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ISCR Case 15-02704.h1 — CASE

ISCR Case 15-02704.h1denied

Case Headnote

ISCR Case No. 15-02704.h1

deniedAug 31, 2017· Hon. Jennifer I. Goldstein· hearing

Summary

A 45-year-old defense contractor was denied a security clearance due to concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The denial stemmed from unresolved debts totaling approximately $35,118 and deliberate omissions on his security clearance applications.

Specifically, the applicant was delinquent on a charged-off automobile loan for $23,035, a credit union debt for $11,515, and a bank debt for $568. Additionally, he deliberately failed to disclose a Chapter 7 bankruptcy filed in July 2005 and discharged in October 2005. He also omitted that he was demoted in 2009 for a romantic relationship with a subordinate.

The judge found insufficient evidence of rehabilitation or responsible financial management. The applicant did not provide evidence of efforts to resolve his financial issues or mitigate concerns related to his personal conduct. Consequently, granting clearance was deemed inconsistent with national security interests.

Why the Applicant Was Denied

Applicant has unresolved debts totaling approximately $35,118, indicating financial irresponsibility.
Applicant deliberately omitted relevant facts regarding a prior bankruptcy and workplace misconduct from his security clearance applications.
No evidence was provided to demonstrate efforts to resolve financial issues or to mitigate the concerns raised by his personal conduct.

Conditions Referenced

Disqualifying

AG ¶ 19(a)appliedInability to Satisfy Debts
AG ¶ 19(c)appliedA History of Not Meeting Financial Obligations
AG ¶ 16(a)appliedDeliberate Omission, Concealment, or Falsification of Relevant Facts

Key Rule Quoted

“A person who seeks access to classified information enters into a fiduciary relationship with the Government predicated upon trust and confidence.”

Procedural Posture

SOR issuedOct 27, 2015
Answer filedNov 15, 2015
Hearing held—Applicant requested a decision on the record without a hearing.
Decision dateAug 31, 2017

Cite For

Denial of Security Clearance Due to Unresolved Financial Obligations Under Guideline F
Deliberate Falsification of Security Clearance Applications Under Guideline E
Failure to Demonstrate Rehabilitation or Responsible Financial Management.

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 against the applicant on allegations of personal conduct under Guideline E. The applicant was determined to have deliberately falsified information on security clearance applications, which raised significant concerns about his reliability and trustworthiness.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
2.a	Applicant deliberately failed to admit he filed Chapter 7 bankruptcy in July 2005, which was discharged in October 2005.	Against Applicant	Falsification Security FormFOUND DELIBERATE	Other	Admitted	—	—	—
2.b	Applicant failed to disclose on his subsequent 2012 SCA that he was demoted by his employer for having a romantic relationship with a subordinate employee in 2009.	Against Applicant	Falsification Security FormFOUND DELIBERATE	Other	Admitted	—	—	—

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 had unresolved financial debts totaling approximately $35,118, including a charged-off automobile loan and other debts. The applicant's financial issues were deemed significant enough to raise security concerns, leading to a decision against the applicant under Guideline F.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Delinquent on a charged-off automobile loan in the amount of $23,035. $23,035	Against Applicant	Auto Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Delinquent on a credit union debt in the amount of $11,515. $11,515	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	Delinquent on a debt to a bank in the amount of $568. $568	Against Applicant	Unspecified Financial	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. 15-02704 ) Applicant for Security Clearance )

For Government: Aubrey M. De Angelis, Esq., Department Counsel For Applicant: Pro se

August 31, 2017 ______________

STATEMENT OF CASE

______________

GOLDSTEIN, Jennifer I., Administrative Judge:

This case alleges security concerns raised under Guideline F (Financial Considerations) and Guideline E (Personal Conduct). Eligibility for access to classified information is denied.

Statement of the Case

Applicant submitted a security clearance application (SCA) on August 10, 2012. (Item 4.) On October 27, 2015, the Department of Defense Consolidated Adjudications Facility (DOD CAF) sent him a Statement of Reasons (SOR) alleging security concerns under Guidelines F and E. (Item 1.) The DOD CAF acted 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 (AG) implemented by the DOD on September 1, 2006.

Applicant answered the SOR on November 15, 2015 (Item 3), and requested a decision on the record without a hearing. Department Counsel submitted the Government’s written case on November 8, 2016. A complete copy of the file of relevant material (FORM) was sent to Applicant, including documents identified as Items 1 through 16. He was given an opportunity to file objections and submit material to refute, extenuate, or mitigate the Government’s evidence. He received the FORM on November 17, 2016, and did not respond. Items 1 through 16 are admitted into evidence. The case was assigned to me on August 9, 2017.

On June 8, 2017, the DOD implemented new AG.1 Accordingly, I have applied the June 2017 AG.2 However, because the September 2006 AG were in effect on the date the FORM was completed, I have also considered the September 2006 AG. Having considered both versions of the AG, I conclude that my decision would have been the same had I applied the September 2006 AG.

