: Pro se

08/15/2017 ______________

STATEMENT OF CASE

______________

MATCHINSKI, Elizabeth M., Administrative Judge:

Applicant used marijuana from February 2015 to December 2016 under his state’s medical marijuana program, including after he had informed the Department of Defense that he had no intention to use marijuana in the future. After losing his home to foreclosure in 2012, he owed a charge-off balance on a second mortgage. While his financial situation has stabilized, he has not provided documentation showing that his old delinquencies have been resolved. The financial considerations and drug involvement security concerns are not yet fully mitigated. Clearance is denied.

Statement of the Case

On October 3, 2016, the Department of Defense Consolidated Adjudications Facility (DOD CAF) issued a Statement of Reasons (SOR) to Applicant, detailing the security concerns under Guideline H (drug involvement and substance misuse), Guideline F (financial considerations), and Guideline E (personal conduct), and explaining why it was unable to find it clearly consistent with the national interest to grant or continue security clearance eligibility for him. The DOD CAF took the action 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 Adjudicative Guidelines for Determining Eligibility for Access to Classified Information effective within the DOD on September 1, 2006.

On November 1, 2016, Applicant answered the SOR allegations and requested a hearing before an administrative judge from the Defense Office of Hearings and Appeals (DOHA). On March 2, 2017, the case was assigned to me to conduct a hearing to determine whether it is clearly consistent with the national interest to grant or continue a security clearance for Applicant. On March 9, 2017, I scheduled a hearing for March 28, 2017.

I convened the hearing as scheduled. Before the introduction of any evidence, Department Counsel withdrew the Guideline E allegations in the SOR. Four Government exhibits (GEs 1, 3-5) were admitted in evidence. Proposed GE 2, a summarized report of subject interview, was withdrawn by Department Counsel after Applicant objected. GE 3, an incident report filed by Applicant’s employer, was admitted over Applicant’s concerns about its accuracy. Applicant testified, as reflected in a transcript (Tr.) received on April 5, 2017.

I held the record open after the hearing for documents from Applicant. On April 25, 2017, Applicant submitted his medical record, which was admitted without objection as Applicant exhibit (AE) A. At Applicant’s request, I extended the deadline for Applicant to submit his credit report, which was received on May 5, 2017. Department Counsel indicated on May 8, 2017, that the Government did not object to its admission. I admitted the document as AE B and closed the record.

While this case was pending a decision, the Director of National Intelligence (DNI) issued Security Executive Agent (SecEA) Directive 4 establishing National Security Adjudicative Guidelines (AG) applicable to all covered individuals who require national security eligibility. The AG supersede the adjudicative guidelines implemented in September 2006 and are effective for any adjudication made on or after June 8, 2017. Accordingly, I have adjudicated Applicant’s security clearance eligibility under the new AG.1

Summary of SOR Allegations

The SOR alleges under Guideline H that Applicant used marijuana with varying frequency from at least February 2015 to October 2015 (SOR ¶ 1.a); that Applicant intends to continue to use marijuana (SOR ¶ 1.b), and that he tested positive for marijuana in a drug screen administered by his current employer (SOR ¶ 1.c). Under Guideline F, Applicant allegedly owed a $40,176 charged- off loan (SOR ¶ 2.a); a past-due utility debt of $659 (SOR ¶ 2.b); wireless phone debts of $437 (SOR ¶ 2.c) and $106 (SOR ¶ 2.f) in collection; a $399 electric utility debt in collection (SOR ¶ 2.d); and a $116 medical debt (SOR ¶ 2.e). Applicant denied the allegations in the SOR, SOR ¶¶ 2.b-2.fbecause they had been paid.

FINDINGS OF FACT

After considering the pleadings, exhibits, and transcript, I make the following findings of fact.

Applicant is a 45-year-old welder who has worked for his current employer, a defense contractor, since June 2015. He married his cohabitant girlfriend in June 2016. He has two sons, who are now ages 12 and 5, who reside with him and his spouse. Applicant seeks his first DOD security clearance. (GE 1; Tr. 39-40, 56.)

On May 18, 2015, Applicant completed and certified to the accuracy of a Questionnaire for National Security Positions (SF 86). Applicant disclosed a felony conviction from 1991, for which he was incarcerated for ten years.2 He listed no drug involvement or financial issues of potential security concern. (GE 1.)

