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ISCR Case 14-06367.h1 — CASE

ISCR Case 14-06367.h1denied

Case Headnote

ISCR Case No. 14-06367.h1

deniedMay 15, 2017· Hon. Robert J. Kilmartin· hearing

Summary

A 33-year-old federal contractor was denied a security clearance under Guideline F, Financial Considerations, due to eleven admitted delinquent debts totaling $16,824. The Statement of Reasons detailed these financial obligations, which the applicant acknowledged.

The applicant stated that some debts were being addressed through wage garnishment. However, the judge found insufficient evidence to demonstrate a comprehensive repayment plan or that the applicant's financial issues were under control. The decision highlighted the applicant's inability to satisfy financial obligations and the lack of a regular payment history or responsible debt management.

Ultimately, the judge concluded that the applicant failed to mitigate the security concerns, as the financial problems were recent and ongoing, raising questions about reliability and judgment. Consequently, the security clearance was denied.

Why the Applicant Was Denied

Applicant admitted to eleven delinquent debts totaling $16,824, indicating an inability to satisfy financial obligations.
No evidence was provided to demonstrate a regular payment history or that debts were being managed responsibly.
The applicant's financial problems were recent and ongoing, raising concerns about his reliability and judgment.

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

“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.”

Procedural Posture

SOR issuedNov 6, 2015
Answer filed—Applicant elected to have the case decided on the written record.
Hearing held—No hearing; decided on the written record.
Decision dateMay 15, 2017

Cite For

Failure to Mitigate Financial Concerns Under Guideline F
Importance of Demonstrating a Repayment Plan for Debts
Impact of Ongoing Financial Issues 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 failed to mitigate financial concerns under Guideline F, as he admitted to eleven delinquent debts totaling $16,824. The applicant's financial issues were deemed ongoing and unresolved, leading to a denial of his security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant admitted all eleven of the alleged delinquent debts in the SOR, totaling $16,824.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Applicant admitted all eleven of the alleged delinquent debts in the SOR, totaling $16,824.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	Applicant admitted all eleven of the alleged delinquent debts in the SOR, totaling $16,824.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	Applicant admitted all eleven of the alleged delinquent debts in the SOR, totaling $16,824.	Against Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	Applicant admitted all eleven of the alleged delinquent debts in the SOR, totaling $16,824.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	Applicant admitted all eleven of the alleged delinquent debts in the SOR, totaling $16,824.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	Applicant admitted all eleven of the alleged delinquent debts in the SOR, totaling $16,824.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	Applicant admitted all eleven of the alleged delinquent debts in the SOR, totaling $16,824.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i	Applicant admitted all eleven of the alleged delinquent debts in the SOR, totaling $16,824.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.j	Applicant admitted all eleven of the alleged delinquent debts in the SOR, totaling $16,824.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.k	Applicant admitted all eleven of the alleged delinquent debts in the SOR, totaling $16,824.	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. 14-06367 ) Applicant for Security Clearance )

For Government: Nicole A. Smith, Esq., Department Counsel For Applicant: Pro se 05/15/2017 ______________

STATEMENT OF CASE

______________

KILMARTIN, Robert J., Administrative Judge:

Applicant failed to mitigate the security concerns under Guideline F, financial considerations. Applicant’s eligibility for access to classified information is denied.

Statement of the Case

On November 6, 2015, the Department of Defense (DOD) issued Applicant a Statement of Reasons (SOR) detailing security concerns under Guideline F, financial considerations. The action was taken under Executive Order (EO) 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 effective within the DOD for SORs issued after September 1, 2006.

Applicant timely answered the SOR and elected to have his case decided on the written record. Department Counsel submitted the Government’s file of relevant material (FORM) on June 3, 2016. Applicant received the FORM on June 10, 2016, and had 30 days to file objections and submit material in refutation, extenuation, or mitigation. Applicant did not object to the Government’s evidence and provided no response to the FORM. The Government’s evidence, identified as items 1 through 6, is admitted into evidence without objection. The case was assigned to me on May 1, 2017.

