CASE · Clearance Adjudication Search EngineCASE

Loading case…

ISCR Case 15-03712.h1 — CASE

ISCR Case 15-03712.h1denied

Case Headnote

ISCR Case No. 15-03712.h1

deniedOct 25, 2017· Hon. Edward W. Loughran· hearing

Summary

A 46-year-old defense contractor was denied a security clearance under Guideline F, Financial Considerations, due to unresolved financial issues. The Statement of Reasons detailed three specific allegations: a past-due mortgage loan in foreclosure with a $24,610 delinquency and a $137,444 balance, a $158 delinquent charged-off debt with a $620 balance, and an $81 delinquent utilities debt associated with the foreclosed home.

The judge applied several disqualifying conditions related to financial irresponsibility and failure to meet financial obligations. While mitigating conditions were considered, they were ultimately insufficient to overcome the concerns.

The denial was based on the applicant's failure to provide documentary evidence of efforts to resolve the delinquent debts. Additionally, the financial issues were recent and ongoing, raising doubts about the applicant's reliability and judgment. The applicant also did not respond to the FORM, leaving the current state of his finances unknown to the adjudicator.

Why the Applicant Was Denied

The applicant failed to provide documentary evidence of efforts to resolve delinquent debts.
The applicant's financial issues were recent and ongoing, raising doubts about his reliability and judgment.
The applicant did not respond to the FORM, leaving the current state of his finances unknown.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability to Satisfy Debts
AG ¶ 19(b)raisedUnwillingness to Satisfy Debts
AG ¶ 19(c)raisedHistory of Not Meeting Financial Obligations

Mitigating

AG ¶ 20(b)appliedConditions Largely Beyond the Person's ControlThe applicant's financial problems were partially attributed to his divorce.
AG ¶ 20(a)rejectedBehavior Occurred Long Ago or Infrequently
AG ¶ 20(c)rejectedReceived Financial Counseling
AG ¶ 20(d)rejectedGood-faith Effort to Repay DebtsThe applicant's intentions to pay debts were not substantiated by evidence.

Key Rule Quoted

“Intentions to pay off debts in the future are not a substitute for a track record of debt repayment or other responsible approaches.”
— ISCR Case No. 11-14570 (App. Bd. Oct. 23, 2013)

Procedural Posture

SOR issuedJan 11, 2016
Answer filedFeb 24, 2016Applicant elected to proceed without a hearing.
Hearing held—Written record only.
Decision dateOct 25, 2017

Cite For

Failure to Mitigate Financial Considerations Under Guideline F
Importance of Providing Evidence of Debt Repayment Efforts
Impact of Unresolved Financial 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 that the applicant did not mitigate the financial considerations security concerns, which included a past-due mortgage loan in foreclosure and two delinquent debts totaling $239. The applicant's financial issues were deemed recent and ongoing, leading to a denial of eligibility for access to classified information.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant has a past-due mortgage loan that was in foreclosure, listed as $24,610 past due, with a $137,444 balance. $24,610	Against Applicant	Mortgage or Home Loan Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.b	Applicant has a delinquent debt of $158, which is listed as an individual charged-off debt with a $620 balance. $158	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.c	Applicant has a delinquent utilities debt of $81, which is tied to his foreclosed home. $81	Against Applicant	Utility or Phone Debt	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (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. 15-03712 ) Applicant for Security Clearance )

For Government: Chris Morin, Esq., Department Counsel For Applicant: Pro se

10/25/2017 ______________

STATEMENT OF CASE

______________

LOUGHRAN, Edward W., Administrative Judge:

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

Statement of the Case

On January 11, 2016, the Department of Defense (DOD) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline F, financial considerations. Applicant responded to the SOR on February 24, 2016, and elected to have the case decided on the written record in lieu of a hearing.

The Government’s written case was submitted on April 5, 2016. A complete copy of the file of relevant material (FORM) was provided to Applicant, who was afforded an opportunity to file objections and submit material to refute, extenuate, or mitigate the security concerns. Applicant received the FORM on May 30, 2017. As of July 10, 2017, he had not responded. The case was assigned to me on October 19, 2017. The Government exhibits included in the FORM are admitted in evidence.