Drug Involvement

Applicant reported during a pre-employment physical examination for his current job that he had a medical marijuana card. (AE A; Tr. 45-46.) On May 22, 2015, Applicant’s employer filed an incident report advising the DOD that Applicant was in possession of a state-issued medical marijuana card and that Applicant failed to acknowledge that fact on his security clearance application. (GE 3.)

Applicant had a valid medical marijuana card from January 21, 2015, to January 21, 2017, to address chronic pain issues. He had shoulder surgery in June 2006 and knee surgery in September 2012 following a fall from a scaffold at work in May 2012. Applicant had taken prescribed narcotics with unpleasant side effects. On November 8, 2014, a physician certified that Applicant had severe, debilitating, chronic pain in his right knee and left shoulder, which qualified him for the medical marijuana program. (AE A; Tr. 37-38, 43-44, 50.) When Applicant applied for enrollment in the state’s medical marijuana program, he was informed in writing about marijuana as a medication, including that “possession of cannabis is still currently illegal under federal law.” Applicant certified that he understood. (AE A.)

Applicant used marijuana in edible form or by smoking approximately once or twice a week from February 2015 to December 2016.3 (AE A; Tr. 52.) Applicant obtained his marijuana from plants cultivated in his home by a friend for him or from a dispensary. (Tr. 38, 88.) He testified that under the medical marijuana program, he could legally grow 50 plants, of which half could be in a vegetative state. (Tr. 87-88.) Applicant took a pre-employment drug screen (hair follicle test), which he submits was negative for marijuana because he would not have been hired if he had tested positive for the drug. (Tr. 56-61.) He attributed the negative drug screen to the fact that he used “very little” of the drug. (Tr. 59.) Applicant was not told that it was contrary to his employer’s drug-free workplace policy to use marijuana legally for a valid medical reason. (Tr. 47-48.)

Applicant received the SOR on October 13, 2016, advising him of the Government’s concerns about his use of marijuana. He indicated in response on November 1, 2016, that he did not intend to use marijuana in the future. (Answer.) He sought assistance from security personnel at work when completing his response and was told that it would be in his best interest to not use marijuana and to not renew his eligibility for the medical marijuana program if he wanted a security clearance. (Tr. 53, 83.) Applicant testified that he “followed that advice.” (Tr. 53.) When asked why he used marijuana in December 2016 after he had received the SOR and denied any intention of future use, Applicant indicated that he did not realize his marijuana use was problematic because his employer knew that he had a medical marijuana card when he was hired. (Tr. 80-81.)

At his hearing in March 2017, Applicant denied any use of marijuana before he obtained his medical marijuana card. (Tr. 80.) He expressed an intention not to use marijuana in the future because he values his job with his employer. A security clearance would open opportunities for a better position. (Tr. 53-55.) In an apparent reference to his criminal past, he acknowledged that he had “got in a lot of trouble” when he was young, and he wants to set a good example for his children and continue to contribute to society. (Tr. 85-86.) He did not renew his eligibility for the state’s medical marijuana program. (Tr. 37.) He has not had any marijuana in his home since December 2016. (Tr. 88.)

Financial Considerations

Applicant was employed as an insulation technician when he bought a home in March 2006. He obtained a primary mortgage loan of $152,000 and a second mortgage loan of $38,000. Six months later, he began working as a welder. He made timely monthly payments of approximately $711 on the primary mortgage and $398 on the second mortgage. (GEs 1, 4.)

Applicant had a significant period of unemployment, although there is discrepant information in the record about the dates. He indicated on his May 18, 2015 SF 86 that he was employed until February 2011, when his then employer closed its business. He reported that he was unemployed through August 2013. (GE 1.) Available medical records indicate that he was employed in 2012, so it is likely that he out of work from 2009 until 2012, as he testified at his hearing. (Tr. 33.)

Applicant made no payments on his mortgage loans after January 2011. In August 2011, the holder of the second mortgage charged off a loan balance of $40,176 (SOR ¶ 2.a). In January 2012, the holder of his primary mortgage foreclosed on his home and closed his account. The home was sold, and Applicant was not held liable for any deficiency balance on that loan. (GEs 4, 5; AE B; Tr. 33-34, 66.)

