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ISCR Case 15-06575.h1 — CASE

ISCR Case 15-06575.h1denied

Case Headnote

ISCR Case No. 15-06575.h1

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

Summary

A 41-year-old mechanic employed by a U.S. defense contractor was denied a security clearance under Guideline F, Financial Considerations, due to unresolved financial issues. The applicant admitted to several delinquent debts totaling over $14,000 but failed to provide sufficient documentation or evidence of efforts to address them.

Specific allegations included a debt from a judgment settled in November 2009, a fraudulent account resulting from the 2015 Office of Personnel Management hack, and another debt disputed in July 2016. An overdraft charge appeared on all three of the applicant's credit reports. While the applicant admitted to two other debts, he provided no documentation of contact with creditors or payment arrangements for one, and no corroboration for his claim of having paid the other.

The denial was based on the applicant's ongoing history of financial difficulties, his failure to document payments or establish a legitimate basis for contesting debts, and his lack of demonstrated responsible measures to address his delinquent financial obligations.

Why the Applicant Was Denied

The applicant has a history of financial difficulties that are ongoing.
He failed to document any payments or establish a legitimate basis for contesting debts.
The applicant did not demonstrate responsible measures to deal with his delinquent debts.

Conditions Referenced

Disqualifying

F.1raisedFinancial Considerations
F.2raisedFinancial Considerations
F.3raisedFinancial Considerations
F.4raisedFinancial Considerations
F.5raisedFinancial Considerations
F.6raisedFinancial Considerations

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 issuedJun 14, 2016
Answer filedJun 26, 2016Applicant requested a decision without hearing.
Hearing held—No hearing was conducted.
Decision dateJul 25, 2017

Cite For

Failure to Mitigate Financial Difficulties Under Guideline F
Lack of Documentation for Debt Resolution Efforts
Ongoing Financial Issues as a Basis for Security Clearance Denial

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 all financial allegations under Guideline F, citing ongoing financial difficulties and a lack of documented efforts to resolve debts. The applicant's claims of having settled debts and disputing others were not substantiated, leading to the denial of the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	SOR debt 1.a was the same debt Applicant listed on his March 2011 clearance application under a named individual. The named individual obtained a judgment against Applicant, which he settled in November 2009. $6,700	Against Applicant	Auto Loan Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	SOR debt 1.b was a fraudulent account, due to his personal information being compromised in the 2015 Office of Personnel Management hack.	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	SOR debt 1.c was not his liability, and provided a July 2016 dispute form.	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	SOR debt 1.d appears to be a bank overdraft charge, and appears on all three of Applicant’s credit reports.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	Applicant admitted SOR debt 1.e, and stated that he would pay the debt. However, he has documented no contacts with the creditor, or any efforts to arrange a payment schedule.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	Applicant admitted SOR debt 1.f, but claimed, without corroboration, to have paid them.	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. 15-06575 ) Applicant for Security Clearance )

For Government: Charles Hale, 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 14 June 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 26 October 2016, when Applicant’s response to the FORM was due. Applicant provided no additional information. DOHA assigned the case to me 1 July 2017.

FINDINGS OF FACT

Applicant denied SOR financial allegations 1.a-1.c, and admitted allegations 1.d- 1.f. He is a 41-year-old mechanic employed by a U.S. defense contractor since August 2008. He has been continuously employed since February 1998, when he enlisted in the United States military, from which he was honorably discharged in June 2005. Applicant has been married since October 1997, and has two adult daughters and a 10- year-old son. He claims to have had a background investigation in November 2009, but did not list a clearance status (Item 3).

The SOR alleges, and Government exhibits (Items 4-7) substantiate, six delinquent debts totaling over $14,000. He admits three debts totaling $6,700. He claimed to have settled SOR debt 1.a in November 2009, and submitted a satisfaction of judgment from a judgment creditor different than the SOR creditor. Applicant’s Answer claimed that SOR debt 1.bwas a fraudulent account, due to his personal information being compromised in the 2015 Office of Personnel Management hack. Applicant’s Answer stated that SOR debt 1.cwas not his liability, and provided a July 2016 dispute form.5

Applicant admitted SOR debts 1.dand 1.f, but claimed, without corroboration, to have paid them. SOR debt 1.dappears to be a bank overdraft charge, and appears on all three of Applicant’s credit reports. His September 2016 credit report (Item 5) also reflects two additional overdraft charges. Applicant also admitted SOR debt 1.e, and stated that he would pay the debt. However, he has documented no contacts with the creditor, or any efforts to arrange a payment schedule.

The Government investigator reported that Applicant provided a personal financial statement (PFS) that showed $2,722 positive monthly cash flow. Applicant stated at the time that he would look into the debts listed on his credit report. Applicant has not really explained his indebtedness, except to note that his wife handles the household finances since Applicant’s job frequently takes him overseas.

Applicant provided no current budget or financial statement. He has not documented any credit or financial 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.6

ANALYSIS

The Government established a case for disqualification under Guideline F, and Applicant failed to mitigate the security concerns. Applicant has a history of financial difficulties, which are ongoing. With the exception of a satisfaction of judgment form that may or may not resolve SOR debt 1.a, Applicant has not documented any of the claimed payments, established a legitimate basis for contesting any debts, or documented any payment arrangements on the one large debt that he admits.

Applicant meets none of the mitigating conditions for financial considerations. His financial difficulties are both recent and multiple, and having not established any clear reason for his financial problems, his financial situation cannot be considered unlikely to recur. Applicant’s financial problems have not been shown to be due to circumstances beyond his control, nor can he demonstrate that he has taken responsible measures to deal with his delinquent debts.9

Applicant submitted no evidence to show that he received credit or financial counseling, and he has not established that these debts are being resolved. He cannot establish that he has made a good-faith effort to address his debts. Accordingly, I resolve Guideline F against Applicant.

FORMAL FINDINGS

Paragraph 1. Guideline F: AGAINST APPLICANT

Subparagraphs a-f: 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 1-7.

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. During a December 2014 interview with a Government investigator (Item 4), Applicant stated that SOR debt 1.a was the same debt Applicant listed on his March 2011 clearance application (Item 3) under a named individual . The named individual obtained a judgment against Applicant, which he settled in November 2009. However, Applicant provided no documentation that the two accounts were the same.

However, Applicant told the Government investigator that the account was for an automobile loan, a fact confirmed by his September 2016 (Item 5), July 2015 (Item 6), and November 2014 (Item 7) credit reports.

However, each of Applicant’s credit reports already indicate that Applicant disputes the account. Applicant has stated no basis for his dispute. The listed creditor is a collection agent for a retail bank that issues store- branded credit cards. 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 individual 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 and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts.