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ISCR Case 15-07692.h1 — CASE

ISCR Case 15-07692.h1denied

Case Headnote

ISCR Case No. 15-07692.h1

deniedSep 12, 2017· Hon. Carol G. Ricciardello· hearing

Summary

A 65-year-old applicant was denied a security clearance under Guideline F (Financial Considerations) due to two delinquent credit card debts totaling over $24,000. The Statement of Reasons specifically alleged these two debts, one for $16,410 and another for $7,587, both of which were in collection. Disqualifying conditions under Adjudicative Guidelines (AG) ¶ 19(a), (b), and (c) were raised.

The applicant admitted to the existence of both delinquent credit card debts, acknowledging they had been in collection since 2009. However, she did not provide any evidence that these debts had been paid, resolved, or settled.

Ultimately, the denial was based on the applicant's failure to demonstrate responsible action regarding her financial obligations. Despite the application of mitigating conditions under AG ¶ 20(a), (b), (c), (d), and (e), the lack of resolution or good-faith effort to address the long-standing debts led to the denial of her security clearance.

Why the Applicant Was Denied

Applicant admitted to having two delinquent credit card debts that have been in collection since 2009.
She did not provide evidence of having paid, resolved, or settled the debts.
The applicant failed to demonstrate responsible action regarding her financial obligations.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(a)rejectedBehavior Happened Long Ago or InfrequentlyThe debts have been ongoing since 2009.
AG ¶ 20(b)rejectedConditions Beyond ControlInsufficient evidence that the debts were due to circumstances beyond her control.
AG ¶ 20(c)rejectedFinancial CounselingNo evidence of participation in financial counseling.
AG ¶ 20(d)rejectedGood-faith Effort to Repay DebtsNo evidence of a good-faith effort to resolve the debts.
AG ¶ 20(e)rejectedDispute Legitimacy of DebtsApplicant did not dispute the debts.

Key Rule Quoted

“The protection of the national security is the paramount consideration.”

Procedural Posture

SOR issuedJun 6, 2016
Answer filedJul 6, 2016Applicant elected to proceed without a hearing.
Hearing held—Case decided on the written record.
Decision dateSep 12, 2017

Cite For

Failure to Mitigate Financial Considerations Under Guideline F
Importance of Providing Evidence of Debt Resolution
Impact of Long-standing Financial Issues 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 failed to mitigate financial concerns under Guideline F, as she had two delinquent credit card debts that remained unresolved since 2009. Despite her claims of having closed one account, she did not provide sufficient evidence to demonstrate that the debts were paid or settled, leading to a denial of her security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	The SOR alleges two delinquent credit cards debts (¶ 1.a-$16,410; ¶ 1.b-$7,587), which are in collection. $16,410	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.b	The SOR alleges two delinquent credit cards debts (¶ 1.a-$16,410; ¶ 1.b-$7,587), which are in collection. $7,587	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (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. 15-07692 ) ) Applicant for Security Clearance

For Government: Braden Murphy, Esq., Department Counsel For Applicant: Pro se

09/12/2017 ______________

STATEMENT OF CASE

______________

RICCIARDELLO, Carol G., Administrative Judge:

Applicant failed to mitigate the security concerns under Guideline F, financial considerations. Eligibility for access to classified information is denied.

Statement of the Case

On June 6, 2016, the Department of Defense Consolidated Adjudications Facility (DOD CAF) 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 (AG) effective within the DOD on September 1, 2006. On June 8, 2017, new AG were implemented and are effective for decisions issued after that date.1 Applicant answered the SOR on July 6, 2016, and elected to have her case decided on the written record in lieu of a hearing. Department Counsel submitted the Government’s file of relevant material (FORM). Applicant received it on October 4, 2016. She was afforded an opportunity to file objections and submit material in refutation, extenuation, or mitigation within 30 days of receipt of the FORM. She provided a response to the FORM and documents that were marked Applicant Exhibits (AE) A and B. The Government’s evidence is identified as Items 1 through 6. There were no objections and all evidence was admitted. The case was assigned to me on July 21, 2017.

