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ISCR Case 16-01310.h1 — CASE

ISCR Case 16-01310.h1denied

Case Headnote

ISCR Case No. 16-01310.h1

deniedOct 6, 2017· Hon. Michael H. Leonard· hearing

Summary

A 32-year-old federal contractor employee was denied a security clearance under Guideline F, Financial Considerations, due to a history of unresolved financial difficulties. The Statement of Reasons cited three charged-off student loans totaling approximately $66,000. These financial issues raised disqualifying conditions under Adjudicative Guidelines Paragraphs 19(a) and 19(c).

While mitigating conditions under Paragraphs 20(b) and 20(d) were considered, the applicant failed to provide sufficient evidence to explain, extenuate, or mitigate the security concerns. Specifically, the applicant did not present documentation demonstrating any efforts to resolve the charged-off student loans.

Ultimately, the applicant's financial history led to doubts about his reliability, trustworthiness, and judgment, resulting in the denial of his security clearance application.

Why the Applicant Was Denied

The applicant did not present sufficient evidence to explain, extenuate, or mitigate the security concern stemming from his financial issues.
The applicant failed to provide documentation showing any efforts to resolve his charged-off student loans.
The applicant's financial history raised doubts about his reliability, trustworthiness, and judgment.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(b)rejectedConditions Largely Beyond the Person's ControlThe applicant's financial problems were connected to unemployment, but he did not demonstrate responsible action under the circumstances.
AG ¶ 20(d)rejectedGood-faith Effort to Repay DebtsThe applicant did not provide documentation to show he was making a good-faith effort to resolve his debts.

Key Rule Quoted

“The burden of proof is less than a preponderance of evidence.”
— Department of Navy v. Egan, 484 U.S. 518 (1988)

Procedural Posture

SOR issuedOct 29, 2016
Answer filedNov 22, 2016Requested decision based on written record.
Hearing heldN/ANo hearing; decision based on written record.
Decision dateOct 6, 2017

Cite For

Failure to Provide Documentation in Support of Financial Claims Under Guideline F
Insufficient Evidence to Mitigate Financial Concerns
Importance of Demonstrating Good-faith Efforts to Resolve Debts in Security Clearance Cases

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 three charged-off student loans totaling approximately $66,000, which raised significant financial concerns under Guideline F. The applicant failed to provide sufficient evidence to mitigate these concerns, leading to a decision against him.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	three charged-off student loans for about $66,000 $66,000	Against Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	three charged-off student loans for about $66,000 $66,000	Against Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	three charged-off student loans for about $66,000 $66,000	Against Applicant	Student Loan Debt	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. 16-01310 ) ) Applicant for Security Clearance

For Government: Andrew H. Henderson, Esq., Department Counsel For Applicant: Pro se

10/06/2017 ______________

STATEMENT OF CASE

______________

LEONARD, Michael H., Administrative Judge:

Applicant contests the Defense Department’s intent to deny or revoke his eligibility for access to classified information. He did not present sufficient evidence to explain, extenuate, or mitigate the security concern stemming from three charged-off student loans for about $66,000. 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 November 12, 2014.1 This document is commonly known as a security clearance application. Thereafter, on October 29, 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 him 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 22, 2016. He requested a decision based on the written record in lieu of a hearing. His response consisted of (1) handwritten responses on a copy of the SOR in which he admitted the allegations, and (2) a two-page handwritten memorandum. He did not submit any enclosures or attachments with his answer.

On January 6, 2017, 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, some of which are identified as evidentiary exhibits in this decision. The FORM was mailed to Applicant, who received it January 20, 2017. He replied to the FORM with a four-page memorandum, which is made part of the record as Exhibit A. He did not submit any enclosures or attachments with his reply. The case was assigned to me October 1, 2017.

PROCEDURAL MATTERS

Department Counsel’s FORM includes Exhibit 3, which is a report of investigation (ROI) summarizing Applicant’s interview that took place during the February 2015 background investigation. The ROI is not authenticated by a witness, as required under ¶ E3.1.20 of the Directive.2 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.3 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. With 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). Applicant did not address the ROI in his reply to the FORM. 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 he 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 32-year-old employee who requires a security clearance for his job as an appointment center clerk for a federal contractor. He has been so employed since November 2014. His educational background includes a bachelor’s degree awarded in 2009. He has never married and has no children.

