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ISCR Case 15-07696.h1 — CASE

ISCR Case 15-07696.h1denied

Case Headnote

ISCR Case No. 15-07696.h1

deniedJun 7, 2017· Hon. Gregg A. Cervi· hearing

Summary

A 45-year-old defense contractor was denied a security clearance under Guideline F (Financial Considerations) due to approximately $64,532 in unresolved financial issues. These debts primarily arose from a divorce and a period of unemployment. The Statement of Reasons cited multiple charged-off consumer credit card debts and a substantial line of credit delinquency.

Disqualifying conditions F.19(a) and F.19(c) were raised, while mitigating conditions F.20(b) and F.20(d) were considered. However, the applicant failed to provide evidence of effective debt resolution or financial counseling. Although he acknowledged his debts and stated he engaged a debt repair company, he did not present documentation to support these claims or demonstrate good-faith efforts to resolve his delinquent accounts.

The denial was based on the applicant's failure to provide evidence of efforts to resolve his debts despite continuous employment since 2015. His financial liabilities remained unaddressed, leading to doubts about his reliability and trustworthiness.

Why the Applicant Was Denied

The applicant failed to provide evidence of efforts to resolve his delinquent debts despite being employed since 2015.
The applicant's financial liabilities remained unaddressed, raising doubts about his reliability and trustworthiness.
The applicant did not present any documentation to support claims of good-faith efforts to resolve his debts.

Conditions Referenced

Disqualifying

F.19(a)raisedInability or Unwillingness to Satisfy Debts
F.19(c)raisedA History of Not Meeting Financial Obligations

Mitigating

F.20(b)appliedConditions That Resulted in the Financial Problem Were Largely Beyond the Person’s Control
F.20(d)rejectedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve DebtsThe applicant's efforts through a debt repair company were insufficient and not completed.

Key Rule Quoted

“Any doubt concerning personnel being considered for access to classified information will be resolved in favor of the national security.”
— Department of Navy v. Egan, 484 U.S. 518, 531 (1988)

Procedural Posture

SOR issuedMay 22, 2016
Answer filedJun 22, 2016Applicant elected to proceed without a hearing.
Hearing held—Decided on the written record.
Decision dateJun 7, 2017

Cite For

Denial of Security Clearance Due to Unresolved Financial Obligations
Insufficient Evidence of Debt Resolution Efforts
Impact of Financial Difficulties on 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 did not mitigate financial concerns related to six delinquent debts totaling approximately $64,532. Despite acknowledging the impact of a divorce and unemployment on his financial situation, the applicant failed to demonstrate sufficient efforts to resolve these debts, leading to a denial of his security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	charged-off consumer credit card debts	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	charged-off consumer credit card debts	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	charged-off consumer credit card debts	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	charged-off consumer credit card debts	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	charged-off consumer credit card debts	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	substantial line of credit delinquency	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: ) ) ) ISCR Case No. 15-07696 ) Applicant for Security Clearance )

For Government: Mary Margaret Foreman, Esq., Department Counsel For Applicant: Pro se

06/07/2017 ______________

STATEMENT OF CASE

______________

CERVI, Gregg A., Administrative Judge:

Applicant has not mitigated the financial considerations security concerns. Eligibility for access to classified information is denied.

Statement of the Case

Applicant completed a Questionnaire for National Security Positions (SF 86) on June 18, 2015. On May 22, 2016, the Department of Defense (DOD) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline F, financial considerations.1 Applicant responded to the SOR on June 22, 2016, and elected to have the case decided on the written record in lieu of a hearing. The Government’s written brief with supporting documents, known as the File of Relevant Material (FORM), was submitted by Department Counsel on August 3, 2016.

A complete copy of the FORM was provided to Applicant, who was afforded an opportunity to file objections and submit material to refute, extenuate, or mitigate the security concerns. Applicant received the FORM on August 11, 2016, but he did submit evidence in mitigation or assert any objections to the Government’s evidence. The Government’s exhibits included in the FORM (Items 1 to 6) are admitted into evidence. The case was assigned to me on June 2, 2017.

FINDINGS OF FACT

The SOR alleges six delinquent debts totaling approximately $64,532. Applicant admitted all the allegations in the SOR with an explanation. Applicant is 45 years old. He earned an associate’s degree in 1995, and has been employed by a defense contractor since 2015. He was married in 1996 and divorced in 2004. He has one child, five years old. The debts alleged in the SOR include charged-off consumer credit card debts and a substantial line of credit delinquency.

