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ISCR Case 15-01508.h1 — CASE

ISCR Case 15-01508.h1denied

Case Headnote

ISCR Case No. 15-01508.h1

deniedMay 5, 2017· Hon. Braden M. Murphy· hearing

Summary

A 42-year-old male applicant was denied a security clearance due to concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The primary issue involved approximately $26,410 in unresolved delinquent debts, including a $489 payday loan. The Statement of Reasons alleged the applicant deliberately omitted some of these debts, raising disqualifying conditions F.19(a) and F.19(c).

Despite the applicant's denial of falsification under Guideline E, the judge found insufficient evidence of responsible action regarding his financial obligations. Most of the debts remained outstanding, even though the applicant had been employed since 2012.

The denial was based on the applicant's failure to demonstrate responsible action to resolve his delinquent debts and his inability to provide corroborating evidence for claims of debt resolution.

Why the Applicant Was Denied

Applicant failed to demonstrate responsible action to resolve delinquent debts.
Most of the applicant's debts remain outstanding despite being employed since 2012.
Applicant did not provide corroborating evidence for claims of debt resolution.

Conditions Referenced

Disqualifying

F.19(a)appliedInability or Unwillingness to Satisfy Debts
F.19(c)appliedHistory of Not Meeting Financial Obligations

Key Rule Quoted

“The protection of the national security is the paramount consideration.”

Procedural Posture

SOR issuedOct 17, 2015
Answer filedFeb 29, 2016Applicant elected to proceed without a hearing.
Hearing held—Case decided on written record.
Decision dateMay 5, 2017

Cite For

Failure to Mitigate Financial Considerations Under Guideline F
Insufficient Evidence of Responsible Action Regarding Debts
Denial of Security Clearance Due to Unresolved Financial Issues

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 E (Personal Conduct) · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The judge found that the Government did not establish the falsification allegation under Guideline E, personal conduct. The applicant was found to have omitted relevant debts on his security clearance application but was not deemed to have deliberately falsified information. Therefore, the personal conduct concerns were resolved in favor of the applicant.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
2.a	Applicant deliberately omitted the debts set forth in subparagraphs 1.a and 1.i, above.	For Applicant	Omission or Failure to Disclose	Financial	Denied	—	—	—

Descriptive standardized rendering of a decided public case (Guideline E). The verbatim source decision is shown in full below.

Standardized Decision Profile

SEAD-4 Guideline F · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The judge found that the applicant failed to demonstrate responsible action to resolve his delinquent debts, leading to security concerns under Guideline F. The applicant admitted to several debts but did not provide sufficient evidence of payments or a plan to resolve them, resulting in a decision against him on the majority of the allegations.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a–1.b	2 sub-charges — specific text not stated in this decision (against the applicant).	Against Applicant			—	—	—
1.c	a $489 debt to a payday loan service $489	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d–1.i	6 sub-charges — specific text not stated in this decision (5 against, 1 for the applicant).	Mixed			—	—	—

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. 15-01508 ) Applicant for Security Clearance )

For Government: David F. Hayes, Esq., Department Counsel For Applicant: Pro se

05/05/2017 ______________

STATEMENT OF CASE

______________

MURPHY, Braden M., Administrative Judge:

Applicant failed to demonstrate that he has taken responsible action to resolve his delinquent debts. He has not mitigated the security concerns under Guideline F, financial considerations. The Government did not establish the falsification allegation under Guideline E, personal conduct. Applicant’s eligibility for access to classified information is denied.

Statement of the Case

On October 17, 2015, the Department of Defense (DOD) issued to Applicant a Statement of Reasons (SOR) detailing security concerns under Guideline F, financial considerations and Guideline E, personal conduct. The action was taken under Executive Order (EO) 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 effective within the DOD for SORs issued after September 1, 2006. Applicant answered the SOR on February 29, 2016, and elected to have his case decided on the written record in lieu of a hearing. On May 27, 2016, Department Counsel submitted the Government’s file of relevant material (FORM), along with documents identified as Items 1 through 6. Applicant received the FORM on June 7, 2016. Applicant was afforded an opportunity to file objections and submit material in refutation, extenuation, or mitigation. Applicant did not respond to the Government’s FORM. The SOR and the answer (combined as Item 1) are the pleadings in the case. Items 2 through 6 are admitted into evidence without objection. The case was assigned to me on April 27, 2017.

