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ISCR Case 15-02534.h1 — CASE

ISCR Case 15-02534.h1denied

Case Headnote

ISCR Case No. 15-02534.h1

deniedNov 7, 2016· Hon. Noreen A. Lynch· hearing

Summary

A 33-year-old electronic engineer and U.S. military veteran was denied a security clearance under Guideline F, Financial Considerations, due to multiple delinquent debts. The Statement of Reasons specifically cited a 2014 judgment for $7,837. Disqualifying conditions 19(a) and 19(c) were raised, indicating a history of not meeting financial obligations and an unwillingness to resolve them.

The denial was based on the applicant's failure to provide evidence of a plan to address or resolve his financial issues, despite acknowledging some debts and a satisfied judgment. He also did not respond to a request to supplement the record with additional information regarding his financial situation.

Ultimately, the applicant's lack of demonstrated effort to resolve his outstanding financial obligations led to concerns about his reliability and trustworthiness, resulting in the denial of his security clearance.

Why the Applicant Was Denied

The applicant had multiple delinquent debts, including a judgment and collection accounts.
He provided no evidence of a plan to address or resolve his financial obligations.
The applicant did not respond to the FORM to supplement the record with additional information.

Conditions Referenced

Disqualifying

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

Key Rule Quoted

“The ultimate burden of persuasion is on the applicant seeking a security clearance.”

Procedural Posture

SOR issuedOct 21, 2015
Answer filedTimely
Hearing heldN/ADecision based on written record.
Decision dateNov 7, 2016

Cite For

Failure to Provide Evidence of Addressing Financial Obligations Under Guideline F
Impact of Unresolved Debts on Security Clearance Eligibility
Burden of Proof Rests on the Applicant in 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 significant financial concerns under Guideline F, including multiple delinquent debts and a judgment against the applicant. While one judgment was satisfied, the applicant failed to provide evidence of addressing other debts, leading to a decision against granting security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	$7,837 (2014 judgment) $7,837	For Applicant	Judgment Against Applicant	Admitted	—	—	—
1.b–1.p	15 sub-charges — specific text not stated in this decision (against the applicant).	Against Applicant			—	—	—

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. 15-02534 ) ) ) Applicant for Security Clearance

For Government: Daniel F. Crowley, Esq. Department Counsel For Applicant: Pro se

11/07/2016 ______________

STATEMENT OF CASE

______________

LYNCH, Noreen, A., Administrative Judge:

The Department of Defense (DOD) issued a Statement of Reasons (SOR) to Applicant alleging security concerns arising under Guideline F (Financial Considerations). The SOR was dated October 21, 2015. The action was taken under Executive Order (EO) 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; DOD 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the Adjudicative Guidelines (AG) implemented in September 2006.

Applicant timely answered the SOR and requested a decision based on the written record in lieu of a hearing. Department Counsel submitted a File of Relevant Material, (FORM), dated January 30, 2016. Applicant received the FORM on February 16, 2016. Applicant did not respond to the FORM. The case was assigned to me on October 19, 2016. Based on a review of the case file, eligibility for access to classified information is denied.

FINDINGS OF FACT

In his answer to the SOR, Applicant admitted allegations 1.b, 1.gthrough 1.j, and 1.lthrough 1.m. He denied the remaining allegations under Guideline F (Financial Considerations).

Applicant is a 33-year-old electronic engineer for a defense contractor. He served in the U.S. military on active duty from 2002 to 2010, receiving an honorable discharge. He was divorced and remarried in 2011, with two children and two stepchildren. He attended community college, but has not yet obtained a degree. Applicant has worked for his current employer since 2012. He noted that he was previously investigated for a security clearance, but was not sure when it was effective. At the time of his 2012 security clearance application, he was being deployed to Afghanistan. (Item 3)

Financial Considerations

The SOR alleges 16 delinquent debts including a judgment, collection accounts, and charged-off accounts. (Items 6 and 8) Applicant provided no explanations for the denied accounts, save a reference to a credit report, which he did not specify. He noted a period of unemployment on his SF-86 from February 2012 to April 2012, and June 2010 to February 2011. He received unemployment benefits while he attended school. (Item 5)

In his 2013 investigative interview, he stated that when he was deployed, he gave a power of attorney to his wife to handle all financial matters. He noted that he had no knowledge of many of the delinquent accounts. He recalled that one account was for a repossessed vehicle. Applicant noted in the interview that if he is legally responsible for the delinquent debts, he will pay them. (Item 5)

As to SOR allegation 1.a, $7,837 (2014 judgment), Applicant provided information from a page of a credit report showing that the judgment for an apartment complex debt had been satisfied in 2014. (Item 2)

There is no information in the record concerning Applicant’s annual income, expenses, indication of a budget, payment plan, or any evidence that he has paid any of the delinquent accounts. He chose not to respond to the FORM to supplement the record.

