ISCR Case No. 14-01205.h1

DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS

In the matter of: ) ) ---------------------- ) ADP Case No. 14-01205 ) ) Applicant for Public Trust Position

For Government: Pamela Benson, Esq., Department Counsel For Applicant: Pro se

02/09/2015 __________

__________

HARVEY, Mark, Administrative Judge:

Applicant’s statement of reasons (SOR) alleges 26 delinquent, collection, or charged-off accounts, totaling $29,287. She did not make sufficient progress resolving her financial problems to mitigate financial considerations concerns. Personal conduct concerns are mitigated because she did not intend to deceive the Government when she failed to list all of her financial problems on her Electronic Questionnaires for Investigations Processing (e-QIP) version of an application for a public trust position (SF 86). Her eligibility to occupy a public trust position is denied.

Statement of the Case

On November 21, 2013, Applicant submitted an SF 86. (GE 1) On May 9, 2014, the Department of Defense (DOD) Consolidated Adjudications Facility (CAF) issued an SOR to Applicant, pursuant to Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (Directive), dated January 2, 1992, as amended; DOD Regulation 5200.2-R, Personnel Security Program, dated Jan. 1987, as amended (Regulation); and the adjudicative guidelines (AG) as revised by the Under Secretary of Defense for Intelligence on August 30, 2006, which became effective on September 1, 2006. The SOR alleges trustworthiness concerns under Guidelines F (financial considerations) and E (personal conduct). (HE 2) The SOR detailed reasons why DOD was unable to find that it is clearly consistent with national security to grant or continue Applicant’s eligibility to occupy a public trust position, which entails access to sensitive information. (HE 2) The DOD CAF recommended referral to an administrative judge to determine whether such access to sensitive information should be granted, continued, denied, or revoked.

Applicant provided an undated response to the SOR and requested a hearing. (HE 3) On December 15, 2014, Department Counsel indicated she was ready to proceed on Applicant’s case. On December 18, 2014, the Defense Office of Hearings and Appeals (DOHA) assigned Applicant’s case to me. On January 9, 2015, DOHA issued a hearing notice, setting Applicant’s hearing for January 13, 2015. (HE 1) Applicant’s hearing was held as scheduled using video teleconference. Applicant waived her right to 15 days of notice of the date, time, and place of the hearing. (Tr. 17- 18) Department Counsel offered three exhibits, and Applicant offered four exhibits. (Tr. 21-23; GE 1-3; AE A-D) All exhibits were admitted without objection. (Tr. 21, 23) The transcript was received on January 22, 2015.

Findings of Fact1

In her Answer to the SOR, Applicant admitted the SOR allegations in ¶¶ 1.b-1.f, 1.h-1.i, 1.p-1.s, and 1.v-1.w. She also provided mitigating information. Her admissions are accepted as findings of fact.

Applicant is a 48-year-old customer service representative employed by a defense contractor for about one year. (Tr. 6-7, 24) She has worked for the same company for three years. (Tr. 8) She has been working full time for the last four years. (Tr. 8) She received her graduate equivalency diploma in 1986. (Tr. 6) She has about four college credits. (Tr. 7) She has not served in the military. (Tr. 7) In 1992, she married, and in 1999, she was divorced. (Tr. 8-9) In 2002, she married, and in October 2013, she was divorced. (Tr. 9) Her three children are ages 22, 24, and 25. (Tr. 9) One of her children resides with her. (Tr. 9) There is no evidence of security violations or drug or alcohol abuse.

Financial Considerations

Applicant’s credit reports reflected and SOR alleges 17 delinquent non-medical debts, totaling $26,857 as follows: vehicle collection debts in 1.a ($5,497), 1.b ($4,181), 1.c ($3,916), and 1.f ($15); student loan collection debts in 1.d ($2,802) and 1.e ($1,761); landlord collection debts in 1.g ($2,432), 1.h ($2,114), and 1.i ($1,132); telecommunications collection debts in 1.j ($1,031), 1.m ($683), 1.p ($212), and 1.t ($114); collection debts of unspecified origin in 1.n ($637) and 1.u ($113); utility collection debt in 1.s ($128); and moving collection debts in 1.u ($113) and 1.v ($89). Applicant’s credit reports and SOR include nine medical debts, totaling $2,430 as follows: 1.k ($934); 1.l ($846); 1.o ($229); 1.q ($137); 1.r ($131); 1.w ($50); 1.x ($42); 1.y ($32); and 1.z ($29).

