CASE · Clearance Adjudication Search EngineCASE

Loading case…

ISCR Case 16-00708.h1 — CASE

ISCR Case 16-00708.h1denied

Case Headnote

ISCR Case No. 16-00708.h1

deniedAug 31, 2017· Hon. Martin H. Mogul· hearing

Summary

A 38-year-old naturalized U.S. citizen from Vietnam was denied a security clearance under Guideline F (Financial Considerations) due to significant overdue debts. The Statement of Reasons (SOR) detailed nine specific financial allegations, including a judgment filed in February 2013 for $27,245, and eight charged-off or collection accounts ranging from $965 to $11,506. The total of these overdue debts exceeded $16,000.

Disqualifying conditions under Guideline F were raised, specifically AG ¶ 19(a) and AG ¶ 19(c). While mitigating conditions AG ¶ 20(d) and AG ¶ 20(c) were applied, they were insufficient to overcome the concerns.

The denial was based on the applicant's substantial overdue debts and a lack of evidence demonstrating current debt payments or future financial responsibility. The applicant failed to submit a Personal Financial Statement or any additional mitigating documents, leading to the conclusion that she had not provided sufficient evidence of financial responsibility or mitigation.

Why the Applicant Was Denied

The applicant has significant overdue debts totaling over $16,000.
No evidence was presented to demonstrate that the applicant is current with her debts or will be able to manage her finances responsibly in the future.
The applicant did not submit a Personal Financial Statement or any additional documents in mitigation.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(d)rejectedGood-faith Effort to Repay Overdue CreditorsWhile the applicant has begun resolving some debts, significant overdue debt remains.
AG ¶ 20(c)rejectedReceiving Financial CounselingNo evidence of financial counseling was provided.

Key Rule Quoted

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

Procedural Posture

SOR issuedJun 3, 2016
Answer filedJun 18, 2016Applicant requested decision on written record.
Hearing held—No hearing; case decided on written record.
Decision dateAug 31, 2017

Cite For

Denial Based on Significant Unresolved Financial Obligations Under Guideline F
Importance of Providing Evidence of Financial Responsibility
Rejection of Mitigating Conditions Due to Lack of Documentation

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 multiple financial concerns under Guideline F, with several debts unresolved or inadequately addressed by the applicant. Ultimately, the judge ruled against the applicant on most allegations, citing insufficient evidence of financial responsibility and ongoing delinquent debts.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	This overdue debt is cited in the SOR for a judgment filed against her in February 2013, in the amount of $27,245. $27,245	For Applicant	Judgment Against Applicant	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	This overdue debt is cited in the SOR for a charged-off account in the amount of $1,282. $1,282	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	This overdue debt is cited in the SOR for a charged-off account in the amount of $11,506. $11,506	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	This overdue debt is cited in the SOR for a charged-off account in the amount of $1,291. $1,291	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	This overdue debt is cited in the SOR for a charged-off account in the amount of $965. $965	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	This overdue debt is cited in the SOR for a charged-off account in the amount of $4,783. $4,783	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	This overdue debt is cited in the SOR for a collection account in the amount of $1,222. $1,222	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	This overdue debt is cited in the SOR for a charged-off account in the amount of $1,488. $1,488	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i	This overdue debt is cited in the SOR for a charged-off account in the amount of $5,181. $5,181	For Applicant	Unspecified Financial	Admitted	(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. 16-00708 ) ) Applicant for Security Clearance )

For Government: Andrea M. Corrales, Esq., Department Counsel For Applicant: Pro se

August 31, 2017 ______________

STATEMENT OF CASE

______________

MOGUL, Martin H., Administrative Judge:

Statement of the Case

On June 3, 2016, in accordance with Department of Defense (DoD) Directive 5220.6, as amended (Directive), the DoD issued Applicant a Statement of Reasons (SOR) alleging facts that raise security concerns under Guideline F.1 (Item 1.) The SOR further informed Applicant that, based on information available to the government, DoD adjudicators could not make the preliminary affirmative finding it is clearly consistent with the national interest to grant or continue Applicant’s security clearance.

