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ISCR Case 15-01622.h1 — CASE

ISCR Case 15-01622.h1denied

Case Headnote

ISCR Case No. 15-01622.h1

deniedSep 15, 2016· Hon. John Grattan Metz, Jr.· hearing

Summary

A 63-year-old senior engineer technician, employed by a U.S. defense contractor, was denied retention of his security clearance under Guideline F (Financial Considerations). The Statement of Reasons alleged that the applicant filed a Chapter 13 bankruptcy petition in March 2014, which remained undischarged, and owed over $70,000 in education loans. These issues raised disqualifying conditions F.19(a) and F.19(c).

While mitigating conditions F.20(a), F.20(b), F.20(c), and F.20(d) were considered, the judge ultimately denied the application. The denial was based on the applicant's ongoing and unresolved history of financial difficulties. He failed to provide evidence of making required payments under his wage earner plan, document any credit or financial counseling, or offer character references. The judge concluded there was insufficient evidence to demonstrate responsible management of his debts.

Why the Applicant Was Denied

Applicant has a history of financial difficulties that are ongoing and unresolved.
He provided no evidence of making required payments under his wage earner plan.
Applicant failed to document any credit or financial counseling or provide character references.

Conditions Referenced

Disqualifying

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

Mitigating

F.20(a)rejectedThe Behavior Happened so Long Ago, Was so Infrequent, or Occurred Under Such Circumstances That It Is Unlikely to Recur
F.20(b)rejectedThe Conditions That Resulted in the Financial Problem Were Largely Beyond the Person’s Control
F.20(c)rejectedThe Person Has Received or Is Receiving Counseling for the Problem and There Are Clear Indications That the Problem Is Being Resolved or Is Under Control
F.20(d)rejectedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts

Key Rule Quoted

“The Government has a compelling interest in ensuring each applicant possesses the requisite judgement, reliability, and trustworthiness of those who must protect national interests as their own.”
— Department of the Navy v. Egan, 484 U.S. 518 (1988)

Procedural Posture

SOR issuedAug 26, 2015
Answer filed—Applicant requested a decision without hearing.
Hearing held—No hearing was conducted.
Decision dateSep 15, 2016

Cite For

Ongoing Financial Difficulties Under Guideline F
Failure to Provide Evidence of Debt Management
Lack of Documentation for Financial Counseling or Character References

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 ongoing financial difficulties, including a Chapter 13 bankruptcy filing and significant education loan debt. While one allegation was found for the applicant, the overall financial situation was deemed inconsistent with the national interest, leading to a denial of the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant filed a Chapter 13 bankruptcy petition in March 2014 that had not yet been discharged	Against Applicant	Bankruptcy Filing	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	owed over $70,000 in education loans $70,000	For Applicant	Student Loan Debt	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: ) ) XXXXXXXXXXXXXXXXXXXX ) ISCR Case No. 15-01622 ) Applicant for Security Clearance )

For Government: Douglas M. Velvel, Esquire, Department Counsel For Applicant: Pro Se

09/15/2016 ______________

STATEMENT OF CASE

______________

METZ, John Grattan, Jr., Administrative Judge:

Based on the record in this case, I deny Applicant’s clearance.

On 26 August 2015, the Department of Defense (DoD) sent Applicant a Statement of Reasons (SOR) raising security concerns under Guideline F, Financial Considerations. Applicant timely answered the SOR, requesting a decision without hearing by the Defense Office of Hearings and Appeals (DOHA). The record in this case closed 15 January 2016, when Applicant’s response to the FORM was due. Applicant provided no additional documents. DOHA assigned the case to me 11 April 2016.

FINDINGS OF FACT

Applicant admitted the SOR financial allegations. He is a 63-year-old senior engineer technician employed by a U.S. defense contractor since September 1994. He seeks to retain the security clearance he appears to have held since June 1978. He has no history of security violations. The record does not reflect when his most recent clearance was granted.

The SOR alleges that Applicant filed a Chapter 13 bankruptcy petition in March 2014 that had not yet been discharged (SOR 1.a) and owed over $70,000 in education loans (SOR 1.b). Applicant’s amended plan was confirmed in January 2015 (Item 8), and specifically excludes any provision for his education loans. Applicant provided no documentation that he was making plan payments as required; however, the Government did not establish that the education loans were delinquent. Applicant’s approved wage earner plan (Item 7) required him to pay about $42,000 over five years, $2,533 monthly for seven months, then $458 monthly for another 53 months.

Applicant traces his financial struggles to the 1980s, when he began to help his brother and his brother’s family after his brother was stricken with a chronic disease. He cites the financial strains placed on his family when his first daughter went to college in 2000 and his second child went to college in 2004. His wife lost her job about 2008, although he says nothing about whether she got a new job, or was even looking. His oldest daughter moved home with her children when she lost her job, but Applicant does not state when this occurred.

