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ISCR Case 15-05189.h1 — CASE

ISCR Case 15-05189.h1denied

Case Headnote

ISCR Case No. 15-05189.h1

deniedMar 31, 2017· Hon. Robert J. Tuidar· hearing

Summary

A 36-year-old driver and laborer was denied a security clearance under Guideline F (Financial Considerations) due to significant delinquent debts. The applicant admitted to 12 outstanding debts totaling $95,629, including a $22,746 charged-off student loan account. These issues raised disqualifying conditions under Adjudicative Guidelines Paragraphs 19(a) and 19(c).

While mitigating conditions such as the debts not being recent, the applicant not being responsible for the circumstances, or the problems being resolved were considered, they were not found sufficient. The applicant failed to provide evidence of good-faith efforts to repay or resolve any of the debts.

Ultimately, the applicant's financial problems were not sufficiently addressed or under control, leading to concerns about reliability and trustworthiness. Consequently, the security clearance was denied.

Why the Applicant Was Denied

The applicant admitted to all allegations of delinquent debt totaling $95,629.
The applicant did not provide evidence of good-faith efforts to repay or resolve any of his debts.
The applicant's financial problems were not sufficiently addressed or under control, raising doubts about his reliability and trustworthiness.

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(d)appliedGood-faith Effort to Repay Overdue CreditorsThe applicant partially paid off a $413 medical collection account.
AG ¶ 20(a)rejectedBehavior Happened so Long Ago or Infrequently
AG ¶ 20(b)rejectedConditions Largely Beyond the Person's Control
AG ¶ 20(c)rejectedReceived Counseling for the Problem
AG ¶ 20(e)rejectedReasonable Basis to Dispute the Legitimacy of the Debt

Key Rule Quoted

“"Any doubt concerning personnel being considered for access to classified information will be resolved in favor of the national security."”
— Directive, Enclosure 2 ¶ 2(b)

Procedural Posture

SOR issuedMar 9, 2016
Answer filedJun 27, 2016
Hearing heldSep 13, 2016
Decision dateMar 31, 2017

Cite For

Failure to Mitigate Financial Considerations Under Guideline F
Insufficient Evidence of Good-faith Efforts to Resolve Debts
Importance of Demonstrating Financial Responsibility for 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 failed to mitigate financial concerns under Guideline F, which included a total of 12 allegations of delinquent debt amounting to $95,629. The judge ruled against the applicant on all but one subparagraph, indicating that the applicant did not provide sufficient evidence of efforts to resolve his debts, leading to a denial of his security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	$22,746 charged off student loan account $22,746	Against Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b–1.l	11 sub-charges — specific text not stated in this decision (10 against, 1 for the applicant).	Mixed			—	—	—

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. 15-05189 ) Applicant for Security Clearance )

For Government: Carroll Connelley, Esq., Department Counsel For Applicant: Jennifer K. Wysocki, Esq.

03/31/2017 __________

STATEMENT OF CASE

__________

TUIDER, Robert J., Administrative Judge:

Applicant failed to mitigate security concerns under Guideline F (financial considerations). Clearance is denied.

Statement of the Case

On November 24, 2014, Applicant submitted a Questionnaire for National Security Positions (SF-86). On March 9, 2016, the Department of Defense Consolidated Adjudications Facility (DOD CAF) issued a Statement of Reasons (SOR) to Applicant, pursuant to Exec. Or. 10865, Safeguarding Classified Information Within Industry, dated February 20, 1960, as amended; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (Directive), dated January 2, 1992, as amended; and the adjudicative guidelines (AG), which became effective on September 1, 2006.

The SOR alleged security concerns under Guideline F. The SOR detailed reasons why the DOD CAF was unable to find that it is clearly consistent with the national interest to grant a security clearance for Applicant, and it recommended that his case be submitted to an administrative judge for a determination whether his clearance should be granted, continued, or denied. On June 27, 2016, Applicant responded to the SOR. On August 8, 2016, Department Counsel was ready to proceed. On August 12, 2016, DOHA assigned Applicant’s case to me. On August 15, 2016, the Defense Office of Hearings and Appeals (DOHA) issued a hearing notice, setting the hearing for September 13, 2016. Applicant’s hearing was held as scheduled.

