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ISCR Case 16-01715.h1 — CASE

ISCR Case 16-01715.h1denied

Case Headnote

ISCR Case No. 16-01715.h1

deniedOct 6, 2017· Hon. Michael H. Leonard· hearing

Summary

A 37-year-old master tradesman, employed by a federal contractor, was denied a security clearance due to financial considerations under Guideline F. The applicant had a history of delinquent debts, totaling approximately $22,274 across ten separate allegations, ranging from $1,000 to $4,993 each.

Disqualifying conditions under Guideline F were raised, specifically concerning a history of not meeting financial obligations and an unwillingness to resolve debts. While mitigating conditions related to the debts being isolated or not recent were considered, they were ultimately not sufficient to overcome the security concerns.

The denial was based on the applicant's failure to provide sufficient documentary evidence demonstrating a good-faith effort to repay overdue creditors. Additionally, the applicant did not substantiate disputes regarding several debts with documented proof and failed to produce any relevant documentation to support his case.

Why the Applicant Was Denied

The applicant did not provide sufficient documentary evidence to establish a good-faith effort to repay overdue creditors.
The applicant failed to substantiate disputes regarding several debts with documented proof.
The applicant did not produce any relevant documentation in support of his case.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(d)rejectedGood-faith Effort to Repay Overdue CreditorsThe applicant did not provide any documentary evidence to establish a good-faith effort to repay overdue creditors.
AG ¶ 20(e)rejectedReasonable Basis to Dispute Legitimacy of Past-due DebtThe applicant did not provide documented proof to substantiate the basis of his disputes.

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 issuedJul 21, 2016
Answer filedAug 23, 2016Applicant requested a decision based on the written record.
Hearing held—No hearing; decision based on written record.
Decision dateOct 6, 2017

Cite For

Failure to Provide Evidence of Good-faith Debt Repayment Efforts Under Guideline F
Insufficient Substantiation of Debt Disputes Leading to Denial of Security Clearance
Importance of Documentary Evidence in Security Clearance 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: Decision on RecordDecided: denied

The judge found that the applicant has a significant history of financial problems, including ten delinquent debts totaling over $22,000, which raised security concerns under Guideline F. The applicant failed to provide sufficient evidence to demonstrate a good-faith effort to resolve these debts, leading to a decision against him.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Delinquent debt totaling $4,993 $4,993	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Delinquent debt totaling $1,500 $1,500	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	Delinquent debt totaling $1,200 $1,200	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	Delinquent debt totaling $1,000 $1,000	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	Delinquent debt totaling $2,000 $2,000	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	Delinquent debt totaling $3,000 $3,000	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	Delinquent debt totaling $2,500 $2,500	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	Delinquent debt totaling $1,800 $1,800	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i	Delinquent debt totaling $1,200 $1,200	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.j	Delinquent debt totaling $1,000 $1,000	Against Applicant	Unspecified Financial	Denied	(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. 16-01715 ) ) Applicant for Security Clearance

For Government: Adrienne M. Driskill, Esq., Department Counsel For Applicant: Pro se

10/06/2017 ______________

STATEMENT OF CASE

______________

LEONARD, Michael H., Administrative Judge:

Applicant contests the Defense Department’s intent to deny or revoke his eligibility for access to classified information. He did not provide sufficient documentary evidence to establish that he is making a good-faith effort to repay overdue creditors or otherwise resolve delinquent debts. Nor did he provide documented proof to substantiate the basis of disputes of several debts. Accordingly, this case is decided against Applicant.

Statement of the Case

Applicant completed and submitted a Questionnaire for National Security Positions (SF 86 format) on March 18, 2015.1 This document is commonly known as a security clearance application. Thereafter, on July 21, 2016, after reviewing the application and the information gathered during a background investigation, the Department of Defense Consolidated Adjudications Facility, Fort Meade, Maryland, sent Applicant a statement of reasons (SOR), explaining it was unable to find that it was clearly consistent with the national interest to grant him eligibility for access to classified information. The SOR is similar to a complaint. It detailed the factual reasons for the action under the security guideline known as Guideline F for financial considerations.

Applicant answered the SOR on August 23, 2016. He initially requested a hearing, but subsequently changed his mind and requested a decision based on the written record in lieu of a hearing. His answer to the SOR consisted of handwritten responses and brief explanations on a copy of the SOR. He did not submit any attachments or enclosures with his answer.

On December 14, 2016, Department Counsel submitted all relevant and material information that could be adduced at a hearing. The file of relevant material (FORM) consists of Department Counsel’s written brief and supporting documentation. The FORM was mailed to Applicant, who received it January 3, 2017. He did not reply within 30 days from receipt of the information as required. The case was assigned to me October 1, 2017.

