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ISCR Case 15-00706.h1 — CASE

ISCR Case 15-00706.h1denied

Case Headnote

ISCR Case No. 15-00706.h1

deniedSep 9, 2016· Hon. Gregg A. Cervi· hearing

Summary

A 38-year-old computer technician was denied a security clearance under Guideline F, Financial Considerations, due to a history of unresolved delinquent debts. The applicant faced concerns stemming from 21 delinquent debts, totaling approximately $15,000, with some obligations dating back to 2008.

The Statement of Reasons detailed a range of outstanding financial obligations, including child support, multiple phone and cable utility debts, various medical bills, several collection accounts for insurance and other debts, state and city collection accounts, renters insurance, and two judgment accounts. Disqualifying conditions under Guideline F, specifically AG ¶ 19(a) and AG ¶ 19(b), were raised.

While mitigating conditions AG ¶ 20(c) and AG ¶ 20(d) were applied, the clearance was ultimately denied. The decision cited the applicant's long history of unresolved delinquent debts, insufficient evidence of a good faith effort to resolve these financial issues, and a lack of consistent and effective financial management. These factors raised doubts about the applicant's reliability and trustworthiness.

Why the Applicant Was Denied

The applicant has a history of unresolved delinquent debts dating back to 2008.
The applicant did not provide sufficient evidence of a good faith effort to resolve his financial issues.
The applicant's financial irresponsibility raised doubts about his reliability and trustworthiness.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(c)rejectedThe Person Has Received or Is Receiving Counseling for the ProblemThe applicant did not provide evidence of specific financial counseling or continued use of a debt resolution company.
AG ¶ 20(d)rejectedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve DebtsThe applicant's efforts to resolve debts were deemed inadequate and not proven through documentary evidence.

Key Rule Quoted

“Any doubt concerning personnel being considered for access to classified information will be resolved in favor of national security.”
— AG ¶ 2(b)

Procedural Posture

SOR issuedAug 28, 2015
Answer filedSep 22, 2015
Hearing heldJun 8, 2016
Decision dateSep 9, 2016

Cite For

Denial of Security Clearance Due to Unresolved Financial Obligations
Impact of Long-standing Financial Irresponsibility on Security Clearance Eligibility
Insufficient Evidence of Good Faith Efforts to Resolve Debts Under Guideline F

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 multiple delinquent debts totaling approximately $15,000. While the applicant resolved some debts, the majority remained unpaid, leading to a decision against the applicant under Guideline F.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Child Support	For Applicant	Child Support Debt	Admitted	—	—	—
1.b	Phone Utility	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.c	Cable Utility	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.d	Phone Utility	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.e	Medical	Against Applicant	Medical Debt	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.f	Medical	Against Applicant	Medical Debt	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.g	Collection for phone utility	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.h	Medical	Against Applicant	Medical Debt	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.i	Collection for insurance debt	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.j	Collection for insurance debt	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.k	Collection account	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.l	State motor vehicle collection account	Against Applicant	Unspecified Financial	Denied	—	—	—
1.m	Medical	Against Applicant	Medical Debt	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.n	City collection	Against Applicant	Unspecified Financial	Denied	—	—	—
1.o	City collection	Against Applicant	Unspecified Financial	Denied	—	—	—
1.p	City collection	Against Applicant	Unspecified Financial	Denied	—	—	—
1.q	Medical	Against Applicant	Medical Debt	Denied	—	—	—
1.r	Renters insurance	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.s	Medical	Against Applicant	Medical Debt	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.t	County judgment	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.u	Judgment account	For Applicant	Unspecified Financial	Admitted	—	—	—

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. 15-00706 ) ) ) Applicant for Security Clearance

For Government: Charles Hale, Esq., Department Counsel For Applicant: Pro se

09/09/2016 ______________

STATEMENT OF CASE

______________

CERVI, Gregg A., Administrative Judge:

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

Statement of the Case

Applicant completed a Questionnaire for National Security Positions (SF 86)1 on February 10, 2014. On August 28, 2015, the Department of Defense Consolidated Adjudications Facility (DOD CAF) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline F, financial considerations.2 Applicant responded to the SOR on September 22, 2015, and requested a hearing before an administrative judge. The case was assigned to me on April 13, 2016. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on May 11, 2016, scheduling the hearing for June 8, 2016. The hearing was convened as scheduled. Government Exhibits (GE) 1 through 4 were admitted in evidence without objection. Applicant testified and submitted Exhibits (AE) A through C, which were admitted without objection. DOHA received the hearing transcript (Tr.) on June 16, 2016. The record was held open for Applicant to submit additional information. He submitted AE D through G, which were admitted without objection.

FINDINGS OF FACT

The SOR alleges Applicant is indebted on 21 delinquent debts totaling approximately $15,000. Applicant admitted all but six SOR allegations, and provided some explanations with his answers.

Applicant is 38 years old and is employed as a computer technician for a defense contractor since 2014. He suffered a period of unemployment between September 2013 and March 2014. He is not married and has one child of whom he took custody in August 2014 while she was in high school. She recently graduated and he has taken on the responsibility to assist her and his grandchild who resides with him. He was awarded a bachelor’s degree in 2000, and has held a security clearance since 2001.

