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ISCR Case 16-02137.h1 — CASE

ISCR Case 16-02137.h1denied

Case Headnote

ISCR Case No. 16-02137.h1

deniedApr 13, 2017· Hon. Edward W. Loughran· hearing

Summary

A 35-year-old defense contractor employee was denied a security clearance due to concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The applicant had over $36,000 in unresolved debts, including eight student loans in collection totaling $26,785, eleven delinquent medical debts of approximately $7,500, and three miscellaneous delinquent debts totaling about $1,700. Additional debts included a $268 delinquent credit card, a $1,058 deficiency from an auto loan after repossession, and a $402 satellite television account in collection.

The judge found that the applicant intentionally falsified her SF 86 by failing to report these debts, raising questions about her reliability and trustworthiness. While a mitigating condition related to financial considerations was applied, the applicant did not demonstrate a good-faith effort to repay her debts.

Ultimately, the ongoing financial issues and lack of evidence of responsible behavior contributed to the denial of her security clearance, as the judge determined she did not mitigate the concerns.

Why the Applicant Was Denied

Applicant failed to demonstrate a good-faith effort to repay her debts.
Applicant intentionally omitted relevant financial information from her SF 86, raising questions about her reliability and trustworthiness.
Ongoing financial issues and lack of evidence of responsible behavior contributed to the denial.

Conditions Referenced

Disqualifying

F.19.aappliedInability or Unwillingness to Satisfy Debts
E.16.aappliedDeliberate Omission, Concealment, or Falsification of Relevant Facts

Mitigating

F.20.bappliedConditions That Resulted in the Financial Problem Were Largely Beyond the Person’s ControlSome financial issues were attributed to supporting a large family and a spouse's job demotion.

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 15, 2016
Answer filedSep 27, 2016
Hearing heldJan 24, 2017
Decision dateApr 13, 2017

Cite For

Failure to Mitigate Financial Considerations Under Guideline F
Intentional Omission of Debts on Security Clearance Application Under Guideline E
Impact of Ongoing Financial Issues on 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 intentionally falsified her SF 86 by failing to report debts that had been turned over to collection companies. The judge concluded that the applicant did not mitigate the personal conduct concerns, resulting in a denial of eligibility for a security clearance.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
2.a	Applicant intentionally falsified her SF 86 when she failed to report her debts that had been turned over to collection companies.	Against Applicant	Falsification Security FormFOUND DELIBERATE	Financial	Denied	(a) deliberate omission, concealment, or falsification on a security form	—	—

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 delinquent debts totaling over $35,000, which the applicant admitted to owing, except for two disputed accounts. The applicant's financial issues were deemed recent and ongoing, leading to a denial of her security clearance due to insufficient evidence of responsible financial behavior or good-faith efforts to resolve her debts.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	8 student loans in collection totaling $26,785 $26,785	Against Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	11 delinquent medical debts totaling about $7,500 $7,500	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	3 miscellaneous delinquent debts totaling about $1,700 $1,700	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d–1.l	9 sub-charges — specific text not stated in this decision (5 against, 4 for the applicant). (low confidence)	Mixed			—	—	—
1.m	$268 delinquent credit card debt $268	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.n	$1,058 deficiency owed on an auto loan after the car was repossessed $1,058	For Applicant	Auto Loan Debt	Denied	—	—	—
1.o–1.t	6 sub-charges — specific text not stated in this decision (for the applicant). (low confidence)	For Applicant			—	—	—
1.u	$402 satellite television account that was placed for collection $402	For Applicant	Unspecified Financial	Denied	—	—	—
1.v	specific text not stated in this decision	For Applicant	Unspecified Financial	Unknown	—	—	—

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. 16-02137 ) Applicant for Security Clearance )

For Government: Bryan J. Olmos, Esq., Department Counsel For Applicant: Pro se

04/13/2017 ______________

STATEMENT OF CASE

______________

LOUGHRAN, Edward W., Administrative Judge:

Applicant did not mitigate the personal conduct and financial considerations security concerns. Eligibility for access to classified information is denied.

Statement of the Case

On September 15, 2016, the Department of Defense (DOD) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guidelines E (personal conduct) and F (financial considerations). 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 (AG) implemented by the DOD on September 1, 2006.

Applicant responded to the SOR on September 27, 2016, and requested a hearing before an administrative judge. The case was assigned to me on December 1, 2016. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on December 19, 2016, scheduling the hearing for January 24, 2017. The hearing was convened as scheduled. Government Exhibits (GE) 1 through 6 were admitted in evidence without objection. Applicant testified, but she did not submit any documentary evidence. DOHA received the hearing transcript (Tr.) on February 2, 2017.

FINDINGS OF FACT

Applicant is a 35-year-old employee of a defense contractor. She attended college between 2004 and 2007, but she did not earn a degree. She married in 2000 and divorced in 2007. She married her current spouse in 2007. She has two children from her first marriage, two children from her current marriage, and a stepchild. All five children live with Applicant and her husband.1

The SOR alleges 8 student loans in collection totaling $26,785, 11 delinquent medical debts totaling about $7,500 and 3 miscellaneous delinquent debts totaling about $1,700. Applicant admitted owing all the debts with the exception of the $1,058 deficiency owed on an auto loan after the car was repossessed (SOR ¶ 1.n) and the $402 satellite television account that was placed for collection (SOR ¶ 1.u). She denied owing those two accounts. There is insufficient evidence for a determination that Applicant is currently liable for those two accounts.2

