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ISCR Case 16-02707.h1 — CASE

ISCR Case 16-02707.h1denied

Case Headnote

ISCR Case No. 16-02707.h1

deniedJun 19, 2017· Hon. Darlene Lokey Anderson· hearing

Summary

An administrative judge denied a security clearance application for a 34-year-old male applicant, citing concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The applicant admitted to significant delinquent debts totaling approximately $32,000 and deliberately provided false information on his security clearance application regarding these financial obligations.

Specifically, the Statement of Reasons detailed a federal tax lien from tax year 2014 for $29,583, which remains outstanding. Additionally, the applicant had two delinquent credit card debts, one for $533 and another for $2,043, both still owing. A delinquent telephone bill of $333 also remained unpaid. The applicant deliberately failed to disclose these delinquent accounts on his application.

The denial was based on the applicant's substantial delinquent debts, including the federal tax lien, and his intentional omission and falsification of financial information on his security clearance application. No mitigating factors were found applicable to either the financial considerations or personal conduct concerns.

Why the Applicant Was Denied

Applicant has significant delinquent debts totaling approximately $32,000, including a Federal tax lien.
Applicant deliberately omitted and falsified information on his security clearance application regarding his financial obligations.
There are no mitigating conditions applicable to the financial considerations or personal conduct concerns.

Conditions Referenced

Disqualifying

F1raisedFinancial ConsiderationsApplicant accumulated a significant amount of delinquent debt.
E2raisedPersonal ConductApplicant deliberately omitted and falsified information on his security clearance application.

Key Rule Quoted

“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.”
— AG ¶ 18

Procedural Posture

SOR issuedOct 29, 2016
Answer filedNov 11, 2016
Hearing heldApr 11, 2017
Decision dateJun 19, 2017

Cite For

Deliberate Omission of Financial Obligations Under Guideline E
Significant Delinquent Debts Under Guideline F
Lack of Mitigating Factors for Financial and Personal Conduct Issues

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, determining that he exhibited questionable judgment and a lack of candor during the security clearance process. The applicant's deliberate omissions in his security clearance application raised significant concerns about his reliability and trustworthiness, leading to a denial of his eligibility for a security clearance.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
2.a	Applicant deliberately failed to disclose the delinquent accounts set forth in the above guideline.	Against Applicant	Falsification Security FormFOUND 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 that the applicant had significant financial issues, including delinquent credit card debts and a federal tax lien totaling approximately $32,000. The applicant's failure to address these debts and his lack of action to resolve them led to a decision against his eligibility for a security clearance under Guideline F.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	A Federal tax lien was filed against him for tax year 2014 in the amount of $29,583. The tax lien remains owing. $29,583	Against Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.b	Two delinquent credit card debts, one in the amount of $533 remain owing. $533	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.c	Two delinquent credit card debts, the other in the amount of $2,043 remain owing. $2,043	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 telephone bill in the amount of $333 remain owing. $333	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	—	—

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. 16-02707 ) ) Applicant for Security Clearance )

For Government: Jeff A. Nagel, Department Counsel For Applicant: Pro se

June 19, 2017 ______________

STATEMENT OF CASE

______________

LOKEY ANDERSON, Darlene D, Administrative Judge:

Statement of the Case

On February 19, 2015, Applicant submitted a security clearance application (e- QIP). On October 29, 2016, the Department of Defense issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline F, Financial Considerations and Guideline E, Personal Conduct. The action was taken under Executive Order (EO) 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) effective June 8, 2007.

Applicant answered the SOR on November 11, 2016 (Answer), and requested a hearing before an administrative judge. In his Answer, he admitted all of the allegations with some explanations. The case was assigned to me on January 17, 2017. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on March 7, 2017, scheduling the hearing for April 11, 2017. The hearing was convened as scheduled. The Government offered Exhibits (GXs) 1 through 5, which were admitted without objection. The record remained open until close of business on April 21, 2017, to allow Applicant to submit additional documentation. Applicant offered four Post- Hearing exhibits which were admitted without objection. He also testified on his own behalf. DOHA received the transcript of the hearing (TR) on April 26, 2017.

FINDINGS OF FACT

Applicant is 34 years old. He is divorced with two children. He has two years of college, equivalent to an Associate’s degree. He is employed with a defense contractor as a Control Materials Handler. He is seeking to obtain 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 $32,000. These debts include two delinquent credit card accounts, a delinquent telephone account, and a Federal tax lien. Credit Reports dated February 26, 2015; August 10, 2016; December 28, 2016; and April 7, 2017, confirm this indebtedness. (Applicant’s Exhibits 2, 3, 4, and 5.)

