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ISCR Case 06-20725.h1 — CASE

ISCR Case 06-20725.h1denied

Case Headnote

ISCR Case No. 06-20725.h1

deniedMay 31, 2007· Hon. Robert J. Tuider· hearing

Summary

A 34-year-old executive assistant with 16 years of employment at a defense contractor was denied a security clearance under Guideline F, Financial Considerations. The denial stemmed from outstanding debts exceeding $20,000 across 18 separate obligations and a pending Chapter 7 bankruptcy filing.

The Statement of Reasons detailed that the applicant was in arrears on all 18 debts, each exceeding $20,000. Disqualifying conditions related to financial difficulties were raised, while one mitigating condition was applied.

Ultimately, the clearance was denied because the applicant had not established a budget or demonstrated a track record of financial responsibility. Although she attributed some financial difficulties to external factors, the judge noted her own admission of "bad judgment" exacerbated her financial issues.

Why the Applicant Was Denied

The applicant has outstanding debts exceeding $20,000 and is awaiting bankruptcy discharge.
She has not established a budget or a financial track record demonstrating financial responsibility.
The applicant's financial issues were exacerbated by her own admission of 'bad judgment.'

Conditions Referenced

Disqualifying

FC DC 18(a)raisedInability or Unwillingness to Satisfy Debts
FC DC 18(b)raisedA History of Not Meeting Financial Obligations

Mitigating

MC 20(b)appliedConditions That Resulted in the Financial Problem Were Largely Beyond the Person’s ControlThe applicant's financial difficulties were attributed to uncovered medical expenses and insufficient child support.

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 issuedFeb 22, 2007
Answer filedMar 21, 2007
Hearing heldMay 16, 2007
Decision dateMay 31, 2007

Cite For

Denial of Clearance Due to Unresolved Financial Issues Under Guideline F
Impact of Personal Judgment on Financial Responsibility
Consideration of External Factors in Financial Difficulties

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 had 18 delinquent debts totaling over $20,000, which she was unable to mitigate. Despite filing for Chapter 7 bankruptcy, the applicant had not established a budget or demonstrated financial responsibility, leading to a denial of her security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant is in arrears on 18 debts exceeding $20,000.00	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	(b) conditions largely beyond the person’s control; acted responsibly	—
1.b	Applicant is in arrears on 18 debts exceeding $20,000.00	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	(b) conditions largely beyond the person’s control; acted responsibly	—
1.c	Applicant is in arrears on 18 debts exceeding $20,000.00	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	(b) conditions largely beyond the person’s control; acted responsibly	—
1.d	Applicant is in arrears on 18 debts exceeding $20,000.00	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	(b) conditions largely beyond the person’s control; acted responsibly	—
1.e	Applicant is in arrears on 18 debts exceeding $20,000.00	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	(b) conditions largely beyond the person’s control; acted responsibly	—
1.f	Applicant is in arrears on 18 debts exceeding $20,000.00	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	(b) conditions largely beyond the person’s control; acted responsibly	—
1.g	Applicant is in arrears on 18 debts exceeding $20,000.00	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	(b) conditions largely beyond the person’s control; acted responsibly	—
1.h	Applicant is in arrears on 18 debts exceeding $20,000.00	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	(b) conditions largely beyond the person’s control; acted responsibly	—
1.i	Applicant is in arrears on 18 debts exceeding $20,000.00	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	(b) conditions largely beyond the person’s control; acted responsibly	—
1.j	Applicant is in arrears on 18 debts exceeding $20,000.00	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	(b) conditions largely beyond the person’s control; acted responsibly	—
1.k	Applicant is in arrears on 18 debts exceeding $20,000.00	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	(b) conditions largely beyond the person’s control; acted responsibly	—
1.l	Applicant is in arrears on 18 debts exceeding $20,000.00	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	(b) conditions largely beyond the person’s control; acted responsibly	—
1.m	Applicant is in arrears on 18 debts exceeding $20,000.00	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	(b) conditions largely beyond the person’s control; acted responsibly	—
1.n	Applicant is in arrears on 18 debts exceeding $20,000.00	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	(b) conditions largely beyond the person’s control; acted responsibly	—
1.o	Applicant is in arrears on 18 debts exceeding $20,000.00	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	(b) conditions largely beyond the person’s control; acted responsibly	—
1.p	Applicant is in arrears on 18 debts exceeding $20,000.00	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	(b) conditions largely beyond the person’s control; acted responsibly	—
1.q	Applicant is in arrears on 18 debts exceeding $20,000.00	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	(b) conditions largely beyond the person’s control; acted responsibly	—
1.r	Applicant is in arrears on 18 debts exceeding $20,000.00	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	(b) conditions largely beyond the person’s control; acted responsibly	—

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

SYNOPSIS

KEYWORD: Financial

DIGEST: Applicant is unable to mitigate financial considerations concerns that arose following the submission of her security clearance application that identified outstanding debts exceeding $20,000.00. She sought chapter 7 bankruptcy protection and is awaiting receipt of her bankruptcy discharge. She has yet to establish a budget and a financial track record establishing financial responsibility. Clearance is denied.

