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ISCR Case 16-01779.h1 — CASE

ISCR Case 16-01779.h1denied

Case Headnote

ISCR Case No. 16-01779.h1

deniedAug 22, 2017· Hon. Jennifer I. Goldstein· hearing

Summary

A 37-year-old male applicant was denied a security clearance under Guideline F (Financial Considerations) due to unresolved debts totaling approximately $17,046 owed to 13 creditors. The Statement of Reasons detailed these financial obligations, which included multiple charged-off accounts and collection accounts. Specific debts ranged from $50 to $9,534.

The denial was based on the applicant's failure to provide documentation demonstrating any efforts to resolve these delinquencies. The judge noted that the applicant's financial problems had been ongoing since 2012 and remained unresolved at the time of the decision.

This lack of resolution and supporting evidence raised concerns about the applicant's reliability and trustworthiness, leading to the ultimate denial of the security clearance.

Why the Applicant Was Denied

Applicant is indebted to 13 creditors totaling approximately $17,046.
Applicant failed to produce documentation showing resolution of any delinquencies.
The applicant's financial problems have been ongoing since 2012 and remain unresolved.

Conditions Referenced

Disqualifying

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

Key Rule Quoted

“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.”

Procedural Posture

SOR issuedJun 2, 2016
Answer filedJun 17, 2016Applicant requested a decision on the written record.
Hearing held—No hearing; case decided on the written record.
Decision dateAug 22, 2017

Cite For

Denial of Security Clearance Due to Unresolved Financial Obligations
Importance of Providing Documentation to Mitigate Financial Concerns
Ongoing Financial Irresponsibility as a Disqualifying Factor 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 applicant was found to have significant financial issues, being indebted to 13 creditors for approximately $17,046. The judge ruled against the applicant on all financial allegations, citing a lack of documentation to resolve the debts and no evidence of responsible financial behavior or mitigation efforts.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant was indebted on a charged-off account in the amount of $9,534. $9,534	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Applicant was indebted on a charged-off account in the amount of $2,662. $2,662	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	Applicant was indebted on a charged-off account in the amount of $1,227. $1,227	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	Applicant was indebted on a collection account in the amount of $1,106. $1,106	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	Applicant was indebted on a collection account in the amount of $430. $430	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	Applicant was indebted on a charged-off account in the amount of $418. $418	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	Applicant was indebted on a collection account in the amount of $299. $299	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	Applicant was indebted on a charged-off account in the amount of $255. $255	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i	Applicant was indebted on a collection account in the amount of $214. $214	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.j	Applicant was indebted on a charged-off account in the amount of $220. $220	Against Applicant	Utility or Phone Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.k	Applicant was indebted on a collection account in the amount of $107. $107	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.l	Applicant was indebted on a collection account in the amount of $50. $50	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.m	Applicant was indebted on a collection account in the amount of $524. $524	Against Applicant	Unspecified Financial	Admitted	(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. 16-01779 ) Applicant for Security Clearance )

For Government: Bryan Olmos, Esquire, Department Counsel For Applicant: Pro se

August 22, 2017 ______________

STATEMENT OF CASE

______________

GOLDSTEIN, Jennifer I., Administrative Judge:

Applicant is indebted to 13 creditors in the approximate amount of $17,046. He failed to produce documentation to show he resolved any of his delinquencies to the satisfaction of his creditors. Based upon a review of the pleadings and exhibits, eligibility for access to classified information is denied.

On April 14, 2015, Applicant submitted a security clearance application (SF-86). (Item 3.) On June 2, 2016, the Department of Defense Consolidated Adjudications Facility (DoD CAF) issued Applicant a Statement of Reasons (SOR), detailing security concerns under Guideline F, Financial Considerations. (Item 1.) The action was taken under Executive Order (EO) 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 for Determining Eligibility for Access to Classified Information. Applicant answered the SOR on June 17, 2016. (Item 2.) He requested that his case be decided by an administrative judge on the written record without a hearing. (Item 2.) On August 31, 2016, Department Counsel submitted the Government’s written case. A complete copy of the File of Relevant Material (FORM), containing six Items, was mailed to Applicant on September 1, 2016, and received by him on September 8, 2016. The FORM notified Applicant that he had an opportunity to file objections and submit material in refutation, extenuation, or mitigation within 30 days of his receipt of the FORM.