At the hearing, Department Counsel offered Government Exhibits (GE) 1 through 3, which were received into evidence without objection. Applicant testified, did not call any witnesses, and offered Applicant Exhibits (AE) A through H, which were received into evidence without objection. On September 20, 2017, DOHA received the hearing transcript (Tr.).

At the conclusion of the hearing, I held the record open until October 28, 2016, to afford Applicant an opportunity to submit additional evidence. Post-hearing, I granted Applicant two additional extensions to submit evidence with due dates of December 30, 2016, and January 30, 2017. The record closed on January 30, 2017. Post-hearing, Applicant offered AE I through N, which were received into evidence without objection.

FINDINGS OF FACT

Applicant admitted all of the SOR allegations. After a thorough review of the record, I make the following findings of fact.

Background Information

Applicant is a 36-year-old driver and laborer employed by a municipality. He seeks a position as a commercial driver with a defense contractor and as such requires a secret security clearance as a condition of employment. (GE 1, GE 2; Tr. 14-15)

Applicant graduated from high school in June 1999. He attended college from January 2000 to May 2005, and is one course away from being awarded a bachelor of science degree in political science. (GE 1, GE 2; Tr. 13-18) Applicant has never married and has no dependents. He did not serve in the U.S. armed forces. (GE 1; Tr. 18-19)

Financial Considerations

Applicant’s SOR contains 12 allegations of delinquent debt totaling $95,629, ranging from a $413 medical collection account to a $22,746 charged off student loan account. These allegations are documented in Applicant’s November 2014 SF-86, his March 2015 Office of Personnel Management Personal Subject Interview (OPM PSI), and his December 2014 credit report. (SOR ¶¶ 1.a – 1.l; GE 1 – 3)

Applicant traces his financial difficulties to his inability to secure a post-college job with an upwardly mobile income. He claims that because he did not have a college degree he was precluded from securing a good paying job. He started out doing seasonal work, but that did not provide him with a steady and sustainable income. At the encouragement of a friend, he started working as a commercial driver in 2008, but that career path has not allowed him to support himself and pay off his student loans. (AE H; Tr. 19-23, 31)

Apart from one medical collection account for $413, all of the remaining SOR debts are for private and federally backed student loans. Since leaving college in 2005, Applicant has been unable to pay off his student loans because of his “hard financial situation” and the “volatile nature of [his] employment.” Additionally, he was involved in an automobile accident in 2015 and his then employer immediately laid him off. Applicant also had a history of varicose veins in both of his legs that prevented him from being able to stand for long periods, limiting his employment options. Fortunately, he was able medically address his varicose vein problem in 2016. (AE A – D; Tr. 23-30)

Applicant’s mother submitted a letter dated September 12, 2016, in which she said Applicant’s federal student loan would be paid in full in October 2016. (AE E) Applicant testified that he had not received support from his parents throughout his college career and after he left college they were “unsupportive financially.” The plan was for Applicant’s parents to pay off his student loans and Applicant in turn would repay his parents. Applicant’s parents co-signed on his student loans and are equally encumbered. (AE I; Tr. 30-31, 36-39) Applicant submitted an article that discussed the high student loan default rate. (AE H)

As of his hearing, Applicant had worked for his current employer for “over a year” and was earning “about $42,000 a year.” (Tr. 32) Applicant has not reached out to either of his student loan lenders since being employed in his current position. His plan was to make a one-time payment with help from his parents. Applicant added that his federal income tax refunds are being recouped by the IRS to repay his federally backed student loans. (Tr. 32-43)

During Applicant’s March 2015 OPM PSI, the investigator discussed in detail delinquent debts on his credit report putting him on notice that his finances raised a security concern. The Government’s concerns were again brought to Applicant’s attention 12 months later when they sent him his March 2016 SOR. At his hearing, Applicant did not produce evidence of any good-faith efforts to pay or resolve any of his SOR debts. (Tr. 43-45)

As noted, I left the record open and granted Applicant two extensions providing him with almost five months post-hearing to submit evidence. During that timeframe, he was able to pay off his $413 medical collection account. He was, however, unable to provide evidence of any payment towards or resolution of his student loans. In his post- hearing documents, Applicant reviewed how he got into financial difficulty and stated, among other things, that he is gainfully employed, is a good citizen, and will pay off his student loans as soon as he is able. (AE I – N) Applicant did not submit evidence of financial counseling or submit a budget.

