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ISCR Case 15-07593.h1 — CASE

ISCR Case 15-07593.h1denied

Case Headnote

ISCR Case No. 15-07593.h1

deniedOct 2, 2017· Hon. Richard A. Cefola· hearing

Summary

A 37-year-old defense contractor employee was denied a security clearance under Guideline F, Financial Considerations, due to significant past-due debts. The applicant admitted to a 2014 judgment of approximately $137,609 resulting from a medical emergency, and an additional past-due medical debt of about $2,503 owed to Creditor B. Furthermore, the applicant had two other admitted past-due medical debts totaling approximately $13,566 that remained unaddressed.

While the applicant, with assistance from his credit union, had paid ten admitted past-due debts totaling about $4,713, these efforts were insufficient to resolve the overall financial concerns. The judge noted a history of the applicant not addressing his admitted past-due indebtedness and that significant debts remained.

Ultimately, the applicant failed to demonstrate that future financial problems were unlikely or that he had acted reasonably and responsibly regarding his debts. Consequently, the security clearance was denied.

Why the Applicant Was Denied

The applicant has a history of not addressing his admitted past-due indebtedness.
He still has significant past-due debts and has not demonstrated that future financial problems are unlikely.
The applicant failed to establish that he acted reasonably or responsibly with respect to his debts.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability to Satisfy Debts
AG ¶ 19(b)raisedUnwillingness to Satisfy Debts Regardless of the Ability to Do So
AG ¶ 19(c)raisedHistory of Not Meeting Financial Obligations

Mitigating

AG ¶ 20(a)rejectedBehavior Happened Long Ago, Infrequent, or Unlikely to RecurThe applicant's financial problems are significant and ongoing.
AG ¶ 20(b)rejectedConditions Largely Beyond the Person's ControlThe applicant failed to demonstrate responsible action regarding his debts.
AG ¶ 20(c)rejectedReceived Financial CounselingThere are no clear indications that his financial problems are being resolved.
AG ¶ 20(d)rejectedGood-faith Effort to Repay DebtsThe applicant has not demonstrated timely or responsible action regarding his debts.

Key Rule Quoted

“Any doubt concerning personnel being considered for national security eligibility will be resolved in favor of national security.”

Procedural Posture

SOR issuedJun 14, 2016
Answer filedOct 3, 2016
Hearing heldDec 8, 2016
Decision dateOct 2, 2017

Cite For

Denial of Security Clearance Due to Unresolved Financial Issues Under Guideline F
Failure to Demonstrate Financial Responsibility Despite Positive Cash Flow
Rejection of Mitigating Conditions Related to Financial Distress

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 significant financial concerns under Guideline F, including a history of delinquencies and outstanding debts. The applicant failed to demonstrate responsible management of his financial obligations, leading to a denial of his security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant admits to a past-due 2014 judgment, as a result of his medical emergency, in the amount of about $137,609. $137,609	Against Applicant	Judgment Against Applicant	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Applicant admits that he is indebted to Creditor B for a past-due medical debt in the amount of about $2,503. $2,503	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	With the help of his credit union, Applicant has been able to pay ten admitted past-due debts totaling about $4,713. $4,713	For Applicant	Unspecified Financial	Unknown	—	—	—
1.d	With the help of his credit union, Applicant has been able to pay ten admitted past-due debts totaling about $4,713. $4,713	For Applicant	Unspecified Financial	Unknown	—	—	—
1.e	Applicant has yet to address two additional, admitted past-due medical debts totaling about $13,566. $13,566	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	Applicant has yet to address two additional, admitted past-due medical debts totaling about $13,566. $13,566	Against Applicant	Medical 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. 15-07593 ) ) Applicant for Security Clearance )

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

October 2, 2017 ______________

STATEMENT OF CASE

______________

CEFOLA, Richard A., Administrative Judge:

Statement of the Case

On June 14, 2016, in accordance with DoD Directive 5220.6, as amended (Directive), the Department of Defense issued Applicant a Statement of Reasons (SOR) alleging facts that raise security concerns under Guideline F.1 The SOR further informed Applicant that, based on information available to the government, DoD adjudicators could not make the preliminary affirmative finding it is clearly consistent with the national interest to grant or continue Applicant’s security clearance.

Applicant answered the SOR on October 3, 2016, and requested a hearing before an administrative judge. (Answer.) The case was assigned to me on October 26, 2016. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on November 18, 2016, scheduling the hearing for December 8, 2016. The hearing was convened as scheduled. The Government offered Exhibits (GXs) 1 through 6, which were admitted without objection. Applicant testified on his own behalf. Applicant presented two documents, which I marked Applicant’s Exhibits (AppXs) A and B, and were admitted without objection. The record was left open until February 9, 2017, for receipt of additional documentation. Applicant offered AppX C, which was admitted without objection. DOHA received the transcript of the hearing (TR) about ten business days after the hearing.