Applicant accepted responsibility for the debts as a result of his divorce in 2004. He became financially overextended when he lost his job in 2008 due to a plant closing. In 2009, he moved from his home in state “A” to take a job in state “B,” but at a substantially reduced salary. He was unemployed for about nine months. He sought assistance from a credit/debt repair company, and attributes the line of credit for that purpose. However, he discovered that only a few debts were resolved by the company before all of his deposited funds were used to pay fees. He recognized that he did not fully read the agreement before beginning the process. He discontinued the service, but continued to have unpaid delinquent debts.

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 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.

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.” The applicant has the ultimate burden of persuasion to obtain a favorable security clearance decision.2 In Department of Navy v. Egan3, the Supreme Court stated that the burden of proof is less than a preponderance of the evidence.4

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.” It is well-established law that no one has a right to a security clearance. As noted by the Supreme Court in Egan, “the clearly consistent standard indicates that security clearance determinations should err, if they must, on the side of denials.” Under Egan, Executive Order 10865, and the Directive, any doubt about whether an applicant should be allowed access to classified information will be resolved in favor of protecting national security.5

The Government reposes a high degree of trust and confidence in individuals to whom it grants access to sensitive and classified information. Decisions include, by necessity, consideration of the possible risk the applicant may deliberately or inadvertently fail to safeguard sensitive or classified information. Such decisions entail a certain degree of legally permissible extrapolation of potential, rather than actual, risk of compromise of sensitive or classified information.

Section 7 of Exec. Or. 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 Exec. Or. 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive information).

ANALYSIS

Guideline F, Financial Considerations

The security concern 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.

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

(a) inability or unwillingness to satisfy debts; and

Applicant has a history of financial difficulties and unresolved delinquent debts. The evidence is sufficient to raise the above disqualifying conditions.

Conditions that could mitigate the financial considerations security concerns are provided under AG ¶ 20. The following are potentially applicable:6

(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.

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).

Applicant incurred debts because of a divorce and unemployment. He found work in another state after nine months of unemployment, but at a reduced salary. Divorce and a loss employment are mitigating factors to consider, but Applicant’s financial liability has not been sufficiently addressed. Although Applicant stated that he initiated good-faith efforts to resolve his debts through use of a debt repair company, he did not account for the fees required to continue the service, and he discontinued it before resolving the debts alleged in the SOR. He has not shown evidence of efforts to resolve the SOR debts despite steady employment with a government contractor since 2015, and he has not presented evidence of financial counseling. AG ¶ 20 (b) and (d) are partially applicable, but Applicant’s inability to complete the debt resolution plan and failure to take other efforts to address his outstanding debts, prevents full application of mitigating credit.

Applicant’s intentions were admirable, and he undertook responsibility to attempt to address his debts, but unfortunately, the results do not reflect his efforts. The totality of the continued delinquent debts and Applicant’s apparent inability to address them leaves me with doubts about his overall financial condition and ability or willingness to face his financial responsibilities. They continue to cast doubt on his current reliability, trustworthiness, and good judgment, and leaves him vulnerable to the potential for pressure, coercion, exploitation, or duress.

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(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 all of the potentially disqualifying and mitigating conditions in light of all the facts and circumstances surrounding this case. I have incorporated my findings of fact and comments under Guideline F in this whole-person analysis.

Applicant suffered a divorce and nine months of unemployment. However, he has been unable or unwilling to prudently manage his finances so that he can pay his delinquent obligations. He offered no documentary evidence of his debt resolution efforts or his current financial status. Overall, the record evidence leaves me with questions and doubts as to Applicant’s eligibility and suitability for a security clearance. I conclude Applicant did not 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 section E3.1.25 of Enclosure 3 of the Directive, are:

Paragraph 1, Guideline F: Against Applicant

Subparagraphs 1.a – 1.f: 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 eligibility for a security clearance. Eligibility for access to classified information is denied.

________________________ Gregg A. Cervi Administrative Judge

FOOTNOTES

1 The action was taken under Executive Order (Exec. Or.) 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) implemented by the DOD on September 1, 2006. 2 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan.27, 1995).

3 Department of Navy v. Egan, 484 U.S. 518, 528 (1988) (“it should be obvious that no one has a ‘right’ to a security clearance”); Duane v. Department of Defense, 275 F.3d 988, 994 (10th Cir. 2002) (no right to a security clearance).

4 Egan, 484 U.S. at 531.

5 Egan, 484 U.S. at 531. 6 AG ¶ 20.fis not applicable.