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ISCR Case 17-03104.h1 — CASE

ISCR Case 17-03104.h1denied

Case Headnote

ISCR Case No. 17-03104.h1

deniedApr 20, 2018· Hon. Francisco Mendez· hearing

Summary

A 32-year-old full-time employee was denied eligibility for a public trust position due to significant financial concerns under Guideline F. The applicant admitted to 21 delinquent debts, totaling over $40,000, which raised disqualifying conditions AG ¶ 19(a) and AG ¶ 19(c).

Despite acknowledging the debts and claiming to be working with a credit repair firm, the applicant failed to provide any supporting documentation. He offered no evidence of concrete efforts to resolve his financial issues or mitigate the concerns.

Consequently, the judge determined that the applicant did not meet his burden of proof and persuasion regarding his financial situation. The denial was based on the insufficient evidence presented to mitigate the substantial financial considerations.

Why the Applicant Was Denied

The applicant admitted to having 21 delinquent debts totaling over $40,000.
He provided no supporting documentation to demonstrate efforts to resolve his financial issues.
The judge found that the applicant did not meet his burden of proof and persuasion regarding his financial situation.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability to Satisfy Debts
AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations

Key Rule Quoted

“Failure to . . . 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 issuedOct 12, 2017
Answer filedNov 4, 2017Applicant admitted all allegations.
Hearing held—Decision made on written record.
Decision dateApr 20, 2018

Cite For

Insufficient Evidence to Mitigate Financial Concerns Under Guideline F
Importance of Providing Documentation to Support Claims of Financial Remediation
Criteria for Evaluating Financial Responsibility in Trustworthiness Determinations

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's financial situation, characterized by 21 delinquent debts totaling over $40,000, raised significant concerns regarding his trustworthiness. Despite the applicant's admission of the debts and his claim of working with a credit repair firm, he failed to provide sufficient evidence to mitigate these concerns, leading to a denial of eligibility for a public trust position.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a–1.u	21 sub-charges — specific text not stated in this decision (against the applicant).	Against Applicant			—	—	—

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: ) ) REDACTED ) ADP Case No. 17-03104 ) ) Applicant for Public Trust Position

For Government: Nicole A. Smith, Department Counsel For Applicant: Pro se

04/20/2018 ______________

STATEMENT OF CASE

______________

MENDEZ, Francisco, Administrative Judge:

Applicant did not present sufficient evidence to mitigate concerns raised by his financial situation. Eligibility for a public trust position is denied.

Statement of the Case

On October 12, 2017, the Department of Defense (DoD) sent Applicant a Statement of Reasons (SOR) alleging trustworthiness concerns under the financial considerations guideline. Specifically, the SOR lists 21 delinquent debts, including several judgements, totaling over $40,000. On November 4, 2017, Applicant answered the SOR, admitting all the SOR allegations and stated that he is working with a credit repair firm to resolve his financial problems. He provided no supporting documentation showing what efforts, if any, he had made to address and resolve the SOR debts. He requested a decision on the administrative (written) record without a hearing.

On December 4, 2017, Department Counsel sent Applicant a file of relevant material (FORM). With the FORM, Department Counsel forwarded to Applicant five exhibits, pre-marked as Items 1 – 5, which the Government offers for admission into the record. Applicant received the FORM on January 3, 2018. (Appellate Exhibit I) He was given 30 days to raise an objection to the material offered by Department Counsel and submit his own evidence. He did not file an objection or submit a response. Accordingly, without objection, Items 1 – 5 are admitted into the record. On April 17, 2018, I received the case for decision and then received confirmation that Applicant remains sponsored for a position of trust. (Appellate Exhibit II) Accordingly, I have jurisdiction over this matter. ISCR Case No. 14-03753 (App. Bd. Sep. 23, 2016).

FINDINGS OF FACT

Applicant, 32, lives with his father. He has been working full-time since 2006, including as a debt collector for a debt collection company from July 2010 to September 2016. He has been with his current employer since May 2017 and, at that time, submitted an application for a position of trust required for his continued employment as a federal contractor. He reported on his application that he had two delinquent accounts totaling less than $10,000. He subsequently reported during his background interview several other delinquent accounts. He admits in his response to the SOR that he has 21 delinquent accounts totaling over $40,000.

Law, Policies, and Regulations

This case is decided by applying the National Security Adjudicative Guidelines (AG or guidelines), which became effective on June 8, 2017, through Security Executive Agent Directive 4 (SEAD 4), and the due process procedures set forth in DoD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive).1

Positions designated as ADP I and ADP II are classified as sensitive positions. The standard that must be met for assignment to sensitive duties is that, based on all available information, the person’s loyalty, reliability, and trustworthiness are such that assigning the person to sensitive duties is clearly consistent with the interests of national security.2

When evaluating an applicant’s eligibility for a position of trust to support a federal contract, an administrative judge must consider the adjudicative guidelines and whole- person concept. In addition to brief introductory explanations, the guidelines list potentially disqualifying and mitigating conditions. The guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, an administrative judge applies the guidelines in a commonsense manner, considering all available and reliable information, in arriving at a fair and impartial decision. See generally AG ¶ 2.

