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ISCR Case 16-01983.h1 — CASE

ISCR Case 16-01983.h1denied

Case Headnote

ISCR Case No. 16-01983.h1

deniedSep 19, 2017· Hon. Claude R. Heiny II· hearing

Summary

A 47-year-old elevator technician was denied a security clearance under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The denial stemmed from two unpaid judgments totaling approximately $7,500 and three other delinquent accounts amounting to approximately $10,000, bringing the total outstanding debt to over $17,000.

Specifically, the applicant had a $5,924 credit card judgment, a $1,603 judgment, a $167 telecommunication collection debt, a $6,374 truck repossession debt, and a $3,300 medical collection debt. A key factor in the denial was the applicant's failure to disclose these delinquent obligations on his October 2015 security questionnaire.

Furthermore, the applicant did not provide documentation to support any claims of debt repayment or demonstrate financial responsibility. The adjudicator concluded that these issues indicated a lack of judgment and reliability, leading to the denial of access to classified information.

Why the Applicant Was Denied

Applicant has two unpaid judgments and three delinquent accounts totaling over $17,000.
Applicant failed to disclose his financial delinquencies on his security questionnaire.
Applicant did not provide documentation to support claims of debt repayment or financial responsibility.

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
AG ¶ 16(a)appliedDeliberate Omission, Concealment, or Falsification of Relevant Facts

Key Rule Quoted

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

Procedural Posture

SOR issuedAug 21, 2016
Answer filedSep 1, 2016
Hearing held—Applicant elected to have the matter decided without a hearing.
Decision dateSep 19, 2017

Cite For

Failure to Disclose Financial Obligations on Security Questionnaire Under Guideline E
Unpaid Debts as a Basis for Denial Under Guideline F
Lack of Evidence to Mitigate Financial Concerns Leading to Security Clearance Denial.

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 against the applicant on the personal conduct allegations, specifically regarding the omission of significant financial obligations on his security questionnaire. The applicant's lack of candor and failure to disclose relevant financial information raised concerns about his reliability and trustworthiness, leading to the denial of his security clearance.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
2.a	Applicant failed to disclose his delinquent obligations when he completed his October 2015 security questionnaire.	Against Applicant	Omission or Failure to DiscloseFOUND DELIBERATE	Financial	Admitted	—	—	—

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 against the applicant on all financial allegations due to two unpaid judgments and three collection accounts totaling over $17,000. The applicant failed to provide evidence of payments or a reasonable plan to address his debts, leading to a determination that he did not meet the financial obligations necessary for security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	$5,924 credit card judgment $5,924	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.b	$1,603 judgment $1,603	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.c	$167 telecommunication collection debt $167	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.d	$6,374 truck repossession debt $6,374	Against Applicant	Auto Loan Debt	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.e	$3,300 medical collection debt $3,300	Against Applicant	Medical Debt	Unknown	(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. 16-01983 ) ) Applicant for Security Clearance

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

09/19/2017 ______________

STATEMENT OF CASE

______________

HEINY, Claude R., Administrative Judge:

Applicant contests the Department of Defense’s (DoD) intent to deny his eligibility for a security clearance to work in the defense industry. Applicant has two unpaid judgments totaling approximately $7,500 and three other delinquent accounts totaling approximately $10,000. Additionally, he also failed to disclose his delinquent obligations when he completed his October 2015 security questionnaire. He has failed to mitigate the security concerns under Guideline F, financial considerations, and Guideline E, personal conduct. Applicant’s eligibility for access to classified information is denied.

Statement of the Case

Acting under the relevant Executive Order and DoD Directive,1 on August 21, 2016, the DoD issued a Statement of Reasons (SOR) detailing security concerns. On September 1, 2016, Applicant answered the SOR and elected to have the matter decided without a hearing. On September 27, 2016, Defense Office of Hearings and Appeals (DOHA) Department Counsel (DC) submitted the Government's case in a File of Relevant Material (FORM). The FORM contained five attachments (Items). On October 5, 2016, Applicant received a copy of the FORM, along with notice of his opportunity to object to the Government’s evidence and submit material to refute, extenuate, or mitigate the potentially disqualifying conditions. He had 30 days from his receipt of the FORM to submit any additional information in response to the FORM. The response was due on November 4, 2016. No response or other additional information was received from Applicant. On August 8, 2017, I was assigned the case.