Applicant did not respond to the FORM within the 30 days allotted, which ended October 8, 2016. DOHA assigned the case to me on August 2, 2017. Items 1 through 6 are admitted into evidence.1

The SOR in this case was issued under the adjudicative guidelines that came into effect within the DoD on September 1, 2006. Security Executive Agent Directive (SEAD) 4, National Security Adjudicative Guidelines, implements new adjudicative guidelines, effective June 8, 2017. All security clearance decisions issued on or after June 8, 2017, are to be decided using the new National Security Adjudicative Guidelines for Determining Eligibility for Access to Classified Information or Eligibility to Hold a Sensitive Position (AG), as implemented by SEAD 4. I considered the previous adjudicative guidelines, effective September 1, 2006, as well as the new AG, effective June 8, 2017, in adjudicating Applicant’s security clearance eligibility. My decision would be the same under either set of guidelines, although this decision is issued pursuant to the new AG.

FINDINGS OF FACT

Applicant is 37 years old and married to his third wife since August 20, 2012. He was married to his first wife from 1998 to 2010. He was married to his second wife from May 2011 to August 5, 2012. He has worked for his current employer, a government contractor, since December 2014. He served on active duty in the Army from 2000 to 2014, and was honorably discharged. (Item 3.)

Applicant was alleged to be indebted to 13 creditors in the approximate amount of $17,046. Applicant admitted to all of the debts identified in SOR ¶¶ 1.a through 1.m. Applicant’s debts appear in the credit reports dated May 7, 2015; and May 26, 2016. (Item 5; Item 6.)

Applicant was indebted on a charged-off account in the amount of $9,534, as alleged in SOR ¶ 1.a. This debt is identified on Applicant’s credit report as an “individual” account that was reported as 180-days delinquent in May 2015. Applicant claimed that this debt was accrued by his first wife while he was deployed. He indicated he was “in the process of going to court over this matter,” but produced no documentation to substantiate his claim.2 It remains unresolved. (Item 2 at 4; Item 5 at 14; Item 6 at 5.)

Applicant was indebted on a charged-off account in the amount of $2,662, as alleged in SOR ¶ 1.b. This debt is identified on Applicant’s credit report as an “individual” account that was reported as 150-days delinquent in April 2015. Applicant claimed that this debt was accrued by his first wife while he was deployed. He indicated he was “in the process of going to court over this matter,” but produced no documentation to substantiate his claim. It remains unresolved. (Item 2 at 4; Item 5 at 14; Item 6 at 6.)

Applicant was indebted on a charged-off account in the amount of $1,227, as alleged in SOR ¶ 1.c. This debt is identified on Applicant’s credit report as “department/mail order” account that was reported as 150-days delinquent in April 2015. Applicant claimed that this debt was accrued by his first wife while he was deployed. He indicated he was “in the process of going to court over this matter,” but produced no documentation to substantiate his claim. It remains unresolved. (Item 2 at 4; Item 5 at 12; Item 6 at 3.)

Applicant was indebted on a collection account in the amount of $1,106, as alleged in SOR ¶ 1.d. This debt is owed to the Federal Government as a result of an overpayment. It became delinquent in March 2015, and remains unresolved. (Item 2; Item 6 at 3.)

Applicant was indebted on a collection account in the amount of $430, as alleged in SOR ¶ 1.e. It was for a rental or leasing agreement. This debt became delinquent in December 2014. It is listed on Applicant’s 2016 credit report as “unpaid.” Applicant indicated he disputed this debt because the creditor “just recently added this charge” despite returning his security deposit. However, he produced no documentation to support his dispute. This debt is not resolved. (Item 2; Item 6 at 1.)

