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ISCR Case 15-01801.h1 — CASE

ISCR Case 15-01801.h1denied

Case Headnote

ISCR Case No. 15-01801.h1

deniedJul 1, 2015· Hon. Roger C. Wesley· hearing

Summary

A 52-year-old welder for a defense contractor was denied a security clearance under Guideline F (Financial Considerations). The denial stemmed from eight delinquent debts totaling over $41,000, primarily consisting of student loans. Specific allegations included debts of $51, $1,934, $1,021, $13,734, $9,874, $4,907, $7,211, and $6,234.

Disqualifying conditions under Guideline F were raised, specifically DC ¶ 19(a) and DC ¶ 19(c). Although the applicant acknowledged his financial difficulties and periods of unemployment, he returned to full-time employment in 2014.

The clearance was denied because the applicant failed to demonstrate any efforts to address his delinquent debts after returning to full-time work. He did not provide sufficient evidence of attempts to resolve his financial obligations, leading the judge to conclude that his ongoing financial issues raised significant concerns about his reliability and trustworthiness.

Why the Applicant Was Denied

The applicant failed to address his delinquent debts after returning to full-time employment.
He did not provide sufficient evidence of efforts to resolve his financial obligations.
The applicant's financial situation raised significant concerns about his reliability and trustworthiness.

Conditions Referenced

Disqualifying

DC ¶ 19(a)appliedInability or Unwillingness to Satisfy Debts
DC ¶ 19(c)appliedA History of Not Meeting Financial Obligations

Key Rule Quoted

“Holding a security clearance involves a fiduciary relationship between the Government and the clearance holder.”

Procedural Posture

SOR issuedOct 18, 2015
Answer filedNov 16, 2015Applicant elected to have the case decided on the written record.
Hearing held—No hearing; decided on the written record.
Decision dateDec 16, 2016

Cite For

Failure to Demonstrate Financial Responsibility Under Guideline F
Impact of Delinquent Debts on Security Clearance Eligibility
Importance of Addressing Financial Obligations for Clearance Approval

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 applicant has accumulated a significant amount of delinquent debts, primarily consisting of defaulted student loans totaling over $41,000. Despite being employed since 2014, the applicant has not made any documented efforts to address these debts, leading to a denial of the security clearance based on financial considerations.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	$51 $51	Against Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	$1,934 $1,934	Against Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	$1,021 $1,021	Against Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	$13,734 $13,734	Against Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	$9,874 $9,874	Against Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	$4,907 $4,907	Against Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	$7,211 $7,211	Against Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	$6,234 $6,234	Against Applicant	Student Loan Debt	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. 15-01801 ) ) Applicant for Security Clearance )

For Government: Alison O’Connell, Esquire, Department Counsel For Applicant: Pro Se

______________

STATEMENT OF CASE

______________

WESLEY, Roger C., Administrative Judge:

History of Case

On October 18, 2015, The Department of Defense (DOD) Consolidated Adjudications Facility (CAF) issued a Statement of Reasons (SOR) detailing reasons why DOHA could not make the preliminary affirmative determination of eligibility for granting a security clearance, and recommended referral to an administrative judge to determine whether a security clearance should be granted, continued, denied, or revoked. The action was taken under Executive Order 10865 (Exec. Or.), Safeguarding Classified Information within Industry (February 20, 1960), as amended; Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the Adjudicative Guidelines (AGs) promulgated by the President on December 29, 2005, and effective within the Department of Defense for SORs issued after September 1, 2006.

Applicant responded to the SOR on November 16, 2015, and elected to have his case decided on the basis of the written record. Applicant received the File of Relevant Material (FORM) on February 29, 2016, and did not respond with any information within the 30 days permitted. The case was assigned to me on December 16, 2016. Based upon a review of the case file, pleadings, and exhibits, eligibility for access to classified information is denied.

Summary of Pleadings

Under Guideline F, Applicant allegedly accumulated eight delinquent debts, exceeding $41,000. Allegedly, these debts remain outstanding.

In his response to the SOR, Applicant admitted all of the listed debts with explanations. He claimed he incurred student loan debts from five different lenders to finance his education and could not address them all simultaneously as required with the modest salary he earned with his first post-graduation employment. He claimed that when his first job was eliminated by his employer, he was laid off and was out of work for over a year. He claimed to have achieved a number of accomplishments: working with a local police officer in building a local municipal skate park and receiving awards recognizing his work efforts at a local academy, and other noted contributions to his community. And he claimed that with promotions within his company, he will be able to address his student loans.

