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ISCR Case 14-07040.h1 — CASE

ISCR Case 14-07040.h1denied

Case Headnote

ISCR Case No. 14-07040.h1

deniedSep 8, 2016· Hon. Richard A. Cefola· hearing

Summary

A 57-year-old mechanic for a federal contractor was denied a security clearance under Guideline F, Financial Considerations, due to significant financial issues. The applicant admitted to 11 past-due debts totaling approximately $13,970. He attributed these difficulties to unforeseen long-term unemployment and stated an intention to pursue Chapter 7 bankruptcy, as debt consolidation was not feasible.

However, despite having nearly nine months to do so, the applicant failed to provide any evidence that he was pursuing bankruptcy or had taken any other action to address his outstanding debts. This lack of demonstrated effort to resolve his financial obligations was a key factor in the denial.

The decision cited the applicant's inability or unwillingness to satisfy debts and a history of not meeting financial obligations as disqualifying conditions. While the applicant's financial problems were acknowledged as stemming from circumstances largely beyond his control, specifically long-term unemployment, the judge found no mitigating conditions applicable because the applicant did not provide evidence of responsible action taken to address his delinquent debts. Consequently, the security clearance was denied.

Why the Applicant Was Denied

Applicant admitted to 11 past-due debts totaling about $13,970.
Applicant failed to provide evidence of pursuing Chapter 7 bankruptcy or addressing his debts.
The judge found no mitigating conditions applicable due to lack of evidence of responsible action regarding financial obligations.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability or Unwillingness to Satisfy Debts
AG ¶ 19(c)raisedHistory of Not Meeting Financial Obligations

Mitigating

AG ¶ 20(b)rejectedConditions Largely Beyond the Person's ControlApplicant did not provide evidence of responsible action regarding his financial difficulties.

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 issuedJun 16, 2015
Answer filedJul 13, 2015
Hearing held—Applicant represented himself.
Decision dateSep 8, 2016

Cite For

Denial of Security Clearance Due to Financial Considerations Under Guideline F
Failure to Provide Evidence of Debt Resolution as a Basis for Denial
Application of the Whole-person Concept in Evaluating Financial Responsibility

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 against the applicant on all financial allegations under Guideline F, citing a total of 11 past-due debts amounting to approximately $13,970. The applicant's claims of pursuing Chapter 7 bankruptcy were not substantiated with evidence, leading to the conclusion that the financial concerns were not mitigated.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant has 11 admitted past-due debts totaling about $13,970. $13,970	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Applicant attributed his financial difficulties to unforeseen long term unemployment.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Other
1.c	Applicant is pursuing a Chapter 7 bankruptcy to clear this debt, as debt consolidation is not feasible.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Other
1.d	Despite having nearly nine months to do so, Applicant has submitted nothing showing that he is pursuing a Chapter 7 bankruptcy.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	Applicant has not submitted any evidence that he has addressed any of his admitted past-due debts, by way of bankruptcy or by any other manner.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	The security concern relating to the guideline for Financial Considerations is set out in AG Paragraph 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.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	An individual who is financially overextended is at risk of having to engage 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.h	The guideline notes several conditions that could raise security concerns. Under Subparagraph 19(a), an inability or unwillingness to satisfy debts is potentially disqualifying.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i	Similarly under Subparagraph 19(c), a history of not meeting financial obligations may raise security concerns.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.j	These may be mitigated by Subparagraph 20(b) where the conditions that resulted in the financial problem were largely beyond the person's control (e.g., loss of employment ...), and the individual has acted responsibly under the circumstances.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.k	Although Applicant can attribute his financial difficulties to unforeseen long term unemployment, he was given an opportunity to submit documentation of responsible action on his delinquent debts in response to the FORM.	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. 14-07040 ) ) Applicant for Security Clearance )

For Government: Gregg A. Cervi, Esquire, Department Counsel For Applicant: Pro se

September 8, 2016

______________

STATEMENT OF CASE

______________

CEFOLA, Richard A., Administrative Judge:

Applicant submitted his Electronic Questionnaires for Investigations Processing (e-QIP) on June 20, 2014. On June 16, 2015, the Department of Defense (DOD) issued a Statement of Reasons (SOR) detailing the security concerns under Guideline F for Applicant. 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 Department of Defense after September 1, 2006.

Applicant answered the SOR in writing (Answer) on July 13, 2015, and requested an Administrative Determination by an administrative judge. Department Counsel issued a File of Relevant Material (FORM) on November 3, 2015. Applicant has not responded to the FORM. The case was assigned to me on April 1, 2016. Based upon a review of the pleadings and exhibits, eligibility for access to classified information is denied.

FINDINGS OF FACT

In his Answer to the SOR, Applicant admitted the factual allegations in all the Paragraphs of the SOR, with explanations.

Guideline F - Financial Considerations

Applicant is a 57 year-old “Mechanic,” who works for a “Federal Contractor.” (Item 3 at pages 5 and 11.) Listed on the SOR are 11 admitted past-due debts totaling about $13,970. In his July 2015 Answer to the SOR, Applicant attributed his financial difficulties to “unforeseen long term unemployment,” and avers he is “pursuing a Chapter 7 bankruptcy to clear this [debt], as debt consolidation is not feasible.” Despite having nearly nine months to do so, from his July 2015 Answer until the FORM’s April 2016 assignment to the undersigned, Applicant has submitted nothing showing that he is pursuing a Chapter 7 bankruptcy. These allegations are found against Applicant.

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 useful 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. (AG Paragraph 2.) The administrative judge’s over-arching adjudicative goal is a fair, impartial and commonsense decision. According to AG Paragraph 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 Paragraph 2(b) requires that “[a]ny doubt concerning personnel being considered for access to classified information will be resolved in favor of the 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 Paragraph E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive Paragraph 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 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 the Applicant may deliberately or inadvertently fail to protect or 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 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

The security concern relating to the guideline for Financial Considerations is set out in AG Paragraph 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.

The guideline notes several conditions that could raise security concerns. Under Subparagraph 19(a), an “inability or unwillingness to satisfy debts@ is potentially disqualifying. Similarly under Subparagraph 19(c), “a history of not meeting financial obligations@ may raise security concerns. These may be mitigated by Subparagraph 20(b) where “the conditions that resulted in the financial problem were largely beyond the person’s control (e.g., loss of employment . . .), and the individual has acted responsibly under the circumstances.” Although Applicant can attribute his financial difficulties to “unforeseen long term unemployment,” he was given an opportunity to submit documentation of responsible action on his delinquent debts in response to the FORM. He has not submitted any evidence that he has addressed any of his admitted past-due debts, by way of bankruptcy or by any other manner. Therefore, I can find no countervailing Mitigating Condition that is applicable here. Financial Considerations are found against Applicant.

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. Under AG Paragraph 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.

The Administrative Judge should also consider the nine adjudicative process factors listed at AG Paragraph 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.

I considered all of the evidence, including the potentially disqualifying and mitigating conditions surrounding this case. The record evidence leaves me with questions and doubts as to his eligibility and suitability for a security clearance. Applicant has failed to fully respond to the Government’s concerns; and as such, has failed to meaningfully address the alleged past-due debt. For this reason, I conclude Applicant has not mitigated the security concerns under the whole-person concept arising from his 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 eligibility for a security clearance. Eligibility for access to classified information is denied.

Richard A. Cefola Administrative Judge