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ISCR Case 15-02623.h1 — CASE

ISCR Case 15-02623.h1denied

Case Headnote

ISCR Case No. 15-02623.h1

deniedMar 6, 2017· Hon. Richard A. Cefola· hearing

Summary

A 40-year-old machinist was denied a security clearance under Guideline F, Financial Considerations, due to significant unresolved financial issues. The Statement of Reasons detailed 16 admitted past-due debts totaling approximately $113,277, for which no explanation was provided. Additionally, the applicant failed to file state and Federal income tax returns for the tax years 2010 through 2013. One specific past-due debt to Creditor Y for about $1,842 was also noted.

The denial was based on the applicant's admission to the 16 past-due debts without offering explanations or evidence of resolution. Furthermore, the applicant did not provide substantial evidence of progress in resolving the unfiled tax returns from 2010-2013.

Ultimately, the applicant failed to demonstrate any efforts to address the financial delinquencies or provide evidence of financial counseling. The judge concluded that the applicant did not provide sufficient evidence to mitigate the financial concerns, determining that granting clearance was not consistent with national interest.

Why the Applicant Was Denied

Applicant admitted to 16 past-due debts totaling about $113,277 without providing explanations or evidence of resolution.
Applicant failed to file state and Federal income tax returns for tax years 2010-2013, offering no substantial evidence of progress in resolving this issue.
Applicant did not demonstrate any efforts to address his financial delinquencies or provide evidence of financial counseling.

Conditions Referenced

Disqualifying

F.1.araisedInability or Unwillingness to Satisfy Debts
F.1.craisedA History of Not Meeting Financial Obligations
F.1.graisedFailure to File Annual Federal, State, or Local Income Tax Returns as Required

Key Rule Quoted

“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.”

Procedural Posture

SOR issuedOct 17, 2015
Answer filedDec 21, 2015
Hearing held—Applicant represented himself.
Decision dateMar 6, 2017

Cite For

Failure to Mitigate Financial Considerations Under Guideline F
Importance of Timely Addressing Financial Obligations for Security Clearance
Impact of Unresolved Tax Issues on Security Clearance Eligibility

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 against the applicant on all financial allegations under Guideline F, citing ongoing financial problems and failure to file tax returns. The applicant did not provide sufficient evidence to mitigate the financial concerns, leading to a denial of security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant admits to 16 past-due debts, totaling about $113,277, without any explanation. $113,277	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Applicant has not filed his state and Federal income tax returns for tax years 2010~2013.	Against Applicant	Tax Filing Failure	Admitted	(g) unexplained affluence	—	—
1.c	Applicant is indebted to Creditor Y for a past-due debt in the amount of about $1,842. $1,842	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts	—	—

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. 15-02623 ) Applicant for Security Clearance )

For Government: Julie R. Mendez , Esquire, Department Counsel For Applicant: Pro se

March 6, 2017 ______________

STATEMENT OF CASE

______________

CEFOLA, Richard A., Administrative Judge:

Applicant submitted his Electronic Questionnaires for Investigations Processing (e-QIP) on May 1, 2013. On October 17, 2015, the Department of Defense (DOD) issued a Statement of Reasons (SOR) detailing the security concerns under Guideline F for Applicant. The action was taken under Executive Order 10865, 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 (AG), effective within the Department of Defense after September 1, 2006.

Applicant answered the SOR in writing (Answer) on December 21, 2015, and requested an Administrative Determination by an administrative judge. Department Counsel issued a File of Relevant Material (FORM) on January 29, 2016. Applicant did not respond to the FORM. The case was assigned to me on September 13, 2016. Based upon a review of the pleadings and exhibits, eligibility for access to classified information is denied.

FINDINGS OF FACT

In his Answer to the SOR, Applicant admitted the factual allegations in all the Paragraphs, with some explanation as to Paragraphs 1.p.~1.w., and Paragraph 1.y.

Guideline F – Financial Considerations

Applicant is 40 years old, and has been employed as a “Machinist” since April of 2013. (Item 3 at pages 5 and 11.) He admits to 16 past-due debts, Paragraphs 1.a.~1.o., 1.x. and 1.y., totaling about $113,277, without any explanation. These allegations are found against Applicant.

Applicant admits that he has not filed his state and Federal income tax returns for tax years 2010–2013, Paragraphs 1.p.~1.w. He avers his “Account[ant] has been working on taxes for over a year[.] Will be done soon and then everything else will be taken care of as well.” (Answer.) He has offered nothing further in this regard; and as such, these allegations are found against Applicant.

Finally, Applicant admits that he is indebted to Creditor Y, Paragraph 1.y., for a past-due debt in the amount of about $1,842. He avers “[it] should be resolved,” but has offered nothing further in this regard. (Answer.) This allegation is found against Applicant.

POLICIES

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the 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 AG ¶ 2 describing 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. 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 clearance 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 the applicant may deliberately or inadvertently fail to protect or 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 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, as follows:

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.

AG ¶ 19 describes three conditions that could raise security concerns and may be disqualifying in this case:

(a) inability or unwillingness to satisfy debts;

(c) a history of not meeting financial obligations; and (g) failure to file annual Federal, state, or local income tax returns as required . . . . Applicant has a history of financial indebtedness and a failure to file tax returns documented by the credit reports in evidence, which substantiate all of the allegations. He has been unable or unwilling to address his delinquencies. The evidence raises security concerns under all of these disqualifying conditions, thereby shifting the burden to Applicant to rebut, extenuate, or mitigate those concerns.

The guideline includes five conditions in AG ¶ 20 that could mitigate security concerns arising from Applicant’s financial difficulties:

(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’s financial problems are ongoing. He has offered nothing to show that he has addressed his about $115,000 of past-due debts, or that he has filed his state and Federal tax returns. Mitigation under AG ¶ 20(a) has not been established.

Applicant provided no explanation for his financial delinquencies. Further, he failed to establish that he has acted reasonably or responsibly. He has not demonstrated that he addressed his debts in a timely manner. Mitigation under AG ¶ 20(b) has not been established.

Applicant provided no evidence of financial counseling. Further, there are no clear indications that his financial problems are being resolved or are under control. Mitigation under AG ¶ 20(c) has not been established. AG ¶ 20(e) requires Applicant to provide documented proof to substantiate the basis of the dispute or provide evidence of actions to resolve the issue. Applicant has not provided evidence of any formal dispute or a basis for one. Mitigation under AG ¶ 20(e) has not been established.

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 the potentially disqualifying and mitigating conditions in light of all the facts and circumstances surrounding this case. I have incorporated my comments under Guideline F in my whole-person analysis. Applicant’s financial problems remain unresolved. Overall, 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 Financial Considerations security concerns under the whole-person concept.

FORMAL FINDINGS

Formal findings for or against Applicant on the allegations set forth in the SOR, as required by ¶ E3.1.25 of Enclosure 3 of the Directive, are:

Paragraph 1, Guideline F: AGAINST APPLICANT

Subparagraphs 1.a.~1.y.: 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 eligibility for a security clearance. Eligibility for access to classified information is denied.

________________________ Richard A. Cefola Administrative Judge