Applicant made no payments on a $116 medical debt incurred in December 2008 and placed for collection in August 2009 (SOR ¶ 2.e) or on a $659 telephone services (SOR ¶ 2.b) debt from May 2010. In May 2011, the debt was placed for collection. In February 2011, a $399 electric utility debt (SOR ¶ 2.d) was placed for collection for nonpayment since December 2010. A $437 wireless phone debt incurred in June 2011 (SOR ¶ 2.c) went unpaid. In August 2012, another cell phone provider assigned a $106 debt (SOR ¶ 2.f) for collection. (GE 4.)

As of April 2016, the $40,176 charged-off second mortgage was still on Applicant’s credit record.4 (GE 5.) In the process of purchasing a new home, he retained the services of a credit repair company to have the debt removed from his credit report. He was told that he was not required to pay the debt because it had been charged off. (Tr. 68-69.) Applicant was disputing the $659 reported telephone delinquency (SOR ¶ 1.b) on his credit record. His credit report showed no other past-due debts. He was making timely payments on a charge account with a balance of $9,458 as of March 2016. He was an authorized user on another revolving charge account with a $249 balance. (GE 5.) In late April 2016, Applicant and his spouse bought a house for $218,000. (Tr. 79.) Applicant obtained an FHA mortgage loan for $214,787, to be repaid at $1,703 monthly. He had no history of late payment on the account as of June 2017. In January 2017, Applicant took out a truck loan for $15,389, to be repaid at $273 monthly. He bought a 2008 model-year vehicle. His account was current with a balance of $14,976 as of April 2017. (AE B; Tr. 66, 72-73.) As of May 2017, Trans Union was reporting the defaulted second mortgage on his foreclosed property as “PAID IN FULL/WAS A CHARGE OFF,” but also with a balloon payment of $32,800 due on April 1, 2021. The credit listing is scheduled to be removed from his credit record in January 2018. (AE B.)

Applicant’s take-home pay from his defense contractor employment is $785-$800 a week, depending on overtime income. His spouse works as a counselor and her income varies. She has a car payment of $280 a month. Their monthly utility costs average $400. His spouse pays for bundled Internet, telephone, and cable television services, which he estimated at $200-$300 a month. They have childcare expenses of $130 a week and medical prescription expenses that fluctuate. (Tr. 72- 77.) He testified that he is an authorized user on his spouse’s credit cards, which had aggregate balances of $18,000 to $19,000. (Tr. 77-78.) As of May 2017, Trans Union was reporting that the revolving charge with a $9,458 balance in March 2016 had been paid off in December 2016. However, the credit card that had a $249 balance in March 2016 had a balance of $9,298 as of April 2017. The collection accounts that Applicant maintains have been paid (SOR ¶¶ 2.b-2.f) were no longer on his credit record. (AE B.) However, he presented no documentation corroborating that they have been resolved.

POLICIES

The U.S. Supreme Court has recognized the substantial discretion the Executive Branch has in regulating access to information pertaining to national security, emphasizing that “no one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). 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 required to be considered 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, these guidelines are applied in conjunction with the factors listed in the adjudicative process. The administrative judge’s overall 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(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. 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 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 that the applicant may deliberately or inadvertently fail to safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation about potential, rather than actual, risk of compromise of classified information. Section 7 of EO 10865 provides that 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).

ANALYSIS

Guideline H: Drug Involvement and Substance Misuse

The security concerns about drug involvement and substance misuse are articulated in AG ¶ 24:

The illegal use of controlled substances, to include the misuse of prescription and non-prescription drugs, and the use of other substances that cause physical or mental impairment or are used in a manner inconsistent with their intended purpose can raise questions about an individual’s reliability and trustworthiness, both because such behavior may lead to physical or psychological impairment and because it raises questions about a person’s ability or willingness to comply with laws, rules, and regulations. Controlled substance means any “controlled substance” as defined in 21 U.S.C. 802. Substance misuse is the generic term adopted in this guideline to describe any of the behaviors listed above.

Applicant used marijuana5 under his state’s medical marijuana program on a weekly basis from February 2015 to December 2016. His use was legal in his state, and there is no evidence that he violated state law by sharing or selling some of the marijuana that he cultivated in his home or purchased from an authorized dispensary. However, federal law does not recognize marijuana as having any legitimate medical use. See 21 U.S.C. § 812(B) (defining Schedule I drugs as having a high potential for abuse, no currently accepted medical use in treatment in the United States, and lack accepted safety for use under medical supervision. State laws pertaining to marijuana use do not alter existing national security adjudicative guidelines, and marijuana use remains against DOD policy. Disqualifying conditions AG ¶ 25(a), “any substance misuse,” and AG ¶ 25(c), “illegal possession of a controlled substance, including cultivation, processing, manufacture, purchase, sale, or distribution; or possession of drug paraphernalia,” apply.

