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ISCR Case 17-01425.h1 — CASE

ISCR Case 17-01425.h1denied

Case Headnote

ISCR Case No. 17-01425.h1

deniedFeb 20, 2018· Hon. Darlene Lokey Anderson· hearing

Summary

A 37-year-old machinist with a high school diploma was denied a security clearance under Guideline F, Financial Considerations, due to significant delinquent debts totaling over $50,000. The applicant faced nine specific allegations, including multiple charged-off debts ranging from approximately $729 to $22,023.

Further allegations included a judgment entered against him in December 2012 for approximately $13,447, and a state tax lien of about $6,300 that resulted in wage garnishment. While the applicant acknowledged most of these debts, he claimed no knowledge of one $22,023 debt and attributed others to being out of work or late tax filings.

The denial was based on the applicant's failure to provide evidence of efforts to resolve his debts or to adequately explain the circumstances leading to his financial distress. He did not demonstrate that his financial problems were under control or that future issues were unlikely, leading to a determination of financial irresponsibility.

Why the Applicant Was Denied

The applicant has nine delinquent debts totaling over $50,000, indicating financial irresponsibility.
The applicant failed to provide evidence of any efforts to resolve his debts or to explain his financial situation.
The applicant did not demonstrate that his financial problems are under control or that future issues are unlikely.

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)raisedHistory of Not Meeting Financial Obligations

Mitigating

AG ¶ 20(b)rejectedConditions Beyond the Person's ControlThe applicant did not provide sufficient evidence to demonstrate that his financial issues were beyond his control or that he acted responsibly.

Key Rule Quoted

“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.”

Procedural Posture

SOR issuedMay 25, 2017
Answer filedJun 7, 2017Applicant requested a decision on the written record.
Hearing held—No hearing; decision made on the written record.
Decision dateFeb 20, 2018

Cite For

Denial of Security Clearance Due to Significant Financial Issues Under Guideline F
Lack of Evidence to Mitigate Financial Concerns
Failure to Demonstrate Financial Responsibility and Control Over 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 had multiple delinquent debts totaling over $50,000, which raised significant financial concerns under Guideline F. Despite the applicant's claims of being out of work due to a car accident, he failed to provide evidence of any efforts to resolve his debts, leading to a decision against him on all allegations.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	A delinquent debt was charged off in the approximate amount of $3,664. The account remains outstanding. $3,664	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.b	A delinquent debt was charged off in the approximate amount of $984. Applicant states that he is preparing to pay off the debt. The account remains outstanding. $984	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.c	A delinquent debt was charged off in the approximate amount of $818. Applicant states that he is preparing to pay off the debt. The account remains outstanding. $818	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	A delinquent debt was charged off in the approximate amount of $729. Applicant states that he will pay off the debt. The account remains owing. $729	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.e	A delinquent credit card debt was charged off. Applicant states that he will pay off the debt. The account remains owing.	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.f	A judgment was entered against Applicant in December 2012 in the approximate amount of $13,447. Applicant claims that he was out of work. The judgment remains owing. $13,447	Against Applicant	Judgment Against Applicant	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.g	A delinquent debt was charged off in the approximate amount of $22,023. Applicant states that he has no knowledge of the debt. The account remains owing. $22,023	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.h	A delinquent debt was charged off in the approximate amount of $3,664. Applicant claims that he was out of work due to a car accident. The debt remains owing. $3,664	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.i	Applicant’s wages were garnished to satisfy a state tax lien entered against him in the approximate amount of $6,300. Applicant stated that he was late in filing his income tax returns and a tax lien was entered against him. The tax lien remains owing. $6,300	Against Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (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. 17-01425 ) ) Applicant for Security Clearance )

For Government: Chris Morin, Esq., Department Counsel For Applicant: Pro se

February 20, 2018 ______________

STATEMENT OF CASE

______________

Lokey Anderson, Darlene D., Administrative Judge:

On September 11, 2015, Applicant submitted a security clearance application (e- QIP). On May 25, 2017, the Department of Defense Consolidated Adjudications Facility (DoD CAF) issued Applicant a Statement of Reasons (SOR), detailing security concerns under Guideline F, Financial Considerations. (Item 1.) The action was taken 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 for Determining Eligibility for Access to Classified Information, effective within the DoD after September 1, 2006.

Applicant answered the SOR on June 7, 2017. He requested that his case be decided by an administrative judge on the written record without a hearing. (Item 2.) On July 12, 2017, Department Counsel submitted the Government’s written case. A complete copy of the File of Relevant Material (FORM), containing 7 Items, was mailed to Applicant on July 12, 2017, and received by him on July 18, 2017. The FORM notified Applicant that he had an opportunity to file objections and submit material in refutation, extenuation, or mitigation within 30 days of his receipt of the FORM. Applicant failed to respond to the FORM. Applicant did not object to Items 1 through 7, and they are admitted into evidence.

The SOR in this case was issued under the adjudicative guidelines that came into effect within the DoD on September 1, 2006. Security Executive Agent Directive (SEAD) 4, National Security Adjudicative Guidelines, implements new adjudicative guidelines, effective June 8, 2017. All national security eligibility decisions issued on or after June 8, 2017, are to be decided using the new National Security Adjudicative Guidelines for Determining Eligibility for Access to Classified Information or Eligibility to Hold a Sensitive Position (AG), as implemented by SEAD 4. I considered the previous adjudicative guidelines, effective September 1, 2006, as well as the new AG, effective June 8, 2017, in adjudicating Applicant’s national security eligibility. My decision would be the same under either set of guidelines, although this decision is issued pursuant to the new AG.

