CASEClearance Adjudication Search EngineCASE

Loading case…

ISCR Case 06-15664.h1 — CASE

ISCR Case 06-15664.h1denied

Case Headnote

ISCR Case No. 06-15664.h1

deniedJan 23, 2007· Hon. Michael H. Leonard· hearing

Summary

A 33-year-old radiological control monitor was denied a security clearance due to concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The Statement of Reasons alleged that the applicant provided false answers to Questions 38 and 39 on her security-clearance application. Additionally, it detailed approximately $10,000 in delinquent or unpaid debts across 12 creditors. These debts included about $5,300 for medical bills, $1,922 and $1,111 for past-due student loans, $1,525 and $124 for other medical accounts, $394 for a charged-off credit card, and $143 for an account stemming from a closed checking account.

Disqualifying conditions related to financial irresponsibility and a history of not meeting financial obligations were raised. While the judge found insufficient evidence of deliberate falsification in her application, the applicant's ongoing financial issues were a primary concern.

The denial was based on the applicant's over $10,000 in delinquent debts, which she had only recently begun to address. Although her efforts were acknowledged, they were deemed insufficient to mitigate the security concern under Guideline F. The applicant failed to present enough evidence to demonstrate a good-faith effort to resolve her financial issues.

Why the Applicant Was Denied

The applicant has over $10,000 in delinquent or unpaid debts that she has just begun to pay off.
Her efforts to address her debts are commendable but insufficient to mitigate the security concern under Guideline F.
The applicant did not present sufficient evidence to demonstrate a good-faith effort to resolve her financial issues.

Conditions Referenced

Disqualifying

E2.A6.1.2.1raisedA History of Not Meeting Financial Obligations
E2.A6.1.2.3raisedInability or Unwillingness to Satisfy Debts

Key Rule Quoted

“The decision to deny a person a security clearance is not a determination of an applicant’s loyalty. Instead, it is a determination that the applicant has not met the strict guidelines the President has established for granting eligibility for a security clearance.”

Procedural Posture

SOR issuedJul 21, 2006
Answer filed—
Hearing heldDec 6, 2006Applicant appeared pro se.
Decision dateJan 23, 2007

Cite For

Insufficient Evidence of Deliberate Falsification Under Guideline E
Ongoing Financial Issues as a Basis for Denial Under Guideline F
The Importance of Demonstrating a Good-faith Effort to Resolve Financial Obligations

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 E (Personal Conduct) · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The judge found that the applicant did not make deliberately false statements on her security clearance application regarding her financial record. The allegations under Guideline E for personal conduct were resolved in favor of the applicant, indicating that the judge did not find sufficient evidence of intentional falsification.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
2.a	Applicant gave false answers to Questions 38 and 39 on her security-clearance application.	For Applicant	Omission or Failure to DiscloseNOT DELIBERATE	Financial	Denied	—	—	—
2.b	Applicant gave false answers to Questions 38 and 39 on her security-clearance application.	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 has more than $10,000 in delinquent or unpaid debts, which she has just begun to pay off. Despite her commendable efforts, the judge concluded that these financial issues raised security concerns under Guideline F, resulting in a denial of her security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant is indebted to creditors for 12 delinquent or unpaid debts for about $10,000 in total. $10,000	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.b	Applicant is indebted to creditors for 12 delinquent or unpaid debts for about $10,000 in total. $10,000	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.c	Applicant owes about $5,300 to this creditor for unpaid medical bills that were placed for collection. $5,300	Against Applicant	Medical Debt	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.d	Applicant owes about $5,300 to this creditor for unpaid medical bills that were placed for collection. $5,300	Against Applicant	Medical Debt	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.e	Applicant owes about $1,922 for a student loan that is past due. $1,922	Against Applicant	Student Loan Debt	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.f	Applicant owes about $1,111 for a student loan that is past due. $1,111	Against Applicant	Student Loan Debt	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.g	Applicant owes about $1,525 for a medical account placed for collection. $1,525	Against Applicant	Medical Debt	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.h	Applicant owes about $124 for a medical bill that was placed for collection. $124	Against Applicant	Medical Debt	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.i	Applicant owes about $394 for a charged-off credit card account that became a bad debt and was placed for collection. $394	Against Applicant	Credit Card Debt	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.j	Applicant owes about $143 for an account that was placed for collection stemming from a checking account that she closed in 2004. $143	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.k	Applicant owes about $143 for an account that was placed for collection stemming from a checking account that she closed in 2004. $143	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.l	Applicant owes about $143 for an account that was placed for collection stemming from a checking account that she closed in 2004. $143	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—

