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ISCR Case 16-01787.h1 — CASE

ISCR Case 16-01787.h1denied

Case Headnote

ISCR Case No. 16-01787.h1

deniedSep 7, 2017· Hon. Darlene Lokey Anderson· hearing

Summary

A 58-year-old defense contractor was denied a security clearance due to concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The denial stemmed from significant unresolved financial debts and a lack of candor in his security clearance application regarding his financial history.

The Statement of Reasons detailed several undisclosed debts, including a mortgage account with CITMORTGE that was foreclosed around 2010, a charged-off home equity loan owed to CITIZRNSBK, a charged-off CAP ONE credit card debt of approximately $19,655, and a charged-off CHASE credit card debt of approximately $11,919. The applicant failed to disclose these specific debts on his application.

The judge found that the applicant had approximately $31,000 in outstanding debts for which he provided no evidence of resolution or efforts to address. Furthermore, the applicant provided false information on his security clearance application concerning his financial record, raising questions about his honesty and reliability. Consequently, the security clearance was denied.

Why the Applicant Was Denied

The applicant has significant outstanding debts totaling approximately $31,000, which he failed to resolve or document efforts to address.
The applicant provided false information on his security clearance application regarding his financial history, indicating a lack of honesty and reliability.

Conditions Referenced

Disqualifying

F1raisedInability to Satisfy Debts
F2raisedUnwillingness to Satisfy Debts Regardless of the Ability to Do So
F3raisedA History of Not Meeting Financial Obligations
E1raisedDeliberate Omission, Concealment, or Falsification of Relevant Facts

Key Rule Quoted

“Any doubt concerning personnel being considered for access to classified information will be resolved in favor of national security.”

Procedural Posture

SOR issuedSep 16, 2016
Answer filedOct 13, 2016Applicant requested a decision on the written record.
Hearing held—No hearing; decision made on the written record.
Decision dateSep 7, 2017

Cite For

Denial Based on Significant Financial Issues Under Guideline F
Lack of Candor in Security Clearance Application Under Guideline E
Failure to Provide Evidence of Debt Resolution as a Factor in Security Clearance Eligibility.

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 E (Personal Conduct) · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The judge found that the applicant engaged in personal conduct that raised concerns about his reliability and trustworthiness. Specifically, the applicant failed to disclose significant financial issues on his security clearance application, which the judge determined to be a deliberate act of concealment. As a result, the applicant was denied eligibility for a security clearance.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
1.a	Applicant failed to disclose the SOR-listed debts that include his foreclosure and his charged off accounts, in response to questions about his financial record on his security clearance application.	Against Applicant	Falsification Security FormFOUND DELIBERATE	Financial	Denied	—	—	—
1.b	Applicant failed to disclose the SOR-listed debts that include his foreclosure and his charged off accounts, in response to questions about his financial record on his security clearance application.	Against Applicant	Falsification Security FormFOUND DELIBERATE	Financial	Denied	—	—	—
1.c	Applicant failed to disclose the SOR-listed debts that include his foreclosure and his charged off accounts, in response to questions about his financial record on his security clearance application.	Against Applicant	Falsification Security FormFOUND DELIBERATE	Financial	Denied	—	—	—
1.d	Applicant failed to disclose the SOR-listed debts that include his foreclosure and his charged off accounts, in response to questions about his financial record on his security clearance application.	Against Applicant	Falsification Security FormFOUND DELIBERATE	Financial	Denied	—	—	—

Descriptive standardized rendering of a decided public case (Guideline E). The verbatim source decision is shown in full below.

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 a foreclosed mortgage and charged-off debts totaling approximately $31,000. The applicant admitted to some debts but failed to provide evidence of payments or resolution, leading to a decision against his eligibility for a security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	A mortgage account with CITMORTGE was foreclosed in about 2010.	Against Applicant	Mortgage or Home Loan Debt	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.b	A delinquent home equity loan owed to CITIZRNSBK was charged off.	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.c	A delinquent credit card debt owed to CAP ONE was charged off in the approximate amount of $19,655. $19,655	Against Applicant	Credit Card 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	A delinquent credit card debt owed to CHASE was charged off in the approximate amount of $11,919. $11,919	Against Applicant	Credit Card Debt	Admitted	(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. 16-01787 ) ) Applicant for Security Clearance )

For Government: Tovah Minster, Esq., Department Counsel For Applicant: Pro se

September 7, 2017 ______________

STATEMENT OF CASE

______________

Lokey Anderson, Darlene D., Administrative Judge:

On April 20, 2015, Applicant submitted a security clearance application (SF-86). On September 16, 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 and Guideline E, Personal Conduct. (Item 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 for Determining Eligibility for Access to Classified Information, effective within the DoD after September 1, 2006.