FINDINGS OF FACT

Applicant is 37 years old. He is married with two children. He has a high school diploma. He is employed with a defense contractor as a Machinist. He is applying for a security clearance in connection with his employment. Applicant began working for his current employer in June 2000.

Guideline F - Financial Considerations

The Government alleged that Applicant is ineligible for a clearance because he made financial decisions that indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which raise questions about his reliability, trustworthiness, and ability to protect classified information. The SOR identified nine delinquent debts totaling in excess of $50,000. Applicant admits to each of the delinquent accounts listed in in the SOR, except 1.g., in which he states he has no knowledge of the debt. Credit Reports of Applicant dated November 4, 2015 and March 29, 2017; confirm the indebtedness listed in the SOR. (Government Exhibits 5 and 6.)

Applicant stated that he was in a car accident which caused him to be out of work. He plans to pay his debts off soon. That is the extent of the information he provided in his Answer to the SOR. (Government Exhibit 2.) There is no evidence that he has attempted to satisfy his debts.

The following debts became owing:

1.a. A delinquent debt was charged off in the approximate amount of $3,664. The account remains outstanding. 1.b. A delinquent debt was charged off in the approximate amount of $984. Applicant states that he is preparing to pay off the debt. The account remains outstanding. (Answer to SOR.)

1.(c) A delinquent debt was charged off in the approximate amount of $818. Applicant states that he is preparing to pay off the debt. The account remains outstanding. (Answer to SOR.)

1.d. A delinquent debt was charged off in the approximate amount of $729. Applicant states that he will pay off the debt. The account remains owing. (Answer to SOR.)

1.e. A delinquent credit card debt was charged off. Applicant states that he will pay off the debt. The account remains owing. (Answer to SOR.)

1.f. A judgment was entered against Applicant in December 2012 in the approximate amount of $13,447. Applicant claims that he was out of work. The judgment remains owing. (Answer to SOR.)

1.g. A delinquent debt was charged off in the approximate amount of $22,023. Applicant states that he has no knowledge of the debt. The account remains owing. (Government Exhibits 5 and 6.)

1.h. A delinquent debt was charged off in the approximate amount of $3,664. Applicant claims that he was out of work due to a car accident. The debt remains owing. (Government Exhibits 5 and 6.)

1.i. Applicant’s wages were garnished to satisfy a state tax lien entered against him in the approximate amount of $6,300. Applicant stated that he was late in filing his income tax returns and a tax lien was entered against him. The tax lien remains owing. (Answer to SOR.)

There is no documentation in the record to show that Applicant has done anything to resolve his debt. It would have been helpful for Applicant to have provided evidence, specifically, documentation to explain his financial circumstances, namely, how they were incurred, and why, what he has done, if anything to remedy the problem, including information about his current financial state of affairs, as well as any budgets in place to show that his finances are now in order or are improving. The record is void of any mitigation.

POLICIES

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines (AG). 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 AG ¶ 2 describing 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 access to national security eligibility will be resolved in favor of 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, and has the ultimate burden of persuasion as to obtaining a favorable clearance decision.”

A person who applies for access to classified information seeks to enter 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 protect or safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation as to 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 relating to the guideline 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. 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 under AG ¶ 19. Three are potentially applicable in this case:

(a) inability to satisfy debts;

(b) unwillingness to satisfy debts regardless of the ability to do so; and

Applicant is excessively indebted to the creditors listed in the SOR. He has not indicated that he has set up payment arrangements to resolve the debt or that he has otherwise settled the debt. There is no evidence in the record to prove that he has done anything to resolve his delinquent debts. The evidence is sufficient to raise the above disqualifying conditions.

AG ¶ 20 provides conditions that could mitigate security concerns. I considered all of the mitigating conditions under AG ¶ 20 including:

(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.

The only evidence in the record is that Applicant was out of work due to a car accident. There are no specifics or particulars provided about this incident. Applicant failed to explain why he became excessively indebted or what if anything he has done to resolve the debt. Under the particular circumstances here, Applicant has failed to establish that he acted reasonably or responsibly with respect to his debts. Applicant has not addressed any of his delinquent debt nor has he demonstrated that future financial problems are unlikely. It has not been demonstrated that his current financial problems are under control.

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 facts and circumstances surrounding this case. I have incorporated my comments under Guideline F in my whole-person analysis. There is no information to explain what if anything has negatively impacted his financial situation. Applicant has not demonstrated that he is financially responsible.

Overall, the record evidence leaves me with questions and doubts as to Applicant’s eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant failed to 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 ¶ E3.1.25 of the Directive, are:

Paragraph 1, Guideline F: AGAINST APPLICANT

Subparagraph 1.a: Against Applicant Subparagraph 1.b: Against Applicant Subparagraph 1.c: Against Applicant Subparagraph 1.d: Against Applicant Subparagraph 1.e: Against Applicant Subparagraph 1.f: Against Applicant Subparagraph 1.g: Against Applicant Subparagraph 1.h: Against Applicant Subparagraph 1.i: Against 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 national security eligibility for a security clearance. Eligibility for access to classified information is denied.

Darlene Lokey Anderson Administrative Judge