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ISCR Case 07-14543.h1 — CASE

ISCR Case 07-14543.h1denied

Case Headnote

ISCR Case No. 07-14543.h1

deniedMar 13, 2008· Hon. Joan Caton Anthony· hearing

Summary

A 48-year-old systems analyst was denied a security clearance under Guideline F (Financial Considerations) due to a history of financial difficulties. The applicant admitted responsibility for multiple unpaid debts totaling approximately $12,750, including two delinquent student loans for which a payment plan was negotiated. Additionally, the applicant acknowledged one charged-off account and four past-due debts, totaling about $3,918, which remained unpaid as of late 2006 and late 2007, respectively.

Disqualifying conditions were raised due to the applicant's inability to meet financial obligations and a pattern of financial irresponsibility. While a mitigating condition was applied for the applicant's efforts to resolve some debts, these actions were deemed insufficient.

The denial was based on the numerous, long-standing, and unresolved nature of the applicant's financial delinquencies. The applicant failed to provide credible evidence to dispute additional alleged debts and did not demonstrate a plan to avoid future financial issues or seek financial counseling, ultimately raising concerns about his reliability and judgment.

Why the Applicant Was Denied

The applicant admitted to multiple unpaid debts totaling approximately $12,750 and failed to provide credible evidence to support his denials of additional debts.
The applicant's financial delinquencies were numerous, long-standing, and unresolved, raising concerns about his reliability and judgment.
The applicant did not seek financial counseling or demonstrate a plan to avoid future delinquencies.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(d)appliedGood-faith Effort to Repay Overdue CreditorsThe applicant made payments on two delinquent student loans, reflecting some effort to mitigate financial issues.

Key Rule Quoted

“The protection of the national security is the paramount consideration.”

Procedural Posture

SOR issuedNov 28, 2007
Answer filedDec 18, 2007Requested determination on the record.
Hearing held—No hearing; case determined on the record.
Decision dateMar 10, 2008

Cite For

Failure to Mitigate Financial Considerations Under Guideline F
Impact of Unresolved Financial Delinquencies on Security Clearance Eligibility
Importance of Demonstrating Financial Responsibility 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 multiple financial delinquencies against the applicant, indicating a history of not meeting financial obligations. Despite some efforts to rehabilitate student loans, the majority of debts remained unresolved, leading to a denial of the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	specific text not stated in this decision	Against Applicant	Unspecified Financial	Unknown	—	—	—
1.l	Applicant admitted responsibility for two delinquent student loans and negotiated a payment plan with the creditor $6,635	For Applicant	Student Loan Debt	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	Credited Payment Plan with Creditor
1.n	Applicant admitted responsibility for one charged-off account, not paid as of October 25, 2007, and four past-due debts, unpaid as of September 6, 2006. These five debts totaled approximately $3,918. $3,918	Against Applicant	Unspecified Financial	Admitted	—	—	—

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. 07-14543 ) ) Applicant for Security Clearance )

For Government: John Bayard Glendon, Esquire, Department Counsel For Applicant: Pro Se

March 13, 2008 ______________

STATEMENT OF CASE

______________

ANTHONY, Joan Caton, Administrative Judge:

After a thorough review of the case file, pleadings, and exhibits, I conclude that Applicant has failed to rebut or mitigate the government’s security concerns under Guideline F, Financial Considerations. His eligibility for a security clearance is denied.

Applicant submitted his Security Clearance Application (SF 86) on July 28, 2006. On November 28, 2007, the Defense Office of Hearings and Appeals (DOHA) issued Applicant a Statement of Reasons (SOR) alleging security concerns under Guideline F, Financial Considerations. DOHA’s action was taken pursuant to Executive Order 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 revised adjudicative guidelines (AG) promulgated by the President on December 29, 2005, and effective within the Department of Defense for SORs issued after September 1, 2006.

On December 18, 2007, Applicant answered the SOR in writing and requested that his case be determined on the record in lieu of a hearing. The government compiled its File of Relevant Material (FORM) on January 25, 2008. The FORM contained documents identified as Items 1 through 8. By letter dated January 29, 2008, a copy of the FORM was forwarded to Applicant, with instructions to submit any additional information and/or objections within 30 days of receipt. On December 19, 2007, Applicant timely filed a response and three exhibits, which I have identified as Applicant’s Exhibit (Ex.) A, Ex. B, and Ex. C. Department Counsel did not object to Applicant’s exhibits or to his response to the FORM, and I have admitted them to the record of this case. On March 10, 2008, the case was assigned to me for a decision.

