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ISCR Case 15-07966.h1 — CASE

ISCR Case 15-07966.h1denied

Case Headnote

ISCR Case No. 15-07966.h1

deniedNov 27, 2017· Hon. Roger C. Wesley· hearing

Summary

A 32-year-old training coordinator for a defense contractor was denied a security clearance under Guideline F (Financial Considerations) due to significant delinquent debts totaling over $44,000. The applicant had accumulated 32 outstanding delinquent debts, and while she had entered a rehabilitation agreement for her student loans, she failed to provide sufficient evidence of financial responsibility or progress in addressing her other obligations.

Specifically, the Statement of Reasons (SOR) noted that the applicant made $50 monthly payments to one creditor between August and October 2016 for a $5,571 debt but provided no evidence of payments or payment plans for any of the remaining creditors. The applicant admitted all allegations in the SOR without offering explanations or evidence of financial responsibility.

The denial was based on the applicant's accumulation of substantial delinquent debts, her admission of the allegations without explanation, and an insufficient demonstration of responsible efforts to address her financial issues. Disqualifying conditions 19(a), 19(b), and 19(c) were raised, while mitigating condition 1(d) was applied. Ultimately, the applicant's inability to demonstrate responsible financial management led to the denial of her security clearance.

Why the Applicant Was Denied

Applicant accumulated 32 delinquent debts exceeding $44,000, which remain outstanding.
Applicant admitted all allegations in the SOR without providing explanations or evidence of financial responsibility.
Insufficient demonstration of responsible efforts in addressing her debts precluded favorable findings.

Conditions Referenced

Disqualifying

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

Mitigating

1(d)appliedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve DebtsApplicant documented some progress in addressing her debts, including a payment plan with one creditor.

Key Rule Quoted

“Eligibility for access to classified information is denied.”

Procedural Posture

SOR issuedJun 7, 2016
Answer filedAug 10, 2016Applicant elected to have her case decided on the written record.
Hearing held—
Decision dateNov 27, 2017

Cite For

Insufficient Demonstration of Financial Responsibility Under Guideline F
Importance of a Meaningful Track Record in Debt Repayment
Criteria for Evaluating Financial Stability in Security Clearance Cases

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 accumulated numerous delinquent debts exceeding $44,000, which raised significant security concerns under Guideline F. While the applicant had made some progress in addressing one specific debt, the overall financial situation was deemed insufficiently stabilized, leading to a denial of the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a–1.w	23 sub-charges — specific text not stated in this decision (against the applicant).	Against Applicant			—	—	—
1.x	Applicant documented monthly payments of $50 between August and October 2016 to SOR creditor ¶ 1.x on a listed debt of $5,571, but provided no evidence of payments or payment plans with any of the remaining creditors listed in the SOR. $5,571	For Applicant	Unspecified Financial	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	Claimed Debt Paid in Full
1.y–1.ff	138 sub-charges — specific text not stated in this decision (against the applicant).	Against Applicant			—	—	—

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. 15-07966 ) ) Applicant for Security Clearance )

For Government: Tova Minster, Esq., Department Counsel For Applicant: Pro se 11/27/2017 _____________

STATEMENT OF CASE

______________

WESLEY, Roger C., Administrative Judge:

Based upon a review of the pleadings and exhibits, I conclude that Applicant did not mitigate the security concerns regarding her financial problems. Eligibility for access to classified information is denied.

On June 7, 2016, the Department of Defense (DOD) Consolidated Adjudications Facility (CAF) issued a Statement of Reasons (SOR) detailing reasons why DOD adjudicators could not make the affirmative determination of eligibility for a security clearance, and recommended referral to an administrative judge to determine whether a security clearance should be granted, continued, denied, or revoked. 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 (AGs) implemented by DOD on September 1, 2006. Security Executive Agent, by Directive 4, National Security Adjudicative Guidelines (SEAD 4), dated December 10, 2016, superceded and replaced the September 2006 adjudicative guidelines (AGs). They apply to all covered individuals who require initial or continued eligibility for access to classified information or eligibility to hold a sensitive position. Procedures for administrative due process for contractor personnel continue to be governed by DOD Directive 5220.6, subject to the updated substantive changes in the AGs, effective June 8, 2017. Application of the AGs that were in effect as of the issuance of the SOR would not affect my decision in this case.

Applicant responded to the SOR on August 10, 2016, and elected to have her case decided on the basis of the written record. Applicant received the File of Relevant Material (FORM) on October 11, 2016. She timely responded to the FORM and did not object to any of the exhibit items in the FORM. She documented her rehabilitation agreement with her student loan lender (SOR ¶¶ 1.y-1.ff) Applicant’s submissions were admitted as Items 6-7.

Summary of Pleadings

Under Guideline F, Applicant allegedly accumulated 32 delinquent debts exceeding $44,000. Allegedly, these debts remain outstanding.

In her response to the SOR, Applicant admitted all of the allegations without any explanations. She provided no attachments to her response.

