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ISCR Case 16-00727.h1 — CASE

ISCR Case 16-00727.h1denied

Case Headnote

ISCR Case No. 16-00727.h1

deniedSep 5, 2017· Hon. Robert J. Tuidar· hearing

Summary

A 51-year-old claims processor for a defense contractor was denied eligibility for a public trust position due to financial considerations under Guideline F. The applicant faced concerns regarding approximately $25,622 in financial difficulties. Specifically, the Statement of Reasons included a $1,536 student loan collection account she co-signed for her nephew.

While the applicant admitted to one debt, she did not provide sufficient evidence to mitigate the remaining 12 delinquent debts. The adjudicator noted a lack of evidence demonstrating payment or resolution for these outstanding obligations. Furthermore, there was no indication that the applicant had sought financial counseling or made efforts to address her financial issues.

Consequently, the adjudicator applied disqualifying conditions under Adjudicative Guidelines Paragraphs 19(a), 19(b), and 19(c), while only applying the mitigating condition under Paragraph 20(d). Ultimately, doubts about the applicant's reliability and trustworthiness remained unmitigated, leading to the denial of her security clearance.

Why the Applicant Was Denied

The applicant failed to provide sufficient evidence of payment or resolution for 12 delinquent debts.
There was no evidence of financial counseling or efforts to address the financial issues.
Doubts regarding the applicant's reliability and trustworthiness remained unmitigated.

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)raisedA History of Not Meeting Financial Obligations

Mitigating

AG ¶ 20(d)appliedThe Individual Initiated and Is Adhering to a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve DebtsThis condition was applied to the one admitted debt but not to the remaining debts.

Key Rule Quoted

“Once a concern arises regarding an Applicant’s security clearance eligibility, there is a strong presumption against the grant or maintenance of a security clearance.”
— Dorfmont v. Brown, 913 F. 2d 1399, 1401 (9th Cir. 1990), cert. denied, 499 U.S. 905 (1991)

Procedural Posture

SOR issuedAug 20, 2016
Answer filedSep 15, 2016Requested decision without a hearing.
Hearing held—No hearing; decision based on written record.
Decision dateSep 5, 2017

Cite For

Failure to Provide Evidence of Financial Responsibility Under Guideline F
Importance of Mitigating Conditions in Financial Security Cases
Presumption Against Granting Security Clearance When Concerns Arise

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 had significant financial concerns, with a total of approximately $25,622 in alleged debts. While the applicant admitted to one student loan debt, the remaining debts were ruled against her due to insufficient evidence of mitigation or resolution, leading to a denial of her eligibility for a public trust position.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	$1,536 student loan collection account she co-signed for her nephew $1,536	For Applicant	Student Loan Debt	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.b–1.m	12 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: ) ) ) ADP Case No. 16-00727 ) Applicant for Security Clearance )

For Government: Tara R. Karoian, Esq., Department Counsel For Applicant: Pro se

09/05/2017 ___________

STATEMENT OF CASE

___________

TUIDER, Robert, Administrative Judge:

This case involves trustworthiness concerns raised by Guideline F (financial considerations). Eligibility for a public trust position is denied.

Statement of the Case

On June 22, 2015, Applicant completed and signed a Questionnaire for National Security Positions (SF-86). On August 20, 2016, the Department of Defense (DOD) Consolidated Adjudications Facility (CAF) issued a Statement of Reasons (SOR) to Applicant under Executive Order (Exec. Or.) 10865, Safeguarding Classified Information within Industry, February 20, 1960; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (Directive), January 2, 1992; and the Adjudicative Guidelines for Determining Eligibility for Access to Classified Information, which became effective on September 1, 2006 (Sept. 1, 2006 AGs).