FINDINGS OF FACT

Applicant, age 45, is divorced and has one child. He was unemployed from December 2010 through February 2011. He has been employed by a defense contractor since February 2011. (Item 4.)

The SOR alleged that Applicant is delinquent on three accounts in the approximate amount of $35,118. These debts were identified on credit reports dated March 4, 2015, and June 7, 2016. (Items 8 and 9.) They include a charged-off automobile loan in the amount of $23,035 (Item 8 at 3); a credit union debt in the amount of $11,515 (Item 9 at 2); and a debt to a bank in the amount of $568 (Item 9 at 2). Applicant admitted each of the alleged delinquencies in his Answer. (Item 3.) He provided no documentation of any actions taken to resolve these debts. They are unresolved.

On October 28, 2006, Applicant submitted a SCA and certified that the statements he made therein were “true, complete, and correct to the best of [his] knowledge and belief and [were] made in good faith.” (Item 5.) However, Applicant answered, “No” to the question about prior bankruptcy filings in section 27 of his SCA. He deliberately failed to admit he filed Chapter 7 bankruptcy in July 2005, which was discharged in October 2005. In his Answer, Applicant stated, “I admit, but I told my investigator.” (Item 3.)

Additionally, Applicant failed to disclose on his subsequent 2012 SCA that he was demoted by his employer for having a romantic relationship with a subordinate employee in 2009, when asked “in the last seven (7) years have you received a written warning, been officially reprimanded, suspended, or disciplined for misconduct in the workplace.” Applicant admitted this allegation, but claimed he “misunderstood [the] question and didn’t know [he] had to report that,” because “It wasn’t in the employee handbook at the time.” His defense is not credible.

Applicant did not document any financial counseling or provide budget information from which to predict his future solvency. He offered no evidence to support findings concerning his good character or trustworthiness, the quality of his professional performance, the level of responsibility his duties entail, or his track record with respect to handling sensitive information and observation of security procedures. I was unable to evaluate his credibility, demeanor, or character in person since he elected to have his case decided without a hearing.

POLICIES

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines. In addition to brief introductory explanations for each guideline, the adjudicative guidelines (AG) list potentially disqualifying conditions and mitigating conditions, which are to be used in evaluating an applicant’s national security eligibility.

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 AG ¶ 2 describing the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. The entire process is a conscientious scrutiny of applicable guidelines in the context 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, “Any doubt concerning personnel being considered for national security eligibility will be resolved in favor of the 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. I have not drawn inferences based on mere speculation or conjecture.

Directive ¶ E3.1.14 requires the Government to present evidence to establish controverted facts alleged in the SOR. Directive ¶ E3.1.15 states, “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, and has the ultimate burden of persuasion as to obtaining 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 national security eligibility. 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 or sensitive information. Finally, as emphasized in Section 7 of EO 10865, “Any determination under this order adverse to an applicant shall be a determination 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 concern under this guideline is set out in AG ¶ 18:

Failure 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 or sensitive information. Financial distress can also be caused or exacerbated by, and thus can be a possible indicator of, other issues of personnel security concern such as excessive gambling, mental health conditions, substance misuse, or alcohol abuse or dependence. An individual who is financially overextended is at greater risk of having to engage in illegal or otherwise questionable acts to generate funds. . . .

This concern is broader than the possibility that a person might knowingly compromise classified information to raise money. It encompasses concerns about a person’s self-control, judgment, and other qualities essential to protecting classified information. A person who is financially irresponsible may also be irresponsible, unconcerned, or negligent in handling and safeguarding classified information. See ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012).

Applicant’s admissions, corroborated by his credit reports, establish two disqualifying conditions under this guideline: AG ¶ 19(a) (“inability to satisfy debts”), and AG ¶ 19(c) (“a history of not meeting financial obligations”).

The financial security concerns raised in the SOR may be mitigated by any of the following potentially applicable factors set out in AG ¶ 20:

(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, a death, divorce or separation, clear victimization by predatory lending practices, or identity theft), and the individual acted responsibly under the circumstances;

(c): the individual has received or is receiving financial counseling for the problem from a legitimate and credible source, such as a non-profit credit counseling service, and there are clear indications that the problem is being resolved or is under control; and

(d): the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts.

AG ¶ 20(a) is not established. Applicant’s delinquent debts remain unresolved. Further, he has a long history of indebtedness, including a Chapter 7 bankruptcy in 2005. Financial problems in the future are likely.

AG ¶ 20(b) is not established. While Applicant’s unemployment was a condition beyond his control, he has not acted responsibly to address the resulting debts.

AG ¶ 20(c) and 20(d) are not established. Applicant did not respond to the FORM and the record does not otherwise demonstrate his efforts, if any, to resolve his financial delinquencies. The record is silent as to his current ability to repay his delinquent debts, the reasons that they have persisted, or his plan to resolve them other than his stated intent to file for bankruptcy. His financial problems are not under control.

Applicant failed to meet his burden to mitigate the financial concerns set out in the SOR. For these reasons, I find SOR ¶¶ 1.a through 1.d. against Applicant.

