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ISCR Case 14-05290.h1 — CASE

ISCR Case 14-05290.h1denied

Case Headnote

ISCR Case No. 14-05290.h1

deniedMar 29, 2017· Hon. Gregg A. Cervi· hearing

Summary

A 46-year-old defense contractor was denied a security clearance under Guideline F, Financial Considerations, due to eight delinquent debts totaling approximately $27,951. The Statement of Reasons listed each of these debts as a separate allegation.

The applicant admitted to the debts, explaining that some originated during his second marriage. However, he failed to provide evidence of any efforts to resolve these financial obligations or to seek financial counseling. The judge noted that the applicant did not address his delinquent debts following his separation and divorce.

Furthermore, the applicant's reliance on his ex-spouse's bankruptcy discharge was deemed unfounded, as it did not apply to his personal obligations. Ultimately, the judge concluded that the applicant did not mitigate the security concerns related to his financial considerations, leading to the denial of his security clearance.

Why the Applicant Was Denied

The applicant failed to address his delinquent debts after separation and divorce.
He did not provide evidence of financial counseling or good-faith efforts to resolve his debts.
The applicant's reliance on his ex-spouse's bankruptcy discharge was unfounded and did not apply to his obligations.

Conditions Referenced

Disqualifying

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

Key Rule Quoted

“Any doubt concerning personnel being considered for access to classified information will be resolved in favor of the national security.”
— Department of Navy v. Egan, 484 U.S. 518, 531 (1988)

Procedural Posture

SOR issuedDec 5, 2014
Answer filedFeb 17, 2016
Hearing held—Case decided on written record
Decision dateMar 29, 2017

Cite For

Failure to Mitigate Financial Considerations Under Guideline F
Importance of Demonstrating Good-faith Efforts to Resolve Debts
Reliance on Ex-spouse's Bankruptcy Discharge Does Not Absolve Personal 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 F · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The judge found that the applicant has unresolved financial delinquencies totaling approximately $27,951, which he failed to address after his separation and divorce. The applicant's reliance on his ex-spouse's bankruptcy discharge and lack of evidence showing responsible financial management led to a denial of his security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Delinquent debt totaling approximately $27,951. $27,951	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Delinquent debt totaling approximately $27,951. $27,951	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	Delinquent debt totaling approximately $27,951. $27,951	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	Delinquent debt totaling approximately $27,951. $27,951	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	Delinquent debt totaling approximately $27,951. $27,951	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	Delinquent debt totaling approximately $27,951. $27,951	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	Delinquent debt totaling approximately $27,951. $27,951	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	Delinquent debt totaling approximately $27,951. $27,951	Against Applicant	Unspecified Financial	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 No. 14-05290 ) Applicant for Security Clearance )

For Government: Daniel F. Crowley, Esq., Department Counsel For Applicant: Pro se

03/29/2017 ______________

STATEMENT OF CASE

______________

CERVI, Gregg A., Administrative Judge:

Applicant has not mitigated the financial considerations security concerns. Eligibility for access to classified information is denied.

Statement of the Case

Applicant completed a Questionnaire for National Security Positions (SF 86) on October 1, 2013. On December 5, 2014, the Department of Defense (DOD) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline F, financial considerations.1 Applicant responded to the SOR on February 17, 2016, and elected to have the case decided on the written record in lieu of a hearing. The Government’s written brief with supporting documents, known as the File of Relevant Material (FORM), was submitted by Department Counsel on March 28, 2016.

A complete copy of the FORM was provided to Applicant, who was afforded an opportunity to file objections and submit material to refute, extenuate, or mitigate the security concerns. Applicant received the FORM on May 30, 2016, but he did submit evidence in mitigation or assert any objections to the Government’s evidence. The Government’s exhibits included in the FORM (Items 1 to 8) are admitted into evidence. The case was assigned to me on March 21, 2017.

FINDINGS OF FACT

The SOR alleges eight delinquent debts totaling approximately $27,951. Applicant admitted all the allegations in the SOR with an explanation.

Applicant is 46 years old. He earned a bachelor’s degree in 2008, and has been employed by a defense contractor since 2005. He married in 1994 and divorced in 1995. He remarried in 1999, separated in 2013, and finally divorced in 2015. He stated in his Answer to the SOR that some of the debts alleged in the SOR derive from his second marriage. In his interview with an Office of Personnel Management (OPM) investigator, he indicated that he is paying for his apartment, vehicle, and living expenses. He has not shown that he is paying on delinquent financial obligations. He also stated that his spouse is paying for her home, but allowed payments on the joint debts to lapse. His spouse wanted to file a joint bankruptcy, but for reasons not presented in the file, she alone filed Chapter 13 Bankruptcy in 2013. Applicant did not join the bankruptcy case. The case was converted to a Chapter 7 Bankruptcy in May 2014, and his spouses debts were discharged in August 2014.

Applicant does not believe he needs to file bankruptcy, and pays his current debts. He has not made payments on debts alleged in the SOR, and appears to believe that his spouse’s bankruptcy discharge similarly applies to his financial obligations. No evidence supporting this assertion or of financial counseling or professional advice was provided. I was unable to further inquire into specifics related to the debts, his current financial status, and the likelihood of future financial difficulties since he elected to have his case decided without a hearing.

