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ISCR Case 16-03441.h1 — CASE

ISCR Case 16-03441.h1denied

Case Headnote

ISCR Case No. 16-03441.h1

deniedSep 22, 2017· Hon. Edward W. Loughran· hearing

Summary

A 46-year-old defense contractor employee was denied a security clearance due to financial considerations under Guideline F. The Statement of Reasons detailed several financial issues, including an unpaid judgment of $4,750, a settled telecommunications debt of $454, and $1,478 owed in child support arrearages. An underlying debt of $4,172 also resulted in a judgment. These issues raised disqualifying conditions related to financial irresponsibility and a history of not meeting financial obligations.

While mitigating conditions were considered, the judge ultimately found them insufficient. The applicant failed to provide documentation of debt payments despite being advised of its importance, and his financial issues were recent and ongoing.

The applicant admitted to poor financial management, and the evidence did not demonstrate effective control over his finances. Consequently, the judge determined there was insufficient evidence of responsible financial management, leading to the denial of his security clearance application.

Why the Applicant Was Denied

The applicant failed to provide documentation of debt payments despite being informed of its importance.
His financial issues are recent and ongoing, casting doubt on his reliability and judgment.
The applicant admitted to being poor at handling finances and did not demonstrate effective financial management.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability to Satisfy Debts
AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations

Mitigating

AG ¶ 20(b)appliedConditions Largely Beyond the Person's ControlThe applicant attributed his financial problems to unemployment, chronic disease, and caregiving responsibilities.
AG ¶ 20(d)appliedGood-faith Effort to Repay DebtsThe applicant made some payments towards child support and settled certain debts.

Key Rule Quoted

“The protection of the national security is the paramount consideration.”

Procedural Posture

SOR issuedDec 27, 2016
Answer filedFeb 16, 2017
Hearing heldJun 27, 2017
Decision dateSep 22, 2017

Cite For

Insufficient Evidence of Financial Responsibility Under Guideline F
Importance of Documentation in Mitigating Financial Concerns
Consideration of the Whole-person Concept in Security Clearance Decisions

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 an unpaid judgment and child support arrearages, which were not sufficiently mitigated. While some debts were settled, the applicant's overall financial situation raised doubts about his reliability and trustworthiness, leading to a denial of his security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	$4,750 unpaid judgment $4,750	Against Applicant	Judgment Against Applicant	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b–1.d	3 sub-charges — specific text not stated in this decision (against the applicant).	Against Applicant			—	—	—
1.e	$454 telecommunications debt settled $454	For Applicant	Utility or Phone Debt	Admitted	—	—	—
1.f	specific text not stated in this decision	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	$1,478 owed in child support arrearages $1,478	For Applicant	Child Support Debt	Admitted	—	—	—
1.h	specific text not stated in this decision	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i	$4,172 underlying debt resulting in judgment $4,172	For Applicant	Unspecified Financial	Unknown	—	—	—
1.j–1.k	2 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: ) ) ) ISCR Case No. 16-03441 ) Applicant for Security Clearance )

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

09/22/2017 ______________

STATEMENT OF CASE

______________

LOUGHRAN, Edward W., Administrative Judge:

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

Statement of the Case

On December 27, 2016, the Department of Defense (DOD) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline F, financial considerations. Applicant responded to the SOR on February 16, 2017, and requested a hearing before an administrative judge.

The case was assigned to me on May 1, 2017. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on May 16, 2017, scheduling the hearing for June 27, 2017. The hearing was convened as scheduled. Government Exhibits (GE) 1 through 4 were admitted in evidence without objection. Applicant testified and submitted Applicant’s Exhibits (AE) A through D, which were admitted without objection. The record was held open until August 30, 2017, for Applicant to submit additional evidence. He did not submit any additional evidence. DOHA received the hearing transcript (Tr.) on July 7, 2017.

FINDINGS OF FACT

Applicant is a 46-year-old employee of a defense contractor. He has worked for his current employer since May 2015. He has a General Educational Development (GED) high school equivalency certificate, and he has technical certifications. He married in 1998 and divorced in 2006. He has an eight-year-old child.1

Applicant has worked in information technology for more than 25 years, primarily as a consultant or in contract positions. As such, he had periods of unemployment and underemployment, which resulted in financial difficulties. He suffers from a chronic disease, and he helped care for his mother before she passed away in 2015. He also admitted he was “very poor at handling finances.” A number of debts became delinquent, and his home was lost to foreclosure.2

The SOR alleges a $4,750 unpaid judgment (SOR ¶ 1.a); the underlying $4,172 debt that resulted in that judgment (SOR ¶ 1.i); $1,478 owed in child support arrearages (SOR ¶ 1.g); and eight miscellaneous delinquent debts totaling $18,937. Applicant admitted that he owed all of the debts at one time, but he stated that some of the debts have been paid, and he is paying others. All of the debts are listed on at least one credit report.3

