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ISCR Case 15-00483.h1 — CASE

ISCR Case 15-00483.h1denied

Case Headnote

ISCR Case No. 15-00483.h1

deniedJan 30, 2017· Hon. Robert J. Tuidar· hearing

Summary

A 56-year-old defense contractor was denied a security clearance under Guideline F (Financial Considerations) due to three delinquent debts totaling $28,160. These included two IRS tax liens, one from 2008 for $25,957 and another from 2011 for $1,739. Additionally, a $464 cell phone collection account was noted, though this debt has since been paid.

The denial was based on the applicant's failure to provide sufficient evidence to mitigate the financial concerns. Specifically, he did not submit documentation of payment plans or financial counseling for his IRS debts. His assertions of actively working to resolve these debts were not substantiated with evidence.

Ultimately, the applicant did not demonstrate a good-faith effort to repay his overdue creditors or resolve his financial issues, leading to the denial of his security clearance.

Why the Applicant Was Denied

The applicant failed to provide documentation of payment plans or financial counseling regarding his IRS debts.
The applicant's claims of working to resolve his debts were not substantiated with evidence.
The applicant did not demonstrate a good-faith effort to repay overdue creditors or resolve his financial issues.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(d)appliedGood-faith Effort to Repay Overdue CreditorsThe applicant provided documentation that one debt had been paid.
AG ¶ 20(a)rejectedBehavior Happened Long Ago or Infrequently
AG ¶ 20(b)rejectedConditions Beyond the Person's Control
AG ¶ 20(c)rejectedReceived Counseling for the Problem
AG ¶ 20(e)rejectedReasonable Basis to Dispute the Legitimacy of the Debt

Key Rule Quoted

“Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the adjudicative guidelines.”

Procedural Posture

SOR issuedJul 13, 2015
Answer filedOct 22, 2015Applicant elected to have the case decided on the written record.
Hearing held—No hearing; decision based on written record.
Decision dateJan 30, 2017

Cite For

Failure to Mitigate Financial Considerations Under Guideline F
Insufficient Evidence of Good-faith Efforts to Resolve Debts
Importance of Documentation in Financial Security Clearance Cases

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 significant financial concerns, including two IRS tax liens totaling $27,696 and a previously delinquent cell phone collection account that has since been paid. While the applicant was able to mitigate the concerns related to the paid cell phone debt, the judge ruled against the applicant regarding the IRS tax liens due to a lack of evidence demonstrating a good-faith effort to resolve those debts.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	IRS tax lien entered against him in 2008 in the amount of $25,957 $25,957	Against Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	IRS tax lien entered against him in 2011 in the amount of $1,739 $1,739	Against Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	$464 cell phone collection account that has since been paid $464	For Applicant	Unspecified Financial	Denied	—	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full

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. 15-00483 ) Applicant for Security Clearance )

For Government: Ross Hyams, Esq., Department Counsel For Applicant: Pro se

01/30/2017 __________

STATEMENT OF CASE

__________

TUIDER, Robert J., Administrative Judge:

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

Statement of the Case

On March 17, 2014, Applicant submitted a Questionnaire for National Security Positions (SF-86). On July 13, 2015, the Department of Defense Consolidated Adjudications Facility (DOD CAF) issued a Statement of Reasons (SOR) to Applicant, under Exec. Or. 10865, Safeguarding Classified Information within Industry, dated February 20, 1960, as amended; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (Directive), dated January 2, 1992, as amended; and the adjudicative guidelines (AG), which became effective on September 1, 2006.

The SOR alleged security concerns under Guideline F. The SOR detailed reasons why DOD CAF was unable to find that it is clearly consistent with the national interest to grant or continue a security clearance for Applicant, and referred his case to an administrative judge for a determination whether his clearance should be granted or denied.