In April 2011, Applicant was in a car accident. (Tr. 38) She lost her $14 an hour employment, and she was unable to earn as much overtime. (Tr. 38-40, 54) Her income was reduced by more than 50%. (Tr. 54) In September 2011, she went to work for $10 an hour. (Tr. 38-40) She received $5,000 in a personal injury settlement. (Tr. 40) She purchased a used car and paid some other debts; however, the car was repossessed because she could not keep up with the payments, resulting in the SOR ¶ 1.b collection debt for $4,181. (Tr. 40-42) She has a blood disorder, which has resulted in medical debts. (Tr. 51)

In 2014, Applicant’s gross pay was $18,567; her net pay after taxes was $15,773; and her pay after deductions for various allotments was $9,940. (AE D at 2) She paid a state tax levy for $280 in 2014. (AE D at 1) There is some variation in the amounts garnished on a monthly basis from her pay for her student loans. In December 2014, she was garnished $78 every two weeks by automatic payment to address her student loans, and in 2014, she paid $2,036 to address her student loans. (AE D at 1) She said she has a $100 student loan garnishment every two weeks for the debts in SOR ¶¶ 1.d for $2,802 (now reduced to $1,956) and 1.e for $1,761 (now reduced to $1,202). (Tr. 32-33, 44-45; GE 3)

Applicant accepted responsibility for the debt in SOR ¶ 1.a for $5,497. (Tr. 42) and for the debt in SOR ¶ 1.c for $3,915, which involved a repossessed vehicle. (Tr. 43) She has a non-SOR debt for $3,314 for repossession of another used vehicle in 2014. (Tr. 52) Applicant tried to pay the debt in SOR ¶ 1.f for $15; however, the creditor refused to accept the money because the creditor said the debt was $3,000 for another repossessed vehicle that her son was using. (Tr. 43-44)

Applicant signed a lease with her daughter, and her daughter broke the lease resulting in the debts in SOR ¶¶ 1.g for $2,432 and 1.h for $2,114, that are duplications of each other. (Tr. 29-30, 45) Her daughter broke the lease because another tenant was violating the rules, and her daughter moved out. (Tr. 29-30)

Applicant had another broken lease, which resulted in the debt in SOR ¶ 1.i for $1,132. (Tr. 46) She has not resolved the debts in SOR ¶¶ 1.i to 1.z. (Tr. 46-48) She explained that she had not made any non-garnishment payments to any SOR creditors. She described her difficulty making payments to her SOR creditors as follows: “They want $25 a month. I barely make it now. I can’t even afford to live on my own.” (Tr. 48) She completed credit counseling on line and learned she is “900 dollars in the hole every month.” (Tr. 48) She met with a bankruptcy attorney in October 2014, and she intends to file for bankruptcy. (Tr. 50-51, 57-58) She conceded, “My credit is terrible. I can’t make any excuses for it.” (Tr. 53) She made her first payment into her legal plan for the bankruptcy in January 2015. (Tr. 63) Applicant has not filed her federal and state tax returns for 2013. (Tr. 35-36) She did not believe she would owe any taxes when she filed. (Tr. 36) She received financial counseling for her bankruptcy. (Tr. 48) Personal Conduct

When Applicant completed her November 21, 2013 SF 86, she disclosed that she had the following financial problems: she had medical bills (resolved in October and November 2013) that became delinquent in 2005 for $1,346 and $1,394, resulting in garnishment of her pay; her pay was being garnished for education loans; the debts resulting from three repossessed vehicle debts in SOR ¶¶ 1.b, 1.c, and 1.f; and the debt resulting from breach of an apartment lease. (GE 1)

SOR ¶ 2.a alleges Applicant failed to disclose more of her delinquent debts, as described in the previous section. Applicant explained that her employer made her rush to complete her SF 86 so that she could return to answering calls at the call center. (Tr. 60-61) She expressed her remorse about providing incomplete financial information on her SF 86. (Tr. 61)

Applicant’s pastor, supervisor, coworker, and friend provided character references. (AE A-C) They described her as being devoted to her church, dedicated, intelligent, honest, compassionate, loyal, a good example and leader, diligent, trustworthy, professional, and a person who strives for improvement. (AE A-C) She makes contributions to her employer and DOD. (AE B-C)

The U.S. Supreme Court has recognized the substantial discretion of the Executive Branch in regulating access to information pertaining to national security emphasizing, “no one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). The Government’s authority to restrict access to classified information applies similarly in the protection of sensitive, unclassified information. As Commander in Chief, the President has the authority to control access to information bearing on national security or other sensitive information and to determine whether an individual is sufficiently trustworthy to have access to such information. See Id. at 527.

