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ISCR Case 16-00681.h1 — CASE

ISCR Case 16-00681.h1denied

Case Headnote

ISCR Case No. 16-00681.h1

deniedOct 4, 2017· Hon. Michael H. Leonard· hearing

Summary

A 54-year-old applicant seeking a top-secret security clearance was denied under Guideline F (Financial Considerations) due to two delinquent credit card accounts totaling approximately $18,000. Specifically, the Statement of Reasons cited a charged-off credit card account for $17,763 and a $334 collection account originating from another credit card. These issues raised disqualifying conditions under Adjudicative Guideline Paragraphs 19(a) and 19(c).

While mitigating condition Adjudicative Guideline Paragraph 20(e) was considered, it was not sufficient to overcome the security concerns. The denial was primarily based on the applicant's failure to provide documented proof to substantiate her disputes regarding the delinquent accounts.

Furthermore, the applicant did not demonstrate any actions taken to resolve these significant debts. The Adjudicator found the applicant's explanations regarding the debts suspect due to the absence of supporting documentation, ultimately leading to the denial of the security clearance.

Why the Applicant Was Denied

The applicant did not provide documented proof to substantiate her disputes regarding the delinquent credit card accounts.
The applicant failed to demonstrate actions taken to resolve the debts, which were significant in amount.
The applicant's explanation regarding the debts was deemed suspect due to a lack of supporting documentation.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability to Satisfy Debts
AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations

Mitigating

AG ¶ 20(e)rejectedThe Individual Has a Reasonable Basis to Dispute the Legitimacy of the Past-due DebtThe applicant did not provide documented proof to substantiate her disputes.

Key Rule Quoted

“It is well-established law that no one has a right to a security clearance.”
— Department of the Navy v. Egan, 484 U.S. 518, 528 (1988)

Procedural Posture

SOR issuedSep 6, 2016
Answer filedNov 9, 2016Requested decision based on written record.
Hearing held—No hearing; decision based on written record.
Decision dateOct 4, 2017

Cite For

Failure to Provide Evidence of Debt Resolution Under Guideline F
Importance of Documented Proof in Disputes Regarding Financial Obligations
Reliability and Trustworthiness Concerns Stemming From Financial Difficulties

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 has two delinquent credit card accounts totaling approximately $18,000, which were not resolved. The applicant's failure to provide documented proof to substantiate her disputes regarding these debts led to a decision against her under Guideline F for financial considerations.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	a charged-off credit card account for $17,763 $17,763	Against Applicant	Credit Card Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	a $334 collection account stemming from a credit card account $334	Against Applicant	Credit Card Debt	Denied with Explanation	(a) inability to satisfy debts (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. 16-00681 ) ) Applicant for Security Clearance

For Government: Alison O’Connell, Esq., Department Counsel For Applicant: Pro se

10/04/2017 ______________

STATEMENT OF CASE

______________

LEONARD, Michael H., Administrative Judge:

Applicant contests the Defense Department’s intent to deny or revoke her eligibility for access to classified information. She did not provide documented proof to substantiate the basis of the disputes she asserts for two delinquent credit card accounts for a total of about $18,000. Nor did she provide evidence of actions taken to resolve the two accounts. Accordingly, this case is decided against Applicant.

Statement of the Case

Applicant completed and submitted a Questionnaire for National Security Positions (SF 86 format) on May 5, 2015. This document is commonly known as a security clearance application. Thereafter, on September 6, 2016, after reviewing the application and the information gathered during a background investigation, the Department of Defense Consolidated Adjudications Facility, Fort Meade, Maryland, sent Applicant a statement of reasons (SOR), explaining it was unable to find that it was clearly consistent with the national interest to grant her eligibility for access to classified information. The SOR is similar to a complaint. It detailed the factual reasons for the action under the security guideline known as Guideline F for financial considerations. Applicant answered the SOR on November 9, 2016. She requested a decision based on the written record in lieu of a hearing. Her response consisted of a two-page memorandum without attachments or enclosures.

On December 8, 2016, Department Counsel submitted all relevant and material information that could be adduced at a hearing. The file of relevant material (FORM) consists of Department Counsel’s written brief and supporting documentation. The FORM was mailed to Applicant, who received it December 13, 2016. She did not reply within 30 days from receipt of the information as required. The case was assigned to me October 1, 2017.

