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ISCR Case 16-02962.h1 — CASE

ISCR Case 16-02962.h1denied

Case Headnote

ISCR Case No. 16-02962.h1

deniedJul 10, 2017· Hon. Eric H. Borgstrom· hearing

Summary

A 52-year-old Department of Defense contractor was denied a security clearance due to concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The applicant had three delinquent student loans, totaling approximately $73,000, which had been outstanding since 2010. The judge noted a lack of demonstrated effort to resolve these debts.

Additionally, the applicant made deliberate falsifications on her January 2016 security clearance application. Specifically, she omitted information regarding her delinquent student loans and failed to disclose her arrest and probation in Section 22 of the application. These omissions were considered deliberate and raised significant doubts about her trustworthiness and reliability.

The judge concluded that the applicant did not mitigate the security concerns related to her financial issues or her personal conduct. Consequently, the security clearance was denied.

Why the Applicant Was Denied

The applicant failed to demonstrate any debt-resolution efforts for her delinquent student loans, which have been outstanding since 2010.
The applicant deliberately falsified her security clearance application by omitting her arrest and probation, which raised significant doubts about her trustworthiness and reliability.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability to Satisfy Debts
AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations
AG ¶ 16(a)appliedDeliberate Omission, Concealment, or Falsification of Relevant Facts

Key Rule Quoted

“Any doubt concerning personnel being considered for access to classified information will be resolved in favor of the national security.”

Procedural Posture

SOR issuedOct 29, 2016
Answer filed—
Hearing heldMay 16, 2017
Decision dateJul 10, 2017

Cite For

Failure to Mitigate Financial Considerations Under Guideline F Due to Lack of Debt-resolution Efforts
Deliberate Falsification of Security Clearance Application Under Guideline E
Importance of Demonstrating Good-faith Efforts to Resolve Financial Issues for 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 did not mitigate personal conduct concerns related to falsification on her security clearance application. The applicant was found to have deliberately falsified her responses regarding her criminal record, while the omission of her delinquent student loans was not deemed deliberate. Ultimately, the personal conduct concerns led to a denial of the security clearance.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
2.a	Applicant omitted her delinquent student loans on her January 2016 SCA.	For Applicant	Omission or Failure to Disclose	Financial	Denied	—	—	—
2.b	Applicant deliberately falsified her responses to Section 22 of her January 2016 SCA.	Against Applicant	Falsification Security FormFOUND DELIBERATE	Criminal Conduct	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 against the applicant on all financial allegations under Guideline F, citing three delinquent student loans totaling approximately $73,000 that have remained unresolved since 2010. The applicant's failure to take any debt-resolution efforts and her lack of financial counseling contributed to the decision to deny her security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	three delinquent student loans	Against Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	three delinquent student loans	Against Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	three delinquent student loans	Against Applicant	Student Loan 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: ) ) [NAME REDACTED] ) ISCR Case No. 16-02962 ) ) Applicant for Security Clearance

For Government: Carroll Connelley, Esq., Department Counsel For Applicant: Pro se

07/10/2017 ______________

STATEMENT OF CASE

______________

BORGSTROM, Eric H., Administrative Judge:

Applicant did not mitigate the security concerns about her financial delinquencies and falsification on her security questionnaire. Eligibility for access to classified information is denied.

Statement of the Case

On October 29, 2016, the Department of Defense (DOD) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline F (financial considerations) and Guideline E (personal conduct).1 Applicant responded to the SOR and requested a hearing before an administrative judge. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing, scheduling the hearing for May 16, 2017. I convened the hearing as scheduled. Government Exhibits (GE) 1-4 were admitted into evidence without objection. Applicant testified and Applicant’s Exhibit (AE) A was admitted into evidence without objection. The record closed on May 31, 2017. I received the hearing transcript (Tr.) on June 1, 2017.

Procedural Issues

On May 11, 2017, I issued an order informing both parties that although the SOR referenced the adjudicative guidelines implemented by the DOD on September 1, 2006, I would be applying the revised adjudicative guidelines (AG) effective as of June 8, 2017, pursuant to SEAD 4. The parties acknowledged receipt of my order and raised no objection.2

FINDINGS OF FACT

The SOR alleges three delinquent student loans (SOR ¶¶ 1.a.-1.c.) and two falsifications (SOR ¶¶ 2.a.-2.b.). Applicant admitted the three delinquent debts. Although she admitted the falsification allegations in her response to the SOR, she denied deliberately falsifying her responses to the security clearance application.3 Therefore, Applicant is found to have denied the falsification allegations. After a thorough and careful review of the pleadings and exhibits, I make the following findings of fact:

Applicant is 52 years old. Since graduating from high school in 1984, Applicant has been gainfully employed by four different companies. She had two periods of unemployment, from January to May 2009 and from September 2015 to January 2016. Since February 2016, she has been employed full time as a DOD contractor. She has been divorced from her second husband since June 2010, and she has two sons – ages 20 and 23.4

Applicant’s admissions and her February 2016 credit report establish the three debts (SOR ¶¶ 1.a.-1.c.), totaling approximately $73,000. Between 2004 and 2007, Applicant co-signed on three student loans for her niece. She understood at the time that she was financially liable for the debts as a co-signor. The student loans became delinquent in 2010. She recalled receiving correspondence about the student loans several years ago when they became delinquent, and the correspondence from the creditor continued every few months since then. She contacted her niece to ascertain her niece’s plan to resolve the delinquent student loans, and it is Applicant’s understanding that no payments have been made on the student loans. There is no documentary evidence that Applicant initiated any debt-resolution efforts beyond contacting the creditor in May 2017.5 In April 2015, Applicant had an altercation with her son’s girlfriend, wherein Applicant slapped the other woman. A few months later, Applicant was charged with simple assault. When presented with the charge, she drove herself to the police station. She was handcuffed and booked at the police station, hired an attorney, and appeared in court. She was placed on probation for one year and ordered to complete anger- management classes. 6

After spending several weeks completing her security clearance application (SCA), Applicant signed and submitted it on January 19, 2016. She responded “NO” to the following questions:

Section 22 – Police Record In the past seven (7) years, have you been issued a summons, citation, or ticket to appear in court in a criminal proceeding against you?

In the past seven (7) years, have you been arrested by any police officer, sheriff, marshal or any other type of law enforcement official?

In the past seven (7) years, have you been, charged, convicted, or sentenced of a crime in any court?

In the past seven (7) years, have you been or are you currently on probation or parole?

Section 26 – Financial Record In the past seven (7) years, [have] you had bills or debts turned over to a collection agency? (Include obligations for which you were the sole debtor, as well as those for which you were a cosignor or guarantor).

In the past seven (7) years, [have] you had any account or credit card suspended, charged off, or cancelled for failing to pay as agreed? (Include obligations for which you were the sole debtor, as well as those for which you were a cosignor or guarantor).7

As to Section 22, Applicant admitted she was worried she might lose her job if her employer learned that she was on probation, and that concern contributed to her omissions. When initially questioned by the Office of Personnel Management (OPM) investigator during her June 2016 security interview, she denied having been arrested in the previous seven years. Only after being confronted with her 2015 arrest and criminal charge did she admit the arrest, charge, and probation. Applicant testified that she did not list her arrest, criminal charge, and probation because she believed that the simple assault charge was not within the scope of the question. She further explained that she did not believe she was arrested because she drove herself to the police station before being handcuffed and booked.8

As to Section 26, Applicant explained she did not list the delinquent student loans on her January 2016 SCA because she did not believe they were within the scope of the question. Moreover, the student loans were not on her mind since she was the co-signor. When initially confronted by the OPM investigator during her June 2016 security interview, she denied any charged-off accounts, but later admitted the three delinquent student loans when confronted.9

Applicant has not received any financial counseling. She has been about two months behind on her rent payments for over a year. Her monthly rent ($1,000) is a significant portion of her monthly income ($1,200).10

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(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 access to classified information will be resolved in favor of the 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. 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 acts or otherwise questionable 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 to satisfy debts; and

Applicant’s three delinquent debts total approximately $73,000. The Government produced substantial evidence to raise the disqualifying conditions in AG ¶¶ 19(a) and 19(c).11 Conditions that could mitigate the 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, 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 a good-faith effort to repay overdue creditors or otherwise resolve debts.

Applicant’s three debts became delinquent in 2010. Since 2010, Applicant has received regular correspondence from the creditor seeking payment for the debts. Applicant’s failure to make any debt-resolution efforts casts doubt on her reliability and good judgment. AG ¶ 20(a) does not apply.

The application of AG ¶ 20(b) requires both that (1) Applicant’s financial indebtedness resulted from circumstances beyond her control, and (2) Applicant acted responsibly under the circumstances. Applicant had periods of unemployment in 2009 and 2015. These events constitute circumstances beyond her control in the context of AG ¶ 20(b).

