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ISCR Case 18-00832 — CASE

ISCR Case 18-00832denied

Case Headnote

ISCR Case No. 18-00832

deniedFeb 1, 2019· Hon. Pamela C. Benson· hearing

Summary

A 57-year-old federal contractor applicant was denied a security clearance under Guideline F (Financial Considerations) due to unresolved financial issues exceeding $44,000. The Statement of Reasons detailed nine allegations, with the applicant admitting to six delinquent accounts. These included a student loan over 180 days past due for $630, two collection accounts for $822 and $87, a timeshare account over 120 days past due for $8,506, a judgment for $4,050, and a clothing account referred for collection for $839. The applicant denied allegations concerning two cell phone service accounts and one utility account.

The denial was based on the applicant's admission of multiple delinquent accounts totaling over $44,000, coupled with a failure to provide evidence of resolution or financial responsibility. Despite being given the opportunity, the applicant did not submit any mitigating evidence or a financial plan to address the debts.

The judge concluded that these financial concerns raised doubts about the applicant's reliability and trustworthiness, leading to the denial of the security clearance. Disqualifying conditions under Adjudicative Guideline Paragraphs 19(a) and 19(c) were raised.

Why the Applicant Was Denied

The applicant admitted to multiple delinquent accounts totaling over $44,000 without providing evidence of resolution or financial responsibility.
The applicant did not submit any mitigating evidence or a financial plan to address his debts after being given the opportunity to do so.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability to Satisfy Debts
AG ¶ 19(c)raisedHistory of Not Meeting Financial Obligations

Key Rule Quoted

“Any doubt concerning personnel being considered for national security eligibility will be resolved in favor of the national security.”

Procedural Posture

SOR issuedApr 3, 2018
Answer filedApr 11, 2018
Hearing held—Applicant requested a decision based on the written record.
Decision dateFeb 1, 2019

Cite For

Failure to Mitigate Financial Concerns Under Guideline F
Impact of Unresolved Debts on Security Clearance Eligibility
Importance of Providing Evidence of Financial Responsibility in Clearance Cases

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: Decision on RecordDecided: denied

The judge found multiple financial concerns under Guideline F, including several accounts in collection and a judgment against the applicant. Ultimately, the judge ruled against the applicant on all allegations, concluding that the applicant's financial issues raised doubts about his judgment and reliability, leading to a denial of his security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant denied the allegation of a utility account referred for collection in the amount of $106. $106	Against Applicant	Utility or Phone Debt	Denied	—	—	—
1.b	Applicant admitted the student loan account that is more than 180 days past due in the amount of $630. $630	Against Applicant	Student Loan Debt	Admitted	—	—	—
1.c	Applicant admitted the account referred for collection in the amount of $822. $822	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.d	Applicant denied the allegation of a cell phone service account referred for collection in the amount of $462. $462	Against Applicant	Utility or Phone Debt	Denied	—	—	—
1.e	Applicant admitted the account referred for collection in the amount of $87. $87	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.f	Applicant admitted the time share account that is more than 120 days past due in the amount of $8,506. $8,506	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.g	Applicant admitted the judgment filed against him in the amount of $4,050. $4,050	Against Applicant	Judgment Against Applicant	Admitted	—	—	—
1.h	Applicant admitted the clothing account referred for collection in the amount of $839. $839	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.i	Applicant denied the allegation of a cell phone service account referred for collection in the amount of $462. $462	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.

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. 18-00832 ) Applicant for Security Clearance ) Appearances For Government: Benjamin R. Dorsey, Esq., Department Counsel For Applicant: Pro se ______________

STATEMENT OF CASE

______________ BENSON, Pamela C., Administrative Judge: Applicant failed to mitigate the security concerns under Guideline F (Financial Considerations). Eligibility for access to classified information is denied. Statement of the Case On November 4, 2015, Applicant submitted a security clearance application (SCA). On April 3, 2018, the Department of Defense Consolidated Adjudications Facility (DOD CAF) issued Applicant a Statement of Reasons (SOR), detailing security concerns under Guideline F, (Financial Considerations.) The action was taken under Executive Order 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; DOD Directive 5220.6, Defense Industrial Personnel Adjudicative Guidelines for Determining Eligibility for Access to Classified Information; and the National Security Adjudicative Guidelines issued by the Director of National Intelligence, effective within the DOD on or after June 8, 2017.1 1 GE 1, 3. 02/01/2019

