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ISCR Case 12-03423.h1 — CASE

ISCR Case 12-03423.h1denied

Case Headnote

ISCR Case No. 12-03423.h1

deniedMar 7, 2017· Hon. Marc E. Curry· hearing

Summary

A 52-year-old Navy veteran was denied a security clearance under Guideline F, Financial Considerations, due to approximately $62,000 in delinquent debt. This total included a $6,187 state tax lien, a $29,924 federal tax lien, approximately $8,500 in medical debt, and about $17,000 from a voluntarily surrendered auto loan. The remaining debt consisted of delinquent credit card accounts.

The applicant attributed his financial difficulties to unemployment and medical issues. However, the administrative judge found that he failed to provide sufficient evidence of responsible actions taken to mitigate these debts. Specifically, he did not provide evidence of making payments towards his debts, and his claims of reducing tax delinquencies were unsubstantiated.

The extensive and longstanding nature of the applicant's financial problems raised concerns about his reliability and trustworthiness. Despite the application of mitigating conditions, the judge cited unresolved doubts, leading to the denial of the security clearance.

Why the Applicant Was Denied

Applicant failed to provide evidence of making payments towards his debts.
Applicant's claims of reducing tax delinquencies were unsubstantiated.
Applicant's financial problems were extensive and longstanding, raising concerns about his reliability.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(b)appliedConditions Beyond the Person's ControlApplicant's financial problems were partially attributed to unsteady employment and health issues.
AG ¶ 20(c)rejectedCounseling for the ProblemApplicant did not demonstrate evidence of receiving counseling or that the problem was under control.
AG ¶ 20(d)rejectedGood-faith Effort to Repay CreditorsApplicant had not made any payments towards his debts.

Key Rule Quoted

“"Failure or inability 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 information."”

Procedural Posture

SOR issuedDec 5, 2014
Answer filedJan 13, 2015
Hearing heldDec 7, 2016rescheduled from June 2, 2016
Decision dateMar 7, 2017

Cite For

Failure to Mitigate Financial Considerations Under Guideline F
Importance of Substantiating Claims of Debt Resolution
Impact of Longstanding Financial Delinquencies on Security Clearance 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 that the applicant had a significant history of delinquent debts, including unpaid federal and state income taxes, medical debts, and an auto loan. Despite the applicant's claims of financial difficulties due to unemployment and health issues, the judge determined that the applicant failed to provide sufficient evidence of responsible actions to mitigate these financial concerns, resulting in a denial of the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	The tax lien totaling $6,187, as alleged in subparagraph 1.a, is owed to Applicant’s state taxing authority. $6,187	Against Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts	—	—
1.b	SOR subparagraph 1.b is a federal tax lien totaling $29,924. $29,924	Against Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts	—	—
1.c	Approximately $8,500 constitutes delinquent medical debt. $8,500	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts	—	—
1.x	Approximately $17,000 constitutes a delinquent auto loan for a car that Applicant voluntarily surrendered. $17,000	Against Applicant	Auto Loan Debt	Admitted	(a) inability to satisfy debts	—	—
1.w	The remainder is delinquent credit card accounts.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts	—	—
1.y	The remainder is delinquent credit card accounts.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts	—	—

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. 12-03423 ) Applicant for Security Clearance )

For Government: Carroll Connelley, Esq., Department Counsel For Applicant: Pro se

03/07/2017 ______________

STATEMENT OF CASE

______________

CURRY, Marc E., Administrative Judge:

Applicant failed to mitigate the financial considerations security concern. Clearance is denied.

Statement of the Case

On December 5, 2014, the Department of Defense Consolidated Adjudications Facility (DOD CAF) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline F, financial considerations. The action was taken under Executive Order 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG) implemented by the DOD on September 1, 2006.

On January 13, 2015, Applicant answered the SOR, admitting the allegations and requesting a hearing before an administrative judge from the Department of Defense Office of Hearings and Appeals (DOHA). The case was initially assigned to another administrative judge on April 11, 2016 who scheduled a hearing for June 2, 2016. On May 26, 2016, the case was continued, and then assigned to me on October 19, 2016. DOHA issued a notice of hearing on November 8, 2016, scheduling the hearing for December 7, 2016. The hearing was held as rescheduled. At the hearing, I received five Government exhibits (GE 1 - GE 5), and considered Applicant’s testimony. DOHA received the transcript (Tr.) on December 15, 2016.

