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ISCR Case 16-00723.h1 — CASE

ISCR Case 16-00723.h1denied

Case Headnote

ISCR Case No. 16-00723.h1

deniedJul 14, 2017· Hon. Jennifer I. Goldstein· hearing

Summary

A 53-year-old male applicant with a bachelor's degree was denied a security clearance under Guideline F (Financial Considerations) due to significant unresolved debts totaling $38,042. The Statement of Reasons detailed six specific allegations of indebtedness, including a judgment filed in March 2012 for $7,528, and five delinquent credit card accounts ranging from $4,235 to $9,060.

The applicant attributed his financial difficulties to his mother's death in 2010. However, the decision noted that he failed to provide sufficient evidence of efforts to resolve his debts. Disqualifying conditions under Adjudicative Guidelines Paragraphs 19(a) and 19(c) were raised, while mitigating condition Paragraph 20(b) was applied.

Ultimately, the clearance was denied because the applicant remained indebted to six creditors for $38,042 with no resolution of delinquencies, and he did not provide clear evidence of a good-faith effort to repay or resolve his financial issues.

Why the Applicant Was Denied

Applicant is indebted to six creditors totaling $38,042 with no resolution of delinquencies.
Applicant did not provide clear evidence of a good-faith effort to repay debts or resolve financial issues.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(b)appliedConditions Largely Beyond the Person's ControlThe death of the applicant's mother in 2010 was a circumstance beyond his control, but he did not demonstrate responsible action regarding his debts.

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 17, 2016
Answer filedJul 11, 2016
Hearing held—Decided on the written record without a hearing.
Decision dateJul 14, 2017

Cite For

Denial of Security Clearance Due to Unresolved Financial Obligations
Importance of Demonstrating Good-faith Efforts to Resolve Debts
Impact of Financial Irresponsibility on 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 has unresolved financial issues totaling $38,042, which raised significant security concerns under Guideline F. Despite attributing his financial difficulties to personal circumstances, the applicant failed to demonstrate sufficient evidence of responsible action or good-faith efforts to resolve his debts, leading to a denial of his security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant was alleged to be indebted on a judgment filed against him in March 2012 in the amount of $7,528 $7,528	Against Applicant	Judgment Against Applicant	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Applicant was alleged to be indebted on a delinquent credit card account in the amount of $4,691 $4,691	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	Applicant was alleged to be indebted on a delinquent credit card account in the amount of $4,235 $4,235	Against Applicant	Credit Card Debt	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	Applicant was alleged to be indebted on a delinquent credit card account in the amount of $9,060 $9,060	Against Applicant	Credit Card Debt	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	Applicant was alleged to be indebted on a delinquent credit card account in the amount of $5,169 $5,169	Against Applicant	Credit Card Debt	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	Applicant was alleged to be indebted on a delinquent credit card account in the amount of $7,359 $7,359	Against Applicant	Credit Card Debt	Unknown	(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.: 16-00723 ) Applicant for Security Clearance )

For Government: Caroline E. Heintzelman, Esquire, Department Counsel For Applicant: Pro se

July 14, 2017 ______________

STATEMENT OF CASE

______________

GOLDSTEIN, Jennifer I., Administrative Judge:

Applicant is indebted to six creditors in the amount of $38,042. He has not resolved any of his delinquencies to the satisfaction of his creditors. Based upon a review of the pleadings and exhibits, eligibility for access to classified information is denied.

On January 20, 2015, Applicant submitted a security clearance application (SF- 86). On June 17, 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. (Item 1.) The action was taken under Executive Order 10865 (EO), 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 for Determining Eligibility for Access to Classified Information. Applicant answered the SOR on July 11, 2016. (Answer.) He requested that his case be decided by an administrative judge on the written record without a hearing. (Item 2.) On August 9, 2016, Department Counsel submitted the Government’s written case. A complete copy of the File of Relevant Material (FORM), containing seven Items, was mailed to Applicant on August 18, 2016, and received by him on August 23, 2016. The FORM notified Applicant that he had an opportunity to file objections and submit material in refutation, extenuation, or mitigation within 30 days of his receipt of the FORM.

Applicant responded to the FORM in a submission dated September 18, 2016. He did not object to Items 1 through 7. Applicant also submitted additional information in his FORM response, to which Department Counsel had no objection. DOHA assigned the case to me on May 10, 2017. Items 1 through 7 are admitted into evidence. Applicant’s response to the FORM is marked as exhibit (AE) A and is also admitted.

The SOR in this case was issued under the adjudicative guidelines that came into effect within the DoD on September 1, 2006. Security Executive Agent Directive (SEAD) 4, National Security Adjudicative Guidelines, implements new adjudicative guidelines, effective June 8, 2017. All security clearance decisions issued on or after June 8, 2017, are to be decided using the new National Security Adjudicative Guidelines for Determining Eligibility for Access to Classified Information or Eligibility to Hold a Sensitive Position (AG), as implemented by SEAD 4. I considered the previous adjudicative guidelines, effective September 1, 2006, as well as the new AG, effective June 8, 2017, in adjudicating Applicant’s security clearance eligibility. My decision would be the same under either set of guidelines, although this decision is issued pursuant to the new AG.

FINDINGS OF FACT

Applicant is 53 years old. He is married. He earned a bachelor’s degree in 1986. He has worked for his employer since July 2012. (Item 3.)

Applicant is indebted to six creditors in the amount of $38,042. Applicant’s debts appear in credit reports dated January 2015 and June 2016. Applicant attributed his delinquencies to falling behind on his bills after the death of his mother in 2010. (Item 4; Item 5; Item 6.)