POLICIES

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

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 clearance decision.2 In Department of Navy v. Egan3, the Supreme Court stated that the burden of proof is less than a preponderance of the evidence.4

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.” It is well-established law that no one has a right to a security clearance. As noted by the Supreme Court in 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.5

The Government reposes a high degree of trust and confidence in individuals to whom it grants access to sensitive and classified information. Decisions include, by necessity, consideration of the possible risk the applicant may deliberately or inadvertently fail to safeguard sensitive or classified information. Such decisions entail a certain degree of legally permissible extrapolation of potential, rather than actual, risk of compromise of sensitive or classified information.

Section 7 of Exec. Or. 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 Exec. Or. 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive information).

ANALYSIS

Guideline F, Financial Considerations

The security concern for financial considerations is set out in AG ¶ 18:

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. An individual who is financially overextended is at risk of having to engage in illegal acts to generate funds.

The guideline notes several conditions that could raise security concerns under AG ¶ 19. The following are potentially applicable in this case:

(a) inability or unwillingness to satisfy debts; and

Applicant has a history of financial delinquencies and unresolved delinquent debts. The evidence is sufficient to raise the above disqualifying conditions.

Conditions that could mitigate the financial considerations security concerns are provided under AG ¶ 20. The following are potentially applicable:6

(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, 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;

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

(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.

The Appeal Board concisely explained Applicant’s responsibility for proving the applicability of mitigating conditions as follows:

Once a concern arises regarding an Applicant’s security clearance eligibility, there is a strong presumption against the grant or maintenance of a security clearance. See Dorfmont v. Brown, 913 F. 2d 1399, 1401 (9th Cir. 1990), cert. denied, 499 U.S. 905 (1991). After the Government presents evidence raising security concerns, the burden shifts to the applicant to rebut or mitigate those concerns. See Directive ¶ E3.1.15. The standard applicable in security clearance decisions is that articulated in Egan, supra. “Any doubt concerning personnel being considered for access to classified information will be resolved in favor of the national security.” Directive, Enclosure 2 ¶ 2(b).

ISCR Case No. 10-04641 at 4 (App. Bd. Sept. 24, 2013).

Applicant incurred debts, mostly during his second marriage, and failed to address them after his separation and divorce. He appears to rely on his ex-spouse’s Chapter 7 Bankruptcy discharge in 2014, but he failed to join that action or show that his ex-spouse’s discharged debts apply to him. Divorce and a loss of family income are mitigating factors to consider, but the total financial liability carried by Applicant points to a failure to address his debts upon separation and divorce and inattention to his personal financial management.7 He has not shown that he acted responsibly or in good faith to resolve his financial obligations, despite a history of steady employment with a government contractor since 2005. There was no evidence presented to show Applicant received financial counseling, or assistance with budgeting and debt resolution.

The totality of the delinquent debts and Applicant’s failure to take action to address them leaves me with doubts about his overall financial condition and ability or willingness to face his financial responsibilities. They continue to cast doubt on his current reliability,

7 The Appeal Board has previously explained what constitutes a “good faith” effort to repay overdue trustworthiness, and good judgment, and leaves him vulnerable to the potential for pressure, coercion, exploitation, or duress.

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(a):

(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.

Under AG ¶ 2(c), the ultimate determination of whether to grant eligibility for a security clearance must be an overall commonsense judgment based upon careful consideration of the guidelines and the whole-person concept. I considered all of the potentially disqualifying and mitigating conditions in light of all the facts and circumstances surrounding this case. I have incorporated my findings of fact and comments under Guideline F in this whole-person analysis.

Applicant has not prudently managed his finances. There is insufficient evidence to show that he attempted to resolve his financial obligations after the separation, and that he is currently financially sound. Overall, the record evidence leaves me with questions and doubts as to Applicant’s eligibility and suitability for a security clearance. I conclude Applicant did not mitigate the financial considerations security concerns.

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: Against Applicant

Subparagraphs 1.a – 1.h: 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.

________________________ Gregg A. Cervi Administrative Judge

FOOTNOTES

1 The action was taken under Executive Order (Exec. Or.) 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 (AG) implemented by the DOD on September 1, 2006. 2 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan.27, 1995).

3 Department of Navy v. Egan, 484 U.S. 518, 528 (1988) (“it should be obvious that no one has a ‘right’ to a security clearance”); Duane v. Department of Defense, 275 F.3d 988, 994 (10th Cir. 2002) (no right to a security clearance).

4 Egan, 484 U.S. at 531.

5 Egan, 484 U.S. at 531. 6 AG ¶ 20.fis not applicable. creditors or otherwise resolve debts:

In order to qualify for application of [the “good faith” mitigating condition], an applicant must present evidence showing either a good-faith effort to repay overdue creditors or some other good-faith action aimed at resolving the applicant’s debts. The Directive does not define the term “good-faith.” However, the Board has indicated that the concept of good-faith “requires a showing that a person acts in a way that shows reasonableness, prudence, honesty, and adherence to duty or obligation.” Accordingly, an applicant must do more than merely show that he or she relied on a legally available option (such as bankruptcy) in order to claim the benefit of [the “good faith” mitigating condition].

(internal citation and footnote omitted) ISCR Case No. 02-30304 at 3 (App. Bd. Apr. 20, 2004) (quoting ISCR Case No. 99-9020 at 5-6 (App. Bd. June 4, 2001)).