CASE · Clearance Adjudication Search EngineCASE

Loading case…

ISCR Case 15-02753.h1 — CASE

ISCR Case 15-02753.h1denied

Case Headnote

ISCR Case No. 15-02753.h1

deniedSep 12, 2016· Hon. Gregg A. Cervi· hearing

Summary

A 42-year-old engineering technician was denied a security clearance under Guideline F (Financial Considerations) due to 12 delinquent debts totaling approximately $33,773. The Statement of Reasons detailed these debts, which included two judgments for $2,795 and $7,280, several collection accounts ranging from $120 to $1,786, and a cable service collection for $836.

Additional financial concerns included a medical debt of $132, child support arrears of $517, and multiple charged-off or past-due bank and credit card debts totaling $4,995, $11,508, $1,704, $1,100, and $1,000. Disqualifying conditions AG ¶ 19(a) and AG ¶ 19(b) were raised, while mitigating condition AG ¶ 20(d) was applied.

Despite some debts being resolved, the applicant failed to provide sufficient evidence of good-faith efforts to address the remaining obligations. The denial was based on the presence of unresolved delinquent debts, a lack of demonstrated good-faith effort to resolve the majority of these debts, and the failure to provide documentary evidence of payments or resolutions for several accounts.

Why the Applicant Was Denied

The applicant has unresolved delinquent debts that raise security concerns.
The applicant did not demonstrate a good-faith effort to resolve the majority of his debts.
The applicant failed to provide documentary evidence of payments or resolutions for several debts.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(d)appliedGood-faith Effort to Repay Overdue CreditorsThe applicant resolved four debts but did not provide evidence for others.

Key Rule Quoted

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

Procedural Posture

SOR issuedNov 19, 2015
Answer filedDec 1, 2015
Hearing heldJun 9, 2016
Decision dateSep 12, 2016

Cite For

Denial of Security Clearance Due to Unresolved Financial Obligations
Importance of Documentary Evidence in Mitigating Financial Concerns
Evaluation of Financial Responsibility Under Guideline F

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 that the applicant had unresolved financial issues, including multiple delinquent debts totaling approximately $33,773, which raised security concerns under Guideline F. While some debts were resolved, the applicant's overall financial responsibility and willingness to comply with obligations were deemed inadequate, leading to a denial of security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Judgment $2,795 $2,795	Against Applicant	Judgment Against Applicant	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.b	Judgment $7,280 $7,280	For Applicant	Judgment Against Applicant	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.c	Collection $120 $120	For Applicant	Unspecified Financial	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.d	Cable service collection $836 $836	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.e	Medical $132 $132	Against Applicant	Medical Debt	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.f	Collection agency account $1,786 $1,786	For Applicant	Unspecified Financial	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor
1.g	Child support arrears $517 $517	For Applicant	Child Support Debt	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.h	Charged-off bank debt $4,995 $4,995	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.i	Charged-off bank debt $11,508 $11,508	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.j	Past-due credit card debt $1,704 $1,704	Against Applicant	Credit Card Debt	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.k	Charged-off credit card debt $1,100 $1,100	Against Applicant	Credit Card Debt	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.l	Charged-off credit card debt $1,000 $1,000	Against Applicant	Credit Card Debt	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—

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. 15-02753 ) ) ) Applicant for Security Clearance

For Government: Charles Hale, Esq., Department Counsel For Applicant: Pro se

09/12/2016 ______________

STATEMENT OF CASE

______________

CERVI, Gregg A., Administrative Judge:

Applicant has not mitigated the financial considerations security concerns. Eligibility for access to classified information is denied.

Statement of the Case

Applicant completed a Questionnaire for National Security Positions (SF 86)1 on July 2, 2014. On November 19, 2015, the Department of Defense Consolidated Adjudications Facility (DOD CAF) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline F, financial considerations.2 Applicant responded to the SOR on December 1, 2015, and requested a hearing before an administrative judge. The case was assigned to me on April 13, 2016. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on May 12, 2016, scheduling the hearing for June 9, 2016. The hearing was convened as scheduled. Government Exhibits (GE) 1 through 6 were admitted in evidence without objection. Applicant testified and submitted Exhibits (AE) A through C, which were admitted without objection. DOHA received the hearing transcript (Tr.) on June 17, 2016. The record was held open for Applicant to submit additional information. He submitted AE D through F, which were admitted without objection.

FINDINGS OF FACT

The SOR alleges Applicant is indebted on 12 delinquent debts totaling approximately $33,773. Applicant admitted all but one SOR allegation regarding arrears owed for child support, and provided explanations with his answers. The evidence supports the SOR allegations.

Applicant is 42 years old and is employed as an engineering technician and quality control inspector for a defense contractor since 2013. He suffered a period of unemployment between 2004 and 2008 while he was on long-term disability for a back injury. He returned to his profession in 2008. He has had two previous divorces, 2002 and 2012, which impacted his financial situation. He has lived with his girlfriend since 2013. He has four children between the ages of 18 and 24. He has held a security clearance since 2002.