FINDINGS OF FACT

The SOR contains 20 allegations of disqualifying conduct under AG F, Financial Considerations. (SOR ¶¶I 1.a. through 1.t.) (Item 1.) In his Answer to the SOR, dated December 18, 2007, Applicant admitted the factual allegations in ¶¶ 1.a. through 1.d., 1.f. through 1.j., and 1.l. through 1.t. He denied allegations in ¶¶ 1.e. and 1.k., with explanations. He also questioned whether ¶ 1.r. duplicated ¶ 1.s. and whether ¶ 1.f. was a duplicate of ¶ 1.t. In his response to the FORM, Applicant asserted that allegations in ¶¶ 1.f. and 1.t. of the SOR were not duplicates but debts owed to separate entities. He provided no credible evidence to corroborate his assertion that SOR allegation 1.r. was a duplicate of SOR allegation 1.s. (Response to FORM at 1.)

Applicant, who was first granted a security clearance in 1982, is employed as a systems analyst by a government contractor. From approximately 1980 to 1994, he served in the U.S. military. (Item 4.)

Applicant is 48 years old and has never married. He shares his household with a woman and her adult son. From approximately September 2003 to June 2006, Applicant attended a university. (Item 4.)

In October 1996, Applicant filed a petition for protection from his creditors, pursuant to Chapter 7, U.S. Bankruptcy Code. He listed $6,625 in assets and $28,654 in liabilities. In January 1997, his debts were discharged. (Item 8.)

Applicant filed a petition for Chapter 13 bankruptcy protection on November 4, 2004. The terms of the bankruptcy obligated Applicant to pay his trustee $615 per month for 57 months in order to satisfy his creditors. Applicant failed to make his obligatory payments, and his petition was dismissed in December 2005. (Item 6.)

In February 2006, Applicant’s automobile was repossessed. At the time of the repossession, Applicant owed the creditor $18,900. While the debt was apparently reduced by the proceeds of the repossession sale, the actual amount Applicant still owed was unclear. Applicant’s credit bureau report of October 25, 2007, indicated a past-due debt of $9,958. In his Answer to the SOR, Applicant indicated the balance due was $9,958. However, in a communication dated April 4, 2007, acknowledging a post- dated check for $300 submitted by Applicant, the successor creditor responsible for collecting the debt identified the amount owed by Applicant as $13,751.82. Applicant provided a statement from the creditor showing the repossession loss fee and the recovery of principal received as of July 19, 2007, which totaled $10,237. This statement included seven $300 payments made by Applicant between January and July of 2007. In supplying these figures, the creditor noted they did not constitute full payoff. (SOR, ¶¶ 1.h., 1.i.; Item 3 at 3, 11; Item 4 at 32-33 of 41; Item 5 at 2; Ex. B.)

In addition to the debt owed for the repossessed automobile, Applicant admitted responsibility for nine debts in collection status. These debts totaled approximately $12,750. Two of the debts had not been paid as of September 6, 2006. Seven of the debts were unpaid as of October 25, 2007. (SOR ¶¶ 1.c., 1.d, 1.f., 1.g., 1.j., 1.l., 1.m., 1.s., 1.t.) Applicant denied responsibility for debts of $128 and $194, which were listed at ¶¶ 1.e. and 1.k. of the SOR. He stated he was not living in the state where the debt alleged at ¶ 1.e. accrued. He stated he did not have an account with the creditor at the time the debt alleged in ¶ 1.k. accrued. (Item 3.) He provided no credible information, however, in support of his denials.

Applicant also admitted responsibility for one charged-off account, not paid as of October 25, 2007, and four past-due debts, unpaid as of September 6, 2006. These five debts totaled approximately $3,918. (SOR ¶¶ 1.n., 1.o., 1.p., 1.q., and 1.r.; Item 3.)

In his response to the FORM, Applicant provided documentation to show he had qualified his delinquent student loan accounts identified on the SOR at ¶¶ 1.l. and 1.m. for rehabilitation by paying $285 per month for nine consecutive months. He provided additional information that his loans had subsequently qualified for servicing by the Student Loan Marketing Association. His new payment schedule required 110 monthly payments of $83.57 on an unpaid principal balance of $6,635.67. (Ex. A; Item 3 at 4, 6, 7-8.)

Applicant provided evidence he had sent a post-dated check for $100 to the creditor holding the student loan account identified at SOR ¶ 1.j. However, he provided no proof that the post-dated check had cleared his bank and had been credited to his account. (Item 3 at 10.)

Applicant provided no evidence that he had received financial credit counseling.

POLICIES

When evaluating an Applicant’s suitability for a security clearance, the administrative judge must consider the revised adjudicative guidelines. 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, the guidelines take cognizance of the complexities of human behavior and are applied in conjunction with the factors listed in the adjudicative process. The administrative judge’s adjudicative goal is a fair, impartial and common sense decision. The adjudicative 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. See A G ¶ 2(c).

The protection of the national security is the paramount consideration. A G ¶ 2(b) requires that “[a]ny doubt concerning personnel being considered for access to classified information 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. Likewise, I have avoided drawing inferences grounded on mere speculation or conjecture.

