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ISCR Case 16-02414.h1 — CASE

ISCR Case 16-02414.h1denied

Case Headnote

ISCR Case No. 16-02414.h1

deniedOct 19, 2017· Hon. LeRoy F. Foreman· hearing

Summary

The applicant, a 57-year-old aircraft mechanic, was denied a security clearance due to concerns under Guideline F (Financial Considerations). This decision stemmed from numerous delinquent debts totaling approximately $27,387, which raised disqualifying conditions AG ¶ 19(a), AG ¶ 19(b), and AG ¶ 19(c).

Despite admitting to these debts, the applicant failed to provide sufficient documentation or evidence of efforts to resolve his financial issues. He did not offer proof of financial counseling or demonstrate good-faith efforts to repay his creditors, which undermined his claims of mitigating circumstances.

Furthermore, the applicant's financial problems were recent and he did not adequately explain them as being beyond his control. Consequently, the security clearance application was denied.

Why the Applicant Was Denied

The applicant had numerous delinquent debts totaling about $27,387, which he admitted to but did not adequately address or document efforts to resolve.
He failed to provide evidence of financial counseling or good-faith efforts to repay creditors, which undermined his claims of mitigating circumstances.
The applicant's financial problems were recent and not sufficiently explained as being beyond his control.

Conditions Referenced

Disqualifying

AG ¶ 19(a)appliedInability to Satisfy Debts
AG ¶ 19(b)appliedUnwillingness to Satisfy Debts Regardless of the Ability to Do So
AG ¶ 19(c)appliedA History of Not Meeting Financial Obligations

Key Rule Quoted

“Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the adjudicative guidelines.”
— Department of the Navy v. Egan, 484 U.S. 518, 528 (1988)

Procedural Posture

SOR issuedSep 20, 2016
Answer filedOct 6, 2016
Hearing held—Decision made on the written record without a hearing.
Decision dateOct 19, 2017

Cite For

Denial of Security Clearance Due to Financial Irresponsibility Under Guideline F
Failure to Provide Evidence of Mitigating Circumstances for Financial Issues
Importance of Documentation in Addressing Delinquent Debts in Security Clearance Cases

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 multiple financial concerns under Guideline F, including the applicant's inability to satisfy debts and a history of not meeting financial obligations. Despite some admissions regarding debts, the applicant failed to provide sufficient evidence of efforts to mitigate these concerns, leading to a denial of security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a–1.s	19 sub-charges — specific text not stated in this decision (against the applicant).	Against Applicant			—	—	—

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: ) ) [Redacted] ) ISCR Case No. 16-02414 ) Applicant for Security Clearance )

For Government: Ross Hyams, Esq., Department Counsel For Applicant: Pro se

10/19/2017 ______________

STATEMENT OF CASE

______________

FOREMAN, LeRoy F., Administrative Judge:

This case involves security concerns raised under Guideline F (Financial Considerations). Eligibility for access to classified information is denied.

Statement of the Case

Applicant submitted a security clearance application on September 24, 2015. On September 20, 2016, the Department of Defense (DOD) sent him a Statement of Reasons (SOR) alleging security concerns under Guideline F. The DOD acted under Executive Order (Exec. Or.) 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG) implemented by DOD on September 1, 2006.1 Applicant answered the SOR on October 6, 2016, and requested a decision on the written record without a hearing. Department Counsel submitted the Government’s written case on October 19, 2016. On October 20, 2016, a complete copy of the file of relevant material (FORM), consisting of Items 1 through 7, was sent to Applicant, who was given an opportunity to file objections and submit material to refute, extenuate, or mitigate the Government’s evidence. He received the FORM on October 31, 2016, and did not respond. The case was assigned to me on October 1, 2017.

