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ISCR Case 19-01826 — CASE

ISCR Case 19-01826denied

Case Headnote

ISCR Case No. 19-01826

deniedJan 31, 2020· Hon. LeRoy F. Foreman· hearing

Summary

A 66-year-old custodian was denied a security clearance under Guideline F (Financial Considerations) due to significant delinquent debts. The Statement of Reasons (SOR) alleged that the applicant and his wife filed for Chapter 7 bankruptcy in January 2009, receiving a discharge in April 2009. Additionally, the SOR identified 15 delinquent debts totaling approximately $35,486.

Disqualifying conditions were raised under Adjudicative Guidelines (AG) ¶ 19(a) and AG ¶ 19(c). While mitigating conditions AG ¶ 20(a), AG ¶ 20(b), AG ¶ 20(c), and AG ¶ 20(d) were considered, they were not sufficient to overcome the security concerns.

The denial was based on the applicant's failure to provide evidence of resolving the numerous delinquent debts. His promises to pay were not supported by a history of timely payments, and there was no evidence of financial counseling or good-faith efforts to repay the outstanding obligations.

Why the Applicant Was Denied

The applicant did not provide evidence of resolving numerous delinquent debts totaling approximately $35,486.
The applicant's promises to pay the debts were not supported by a track record of timely payments.
The applicant's financial issues were not mitigated by any evidence of financial counseling or good-faith efforts to repay debts.

Conditions Referenced

Disqualifying

AG ¶ 19(a)appliedInability to Satisfy Debts
AG ¶ 19(c)appliedA History of Not Meeting Financial Obligations

Mitigating

AG ¶ 20(a)rejectedBehavior Happened so Long Ago, Was Infrequent, or Unlikely to RecurThe applicant's delinquent debts are numerous, recent, and not unlikely to recur.
AG ¶ 20(b)rejectedConditions Beyond the Person's ControlNo evidence connected the applicant's divorce or disabilities to his current debts.
AG ¶ 20(c)rejectedReceived Financial CounselingThe applicant's current financial problems are not under control.
AG ¶ 20(d)rejectedGood-faith Effort to Repay DebtsThe applicant submitted no evidence of payments or agreements to resolve debts.

Key Rule Quoted

“Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the adjudicative guidelines.”

Procedural Posture

SOR issuedSep 5, 2019
Answer filedSep 16, 2019
Hearing heldJan 31, 2020Decision issued on the same day.
Decision dateJan 31, 2020

Cite For

Denial of Security Clearance Due to Unresolved Financial Delinquencies
Impact of Financial Irresponsibility on Security Clearance Eligibility
Requirements for Mitigating Financial Considerations Under Guideline F

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's financial issues, including a Chapter 7 bankruptcy and multiple delinquent debts, raised significant security concerns under Guideline F. Despite the applicant's claims of settlement and efforts to pay debts, the judge concluded that these concerns were not mitigated, resulting in a denial of the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant and his wife filed a joint Chapter 7 bankruptcy petition in January 2009 and received a discharge in April 2009. $21,094	Against Applicant	Bankruptcy Filing	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	The SOR also alleges 15 delinquent debts totaling about $35,486. $35,486	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c–1.p	14 sub-charges — specific text not stated in this decision (against the applicant). (low confidence)	Against Applicant			—	—	—

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: )

)

[Redacted] )

ISCR Case No. 19-01826

) Applicant for Security Clearance )

For Government: Eric C. Price, Esq., Department Counsel For Applicant: Pro se 01/31/2020

STATEMENT OF CASE

FOREMAN, LeRoy F., 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 on May 2, 2017. On September 5, 2019, 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 adjudicative guidelines (AG) promulgated in Security Executive Agent Directive 4, National Security Adjudicative Guidelines (December 10, 2016).

Applicant answered the SOR on September 16, 2019, and requested a decision on the written record without a hearing. Department Counsel submitted the Government’s written case on December 27, 2019. On December 30, 2019, a complete copy of the file

of relevant material (FORM) was sent to Applicant, who was given an opportunity to file objections and submit material to refute, extenuate, or mitigate the Government’s evidence. He received the FORM on January 6, 2020, and timely responded. His response was marked as Applicant’s Exhibit (AX) A and included in the record without objection. AX A consisted of another copy of Applicant’s answer to the SOR and did not include any additional information. The case was assigned to me on January 23, 2020.

Evidentiary Issue

The FORM included a summary of a personal subject interview (PSI) conducted on September 25, 2018. The PSI summary was not authenticated as required by Directive ¶ E3.1.20. Department Counsel informed Applicant that he was entitled to comment on the accuracy of the PSI summary; make any corrections, additions, deletions or updates; or object to consideration of the PSI summary on the ground that it was not authenticated. Applicant responded to the FORM but did not comment on the accuracy or completeness of the PSI summary, nor did he object to it. I conclude that he waived any objections to the PSI summary. Although pro se applicants are not expected to act like lawyers, they are expected to take timely and reasonable steps to protect their rights under the Directive. ISCR Case No. 12-10810 at 2 (App. Bd. Jul. 12, 2016). See ADP Case No. 17- 03252 (App. Bd. Aug. 13, 2018) (holding that it was reasonable for the administrative judge to conclude that any objection had been waived by an applicant’s failure to object after being notified of the right to object).