The SOR alleges a history of financial problems or difficulties consisting of three charged-off student loan accounts for about $66,000. The delinquent accounts are established by Applicant’s admissions in his answer to the SOR, his answers to written interrogatories, and credit reports from December 2014, February 2016, and January 2017.4 There is no documentation in the written record to establish that any of the delinquent accounts were paid, settled or compromised, in a payment arrangement, cancelled, forgiven, or otherwise resolved.

In his March 2016 answers to written interrogatories, Applicant explained the following about the charged-off student loans:

I have not taken action to resolve the aforementioned debts, as I have not yet finalized any plans or arrangements. I am currently looking into student loan debt consolidation through my bank, but have to schedule a time with them to discuss my options with my parents who are currently co-signers on these accounts. If at all possible, I would like to submit documentation for these within the next two (2) months.5

Applicant did not submit such documentation when he answered the SOR about eight months later in November 2016. Nor did he submit such documentation in his February 2017 reply to the FORM. In his reply, Applicant attributed his financial problems and inability to resolve the charged-off student loans to a history of unemployment and underemployment beginning upon the award of his bachelor’s degree in 2009 and continuing until he obtained his current job in 2014.6 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, 2017.7

It is well-established law that no one has a right to a security clearance.8 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.”9 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.10 The Appeal Board has followed the Court’s reasoning, and a judge’s findings of fact are reviewed under the substantial-evidence standard.11

A favorable clearance decision establishes eligibility of an applicant to be granted a security clearance for access to confidential, secret, or top-secret information.12 An unfavorable clearance decision (1) denies any application, (2) revokes any existing security clearance, and (3) prevents access to classified information at any level.13

There is no presumption in favor of granting, renewing, or continuing eligibility for access to classified information.14 The Government has the burden of presenting evidence to establish facts alleged in the SOR that have been controverted.15 An applicant is responsible for presenting evidence to refute, explain, extenuate, or mitigate facts that have been admitted or proven.16 In addition, an applicant has the ultimate burden of persuasion to obtain a favorable clearance decision.17

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.18

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;

AG ¶ 20(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

AG ¶ 20(d) the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts.

The evidence supports a conclusion that Applicant has a problematic financial history sufficient to raise a security concern under Guideline F, as established by the three charged-off student loans for about $66,000. There is no evidence that Applicant has made any progress in resolving the debts. His problematic financial history suggests he may be irresponsible, unconcerned, or negligent in handling and safeguarding classified information.

What’s missing here is documentation in support of Applicant’s case. There is no documentation to establish that he has initiated and is adhering to a good-faith effort to repay the delinquent student loans. Although his financial problems appear to be connected to a lengthy history of unemployment and underemployment that preceded his current job, I cannot conclude that he has acted responsibly under the circumstances given the state of the written record. He has not produced a single page of documentation from the original lenders or the current companies servicing the loans. Moreover, given that he requested a decision based on the written hearing in lieu of a hearing, the lack of documentation undermines his case. It’s the responsibility of the individual applicant to produce relevant documentation in support of their case. Here, Applicant has not met his burden of production because he did not present sufficient documentation showing that he is making some sort of a good-faith effort to resolve the delinquent student loans.

Applicant’s history of financial problems or difficulties creates doubt about his 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 he did not meet his ultimate burden of persuasion to show that it is clearly consistent with the national interest to grant his 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.c: 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 Exhibit 2. 2 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.). 3 See United States v. Olano, 507 U.S. 725 (1993) (in this opinion, the Supreme Court distinguishes between forfeiture and waiver). 4 Exhibits 4, 5, 6, and 7. 5 Exhibit 4. 6 Exhibit A. 7 The 2017 AG are available at http://ogc.osd.mil/doha. 8 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). 9 484 U.S. at 531. 10 484 U.S. at 531. 11 ISCR Case No. 01-20700 (App. Bd. Dec. 19, 2002) (citations omitted). 12 Directive, ¶ 3.2. 13 Directive, ¶ 3.2. 14 ISCR Case No. 02-18663 (App. Bd. Mar. 23, 2004). 15 Directive, Enclosure 3, ¶ E3.1.14. 16 Directive, Enclosure 3, ¶ E3.1.15. 17 Directive, Enclosure 3, ¶ E3.1.15. 18 AG ¶ 18.