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ISCR Case 08-01538.h1 — CASE

ISCR Case 08-01538.h1denied

Case Headnote

ISCR Case No. 08-01538.h1

deniedJul 1, 2008· Hon. Marc E. Curry· hearing

Summary

A 32-year-old woman with a master's degree and two children was denied a security clearance due to concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The applicant had approximately $15,100 in delinquent debts, which included a $50 medical bill from around 2004, a bounced check at a grocery store, and a phone bill from approximately 2004. Other debts included a car towing fee from around 2004, a deficiency from a repossessed car, and three unpaid utility bills. A court judgment was also entered against her for $4,174, covering three months' rent, attorney fees, and court costs.

While several phone bills owed to the same company were satisfied in April 2009, the judge found that the applicant's financial issues were not sufficiently mitigated. Disqualifying conditions F.1 and E.2 were raised, and mitigating conditions F.2 and F.3 were considered.

Ultimately, the security clearance was denied because the applicant failed to mitigate the government's concerns regarding her financial delinquencies. She had not followed through with financial counseling despite acknowledging her debts, and the largest delinquencies remained unpaid, indicating ongoing financial instability.

Why the Applicant Was Denied

The applicant failed to mitigate the government's security concerns regarding her financial delinquencies.
She has not followed through with financial counseling despite acknowledging her debts.
The largest delinquencies remain unpaid, indicating ongoing financial instability.

Conditions Referenced

Disqualifying

F.1raisedFinancial ConsiderationsFailure or inability to live within one’s means, satisfy debts, and meet financial obligations.
E.2rejectedPersonal ConductOmissions from the security clearance application indicated disorganization rather than duplicity.

Mitigating

F.2appliedFinancial ConsiderationsThe individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.
F.3rejectedFinancial ConsiderationsThe conditions that resulted in the financial problem were largely beyond the person’s control.

Key Rule Quoted

“Any doubt concerning personnel being considered for access to classified information will be resolved in favor of national security.”
— AG ¶ 2(b)

Procedural Posture

SOR issuedNov 19, 2008
Answer filedJan 3, 2009
Hearing heldApr 3, 2009
Decision dateMay 21, 2009

Cite For

Denial of Security Clearance Due to Unresolved Financial Delinquencies
Impact of Financial Instability on Security Clearance Eligibility
Consideration of the Whole Person Concept in Security Clearance Decisions

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 no personal conduct security concerns for the applicant under Guideline E. The applicant's omissions from her security clearance application were determined to be indicative of disorganization rather than intentional concealment, leading to a ruling in favor of the applicant on the relevant allegations.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
2.a	specific text not stated in this decision	For Applicant	Unspecified Personal Conduct	—	Unknown	—	—	—

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 multiple financial delinquencies against the applicant, including unpaid debts and a judgment from a landlord. While some debts were satisfied, the applicant's overall financial situation and failure to complete financial counseling led to a denial of the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	indebted to a medical provider in the approximate amount of $50, for a delinquent account referred for collection in about 2004 $50	For Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	delinquency owed to the collection agent for a grocery store where Applicant allegedly wrote a bounced check	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	accrued the phone bill listed in SOR subparagraph 1.c in approximately 2004	Against Applicant	Utility or Phone Debt	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	the debt listed in SOR subparagraph 1.d accrued when the property management company of Applicant’s then-residence towed her car from the apartment complex parking lot in approximately 2004	Against Applicant	Auto Loan Debt	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	phone bills Applicant owes to the same company, satisfied in April 2009	For Applicant	Utility or Phone Debt	Unknown	—	—	—
1.f	the deficiency from a car that was repossessed	Against Applicant	Auto Loan Debt	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	phone bills Applicant owes to the same company, satisfied in April 2009	For Applicant	Utility or Phone Debt	Unknown	—	—	—
1.h	phone bills Applicant owes to the same company, satisfied in April 2009	For Applicant	Utility or Phone Debt	Unknown	—	—	—
1.i	phone bills Applicant owes to the same company, satisfied in April 2009	For Applicant	Utility or Phone Debt	Unknown	—	—	—
1.j	phone bills Applicant owes to the same company, satisfied in April 2009	For Applicant	Utility or Phone Debt	Unknown	—	—	—
1.k	three utilities remain unpaid	Against Applicant	Utility or Phone Debt	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.l	three utilities remain unpaid	Against Applicant	Utility or Phone Debt	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.m	three utilities remain unpaid	Against Applicant	Utility or Phone Debt	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.n	the court entered a judgment against Applicant for $4,174, consisting of three months’ rent, attorney fees, and court costs $4,174	Against Applicant	Judgment Against Applicant	Unknown	(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. 08-01538 SSN: ----------- ) ) Applicant for Security Clearance )

For Government: Francisco Mendez, Esquire, Department Counsel For Applicant: Pro se

May 21, 2009 ______________

STATEMENT OF CASE

______________

CURRY, Marc E., Administrative Judge:

Applicant failed to mitigate the government’s security concerns. Clearance is denied.

On November 19, 2008, the Defense Office of Hearings and Appeals (DOHA) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guidelines F, financial considerations, and E, personal conduct. The action was taken under 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.

Applicant answered the SOR on January 3, 2009, admitting all of the allegations except subparagraph 1.b, and requested a hearing. The case was assigned to me on February 10, 2009. On March 9, 2009, a Notice of Hearing was issued scheduling the case for April 3, 2009. It was held as scheduled. At the hearing, I received eight government exhibits, five Applicant exhibits, and Applicant’s testimony. At the hearing’s conclusion, I left the record open at Applicant’s request so that she could submit additional exhibits. Within the allotted time, she submitted eight additional exhibits that I incorporated into the record. The transcript was received on April 10, 2009.