When Applicant responded to the SOR on November 1, 2016, he indicated that he did not intend to continue to use marijuana. Concerning his decision to cease his marijuana use, Applicant testified in March 2017 that he sought the assistance of security personnel at work to respond to the SOR allegations, and he was advised that it would be in his best interest to discontinue his medical marijuana use if he wanted a security clearance. His use of marijuana to at least sometime in December 2016, after he had denied any intention of future use, implicates the second component of AG ¶ 25(g), “expressed intent to continue drug involvement and substance misuse, or failure to clearly and convincingly commit to discontinue such misuse.” The Government did not meet its burden of showing that Applicant tested positive for marijuana in a drug screen for his current employer, so AG ¶ 25(b), “testing positive for an illegal drug,” was not established.

Applicant’s use of marijuana on a weekly basis to December 2016 was neither so infrequent nor so far in the past to be mitigated under AG ¶ 26(a), which provides:

5 Schedules I, II, III, IV, and V, as referred to in the Controlled Substances Act, are contained in 21 U.S.C. § 812(c). Marijuana is a Schedule I drug. Despite some states providing for medical marijuana use or the decriminalization or legalization of recreational use of minor amounts of the drug, marijuana remains a Schedule I controlled substance under federal law. Such drugs have a high potential for abuse, no currently accepted medical use in treatment in the United States, and lack accepted safety for using the drug under medical supervision. (a) the behavior happened so long ago, was so infrequent, or happened under such circumstances that it is unlikely to recur or does not cast doubt on the individual’s current reliability, trustworthiness, or good judgment.

Medical records in evidence (AE A) show that Applicant disclosed to his employer during his pre-employment physical examination that he was using cannabis “once per week to twice per week” under his state’s medical marijuana program. AG ¶ 26(b) has some applicability in that Applicant acknowledges his drug involvement. He has taken steps “to overcome this problem” by not renewing his medical marijuana card. Applicant testified under advisement of Title 18, Section 1001 of the United States Code that he does not intend to use marijuana in the future because his job is important to him. AG ¶ 26(b) provides:

(b) the individual acknowledges his or drug involvement and substance misuse, provides evidence of actions taken to overcome this problem, and has established a pattern of abstinence, including, but not limited to:

(1) disassociation from drug-using associates and contacts;

(2) changing or avoiding the environment where drugs were used; and

(3) providing a signed statement of intent to abstain from all illegal drug involvement and substance misuse, acknowledging that any future involvement or misuse is grounds for revocation of national security eligibility.

There is no evidence that Applicant used any marijuana after December 2016. However, his three months without marijuana as of his hearing is too short to establish the pattern of abstinence under AG ¶ 26(b), especially given that his marijuana use continued after he indicated in response to the SOR that he did not intend any future use. He testified that he did not realize the concern about not complying with his stated intention because, while his employer had told him that it would be in his best interest to abstain, his employer had hired him knowing that he used marijuana under his state’s medical marijuana program. Even if Applicant assumed that his employer had no problem with his marijuana use because he used it legally in his state,6 Applicant had reason to doubt that the federal government felt the same way after he received the SOR. He claimed to not know that marijuana use was prohibited under federal law. (Tr. 84.) However, his medical records (AE A) reveal that when he applied for the medical marijuana program, Applicant certified that he understood that marijuana use was still illegal under federal law. Whether or not he was expressly told by his employer or the OPM investigator that medical marijuana use was prohibited under federal law and DOD policy, he raised some doubt about his ability to abide by stated commitments by continuing to use marijuana after denying any intention of future use. The drug involvement security concerns raised by his medical marijuana use are not yet fully mitigated.

Guideline F: Financial Considerations

The security concerns about financial considerations are articulated 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.

The Government met its burden of establishing a prima facie case for disqualification because Applicant defaulted on the mortgage debt, utility (telephone and electric services) debts, and medical debt in the SOR. Although he denied the debts when he answered the SOR, he admitted that he had incurred the delinquencies. His denial was based on the charge off of his loan on the foreclosed property and claimed payment of the smaller delinquencies. All of the debts in the SOR were listed as seriously past due on his June 2015 credit report. Only the $40,176 charged-off second mortgage (SOR ¶ 2.a) and $659 telephone debt (SOR ¶ 2.b) were on his Equifax credit report as of April 2016 (GE 5), but debts may not be reported to all three credit reporting agencies or they may have dropped off a credit report because of the passage of time or other reason. Disqualifying conditions AG ¶ 19(a), “inability to satisfy debts,” and AG ¶ 19(c), “history of not meeting financial obligations,” apply.