PROCEDURAL MATTERS

Department Counsel’s FORM includes Exhibit 10, which is a report of investigation (ROI) summarizing Applicant’s interview that took place during the November 2015 background investigation. The ROI is not authenticated by a witness, as required under ¶ E3.1.20 of the Directive.1 Likewise, Section 5(a) of Executive Order 10865 prohibits receipt and consideration of “investigative reports” without authenticating witnesses. The Directive provides no exception to the authentication requirement. Indeed, the authentication requirement is the exception to the general rule that prohibits consideration of an ROI.

Department Counsel’s written brief includes a footnote advising Applicant that the ROI was not authenticated and that failure to object may constitute a “waiver” of the authentication requirement. In my view, Department Counsel is conflating or confusing the terms waiver and forfeiture.2 In the law of evidence, errors are preserved by timely objections, and relief on appeal is granted from a preserved error unless it is harmless (the harmless-error doctrine). Waiver is the voluntary relinquishment or abandonment of a legal right or advantage. When there is a waiver there is no error to correct on appeal and no relief to grant. On the other hand, failure to make a timely objection usually forfeits any error, and relief on appeal is appropriate from a forfeited error only upon a showing that the error was plain, obvious, and prejudicial (the plain-error doctrine).

Here, the written record does not demonstrate that Applicant, who has not replied to the FORM, understood the concepts of authentication, waiver, and admissibility. It also does not demonstrate that she understood the implications of waiving an objection. Accordingly, given the lack of an authenticating witness, I have not considered the ROI in reaching my decision.

FINDINGS OF FACT

Applicant is a 54-year-old employee who requires a top-secret security clearance for her employment as an assistant facility security officer for a federal contractor. She married in 1983, and she and her husband have two adult children.

The SOR alleges a history of financial problems or difficulties consisting of (1) a charged-off credit card account for $17,763 and (2) a $334 collection account stemming from a credit card account. The two delinquent accounts are established by credit reports from July 2009, May 2015, January 2016, and June 2016.3 There is no documentation in the written record to establish that the delinquent accounts were paid, settled, in a payment arrangement, cancelled, forgiven, or otherwise resolved.

In her answer to the SOR, Applicant denied the charged-off credit card account, asserting that it was not a debt she incurred. She explained at some length her belief that the debt was due to fraud, but she did not provide any documented proof to support the basis of her dispute. As noted by Department Counsel in her brief, the July 2009 credit report in the written record shows that the credit card account, which is an individual account, was opened in May 2008, was current and in good standing until at least June 2009, and had a credit limit of $19,000, a balance of $18,799, and $0 past due.4

The May 2015 credit report shows the credit card account was in collection and had been closed by the credit grantor.5 The date of last activity is May 2010. It has a balance of $17,763 and a past-due amount of $16,160.

The credit reports from January and June 2016 provide similar information about the credit card account.6 Both reports show the debt as a charged-off account in the amount of $17,763. And the June 2016 report notes the date of first delinquency was November 2009, which is more than a year after it was opened in May 2008.7

Applicant denied in part and admitted in part the $334 collection account. She did not provide documented proof to support the basis of her dispute. Nor did she provide documentation of actions taken to resolve the debt. Law and Policies

This case is adjudicated under Executive Order (E.O.) 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the National Security Adjudicative Guidelines for Determining Eligibility for Access to Classified Information or Eligibility to Hold a Sensitive Position (AG), effective June 8, 2017.8

It is well-established law that no one has a right to a security clearance.9 As noted by the Supreme Court in Department of the Navy v. Egan, “the clearly consistent standard indicates that security clearance determinations should err, if they must, on the side of denials.”10 Under Egan, Executive Order 10865, and the Directive, any doubt about whether an applicant should be allowed access to classified information will be resolved in favor of protecting national security. In Egan, the Supreme Court stated that the burden of proof is less than a preponderance of evidence.11 The Appeal Board has followed the Court’s reasoning, and a judge’s findings of fact are reviewed under the substantial-evidence standard.12

A favorable clearance decision establishes eligibility of an applicant to be granted a security clearance for access to confidential, secret, or top-secret information.13 An unfavorable clearance decision (1) denies any application, (2) revokes any existing security clearance, and (3) prevents access to classified information at any level.14

There is no presumption in favor of granting, renewing, or continuing eligibility for access to classified information.15 The Government has the burden of presenting evidence to establish facts alleged in the SOR that have been controverted.16 An applicant is responsible for presenting evidence to refute, explain, extenuate, or mitigate facts that have been admitted or proven.17 In addition, an applicant has the ultimate burden of persuasion to obtain a favorable clearance decision.18

DISCUSSION

Under Guideline F for financial considerations, the suitability of an applicant may be questioned or put into doubt when that applicant has a history of excessive indebtedness or financial problems or difficulties. The overall concern is:

Failure or inability 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.19

The concern is broader than the possibility that a person might knowingly compromise classified or sensitive information to obtain money or something else of value. It encompasses concerns about a person’s self-control, judgment, and other important qualities. A person who is financially irresponsible may also be irresponsible, unconcerned, or negligent in handling and safeguarding classified information.

