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ISCR Case 16-00203.h1 — CASE

ISCR Case 16-00203.h1denied

Case Headnote

ISCR Case No. 16-00203.h1

deniedJun 27, 2017· Hon. Noreen A. Lynch· hearing

Summary

A 43-year-old federal contractor applicant was denied a security clearance due to financial considerations under Guideline F. The applicant faced concerns regarding 16 delinquent debts totaling approximately $23,085, with specific allegations including an $864 medical account and a $622 phone account. Disqualifying conditions under AG ¶ 19(a), (b), and (c) were raised.

While mitigating conditions AG ¶ 20(b) and (c) were applied, they were insufficient to overcome the security concerns. The applicant claimed identity theft and participation in financial counseling but failed to provide adequate documentation.

The denial was based on the applicant's inability to provide evidence that any debts were paid or resolved. Additionally, the financial difficulties were recent and ongoing, raising concerns about reliability and judgment. The applicant also failed to demonstrate a credible plan to address her financial issues.

Why the Applicant Was Denied

The applicant did not provide documentation showing any debts were paid or resolved.
The applicant's financial difficulties were recent and ongoing, raising concerns about her reliability and judgment.
The applicant failed to demonstrate a credible plan to address her financial issues.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(b)appliedConditions That Resulted in the Financial Problem Were Largely Beyond the Person’s ControlThe applicant cited unemployment and identity theft as contributing factors.
AG ¶ 20(c)appliedThe Person Has Received or Is Receiving Counseling for the Problem From a Credible SourceThe applicant completed a financial counseling course.

Key Rule Quoted

“The ultimate burden of persuasion is on the applicant seeking a public trust position.”

Procedural Posture

SOR issuedMay 18, 2016
Answer filedTimely
Hearing heldN/ADecision based on written record.
Decision dateJun 27, 2017

Cite For

Failure to Provide Evidence of Debt Resolution Under Guideline F
Impact of Financial Difficulties on Trustworthiness Determinations
Burden of Proof Rests with the Applicant 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 multiple financial concerns under Guideline F, including delinquent debts totaling approximately $23,085, which were not sufficiently mitigated by the applicant. While one debt was admitted and resolved, the majority of the allegations were ruled against the applicant, leading to a denial of eligibility for a position of trust.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a–1.b	2 sub-charges — specific text not stated in this decision (against the applicant).	Against Applicant			—	—	—
1.c	$864 medical account $864	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.d	specific text not stated in this decision	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.e	$622 phone account $622	For Applicant	Unspecified Financial	Admitted	—	—	—
1.f–1.p	11 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: ) ) ) ADP Case No. 16-00203 ) Applicant for Public Trust Position )

For Government: Tara R. Karoian Esq., Department Counsel For Applicant: Pro se

06/27/2017 ______________

STATEMENT OF CASE

______________

LYNCH, Noreen A., Administrative Judge:

On May 18, 2016, the Department of Defense (DOD) issued a Statement of Reasons (SOR) to Applicant listing trustworthiness concerns arising under Guideline F (Financial Considerations). The action was taken under DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG), implemented in September 2006. Security Executive Agent Directive (SEAD) 4, implemented new National Security Adjudicative Guidelines, effective June 8, 2017. The decision in this case is based on the new AGs. I have also considered this case based on the Ags implemented on September 1, 2006. The outcome of my decision would have remained the same if adjudicated under the former AGs.

Applicant timely answered the SOR and requested a decision based on the written record in lieu of a hearing. Department Counsel submitted a File of Relevant Material (FORM), dated July 11, 2016. Applicant received the FORM on September 17, 2016. She submitted additional information for the record. I received the case assignment on June 2, 2017. Based on a review of the case file, I find Applicant has not mitigated the trustworthiness concerns raised. Eligibility for a position of trust is denied.

