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ISCR Case 19-01660 — CASE

ISCR Case 19-01660denied

Case Headnote

ISCR Case No. 19-01660

deniedFeb 5, 2020· Hon. Richard A. Cefola· hearing

Summary

A 32-year-old defense contractor and former U.S. Navy service member was denied a security clearance due to financial considerations under Guideline F. The applicant faced allegations concerning significant past-due debts, which raised security concerns regarding her financial responsibility and the likelihood of future financial problems.

The applicant admitted to several debts, including two co-signed debts with her mother to Creditor A totaling approximately $23,616. She also acknowledged an outstanding debt of $6,435 to Creditor C for automobile repairs, about $3,071 to Creditor D, and approximately $330 to Creditor E. Additionally, the applicant admitted to two past-due debts totaling about $19,409 owed to Creditor F.

Despite admitting to these debts, the applicant did not provide evidence of their resolution or mitigation. The denial was based on her failure to demonstrate a good-faith effort to resolve the debts, provide evidence of financial counseling, or show that future financial issues are unlikely to recur.

Why the Applicant Was Denied

The applicant has significant past-due indebtedness that raises security concerns.
The applicant failed to demonstrate that future financial problems are unlikely to recur.
The applicant did not provide evidence of financial counseling or a good-faith effort to resolve debts.

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

Key Rule Quoted

“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.”

Procedural Posture

SOR issuedJun 28, 2019
Answer filedAug 1, 2019
Hearing heldNov 19, 2019
Decision dateFeb 5, 2020

Cite For

Significant Past-due Indebtedness Under Guideline F
Failure to Demonstrate Financial Responsibility
Ongoing Financial Issues as a Security Concern

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 against the applicant on all financial allegations under Guideline F, concluding that the applicant failed to mitigate the financial concerns raised. The applicant admitted to several debts but denied others, which contributed to the overall negative assessment of her financial situation.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant denies these allegations, but admits that she co-signed with her mother for two past-due debts owed to Creditor A totaling about $23,616. $23,616	Against Applicant	Unspecified Financial	Denied	—	—	—
1.b	Applicant denies these allegations, but admits that she co-signed with her mother for two past-due debts owed to Creditor A totaling about $23,616. $23,616	Against Applicant	Unspecified Financial	Denied	—	—	—
1.c	Applicant admits that she is indebted to Creditor C for $6,435 as the result of automobile repairs. $6,435	Against Applicant	Auto Loan Debt	Admitted	—	—	—
1.d	Applicant admits that she is indebted to Creditor D for about $3,071. $3,071	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.e	Applicant admits that she is indebted to Creditor E for about $330. $330	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.f	Applicant admits that she is indebted to Creditor F for two past-due debts totaling about $19,409. $19,409	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.g	Applicant admits that she is indebted to Creditor F for two past-due debts totaling about $19,409. $19,409	Against Applicant	Unspecified Financial	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. 19-01660

)

) Applicant for Security Clearance )

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

February 5, 2020 ______________

STATEMENT OF CASE

______________

CEFOLA, Richard A., Administrative Judge:

Statement of the Case

On June 28, 2019, 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 August 1, 2019, and requested a hearing before an administrative judge. (Answer.) The case was assigned to me on October 22, 2019. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on October 22, 2019, scheduling the hearing for November 19, 2019. The hearing was convened as scheduled. The Government offered Exhibits (GXs) 1 through 4, which were admitted into evidence. Applicant testified on her own behalf. The record was left open until December 19, 2019, for receipt of additional documentation. Applicant

submitted nothing further in support of her contentions. DOHA received the transcript of the hearing (TR) on December 3, 2019.

FINDINGS OF FACT

Applicant admitted to the allegations in SOR ¶¶ 1.c. through 1.g. She denied SOR allegations ¶¶ 1.a. and 1.b. 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. (GX 1 at pages 7 and 15.) She has been employed with the defense contractor since October of 2017. Applicant held a security clearance during her nine years of active duty with the U.S. Navy from 2007–2016. (GX 1 at pages 21 and 34, and TR at page 12 line 25 to page 15 line 15.) She is divorced, and has one child. (TR at page 15 lines 4–11.)

Guideline F - Financial Considerations

1.a. and 1.b. Applicant denies these allegations, but admits that she co-signed with her mother for two past-due debts owed to Creditor A totaling about $23,616. (TR at page 15 line 19 to page 18 line 11, and GX 2 at page 3.) Applicant avers that her mother is pursuing the discharge of these debts through a bankruptcy, but has offered nothing further in this regard. (TR at page 15 line 19 to page 18 line 11.) These allegations are found against Applicant.

1.c. Applicant admits that she is indebted to Creditor C for $6,435 as the result of automobile repairs. (TR at page 18 line 12 to page 22 line 11.) Despite having been given a month to do so, Applicant has submitted nothing further in this regard. This allegation is found against Applicant.

1.d. Applicant admits that she is indebted to Creditor D for about $3,071. (TR at page 22 line 12 to page 22 line 23.) Despite having been given a month to do so, Applicant has submitted nothing further in this regard. This allegation is found against Applicant.

1.e. Applicant admits that she is indebted to Creditor E for about $330. (TR at page 24 line 22 to page 26 line 1.) Despite having been given a month to do so, Applicant has submitted nothing further in this regard. This allegation is found against Applicant.

1.f. and 1.g. Applicant admits that she is indebted to Creditor F for two past-due debts totaling about $19,409. (TR at page 26 line 2 to page 28 line 23.) Despite having been given a month to do so, Applicant 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. 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;

(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.

None of these apply. Applicant’s financial problems are ongoing. She has a history of delinquencies. Applicant 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 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 or 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.g.:

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