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ISCR Case 16-01463.h1 — CASE

ISCR Case 16-01463.h1denied

Case Headnote

ISCR Case No. 16-01463.h1

deniedOct 17, 2017· Hon. Eric H. Borgstrom· hearing

Summary

A 64-year-old part-time shipping inspector was DENIED a security clearance due to concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The applicant faced allegations of seven delinquent debts totaling approximately $30,439, which became delinquent between 2011 and 2013 and remained unresolved.

Additionally, the applicant was found to have made deliberate falsifications on her November 2015 security questionnaire. Specifically, she omitted information in Section 26 and failed to disclose criminal charges from over 30 years prior in Section 22.

The judge determined that the applicant did not mitigate these concerns. She failed to provide evidence of any efforts to resolve her debts or adhere to her bankruptcy plan, indicating a lack of responsible financial behavior. Furthermore, her deliberate omissions on the security clearance application were not corrected in good faith before the facts were presented.

Why the Applicant Was Denied

The applicant did not provide evidence of any debt-resolution efforts or adherence to her bankruptcy plan.
The applicant's financial problems were not mitigated by circumstances beyond her control, as she failed to demonstrate responsible financial behavior.
The applicant's deliberate omissions on her security clearance application were not corrected in good faith before being confronted with the facts.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability to Satisfy Debts
AG ¶ 19(c)raisedHistory of Not Meeting Financial Obligations
AG ¶ 16(a)appliedDeliberate Omission, Concealment, or Falsification of Relevant Facts

Key Rule Quoted

“A person who seeks access to classified information enters into a fiduciary relationship with the Government predicated upon trust and confidence.”

Procedural Posture

SOR issuedJul 4, 2016
Answer filedJul 21, 2016Applicant elected a decision on the written record.
Hearing held—No hearing; decision made on the written record.
Decision dateOct 17, 2017

Cite For

Failure to Mitigate Financial Considerations Under Guideline F
Deliberate Falsification of Information on Security Clearance Applications Under Guideline E
Importance of Demonstrating Good Faith Efforts to Resolve Financial Issues for 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 E (Personal Conduct) · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The judge found against the applicant on the personal conduct allegations, specifically regarding deliberate falsification of her security questionnaire. The applicant's omissions concerning her delinquent debts were deemed intentional, leading to a denial of her security clearance.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
2.a	The SOR alleges that Applicant deliberately falsified her responses to Sections 26 (SOR ¶ 2.a.) on her November 2015 security questionnaire.	Against Applicant	Falsification Security FormFOUND DELIBERATE	Financial	Denied	(a) deliberate omission, concealment, or falsification on a security form	—	—
2.b	The SOR alleges that Applicant omitted her criminal charges from over 30 years ago, in response to Section 22 (SOR ¶¶ 2.b.-2.c.).	For Applicant	Omission or Failure to Disclose	Criminal Conduct	Denied	—	—	—
2.c	The SOR alleges that Applicant omitted her criminal charges from over 30 years ago, in response to Section 22 (SOR ¶¶ 2.b.-2.c.).	For Applicant	Omission or Failure to Disclose	Criminal Conduct	Denied	—	—	—

Descriptive standardized rendering of a decided public case (Guideline E). The verbatim source decision is shown in full below.

Standardized Decision Profile

SEAD-4 Guideline F · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The judge found that the applicant did not mitigate the financial concerns related to seven delinquent debts totaling approximately $30,439, which remained unpaid for several years. The applicant's failure to provide evidence of debt-resolution efforts or adherence to a bankruptcy plan contributed to the denial of her security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant has seven delinquent debts totaling approximately $30,439, which became delinquent between 2011 and 2013 and remain delinquent.	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Applicant has seven delinquent debts totaling approximately $30,439, which became delinquent between 2011 and 2013 and remain delinquent.	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	Applicant has seven delinquent debts totaling approximately $30,439, which became delinquent between 2011 and 2013 and remain delinquent.	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	Applicant has seven delinquent debts totaling approximately $30,439, which became delinquent between 2011 and 2013 and remain delinquent.	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	Applicant has seven delinquent debts totaling approximately $30,439, which became delinquent between 2011 and 2013 and remain delinquent.	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	Applicant has seven delinquent debts totaling approximately $30,439, which became delinquent between 2011 and 2013 and remain delinquent.	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	Applicant has seven delinquent debts totaling approximately $30,439, which became delinquent between 2011 and 2013 and remain delinquent.	Against Applicant	Unspecified Financial	Denied	(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: ) ) [NAME REDACTED] ) ISCR Case No. 16-01463 ) ) Applicant for Security Clearance

