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ISCR Case 17-00489.h1 — CASE

ISCR Case 17-00489.h1denied

Case Headnote

ISCR Case No. 17-00489.h1

deniedNov 22, 2017· Hon. Noreen A. Lynch· hearing

Summary

A 61-year-old federal contractor employee, working since 1977, was denied a security clearance under Guideline F (Financial Considerations) due to unresolved delinquent debts totaling approximately $9,006. The Statement of Reasons cited multiple instances of these debts, noting that the applicant believed one account was paid but provided no documentation, and stated he was unaware of some other debts.

While the applicant acknowledged his financial difficulties and expressed an intent to pay, he failed to present a concrete plan or evidence of financial rehabilitation. He did provide documentation showing the satisfaction of one judgment for $1,178.16 with his response to the FORM.

Ultimately, the clearance was denied because the applicant had ongoing unresolved delinquent debts, failed to provide documentation of payments or a solid plan to address them, and his financial issues were not attributed to circumstances beyond his control. The decision concluded that granting a clearance was not consistent with national interest.

Why the Applicant Was Denied

The applicant has unresolved delinquent debts totaling approximately $9,006.
He failed to provide documentation of payments or a solid plan to address his debts.
The applicant's financial issues were ongoing and not caused by events beyond his control.

Conditions Referenced

Disqualifying

F1raisedFinancial ConsiderationsThe applicant has a history of not meeting his financial obligations.
F3raisedFinancial ConsiderationsFailure to meet financial obligations raises questions about reliability and trustworthiness.

Key Rule Quoted

“A promise to pay in the future is not enough to mitigate the financial concerns.”

Procedural Posture

SOR issuedMar 24, 2017
Answer filed—Timely response to SOR.
Hearing held—Pro se representation.
Decision dateNov 22, 2017

Cite For

Denial of Security Clearance Due to Unresolved Financial Obligations
Importance of Presenting a Clear Plan for Financial Rehabilitation
Impact of Financial Issues on Trustworthiness and Reliability Under Guideline F.

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 had unresolved delinquent debts totaling approximately $9,006, which raised significant financial concerns. While one judgment was satisfied, the applicant did not provide a clear plan for addressing the remaining debts, leading to a decision against granting the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant has unresolved delinquent debt totaling approximately $9,006. $9,006	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts	—	—
1.b	Applicant has unresolved delinquent debt totaling approximately $9,006. $9,006	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts	—	—
1.c	Applicant has unresolved delinquent debt totaling approximately $9,006. $9,006	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts	—	—
1.d	Applicant believed one of the accounts was paid but provided no documentation.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts	—	—
1.e	Applicant stated that he was not aware of some of the debts.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts	—	—
1.f	Applicant provided a satisfaction of the judgment ($1,178.16) with his response to the FORM. $1,178	For Applicant	Judgment Against Applicant	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly	—
1.g	Applicant has unresolved delinquent debt totaling approximately $9,006. $9,006	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts	—	—

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. 17-00489 ) Applicant for Security Clearance )

For Ray T. Blank, Jr., Esq., Department Counsel For Applicant: Pro se 11/22/2017 ______________

STATEMENT OF CASE

______________

LYNCH, Noreen A., Administrative Judge:

Applicant contests the Department of Defense’s (DOD) intent to deny his eligibility for a security clearance to work in the defense industry. He has not mitigated concerns raised by his unresolved delinquent debt. Clearance is denied.

Statement of the Case

On March 24, 2017, the DOD issued a Statement of Reasons (SOR) detailing security concerns under the financial considerations guideline.1 DOD adjudicators were unable to find that it is clearly consistent with the national interest to grant Applicant a security clearance.

Applicant timely answered the SOR and requested an administrative determination. On May 3, 2017, Department Counsel sent Applicant the Government’s written case, known as a file of relevant material (FORM), which contained eight items. Applicant received the FORM on May 15, 2017. Applicant responded to the FORM.

PROCEDURAL MATTERS

While the case was pending decision, the Director of National Intelligence (DNI) issued Security Executive Agent Directive 4, establishing the National Security Adjudicative Guidelines (AG) applicable to all covered individuals who require initial or continued eligibility for access to classified information or eligibility to hold a sensitive position. The 2017 AG superseded the AG implemented in September 2006, and they are effective for any adjudication made on or after June 8, 2017. Accordingly, I have applied them in this case.