CASENO: 06-20725.h1

DATE: 05/31/2007

DATE: May 31, 2007

) ) In Re: ) ) ISCR Case No. 06-20725 ------------------- ) SSN: ------------ ) ) Applicant for Security Clearance )

DECISION OF ADMINISTRATIVE JUDGE ROBERT J. TUIDER

APPEARANCES

SYNOPSIS Applicant is unable to mitigate financial considerations concerns that arose following the submission of her security clearance application that identified outstanding debts exceeding $20,000.00. She sought chapter 7 bankruptcy protection and is awaiting receipt of her bankruptcy discharge. She has yet to establish a budget and a financial track record establishing financial responsibility. Clearance is denied.

STATEMENT OF CASE

The Defense Office of Hearings and Appeals (DOHA) declined to grant or continue a security clearance for Applicant. On February 22, DOHA issued a Statement of Reasons (SOR)1 detailing the basis for its decision–security concerns raised under Guideline F (Financial Considerations) of the Directive. Applicant answered the SOR in writing on March 21, 2007, and elected to have a hearing before an administrative judge.

Department Counsel indicated he was ready to proceed on April 11, 2007, and the case was assigned to me on April 13, 2007. On April 26, 2007, DOHA issued a notice of hearing scheduling the case to be heard on May 16, 2007. The case was conducted as scheduled to consider whether it is clearly consistent with the national interest to grant or continue a security clearance for Applicant.

At the hearing, the government presented six exhibits, which were marked as Government Exhibits (GE) 1 through 6, and admitted without objection. Applicant did not present any exhibits. DOHA received the transcript on May 25, 2007.

FINDINGS OF FACT

Applicant’s admissions to the SOR allegations are incorporated herein. In addition, after a thorough review of the pleadings, exhibits, and testimony, I make the following findings of fact:

Applicant is a 34-year-old executive assistant, who has been employed by a defense contractor since August 1990, accumulating over 16 years of employment with the same company. She began her employment with her company shortly after she graduated from high school in June 1990. She seeks reinstatement of her clearance, which was suspended as a result of these proceedings. Applicant is unmarried and mother of three children, a 12-year-old son, a 5-year-old daughter, and a 3-year-old son. The father of her oldest son does not currently pay child support because of their recent joint custody arrangement. The father of her daughter and youngest son pays intermittent and erratic child support. The father of her oldest child lives nearby and is involved in their daughter’s life. The father of her son and youngest daughter lives in another state and is not involved in the lives their children.

The SOR alleges Applicant is in arrears on 18 debts exceeding $20,000.00 (SOR ¶¶ 1.a. through 1.r.). Applicant recently filed for chapter 7 bankruptcy on March 15, 2007, and all of the debts alleged in the SOR are included on her Schedule F - Creditors Holding Unsecured Nonpriority Claims. Applicant’s unsecured debts listed on her Schedule F total $40,973.53. GE 6. She estimates she will be granted her discharge in July 2007. Tr. 44.

Applicant attributes her financial difficulties to lack of child support, uncovered medical expenses for her children and herself, and “bad judgment.” Tr. 45-47. She also underwent credit counseling as a requirement of filing bankruptcy. Tr. 44-45. When Applicant received her discharge, she plans to prepare a budget and attempt to rebuild her credit with the assistance of her bankruptcy attorney. Tr. 47. She has also applied for low income housing to lower her housing costs. Tr. 49.

POLICIES

The adjudicative guidelines in the Directive are not a set of inflexible rules of procedure. Instead, they are to be applied by administrative judges on a case-by-case basis with an eye toward making determinations that are clearly consistent with the interests of national security. In making overall common sense determinations, administrative judges must consider, assess, and analyze the evidence of record, both favorable and unfavorable, not only with respect to the relevant adjudicative guidelines, but in the context of factors set forth in section E 2.2.1. of the Directive. The government has the burden of proving any controverted fact(s) alleged in the SOR, and the facts must have a nexus to an applicant’s lack of security worthiness.

The adjudication process is based on the whole person concept. All available, reliable information about the person, past and present, is to be taken into account in reaching a decision as to whether a person is an acceptable security risk. Although the presence or absence of a particular condition for or against clearance is not determinative, the specific adjudicative guidelines should be followed whenever a case can be measured against this policy guidance.

