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ISCR 16-00495.h1: Guideline F security clearance hearing, denied (2017) · CASE

ISCR Case 16-00495.h1denied

Case headnote

ISCR Case No. 16-00495.h1

deniedJun 16, 2017· Hon. Robert E. Coacher· hearing

Summary

A 52-year-old IT specialist with military service was denied a security clearance due to financial considerations under Guideline F. The applicant had four unresolved delinquent debts totaling approximately $14,481. These included a delinquent loan on an investment property, a credit card account, and two medical collection accounts.

The judge identified several disqualifying conditions, noting the applicant's significant overdue debts and lack of demonstrated effort to resolve them. While mitigating conditions were considered, the applicant failed to provide sufficient evidence of financial stability or any proof of payment or settlement for the listed debts.

Ultimately, the denial was based on the applicant's failure to demonstrate a good-faith effort to resolve his financial obligations, leading to the conclusion that the security concerns under Guideline F were not mitigated.

Why the applicant was denied

The applicant has unresolved delinquent debts totaling approximately $14,481.
The applicant provided no proof of payment or settlement for the debts listed in the SOR.
The applicant did not demonstrate a good-faith effort to resolve his financial obligations.

Conditions referenced

Disqualifying

F.1.araisedInability to Satisfy Debts
F.1.braisedUnwillingness to Satisfy Debts Regardless of the Ability to Do So
F.1.craisedA History of Not Meeting Financial Obligations

Mitigating

F.2.arejectedThe Behavior Happened so Long Ago, Was so Infrequent, or Occurred Under Such Circumstances That It Is Unlikely to Recur
F.2.brejectedThe Conditions That Resulted in the Financial Problem Were Largely Beyond the Person's Control
F.2.cappliedThe Individual Has Received or Is Receiving Financial CounselingThere is some evidence of financial counseling, but it was insufficient to mitigate the concerns.
F.2.drejectedThe Individual Initiated and Is Adhering to a Good-faith Effort to Repay Overdue Creditors

Key rule quoted

“The protection of the national security is the paramount consideration.”

Procedural posture

SOR issuedJun 8, 2016
Answer filedJul 11, 2016
Hearing held—Decided on the written record.
Decision dateJun 16, 2017

Cite for

Failure to Mitigate Financial Considerations Under Guideline F
Impact of Unresolved Debts on Security Clearance Eligibility
Importance of Demonstrating Financial Responsibility for Security Clearance Applicants.

Editorial summary generated for research. Not legal advice; not a prediction. Verify against the full decision before relying on any quoted language.

From the decision

Facts this decision states, each with the exact sentence it comes from. Descriptive of the record, not an assessment.

Age at decision: 52: “Applicant is 52 years old.”
Tenure: ~16 years: “He has worked for a defense contractor since 2001.”
Delinquent debt cited: $14,481 (on a payment plan): “The SOR alleges four delinquent debts totaling approximately $14,481.”

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 financial issues, including delinquent debts totaling approximately $14,481, which raised security concerns under Guideline F. The applicant's financial problems were not mitigated, leading to a denial of eligibility for a security clearance.

The sub-allegation breakdown is part of the Professional plan. See what it includes.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation

Descriptive standardized rendering of a decided public case. 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. 16-00495 ) ) Applicant for Security Clearance )

For Government: Jeff A. Nagel, Esq., Department Counsel For Applicant: Pro se

06/16/2017 ______________

STATEMENT OF CASE

______________

COACHER, Robert E., Administrative Judge:

Applicant has not mitigated the financial considerations security concerns. Eligibility for access to classified information is denied.

Statement of the Case

On June 8, 2016, the Department of Defense Consolidated Adjudications Facility (DOD CAF) issued Applicant a Statement of Reasons (SOR) detailing security concerns under Guideline F, financial considerations. The DOD CAF acted under Executive Order (EO) 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; DOD 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG).1 Applicant answered the SOR on July 11, 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) on August 17, 2016. The evidence included in the FORM is identified as Items 2-4 (Item 1 includes pleadings and transmittal information). The FORM was mailed to Applicant, who received it on September 23, 2016. Applicant was given an opportunity to file objections and submit material in refutation, extenuation, or mitigation. Applicant submitted exhibits (AE) A-C, which were admitted without objection. The Government’s transmittal memo was marked as hearing exhibit (HE) I. Items 2-4 are admitted into evidence without objection. The case was assigned to me on June 2, 2017.

