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ISCR Case 16-00272.h1 — CASE

ISCR Case 16-00272.h1denied

Case Headnote

ISCR Case No. 16-00272.h1

deniedOct 19, 2017· Hon. Francisco Mendez· hearing

Summary

A 41-year-old applicant with a GED was denied a public trust position due to financial considerations under Guideline F. The Statement of Reasons cited 12 separate allegations of delinquent debts, each totaling over $10,000, in addition to a prior Chapter 7 bankruptcy discharge. These issues raised disqualifying conditions under Adjudicative Guidelines Paragraphs 19(a), 19(b), and 19(c).

The applicant admitted to the allegations of delinquent debts. While mitigating conditions under Adjudicative Guidelines Paragraphs 20(a), 20(b), 20(c), and 20(d) were considered, the applicant failed to provide sufficient evidence of a plan or actions taken to address the financial issues.

Ultimately, the judge determined that the applicant's financial situation raised doubts about his reliability and trustworthiness, leading to the denial of the security clearance. The decision emphasized the lack of demonstrated mitigation for the significant financial concerns.

Why the Applicant Was Denied

The applicant admitted to the allegations of delinquent debts totaling over $10,000.
The applicant failed to provide evidence of a plan or actions taken to address his financial issues.
The applicant's financial situation raised doubts about his reliability and trustworthiness.

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(a)rejectedThe Behavior Happened so Long Ago, Was so Infrequent, or Occurred Under Such Circumstances That It Is Unlikely to Recur
AG ¶ 20(b)rejectedConditions That Resulted in the Financial Problem Were Largely Beyond the Person’s Control
AG ¶ 20(c)rejectedThe Person Has Received or Is Receiving Counseling for the Problem
AG ¶ 20(d)rejectedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors

Key Rule Quoted

“Individuals applying for a sensitive position are not required to be debt free.”

Procedural Posture

SOR issuedAug 15, 2016
Answer filed—Applicant admitted the allegations.
Hearing heldOct 6, 2017Record closed.
Decision dateOct 19, 2017

Cite For

Insufficient Evidence to Mitigate Financial Concerns Under Guideline F
Impact of Delinquent Debts on Eligibility for Public Trust Positions
Burden of Proof on Applicants to Demonstrate Financial Responsibility

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's financial issues raised significant concerns regarding his reliability and trustworthiness for a public trust position. Despite admitting to multiple delinquent debts totaling over $10,000, the applicant failed to provide sufficient evidence to mitigate these concerns, resulting in a denial of eligibility.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Delinquent debts totaling over $10,000 $10,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.b	Delinquent debts totaling over $10,000 $10,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.c	Delinquent debts totaling over $10,000 $10,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.d	Delinquent debts totaling over $10,000 $10,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.e	Delinquent debts totaling over $10,000 $10,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.f	Delinquent debts totaling over $10,000 $10,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.g	Delinquent debts totaling over $10,000 $10,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.h	Delinquent debts totaling over $10,000 $10,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.i	Delinquent debts totaling over $10,000 $10,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.j	Delinquent debts totaling over $10,000 $10,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.k	Delinquent debts totaling over $10,000 $10,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.l	Delinquent debts totaling over $10,000 $10,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.m	Delinquent debts totaling over $10,000 $10,000	Against Applicant	Unspecified Financial	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: ) ) REDACTED ) ADP Case No. 16-00272 ) ) Applicant for Public Trust Position

For Government: Caroline E. Heintzelman, Department Counsel For Applicant: Pro se

10/19/2017 ______________

STATEMENT OF CASE

______________

MENDEZ, Francisco, Administrative Judge:

Applicant did not provide sufficient evidence to mitigate concerns raised by his financial situation. Eligibility for a public trust position is denied.

Statement of the Case

On August 15, 2016, the Department of Defense (DoD) sent Applicant a Statement of Reasons (SOR) recommending the denial of his application to occupy a public trust position. Applicant answered the SOR. He admitted the SOR allegations, including the 12 referenced delinquent debts totaling over $10,000. He requested a decision on the administrative (written) record.

On October 17, 2016, Department Counsel sent Applicant the Government’s written case, known as a file of relevant material (FORM). With the FORM, Department Counsel forwarded to Applicant seven exhibits (Items 1 – 7) that the Government offers for admission into the record. Applicant received the FORM and accompanying exhibits on November 15, 2016. (Appellate Exhibit I.) He was given 30 days to submit a response to the FORM and raise an objection(s) to the evidence offered by the Government. He did not submit a response or raise an objection.

On October 1, 2017, I was assigned Applicant’s case for decision. I reopened the record to give the parties the opportunity to submit updated information. Department Counsel timely submitted a new credit report (Item 8), which reflects some of the delinquent debts referenced in the SOR and a number of new past-due accounts. Applicant did not submit any matters for the record, nor did he raise any objection to the evidence offered by the Government. Without objection, Items 1 – 8 are admitted. The record closed on October 6, 2017.

FINDINGS OF FACT

Applicant, 41, earned his GED in 2002. He took some courses through an online college from 2007 to 2008, but did not earn a degree. He and his first wife divorced in October 2012, and he married his current spouse in December 2012. Applicant and his spouse have five children. Applicant has been working for his current employer since 2002. He was granted a public trust position in approximately 2005.

In August 2015, Applicant submitted an electronic questionnaire for investigations processing. On the questionnaire, Applicant listed receiving a Chapter 7 bankruptcy discharge in approximately October 2012. During the course of the subsequent investigation, Applicant was asked about a number of past-due accounts appearing on his credit reports, including the 12 delinquent debts referenced in the SOR. In response to an interrogatory, dated November 24, 2015, Applicant reported that, after paying recurring expenses and debts, his monthly deficit is $1,250. He also reported being delinquent on his monthly car payments and utilities.