Applicant answered the SOR on April 11, 2018. He admitted six of the SOR allegations (SOR ¶¶ 1.b, 1.c, and 1.e-1.h), and he denied the others (SOR ¶¶ 1.a, 1.d, and 1.i). He submitted a document in reference to SOR ¶ 1.a with his response to the SOR. Applicant requested that his case be decided by an administrative judge on the written record in lieu of a hearing.2

On July 16, 2018, Department Counsel submitted the Government’s written case. A complete copy of the File of Relevant Material (FORM), containing nine items, was mailed to Applicant on July 17, 2018. The FORM notified Applicant that he had an opportunity to file objections and submit material in refutation, extenuation, or mitigation within 45 days of his receipt of the FORM. Applicant received the FORM on July 23, 2018, but he did not respond to the FORM. He did not object to Items 1 through 9, which I marked as Government Exhibits (GE) 1-9, and admitted into evidence. The Defense Office of Hearings and Appeals (DOHA) assigned the case to me on October 29, 2018.

FINDINGS OF FACT

Having thoroughly considered the evidence in the record, including Applicant's admissions, I make the following findings of fact: Applicant is 57 years old. He has been employed full time with a Federal contractor since August 2011. He divorced in 1986 and re-married in 1992. He has an adult daughter and two adult step-children. He earned two honorable discharges with the U.S. Air Force, in 1984 and 2003.3

Financial Considerations

The SOR alleges nine delinquent accounts totaling just over $44,000.00, which are supported by credit reports submitted by the Government.4 In Applicant's response to the SOR, he failed to provide any explanation for his financial issues or what plans he had, if any, to resolve his outstanding debts. The record establishes the status of Applicant’s accounts as follows:

SOR ¶ 1.a alleges an outstanding car loan account for a vehicle had been repossessed for nonpayment of $23,828. In his response to the SOR, Applicant attached a document which appears to be a settlement offer from the creditor. The creditor noted that Applicant's overdue balance was $16,432, but if he agreed to pay a settlement of $9,859, the creditor would annotate the account as resolved. There is no evidence that Applicant paid, or is in the process of resolving, this outstanding account.

2 GE 2.

3 GE 3.

4 GE 5, 6, 7, 8.

SOR ¶ 1.bis a student loan account that is more than 180 days past due in the amount of $630, with a loan balance of $5,514. In his response to the SOR, Applicant admitted this account, but he did not provide any documentation to show that the student loan is current, or if he is in the process of paying this delinquent debt. This debt has not been resolved. [I moved this para. up one line.]

SOR ¶ 1.calleges an account referred for collection in the amount of $822. In his response to the SOR, Applicant admitted this account, but he did not provide any documentation to show that the delinquent account is current, or if he is in the process of resolving this debt. This debt has not been resolved.

SOR ¶ 1.dalleges a cell phone service account referred for collection in the amount of $462. In his response to the SOR, Applicant denied this account. He failed to provide any explanation or documentation to show that the delinquent account is current, or he is in the process of resolving this debt. This debt has not been resolved.

SOR ¶ 1.e alleges an account referred for collection in the amount of $87. In his response to the SOR, Applicant admitted this account, but he did not provide any documentation to show that the delinquent account is current, or if he is in the process of resolving this debt. This debt has not been resolved.

SOR ¶ 1.fappears to be a time share account that is more than 120 days past due in the amount of $8,506, with a loan balance of $8,844. In his response to the SOR, Applicant admitted this account, but he did not provide any documentation to show that the delinquent account is current, or if he is in the process of paying this debt. This debt has not been resolved.

