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ISCR Case 15-06968.h1 — CASE

ISCR Case 15-06968.h1denied

Case Headnote

ISCR Case No. 15-06968.h1

deniedMay 30, 2017· Hon. Carol G. Ricciardello· hearing

Summary

A 45-year-old male applicant with a military background was denied a security clearance under Guideline F, Financial Considerations, due to approximately $23,487 in unresolved delinquent debts. The Statement of Reasons detailed several specific financial issues, including an overextended credit card from 2012, an $11,519 debt from a repossessed vehicle in September 2013, and a $337 debt for internet service associated with a foreclosed property.

The applicant acknowledged these five delinquent debts but did not provide evidence of any payment plans or financial counseling to address them. He attributed his financial difficulties to carelessness and failed to demonstrate that the issues were beyond his control.

Ultimately, the judge determined that the applicant did not mitigate the security concerns raised by his financial history, leading to the denial of his security clearance. Disqualifying conditions under Adjudicative Guidelines ¶ 19(a) and ¶ 19(c) were cited in the decision.

Why the Applicant Was Denied

Applicant has five delinquent debts totaling approximately $23,487, which he admitted to.
He failed to provide evidence of payment plans or the current status of his debts.
The applicant attributed his financial problems to carelessness and did not demonstrate that they were beyond his control.

Conditions Referenced

Disqualifying

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

Key Rule Quoted

“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.”
— AG & 18

Procedural Posture

SOR issuedMar 25, 2016
Answer filedApr 21, 2016Applicant elected to have the case decided on the written record.
Hearing held—No hearing; decided on the written record.
Decision dateMay 30, 2017

Cite For

Failure to Provide Evidence of Debt Resolution Under Guideline F
Impact of Financial Irresponsibility on Security Clearance Eligibility
Importance of Demonstrating Good-faith Efforts to Resolve Debts

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 delinquent debts totaling approximately $23,487, which he failed to mitigate. The applicant's financial irresponsibility and lack of evidence showing efforts to resolve these debts led to a denial of his security clearance under Guideline F.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	The debt in SOR ¶ 1.a is a credit card that became delinquent in 2012 due to being overextended.	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b–1.c	2 sub-charges — specific text not stated in this decision (against the applicant).	Against Applicant			—	—	—
1.d	The debt in SOR ¶ 1.d ($11,519) is for a repossessed vehicle from September 2013. $11,519	Against Applicant	Auto Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	Applicant acknowledged to the investigator that the debt in SOR ¶ 1.e ($337) was for internet service, likely for a house that he had lived in but was foreclosed. $337	Against Applicant	Utility or Phone Debt	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. 15-06968 ) ) Applicant for Security Clearance

For Government: Andrew H. Henderson, Esq., Department Counsel For Applicant: Pro se

05/30/2017 ______________

STATEMENT OF CASE

______________

RICCIARDELLO, Carol G., Administrative Judge:

Applicant failed to mitigate the security concerns under Guideline F, financial considerations. Applicant’s eligibility for a security clearance is denied.

Statement of the Case

On March 25, 2016, the Department of Defense (DOD) issued to Applicant a Statement of Reasons (SOR) detailing security concerns under Guideline F, financial considerations. The action was taken 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 effective within the DOD for SORs issued after September 1, 2006.

Applicant answered the SOR on April 21, 2016, and elected to have his case decided on the written record. Department Counsel submitted the Government’s file of relevant material (FORM). The FORM was mailed to Applicant, and it was received on June 29, 2016. Applicant was afforded an opportunity to file objections and submit material in refutation, extenuation, or mitigation. Applicant did not object to the Government’s evidence or provide additional evidence. The Government’s documents identified as Items 2 through 5 are admitted into evidence. The case was assigned to me on May 5, 2017.

FINDINGS OF FACT

Applicant admitted all of the allegations in the SOR. After a thorough and careful review of the pleadings and exhibits submitted, I make the following findings of fact.

Applicant is 45 years old. He attended college, but did not earn a degree. He served in the military on active duty and in the active reserves from 1990 to 2008 and was honorably discharged. He married in 2001 and divorced in 2003. He has worked for federal contractors since 2008.1

Applicant has five delinquent debts alleged in the SOR totaling approximately $23,487. They are supported by credit reports from February 2015 and March 2016, and Applicant’s admissions. In his answer to the SOR, he stated for each debt “working on paying off.”

