CASE · Clearance Adjudication Search EngineCASE

Loading case…

ISCR Case 16-00325.h1 — CASE

ISCR Case 16-00325.h1denied

Case Headnote

ISCR Case No. 16-00325.h1

deniedOct 17, 2017· Hon. Candace Le'i Garcia· hearing

Summary

A 44-year-old driver and technician for a defense contractor was denied a security clearance under Guideline F, Financial Considerations, due to ten delinquent debts totaling $38,858. The applicant attributed these financial difficulties to periods of unemployment.

Specific allegations included a car loan from 2011, which, as of April 2015, had been delinquent for a year and was in collection for $25,327. While the applicant stated he was refinancing and expected to resume payments by May 2015, a May 2016 credit report still showed a past due amount of $1,066 on a $25,076 balance. Additionally, two personal loans from 2007 and 2010, taken to cover rent and bills, were also at issue. As of April 2015, the applicant was attempting to settle these loans and anticipated resolution by the end of summer 2015.

Despite the applicant's explanations, the clearance was denied because he failed to provide evidence of concrete actions taken to resolve his financial issues. This lack of mitigation led to the conclusion that his financial problems continued to raise doubts about his reliability and trustworthiness.

Why the Applicant Was Denied

Applicant failed to mitigate security concerns related to delinquent debts.
He did not provide evidence of actions taken to resolve his financial issues.
His financial problems continue to cast doubt on 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)raisedHistory of Not Meeting Financial Obligations

Mitigating

AG ¶ 20(b)appliedConditions Largely Beyond the Person's ControlApplicant's periods of unemployment contributed to his financial problems.
AG ¶ 20(a)rejectedBehavior Unlikely to RecurInsufficient evidence to conclude that financial problems are unlikely to recur.
AG ¶ 20(d)rejectedGood-faith Effort to Repay DebtsApplicant failed to provide documentation of actions taken to resolve debts.

Key Rule Quoted

“Any doubt concerning personnel being considered for national security eligibility will be resolved in favor of the national security.”

Procedural Posture

SOR issuedJun 10, 2016
Answer filedJul 1, 2016Applicant elected to have case decided on written record.
Hearing held—No hearing; case decided on written record.
Decision dateOct 17, 2017

Cite For

Failure to Mitigate Financial Considerations Under Guideline F
Impact of Unresolved Debts on Security Clearance Eligibility
Importance of Providing Evidence of Debt Resolution Efforts

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 has ten delinquent debts totaling $38,858, which he admitted to, except for three. The judge found that the applicant failed to mitigate the financial concerns, leading to a denial of his security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	SOR ¶ 1.a is for a car Applicant purchased in 2011. As of April 2015, it had been one year since he made a payment, he was in the process of refinancing the account, and he expected to have it refinanced by May 2015, at which time he would begin making payments. His April 2015 credit report listed this debt as in collection for $25,327. His May 2016 credit report listed this debt as $1,066 past due, with a scheduled payment of $385, and a total balance of $25,076. $25,076	Against Applicant	Auto Loan Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (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			—	—	—
1.e	SOR ¶ 1.e is for two personal loans Applicant obtained in 2007 and 2010, to assist with paying his rent and bills. As of April 2015, he was attempting to work out settlement payments, and he expected to pay the debt by the end of summer 2015.	Against Applicant	Personal Loan Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.f–1.j	5 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 No. 16-00325 ) Applicant for Security Clearance )

For Government: Adrienne Driskill, Esq., Department Counsel For Applicant: Pro se

10/17/2017 ______________

STATEMENT OF CASE

______________

GARCIA, Candace Le’i, Administrative Judge:

Applicant failed to mitigate the security concerns raised by his delinquent debts. Clearance is denied.

Statement of the Case

On June 10, 2016, the Department of Defense (DOD) issued a Statement of Reasons (SOR) to Applicant 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) implemented by the DOD on September 1, 2006.1

Applicant responded to the SOR on July 1, 2016, and elected to have his case decided on the written record in lieu of a hearing. The Government’s written case was submitted on July 28, 2016. A complete copy of the file of relevant material (FORM) was provided to Applicant, who was afforded an opportunity to file objections and submit material to refute, extenuate, or mitigate the security concerns. Applicant received the FORM on September 13, 2016. He did not respond to the Government’s FORM. The Government’s documents identified as Items 1 through 5 are admitted in evidence without objection. The case was assigned to me on August 8, 2017.