POLICIES

The U.S. Supreme Court has recognized the substantial discretion of the Executive Branch in regulating access to information pertaining to national security emphasizing, “no one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). As Commander in Chief, the President has the authority to control access to information bearing on national security and to determine whether an individual is sufficiently trustworthy to have access to such information.” Id. at 527. The President has authorized the Secretary of Defense or his designee to grant applicant’s eligibility for access to classified information “only upon a finding that it is clearly consistent with the national interest to do so.” Exec. Or. 10865, Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960), as amended.

Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the adjudicative guidelines. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, these guidelines are applied in conjunction with an evaluation of the whole person. An administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. An administrative judge must consider all available, reliable information about the person, past and present, favorable and unfavorable.

The Government reposes a high degree of trust and confidence in persons with access to classified information. This relationship transcends normal duty hours and endures throughout off-duty hours. 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. Clearance decisions must be “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See Exec. Or. 10865 § 7. See also Executive Order 12968 (Aug. 2, 1995), § 3.1. Thus, nothing in this Decision should be construed to suggest that I have based this decision, in whole or in part, on any express or implied determination about applicant’s allegiance, loyalty, or patriotism. It is merely an indication the applicant has not met the strict guidelines the President and the Secretary of Defense have established for issuing a clearance.

Initially, the Government must establish, by substantial evidence, conditions in the personal or professional history of the applicant that may disqualify the applicant from being eligible for access to classified information. The Government has the burden of establishing controverted facts alleged in the SOR. See Egan, 484 U.S. at 531. “Substantial evidence” is “more than a scintilla but less than a preponderance.” See v. Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994). The guidelines presume a nexus or rational connection between proven conduct under any of the criteria listed therein and an applicant’s security suitability. See ISCR Case No. 95-0611 at 2 (App. Bd. May 2, 1996).

Once the Government establishes a disqualifying condition by substantial evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the facts. Directive ¶ E3.1.15. An applicant “has the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue her security clearance.” ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002). The burden of disproving a mitigating condition never shifts to the Government. See ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 2005). “[S]ecurity clearance determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531; see AG ¶ 2(b).

ANALYSIS

Financial Considerations

The Government met its burden of production in support of the allegations in the SOR. The facts established raise a security concern addressed, in relevant part, at 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 Appeal Board explained the scope and rationale for the financial considerations security concern as follows:

This concern is broader than the possibility that an applicant might knowingly compromise classified information in order to raise money in satisfaction of his or her debts. Rather, it requires a Judge to examine the totality of an applicant’s financial history and circumstances. The Judge must consider pertinent evidence regarding the applicant’s self-control, judgment, and other qualities essential to protecting the national secrets as well as the vulnerabilities inherent in the circumstances. The Directive presumes a nexus between proven conduct under any of the Guidelines and an applicant’s security eligibility.

ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012) (citation omitted).

AG ¶ 19 provides two disqualifying conditions that could raise a security concern and may be disqualifying in this case: “(a) inability or unwillingness to satisfy debts;” and “(c) a history of not meeting financial obligations.”

Applicant’s history of delinquent debt is documented in his credit reports, OPM PSI, SOR response, and hearing record. The Government established the disqualifying conditions in AG ¶¶ 19(a) and 19(c) requiring additional inquiry about the possible applicability of mitigating conditions. Five 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;

(d) the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts;1 and

(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.

The Appeal Board concisely explained Applicant’s responsibility for proving the applicability of mitigating conditions as follows:

Once a concern arises regarding an Applicant’s security clearance eligibility, there is a strong presumption against the grant or maintenance of a security clearance. See Dorfmont v. Brown, 913 F. 2d 1399, 1401 (9th Cir. 1990), cert. denied, 499 U.S. 905 (1991). After the Government presents evidence raising security concerns, the burden shifts to the applicant to rebut or mitigate those concerns. See Directive ¶ E3.1.15. The standard applicable in security clearance decisions is that articulated in Egan, supra. “Any doubt concerning personnel being considered for access to classified information will be resolved in favor of the national security.” Directive, Enclosure 2 ¶ 2(b).