Applicant is current on his child support. He settled the $454 telecommunications debt alleged in SOR ¶ 1.e. He paid $180 to settle a $603 debt that was not alleged in the SOR. He agreed to pay $150 per month towards the $4,750 unpaid judgment (SOR ¶ 1.a). He made a $150 payment on April 28, 2017. He missed his May payment because of the expenses related to a move to a cheaper apartment. He stated, without documentation, that he made the June payment. He stated that the balance of the judgment is $5,750, with interest. He stated, without documentation, that he settled the $339 utilities debt alleged in SOR ¶ 1.b, and he paid or settled the $232 telecommunications debt alleged in SOR ¶ 1.h.4

Applicant’s annual salary is $90,000 in an area that does not have a high cost of living. He makes regular trips to another state to visit his child, which he described as “a drain on [his] finances.” He stated that he lives paycheck to paycheck. He was informed of the importance of documenting his payments, but he submitted nothing post-hearing. He stated that he was “really bad at finances and looking at the finances tends to put [him] into an anxiety thing.”5 He explained his current financial situations as follows:

I do try to live within my means. I don’t know how to budget. I’m very bad at that, very poor at that. I probably could take a class or two on that, and that more than likely would assist me. I’m just here to try and prove that I’m trying to do the best I possibly can to repay these debts and get them behind me.6

POLICIES

This case is adjudicated 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), which became effective on June 8, 2017.

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 national security eligibility 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 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.

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 has a history of financial problems, and he accrued multiple delinquent debts. The evidence is sufficient to raise the above disqualifying conditions.

SOR ¶ 1.i alleges a $4,172 debt, which was the basis for the $4,750 judgment alleged in SOR ¶ 1.a. When the same conduct is alleged twice in the SOR under the same guideline, one of the duplicative allegations should be resolved in Applicant’s favor. See ISCR Case No. 03-04704 (App. Bd. Sep. 21, 2005) at 3. SOR ¶ 1.i is concluded for Applicant. 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 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 attributed his financial problems to unemployment and underemployment, his chronic disease, and caring for his mother before she passed away in 2015. Applicant also admitted he was “very poor at handling finances.”

Applicant is credited with bringing his child support current (SOR ¶ 1.g); settling the $454 telecommunications debt alleged in SOR ¶ 1.e; and making a $150 payment towards the unpaid judgment (SOR ¶ 1.a). He also paid $180 to settle a $603 debt that was not alleged in the SOR. He stated, without documentation, that he paid or settled other debts. He was informed of the importance of documentation, and he was given more than two months to submit additional documentary evidence, but he failed to submit anything. The Appeal Board has held that “it is reasonable for a Judge to expect applicants to present documentation about the satisfaction of specific debts.” See ISCR Case No. 09-07091 at 2 (App. Bd. Aug 11, 2010) (quoting ISCR Case No. 04-10671 at 3 (App. Bd. May 1, 2006)).

There is insufficient evidence for a determination that Applicant’s financial problems will be resolved within a reasonable period. I am unable to find that he acted responsibly under the circumstances. His financial issues are recent and ongoing. They continue to cast doubt on his current reliability, trustworthiness, and good judgment. AG ¶¶ 20(a) and 20(c) are not applicable. AG ¶ 20(b) is partially applicable. AG ¶ 20(d) is only applicable to Applicant’s child support obligations and the settled telecommunications debt. I find that financial considerations concerns remain despite the presence of some mitigation.

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 Guideline F in my whole-person analysis.

Overall, the record evidence leaves me with questions and doubts about Applicant’s eligibility and suitability for a security clearance. I conclude Applicant did not mitigate the 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.d: Against Applicant Subparagraph 1.e: For Applicant Subparagraph 1.f: Against Applicant Subparagraph 1.g: For Applicant Subparagraph 1.h: Against Applicant Subparagraph 1.i: For Applicant Subparagraphs 1.j-1.k: 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 24, 29-31, 58-59; GE 1, 2. 2 Tr. at 20-24, 27-28, 31-33, 41; Applicant’s response to SOR; GE 1, 2. The SOR did not allege the foreclosure. Any matter that was not alleged in the SOR will not be used for disqualification purposes. It may be considered when assessing Applicant’s overall financial situation, in the application of mitigating conditions, and during the whole-person analysis. 3 Applicant’s response to SOR; GE 1-4; AE C. 4 Tr. at 24-27, 36-53; GE 3, 4; AE B-D. 5 Tr. at 34-37, 40-41, 46-47, 53-63, 67-68; AE A, B. 6 Tr. at 30.