FINDINGS OF FACT

Applicant is a 46-year-old employee of a defense contractor. The most recent information available indicates that his two marriages ended in divorce in 2004 and 2010. He does not have children.1

The SOR alleges a past-due mortgage loan that was in foreclosure and two delinquent debts totaling $239. The debts are established by Applicant’s admissions and credit reports from August 2012 and April 2015.2

There is little in the record about the cause of Applicant’s financial problems other than his 2010 divorce. He has been steadily employed in the defense industry for more than 20 years. He reported his foreclosed mortgage loan in his August 2012 Questionnaire for National Security Positions (SF 86). He wrote that they tried to sell the house in 2010, and it was on the market for ten months. He indicated that by the time he was able to catch up on the loan, it was too late. The loan is listed on the April 2015 credit report as $24,610 past due, with a $137,444 balance, and in foreclosure. Applicant wrote in response to the SOR that he contacted the creditor in an attempt to settle the account. He was told the account was closed and had not gone to a collection company. He stated that he was unable to start paying the debt.3

Applicant wrote in his February 2016 response to the SOR that he was unaware of the $158 debt alleged in SOR ¶ 1.b. He wrote that it was a joint debt with his ex-wife, and he made arrangements to pay the debt in March 2016. The debt is listed on the August 2012 and April 2015 credit reports as an individual charged-off debt that was $158 past due, with a $620 balance.4

Applicant also wrote in his response to the SOR that he was unaware of the $81 utilities debt alleged in SOR ¶ 1.c. He wrote that the debt was tied to his foreclosed home. He stated that he had made arrangements to pay the debt in March 2016.5

Department Counsel noted in the FORM that Applicant did not submit any documentary evidence about the status of the three debts. He further noted:

Absent compelling evidence that Applicant has made, and then carried out arrangements to resolve his delinquent debts, the evidence in this record precludes finding that he has the good judgment and reliability needed to be cleared for access to classified information . . . . There is no evidence that Applicant received financial counseling. Because he did not respond to the FORM, the current state of Applicant’s finances is unknown.

POLICIES

This case is adjudicated 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), which became effective on June 8, 2017.

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 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.

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 the national security.”

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 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 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 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 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.

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

(a) inability to satisfy debts;

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

Applicant had delinquent debts that he was unable or unwilling to pay. 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, 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.

Applicant’s foreclosed mortgage loan was apparently related to his 2010 divorce. The record is lacking details about Applicant’s financial circumstances. He wrote in response to the SOR that he intended to pay the two non-mortgage debts the following month. The Appeal Board has held that “intentions to pay off debts in the future are not a substitute for a track record of debt repayment or other responsible approaches.” See ISCR Case No. 11-14570 at 3 (App. Bd. Oct. 23, 2013) (quoting ISCR Case No. 08- 08440 at 2 (App. Bd. Sep. 11, 2009)). The FORM put Applicant on notice of the importance of documenting any payments. He did not respond. The Appeal Board has further held that “it is reasonable for a Judge to expect applicants to present documentation about the satisfaction of specific debts.” See ISCR Case No. 09-07091 at 2 (App. Bd. Aug 11, 2010) (quoting ISCR Case No. 04-10671 at 3 (App. Bd. May 1, 2006)).

I am unable to find that Applicant acted responsibly under the circumstances or that he made a good-faith effort to pay his debts. His financial issues are recent and ongoing. They continue to cast doubt on his current reliability, trustworthiness, and good judgment. AG ¶¶ 20(a), 20(c), and 20(d) are not applicable. AG ¶ 20(b) is partially applicable. I find that financial considerations concerns remain despite the presence of some mitigation.

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 the 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 questions and doubts about Applicant’s eligibility and suitability for a security clearance. I conclude Applicant did not mitigate the financial considerations security concerns.

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-1.c: 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.

________________________ Edward W. Loughran Administrative Judge

FOOTNOTES

1 Item 3. 2 Items 2-5. 3 Item 2. 4 Items 2, 4, 5. 5 Items 2, 4, 5.