FINDINGS OF FACT

Applicant is 61 years old and has been employed by a Federal contractor since 1977. (Item 4) He is divorced, remarried and has two children from his first marriage, two stepchildren, and a child from his current marriage. He served in the U.S. Army in the inactive reserves from 1974 to 1977, and the Army National Guard from 1977 to 1982. He admits and his credit report shows numerous collection accounts and judgments for a total of about $9,006. (Items 5 through 7) Applicant intends to pay his debts one at a time because he does not have cash to resolve all the debts. (Item 2) He believed one of the accounts was paid (1.d) but provided no documentation. He also stated that he was not aware of some of the debts (1.e-g). He has not provided proof of payments made or payment plans. He provided a satisfaction of the judgment ($1,178.16) in 1.fwith his response to the FORM. (AX A) He reports no unemployment for 40 years. He has held a security clearance since 1975. Applicant completed his security clearance application in January 2017, disclosing that he had financial difficulties. (Item 4)

Applicant’s only explanation for his financial difficulties was an unawareness of some of the debts. However, he mentioned “money being taken from his check” in his security clearance application for one account. In his 2016 subject interview, he mentioned a garnishment of $90 a month for a judgment. It is not clear if that is the same judgment that was satisfied and that he provided in his response to FORM. As to all other collection accounts, he told the investigator that he was unaware but he will follow up with each creditor. (Item 8) He noted a home foreclosure in 1998 and that his wife overspent. He was emphatic that the delinquent debts are his responsibility and that he will pay them. There is nothing in the record concerning financial counseling, budgets, or solid payment plans to resolve the debts. To his credit, there are accounts on his 2016 credit report that reflect “pays as agreed.” (Item 5).

Applicant’s current financial status is not known as he provided no information. He referred to his divorce and a garnishment, but provided no details. He did not report any financial counseling. He intends to pay the delinquent debts, but he did not have a definite plan. (Answer to SOR) His response to the FORM provided documentation that the judgment in allegation 1.f. was paid. (AX A)

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 national security eligibility 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.

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

Applicant’s finances remain a source of concern. Failure to meet one’s 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.2 Applicant’s admissions and the credit reports establish the Government’s prima facie case that Applicant has a history of not meeting his financial obligations, and that he has an inability to do so.3 Applicant presented no evidence to mitigate the concerns about his plans to resolve the issues by working with a collection company. He chose not to file bankruptcy. A promise to pay in the future is not enough to mitigate the financial concerns. Applicant’s financial problems are ongoing and were not caused by events beyond his control. He did not present a clear nexus between his divorce many years ago and his inability to pay his debts. He has not shown that he has acted responsibly. Although Applicant has expressed a desire to repay his creditors, the alleged delinquent accounts remain unresolved and Applicant did not present a plan for resolving them.4

After a review of the record and a consideration of the whole-person factors at AG ¶ 2(d), I conclude that Applicant’s financial problems render him unsuitable for access to classified information at this time. This decision should not be construed as a determination that Applicant cannot or will not attain the type of financial stability necessary to reapply for national security eligibility in the future. The award of a security clearance is not a once-in-a-lifetime occurrence, but is based on applying the factors, both disqualifying and mitigating, to the evidence presented. While a favorable decision is not warranted at this time, he may present persuasive evidence of financial rehabilitation and reform in the future.

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, Financial Considerations: AGAINST APPLICANT

Subparagraphs 1.a-1.g Against Applicant Subparagraph 1.f: For Applicant :

CONCLUSION

In light of all of the circumstances presented, it is not clearly consistent with the national interest to grant Applicant a security clearance. Eligibility for access to classified information is denied.

________________________ Noreen A. Lynch Administrative Judge

FOOTNOTES

1 The DOD CAF acted under Executive Order (EO) 10865, Safeguarding Classified Information within Industry, signed by President Eisenhower on February 20, 1960, as amended; as well as DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program, dated January 2, 1992, as amended (Directive), and the Adjudicative Guidelines for Determining Eligibility for Access to Classified Information, implemented on September 1, 2006. 2 AG ¶ (18).

3 AG ¶¶ 19(a),(c).

4 AG ¶¶ 20(b), (c), (d), and (e) do not apply.