CASEClearance Adjudication Search EngineCASE

Loading case…

ISCR Case 15-00462.h1 — CASE

ISCR Case 15-00462.h1denied

Case Headnote

ISCR Case No. 15-00462.h1

deniedFeb 16, 2017· Hon. Robert E. Coacher· hearing

Summary

A 45-year-old defense contractor was denied a security clearance under Guideline F (Financial Considerations) due to significant unresolved financial issues totaling approximately $411,740. The Statement of Reasons detailed several specific allegations, including a delinquent mortgage of $385,332, a charged-off boat loan for $26,044, and two tax liens for $183 and $181 respectively.

The denial was based on the applicant's admission to these debts without providing any evidence of efforts to resolve them. Specifically, no information was presented to show contact with creditors, establishment of payment plans, or details about the applicant's current financial status.

Furthermore, the applicant did not seek financial counseling to address the outstanding obligations. Consequently, the security clearance was denied due to the unresolved delinquent debts and the lack of demonstrated mitigation efforts.

Why the Applicant Was Denied

The applicant has unresolved delinquent debts totaling approximately $411,740.
No evidence was presented showing efforts to contact creditors or establish payment plans.
The applicant did not provide information about current financial status or seek financial counseling.

Conditions Referenced

Disqualifying

F.1.araisedInability or Unwillingness to Satisfy Debts
F.1.craisedA History of Not Meeting Financial Obligations

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 issuedOct 14, 2015
Answer filedNov 8, 2015Applicant elected to have the case decided on the written record.
Hearing held—No hearing; decision made on the written record.
Decision dateFeb 16, 2017

Cite For

Failure to Mitigate Financial Considerations Under Guideline F
Significant Unresolved Debts as a Basis for Denial
Lack of Evidence for Financial Stability and 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 that the applicant had unresolved financial issues, including a delinquent mortgage, a charged-off boat loan, and two tax liens. The applicant did not provide sufficient evidence to mitigate the financial concerns, leading to a decision against the applicant under Guideline F.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	delinquent mortgage $385,332 $385,332	Against Applicant	Mortgage or Home Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	charged-off boat loan $26,044 $26,044	Against Applicant	Personal Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	tax liens for $183 $183	Against Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	tax liens for $181 $181	Against Applicant	Tax Unpaid	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. 15-00462 ) ) Applicant for Security Clearance )

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

02/16/2017 ______________

STATEMENT OF CASE

______________

COACHER, Robert E., Administrative Judge:

Applicant has not mitigated the financial considerations security concerns. Eligibility for access to classified information is denied.

Statement of the Case

On October 14, 2015, the Department of Defense Consolidated Adjudications Facility (DOD CAF) issued Applicant a Statement of Reasons (SOR) detailing security concerns under Guideline F, financial considerations. The DOD CAF acted under Executive Order (EO) 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; DOD 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG).

Applicant answered the SOR on November 8, 2015, and elected to have his case decided on the written record in lieu of a hearing. Department Counsel submitted the Government’s File of Relevant Material (FORM) on February 2, 2016. The evidence included in the FORM is identified as Items 3-6 (Items 1-2 include pleadings and transmittal information). The FORM was mailed to Applicant, who received it on February 17, 2016. Applicant was given an opportunity to file objections and submit material in refutation, extenuation, or mitigation. Applicant did not submit additional evidence, nor object to the Government’s evidence. Items 3-6 are admitted into evidence without objection. The case was assigned to me on January 27, 2017.

FINDINGS OF FACT

In Applicant’s answer to the SOR, he admitted all the allegations. The admissions are adopted as findings of fact. After a careful review of the pleadings and evidence, I make the following additional findings of fact.

Applicant is 45 years old. According to his July 2012 security clearance application, he is single. In his answer to the SOR, he stated he was having a baby in November 2015. There is no further family information in the record. He has worked for a defense contractor since February 2010. He holds a bachelor’s degree.1

The SOR lists four delinquent debts totaling approximately $411,740. The debts include a delinquent mortgage account, a charged-off account for a boat loan, and two tax liens against the boat. The debts are supported by credit reports from December 2014 and July 2012, Applicant’s statement to a defense investigator in August 2012, and by Applicant’s SOR admissions.2

Applicant offers no explanation for his debts except for the charged-off boat loan. He stated he obtained the loan with a friend to purchase the boat. When the friend could not make his half of the payments the loan went into delinquency. Applicant and his friend agreed to a voluntary repossession of the boat. Applicant has not made any arrangements to pay the delinquent balance. During his statement to a defense investigator in August 2012, he committed to contacting the creditor identified and setting up a payment plan. No evidence was presented that he made contact with the creditor.3 The status of the debts is as follows:

SOR ¶ 1.a (delinquent mortgage $385,332):

Applicant’s December 2014 credit report shows a balance owed of $385,332 on this mortgage and a past-due amount of $113,354. The date of last activity was November 2011. This debt is unresolved.4

SOR ¶ 1.b (charged-off boat loan $26,044):

Applicant’s December 2014 credit report shows a balance of $26,044 on this loan. The date of last activity was February 2009. This debt is unresolved.5

SOR ¶¶ 1.cand 1.d (tax liens for $183 and $181):

Applicant admitted these liens were from taxes he owed on his repossessed boat. He has never contacted the taxing authority to pay or settle the debts. In August 2012, he stated to a defense investigator that he intended to set up a payment plan or pay the debts within a month. There is no evidence of payment, a payment plan, or settlement. These debts are unresolved.6

Applicant did not provide any information about his current financial status or a budget. There is no evidence that he sought financial counseling.7

POLICIES

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines. 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.

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 to obtain 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 about 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

AG ¶ 18 expresses the security concern for financial considerations:

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. I have considered all of them under AG ¶ 19 and the following two potentially apply: (a) inability or unwillingness to satisfy debts; and

Applicant has delinquent debts that remain unpaid or unresolved. I find both disqualifying conditions are raised.

The guideline also includes conditions that could mitigate security concerns arising from financial difficulties. I have considered all of the mitigating conditions under AG ¶ 20 and the following four potentially apply:

(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.

Applicant’s debts are recent and remain unresolved. He did not provide sufficient evidence to show that his financial problems are unlikely to recur. AG ¶ 20(a) does not apply. Applicant presented no evidence that the debts were due to circumstances beyond his control. I find AG ¶ 20(b) does not apply. He showed no efforts to contact the creditors, set up payment plans, or make payments on the debts. There is no evidence of financial counseling. AG ¶ 20(c) does not apply. AG ¶ 20(d) does 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 guideline 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 considered his contractor service. Applicant has not established a track record of financial stability.

Overall, the record evidence leaves me with questions and doubts as to Applicant’s eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant failed to mitigate 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.d: 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.

_____________________________ Robert E. Coacher Administrative Judge

FOOTNOTES

1 Item 3. 2 Items 2, 4-6. 3 Items 2, 3, 6. 4 Item 4. 5 Items 4-5. 6 Items 4-6. 7 Items 2-6.