For Government: Andre Gregorian, Esq., Department Counsel For Applicant: Pro se

10/17/2017 ______________

STATEMENT OF CASE

______________

BORGSTROM, Eric H., Administrative Judge:

Applicant did not mitigate the security concerns about her financial problems and falsifications. Eligibility for access to classified information is denied.

Statement of the Case

On July 4, 2016, the Department of Defense (DOD) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline F (financial considerations) and Guideline E (personal conduct).1 Applicant responded to the SOR on July 21, 2016, and she elected a decision on the written record in lieu of a hearing. On August 16, 2016, Department Counsel submitted his file of relevant material (FORM) and provided a complete copy to Applicant. Applicant received the FORM on August 22, 2016. She was afforded an opportunity to respond within 30 days of its receipt and to file objections to and submit material to refute, extenuate, or mitigate the security concerns. Applicant did not respond to the FORM. The case was assigned to me on April 7, 2017. Procedural Issues

On September 11, 2017, I issued an order informing both parties that although the SOR referenced the adjudicative guidelines implemented by the DOD on September 1, 2006, I would be applying the revised adjudicative guidelines (AG) effective as of June 8, 2017, pursuant to Security Executive Agent Directive 4 (SEAD 4). I also permitted the parties to supplement the record with additional evidence and argument. Both parties received my order, and neither party raised an objection nor submitted additional documents.2

In the FORM, Department Counsel references FORM Items 1-11.3 FORM Item 3 is an unauthenticated summary of an interview with a government investigator conducted on January 6, 2016. In the FORM, Department Counsel advised Applicant that she could object to FORM Item 3 and it would not be admitted, or that she could make corrections, additions, deletions, and update the document to make it accurate. Applicant was informed that her failure to respond to the FORM or to raise any objections could constitute a waiver, and the evidence would be considered by me. Applicant did not respond to the FORM or file any objections. Given Department Counsel’s advisement and Applicant’s work experience, I find her waiver to be knowing and intelligent.4 FORM Items 2-11 are admitted into evidence as Government Exhibits (GE) 2-11, without objection.

FINDINGS OF FACT

The SOR alleges seven delinquent debts (SOR ¶¶ 1.a.-1.g.) and three deliberate falsifications on Applicant’s November 2015 security questionnaire (SOR ¶¶ 2.a.-2.c.). In her response to the SOR, Applicant denied all of the allegations. After a thorough and careful review of the pleadings and exhibits, I make the following findings of fact:

Applicant is 64 years old. Since March 1978, she has been employed part time as a shipping inspector by a DOD contractor. She was married in 1970 and divorced in 1990. She has a 31-year-old son, with whom she resides.5

In April 2016, Applicant filed a Chapter 13 bankruptcy petition, listing liabilities totaling approximately $85,000. This petition includes the eight alleged debts, which became delinquent between March 2011 and September 2013. The bankruptcy plan was confirmed in July 2016, but there is no evidence of any payments in accordance with the bankruptcy plan or that Applicant has completed the requisite financial counseling. Moreover, there is no documentary evidence of any debt-resolution efforts prior to the bankruptcy filing.6

During her January 2016 security interview, Applicant’s explanation as to the cause of her financial problems lacked clarity. She both stated that she lived within her means but also that her financial problems were caused by her low income. She has provided no further information about her monthly income and expenses, any debt- resolution efforts, any circumstances beyond her control that contributed to her financial problems, and whether she has sought to supplement her part-time employment.7

In 1984, Applicant was charged with and convicted of driving under the influence (DUI). She was sentenced to two years of probation. In 1986, she was charged with two felony drug possession charges, and she was placed on probation for six years.8

Applicant omitted her criminal conduct or financial delinquencies on her November 2015 security clearance application (SCA). She responded “NO” to the following questions:

Section 22 – Police Record

Have you EVER been charged with a felony offense?