The SOR alleges 21 delinquent debts, which range in date to 2008. Applicant’s actions with respect to the SOR allegations and the current status are noted below:

SOR ALLEGATION ACTION TAKEN CURRENT STATUS

1.a Child Support Paid (AE A and B) Resolved

1.b Phone Utility Claims disputed by debt No documented resolution resolution co. provided

1.c Cable Utility Claims payoff plan arranged No documented resolution provided

1.d Phone Utility Claims disputed with No documented resolution creditor and credit bureaus provided

1.e Medical Not paid No resolution 1.f Medical Not paid No resolution

1.g Collection for phone Claims disputed by debt No documented resolution utility resolution co. provided

1.h Medical Claims should have been No documented resolution settled via victim restitution provided fund/disputed by debt resolution co. 1.i Collection for insurance Not paid No resolution debt

1.j Collection for insurance Not paid No resolution debt

1.k Collection account Claims disputed by debt No documented resolution resolution co. provided

1.l State motor vehicle Claims paid – no record of No documented resolution collection account current debt owed provided

1.m Medical Not paid No resolution

1.n City collection Claims paid No documented resolution provided

1.o City collection Claims paid No documented resolution provided

1.p City collection Claims paid No documented resolution provided

1.q Medical Claims paid No documented resolution provided

1.r Renters insurance Not paid – intend to pay by No documented resolution July 15, 2016. provided 1.s Medical Claims should have been No documented resolution settled via victim restitution provided fund/disputed by debt resolution co. 1.t County judgment Claims should have been (AE G shows joint default settled via victim restitution judgment against App) No fund/disputed by debt final documented resolution resolution co. App claims provided to show App debt belongs to co-offender relieved of responsibility and App relieved of responsibility 1.u Judgment account Paid (AE C) Resolved

Applicant testified that he was not current on his federal and state tax returns because his accountant files them every two years, however in post-hearing submissions, Applicant asserted that 2013 and 2014 tax returns have since been filed. Additionally, he provided documentation from a credit repair company, from December 2015, showing they disputed three accounts and requested account validations on three accounts; however no evidence was submitted showing responses or final resolution of the accounts.

Applicant has approximately $200 in savings, $11,000 in a 401kretirement plan on which he is repaying a loan, and approximately $200 to $400 per month in discretionary funds remaining after paying monthly expenses.

Law and 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 to be 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, administrative judges apply the guidelines 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(a), 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.

Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, the applicant is responsible for presenting “witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by the applicant or proven by Department Counsel.” The applicant has the ultimate burden of persuasion to obtain a favorable security clearance decision.3 The Supreme Court stated that the burden of proof is less than a preponderance of the evidence.4

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.” It is well-established law that no one has a right to a security clearance. As noted by the Supreme Court in Egan, “the clearly consistent standard indicates that security clearance determinations should err, if they must, on the side of denials.” Under Egan, Executive Order 10865, and the Directive, any doubt about whether an applicant should be allowed access to classified information will be resolved in favor of protecting national security.5

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 safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation of potential, rather than actual, risk of compromise of classified information.

Section 7 of EO 10865 provides that adverse 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 for financial considerations 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.

The guideline notes several conditions that could raise security concerns under AG ¶ 19. The following are potentially applicable in this case:

(a) inability or unwillingness to satisfy debts; and

(b) a history of not meeting financial obligations.

Applicant incurred long-standing delinquent debts which have largely gone unresolved. The evidence is sufficient to raise the above disqualifying conditions.

Conditions that could mitigate the financial considerations security concerns are provided under AG ¶ 20. The following 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.

Applicant allowed his debts to remain unresolved for many years before they became a security concern. Although he suffered a period of unemployment from September 2013 to March 2014, he has been steadily employed since and his delinquent debts date to 2008. He has taken some action toward challenging some collection accounts and paid two others. He has not shown a good faith effort to resolve the remaining debts or to establish that he is not responsible for certain debts. He has not established a financial track record to show similar issues are unlikely to recur. His financial issues have been longstanding and remain recent and ongoing. Although he has shown that he used a debt resolution company in 2015, no evidence of specific financial counseling or continued use of the company to resolve debts has been provided. Mitigating conditions ¶¶ 20(c) and (d) partially apply, but Applicant’s efforts have not been proven through documentary evidence of follow-up action. His overall financial irresponsibility and unwillingness to comply with rules and regulations remain a concern, and his actions cast doubt on his current reliability, trustworthiness, and good judgment. He has exhibited a long-term laissez faire attitude toward his financial responsibilities and showed little effort to resolve the debts until they became a security clearance issue. His efforts so far have been inadequate to demonstrate that his financial circumstances are under control or that he is willing and able to meet his financial obligations, past and future.

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 relevant 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 guidelines and the whole-person concept. I considered all of the potentially disqualifying and mitigating conditions in light of all the evidence in favor of and against Applicant, and the facts and circumstances surrounding this case. I have incorporated my findings of fact and comments under Guideline F in this whole-person analysis.

Applicant has proven that two debts have been resolved. Although he claims to have made progress on others or asserted disputes, he did not follow through with evidence of payments or successful disputes. Overall, the record leaves me with questions and doubts as to Applicant’s eligibility and suitability for a security clearance.

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

Subparagraph 1.a: For Applicant Subparagraph 1.b – t: Against Applicant

Subparagraph 1.u: For 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.

________________________ Gregg A. Cervi Administrative Judge

FOOTNOTES

1 Also known as a Security Clearance Application (SCA).

2 The action was taken under Executive Order 10865, Safeguarding Classified Information Within Industry (February 20, 1960), as amended; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (Directive) (January 2, 1992), as amended; and the Adjudicative Guidelines for Determining Eligibility for Access to Classified Information (AG), implemented by the DOD on September 1, 2006. 3 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).

4 Department of Navy v. Egan, 484 U.S. 518, 531 (1988) (“it should be obvious that no one has a ‘right’ to a security clearance”); Duane v. DOD, 275 F.3d 988, 994 (10th Cir. 2002) (no right to a security clearance). 5 Egan, 484 U.S. at 531.