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ISCR Case 16-01689.h1 — CASE

ISCR Case 16-01689.h1denied

Case Headnote

ISCR Case No. 16-01689.h1

deniedJul 19, 2017· Hon. Arthur E. Marshall, Jr.· hearing

Summary

A 46-year-old contracts manager was denied a security clearance under Guideline F (Financial Considerations) due to over $136,000 in delinquent debts. The Statement of Reasons detailed numerous financial obligations, including approximately $106,250 in U.S. Department of Education student loans, a charged-off account, a repossessed vehicle balance, a collection account from a rental property, a charged-off credit account, multiple telecommunications balances, and three adverse judgments.

The applicant admitted responsibility for about $127,000 of the delinquent debts. However, the denial was based on the applicant's failure to provide sufficient documentary evidence of efforts to resolve these debts or to seek financial counseling.

Furthermore, the applicant's claims of financial hardship due to unemployment were not substantiated with evidence. Consequently, the adjudicator concluded that the financial concerns were not mitigated, leading to the denial of the security clearance.

Why the Applicant Was Denied

Applicant admitted responsibility for approximately $127,000 in delinquent debts.
Applicant provided no documentary evidence of efforts to resolve her debts or financial counseling.
The applicant's claims of financial hardship due to unemployment were not substantiated with evidence.

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

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

Procedural Posture

SOR issuedAug 6, 2016
Answer filedJul 28, 2016Notarized response admitting some allegations.
Hearing held—Determination based on written record.
Decision dateJul 19, 2017

Cite For

Failure to Provide Evidence of Financial Responsibility Under Guideline F
Insufficient Documentation to Mitigate Financial Concerns
Importance of Substantiating Claims of Financial Hardship

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 had significant financial issues, including over $136,000 in delinquent debts, primarily due to student loans and other financial obligations. Despite admitting responsibility for many debts, the applicant failed to provide sufficient documentation to demonstrate efforts to mitigate these financial concerns, leading to a decision against the applicant on all allegations under Guideline F.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	About $106,250 of that debt is related to U.S. Department of Education (ED) student loans $106,250	Against Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.b	Charged off account	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.c	Repossessed vehicle balance	Against Applicant	Auto Loan Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.d	Collection account related to a rental property	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.e	Charged off credit account	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.f	Telecommunications balance	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.g	Telecommunications balance	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.h	Adverse judgment	Against Applicant	Judgment Against Applicant	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.i	Adverse judgment	Against Applicant	Judgment Against Applicant	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.j	Adverse judgment	Against Applicant	Judgment Against Applicant	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.k	Telecommunications balance	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.l	Collection account	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (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. 16-01689 ) ) Applicant for Security Clearance

For Government: Benjamin R. Dorsey, Esquire, Department Counsel For Applicant: Pro se

07/19/2017 ______________

STATEMENT OF CASE

______________

MARSHALL, Jr., Arthur E., Administrative Judge:

Statement of the Case

On August 6, 2016, the Department of Defense (DOD) Consolidated Adjudications Facility (CAF) issued Applicant a Statement of Reasons (SOR) detailing security concerns under Guideline F (Financial Considerations).1 In a response notarized on July 28, 2016, Applicant admitted eight allegations and requested a determination based on the written record. On September 20, 2016, the Government issued a File of Relevant Material (FORM) with six attachments (“Items”). The case was assigned to me on July 1, 2017. Based on my review of the case file and submissions, I find Applicant failed to mitigate financial considerations security concerns.

FINDINGS OF FACT

Applicant is a 46-year-old contracts manager who has worked for the same employer since April 2013, following a period of unemployment from January 2013 to April 2013. In the 1990s, she was honorably discharged from the United States Army National Guard, where she had served as an inactive reservist. Divorced in late 2012, she is the mother of a 19-year-old child. Applicant earned both bachelor’s and master’s degrees, and, most recently, a post-graduate certification from a leading university.

Cited in the SOR at allegations 1.a-1.lare 12 delinquent debts. Those debts amount to over $136,000. About $106,250 of that debt is related to U.S. Department of Education (ED) student loans, as noted at allegation 1.a. Other debts are related to automobile loans, debts owed to rental properties, judgments, and credit accounts.

Applicant admits responsibility for the delinquent debts cited at 1.a (the student loan debt noted), 1.c (repossessed vehicle balance), 1.d (collection account related to a rental property), 1.e (charged off credit account), 1.h (adverse judgment), 1.i (adverse judgment), and 1.j (adverse judgment), amounting to approximately $127,000. Applicant denies the debts alleged at 1.b (charged off account), 1.f (telecommunications balance), 1.g (telecommunications balance), 1.k (telecommunications balance), and 1.l (collection account), amounting to over $9,000. In her SOR response, Applicant wrote: “Unemployment is not an excuse from repaying my debt, but it is the cause of my financial issues listed here that I have experienced since 2013.”2 (FORM, Item 2 (SOR response, dated August 29, 2016))

With regard to these accounts, Applicant wrote that she is making payments on the debt balance at 1.a, but provided no documentary evidence reflecting such measures. She wrote that she is working with the creditors noted at allegations 1.b, 1.d, 1.f, 1.g, and 1.k, and has initiated contact with the creditors cited at allegations 1.cand 1.e, but she provided no supporting documentary evidences. She conveyed that the debts at 1.hand 1.i were paid, and that the debts cited at 1.jand 1.dare the same, but no documentary evidence was offered to that effect. As for the alleged obligation noted at allegation 1.l, Applicant wrote that she disputes the debt, but provided no documentation reflecting a dispute with any entity or substantiating her claim that the adverse account entry is in error.3

POLICIES

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines. In addition to brief introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which are used in evaluating an applicant’s eligibility for access to classified information.