FINDINGS OF FACT

Applicant is a 32-year-old training coordinator for a defense contractor who seeks a security clearance. The allegations covered in the SOR and admitted by Applicant are incorporated and adopted as relevant and material findings. Additional findings follow.

Background

Applicant married in July 2007 and has two children: one from her current marriage (age 9) and another from a prior relationship (age 13). (Items 2-3) She earned an associate’s degree in May 2008 and a bachelor’s degree in February 2011. (Item 2) Applicant reported no military service.

Since August 2013, Applicant has worked for her current employer. (Items 2-3) Between September 2005 and August 2013, she worked for other defense contractors in administrative support positions. (Items 2-3)

Applicant’s finances

In August 2007, Applicant contracted for eight educational loans with an education lender covering SOR debts ¶¶ 1.y-1.ff to finance her college classes. (Items 4-6) She accumulated delinquent educational loans exceeding $35,700 (includes accrued interest) while enrolled in college between 2010 and 2014. (Item 3-6) These eight educational loans became delinquent in 2014 and remain in delinquent status. In October 2016, Applicant entered into a loan rehabilitation agreement with her educational lender. (Item 6) Under the terms of her agreement, she agreed to make nine monthly payments of $5.00 within a ten-month period. She provided no evidence of up-front or other payments to initiate her payment agreement. At this time, her student loans remain in delinquent status pending satisfaction of the terms of her rehabilitation agreement with her lender.

Besides her educational debts, Applicant accumulated over $11,000 in delinquent medical and consumer debts. (Items 3-7) She documented monthly payments of $50 between August and October 2016 to SOR creditor ¶ 1.xon a listed debt of $5,571, but provided no evidence of payments or payment plans with any of the remaining creditors listed in the SOR. All of Applicant’s listed debts remain delinquent and outstanding.

In her student loan rehabilitation application, Applicant reported gross monthly income of $4,200 and monthly expenses of $2,970, but no further information on the state of her finances. (Item 6) Nor did she provide any evidence of budgeting or financial counseling. Applicant did not furnish character references, performance evaluations, or evidence of community involvement.

POLICIES

The SEAD 4, App. A lists guidelines to be used by administrative judges in the decision-making process covering security clearance cases. These guidelines take into account factors that could create a potential conflict of interest for the individual applicant, as well as considerations that could affect the individual’s reliability, trustworthiness, and ability to protect classified information. These guidelines include conditions that could raise a security concern and may be disqualifying (disqualifying conditions), if any, and many of the conditions that could mitigate security concerns.

These guidelines must be considered before deciding whether or not a security clearance should be granted, continued, or denied. The guidelines do not require administrative judges to place exclusive reliance on the enumerated disqualifying and mitigating conditions in the guidelines in arriving at a decision. Each of the guidelines is to be evaluated in the context of the whole person in accordance with App. A. AG ¶ 2(c).

In addition to the relevant AGs, administrative judges must take into account the pertinent considerations for assessing extenuation and mitigation set forth in App. A, AG ¶ 2(d) of the AGs, which are intended to assist the judges in reaching a fair and impartial commonsense decision based upon a careful consideration of the pertinent guidelines within the context of the whole person.

The adjudicative process is designed to examine a sufficient period of an applicant’s life to enable predictive judgments to be made about whether the applicant is an acceptable security risk. The following App A, AG ¶ 2(d) factors are pertinent: (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 chances; (7) the motivation for the conduct; (8) the potential for pressure, coercion, exploitation, or duress; and (9) the likelihood of continuation or recurrence.

Viewing the issues raised and evidence as a whole, the following individual guidelines are pertinent in this case:

Financial Considerations

The Concern: 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 or sensitive information. . . . An individual who is financially overextended is at greater risk of having to engage in illegal acts or otherwise questionable acts to generate funds. . . . AG ¶ 18.

Burden of Proof

By virtue of the principles and policies framed by the AGs, a decision to grant or continue an applicant's security clearance may be made only upon a threshold finding that to do so is clearly consistent with the national interest. Because the Directive requires administrative judges to make a commonsense appraisal of the evidence accumulated in the record, the ultimate determination of an applicant's eligibility for a security clearance depends, in large part, on the relevance and materiality of that evidence. See United States, v. Gaudin, 515 U.S. 506, 509-511 (1995).

As with all adversarial proceedings, the judge may draw only those inferences which have a reasonable and logical basis from the evidence of record. Conversely, the judge cannot draw factual inferences that are grounded on speculation or conjecture.

The Government's initial burden is twofold: (1) it must prove by substantial evidence any controverted facts alleged in the SOR, and (2) it must demonstrate that the facts proven have a material bearing to the applicant's eligibility to obtain or maintain a security clearance. The required materiality showing, however, does not require the Government to affirmatively demonstrate that the applicant has actually mishandled or abused classified information before it can deny or revoke a security clearance. Rather, the judge must consider and weigh the cognizable risks that an applicant may deliberately or inadvertently fail to safeguard classified information.

