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ISCR Case 16-00315.h1 — CASE

ISCR Case 16-00315.h1denied

Case Headnote

ISCR Case No. 16-00315.h1

deniedSep 12, 2017· Hon. Matthew E. Malone· hearing

Summary

A 37-year-old defense contractor employee and former Navy service member was denied a security clearance under Guideline F (Financial Considerations) due to $17,007 in unresolved delinquent debts. The Statement of Reasons (SOR) alleged 12 past-due debts, though a state tax debt was not reflected on a more recent credit report and was denied by the applicant. The applicant admitted to the remaining debts, noting one was a duplicate.

The denial was based on the applicant's failure to provide evidence of efforts to address these financial obligations. Disqualifying conditions under Guideline F, specifically AG ¶ 19(a), AG ¶ 19(b), and AG ¶ 19(c), were raised.

The judge determined that the applicant's history of financial problems, dating back to 2011, including a previously revoked security clearance due to similar concerns, indicated a lack of reliability and judgment. Consequently, the security clearance was denied.

Why the Applicant Was Denied

The applicant did not provide evidence of addressing his financial debts.
The applicant has a history of financial problems dating back to 2011, including a revoked security clearance due to financial concerns.

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)appliedA History of Not Meeting Financial Obligations

Key Rule Quoted

“A person who has access to such information enters into a fiduciary relationship with the Government based on trust and confidence.”
— Department of the Navy v. Egan, 484 U.S. 518 (1988)

Procedural Posture

SOR issuedMay 27, 2016
Answer filed—Applicant requested a decision without a hearing.
Hearing held—No hearing was held.
Decision dateSep 12, 2017

Cite For

Failure to Demonstrate Rehabilitation of Financial Issues Under Guideline F
Impact of Unresolved Debts on Security Clearance Eligibility
Importance of Addressing Financial Obligations to Mitigate Security Concerns

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 significant financial problems, including multiple delinquent debts, which raised security concerns under Guideline F. While the applicant denied some debts and did not provide evidence of addressing his financial issues, the judge ultimately ruled against the applicant on most allegations, leading to a denial of security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant owes $17,007 for 12 delinquent or past-due debts $17,007	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	The more recent credit report, obtained in April 2016, does not reflect the state tax debt alleged at SOR 1.h, which Applicant has denied.	For Applicant	Unspecified Financial	Denied	—	—	—
1.j	Applicant admitted the remaining debts and averred that the debt at SOR 1.j is a duplicate of SOR 1.i.	For Applicant	Unspecified Financial	Admitted	—	—	—

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: ) ) ) [NAME REDACTED] ) ISCR Case No. 16-00315 ) ) ) Applicant for Security Clearance

For Government: Julie R. Mendez, Esq., Department Counsel For Applicant: Pro se

09/12/2017 ______________

STATEMENT OF CASE

______________

MALONE, Matthew E., Administrative Judge:

Applicant has had financial problems for several years. He did not submit any information that shows he is addressing his debts. His request for eligibility for access to classified information is denied.

Statement of the Case

On April 14, 2014, Applicant submitted an Electronic Questionnaire for Investigations Processing (e-QIP) to obtain eligibility for access to classified information as required for his job with a defense contractor. After reviewing the completed background investigation, Department of Defense (DOD) adjudicators could not determine that it is clearly consistent with the interests of national security for Applicant to have access to classified information.1 On May 27, 2016, DOD issued a Statement of Reasons (SOR) alleging facts that raise security concerns addressed under Guideline F (Financial Considerations).2 At the time the SOR was written, the DOD CAF applied the adjudicative guidelines (AG) implemented by the DOD on September 1, 2006. On December 10, 2016, the Director of National Intelligence (DNI) issued a new set of AGs, effective for all security clearance adjudications conducted on or after June 8, 2017. I have based my recommended decision in this case on the June 8, 2017 AGs.3

Applicant timely responded to the SOR (Answer) and requested a decision without a hearing. On August 24, 2016, Department Counsel for the Defense Office of Hearings and Appeals (DOHA) issued a File of Relevant Material (FORM)4 in support of the SOR. Applicant received the FORM on August 29, 2016, and had 30 days from the date of receipt to object to the use of the information included in the FORM and to submit additional information in response to the FORM.5 Applicant did not provide any additional information in response to the FORM. I received the case on June 5, 2017.

FINDINGS OF FACT

The Government alleged in the SOR that Applicant owes $17,007 for 12 delinquent or past-due debts (SOR 1.a – 1.l). Applicant denied SOR 1.h. He admitted the remaining debts and averred that the debt at SOR 1.jis a duplicate of SOR 1.i. He did not provide any supporting or explanatory information with his Answer. In addition to the facts established by Applicant’s admissions, I make the following findings of fact.