While this case was pending a decision, the Director of National Intelligence issued Security Executive Agent Directive 4, establishing the National Security Adjudicative Guidelines for Determining Eligibility for Access to Classified Information or Eligibility to Hold a Sensitive Position (AGs), which he made applicable to all covered individuals who require initial or continued eligibility for access to classified information or eligibility to hold a sensitive position. The new AGs supersede the Sept. 1, 2006 AGs and are effective “for all covered individuals” on or after June 8, 2017. Accordingly, I have evaluated Applicant’s security clearance eligibility under the new AGs.2

FINDINGS OF FACT

In Applicant’s answer to the SOR, he admitted the five delinquent obligations and stated he had paid off most of the debt, but he failed to provide documentation corroborating payment of his debts. He also admitted not disclosing he had “lost [his] house” because he worried that revealing it would negatively impact his ability to get a job. After a thorough review of the pleadings and exhibits, I make the following additional findings of fact.

Applicant is a 47-year-old elevator technician who has worked for a defense contractor since September 2015, and he seeks to obtain a security clearance. Since April 1999, he has been a self-employed elevator mechanic. (Item 4) Between January 1993 and June 1997, he served on active duty for training and as a reservist in the U.S. Marine Corps. (Item 4) In late 1994, he broke his foot, which failed to heal properly. The injury resulted in him being discharged from the reserves due to unsatisfactory drill performance. (Item 4) He also stated he had been in Afghanistan, but did not indicate when his occurred, if he was a civilian or in the military while there, or how it impacted on his finances. In November 2005, he was divorced ending a six-year marriage. (Item 3)

In January 1999, Applicant was sentenced to six months in jail for violation of a restraining order, intimidation, and for violation of his eight-year probation period he had received from prior convictions. (Item 4) He received four days off for good behavior and served the remainder of the six-month sentence. He was unable to pay his debts while incarcerated. When Applicant completed his October 2015 Electronic Questionnaires for Investigations Processing (e-QIP), he was asked in Section 26 – Financial Record, Delinquency Involving Routine Accounts, if, during the past seven years, he had a judgment entered against him; had any repossessions or foreclosures; had defaulted on any loans; had any bills or debts turned over to a collection agency; had any account or credit card suspended, charged off, or cancelled for failing to pay as agreed; been more than 120 days delinquent on any debt; or was currently more than 120 days delinquent on any debt. He answered “no” to these inquires. The delinquent obligations are listed in the November 2015 credit report. (Item 5)

In Applicant’s December 2015 personal subject interview (PSI), he denied he had any judgments entered against him during the previous seven years. (Item 4) When confronted about the $5,924 credit card judgment (SOR 1.a), he acknowledged the account was for a credit card he used for work. The account became delinquent while he was incarcerated. (Item 4) As of the time of his interview, he had not made efforts to pay the debt.

When confronted about the $1,603 judgment (SOR 1.b), Applicant had no knowledge about the judgment. During his interview, he said he would look into the obligation and, if he owed the judgment, would pay it within the next year. (Item 4)

Applicant purchased a home, which required a $2,200 monthly payment on a $280,000 mortgage. (Item 4) His mortgage went into collection due to his incarceration. The home went for foreclosure. As of December 2016, he did not know how much is owed on this obligation, but intended to look into it and pay what he owes on the debt. (Item 4) Any debt that may exist following the foreclosure is not listed as an SOR debt of concern. He was unsure why he failed to list he foreclosure on his e-QIP.

In 2012, Applicant purchased a truck for $15,000. In 2014, the truck was involuntarily repossessed. He owed $6,374 (SOR 1.d) at the time of the repossession. He intended to establish a repayment plan and pay off the debt within one year of his December 2015 interview. (Item 4) He did not list his debt on his e-QIP because he was unsure of the status of the debt.

During Applicant’s interview, he was questioned about the $3,300 medical collection debt (SOR 1.e) and a $167 (SOR 1.c) telecommunication collection debt. He was unaware of these two debts, said he would look into them, and pay them if he needs to pay them. As of the interview, he had no credit counseling.