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

SYNOPSIS

KEYWORD: Personal Conduct; Financial

DIGEST: The evidence is not sufficient to prove that Applicant made deliberately false statements about her financial record when she completed her security-clearance application. But she has more than $10,000 in delinquent or unpaid debts that she has just begun to pay off. Her efforts, while commendable, are not sufficient to rebut, explain, extenuate, or mitigate the security concern under Guideline F for financial considerations. Clearance is denied.

CASENO: 06-15664.h1

DATE: 01/23/2007

DATE: January 23, 2007

) ) In re: ) ) ISCR Case No. 06-15664 ------------------------ ) SSN: ----------- ) ) Applicant for Security Clearance )

DECISION OF ADMINISTRATIVE JUDGE MICHAEL H. LEONARD

APPEARANCES

SYNOPSIS The evidence is not sufficient to prove that Applicant made deliberately false statements about her financial record when she completed her security-clearance application. But she has more than $10,000 in delinquent or unpaid debts that she has just begun to pay off. Her efforts, while commendable, are not sufficient to rebut, explain, extenuate, or mitigate the security concern under Guideline F for financial considerations. Clearance is denied.

STATEMENT OF CASE

Applicant contests the Defense Department’s preliminary decision to deny or revoke her eligibility for a security clearance. Acting under the relevant Executive Order and DoD Directive,1 on July 21, 2006, the Defense Office of Hearings and Appeals (DOHA) issued a statement of reasons (SOR) detailing the basis for its action. The SOR—which is in essence the administrative complaint—alleges a security concern under Guideline F for financial considerations. Applicant timely replied to the SOR and requested a hearing.

The case was assigned to me on October 16, 2006, and a notice of hearing was issued scheduling the case for December 6, 2006. Applicant appeared without counsel and the hearing took place as scheduled. DOHA received the hearing transcript on December 15, 2006.2

Per Applicant’s request, the record was left open until Wednesday, December 27, 2006, to allow her to submit additional documentary evidence. She did so in a timely manner and those matters were forwarded to me by department counsel who voiced no objections to Applicant’s post- hearing submission, which consists of a one-page fax cover sheet and eight pages. The nine-page document is admitted as Applicant’s Exhibit B.

RULINGS ON PROCEDURE

Before the hearing, the government moved to amend the SOR (Appellate Exhibit I). The crux of the amendment is to add a second paragraph to the SOR alleging a security concern under Guideline E for personal conduct (falsification). The second paragraph contains two allegations that Applicant gave false answers to Questions 38 and 39 on her security-clearance application. The motion was explained to Applicant during the hearing and she had no objections to it. Accordingly, the motion to amend the SOR was granted.

FINDINGS OF FACT

The SOR alleges that Applicant is indebted to several creditors for 12 delinquent or unpaid debts for about $10,000 in total. In addition, it alleges Applicant gave false answers in response to two questions about her financial record. Concerning the indebtedness, Applicant’s reply to the SOR was mixed, admitting several debts and denying others. Concerning the personal conduct, she denied both falsification allegations. In addition, I make the following findings of fact.

1. Applicant is a 33-year-old woman who works at a shipyard as a radiological control monitor. She is in a trainee status. She has worked in this job since September 2004. She is seeking to obtain a Defense Department security clearance for the first time.

