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ISCR Case 15-06494.h1 — CASE

ISCR Case 15-06494.h1denied

Case Headnote

ISCR Case No. 15-06494.h1

deniedJul 25, 2017· Hon. John Grattan Metz, Jr.· hearing

Summary

A 48-year-old aerospace ground equipment mechanic and military veteran was denied a security clearance under Guideline F, Financial Considerations. The denial stemmed from 13 admitted delinquent debts totaling nearly $129,000. These included a past-due first mortgage, a charged-off line of credit, and a repossessed vehicle, each exceeding $100,000. Additionally, the applicant had multiple delinquent debts in repayment plans with various collection agents.

The Statement of Reasons also noted that the applicant claimed a federal debt was paid when the IRS seized a portion of his 2015 income tax return, and expected a Form 1099 for another debt which was not received. Disqualifying conditions F.19(a), F.19(b), and F.19(c) were raised.

The judge determined that the applicant failed to provide sufficient corroborating evidence for claimed debt payments or repayment plans. Furthermore, there was no documentation of financial or credit counseling, or community involvement. Consequently, the judge concluded that granting a clearance was not consistent with national interest, and the security clearance was denied.

Why the Applicant Was Denied

Applicant admitted to 13 delinquent debts totaling nearly $129,000, including a past-due mortgage and charged-off credit.
Applicant provided no corroborating evidence for claimed debt payments or repayment plans.
Applicant failed to document any financial or credit counseling or community involvement.

Conditions Referenced

Disqualifying

F.19(a)raisedInability to Satisfy Debts
F.19(b)raisedUnwillingness to Satisfy Debts Regardless of the Ability to Do So
F.19(c)raisedA History of Not Meeting Financial Obligations

Key Rule Quoted

“The Government has a compelling interest in ensuring each applicant possesses the requisite judgement, reliability, and trustworthiness of those who must protect national interests as their own.”
— Department of the Navy v. Egan, 484 U.S. 518 (1988)

Procedural Posture

SOR issuedFeb 21, 2016
Answer filedMar 1, 2016
Hearing held—Applicant requested a decision without hearing.
Decision dateJul 25, 2017

Cite For

Failure to Document Efforts to Resolve Financial Issues Under Guideline F
Significant Financial Obligations as a Disqualifying Factor
Lack of Evidence for Mitigating Conditions in Financial Considerations 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 that the applicant had significant financial difficulties, including 13 delinquent debts totaling nearly $129,000, which he admitted. The applicant failed to provide sufficient documentation to mitigate the financial concerns, leading to a decision against granting a security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant has a past-due first mortgage totaling over $100,000. $100,000	Against Applicant	Mortgage or Home Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Applicant has a charged-off line of credit totaling over $100,000.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	Applicant has a repossessed vehicle totaling over $100,000.	Against Applicant	Auto Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	Applicant has a delinquent debt in repayment plans with two collection agents.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	Applicant is making payments on a delinquent debt to a third collection agent.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	Applicant is expecting to receive a Form 1099 for a delinquent debt but did not.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	Applicant claimed that a Federal debt had been paid when the IRS seized a portion of his 2015 income tax return.	Against Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	Applicant has a delinquent debt in repayment plans with two collection agents.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i	Applicant has a delinquent debt in repayment plans with two collection agents.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.j	Applicant has a delinquent debt in repayment plans with two collection agents.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.k	Applicant has a delinquent debt in repayment plans with two collection agents.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.l	Applicant has a delinquent debt in repayment plans with two collection agents.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.m	Applicant has a delinquent debt in repayment plans with two collection agents.	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: ) ) XXXXXXXXXXXXXXXXXXXX ) ISCR Case No. 15-06494 ) Applicant for Security Clearance )

For Government: Ross Hyams, Esquire, Department Counsel For Applicant: Pro se

07/25/2017 ______________

STATEMENT OF CASE

______________

METZ, John Grattan, Jr., Administrative Judge:

Based on the record in this case, I deny Applicant’s clearance.

On 21 February 2016, the Department of Defense (DoD) sent Applicant a Statement of Reasons (SOR) raising security concerns under Guideline F, Financial Considerations. Applicant timely answered the SOR, requesting a decision without hearing by the Defense Office of Hearings and Appeals (DOHA). The record in this case closed 5 August 2016, when Applicant’s response to the FORM was due. Applicant provided no additional documents. DOHA assigned the case to me 22 May 2017.

FINDINGS OF FACT

Applicant admitted the SOR financial allegations. He is a 48-year-old aerospace ground equipment mechanic employed by a U.S. defense contractor since April 2013. He served in the U.S. military from September 1986 to October 2012, when he was honorably retired in paygrade E-8. He seeks to continue the clearance he held during his military career.

The SOR alleges, Government exhibits (Items 3-6) establish, and Applicant admits 13 delinquent debts totaling nearly $129,000. Over $100,000 of the debt consists of a past-due first mortgage, a charged-off line of credit, and a repossessed vehicle. He reported these three debts, and three others, on his February 2015 clearance application (Item 4). He discussed these debts, as well as the remaining SOR debts, during an April 2015 interview with a Government investigator (Item 5), based on his March 2015 credit report (Item 6). He told the investigator that he would research the delinquent debts and take steps to resolve them.

