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ISCR Case 15-04027.h1 — CASE

ISCR Case 15-04027.h1denied

Case Headnote

ISCR Case No. 15-04027.h1

deniedNov 1, 2017· Hon. Martin H. Mogul· hearing

Summary

A 37-year-old U.S. citizen, born in Mexico, was denied a security clearance under Guideline F (Financial Considerations) due to approximately $30,000 in overdue debts. The Statement of Reasons (SOR) detailed fourteen specific delinquent accounts, ranging from $46 to $14,315. These allegations raised disqualifying conditions under Adjudicative Guidelines Paragraphs 19(a) and 19(c).

The denial was based on the applicant's failure to provide sufficient evidence to dispute the majority of the debts. While one debt was resolved, the applicant claimed the remaining thirteen were not his responsibility without offering independent substantiating evidence.

The judge concluded that the applicant did not adequately address the financial concerns outlined in the SOR. This lack of evidence to dispute the debts, coupled with the overall financial history, led to significant questions regarding the applicant's reliability and trustworthiness, resulting in the denial of the security clearance.

Why the Applicant Was Denied

The applicant did not provide independent evidence to dispute the majority of the debts listed in the Statement of Reasons.
Only one debt was resolved, while the applicant claimed all others were not his without substantiating evidence.
The applicant's financial history raised significant questions about his reliability and trustworthiness.

Conditions Referenced

Disqualifying

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

Key Rule Quoted

“Any doubt concerning personnel being considered for national security eligibility will be resolved in favor of national security.”

Procedural Posture

SOR issuedDec 21, 2015
Answer filedJan 27, 2016Requested decision on written record.
Hearing held—No hearing; decided on written record.
Decision dateNov 1, 2017

Cite For

Failure to Provide Evidence Disputing Debts Under Guideline F
Significant Financial Obligations Raising Security Concerns
Importance of Independent Evidence in Financial Disputes for 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 against the applicant on the majority of financial allegations, citing a total of approximately $30,000 in overdue debts. Only one debt was found to be resolved, while the applicant's claims of disputing the other debts were not substantiated with independent evidence, leading to a denial of the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	This overdue debt is cited in the SOR for a delinquent account in the amount of $892. $892	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	This overdue debt is cited in the SOR for a delinquent account in the amount of $246. $246	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	This overdue debt is cited in the SOR for a delinquent account in the amount of $46. $46	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	This overdue debt is cited in the SOR for a delinquent account in the amount of $519. $519	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	This overdue debt is cited in the SOR for a delinquent account in the amount of $866. $866	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	This overdue debt is cited in the SOR for a delinquent account in the amount of $14,315. $14,315	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	This overdue debt is cited in the SOR for a delinquent account in the amount of $4,946. $4,946	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	This overdue debt is cited in the SOR for a delinquent account in the amount of $2,302. $2,302	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i	This overdue debt is cited in the SOR for a delinquent account in the amount of $1,907. $1,907	For Applicant	Student Loan Debt	Denied	—	—	—
1.j	This overdue debt is cited in the SOR for a delinquent account in the amount of $468. $468	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.k	This overdue debt is cited in the SOR for a delinquent account in the amount of $1,190. $1,190	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.l	This overdue debt is cited in the SOR for a delinquent account in the amount of $1,078. $1,078	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.m	This overdue debt is cited in the SOR for a delinquent account in the amount of $837. $837	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.n	This overdue debt is cited in the SOR for a delinquent account in the amount of $456. $456	Against Applicant	Unspecified Financial	Denied	(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. 15-04027 ) ) Applicant for Security Clearance )

For Government: Andrea M. Corrales, Esq., Department Counsel For Applicant: Pro se

November 1, 2017 ______________

STATEMENT OF CASE

______________

MOGUL, Martin H., Administrative Judge:

Statement of the Case

On December 21, 2015, in accordance with Department of Defense (DoD) Directive 5220.6, as amended (Directive), the DoD issued Applicant a Statement of Reasons (SOR) alleging facts that raise security concerns under Guideline F.1 (Item 1.) The SOR further informed Applicant that, based on information available to the government, DoD adjudicators could not make the preliminary affirmative finding it is clearly consistent with the national interest to grant or continue Applicant’s security clearance.