In analyzing the facts of this case, I considered the following disqualifying and mitigating conditions as most pertinent:

AG ¶ 19(a) inability to satisfy debts;

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

AG ¶ 20(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 taken to resolve the issue.

The evidence supports a conclusion that Applicant has a problematic financial history sufficient to raise a security concern under Guideline F. That evidence consists of four credit reports from 2009-2016 that establish the two delinquent credit card accounts for a total of about $18,000 in her name. Neither debt is resolved.

Applicant has not met the requirements of the second prong of the mitigating condition found at AG ¶ 20(e). For both debts, she did not provide documented proof to substantiate the basis of her disputes. The lack of documentation is not much of a concern for the $334 collection account because it’s a minor amount. But that is not the case with the charged-off account for more than $17,000. For that debt, her explanation in her answer to the SOR is suspect. If the charges on the credit card account were due to fraud, as she asserts, then it is unclear why payments were initially made on the account as reflected in the credit reports. In addition, she did not provide documentation of actions taken to address either debt.

Given that Applicant requested a decision based on the written record in lieu of a hearing, the lack of supporting documentation undermines her case. It’s the responsibility of the individual applicant to produce relevant documentation in support of their case. Here, Applicant has not met her burden of production because she did not produce any documentation to substantiate the basis of her disputes or of actions taken to resolve the two delinquent debts. Accordingly, based on the written record, I am unable to make an affirmative determination that Applicant is an acceptable security risk.20

Applicant’s history of financial problems or difficulties creates doubt about her reliability, trustworthiness, good judgment, and ability to protect classified information. In reaching this conclusion, I weighed the evidence as a whole and considered if the favorable evidence outweighed the unfavorable evidence or vice versa. I also considered the whole-person concept. Accordingly, I conclude that she did not meet her ultimate burden of persuasion to show that it is clearly consistent with the national interest to grant her eligibility for access to classified information.

FORMAL FINDINGS

The formal findings on the SOR allegations are:

Paragraph 1, Guideline F: Against Applicant

Subparagraphs 1.a-1.b: Against Applicant

CONCLUSION

In light of the record as a whole, it is not clearly consistent with the national interest to grant Applicant access to classified information.

Michael H. Leonard Administrative Judge

FOOTNOTES

1 See generally ISCR Case No. 12-10933 (App. Bd. Jun. 29, 2016) (In a concurring opinion, Judge Ra’anan notes the historical concern about reports of investigation in that they were considered by some to present a heightened problem in providing due process in security clearance cases. Judge Ra’anan raises a number of pertinent questions about using an unauthenticated ROI in a non-hearing case with a pro se applicant.). 2 See United States v. Olano, 507 U.S. 725 (1993) (in this opinion, the Supreme Court distinguishes between forfeiture and waiver). 3 Exhibits 6, 7, 8, and 9. 4 Exhibit 9 at 4. 5 Exhibit 8 at 4. 6 Exhibits 6 at 3 and 7 at 2. 7 Exhibit 6 at 3. 8 The 2017 AG are available at http://ogc.osd.mil/doha. 9 Department of the Navy v. Egan, 484 U.S. 518, 528 (1988) (“it should be obvious that no one has a ‘right’ to a security clearance”); Duane v. Department of Defense, 275 F.3d 988, 994 (10th Cir. 2002) (no right to a security clearance). 10 484 U.S. at 531. 11 484 U.S. at 531. 12 ISCR Case No. 01-20700 (App. Bd. Dec. 19, 2002) (citations omitted). 13 Directive, ¶ 3.2. 14 Directive, ¶ 3.2. 15 ISCR Case No. 02-18663 (App. Bd. Mar. 23, 2004). 16 Directive, Enclosure 3, ¶ E3.1.14. 17 Directive, Enclosure 3, ¶ E3.1.15. 18 Directive, Enclosure 3, ¶ E3.1.15. 19 AG ¶ 18. 20 Directive, Enclosure 2, ¶ 2(a).