In 2010, a judgment was filed against Applicant, as alleged in SOR ¶ 1.g, in the amount of $4,050. In his response to the SOR, Applicant admitted this judgment, but he did not provide any information to indicate that he is either paying, paid, or in the process of resolving this unsatisfied judgment. This debt has not been resolved.

SOR ¶ 1.halleges a clothing account referred for collection in the amount of $839. In his response to the SOR, Applicant admitted this account, but he did not provide any documentation to show that the delinquent account is current, or he is in the process of resolving this debt. This debt has not been resolved.

SOR ¶ 1.i alleges a utility account referred for collection in the amount of $106. In his response to the SOR, Applicant denied this account. He failed to provide any explanation or documentation to show that the delinquent account is current, or he is in the process of resolving this debt. This debt has not been resolved.

Department Counsel noted in his brief, that: “Absent documentary evidence submitted in response to this FORM that Applicant has acted responsibly and in good-faith to satisfy his delinquent debts and established a sustained track record of financial responsibility, the unmitigated SOR allegations establish a

basis for disqualification…."5 Despite the clear warning, Applicant did not submit any mitigating evidence within the 45-day time period after receipt of the Government FORM. He did not provide information concerning a budget or other information related to his financial obligations from which to determine his current financial circumstances.

POLICIES

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the AG. In addition to brief introductory explanations for each guideline, the AG list potentially disqualifying conditions and mitigating conditions, which are used 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 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.” In reaching this decision, I have drawn only those conclusions that are reasonable, logical, and based on the evidence contained in the record. Likewise, I have avoided drawing inferences grounded on mere speculation or conjecture.

Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Directive ¶ E3.1.15 an “applicant is responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by applicant or proven by Department Counsel, and has the ultimate burden of persuasion as to obtaining 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 an applicant may deliberately or inadvertently fail to 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.

5 Department Counsel FORM brief page 3.

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 F: Financial Considerations

The security concern 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 security concerns. The following are potentially applicable:

(a) inability to satisfy debts; and

The above disqualifying conditions apply. Applicant has approximately $44,000 of delinquent debt that is unpaid and unresolved, as shown on his credit reports. 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.

The guideline also includes conditions that could mitigate security 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; 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.

There is insufficient evidence to apply any of the mitigating conditions. Applicant denied three of the nine delinquent accounts alleged in SOR ¶¶ 1.a, 1.d, and 1.i. He did not provide any explanation for his denials, and he did not provide any supporting documentation to show that his disputes, if any, with creditors are legitimate. He did not provide proof of his communication with these creditors, if any, in an effort to resolve the disputed accounts. Applicant admitted responsibility for the other six debts alleged, but he failed to provide any evidence to show that he is paying, resolving, or has paid any of those debts. There is no evidence to show Applicant received financial counseling or that he acted responsibly under the circumstances in dealing with his creditors.

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 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 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 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 those guidelines, but some warrant additional comment.

A person’s relationship with his creditors is a private matter until evidence is uncovered demonstrating an inability or unwillingness to repay debts under agreed terms. Absent evidence of strong extenuating or mitigating circumstances, an applicant with a history of serious or recurring financial difficulties is in a situation of risk inconsistent with the holding of a position of trust with the Government. An applicant is not required to be debt-free, but is required to manage his finances to meet his financial obligations.

Applicant failed to provide supporting documentation to mitigate his delinquent accounts and he failed to demonstrate that he acted responsibly under the circumstances in dealing with his creditors. There is no showing by Applicant of any effort to pay, legitimately dispute, or otherwise resolve any of the financial security concerns. Applicant has not provided a financial plan or a detailed budget of his current financial circumstances.

Overall, the record evidence leaves me with doubts as to Applicant’s good judgment, reliability as well as eligibility and suitability for a security clearance. Because protection of the national interest is the principal focus of these adjudications, any unresolved doubts must be resolved against the granting of eligibility to classified information.

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 F:

AGAINST APPLICANT

Subparagraphs 1.a-1.i:

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 security to grant or continue Applicant’s national security eligibility. Eligibility for access to classified information is denied.

Pamela C. Benson Administrative Judge