On October 22, 2015, Applicant answered the SOR and elected to have his case decided on the written record in lieu of a hearing. A complete copy of the file of relevant material (FORM), dated December 29, 2015, was provided to him by letter dated January 8, 2016. Applicant received the FORM on February 17, 2016. He was afforded a period of 30 days to file objections and submit material in refutation, extenuation, or mitigation. Applicant timely submitted additional information within the 30-day period, which was received without objection.1 On September 13, 2016, the case was assigned to me.

FINDINGS OF FACT

Applicant admitted SOR ¶¶ 1.a and 1.b, and denied SOR ¶ 1.c, claiming that it had been paid.

Background Information2

Applicant is a 56-year-old defense contractor employee who seeks a security clearance in conjunction with his current employment. (Item 4)

Applicant graduated from high school in 1981. He received a certificate for basic corrections recruit and for first aid for criminal justice officers in 2008, received a quartermaster certificate also in 2008, and took on-line college courses from 2009 to 2010. (Items 4, 5) Applicant served in the U.S. Army from 1979 to 1988, and was honorably discharged. After he was discharged, he completed enough years to vest a military retirement in 2011 after having served in the Army Reserve, Navy Reserve, Army National Guard, and Regular Army. (Items 4, 5) Applicant has been previously married and divorced three times. He has been in a relationship since 2005. He did not list any dependents on his SF-86. (Items 4, 5)

Financial Considerations

Applicant’s SOR lists three delinquent debts totaling $28,160. The first two debts are IRS tax liens entered against him in 2008 and 2011 in the respective amounts of $25,957 and $1,739. The third debt is a $464 cell phone collection account that has since been paid. (SOR ¶¶ 1.a – 1.c; Items 1, 3 – 7, FORM response)

In Applicant’s March 2014 SF-86, he stated that he was setting up a payment plan with the IRS to repay this debt. In his October 2015 SOR answer, he reiterated that claim. Department Counsel noted in his FORM that Applicant claimed that he attached correspondence demonstrating payment plans, however, none was attached to his answer. In Applicant’s FORM response, he stated that his debt to the IRS will be paid, adding that he is currently making payment arrangements with the IRS. No corroborating documentation was attached to his FORM response. (Items 3, 4, FORM response)

In his FORM response, Applicant stated that he is working diligently to secure a top secret security clearance to secure a better paying job and clear his debts. He also stated that he is a reliable employee and as a result of being laid off “for long periods of time,” he did not have the funds to pay his debts. (FORM response) Applicant’s record evidence did little to enhance his situation. Despite Applicant’s claims to the contrary, there is no documentation of any attempt over an eight-year period to contact the IRS or otherwise resolve his IRS debt. Nor is there any record evidence that Applicant sought financial counseling.

POLICIES

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

Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the adjudicative guidelines. These guidelines 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 overarching 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.

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 the 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. 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), § 3.1. Thus, nothing in this Decision should be construed to suggest that I have based this decision, in whole or in part, on any express or implied determination about applicant’s allegiance, loyalty, or patriotism. It is merely an indication the applicant 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 therein 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 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

Financial Considerations

AG ¶ 18 articulates the security concern relating to financial problems:

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 Appeal Board explained the scope and rationale for the financial considerations security concern as follows:

This concern is broader than the possibility that an applicant might knowingly compromise classified information in order to raise money in satisfaction of his or her debts. Rather, it requires a Judge to examine the totality of an applicant’s financial history and circumstances. The Judge must consider pertinent evidence regarding the applicant’s self-control, judgment, and other qualities essential to protecting the national secrets as well as the vulnerabilities inherent in the circumstances. The Directive presumes a nexus between proven conduct under any of the Guidelines and an applicant’s security eligibility.

ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012) (citation omitted).

Applicant’s history of delinquent debt is documented in his March 2014 SF-86, May 2014 Office of Personnel Management Personal Subject Interview (OPM PSI), October 2015 SOR answer, and April 2014 and December 2014 credit reports. (Items 3–7) AG ¶ 19 provides two disqualifying conditions that could raise a security concern and may be disqualifying in this case: “(a) inability or unwillingness to satisfy debts;” and “(c) a history of not meeting financial obligations.” The record established the disqualifying conditions in AG ¶¶ 19(a) and 19(c), requiring additional inquiry about the possible applicability of mitigating conditions.

