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ISCR Case 19-02275 — CASE

ISCR Case 19-02275denied

Case Headnote

ISCR Case No. 19-02275

deniedApr 6, 2020· Hon. Gregg A. Cervi· hearing

Summary

A 56-year-old staff duty driver for a defense contractor was denied a security clearance due to significant financial concerns under Guideline F. The applicant admitted to owing approximately $29,000 in delinquent debts, which were the sole basis for the Statement of Reasons.

Despite his employment and support from colleagues, the applicant failed to demonstrate any efforts to resolve these outstanding debts. He also did not seek financial counseling to address his situation. These omissions raised disqualifying conditions under Adjudicative Guidelines ¶ 19(a) and ¶ 19(c).

Ultimately, the applicant's failure to address his financial obligations or seek assistance led to significant doubts regarding his reliability and trustworthiness. Consequently, his security clearance was denied.

Why the Applicant Was Denied

The applicant admitted to owing approximately $29,000 in delinquent debts.
He failed to show any efforts to resolve these debts or seek financial counseling.
His financial status raised significant doubts about his reliability and trustworthiness.

Conditions Referenced

Disqualifying

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

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 15, 2019
Answer filedSep 22, 2019
Hearing heldJan 15, 2020
Decision dateApr 6, 2020

Cite For

Failure to Demonstrate Financial Responsibility Under Guideline F
Impact of Unresolved Debts on Security Clearance Eligibility
Importance of Mitigating Conditions in Financial 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: HearingDecided: denied

The applicant has approximately $29,000 in delinquent debts, which he admitted to owing. The judge found that the applicant has a history of financial delinquencies that remain unresolved, leading to a decision against the applicant regarding his security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant owes approximately $29,000 in delinquent debts. $29,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Other
1.b–1.j	9 sub-charges — specific text not stated in this decision (against the applicant).	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: )

)

ISCR Case No. 19-02275

) Applicant for Security Clearance )

For Government: Tara Karoian, Esq., Department Counsel For Applicant: Pro se 04/06/2020

______________

STATEMENT OF CASE

______________

CERVI, Gregg A., 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 December 17, 2018. On August 15, 2019, the Department of Defense Consolidated Adjudications Facility (DOD CAF) sent him a Statement of Reasons (SOR) alleging security concerns under Guideline F (Financial Considerations). 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) effective on June 8, 2017.

Applicant responded to the SOR on September 22, 2019, and requested a hearing before an administrative judge. The Defense Office of Hearings and Appeals issued a notice of hearing on December 11, 2019, and the hearing was convened on January 15, 2020. Government Exhibits (GE) 1 through 4 were admitted into evidence without

objection. Applicant testified and submitted Applicant’s Exhibits (AE) A and B, which were admitted into evidence. DOHA received the hearing transcript on January 28, 2020.

FINDINGS OF FACT

Applicant is a 56-year-old staff duty driver for a defense contractor, employed since September 2018. He graduated from high school in 1981 and completed some college credits. He served on active duty in the United States Army from 1982 until he was honorably discharged in 1985. He was married in 1985 and divorced in 1995; again married in 1996 and divorced in 1998; and last remarried in 2006. He has three biological children and two step children. One eight-year-old child lives with him. Applicant was laid off from a job in June 2014 and remained unemployed until November 2014. He was dismissed from a job in February 2016 until he was employed in October 2016. He was again laid off in May 2017. While unemployed, he drove a car for hire, and when reemployed in his current position in September 2018, he continued to drive a car for hire on a part-time basis.

The SOR alleges Applicant owes approximately $29,000 in delinquent debts. Applicant admitted all of the allegations, and stated in his Answer to the SOR that he was unaware of some of the medical debts alleged. He noted that he was generally current on all of his debts until about January 2018, when he was unable to make ends meet and had to choose which debts to pay.

Applicant has not addressed any of the SOR debts. He lives from paycheck -to - paycheck and has little to no savings. He used $18,000 in his retirement plan to pay a debt in 2018, and owns a house valued at $150,000 with a mortgage of $126,000. He is paying his mortgage, car loan, and student loans (owes $11,000) on time, but is unable to make payments on other debts. He testified that he was told by his employer that he should not seek financial counseling or bankruptcy protection, as it would preclude him from receiving a security clearance. Regardless, Applicant has had no contact with creditors nor has he made attempts to resolve his debts.

Applicant and his spouse are both working, and earn about $65,500 in net pay. He is supported by his team lead and human resources manager. Both believe Applicant is an employee in good standing, trustworthy, and well-liked by the soldiers he serves.

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. 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, e.g., ISCR Case No. 12-01295 at 3 (App. Bd. Jan. 20, 2015).

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, e.g., 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

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. . . .

The relevant disqualifying conditions under AG ¶ 19 include: (a) inability to satisfy debts; and

(c) a history of not meeting financial obligations. Applicant’s admissions, testimony, and the documentary evidence in the record are sufficient to establish the disqualifying conditions AG ¶¶ 19(a) and (c).

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 has a history of financial delinquencies that remain unresolved. The debts appear to have resulted from periods of unemployment and underemployment, and he was instructed by his employer not to seek financial assistance. However, Applicant has not shown efforts to resolve debts. Despite being poorly informed about financial assistance, he does not have the financial means to pay debts, and appears to live above his means.

Overall, Applicant’s financial status raises significant doubts about his financial management decisions, personal responsibility, and ability to address delinquent debts. I am not convinced Applicant makes good financial decisions, and his financial status continues to cast doubt on his reliability, trustworthiness, and good judgment. No mitigation conditions fully apply.

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 listed at AG ¶ 2(d).

I considered all of the potentially disqualifying and mitigating conditions in light of the facts and circumstances surrounding this case. I have incorporated my findings of fact and comments under Guideline F in my whole-person analysis. I also considered Applicant’s military service and difficult employment history. However, I remain unconvinced of his financial responsibility and ability to meet his financial obligations.

Accordingly, I conclude Applicant 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.j:

Against Applicant

CONCLUSION

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

_______________________ Gregg A. Cervi Administrative Judge