Applicant attributed her financial problems to supporting a family of seven on her and her husband’s income. Her husband was demoted from a supervisor position in November 2015. Except for the period from March 2009 through February 2010, when Applicant was a stay-at-home mother, she has been consistently employed since 2007. The medical debts resulted from a period when her family could not afford the high cost of medical insurance.3

Applicant receives about $500 per month in court-ordered child support. She has not made any payments on her defaulted student loans since 2010. She has not paid any of the other debts alleged in the SOR. She stated that her husband was promoted back to a supervisor position in July 2016, and she is now earning a better salary. She stated that she intends to pay her debts. She has not received financial counseling.4

Applicant submitted a Questionnaire for National Security Positions (SF 86) in April 2015. She answered “No” to all the financial questions under Section 26, including the following:

In the past seven (7) years, you had bills or debts turned over to a collection agency? (Include financial obligations for which you were the sole debtor, as well as those for which you were a cosigner or guarantor). In the past seven (7) years, you had any account or credit card suspended, charged off, or cancelled for failing to pay as agreed? (Include financial obligations for which you were the sole debtor, as well as those for which you were a cosigner or guarantor).5

Applicant was interviewed for her background investigation in March 2016. She stated that her husband had a $3,000 delinquent debt, but she did not have any delinquent debts. When confronted with delinquent debts from her credit report, including her defaulted student loans, she denied knowledge of all her debts except for the $268 delinquent credit card debt alleged in SOR ¶ 1.m. She stated that she forgot about that debt.6

Applicant admitted during the hearing that she knew when she submitted the SF 86 that her student loans were in default and that her student loans and medical debts had been turned over to collection companies. She stated that the SF 86 had to be turned in to the person who reported the incident that led to her husband’s demotion. She did not list her delinquent debts because she did not want the person to find out about their financial problems. She felt the individual wanted Applicant and her husband to be fired, and she did not want to give him anything that could have been used against them.7

POLICIES

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines. In addition to brief introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which are 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 the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶ 2(c), 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.” 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.” 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 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 for financial considerations is set out in AG ¶ 18:

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 information. An individual who is financially overextended is at risk of having to engage in illegal acts to generate funds.

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

(a) inability or unwillingness to satisfy debts; and

Applicant accumulated delinquent debts and was unable or unwilling to pay her financial obligations. The above disqualifying conditions are applicable. There is insufficient evidence for a determination that Applicant is currently liable for the debts alleged in SOR ¶¶ 1.nand 1.u. Those allegations are concluded for Applicant.

Conditions that could mitigate financial considerations security concerns are provided under AG ¶ 20. The following 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, or a death, divorce or separation), and the individual acted responsibly under the circumstances;

(c) the person has received or is receiving counseling for the problem and/or there are clear indications that the problem is being resolved or is under control; and

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

Applicant attributed her financial problems to supporting a family of seven on her and her husband’s income. Her husband was demoted from a supervisor position in November 2015. The medical debts resulted from a period when her family could not afford the high cost of medical insurance. The medical debts do not generate a security concern, and they are mitigated. However, Applicant’s husband was promoted back to a supervisor position in July 2016; Applicant is now earning a better salary; and she receives about $500 per month in court-ordered child support. She has not paid any of the debts alleged in the SOR, but she stated that she intends to pay her debts. Intentions to pay off debts in the future are not a substitute for a track record of debt repayment or other responsible approaches.8

I am unable to find that Applicant acted responsibly under the circumstances or that she made a good-faith effort to pay her debts. Her financial issues are recent and ongoing. They continue to cast doubt on her current reliability, trustworthiness, and good judgment. AG ¶¶ 20(a), 20(c), and 20(d) are not applicable. AG ¶ 20(b) is partially applicable. I find that financial considerations concerns remain despite the presence of some mitigation. Guideline E, Personal Conduct

The security concern for personal conduct is set out in AG ¶ 15, as follows:

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.

Applicant intentionally falsified her SF 86 when she failed to report her debts that had been turned over to collection companies. AG ¶ 16(a) is applicable.

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

(f) the information was unsubstantiated or from a source of questionable reliability.

Applicant stated that she did not list her delinquent debts on the SF because she did not want the person that would receive the questionnaire to find out about her and her husband’s financial problems. That does not explain why she lied to the investigator. There are no applicable mitigating conditions.

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(a):

(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 the facts and circumstances surrounding this case. I have incorporated my comments under Guidelines E and F in my whole-person analysis. Applicant has unresolved financial problems, and she intentionally provided false information about her finances on her SF 86.

Overall, the record evidence leaves me with questions and doubts as to Applicant’s eligibility and suitability for a security clearance. I conclude Applicant did not mitigate the personal conduct and financial considerations 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, Guideline F: Against Applicant

Subparagraphs 1.a-1.h: Against Applicant Subparagraphs 1.i- 1.l: For Applicant Subparagraph 1.m: Against Applicant Subparagraphs 1.n-1.v: For Applicant

Paragraph 2, Guideline E: 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.

________________________ Edward W. Loughran Administrative Judge

FOOTNOTES

1 Tr. at 14-15, 18-19; GE 1, 3. 2 Tr. at 21-22; Applicant’s response to SOR; GE 4-6. 3 Tr. at 14-16, 18-19, 26-29; GE 1, 3. 4 Tr. at 16-17, 20-25, 37-44; Applicant’s response to SOR; GE 4-6. 5 GE 1. 6 GE 3. 7 Tr. at 30-36. 8 See ISCR Case No. 11-14570 at 3 (App. Bd. Oct. 23, 2013) (quoting ISCR Case No. 08-08440 at 2 (App. Bd. Sep. 11, 2009)).