FINDINGS OF FACT

Applicant is a 52-year-old welder for a defense contractor who seeks a security clearance. The allegations covered in the SOR and admitted to by Applicant are adopted as relevant and material findings. Additional findings follow.

Background

Applicant has never been married and has co-habited with a woman since July 1992. (Items 4 and 6) He has two children from this relationship. (GEs 4 and 6) He earned an associate’s degree in May 2009 and has never served in the military.

Applicant has worked for his current employer since July 2014 as a welder. He reported unemployment between July 2013 and June 2014. (Item 4) Between May 2009 and June 2013 he worked as a help desk technician for a non-defense employer. Previously, he was unemployed between September 2007 and May 2009. (Item 4) Prior to his unemployment, he was employed as an administrator for a non-defense contractor between March 1998 and September 2007. (Item 4)

Finances

Applicant incurred a number of delinquent debts between 2012 and 2013. Most of the listed SOR debts involve delinquent student loans that Applicant signed for and received in 2007. (Item 5) Applicant’s listed debts are comprised of the following: SOR debt ¶ 1.a ($51); SOR debt ¶ 1.b ($1,934); SOR debt ¶ 1.c ($1,021); SOR debt ¶ 1.d ($13,734); SOR debt ¶ 1.e ($9,874); SOR debt ¶ 1.f ($4,907); SOR debt ¶ 1.g ($7,211); and SOR debt ¶ 1.h ($6,234). To date, Applicant has not addressed any of his listed debts that he can substantiate, and they remain outstanding. (Items 3 and 6) He attributed his delinquent debts to extended unemployment between July 2013 and August 2014 and expiration of his unemployment benefits. (Item 6) Since returning to full-time employment in July 2014, he has made no documented efforts to address his delinquent debts. (Item 6)

Endorsements

Applicant provided no endorsements or performance evaluations on his behalf. Nor did he provide any proof of community and civic contributions.

POLICIES

The AGs list guidelines to be used by administrative judges in the decision- making process covering DOHA cases. These guidelines take into account factors that could create a potential conflict of interest for the individual applicant, as well as considerations that could affect the individual’s reliability, trustworthiness, and ability to protect classified information. These guidelines include "[c]onditions that could raise a security concern and may be disqualifying” (disqualifying conditions), if any, and many of the "[c]onditions that could mitigate security concerns.” These guidelines must be considered before deciding whether or not a security clearance should be granted, continued, or denied. The guidelines do not require administrative judges to place exclusive reliance on the enumerated disqualifying and mitigating conditions in the guidelines in arriving at a decision. Each of the guidelines is to be evaluated in the context of the whole person in accordance with AG ¶ 2(c).

In addition to the relevant AGs, administrative judges must take into account the pertinent considerations for assessing extenuation and mitigation set forth in AG ¶ 2(a) of the revised AGs, which are intended to assist the judges in reaching a fair and impartial commonsense decision based upon a careful consideration of the pertinent guidelines within the context of the whole person. The adjudicative process is designed to examine a sufficient period of an applicant’s life to enable predictive judgments to be made about whether the applicant is an acceptable security risk.

When evaluating an applicant’s conduct, the relevant guidelines are to be considered together with the following AG ¶ 2(a) factors: (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 chances; (7) the motivation for the conduct; (8) the potential for pressure, coercion, exploitation, or duress; and (9) the likelihood of continuation or recurrence.

Viewing the issues raised and evidence as a whole, the following individual guidelines are pertinent in this case: Financial Considerations

The Concern: 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. Compulsive gambling is a concern as it may lead to financial crimes including espionage. Affluence that cannot be explained by known sources of income is also a security concern. It may indicate proceeds from financially profitable criminal acts. AG ¶ 18.

Burden of Proof

By virtue of the principles and policies framed by the AGs, a decision to grant or continue an applicant's security clearance may be made only upon a threshold finding that to do so is clearly consistent with the national interest. Because the Directive requires administrative judges to make a commonsense appraisal of the evidence accumulated in the record, the ultimate determination of an applicant's eligibility for a security clearance depends, in large part, on the relevance and materiality of that evidence. See Kungys v. United States, 485 U.S. 759, 792-800 (1988).

As with all adversarial proceedings, the judge may draw only those inferences which have a reasonable and logical basis from the evidence of record. Conversely, the judge cannot draw factual inferences that are grounded on speculation or conjecture.

The Government's initial burden is twofold: (1) it must prove by substantial evidence any controverted facts alleged in the SOR, and (2) it must demonstrate that the facts proven have a material bearing to the applicant's eligibility to obtain or maintain a security clearance. The required materiality showing, however, does not require the Government to affirmatively demonstrate that the applicant has actually mishandled or abused classified information before it can deny or revoke a security clearance. Rather, the judge must consider and weigh the cognizable risks that an applicant may deliberately or inadvertently fail to safeguard classified information.