Applicant served in the U.S. Army from July 2001 to September 2008, including two tours in Iraq. He served in the Army Reserves from September 2008 to June 2009. During his eight year military career, he received a number of awards and commendations for his service. Among his accolades are the Army Commendation medal, Army Achievement Medal, the Meritorious Service Medal, two Good Conduct Medals, and two Iraqi Campaign Medals. Applicant did not hold a security clearance during his military service. (Applicant’s Post-Hearing Exhibit 2.)

When Applicant left the Army, he went to work for a defense contractor in Iraq for a year and a half. He attributes his present past-due indebtedness to his overseas assignment as a civilian employee. During this period, Applicant was earning in the low six figures and was not taxed. He states that his income tax returns were not completed on the correct forms. 1(a) A Federal tax lien was filed against him for tax year 2014 in the amount of $29,583. The tax lien remains owing. Applicant has not yet filed his income tax returns for tax years 2015 and 2016. He also claims that he did not save any money during his overseas assignment. (Tr. pp. 27-30.)

Applicant is indebted to four creditors that he has not yet resolved. Two delinquent credit card debts, 1(b) and 1(c), one in the amount of $533 and the other in the amount of $2,043 remain owing. Applicant used both of these credit cards during his divorce. (Tr. pp. 31-33.) 1(d) A delinquent telephone bill in the amount of $333 remain owing. (Tr. p. 33.) Applicant currently earns about $1,196 every two weeks. He states that he is merely surviving on this. Although his regular monthly expenses are current, he does not have discretionary funds available to pay his delinquent debts. He is currently applying to go into the Army Reserves in order to earn extra money to resolve his past due indebtedness. (Tr. pp. 35-37.)

Guideline E Personal Conduct

The Government alleges that Applicant is ineligible for clearance because he has exhibited 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.

Applicant completed an Electronic Questionnaire for Investigations Processing (e-QIP), dated February 19, 2015. (Government Exhibit 1.) Section 26, asked the following series of questions. Have you failed to file or pay Federal, state or other taxes when required by law or ordinance? Have you had bills or debts turned over to a collection agency? Have you had any account or credit card suspended, charged off or cancelled for failing to pay as agreed? Have you been over 120 days delinquent on any debts not previous entered? Applicant answered, “No” to each of the questions. His answers were not truthful. He deliberately failed to disclose the delinquent accounts set forth in the above guideline.

Applicant stated that he applied for his security clearance in connection with his application to join the Army Reserves. He answered “NO” to each of the questions at issue in order to get it done as quickly as possible, and to shorten the process of entering the Army Reserves. (Tr. p. 40.) Applicant must have sufficient integrity to understand the importance of the security clearance application, and to do the right thing even when no one is looking. This conduct is unacceptable and shows poor judgment, unreliability and immaturity. There is no reasonable excuse for this misconduct.

Letters of recommendation from both Applicant’s current and previous supervisors indicate that Applicant is one of the most productive, efficient, and hardest working employees in the company. His technical expertise, dedication and character have promoted a healthy work environment, and overall improved the success of the department. His leadership qualities have proved to be monumental in the overall success of the entire organization. He is highly regarded and recommended for a security clearance. (Applicant’s Post-Hearing Exhibits 3 and 4.)

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. 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 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. Likewise, I have avoided drawing inferences grounded on mere speculation or conjecture.

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 clearance 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 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 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. 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 risk of having to engage in illegal acts 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 or unwillingness to satisfy debts;

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

Applicant accumulated a significant amount of delinquent debt. His actions demonstrated both a history of not addressing his debt and an inability to do so. The evidence is sufficient to raise the above disqualifying conditions.

There are no mitigating conditions under the Financial Considerations that are applicable here. The evidence shows that Applicant has several past-due debts and a substantial Federal tax lien that remains owing. He has done absolutely nothing to resolve this indebtedness. It does cast doubt on his current reliability, trustworthiness, or good judgment.

Guideline E, Personal Conduct

The security concern relating to the guideline for Personal Conduct 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 conditions are potentially applicable:

(a) 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.

AG ¶ 17 provides conditions that could mitigate security concerns. There are no mitigating conditions that apply.

The falsifications made by Applicant were deliberate. He answered the questions carelessly and without concern for the truth. He submitted the application when applying for the Army reserves. He knew or should have known the importance of disclosing accuracy on the security clearance application. As noted earlier, Applicant has failed to mitigate the Personal Conduct concern.

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 relevant facts and circumstances surrounding this case. I conclude Applicant has not mitigated 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, Guideline F: AGAINST APPLICANT

Subparagraphs 1.a.~d.: Against Applicant

Paragraph 2, Guideline E: AGAINST APPLICANT

Subparagraphs 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 or continue Applicant’s eligibility for a security clearance. Eligibility for access to classified information is denied.

________________________ Darlene Lokey Anderson Administrative Judge