CASE · Clearance Adjudication Search EngineCASE

Loading case…

ISCR Case 17-01073.h1 — CASE

ISCR Case 17-01073.h1denied

Case Headnote

ISCR Case No. 17-01073.h1

deniedJan 5, 2018· Hon. Robert E. Coacher· hearing

Summary

A 52-year-old defense contractor working in Japan was denied a security clearance primarily due to unresolved financial debts. The applicant faced concerns under Guideline B (Foreign Influence), Guideline E (Personal Conduct), and Guideline F (Financial Considerations). While the foreign influence and personal conduct concerns were not substantiated, the judge found that the applicant failed to mitigate financial considerations.

The Statement of Reasons included allegations that the applicant's current wife, three children, and a step-son are all citizens and residents of Japan. Additionally, the applicant failed to list delinquent debts totaling approximately $20,643 on their security clearance application. These debts included a collection account to the U.S. Treasury for $16,356 and a charged-off credit card debt of $4,287.

The denial was based on the applicant's unresolved delinquent debts, which indicated financial instability. The applicant did not provide sufficient evidence of efforts to resolve these debts or engage in financial counseling, nor did they demonstrate a track record of financial stability.

Why the Applicant Was Denied

The applicant has unresolved delinquent debts totaling approximately $20,643, indicating financial instability.
The applicant did not provide sufficient evidence of efforts to resolve debts or financial counseling.
The applicant failed to demonstrate a track record of financial stability.

Conditions Referenced

Disqualifying

F.1.araisedInability to Satisfy Debts
F.1.craisedHistory of Not Meeting Financial Obligations

Key Rule Quoted

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

Procedural Posture

SOR issuedJun 6, 2017
Answer filedJul 15, 2017Applicant elected to have the case decided on the written record.
Hearing held—No hearing; case decided on written record.
Decision dateJan 5, 2018

Cite For

Failure to Mitigate Financial Considerations Under Guideline F
Lack of Evidence for Financial Stability
Personal Conduct and Foreign Influence Concerns Not Established

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 B (Foreign Influence) · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The judge found that the foreign influence security concerns were not established. The applicant's connection with his foreign wife will soon terminate through divorce, and he is seeking custody of his children. The judge concluded that there was no heightened risk of foreign exploitation from Japan, and thus ruled in favor of the applicant on all allegations under Guideline B.

U.S. ties the decision noted: Naturalized U.S. Citizen · U.S. Home or Property · U.S. Career or Business

¶	Allegation	Finding	Relationship	Country	Response	Disqualifying (¶7)	Mitigating applied (¶8)	Mitigation
3.a	Applicant’s current wife, three children, and a step-son are all citizens and residents of Japan.	For Applicant	Spouse Dual or Foreign Citizen Immediate Family	Japan	Admitted	—	(a) relationships such that a conflict between foreign and U.S. interests is unlikely (b) deep/longstanding U.S. loyalties; conflict resolves in favor of the U.S.	—
3.b–3.c	2 sub-charges — specific text not stated in this decision (for the applicant).	For Applicant	Unspecified Foreign Relationship Other	—		—	—	—

Descriptive standardized rendering of a decided public case (Guideline B). The verbatim source decision is shown in full below.

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 personal conduct security concerns were not established. Specifically, the judge ruled in favor of the applicant on the single allegation under Guideline E, indicating that there was no deliberate omission or concealment of relevant facts in the security clearance application.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
2.a	Applicant failed to list his delinquent debts in his security clearance application (SCA) as he was required to do.	For Applicant	Omission or Failure to DiscloseNOT DELIBERATE	Financial	Denied	—	—	—

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 that the applicant had unresolved financial issues, including a collection account with the U.S. Treasury and a charged-off credit card debt. The applicant's failure to provide evidence of efforts to resolve these debts led to a decision against him under Guideline F.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	A collection account to the U.S. Treasury in the amount of $16,356. $16,356	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	A charged-off credit card debt in the amount of $4,287. $4,287	Against Applicant	Credit Card Debt	Denied	(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: ) ) ) ISCR Case No. 17-01073 ) ) Applicant for Security Clearance )

For Government: Tovah Minster, Esq., Department Counsel For Applicant: Pro se

01/05/2018 ______________

STATEMENT OF CASE

______________

COACHER, Robert E., Administrative Judge:

Applicant has not mitigated the financial considerations security concerns. Personal conduct and foreign influence security concerns were not established. Eligibility for access to classified information is denied.

