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ISCR Case 17-01381.h1 — CASE

ISCR Case 17-01381.h1denied

Case Headnote

ISCR Case No. 17-01381.h1

deniedDec 28, 2017· Hon. Noreen A. Lynch· hearing

Summary

A 42-year-old former U.S. Navy service member was denied a security clearance under Guideline F (Financial Considerations) due to unresolved delinquent debts totaling approximately $29,728 across five collection accounts. The Statement of Reasons highlighted that the applicant had not provided an explanation for these debts, which have been ongoing since 2004 and were not attributed to events beyond his control.

Further concerns included the applicant's failure to report any financial counseling or present a definite plan for resolving his financial issues, despite expressing an intent to pay. The decision noted that the applicant did not provide documentation regarding his financial difficulties or demonstrate a clear path to resolution.

Ultimately, the security clearance was denied because the applicant's ongoing financial problems, lack of explanation, and absence of a concrete resolution plan led to the conclusion that granting a clearance was not consistent with national interest. Disqualifying conditions F1, F2, and F3 were raised in this case.

Why the Applicant Was Denied

The applicant has unresolved delinquent debts totaling approximately $29,728.
He did not provide any explanation or documentation regarding his financial difficulties.
The applicant failed to demonstrate a plan to resolve his delinquent debts.

Conditions Referenced

Disqualifying

F1raisedFinancial Considerations
F2raisedFinancial Considerations
F3raisedFinancial Considerations

Key Rule Quoted

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

Procedural Posture

SOR issuedMay 17, 2017
Answer filed—Applicant requested an administrative determination.
Hearing held—
Decision dateDec 28, 2017

Cite For

Denial of Security Clearance Due to Unresolved Financial Obligations
Lack of Evidence for Financial Rehabilitation
Importance of Demonstrating a Plan to Resolve Debts in Security Clearance Cases

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 $29,728, which raised significant financial concerns. The applicant's failure to provide a plan to address these debts led to a decision against granting security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant has five collection accounts for a total of about $29,728. $29,728	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Applicant has not provided any explanation for the delinquent debts.	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	Applicant has had financial problems since 2004.	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	Applicant did not report any financial counseling.	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	Applicant intends to pay the delinquent debts but did not have a definite plan.	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	Applicant's financial problems are ongoing and were not caused by events beyond his control.	Against Applicant	Unspecified Financial	Unknown	(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. 17-01381 ) Applicant for Security Clearance )

For Government: Aubrey M. De Angelis, Esq., Department Counsel For Applicant: Pro se 12/28/2017 ______________

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 May 17, 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 August 17, 2017, Department Counsel sent Applicant the Government’s written case, known as a file of relevant material (FORM), which contained nine Items. Applicant received the FORM on August 23, 2017. Applicant did not respond 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 42 years old, graduated from high school and attended college courses. He served on active duty with the U.S. Navy from 1992 to 2013. (Item 1) He is now a member of the inactive reserves. He is married, but he has been separated since 2006. He has one son and one stepchild. He has been employed by a Federal contractor since 2015. (Item 43) He admits and his credit report shows five collection accounts for a total of about $29,728. (Items 5-8) Applicant has not provided any explanation for the delinquent debts. He was unemployed for under 30 days after he left the service, but has been employed full time. (Items 4, 9) He received unemployment for that period of time. He has not provided any documentation nor any evidence to reflect that he has taken steps or has a plan to resolve his delinquent debts. He held a security clearance while in the military. Applicant completed his security clearance application in November 2015. (Item 3)

Applicant’s explanation for his financial difficulties is his lack of sufficient income since military retirement. During his 2017 investigative interview, he stated that he had a car repossessed during the last seven years. He also stated that he did not know how to budget for his finances. His credit reports indicate that he has had financial problems since 2004. (Item 5) He intends to pay or dispute his debts. (Item 9))

Applicant’s current financial status is not known as he provided no information. He referred to a hardship, 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. He did not respond to the FORM to supplement the record.

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, but he intends to pay his debts. 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 has not shown by this record that he has acted responsibly. None of the mitigating conditions apply. AG 20(a)- 20(d)

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

Subparagraph 1.a-1.f: Against 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).