Applicant was indebted on a charged-off account in the amount of $418, as alleged in SOR ¶ 1.f. This debt is identified on Applicant’s credit report as a credit-card account that was reported as 150-days delinquent in May 2015. In his Answer, Applicant claimed that his second wife accrued this debt while he was deployed, using an expired power of attorney. He presented nothing further in this regard. It remains unresolved. (Item 2; Item 5 at 4; Item 6 at 4.)

Applicant was indebted on a collection account in the amount of $299, as alleged in SOR ¶ 1.g. This debt first became delinquent in July 2012. It is listed on Applicant’s 2016 credit report as “unpaid.” In his Answer, Applicant indicated he was “working towards getting [this debt] resolved.” He presented nothing further in this regard. This deb is not resolved. (Item 2; Item 6 at 2.)

Applicant was indebted on a charged-off account in the amount of $255, as alleged in SOR ¶ 1.h. This debt is identified on Applicant’s credit reports as a “department/mail order” account that was reported as charged-off in 2013. In his Answer, Applicant claimed that his second wife accrued this debt while he was deployed, using an expired power of attorney. He presented nothing further in this regard. It remains unresolved. (Item 5 at 6; Item 6 at 2.)

Applicant was indebted on a collection account in the amount of $214, as alleged in SOR ¶ 1.i. This debt first became delinquent in January 2012. It is listed on Applicant’s 2016 credit report as “unpaid.” In his Answer, Applicant claimed that his second wife accrued this debt while he was deployed, using an expired power of attorney. He presented nothing further in this regard. It remains unresolved. (Item 6 at 2.)

Applicant was indebted on a charged-off account in the amount of $220, as alleged in SOR ¶ 1.j. This debt is identified on Applicant’s credit report as a utility account that was reported as charged-off in 2012. In his Answer, Applicant indicated he was “working towards getting [this debt] resolved.” He presented nothing further in this regard. It remains unresolved. (Item 2; Item 5 at 13; Item 6 at 8.)

Applicant was indebted on a collection account in the amount of $107, as alleged in SOR ¶ 1.k. This debt was placed for collections in March 2015. In his Answer, Applicant claimed that his second wife accrued this debt while he was deployed, using an expired power of attorney. He presented nothing further in this regard. It remains unresolved. (Item 5 at 5.)

Applicant was indebted on a collection account in the amount of $50, as alleged in SOR ¶ 1.l. This debt is identified on Applicant’s credit report as a collection account for a debt owed to a city, which was delinquent since May 2015. In his Answer, Applicant claimed that his second wife accrued this debt while he was deployed, using an expired power of attorney. He presented nothing further in this regard. It remains unresolved. (Item 5 at 8.)

Applicant was indebted on a collection account in the amount of $524, as alleged in SOR ¶ 1.m. This debt was charged off by the creditor in April 2015. In his Answer, Applicant claimed that his second wife accrued this debt while he was deployed, using an expired power of attorney. He presented nothing further in this regard. It remains unresolved. (Item 5 at 13.)

Applicant submitted no evidence of financial counseling, or of budget estimates from which to analyze his current financial situation. No character references were submitted to describe Applicant’s judgment, trustworthiness, integrity, or reliability. I was unable to evaluate his credibility, demeanor, or character in person since he elected to have his case decided without a hearing.

POLICIES

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines (AG). In addition to brief introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which are useful 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, administrative judges apply the guidelines in conjunction with the factors listed in AG ¶ 2 describing the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶ 2(a), 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, past and present, favorable and unfavorable, in making a decision.

The protection of the national security is the paramount consideration. AG ¶ 2(b) requires that “[a]ny doubt concerning personnel being considered for national security eligibility will be resolved in favor of the national security.” In reaching this decision, I have drawn only those conclusions that are reasonable, logical and based on the evidence contained in the record. Likewise, I have avoided drawing inferences grounded on mere speculation or conjecture.

Directive ¶ E3.1.14 requires the Government to present evidence to establish controverted facts alleged in the SOR. Directive ¶ E3.1.15, states an “applicant is responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by the applicant or proven by Department Counsel, and has the ultimate burden of persuasion as to obtaining a favorable clearance decision.”