Applicant was alleged to be indebted on a judgment filed against him in March 2012 in the amount of $7,528 (SOR ¶ 1.a). Applicant claimed in his Answer and in AE A that this debt is the same debt listed in SOR ¶ 1.e, although the accounts bear different creditor’s names and account numbers. He presented a copy of the judgment file against him by the creditor alleged in SOR ¶ 1.a with his answer. He claimed to be paying on this debt and presented a copy of a money order made out to the creditor identified in SOR ¶ 1.a in the amount of $24.36, and a letter to an attorney claiming to be making the final installment on this debt. The case number on that money order does not match the case number on the judgment. Item 5 shows that there were two different judgments against Applicant by this creditor. One judgment was satisfied in December 2015. That satisfied judgment bears the same account number as printed on Applicant’s money order. Applicant failed to present sufficient evidence that he has resolved or is resolving this debt. (Answer; AE A; Item 5.)

Applicant was alleged to be indebted on a delinquent credit card account in the amount of $4,691 (SOR ¶ 1.b). This debt has been delinquent since January 2011. Applicant admitted this debt in his Answer, and claimed to be “in active state of remittance,” having reduced the balance to $2,929. (Answer) In AE A, he claimed to have fully resolved this account and to have enclosed a copy of the final payment. However, his submission does not contain clear evidence that this debt is resolved. (Answer; AE A; Item 5.)

Applicant was alleged to be indebted on a delinquent credit card account in the amount of $4,235 (SOR ¶ 1.c). This debt became a “major delinquency” in May 2014. He last made a payment in April 2016, as reflected on his June 2016 credit report. Further, an account statement provided by Applicant shows this debt has a balance of $4,095. This debt is unresolved. (AE A; Item 5.)

Applicant was alleged to be indebted on a delinquent credit card account in the amount of $9,060 (SOR ¶ 1.d). This debt became a “major delinquency” in April 2014. He last made a payment in April 2016, as reflected on his June 2016 credit report. This debt is unresolved. (AE A; Item 5.)

Applicant was alleged to be indebted on a delinquent credit card account in the amount of $5,169 (SOR ¶ 1.e). This account was charged off by the creditor. Applicant’s last payment on this debt was in February 2014. (Item 5.)

Applicant was alleged to be indebted on a delinquent credit card account in the amount of $7,359 (SOR ¶ 1.f). This debt became a “major delinquency” in June 2011. He last made a payment in November 2010, as reflected on his June 2016 credit report. (Item 5.)

Applicant submitted no evidence of financial counseling, or of budget estimates from which to analyze his current financial situation. No character references were submitted to describe Applicant’s judgment, trustworthiness, integrity, or reliability. I was unable to evaluate his credibility, demeanor, or character in person since he elected to have his case decided without a hearing.

POLICIES

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines (AG). In addition to brief introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which are useful 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 AG ¶ 2 describing 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. Likewise, I have avoided drawing inferences grounded on mere speculation or conjecture.

Directive ¶ E3.1.14, requires 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 the applicant or proven by Department Counsel, and has the ultimate burden of persuasion as to obtaining a favorable clearance 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 protect or 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 Executive Order 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 concerns relating to the guideline for financial considerations are set out in AG ¶ 18, which reads in pertinent part:

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.

AG ¶ 19 describes two conditions that could raise security concerns and may be disqualifying in this case:

(a) inability to satisfy debts; and

Applicant is indebted to six creditors in the amount of $38,042. He has taken little action to document resolution of these delinquencies, despite his claims of making payment on some of them. The facts establish prima facie support for the foregoing disqualifying conditions, and shift the burden to Applicant to mitigate those concerns.

The guideline includes three conditions in AG ¶ 20 that could mitigate the security concerns arising from Applicant’s alleged financial difficulties:

(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.

The evidence does not establish mitigation under AG ¶ 20(a). Applicant’s financial problems have been ongoing since 2011. Further, as his debts are unresolved, his financial problem continue to date.

The evidence establishes partial mitigation under AG ¶ 20(b). The 2010 death of Applicant’s mother was a circumstance beyond his control. However, he did not provide evidence that he acted responsibly under the circumstances with respect to his debt, which is necessary for full mitigation under this condition. He has been fully employed since 2012, yet he has documented few steps taken to resolve his delinquencies. Mitigation under AG ¶ 20(b) is not fully applicable.

At this time, he has not established a history of responsible action with respect to his credit card debt or judgment. There is no discernable evidence of a good-faith effort to repay those debts in the record. The evidence does not establish mitigation under AG ¶ 20(d).

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(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.

According to 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 applicable guidelines and the whole-person concept.

I considered the potentially disqualifying and mitigating conditions in light of all pertinent facts and circumstances surrounding this case. Applicant is a mature individual who is accountable for the decisions and choices that led to his financial difficulties. He failed to demonstrate a basis for finding current good judgment, or permanent behavioral change, concerning his continuing pattern of financial irresponsibility. His ongoing delinquent debts establish continuing potential for pressure, coercion, or duress.

Overall, the record evidence leaves me with questions and doubts as to his eligibility and suitability for a security clearance. For these reasons, I conclude Applicant did not meet his burden to mitigate the security concerns arising from his financial considerations.

FORMAL FINDINGS

Formal findings for or against Applicant on the allegations set forth in the SOR, as required by ¶ E3.1.25 of Enclosure 3 of the Directive, are:

Paragraph 1, Guideline F: AGAINST APPLICANT

Subparagraphs 1.a through1.f: 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.

Jennifer Goldstein Administrative Judge