ISCR Case No. 10-04641 at 4 (App. Bd. Sept. 24, 2013).

Apart from partial application of AG ¶ 20(d) to SOR ¶ 1.l, none of the mitigating conditions are fully applicable. Applicant did not provide enough details about what he did to address his SOR debts. Except as indicated, he did not provide sufficient documentation relating to any of his SOR debts: (1) proof of payments, such as checking account statements, photocopies of checks, or a letter from the creditor proving that he paid or made any payments to the creditors; (2) correspondence to or from the creditors to establish maintenance of contact;2 (3) credible debt disputes indicating he did not believe he was responsible for the debts and why he held such a belief; (4) more evidence of attempts to negotiate payment plans, such as settlement offers or agreements to show that he was attempting to resolve these debts; or (5) other evidence of progress or resolution. Applicant failed to establish mitigation under AG ¶ 20(e) because he did not provide documented proof to substantiate the existence, basis, or the result of any debt disputes.

There is insufficient evidence about why Applicant was unable to make greater progress resolving the vast majority of his SOR debts in the 11 years since attending college. There is insufficient assurance that his financial problems are being resolved, are under control, and will not recur in the future. Under all the circumstances, he failed to establish that financial considerations security concerns are mitigated.

In summary, Applicant did not mitigate the security concerns raised by the Government’s information. In addition to evaluating the facts and applying the appropriate adjudicative factors under Guideline F, I have reviewed the record before me in the context of the whole-person factors listed in AG ¶ 2(a). Applicant has been employed in varying capacities for the majority of his adult life. More recently he has been employed full-time for over one year in his current position, and he is presumed to be a mature, responsible citizen. Nonetheless, without other information suggesting his financial problems are being addressed, doubts remain about his suitability for access to classified information. Protection of the national interest is the principal focus of these adjudications. Accordingly, those doubts must be resolved against the Applicant.

debts current.

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

Subparagraph 1.a – 1.k: Against Applicant Subparagraphs 1.l: For Applicant

CONCLUSION

In light of all of the circumstances presented by the record in this case, it is not clearly consistent with national security to grant Applicant eligibility for a security clearance. Clearance is denied.

_________________ ROBERT J. TUIDER Administrative Judge

FOOTNOTES

1 The Appeal Board has previously explained what constitutes a “good faith” effort to repay overdue creditors or otherwise resolve debts: In order to qualify for application of [the “good faith” mitigating condition], an applicant must present evidence showing either a good-faith effort to repay overdue creditors or some other good-faith action aimed at resolving the applicant’s debts. The Directive does not define the term “good-faith.” However, the Board has indicated that the concept of good-faith “requires a showing that a person acts in a way that shows reasonableness, prudence, honesty, and adherence to duty or obligation.” Accordingly, an applicant must do more than merely show that he or she relied on a legally available option (such as bankruptcy) in order to claim the benefit of [the “good faith” mitigating condition]. (internal citation and footnote omitted) ISCR Case No. 02-30304 at 3 (App. Bd. Apr. 20, 2004) (quoting ISCR Case No. 99-9020 at 5-6 (App. Bd. June 4, 2001)). 2“Even if Applicant’s financial difficulties initially arose, in whole or in part, due to circumstances outside his [or her] control, the Judge could still consider whether Applicant has since acted in a reasonable manner when dealing with those financial difficulties.” ISCR Case No. 05-11366 at 4 n.9 (App. Bd. Jan. 12, 2007) (citing ISCR Case No. 99-0462 at 4 (App. Bd. May 25, 2000); ISCR Case No. 99-0012 at 4 (App. Bd. Dec. 1, 1999); ISCR Case No. 03-13096 at 4 (App. Bd. Nov. 29, 2005)). A component is whether he or she maintained contact with creditors and attempted to negotiate partial payments to keep