Statement of the Case

On June 6, 2017, the Department of Defense Consolidated Adjudications Facility (DOD CAF) issued Applicant a Statement of Reasons (SOR) detailing security concerns under Guidelines F, E, and B. The DOD CAF acted under Executive Order (EO) 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; DOD 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG).1 Applicant answered the SOR on July 15, 2017, and elected to have his case decided on the written record in lieu of a hearing. Department Counsel submitted the Government’s File of Relevant Material (FORM) on August 3, 2017. The evidence included in the FORM is identified as Items 3-6 (Items 1 and 2 include pleadings and transmittal information). The FORM was mailed to Applicant, who received it on August 27, 2017. Applicant was given an opportunity to file objections and submit material in refutation, extenuation, or mitigation. Applicant did not file objections, but he submitted exhibit (AE) A, which was admitted without objection. Items 3-6 are admitted into evidence without objection. The case was assigned to me on December 19, 2017.

FINDINGS OF FACT

Applicant admitted some of the allegations and denied other allegations in his answer to the SOR. The admissions are adopted as findings of fact. After a careful review of the pleadings and evidence, I make the following additional findings of fact.

Applicant is 52 years old. He has worked for a defense contractor since at least 2005. His place of duty during his contractor career has been in Japan. He is married for the fourth time, but is pending a divorce from his fourth wife. He has four children and a stepchild. He has a high school diploma. He has never held a security clearance.2

The SOR alleged two delinquent debts totaling approximately $20,643. One debt is a collection account to the U.S. Treasury in the amount of $16,356. Applicant admitted this debt. The second debt is a charged-off credit card debt in the amount of $4,287. Applicant denied this debt. The debts are supported by credit reports from June 2016 and April 2017, and his interview with a defense investigator (PSI) in August 2016. The SOR also alleged Applicant failed to list his delinquent debts in his security clearance application (SCA) as he was required to do. Applicant denied this allegation. The SOR alleged Applicant’s current wife, three children, and a step-son are all citizens and residents of Japan. Applicant admitted these allegations.3

Applicant revealed in his PSI that he was unaware of the debts at the time he completed his SCA. In his answer, he claimed both debts were paid, but he offered no documented proof of payment, establishment of payment plans, or any correspondence with any creditor. The accounts remain unresolved.4

Applicant did not provide any information about his current financial situation or a budget. There is no evidence of financial counseling.5 The Government did not present any evidence concerning Japan, through administrative notice or otherwise. I find, based upon the record evidence, that Japan does not create a heightened risk of foreign coercion. Applicant’s presence in Japan is due to his employment by his employer. He is currently seeking a divorce from his wife and is seeking custody of his children. Although he resides in Japan, because of his job, he owns property in the United States.6

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 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, these guidelines are applied 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, an “applicant is responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by applicant or proven by Department Counsel, and 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 that an applicant may deliberately or inadvertently fail to safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation about potential, rather than actual, risk of compromise of classified information.

Section 7 of EO 10865 provides that 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

AG ¶ 18 expresses the security concern for financial considerations:

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.

The guideline notes several conditions that could raise security concerns. I have considered all of them under AG ¶ 19 and the following potentially apply:

(a) inability to satisfy debts; and

Applicant has delinquent debts that remain unpaid or unresolved because of his inability to pay them. I find both disqualifying conditions are raised.

The guideline also includes conditions that could mitigate security concerns arising from financial difficulties. I have considered all of the mitigating conditions under AG ¶ 20 and the following potentially apply:

(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; (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; and

(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.

Applicant’s debts are recent and remain unresolved. He did not provide sufficient evidence to show that his financial problems are unlikely to recur. AG ¶ 20(a) does not apply. Applicant failed to provide documentation showing any efforts to contact the creditors, set up payment plans, or make payments on the debts. There is no evidence of financial counseling. AG ¶¶ 20(c) and 20(d) do not apply. He failed to present documentation supporting his assertion that the two debts were paid. AG ¶ 20(e) does not apply.

Guideline E, Personal Conduct

AG ¶ 15 expresses the personal conduct security concern:

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.

AG ¶ 16 describes conditions that could raise a security concern and may be disqualifying in this case. The following disqualifying condition is potentially applicable:

(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.

Applicant was unaware of his delinquent debts when he completed his SCA. I conclude that he did not intentionally withheld this information when he completed his SCA. AG ¶ 16(a) does not apply. Guideline B, Foreign Influence

AG ¶ 6 explains the security concern about “foreign contacts and interests” as follows:

Foreign contacts and interests, including, but not limited to, business, financial, and property interests, are a national security concern if they result in divided allegiance. They may also be a national security concern if they create circumstances in which the individual may be manipulated or induced to help a foreign person, group, organization, or government in a way inconsistent with U.S. interests or otherwise made vulnerable to pressure or coercion by any foreign interest. Assessment of foreign contacts and interests should consider the country in which the foreign contact or interest is located, including, but not limited to, considerations such as whether it is known to target U.S. citizens to obtain classified or sensitive information or is associated with a risk of terrorism.