Applicant’s December 2012 credit report (Item 5) reflects many collection accounts that had been paid or settled for less than the full amount. His August 2015 credit report (Item 6) reflects debts placed in his initial Chapter 13 petition that may have been resolved by the time of his amended petition in March 2014.

Applicant provided no budget or personal financial statement indicating his family’s financial situation. He has not documented any credit or financial counseling. He provided no work or character references, or evidence of civic or community involvement.

POLICIES

The adjudicative guidelines (AG) list factors for evaluating a person’s suitability for access to classified information. Administrative judges must assess disqualifying and mitigating conditions under each issue fairly raised by the facts and situation presented. Each decision must also reflect a fair, impartial, and commonsense consideration of the factors listed in AG ¶ 2(a). Any one disqualifying or mitigating condition is not, by itself, conclusive. However, specific adjudicative guidelines should be followed where a case can be measured against them, as they represent policy guidance governing access to classified information. Considering the SOR allegations and the evidence as a whole, the relevant adjudicative guideline is Guideline F (Financial Considerations). Security clearance decisions resolve whether it is clearly consistent with the national interest to grant or continue an applicant’s security clearance. The Government must prove, by substantial evidence, controverted facts alleged in the SOR. If it does, the burden shifts to applicant to refute, extenuate, or mitigate the Government’s case. Because no one has a right to a security clearance, the applicant bears a heavy burden of persuasion.

Persons with access to classified information enter into a fiduciary relationship with the Government based on trust and confidence. Therefore, the Government has a compelling interest in ensuring each applicant possesses the requisite judgement, reliability, and trustworthiness of those who must protect national interests as their own. The “clearly consistent with the national interest” standard compels resolution of any reasonable doubt about an applicant’s suitability for access in favor of the Government.3

ANALYSIS

The Government established a case for disqualification under Guideline F, and Applicant failed to submit sufficient evidence to mitigate the security concerns. Applicant has a history of financial difficulties, which are ongoing, and seem unlikely to be resolved any time soon. Applicant’s financial problems appear to date from at least the 1980s, when he began providing financial support to his ill brother.

Setting aside for the moment the questions whether the financial expenditures that led to the financial issues were reasonable and whether the Chapter 13 bankruptcy filing was appropriate, Applicant has not mitigated the security concerns because he has not provided any evidence of the current status of his wage earner plan or his education loans.

Applicant only partially meets the mitigating conditions for financial considerations. His financial difficulties are both recent and multiple; and the circumstances under which they occurred appear to be ongoing. Moreover, assuming that Applicant’s financial strains might be considered beyond his control, and that his wage earner plan was appropriate, he has not demonstrated that he has been responsible in addressing his debt. Applicant’s response to the FORM was due in January 2016, a year since his plan was approved, yet he provided no proof that he had made the required payments. His education loans raise no security concerns.

Applicant submitted no evidence to show that he received credit or financial counseling, and the absence of any proof of plan payments means that he cannot demonstrate that the underlying debts are being resolved. Similarly, the absence of any proof of plan payments means that he cannot establish that he has made a good-faith effort to address his debts. Almost 50% of the required plan payments were due in the first 12 months of the plan.

Moreover, Applicant failed to provide any documentation of his current work evaluations, or work or character references upon which I might base a favorable “whole-person” analysis. Accordingly, I conclude Guideline F against Applicant.

FORMAL FINDINGS

Paragraph 1. Guideline F: AGAINST APPLICANT

Subparagraph a: Against Applicant Subparagraph b: For Applicant

CONCLUSION

Under 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 denied.

JOHN GRATTAN METZ, JR Administrative Judge

FOOTNOTES

Consisting of the File of Relevant Material (FORM), Items 1-8.

DoD acted 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 (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG) effective within the DoD on 1 September 2006. See, Department of the Navy v. Egan, 484 U.S. 518 (1988).

¶19 (a) inability or unwillingness to satisfy debts; (c) a history of not meeting financial obligations;

Applicant undertook the bankruptcy filing after his December 2012 clearance application (Item 3) and his January 2013 subject interview with a Government investigator (Item 4).

¶20(a) the behavior happened so long ago, was so infrequent, or occurred under such circumstances that it is unlikely to recur . . .

¶20(b) the conditions that resulted in the financial problem were largely beyond the person’s control . . . and the individual acted responsibly under the circumstances; ¶20(c) the person has received or is receiving counseling for the problem and there are clear indications that the problem is being resolved or is under control;

¶20(d) the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.