FINDINGS OF FACT

In her answer to the SOR, Applicant denied the majority of the SOR allegations under Guideline F, with explanations. She admitted SOR allegations ¶¶ 1.cand 1.e. (Item 2)

Applicant is 43 years old. She is employed with a federal contractor. She graduated from high school in 1993 and she attended college but did not obtain her degree. Applicant received a Certificate of training from a technical college in 2013, which made her a Certified Coding Specialist. She married in 1998 and is the mother of five children. (Item 3) She has been employed with her current employer since 2014, but she has been employed since 1999, with the exception of unemployment in 2006 to January 2008. This is her first application for a position of trust, which she completed on November 15, 2014. (Item 3)

The SOR alleges 16 delinquent debts totaling approximately $23,085. These debts include medical accounts, judgments, and collection accounts. (Item 1) Credit reports in evidence confirm the debts. (Items 4 and 5)

Applicant explained in her Answer that she denied SOR allegations ¶¶ 1.a, 1.b,1.d,1.f,1.g,1.h,1.i, 1.j,1.k,1.l,1.m,1.n,1.o, and 1.pbecause “they have been removed from her credit report.” (Item 2) She provided no documentation of any disputes or evidence of any efforts to pay or resolve any of the accounts.

As to the remaining SOR allegations, Applicant admitted the debt in ¶ 1.cfor $864, but stated that the account was in her husband’s name, the amount owed was not correct, and it has been removed from the credit report. As to ¶ 1.e, Applicant admitted it and stated that the phone account for $622 has been “re-established and resolved.” (Item 2)

Applicant also stated in her answer that she was a victim of identity theft. She claimed that she experienced a series of issues that negatively impacted her credit report. Applicant referred to police reports concerning identity theft that were on file in her county of residence. She retained Lexington Law to assist her and to effectively address each credit account. Applicant disclosed on her SF-86 that she sought a financial counselor for guidance about the identity theft. She completed a financial counseling course and received a certificate of completion in March 2016. (Report in File) Applicant downsized her vehicle and rental home in 2013 to save money. (Item 3)

During her investigative interview in 2015, Applicant explained that she did not recognize many of the accounts. She also believed that the medical accounts were being paid. Applicant stated that she would investigate the delinquent accounts. She noted that her finances were improving and she can now save money. (Item 6) In Applicant’s response to the FORM, she disagreed with the Government’s use of a January 2016 credit report because it was more than 120 days old. She attached a current credit report, dated September 2016. Applicant insisted that she has resolved each derogatory account, but there are still some SOR delinquent accounts listed on her most recent credit bureau report. It also showed new accounts that are current. She emphasized that complications with a pregnancy and her husband’s unemployment, combined with her two year unemployment, took a toll on her credit. Applicant stated that since 2014, she has cleared up her credit and established financial security. Applicant also referred to a March 2016 chapter 7 bankruptcy filing, which was dismissed (not discharged). She added that she has not pursued the bankruptcy but successfully addressed each delinquent account by payment or claiming it was inaccurate. She believes that her current debt is about $2,600. (Response to FORM)

The record does not indicate Applicant’s current salary. Applicant did not provide any information concerning a budget or expenses. She did not provide any recommendations from her employer or any character references.

POLICIES

Positions designated as ADP I and ADP II are classified as “sensitive positions.” Regulation ¶¶ C3.1.2.1.1.7 and C3. 1.2.1.2.3. The standard that must be met for assignment to sensitive duties is that the person’s loyalty, reliability, and trustworthiness are such that assigning the person to sensitive duties is “clearly consistent with the interests of national security.” Regulation C6.1.1.1 Department of Defense contractor personnel are entitled to the procedural protections in the Directive before any final unfavorable access determination may be made. Regulation ¶¶8.2.1

When evaluating an applicant’s suitability for a public trust position, an 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. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, they are applied in conjunction with the factors listed in the adjudicative process. An administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. Under AG ¶ 2(c), this process is a conscientious scrutiny of a number of variables known as the “whole-person concept.” An 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 access to [sensitive] information will be resolved in favor of the national interest.”

The Government must present evidence to establish controverted facts alleged in the SOR. 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. . . .” The burden of proof is something less than a preponderance of evidence. The ultimate burden of persuasion is on the applicant.