AG ¶ 7 indicates conditions that could raise a security concern and may be disqualifying in this case:

(a) contact, regardless of method, with a foreign family member, business or professional associate, friend, or other person who is a citizen of or resident in a foreign country if that contact creates a heightened risk of foreign exploitation, inducement, manipulation, pressure, or coercion; and

(b) connections to a foreign person, group, government, or country that create a potential conflict of interest between the individual's obligation to protect classified or sensitive information or technology and the individual's desire to help a foreign person, group, or country by providing that information or technology.

The nature of a nation’s government, its relationship with the United States, and its human rights record are relevant in assessing the likelihood that Applicant is vulnerable to government coercion or inducement. The risk of coercion, persuasion, or duress is significantly greater if the foreign country has an authoritarian government, a family member or friend is associated with or dependent upon the government, the country is known to conduct intelligence collection operations against the United States, or the foreign country is associated with a risk of terrorism. There is no evidence in the record of any of these conditions regarding Japan.

Guideline B is not limited to countries hostile to the United States. “The United States has a compelling interest in protecting and safeguarding classified information from any person, organization, or country that is not authorized to have access to it, regardless of whether that person, organization, or country has interests inimical to those of the United States.”7 Furthermore, friendly nations can have profound disagreements with the United States over matters they view as important to their vital interests or national security. Finally, we know friendly nations have engaged in espionage against the United States, especially in the economic, scientific, and technical fields.

AG ¶¶ 7(a) and 7(b) do not apply because Applicant’s connection with his foreign wife will soon terminate through divorce and he is seeking custody of his children. There is no evidence in the record that Japan creates a heightened risk of foreign exploitation.

AG ¶ 8 lists conditions that could mitigate foreign influence security concerns, including:

(a) the nature of the relationships with foreign persons, the country in which these persons are located, or the positions or activities of those persons in that country are such that it is unlikely the individual will be placed in a position of having to choose between the interests of a foreign individual, group, organization, or government and the interests of the U.S.; and

(b) there is no conflict of interest, either because the individual's sense of loyalty or obligation to the foreign person, or allegiance to the group, government, or country is so minimal, or the individual has such deep and longstanding relationships and loyalties in the United States, that the individual can be expected to resolve any conflict of interest in favor of the U.S. interest.

Even though I find that Applicant’s actions are not disqualifying under AG ¶ 7, out of an abundance of caution, I will also analyze whether mitigating conditions under AG ¶ 8 apply. Applicant is pending divorce from his foreign wife and custody of his children. Given this recent circumstance, it is unlikely that Applicant would be placed in a position of having to choose between the interests of his wife and children, and those of the United States. AG ¶ 8(a) applies.

Applicant has met his burden to establish his “deep and longstanding relationships and loyalties in the U.S.” He is a natural born U.S. citizen. He owns a property in the United States. He has worked for U.S.-based contractor, which requires his presence in Japan, since at least 2005. The evidence supports that Applicant has longstanding ties to the United States and would resolve any conflict of interest in favor of the United States. AG ¶ 8(b) applies.

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 the 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 guideline 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 considered his civilian employment, but I also considered his lack of progress in resolving his two debts. Applicant has not established a track record of financial stability.

Overall, the record evidence leaves me with questions and doubts as to Applicant’s eligibility and suitability for a security clearance because of his financial status. For all these reasons, I conclude Applicant failed to mitigate the security concerns arising under Guideline F, financial considerations. I also conclude that the personal conduct and foreign influence security concerns were not established.

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.b: Against Applicant

Paragraph 2, Guideline E: FOR APPLICANT

Subparagraph 2.a: For Applicant Paragraph 3, Guideline B: FOR APPLICANT

Subparagraphs 3.a – 3.c: For 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.

_____________________________ Robert E. Coacher Administrative Judge

FOOTNOTES

1 I decided this case using the AG implemented by DOD on June 8, 2017. However, I also considered this case under the previous version of the AG implemented on September 1, 2006, and my conclusions are the same using either set of AG. 2 Items 3-4. 3 Items 1-2, 4-6. 4 Items 2-4; AEA. 5 Item 2; AE A. 6 Item 2-4; AE A. 7 ISCR Case No. 02-11570 at 5 (App. Bd. May 19, 2004).