Applicant is a 37-year-old employee of a defense contractor for whom he has worked since March 2014. He served in the United States Navy from December 2000 until receiving an honorable discharge in August 2012. Applicant was unemployed for about nine months after leaving the military. He then worked for a different defense contractor from May 2013 until starting his current job. Applicant held a security clearance until October 2011, when, according to his answer to e-QIP Section 25, the Navy revoked his clearance because of security concerns about his finances. (FORM, Item 3)

Credit reports obtained during Applicant’s background investigation document the debts alleged in the SOR. The more recent credit report, obtained in April 2016, does not reflect the state tax debt alleged at SOR 1.h, which Applicant has denied. SOR 1.his resolved for Applicant. The information about the debts alleged at SOR 1.i and 1.jtends to support Applicant’s claim that they pertain to the same account. SOR 1.jis resolved for Applicant. (FORM, Items 4 and 5)

Applicant was married from December 2003 until divorcing in November 2011. He has three children (ages 5, 11, and 14) from his marriage. According to one of the Government’s credit reports, he is current on his child support payments. (FORM, Items 3 and 5)

POLICIES

Each security clearance decision must be a fair, impartial, and commonsense determination based on examination of all available relevant and material information,6 and consideration of the pertinent criteria and adjudication policy in the adjudicative guidelines. Decisions must also reflect consideration of the factors listed in ¶ 2(d) of the new guidelines. Commonly referred to as the “whole-person” concept, those factors are:

(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.

The presence or absence of a disqualifying or mitigating condition is not determinative of a conclusion for or against an applicant. However, specific applicable guidelines should be followed whenever a case can be measured against them as they represent policy guidance governing the grant or denial of access to classified information. A security clearance decision is intended only to resolve whether it is clearly consistent with the national interest7 for an applicant to either receive or continue to have access to classified information. Department Counsel must produce sufficient reliable information on which DOD based its preliminary decision to deny or revoke a security clearance for an applicant. Additionally, Department Counsel must prove controverted facts alleged in the SOR.8 If the Government meets its burden, it then falls to the applicant to refute, extenuate, or mitigate the case for disqualification.9

Because no one is entitled to a security clearance, applicants bear a heavy burden of persuasion to establish that it is clearly consistent with the national interest for them to have access to protected information.10 A person who has access to such information enters into a fiduciary relationship with the Government based on trust and confidence. Thus, there is a compelling need to ensure each applicant possesses the requisite judgment, reliability, and trustworthiness of one who will protect the nation’s interests as his or her own. The “clearly consistent with the national interest” standard compels resolution of any reasonable doubt about an applicant’s suitability for access to classified information in favor of the Government.11

ANALYSIS

Financial Considerations

The Government’s information about Applicant’s debts reasonably raised the security concern expressed at 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.

Applicant has been experiencing significant financial problems since at least 2011. Available information shows that, aside from a state tax lien, Applicant has not addressed any of the debts alleged in the SOR and documented in his credit reports. The manner in which the tax lien was resolved is unclear from this record. This information requires application of the disqualifying condition at AG ¶¶ 19(a) (inability to satisfy debts); 19(b) (unwillingness to satisfy debts regardless of the ability to do so); and 19(c) (a history of not meeting financial obligations).

I have also considered whether the record supports application of any of the AG ¶ 20 mitigating conditions. I conclude it does not. Some of Applicant’s recent debts may have arisen from his divorce and his post-Navy unemployment. However, it was incumbent on him to present information that makes such a connection. It also was his burden to show what, if any, action he has taken to resolve his debts. Applicant has been gainfully employed since May 2013, yet he did not provide any such information. The security concerns about his finances remain unmitigated.

In addition to my evaluation of the facts and application of the appropriate adjudicative factors under Guideline F, I have reviewed the record before me in the context of the whole-person factors listed in AG ¶ 2(d). Despite his honorable military service and his apparent fulfillment of his financial support obligations, doubts about his suitability remain because there is no indication Applicant is addressing his financial problems. Because protection of the interests of national security is the principal focus of these adjudications, any remaining doubts must be resolved against the granting of access to classified information.

FORMAL FINDINGS

Formal findings 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.hand 1.j: For Applicant

Subparagraphs 1.a – 1.g, 1.i, 1.k, 1.l: Against Applicant

CONCLUSION

In light of all available information, it is not clearly consistent with the interests of national security for Applicant to have access to classified information. Applicant’s request for security clearance eligibility is denied.

MATTHEW E. MALONE Administrative Judge

FOOTNOTES

1 Required by Executive Order 10865, as amended, and by the Directive. 2 See Directive, Enclosure 2. 3 My decision in this case would have been the same under either version of the adjudicative guidelines. 4 See Directive, Enclosure 3, Section E3.1.7. In the FORM, Department Counsel relies on five enclosed exhibits (Items 1 - 5). 5 See Directive, Enclosure 3, Section E3.1.7. 6 Directive. 6.3. 7 See Department of the Navy v. Egan, 484 U.S. 518 (1988). 8 Directive, E3.1.14. 9 Directive, E3.1.15. 10 See Egan, 484 U.S. at 528, 531. 11 See Egan; Adjudicative Guidelines, ¶ 2(b).