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ISCR Case 16-02194.h1 — CASE

ISCR Case 16-02194.h1denied

Case Headnote

ISCR Case No. 16-02194.h1

deniedOct 11, 2017· Hon. Robert E. Coacher· hearing

Summary

A 53-year-old defense contractor was denied a security clearance under Guideline F (Financial Considerations) due to unresolved delinquent debts totaling approximately $20,438. These debts primarily stemmed from credit card charges incurred during his divorce. The Statement of Reasons specifically cited three instances of charged-off credit card debt.

Disqualifying conditions F.1.a and F.1.c were raised, indicating concerns about the applicant's inability or unwillingness to satisfy debts and a history of not meeting financial obligations. Despite acknowledging the debts and stating an intent to resolve them, the applicant provided no evidence of payments made or participation in financial counseling.

The denial was based on the applicant's failure to address his recent and unresolved financial issues. This lack of demonstrated effort to mitigate the debts raised concerns regarding his reliability and trustworthiness, ultimately leading to the denial of his security clearance application.

Why the Applicant Was Denied

The applicant has unresolved delinquent debts totaling approximately $20,438.
He failed to provide evidence of any efforts to address his debts or seek financial counseling.
The applicant's financial issues were recent and unresolved, raising concerns about his reliability and trustworthiness.

Conditions Referenced

Disqualifying

F.1.araisedInability to Satisfy Debts
F.1.craisedA History of Not Meeting Financial Obligations

Key Rule Quoted

“Any doubt concerning personnel being considered for national security eligibility will be resolved in favor of the national security.”

Procedural Posture

SOR issuedSep 28, 2016
Answer filedOct 25, 2016Applicant elected to have the case decided on the written record.
Hearing held—No hearing; decided on the written record.
Decision dateOct 11, 2017

Cite For

Failure to Mitigate Financial Considerations Under Guideline F
Importance of Providing Evidence of Financial Responsibility
Impact of Unresolved Debts 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 F · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The judge found that the applicant had unresolved financial issues, specifically three delinquent credit card debts totaling approximately $20,438. The applicant's failure to provide evidence of efforts to address these debts led to a decision against him under Guideline F.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	charged-off credit card debt	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	charged-off credit card debt	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	charged-off credit card debt	Against Applicant	Credit Card Debt	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. 16-02194 ) ) Applicant for Security Clearance )

For Government: Ray T. Blank, Jr., Esq., Department Counsel For Applicant: Pro se

10/11/2017 ______________

STATEMENT OF CASE

______________

COACHER, Robert E., Administrative Judge:

Applicant has not mitigated the financial considerations security concerns. Eligibility for access to classified information is denied.

Statement of the Case

On September 28, 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. The DOD CAF acted under Executive Order (EO) 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; DOD 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG).1 Applicant answered the SOR on October 25, 2016, and elected to have his case decided on the written record in lieu of a hearing. Department Counsel submitted the Government’s File of Relevant Material (FORM) on November 28, 2016. The evidence included in the FORM is identified as Items 4-8 (Items 1-3 include pleadings and transmittal information). The FORM was mailed to Applicant, who received it on December 5, 2016. Applicant was given an opportunity to file objections and submit material in refutation, extenuation, or mitigation. Applicant did not file objections and did not submit any evidence. Items 4-8 are admitted into evidence without objection. The case was assigned to me on October 1, 2017.

FINDINGS OF FACT

Applicant admitted all the allegations in his answer to the SOR. The admissions are adopted as findings of fact. After a careful review of the pleadings and evidence, I make the following additional findings of fact.

Applicant is 53 years old. He has worked for a defense contractor since January 2014. He had a period of unemployment from July to October 2012, otherwise he has been steadily employed since 2005. He is married for the second time, his first marriage ending in divorce. He has two children and two stepchildren. He has a bachelor’s degree. He has never held a security clearance.2

The SOR alleges three delinquent debts totaling approximately $20,438. All are charged-off credit card debts. The debts are supported by credit reports from October 2015, June 2016, and November 2016, Applicant’s September 2015 security clearance application (SCA), his interview with a defense investigator in February 2016, and by his SOR admissions.3

Applicant revealed in his SOR answer that the three listed debts arose out of his divorce from his first wife. He explained that she suffered from some serious medical issues that ultimately led to their divorce in 2011. He accepted responsibility for all these debts and stated his intent to contact the creditors and ultimately fulfill his obligations. He offered no documented proof of payment, establishment of payment plans, or any correspondence with any creditor. Credit reports establish that his last action on the accounts was in December 2011 (SOR ¶ 1.a), January 2012 (SOR ¶ 1.b), and April 2012 (SOR ¶ 1.c). The accounts remain unresolved.4

Applicant did not provide any information about his current financial situation or a budget. There is no evidence of financial counseling.5

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 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, 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 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.

Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, an “applicant is responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by applicant or proven by Department Counsel, and 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 that an applicant may deliberately or inadvertently fail to safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation about potential, rather than actual, risk of compromise of classified information.

Section 7 of EO 10865 provides that 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

AG ¶ 18 expresses the security concern for financial considerations:

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. I have considered all of them under AG ¶ 19 and the following potentially apply:

(a) inability to satisfy debts; and

Applicant has delinquent debts that remain unpaid or unresolved because of his inability to pay them. I find both disqualifying conditions are raised.

The guideline also includes conditions that could mitigate security concerns arising from financial difficulties. I have considered all of the mitigating conditions under AG ¶ 20 and the following potentially apply:

(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; and

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

Applicant’s debts are recent and remain unresolved. He did not provide sufficient evidence to show that his financial problems are unlikely to recur. AG ¶ 20(a) does not apply. Applicant’s divorce from his wife is a condition beyond his control, as was his period of unemployment in 2012, however, he failed to take responsible actions to address his debts in the six years since his divorce and he has been steadily employed since October 2012. I find AG ¶ 20(b) does not fully apply. Applicant failed to provide documentation showing any efforts to contact the creditors, set up payment plans, or make payments on the debts. There is no evidence of financial counseling. AG ¶¶ 20(c) and 20(d) do not apply.

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 the 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 guideline 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 considered his civilian employment, the circumstances that led to his divorce from his first wife, and his period of unemployment. Applicant has not established a track record of financial stability.

Overall, the record evidence leaves me with questions and doubts as to Applicant’s eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant failed to mitigate the security concerns arising under Guideline F, financial considerations.

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.c: 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.

_____________________________ Robert E. Coacher Administrative Judge

FOOTNOTES

1 I decided this case using the AG implemented by DOD on June 8, 2017. However, I also considered this case under the previous version of the AG implemented on September 1, 2006, and my conclusions are the same using either set of AG. 2 Item 4. 3 Items 2, 4-8. 4 Items 2, 5-7. 5 Items 2, 4-8.