CASEClearance Adjudication Search EngineCASE

Loading case…

ISCR Case 09-04539.h1 — CASE

ISCR Case 09-04539.h1denied

Case Headnote

ISCR Case No. 09-04539.h1

deniedJan 31, 2011· Hon. Mark W. Harvey· hearing

Summary

A 32-year-old computer technician was denied a security clearance under Guideline F, Financial Considerations, due to significant unresolved debts totaling $54,210. The Statement of Reasons detailed eight specific allegations, including multiple collection accounts ranging from $49 to $3,021, a telecommunications collection of $254, and a vehicle repossession collection for $19,014.

The most substantial financial issues involved a foreclosure with $25,919 overdue on a $178,644 mortgage. Disqualifying conditions under Guideline F were raised, specifically regarding a history of not meeting financial obligations and an inability or unwillingness to satisfy debts.

While mitigating conditions were considered, the applicant ultimately failed to provide proof of any payments to his creditors or demonstrate sufficient progress in resolving his debts. Furthermore, there was no evidence of financial counseling or other responsible actions taken to address his financial situation, leading to the denial of his security clearance.

Why the Applicant Was Denied

The applicant did not provide proof of any payments to his creditors.
He failed to make sufficient progress in resolving his debts.
There was no evidence of financial counseling or responsible actions taken regarding his debts.

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)rejectedConditions Largely Beyond the Person's ControlWhile the applicant's financial issues stemmed from unemployment, he did not act responsibly to resolve his debts.
AG ¶ 20(c)rejectedReceived or Receiving CounselingThere was no evidence of financial counseling.
AG ¶ 20(d)rejectedGood-faith Effort to Repay DebtsThe applicant did not provide sufficient evidence of efforts to resolve his debts.

Key Rule Quoted

“Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the adjudicative guidelines.”

Procedural Posture

SOR issuedApr 13, 2010
Answer filedMay 10, 2010Applicant requested a hearing.
Hearing heldSep 22, 2010Applicant requested a decision without a hearing.
Decision dateJan 31, 2011

Cite For

Denial of Security Clearance Due to Unresolved Financial Obligations
Failure to Demonstrate Financial Responsibility Under Guideline F
Insufficient Evidence of Good-faith Efforts to Resolve Debts

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 multiple delinquent debts totaling $54,210, which raised significant financial concerns under Guideline F. Despite some admissions of responsibility for the debts, the applicant failed to provide sufficient evidence of efforts to resolve them, leading to a denial of eligibility for access to classified information.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	credit card collection ($2,654) $2,654	Against Applicant	Credit Card Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Other
1.b	bank collection ($1,640) $1,640	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Other
1.c	collection ($1,659) $1,659	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Other
1.d	collection ($49) $49	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Other
1.e	bank collection ($3,021) $3,021	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Other
1.f	telecommunications collection ($254) $254	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Other
1.g	vehicle repossession collection ($19,014) $19,014	Against Applicant	Auto Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Other
1.h	foreclosure ($25,919 overdue on $178,644 mortgage) $25,919	Against Applicant	Mortgage or Home Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Other

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. 09-04539 ) ) Applicant for Security Clearance )

For Government: Richard Stevens, Esquire, Department Counsel For Applicant: Pro se

January 31, 2011 __________

STATEMENT OF CASE

__________

HARVEY, Mark, Administrative Judge:

Applicant’s statement of reasons (SOR) lists eight debts, totaling $54,210. He did not provide proof of any payments to his SOR creditors. He failed to make sufficient progress in resolving his SOR debts, and financial considerations concerns are not mitigated at this time. Eligibility for access to classified information is denied.

