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ISCR Case 17-00100.h1 — CASE

ISCR Case 17-00100.h1denied

Case Headnote

ISCR Case No. 17-00100.h1

deniedMar 12, 2018· Hon. Edward W. Loughran· hearing

Summary

A 34-year-old defense contractor and military veteran was denied a security clearance under Guideline F, Financial Considerations, due to a history of significant financial problems. These issues included a foreclosed mortgage, child support arrearages, and multiple delinquent debts. The decision cited disqualifying conditions related to a history of not meeting financial obligations and an inability or unwillingness to satisfy debts.

While several mitigating conditions were considered, such as the debts not being recent or the result of circumstances beyond the applicant's control, the judge ultimately determined these were insufficient. The denial was based on the applicant's ongoing financial issues, a lack of demonstrated good-faith effort to resolve his debts, and a pattern of irresponsible financial behavior.

The recency and persistence of these financial problems raised concerns about the applicant's reliability and judgment, leading to the denial of his security clearance.

Why the Applicant Was Denied

The applicant has a history of financial problems, including a foreclosed home and delinquent debts.
The applicant has not made a good-faith effort to pay his debts or resolve his financial issues.
The applicant's financial issues are recent and ongoing, casting doubt on his reliability and judgment.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(b)appliedConditions Largely Beyond the Person's ControlThe applicant's financial issues were exacerbated by periods of unemployment and a divorce.
AG ¶ 20(a)rejectedBehavior Happened Long Ago or Infrequently
AG ¶ 20(c)rejectedReceived Financial CounselingThe applicant has not received financial counseling.
AG ¶ 20(d)rejectedGood-faith Effort to Repay DebtsThe applicant's intentions to file bankruptcy do not constitute a good-faith effort.

Key Rule Quoted

“Any doubt concerning personnel being considered for national security eligibility will be resolved in favor of the national security.”

Procedural Posture

SOR issuedMar 13, 2017
Answer filedMar 30, 2017
Hearing heldDec 6, 2017
Decision dateMar 12, 2018

Cite For

Denial of Security Clearance Due to Unresolved Financial Issues
Impact of Ongoing Financial Distress on Reliability and Trustworthiness
Insufficient Evidence of Good-faith Efforts to Resolve Debts

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 did not mitigate the financial considerations security concerns, leading to a denial of eligibility for access to classified information. While some debts were found to be mitigated, the applicant's overall financial issues were deemed recent and ongoing, raising doubts about his reliability and trustworthiness.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a–1.q	17 sub-charges — specific text not stated in this decision (14 against, 3 for the applicant).	Mixed			—	—	—

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. 17-00100 ) Applicant for Security Clearance )

For Government: David F. Hayes, Esq., Department Counsel For Applicant: Pro se

03/12/2018 ______________

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 March 13, 2017, 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 March 30, 2017, and requested a hearing before an administrative judge.

The case was assigned to me on September 12, 2017. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on November 7, 2017, scheduling the hearing for December 6, 2017. The hearing was convened as scheduled. Government Exhibits (GE) 1 through 4 were admitted in evidence without objection. Applicant testified, but he did not submit any documentary evidence. The record was held open for Applicant to submit additional information. He submitted documents that I have marked Applicant’s Exhibits (AE) A through C and admitted without objection. DOHA received the hearing transcript (Tr.) on December 14, 2017.

FINDINGS OF FACT

Applicant is a 34-year-old employee of a defense contractor. He has worked for his current employer since January 2016. He served on active duty in the U.S. military from 2003 until he was honorably discharged in 2008. He attended college for a period without earning a degree. He is divorced with two children from the marriage. He also has two children from another relationship.1

The SOR alleges a foreclosed mortgage loan; $24,009 in past-due child support arrearages for the children from his marriage; and 15 delinquent debts. The debts alleged in SOR ¶¶ 1.i and 1.mare duplicate accounts. The 14 non-duplicate debts total about $28,000. Applicant admitted the foreclosed mortgage loan and owing the 14 non- duplicate debts. He admitted having child support arrearages, but he established that child support payments, plus an amount for arrearages, are automatically garnished from his paycheck.3

Applicant reported financial issues on his November 2015 Questionnaire for National Security Positions. He indicated that he planned to file bankruptcy. He stated a similar plan when he was interviewed for his background investigation in September 2016.4

There is no evidence of a deficiency after the foreclosure of Applicant’s home. With the exception of the child support payments by garnishment, he has not paid any of the debts alleged in the SOR. He testified that he planned to file bankruptcy. He has not received financial counseling. Applicant retained a bankruptcy attorney in January 2018. He paid the attorney $200, and is scheduled to pay an additional $995 in March 2018 and the final $995 in May 2018.5

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, including a foreclosed home, child support arrearages, and delinquent debts. The evidence is sufficient to raise the above disqualifying conditions.

The debts alleged in SOR ¶¶ 1.i and 1.mare duplicate accounts. 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 at 3 (App. Bd. Sep. 21, 2005). 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 had periods of unemployment and underemployment from the time he was discharged from the military until he obtained his current job. His 2009 divorce also adversely affected his finances. There is no evidence of a deficiency after the foreclosure of Applicant’s home, and he is paying his child support and arrearages through automatic garnishment from his paycheck. Those two allegations (SOR ¶¶ 1.a and 1.h) are mitigated.

Applicant has not paid any of the other debts alleged in the SOR. He has stated since November 2015 that he intended to file bankruptcy. The Appeal Board has held that intentions to resolve debts in the future are not a substitute for a track record of debt repayment or other responsible approaches. See ISCR Case No. 11-14570 at 3 (App. Bd. Oct. 23, 2013).

I am unable to find that Applicant acted responsibly under the circumstances or that he made a good-faith effort to pay his debts. His financial issues are recent and ongoing. They continue to cast doubt on his current reliability, trustworthiness, and good judgment. AG ¶¶ 20(a), 20(c), and 20(d) are not applicable. AG ¶ 20(b) is partially applicable. 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. I also considered Applicant’s honorable military service.

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

Subparagraph 1.a: For Applicant Subparagraphs 1.b-1.g: Against Applicant Subparagraphs 1.h-1.i: For Applicant Subparagraphs 1.j-1.q: Against Applicant

CONCLUSION

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 15-16, 20, 22, 27; GE 1, 2. 2 Tr. at 15, 18-19; Applicant’s response to SOR; GE 1, 2. 3 Tr. at 15, 19-20, 27; Applicant’s response to the SOR; GE 1-4; AE A, C. 4 GE 1, 2. 5 Tr. at 15, 21, 25-29; GE 3, 4; AE A, B.