FINDINGS OF FACT

Applicant admitted all the allegations in his answer to the SOR. The admissions are adopted as findings of fact. After a careful review of the pleadings and evidence, I make the following additional findings of fact.

Applicant is 52 years old. He has worked for a defense contractor since 2001. He is married and has no children. He works as an IT specialist. He served in the Navy for 11 years and received an honorable discharge. He satisfied the requirements for general educational development (GED).2

The SOR alleges four delinquent debts totaling approximately $14,481. The largest debt is a delinquent loan on an investment property (SOR ¶ 1.a). The remaining delinquent debts are for a credit card account (¶ 1.b) and two medical collection accounts (¶¶ 1.c-1.d). The debts are supported by a credit report from September 2015, Applicant’s statement to a defense investigator in December 2015, and by Applicant’s SOR admissions.3

In approximately 2006, Applicant purchased a vacation rental home, for about $450,000, with several members of his family. Applicant and his wife obtained the mortgage in their names and the deed reflected their ownership. For several years the other participating family members made their payments, but in about 2008, they began opting out of the payments. By about 2013, only Applicant and his wife were contributing to the mortgage payment on this property. They could not make the payment at that time and the loan became delinquent. They have made sporadic payments since then, but the value of the property is significantly less than the amount owed. In October 2016, Applicant entered into a real estate listing agreement with a realtor in the hopes of selling the property. The property is listed at $349,900. There is no evidence that the house sold. This debt is unresolved.4 Applicant provided no proof that he has paid or settled the three remaining SOR debts. He submitted a one-page debt “personalized program overview.” This document is dated in October 2016 and purports to enroll Applicant in a debt payment program. The debts covered by the program are not listed in the document and there is no proof that Applicant made any payments toward the program. The remaining SOR debts are not resolved.5

Applicant did not provide any information about his current financial situation or a budget. Other than the debt payment program, there is no evidence of financial counseling.6

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 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(a), 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.

Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, 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 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 that an applicant may deliberately or inadvertently fail to safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation about 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

AG ¶ 18 expresses the security concern for financial considerations:

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. I have considered all of them under AG ¶ 19 and the following potentially apply:

(a) inability to satisfy debts;

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

Applicant has delinquent debts that remain unpaid or unresolved. I find all disqualifying conditions are raised. The guideline also includes conditions that could mitigate security concerns arising from financial difficulties. I have considered all of the mitigating conditions under AG ¶ 20 and the following potentially apply:

(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; and

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

Applicant’s debts are recent and remain unresolved. He did not provide sufficient evidence to show that his financial problems are unlikely to recur. AG ¶ 20(a) does not apply. Applicant presented no evidence that the debts were due to circumstances beyond his control. He entered into a business relationship with his relatives to fund a vacation rental property. He assumed the business risks of such a transaction. I find AG ¶ 20(b) does not apply. Aside from a one-page document purportedly setting up a payment program, with no proof of payment towards the program or identifying which debts are covered by the program, Applicant failed to provide documentation showing any efforts to contact the creditors, set up payment plans, or make payments on the debts. There is some evidence of financial counseling. AG ¶ 20(c) partially applies. AG ¶ 20(d) 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 guideline 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 considered his honorable military service and his lengthy civilian employment. Applicant has not established a track record of financial stability.

Overall, 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.d: 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 eligibility for a security clearance. Eligibility for access to classified information is denied.

_____________________________ Robert E. Coacher 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 version of the AG implemented on September 1, 2006, and my conclusions are the same using either set of AG. 2 Items 2-3. 3 Items 1, 3, 5. 4 Items 1, 3; AE A, C. 5 Items 1, 3; AE A, B. 6 AE A-C.