Statement of the Case

On March 16, 2009, Applicant submitted an Electronic Questionnaires for Investigations Processing (e-QIP) or security clearance application (SF 86) (Item 6). On April 13, 2010, the Defense Office of Hearings and Appeals (DOHA) issued an SOR to Applicant, pursuant to Executive Order 10865, Safeguarding Classified Information Within Industry, dated February 20, 1960, as amended; Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (Directive), dated January 2, 1992, as amended; and the adjudicative guidelines (AG) promulgated by the President on December 29, 2005. The SOR alleged security concerns under Guideline F (financial considerations). (Item 1) The SOR detailed reasons why DOHA could not make the preliminary affirmative finding under the Directive that it is clearly consistent with the national interests to grant or continue a security clearance for Applicant, and recommended referral to an administrative judge to determine whether Applicant’s clearance should be granted, continued, denied, or revoked.

On May 10, 2010, Applicant responded to the SOR allegations and requested a hearing. (Item 4) On September 22, 2010, he requested a decision without a hearing. (Item 5) A complete copy of the file of relevant material (FORM), dated November 15, 2010, was provided to him on November 22, 2010. He was afforded an opportunity to file objections and to submit material in refutation, extenuation, or mitigation.1 Applicant did not respond to the FORM. The case was assigned to me on January 11, 2011.

Findings of Fact2

In Applicant’s response to the SOR, he admitted the debts in SOR ¶¶ 1.b-1.h.3 He denied responsibility for the debt in SOR ¶ 1.a without elaboration. His admissions are accepted as factual findings.

Applicant is a 32-year-old computer technician employed by a government contractor since early 2008.4 He attended a university from 1996 to 2003 and he majored in film and video production as well as management information systems. He earned a bachelor’s degree. He has never served in the military. Applicant has never been married, and he does not have any children.

Financial Considerations

Applicant’s SOR lists eight debts totaling $54,210. Of this total, $25,919 relates to overdue mortgage payments on a $178,644 mortgage, which is in foreclosure status. When Applicant became unemployed in March 2007, he was unable to make the mortgage payments on his condominium. (Item 8 at 4) Applicant tried to sell his condominium using a short sale; however, he was unsuccessful. (Item 8 at 4) He informed the creditor that he was moving out of his condominium. (Item 8 at 4) Applicant said he has not been notified that the property is in foreclosure. (Item 8 at 5)

(Item 2) Applicant’s SOR debts are as follows: ¶1.a credit card collection ($2,654); ¶1.bbank collection ($1,640); ¶1.ccollection ($1,659); ¶1.dcollection ($49); ¶1.e bank collection ($3,021); ¶1.ftelecommunications collection ($254); ¶1.gvehicle repossession collection ($19,014); and ¶1.hforeclosure ($25,919 overdue on $178,644 mortgage).

Although Applicant denied responsibility for the debt in SOR ¶1.a in his SOR response, during his Office of Personnel Management (OPM) personal subject interview (PSI), he recognized the debt in SOR ¶1.a and indicated he stopped making payments in March 2007. (Item 8 at 3) He told the OPM investigator that he was attempting to establish a payment plan until the debt in SOR ¶1.a is paid in full. (Item 6 at 9-11, Item 7 at 3; FORM at 4) On October 26, 2009, he responded to DOHA interrogatories and in connection with the debts in SOR ¶¶1.a, 1.b, 1.c, 1.f, and 1.h, he stated, “Due to the reduction of working hours, I cannot make payments on the account at this time. My income is not sufficient to cover the bills.” (Item 7 at 2-3)

Applicant explained at his OPM PSI that he was financially stable until March 2007, when he became unemployed from his job in the real estate industry. (Item 8 at 3- 5; FORM at 5) In his OPM PSI, Applicant said he was attempting to establish payment plans; however, he did not provide proof of any payment plans or payments to the SOR creditors. (Item 8 at 3-5; FORM at 5) There is no evidence of financial counseling. (Item 6 at 5; FORM at 5)

POLICIES

The U.S. Supreme Court has recognized the substantial discretion of the Executive Branch in regulating access to information pertaining to national security emphasizing, “no one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). As Commander in Chief, the President has the authority to control access to information bearing on national security and to determine whether an individual is sufficiently trustworthy to have access to such information.” Id. at 527. The President has authorized the Secretary of Defense or his designee to grant applicant’s eligibility for access to classified information “only upon a finding that it is clearly consistent with the national interest to do so.” Exec. Or. 10865, Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960), as amended.

Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the adjudicative guidelines. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, these guidelines are applied in conjunction with an evaluation of the whole person. An administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. An administrative judge must consider all available, reliable information about the person, past and present, favorable and unfavorable.

The Government reposes a high degree of trust and confidence in persons with access to classified information. This relationship transcends normal duty hours and endures throughout off-duty hours. Decisions include, by necessity, consideration of the possible risk the applicant may deliberately or inadvertently fail to safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation about potential, rather than actual, risk of compromise of classified information. Clearance decisions must be “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See Exec. Or. 10865 § 7. See also Executive Order 12968 (Aug. 2, 1995), § 3.1. Thus, nothing in this Decision should be construed to suggest that I have based this decision, in whole or in part, on any express or implied determination about applicant’s allegiance, loyalty, or patriotism. It is merely an indication the applicant has not met the strict guidelines the President and the Secretary of Defense have established for issuing a clearance.

Initially, the Government must establish, by substantial evidence, conditions in the personal or professional history of the applicant that may disqualify the applicant from being eligible for access to classified information. The Government has the burden of establishing controverted facts alleged in the SOR. See Egan, 484 U.S. at 531. “Substantial evidence” is “more than a scintilla but less than a preponderance.” See v. Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994). The guidelines presume a nexus or rational connection between proven conduct under any of the criteria listed therein and an applicant’s security suitability. See ISCR Case No. 95-0611 at 2 (App. Bd. May 2, 1996).

Once the Government establishes a disqualifying condition by substantial evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the facts. Directive ¶ E3.1.15. An applicant “has the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue his security clearance.” ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002). The burden of disproving a mitigating condition never shifts to the Government. See ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 2005). “[S]ecurity clearance determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531; see AG ¶ 2(b).

ANALYSIS

Upon consideration of all the facts in evidence, and after application of all appropriate legal precepts, factors, and conditions, I conclude the relevant security concerns are under Guideline F (financial considerations).

Financial Considerations

AG ¶ 18 articulates the security concern relating to financial problems:

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. AG ¶ 19 provides two disqualifying conditions that could raise a security concern and may be disqualifying in this case: “(a) inability or unwillingness to satisfy debts;” and “(c) a history of not meeting financial obligations.” In ISCR Case No. 08-12184 at 7 (App. Bd. Jan. 7, 2010), the Appeal Board explained:

It is well-settled that adverse information from a credit report can normally meet the substantial evidence standard and the government’s obligations under [Directive] ¶ E3.1.14 for pertinent allegations. At that point, the burden shifts to applicant to establish either that [he or] she is not responsible for the debt or that matters in mitigation apply.

(internal citation omitted). Applicant’s history of delinquent debt is documented in his credit reports, his OPM PSI, his responses to DOHA interrogatories, and his SOR response. Applicant’s SOR lists eight debts totaling $54,210. Some of his debts became delinquent in March 2007, when he became unemployed. The Government established the disqualifying conditions in AG ¶¶ 19(a) and 19(c), requiring additional inquiry about the possible applicability of mitigating conditions.

Five mitigating conditions under AG ¶ 20 are potentially applicable:

(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.

Applicant’s conduct in resolving his debts warrants very limited application of AG ¶¶ 20(b), 20(c), and 20(d).5 There is no evidence of financial counseling. He showed some good faith when he admitted responsibility for his SOR debts in his OPM PSI and his SOR response. Applicant’s financial situation was damaged by insufficient income, and his unemployment in March 2007, as well as his underemployment as noted in his response to DOHA interrogatories. However, Applicant’s financial circumstances have been relatively stable since early 2008, and he has not provided sufficient information about variations in his income over the last three years to fully establish any mitigating conditions.

Applicant did not establish that he acted responsibly under the circumstances. The file lacks proof that he maintained contact with all of his creditors.6 There are no receipts or account statements from creditors, establishing any payments to his SOR creditors. There is insufficient evidence that his financial problem is being resolved and is under control. The file lacks evidence that he has acted responsibly on any of his SOR debts.