2. Her marital status is never married. She is a college graduate with a bachelor’s degree in biological sciences awarded in 1997. During 1998–2003, she was a graduate student in a master’s program studying Oriental Medicine. She did not complete the program or earn a degree.

3. As part of the background investigation for her security clearance, a credit report was obtained in November 2004 (Exhibit 2), and it revealed unfavorable information. For example, the trade section of the report has about nine accounts that were then, or in the past, in a collection status. Also, the collection section of the report lists 12 collection accounts, of which 4 accounts were paid to a zero balance. Many of the collection accounts were based on unpaid medical bills. Two additional credit reports were obtained in 2006 (Exhibits 3 and 4), and these reports further reveal or confirm Applicant’s unfavorable financial history.

4. The SOR alleges that she is indebted to creditors for 12 delinquent or unpaid debts for about $10,000 in total. To date, most of the debts in the SOR are unpaid or otherwise unresolved. The debts from the SOR are discussed below.

5. The debts in subparagraphs 1.a and 1.bare student loans owed to the same creditor. Applicant was past due on each loan in the amounts of $1,922 and $1,111. On about October 30, 2006, Applicant entered into a repayment plan for these debts wherein she agreed to pay $150 per month (R. 64; Exhibit B). It appears that the balance for the consolidated loans is now about $52,686 (Exhibit B at 2). She had made one payment per the plan before the hearing.

6. The several debts in subparagraphs 1.c–1.hare unpaid medical bills that were placed for collection. The debts are owed to the same creditor. In total, Applicant owes about $5,300 to this creditor. On about October 30, 2006, Applicant entered into a repayment plan for these debts wherein she agreed to pay $200 per month (R. 62–63; Exhibit B at 1). She had made one payment per the plan before the hearing.

7. The debt of $1,641 in subparagraph 1.I is for an account that was placed for collection. In reply to the SOR, Applicant denied this debt and explained that she was not aware of it or when she accrued it. During the hearing, her position did not change (R. 34–36). Based on close review of the three credit reports, it appears this debt is a medical account placed for collection and the balance is about $1,525 (Exhibit 2 at 9).

8. The debt of $124 in subparagraph 1.jis for an account that was placed for collection. In reply to the SOR, Applicant denied this debt and explained that she paid it in 2004–2005. At the hearing, she said that it was a medical bill and she believed that she had paid it, but she did not have proof of payment (R. 36).

9. The debt of $394 in subparagraph 1.kis for a charged-off account. In reply to the SOR, Applicant denied this debt and explained that she had never been indebted to this creditor. At the hearing, she said that she did not recall this debt, but was unsure about its status. Review of the March 2004 credit report shows this account was for a credit card account, which became a bad debt and was placed for collection (Exhibit 2 at 4). The account was closed when it was charged off. This debt does not appear on the 2006 credit reports.

10. The debt of $143 in subparagraph 1.lis for an account that was placed for collection. In reply to the SOR, Applicant denied this debt and explained that the debt stemmed from a checking account that she closed in 2004. When she sought to open a checking account with her current bank, she learned that she owed this amount due to some outstanding checks that had not cleared before she closed the account. She was required to pay this debt to open a checking account with her current bank, and she did so in late 2004 or early 2005. At the hearing, Applicant’s position did not change (R. 37–39).

11. To help explain her financial difficulties, Applicant presented a letter from her psychotherapist (Exhibit A). Applicant has seen the psychotherapist since March 2006, and she continues to do so weekly. In the letter, the psychotherapist explained Applicant was referred to her by a medical doctor concerned about Applicant’s depression and the impact it was having on her functioning and health. Also, the letter notes that Applicant has been depressed for several years, has been in treatment several times, and her depression affects her ability to take care of day-to-day life duties.

12. To obtain a security clearance, Applicant completed submitted a security-clearance application in September 2004 (Exhibit 1). Applicant signed the form and certified that her statements were true, complete, and correct to the best of her knowledge and belief and made in good faith. She also certified that she understood that a knowing and willful false statement on the application could be punished under federal law by a fine or imprisonment or both.