The SOR detailed reasons why the DOD CAF did not find under the Directive that it is clearly consistent with the interests of national security to grant or continue a public trust position for Applicant, and recommended referral to an administrative judge to determine whether a public trust position should be granted, continued, denied, or revoked. Specifically, the SOR set forth security concerns arising under the financial considerations guideline. On September 15, 2016, Applicant answered the SOR, and requested a decision without a hearing. (Item 1) On September 28, 2016, Department Counsel completed the File of Relevant Material (FORM). On October 14, 2016, Applicant received the FORM. She did not submit any information within the 30-days after receiving the FORM. On August 10, 2017, the case was assigned to me. The case file consists of six exhibits, all of which are admitted. (Items 1-6)

While this case was pending a decision, the Director of National Intelligence (DNI) issued Security Executive Agent Directive 4, establishing in Appendix A the National Security Adjudicative Guidelines for Determining Eligibility for Access to Classified Information or Eligibility to Hold a Sensitive Position (AGs), which he made applicable to all covered individuals who require initial or continued eligibility for access to classified information or eligibility to hold a sensitive position. The new AGs supersede the September 1, 2006 AGs and are effective “for all covered individuals” on or after June 8, 2017. Accordingly, I have evaluated Applicant’s public trust position eligibility under the new AGs.1 My decision would have been the same under the prior AGs.

Findings of Fact2

The SOR alleged 13 debts under financial considerations. Applicant admitted SOR ¶ 1.a, and denied the others. She provided explanations in response to all 13 allegations. Her admission is accepted as a finding of fact. Additional findings of fact follow.

Applicant is a 51-year-old claims processor employed by a defense contractor since 1998. She seeks a public trust position in conjunction with her current employment. Applicant graduated from high school in 1984, and was awarded a cosmetology degree in 1986. She was married from 1991 to 1996, and that marriage ended by divorce. Applicant has no dependents.

Financial Considerations

The SOR consists of debts that total approximately $25,622. (SOR ¶¶ 1.a – 1.m) These allegations are established through Applicant’s admissions in part; her March 12, 2015 SF-86; her April 11, 2015 and January 25, 2016 credit reports; and her July 21, 2015 Office of Personnel Management Personal Subject Interview (OPM PSI). (Items 2 - 6)

As noted, Applicant admitted to SOR ¶ 1.a, $1,536 student loan collection account she co-signed for her nephew. She provided proof of a payment and deferment of this loan. (Item 2). With regard to the remaining 12 SOR debts, she stated, “[these] debt[s] [are] not currently showing on my credit reports… .” (Item 2) Applicant provided copies of credit reports that she referenced with her SOR answer. However, during her OPM PSI, Applicant discussed the specifics behind most of the debts alleged that she now denies. (Item 6) In her SOR answer, Applicant did not provide supporting documentation evidencing payment of the remaining 12 delinquent debts or successful resolution of them, nor does she provide sufficient explanation or documentation of the current status of each debt.

Applicant has been gainfully employed since 1998. There is no information to support that her financial difficulties were a result of circumstances beyond her control or have been otherwise addressed warranting mitigation. The record also does not contain character evidence, such as reference letters, performance evaluation, or other evidence that would support a whole-person analysis.

POLICIES

The Under Secretary of Defense’s Memorandum of November 19, 2004, treats ADP positions as sensitive positions, and it entitles applicants for ADP positions to the procedural protections in the Directive before any final unfavorable access determination may be made. The standard set out in the adjudicative guidelines assignment to sensitive duties is that the person’s loyalty, reliability, and trustworthiness are such that assigning the person to sensitive duties is clearly consistent with the interests of national security.

A person who seeks access to sensitive 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. Decisions include, by necessity, consideration of the possible risk the applicant may deliberately or inadvertently fail to safeguard sensitive information.

When evaluating an applicant’s suitability for a public trust position, the administrative judge must consider the disqualifying and mitigating conditions in the AG. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, these guidelines are applied in conjunction with an evaluation of the whole person. The administrative judge’s overarching adjudicative goal is a fair, impartial and commonsense decision. An administrative judge must consider all available, reliable information about the person, past and present, favorable and unfavorable.

The protection of the national security is the paramount consideration. Under AG ¶ 2(b), “[a]ny doubt concerning personnel being considered for access to [sensitive] information will be resolved in favor of national security.” The Government must present substantial evidence to establish controverted facts alleged in the SOR. Directive ¶ E3.1.14. Once the Government establishes a disqualifying condition by substantial evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the facts. Directive ¶ E3.1.15. An applicant has the burden of proving a mitigating condition, and the burden of disproving it never shifts to the Government. See ISCR Case No. 02- 31154 at 5 (App. Bd. Sep. 22, 2005). An applicant has the ultimate burden of demonstrating that it is clearly consistent with national security to grant or continue eligibility for access to sensitive information.