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 the 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.

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. AG ¶ 2(c). I have incorporated my comments under Guideline F in my whole-person analysis. Some of the factors in AG ¶ 2(a) were addressed under Guideline F, but some warrant additional comment.

Although the rationale for reinstating Applicant’s clearance is insufficient to support a security clearance at this time, there are several factors tending to support approval of his access to classified information. Applicant is a 32-year-old computer technician, who has retained employment by the same government contractor since early 2008. He earned a bachelor’s degree with two majors. He is sufficiently mature to understand and comply with his security responsibilities. He deserves some credit for volunteering to support the U.S. Government as an employee of a contractor. There is every indication that he is loyal to the United States and his employer. There is no evidence that he abuses alcohol or uses illegal drugs. Applicant’s financial situation was damaged by unemployment in March 2007, and insufficient income to address his delinquent debts. I give Applicant substantial credit for admitting responsibility for seven of eight SOR debts in his SOR response and to the remaining SOR debt in his OPM PSI. He has been honest about his failure to address his financial plight. These factors show some responsibility, rehabilitation, and mitigation.

The whole-person factors against reinstatement of Applicant’s clearance are more substantial at this time. Applicant’s SOR lists eight delinquent debts, totaling $54,210. He said he has been making some efforts to resolve his delinquent debts, such as attempting to utilize a short sale to resolve his delinquent mortgage debt on his condominium, and attempting to establish payment plans with his other SOR creditors. Applicant’s employment has been stable since early 2008; however, on October 26, 2009, he mentioned in his response to DOHA interrogatories, “Due to the reduction of working hours, I cannot make payments on [his SOR debts] at this time. My income is not sufficient to cover the bills.” He did not provide any proof that underemployment caused him to be unable to pay his SOR debts. He did not provide his pay statements or his income tax returns. He did not provide enough information to assess his ability to address his delinquent debts. He did not provide any documentation showing attempts to establish payment plans. He did not pay the two smallest SOR debts in SOR ¶1.dfor $49 and in SOR ¶1.ffor $254. There is no evidence that the eight SOR creditors have received any payments since early 2008, when Applicant began working for his current employer. Applicant has failed to make sufficient progress resolving his delinquent SOR debts to establish his financial responsibility.

I have carefully applied the law, as set forth in Department of Navy v. Egan, 484 U.S. 518 (1988), Exec. Or. 10865, the Directive, and the AGs, to the facts and circumstances in the context of the whole person. I conclude financial considerations concerns are not mitigated. Eligibility for access to classified information is denied.

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 to 1.h: Against Applicant

CONCLUSION

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 Applicant’s eligibility for a security clearance. Eligibility for a security clearance is denied.

____________________________ MARK HARVEY Administrative Judge

FOOTNOTES

1 The DOHA transmittal letter is dated November 16, 2010, and Applicant’s receipt is dated November 22, 2010. The DOHA transmittal letter informed Applicant that he had 30 days after his receipt to submit information.

2 Some details have not been included in order to protect Applicant’s right to privacy. Specific information is available in the cited exhibits.

3 Unless stated otherwise, the information in this paragraph is from Applicant’s SOR response.

4 Unless stated otherwise, the information in this paragraph is from Applicant’s SF 86. (Item 6) 5The Appeal Board has previously explained what constitutes a “good faith” effort to repay overdue 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)).

6 “Even if Applicant’s financial difficulties initially arose, in whole or in part, due to circumstances outside his [or her] control, the Judge could still consider whether Applicant has since acted in a reasonable manner when dealing with those financial difficulties.” ISCR Case No. 05-11366 at 4 n.9 (App. Bd. Jan. 12, 2007) (citing ISCR Case No. 99-0462 at 4 (App. Bd. May 25, 2000); ISCR Case No. 99-0012 at 4 (App. Bd. Dec. 1, 1999); ISCR Case No. 03-13096 at 4 (App. Bd. Nov. 29, 2005)). A component is whether he or she maintained contact with creditors and attempted to negotiate partial payments to keep debts current.