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ISCR Case 18-02476 — CASE

ISCR Case 18-02476denied

Case Headnote

ISCR Case No. 18-02476

deniedMar 22, 2019· Hon. Noreen A. Lynch· hearing

Summary

A 59-year-old machinist was denied a security clearance under Guideline F (Financial Considerations) due to approximately $24,000 in delinquent accounts. The Statement of Reasons detailed nine debts, with the applicant admitting to four totaling over $12,000, and an additional account for $8,555, attributing these issues to periods of unemployment.

Regarding other alleged medical debts, the applicant stated he could establish installment plans if provided with creditor information or invoices. He denied several other charges, claiming they were unknown, and disputed a cable equipment charge, believing he did not owe for it.

The judge found that the applicant provided no documentation of efforts to pay or settle his debts, nor any evidence of financial counseling or a concrete plan to address his financial issues. Consequently, the security clearance was denied.

Why the Applicant Was Denied

The applicant admitted to multiple delinquent accounts totaling approximately $24,000.
He provided no documentation of efforts to pay or settle his debts.
There was no evidence of financial counseling or a plan to address his financial issues.

Conditions Referenced

Disqualifying

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

Key Rule Quoted

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

Procedural Posture

SOR issuedOct 26, 2018
Answer filed—Applicant elected to have the case decided on the written record.
Hearing held—Decision based on written record.
Decision dateMar 22, 2019

Cite For

Insufficient Evidence of Financial Stability Under Guideline F
Failure to Mitigate Financial Obligations
Lack of Documentation Supporting Claims of Financial Responsibility

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 multiple financial concerns under Guideline F, including admitted debts totaling over $12,000. The applicant's claims of unemployment and inability to pay were not sufficient to mitigate the security concerns, leading to a decision against the applicant.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant admitted four of the nine debts listed on the SOR, which total more than $12,000, and provided explanations. $12,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Applicant admitted that he owes the account in 1.b, in the amount of $8,555 due to unemployment. $8,555	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	As to SOR allegations for 1.c, 1.d, and 1.f (medical accounts), Applicant states that he could set up an installment plan if he knew the creditor or was provided an invoice.	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	specific text not stated in this decision	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	He denied 1.e, 1.g, 1.h, and 1.i claiming that they were unknown charges and creditors.	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	As to SOR allegations for 1.c, 1.d, and 1.f (medical accounts), Applicant states that he could set up an installment plan if he knew the creditor or was provided an invoice.	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	He denied 1.e, 1.g, 1.h, and 1.i claiming that they were unknown charges and creditors.	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	He denied 1.e, 1.g, 1.h, and 1.i claiming that they were unknown charges and creditors.	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i	As to 1.i, Applicant states that cable equipment was left in the unit. He did not think he owed for the equipment.	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—

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. 18-02476 ) Applicant for Security Clearance ) Appearances For Government: Rhett Petcher, Esq., Department Counsel For Applicant: Pro se ______________

STATEMENT OF CASE

______________ LYNCH, Noreen 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 on February 7, 2017. On October 26, 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 adjudicative guidelines (AG) implemented by the DOD on June 7, 2017. Applicant timely answered the SOR and elected to have his case decided on the written record in lieu of a hearing. Department Counsel submitted the Government’s file of relevant material (FORM) on January 9, 2019. Applicant received the FORM on January 15, 2019. The Government’s evidence, included in the FORM and identified as 03/22/2019

Items 1 through 5, is admitted without objection. Applicant did not provide a response to the FORM. The case was assigned to me on March 12, 2019. Based on my review of the documentary evidence, I find that Applicant has not mitigated the financial concerns.

Findings of Fact1

Applicant is a 59-year-old machinist for a federal contractor. He is thrice divorced and has two adult children. (Item 2) He obtained his general education degree (GED) in 1980. He has never held a security clearance. He has been employed with his current employer since August 2017. (Item 3)

Financial

The SOR alleges in 1.a-1.i, nine delinquent accounts including auto, rent, consumer, and medical collection or charged-off accounts totaling approximately $24,000. (Item 1) Applicant admitted four of the nine debts listed on the SOR , which total more than $12,000, and provided explanations. He denied the other accounts claiming that in the case of 1.a, the account was “taken off the books” and he does not owe $9,500. He denied 1.e, 1.g, 1.h, and 1.i claiming that they were unknown charges and creditors. (Item 1) His credit reports confirm the delinquent debts. (Items 4, 5)

Applicant attributes his delinquent debts to a period of unemployment. He was unemployed from June 2016 to August 2016. He received unemployment benefits during this time to support himself. He also reported unemployment from August 2009 to September 2010. (Item 3) He provided no other information other than one of his divorces had a negative impact on his finances .

Applicant admitted that he owes the account in 1.b, in the amount of $8,555 due to unemployment. He did not provide any information as to how or when he would address the debt.

As to SOR allegations for 1.c, 1.d, and 1.f (medical accounts), Applicant states that he could set up an installment plan if he knew the creditor or was provided an invoice.

As to 1.i, Applicant states that cable equipment was left in the unit. He did not think he owed for the equipment.

During his investigatve interview in 2018, Applicant stated that most of the delinquent accounts were due to his former spouses or that he had no knowledge of the accounts. He told the investigator that he would look into them by contacting the creditor and trying to resolve the account. (Item 3) There is no information in the record as to Applicant’s income, budget, or any financial counseling. He provided no documentary

1 Applicant’s personal information is extracted from his security clearance application (Item 2) unless otherwise indicated by a parenthetical citation to the record.

evidence of any kind to reflect any efforts he has made to pay his bills or settle with an installment plan.

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. 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.

ANALYSIS

Guideline F (Financial Considerations)

The 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. 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 . . . .

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, corroborated by his credit reports, and failure to pay his delinquent debts or set up any payment plans raises 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 security concerns raised in the SOR may be mitigated by any of the following potentially applicable factors:

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;

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

AG ¶ 20 (e): consistent spending beyond one’s means or frivolous or irresponsible spending, which may be indicated by excessive indebtedness, significant negative cash flow, a history of late paymenys or of non- payment, or other negative financial indicators.

Applicant provided no documentation that any of the delinquent accounts have been addressed or paid. He was unemployed for a short time but he presented no nexus to the delinquent accounts. Neither did he present any specific information concerning his divorces. He admitted that he owes some debts and promises to pay and set up plans. However, he provided no documentation to confirm his assertions. There is no information in the record as to his current salary. It is impossible to know if he is financially stable. Applicant has furnished insufficient information to meet his burden. There is no record of financial counseling. He provided no information that the accounts were not his accounts. None of the mitigating conditions apply.

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.

Applicant is thrice divorced and has two adult children. He has worked as a defense contractor for several employers.

The record does not provide sufficient information as to why Applicant accrued so many debts. He was unemployed for a short time. He wants to pay his debts and promises to set up plans. He did not submit any documentation that he has done anything to resolve his accounts, or that he does not owe them. He has not received financial counseling. There is no information as to his salary and ability to pay his debts.

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.i:

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.

Noreen A. Lynch Administrative Judge