These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, these guidelines are applied in conjunction with the factors listed in the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. 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, in making a decision.

The protection of the national security is the paramount consideration. Any doubt concerning personnel being considered for access to classified information will be resolved in favor of national security. In reaching this decision, I have only drawn conclusions that are reasonable, logical, and based on the evidence provided.

Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. An applicant is responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by applicant or proven by Department Counsel and has the ultimate burden of persuasion to obtain a favorable security decision.

A person seeking access to classified information enters into a fiduciary relationship with the Government based on trust and confidence. This relationship transcends normal duty hours. Decisions include consideration of the possible risk the applicant may deliberately or inadvertently fail to safeguard classified information. Such 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.

ANALYSIS

Under AG ¶ 18, the security concern under this guideline is that failure or inability 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.

Here, Applicant admitted responsibility for about $127,0000 in delinquent debts, and provided no documentary evidence substantiating her denial of responsibility for an additional sum of approximately $9,000. This is sufficient evidence to invoke three of the available disqualifying conditions: AG ¶ 19(a) inability to satisfy debts;

AG ¶ 19(b) unwillingness to satisfy debts regardless of the ability to do so; and

AG ¶ 19(c) a history of not meeting financial obligations.

Five conditions could potentially mitigate these finance-related security concerns: 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, or 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 course, 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) 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.

The debts at issue are multiple in number and, according to Applicant, are mainly the result of a period of unemployment between January 2013 and April 2013. While a relatively brief period of unemployment is neither unique nor a condition unlikely to recur, it is notable. That period, along with her late-2012 divorce, could give rise to AG ¶ 20(b). However, insufficient information was offered to determine whether she acted responsibly at the time, obviating application of that mitigating condition.

Moreover, there is no documentation reflecting that Applicant has received financial counseling. Further, her lack of documentation regarding any efforts toward resolving the delinquent debts at issue undermines a finding that she has initiated a good-faith effort to repay the debts, made genuine strides to resolve those debts, or moved forward with a substantiated dispute of any of the delinquent debts alleged. Finally, her failure to submit any documentation regarding her finances makes it impossible to assess her present financial situation. Consequently, none of the available mitigating conditions apply.

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 adjudicative process factors listed at AG ¶ 2(d). Under AG ¶ 2(a), the need to utilize a “whole-person” evaluation is set forth. I considered the potentially disqualifying and mitigating conditions in light of all the facts and circumstances surrounding this case. I incorporated my comments under the guideline at issue in my whole-person analysis.

Applicant is a 46-year-old contracts manager who has worked for the same employer since April 2013, following a period of unemployment from January 2013 to April 2013. This period of unemployment occurred shortly after her 2012 divorce. She was honorably discharged from the Army National Guard in the 1990safter a period as an inactive reservist. She is the mother of a 19-year-old child. Applicant most recently received a post-master’s degree certification program.

Applicant admitted responsibility for about $106,250 of the $136,000 in delinquent debt alleged. She denied responsibility for an additional sum of about $9,000 in delinquent debt. Applicant attributed her acquired debt to her period of unemployment between January 2013 and April 2013. She failed, however, to provide any documentary materials evidencing any subsequent efforts toward addressing her admitted debts, forming a basis for denying the remaining delinquent debts at issue.

This process does not require all delinquent debts to be satisfied, but it does expect an applicant to formulate and initiate a realistic plan to address those debts. Applicant’s undocumented efforts fail to satisfy that standard. Therefore, I find Applicant failed to mitigate financial considerations security concerns. Clearance is denied.

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.l: 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 a security clearance. Eligibility for access to classified information is denied.

_____________________________ Arthur E. Marshall, Jr. Administrative Judge

FOOTNOTES

1 The action was taken under Executive Order 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 within the DOD on September 1, 2005. Effective June 8, 2017, by Directive 4 of the Security Executive Agent (SEAD 4), dated December 10, 2016, National Security Adjudicative Guidelines for all covered individuals who require initial or continued eligibility for access to classified information or eligibility to hold a sensitive position, were established to supersede all previously issued national security adjudicative criteria or guidelines. Accordingly, those guidelines previously implemented on September 1, 2006, under which this security clearance review was initiated, no longer apply. In comparing the two versions, there is no substantial difference that might have a negative effect on Applicant in this case. 2 Applicant’s unemployment between January 2013 and April 2013 is the only period of unemployment noted between 2000 and, at least, July 2014. (FORM, Item 3)

3 This alleged debt for $393 is related to a musical instrument rented for Applicant’s daughter. Applicant maintains that the instrument was returned and no balance is owed. She presented no documentation, however, reflecting the return of the instrument or any attempt to formally dispute the matter with either the creditor or one of the leading credit reporting bureaus.