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ISCR Case 14-06127.h1 — CASE

ISCR Case 14-06127.h1denied

Case Headnote

ISCR Case No. 14-06127.h1

deniedAug 9, 2016· Hon. Marc E. Curry· hearing

Summary

A 36-year-old single woman with a business administration background was denied a security clearance under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The denial stemmed primarily from unresolved financial issues that originated during a period of unemployment.

The Statement of Reasons detailed numerous financial delinquencies. The applicant owed approximately $12,000 across four specific accounts. While some debts were satisfied, including $536, $301 on June 27, 2016, and $160 on October 20, 2015, other significant obligations remained. One debt of $1,363 was settled with an agreement to pay $50 on June 23, 2016, followed by $149 monthly.

Despite these efforts, the judge found insufficient evidence that the applicant's financial problems were under control. The nature and extent of the delinquencies were deemed serious, and promises to pay contingent on future employment lacked a demonstrated repayment track record. Consequently, the security clearance application was denied.

Why the Applicant Was Denied

The applicant's financial problems were not resolved or under control despite some debt repayment efforts.
The applicant's promises to pay debts contingent on future employment lacked probative value without a demonstrated track record of repayment.
The nature and extent of the applicant's financial delinquencies were serious enough to warrant denial.

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)appliedConditions That Resulted in the Financial Problem Were Largely Beyond the Person's Control
AG ¶ 20(d)appliedIndividual Initiated a Good-faith Effort to Repay Overdue Creditors

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 issuedSep 13, 2015
Answer filedSep 22, 2015
Hearing heldJun 22, 2016
Decision dateAug 9, 2016

Cite For

Denial of Security Clearance Due to Unresolved Financial Issues Under Guideline F
Application of Mitigating Conditions Related to Financial Difficulties
Consideration of the Whole-person Concept in Security Clearance Decisions

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 E (Personal Conduct) · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The judge found that the allegations under Guideline E were withdrawn, resulting in no formal findings against the applicant for personal conduct. Consequently, the applicant's security clearance was denied based on other concerns under Guideline F.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
2.a	specific text not stated in this decision	Unknown	Unspecified Personal Conduct	—	Unknown	—	—	—

Descriptive standardized rendering of a decided public case (Guideline E). The verbatim source decision is shown in full below.

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 significant financial issues, primarily due to a lengthy period of unemployment, which resulted in approximately $53,000 of delinquent debt. While some debts were settled or in payment plans, the judge concluded that the applicant's financial problems were not sufficiently resolved or under control, leading to a denial of the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Owes approximately $12,000 on four accounts listed in SOR subparagraphs 1.a, 1.l, 1.m, and 1.q. $12,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Owes approximately $12,000 on four accounts listed in SOR subparagraphs 1.a, 1.l, 1.m, and 1.q. $12,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	Satisfied a debt of $536. $536	For Applicant	Unspecified Financial	Admitted	—	—	—
1.d	Owes approximately $12,000 on four accounts listed in SOR subparagraphs 1.a, 1.l, 1.m, and 1.q. $12,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	Owes approximately $12,000 on four accounts listed in SOR subparagraphs 1.a, 1.l, 1.m, and 1.q. $12,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	Owes approximately $12,000 on four accounts listed in SOR subparagraphs 1.a, 1.l, 1.m, and 1.q. $12,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	Satisfied a debt of $301 on 6/27/16. $301	For Applicant	Unspecified Financial	Admitted	—	—	—
1.h	Owes approximately $12,000 on four accounts listed in SOR subparagraphs 1.a, 1.l, 1.m, and 1.q. $12,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i	Owes approximately $12,000 on four accounts listed in SOR subparagraphs 1.a, 1.l, 1.m, and 1.q. $12,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.j	Owes approximately $12,000 on four accounts listed in SOR subparagraphs 1.a, 1.l, 1.m, and 1.q. $12,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.k	Owes approximately $12,000 on four accounts listed in SOR subparagraphs 1.a, 1.l, 1.m, and 1.q. $12,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.l	Owes approximately $12,000 on four accounts listed in SOR subparagraphs 1.a, 1.l, 1.m, and 1.q. $12,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.m	Owes approximately $12,000 on four accounts listed in SOR subparagraphs 1.a, 1.l, 1.m, and 1.q. $12,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.n	Satisfied a debt of $160 on 10/20/15. $160	For Applicant	Unspecified Financial	Admitted	—	—	—
1.o	Settled a debt of $1,363, agreeing to pay $50 on June 23, 2016, and $149 monthly thereafter. $1,363	For Applicant	Unspecified Financial	Admitted	—	—	—
1.p	Owes approximately $12,000 on four accounts listed in SOR subparagraphs 1.a, 1.l, 1.m, and 1.q. $12,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.q	Owes approximately $12,000 on four accounts listed in SOR subparagraphs 1.a, 1.l, 1.m, and 1.q. $12,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.r	Owes approximately $12,000 on four accounts listed in SOR subparagraphs 1.a, 1.l, 1.m, and 1.q. $12,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.s	Owes approximately $12,000 on four accounts listed in SOR subparagraphs 1.a, 1.l, 1.m, and 1.q. $12,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.t	Owes approximately $12,000 on four accounts listed in SOR subparagraphs 1.a, 1.l, 1.m, and 1.q. $12,000	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.u	Owes approximately $12,000 on four accounts listed in SOR subparagraphs 1.a, 1.l, 1.m, and 1.q. $12,000	Against Applicant	Unspecified Financial	Denied	(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. 14-06127 ) Applicant for Security Clearance )

