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ISCR Case 15-08554.h1 — CASE

ISCR Case 15-08554.h1denied

Case Headnote

ISCR Case No. 15-08554.h1

deniedOct 12, 2017· Hon. Jennifer I. Goldstein· hearing

Summary

A 24-year-old unmarried applicant was denied a security clearance under Guideline F (Financial Considerations) due to unresolved debts totaling approximately $13,702. The Statement of Reasons specifically cited a $416 debt to a collection agent for a phone company, delinquent since at least November 2014.

The judge determined that the applicant failed to demonstrate a good-faith effort to resolve these financial issues. No documentation was provided to show any resolution of the debts, nor was there evidence of an attempt to repay overdue creditors.

The denial was based on the applicant's ongoing financial problems, which have persisted since 2013, suggesting a likelihood of recurrence. The applicant's failure to address these concerns led to the denial of the security clearance.

Why the Applicant Was Denied

The applicant failed to document any resolution of his debts.
The applicant did not provide evidence of a good-faith effort to repay overdue creditors.
The applicant's financial problems have been ongoing since 2013, indicating a likelihood of recurrence.

Conditions Referenced

Disqualifying

F.1.araisedInability to Satisfy Debts
F.1.craisedHistory of Not Meeting Financial Obligations

Key Rule Quoted

“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.”

Procedural Posture

SOR issuedMay 27, 2016
Answer filedJun 28, 2016
Hearing held—Decided on written record without a hearing.
Decision dateOct 12, 2017

Cite For

Failure to Demonstrate Good-faith Effort to Resolve Debts Under Guideline F
Ongoing Financial Issues as a Basis for Denial
Impact of Unresolved Debts on National Security 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 applicant faced financial concerns under Guideline F due to unresolved debts totaling approximately $13,702, including a collection account and three student loans. The judge ruled against the applicant, finding insufficient evidence of mitigation for the financial issues, which have persisted since 2013.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant is indebted to a collection agent for a phone company in the amount of $416, as alleged in SOR ¶ 1.a. This account has been delinquent since at least November 2014. $416	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b–1.d	3 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: 15-08554 ) Applicant for Security Clearance )

For Government: Eric Borgstrom, Esquire, Department Counsel For Applicant: Pro se

October 12, 2017 ______________

STATEMENT OF CASE

______________

GOLDSTEIN, Jennifer I., Administrative Judge:

Applicant was alleged to be indebted to four creditors in the approximate amount of $13,702. He failed to document any of his SOR-listed debts have been resolved. Based upon a review of the pleadings and exhibits, national security eligibility is denied.

On May 22, 2015, Applicant submitted a security clearance application (SF-86). (Item 3.) On May 27, 2016, the Department of Defense Consolidated Adjudications Facility (DoD CAF) issued Applicant a Statement of Reasons (SOR), detailing security concerns under Guideline F, Financial Considerations. (Item 1.) The action was taken under Executive Order 10865 (EO), 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 for Determining Eligibility for Access to Classified Information effective September 1, 2006. Applicant answered the SOR on June 28, 2016. (Item 2.) He requested that his case be decided by an administrative judge on the written record without a hearing. On October 24, 2016, Department Counsel submitted the Government’s written case. A complete copy of the File of Relevant Material (FORM), containing seven Items, was received by Applicant on October 31, 2016. The FORM notified Applicant that he had an opportunity to file objections and submit material in refutation, extenuation, or mitigation within 30 days of his receipt of the FORM.

Applicant did not respond to the FORM. DOHA assigned the case to me on October 1, 2017. Items 1 through 7 are admitted into evidence.

The SOR in this case was issued under the adjudicative guidelines that came into effect within the DoD on September 1, 2006. Security Executive Agent Directive (SEAD) 4, National Security Adjudicative Guidelines, implements new adjudicative guidelines, effective June 8, 2017. All national security eligibility decisions issued on or after June 8, 2017, are to be decided using the new National Security Adjudicative Guidelines for Determining Eligibility for Access to Classified Information or Eligibility to Hold a Sensitive Position (AG), as implemented by SEAD 4. I considered the previous adjudicative guidelines, effective September 1, 2006, as well as the new AG, effective June 8, 2017, in adjudicating Applicant’s national security eligibility. My decision would be the same under either set of guidelines, although this decision is issued pursuant to the new AG.