A person who seeks access to classified information enters into a fiduciary relationship with the Government predicated upon trust and confidence. This relationship transcends normal duty hours and endures throughout off-duty hours. The Government reposes a high degree of trust and confidence in individuals to whom it grants access to classified information. Decisions include, by necessity, consideration of the possible risk the applicant may deliberately or inadvertently fail to protect or safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation as to potential, rather than actual, risk of compromise of classified information.

Section 7 of Executive Order 10865 provides that adverse 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.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive information).

ANALYSIS

Guideline F, Financial Considerations

The security concerns relating to the guideline for financial considerations are set out in AG ¶ 18, which reads in pertinent part:

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.

AG ¶ 19 describes two conditions that could raise security concerns and may be disqualifying in this case:

(a) inability to satisfy debts; and

Applicant is indebted to 13 creditors in the approximate amount of $17,046. He has documented no action to resolve these delinquencies. The facts establish prima facie support for the foregoing disqualifying conditions, and shift the burden to Applicant to mitigate those concerns.

The guideline includes three conditions in AG ¶ 20 that could mitigate the security concerns arising from Applicant’s alleged financial difficulties:

(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.

The evidence does not establish mitigation under AG ¶ 20(a). Applicant’s SOR- alleged financial problems have been ongoing since 2012, are unresolved, and continue to date.

The evidence does not establish mitigation under AG ¶ 20(b). Applicant asserts that some of his debts were incurred by his ex-wives while he was deployed. First, the dates of those delinquencies do not necessarily correspond with his military service or past marriages. Second, he did not provide evidence that he acted responsibly under the circumstances with respect to his debts, which is necessary for full mitigation under this condition. He married his present wife in 2012 and left the Army in 2014. He has been fully employed as a civilian since December 2014. Yet many of his debts, including those alleged in SOR ¶¶ 1.a through 1.d, 1.f, 1.k, and 1.m, were placed for collections or were charged off in 2015. Mitigation under AG ¶ 20(b) is not fully applicable.

Applicant has not established a history of responsible action with respect to his delinquent debts. There is no discernable evidence of a good-faith effort to repay those debts in the record, or of any financial counseling. The evidence does not establish mitigation under AG ¶¶ 20(c) or 20(d).

Applicant claimed he contested the delinquency in SOR ¶ 1.e because the debt was charged after his security deposit had been returned. However, Applicant failed to document his dispute or provide evidence of actions to resolve the issue. Mitigation under AG ¶ 20(e) has not been established.

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):

(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.

According to 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 applicable guidelines and the whole-person concept.

I considered the potentially disqualifying and mitigating conditions in light of all pertinent facts and circumstances surrounding this case. Applicant is a mature individual who is accountable for the decisions and choices that led to his financial difficulties. He failed to demonstrate a basis for finding current good judgment, or permanent behavioral change, concerning his continuing pattern of financial irresponsibility. His ongoing delinquent debts establish continuing potential for pressure, coercion, or duress.

Overall, the record evidence leaves me with questions and doubts as to Applicant’s eligibility and suitability for a security clearance. For these reasons, I conclude that he did not meet his burden to mitigate the security concerns arising from his financial considerations.

FORMAL FINDINGS

Formal findings for or against Applicant on the allegations set forth in the SOR, as required by ¶ E3.1.25 of Enclosure 3 of the Directive, are:

Paragraph 1, Guideline F: AGAINST APPLICANT

Subparagraphs 1.a through1.m: 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 eligibility for a security clearance. Eligibility for access to classified information is denied.

Jennifer Goldstein Administrative Judge

FOOTNOTES

1 Because Applicant did not respond to the FORM or affirmatively waive any objection to Item 4, I will consider only those facts in Item 4 that are not adverse to Applicant unless they are also contained in other evidence or included in the admissions in his answer to the SOR. 2 Further, this debt and the debts in SOR ¶¶ 1.band 1.cbecame delinquent after Applicant had been discharged and was married to his third wife. His explanation is not credible.