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ISCR Case 15-02903.h1 — CASE

ISCR Case 15-02903.h1denied

Case Headnote

ISCR Case No. 15-02903.h1

deniedDec 27, 2016· Hon. Richard A. Cefola· hearing

Summary

A 57-year-old Survivability Engineer was denied a security clearance under Guideline F (Financial Considerations) due to unmitigated financial difficulties. The applicant's financial issues were primarily attributed to his spouse's job loss and a downturn in the housing market.

Specific allegations included two credit card debts totaling approximately $17,923, which Creditor A wrote off as a business loss, related to home improvements on Applicant’s Home #1. Additionally, Creditor G wrote off a mortgage debt of about $106,848 associated with Applicant’s Home #2. The applicant also had unpaid medical bills totaling approximately $1,311.

Despite acknowledging his debts, the applicant failed to demonstrate responsible action to address these financial obligations. Most debts remained unpaid at the time of the hearing, and insufficient documentation was provided to show efforts to resolve the delinquent accounts. Although the financial difficulties stemmed from circumstances beyond his control, the lack of responsible action led to the denial of his security clearance.

Why the Applicant Was Denied

Applicant failed to pay medical bills totaling about $1,311, with most debts remaining unpaid at the time of the hearing.
The applicant did not act responsibly regarding his financial obligations, as evidenced by the lack of documentation for addressing his delinquent debts.
The applicant's financial difficulties were attributed to circumstances beyond his control, but he did not provide sufficient evidence of responsible action to mitigate the concerns.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(b)rejectedConditions That Resulted in the Financial Problem Were Largely Beyond the Person’s ControlAlthough the applicant attributed his financial difficulties to external factors, he failed to demonstrate responsible action regarding his debts.

Key Rule Quoted

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

Procedural Posture

SOR issuedOct 30, 2015
Answer filedNov 26, 2015
Hearing heldJun 23, 2016
Decision dateDec 27, 2016

Cite For

Failure to Demonstrate Responsible Action Regarding Financial Obligations Under Guideline F
Inability to Mitigate Financial Concerns Despite Attributing Them to External Factors
Importance of the Whole-person Concept in Evaluating 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 multiple financial concerns under Guideline F, including unpaid medical debts and a history of financial mismanagement. While some debts were forgiven, the applicant failed to demonstrate responsible action regarding his financial obligations, leading to a denial of his security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Creditor A wrote off as a business loss the two credit card debts related to home improvements made to Applicant’s Home #1, totaling about $17,923. $17,923	For Applicant	Credit Card Debt	Admitted	—	—	—
1.c	Applicant has yet to pay medical bills totaling about $1,311. $1,311	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	specific text not stated in this decision	For Applicant	Unspecified Financial	Unknown	—	—	—
1.f	Applicant has yet to pay medical bills totaling about $1,311.	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	Creditor G wrote off as a business loss the mortgage debt related to Applicant’s Home #2, totaling about $106,848. $106,848	For Applicant	Mortgage or Home Loan Debt	Admitted	—	—	—

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. 15-02903 ) ) Applicant for Security Clearance )

For Government: Aubrey De Angelis, Esquire, Department Counsel For Applicant: Pro se

December 27, 2016

______________

STATEMENT OF CASE

______________

CEFOLA, Richard A., Administrative Judge:

Applicant submitted his Electronic Questionnaires for Investigations Processing (e-QIP) on August 21, 2014. On October 30, 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 acknowledged receipt of the SOR on November 13, 2015. He answered the SOR in writing on November 26, 2015, and requested a hearing before an Administrative Judge. The Defense Office of Hearings and Appeals (DOHA) received the request soon thereafter, and I received the case assignment on May 9, 2016. DOHA issued a notice of hearing on May 25, 2016, and I convened the hearing as scheduled on June 23, 2016. The Government offered Exhibits (GXs) 1 through 5, which were received without objection. Applicant testified on his own behalf, as did a financial debt consolidator, and submitted Exhibits (AppXs) A through C, which were received without objection. DOHA received the transcript of the hearing (TR) on July 1, 2016. I granted Applicant’s request to keep the record open until July 22, 2016, to submit additional matters. On July 21, 2016, he submitted Exhibit D, which was received without objection. The record closed on July 22, 2016. Based upon a review of the pleadings, exhibits, and testimony, 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 Subparagraphs of the SOR, with explanations. He also provided additional information to support his request for eligibility for a security clearance.