Have you EVER been charged with an offense involving alcohol or drugs?

Section 26 – Financial Record

In the past seven (7) years, [have] you had bill or debts turned over to a collection agency?

In the past seven (7) years, [have] you had any account or credit card suspended, charged off, or cancelled for failing to pay as agreed?

She omitted the aforementioned seven debts, which were charged off or placed for collection between 2011 and 2013. She also omitted the two felony drug offenses and the DUI. In her response to the SOR, Applicant admitted the three charges. During her January 2016 security interview, Applicant voluntarily disclosed the DUI and drug charges and explained that she had forgotten about them due to the passage of time. Applicant initially denied any delinquent accounts, but later admitted that she was aware that she had past-due accounts when confronted. Applicant has not provided any explanation for her omission of her delinquent debts on the November 2015 SCA.9

POLICIES

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines. 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 the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶ 2(c), 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.”

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.” The applicant has the ultimate burden of persuasion to obtain a favorable security 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 safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation of potential, rather than actual, risk of compromise of classified information.

Section 7 of 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 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 risk of having to engage in illegal acts to generate funds. . . .

The guideline notes several conditions that could raise security concerns under AG ¶ 19. The following are potentially applicable in this case:

(a) inability to satisfy debts;

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

Applicant’s seven delinquent debts total approximately $30,439. These debts became delinquent between 2011 and 2013, and they remain delinquent. The Government produced substantial evidence to raise the disqualifying conditions in AG ¶¶ 19(a), and 19(c). Conditions that could mitigate the financial considerations security concerns are provided under AG ¶ 20. The following are potentially applicable:

(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 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; and

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

Applicant’s delinquent debts have remained delinquent for several years. There is no evidence of any debt-resolution efforts or evidence demonstrating Applicant’s current reliability, trustworthiness or good judgment. AG ¶ 20(a) does not apply. During her January 2016 security interview, Applicant identified no circumstances beyond her control that contributed to her financial problems, though she alluded to having insufficient income. She provided no further information as to whether she has sought to supplement her part-time employment. More importantly, there is no documentary evidence of any debt-resolution efforts prior to her April 2016 bankruptcy filing or that she has adhered to payments in accordance with the bankruptcy plan. AG ¶ 20(b) does not apply.

There is no evidence that Applicant has sought credit counseling. Nor is there evidence of her monthly income or expenses to establish that her financial problems are under control. AG ¶ 20(c) does not apply.

The concept of good faith Arequires a showing that a person acts in a way that shows reasonableness, prudence, honesty, and adherence to duty or obligation.”10 Although Applicant has filed Chapter 13 bankruptcy, there is no documentary evidence that she has adhered to the payment plan. AG ¶ 20(d) does not apply.

Applicant’s seven delinquent debts are included in her Chapter 13 bankruptcy; however, there is no documentary evidence that she has made any payments in accordance with the bankruptcy plan. Beyond the bankruptcy filing, there is no documentary evidence of any debt-resolution efforts nor evidence demonstrating Applicant’s financial responsibility. I find that Applicant did not mitigate the financial considerations security concerns.

Guideline E, Personal Conduct

The concern under this guideline is set out in AG ¶ 15:

Conduct involving questionable judgment, lack of candor, dishonesty or unwillingness to comply with rules and regulations can raise questions about an individual’s reliability, trustworthiness, and ability to protect classified or sensitive information. Of special interest is any failure to cooperate or provide truthful and candid answers during national security investigative or adjudicative processes. . . .