A person seeking access to sensitive information enters into a fiduciary relationship with the Government based on 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 sensitive information. Decisions include, by necessity, consideration of the possible risk the applicant may deliberately or inadvertently fail to protect sensitive information.

ANALYSIS

Guideline F, Financial Considerations

The trustworthiness concern 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 sel-control, lack of judgement, 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 concerns 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.

The Government produced credible evidence to establish Applicant’s delinquent debts and her credit reports confirm the debts. Consequently, Financial Considerations Disqualifying Conditions (FC DC) AG ¶ 19(a): (inability to satisfy debts), FC DC AG ¶ 19(b): (unwillingness to satisfy debts regardless of the ability to do so) and (FCDC) AG ¶ 19(c): (a history of not meeting financial obligations) apply. With such conditions raised, it is left to Applicant to overcome the case against her and mitigate trustworthiness concerns.

The nature, frequency, and relative recency of Applicant’s financial difficulties make it difficult to conclude that it occurred “so long ago.” An unpaid debt is a continuous course of conduct for the purposes of adjudications. See, ISCR Case No. 10-11083 at 2 (App. Bd. Dec. 17, 2012). Applicant has not provided any documentation that any debt is paid. Consequently, Financial Considerations Mitigating Condition (FC MC) AG ¶ 20(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) does not apply.

FC MC AG ¶ 20(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, clear victimization by predatory lending practices, or identity theft), and the individual acted responsibly under the circumstances) partially applies. Applicant listed information concerning her unemployment, her husband’s unemployment, medical issues, and identity theft. However, she did not produce documentary evidence when she answered the SOR, or with the Response to the FORM showing that any debts had been paid. She relied on the fact that the delinquent accounts had been removed, or resulted from the identity theft. From this record, it is unclear which debts were acknowledged to be the direct result of events beyond her control. She has not shown that she acted responsibly. This mitigating condition does not fully apply.

FC MC AG ¶ 20(d): (the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts) does not apply. Applicant provided one document that shows the phone account is current. There was no evidence of earlier payment. She has not provided any documentation for any other delinquent bills. She referred to a bankruptcy filing that was dismissed. There was no indication that the debts were discharged. She does not intend to continue with the bankruptcy, which is a legitimate way to resolve debts. She presented a certificate of financial counseling, dated 2016. AG ¶ 20(c): (the person has received or is receiving counseling for the problem from a credible source, such as a non-profit credit counseling service) applies. However, the additional requirement that there are clear indications that her financial problems are being resolved or is under control, does not apply. Consequently, I do not find that there are clear indications that her financial problems are being resolved or disputed.

WHOLE PERSON CONCEPT

Under the whole-person concept, the administrative judge must evaluate an applicant’s eligibility for a position of trust by considering the totality of an applicant’s conduct and all the relevant circumstances. The administrative judge should consider the nine adjudicative 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 position of trust must be an overall commonsense judgment based upon careful consideration of the guidelines and the whole-person concept. As noted above, the ultimate burden of persuasion is on the applicant seeking a public trust position.

I considered the potentially disqualifying and mitigating conditions in light of all the facts and circumstances surrounding this case, as well as the whole-person factors. Applicant is 43 years old. She has worked for her current employer since 2014. She has been unemployed, but she has not presented any evidence that she has acted responsibly. Applicant is required to show that she has a credible, reasonable plan to resolve her financial problems, and that she has taken significant actions to resolve her delinquent debts. She has not produced any documentation or evidence in this case to meet her burden of proof. Overall, the record leaves me with questions and doubts pertaining to Applicant’s judgment, reliability, trustworthiness, and her eligibility and suitability for a position of trust. For all these reasons, Applicant’s eligibility for a trustworthiness position is denied.

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.d: Against Applicant Subparagraph 1.e: For Applicant Subparagraphs 1.f-1.p: 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 a position of public trust. Eligibility for a position of public trust is denied.

NOREEN A. LYNCH Administrative Judge

FOOTNOTES

The Government submitted six items in support of its case. See also ISCR Case No. 94-1075 at 3-4 (App. Bd. Aug. 10, 1995). Department of the Navy v. Egan, 484 U.S. 518, 531 (1988). ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).