FINDINGS OF FACT

Under Guideline F, Applicant admitted SOR ¶¶ 1.a, 1.b, 1.d, 1.f, 1.g, and 1.i. He denied SOR ¶¶ 1.c, 1.e and 1.h. He denied the Guideline E falsification allegation, with an explanation. I have incorporated his answers and relevant comments into the findings of fact. After a thorough and careful review of the pleadings and exhibits submitted, I make the following findings of fact.

Applicant is 42 years old. He has never been married and has no children. He has lived at the same address since 1993. From July 1999 to July 2010, he worked in a restaurant. He was laid off when the business closed. He was unemployed until August 2012, when he was hired for his current position with a defense contractor.1

Applicant completed a security clearance application (SCA) in September 2012. At the time, he had multiple delinquent debts, set forth on a credit bureau report pulled as part of his background investigation. In response to questions on the SCA calling for disclosure of any delinquencies within the previous seven years, Applicant did not disclose that he had any delinquent debts.2 When he reviewed the answers he gave on his SCA with the interviewing agent a month later, Applicant acknowledged his delinquencies before being confronted with a credit report. He said they were due to his lack of employment.3

Under Guideline F, the Government alleged that Applicant has incurred nine delinquent accounts, totaling about $26,410. All are consumer debts or credit cards. They are found on Applicant’s credit reports from September 2012, December 2014, and August 2015.4 In his answer. Applicant does not offer additional information for any debt that he admits. He gives no indication that any of them have been or are being paid or otherwise resolved.5

SOR ¶¶ 1.band 1.i are debts to the same creditor bank, for the same amount ($6,479), though under different account numbers. Applicant became delinquent on both accounts in the same month (September 2011). Applicant’s 2015 credit report lists SOR ¶ 1.i as a charged-off debt that has been transferred or sold.6 I find that SOR ¶ 1.i is a duplicate.7

Applicant denies SOR debts ¶¶ 1.e and 1.h, claiming that they have been paid. He provides no corroborating documentation.8 He denies SOR ¶ 1.c (a $489 debt to a payday loan service) because he questions the debt’s legitimacy, without corroboration. Applicant’s credit reports from December 2014 and August 2015 verify the debt.9

Applicant gives no indication that he has pursued credit counseling. He provides no information or documentation about his current monthly income or expenses. He gives no indication that he has attempted to contact his creditors in an effort to resolve his debts.

Of the nine debts alleged under Guideline F in the SOR, seven were delinquent and in collection when Applicant submitted his SCA in September 2012.10 However, under Guideline E, the Government specifically alleged falsification as to only two debts. In the text of SOR ¶ 2.a, the Government alleges that Applicant “deliberately omitted the debts set forth in subparagraphs 1.a and 1.i, above.”11

Applicant denies the falsification allegation, and explains that at the time he filled out his SCA, he was “still trying to work with the creditors to avoid debts turned over to collection agencies.”12

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 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. Likewise, I have avoided drawing inferences grounded on mere speculation or conjecture.

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 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 that an applicant may deliberately or inadvertently fail to 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 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

The security concern relating to the guideline 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.

This concern is broader than the possibility that an individual might knowingly compromise classified information in order to raise money. It encompasses concerns about an individual’s self-control, judgment, and other qualities essential to protecting classified information. An individual who is financially irresponsible may also be irresponsible, unconcerned, or negligent in handing and safeguarding classified information.13

AG ¶ 19 provides conditions that could raise security concerns. The following are potentially applicable:

(a) inability or unwillingness to satisfy debts; and

Applicant’s delinquent debts are established by the record. There is sufficient evidence to support the application of disqualifying conditions AG ¶¶ 19(a) and 19(c).

The guideline also includes conditions that could mitigate security concerns arising from financial difficulties. The following 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; 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.

Applicant lost his job in summer 2010 after his employer closed the business. He was unemployed for the next two years, until he was hired for his current position in August 2012. Applicant’s job loss and resulting unemployment were circumstances beyond his control that led directly to his financial difficulties. The first prong of AG ¶ 20(b) applies. However, for the full application of AG ¶ 20(b), Applicant must provide evidence that he acted responsibly under the circumstances. Applicant has now been gainfully employed for several years, yet most of his debts remain outstanding. He claims, but does not document, that two of his debts have been paid.14 He has not shown that he has made any payments towards any of his delinquent debts, or has a reasonable plan for resolving them. There is insufficient evidence to conclude Applicant has acted responsibly under the circumstances. The second prong of AG ¶ 20(b) does not apply.

