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ISCR Case 18-02071 — CASE

ISCR Case 18-02071denied

Case Headnote

ISCR Case No. 18-02071

deniedFeb 14, 2019· Hon. Richard A. Cefola· hearing

Summary

A 29-year-old defense contractor and former Marine was denied a security clearance under Guideline F, Financial Considerations. The applicant admitted to approximately $20,121 in past-due debts owed to eight different creditors, demonstrating a history of not meeting financial obligations. The Statement of Reasons highlighted that these financial problems were ongoing and had only recently begun to be addressed.

While the applicant successfully disputed an alleged $14,257 debt with one creditor and approximately $3,104 with another, and made a minor payment of $35 to a third, these actions were deemed insufficient. The judge found that the applicant's significant past-due indebtedness remained largely unaddressed, and the recent efforts to resolve debts were too late to mitigate the concerns.

Ultimately, the security clearance was denied because the applicant's financial problems were ongoing, had not been adequately addressed over time, and the recent actions taken to resolve debts were considered insufficient.

Why the Applicant Was Denied

The applicant has significant past-due indebtedness totaling approximately $20,121.
The applicant's financial problems are ongoing and have not been adequately addressed over time.
The applicant's recent actions to resolve debts were deemed insufficient and too late.

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)raisedHistory of Not Meeting Financial Obligations

Mitigating

AG ¶ 20(a)rejectedBehavior Happened Long Ago or InfrequentlyThe applicant's financial issues are ongoing.
AG ¶ 20(b)rejectedConditions Largely Beyond the Person's ControlThe applicant's financial issues were not sufficiently mitigated.
AG ¶ 20(d)rejectedGood-faith Effort to Repay Overdue CreditorsThe applicant's recent actions were too minimal and late.
AG ¶ 20(e)appliedReasonable Basis to Dispute Legitimacy of Past-due DebtThe applicant successfully disputed some debts.

Key Rule Quoted

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

Procedural Posture

SOR issuedAug 31, 2018
Answer filedSep 24, 2018
Hearing heldDec 4, 2018
Decision dateFeb 14, 2019

Cite For

Ongoing Financial Issues Under Guideline F
Insufficient Mitigation of Financial Considerations
Disputing Debts Does Not Automatically Mitigate Financial Concerns

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 under Guideline F, including significant past-due debts totaling approximately $20,121. While the applicant successfully mitigated some debts, the overall financial situation was deemed inconsistent with national security interests, leading to a denial of the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant has past-due debts to eight different creditors totaling about $20,121. $20,121	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.b	Applicant has a history of not meeting financial obligations.	Against Applicant	Unspecified Financial	Unknown	—	—	—
1.c	Applicant's financial problems are ongoing and continuing.	Against Applicant	Unspecified Financial	Unknown	—	—	—
1.d	Applicant has significant past-due indebtedness that he has only recently begun to address.	Against Applicant	Unspecified Financial	Unknown	—	—	—
1.e	Applicant has paid the alleged $35 past-due debt to Creditor E. $35	For Applicant	Unspecified Financial	Admitted	—	—	—
1.f	Applicant has a history of not meeting financial obligations.	Against Applicant	Unspecified Financial	Unknown	—	—	—
1.g	Applicant successfully disputed an alleged $14,257 past-due debt to Creditor G. $14,257	For Applicant	Unspecified Financial	Admitted	—	—	—
1.h	Applicant successfully disputed three alleged past-due debts, totaling about $3,104, to Creditor H. $3,104	For Applicant	Unspecified Financial	Admitted	—	—	—
1.i–1.n	6 sub-charges — specific text not stated in this decision (4 against, 2 for the applicant). (low confidence)	Mixed			—	—	—

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. 18-02071

)

) Applicant for Security Clearance )

For Government: Tara Karoian, Esq., Department Counsel For Applicant: Pro se

February 14, 2019 ______________

STATEMENT OF CASE

______________

CEFOLA, Richard A., Administrative Judge:

Statement of the Case

On August 31, 2018, 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 September 24, 2018, and requested a hearing before an administrative judge. (Answer.) The case was assigned to me on October 25, 2018. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on November 14, 2018, scheduling the hearing for December 4, 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. The record was left open until January 4, 2019, for receipt of additional documentation. Applicant presented 11 documents, which Applicant marked Applicant’s Exhibits (AppXs) A through N (AppX

H~K is one and the same document addressing four past-due debts to the same creditor). DOHA received the transcript of the hearing (TR) on December 13, 2018.

