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ISCR Case 18-01964 — CASE

ISCR Case 18-01964denied

Case Headnote

ISCR Case No. 18-01964

deniedJun 19, 2019· Hon. Gregg A. Cervi· hearing

Summary

A 54-year-old network administrator was denied a security clearance under Guideline F (Financial Considerations) due to multiple delinquent debts totaling approximately $96,319. The Statement of Reasons (SOR) detailed several specific financial concerns. SOR 1.a identified a child support arrearage with interest, amounting to $69,089. SOR 1.b concerned a delinquent cell phone provider account.

SOR 1.c involved an unpaid judgment from a loan taken out in 2007 for a mobile entertainment business that failed in 2008. SOR 1.d, a judgment from an apartment rental debt, was the only item for which the applicant provided evidence of payment, having resolved it in 2015.

Despite the application of several mitigating conditions, the judge found insufficient evidence of the applicant's good-faith efforts to resolve the outstanding debts. The decision to deny the clearance was based on the applicant's financial irresponsibility, which raised significant concerns regarding his trustworthiness and reliability.

Why the Applicant Was Denied

The applicant had multiple delinquent debts, including child support and judgments.
Insufficient evidence of good-faith efforts to resolve the debts was presented.
The applicant's financial irresponsibility raised significant concerns about his trustworthiness and reliability.

Conditions Referenced

Disqualifying

AG 19(a)raisedInability to Satisfy Debts
AG 19(b)raisedUnwillingness to Satisfy Debts Regardless of the Ability to Do So
AG 19(c)raisedA History of Not Meeting Financial Obligations

Mitigating

AG 20(a)rejectedBehavior Happened so Long Ago, Was Infrequent, or Occurred Under Circumstances Unlikely to Recur
AG 20(b)rejectedConditions Resulting in Financial Problems Were Largely Beyond the Person's Control
AG 20(c)rejectedReceived Financial Counseling From a Legitimate Source
AG 20(d)rejectedGood-faith Effort to Repay Overdue Creditors
AG 20(e)rejectedReasonable Basis to Dispute the Legitimacy of the Past-due Debt

Key Rule Quoted

“No one has a ‘right’ to a security clearance.”
— Department of the Navy v. Egan, 484 U.S. 518, 528 (1988)

Procedural Posture

SOR issuedAug 20, 2018
Answer filedSep 11, 2018
Hearing heldJan 18, 2019Applicant requested decision based on written record instead.
Decision dateJun 19, 2019

Cite For

Insufficient Evidence of Good-faith Efforts to Resolve Debts Under Guideline F
Financial Irresponsibility as a Disqualifying Factor for Security Clearance
The Importance of Demonstrating Financial Stability for Security Clearance Eligibility

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 that the applicant had significant financial concerns under Guideline F, including a child support arrearage and a judgment related to a failed business. While one judgment was resolved, the applicant did not provide sufficient evidence to mitigate the other debts, leading to a decision against the applicant on those allegations.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	SOR 1.a involves Applicant’s child-support arrearage with interest charges, resulting in a past-due balance of $69,089. $69,089	Against Applicant	Child Support Debt	Admitted	—	—	—
1.b	SOR 1.b is a delinquent cell phone provider account.	Against Applicant	Unspecified Financial	Denied	—	—	—
1.c	SOR 1.c is a loan obtained to start a mobile entertainment business in 2007. The business failed in 2008, and the debt was reduced to a judgment. It remains unpaid.	Against Applicant	Judgment Against Applicant	Admitted	—	—	—
1.d	SOR 1.d is a judgment from a debt from an apartment rental. Applicant provided evidence that the debt was paid in 2015.	For Applicant	Judgment Against Applicant	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. 18-01964

) Applicant for Security Clearance )

For Government: Mary Margaret Foreman, Esq., Department Counsel For Applicant: Pro se 06/19/2019

______________

STATEMENT OF CASE

______________

Gregg A. Cervi, Administrative Judge

This case involves security concerns raised under Guideline F (Financial Considerations). Eligibility for access to classified information is denied.

Statement of the Case

Applicant submitted a security clearance application (SCA) on April 20, 2017. On August 20, 2018, the Department of Defense Consolidated Adjudications Facility (DOD CAF) sent him a statement of reasons (SOR) alleging security concerns under Guideline F. The DOD CAF acted under Executive Order (Exec. Or.) 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 revised adjudicative guidelines (AG) effective on June 8, 2017.

Applicant answered the SOR on September 11, 2018, and requested a hearing before a DOHA Administrative Judge. Another Administrative Judge was assigned and scheduled a hearing for January 18, 2019. On January 14, 2019, Applicant notified the

Administrative Judge and Department Counsel that he no longer wanted a hearing, and requested a decision based on the written record. The Government’s written brief with supporting documents, known as the File of Relevant Material (FORM), was submitted by Department Counsel on January 30, 2019. The case was assigned to me on May 29, 2019.

A complete copy of the FORM was provided to Applicant, who was afforded an opportunity to file objections and submit material to refute, extenuate, or mitigate the security concerns. Applicant received the FORM but did not submit a response. Government exhibits (GE) 1 to 6 are admitted into evidence.

FINDINGS OF FACT

Applicant is a 54-year-old network administrator, employed by a defense contractor since March 2017. He was previously employed by another contractor from January 2016 to March 2016, and reported periods of unemployment, including from April 2016 to March 2017. He earned a bachelor’s degree in 1993 and a master’s degree in 2005. He married in 1998 and divorced in 2003. He has one child. He does not currently hold a security clearance.