FINDINGS OF FACT

In Applicant’s answer to the SOR, he admitted the allegations in SOR ¶¶ 1.a and 1.b. He did not expressly admit or deny the allegations in SOR ¶¶ 1.cthrough 1.p. In response to the allegations in SOR ¶¶ 1.e and 1.n, he stated that the debts were settled, but he did not provide any documentation of a settlement. In response to the allegations in SOR ¶¶ 1.c, 1.d, 1.f-1.j, 1.m, 1.o, and 1.p, he stated that he would make an effort to pay the debts. He did not respond to the allegations in SOR ¶¶ 1.kand 1.l. His answers to the SOR are incorporated in my findings of fact.

Applicant is a 66-year-old custodian employed by a federal contractor since June 1998. He applied for a security clearance in June 1998, and it apparently was granted and has been revalidated at least once since he was hired by his current employer.

Applicant attended an institute for the deaf and blind from about August 1960 to May 1969 and then attended a trade school for about three years. He did not receive a diploma or degree from either institution. (FORM Item 4 at 3.)

Applicant married in April 1984 and divorced in March 2010. He has lived with his ex-wife since July 2016. He has a 33-year-old daughter, who assisted him in completing his SCA and handles all his financial matters. (FORM Item 3 at 18; FORM Item 4 at 3-5.) The security investigator who interviewed Applicant noted that he did not understand several of the concepts discussed during the interview. The investigator also noted that

Applicant cannot read, write, or type and has limited ability to use sign language. Applicant told the investigator that he did not know what a credit report is, because his daughter handles all his financial affairs. (FORM Item 4 at 5.)

Applicant and his wife filed a joint Chapter 7 bankruptcy petition in January 2009 and received a discharge in April 2009. The petition listed $21,094 in secured claims, including two automobiles, and $41,133 in unsecured debts, including deficiencies after two repossessions and multiple consumer debts and credit-card accounts. The bankruptcy is alleged in SOR ¶ 1.a.

The SOR also alleges 15 delinquent debts totaling about $35,486 (SOR ¶¶ 1.b- 1.p). Applicant did not provide evidence that any of the debts have been resolved. In his answer to the SOR, he promised to resolve 11 of the debts, but provided no evidence of specific actions to resolve them. During the interview by the security investigator in September 2018, he was unable to provide any specific information about the delinquent debts reflected in his credit reports. Most of the debts became delinquent before May 2016, except the $70 medical debt alleged in SOR ¶ 1.j, which became delinquent in September 2018.

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.

Eligibility for a security clearance 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 all available and reliable information about the person, past and present, favorable and unfavorable.

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. 15-01253 at 3 (App. Bd. Apr. 20, 2016).

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.

ANALYSIS

Guideline F, 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. . . . An individual who is financially overextended is at greater risk of having to engage in illegal or otherwise questionable acts to generate funds. . . .

This concern is broader than the possibility that a person might knowingly compromise classified information to raise money. It encompasses concerns about a person’s self-control, judgment, and other qualities essential to protecting classified information. A person who is financially irresponsible may also be irresponsible,

unconcerned, or negligent in handling and safeguarding classified information. See ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012).

Applicant’s admissions and the evidence in the record establish two disqualifying conditions under this guideline: AG ¶ 19(a) (“inability to satisfy debts”) and AG ¶ 19(c) (“a history of not meeting financial obligations”). The following mitigating conditions are potentially applicable:

AG ¶ 20(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;

AG ¶ 20(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;

AG ¶ 20(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; and

AG ¶ 20(d): the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts.

AG ¶ 20(a) is not established. Applicant’s delinquent debts are numerous, recent, and were not incurred under circumstances making them unlikely to recur.

AG ¶ 20(b) is not established. Applicant’s divorce, his limited communication ability, and inability to manage his own financial affairs are conditions beyond his control. However, there is no evidence in the record connecting his divorce or his disabilities to the Chapter 7 bankruptcy or his current debts.

AG ¶ 20(c) is not established. Applicant completed the counseling required to obtain a Chapter 7 bankruptcy discharge, but his current problems are not under control.

AG¶ 20(d) is not established. Applicant submitted no evidence of payments, payment agreements, or other resolution of his debts. His promises to pay the debts are not a substitute for a track record of paying debts in a timely manner. ISCR Case No. 07- 13041 at 4 (App. Bd. Sep. 19, 2008).

WHOLE PERSON CONCEPT

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. In applying the whole- person concept, an 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. An 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.

I have incorporated my comments under Guideline F in my whole-person analysis. Some of the factors in AG ¶ 2(d) were addressed under that guideline, but some warrant additional comment.

While Applicant’s disabilities deserve sympathetic consideration, his inability to manage his financial affairs makes him vulnerable to pressure, coercion, exploitation or duress. Because he requested a determination on the record without a hearing, I had no opportunity to evaluate his credibility and sincerity based on demeanor. See ISCR Case No. 01-12350 at 3-4 (App. Bd. Jul. 23, 2003). After weighing the disqualifying and mitigating conditions under Guideline F, and evaluating all the evidence in the context of the whole person, I conclude Applicant has not mitigated the security concerns raised by his financial delinquencies.

FORMAL FINDINGS

I make the following formal findings on the allegations in the SOR:

Paragraph 1, Guideline F (Financial Considerations): AGAINST APPLICANT

Subparagraphs 1.a-1.p:

Against Applicant

CONCLUSION

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

LeRoy F. Foreman Administrative Judge