AG ¶ 20(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,” applies in that the delinquencies were incurred more than five years ago with the possible exception of the $106 wireless phone debt in SOR ¶ 2.f, which was assigned for collection in August 2012.Yet, AG ¶ 20(a) does not mitigate the financial irresponsibility exhibited when debts continue to be neglected. The wireless telephone debt in SOR ¶ 2.cwas placed for collection in January 2015 more than four years after it first came due. The telephone debt in SOR ¶ 2.bfrom May 2010 was still in collection as of March 2015. Applicant was disputing that debt as of April 2016, but he presented no evidence to substantiate or explain the basis of his dispute that could trigger AG ¶ 20(d).7

AG ¶ 20(b) Applicant’s job layoff and subsequent lengthy unemployment are circumstances that credibly explain his default of his second mortgage. AG ¶ 20(b) provides:

(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. Applicant testified that he was unemployed for about three years after being laid off in 2009. His SF 86 report of unemployment from February 2011 to August 2013 cannot be easily reconciled with his medical records (AE A) from 2012, which indicate that he was working as a welder for a marine company at that time. Applicant’s credit reports show that he stopped making his mortgage payments in early 2011, which would have been either immediately after he lost his job based on his SF 86 dates or a year or so into his unemployment if his current recollection of his unemployment is more accurate. The second mortgage was charged off in July 2011, when Applicant was unemployed. The debts in SOR ¶¶ 2.b-2.dare likewise from 2010-2011. Depending on when Applicant was unemployed, lack of income could explain why a $116 medical debt from December 2008 was placed for collection in August 2009.

AG ¶ 20(b) requires that an individual act responsibly under the circumstances. In that regard, credit reports show that Applicant’s second mortgage was charged off when he was unemployed, six months after he stopped paying. There is no evidence that Applicant made any payments on the defaulted loan after he resumed working. Applicant testified that he had no contact with the creditor, but that he was told by the OPM investigator, by a credit repair company, and by his company that gave him a mortgage for his current home in April 2016 that he did not have to repay the mortgage loan because it was charged off in August 2011. His latest credit report of May 2017 discrepantly indicates the account as paid in full with a payment received of $32,880, but also that a balloon payment of $32,880 is due on April 2, 2021. The credit entry is scheduled to be removed from his record in January 2018. There is no evidence that Applicant is currently being pursued for any balance on the loan, but Applicant also took no steps to either address the loan or ensure that he had no legal liability after his primary mortgage lender foreclosed on the property. AG ¶ 20(c), “he person has received or is receiving 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 AG ¶ 20(d), ‘the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts,” could have some applicability if Applicant paid the smaller debts in SOR ¶¶ 2.b-2.fas he claims. He presented no documentation showing any payments of even the debts in SOR ¶¶ 2.e and 2.f, which are under $120. He was reportedly disputing the $659 telephone debt (SOR ¶ 2.b) as of April 2016. If his dispute was based on payment, he should have been able to produce some record showing that it has been satisfied. The absence of the collection debts from Applicant’s Trans Union credit report of May 2017 does not necessarily mean that they have been paid. Debts may not be reported to all three of the credit reporting companies. Applicant’s June 2015 credit report, which did not include any credit information from Trans Union, indicates that the collection information about the accounts in SOR ¶¶ 2.band 2.fcame only from Equifax. The collection debt in SOR ¶ 2.fwas reported only by Experian.

The charge-off of the second mortgage in August 2011 did not preclude Applicant from obtaining a mortgage for his current residence in April 2016 or a car loan in January 2017. Applicant has made timely payments on his mortgage and car loans, but I cannot ignore Appeal Board precedent, which requires that “a person acts in a way that shows reasonableness, prudence, honesty, and adherence to duty or obligation.”8 The SOR debts may have become seriously

8 The DOHA Appeal Board stated in ISCR Case No. 07-06482, decided on May 21, 2008, in part: delinquent because of unemployment, but Applicant also took no steps to address his loans on the home lost to foreclosure. Applicant’s financial situation appears to have stabilized in that he is meeting his current obligations, but he has not demonstrated a track record of debt reduction for the debts in the SOR. The financial considerations security concerns are not fully mitigated.