On January 27, 2016, Applicant submitted a written reply to the (RSOR), and he requested that his case be decided on the written record in lieu of a hearing. (Item 2.) On April 21, 2016, Department Counsel issued the Department's written case. A complete copy of the file of relevant material (FORM) was provided to Applicant. In the FORM, Department Counsel offered seven documentary exhibits. (Items 1-7.) Applicant was given the opportunity to file objections and submit material in refutation, extenuation, or mitigation. A response was due on May 29, 2016. Applicant submitted additional evidence that has been identified and entered into evidence as Items A through D. The case was assigned to this Administrative Judge on January 26, 2017. Based upon a review of the pleadings and exhibits, eligibility for access to classified information is denied.

FINDINGS OF FACT

After a thorough and careful review of the pleadings, and exhibits, I make the following findings of fact.

Applicant is 37 years old, and he is married. Applicant was born in Mexico and is a United States citizen. Applicant seeks a DoD security clearance in connection with employment in the defense sector. (Item 4.)

Guideline F, Financial Considerations

The SOR lists 14 allegations (1.a. through 1.n.) regarding financial difficulties, specifically overdue debts, under Adjudicative Guideline F. The delinquent debts total approximately $30,000. All of the SOR allegations were established by the credit reports listed as Item 4, 5, and 6. The debts will be discussed below in the order that they were listed on the SOR:

On Applicant's Post-FORM submission, he argues that all of the debts listed on the SOR, which were first accessed from the credit reports, are not owed by him, and that the credit reports are simply incorrect. He cites the fact that the date of birth used by some these credit reports are incorrect and there are some variations of his name used as well. (Item A.)

1.a. This overdue debt is cited in the SOR for a delinquent account in the amount of $892. Applicant denied this debt belongs to him in his RSOR, and he wrote that this matter is being disputed with a credit reporting agency. (Item 2.) No independent evidence has been introduced to establish that this debt has been resolved or reduced.

1.b. This overdue debt is cited in the SOR for a delinquent account in the amount of $246. Applicant denied this debt belongs to him in his RSOR, and he wrote that this matter is being disputed with a credit reporting agency. (Item 2.) No independent evidence has been introduced to establish that this debt has been resolved or reduced.

1.c. This overdue debt is cited in the SOR for a delinquent account in the amount of $46. Applicant denied this debt belongs to him in his RSOR, and he wrote that this matter is being disputed with a credit reporting agency. (Item 2.) No independent evidence has been introduced to establish that this debt has been resolved or reduced. 1.d. This overdue debt is cited in the SOR for a delinquent account in the amount of $519. Applicant denied this debt belongs to him in his RSOR, and he wrote that this matter is being disputed with a credit reporting agency. (Item 2.) No independent evidence has been introduced to establish that this debt has been resolved or reduced.

1.e. This overdue debt is cited in the SOR for a delinquent account in the amount of $866. Applicant denied this debt belongs to him in his RSOR, and he wrote that this matter is being disputed with a credit reporting agency. (Item 2.) No independent evidence has been introduced to establish that this debt has been resolved or reduced.

1.f. This overdue debt is cited in the SOR for a delinquent account in the amount of $14,315. Applicant denied this debt belongs to him in his RSOR, and he wrote that this matter is being disputed with a credit reporting agency. (Item 2.) No independent evidence has been introduced to establish that this debt has been resolved or reduced.

1.g. This overdue debt is cited in the SOR for a delinquent account in the amount of $4,946. Applicant denied this debt belongs to him in his RSOR, and he wrote that this matter is being disputed with the creditor. (Item 2.) No independent evidence has been introduced to establish that this debt has been resolved or reduced.

1.h. This overdue debt is cited in the SOR for a delinquent account in the amount of $2,302. Applicant denied this debt belongs to him in his RSOR, and he wrote that this matter is being disputed with the creditor. (Item 2.) No independent evidence has been introduced to establish that this debt has been resolved or reduced.

1.i. This overdue debt is cited in the SOR for a delinquent account in the amount of $1,907. Applicant denied this debt in his RSOR, and he wrote that this education debt has been satisfied in full, and he attached a letter confirming that this debt was paid in full. (Item 2.) I find that this debt has been resolved.

1.j. This overdue debt is cited in the SOR for a delinquent account in the amount of $468. Applicant denied this debt belongs to him in his RSOR, and he wrote that this matter is being disputed with two credit reporting agencies. (Item 2.) No independent evidence has been introduced to establish that this debt has been resolved or reduced.

1.k. This overdue debt is cited in the SOR for a delinquent account in the amount of $1,190. Applicant denied this debt belongs to him in his RSOR, and he wrote that this matter is being disputed with the creditor. (Item 2.) No independent evidence has been introduced to establish that this debt has been resolved or reduced.

