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ISCR Case 17-04131 — CASE

ISCR Case 17-04131denied

Case Headnote

ISCR Case No. 17-04131

deniedFeb 11, 2019· Hon. Richard A. Cefola· hearing

Summary

A 32-year-old defense contractor employee was denied a security clearance due to significant financial issues under Guideline F (Financial Considerations). The Statement of Reasons (SOR) alleged approximately $130,000 in past-due debts and tax liens. The applicant admitted to a state tax lien of about $553, past-due child support totaling about $12,436, and past-due student loans of about $80,000.

Additionally, the applicant admitted to past-due debts to Creditor C (about $395), Creditor G (about $2,058), and two debts to Creditor H (totaling about $1,766). The applicant also admitted to eight separate past-due debts totaling about $20,021. The applicant denied allegations regarding an outstanding judgment to Creditor B (about $1,828) and past-due debts to Creditor E (about $7,202), Creditor F (about $2,314), and Creditor I (about $683).

The administrative judge concluded that the applicant failed to mitigate the security concerns. The denial was based on the applicant's admitted significant financial issues, lack of documentation or evidence to mitigate these concerns, and a long history of ongoing delinquencies with no demonstrated efforts toward resolution.

Why the Applicant Was Denied

The applicant admitted to significant financial issues, including multiple past-due debts and tax liens totaling approximately $130,000.
The applicant did not provide any documentation or evidence to mitigate the financial concerns raised in the Statement of Reasons (SOR).
The applicant's financial problems were ongoing, with a long history of delinquencies and no demonstrated efforts to resolve them.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability to Satisfy Debts
AG ¶ 19(b)raisedUnwillingness to Satisfy Debts
AG ¶ 19(c)raisedHistory of Not Meeting Financial Obligations
AG ¶ 19(f)raisedFailure to File or Fraudulently Filing Tax Returns

Key Rule Quoted

“The protection of the national security is the paramount consideration.”

Procedural Posture

SOR issuedDec 21, 2017
Answer filedApr 15, 2018
Hearing heldAug 1, 2018scheduled as planned
Decision dateFeb 11, 2019

Cite For

Denial of Security Clearance Due to Significant Financial Issues Under Guideline F
Failure to Mitigate Financial Considerations Despite Admission of Debts
Importance of Providing Evidence to Address Security Concerns Raised in SOR

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 F · descriptive summary of a decided case

Posture: HearingDecided: denied

The judge found multiple financial concerns against the applicant, including a state tax lien, past-due debts, and significant child support obligations. The applicant admitted to most of the debts, and the judge concluded that these financial issues were not mitigated, resulting in a denial of the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant admits a state tax lien to his former state of residence in the amount of about $553. $553	Against Applicant	Tax Unpaid	Admitted	—	—	—
1.b	Applicant denies that he has an outstanding judgment to Creditor B in the amount of about $1,828. $1,828	Against Applicant	Unspecified Financial	Denied	—	—	—
1.c	Applicant admits that he has a past-due debt to Creditor C in the amount of about $395. $395	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.d	Applicant admits that he has past-due child support payments totaling about $12,436. $12,436	Against Applicant	Child Support Debt	Admitted	—	—	—
1.e	Applicant denies that he has a past-due debt to Creditor E in the amount of about $7,202. $7,202	Against Applicant	Unspecified Financial	Denied	—	—	—
1.f	Applicant denies that he has a past-due debt to Creditor F in the amount of about $2,314. $2,314	Against Applicant	Unspecified Financial	Denied	—	—	—
1.g	Applicant admits that he has a past-due debt to Creditor G in the amount of about $2,058. $2,058	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.h	Applicant admits that he has two past-due debts to Creditor H in an amount totaling about $1,766. $1,766	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.i	Applicant denies that he has a past-due debt to Creditor I in the amount of about $683. $683	Against Applicant	Unspecified Financial	Denied	—	—	—
1.k	Applicant admits that he has eight past-due debts to eight separate creditors in an amount totaling about $20,021. $20,021	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.s	Applicant admits that he has past-due student loans totaling about $80,000. $80,000	Against Applicant	Student Loan Debt	Admitted	—	—	—

