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ISCR Case 15-08027.h1 — CASE

ISCR Case 15-08027.h1denied

Case Headnote

ISCR Case No. 15-08027.h1

deniedOct 12, 2017· Hon. Stephanie C. Hess· hearing

Summary

A 41-year-old defense contractor employee was denied a security clearance due to financial considerations under Guideline F. The applicant faced concerns regarding eight delinquent debts totaling approximately $28,250, which raised disqualifying conditions AG ¶ 19(a) and AG ¶ 19(c).

The Statement of Reasons detailed these debts, including a $23,905 charged-off vehicle loan, $3,859 owed for cellular and cable-television services across three separate accounts, and three medical debts totaling $236.

Despite admitting to the debts and stating an intention to arrange repayment plans, the applicant failed to provide any evidence of measurable action taken to resolve them. Consequently, none of the mitigating conditions under Guideline F were found applicable, leading to the denial of the security clearance.

Why the Applicant Was Denied

Applicant admitted to eight delinquent debts totaling approximately $28,250.
No evidence was provided to show measurable action taken to resolve the debts.
None of the mitigating conditions under Guideline F were applicable.

Conditions Referenced

Disqualifying

AG ¶ 19(a)appliedInability to Satisfy Debts
AG ¶ 19(c)appliedA History of Not Meeting Financial Obligations

Key Rule Quoted

“An applicant has the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue his security clearance.”
— ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002)

Procedural Posture

SOR issuedJun 8, 2016
Answer filedJul 13, 2016
Hearing held—Decision made without a hearing, pro se applicant.
Decision dateOct 12, 2017

Cite For

Failure to Mitigate Financial Considerations Under Guideline F
Importance of Providing Evidence of Debt Resolution
Burden of Proof on Applicant for 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 had multiple delinquent debts totaling approximately $28,250, which raised significant security concerns under Guideline F. The applicant failed to provide sufficient evidence to mitigate these concerns, resulting in a denial of her security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	The $23,905 charged-off debt alleged in SOR ¶ 1.a is owed to a vehicle-loan financing company. $23,905	Against Applicant	Auto Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	SOR debts ¶¶ 1.b, 1.c, and 1.d, totaling $3,859, are for cellular and cable-television services. $3,859	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	SOR debts ¶¶ 1.b, 1.c, and 1.d, totaling $3,859, are for cellular and cable-television services. $3,859	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	SOR debts ¶¶ 1.b, 1.c, and 1.d, totaling $3,859, are for cellular and cable-television services. $3,859	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	The medical debts alleged in SOR ¶¶ 1.f, 1.g, and 1.h total $236. $236	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	The medical debts alleged in SOR ¶¶ 1.f, 1.g, and 1.h total $236. $236	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	The medical debts alleged in SOR ¶¶ 1.f, 1.g, and 1.h total $236. $236	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	The medical debts alleged in SOR ¶¶ 1.f, 1.g, and 1.h total $236. $236	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: ) ) [REDACTED] ) ISCR Case No. 15-08027 ) ) Applicant for Security Clearance

For Government: Rhett Petcher, Esq., Department Counsel For Applicant: Pro se

10/12/2017 ______________

STATEMENT OF CASE

______________

HESS, Stephanie C., Administrative Judge:

Applicant failed to mitigate the security concerns raised under Guideline F (Financial Considerations). Eligibility for access to classified information is denied.

Statement of the Case

Applicant submitted a security clearance application (e-QIP) on December 30, 2014. On June 8, 2016, the Department of Defense (DOD) sent her a Statement of Reasons (SOR), alleging security concerns under Guideline F. The DOD acted under Executive Order (Ex. Or.) 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG) implemented by DOD on September 1, 2006.

Applicant answered the SOR on July 13, 2016, and requested a decision on the record without a hearing. Department Counsel submitted the Government’s written case on August 25, 2016. A complete copy of the file of relevant material (FORM), which included Government Exhibits (GX) 1 through 5, was sent to Applicant on August 30, 2016. She was given an opportunity to file objections and submit material to refute, extenuate, or mitigate the Government’s evidence. She received the FORM on February 19, 2016, and did not respond.1 The case was assigned to me on August 10, 2017.

The SOR was issued under the AG implemented on September 1, 2006. The DOD implemented the amended AG on June 8, 2017, while this decision was pending. This decision will be decided based on the amended AG effective June 8, 2017. The outcome of this case would have been the same if decided based on the former AG.

FINDINGS OF FACT

The SOR alleges eight delinquent debts totaling approximately $28,250. In her Answer, Applicant admitted each of the debts, and stated that she would contact each of the creditors within the next 30 days to arrange repayment plans. Applicant’s admissions in her Answer are incorporated in my findings of fact.

Applicant is a 41-year-old employee of a defense contractor since October 2008. She previously held a secret security clearance. She and her husband married in 2000 and have a 17-year-old son. Applicant has an adult daughter from a previous relationship. (GX 2; GX 3.)