FINDINGS OF FACT

Applicant is a 52-year-old married man with an adult child from a previous marriage. He is a veteran of the Navy, serving from 1982 through his honorable discharge in 1991. He graduated from college in 2015, earning a bachelor’s degree in information technology. He is currently working toward a master’s degree. Since October 2016, he has been working for a defense contractor. (Tr. 12)

Between 2007 and 2012, Applicant incurred approximately $62,000 of delinquent debt. Approximately $36,000 of this debt constitutes unpaid federal and state income taxes that he incurred over multiple years (subparagraphs 1.a and 1.b). Approximately $8,500 constitutes delinquent medical debt (subparagraphs 1.c - 1.v). Approximately $17,000 constitutes a delinquent auto loan for a car that Applicant voluntarily surrendered (subparagraph 1.x), and the remainder is delinquent credit card accounts (subparagraphs 1.wand 1.y). Applicant attributes his financial problems to bouts of unemployment and unsteady employment, together with a history of medical problems. (Answer at 2- 3)

The tax lien totaling $6,187, as alleged in subparagraph 1.a, is owed to Applicant’s state taxing authority. He contends that he has reduced this delinquency by approximately $1,000 through automatic withdrawals from paychecks from his previous job. (Tr. 14) He provided no supporting evidence for this assertion. He is not currently making any payments.

SOR subparagraph 1.bis a federal tax lien totaling $29,924. Applicant contends that he has reduced this debt by $18,000 through annual tax refund offsets. (Tr. 22) He provided no documentary evidence.

As for the remainder of the debts, Applicant met with a representative of a debt consolidation company and developed a plan, but was unable to afford the required monthly payments. (Tr. 16) Now that his court-ordered child support has ended, he plans to apply $400 a month toward his debts.

Applicants’ current plan is to apply $400 per month, constituting the money previously earmarked for his adult daughter’s child support for which he is no longer responsible, to his delinquencies. He has not yet begun making payments.

POLICIES

The adjudicative guidelines list potentially disqualifying conditions and mitigating conditions. These guidelines are flexible rules of law. Instead, recognizing the complexities of human behavior, they are applied together with the factors listed in the adjudicative process. According to AG ¶ two(c), 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 classified information will be resolved in favor of national security.”

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 applicant or proven by department counsel. . . .” The applicant has the ultimate burden of persuasion for obtaining a favorable security decision.

ANALYSIS

Guideline F, Financial Considerations

Under this guideline, “failure or inability 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 information.” (AG ¶ 18) Applicant’s history of delinquent debt triggers the application of AG ¶ 19(a), “inability or unwillingness to satisfy debts,” and AG ¶ 19(c), “a history of not meeting financial obligations.”

The following mitigating conditions under AG ¶ 20 are potentially applicable:

(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, or a death, divorce or separation), and the individual acted responsibly under the circumstances; (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

(d) the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.

Applicant contends that his financial problems were caused by unsteady employment and unemployment, and that his financial problems were exacerbated by serious health problems. Although these problems constitute circumstances beyond his control, he provided minimal evidence that he addressed these problems responsibly. AG ¶ 20(b) is only partially applicable.

Applicant acknowledges that he has not made any payments towards the resolution of his commercial debts or his medical bills, and his contention that he has reduced his tax delinquencies, either through refund offsets or wage garnishments, are unsubstantiated. None of the remaining mitigating conditions applies.

WHOLE PERSON CONCEPT

Under the whole-person concept, the administrative judge should consider the nine adjudicative process factors listed at AG ¶ 2(a). They are as follows:

(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.

Applicant’s longstanding and extensive financial delinquencies, particularly his income tax debts, generate unresolved doubt as to whether it is clearly consistent with the national interest to grant him a security clearance.

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: A G A I N S T APPLICANT Subparagraphs 1.a - 1.y: 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 eligibility for a security clearance. Eligibility for access to classified information is denied.

________________________________ MARC E. CURRY Administrative Judge