For Government: Carroll Connelley, Esq., Department Counsel For Applicant: Pro se

08/09/2016 ______________

STATEMENT OF CASE

______________

CURRY, Marc E., Administrative Judge:

Although Applicant’s financial problems were caused by circumstances beyond her control, there is not sufficient evidence indicating that they are either resolved or under control. Clearance is denied.

Statement of the Case

On September 13, 2015, the Department of Defense Consolidated Adjudications Facility (DOD CAF) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline F, financial considerations, and Guideline E, Personal Conduct. 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) implemented by the DOD on September 1, 2006.

On September 22, 2015, Applicant answered the SOR, admitting all of the allegations in SOR Paragraph 1 except subparagraphs 1.b, 1.t, and 1.u. She did not respond to the Paragraph 2 allegations. Applicant requested a hearing, and the case was assigned to me on April 11, 2016. DOHA issued a notice of hearing on June 6, 2016, scheduling the hearing for June 22, 2016. The hearing was held as scheduled.

Department Counsel submitted five exhibits that I identified and received as Government Exhibits (GE) 1 through 4. I identified and received six exhibits that Applicant submitted (AE A - F). At the close of the hearing, I left the record open, at Applicant’s request, to allow her the opportunity to submit additional exhibits. Within the time allotted, she submitted one additional exhibit that I admitted and incorporated into the record as AE G. DOHA received the transcript (Tr.) on June 30, 2016.

FINDINGS OF FACT

Applicant is a 36-year-old single woman. She is a high school graduate who earned an associate’s degree in business administration, and she earned a college degree, in the same field, in 2012. Applicant works as a contract personnel security specialist. (Tr. 16) She has been doing this type of work since 2003. (Tr. 17-18)

In March 2012, Applicant was laid off. She remained unemployed for the next two and a half years until she obtained another job in September 2014. While unemployed, she relied upon her savings, together with unemployment compensation, and help from her mother to make ends meet. (AE 2 at 2) She was unable, however, to keep up with her bills.

By 2015, she had incurred approximately $53,000 of delinquent debt, as alleged in the SOR. Since late 2015, Applicant has been in contact with her creditors, attempting to satisfy her debts entirely or satisfy them through payment plans. Currently, she has satisfied the following:

Subparagraph Amount Date Satisfied Cite 1.c $536 unknown AE G at 9 1.g $301 6/27/16 AE G at 10 1.n $160 10/20/15 AE D

In June 2016, Applicant contacted the creditor of the debt listed in SOR subparagraph 1.o, totalling $1,363. Applicant settled this account, agreeing to pay $50 on June 23, 2016, and $149 monthly, thereafter. (AE G at 5-7) She made the first payment, as agreed. (AE G at 5)

Applicant owes a creditor approximately $12,000 on four accounts listed in SOR subparagraphs 1.a, 1.l, 1.m, and 1.q. In June 2016, she negotiated a $3,600 settlement (reduced from $4,153) for the account alleged in SOR subparagraph 1.a. Under the settlement, she agreed to repay the debt in $600 monthly increments, beginning in July 2016. (GE 11) Under another agreement with this creditor, Applicant agreed to repay one of the accounts in $150 increments, beginning in July 2016. (AE G at 12) The corresponding account that Applicant agreed to repay through this agreement is unclear from the record.