FINDINGS OF FACT

Applicant admitted to the allegations in SOR ¶¶ 1.a. through 1.g., and 1.k. through 1.n. He denied SOR allegations ¶¶ 1.h. through 1.j. After a thorough and careful review of the pleadings, exhibits, and testimony, I make the following findings of fact.

Applicant is a 29-year-old employee of a defense contractor. (TR at page 14 line 4 to page 15 line 5, and GX 1 at pages 5 and 15.) He has been employed with the defense contractor since March of 2016, but he does not currently have a security clearance. (Id.) Applicant served in the Marine Corps from 2008–2013. (TR at page 14 line 11 to page 15 line 23, and GX 1 at page 25.) He was deployed “to Iraq in 2009,” and “to Afghanistan in 2010 to 2011.” (Id.) As a result, he receives 70% compensation from the Veterans Administration. (TR at page 15 lines 2-~23.) Applicant received an Honorable Discharge. (GX 1 at page 26.)

Guideline F - Financial Considerations

Applicant attributes his current financial difficulties to a divorce in 2012, and periods of unemployment in 2013 and in 2014. (TR at page 15 line 9 to page 19 line 2.)

1.a.~1.d., 1.f., and 1.k.~1.n. Applicant admits that he has past-due debts to eight different creditors totaling about $20,121. (TR at page 19 at line 23 to page 23 line 8, at page 26 line 7 to page 33 line 2, and at page 35 line 14 to page 36 line 19.) On New Year’s Eve, four months after the issuance of the SOR, Applicant sent the following two line, letter request to each of these creditors. (AppXs a~d, f, and k~n.) In each letter he simply requested the following: “this letter is being sent to you to request information on my account. I would like to be sent a statement with current amount due and minimum monthly payment options to be able to resolve this credit account.” (Id.) Applicant’s recent requests, though laudable, are too little too late. He has had years to address these known delinquencies that remain outstanding. These allegations are found against Applicant.

1.e. Applicant has paid the alleged $35 past-due debt to Creditor E, as evidenced by correspondence with Creditor E. (TR at page 34 line 17 to page 35 line 13, and AppX E.) This allegation is found for Applicant.

1.g. Applicant successfully disputed an alleged $14,257 past-due debt to Creditor G; and as such, it does not appear on the Government’s two most recent 2018 credit reports. (TR at page 24 line 16 to page 26 line 6, and GXs 4 and 5.) This allegation is found for Applicant.

1.h.~1.j. Applicant successfully disputed three alleged past-due debts, totaling about $3,104, to Creditor H; and as such, they do not appears on the Government’s two

most recent 2018 credit reports. (TR at page 23 line 9 to page 24 line 15, and GXs 4 and 5.) These allegations are found for 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. Three are potentially applicable in this case:

(a) inability to satisfy debts;

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

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;

(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 financial problems are ongoing and continuing. He has a long history of delinquencies, and significant past-due indebtedness that he has only recently begun to address, through simple two sentence letters requesting “information.” He has clearly not demonstrated that future financial problems are unlikely. Mitigation under AG ¶ 20 has not been established. Guideline F is found against Applicant.

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 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.d.:

Against Applicant Subparagraph 1.e:

For Applicant Subparagraph 1.f:

Against Applicant Subparagraphs 1.g.-1.j.:

For Applicant Subparagraphs 1.k.-1.n.:

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