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ISCR Case 14-03120.h1 — CASE

ISCR Case 14-03120.h1denied

Case Headnote

ISCR Case No. 14-03120.h1

deniedJul 1, 2014· Hon. Nichole L. Noel· hearing

Summary

A 65-year-old federal contractor and retired military member was denied a security clearance under Guideline F, Financial Considerations, due to unresolved delinquent debts. The Statement of Reasons alleged the applicant owed approximately $38,500 across ten delinquent accounts, and also co-signed an $18,000 student loan for his daughter.

While one significant debt was resolved, the applicant still had approximately $29,750 in outstanding delinquent debts. The decision noted the applicant did not challenge these debts or report potential identity theft to credit reporting agencies.

Ultimately, the applicant failed to demonstrate responsible financial management or mitigate the security concerns associated with the remaining debts. Consequently, the security clearance was denied.

Why the Applicant Was Denied

Applicant has unresolved delinquent debts totaling approximately $29,750.
Applicant failed to demonstrate responsible management of his finances.
Applicant did not challenge the debts or notify credit reporting agencies of potential identity theft.

Conditions Referenced

Disqualifying

AG ¶ 18raisedFinancial Considerations

Mitigating

AG ¶ 20(d)appliedGood Faith Effort to Repay DebtsApplicant resolved the largest alleged account, showing a good-faith effort to repay his delinquent accounts.

Key Rule Quoted

“Failure to satisfy debts or 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

Procedural Posture

SOR issuedOct 6, 2014
Answer filed—Applicant requested a hearing.
Hearing heldApr 14, 2016Applicant withdrew request for hearing and opted for a decision on the written record.
Decision dateApr 14, 2016

Cite For

Unresolved Delinquent Debt as a Security Concern Under Guideline F
Good Faith Efforts to Repay Debts as a Mitigating Factor
Responsibility for Debts and Financial Management in Security Clearance Evaluations

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 several financial considerations, including multiple delinquent accounts totaling approximately $29,750. Although the applicant resolved one significant debt related to a student loan co-signed for his daughter, he failed to mitigate the overall security concerns related to his unresolved debts.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant owes approximately $38,500 on 10 delinquent accounts.	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.b	Applicant owes approximately $38,500 on 10 delinquent accounts.	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.c–1.d	2 sub-charges — specific text not stated in this decision (for the applicant).	For Applicant			—	—	—
1.e	Applicant owes approximately $38,500 on 10 delinquent accounts.	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.f–1.i	4 sub-charges — specific text not stated in this decision (against the applicant).	Against Applicant			—	—	—
1.j	Applicant co-signed for a student loan for his daughter ($18,000). $18,000	For Applicant	Student Loan Debt	Admitted	—	(c) received/receiving counseling; problem being resolved	Documented Debt Paid in Full

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. 14-03120 ) Applicant for Security Clearance )

For Government: Tovah Minster, Esq., Department Counsel For Applicant: Pro se 04/14/2016 ______________

STATEMENT OF CASE

______________

NOEL, Nichole L., Administrative Judge:

Applicant contests the Department of Defense’s (DOD) intent to deny his eligibility for a security clearance. Applicant failed to mitigate the security concerns raised by his unresolved delinquent debt. Clearance is denied.

Statement of the Case

On October 6, 2014, the DOD issued a Statement of Reasons (SOR) detailing security concerns under the financial considerations guideline.1 DOD adjudicators were unable to find that it is clearly consistent with the national interest to grant Applicant’s security clearance.

Applicant answered the SOR and requested a hearing.2 In April 2015, Applicant withdrew his request and requested that the case be decided on the written record.3 The Government submitted its written case on August 11, 2015. A complete copy of the file of relevant material (FORM) and the Directive were provided to Applicant. He received the FORM on September 6, 2015, and provided a response. The case was assigned to me on November 2, 2015. The documents appended to the FORM are admitted as Government’s Exhibits (GE) 14 through 5, without objection. The Applicant’s documents are admitted as Applicant’s Exhibits (AE) A and B.5

FINDINGS OF FACT

Applicant, 65, has worked as a federal contractor since December 2003. Applicant, who retired from the military after 22 years of service, was granted a security clearance in 1981. The record does not contain any information about a more recent clearance. Applicant completed his most recent security clearance application in April 2013. The ensuing investigation revealed several delinquent accounts. The SOR alleges that Applicant owes $38,500 on 10 delinquent accounts.6