Positions designated as ADP I and ADP II are classified as “sensitive positions.” Regulation ¶¶ C3.1.2.1.1.7 and C3.1.2.1.2.3. “The standard that must be met for . . . assignment to sensitive duties is that, based on all available information, the person’s loyalty, reliability, and trustworthiness are such that . . . assigning the person to sensitive duties is clearly consistent with the interests of national security.” Regulation ¶ C6.1.1.1. 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. See Regulation ¶ C8.2.1.

When evaluating an applicant’s suitability for a public trust position, an 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 an evaluation of the whole person. An administrative judge’s overarching adjudicative goal is a fair, impartial and commonsense decision. An administrative judge must consider all available, reliable information about the person, past and present, favorable and unfavorable.

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 protect or safeguard sensitive information. Such decisions entail a certain degree of legally permissible extrapolation as to potential, rather than actual, risk of compromise of sensitive information.

Initially, the Government must establish, by substantial evidence, conditions in the personal or professional history of the applicant which may disqualify the applicant from being eligible for access to sensitive information. See Egan, 484 U.S. at 531. “Substantial evidence” is “more than a scintilla but less than a preponderance.” See v. Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994). The guidelines presume a nexus or rational connection between proven conduct under any of the criteria listed therein and an applicant’s security and trustworthiness suitability. See ISCR Case No. 95-0611 at 2 (App. Bd. May 2, 1996).

Once the Government establishes a disqualifying condition by substantial evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the facts. Directive ¶ E3.1.15. An applicant “has the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue his or her security clearance [or access to sensitive information].” ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002). The burden of disproving a mitigating condition never shifts to the Government. See ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 2005). “[S]ecurity clearance [or trustworthiness] determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531; see AG ¶ 2(b).

The protection of the national security and sensitive records is of paramount consideration. AG ¶ 2(b) requires that “[a]ny doubt concerning personnel being considered for access to [sensitive] information will be resolved in favor of national security.” Section 7 of Executive Order (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.”

Financial Considerations

AG ¶ 18 articulates the trustworthiness concern relating to financial problems: 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 an individual’s reliability, trustworthiness, and ability to protect [sensitive] information. An individual who is financially overextended is at risk of having to engage in illegal acts to generate funds.

AG ¶ 19 provides two disqualifying conditions that could raise a trustworthiness concern and may be disqualifying in this case: “(a) inability or unwillingness to satisfy debts;” and “(c) a history of not meeting financial obligations.” Applicant’s SOR and credit reports allege 26 delinquent, collection, or charged-off accounts, totaling $29,287.

In ISCR Case No. 08-12184 at 7 (App. Bd. Jan. 7, 2010), the Appeal Board explained:

It is well-settled that adverse information from a credit report can normally meet the substantial evidence standard and the government’s obligations under [Directive] ¶ E3.1.14 for pertinent allegations. At that point, the burden shifts to applicant to establish either that [he or] she is not responsible for the debt or that matters in mitigation apply. (internal citation omitted).

The Government established the disqualifying conditions in AG ¶¶ 19(a) and 19(c), requiring additional inquiry about the possible applicability of mitigating conditions.

Five 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, or a death, divorce or separation), and the individual acted responsibly under the circumstances;

(c) the person has received or is receiving counseling for the problem and/or there are clear indications that the problem is being resolved or is under control;

(d) the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts;2 and (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.

The Appeal Board concisely explained Applicant’s responsibility for proving the applicability of mitigating conditions as follows:

Once a concern arises regarding an Applicant’s security clearance eligibility, there is a strong presumption against the grant or maintenance of a security clearance. See Dorfmont v. Brown, 913 F. 2d 1399, 1401 (9th Cir. 1990), cert. denied, 499 U.S. 905 (1991). After the Government presents evidence raising security concerns, the burden shifts to the applicant to rebut or mitigate those concerns. See Directive ¶ E3.1.15. The standard applicable in security clearance decisions is that articulated in Egan, supra. “Any doubt concerning personnel being considered for access to classified information will be resolved in favor of the national security.” Directive, Enclosure 2 ¶ 2(b).

ISCR Case No. 10-04641 at 4 (App. Bd. Sept. 24, 2013).