Five 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;

(d) the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts;3 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 provides evidence of actions to resolve the issue.

The Appeal Board concisely explained Applicant’s responsibility for proving the applicability of mitigating conditions as follows:

Once a concern arises regarding an Applicant’s security clearance eligibility, there is a strong presumption against the grant or maintenance of a security clearance. See Dorfmont v. Brown, 913 F. 2d 1399, 1401 (9th Cir. 1990), cert. denied, 499 U.S. 905 (1991). After the Government presents evidence raising security concerns, the burden shifts to the applicant to rebut or mitigate those concerns. See Directive ¶ E3.1.15. The standard applicable in security clearance decisions is that articulated in Egan, supra. “Any doubt concerning personnel being considered for access to classified information will be resolved in favor of the national security.” Directive, Enclosure 2 ¶ 2(b).

ISCR Case No. 10-04641 at 4 (App. Bd. Sept. 24, 2013).

Applicant’s efforts to resolve his delinquent debt do not warrant full application of any mitigating conditions to the debts alleged in SOR ¶¶ 1.a and 1.b. However, mitigating condition AG ¶ 20(d) is fully applicable to the debt in SOR ¶ 1.cbecause Applicant provided documentation that it has been paid. With regard to the remaining IRS tax liens, it is highly unlikely that Applicant has been unable to set up a payment plan with the IRS considering the first tax lien as filed in 2008 and the second in 2011. Absent documentation, his repeated claims that he has or is setting up payment plan ring hollow.

In requesting an administrative determination, Applicant chose to rely on the written record. In so doing, however, he failed to submit sufficient evidence to supplement the record with relevant and material facts regarding his circumstances, articulate his position, and mitigate the financial security concerns. He failed to offer evidence of financial counseling or provide documentation regarding his past efforts to address his delinquent debt. By failing to provide such information, and in relying on an explanation lacking sufficient detail to fully establish mitigation, financial considerations security concerns remain.

After weighing the relevant disqualifying and mitigating conditions and evaluating the evidence in light of the whole-person concept,4 I conclude Applicant did not present sufficient evidence to explain, extenuate, and mitigate the Guideline F security concern. Accordingly, Applicant has not met his ultimate burden of persuasion to show that it is clearly consistent with the national interest to grant his eligibility for access to classified information.

FORMAL FINDINGS

The formal findings on the SOR are as follows:

Paragraph 1, Guideline F: AGAINST APPLICANT

Subparagraphs 1.a – 1.b: Against Applicant Subparagraph 1.c: For Applicant

CONCLUSION

In light of all of the record as a whole, it is not clearly consistent with the national interest to grant Applicant eligibility for a security clearance. Clearance is denied.

_________________ ROBERT J. TUIDER Administrative Judge

FOOTNOTES

1 Applicant’s additional information will be referred to as FORM response.

2 The limited background information regarding Applicant was derived from the FORM and was the most current information available. 3The Appeal Board has previously explained what constitutes a “good faith” effort to repay overdue creditors or otherwise resolve debts:

In order to qualify for application of [the “good faith” mitigating condition], an applicant must present evidence showing either a good-faith effort to repay overdue creditors or some other good-faith action aimed at resolving the applicant’s debts. The Directive does not define the term “good-faith.” However, the Board has indicated that the concept of good-faith “requires a showing that a person acts in a way that shows reasonableness, prudence, honesty, and adherence to duty or obligation.” Accordingly, an applicant must do more than merely show that he or she relied on a legally available option (such as bankruptcy) in order to claim the benefit of [the “good faith” mitigating condition].

(internal citation and footnote omitted) ISCR Case No. 02-30304 at 3 (App. Bd. Apr. 20, 2004) (quoting ISCR Case No. 99-9020 at 5-6 (App. Bd. June 4, 2001)). 4 AG ¶ 2(a) (1)-(9).