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ISCR Case 14-04045.h1 — CASE

ISCR Case 14-04045.h1denied

Case Headnote

ISCR Case No. 14-04045.h1

deniedAug 27, 2015· Hon. James F. Duffy· hearing

Summary

A 45-year-old defense contractor employee was denied a security clearance under Guideline F (Financial Considerations) due to 12 delinquent debts totaling $62,580. The Statement of Reasons detailed several financial concerns, including past-due tax debts totaling approximately $11,226, a $21,532 delinquent second mortgage on a foreclosed home, and consumer debts totaling $29,822. These issues raised disqualifying conditions under Adjudicative Guidelines Paragraphs 19(a) and 19(c).

The applicant admitted to most of the debts, attributing his financial difficulties to personal circumstances. However, the judge found that he failed to provide sufficient evidence of debt resolution or participation in financial counseling.

Ultimately, the clearance was denied because the applicant's 12 delinquent debts demonstrated an inability to satisfy his financial obligations. His ongoing financial problems, coupled with the lack of a repayment plan or financial counseling, raised significant doubts about his reliability and trustworthiness.

Why the Applicant Was Denied

The applicant had 12 delinquent debts totaling $62,580, indicating an inability to satisfy debts.
He failed to provide evidence of a repayment plan or financial counseling.
His financial problems were ongoing and raised doubts about his reliability and trustworthiness.

Conditions Referenced

Disqualifying

AG ¶ 19(a)appliedInability or Unwillingness to Satisfy Debts
AG ¶ 19(c)appliedA History of Not Meeting Financial Obligations

Key Rule Quoted

“Doubts about granting Applicant’s eligibility for a security clearance must be resolved in favor of national security.”
— Department of the Navy v. Egan, 484 U.S. 518 (1988)

Procedural Posture

SOR issuedOct 17, 2014
Answer filedDec 30, 2014Applicant elected to decide on the written record.
Hearing held—No hearing; case decided on written record.
Decision dateAug 27, 2015

Cite For

Failure to Mitigate Financial Considerations Under Guideline F
Impact of Ongoing Financial Problems on Security Clearance Eligibility
Importance of Providing Evidence of Financial Resolution Efforts

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 faced significant financial concerns under Guideline F, with 12 delinquent debts totaling $62,580. The judge found that the applicant failed to mitigate these concerns, resulting in a denial of the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	past-due tax debts totaling about $11,226 $11,226	Against Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	past-due tax debts totaling about $11,226 $11,226	Against Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	past-due tax debts totaling about $11,226 $11,226	Against Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	$21,532 delinquent second mortgage on a foreclosed home $21,532	Against Applicant	Mortgage or Home Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	consumer debts totaling $29,822 $29,822	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	consumer debts totaling $29,822 $29,822	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	consumer debts totaling $29,822 $29,822	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	consumer debts totaling $29,822 $29,822	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i–1.l	4 sub-charges — specific text not stated in this decision (against the applicant).	Against Applicant			—	—	—

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. 14-04045 ) Applicant for Security Clearance )

For Government Julie R. Mendez, Esq., Department Counsel For Applicant: Pro se

08/27/2015 __________

STATEMENT OF CASE

__________

DUFFY, James F., Administrative Judge:

Applicant failed to mitigate the security concerns under Guideline F (financial considerations). Clearance is denied.

Statement of the Case

On January 21, 2013, Applicant submitted an Electronic Questionnaire for Investigations Processing (e-QIP). Based on a review of Applicant’s e-QIP and the ensuing investigation, Department of Defense (DOD) adjudicators issued Applicant a Statement of Reasons (SOR) on October 17, 2014, pursuant to Executive Order 10865, Safeguarding Classified Information Within Industry, dated February 20, 1960, as amended; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program, dated January 2, 1992, as amended (Directive); and the adjudicative guidelines (AG) implemented on September 1, 2006. The SOR alleged security concerns under the financial considerations guideline.

On December 30, 2014, Applicant answered the SOR and elected to have his case decided on the written record in lieu of a hearing. On March 18, 2015, Department Counsel prepared a File of Relevant Material (FORM) that contained documents marked as Items 1 through 5. On April 28, 2015, Applicant received a copy of the FORM and was given 30 days from its receipt to submit objections and supply additional information. Applicant did not submit a response to the FORM. The case was assigned to me on August 12, 2015.