Applicant answered the SOR on October 13, 2016. He requested that his case be decided by an administrative judge on the written record without a hearing. (Item 1.) On October 26, 2016, Department Counsel submitted the Government’s written case. A complete copy of the File of Relevant Material (FORM), containing 5 Items, was mailed to Applicant on October 27, 2016, and received by him on November 1, 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 failed to respond to the FORM. Applicant did not object to Items 1 through 5, and they were admitted into evidence.

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 national security eligibility 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 national security 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 58 years old. He is married and has two teenaged children. He is employed with a defense contractor as a Test Technician. He is seeking to retain a security clearance in connection with his employment.

Guideline F - Financial Considerations

The Government alleged that Applicant is ineligible for a clearance because he made financial decisions that indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which raise questions about his reliability, trustworthiness, and ability to protect classified information. The SOR identified four debts totaling approximately $31,000 as well as an unspecified foreclosed mortgage account. Applicant admits to each of the delinquent accounts listed in subparagraphs 1(b), 1(c) and 1(d), and states that he is making monthly payments toward the debts. In regard to subparagraph 1(a), he denies that he owes anything toward the foreclosed property.

Credit Reports of Applicant dated May 9, 2015 and April 22, 2016, confirm the indebtedness listed in the SOR. (Applicant’s Exhibits 4 and 5.) Applicant has been working for his current employer since January 2010.

Applicant has worked in the defense industry for over 35 years and has held a security clearance during that entire time. He explained that in 2009, the contract he was working on ended, and he was without employment and unable to pay his mortgage and other expenses. The following debts became owing and remain outstanding:

1(a) A mortgage account with CITMORTGE was foreclosed in about 2010. Applicant states that he hired a realtor to short sell his home, but that was unsuccessful. The lender then foreclosed on Applicant’s house and sold the house to another party. Applicant states that his debt was satisfied with the sale of the home. (Answer to SOR.) Applicant has provided no documentary evidence to support his averment.

1(b) A delinquent home equity loan owed to CITIZRNSBK was charged off. The account remains owing. Applicant claims that this money was used for a new roof and siding for the house. He states that he is currently making payments toward resolving the debt. (Answer to SOR.) Applicant has provided no documentary evidence to support this averment.

1(c) A delinquent credit card debt owed to CAP ONE was charged off in the approximate amount of $19,655. Applicant claims that he is currently making payments toward resolving the debt. (Answer to SOR.) Applicant has provided no documentary evidence to support this averment.

1(d) A delinquent credit card debt owed to CHASE was charged off in the approximate amount of $11,919. Applicant claims that he is currently making payments toward resolving the debt. (Answer to SOR.) Applicant has provided no documentary evidence to support this averment.

There is no documentation in the record to show that Applicant has made any financial arrangements or that he has followed through with any agreements he may have made with any of his creditors. Thus, each of the debts listed in the SOR continue to remain delinquent and owing.

Applicant completed an Electronic Questionnaire for Investigations Processing (e-OIP) date April 20, 2015. (Government Exhibit 2.) In response to Section 26 concerning his financial record, Applicant was asked if in the past seven years, had he any possessions or property voluntarily or involuntarily repossessed or foreclosed? And further, in the past seven years, had he any account or credit card suspended, charged off, or cancelled for failing to pay as agreed? The Applicant answered, “NO” to both questions. These were both false answers. Applicant failed to disclose his mortgage foreclosure and the charged off debts discussed above. (Government Exhibit 2.)

Applicant apologizes for his dishonesty during the investigative process. (Answer to SOR.) He states that he was extremely nervous and afraid of losing his security clearance. He further states that he is not a risk to the Government as he has no intention to sell secrets to anyone for financial gain. Applicant’s conduct shows unreliability and untrustworthiness. He must know after 35 years working for the defense industry that he must be honest and truthful with the Government on his security clearance application. There is no excuse for his misconduct.

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 to be 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, 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 access to classified information will be resolved in favor of 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.

Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, the “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 applies for access to classified information seeks to enter 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 EO 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 concern relating to the guideline for Financial Considerations 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. Affluence that cannot be explained by known sources of income is also a security concern insofar as it may result from criminal activity, including espionage.

The guideline notes several conditions that could raise security concerns under AG ¶ 19. Three are potentially applicable in this case:

(a) inability to satisfy debts;

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

Applicant is excessively indebted to the creditors listed in the SOR. He has failed to prove that he has done anything to resolve the debts. The evidence is sufficient to raise the above disqualifying conditions.