ANALYSIS

Financial Considerations

AG ¶ 18 articulates the security concern for financial problems:

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.

AG ¶ 19 provides three disqualifying conditions that could raise a security concern and may be disqualifying in this case: “(a) inability to satisfy debts;” “(b) unwillingness to satisfy debts regardless of the ability to do so;” and “(c) a history of not meeting financial obligations.” Based on the information in the SOR, the record established the disqualifying conditions in AG ¶¶ 19(a), 19(b), and 19(c), requiring additional inquiry about the possible applicability of mitigating conditions.

AG ¶ 20 lists seven potential mitigating conditions:

(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.

The Appeal Board concisely explained Applicant’s responsibility for proving the applicability of mitigating conditions as follows:

Once a concern arises regarding an Applicant’s security clearance eligibility, there is a strong presumption against the grant or maintenance of a security clearance. See Dorfmont v. Brown, 913 F. 2d 1399, 1401 (9th Cir. 1990), cert. denied, 499 U.S. 905 (1991). After the Government presents evidence raising security concerns, the burden shifts to the applicant to rebut or mitigate those concerns. See Directive ¶ E3.1.15. The standard applicable in security clearance decisions is that articulated in Egan, supra. “Any doubt concerning personnel being considered for access to classified information will be resolved in favor of the national security.” Directive, Enclosure 2 ¶ 2(b).

ISCR Case No. 10-04641 at 4 (App. Bd. Sept. 24, 2013).

Application of AG ¶ 20(d) is applicable to the debt contained in SOR ¶ 1.a. With regard to the remaining 12 SOR debts, no mitigating conditions fully apply. Applicant asserts that she does not owe the remaining 12 debts because they have been deleted from her credit report. Security requirements must include consideration of an applicant’s judgment, reliability, and an assessment of an applicant’s overall sense of her or her legal obligations.

It is well settled that adverse information from a credit report can normally meet the substantial evidence standard and the government’s obligations under ¶ E3.1.14. See, e.g., ISCR Case No. 08-12184 at 7 (App. Bd. Jan. 7. 2010). Conversely, the Board has noted that the fact that a debt no longer appears on a credit report does not establish any meaningful, independent evidence as to the disposition of the debt. See, e.g., ISCR Case No. 14- 03612 at 3 (App. Bd. Aug. 15, 2015).

ISCR Case No. 14-04802 (App. Bd. Mar. 21, 2016) at 3.

In addition to evaluating the facts and applying the appropriate adjudicative factors under Guideline F, I have reviewed the record before me in the context of the whole- person factors listed in AG ¶ 2(a). Applicant has been gainfully employed for the majority of her adult life, and she is presumed to be a mature, responsible citizen. Nonetheless, without other information suggesting her financial problems are being addressed, doubts remain about her suitability for a public trust position. Protection of the national interest is the principal focus of these adjudications. According, those doubts must be resolved against the Applicant.

In requesting an administrative determination, Applicant chose to rely on the written record. In so doing, however, she failed to submit sufficient evidence to supplement the record with relevant and material facts regarding her circumstances, articulate her position, and mitigate the financial security concerns. She failed to offer evidence of financial counseling or provide documentation regarding her past efforts to address her delinquent debt. By failing to provide such information, and in relying solely on an explanation lacking sufficient detail to fully establish mitigation, financial considerations security concerns remain.

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

Subparagraph 1.a: For Applicant Subparagraphs 1.b – 1.m: Against Applicant

CONCLUSION

I conclude that is not clearly consistent with national security to grant Applicant eligibility for a public trust position. Eligibility for a public trust position is denied.

_________________________ ROBERT TUIDER Administrative Judge

FOOTNOTES

1 The new AGs are available at http://ogc.osd.mil/doha/SEAD4 20170608.pdf. 2 Some details were excluded to protect Applicant’s right to privacy. Specific information is available in the cited exhibits.