FINDINGS OF FACT

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

Applicant is a 37-year-old employee of a defense contractor. (GX 1 at pages 5 and 13.) He has been employed with the defense contractor since January of 2015. (GX 1 at page 13.) He has held a security clearance since October of 2012. (GX 1 at page 44.) He is married, and has two “stepchildren.” (TR at page 23 lines 20–25.) Each month, he and his wife are able to save about $3,847. (AppX C.)

Guideline F – Financial Considerations

Applicant attributes much of his past-due indebtedness to a medical emergency in November of 2011, when he had no medical insurance. (TR at page 16 line 12 to page 21 line 19.)

1.a. Applicant admits to a past-due 2014 judgment, as a result of his medical emergency, in the amount of about $137,609. (Id.) As this judgment is still outstanding, this allegation is found against Applicant.

1.b. Applicant admits that he is indebted to Creditor B for a past-due medical debt in the amount of about $2,503. (TR at page 16 line 12 to page 21 line 19.) As this debt is still outstanding, this allegation is also found against Applicant.

1.c., 1.d., and 1.g.~1.n. With the help of his credit union, Applicant has been able to pay ten admitted past-due debts totaling about $4,713. (TR at page 26 line 10 to page 28 line 14, and AppX A.) This finding is supported by Applicant’s most recent December 2016 credit report. (AppX B.)

1.e. and 1.f. Applicant has yet to address two additional, admitted past-due medical debts totaling about $13,566. (TR at page 28 lines 15–25.) These two allegations are found against Applicant.

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 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 AG ¶ 2 describing the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶ 2(a), 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 national security eligibility 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, and has the ultimate burden of persuasion as to obtaining a favorable clearance decision.”

A person who applies for access to classified information seeks to enter 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 protect or 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 Executive Order (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 relating to the guideline for Financial Considerations is set out in AG ¶ 18: Failure 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 or sensitive information. Financial distress can also be caused or exacerbated by, and thus can be a possible indicator of, other issues of personnel security concern such as excessive gambling, mental health conditions, substance misuse, or alcohol abuse or dependence. An individual who is financially overextended is at greater risk of having to engage in illegal or otherwise questionable acts to generate funds. Affluence that cannot be explained by known sources of income is also a security concern insofar as it may result from criminal activity, including espionage.

The guideline notes several conditions that could raise security concerns under AG ¶ 19. Three are potentially applicable in this case:

(a) inability to satisfy debts;

(b) unwillingness to satisfy debts regardless of the ability to do so; and

Applicant has a history of not addressing his admitted past-due indebtedness The evidence is sufficient to raise these disqualifying conditions.

AG ¶ 20 provides conditions that could mitigate security concerns. I considered all of the mitigating conditions under AG ¶ 20 including:

(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, a death, divorce or separation, clear victimization by predatory lending practices, or identity theft), and the individual acted responsibly under the circumstances;

(c) the individual has received or is receiving financial counseling for the problem from a legitimate and credible source, such as a non-profit credit counseling service, and there are clear indications that the problem is being resolved or is under control; and

(d) the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts. Applicant failed to demonstrate that he is financially responsible. His financial problems are significant and ongoing. He has a long history of delinquencies. He still has significant past-due indebtedness. He has not demonstrated that future financial problems are unlikely. Mitigation under AG ¶ 20(a) has not been established.

Applicant attributed his delinquencies to a 2011 medical emergency. These were circumstances beyond his control. However, he failed to establish that he acted reasonably or responsibly with respect to his debts, despite now having a significant positive monthly cash flow. He has not demonstrated that he addressed his debts in a responsible or timely manner. Full mitigation under AG ¶ 20(b) has not been established.

Furthermore, there are no clear indications that his financial problems are being resolved or are under control. Mitigation under AG ¶¶ 20(c) or (d) has not been established.

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(d):

(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 facts and circumstances surrounding this case. I have incorporated my comments under Guideline F in my whole-person analysis. Overall, the record evidence leaves me with questions or doubts as to Applicant’s eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant failed to mitigate the Financial Considerations security concerns.

FORMAL FINDINGS

Formal findings for or against Applicant on the allegations set forth in the SOR, as required by ¶ E3.1.25 of the Directive, are:

Paragraph 1, Guideline F: AGAINST APPLICANT

Subparagraph 1.a: Against Applicant Subparagraph 1.b: Against Applicant Subparagraph 1.c: For Applicant Subparagraph 1.d: For Applicant Subparagraph 1.e: Against Applicant Subparagraph 1.f: Against Applicant Subparagraphs 1.g.~1.n. For 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 national security eligibility and a security clearance. Eligibility for access to classified information is denied.

________________________ Richard A. Cefola Administrative Judge

FOOTNOTES

1 I considered the previous Adjudicative Guidelines, effective September 1, 2006, as well as the new Adjudicative Guidelines, effective June 8, 2017. My decision would be the same if the case was considered under the previous Adjudicative Guidelines, effective September 1, 2006.