1.l. This overdue debt is cited in the SOR for a delinquent account in the amount of $1,078. Applicant denied this debt belongs to him in his RSOR, and he wrote that this matter is being disputed with the creditor. (Item 2.) No independent evidence has been introduced to establish that this debt has been resolved or reduced.

1.m. This overdue debt is cited in the SOR for a delinquent account in the amount of $837. Applicant denied this debt belongs to him in his RSOR, and he wrote that this matter was previously disputed in 2014 with a credit reporting agency. (Item 2.) No independent evidence has been introduced to establish that this debt has been resolved or reduced.

1.n. This overdue debt is cited in the SOR for a delinquent account in the amount of $456. Applicant denied this debt belongs to him in his RSOR, and he wrote that this matter is being disputed with the creditor. (Item 2.) No independent evidence has been introduced to establish that this debt has been resolved or reduced.

Applicant provided no independent evidence that all of these SOR debts were not his. While he denied that the SOR debts were incurred by him, with the exception of the student loan, listed as 1.i., above, Applicant does list several delinquent debts on his Security Clearance Application (SCA), signed by him on April 29, 2013. (Item 3.) These include: a debt for a repossessed vehicle, a debt for a stolen vehicle, a television cable bill, and two credit card debts. There is no evidence that these debts are not some of the same debts listed on the SOR.

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 AG ¶ 2 describing 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.

The protection of the national security is the paramount consideration. AG ¶ 2(b) requires that “[a]ny doubt concerning personnel being considered for national security eligibility 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, and has the ultimate burden of persuasion as to obtaining a favorable clearance decision.” A person who applies for access to classified information seeks to enter 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 (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 relating to the guideline for Financial Considerations 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. Affluence that cannot be explained by known sources of income is also a security concern insofar as it may result from criminal activity, including espionage.

Applicant had many delinquent debts listed on his credit reports for several years. Independent evidence was introduced to establish that only one of his significant SOR overdue debts have been reduced or resolved. While Applicant contends that all but one of the SOR-listed delinquent debts were not incurred by him, no independent evidence was introduced to explain how so many debts listed on the credit reports could be incorrectly listed. I also considered that Applicant listed several delinquent debts on his 2013 SCA that appear to be similar to the SOR debts, and there has been no evidence by Applicant that these debts have been resolved. The guideline notes several conditions that could raise security concerns under AG ¶ 19. The evidence is sufficient to raise disqualifying conditions (a) and (c) as potentially applicable in this case:

(a) inability to satisfy debts;

(b) unwillingness to satisfy debts regardless of the ability to do so;

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

(e) consistent spending beyond one's means or frivolous or irresponsible spending, which may be indicated by excessive indebtedness, significant negative cash flow, a history of late payments or of non-payment, or other negative financial indicators;

(f) failure to file or fraudulently filing annual Federal, state, or local income tax returns or failure to pay annual Federal, state, or local income tax as required;

(g) unexplained affluence, as shown by a lifestyle or standard of living, increase in net worth, or money transfers that are inconsistent with known legal sources of income;

(h) borrowing money or engaging in significant financial transactions to fund gambling or pay gambling debts; and

(i) concealing gambling losses, family conflict, or other problems caused by gambling.

AG ¶ 20 provides conditions that could mitigate security concerns. I considered all of the mitigating conditions under AG ¶ 20 including:

(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;

(d) the individual initiated and is adhering to 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;

(f) the affluence resulted from a legal source of income; and

(g) the individual has made arrangements with the appropriate tax authority to file or pay the amount owed and is in compliance with those arrangements.

Based on the factors discussed above, I do not find that mitigation under AG ¶ 20 has been established. Guideline F is 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 relevant circumstances. The 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.

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 facts and circumstances surrounding this case. I have incorporated my comments under Guideline F in my whole-person analysis. Overall, the record evidence leaves me with significant questions and doubts as to Applicant’s national security eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant has not mitigated the Financial Considerations security concerns.

FORMAL FINDINGS

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

Paragraph 1, Guideline F: AGAINST APPLICANT

Subparagraphs 1.a.-1.h: Against Applicant Subparagraphs 1.i.: For Applicant Subparagraphs 1.j.-1.n: 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.

Martin H. Mogul Administrative Judge

FOOTNOTES

1 I considered the previous Adjudicative Guidelines, effective September 1, 2006, as well as the new Adjudicative Guidelines, effective June 8, 2017. My decision would be the same if the case was considered under the previous Adjudicative Guidelines, effective September 1, 2006.