Descriptive standardized rendering of a decided public case (Guideline F). 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: )

)

ISCR Case No. 17-04131

)

) Applicant for Security Clearance )

For Government: Andrew Henderson, Esq., Department Counsel For Applicant: Pro se

February 11, 2019 ______________

STATEMENT OF CASE

______________

CEFOLA, Richard A., Administrative Judge:

Statement of the Case

On December 21, 2017, in accordance with DoD Directive 5220.6, as amended (Directive), the Department of Defense issued Applicant a Statement of Reasons (SOR) alleging facts that raise security concerns under Guideline F. The SOR further informed Applicant that, based on information available to the government, DoD adjudicators could not make the preliminary affirmative finding it is clearly consistent with the national interest to grant or continue Applicant’s security clearance.

Applicant answered the SOR on April 15, 2018, and requested a hearing before an administrative judge. (Answer.) The case was assigned to me on July 5, 2018. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on that same day, scheduling the hearing for August 1, 2018. The hearing was convened as scheduled. The Government offered Exhibits (GXs) 1 through 5, which were admitted into evidence. Applicant testified on his own behalf, but presented no documentation. The record was left open until October 3, 2018, for receipt of additional documentation.

Applicant submitted nothing. DOHA received the transcript of the hearing (TR) on August 9, 2018.

FINDINGS OF FACT

Applicant admitted to all the allegations of the SOR, except for SOR ¶¶ 1.b., 1.e., 1.f., 1.i., 1.l., and 1.q. After a thorough and careful review of the pleadings, exhibits, and testimony, I make the following findings of fact.

Applicant is a 32-year-old employee of a defense contractor. (TR at page 13 line 2 to page 18 line 4, and GX 1 at pages 5 and12–13.) He has been employed, part time, with the defense contractor since about November of 2015. He is divorced, and has three children, two of which he is paying child support for. (TR at page 13 line 2 to page 18 line 4.) He is homeless, and lives in his car. (TR at page 33 lines 15–21.)

Guideline F - Financial Considerations

1.a. Applicant admits a state tax lien to his former state of residence in the amount of about $553. (TR at page 18 line 11 to page 20 line 11.) Despite having two months to do so, Applicant has submitted nothing further in this regard. This allegation is found against Applicant.

1.b. Applicant denies that he has an outstanding judgment to Creditor B in the amount of about $1,828. (TR at page 20 line 12 to page 21 line 9.) As this outstanding judgment appears on the Government’s February 2016 credit report (CR); and as Applicant has submitted nothing further in this regard, this allegation is found against Applicant. (GX 3 at page 3.)

1.c. Applicant admits that he has a past-due debt to Creditor C in the amount of about $395. (TR at page 21 line 10 to page 22 line 6.) As he has submitted nothing further in this regard, this allegation is found against Applicant.

1.d. Applicant admits that he has past-due child support payments totaling about $12,436. He avers that he is paying about $120 each month by way of garnishment to address this admitted debt. (TR at page 22 line 8 to page 24 line 12.) As Applicant has submitted nothing further in this regard, this allegation is found against Applicant.

1.e. Applicant denies that he has a past-due debt to Creditor E in the amount of about $7,202. (TR at page 24 line 13 to page 25 line 7, and at page 25 line 24 to page 26 line 7.) As this past-due debt appears on the Government’s October 2017 CR; and as Applicant has submitted nothing further in this regard, this allegation is found against Applicant. (GX 4 at page 2.)

1.f. Applicant denies that he has a past-due debt to Creditor F in the amount of about $2,314. (TR at page 25 lines 8–23, and at page 26 lines 8–10.) As this past-due debt appears on the Government’s October 2017 CR; and as Applicant has submitted

nothing further in this regard, this allegation is found against Applicant. (GX 4 at page 2.)