Findings of Fact1

Applicant is 33 years old. He graduated from high school in 1999, and reports some college. He has been married since May 2013, and reports having no children. He has been employed by a federal contractor since April 2014, pending his acquisition of a security clearance. Applicant reports having no previous security clearance. Applicant disclosed some of his delinquencies involving student loans in section 26 of his May 2, 2014, Questionnaire for National Security Positions or security clearance application (SCA). Applicant’s only explanation for these delinquent debts alleged in the SOR, was that he had insufficient income to pay these debts, and his wife handled all of their family finances.

Applicant admitted all eleven of the alleged delinquent debts in the SOR, totaling $16,824. In his Answer to the SOR, Applicant stated that SOR ¶¶ 1.d – 1.i, which are all student loan debts, are currently being paid by a garnishment of 15% of his wages each month.2 He also stated that he will begin paying off the debts alleged in SOR ¶¶ 1.a, 1.b,1.c,1.j, and 1.kafter he pays off the delinquent student loan debts. Applicant has failed to establish a regular payment history through the putative garnishments or an installment plan for the delinquent student loans. He did not document that he brought his other delinquent consumer and cable provider debts current. No explanation has been offered as to how he became delinquent on these debts in the first place, except to say that he relied on his wife, and he had inadequate income. He earned approximately $22,000 a year at all relevant times, and his spouse earned $30,000 a year.3

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 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 avoided drawing 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 as to obtaining 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 as to 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

The security concern relating to the guideline 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.

This concern is broader than the possibility that an individual might knowingly compromise classified information in order to raise money. It encompasses concerns about an individual’s self-control, judgment, and other qualities essential to protecting classified information. An individual who is financially irresponsible may also be irresponsible, unconcerned, or negligent in handling and safeguarding classified information.

AG ¶ 19 provides conditions that could raise security concerns. The following apply here:

(a) inability or unwillingness to satisfy debts; and

Applicant admitted to all of the delinquent debts alleged in the SOR. These admissions are corroborated by his SCA, the Officer of Personnel Management (OPM) Personal Subject Interview of June 2014, and his credit reports. There is sufficient evidence to support the application of the above disqualifying conditions.

The guideline also includes conditions that could mitigate security concerns arising from financial difficulties. The following 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 problems were largely beyond the person’s control, 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 provide evidence of actions to resolve the issue. Applicant disclosed his student loan delinquent debts in his SCA. His wages are being garnished each month to pay down these debts. However, no garnishment order or documents have been provided to show this. He repeatedly stated the reason for his financial problems is insufficient income. This is another way of saying that he spends beyond his means. Applicant indicated that he plans to pay off the other delinquent consumer debts alleged in the SOR, once he is employed and after he pays off the student loans. However, he has produced no evidence that he reached out to these creditors, attempted to settle these debts, or entered into any installment payment plans. These debts remain unresolved. His financial problems are recent and ongoing. Applicant provided insufficient evidence to show that his financial problems are under control, and that his debts were incurred under circumstances unlikely to recur. The mitigating conditions enumerated above do 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(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 the potentially disqualifying and mitigating conditions in light of all the facts and circumstances surrounding this case. I have incorporated my comments under Guideline F in my whole-person analysis. Some of the factors in AG ¶ 2(a) were addressed under that guideline.

Applicant’s finances remain a security concern. There are ample indications that Applicant’s financial problems, including his student loans, are not under control. He has not met his burden of persuasion. The record evidence leaves me with questions and doubts as to Applicant’s suitability for a security clearance. For all these reasons, I conclude Applicant has not mitigated 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.k: 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.

_____________________________ Robert J. Kilmartin Administrative Judge

FOOTNOTES

1 Unless stated otherwise, the source of the information in this paragraph is Applicant’s May 2, 2014, Questionnaire for National Security Positions (SF 86) or Security Clearance Application (SCA). (Item 3). 2 Item 2. 3 Item 4, p. 4.