Applicant’s conduct in resolving her delinquent debt does not warrant full application of any mitigating conditions to all of her SOR debts; however, she provided some mitigating information. In April 2011, Applicant was in a car accident. She lost her $14 an hour employment, and she was unable to earn as much overtime. Her income was reduced by more than 50%. In September 2011, she went to work for $10 an hour. She has a blood disorder, which has resulted in medical debts. She was divorced in 2013. These are circumstances largely beyond her control.

Applicant receives some credit for the funds paid to her creditors through garnishment in SOR ¶¶ 1.d and 1.e. SOR ¶¶ 1.g for $2,432 and 1.h for $2,114 are duplications of each other, and Applicant is credited with mitigating the debt in SOR ¶ 1.h as a duplication.

Applicant did not act responsibly under the circumstances. She received ample notice of her delinquent debts raising trustworthiness concerns. Applicant did not provide sufficient information about her finances to establish her inability to voluntarily pay her SOR creditors anything. She received financial counseling. She said her expenses exceeded her income by $900 monthly. She did not explain how she was either going to increase her income or decrease her expenses to balance her budget.

In sum, Applicant conceded that she did not make any payments to any of her SOR creditors, except for her wages that are being garnished.3 There is no financial documentation relating to any of her SOR creditors showing maintenance of contact with creditors4 or other evidence of progress or resolution of her SOR debts. There is insufficient evidence that her financial problems are being resolved, are under control, and will not occur in the future. Financial considerations concerns are not mitigated.

Personal Conduct

AG ¶ 15 expresses the trustworthiness concern pertaining to personal conduct:

Conduct involving questionable judgment, lack of candor, dishonesty, or unwillingness to comply with rules and regulations can raise questions about an individual's reliability, trustworthiness and ability to protect classified information. Of special interest is any failure to provide truthful and candid answers during the security clearance process or any other failure to cooperate with the security clearance process.

One personal conduct disqualifying condition under AG ¶ 16 is potentially applicable. AG ¶ 16(a) provides, “(a) deliberate omission, concealment, or falsification of relevant facts from any personnel security questionnaire . . . used to conduct investigations, . . . [to] determine security clearance eligibility or trustworthiness. . . .”5 Applicant’s November 21, 2013 SF 86 asked about her finances, and she disclosed that she had medical and education debts as well as debts from three repossessed vehicles and a debt resulting from breach of an apartment lease. SOR ¶ 2.a alleges Applicant failed to disclose more of her delinquent debts. Applicant explained that her employer made her rush to complete her SF 86 so that she could return to answering calls at the call center.

Applicant’s failure to disclose full information about her delinquent debts was erroneous; however, it was not a deliberate decision made with intent to conceal adverse information about her worthiness to receive access to sensitive information. Her mistaken failure to provide complete information was not made with intent to deceive; she put the Government on notice that she had financial problems; she refuted the allegation of intentional concealment of financial information; and personal conduct concerns are mitigated. See also AG ¶ 17(f) (mitigating condition stating “the information was unsubstantiated . . .”).

Under the whole-person concept, the administrative judge must evaluate an Applicant’s eligibility for a public trust position 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(a):

(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 public trust position must be an overall commonsense judgment based upon careful consideration of the guidelines and the whole-person concept. I have incorporated my comments under Guidelines F and E in my whole-person analysis. Some of the factors in AG ¶ 2(a) were addressed under those guidelines, but some warrant additional comment. There is some evidence supporting approval of Applicant’s clearance. Applicant is a 48-year-old customer service representative employed by a defense contractor for about one year. She has worked for the same company for three years. She has been working full time for the last four years. There is no evidence of security violations, or drug or alcohol abuse. Some circumstances beyond her control adversely affected her finances, including medical problems, reduction in income, and divorce. Applicant’s pastor, supervisor, coworker, and friend described her as being devoted to her church, dedicated, intelligent, honest, compassionate, loyal, a good example and leader, diligent, trustworthy, professional, and a person who strives for improvement. She contributes to her company and the Department of Defense.

The financial evidence against approval of Applicant’s clearance is more substantial at this time. Applicant has a history of financial problems. Applicant’s credit reports and SOR allege 26 delinquent, collection, or charged-off accounts, totaling $29,287. Her monthly expenses substantially exceed her income. Even after crediting her with mitigating the debts in SOR ¶¶ 1.d, 1.e, and 1.h, she still has 23 delinquent SOR debts totaling $22,610. Her failure to show greater progress by at least paying some of her SOR debts that were less than $100 indicates lack of financial responsibility and judgment and raises unmitigated questions about Applicant’s reliability, trustworthiness, and ability to protect sensitive information. See AG ¶ 18. More financial progress and time without criminal offenses is necessary to mitigate trustworthiness concerns.