Applicant claimed, without corroboration, that the Federal debt at SOR 1.ghad been paid when the Internal Revenue Service (IRS) seized a portion of his 2015 income tax return. He also claimed, without corroboration, to have paid SOR debts 1.l-1.m. Applicant reported, without documentation, that SOR debts 1.dand 1.h-1.I, and SOR debts 1.j-1.kwere in repayment plans with two collection agents. He stated that he was expecting to received a Form 1099 for SOR debt 1.f, but did not, and is now planning to pay the debt. He claimed to be making payments on SOR debt 1.e to a third collection agent. He claimed to have received a mortgage modification on SOR debt 1.a, and to be awaiting payment arrangement on SOR debts 1.b-1.c.

Applicant attributes his financial problems to his 2010 separation from his wife, and their subsequent divorce in May 2014, in which she received over 40 percent of his military retired pay. However, he also acknowledges his gross negligence and irresponsibility in letting his finances get out of control. Further, he has documented no contacts with his creditors since his February 2015 clearance application, his April 2015 interview, his March 2016 Answer, or his June 2016 FORM. Moreover, he provided insufficient information on the circumstances of his separation and divorce, and their effect on his finances, as well as any explanation why the nearly $49,000 in joint debt was not split with his ex-wife.

Applicant has not documented any financial or credit counseling. He provided no work or character references, or any evidence of community involvement.

POLICIES

The adjudicative guidelines (AG) list factors for evaluating a person’s suitability for access to classified information. Administrative judges must assess disqualifying and mitigating conditions under each issue fairly raised by the facts and situation presented. Each decision must also reflect a fair, impartial, and commonsense consideration of the factors listed in AG ¶ 2(d). Any one disqualifying or mitigating condition is not, by itself, conclusive. However, specific adjudicative guidelines should be followed where a case can be measured against them, as they represent policy guidance governing access to classified information. Considering the SOR allegations and the evidence as a whole, the relevant adjudicative guideline is Guideline F (Financial Considerations).

Security clearance decisions resolve whether it is clearly consistent with the national interest to grant or continue an applicant’s security clearance. The Government must prove, by substantial evidence, controverted facts alleged in the SOR. If it does, the burden shifts to applicant to refute, extenuate, or mitigate the Government’s case. Because no one has a right to a security clearance, the applicant bears a heavy burden of persuasion.

Persons with access to classified information enter into a fiduciary relationship with the Government based on trust and confidence. Therefore, the Government has a compelling interest in ensuring each applicant possesses the requisite judgement, reliability, and trustworthiness of those who must protect national interests as their own. The “clearly consistent with the national interest” standard compels resolution of any reasonable doubt about an applicant’s suitability for access in favor of the Government.3

ANALYSIS

The Government established a case for disqualification under Guideline F, and Applicant did not mitigate the security concerns. Applicant has an extensive history of financial difficulties extending at least as far back as August 2012.4

Applicant’s case is a failure of proof. His failure to document any of his claimed payments, payment plans, or adjustments to his debts, or the particulars of his divorce and its impact on his finances, precludes favorable consideration of his clearance application, notwithstanding his lengthy military career.

Applicant meets none of the mitigating conditions for financial considerations, given that he has not documented his claimed actions to address them. His financial problems are recent, frequent, and certainly occurred under circumstances capable of recurring. His May 2014 divorce was clearly a circumstance beyond his control, but he has not provided sufficient details about these circumstances to draw mitigating conclusions. Without clear evidence about when he began to address his financial problems and the progress he has made, he cannot demonstrate that he has taken responsible action under the circumstances. Applicant has had no credit or financial counseling, and he has not documented that the debts are being resolved.7 Consequently, I cannot conclude that he has made a good-faith effort to address his debts. Accordingly, I conclude Guideline F against Applicant.

FORMAL FINDINGS

Paragraph 1. Guideline F: AGAINST APPLICANT

Subparagraphs a-m: Against Applicant

CONCLUSION

Under the circumstances presented by the record in this case, it is not clearly consistent with the national interest to grant or continue a security clearance for Applicant. Clearance denied.

JOHN GRATTAN METZ, JR Administrative Judge

FOOTNOTES

Consisting of the File of Relevant Material (FORM), Items 1-6 .

DoD acted under Executive Order 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 1 September 2006. On 10 December 2016, the Director of National Intelligence (DNI) signed Security Executive Agent Directive 4, implementing new AG, effective with any decision issued on or after 8 June 2017. See, Department of the Navy v. Egan, 484 U.S. 518 (1988).

¶19(a) inability to satisfy debts; (b) unwillingness to satisfy debts regardless of the ability to do so; (c) a history of not meeting financial obligations;

¶20(a) the behavior happened so long ago, was so infrequent, or occurred under such circumstances that it is unlikely to recur . . . ¶20(b) the conditions that resulted in the financial problem were largely beyond the person’s control . . . and the individual acted responsibly under the circumstances;

¶20(c) the person has received or is receiving counseling for the problem and there are clear indications that the problem is being resolved or is under control;

¶20(d) the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.