The guideline notes several conditions that could raise security concerns under AG ¶ 16. The following disqualifying condition is potentially applicable in this case:

AG ¶ 16(a) deliberate omission, concealment, or falsification of relevant facts from any personnel security questionnaire, personal history statement, or similar form used to conduct investigations, determine employment qualifications, award benefits or status, determine national security eligibility or trustworthiness, or award fiduciary responsibilities. The SOR alleges that Applicant deliberately falsified her responses to Sections 26 (SOR ¶ 2.a.) and 22 (SOR ¶¶ 2.b.-2.c.) on her November 2015 SCA. During her January 2016 security interview, Applicant admitted that she was aware that she had delinquent debts, and she has not provided an explanation as to why she omitted these delinquent accounts on her security questionnaire. The Government established that Applicant deliberately falsified her responses to Section 26 (SOR ¶ 2.a.). AG ¶ 16(a) applies to SOR ¶ 2.a.

Applicant omitted her criminal charges from over 30 years ago, in response to Section 22 (SOR ¶¶ 2.b.-2.c.). During her security interview, Applicant voluntarily disclosed this information when questioned by the OPM investigator and explained that she had forgotten these aged charges. Because the charges are over 30 years old and Applicant later volunteered this information, I find her explanation credible. AG ¶ 16(a) does not apply to SOR ¶¶ 2.b.-2.c.

The following mitigating condition is potentially relevant:

AG ¶ 17(a) the individual made prompt, good-faith efforts to correct the omission, concealment, or falsification before being confronted with the facts.

Applicant did not make prompt, good-faith efforts to correct the omissions about her delinquent debts. Rather, she denied any delinquent debts when initially questioned by the OPM investigator. Only after she was confronted by the OPM investigator with her delinquent accounts did she admit that she was aware that she had delinquent debts. AG ¶ 17(a) does not apply. Applicant has not mitigated the personal conduct security concerns arising from these falsifications.

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 the facts and circumstances surrounding this case. I have incorporated my comments under Guidelines F and E and the factors in AG ¶ 2(d) in this whole-person analysis.

Applicant incurred approximately $30,000 in delinquent debts between 2011 and 2013, and she was aware of her financial delinquencies. She deliberately omitted her delinquent debts on her SCA. Beyond her bankruptcy filing, she has failed to provide any documentary evidence of any payments under the bankruptcy, any debt-resolution efforts outside of bankruptcy, or that she has acted responsibly with her finances. I conclude Applicant did not mitigate the financial considerations and personal conduct security concerns.

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

Subparagraphs 1.a.-1.g: Against Applicant

Paragraph 2, Guideline E: AGAINST APPLICANT

Subparagraph 2.a.: Against Applicant

For Applicant Subparagraphs 2.b.-2.c.:

CONCLUSION

In light of all of the circumstances presented by the record in this case, it is not clearly consistent with the interests of national security to grant Applicant eligibility for a security clearance.11 Eligibility for access to classified information is denied.

_______________________ Eric H. Borgstrom Administrative Judge

FOOTNOTES

1 The action was taken under Executive Order (EO) 10865, 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 implemented by the DOD on September 1, 2006. 2 Hearing Exhibit I.

3 FORM Item 1 consists of the the SOR and Applicant’s answer, which are pleadings and are included in the administrative record.

4 See ISCR Case No. 15-05252 at 3 (App. Bd. Apr. 13, 2016) (Applicant’s waiver of the authentication element must be knowing and intelligent.). See ISCR Case No. 12-10810 at 2 (App. Bd. Jul. 12, 2016) (“Although pro se applicants are not expected to act like lawyers, they are expected to take timely and reasonable steps to protect their rights under the Directive.”)

5 GE 2. 6 GE 4-8.

7 GE 3-5.

8 GE 3; GE 9-11.

9 Response to SOR; GE 2; GE 3. 10 See ISCR Case No. 08-12184 at 10 (App. Bd. Jan. 7, 2010) (Good-faith effort to resolve debts must be evidenced by a meaningful track record of repayment). 11 See SEAD 4, Appendix A, ¶¶ 1(d) and 2(c).