During Applicant’s June 2015 background interview with a government investigator, he stated that the debt in SOR ¶ 1.a is a credit card that became delinquent in 2012 due to being overextended. The debt was charged off. Applicant told the investigator he had a payment plan with the creditor, but at the time he was one month late in his payments, and he was trying to catch up. Applicant did not present any evidence of the current status of the debt.2

The debt in SOR ¶ 1.d ($11,519) is for a repossessed vehicle from September 2013. The amount alleged is the deficiency balance owed to the creditor. Applicant told the investigator that in 2014 he contacted the creditor and set up a payment plan for $100 payments every two weeks. He was a month late at the time of his background interview. Applicant did not provide any documents to show the current status of this debt.3

Applicant acknowledged to the investigator that the debt in SOR ¶ 1.e ($337) was for internet service, likely for a house that he had lived in but was foreclosed. He told the investigator he would look into the debt and pay it off once he had extra money. He did not provide any documents to show the current status of this debt.4 Applicant further told the investigator that at the time of his interview his financial situation was improving. He explained that his financial issues were due to being careless and irresponsible by getting too far into debt. He has not received financial counseling.5

POLICIES

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines (AG). In addition to brief introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which are 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, these guidelines are applied 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. Likewise, I have avoided drawing inferences grounded on mere speculation or conjecture.

Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, an “applicant is responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by applicant or proven by Department Counsel, and has the ultimate burden of persuasion as to obtaining 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 that an applicant may deliberately or inadvertently fail to safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation as to potential, rather than actual, risk of compromise of classified information. Section 7 of EO 10865 provides that 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 relating to the guideline for financial considerations is set out in AG ¶ 18:

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.

This concern is broader than the possibility that an individual might knowingly compromise classified information in order to raise money. It encompasses concerns about an individual’s self-control, judgment, and other qualities essential to protecting classified information. An individual who is financially irresponsible may also be irresponsible, unconcerned, or negligent in handling and safeguarding classified information.6

AG ¶ 19 provides conditions that could raise security concerns. The following are potentially applicable:

(a) inability or unwillingness to satisfy debts; and

Applicant has delinquent debts that are unresolved. There is sufficient evidence to support the application of the above disqualifying conditions.

The guideline also includes conditions that could mitigate security concerns arising from financial difficulties. The following 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; 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.

Applicant has delinquent debts totaling more than $23,487. He began experiencing financial problems in approximately 2013 due to being careless and overextended. Applicant told the government investigator that he had payment plans on two debts, but was a month behind in payments. In his answer to the SOR, he stated he was working on paying his delinquent debts, but failed to provide any documents to show the current status of any of the alleged debts. There is insufficient evidence to conclude that his financial problems are unlikely to recur. His failure to timely address his delinquent debts casts doubt on his current reliability, trustworthiness, and good judgment. AG ¶ 20(a) does not apply.

Applicant attributed his financial problems to being overextended and careless. He did not provide evidence that his financial problems were beyond his control. AG ¶ 20(b) does not apply. Applicant told the investigator that he had payment plans for two debts, but did not provide substantiating evidence. Insufficient evidence was presented to raise AG ¶¶ 20(c), 20(d), or 20(e).

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 the 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 the 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.

Applicant is 45 years old. He has been employed since at least 2008. He has delinquent debts that began to accumulate in 2013. Applicant did not provide any evidence that he is currently resolving his delinquent debts. Applicant does not have a reliable financial track record at this time. His finances remain a security concern. He has failed to meet his burden of persuasion. The record evidence leaves me with serious questions and doubts as to Applicant’s eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant failed to mitigate the security concerns arising under Guideline F, financial considerations.

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.e: 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’s eligibility for a security clearance. Eligibility for access to classified information is denied.

_____________________________ Carol G. Ricciardello Administrative Judge

FOOTNOTES

1 Item 2. 2 Items 2, 3, 4, 5. 3 Item 3. 4 Item 3. 5 Item 3. 6 See ISCR Case No. 11-05365 at 3 (App.Bd. May 1, 2012).