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ISCR Case 16-00303.h1 — CASE

ISCR Case 16-00303.h1denied

Case Headnote

ISCR Case No. 16-00303.h1

deniedAug 15, 2017· Hon. Carol G. Ricciardello· hearing

Summary

A 60-year-old military veteran was denied a security clearance under Guideline F (Financial Considerations) due to unresolved financial issues, including delinquent debts and a judgment. The applicant admitted to a charged-off delinquent debt of $18,297, claiming to make bi-monthly payments of $111, and stated that arrangements were in place to clear other accounts. While acknowledging another debt, the applicant asserted it was paid. The applicant denied a judgment related to a lease, but also indicated that payments were being made to resolve that matter.

The denial was based on the applicant's unresolved delinquent debts and a judgment that he was deemed unable or unwilling to pay. A key factor was the applicant's failure to provide sufficient corroborating evidence to support his claims of making payments or resolving these debts.

Furthermore, the applicant did not demonstrate that his financial difficulties were beyond his control, nor did he show responsible actions regarding his debts. Consequently, the adjudicator found that the applicant's financial issues raised concerns about his reliability and trustworthiness, leading to the denial of his security clearance.

Why the Applicant Was Denied

Applicant has unresolved delinquent debts and a judgment that he is unable or unwilling to pay.
Applicant failed to provide corroborating evidence to document his claims of making payments or resolving debts.
The applicant's financial difficulties were not shown to be beyond his control, and he did not demonstrate responsible actions regarding his debts.

Conditions Referenced

Disqualifying

AG ¶ 19(a)appliedInability to Satisfy Debts
AG ¶ 19(b)appliedUnwillingness to Satisfy Debts Regardless of the Ability to Do So
AG ¶ 19(c)appliedHistory 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 issuedJun 10, 2016
Answer filedJul 7, 2016Applicant elected to have case decided on written record.
Hearing held—No hearing; case decided on written record.
Decision dateAug 15, 2017

Cite For

Failure to Provide Corroborating Evidence for Financial Claims
Unresolved Debts as a Disqualifying Factor Under Guideline F
Importance of Demonstrating Responsible Financial Behavior 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 unresolved delinquent debts and a judgment, which he was unable or unwilling to pay. Despite the applicant's claims of making payments and resolving debts, he failed to provide sufficient evidence to substantiate these assertions, leading to a denial of his security clearance under Guideline F.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant admitted the charged-off delinquent debt in SOR ¶ 1.a ($18,297), but disputed the balance owed and indicated that he was making payments of $111 twice a month on the debt. $18,297	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	Applicant stated 'arrangement[s] have been made to clear this account.'	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	Applicant admitted owing the debt, and he stated it was paid.	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	Applicant denied the judgment in SOR ¶ 1.d. Apparently the debt is for a lease.	Against Applicant	Judgment Against Applicant	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.e	Applicant stated 'as of this date payment is being made to clear this matter up.'	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: ) ) ) ISCR Case No. 16-00303 ) ) Applicant for Security Clearance

For Government: Ray T. Blank, Jr., Esq., Department Counsel For Applicant: Pro se

08/15/2017 ______________

STATEMENT OF CASE

______________

RICCIARDELLO, Carol G., Administrative Judge:

Applicant failed to mitigate the security concerns under Guideline F, financial considerations. Eligibility for access to classified information is denied.

Statement of the Case

On June 10, 2016, the Department of Defense Consolidated Adjudications Facility (DOD CAF) issued to Applicant a Statement of Reasons (SOR) detailing security concerns under Guideline F, financial considerations. The action was taken under Executive Order (EO) 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 (AG) effective within the DOD on September 1, 2006. On June 8, 2017, new AG were implemented and are effective for decisions issued after that date.1 Applicant answered the SOR on July 7, 2016, and elected to have his case decided on the written record in lieu of a hearing. Department Counsel submitted the Government’s file of relevant material (FORM). Applicant received it on October 3, 2016. He was afforded an opportunity to file objections and submit material in refutation, extenuation, or mitigation within 30 days of receipt of the FORM. The Government’s evidence is identified as Items 1 through 8. Applicant did not provide a response to the FORM, object to the Government’s evidence, or submit documents. The Government’s evidence is admitted. The case was assigned to me on July 12, 2017.

FINDINGS OF FACT

Applicant admitted the allegations in SOR ¶¶ 1.a, 1.b, 1.c, and 1.e, with explanations. He denied the allegation in SOR ¶ 1.d. After a thorough and careful review of the pleadings and exhibits submitted, I make the following findings of fact.

Applicant is 60 years old. He served in the military from 1972 to 1995 and was honorably discharged. He married in 1982 and divorced in 2011. He has two grown children. He has worked for his present employer since 2003.2

The SOR alleges four delinquent debts and a judgment. The debts and the judgment are corroborated by credit reports from April 2015, December 2015, and September 2016.

In his answer to the SOR, Applicant admitted the charged-off delinquent debt in SOR ¶ 1.a ($18,297), but disputed the balance owed and indicated that he was making payments of $111 twice a month on the debt.3 He disclosed in his March 2015 security clearance application (SCA) that he “made commitment to pay $447.33 a month until the entire balance is repaid.”4 The December 2015 credit report reflected there had been no activity on the account since July 2014.5 The September 2016 credit report shows a reduced balance and payment in August 2016, but no other evidence was provided to show Applicant is making consistent payments or its current status.6

In his answer to the SOR, referring to SOR ¶ 1.b, Applicant stated “arrangement[s] have been made to clear this account.”7 With regard to the debt in SOR ¶ 1.c, he admitted owing the debt, and he stated it was paid.8 He did not provide supporting documents for either debt. For SOR ¶ 1.e, he stated “as of this date payment is being made to clear this matter up.”9 No supporting documents were provided.

Applicant denied the judgment in SOR ¶ 1.d. Apparently the debt is for a lease. He stated: “The person who did had my name on the bill which she was contacted and clear[ed] the bill of my name.”10 The judgment is listed on his most recent credit bureau report from September 2016. It is not resolved.

Applicant was interviewed by a government investigator in September 2015. He was confronted with the debts that were later alleged in the SOR. Applicant attributed his financial difficulties to his employer changing how he was paid. He told the investigator that his employer transferred $1,000 a month from a health and welfare account and deposited it into a 401kpension plan. He told the investigator that in September 2015 he obtained a credit report and some of his son’s accounts were listed in his credit report. His son has the same name. Applicant did not state that the accounts in the SOR belonged to his son.11 Applicant did not provide any documents to show he has been paying or paid his delinquent debts or the judgment. He did not provide information about his current financial status.

POLICIES

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the AG. In addition to brief introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which are used 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, these guidelines are applied in conjunction with the factors listed in the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶ 2(c), 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.

Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Directive ¶ E3.1.15 states that 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, and has the ultimate burden of persuasion as to obtaining a favorable security 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 that an applicant may deliberately or inadvertently fail to 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 EO 10865 provides that 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 concern relating to the guideline 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 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. 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. AG ¶ 19 provides conditions that could raise security concerns. The following are potentially applicable:

(a) inability to satisfy debts;

(b) unwillingness to satisfy debts regardless of the ability to do so; and

Applicant has unresolved delinquent debts and a judgment that he is unable or unwilling to pay. There is sufficient evidence to support the application of the above disqualifying conditions.

The guideline also includes conditions that could mitigate security concerns arising from financial difficulties. The following mitigating conditions under AG ¶ 20 are potentially applicable:

(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;

(c) the individual has received or is receiving financial counseling for the problem from a legitimate and credible source, such as a non-profit credit counseling service, and there are clear indications that the problem is being resolved or is under control;

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

(e) the individual has a reasonable basis to dispute the legitimacy of the past-due debt which is the cause of the problem and provides documented proof to substantiate the basis of the dispute or provides evidence of actions to resolve the issue.

Applicant asserted in his SOR answer that he had paid, was paying, or intended to resolve the alleged debts and judgment. The FORM repeatedly stated that he failed to provide corroborating evidence to document his actions. There is no evidence to substantiate his assertions. Applicant’s history of being unable or unwilling to resolve his debts is ongoing. AG ¶ 20(a) does not apply. The only information provided by Applicant regarding the cause of his financial problems was that his employer changed his payment plan in 2012. Without additional amplifying information, I am unable to find that his inability to pay his delinquent debts was beyond his control. For the full application of AG ¶ 20(b), Applicant must have acted responsibly under the circumstances. Although, Applicant may be making payments toward his largest delinquent debt, and he may have resolved others, he failed to provide documented evidence to verify that conclusion. He did not provide proof of payments or that the judgment was removed from his credit report. There is no information about his current finances. I cannot find that under the circumstances he has acted responsibly. I find AG ¶ 20(b) does not apply.

There is no evidence confirming that Applicant received financial counseling. In his SOR answer, Applicant stated he was paying his largest delinquent debt and had resolved or intended to resolve other debts. There is no supporting documentation, so I am unable to find that there are clear indications his financial problems are being resolved or under control, or that he made a good-faith effort to resolve his debts. AG ¶¶ 20(c) and 20(d) do not apply.

Applicant disputed the judgment in SOR ¶ 1.d. He claimed it was not his debt. For the application of AG ¶ 20(e), he must provide documented proof to substantiate his dispute and evidence of his actions to resolve the issue. Applicant did not provide this information. AG ¶ 20(e) does not apply.

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 the 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.

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.

I considered the potentially disqualifying and mitigating conditions in light of all the facts and circumstances surrounding this case. I have incorporated my comments under Guideline F in my whole-person analysis. Some of the factors in AG ¶ 2(d) were addressed under that guideline, but some warrant additional comment.

Applicant is 60 years old. He served honorably in the military. He has been employed by his present employer since 2003. He has a judgment and other unresolved delinquent debts. He did not provide sufficient evidence in mitigation. The record evidence leaves me with questions and doubts as to Applicant’s eligibility and suitability for a security clearance. For these reasons, I conclude Applicant failed to mitigate the security concerns arising under Guideline F, financial considerations.

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.e: 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’s eligibility for a security clearance. Eligibility for access to classified information is denied.

_____________________________ Carol G. Ricciardello Administrative Judge

FOOTNOTES

1 I considered the previous AG, effective September 1, 2006, as well as the new AG, effective June 8, 2017. My decision would be the same if the case was considered under the previous AG. 2 Item 4. 3 Item 2. 4 Item 4. 5 Item 6. 6 Item 7. 7 Item 2. 8 Item 2. 9 Item 2. 10 Item 2. 11 Item 8.