Notwithstanding her periods of unemployment, there is no documentary evidence of a debt-resolution plan or steps taken in furtherance of such a plan to address these three delinquent student loans in the last seven years. AG ¶ 20(b) does not apply.

Applicant has not received any financial counseling, and she has been behind on her rent for over one year. AG ¶ 20(c) does not apply.

The concept of good faith Arequires a showing that a person acts in a way that shows reasonableness, prudence, honesty, and adherence to duty or obligation.”12 As discussed above, this is no evidence of any debt-resolution efforts. AG ¶ 20(d) does not apply.

Applicant’s periods of unemployment contributed to her financial problems. Nonetheless, there is no documentary evidence of any debt-resolution efforts or evidence demonstrating financial responsibility. I find that Applicant did not mitigate the financial considerations security concerns.

Guideline E, Personal Conduct

The concern under this guideline 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 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 following will normally result in an unfavorable national security eligibility determination, security clearance action, or cancellation of further processing for national security eligibility.

The guideline notes several conditions that could raise security concerns under AG ¶ 16. The following disqualifying condition is potentially applicable in this case:

AG ¶ 16(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.

The SOR alleges that Applicant deliberately falsified her responses to Sections 22 (SOR ¶ 2.b.) and 26 (SOR ¶ 2.a.) of her January 2016 SCA. Applicant admitted she was aware that she was arrested, charged, and placed on probation at the time she completed the SCA. She further admitted she was concerned that she might lose her job if her employer learned about the criminal charge and her probation. Applicant’s explanations that she did not list her arrest, criminal charge, and probation – because she drove herself to the police station and because it was a simple assault charge – are not credible in light of the totality of the evidence. The Government established that Applicant deliberately falsified her responses to Section 22 (SOR ¶ 2.b.). AG ¶ 16(a) applies as to SOR ¶ 2.b.

Applicant omitted her delinquent student loans on her January 2016 SCA. She received correspondence from the creditor for several years, and she was aware that these accounts were delinquent. Applicant explained that she did not believe these accounts fell within the scope of Section 26. Given her level of education and that she was the co-signor on these dated student loans, I find her explanation credible. AG ¶ 16(a) does not apply as to SOR ¶ 2.a.

The following mitigating condition is potentially relevant:

AG ¶ 17(a) the individual made prompt, good-faith efforts to correct the omission, concealment, or falsification before being confronted with the facts. Applicant did not make prompt, good-faith efforts to correct the omissions of her arrest and criminal charge. After submitting her SCA in January 2016, she was interviewed by an OPM investigator in June 2016. She initially confirmed her negative response that she had not been arrested in the previous seven years. Only after she was confronted by the OPM investigator with the arrest and criminal charge did she disclose information about the incident. AG ¶ 17(a) does not apply.

Applicant deliberately omitted her arrest, criminal charge, and probation on her January 2016 SCA. She has not mitigated the personal conduct security concerns arising from this falsification.

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 the facts and circumstances surrounding this case. I have incorporated my comments under Guidelines F and E and the factors in AG ¶ 2(d) in this whole-person analysis.

Applicant made no debt-resolution efforts on the three delinquent student loans, which have remained delinquent since 2010. In addition, her deliberate falsification on the January 2016 SCA casts significant doubt as to her trustworthiness, reliability, and good judgment. I conclude Applicant did not 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, Guideline F: AGAINST APPLICANT Subparagraphs 1.a.-1.c.: Against Applicant

Paragraph 2, Guideline E: AGAINST APPLICANT

Subparagraph 2.a.: For Applicant

Subparagraph 2.b. 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.13 Eligibility for access to classified information is denied.

________________________ Eric H. Borgstrom Administrative Judge

FOOTNOTES

1 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 implemented by the DOD on September 1, 2006. 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. 2 Hearing Exhibit (HE) I; Tr. 13-14.

3 Tr. 9.

4 GE 1; GE 2.

5 GE 2; GE 3; AE A; Tr. 28-33, 63. 6 GE 2; Tr. 43-56.

7 GE 1. 8 GE 2; Tr. 43-45, 60-62.

9 GE 2; Tr. 39, 60-62.

10 Tr. 36, 72. 11 Directive ¶ E3.1.15. See ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 2005) (An applicant has the burden of proving a mitigating condition, and the burden of disproving it never shifts to the Government.). 12 See ISCR Case No. 08-12184 at 10 (App. Bd. Jan. 7, 2010) (Good-faith effort to resolve debts must be evidenced by a meaningful track record of repayment). 13 See SEAD 4, Appendix A, ¶¶ 1(d) and 2(c).