BURDEN OF PROOF

As noted by the United States Supreme Court in Department of Navy v. Egan, 484 U.S. 518, 528 (1988), “no one has a ‘right’ to a security clearance.” As Commander in Chief, the President has “the authority to . . . control access to information bearing on national security and to determine whether an individual is sufficiently trustworthy to occupy a position . . . that will give that person access to such information.” Id. at 527. The President has restricted eligibility for access to classified information to “United States citizens . . . whose personal and professional history affirmatively indicates loyalty to the United States, strength of character, trustworthiness, honesty, reliability, discretion, and sound judgment, as well as freedom from conflicting allegiances and potential for coercion, and willingness and ability to abide by regulations governing the use, handling, and protection of classified information.” Executive Order 12968, Access to Classified Information § 3.1(b) (Aug. 4, 1995). Eligibility for a security clearance is predicated upon the applicant meeting the security guidelines contained in the Directive.

Initially, the government must establish, by substantial evidence, that conditions exist in the personal or professional history of the applicant which disqualify, or may disqualify, the applicant from being eligible for access to classified information. See Egan, 484 U.S. at 531. All that is required is proof of facts and circumstances which indicate an applicant is at risk for mishandling classified information, or that an applicant does not demonstrate the high degree of judgment, reliability, or trustworthiness required of persons handling classified information. Where the facts proven by the government raise doubts about an applicant's judgment, reliability or trustworthiness, then the applicant has the ultimate burden of establishing his security suitability with substantial evidence in explanation, mitigation, extenuation, or refutation, sufficient to demonstrate that despite the existence of guideline conduct, it is clearly consistent with the national interest to grant or continue his security clearance.

Security clearances are granted only when “it is clearly consistent with the national interest to do so.” See Executive Orders 10865 § 2 and 12968 § 3.1(b). “Any doubt as to whether access to classified information is clearly consistent with national security will be resolved in favor of the national security.” Directive ¶ E2.2.2 “The clearly consistent standard indicates that security clearance determinations should err, if they must, on the side of denials.” See Egan, 484 U.S. at 531. Doubts are to be resolved against the applicant.

CONCLUSION

Guideline F – Financial Considerations

Under Guideline F for financial considerations, a security concern arises by:

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.

The government established its case under Guideline F by Applicant’s admissions and evidence submitted establishing she had 18 delinquent debts exceeding $20,000.00. These facts give rise to Financial Considerations Disqualifying Condition (FC DC) 18(a) inability or unwillingness to satisfy debts; and FC DC 18(b) a history of not meeting financial obligations.

Applicant accumulated substantial debt over a lengthy period of time. Her situation was no doubt exacerbated by shortfalls in child support and uncovered medical bills. However, I have also noted Applicant’s admission that her problems were also caused by exercising “bad judgment.” This is further demonstrated by the fact her SOR identified only $20,000.00 of her unsecured debt in contrast her Schedule F, which listed unsecured debt exceeding $40,000.00.

Applicant’s situation deteriorated to the point she sought bankruptcy as her remedy. Although, she is to be commended for attempting to achieve financial stability, she has yet to demonstrate she has attained the state of financial stability required before she could be granted a clearance. Whether she will reach that state remains to be seen. Given her current unresolved situation based on the fact her bankruptcy discharge has not been granted and she has not established a budget, I have little upon which to conclude she has changed her behavior.

I have reviewed the mitigating conditions under Guideline F and viewing the facts in the light most favorable to the Applicant am able to apply MC 20(b) the conditions that resulted in the financial problem were largely beyond the person’s control (e.g., . . . unexpected medical emergency, or. . . separation.

While Applicant may be given consideration for uncovered medical expenses and insufficient child support, she is unable to overcome the “bad judgment” aspect of her conduct. Until such time as she is able to demonstrate a track record of financial responsibility over a reasonable period of time, I am unable to find for Applicant on this concern.

In reaching my decision I have applied the facts and circumstances presented in this case using the “whole person” concept as required by the Directive. I have specifically considered Applicant’s 16 years of employment with the same company and the challenges she has encountered being a single mother. Unfortunately, Applicant’s has been unable to establish she has regained control of her financial situation.

FORMAL FINDINGS

The following are my conclusions as to each allegation in the SOR:

Paragraph 1. Guideline F: AGAINST APPLICANT

Subparagraphs 1.a.-1.r.: Against Applicant

DECISION

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 or continue a security clearance for Applicant. Clearance is denied.

Robert J. Tuider Administrative Judge

FOOTNOTES

FOR GOVERNMENT Daniel F. Crowley, Esq., Department Counsel

FOR APPLICANT Pro Se Pursuant to Exec. Or. 10865, Safeguarding Classified Information within Industry (Feb. 20, 1960), as amended and modified, and Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (Jan. 2, 1992), as amended and modified. Concerning the security guidelines, this case is brought under the revised Adjudicative Guidelines for Determining Eligibility for Access to Classified Information approved by the President on December 29, 2005. The revised guidelines were then modified by the Defense Department, effective September 1, 2006. They supersede or replace the guidelines published in Enclosure 2 to the Directive and Appendix 8 to DoD Regulation 5200.2-R. They apply to all adjudications and other determinations where an SOR has been issued on September 1, 2006 or thereafter, and they apply to this case because the SOR is dated February 22, 2007. Both the Directive and the Regulation are pending formal amendment.