13. In response to Question 38 addressing financial delinquencies, Applicant replied “Yes.” She revealed a student loan with a balance of $46,000 that had been more than 180 days delinquent in the last seven years. In response to Question 39 addressing financial delinquencies, Applicant replied “No.” By answering in the negative, she denied currently having any debts more than 90 days delinquent. She did not disclose any of her other debts in response to Questions 38 and 39 or anywhere else on her security-clearance application.

POLICIES

The Directive sets forth adjudicative guidelines to consider when evaluating a person’s security clearance eligibility, including disqualifying conditions (DC) and mitigating conditions (MC) for each guideline. In addition, each clearance decision must be a fair and impartial commonsense decision based upon consideration of all the relevant and material information, the pertinent criteria and adjudication factors, and the whole-person concept. A person granted access to classified information enters into a special relationship with the government. The government must be able to have a high degree of trust and confidence in those persons to whom it grants access to classified information. The decision to deny a person a security clearance is not a determination of an applicant’s loyalty. Instead, it is a determination that the applicant has not met the strict guidelines the President has established for granting eligibility for a security clearance.

BURDEN OF PROOF

The only purpose of a security-clearance decision is to decide if it is clearly consistent with the national interest to grant or continue a security clearance for an applicant. There is no presumption in favor of granting or continuing access to classified information. The government has the burden of presenting evidence to establish facts alleged in the SOR that have been controverted. An applicant is responsible for presenting evidence to refute, explain, extenuate, or mitigate facts that have been admitted or proven. In addition, an applicant has the ultimate burden of persuasion to obtain a favorable clearance decision.9

No one has a right to a security clearance. And as noted by the Supreme Court in Department of Navy v. Egan, “the clearly consistent standard indicates that security clearance determinations should err, if they must, on the side of denials.” Under Egan, Executive Order 10865, and the Directive, any doubt about whether an applicant should be allowed access to classified information will be resolved in favor of protecting national security.

CONCLUSION

1. The Personal Conduct Security Concern Personal conduct under Guideline E is always a security concern because it asks the central question: Does a person’s past conduct justify confidence the person can be trusted to properly safeguard classified information. Deliberate omission, concealment, or falsification of a material fact in any written document or oral statement to the government when applying for a security clearance or in other official matters is a security concern. It is deliberate if it is done knowingly and willfully. An omission of relevant and material information is not deliberate if the person genuinely forgot about it, inadvertently overlooked it, misunderstood the question, or genuinely thought the information did not need to be reported.

To prove the falsification allegations, the government offered the security-clearance application and relied on its cross-examination of Applicant. Although substantial evidence is a low standard, the evidence here is insufficient to prove that Applicant made deliberately false statements when completing her security-clearance application. At the hearing, she explained why she did not report the debts in subparagraphs 1.c–1.hand 1.j–1.las called for in her responses to Questions 38 and 39 (R. 41–43). In summary, she explained that she was either unaware of the debt or forgot about the debt, and that she was not trying to mislead, falsify, or be untruthful. Having had a chance to listen to Applicant’s testimony, observe her demeanor, and gauge her sincerity, I found Applicant’s explanation to be credible, and I am not persuaded that her responses to Questions 38 and 39 were deliberately false. Accordingly, Guideline E will be decided for Applicant.

2. The Financial Considerations Security Concern

Under Guideline F, a security concern typically exists for two different types of situations—significant unpaid debts or unexplained affluence. An individual who is financially overextended is at risk of having to engage in illegal or unethical acts to generate funds to meet financial obligations. Similarly, an individual who is financially irresponsible may also be irresponsible, unconcerned, negligent, or careless in properly handling and safeguarding classified information.

Here, based on the record evidence, a security concern is raised by significant unpaid debts. Applicant has a history of not meeting financial obligations as well as inability or unwillingness to pay just debts. The record evidence shows a pattern of Applicant not fulfilling her financial obligations. She just (in October 2006) put a plan in place to address her student loan debt and the several medical debts owed to the same creditor. So far, she has made one payment to each creditor per the plan.