The FORM included Item 5, a summary of a personal subject interview (PSI) conducted on December 22, 2015. The PSI was not authenticated as required by Directive ¶ E3.1.20. Department Counsel informed Applicant that he was entitled to comment on the accuracy of the PSI summary; make any corrections, additions, deletions or updates; or object to consideration of the PSI on the ground that it was not authenticated. I conclude that he waived any objections to the PSI summary by failing to respond to the FORM. “Although pro se applicants are not expected to act like lawyers, they are expected to take timely and reasonable steps to protect their rights under the Directive.” ISCR Case No. 12-10810 at 2 (App. Bd. Jul. 12, 2016).

Findings of Fact2

In Applicant’s answer to the SOR, he admitted the allegations in SOR ¶¶ 1.c-1.g, 1.i-1.k, 1.m, 1.n, 1.p, 1.q, and 1.s. He denied the allegations in SOR ¶¶ 1.a, 1.b, 1.h, 1.l, 1.o, and 1.r. His admissions are incorporated in my findings of fact.

Applicant is a 57-year-old aircraft mechanic employed by a defense contractor since August 2015. He served on active duty in the U.S. Army from 1978 to 1981 and in the U.S. Army Reserve until 1993, when he was honorably discharged. He held a security clearance while on active duty in the U.S. Army and he received a clearance from another federal agency in June 2015.

Applicant married in October 1980 and divorced in May 1988. He married his current spouse in February 2005. He has five adult children.

Applicant previously worked for his current employer from February 2009 to March 2013. He worked in the private sector for about six months, was unemployed from September to December 2013, worked for another defense contractor from December 2013 to November 2014, and was unemployed from November 2014 to March 2015. He worked in the private sector from March 2015 until he began his current job.

In Applicant’s answer to the SOR, he stated that he was laid off by his current employer five times for short periods between 2013 and 2015. To avoid further layoffs, he transferred to a lower-paying job with no overtime. During the December PSI, he stated that he lives paycheck to paycheck. (Item 5 at 12.) The SOR alleges 19 delinquent debts totaling about $27,387. All the debts are reflected in the credit reports from October 2015 and June 2016. (Items 6 and 7.) Applicant admitted 13 debts and denied 6, but he did not explain or provide documentation showing the basis for the denials.

In the December 2015 PSI, Applicant stated that his financial problems began in 2010, when he could not afford the mortgage-loan payments on his home and could not find renters for it when he moved to another work location, where he was paying rent of $1,100 per month. (Item 5 at 4.) In his answer to the SOR, he stated that his wife is “in and out of hospitals,” but he provided no specific information about the amounts or dates of his medical expenses.

In Applicant’s answer to the SOR, he stated that he was paying $126 per month by payroll deduction for the child-support arrearage alleged in SOR ¶ 1.q, but he submitted no documentation to support his statement. In the PSI, he stated that the debt alleged in SOR ¶ 1.swas paid in full, but he admitted the debt in his answer to the SOR and provided no proof that it was resolved. In the PSI, he stated that he was making payments of $25-$30 per month on the credit-card debt alleged in SOR ¶ 1.r. (Item 5 at 9-10.) He presented no documentary evidence of contacts with his creditors, payments, or payment plans for any of the debts alleged in the SOR.

POLICIES

“[N]o one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). As Commander in Chief, the President has the authority to “control access to information bearing on national security and to determine whether an individual is sufficiently trustworthy to have access to such information.” Id. at 527. The President has authorized the Secretary of Defense or his designee to grant applicants eligibility for access to classified information “only upon a finding that it is clearly consistent with the national interest to do so.” Exec. Or. 10865 § 2.

Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the adjudicative guidelines. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, an administrative judge applies these guidelines in conjunction with an evaluation of the whole person. An administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. An administrative judge must consider all available and reliable information about the person, past and present, favorable and unfavorable.

The Government reposes a high degree of trust and confidence in persons with access to classified information. This relationship transcends normal duty hours and endures throughout off-duty hours. Decisions include, by necessity, consideration of the possible risk that the 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.

Clearance decisions must be made “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” Exec. Or. 10865 § 7. Thus, a decision to deny a security clearance is merely an indication the applicant has not met the strict guidelines the President and the Secretary of Defense have established for issuing a clearance.