PROCEDURAL MATTERS

Department Counsel’s FORM includes Exhibit 3, which is a report of investigation (ROI) summarizing Applicant’s interview that took place during the January 2016 background investigation. The ROI is not authenticated by a witness, as required under ¶ E3.1.20 of the Directive.2 Likewise, Section 5(a) of Executive Order 10865 prohibits receipt and consideration of “investigative reports” without authenticating witnesses. The Directive provides no exception to the authentication requirement. Indeed, the authentication requirement is the exception to the general rule that prohibits consideration of an ROI.

Department Counsel’s written brief includes a footnote advising Applicant that the ROI was not authenticated and that failure to object may constitute a “waiver” of the authentication requirement. In my view, Department Counsel is conflating or confusing the terms waiver and forfeiture.3 In the law of evidence, errors are preserved by timely objections, and relief on appeal is granted from a preserved error unless it is harmless (the harmless-error doctrine). Waiver is the voluntary relinquishment or abandonment of a legal right or advantage. With a waiver, there is no error to correct on appeal and no relief to grant. On the other hand, failure to make a timely objection usually forfeits any error, and relief on appeal is appropriate from a forfeited error only upon a showing that the error was plain, obvious, and prejudicial (the plain-error doctrine). Here, the written record does not demonstrate that Applicant, who has not replied to the FORM, understood the concepts of authentication, waiver, and admissibility. It also does not demonstrate that he understood the implications of waiving an objection. Accordingly, given the lack of an authenticating witness, I have not considered the ROI in reaching my decision.

FINDINGS OF FACT

Applicant is a 37-year-old employee who requires a security clearance for his job as a master tradesman for a federal contractor. He has been so employed since July 2012. His employment history includes active duty service in the U.S. Navy during 1998-2008, which ended with a discharge under other than honorable conditions due to drug use. His educational background includes an associate’s degree awarded in 2006 and a bachelor’s degree awarded in 2012. He married in 2012 and has two minor stepchildren.

The SOR alleges a history of financial problems or difficulties consisting of ten delinquent debts ranging in amounts from $67 to $4,993 for a total of about $22,274. The debts include an unpaid judgment filed in 2009 and nine collection or charged-off consumer accounts. A garnishment action in the amount of $11,466 was initiated in about June 2015 to collect the unpaid judgment, the balance of which has increased due to interest.4 The ten delinquent accounts are established by credit reports from August 2015, April 2016, and October 2016.5 Other than the garnishment (which is not a form of voluntary payment), there is no documentation in the written record to establish that any of the delinquent accounts were paid, settled, in a payment arrangement, cancelled, forgiven, or otherwise resolved.

In his answer to the SOR, Applicant admitted five of the delinquent debts; he denied the remaining five debts; and he made various assertions in support of his denials. For example, he stated that the creditor in SOR ¶ 1.b (a lender) was found to have used unlawful business practices in his state of residence and all accounts were suspended. He did not submit any supporting documentation with his answer. Likewise, he did not reply to the FORM.

Law and Policies

This case is adjudicated under Executive Order (E.O.) 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the National Security Adjudicative Guidelines for Determining Eligibility for Access to Classified Information or Eligibility to Hold a Sensitive Position (AG), effective June 8, 2017.6 It is well-established law that no one has a right to a security clearance.7 As noted by the Supreme Court in Department of the Navy v. Egan, “the clearly consistent standard indicates that security clearance determinations should err, if they must, on the side of denials.”8 Under Egan, Executive Order 10865, and the Directive, any doubt about whether an applicant should be allowed access to classified information will be resolved in favor of protecting national security. In Egan, the Supreme Court stated that the burden of proof is less than a preponderance of evidence.9 The Appeal Board has followed the Court’s reasoning, and a judge’s findings of fact are reviewed under the substantial-evidence standard.10

A favorable clearance decision establishes eligibility of an applicant to be granted a security clearance for access to confidential, secret, or top-secret information.11 An unfavorable clearance decision (1) denies any application, (2) revokes any existing security clearance, and (3) prevents access to classified information at any level.12

There is no presumption in favor of granting, renewing, or continuing eligibility for access to classified information.13 The Government has the burden of presenting evidence to establish facts alleged in the SOR that have been controverted.14 An applicant is responsible for presenting evidence to refute, explain, extenuate, or mitigate facts that have been admitted or proven.15 In addition, an applicant has the ultimate burden of persuasion to obtain a favorable clearance decision.16

DISCUSSION

Under Guideline F for financial considerations, the suitability of an applicant may be questioned or put into doubt when that applicant has a history of excessive indebtedness or financial problems or difficulties. The overall concern is: 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.17

The concern is broader than the possibility that a person might knowingly compromise classified or sensitive information to obtain money or something else of value. It encompasses concerns about a person’s self-control, judgment, and other important qualities. A person who is financially irresponsible may also be irresponsible, unconcerned, or negligent in handling and safeguarding classified or sensitive information.