The SOR alleges 12 delinquent debts, some of which date back to 2009. Applicant’s actions with respect to the SOR allegations and the current status are noted below:

SOR ALLEGATION ACTION TAKEN CURRENT STATUS

1.a Judgment $2,795 Testified that account paid. Not resolved No documentary evidence of payment. 1.b Judgment $7,280 Judgment satisfied. AE A Resolved and B.

1.c Collection $120 Paid. AE C. Resolved 1.d Cable service collection Testified that account paid. Not resolved $836 Checked with provider who could not find an open account. No evidence of payment provided. 1.e Medical $132 No resolution. Not resolved

1.f Collection agency Auto payment plan Resolved with payment account $1,786 arranged for July – plan. November 2016. AE E. 1.g Child support arrears Unpaid medical bill. Paid via Resolved $517 wage garnishment. AE D.

1.h Charged-off bank debt No resolution. Not resolved $4,995

1.i Charged-off bank debt Testified that personal loan Not resolved $11,508 that Applicant could not pay. Claims rec’d IRS Form 1099 (Cancellation of debt). No documentary evidence provided. 1.j Past-due credit card debt Testified that he paid via Not resolved $1,704 installment agreement. Provided AE F but shows as of June 2016, agreement to settle account – no proof of payment. 1.k Charged-off credit card Submitted inconclusive Not resolved debt $1,100 payment email that does not correspond with the account number or amount owed. 1.l Charged-off credit card Submitted inconclusive Not resolved debt $1,000 payment email that does not correspond with the account number or amount owed.

Applicant has approximately $1,900 in savings; $11,000 in a 401kretirement plan; and $850 to $1,300 per month in discretionary funds remaining after paying monthly expenses. In 2012, he borrowed money from his 401kaccount to take his family on a cruise. In 2014, Applicant consulted with a bankruptcy attorney, but decided not to file. Applicant has not sought financial counseling or assistance with debt reduction.

Law and 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 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 the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶ 2(a), 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.

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 security clearance decision.3 The Supreme Court stated that the burden of proof is less than a preponderance of the evidence.4

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.” It is well-established law that no one has a right to a security clearance. As noted by the Supreme Court in Egan, “the clearly consistent standard indicates that security clearance determinations should err, if they must, on the side of denials.” Under Egan, Executive Order 10865, and the Directive, any doubt about whether an applicant should be allowed access to classified information will be resolved in favor of protecting national security.5 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 safeguard 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 Exec. Or. (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:

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.

The guideline notes several conditions that could raise security concerns under AG ¶ 19. The following are potentially applicable in this case:

(a) inability or unwillingness to satisfy debts; and

(b) a history of not meeting financial obligations.

Applicant incurred long-standing delinquent debts that have largely gone unresolved. The evidence is sufficient to raise the above disqualifying conditions.

Conditions that could mitigate the financial considerations security concerns are provided under AG ¶ 20. The following 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; and

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

Applicant allowed his debts to remain unresolved for many years before they became a security concern. Although he suffered a period of unemployment and divorce that contributed to his financial problems, he has been steadily employed since 2008 and he has resolved only four delinquent debts. He has not shown evidence of a good-faith effort to resolve the remaining debts. He has not established a financial track record to show similar issues are unlikely to recur. His financial issues have been long standing and remain recent and ongoing and there is no evidence of financial counseling or use of a professional to resolve debts. Mitigating condition ¶ 20(d) is applicable to SOR ¶¶ 1.b, c, fand g. Any other efforts to resolve debts have not been proven through documentary evidence. His overall financial responsibility and willingness to comply with rules and regulations remain a concern, and his financial condition casts doubt on his current reliability, trustworthiness, and good judgment. His efforts so far have been inadequate to demonstrate that his financial circumstances are under control or that he is willing and able to meet his past financial obligations.

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 all of the potentially disqualifying and mitigating conditions in light of all the evidence in favor of and against Applicant, and the facts and circumstances surrounding this case. I have incorporated my findings of fact and comments under Guideline F in this whole-person analysis.

Applicant has proven that four debts have been resolved. Although he claims to have made progress on some others, he did not follow through with evidence of payments or successful resolution. Overall, the record leaves me with questions and doubts as to Applicant’s eligibility and suitability for a security clearance.

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, d, e, h - l: Against Applicant

Subparagraphs 1.b, c, fand g: 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 eligibility for a security clearance. Eligibility for access to classified information is denied.

________________________ Gregg A. Cervi Administrative Judge

FOOTNOTES

1 Also known as a Security Clearance Application (SCA).

2 The action was taken under Executive Order 10865, Safeguarding Classified Information Within Industry (February 20, 1960), as amended; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (Directive) (January 2, 1992), as amended; and the Adjudicative Guidelines for Determining Eligibility for Access to Classified Information (AG), implemented by the DOD on September 1, 2006. 3 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).

4 Department of Navy v. Egan, 484 U.S. 518, 531 (1988) (“it should be obvious that no one has a ‘right’ to a security clearance”); Duane v. DOD, 275 F.3d 988, 994 (10th Cir. 2002) (no right to a security clearance). 5 Egan, 484 U.S. at 531.