Applicant provided no documentation corroborating his assertions in his SOR response that he had “paid most of that debt off,” nor corroboration showing any payment of his delinquent obligations. He was informed of his need to document the assertions he made in his SOR response. The FORM stated:

Absent documentary evidence submitted in response to this FORM that Applicant has acted responsibly and in good-faith to satisfy his delinquent debts, established a sustained track record of financial responsibility, and sufficiently explained his failure to report these delinquencies, the unmitigated SOR allegations establish a basis for disqualification under Directive’s Guideline F, paragraphs 19 (a) and (c) and Guideline E, paragraph 16 (a), and precludes a finding that he has the requisite judgment, reliability, and trustworthiness to have access to classified information. (FORM, page 2)

Applicant was informed in the FORM that the delinquent obligations remained outstanding and that there was no evidence payments had been made. The FORM stated:

. . . you shall have 30 days from the receipt of this information in which to submit a documentary response setting forth objections, rebuttal, extenuation, mitigation, or explanation, as appropriate . . . If you do not file any objections or submit any additional information within 30 days of receipt of this letter, your case will be assigned to an Administrative Judge for a determination based solely on this file of relevant material. (FORM)

No response to the FORM was received from Applicant. He did not provide any documentation as to payment on or showing the current status of his delinquent obligations.

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 must be considered 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. According to AG ¶ 2(a), the adjudication process is an examination of a sufficient period and a careful weight of a number of variables of an individual’s life to make an affirmative determination that the individual is an acceptable security risk. This is known as the whole-person concept.

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.

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 applicant or proven by Department Counsel. . . .” The applicant has the ultimate burden of persuasion to obtain a favorable security 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 safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation of potential, rather than actual, risk of compromise of classified information.

Section 7 of Executive Order 10865 provides that decisions shall be “in terms of the national interest and shall in no sense be a determination of 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

Adjudicative Guideline (AG) ¶ 18 articulates the security concerns relating to financial problems:

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 . . . An individual who is financially overextended is at greater risk of having to engage in illegal or otherwise questionable acts to generate funds.

Additionally, an individual who is financially irresponsible may also be irresponsible, unconcerned, negligent, or careless in properly handling and safeguarding classified information. Behaving responsibly or irresponsibly in one aspect of life provides an indication of how a person may behave in other aspects of life.

A person’s relationship with his creditors is a private matter until evidence is uncovered demonstrating an inability or unwillingness to repay debts under agreed-upon terms. Absent evidence of strong extenuating or mitigating circumstances, an applicant with a history of serious or recurring financial difficulties is in a position of risk that is inconsistent with holding a security clearance. An applicant is not required to be debt free, but is required to manage his finances to meet his financial obligations.

Applicant’s two unpaid judgments and three collection accounts total more than $17,000. The Government’s evidence and Applicant’s own admissions raise security concerns under AG ¶¶ 19(a), 19(b), and 19(c): “(a) inability to satisfy debts;” “(b) unwillingness to satisfy debts regardless of the ability to do so;” and “(c) a history of not meeting financial obligations.” The burden shifts to Applicant to produce evidence to rebut, explain, extenuate, or mitigate the security concerns. (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. September 22, 2005)).

Four of the seven Financial Considerations Mitigating Conditions under AG ¶ 20 are potentially applicable:

(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 person has received or is receiving 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; and

(d) the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts.

Applicant provided no information as to the cause of his delinquent obligations other than his six months of incarceration, which occurred in 2009. He asserted that he had paid most of the delinquent obligations. However, he failed to provide any documentation corroborating payment on the debts.

An applicant is not required to be debt-free or to develop a plan for paying off all debts immediately or simultaneously, but he is required to act responsibly given his circumstances and develop a reasonable plan for repayment, accompanied by “concomitant conduct,” that is, actions which evidence a serious intent to effectuate the plan. See ISCR Case No. 07-06482 at 3 (App. Bd. May 21, 2008). Applicant must show that significant action to implement the plan has occurred, which has not been presented.