Initially, the Government must establish, by substantial evidence, conditions in the personal or professional history of the applicant that may disqualify the applicant from being eligible for access to classified information. The Government has the burden of establishing controverted facts alleged in the SOR. See Egan, 484 U.S. at 531. “Substantial evidence” is “more than a scintilla but less than a preponderance.” See v. Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994). The guidelines presume a nexus or rational connection between proven conduct under any of the criteria listed therein and an applicant’s security suitability. See ISCR Case No. 15- 01253 at 3 (App. Bd. Apr.20, 2016).

Once the Government establishes a disqualifying condition by substantial evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the facts. 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. Sep. 22, 2005).

An applicant “has the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue his security clearance.” ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002). “[S]ecurity clearance determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531.

ANALYSIS

Guideline F, Financial Considerations

The security concern under this guideline 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. . . . This concern is broader than the possibility that a person might knowingly compromise classified information to raise money. It encompasses concerns about a person’s self-control, judgment, and other qualities essential to protecting classified information. A person who is financially irresponsible may also be irresponsible, unconcerned, or negligent in handling and safeguarding classified information. See ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012).

Applicant’s admissions and the credit reports included in the FORM establish three disqualifying conditions under this guideline: AG ¶ 19(a) (“inability to satisfy debts”); AG ¶ 19(b) (“unwillingness to satisfy debts regardless of the ability to do so”); and AG ¶ 19(c) (“a history of not meeting financial obligations”). The following mitigating conditions are potentially applicable:

AG ¶ 20(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;

AG ¶ 20(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;

AG ¶ 20(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;

AG ¶ 20(d): the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts; and

AG ¶ 20(e): the individual has a reasonable basis to dispute the legitimacy of the past-due debt which is the cause of the problem and provides documented proof to substantiate the basis of the dispute or provides evidence of actions to resolve the issue.

None of the above mitigating conditions are established. Applicant’s delinquent debts are numerous, recent, and were not incurred under circumstances making them unlikely to recur. His periods of unemployment and his wife’s medical problems were conditions beyond his control, but he presented no evidence of the impact of his wife’s problems on his ability to pay other debts, and he has not acted responsibly toward his creditors. He submitted no documentary evidence of attempts to contact creditors, counseling, payments, payment plans, or a basis for disputing any of the debts.

WHOLE PERSON CONCEPT

Under AG ¶ 2(c), the ultimate determination of whether to grant eligibility for a security clearance must be an overall commonsense judgment In applying the whole- person concept, an 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 and applying the adjudicative factors in AG ¶ 2(d).3

I have incorporated my comments under Guideline F in my whole-person analysis and applied the adjudicative factors in AG ¶ 2(d). I have considered Applicant’s honorable military service and employment by defense contractors. Because Applicant requested a determination on the record without a hearing, I had no opportunity to evaluate his credibility and sincerity based on demeanor. See ISCR Case No. 01-12350 at 3-4 (App. Bd. Jul. 23, 2003). After weighing the disqualifying and mitigating conditions under Guideline F, and evaluating all the evidence in the context of the whole person, I conclude Applicant has not mitigated the security concerns raised by his delinquent debts.

FORMAL FINDINGS

I make the following formal findings on the allegations in the SOR:

Paragraph 1, Guideline F (Financial Considerations): AGAINST APPLICANT

Subparagraphs 1.a-1.s: Against Applicant

CONCLUSION

I conclude that it is not clearly consistent with the national security interests of the United States to grant Applicant eligibility for access to classified information. Clearance is denied.

LeRoy F. Foreman Administrative Judge

FOOTNOTES

1 Security Executive Agent Directive 4 (SEAD 4), was issued on December 10, 2016, revising the 2006 adjudicative guidelines. The SEAD 4 guidelines apply to all adjudicative decisions issued on or after June 8, 2017. The changes resulting from issuance of SEAD 4 did not affect my decision in this case. 2 Applicant’s personal information is extracted from his security clearance application (Item 4) unless otherwise indicated by a parenthetical citation to the record. 3 The factors are: (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.