Guideline E: Personal Conduct

The concern under this guideline is set out in AG ¶ 15:

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 or sensitive information. Of special interest is any failure to cooperate or provide truthful and candid answers during national security investigative or adjudicative processes. The following will normally result in an unfavorable national security eligibility determination, security clearance action, or cancellation of further processing for national security eligibility:

(a) refusal, or failure without reasonable cause, to undergo or cooperate with security processing, including but not limited to meeting with a security investigator for subject interview, completing security forms or releases, cooperation with medical or psychological evaluation, or polygraph examination, if authorized and required; and (b) refusal to provide full, frank, and truthful answers to lawful questions of investigators, security officials, or other official representatives in connection with a personnel security or trustworthiness determination.

Based on Applicant’s deliberate falsification of his SCAs, the following disqualifying condition applies:

AG ¶ 16 (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 national security eligibility or trustworthiness, or award fiduciary responsibilities.

Applicant denied intentionally falsifying his SCAs. When a falsification allegation is controverted, the Government has the burden of proving it. An omission, standing alone, does not prove falsification. An administrative judge must consider the record evidence as a whole to determine an applicant’s state of mind at the time of the omission.3

In this instance, it is apparent from Applicant’s comments that he was aware of his 2005 Chapter 7 bankruptcy when he completed is 2006 SCA, and his 2009 demotion due to misconduct when he completed his 2012 SCA. He should have disclosed these facts to the Government. I find substantial evidence of an intent by Applicant to omit, conceal, or falsify facts from and on his SCAs. Therefore, AG ¶ 16(a) is established.

The personal conduct security concerns raised in the SOR may be mitigated by any of the following potentially applicable factors in AG ¶ 17:

(a) the individual made prompt, good-faith efforts to correct the omission, concealment, or falsification before being confronted with the facts;

(b) the refusal or failure to cooperate, omission, or concealment was caused or significantly contributed to by advice of legal counsel or of a person with professional responsibilities for advising or instructing the individual specifically concerning security processes. Upon being made aware of the requirement to cooperate or provide the information, the individual cooperated fully and truthfully; and

(c) the offense is so minor, or so much time has passed, or the behavior is so infrequent, or it happened under such unique circumstances that it is unlikely to recur and does not cast doubt on the individual's reliability, trustworthiness, or good judgment. After considering the mitigating conditions outlined above, none of them apply. Applicant did not make prompt or good-faith efforts to correct his falsifications or concealments. While he discussed the bankruptcy with an investigator, he failed to establish that his disclosure was prompt or in good-faith. He provided no information that indicates he was ill-advised in completing his SCAs. Falsifying information is a serious offense, and Applicant has shown that similar lapses in judgment are likely to occur. Further, he failed to take responsibility for his actions. He has not provided sufficient information in this record to demonstrate that he has met his burden of proof for his personal conduct.

WHOLE PERSON CONCEPT

Under AG ¶ 2(c), the ultimate determination of whether the granting or continuing of national security eligibility is clearly consistent with the interests of national security must be an overall common sense judgment based upon careful consideration of the applicable guidelines, each of which is to be evaluated in the context of the whole person. An administrative judge should consider the nine adjudicative process factors listed at AG ¶ 2(d):

(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.

I have incorporated my comments under Guidelines F and E in my whole-person analysis, and I have considered the factors in AG ¶ 2(d). After weighing the disqualifying and mitigating conditions under Guidelines F and E, and evaluating all the evidence in the context of the whole person, I conclude that Applicant failed to mitigate the security concerns raised by the falsification of his SCAs and his financial indebtedness. Accordingly, Applicant has not carried his burden of showing that it is clearly consistent with the national interest to grant him eligibility for access to classified information.

FORMAL FINDINGS

I make the following formal findings on the allegations in the SOR:

Paragraph 1, Guideline F (Financial Considerations): AGAINST APPLICANT

Subparagraphs 1.a – 1.c: Against Applicant

Paragraph 2, Guideline E (Personal Conduct): AGAINST APPLICANT

Subparagraph 2.a – 2.b: Against Applicant

CONCLUSION

I conclude that it is not clearly consistent with the national interest to grant or continue Applicant’s eligibility for access to classified information. Clearance is denied.

Jennifer I. Goldstein Administrative Judge

FOOTNOTES

1 On December 10, 2016, the Security Executive Agent issued Directive 4 (SEAD-4), establishing a “single, common adjudicative criteria for all covered individuals who require initial or continued eligibility for access to classified information or eligibility to hold a sensitive position.” (SEAD-4 ¶ B, Purpose). The SEAD-4 became effective on June 8, 2017 (SEAD-4 ¶ F, Effective Date). The National Security Adjudicative Guidelines (AG), which are found at Appendix A to SEAD-4, apply to determine eligibility for initial or continued access to classified national security information. (SEAD-4 ¶ C, Applicability).

2 ISCR Case No. 02-00305 at 3 (App. Bd. Feb. 12, 2003) (security clearance decisions must be based on current DoD policy and standards). 3 See ISCR Case No. 03-09483 at 4 (App. Bd. Nov. 17, 2004).