Applicant provided no evidence of any responsible steps he has taken to pay or resolve his delinquent obligations. There is no evidence the delinquent obligations occurred under unusual conditions. The failure to repay has persisted for numerous years. These delinquent obligations casts doubt on his current reliability, trustworthiness, and good judgment. AG ¶ 20(a) does not apply. In 2009, he was incarcerated for six months, but that occurred more than seven years prior to the FORM. In November 2005, he was divorced, which was eleven years prior to the FORM. He failed to act responsibly under the circumstances. AG ¶ 20(b) does not apply.

There is no evidence of financial counseling or clear indications that the delinquent obligations are being resolved or that Applicant’s finances are under control. AG ¶ 20(c) does not apply. There is no showing of Applicant having made good-faith payments towards his delinquent obligations or evidence to establish that he is executing a reasonable ongoing plan to pay or resolve his debts. He asserted he had paid most of the SOR debts, but provided no documentation to support his claims of payment. AG ¶ 20(d) does not apply.

Guideline E: Personal Conduct

The concerns for personal conduct are articulated 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 or sensitive information. Of special interest is any failure to cooperate or provide truthful and candid answers during national security investigative or adjudicative processes.

The undisputed evidence is that Applicant certified to the accuracy of his October 2015 e-QIP on which he did not list his home foreclosure,3 repossession of his truck, his two unpaid judgments, or his other delinquent financial obligations. He stated he did not know the status of his repossessed truck and was unaware of some of his delinquent obligations. During his December 2015 interview, he provided no explanation as to his false answers concerning the delinquent obligations not being listed on his e-QIP. In his SOR Answer he stated he did not list the foreclosure on his home because he was worried that reporting the foreclosure would affect his opportunity for employment.

Of concern is Applicant’s demonstrated lack of trustworthiness in failing to honestly answer the financial questions on his October 2015 e-QIP. AG ¶ 16(a) applies to the falsification, as follows:

(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 national security eligibility or trustworthiness, or award fiduciary responsibilities.

Without any credible explanation to rebut the reasonable inference of falsification, the personal conduct security concerns remain.

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. It is noted Applicant served in the U.S. Marine Corps on active duty and in the Reserves. His unpaid judgments and unpaid collection accounts totaling more than $17,000.

Applicant has been aware of the Government’s security concern about this delinquent obligations since his December 2015 interview when he was specifically confronted about his delinquent obligations. At that time, he said he would look into the debts and pay them within a year, if he owed them. Additionally, the August 2016 SOR and September 2016 FORM put him on notice of the Government’s concern about the delinquent obligations. The FORM specifically informed him there was no evidence that the delinquent obligations had been paid. There is no evidence he has contacted his creditors or negotiated any repayment agreements concerning the delinquent debts.

In requesting a decision without a hearing, Applicant chose to rely on the written record. In so doing, however, he failed to submit sufficient information or evidence to supplement the record with relevant and material facts regarding his circumstances, articulate his position, and mitigate the financial security concerns. He failed to offer evidence of financial counseling or provide documentation showing any efforts to address the delinquent debt. By failing to provide such information, and in relying on only the limited response in his SOR Answer, the financial considerations and personal conduct security concerns remain.

The issue is not simply whether all the delinquent obligations have been paid—it is whether his financial circumstances raise concerns about his fitness to hold a security clearance. (See AG ¶ 2(c)) His delinquent obligations remain unpaid. He provided no explanation for his false answers on his October 2015 e-QIP. Overall, the record evidence leaves me with questions and doubts about 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 Section E3.1.25 of Enclosure 3 of the Directive, are:

Paragraph 1, Financial Considerations: AGAINST APPLICANT

Subparagraphs 1.a – 1.e: Against Applicant

Paragraph 2, Personal Conduct: 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 a security clearance. Eligibility for access to classified information is denied.

_______________________ CLAUDE R. HEINY II Administrative Judge

FOOTNOTES

1 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 (Sept. 1, 2006 AG) effective within the DoD on September 1, 2006. 2 Application of the AGs that were in effect as of the issuance of the SOR would not change my decision in this case. The new AGs are available at http://ogc.osd.mil/doha/5220-6 R20170608.pdf. 3 Applicant’s failure to list the foreclosure on his home was not listed as an SOR personal conduct security concern.