FINDINGS OF FACT

Applicant is a 44-year-old driver and technician employed by a defense contractor since February 2015. He obtained a high-school diploma in 1991 and attended college in 2014, but did not earn a degree. He served honorably in the U.S. military from March 1993 until he retired in September 2013. He was first granted a DOD security clearance in 1993. He was previously married from 1993 to 1998, and he has one adult child.2

The SOR alleges 10 delinquent debts, totaling $38,858. In his response to the SOR, Applicant admitted ¶¶ 1.a, 1.b, 1.e, 1.g, 1.h, 1.i, and 1.j. He denied SOR ¶¶ 1.c, 1.d, and 1.f.3

Applicant attributed his delinquent debts to two periods of unemployment. The first period occurred from September 2013 to September 2014, after he retired from the U.S. military and was unable to find a job. The second period occurred from November 2014 to February 2015, when the contract for his prior job ended. He supported himself with military retirement benefits during both periods of unemployment; he did not receive unemployment benefits.4

Applicant listed SOR ¶ 1.a in his March 2015 security clearance application. He discussed SOR ¶¶ 1.a to 1.gduring his April 2015 background interview. Credit reports from April 2015 and May 2016 also verify his delinquent debts.5

SOR ¶ 1.a is for a car Applicant purchased in 2011. As of April 2015, it had been one year since he made a payment, he was in the process of refinancing the account, and he expected to have it refinanced by May 2015, at which time he would begin making payments. His April 2015 credit report listed this debt as in collection for $25,327. His May 2016 credit report listed this debt as $1,066 past due, with a scheduled payment of $385, and a total balance of $25,076.6 As of April 2015, Applicant was unaware of SOR ¶¶ 1.cand 1.d. He intended to look into and pay them if he determined they were his debts.7

SOR ¶ 1.e is for two personal loans Applicant obtained in 2007 and 2010, to assist with paying his rent and bills. As of April 2015, he was attempting to work out settlement payments, and he expected to pay the debt by the end of summer 2015.8

SOR ¶ 1.fis for a car Applicant cosigned for an ex-girlfriend in 2012. He began receiving calls from the creditor for payment after they broke up in April 2014. He ignored the calls because he could not afford to make any payments, and he could not force his ex-girlfriend to make any payments. He assumed the car was repossessed. He has since learned not to cosign for anyone.9

Applicant believes SOR ¶ 1.gis for an internet account in his name that he forgot to cancel. As of April 2015, he intended to look into and set up a payment plan if he determined the debt was his.10

Applicant indicated during his April 2015 interview that his finances had gotten better since he obtained his current job. He had been able to budget properly for the first time since retiring from the U.S. military. He had been living rent free with a friend since February 2015, which was helpful for his finances. He was in the process of reaching out to his creditors to attempt to settle his debts. He did not believe his financial issues would recur. Applicant failed to provide documentary evidence of any actions he may have taken to resolve the SOR debts.11

POLICIES

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines. In addition to brief introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which are to be 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, administrative judges apply the guidelines 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.”

Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, the 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.” The applicant has the ultimate burden of persuasion to obtain 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 the applicant may deliberately or inadvertently fail to safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation of potential, rather than actual, risk of compromise of classified information.

Section 7 of EO 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 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 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.

The guideline notes several conditions that could raise security concerns under AG ¶ 19. The following are potentially applicable in this case:

(a) inability to satisfy debts;

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

Applicant has ten delinquent debts totaling $38,858. He admitted all of the debts with the exception of SOR ¶¶ 1.c, 1.d, and 1.f. The debts are verified by his credit reports. While the May 2016 credit report no longer listed SOR ¶ 1.a as being in collection status, it was reported as past due in the amount of $1,066 with a balance of $25,076. There is sufficient evidence to support the application of the above disqualifying conditions.

Conditions that could mitigate the financial considerations security concerns are provided under AG ¶ 20. The following 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; and

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

Applicant’s periods of unemployment are conditions beyond Applicant’s control that contributed to his financial problems. However, Applicant has not shown that he acted responsibly under his circumstances. AG ¶ 20(b) only partially applies. Applicant indicated that he intended to look into SOR debts ¶¶ 1.b, 1.c, 1.d, and 1.gto determine if these debts belonged to him, and to pay them if they did. Applicant has not provided documentation to show that he has taken action to resolve his delinquent debts. There is insufficient evidence to conclude that his financial problems are unlikely to recur, and they continue to cast doubt on his current reliability, trustworthiness, and good judgment. His financial problems are not under control. AG ¶¶ 20(a) and 20(d) do 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 relevant circumstances. The administrative judge should consider the nine adjudicative process factors listed at AG ¶ 2(a):

(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 this whole-person analysis. Some of the factors in AG ¶ 2(a) were addressed under that guideline, but some warrant additional comment.

Applicant served honorably in the U.S. military from March 1993 until he retired in September 2013. He was first granted a DOD security clearance in 1993.

However, Applicant’s financial delinquencies remain unresolved. His finances remain a security concern. He failed to meet his burden of persuasion. The record evidence leaves me with questions and doubts as to Applicant’s eligibility and suitability for a security clearance. For all 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.j: Against Applicant

CONCLUSION

In light of all of the circumstances, it is not clearly consistent with the national interest to continue Applicant’s eligibility for a security clearance. Eligibility for access to classified information is denied.

________________________ Candace Le’i Garcia Administrative Judge

FOOTNOTES

1 I decided this case using the AG implemented by DOD on June 8, 2017. However, I also considered this case under the previous AG implemented on September 1, 2006, and my conclusions are the same using either set of AG. 2 Items 2, 3. 3 Item 1. 4 Items 1-3. 5 Items 2-5. 6 Items 3-5. 7 Item 3. 8 Item 3. 9 Item 3. 10 Item 3. 11 Items 1-5.