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ISCR Case 16-01169.h1 — CASE

ISCR Case 16-01169.h1denied

Case Headnote

ISCR Case No. 16-01169.h1

deniedOct 25, 2017· Hon. Robert J. Tuidar· hearing

Summary

A 40-year-old administrative assistant for a defense contractor was denied a security clearance under Guideline F (Financial Considerations) due to a history of financial difficulties. These issues included two Chapter 7 bankruptcies, filed in October 2000 and October 2014, and discharged in January 2001 and January 2015, respectively. Additionally, the applicant had six delinquent debts totaling approximately $10,784, and three student loans amounting to $8,432.

The applicant admitted to the financial allegations but did not provide adequate evidence to mitigate the concerns. Specifically, she failed to provide documentation to corroborate her claims regarding financial arrangements and counseling. The applicant also did not demonstrate a good-faith effort to resolve her delinquent debts or provide a budget.

Ultimately, the judge found that doubts about the applicant's financial responsibility remained unaddressed, leading to the denial of her security clearance.

Why the Applicant Was Denied

The applicant failed to provide documentation to corroborate her claims regarding financial arrangements and counseling.
The applicant did not demonstrate a good-faith effort to resolve her delinquent debts or provide a budget.
The judge found that doubts about the applicant's financial responsibility remained unaddressed.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability to Satisfy Debts
AG ¶ 19(b)raisedUnwillingness to Satisfy Debts Regardless of the Ability to Do So
AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations

Key Rule Quoted

“Once a concern arises regarding an Applicant’s security clearance eligibility, there is a strong presumption against the grant or maintenance of a security clearance.”
— Dorfmont v. Brown, 913 F. 2d 1399, 1401 (9th Cir. 1990), cert. denied, 499 U.S. 905 (1991)

Procedural Posture

SOR issuedOct 29, 2016
Answer filedNov 29, 2016Applicant elected to have the case decided on the written record.
Hearing held—No hearing; decision based on written record.
Decision dateOct 25, 2017

Cite For

Failure to Mitigate Financial Concerns Under Guideline F
Importance of Providing Corroborative Evidence in Financial Cases
Presumption Against Granting Security Clearance When Concerns Are Raised

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 failed to mitigate financial concerns under Guideline F, which included multiple debts and two Chapter 7 bankruptcies. As a result, the application for a security clearance was denied.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Chapter 7 bankruptcy filed in October 2000 and discharged in January 2001	Against Applicant	Bankruptcy Filing	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.b	Chapter 7 bankruptcy filed in October 2014 and discharged in January 2015	Against Applicant	Bankruptcy Filing	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.c	six debts totaling approximately $10,784 $10,784	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	—	—
1.d	three student loans totaling $8,432 $8,432	Against Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.e–1.h	4 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. 16-01169 ) Applicant for Security Clearance )

For Government: Pamela C. Benson, Esq., Department Counsel For Applicant: Pro se

10/25/2017 __________

STATEMENT OF CASE

__________

TUIDER, Robert, Administrative Judge:

Applicant failed to mitigate security concerns regarding Guideline F (financial considerations). Clearance 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. On November 29, 2016, Applicant responded to the SOR, and elected to have the case decided on the written record in lieu of a hearing.

The Government’s written case was submitted on January 27, 2017. A complete copy of the file of relevant material (FORM) was provided to Applicant, who was afforded an opportunity to file objections and submit material to refute, extenuate, or mitigate the security concerns. Applicant received the FORM on February 2, 2017. She was afforded a period of 30 days to file objections and submit material in refutation, extenuation, or mitigation. Applicant did not submit any additional information within the 30-day period. On October 1, 2017, the case was assigned to another administrative judge, and on October 16, 2017, the case was reassigned to me. The Government exhibits, Items 1 through 6, in the FORM, are admitted in evidence.

FINDINGS OF FACT

Applicant admitted all of the SOR allegations, with explanations. Her admissions are accepted as findings of fact. Additional findings of fact follow.

Background Information1

Applicant is a 40-year-old administrative assistant employed by a defense contractor since September 2012. She seeks a security clearance in conjunction with her current employment.2 Applicant graduated from high school in May 1995. She received a medical assistant diploma in August 2004, and attended an online university from September 2011 to April 2013, but did not graduate. She married in October 1998, and has three minor children.