In analyzing the facts of this case, I considered the following disqualifying and mitigating conditions as most pertinent:

AG ¶ 19(a) inability to satisfy debts;

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

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 taken to resolve the issue.

The evidence supports a conclusion that Applicant has a problematic financial history sufficient to raise a security concern under Guideline F. The evidence in the written record establishes ten accounts for a total of more than $20,000 in delinquent debt. None of the debts are resolved. Indeed, the only proof of payment in the written record shows that the 2009 judgment is being collected via a garnishment action, and the balance due has more than doubled from $4,568 to $11,466. Compound interest has not been kind to Applicant. His problematic financial history suggests that may be irresponsible, unconcerned, or negligent in handling and safeguarding classified or sensitive information.

Turning to the mitigating conditions, Applicant has not met the requirements of the second prong of AG ¶ 20(e) for the five debts he denies and disputes. For those debts, he did not provide documented proof to substantiate the basis of his disputes. He also has not met the requirements of AG ¶ 20(d), because he did not provide any documentary evidence to establish that he is making a good-faith effort to repay overdue creditors or otherwise resolve delinquent debts. In summary, he has not provided sufficient evidence to substantiate his various assertions concerning the debts, such as proof that some were paid or are in a payment arrangement, that one of the debts is duplicative, or that some of the debts are not legitimate.

Given that Applicant requested a decision based on the written record in lieu of a hearing, the lack of supporting documentation undermines his case. It’s the responsibility of the individual applicant to produce relevant documentation in support of their case. Here, Applicant has not met his burden of production because he did not produce any documentation in support of his case. Accordingly, based on the written record, I am unable to make an affirmative determination that Applicant is an acceptable security risk.18

Applicant’s history of financial problems or difficulties creates doubt about his reliability, trustworthiness, good judgment, and ability to protect classified information. In reaching this conclusion, I weighed the evidence as a whole and considered if the favorable evidence outweighed the unfavorable evidence or vice versa. I also considered the whole-person concept. Accordingly, I conclude that he did not meet his ultimate burden of persuasion to show that it is clearly consistent with the national interest to grant him eligibility for access to classified information.

FORMAL FINDINGS

The formal findings on the SOR allegations are:

Paragraph 1, Guideline F: Against Applicant

Subparagraphs 1.a-1.j: Against Applicant

CONCLUSION

In light of the record as a whole, it is not clearly consistent with the national interest to grant Applicant access to classified information.

Michael H. Leonard Administrative Judge

FOOTNOTES

1 Exhibit 2. 2 See generally ISCR Case No. 12-10933 (App. Bd. Jun. 29, 2016) (In a concurring opinion, Judge Ra’anan notes the historical concern about reports of investigation in that they were considered by some to present a heightened problem in providing due process in security clearance cases. Judge Ra’anan raises a number of pertinent questions about using an unauthenticated ROI in a non-hearing case with a pro se applicant.). 3 See United States v. Olano, 507 U.S. 725 (1993) (in this opinion, the Supreme Court distinguishes between forfeiture and waiver). 4 Exhibit 4. 5 Exhibits 5, 6, and 7. 6 The 2017 AG are available at http://ogc.osd.mil/doha. 7 Department of the Navy v. Egan, 484 U.S. 518, 528 (1988) (“it should be obvious that no one has a ‘right’ to a security clearance”); Duane v. Department of Defense, 275 F.3d 988, 994 (10th Cir. 2002) (no right to a security clearance). 8 484 U.S. at 531. 9 484 U.S. at 531. 10 ISCR Case No. 01-20700 (App. Bd. Dec. 19, 2002) (citations omitted). 11 Directive, ¶ 3.2. 12 Directive, ¶ 3.2. 13 ISCR Case No. 02-18663 (App. Bd. Mar. 23, 2004). 14 Directive, Enclosure 3, ¶ E3.1.14. 15 Directive, Enclosure 3, ¶ E3.1.15. 16 Directive, Enclosure 3, ¶ E3.1.15. 17 AG ¶ 18. 18 Directive, Enclosure 2, ¶ 2(a).