I reviewed the MCs under the guideline and conclude none apply in her favor. Applicant has not presented sufficient evidence to support application of any MC under the guideline. Applicant’s financial problems are both recent and ongoing, and they are part of a pattern of conduct as opposed to an isolated incident. Her financial problems were not caused by a condition or circumstance largely beyond her control. As Applicant just started a repayment plan with her two chief creditors, it is too soon to say that there are clear indications that her financial problems are being resolved or are under control. Finally, although she is commended for making some progress, her efforts at this point are not enough to conclude that she has made a good-faith effort to repay overdue creditors or otherwise resolve her debts. What’s missing here is a substantial improvement to her financial situation. Lacking a long-term track record of financially-responsible behavior, Applicant is unable to overcome her history of significant unpaid debts.

I have considered the psychotherapist’s letter in the context of MC 3, and conclude that information cuts both ways. On one hand, it may help explain why Applicant had financial problems in the past. On the other hand, it is not particularly helpful because her depression is an ongoing condition for which she continues to receive treatment. So long as her depression continues to hinder her ability to function in day-to-day activities (e.g., handling her finances), it is possible that her depression will hinder her ability to put her financial house in order.

Given these circumstances, I conclude Applicant failed to present sufficient evidence to rebut, explain, extenuate, or mitigate the financial considerations security concern. Likewise, she did not meet her ultimate burden of persuasion to obtain a favorable clearance decision. In reaching this conclusion, I also considered Applicant’s case under the whole-person concept, which a detailed discussion thereof would not change the outcome of this case.

FORMAL FINDINGS

Here are my conclusions for each allegation in the SOR:

SOR ¶ 1–Guideline F: Against Applicant Subparagraphs a–l: Against Applicant

SOR ¶ 2–Guideline E: For Applicant Subparagraphs a–b: For Applicant

DECISION

In light of all the circumstances presented by the record in this case, it is not clearly consistent with the national interest to grant or continue a security clearance for Applicant. Clearance is denied.

Michael H. Leonard Administrative Judge

FOOTNOTES

FOR GOVERNMENT Emilio Jaksetic, Esq., Department Counsel FOR APPLICANT Pro Se Executive Order 10865, dated February 20, 1960, as amended, and DoD Directive 5220.6, dated January 2, 1992, as amended (Directive). The title page of the transcript reports the case number as 05-15664. The correct case number is 06-15664. Directive, Enclosure 2, Item E2.2.1 (setting forth nine factors to consider under the whole-person concept). Executive Order 10865, § 7. ISCR Case No. 96-0277 (July 11, 1997) at p. 2. ISCR Case No. 02-18663 (March 23, 2004) at p. 5. Directive, Enclosure 3, Item E3.1.14. Directive, Enclosure 3, Item E3.1.15. Directive, Enclosure 3, Item E3.1.15. Department of Navy v. Egan, 484 U.S. 518, 528 (1988) (“it should be obvious that no one has a ‘right’ to a th security clearance”); Duane v. Department of Defense, 275 F.3d 988, 994 (10 Cir. 2002) (“It is likewise plain that there is no ‘right’ to a security clearance, so that full-scale due process standards do not apply to cases such as Duane’s.”) (citations omitted). 484 U.S. at 531. Directive, Enclosure 2, Attachment 5 (setting forth the disqualifying and mitigating conditions). Directive, Enclosure 2, Attachment 6 (setting forth the disqualifying and mitigating conditions). Directive, Item E2.A6.1.2.1. A history of not meeting financial obligations; Item E2.A6.1.2.3. Inability or unwillingness to satisfy debts. Directive, Item E2.A6.1.3.3. The conditions that resulted in the behavior were largely beyond the person’s control (e.g., loss of employment, a business downturn, unexpected medical emergency, or a death, divorce, or separation).