FINDINGS OF FACT

Applicant is a 45-year-old employee of a defense contractor. He has been working for that contractor since February 2000. He graduated from high school in June 1987. He reported no military service. He has never been married, but lives with a cohabitant. He has two children, ages 6 and 16. He has held a security clearance for about 15 years.1

The SOR alleged that Applicant had 12 delinquent debts totaling $62,580 (SOR ¶¶ 1.a-1.l). In his Answer to the SOR, Applicant admitted all of the allegations with the exception of SOR ¶ 1.i ($2,363 debt). His admissions are incorporated as findings of fact. A credit report (Item 3) established the debt in SOR ¶ 1.i.2

Applicant attributed his financial problems to an irresponsible girlfriend and to making poor financial decisions. However, he provided scant information about those circumstances. He also indicated that he had a serious medical condition that caused him to miss work for three months.3

SOR ¶¶ 1.a through 1.care past-due tax debts totaling about $11,226. Applicant claimed that he has a repayment plan for those past-due taxes, but provided no proof of the plan or the associated payments. SOR ¶ 1.dis a $21,532 delinquent second mortgage on a foreclosed home. No evidence was presented to establish the mortgage debt was being resolved. SOR ¶¶ 1.e through 1.lare consumer debts, totaling $29,822. In his Answer to the SOR, Applicant indicated that he was unable to pay the consumer debts.4

Applicant has worked for a fire department and in security positions for 28 years. He indicated that he never had any disciplinary problems. He did not provide a monthly budget or evidence that he received financial counseling. It is unknown whether he has any discretionary income remaining each month after payment of his expenses.5

POLICIES

The President of the United States 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. Department of the Navy v. Egan, 484 U.S. 518, 527 (1988). The President has authorized the Secretary of Defense to grant 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. The U.S. Supreme Court has recognized the substantial discretion of the Executive Branch in regulating access to information pertaining to national security, emphasizing that “no one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988).

Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the adjudicative guidelines. These AGs 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 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, in reaching a decision.

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 that the applicant may deliberately or inadvertently fail to safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation of 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), Section 3. Thus, a clearance decision is merely an indication that the applicant has or 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 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 or her] 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

Guideline F, Financial Considerations

The security concern under this guideline 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.

Applicant’s admissions and the record evidence established two disqualifying conditions in AG ¶ 19:

(a) inability or unwillingness to satisfy debts; and

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

None of the mitigating conditions are fully established. His delinquent debts are ongoing. While Applicant encountered recent medical problems that caused him to miss work for three months, he failed to present sufficient evidence to establish that his financial problems were incurred due to conditions beyond his control and that he acted responsibly under the circumstances. From the record evidence, I am unable to find that Applicant’s financial problems are being resolved and are unlikely to recur. No evidence was presented that he received financial counseling. His financial problems continue to cast doubt on his current reliability, trustworthiness, and good judgment.

WHOLE PERSON CONCEPT

In the adjudication process, an administrative judge must carefully weigh a number of variables known as the whole-person concept. Available information about the applicant as well as the factors listed in AG ¶ 2(a) should be considered in reaching a determination. In this case, I gave due consideration to the information about Applicant in the record and concluded the favorable information does not outweigh the security concerns at issue. Applicant failed to meet his burden of persuasion. His financial problems create doubts about his current eligibility to access classified information. Following the Egan decision and the “clearly consistent with the national interest” standard, doubts about granting Applicant’s eligibility for a security clearance must be resolved in favor of national security.

FORMAL FINDINGS

Formal findings as required by Section E3.1.25 of Enclosure 3 of the Directive are:

Paragraph 1, Guideline F: Against Applicant

Subparagraphs 1.a – 1.l: Against Applicant

DECISION

In light of all 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. Clearance is denied.

________________ James F. Duffy Administrative Judge

FOOTNOTES

1 Items 1, 2. 2 Item 1. 3 Item 1. 4 Items 1-5. 5 Items 1-5.