FINDINGS OF FACT

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

Applicant is 65 years old. She was married and divorced three times and has two grown children. Applicant has been employed by federal contractors since 1994 and with her current employer since 2010. She did not disclose any periods of unemployment.

The SOR alleges two delinquent credit cards debts (¶ 1.a-$16,410; ¶ 1.b- $7,587), which are in collection. In 2009, Applicant disclosed to her security manager that she was having financial difficulties and specifically disclosed the two debts alleged.2 She also disclosed the debts on her March 2015 security clearance application (SCA) and admitted them in her answer to the SOR.3

During Applicant’s background interview in July 2015, she explained to the government investigator that the two SOR debts became past-due in February 2009, and both were turned over to collection companies. She stated the debt in SOR ¶ 1.a was closed, and she did not owe anything. She did not explain or provide proof of why she no longer owed this debt. She did not know the status of the collection account in SOR ¶ 1.b. When confronted with the two collection accounts, she agreed one account was for the debt in SOR ¶ 1.a for the original debt. She stated that she was not familiar with the name of the collection account in SOR ¶ 1.b. Her April 2015 credit report reflects both collection accounts.4

In Applicant’s response to the FORM, she provided a copy of a credit report from November 2016 and stated, “Please note there are no delinquencies listed.”5 She further stated: I would also like to offer some explanation as to how the two credit cards accounts became such an issue. Both credit card companies began to add late fees and penalties when I was unable to pay the minimum amount due each month, even though I was still paying them something each month before the due date. The balance due grew larger each month instead of going down until it overwhelmed me.6

Applicant did not state that she paid the debts or provide any documents to show she resolved or settled the debts alleged in the SOR. She stated that she purchased a home in October 2015. No additional information was provided.

POLICIES

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the 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 national security eligibility will be resolved in favor of the 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. Directive ¶ E3.1.15 states that 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 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.

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

(a) inability to satisfy debts;

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

Applicant experienced financial difficulty in 2009. She admitted two credit cards became past due and are now in collection. She is unwilling or unable to pay them. 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, 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;

(d) the individual initiated and is adhering to 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 admitted several times that the debts alleged in the SOR are her debts. They have been past-due since 2009. They may no longer be listed on her most recent credit report due to the age of the debts, but she has not provided any evidence that the debts were paid, resolved, or settled. It appears she has the ability to resolve them because she was able to purchase a house. These debts are ongoing. AG ¶ 20(a) does not apply. There is insufficient evidence that the debts were the result of conditions that were beyond Applicant’s control. Her only explanation was that she failed to make minimum payments on the debts, and subsequently she was unable to make payments because of the additional late fees and penalties. Applicant did not provide evidence she has acted responsibly in addressing her delinquent debts, that she participated in credit counseling, or that her financial problems are under control. There is insufficient evidence to show that her delinquent debts are being resolved or she has made a good- faith effort to do so. AG ¶¶ 20(b), 20(c), and 20(d) do not apply. Applicant did not dispute the debts. AG ¶ 20(e) does not apply.

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(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 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(d) were addressed under that guideline, but some warrant additional comment.

Applicant is 65 years old. She has been aware since 2009 that two of her credit cards were past due. She has not provided evidence that she has attempted to pay, resolve, or settle the delinquent accounts during the past eight years. The record evidence leaves me with 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 ¶ E3.1.25 of Enclosure 3 of the Directive, are:

Paragraph 1, Guideline F: AGAINST APPLICANT

Subparagraphs 1.a and 1.b: 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 security to grant Applicant’s eligibility for a security clearance. Eligibility for access to classified information is denied.

_____________________________ Carol G. Ricciardello Administrative Judge

FOOTNOTES

1 I considered the previous AG, effective September 1, 2006, as well as the new AG, effective June 8, 2017. My decision would be the same if the case was considered under the previous AG. 2 Item 7. 3 Items 3, 4. 4 Items 5, 6. 5 AE A, B. 6 AE A.