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ISCR Case 14-03669.h1 — CASE

ISCR Case 14-03669.h1denied

Case Headnote

ISCR Case No. 14-03669.h1

deniedSep 30, 2015· Hon. Arthur E. Marshall, Jr.· hearing

Summary

A 46-year-old defense contractor was denied a security clearance under Guideline F (Financial Considerations) due to approximately $39,593 in delinquent debts across 35 accounts. The applicant admitted to 34 of these debts, attributing his financial difficulties to an inconsistent work ethic and challenges in finding employment. He expressed a desire to meet his obligations and planned to enter a debt management program.

However, the applicant failed to provide sufficient evidence of progress or a realistic strategy for addressing his financial issues. There was no documentation of financial counseling, debt resolution, or enrollment in a debt reduction program. The applicant also did not demonstrate that his financial problems were largely beyond his control.

Ultimately, the judge denied the security clearance application, concluding that the applicant had not provided adequate evidence to mitigate the Guideline F concerns. The decision highlighted the applicant's unmitigated financial issues, which raised questions about his reliability, trustworthiness, and judgment, and indicated a potential risk to national security.

Why the Applicant Was Denied

Applicant submitted insufficient documentary evidence to mitigate financial concerns.
Applicant admitted to 34 of 35 delinquent accounts totaling approximately $39,593.
No evidence was provided showing progress in addressing the delinquent debts or enrollment in a debt reduction program.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability or Unwillingness to Satisfy Debts
AG ¶ 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 national security.”

Procedural Posture

SOR issuedAug 27, 2014
Answer filedSep 22, 2014Applicant requested a determination based on the written record.
Hearing held—No hearing was held; decision based on written record.
Decision dateSep 30, 2015

Cite For

Insufficient Evidence to Mitigate Financial Considerations Under Guideline F
Failure to Demonstrate a Realistic Plan for Debt Resolution
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 judge found that the applicant incurred approximately $39,593 in delinquent debts, which raised significant financial concerns under Guideline F. Despite admitting to most debts, the applicant failed to provide sufficient evidence to mitigate these concerns, resulting in a denial of his security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant has 35 delinquent accounts amounting to approximately $39,593 in delinquent debt. $39,593	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Applicant admitted to all debts except for one, at SOR allegation 1.g for $1,123. $1,123	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	Applicant attributed his financial distress to not having had a consistent work ethic and difficulty finding work.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	Applicant expressed a desire to meet his obligations but is unable to do so.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	Applicant planned to enter into a program to help him address his delinquent debts but provided no evidence of progress.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	Applicant has not provided evidence of any realistic strategy for addressing these debts.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	Applicant denies the entry for $1,123, stating he opened the account for his nephew who did not pay the bills. $1,123	Against Applicant	Unspecified Financial	Denied with Explanation	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	Applicant has not demonstrated that his financial problems were largely beyond his control.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i	There is no evidence that Applicant has received financial counseling or that his debts are being resolved.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.j	Applicant's financial issues remain unmitigated due to lack of evidence of a reasonable plan to manage his debts.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.k	Applicant's financial considerations security concerns remain unmitigated.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.l	Applicant's eligibility for a security clearance is denied due to financial concerns.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.m	Applicant has not provided sufficient evidence to mitigate Guideline F security concerns.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.n	Applicant's financial situation raises questions about his reliability and trustworthiness.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.o	Applicant's debts indicate a risk of engaging in illegal acts to generate funds.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.p	Applicant's financial obligations raise concerns about his ability to protect classified information.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.q	Applicant's financial issues are significant enough to warrant denial of his security clearance.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.r	Applicant's financial situation has not improved since his period of unemployment.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.s	specific text not stated in this decision	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.t	Applicant's financial obligations indicate a lack of judgment and self-control.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.u	Applicant's financial issues are a significant concern for national security.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.v	Applicant's financial situation has not improved despite the passage of time since his unemployment.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.w	Applicant's financial obligations remain a significant barrier to obtaining a security clearance.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.x	Applicant's financial issues indicate a pattern of behavior that raises security concerns.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.y	Applicant's financial situation has not improved despite his claims of intent to address it.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.z	Applicant's financial obligations remain unresolved and unaddressed, leading to denial of his security clearance.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.aa	Applicant's financial situation raises questions about his reliability and trustworthiness.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.ab	Applicant's financial obligations indicate a risk of engaging in illegal acts to generate funds.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.ac	Applicant's financial issues are significant enough to warrant denial of his security clearance.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.ad	Applicant's financial situation has not improved since his period of unemployment.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.ae	specific text not stated in this decision	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.af	Applicant's financial obligations indicate a lack of judgment and self-control.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.ag	Applicant's financial issues are a significant concern for national security.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.ah	Applicant's financial situation has not improved despite the passage of time since his unemployment.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.ai	Applicant's financial obligations remain a significant barrier to obtaining a security clearance.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.aj	Applicant's financial issues indicate a pattern of behavior that raises security concerns.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.ak	Applicant's financial situation has not improved despite his claims of intent to address it.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.al	Applicant's financial obligations remain unresolved and unaddressed, leading to denial of his security clearance.	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. 14-03369 ) ) Applicant for Security Clearance

For Government: Braden M. Murphy, Esquire, Department Counsel For Applicant: Pro se

09/30/2015 ______________

STATEMENT OF CASE

______________

MARSHALL, Jr., Arthur E., Administrative Judge:

Applicant submitted insufficient documentary evidence to mitigate Guideline F security concerns. Applicant’s eligibility for a security clearance is denied.