It is well settled that once a concern arises regarding an applicant’s eligibility for a public trust position, there is a strong presumption against the grant or renewal of a public trust position. Unmitigated financial considerations concerns lead me to conclude that reinstatement of a public trust position to Applicant is not warranted at this time. This decision should not be construed as a determination that Applicant cannot or will not attain the state of reform necessary to justify the award of a public trust position in the future. With more effort towards resolving her past-due debts, and a track record of behavior consistent with her obligations, she may well be able to demonstrate persuasive evidence of her worthiness for a security clearance.

I have carefully applied the law, as set forth in Egan, Exec. Or. 10865, the Directive, and the AGs, to the facts and circumstances in the context of the whole person. Personal conduct concerns are mitigated; however, financial considerations concerns are not mitigated. For the reasons stated, I conclude Applicant is not eligible for access to classified information at this time.

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 to 1.c: Against Applicant Subparagraphs 1.d and 1.e: For Applicant Subparagraphs 1.f and 1.g: Against Applicant Subparagraph 1.h: For Applicant Subparagraphs 1.i to 1.z: Against Applicant

Paragraph 2, Guideline E: FOR APPLICANT

Subparagraph 2.a: For Applicant

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

_________________________ Mark Harvey Administrative Judge

1 Some details have been excluded in order to protect Applicant’s right to privacy. Specific information is available in the cited exhibits. 2The Appeal Board has previously explained what constitutes a “good faith” effort to repay overdue creditors or otherwise resolve debts: In order to qualify for application of [the “good faith” mitigating condition], an applicant must present evidence showing either a good-faith effort to repay overdue creditors or some other good-faith action aimed at resolving the applicant’s debts. The Directive does not define the term “good-faith.” However, the Board has indicated that the concept of good-faith “requires a showing that a person acts in a way that shows reasonableness, prudence, honesty, and adherence to duty or obligation.” Accordingly, an applicant must do more than merely show that he or she relied on a legally available option (such as bankruptcy) in order to claim the benefit of [the “good faith” mitigating condition]. (internal citation and footnote omitted) ISCR Case No. 02-30304 at 3 (App. Bd. Apr. 20, 2004) (quoting ISCR Case No. 99-9020 at 5-6 (App. Bd. June 4, 2001)). 3Of course, Applicant loses some mitigating credit because some debt payments were made through garnishment of her salary even though her opportunity to establish a payment plan was limited because of her limited income and other financial commitments. Payment of a debt “though garnishment rather than a voluntary effort diminishes its mitigating force.” Compare ISCR Case No. 08-06058 at 4 (App. Bd. Aug. 26, 2010) with ISCR Case No. 04-07360 at 2-3 (App. Bd. Sept. 26, 2006) (payment of two of four debts through garnishment did not bar mitigation of financial considerations concerns).

4 “Even if Applicant’s financial difficulties initially arose, in whole or in part, due to circumstances outside his [or her] control, the Judge could still consider whether Applicant has since acted in a reasonable manner when dealing with those financial difficulties.” ISCR Case No. 05-11366 at 4 n.9 (App. Bd. Jan. 12, 2007) (citing ISCR Case No. 99-0462 at 4 (App. Bd. May 25, 2000); ISCR Case No. 99-0012 at 4 (App. Bd. Dec. 1, 1999); ISCR Case No. 03-13096 at 4 (App. Bd. Nov. 29, 2005)). A component is whether he or she maintained contact with creditors and attempted to negotiate partial payments to keep debts current.

5 The Appeal Board has cogently explained the process for analyzing falsification cases, stating: (a) when a falsification allegation is controverted, Department Counsel has the burden of proving falsification; (b) proof of an omission, standing alone, does not establish or prove an applicant’s intent or state of mind when the omission occurred; and (c) a Judge must consider the record evidence as a whole to determine whether there is direct or circumstantial evidence concerning the applicant’s intent or state of mind at the time the omission occurred. [Moreover], it was legally permissible for the Judge to conclude Department Counsel had established a prima facie case under Guideline E and the burden of persuasion had shifted to the applicant to present evidence to explain the omission. ISCR Case No. 03-10380 at 5 (App. Bd. Jan. 6, 2006) (citing ISCR Case No. 02-23133 (App. Bd. June 9, 2004)).