Applicant has had delinquent debts for several years. He failed to provide corroborating evidence that he has paid or resolved any of the alleged SOR debts. There is insufficient evidence to conclude that his financial problems are unlikely to recur. His delinquent debts continue to cast doubt on his current reliability, trustworthiness, and good judgment. AG ¶ 20(a) does not apply.

Applicant does not indicate that he has pursued credit counseling. He has not otherwise demonstrated that his financial problems are under control. AG ¶ 20(c) does not apply. Applicant has not provided sufficient evidence of his good-faith efforts to repay his creditors or otherwise resolve his debts. AG ¶ 20(d) does not apply.

Applicant disputes the legitimacy of one debt, SOR ¶ 1.c, but he does not set forth, or document, a basis for doing so. The debt is listed on the most recent credit report in the record. Applicant claims he has paid two other debts, SOR ¶¶ 1.e and 1.h, but does not provide supporting documentation. AG ¶ 20(e) does not apply to these debts.

Guideline E, Personal Conduct

The security concern for personal conduct is set out in AG ¶ 15, as follows: Conduct involving questionable judgment, lack of candor, dishonesty, or unwillingness to comply with rules and regulations can raise questions about an individual’s reliability, trustworthiness and ability to protect classified information. Of special interest is any failure to provide truthful and candid answers during the security clearance process or any other failure to cooperate with the security clearance process.

AG ¶ 16 describes conditions that could raise a security concern and may be disqualifying. The following disqualifying condition is potentially applicable:

(a) deliberate omission, concealment, or falsification of relevant facts from any personnel security questionnaire, personal history statement, or similar form used to conduct investigations, determine employment qualifications, award benefits or status, determine security clearance eligibility or trustworthiness, or award fiduciary responsibilities.

Applicant accrued delinquent debts as a result of his unemployment, from summer 2010 to summer 2012. He did not disclose his debts on his September 2012 SCA in answer to various questions about his financial record. Applicant denied the allegation of deliberate falsification. This puts the burden on the Government to prove the allegation. I find that the Government has not set forth sufficient evidence to establish Applicant’s deliberate falsification. AG ¶ 16(a) is not applicable. SOR ¶ 2.a is concluded for 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. 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 the potentially disqualifying and mitigating conditions in light of all the facts and circumstances surrounding this case. I have incorporated my comments under Guidelines F and E in my whole-person analysis. Some of the factors in AG ¶ 2(a) were addressed under these guidelines, but some warrant additional comment.

Applicant was unemployed for two-years after he lost his job in a restaurant when the business closed. He accrued numerous delinquent debts during this period. He has been gainfully employed in the defense industry since August 2012. He has not been shown to have deliberately falsified his SCA concerning his finances. However, he still has significant unresolved delinquencies. He has not set forth a realistic plan for resolving them. Applicant does not have a reliable financial track record at this time. His finances remain a security concern. He has failed to meet his burden of persuasion. 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.h: Against Applicant Subparagraph 1.i: For Applicant

Paragraph 2, Guideline E: FOR APPLICANT

Subparagraph 2.a: 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’s eligibility for a security clearance. Eligibility for access to classified information is denied.

_____________________________ Braden M. Murphy Administrative Judge

FOOTNOTES

1 Item 2. 2 Items 2, 4. 3 Item 3 at 2. 4 Items 1, 4, 5, 6. 5 Item 1. 6 Item 6 at 5. 7 When the same conduct is alleged twice in the SOR under the same guideline, one of the duplicative allegations should be resolved in Applicant’s favor. See ISCR Case No. 03-04704 at 3 (App. Bd. Sep. 21, 2005) (same debt alleged twice). 8 SOR debts ¶¶ 1.e and 1.hare both listed as delinquent on Item 6, Applicant’s August 2015 credit report. 9 Items 5, 6 at 2. 10 Item 4 (listing SOR debts ¶¶ 1.a, 1.b, 1.d, 1.e, 1.f, 1.g, and 1.i as being in collection). Two debts, SOR ¶¶ 1.cand 1.h, became delinquent later. 11 Item 1 (alleging that Applicant deliberately omitted from his SCA only two of the nine delinquent debts alleged under Guideline F, when in fact seven of them were delinquent at the time, according to Item 4). Neither party addressed this issue, either in Applicant’s answer or in Department Counsel’s FORM. I therefore take the text of the Guideline E allegation at face value. 12 Items 1, 4. 13 See ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012). 14 It is reasonable to expect applicants to present documentation about the satisfaction of individual debts. ISCR Case No. 07-10310 at 2 (App. Bd. Jul. 30, 2008).