Guideline F - Financial Considerations

Applicant is a 57-year-old “Survivability Engineer.” (TR at page 51 line 1 to page 52 line 21.) He attributes his past and present financial difficulties to his spouse quitting her job, and to the downturn of the housing market in 2007–2008. (TR at page 62 lines 5–16, at page 28 line 18 to page 64 line 7; See also at page 64 line 14 to page 65 line 3.)

1.h. In July of 2008, Applicant filed a Chapter 13 Bankruptcy petition. (AppX D at page 4.) As he was told this filing would impact on his security clearance, Applicant did not follow through with the petition; and as a result, it was dismissed in October of 2008. (TR at page 27 lines 8!25, at page 66 line 11 to page 68 line 8, and at page 73 lines 13–21.)

1.a. and 1.b. Creditor A wrote off as a business loss the two credit card debts related to home improvements made to Applicant’s Home #1, totaling about $17,923. (TR at page 62 line 22 to page 64 line 7, and at page 73 lines 15–21.) This is evidenced by a “Combined Tax Statement” from Creditor A. (AppX C.) These allegations are found for Applicant.

1.g. Creditor G wrote off as a business loss the mortgage debt related to Applicant’s Home #2, totaling about $106, 848. (TR at page 29 line 5 to page 50 line 6, and at page 7 line 24 to page 73 line 14.) This is evidenced by tax documentation from Creditor G. AppX B.) This allegation is found for Applicant.

1.c.~1.f. Applicant has yet to pay medical bills totaling about $1,311. He averred at his hearing that he would do so; and the record was kept open for a month for him to provide supporting evidence. Applicant has only offered a post-hearing credit report showing that three of the four alleged past-due debts, totaling about $1,090, remain unpaid. Allegation 1.e. is no longer listed as past due. (TR at page 73 line 22 to page

The allegations will be discussed chronologically, and not as they appear on the SOR. 74 line 19, and AppX D at page 4.) Allegations 1.c., 1.d., and 1.f. are found against Applicant.

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 useful 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, these guidelines are applied in conjunction with the factors listed in the adjudicative process. (AG Paragraph 2.) The administrative judge’s over-arching adjudicative goal is a fair, impartial and commonsense decision. According to AG Paragraph 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 Paragraph 2(b) requires that “[a]ny doubt concerning personnel being considered for access to classified information 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. Likewise, I have avoided drawing inferences grounded on mere speculation or conjecture.

Under Directive Paragraph E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive Paragraph E3.1.15, the 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 applicant has the ultimate burden of persuasion as to obtaining a favorable security 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 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.” 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 relating to the guideline for Financial Considerations is set out in AG Paragraph 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 Subparagraph 19(a), an “inability or unwillingness to satisfy debts@ is potentially disqualifying. Similarly under Subparagraph 19(c), “a history of not meeting financial obligations@ may raise security concerns. These may be mitigated by Subparagraph 20(b) where “the conditions that resulted in the financial problem were largely beyond the person’s control (e.g., loss of employment, a business downturn . . .), and the individual has acted responsibly under the circumstances.” Although Applicant can attribute his financial difficulties to his wife quitting her job and the downturn in the housing market in 2007–2008, he was given an opportunity to submit documentation of responsible action vis-a-vis his delinquent medical debts. Applicant has only addressed one small debt identified on the SOR. The mortgage debt and loans were forgiven by their creditors after default. He has submitted evidence showing that, for the most part, the medical debts are still past due, as alleged in Subparagraphs 1.c., 1.d. and 1.f. He has not acted responsibly under the circumstances. Therefore, I can find no countervailing Mitigating Condition that is applicable here. Financial Considerations are found against Applicant.

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 the circumstances. Under AG Paragraph 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.

The Administrative Judge should also consider the nine adjudicative process factors listed at AG Paragraph 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.

I considered all of the evidence, including the potentially disqualifying and mitigating conditions surrounding this case. The record evidence leaves me with questions and doubts as to Applicant’s eligibility and suitability for a security clearance. Applicant has failed to fully respond to the Government’s concerns; and as such, has failed to meaningfully address all the alleged past-due debt. For this reason, I conclude Applicant has not mitigated the security concerns under the whole-person concept arising from his Financial Considerations.

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. and 1.b. For Applicant

Subparagraphs 1.c. and 1.d. Against Applicant

Subparagraph 1.e. For Applicant

Subparagraph 1.f. Against Applicant

Subparagraphs 1.g. and 1.h. 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.

Richard A. Cefola Administrative Judge