In his response to the SOR, Applicant noted that his financial problems were primarily attributable to his divorce and supporting his family on his salary alone. He indicated that he had a plan to address his financial situation, but did not elaborate further. He also did not provide any evidence about what steps, if any, he had taken to address his past-due debts. A current credit report, Item 8, reflects a number of delinquent accounts beyond those listed on the SOR.

Law, Policies, and Regulations

This case is decided under DoD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive) and the adjudicative guidelines (AG) implemented on June 8, 2017, through Security Executive Agent Directive 4 (SEAD-4).1 ISCR Case No. 02-00305 at 3 (App. Bd. Feb. 12, 2003) (judges must utilize current DoD policy and standards).

Positions designated as ADP I and ADP II are classified as sensitive positions. The standard that must be met for assignment to sensitive duties is that, based on all available information, 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.2

When evaluating an applicant’s eligibility for a position of trust to support a federal contract, an administrative judge must consider the adjudicative guidelines and whole- person concept. In addition to brief introductory explanations, the guidelines list potentially disqualifying and mitigating conditions. The guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, an administrative judge applies the guidelines in a commonsense manner, considering all available and reliable information, in arriving at a fair and impartial decision.3

The Directive sets forth the due process procedures that must be followed in all DOHA proceedings. Department Counsel must present evidence to establish controverted facts (i.e., SOR allegations denied by the applicant). While an applicant is responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or mitigate relevant conduct or circumstances that he or she admitted or proven by Department Counsel. An applicant has the ultimate burden of persuasion to establish their eligibility for a position of trust. Any doubt raised by the evidence, must be resolved by the judge in favor of the national security.4

ANALYSIS

Guideline F, Financial Considerations

Applicant’s history of financial problems raise a concern about his ability to hold a sensitive position. The financial considerations concern is explained at AG ¶ 18:

Failure to . . . 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. . . .

The concern here is not limited to a consideration of whether a person with financial issues might be tempted to compromise sensitive information or engage in other illegality to pay their debts. It also addresses the extent to which the circumstances giving rise to delinquent debt cast doubt upon a person’s judgment, self-control, and other qualities essential to protecting sensitive information.5 In assessing Applicant’s case, I considered all disqualifying and mitigating conditions under Guideline F, including the following:

AG ¶ 19(a): inability to satisfy debts;

AG ¶ 19(b): unwillingness to satisfy debts regardless of the ability to do so;

AG ¶ 19(c): a history of not meeting financial obligations;

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;

AG ¶ 20(b): the conditions that resulted in the financial problem were largely beyond the person’s control . . . and the individual acted responsibly under the circumstances;

AG ¶ 20(c): the person has received or is receiving counseling for the problem and/or there are clear indications that the problem is being resolved or is under control; and

AG ¶ 20(d): the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.

Individuals applying for a sensitive position are not required to be debt free. They are also not required to resolve all past-due debts simultaneously or even resolve the delinquent debts listed in the SOR first. However, they are expected to present documentation to refute, explain, or mitigate concerns raised by their circumstances, to include the presence of delinquent debt. Moreover, they bear the burden of showing that they manage their finances in a manner expected of those granted a position of trust.6

Applicant failed to meet his burden of proof and persuasion. He may in the future be able to (re-)establish his eligibility for a position of trust by showing that he has addressed his past-due debts and is managing his personal finances in a responsible manner. At present, however, the questions and doubts about his eligibility, which were raised by the presence of delinquent debt following a Chapter 7 bankruptcy discharge, remain. AG ¶¶ 19(a) – 19(c) apply. None of the mitigating conditions fully apply. Applicant’s financial situation remains a concern.7

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 (Financial Considerations): AGAINST APPLICANT

Subparagraphs 1.a – 1.m: Against Applicant

CONCLUSION

In light of the circumstances presented by the record in this case, it is not clearly consistent with the interest of national security to grant Applicant eligibility for access to sensitive information. Applicant’s request for a position of trust is denied.

____________________ Francisco Mendez Administrative Judge

FOOTNOTES

1 See SEAD-4, ¶ E.1 (the current guidelines “shall be used by all authorized adjudicative agencies when rendering a determination for initial or continued eligibility . . . to hold a sensitive position.”). See also ADP Case No. 14-01655 (App. Bd. Nov. 3, 2015) (“the Guidelines apply to all adjudications under the Directive, including both security clearance and public trust cases.”) Nonetheless, I have considered the previous version of the guidelines (Adjudicative Guidelines for Determining Eligibility for Access to Classified Information, dated December 29, 2005), and my ultimate conclusion in this case would be the same. 2 Memorandum; Directive, § 3.2; SEAD-4, ¶ E.4. ADP Case No. 14-00590 (App. Bd. Dec. 10, 2014) (“The standard applicable to trustworthiness cases is that set forth in Department of the Navy v. Egan, 484 U.S. 518, 528 (1988) regarding security clearances: such a determination “may be granted only when ‘clearly consistent with the interests of the national security’.”)

3 See generally SEAD-4, Appendix A, ¶ 2.

4 Directive, ¶ E3.1.25; SEAD-4, Appendix A, ¶ 1(d).

5 ISCR Case No. 11-05365 at 3 (App. Bd. May. 1, 2012) 6 ISCR Case 07-10310 at 2 (App. Bd. Jul. 30, 2008).

7 In reaching this adverse decision, I considered the whole-person concept. See generally AG ¶ 2. I also considered the exceptions listed in SEAD-4, Appendix C, but none are warranted in this case.