AG ¶ 20 provides conditions that could mitigate security concerns. I considered all of the mitigating conditions under AG ¶ 20 including:

(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.

Applicant was without employment in 2009, after his contract ended with his previous employer. However, he was subsequently hired by his current employer with whom he has worked for the past 17 years. Applicant states that he is, and has been working to resolve his delinquent debts, but he has provided no documentation to substantiate his averments. He failed to establish that he acted reasonably or responsibly with respect to his debts. Accordingly it is found that his debts all remain owing. Furthermore, Applicant has not demonstrated that future financial problems are unlikely. There are no indications that his financial problems are being resolved or are under control.

Guideline E, Personal Conduct

The security concern for the personal conduct guideline is set out in AG ¶ 15:

Conduct involving questionable judgment, lack of candor, dishonesty, or unwillingness to comply with rules and regulations can raise questions about an individual’s reliability, trustworthiness and ability to protect classified information. Of special interest is any failure to provide truthful and candid answers during the security clearance process or any other failure to cooperate with the security clearance process.

AG ¶ 16 describes conditions that could raise a security concern and may be disqualifying. The following disqualifying condition is potentially applicable:

(a) deliberate omission, concealment, or falsification of relevant facts from any personnel security questionnaire, personal history statement, or similar form used to conduct investigations, determine employment qualifications, award benefits or status, determine security clearance eligibility or trustworthiness, or award fiduciary responsibilities.

Appellant failed to disclose the SOR-listed debts that include his foreclosure and his charged off accounts, in response to questions about his financial record on his security clearance application. He clearly knew he had debts that had not been resolved, yet, he willfully chose not to include them on the e-QIP. He also failed to list his foreclosure. This behavior indicates questionable judgment, unreliability, and untrustworthiness.

AG ¶ 17 provides conditions that could mitigate security concerns. The following are potentially applicable:

(a) the individual made prompt, good-faith efforts to correct the omission, concealment, or falsification before being confronted with the facts;

(b) the refusal or failure to cooperate, omission, or concealment was caused or significantly contributed to by improper or inadequate advice of authorized personnel or legal counsel advising or instructing the individual specifically concerning the security clearance process. Upon being made aware of the requirement to cooperate or provide the information, the individual cooperated fully and truthfully; (c) the offense is so minor, or so much time has passed, or the behavior is so infrequent, or it happened under such unique circumstances that it is unlikely to recur and does not cast doubt on the individual’s reliability, trustworthiness, or good judgment;

(d) the individual has acknowledged the behavior and obtained counseling to change the behavior or taken other positive steps to alleviate the stressors, circumstances, or factors that caused untrustworthy, unreliable, or other inappropriate behavior, and such behavior is unlikely to recur; and

(e) the individual has taken positive steps to reduce or eliminate vulnerability to exploitation, manipulation, or duress.

After considering the mitigating conditions outlined above in AG ¶ 17, none of them were established in this case. Applicant intentionally and deliberately attempted to conceal material information from the Government regarding his financial record because he was in fear of losing his security clearance. Appellant did not make prompt or good-faith efforts to correct his falsification and concealment. He was not ill advised. Falsifying material information is a serious offense, and Appellant has done nothing to show that similar lapses in judgment are unlikely to recur. He has not provided sufficient evidence to meet his burden of proof with respect to his personal conduct.

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.

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.

I considered the potentially disqualifying and mitigating conditions in light of all facts and circumstances surrounding this case. I have incorporated my comments under Guideline F and Guideline E in my whole-person analysis. Applicant is a long time employee of the defense department who states that he is making payments to resolve his debts, but has failed to provide any documentation to show proof of payment. Furthermore, Applicant must understand the need to ensure that only individuals with whom the Government can trust should be provided access to classified information. Applicant has not demonstrated that he is candid, honest, and/or trustworthy.

Overall, the record evidence leaves me with questions and or doubts as to Applicant’s eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant failed to mitigate the Financial Considerations and Personal Conduct security concerns.

FORMAL FINDINGS

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

Paragraph 1, Guideline F: AGAINST APPLICANT

Subparagraph 1.a: Against Applicant Subparagraph 1.b: Against Applicant Subparagraph 1.c: Against Applicant Subparagraph 1.d: Against Applicant

Paragraph 2, Guideline F: AGAINST APPLICANT

Subparagraph 2.a: 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.

Darlene Lokey Anderson Administrative Judge