The SOR alleges four delinquent debts: a child-support arrearage; a collection account; and two judgments totaling about $96,319. Applicant admitted SOR 1.a (child support) and 1.c (judgment), and denied SOR 1.b (collection) and 1.d (apartment judgment), with explanations. All of the SOR debts are supported by substantial evidence in the record.

In his Answer to the SOR, Applicant noted that his debts became delinquent as a result of an inconsistent work history. He stated that he is the victim of a combination of many years of a poor economy, living in a poor location for his skill set, being overqualified, and jobs in his career field being moved overseas.

SOR 1.a involves Applicant’s child-support arrearage with interest charges, resulting in a past-due balance of $69,089. Applicant claimed to have a history of paying toward this debt when he is employed, and he communicates with the agency regularly. He did not provide documentary evidence supporting past payments or recent efforts to resolve the debt. The debt remains unresolved.

SOR 1.bis a delinquent cell phone provider account. Applicant claimed that the debt was resolved and he could provide proof “upon request.” No such documentary evidence proof was provided. SOR 1.cis a loan obtained to start a mobile entertainment business in 2007. The business failed in 2008, and the debt was reduced to a judgment. It remains unpaid. SOR 1.dis a judgment from a debt from an apartment rental. Applicant provided evidence that the debt was paid in 2015.

No evidence of credit counseling, current financial status, or other mitigating evidence was provided.

Law and Policies

“[N]o one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). As Commander in Chief, the President has the authority to “control access to information bearing on national security and to determine whether an individual is sufficiently trustworthy to have access to such information.” Id. at 527. The President has authorized the Secretary of Defense or his designee to grant applicants eligibility for access to classified information “only upon a finding that it is clearly consistent with the national interest to do so.” Exec. Or. 10865 § 2.

National security eligibility is predicated upon the applicant meeting the criteria contained in the adjudicative guidelines. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, an administrative judge applies these guidelines 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 a person’s stability, trustworthiness, reliability, discretion, character, honesty, and judgment. AG 1(b).

The Government reposes a high degree of trust and confidence in persons with access to classified information. This relationship transcends normal duty hours and endures throughout off-duty hours. 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.

Clearance decisions must be made “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” Exec. Or. 10865 § 7. Thus, a decision to deny a security clearance is merely an indication the applicant has not met the strict guidelines the President and the Secretary of Defense have established for issuing a clearance.

Initially, the Government must establish, by substantial evidence, conditions in the personal or professional history of the applicant that may disqualify the applicant from being eligible for access to classified information. The Government has the burden of establishing controverted facts alleged in the SOR. 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 suitability. See ISCR Case No. 92-1106 at 3, 1993 WL 545051 at *3 (App. Bd. Oct. 7, 1993).

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 burden of proving a mitigating condition,

and the burden of disproving it never shifts to the Government. See ISCR Case No. 02- 31154 at 5 (App. Bd. Sep. 22, 2005).

An applicant “has the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue his security clearance.” ISCR Case No. 01- 20700 at 3 (App. Bd. Dec. 19, 2002). “[S]ecurity clearance determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531; see AG 1(d).

ANALYSIS

Financial Considerations The security concern under this guideline 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. . . . The relevant disqualifying conditions under AG 19 include: (a) inability to satisfy debts;

(b) unwillingness to satisfy debts regardless of the ability to do so; and (c) a history of not meeting financial obligations. Applicant’s admissions and the documentary evidence in the record supporting the SOR allegations are sufficient to establish the disqualifying conditions above.

The following mitigating conditions under AG 20 are potentially relevant:

(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.

Applicant’s unresolved debts have been a recurring problem that have not been sufficiently addressed. Although Applicant generally claims his irregular work history resulted in his inability to satisfy debts, he has not shown good-faith efforts to resolve three unpaid debts and a stable financial status. I have insufficient evidence of Applicant’s ability or willingness to satisfy his current financial obligations and pay the delinquent debts to which he is responsible, even though he has been employed since 2017. SOR 1.dwas satisfied.

Applicant’s long-standing delinquent debts without a plan and good-faith efforts toward their resolution, raise significant doubts about his financial responsibility and he has not shown that continued financial problems are unlikely to recur. No mitigating condition fully applies to the remaining unresolved debts.

WHOLE PERSON CONCEPT

Under AG 2(a), 2(c), and 2(d), the ultimate determination of whether to grant national security eligibility must be an overall commonsense judgment based upon careful consideration of the guidelines and the 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:

(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. AG 2(d).

Although adverse information concerning a single criterion may not be sufficient for an unfavorable eligibility determination, the individual may be found ineligible if

available information reflects a recent or recurring pattern of questionable judgment, irresponsibility, or unstable behavior. AG 2(e).

I considered all of the potentially disqualifying and mitigating conditions in light of all the facts and circumstances surrounding this case. I have incorporated my findings of fact and comments under Guideline F in my whole-person analysis. Applicant’s delinquencies remain an ongoing concern. He has not shown evidence of whole-person factors sufficient to overcome the financial concerns. Accordingly, I conclude he has not carried his burden of showing that it is clearly consistent with the national security interests of the United States to grant him eligibility for access 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.c:

Against Applicant

Subparagraph 1.d:

For Applicant

CONCLUSION

I conclude that it is not clearly consistent with the national security interests of the United States to grant Applicant eligibility for access to classified information. Clearance is denied.

_______________________ Gregg A. Cervi Administrative Judge