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ISCR Case 14-05477.h1 — CASE

ISCR Case 14-05477.h1denied

Case Headnote

ISCR Case No. 14-05477.h1

deniedAug 11, 2017· Hon. Robert E. Coacher· hearing

Summary

This case involves a 46-year-old defense contractor and Army veteran whose security clearance application was denied under Guideline F (Financial Considerations). The denial stemmed from 12 unresolved delinquent debts, totaling approximately $33,057, which included charged-off and collections accounts for credit cards, consumer debts, telecommunication debts, and utility debts.

The applicant attributed his financial difficulties to his divorce and retirement. However, he failed to provide sufficient documentation of efforts to resolve these debts or to demonstrate participation in financial counseling. The judge noted the applicant's ongoing financial distress and lack of a track record of financial stability.

Ultimately, the application for a security clearance was denied due to the applicant's unresolved delinquent debts and his inability to provide adequate evidence of efforts to address these financial concerns.

Why the Applicant Was Denied

Applicant has unresolved delinquent debts totaling approximately $33,057.
Applicant failed to provide documentation of efforts to resolve his debts or financial counseling.
The applicant did not demonstrate a track record of financial stability.

Conditions Referenced

Disqualifying

F.1.araisedInability to Satisfy Debts
F.1.braisedUnwillingness to Satisfy Debts Regardless of the Ability to Do So
F.1.craisedA History of Not Meeting Financial Obligations

Key Rule Quoted

“The protection of the national security is the paramount consideration.”

Procedural Posture

SOR issuedDec 8, 2014
Answer filedDec 30, 2014Applicant elected to proceed without a hearing.
Hearing held—Decided on the written record.
Decision dateAug 11, 2017

Cite For

Denial of Security Clearance Due to Unresolved Financial Obligations
Importance of Providing Documentation to Support Claims of Financial Stability
Impact of Financial Distress 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 applicant has unresolved financial issues, including multiple delinquent debts totaling approximately $33,057, which the judge found to be against the applicant. The judge determined that the applicant failed to provide sufficient evidence to mitigate the financial concerns, leading to a denial of eligibility for a security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.d	Delinquent debts totaling approximately $33,057, comprised of charged-off and collections accounts (credit cards, consumer debts, telecommunication debts, and utility debts). $33,057	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.e	Delinquent debts totaling approximately $33,057, comprised of charged-off and collections accounts (credit cards, consumer debts, telecommunication debts, and utility debts). $33,057	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.f	Delinquent debts totaling approximately $33,057, comprised of charged-off and collections accounts (credit cards, consumer debts, telecommunication debts, and utility debts). $33,057	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.g	Delinquent debts totaling approximately $33,057, comprised of charged-off and collections accounts (credit cards, consumer debts, telecommunication debts, and utility debts). $33,057	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.h	Delinquent debts totaling approximately $33,057, comprised of charged-off and collections accounts (credit cards, consumer debts, telecommunication debts, and utility debts). $33,057	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.i	Delinquent debts totaling approximately $33,057, comprised of charged-off and collections accounts (credit cards, consumer debts, telecommunication debts, and utility debts). $33,057	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (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. 14-05477 ) ) Applicant for Security Clearance )

For Government: Richard Stevens, Esq., Department Counsel For Applicant: Pro se

08/11/2017 ______________

STATEMENT OF CASE

______________

COACHER, Robert E., Administrative Judge:

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

Statement of the Case

On December 8, 2014, the Department of Defense Consolidated Adjudications Facility (DOD CAF) issued Applicant a Statement of Reasons (SOR) detailing security concerns under Guideline F, financial considerations. The DOD CAF acted under Executive Order (EO) 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; DOD 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG).1 Applicant answered the SOR on December 30, 2014, and elected to have his case decided on the written record in lieu of a hearing. Department Counsel submitted the Government’s File of Relevant Material (FORM) on June 21, 2016. The evidence included in the FORM is identified as Items 2-8 (Item 1 includes pleadings and transmittal information). The FORM was mailed to Applicant, who received it on August 3, 2016. Applicant was given an opportunity to file objections and submit material in refutation, extenuation, or mitigation. Applicant did not file objections or submit any documentary evidence. Items 2-8 are admitted into evidence without objection. The case was assigned to me on July 5, 2017.

Procedural Issue

Department Counsel withdrew the following allegations as stated in his FORM submission: ¶¶ 1.a – 1.c, 1.k – 1.m, 1.r, and 1.t. My formal findings will reflect that those allegations were withdrawn.

FINDINGS OF FACT

Applicant admitted part of the allegations and denied other allegations in his answer to the SOR. The admissions are adopted as findings of fact. After a careful review of the pleadings and evidence, I make the following additional findings of fact.