On June 18, 2016, Applicant submitted a written reply to the SOR with six attachments (RSOR A-F), and she requested that her case be decided on the written record in lieu of a hearing. (Item 3.) On July 19, 2017, Department Counsel issued the Department's written case. A complete copy of the file of relevant material (FORM) was

1 I considered the previous Adjudicative Guidelines, effective September 1, 2006, as well as the new provided to Applicant. In the FORM, Department Counsel offered six documentary exhibits. (Items 1-6.) Applicant was given the opportunity to file objections and submit material in refutation, extenuation, or mitigation. A response was due on August 25, 2016. Applicant submitted no additional documents. The case was assigned to this Administrative Judge on June 5, 2017. Based upon a review of the pleadings and exhibits, eligibility for access to classified information is denied.

FINDINGS OF FACT

After a thorough and careful review of the pleadings, and exhibits, I make the following findings of fact.

Applicant is 38 years old. She was born in Saigon, Vietnam. She became a naturalized United States citizen in 1983. Applicant is married. She is employed by a defense contractor, and she seeks a DoD security clearance in connection with her employment in the defense sector. (Item 3.)

Guideline F, Financial Considerations

The SOR lists nine allegations (1.a. through 1.i.) regarding financial difficulties, specifically overdue debts, under Adjudicative Guideline F. All of the SOR allegations will be discussed below in the order they were listed on the SOR:

1.a. This overdue debt is cited in the SOR for a judgment filed against her in February 2013, in the amount of $27,245. Applicant admitted this debt in her RSOR, but she wrote that the debt had been paid, and that the final payment was posted on February 9, 2015. She also wrote that she has made multiple attempts to have the creditor update her credit reports, and she has filed disputes with the credit reporting agencies. RSOR A establishes that this debt has been resolved.

1.b. This overdue debt is cited in the SOR for a charged-off account in the amount of $1,282. Applicant admitted this debt in her RSOR, and she wrote that she is currently enrolled in a debt settlement program through “FDR.” She added that she is currently working with the program to have her debt negotiation accelerated. (Item 2.) While Applicant wrote on the update from FDR that she has settled this debt, the printed material from FDR states 0 payments have been made. (RSOR E.) No independent evidence has been introduced to establish that this debt has been resolved or reduced.

RSOR B includes a letter from Freedom Debt Relief (FDR), the debt settlement program referred to by Applicant in her RSOR, which states that Applicant enrolled in their program in June 15, 2015, which is scheduled to continue for 36 months. Applicant is scheduled to make monthly payments of $540, and she had 11 accounts enrolled in the program. RSOR C confirms that Applicant has made 25 payment of $270 to FDR.

1.c. This overdue debt is cited in the SOR for a charged-off account in the amount of $11,506. Applicant admitted this debt in her RSOR, and she wrote that she is currently enrolled in a debt settlement program through “FDR.” She added that the account has been negotiated, and she is currently making timely payments according to the agreed upon terms. (Item 2.) The update from FDR states 5 of 18 payments of $200 have been made toward this debt, and the debt has been reduced to $6,769. (RSOR E.)

1.d. This overdue debt is cited in the SOR for a charged-off account in the amount of $1,291. Applicant admitted this debt in her RSOR, and she wrote that she is currently enrolled in a debt settlement program through “FDR.” She added that she is currently working with the program to have her debt negotiation accelerated. (Item 2.) The update from FDR states 0 payments have been made toward this debt. (RSOR E.) No independent evidence has been introduced to establish that this debt has been resolved or reduced.

1.e. This overdue debt is cited in the SOR for a charged-off account in the amount of $965. Applicant admitted this debt in her RSOR, and she wrote that she is currently enrolled in a debt settlement program through “FDR.” She added that she is currently working with the program to have her debt negotiation accelerated. (Item 2.) The update from FDR states 0 payments have been made toward this debt. (RSOR E.) No independent evidence has been introduced to establish that this debt has been resolved or reduced.

1.f. This overdue debt is cited in the SOR for a charged-off account in the amount of $4,783. Applicant admitted this debt in her RSOR, and she wrote that she is currently enrolled in a debt settlement program through “FDR.” She added that she is currently working with the program to have her debt negotiation accelerated. (Item 2.) The update from FDR states 0 payments have been made toward this debt. (RSOR E.) No independent evidence has been introduced to establish that this debt has been resolved or reduced.

