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ISCR Case 17-02106.h1 — CASE

ISCR Case 17-02106.h1denied

Case Headnote

ISCR Case No. 17-02106.h1

deniedNov 27, 2018· Hon. Richard A. Cefola· hearing

Summary

A 37-year-old married applicant with four children was denied a security clearance under Guideline F, Financial Considerations, due to approximately $17,000 in delinquent student loan debts. The Statement of Reasons detailed three specific debts.

The applicant admitted to a charged-off private student loan initially alleged at $11,355, which documentation showed had increased to $12,139. He also admitted to a second charged-off private student loan, initially alleged at $3,690, which documentation indicated had increased to $3,755. Finally, the applicant acknowledged a third delinquent Department of Education student loan, alleged at $1,382, though it was unclear from submitted documents whether this debt was being addressed.

The denial was based on the applicant's admission of these approximately $17,000 in delinquent student loan debts and his failure to take reasonable and effective action to resolve these financial issues.

Why the Applicant Was Denied

Applicant admitted to having approximately $17,000 in delinquent student loan debts.
Applicant did not take reasonable and effective action to resolve his financial issues.

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

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 issuedJan 16, 2018
Answer filedMar 20, 2018
Hearing held—Decided on the written record without a hearing.
Decision dateNov 27, 2018

Cite For

Denial of Security Clearance Due to Financial Considerations Under Guideline F
Failure to Demonstrate Responsible Action in Addressing Delinquent Debts
Impact of Financial Distress on Reliability and Trustworthiness for National Security Eligibility

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 against the applicant on all financial allegations under Guideline F, citing significant delinquent student loan debts totaling approximately $17,000. The applicant admitted to the debts but failed to demonstrate responsible action to mitigate the financial concerns, leading to a denial of security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant admits that he has a charged off private student loan alleged to be for $11,355. He has submitted documentation to show the amount owed has been increased to $12,139. $12,139	Against Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Applicant admits that he has another charged off private student loan alleged to be for $3,690. He has submitted documentation to show the amount owed has been increased to $3,755. $3,755	Against Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	Applicant admits that he has a third Department of Education delinquent student loan alleged to be for $1,382. It is unclear from the documents submitted with Applicant’s Response whether or not he is addressing this debt. $1,382	Against Applicant	Student Loan Debt	Admitted	(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: 17-02106 ) Applicant for Security Clearance )

For Government: Tara R. Karoian, Esquire, Department Counsel For Applicant: Pro se

November 27, 2018

______________

STATEMENT OF CASE

______________

CEFOLA, Richard A., Administrative Judge:

On June 4, 2015, Applicant submitted a security clearance application (SF-86). On January 16, 2018, 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 June 8, 2017.

Applicant answered the SOR (Answer) on March 20, 2018. He admitted all of the SOR allegations concerning his delinquent debts, and requested that his case be decided by an administrative judge on the written record without a hearing. On May 15, 2018, Department Counsel submitted the Government’s written case. 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 responded to the FORM on or about June 24, 2018. He submitted additional information in his FORM response, to which Department Counsel had no objection. DOHA assigned the case to me on July 30, 2018. Applicant’s response to the FORM (Response) with its attachments is admitted into evidence.

FINDINGS OF FACT

Guideline F – Financial Considerations

Applicant is 37 years old. (Item 1 at page 5.) He is married, with four children. (Item 1 at pages 21 and 25–26.) In his March 2018 Answer, Applicant avers: “I am aware and don’t deny that I am delinquent in three of my student loans only because I am financially not able to pay.” In his June 2018 Response he further avers: “I do not chose(sic) to not pay my delinquent loans but my finances are stretched.”

1.a. Applicant admits that he has a charged off private student loan alleged to be for $11,355. He has submitted documentation to show the amount owed has been increased to $12,139. (Response at page 10.) This allegation is found against Applicant.

1.b. Applicant admits that he has another charged off private student loan alleged to be for $3,690. He has submitted documentation to show the amount owed has been increased to $3,755. (Response at page 9.) This allegation is also found against Applicant.

1.c. Applicant admits that he has a third Department of Education delinquent student loan alleged to be for $1,382. It is unclear from the documents submitted with Applicant’s Response whether or not he is addressing this debt. (Response at pages 5–8.) This allegation is found against Applicant.

POLICIES

When evaluating an applicant’s suitability for national security eligibility, the administrative judge must consider the adjudicative guidelines. In addition to brief introductory explanations for each guideline, the adjudicative guidelines (AG) list potentially disqualifying conditions and mitigating conditions, which are to be used in evaluating an applicant’s national security eligibility.

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 AG ¶ 2 describing the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. The entire process is a conscientious scrutiny of applicable guidelines in the context 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. I have not drawn inferences based on mere speculation or conjecture.

Directive ¶ E3.1.14, requires the Government to 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 the applicant or proven by Department Counsel, and has the ultimate burden of persuasion as to obtaining a favorable clearance decision.”

A person applying for national security eligibility 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 national security eligibility. 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 or sensitive information. Finally, as emphasized in Section 7 of EO 10865, “[a]ny determination under this order adverse to an applicant shall be a determination 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 concerns relating to the guideline for financial considerations are set out in AG ¶ 18, which reads in pertinent part:

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. . . .

AG ¶ 19 describes three conditions that could raise security concerns and may be disqualifying in this case:

(a) inability to satisfy debts;

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

Applicant has about $17,000 in delinquent student loan debts. These facts establish prima facie support for the foregoing disqualifying conditions, and shift the burden to Applicant to mitigate those concerns.

The guideline includes seven conditions in AG ¶ 20 that could mitigate the security concerns arising from Applicant’s alleged financial difficulties:

(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;

(d) the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts;

(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;

(f) the affluence resulted from a legal source of income; and

(g) the individual has made arrangements with the appropriate tax authority to file or pay the amount owed and is in compliance with those arrangements.

None of these apply. Applicant has not acted responsibly to address his outstanding student loans.

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.

According to AG ¶ 2(c), the ultimate determination of whether to grant national security eligibility must be an overall commonsense judgment based upon careful consideration of the applicable guidelines and the whole-person concept.

I considered the potentially disqualifying and mitigating conditions in light of all pertinent facts and circumstances surrounding this case. Applicant is a mature adult, who did not take reasonable and effective action to resolve his financial. Overall, the record evidence leaves me with questions and doubts as to Applicant’s judgment, eligibility, and suitability for a security clearance. He has not met his burden to mitigate the security concerns arising under the guideline for financial considerations.

FORMAL FINDINGS

Formal findings for or against Applicant on the allegations set forth in the SOR, as required by ¶ E3.1.25 of Enclosure 3 of the Directive, are:

Paragraph 1, Guideline F: AGAINST APPLICANT

Subparagraphs 1.a through1.c: 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 and a security clearance. National security eligibility is denied.

Richard A. Cefola Administrative Judge