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 applicant or proven by Department Counsel. . . .” The Applicant has the ultimate burden of persuasion in obtaining 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 that 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 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 Adjudicative Guideline F, & 18: 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 information. 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 & 19(a), an Ainability or unwillingness to satisfy debts@ is potentially disqualifying. Similarly under & 19(c), Aa history of not meeting financial obligations@ may raise security concerns. Applicant accumulated multiple debts and was unable to pay his financial obligations for a period of time. The evidence is sufficient to raise these potentially disqualifying conditions, requiring a closer examination.

The guideline also includes examples of conditions that could mitigate security concerns arising from financial difficulties. Several conditions could mitigate the security concerns raised by Applicant’s financial delinquencies. Unresolved financial delinquency might be resolved if it 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. (Guideline F, ¶ 20(a)) Additionally, unresolved financial delinquency might be mitigated if the conditions that resulted in the financial problem were largely beyond the person’s control, such as loss of employment, a business downturn, unexpected medical emergency, or a death, divorce, or separation, and the individual acted responsibly under the circumstances. (Guideline F, ¶ 20(b)) Still other mitigating circumstances that might be applicable include evidence the person has received or is receiving counseling for the problem and/or there are clear indications that the problem is being resolved or is under control (Guideline F, ¶ 20(c) or the individual has initiated a good-faith effort to repay overdue creditors or otherwise resolve debts. (Guideline F, ¶ 20(d).)

Applicant’s acknowledged financial delinquencies are numerous, long-standing, and continue to the present day. Applicant admitted 15 unpaid delinquencies and failed to provided credible evidence to corroborate his denials of two additional debts. The majority of his financial delinquencies remain unresolved and suggest that the circumstances that caused these delinquencies are likely to continue in the future, thereby casting doubt on Applicant’s current reliability, trustworthiness, and good judgment. Accordingly, ¶ 20(a) does not apply as a mitigating condition. Applicant provided no credible evidence to support a conclusion that his financial delinquencies were largely beyond his control or that he acted reasonably under the circumstances. Accordingly, I conclude ¶ 20(b) does not apply to the facts of Applicant’s case.

Nothing in the record suggests Applicant has sought or participated in financial counseling or has in place a plan to avoid financial delinquencies in the future. Accordingly, I conclude that ¶ 20(c) is inapplicable. While most of Applicant’s financial delinquencies remain unaddressed, he deserves credit for rehabilitating two of his delinquent student loans and negotiating a payment plan with the creditor. Applicant’s positive actions on his two student loans reflect a good faith effort to mitigate long-standing financial delinquencies and resolve debt. I conclude that ¶ 20(d) is applicable in part to the facts of Applicant’s case.

WHOLE PERSON CONCEPT

The revised adjudicative guidelines and the Directive require that the adjudicative process in a security clearance case not only assess conduct under the adjudicative guidelines, but it must also reflect a careful weighing of a number of variables known as the whole person concept. The factors to be considered in a whole person analysis include the nature, extent, and seriousness of the conduct; the circumstances surrounding the conduct, to include knowledgeable participation; the frequency and recency of the conduct; the individual’s age and maturity at the time of the conduct; the extent to which participation is voluntary; the presence or absence of rehabilitation and other pertinent behavioral changes; the motivation for the conduct; the potential for pressure, coercion, exploitation, or duress; and, the likelihood for continuation or recurrence.

Applicant is a mature adult who has a history of financial over-extension. His history of not meeting his financial obligations and his inability to pay his debts over a period of at least ten years raises a security concern because it suggests a lack of effort or resolve. While he has made payments on the debt which arose from the repossession of his automobile, he has not done so consistently. He has not sought consumer credit counseling or assistance in learning how to manage his finances. Despite a laudable attempt to establish a payment plan for two of his delinquent student loans, Applicant has failed to demonstrate that the majority of his delinquencies will not continue to be security concerns in the future.

In all adjudications, the protection of our national security is the paramount concern. Security clearance decisions are not intended to assign guilt or to impose further punishment for past transgressions. Rather, the objective of the security clearance process is the fair-minded, common sense assessment of a person’s trustworthiness and fitness for access to classified information. Indeed, the “whole person” concept recognizes we should view a person by the totality of his or her acts and omissions, including all disqualifying and mitigating conduct. Having done so, I conclude Applicant should not be entrusted with a security clearance. In reaching my decision, I have considered the evidence as a whole, including the appropriate factors and guidelines in Department of Defense Directive, 5220.6., as amended. I conclude that Applicant failed to mitigate security concerns under Guideline F (Financial Considerations.

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. through 1.k.: Against Applicant Subparagraphs 1.l. and 1.m.: For Applicant Subparagraphs 1.n. through 1.t.: Against Applicant

CONCLUSION

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

_________________ JOAN CATON ANTHONY Administrative Judge

FOOTNOTES

Applicant provided no proof that the post-dated check cleared his bank and was credited to his account.