Once the Government meets its initial burden of proof of establishing admitted or controverted facts, the evidentiary burden shifts to the applicant for the purpose of establishing his or her security worthiness through evidence of refutation, extenuation, or mitigation. Based on the requirement of Exec. Or. 10865 that all security clearances be clearly consistent with the national interest, the applicant has the ultimate burden of demonstrating his or her clearance eligibility. “[S]ecurity-clearance determinations should err, if they must, on the side of denials.” See Department of the Navy v. Egan, 484 U.S. 518, 531 (1988).

ANALYSIS

Applicant is a welder for a defense contractor who accumulated a number of delinquent debts (mostly defaulted student loans) during recurrent periods of underemployment. His accumulation of delinquent debts and his failure to address these debts after returning to full-time employment in 2014 warrant the application of two of the disqualifying conditions (DC) of the Guidelines: DC ¶ 19(a), “inability or unwillingness to satisfy debts,” and ¶19(c) “a history of not meeting financial obligations.”

Applicant’s pleading admissions of the debts covered in the SOR negate the need for any independent proof (see McCormick on Evidence, § 262 (6th ed. 2006)). Each of Applicant’s listed debts are fully documented in his latest credit reports and provide ample corroboration of his debts.

Judgment problems persist, too, over Applicant’s unexplained delinquencies and his failure to demonstrate he acted responsibly in addressing his listed debts once the underemployment conditions that contributed to the delinquencies had passed or eased, and his finances had improved. See ISCR Case 03-01059 at 3 (App. Bd. Sep. 24, 2004). Not only are his listed debt delinquencies ongoing, but he has failed to address them in any tangible way. Mitigation credit is not available to Applicant based on the evidence developed in this record.

Holding a security clearance involves a fiduciary relationship between the Government and the clearance holder. Quite apart from any agreement the clearance holder may have signed with the Government, the nature of the clearance holder’s duties and access to classified information necessarily imposes important duties of trust and candor on the clearance holder that are considerably higher than those typically imposed on Government employees and contractors involved in other lines of Government business. See Snepp v. United States, 444 U.S. 507, 511 n.6 (1980).

Applicant’s debts are attributable in part to his recurrent periods of unemployment. His largest debts involve defaulted student loans. These delinquent student loans (five in all) exceed $41,000 that fell into default and have not been restored by Applicant to current status since he returned to gainful employment in 2014.

Based on the documented materials in the FORM, some extenuating circumstances are associated with Applicant’s inability to pay off or otherwise resolve his debts. Available to Applicant is MC ¶ 20(b), “the conditions that resulted in the behavior 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.” Because Applicant has not taken more responsible steps in resolving his delinquent debts, the second prong of MC ¶ 20(b) is not available to him.

Whole-person assessment does not enable Applicant to surmount the judgment questions raised by his accumulation of delinquent debts and failure to address them once he returned to full-time employment. Resolution of his delinquent accounts is a critical prerequisite to his regaining control of his finances.

While unemployment played some role in his accumulation of delinquent debts, Applicant failed to provide sufficient explanatory information about his failure to address his debts after he returned to full-time employment in 2014. Endorsements and performance evaluations might have been helpful in making a whole-person assessment of his overall clearance eligibility, but were not provided. Overall, clearance eligibility assessment of Applicant based on the limited amount of information available for consideration in this record does not enable him to establish judgment and trust levels sufficient to overcome security concerns arising out of his accumulation of delinquent debts.

Taking into account all of the documented facts and circumstances surrounding Applicant’s debt accumulations, his lack of sufficient explanations for his debt accruals, and his failure to provide any proof of corrective actions taken to address his old debts, it is still soon to make safe predictive judgments about Applicant’s ability to repay his debts and restore his finances to stable levels commensurate with the minimum requirements for holding a security clearance. Unfavorable conclusions warrant with respect to the allegations covered by subparagraphs 1.a through 1.h.

FORMAL FINDINGS

In reviewing the allegations of the SOR and ensuing conclusions reached in the context of the findings of fact, conclusions, conditions, and the factors listed above, I make the following formal findings:

GUIDELINE F (FINANCIAL CONSIDERATIONS): AGAINST APPLICANT

Subparas. 1.a through 1.h: Against Applicant

CONCLUSION

In light of all the circumstances presented by the record in this case, it is not clearly consistent with the national interest to grant or continue Applicant’s security clearance. Clearance is denied.

Roger C. Wesley Administrative Judge