POLICIES

When evaluating an applicant’s suitability for a security clearance, an 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. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, they are applied in conjunction with the factors listed in the adjudicative process. An administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. Under AG ¶ 2(c), this process is a conscientious scrutiny of a number of variables known as the “whole-person concept.” An 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.

The Government must present evidence to establish controverted facts alleged in the SOR. 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. . . .” The burden of proof is something less than a preponderance of evidence. The ultimate burden of persuasion is on the applicant.

A person seeking access to classified information enters into a fiduciary relationship with the Government based on 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 the applicant may deliberately or inadvertently fail to protect 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 Executive Order 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.” “The clearly consistent standard indicates that security clearance determinations should err, if they must, on the side of denials.” Any reasonable doubt about whether an applicant should be allowed access to sensitive information must be resolved in favor of protecting such information. The decision to deny an individual a security clearance does not necessarily reflect badly on an applicant’s character. It is merely an indication that the applicant has not met the strict guidelines the President and the Secretary of Defense established for issuing a clearance.

ANALYSIS

Guideline F, Financial Considerations

AG ¶ 18 expresses the security concern pertaining to financial considerations:

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 over- extended 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 ¶ 19 describes conditions that could raise a security concern and may be disqualifying:

(a) inability or unwillingness to satisfy debts;

(b) indebtedness caused by frivolous or irresponsible spending and the absence of any evidence of willingness or intent to pay the debt or establish a realistic plan to pay the debt;

(d) deceptive or illegal financial practices such as embezzlement, employee theft, check fraud, income tax evasion, expense account fraud, filing deceptive loan statements, and other intentional financial breaches of trust;

(e) consistent spending beyond one's means, which may be indicated by excessive indebtedness, significant negative cash flow, high debt-to- income ratio, and/or other financial analysis; (f) financial problems that are linked to drug abuse, alcoholism, gambling problems, or other issues of security concern;

(g) failure to file annual Federal, state, or local income tax returns as required or the fraudulent filing of the same;

(h) unexplained affluence, as shown by a lifestyle or standard of living, increase in net worth, or money transfers that cannot be explained by subject's known legal sources of income; and

(i) compulsive or addictive gambling as indicated by an unsuccessful attempt to stop gambling, "chasing losses" (i.e. increasing the bets or returning another day in an effort to get even), concealment of gambling losses, borrowing money to fund gambling or pay gambling debts, family conflict or other problems caused by gambling.

The Government produced credible evidence to establish the delinquent debts. Consequently, the evidence is sufficient to raise disqualifying conditions ¶¶ 19(a) and 19(c).

AG ¶ 20 provides conditions that could mitigate the security concerns:

(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;

(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; and

(f) the affluence resulted from a legal source of income. Applicant noted unemployment for two separate periods of time, but did not provide a nexus to his delinquent debts. He also noted that his wife did not pay the bills while he was deployed and that he had no knowledge of many of the accounts. He promised to attend to the delinquent bills when he was interviewed in 2013. He did not provide any documentation that he paid or resolved any delinquent debts, except for the judgment in 1.a. The record has scant information and is not sufficient to mitigate the financial security concerns. None of the mitigating conditions apply.

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 an 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. As noted above, the ultimate burden of persuasion is on the applicant seeking a security clearance.

I considered the potentially disqualifying and mitigating conditions in light of all the facts and circumstances surrounding this case, as well as the whole-person factors.

Applicant served in the U.S. military and received an honorable discharge. He was deployed and served his country. He is remarried and has children. However, he did not provide any information or documentation that he is addressing his delinquent debts. The judgment is satisfied, but that leaves him with significant unresolved debts.

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 Subparagraphs 1.b-1.p: Against 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 a security clearance. Clearance is denied.

NOREEN A. LYNCH. Administrative Judge

FOOTNOTES

The Government submitted eight items for the record. See also ISCR Case No. 94-1075 at 3-4 (App. Bd. Aug. 10, 1995). Department of the Navy v. Egan, 484 U.S. 518, 531 (1988). ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995). See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive information), and EO 10865 § 7. ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995). Id.