Financial Considerations

Applicant’s SOR lists eight allegations to include a Chapter 7 bankruptcy filed in October 2000 and discharged in January 2001, a Chapter 7 bankruptcy filed in October 2014 and discharged in January 2015, and six debts totaling approximately $10,784. Three of those six debts are student loans totaling $8,432. (SOR ¶¶ 1.a – l.h) These allegations are established through Applicant’s admissions and the Government’s exhibits. (Items 1 – 6)

Applicant’s most recent October 2014 Chapter 7 bankruptcy listed $110,307 in liabilities and her January 2015 discharge totaled $106,747. (Items 6, 7) Applicant attributed her financial delinquencies to her husband’s lay-off. She stated that a tax- offset payment was credited to her delinquent student loans and that those student loans were in a loan rehabilitation program. She also stated that payment arrangements had been made for the remaining accounts. Applicant failed to provide any documentation to corroborate these claims in her SOR answer. (Item 1) According to her SF-86, Applicant has been working continuously since August 2010. (Item 2)

In short, the file lacks sufficient evidence that Applicant paid, arranged to pay, settled, compromised, disputed, or otherwise resolved any of her delinquent SOR accounts. She did not describe financial counseling or present a budget. The FORM noted that Applicant had 30 days from the receipt of the FORM “in which to submit a documentary response setting forth objections, rebuttal, extenuation, mitigation, or explanation, as appropriate. If you do not file any objections or submit any additional information . . . your case will be assigned to an Administrative Judge for a determination based solely” on the evidence set forth in the FORM.

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(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.”

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

Financial Considerations

AG ¶ 18 articulates the security concern for financial problems:

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.

AG ¶ 19 provides three disqualifying conditions that could raise a security concern and may be disqualifying in this case: “(a) inability to satisfy debts”; “(b) unwillingness to satisfy debts regardless of the ability to do so”; and “(c) a history of not meeting financial obligations.” Based on the information in the SOR, the record established the disqualifying conditions in AG ¶¶ 19(a), 19(b), and 19(c), requiring additional inquiry about the possible applicability of mitigating conditions.

AG ¶ 20 lists seven potential mitigating conditions:

(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;

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

(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;

(f) the affluence resulted from a legal source of income; and

(g) the individual has made arrangements with the appropriate tax authority to file or pay the amount owed and is in compliance with those arrangements.

The Appeal Board concisely explained Applicant’s responsibility for proving the applicability of mitigating conditions as follows:

Once a concern arises regarding an Applicant’s security clearance eligibility, there is a strong presumption against the grant or maintenance of a security clearance. See Dorfmont v. Brown, 913 F. 2d 1399, 1401 (9th Cir. 1990), cert. denied, 499 U.S. 905 (1991). After the Government presents evidence raising security concerns, the burden shifts to the applicant to rebut or mitigate those concerns. See Directive ¶ E3.1.15. The standard applicable in security clearance decisions is that articulated in Egan, supra. “Any doubt concerning personnel being considered for access to classified information will be resolved in favor of the national security.” Directive, Enclosure 2 ¶ 2(b).

ISCR Case No. 10-04641 at 4 (App. Bd. Sept. 24, 2013).

In summary, no mitigating conditions fully apply. In addition to evaluating the facts and applying the appropriate adjudicative factors under Guideline F, I have reviewed the record before me in the context of the whole-person factors listed in AG ¶ 2(d). Applicant has been gainfully employed for the majority of her adult life, and she is presumed to be a mature, responsible citizen. Nonetheless, without other information suggesting her financial problems are being adequately addressed, doubts remain about her suitability for access to classified information. Protection of the national interest is the principal focus of these adjudications. According, those doubts must be resolved against the Applicant.

Applicant chose to rely on the written record. In so doing, however, she failed to submit sufficient evidence to supplement the record with relevant and material facts regarding her circumstances, articulate her position, and mitigate the financial security concerns. She failed to offer evidence of financial counseling or provide documentation regarding her past efforts to address her delinquent debt. By failing to provide such information, and in relying on an explanation lacking sufficient detail to fully establish mitigation, financial considerations security concerns remain.

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.h: Against Applicant

CONCLUSION

In light of all of the record as a whole, it is not clearly consistent with the national interest to grant Applicant eligibility for a security clearance. Clearance is denied.

_________________________ ROBERT TUIDER Administrative Judge

FOOTNOTES

1 The limited background information regarding Applicant was derived from the FORM and was the most current information available.

2 Applicant previously applied for a public trust position on December 22, 2010. On September 26, 2012, DOD issued her an SOR citing security concerns under Guidelines F (financial considerations) and E (personal conduct – falsifying her security clearance application). In response to her SOR, Applicant requested a decision based on the written record. On March 4, 2013, Administrative Judge Jennifer Goldstein issued a decision denying her eligibility for access to sensitive information, finding that Applicant had failed to mitigate both Guidelines F and E security concerns. (Item 1)