The record includes settlement offers from the creditors of the debts alleged in SOR subparagraphs 1.e and 1.h. (GE 13-14) There is no evidence of whether Applicant has accepted either offer. The remainder of the record evidence consists of nominal, miscellaneous payments to some of the other SOR creditors.

Applicant has federal and state income tax delinquencies from tax years 2013 and 2014. (Tr. 52) Her federal tax delinquency totals $9,000. She is satisfying this debt through a $135 monthly garnishment. (Tr. 51-52) Her state income tax delinquency totals $5,000. She is satisfying this debt through $152 monthly increments. (Tr. 52)

Applicant attributes her inability to make sustained debt reduction progress to her lengthy unemployment. (AE A) Although she remains unemployed, a prospective employer has extended an offer contingent on her gaining a security clearance. Applicant intends to more aggressively satisfy her debts once she begins this job. Also, once Applicant begins this job, her mother will help her satisfy her debts by lending her $20,000. (AE B) Applicant has approximately $4,000 remaining in her savings account. (AE A)

POLICIES

The adjudicative guidelines list potentially disqualifying conditions and mitigating conditions. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, they are applied together with the factors listed in the adjudicative process. 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.”

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 applicant or proven by department counsel. . . .” The applicant has the ultimate burden of persuasion for obtaining a favorable security decision.

ANALYSIS

Guideline F, Financial Considerations

Applicant’s history of financial problems triggers the application of AG ¶ 19(a), “inability or unwillingness to satisfy debts,” and AG ¶ 19(c), “a history of not meeting financial obligations.”

The following mitigating conditions under AG ¶ 20 are potentially applicable:

(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; and

(d) the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debt.

Applicant’s financial problems were caused by a lengthy period of unemployment. Through a combination of savings and unemployment compensation, she has satisfied the debts alleged in SOR subparagraphs 1.c, 1.g, and 1.n. She has settled the account listed in SOR subparagraph 1.o, and she has recently begun executing the agreement, beginning with the first payment in June 2016. These steps are sufficient to resolve these subparagraphs in her favor, and to trigger the application of AG ¶¶ 20(b) and 20(d).

Applicant contends that she will begin paying her other debts once her employer, who has made her a continency offer, hires her, and she begins work. Then, her mother will lend her $20,000, which she will use to satisfy the debt. Typically, promises to pay debt absent a demonstrated track record of debt repayment have minimal probative value. However, I am mindful of Applicant’s continuing unemployment as she awaits the outcome of her security clearance application. She deserves some credit for taking the initiative to resolve her debts, despite her unemployment. Nevertheless, in light of the amount of the delinquencies and the conditional nature of her payment plan, it is too soon to conclude that her financial problems are under control. AG ¶ 20(c) does not apply.

WHOLE PERSON CONCEPT

Under the whole-person concept, the administrative judge should consider the nine adjudicative process factors listed at AG ¶ 2(a). They are as follows: (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.

Applicant’s financial problems were caused by circumstances largely beyond her control. However, given the nature, extent, and seriousness of her financial problems, it is too soon to conclude that she has rehabilitated her finances. I conclude that Applicant has failed to carry the burden.

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.b: Against Applicant

Subparagraph 1.c: For Applicant

Subparagraphs 1.d - 1.m: Against Applicant

Subparagraphs 1.n - 1.o: For Applicant

Subparagraphs 1.p - 1.u: Against Applicant

PARAGRAPH 2, Guideline E: WITHDRAWN

Subparagraph 2.a: 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.

MARC E. CURRY Administrative Judge

FOOTNOTES

Department Counsel subsequently withdrew Paragraph 2 at hearing.