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ISCR Case 15-05086.h1 — CASE

ISCR Case 15-05086.h1denied

Case Headnote

ISCR Case No. 15-05086.h1

deniedJan 27, 2017· Hon. Robert E. Coacher· hearing

Summary

A 47-year-old defense contractor and retired Air Force master sergeant was denied a security clearance due to financial considerations under Guideline F. The applicant faced concerns stemming from seven delinquent debts totaling approximately $11,826 and a prior Chapter 7 bankruptcy from 2004. These issues raised disqualifying conditions F.19(a) and F.19(c).

The applicant claimed his financial difficulties were beyond his control and stated he had engaged a debt relief service. However, he failed to provide evidence demonstrating efforts to address his financial obligations or the specific terms of the debt relief service.

Despite the application of mitigating conditions F.20(a), F.20(b), F.20(c), and F.20(d), the applicant's security clearance was denied. The denial was based on the unresolved delinquent debts, the history of bankruptcy, and the lack of evidence showing his financial problems were under control, which raised questions about his reliability and judgment.

Why the Applicant Was Denied

Applicant has seven unresolved delinquent debts and a history of bankruptcy.
He did not provide evidence of efforts to address his financial obligations or the debt relief service's terms.
The applicant's financial problems are not under control, raising questions about his reliability and judgment.

Conditions Referenced

Disqualifying

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

Mitigating

F.20(a)rejectedBehavior Happened so Long Ago, Was Infrequent, or Unlikely to RecurApplicant's debts are recent and multiple.
F.20(b)rejectedConditions Largely Beyond the Person's ControlApplicant failed to provide evidence of responsible actions regarding his debts.
F.20(c)rejectedReceived Counseling or Indications of Problem ResolutionApplicant's financial problems are not under control.
F.20(d)rejectedGood-faith Effort to Repay or Resolve DebtsLack of evidence showing good-faith efforts to resolve debts.

Key Rule Quoted

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

Procedural Posture

SOR issuedFeb 9, 2016
Answer filedApr 14, 2016
Hearing heldAug 23, 2016
Decision dateJan 27, 2017

Cite For

Denial of Security Clearance Due to Unresolved Financial Obligations
Importance of Providing Evidence of Debt Management Efforts
Impact of Financial Irresponsibility 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 had multiple recent delinquent debts totaling approximately $11,826 and a Chapter 7 bankruptcy, which raised significant financial concerns under Guideline F. The applicant's failure to take effective action to resolve these debts led to a decision against granting security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant has seven delinquent debts in the approximate amount of $11,826 and a 2004 Chapter 7 bankruptcy. $11,826	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Applicant has seven delinquent debts in the approximate amount of $11,826 and a 2004 Chapter 7 bankruptcy. $11,826	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	Applicant has seven delinquent debts in the approximate amount of $11,826 and a 2004 Chapter 7 bankruptcy. $11,826	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	Applicant has seven delinquent debts in the approximate amount of $11,826 and a 2004 Chapter 7 bankruptcy. $11,826	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	Applicant has seven delinquent debts in the approximate amount of $11,826 and a 2004 Chapter 7 bankruptcy. $11,826	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	Applicant has seven delinquent debts in the approximate amount of $11,826 and a 2004 Chapter 7 bankruptcy. $11,826	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	Applicant has seven delinquent debts in the approximate amount of $11,826 and a 2004 Chapter 7 bankruptcy. $11,826	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	Applicant has seven delinquent debts in the approximate amount of $11,826 and a 2004 Chapter 7 bankruptcy. $11,826	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. 15-05086 ) Applicant for Security Clearance )

For Government: Robert J. Kilmartin, Esq., Department Counsel For Applicant: Pro se

01/27/2017 ______________

STATEMENT OF CASE

______________

COACHER, Robert E., Administrative Judge:

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

Statement of the Case

On February 9, 2016, the Department of Defense (DOD) issued Applicant a Statement of Reasons (SOR) detailing security concerns under Guideline F, financial considerations. DOD 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) effective within the DOD on September 1, 2006.