Applicant is 46 years old. He has worked for a defense contractor since 2014. Before he was hired for his current position, he had been unemployed since June 2013. He also listed unemployment from February 2011 until January 2013. He is divorced and has five children. He pays child support for the two minor children who live with their mother. In 2011, he retired from the Army after 21 years of service with an honorable discharge in the pay grade of E-7. He deployed to Iraq on two separate occasions. He was an IT specialist in the Army. He received an associate’s degree in 2013.2

The SOR alleges 12 delinquent debts totaling approximately $33,057. The debts are comprised of charged-off and collections accounts (credit cards, consumer debts, telecommunication debts, and utility debts). These debts are supported by credit reports from March and September 2014, his statement to an investigator in March 2014, and his SOR admissions in his answer from December 2014.3

Applicant attributes his financial problems to two significant events: his divorce in 2009 and his retirement from the Army in 2011. He claims to have contracted with a debt relief company (DRC) in late 2013 to pay his delinquent debts by paying the DRC approximately $423 monthly. He failed to provide documentation showing this arrangement. He also disputed three debts, but failed to provide documentation supporting the disputes. Applicant’s debts remain unresolved.4

Applicant provided work performance appraisals for 2014 and 2015, which show that he was rated as an excellent performer. He did not provide any information about his current financial situation or a budget. Other than the debt payment program, there is no evidence of financial counseling.5

POLICIES

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines. In addition to brief introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which are 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, these guidelines are applied 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.

The protection of the national security is the paramount consideration. AG ¶ 2(b) requires that “[a]ny doubt concerning personnel being considered for national security eligibility will be resolved in favor of the national security.” In reaching this decision, I have drawn only those conclusions that are reasonable, logical, and based on the evidence contained in the record.

Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, an “applicant is responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by applicant or proven by Department Counsel, and has the ultimate burden of persuasion to obtain a favorable security decision.”

A person who seeks access to classified information enters into a fiduciary relationship with the Government predicated upon trust and confidence. This relationship transcends normal duty hours and endures throughout off-duty hours. The Government reposes a high degree of trust and confidence in individuals to whom it grants access to classified information. Decisions include, by necessity, consideration of the possible risk that an 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.

Section 7 of EO 10865 provides that 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

Guideline F, Financial Considerations

AG ¶ 18 expresses the security concern for financial considerations:

Failure 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 or sensitive information. Financial distress can also be caused or exacerbated by, and thus can be a possible indicator of, other issues of personnel security concern such as excessive gambling, mental health conditions, substance misuse, or alcohol abuse or dependence. An individual who is financially overextended is at greater risk of having to engage in illegal or otherwise questionable acts to generate funds. Affluence that cannot be explained by known sources of income is also a security concern insofar as it may result from criminal activity, including espionage.

The guideline notes several conditions that could raise security concerns. I have considered all of them under AG ¶ 19 and the following potentially apply:

(a) inability to satisfy debts;

(b) unwillingness to satisfy debts regardless of the ability to do so; and

Applicant has delinquent debts that remain unpaid or unresolved. I find the above disqualifying conditions are raised.

The guideline also includes conditions that could mitigate security concerns arising from financial difficulties. I have considered all of the mitigating conditions under AG ¶ 20 and the following potentially apply: (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, a death, divorce or separation, clear victimization by predatory lending practices, or identity theft), and the individual acted responsibly under the circumstances;

(c) the individual has received or is receiving financial counseling for the problem from a legitimate and credible source, such as a non-profit credit counseling service, and there are clear indications that the problem is being resolved or is under control;

(d) the individual initiated and is adhering to 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 debts are recent and remain unresolved. He did not provide sufficient evidence to show that his financial problems are unlikely to recur. AG ¶ 20(a) does not apply. Applicant presented some evidence that the debts were due to circumstances beyond his control (unemployment and divorce). He did not show that he took responsible action to attempt to resolve his debts. I find AG ¶ 20(b) does not apply. Other than his uncorroborated assertions that he contracted with a DRC to resolve his debts, Applicant failed to provide documentation showing any efforts to contact the creditors, set up payment plans, or make payments on the debts. There is no evidence of financial counseling from a legitimate and credible source. AG ¶¶ 20(c) and 20(d) do not apply. Applicant also failed to present documentation supporting any of his debt disputes. AG ¶ 20(e) does not apply.

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(d):

(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 guideline and the whole-person concept.

I considered the potentially disqualifying and mitigating conditions in light of all the facts and circumstances surrounding this case. I considered his honorable military service, including his combat deployments, his periods of unemployment, and his divorce. However, I also considered that Applicant failed to present documentation addressing his debt. Applicant has not established a track record of financial stability.

Overall, the record evidence leaves me with questions and doubts as to Applicant’s eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant failed to mitigate the security concerns arising under Guideline F, financial considerations.

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.c: Withdrawn Subparagraphs 1.d – 1.j: Against Applicant Subparagraphs 1.k – 1.m: Withdrawn Subparagraphs 1.n – 1.q: Against Applicant Subparagraph 1.r: Withdrawn Subparagraph 1.s: Against Applicant Subparagraph 1.t: Withdrawn

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.

_____________________________ Robert E. Coacher Administrative Judge

FOOTNOTES

1 I decided this case using the AG implemented by DOD on June 8, 2017. However, I also considered this case under the previous version of the AG implemented on September 1, 2006, and my conclusions are the same using either set of AG. 2 Items 2-3. 3 Items 1, 3, 4-5. 4 Items 1-7. 5 Items 1-7.