Applicant has lived and worked abroad since December 2003. He manages his U.S.-based accounts by e-mail or through the internet and pays his financial obligations on time. Applicant did not learn of the delinquent accounts alleged in the SOR until his background investigation. He admitted co-signing for a student loan for his daughter (SOR ¶ 1.j $18,000), but did not know the loan had gone into default. Applicant resolved the account in November 2013. Applicant claims that he was unaware of the other accounts alleged in the SOR, but takes responsibility for them because they were likely opened by his ex-wife or another one of his family members. All of the alleged accounts were opened between 2008 and 2012.7

Although Applicant has expressed his intent to pay the delinquent accounts alleged in the SOR, he has not yet done so, blaming the difficulty of corresponding with creditors while living outside the United States.8

POLICIES

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines. 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 the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶ 2(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.” In reaching this decision, I have drawn only those conclusions that are reasonable, logical, and based on the evidence.

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.” The applicant has the ultimate burden of persuasion to obtain a favorable security decision.

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

Financial Considerations

Unresolved delinquent debt is a serious security concern because failure to “satisfy debts [or] 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.”9

The SOR alleges that Applicant owes approximately $38,500 on 10 delinquent accounts. However, the credit reports in the record do not support SOR ¶¶ 1.cand 1.d. Accordingly, I find for Applicant on these two allegations. The evidence supports SOR allegations ¶¶ 1.a–1.band 1.e–1.j, totaling $29,750. Applicant admits responsibility for these debts. This is sufficient evidence to determine that Applicant has demonstrated a history of not meeting his financial obligations.10 The record contains some evidence in mitigation, but not enough to overcome the security concerns raised by the delinquent accounts alleged in the SOR. Applicant has resolved the largest alleged account, SOR ¶ 1.jfor the $18,000 student loan he co-signed for his daughter, showing a good-faith effort to repay his delinquent accounts.11 Although Applicant has not specifically claimed that he is a victim of identity theft, it is plausible, given that Applicant has not lived in the United States for the past 13 years, that he did not open the other accounts alleged in SOR. While delinquent debt resulting from identity theft is beyond Applicant’s control, he has not acted responsibly in light of his circumstances. He has not challenged the debts with the credit reporting agencies or notified them of potential identity theft. Nor has Applicant taken any steps to confront his family or prevent them from illegally obtaining credit in his name in the future. As a result, his finances remain an ongoing source of vulnerability and exploitation and cannot be considered to be under control. This assessment is not changed by the fact that Applicant is able to pay many of his recurring accounts timely.

After reviewing the record, I conclude that despite the favorable evidence in the record, Applicant has failed to mitigate the concerns raised by his current finances. In reaching this decision, I have considered the whole-person factors at AG ¶ 2. Ultimately, Applicant failed to meet his burdens of production and persuasion. Because the security concerns raised in the SOR remain, following Egan12 and the clearly- consistent standard, I resolve these doubts in favor of protecting national security.

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, Financial Considerations: AGAINST APPLICANT

Subparagraphs 1.a-1.band 1.e-1.i: Against Applicant

Subparagraphs 1.c-1.d, and 1.j: For Applicant

CONCLUSION

Based on the record, 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.

________________________ Nichole L. Noel Administrative Judge

FOOTNOTES

1 This case is adjudicated under Executive Order (EO) 10865, Safeguarding Classified Information within Industry, signed by President Eisenhower on February 20, 1960, as amended; as well as DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program, dated January 2, 1992, as amended (Directive). In addition, the Adjudicative Guidelines for Determining Eligibility for Access to Classified Information (AG), effective within the Defense Department on September 1, 2006, apply to this case. The AG were published in the Federal Register and codified in 32 C.F.R. § 154, Appendix H (2006). The AG replace the guidelines in Enclosure 2 to the Directive. 2 GE 3. 3 GE 5.

4 In the FORM, the Government indicates that GE 1 is Applicant’s response to the SOR. However, GE 1 also contains the SOR. 5 In his response, Applicant included a copy of the FORM, the SOR, and his answer to the SOR. These documents are not admitted as Applicant’s exhibits because they are duplicative of the Government’s Exhibits. However, the copies remain in the correspondence file. 6 GE 2-4.

7 GE 1, 3-4; AE A-B.

8 AE A. 9 AG ¶ 18.

10 AG ¶ 19(c). 11 AG ¶ 20(d).

12 Navy v. Egan, 484 U.S. 518 (1988).