1.g. Applicant admits that he has a past-due debt to Creditor G in the amount of about $2,058. (TR at page 26 lines 11–24.) As he has submitted nothing further in this regard, this allegation is found against Applicant.

1.hand 1.j. Applicant admits that he has two past-due debts to Creditor H in an amount totaling about $1,766. (TR at page 26 line 25 to page 27 line 9, and at page 27 line 20 to page 28 line 3.) As he has submitted nothing further in this regard, these allegations are found against Applicant.

1.i. Applicant denies that he has a past-due debt to Creditor I in the amount of about $683. (TR at page 27 lines 10–19.) As this past-due debt appears on the Government’s October 2017 CR; and as Applicant has submitted nothing further in this regard, this allegation is found against Applicant. (GX 4 at page 2.)

1.k.~1.r. Applicant, at his hearing, now admits that he has eight past-due debts to eight separate creditors in an amount totaling about $20,021. (TR at page 28 line 4 to page 29 line 2, and at page 30 lines 4–11.) As he has submitted nothing further in this regard, these allegations are found against Applicant.

1.s. and 1.t. Applicant admits that he has past-due student loans totaling about $80,000. (TR at page 30 line 12 to page 32 line 12.) They were once in “forbearance”; and as such, he avers he will again seek forbearance. (Id.) As he has submitted nothing further in this regard, these allegations are found against Applicant.

POLICIES

When evaluating an applicant’s national security eligibility, the administrative judge must consider the adjudicative guidelines (AG). In addition to brief introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which are to be used in evaluating an applicant’s national security eligibility.

These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, administrative judges apply the guidelines in conjunction with the factors listed in AG ¶ 2 describing the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶ 2(a), the entire process is a conscientious scrutiny of a number of variables known as the whole-person concept. The administrative judge must consider all available, reliable information about the person, past and present, favorable and unfavorable, in making a decision.

The protection of the national security is the paramount consideration. AG ¶ 2(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. Directive ¶ E3.1.15 states the “applicant is responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by the applicant or proven by Department Counsel, and has the ultimate burden of persuasion as to obtaining a favorable clearance decision.”

A person who applies for access to classified information 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 access to classified information. 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 information.

Section 7 of Executive Order (EO) 10865 provides that adverse decisions shall be “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive information).

ANALYSIS

Guideline F - Financial Considerations

The security 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.

The guideline notes several conditions that could raise security concerns under AG ¶ 19. Four are potentially applicable in this case:

(a) inability to satisfy debts;

(b) unwillingness to satisfy debts regardless of the ability to do so;

(f) failure to file or fraudulently filing annual Federal, state, or local income tax returns or failure to pay annual Federal, state, or local income tax as required.

Applicant has significant past-due indebtedness. The evidence is sufficient to raise these disqualifying conditions.

AG ¶ 20 provides conditions that could mitigate security concerns. I considered all of the mitigating conditions under AG ¶ 20 including:

(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;

(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; and

(g) the individual has made arrangements with the appropriate tax authority to file or pay the amount owed and is in compliance with those arrangements.

Applicant’s financial problems are ongoing. He has a long history of delinquencies. His past-due indebtedness totals about $130,000. He has not demonstrated that future financial problems are unlikely. Mitigation under AG ¶ 20 has not been established.

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 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.

Under AG ¶ 2(c), the ultimate determination of whether to grant his eligibility for a security clearance 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 facts and circumstances surrounding this case. I have incorporated my comments under Guideline F in my whole-person analysis. Overall, the record evidence leaves me with questions and doubts as to Applicant’s eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant failed to mitigate the Financial Considerations security concerns.

FORMAL FINDINGS

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

Paragraph 1, Guideline F:

AGAINST APPLICANT

Subparagraphs 1.a.~1.t.:

Against Applicant

CONCLUSION

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 national security eligibility for a security clearance. Eligibility for access to classified information is denied.

________________________ Richard A. Cefola Administrative Judge