Applicant answered the SOR on April 14, 2016, and requested a hearing before an administrative judge. The case was assigned to me on May 24, 2016. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on July 20, 2016, and the hearing was convened as scheduled on August 23, 2016. The Government offered exhibits (GE) 1 through 4, which were admitted into evidence without objection. Applicant testified, but did not offer any exhibits at the hearing. The record was held open for Applicant to submit additional information. Applicant did not submit any additional evidence. DOHA received the hearing transcript (Tr.) on August 31, 2016.

FINDINGS OF FACT

Applicant admitted all the SOR allegations. These admissions are incorporated as findings of fact. After a review of the pleadings and evidence, I make the following additional findings of fact.

Applicant is a 47-year-old employee of a defense contractor. He has worked for this employer since 2011. He has an associate’s degree. He retired from the Air Force after 22 years of honorable service in the pay grade of E-7 (master sergeant). He is married, pending a divorce, and has four children. He held a security clearance during his Air Force career without incident.1

The SOR alleges seven delinquent debts in the approximate amount of $11,826 and a 2004 Chapter 7 bankruptcy. The debts were listed in a credit report from January October 2014, and he admitted them in his personal subject interview (PSI) to an investigator in October 2014.2

During his PSI, Applicant attributed his bankruptcy to poor financial decisions and living beyond his means. He reaffirmed this explanation during his testimony. Concerning the later seven SOR debts, Applicant stated they were incurred during a period of unemployment in 2011, also when he was receiving a lower wage for his post- military job, and due to his wife’s inability to work because of her illness. He claimed to have hired a debt relief service (DRS) to address his debts. He did not provide documentation to show the terms of the DRS’s duties and obligations. He was provided an opportunity to produce documentation about the DRS post-hearing, but he did not do so. He admitted that he had not addressed any of the SOR debts outside of hiring the DRS. All the SOR debts remain unresolved.3

Applicant stated that concerning his current finances he is “treading water.” He is one payment behind on his mortgage. He has a retirement account with a balance of about $14,000. He recently began a second job to help his finances.4

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 list potentially disqualifying conditions and mitigating conditions that 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(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 ¶ 2(b) requires that “[a]ny doubt concerning personnel being considered for access to classified information 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.” The applicant has the ultimate burden of persuasion to obtain a favorable 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 about 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 as follows:

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. Two are potentially applicable in this case:

(a) inability or unwillingness to satisfy debts; and

Applicant has seven delinquent debts and a Chapter 7 bankruptcy. The evidence is sufficient to raise the above disqualifying conditions.

Several financial considerations mitigating conditions under AG ¶ 20 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’s debts are recent and multiple, and his inaction on the debts shows a lack of reliability, trustworthiness, and good judgment. AG ¶ 20(a) is not applicable. Applicant presented evidence to show that his financial difficulties were beyond his control. He claimed to have hired a DRS to address his debts, but he did not provide evidence of his relationship with a DRS. He failed to provide evidence that he is addressing his debts. Overall, the record evidence does not support that Applicant’s actions were responsible under the circumstances. AG ¶ 20(b) is not applicable.

Applicant claimed to hire a DRS. Given the unpaid status of all the debts, Applicant’s financial problems are not under control. Evidence of good-faith efforts to pay or resolve the debts is lacking. AG ¶ 20(c) partially applies and ¶ 20(d) does not apply.

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 the potentially disqualifying and mitigating conditions in light of all relevant facts and circumstances surrounding this case. I have incorporated my comments under Guideline F in my whole-person analysis. Some of the factors in AG ¶ 2(a) were addressed under that guideline, but some warrant additional comment.

I considered Applicant’s military service, his federal contractor service, and the circumstances by which he became indebted. However, I also considered that he has made little effort to resolve his financial situation. He has not established a meaningful track record of debt management, which causes me to question his ability to resolve his debts.

Overall, the record evidence leaves me with questions and doubts about Applicant’s 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 section E3.1.25 of Enclosure 3 of the Directive, are:

Paragraph 1, Guideline F: AGAINST APPLICANT

Subparagraphs: 1.a – 1.h: 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.

________________________ Robert E. Coacher Administrative Judge