FINDINGS OF FACT

Applicant is 24 years old. He is unmarried. He has worked full-time for his employer since May 2015, and was previously employed in another full-time position since May 2013. (Item 3.)

Applicant was alleged to be indebted on one collection account (SOR ¶ 1.a) and three student loans (SOR ¶¶ 1.bthrough 1.d). He denied the collection account in SOR ¶ 1.a and admitted the student loan delinquencies in his Answer to the SOR. (Item 2.)

Applicant is indebted to a collection agent for a phone company in the amount of $416, as alleged in SOR ¶ 1.a. This account has been delinquent since at least November 2014. (Item 4 at 1.) During his security clearance interview, Applicant explained that he disputed this debt because his new phone carrier had agreed to pay the early termination fee charged by this phone company, but failed to follow through on that agreement. This debt remains unresolved. (Item 7 at 3.)

Applicant is indebted on three student loan accounts as alleged in SOR ¶¶ 1.bthrough 1.d, in the amounts of $3,740; $2,340; and $6,842, respectively. These debts became delinquent in 2013. (Item 4 at 1 and 2; Item 5 at 2 and 3; Item 6 at 3.) Applicant indicated during his September 11, 2015 security clearance interview that these debts became delinquent due to “insufficient income,” but that he was in the process of “renegotiating a payment plan.” (Item 7 at 2 and 3.) His credit reports, dated May 2016 and October 2016, both reflect that Applicant’s most recent payments on these accounts were made in January 2016. (Item 4 at 1 and 2; Item 5 at 2 and 3.) They remain outstanding.

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 useful 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 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.

Directive ¶ E3.1.14 requires the Government to present evidence that establishes controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, an “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 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 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 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 concerns relating to the guideline for financial considerations are set out in AG ¶ 18, which reads in pertinent part:

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.

AG ¶ 19 describes two conditions that could raise security concerns and may be disqualifying in this case:

(a) inability to satisfy debts; and

Applicant defaulted on his student loans in 2013 and failed to pay an early termination fee for a phone in 2014. These debts remain unresolved. These facts establish prima facie support for the foregoing disqualifying conditions, and shift the burden to Applicant to mitigate those concerns.

The guideline includes three conditions in AG ¶ 20 that could mitigate the security concerns arising from Applicant’s alleged financial difficulties:

(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; and

(d) the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts.

The evidence does not establish mitigation under AG ¶ 20(a). Applicant’s financial problems have been ongoing since 2013. Further, his financial problems continue to date.

The evidence establishes no mitigation under AG ¶ 20(b). Applicant did not attribute these delinquent debts to circumstances beyond his control. In addition, he did not provide evidence that he acted responsibly under the circumstances with respect to his debts, which is necessary for full mitigation under this condition.

Applicant failed to establish mitigation under AG ¶ 20(d). While the evidence shows one payment on the student loans in January 2016, this does not rise to the level of a good-faith effort to address and repay his student-loan debt. At this time, he has not established a history of responsible action with respect to his debts. There is no evidence of a good-faith effort to repay those debts in the record.

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.

According to 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 applicable guidelines and the whole-person concept. I considered the potentially disqualifying and mitigating conditions in light of all pertinent facts and circumstances surrounding this case. Applicant is a mature adult, but failed to take reasonable or effective action to resolve his financial issues. There is a high likelihood that financial problems will recur; and the potential for pressure, coercion, or duress remains undiminished. Overall, the record evidence leaves me with doubts as to Applicant’s judgment, eligibility, and suitability for a security clearance. He failed to meet his burden to mitigate the security concerns arising under the guideline for 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 through1.d: 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 national security eligibility and a security clearance. National security eligibility is denied.

Jennifer I. Goldstein Administrative Judge