The $23,905 charged-off debt alleged in SOR ¶ 1.a is owed to a vehicle-loan financing company. SOR debts ¶¶ 1.b, 1.c, and 1.d, totaling $3,859, are for cellular and cable-television services. The medical debts alleged in SOR ¶¶ 1.f, 1.g, and 1.htotal $236. The delinquent debts are reflected in Applicant’s credit bureau reports (CBRs) from January 2015 and October 2015. (GX 4; GX 5.) While the CBRs reflect that Applicant has disputed the debt in SOR ¶ 1.a, however, she did not provide any information about the status of the dispute, and specifically admitted responsibility for this debt in her Answer. Each of the SOR debts remains unresolved.

POLICIES

“[N]o one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). As Commander in Chief, the President has the authority to “control access to information bearing on national security and to determine whether an individual is sufficiently trustworthy to have access to such information.” Id. at 527. The President has authorized the Secretary of Defense or his designee to grant applicants eligibility for access to classified information “only upon a finding that it is clearly consistent with the national interest to do so.” Exec. Or. 10865, Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960), as amended. Eligibility for a security clearance is predicated upon the applicant’s meeting the criteria contained in the AG. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, an administrative judge applies these guidelines in conjunction with an evaluation of the whole person. An administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. An administrative judge must consider all available and reliable information about the person, past and present, favorable and unfavorable.

The Government reposes a high degree of trust and confidence in persons with access to classified information. This relationship transcends normal duty hours and endures throughout off-duty hours. Decisions include, by necessity, consideration of the possible risk that the applicant may deliberately or inadvertently fail to safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation about potential, rather than actual, risk of compromise of classified information.

Clearance decisions must be made “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See Exec. Or. 10865 § 7. Thus, a decision to deny a security clearance is merely an indication the applicant has not met the strict guidelines the President and the Secretary of Defense have established for issuing a clearance.

Initially, the Government must establish, by substantial evidence, conditions in the personal or professional history of the applicant that may disqualify the applicant from being eligible for access to classified information. The Government has the burden of establishing controverted facts alleged in the SOR. See Egan, 484 U.S. at 531. “Substantial evidence” is “more than a scintilla but less than a preponderance.” See v. Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994). The guidelines presume a nexus or rational connection between proven conduct under any of the criteria listed therein and an applicant’s security suitability. See ISCR Case No. 92-1106 at 3, 1993 WL 545051 at *3 (App. Bd. Oct. 7, 1993).

Once the Government establishes a disqualifying condition by substantial evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the facts. Directive ¶ E3.1.15. An applicant has the burden of proving a mitigating condition, and the burden of disproving it never shifts to the Government. See ISCR Case No. 02- 31154 at 5 (App. Bd. Sep. 22, 2005).

An applicant “has the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue his security clearance.” ISCR Case No. 01- 20700 at 3 (App. Bd. Dec. 19, 2002). “[S]ecurity clearance determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531; see AG ¶ 2(b).

ANALYSIS

Guideline F, Financial Considerations

The concern under this guideline 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. See ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012).

Applicant’s testimony, corroborated by the record evidence, establishes two disqualifying conditions under this guideline: AG ¶ 19(a) (“inability to satisfy debts”) and AG ¶ 19(c) (“a history of not meeting financial obligations”).

However, a person can mitigate concerns about his or her ability to handle and safeguard classified information raised by the person’s financial circumstances by establishing one or more of the mitigating conditions set forth in AG ¶¶ 20(a) through 20(e). Each of the SOR debts were incurred prior to the October 2015 CBR, and Applicant has not provided evidence of any measurable action taken to resolve any of the debts. None of the mitigating conditions apply.

WHOLE PERSON CONCEPT

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. In applying the whole- person concept, an 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. An 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.

I have incorporated my comments under Guideline F in my whole-person analysis and have considered the factors in AG ¶ 2(a). After weighing the disqualifying and mitigating conditions under Guideline F, and evaluating all the evidence in the context of the whole person, I conclude Applicant has not mitigated the security concerns raised by her delinquent debts. Accordingly, I conclude she has not carried her burden of showing that it is clearly consistent with the national interest to grant her eligibility for access to classified information.

FORMAL FINDINGS

As required by section E3.1.25 of Enclosure 3 of the Directive, I make the following formal findings on the allegations in the SOR:

Paragraph 1, Guideline F (Financial Considerations): AGAINST APPLICANT

Subparagraphs 1.a – 1.h: Against Applicant

CONCLUSION

I conclude that 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.

Stephanie C. Hess Administrative Judge

FOOTNOTES

1 The Defense Office of Hearings and Appeals (DOHA) transmittal letter is dated August 25, 2016, and Applicant’s receipt is dated August 30, 2016. The DOHA transmittal letter informed Applicant that she had 30 days after receiving it to submit information.