Once the Government meets its initial burden of proof of establishing admitted or controverted facts, the evidentiary burden shifts to the applicant for the purpose of establishing his or her security worthiness through evidence of refutation, extenuation, or mitigation. Based on the requirement of Exec. Or. 10865 that all security clearances be clearly consistent with the national interest, the applicant has the ultimate burden of demonstrating his or her clearance eligibility. “[S]ecurity-clearance determinations should err, if they must, on the side of denials.” See Department of the Navy v. Egan, 484 U.S. 518, 531 (1988).

ANALYSIS

Security concerns are raised over Applicant’s accrual of delinquent educational, medical, and consumer accounts. Applicant’s accumulation of delinquent debts warrant the application of three of the disqualifying conditions (DC) of the Guidelines: DC ¶¶ 19(a), “inability to satisfy debts”; 19 (b), “unwillingness to satisfy debts regardless of the ability to do so”; and 19(c), “a history of not meeting financial obligations.”

Applicant’s pleading admissions with respect to her accumulation of delinquent debts (SOR ¶¶ 1.a-1.ff) negate the need for any independent proof (see McCormick on Evidence, § 262 (6th ed. 2006)). Each of Applicant’s delinquent debts are fully documented in her credit reports and interview by an agent of the Office of Personnel Management (OPM) and create some judgment issues. See ISCR Case 03-01059 at 3 (App. Bd. Sep. 24, 2004).

Financial stability in a person cleared to protect classified information is required precisely to inspire trust and confidence in persons cleared to access classified information. While the principal concern of a security clearance holder’s demonstrated financial difficulties is vulnerability to coercion and influence, judgment and trust concerns are implicit in cases involving debt delinquencies.

Applicant provided little documented evidence of payment initiatives or extenuating circumstances, financial counseling, or reasonable disputes with any of the listed SOR debts. Based on the evidence provided, none of the mitigating conditions pertaining to extenuating circumstances, financial counseling, or reasonable basis to dispute a past-due debt, apply to Applicant’s situation.

To her credit, Applicant, documented evidence of some progress in addressing her debts. She established a payment plan with SOR creditor 1.xand documented several monthly payments. And she completed a rehabilitation agreement with her education lender to pay off SOR debts ¶¶¶ 1.y-1.ff. But while she has made several monthly payments on her SOR debt 1.x, she has documented no monthly payments on her rehabilitation agreement covering SOR debts ¶¶ 1.y-1.ff.

Applicant’s listed SOR education debts remain outstanding. In recognition of her payment progress with SOR debt ¶ 1.x, some application of MC ¶ 1(d), “the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts,” is warranted. In evaluating Guideline F cases, the Appeal Board has stressed the importance of a “meaningful track record” that includes evidence of actual debt reduction through voluntary payment of debts. ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008) (internal citations omitted). In Applicant’s case, her insufficient demonstration of responsible efforts in addressing her SOR-listed debts preclude favorable findings and conclusions with respect to her security clearance application. See ISCR Case No. 05- 11366 at 4 n.9 (App. Bd. Jan. 12, 2007) (citing ISCR Case No. 99-0462 at 4 (App. Bd. Nov. 29, 2005).

Whole-person assessment is unfavorable to Applicant. She has shown insufficient progress to date in addressing her delinquent consumer debts covered in the SOR. Her actions to date reflect insufficient financial responsibility and judgment and raise unresolved questions about her trustworthiness, reliability, and ability to protect classified information. See AG ¶ 18.

More documented information about her inability to make more progress in paying or otherwise resolving her delinquent education, medical, and consumer debts is necessary to mitigate financial concerns under the financial guideline and consideration of the whole-person to mitigate security concerns.

Taking into account all of the documented facts and circumstances surrounding Applicant’s education loan, medical, and consumer debt delinquencies that she has accrued and addressed in part to date, Applicant has failed to demonstrate enough probative efforts to mitigate financial concerns. Conclusions are warranted that her finances are insufficiently stabilized at this time to meet minimum eligibility requirements for holding a security clearance.

Unfavorable conclusions are entered with respect to the allegations covered by subparagraphs ¶¶ 1.a-1.wand 1.y-1.ff of the SOR; while favorable conclusions are warranted with respect to SOR debt ¶ 1.x. of the SOR. Eligibility to hold a security clearance under the facts and circumstances of this case is not consistent with the national interest.

FORMAL FINDINGS

In reviewing the allegations of the SOR and ensuing conclusions reached in the context of the findings of fact, conclusions, conditions, and the factors listed above, I make the following formal findings:

GUIDELINE F (FINANCIAL CONSIDERATIONS): AGAINST APPLICANT

Subparagraphs 1.a-1.wand 1.y-1.ff: Against Applicant

Subparagraph 1.x: For Applicant

CONCLUSION

In light of all the circumstances presented by the record in this case, it is not clearly consistent with the national interest to grant or continue Applicant’s eligibility to hold a security clearance. Clearance is denied.

Roger C. Wesley Administrative Judge