The Directive sets forth in Enclosure 3 the due process procedures that must be followed in all DOHA proceedings. Department Counsel must present evidence to establish controverted facts (i.e., SOR allegations denied by the applicant). While an applicant is responsible for presenting evidence to rebut, explain, extenuate, or mitigate relevant conduct or circumstances that he or she admits or is otherwise established. Directive, ¶¶ E3.1.14; E3.1.25. An applicant has the ultimate burden of persuasion to establish their eligibility for a position of trust. Any doubt raised by the evidence, must be resolved in favor of the national security. See AG ¶ 1(d).

ANALYSIS

Guideline F, Financial Considerations

Applicant’s accumulation of a large amount of delinquent debt raises concern about his ability to hold a sensitive position. The financial considerations concern is explained at AG ¶ 18:

Failure to . . . 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. . . .

The concern here is not limited to a consideration of whether persons with financial issues might be tempted to compromise sensitive information or engage in other illegality to pay their debts. It also addresses the extent to which the circumstances giving rise to delinquent debt cast doubt upon a person’s judgment, self-control, and other qualities essential to protecting sensitive information.3

In assessing Applicant’s case, I considered the applicable disqualifying and mitigating conditions, including the following:

AG ¶ 19(a): inability to satisfy debts;

AG ¶ 19(c): a history of not meeting financial obligations;

AG ¶ 20(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;

AG ¶ 20(b): the conditions that resulted in the financial problem were largely beyond the person’s control . . . and the individual acted responsibly under the circumstances;

AG ¶ 20(c): the person has received or is receiving counseling for the problem and/or there are clear indications that the problem is being resolved or is under control; and AG ¶ 20(d): the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.

Persons applying for a position of trust are not required to be debt free, or have unblemished financial records, or a certain credit score. However, they are expected to present evidence mitigating concerns raised by delinquent debt. They are also required to show that they manage their personal financial obligations in a manner consistent with the expectations for those granted access to sensitive information.4

Here, Applicant did not meet his burden of proof and persuasion. Although he may have retained a credit repair firm to help him clean up his credit, he supplied no supporting documentation showing what steps, if any, he has taken to address his past-due debts and take control of his financial situation. AG ¶¶ 19(a) and 19(c) apply. None of the mitigating conditions apply. Applicant’s financial situation remains a concern. 5

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 (Financial Considerations): AGAINST APPLICANT

Subparagraphs 1.a – 1.u: Against Applicant

CONCLUSION

In light of the circumstances presented by the record in this case, it is not clearly consistent with the interests of national security to grant Applicant eligibility for access to sensitive information. Applicant’s request for a position of trust is denied.

____________________ Francisco Mendez Administrative Judge

FOOTNOTES

1 SEAD 4, ¶ E.1 (the current guidelines “shall be used by all authorized adjudicative agencies when rendering a determination for initial or continued eligibility . . . to hold a sensitive position.”); Memorandum from the Office of the Deputy Under Secretary of Defense for Counterintelligence and Security, dated November 19, 2004 (the Defense Office of Hearings and Appeals (DOHA) is directed to utilize the provisions of the Directive, to include the current version of the adjudicative guidelines, to resolve contractor cases forwarded to it for a trustworthiness determination).

2 SEAD 4, ¶ E.4; Directive, § 3.2. ADP Case No. 14-00590 (App. Bd. Dec. 10, 2014) (“The standard applicable to trustworthiness cases is that set forth in Department of the Navy v. Egan, 484 U.S. 518, 528 (1988) regarding security clearances: such a determination “may be granted only when ‘clearly consistent with the interests of the national security’.”) 3 ISCR Case No. 11-05365 at 3 (App. Bd. May. 1, 2012). 4 See generally ISCR Case No. 07-06482 at 3 (App. Bd. May 21, 2008) (“[A]napplicant is not required, as a matter of law, to establish that he [or she] has paid off each and every debt listed in the SOR. All that is required is that an applicant demonstrate that he [or she] has “ . . . established a plan to resolve his [or her] financial problems and taken significant actions to implement that plan.”) (internal citations omitted). See also ISCR Case No. 15-02585 at 2 (App. Bd. Dec. 20, 2016) (“It is reasonable for Judges to expect applicants to present documentation about the satisfaction of individual debts.”)

5 In reaching this adverse conclusion, I considered the whole-person concept. See generally AG ¶ 2. I also considered the exceptions listed in SEAD 4, Appendix C, but none are warranted in this case.