1.g. This overdue debt is cited in the SOR for a collection account in the amount of $1,222. Applicant admitted this debt in her RSOR, and she wrote that she is currently enrolled in a debt settlement program through “FDR.” She added that she is currently working with the program to have her debt negotiation accelerated. (Item 2.) No evidence has been introduced to establish that this debt has been resolved or reduced.

1.h. This overdue debt is cited in the SOR for a charged-off account in the amount of $1,488. Applicant admitted this debt in her RSOR, and she wrote that this debt was settled on May 19, 2016, according to the terms agreed to with the creditor. She is currently filing disputes through credit reporting agencies to have her status updated. (Item 2.) RSOR F shows that this debt was paid.

1.i. This overdue debt is cited in the SOR for a charged-off account in the amount of $5,181. Applicant admitted this debt in her RSOR, and she wrote that this debt was settled on December 23, 2015, according to the terms agreed to with the creditor. She is currently filing disputes through credit reporting agencies to have her status updated. (Item 2.) RSOR D establishes that this debt has been resolved. The evidence has established that Applicant currently owes more than $16,000 in delinquent debts. Applicant did not submit a Personal Financial Statement or provide any other information or evidence about her current financial status. She also has failed to submit any other documents in mitigation.

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 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 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 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, 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, and has the ultimate burden of persuasion as to obtaining a favorable clearance decision.”

A person who applies for access to classified information seeks to enter 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 (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 relating to the guideline 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.

Applicant had many delinquent debts for several years. While some of her debts have been reduced or resolved, she still has significant delinquent debt, and there has been no evidence introduced to establish that Applicant will be able to be more responsible in resolving her debts in the future.

The guideline notes several conditions that could raise security concerns under AG ¶ 19. The evidence is sufficient to raise disqualifying conditions (a) and (c) as potentially applicable in this case:

(a) inability to satisfy debts;

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

(d) deceptive or illegal financial practices such as embezzlement, employee theft, check fraud, expense account fraud, mortgage fraud, filing deceptive loan statements and other intentional financial breaches of trust;

(e) consistent spending beyond one's means or frivolous or irresponsible spending, which may be indicated by excessive indebtedness, significant negative cash flow, a history of late payments or of non-payment, or other negative financial indicators; (f) failure to file or fraudulently filing annual Federal, state, or local income tax returns or failure to pay annual Federal, state, or local income tax as required;

(g) unexplained affluence, as shown by a lifestyle or standard of living, increase in net worth, or money transfers that are inconsistent with known legal sources of income;

(h) borrowing money or engaging in significant financial transactions to fund gambling or pay gambling debts; and

(i) concealing gambling losses, family conflict, or other problems caused by gambling.

AG ¶ 20 provides conditions that could mitigate security concerns. I considered all of the mitigating conditions under AG ¶ 20 including:

(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;

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

(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 to resolve the issue;

(f) the affluence resulted from a legal source of income; and

(g) the individual has made arrangements with the appropriate tax authority to file or pay the amount owed and is in compliance with those arrangements. Applicant has begun resolving her delinquent debts. However, there is still significant overdue debt, and no evidence has been introduced to establish that Applicant is current with all her recent debt, or will be able to live within her means in the future do not find that mitigation under AG ¶ 20 has been established.

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.

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 facts and circumstances surrounding this case. I have incorporated my comments under Guideline F in my whole-person analysis.

Overall, the record evidence leaves me with significant questions and doubts as to Applicant’s eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant has not mitigated the Financial Considerations security concerns.

FORMAL FINDINGS

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

Paragraph 1, Guideline F: AGAINST APPLICANT

Subparagraph 1.a: For Applicant Subparagraph 1.b: Against Applicant Subparagraph 1.c: For Applicant Subparagraph 1.d: Against Applicant Subparagraph 1.e: Against Applicant Subparagraph 1.f: Against Applicant Subparagraph 1.g: Against Applicant Subparagraph 1.h: For Applicant Subparagraph 1.i: For 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.

Martin H. Mogul Administrative Judge

FOOTNOTES

Adjudicative Guidelines, effective June 8, 2017. My decision would be the same if the case was considered under the previous Adjudicative Guidelines, effective September 1, 2006.