WHOLE PERSON CONCEPT

Under the whole-person concept, the administrative judge must evaluate an applicant’s eligibility for a security clearance by considering the totality of his conduct and all relevant circumstances in light of the nine adjudicative process factors listed at AG ¶ 2(d).9 In making the overall commonsense determination required under AG ¶ 2(a), I cannot ignore that Applicant held a medical marijuana card that qualified him to use marijuana for medical purposes in his state. He was upfront with his employer about his marijuana use and possession of a medical marijuana card. However, it is most troubling that Applicant continued to use marijuana after he had informed the DOD that he did not intend any future marijuana use. Applicant may no longer have any intention to use marijuana, but he raised doubts about whether the Government can reasonably rely on his representations. It is well settled that once a concern arises regarding an applicant’s security clearance eligibility, there is a strong presumption against the grant or renewal of a security clearance. See Dorfmont v. Brown, 913 F. 2d 1399, 1401 (9th Cir. 1990). For the reasons discussed, I am unable to conclude that it is clearly consistent with the national interest to grant Applicant security clearance eligibility at this time.

FORMAL FINDINGS

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 H: AGAINST APPLICANT

Subparagraphs 1.a-1.b: Against Applicant Subparagraph 1.c: For Applicant

Paragraph 2, Guideline F: AGAINST APPLICANT

Subparagraphs 2.a-2.f: Against Applicant

Paragraph 3, Guideline E: Withdrawn

9 The factors under AG ¶ 2(d) are as follows:

(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.

CONCLUSION

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

_____________________ Elizabeth M. Matchinski Administrative Judge

FOOTNOTES

1 Application of the AGs that were in effect as of the issuance of the SOR would not change my decision in this case. 2 The SOR did not allege and criminal conduct, presumably because of the passage of time. Under Appendix B of the SecEA Directive 4, the “Bond Amendment” prohibition against granting or renewing access to individuals convicted of a crime punished by a sentence of more than one year in prison and who were incarcerated for not less than one year only applies to covered individuals seeking access to sensitive compartmented information (SCI), special access programs (SAP), or restricted data (RD). There is no evidence that Applicant is seeking such access so the prohibition does not apply.

3 Applicant testified discrepantly about the frequency of his marijuana use. When asked about his OPM interview, Applicant confirmed that he had told the investigator that he used it once a month. (Tr. 41.) Yet, when asked about him obtaining his medical marijuana card in 2015 and use once a month, Applicant responded, “I didn’t even tell him once a month, I don’t even know where he got once a month from. But it was actually—I actually, it was like once a week.” (Tr. 52.) 4 Applicant surmised at the hearing that the $40,000 was the deficiency balance on his mortgage after the bank foreclosed and sold his home at auction. (Tr. 68.) Available credit reports indicate that it was a second mortgage that was paid on time until February 2011. (AE GE 4.) 6 Applicant testified that his employer did not inform him that his marijuana use was incompatible with his employment:

I mean, why would they? They knew about it, they still hired me. So that would almost be like a contradiction to hire me knowing that I have a medical marijuana cad, and then being in there and they turn around and say you know, you can’t do this and this, that, that, and the other. I mean, in my mind that’s kind of a contradiction. (Tr. 54.) 7 AG ¶ 20(e) provides:

(e) the individual has a reasonable basis to dispute the legitimacy of the past-due debt which is the cause of the problem and provides documented proof to substantiate the basis of the dispute or provides evidence of actions to resolve the issue. In evaluating Guideline F cases, the Board has previously noted that the concept of “‘meaningful track record’ necessarily includes evidence of actual debt reduction through payment of debts.” See, e.g., ISCR Case No. 05-01920 at 5 (App. Bd. Mar. 1, 2007). However, an applicant is not required, as a matter of law, to establish that he has paid off each and every debt listed in the SOR. See, e.g., ISCR Case No. 02-25499 at 2 (App. Bd. Jun. 5, 2006). All that is required is that an applicant demonstrate[s] that he has “. . . established a plan to resolve his financial problems and taken significant actions to implement that plan.” See, e.g., ISCR Case No. 04-09684 at 2 (App. Bd. Jul. 6, 2006).