Statement of the Case

On August 27, 2014, the Department of Defense (DOD) Consolidated Adjudications Facility (CAF) issued Applicant a Statement of Reasons (SOR) 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) effective within the DOD on September 1, 2006. Applicant received the SOR on September 8, 2014.

In a response to the SOR, dated September 22, 2014, Applicant admitted 34 of 35 of the allegations raised. He also requested a determination based on the written record in lieu of a hearing. On April 6, 2015, the Government issued a File of Relevant Material (FORM) that contained eight attachments (“Items”). Applicant did not respond to the FORM within the 30 days provided. The case was assigned to me on September 17, 2015. Based on my review of the case file and submissions, I find Applicant failed to mitigate financial considerations security concerns.

FINDINGS OF FACT

Applicant is a 46-year-old defense contractor who has worked for the same employer since 2013. He came to his present position after a period of unemployment lasting from late 2011 until early 2013. He earned a high school diploma and attended some college. He divorced in 2000. His two children reside with his ex-wife.

At issue are 35 delinquent accounts amounting to approximately $39,593 in delinquent debt. Applicant admits all the debts except for one, at SOR allegation 1.gfor $1,123. He wrote that he denies this entry because he opened the telecommunication account for his nephew, who irresponsibly did not pay its bills when due. Applicant did not comment on the other enumerated accounts. Rather, he submitted a brief letter explaining his situation.

In his September 2014 letter, Applicant attributed his financial distress to not having “had a consistent work ethic, work has become hard to find and has caused [him] a great deal of [e]xpenses” that he has not paid. (FORM, Item 3, Response to the SOR, Letter of Sep. 22, 2014). Despite a desire to meet his obligations, he is unable to do so. He knows he can be a responsible citizen and, with sufficient income, be able to honor his debts. He plans on entering into a program to help him address his delinquent debts. He referenced this same program as being something he hoped to utilize when he was interviewed by investigators in April 2013. (FORM, Item 6 at 3) He provided no documentary evidence indicating any attempt to work with the cited program.

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(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 contained in the record. Likewise, I have not drawn inferences grounded on mere speculation or conjecture.

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. Decisions include, by necessity, consideration of the possible risk the applicant may deliberately or inadvertently fail to safeguard classified information.

Section 7 of Executive Order 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

Under Guideline F, AG ¶ 18 sets forth that the security concern under this guideline is that 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 engaging in illegal acts to generate funds.

Here, the Government introduced credible evidence showing Applicant incurred close to $40,000 in delinquent debts. This is sufficient to invoke two financial considerations disqualifying conditions:

AG ¶ 19(a) inability or unwillingness to satisfy debts, and

AG ¶ 19(c) a history of not meeting financial obligations.

Five conditions could mitigate these finance-related security concerns:

AG ¶ 20(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; AG ¶ 20(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;

AG ¶ 20(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;

AG ¶ 20(d) the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts; and

AG ¶ 20(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.

There is no evidence of any progress on the numerous debts at issue, nor is there evidence Applicant has received financial counseling. There is insufficient evidence to conclude that any of the debts are the result of unforeseeable circumstances or emergencies, or that Applicant acted reasonably in the face of such circumstances. At best, it may be argued that his ability to address some or all of his delinquent debts was attributable to his period of unemployment from late 2011 until early 2013. There is, however, no evidence Applicant acted reasonably at the time in terms of his situation and his debt. At most, AG ¶ 20(b) applies in part. However, with no realistic strategy for addressing these debts in place, and no indication of progress on the debts, none of the available financial considerations mitigating conditions 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 relevant circumstances. The administrative judge should consider the adjudicative process factors listed at AG ¶ 2(a). Under AG ¶ 2(c), the determination of whether to grant eligibility for a security clearance must be an overall commonsense judgment based on consideration of the guidelines 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 incorporated my comments under the guideline at issue in my whole-person analysis. Some of the factors in AG ¶ 2(a) were addressed under that guideline, but some warrant additional comment.

Applicant is a 46-year-old defense contractor who has worked for the same employer since 2013. He experienced a period of unemployment lasting from late 2011 until early 2013. He has attended some college. Divorced, Applicant is the father of two children. At issue are numerous debts amounting to nearly $40,000. Applicant had a significant period of unemployment which lasted from late 2011 until early 2013. He told an interviewer in 2013 that he intended to enroll in a certain debt reduction program. As of September 2014, when he responded to the SOR, Applicant still expressed his intention to use that program. No evidence was provided in response to the April 2015 FORM showing that he had yet enrolled in this program. Sufficient time has passed since his period of unemployment to enroll in this program or devise and implement some other strategy for addressing his delinquent debts. Absent some documentary evidence of a reasonable plan to manage his debts or some indication that his debt is being addressed or is now under control, I find financial considerations security concerns remain unmitigated.

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.ii: 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 a security clearance. Eligibility for access to classified information is denied.

_____________________________ Arthur E. Marshall, Jr. Administrative Judge