PROCEDURAL RULINGS

SOR subparagraph 1.a alleges that Applicant is “indebted to a medical provider in the approximate amount of $50, for a delinquent account referred for collection in about 2004.” This allegation is overbroad because it does not identify a specific creditor. Although an SOR does not have to satisfy the strict requirements of a criminal indictment, it must still place an applicant on adequate notice of the allegations so that she may have a reasonable opportunity to respond and prepare a defense.1 Subparagraph 1.a. does not meet this minimum threshold, therefore, I conclude that it is not justiciable.

FINDINGS OF FACT

Applicant is a 32-year-old woman with two children, ages seven and five. She has been married for eight years. She has an undergraduate degree in criminal justice, and a master’s degree in business administration. She has been supporting herself since her mother’s death, which occurred when Applicant was 15 years old (Exhibit B). While in college, she helped her grandmother support her two younger siblings by working two part-time jobs (Id.).

Currently, Applicant works for a defense contractor as a program manager in the field of contract procurement (Tr. 29). She is highly respected on the job. In the two years since she began working for her employer, she has risen to the level of team leader (Exhibit A). Her contribution to the government agency that her team supports has been invaluable (Id.). She was recently promoted (Tr. 92).

Since 2004, Applicant has accrued approximately $15,100 of delinquent debt, including six phone bills (SOR subparagraphs 1c, 1.e, 1.g - 1.j), three utilities (SOR subparagraphs 1.k - 1.m), two automobile - related debts (1.d, 1.f), and an apartment rental delinquency (SOR subparagraph 1.n). She attributes her inability to make ends meet to her husband’s unsteady employment (Tr. 118). He is currently unemployed, and has been unemployed four of the past six years (Tr. 119).

SOR subparagraph 1.balleges a delinquency owed to the collection agent for a grocery store where Applicant allegedly wrote a bounced check. Applicant denies this allegation. This debt is listed in a 2007 credit report (Exhibit 5 at 14). Applicant alleged she contacted the creditor, but provided no supporting documentary evidence. I find Applicant owes this creditor as alleged in the SOR, and that it remains outstanding. Applicant accrued the phone bill listed in SOR subparagraph 1.cin approximately 2004 (Tr. 53). She contends that when she contacted the creditor to make payment arrangements, the creditor informed her it was no longer pursuing payment because the delinquency had been charged off (Tr. 53). Applicant provided no evidence documenting her contact with this creditor.

The debt listed in SOR subparagraph 1.daccrued when the property management company of Applicant’s then-residence towed her car from the apartment complex parking lot in approximately 2004 (Tr. 54). Because of the car’s bad condition, Applicant never retrieved it from the towing company. The delinquency represents unpaid storage fees (Tr. 54). She does not know what the towing company has done with the car (Tr. 55). The delinquency remains outstanding.

SOR subparagraphs 1.e and 1.gthrough 1.jare phone bills Applicant owes to the same company. The collection agent contacted her with a settlement proposal in February 2009. Consistent with the proposal, Applicant satisfied the bills in April 2009 (Exhibits E, F).

SOR subparagraph 1.fis the deficiency from a car that was repossessed (Tr. 57). Applicant does not recall the exact date of the repossession, but contends it occurred before the property management company towed her other car in 2004. Applicant contacted the creditor in 2007, and negotiated a payment plan under which she was to pay $100 per month toward the debt’s satisfaction (Tr. 57). Shortly after executing the payment plan, Applicant’s husband lost his job. Consequently, she stopped making payments after a few months without satisfying the delinquency. (Tr. 57-58).

SOR subparagraphs 1.kthrough 1.mremain unpaid (Tr. 23). Applicant testified that she has contacted the respective creditors, and is working to satisfy them (Tr. 24). She provided no documentary supporting evidence.

In 2004, Applicant’s then-landlord sued her for allegedly breaching the lease by moving before it expired (Tr. 72; see Answer, SOR subparagraph 1.n). In May 2007, the court entered a judgment against Applicant for $4,174, consisting of three months’ rent, attorney fees, and court costs. (Tr. 68; Exhibit 4). Currently, the judgment is unpaid, and Applicant is working with the landlord’s attorney to arrange a payment plan (Tr. 75).

In June 2008, Applicant met with a credit counselor who proposed a debt counseling program (Tr. 90). She was unsatisfied with the proposal, and did not continue working with the counselor (Tr. 91). In February 2009, Applicant met with a debt consolidation company (Tr. 91). She is not currently working with the company, but plans on returning (Tr. 93).

Currently, Applicant maintains a budget (Tr. 176; Exhibit I). She has approximately $490 in monthly, after-expense income. She has student loans that are currently in deferment (Tr. 114). Their deferment status will end in approximately two years. The amount of the student loans is unclear from the record. Applicant completed a security clearance application in December 2006. She answered “no” in response to Questions 28A - (In the last 7 years, over 180 days delinquent on any debts?), and 28B - (Currently over 90 days delinquent on any debts?). On the next page of the application (Exhibit 2 at 8), she states that she incurred a loan of an unknown amount in June 2001. At the hearing, Applicant explained that at the time she completed the application, she knew she had some delinquent debts, but was unsure of their identity (Tr. 79). Moreover, she testified that she could not access her credit report online because the credit reporting agencies had placed a fraud alert on her credit report after she had disputed several items on it. (Exhibit 7 at 1).

POLICIES

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the revised adjudicative guidelines (AG). 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, recognizing the complexities of human behavior, these guidelines are applied in conjunction with the factors listed in the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial and common sense 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 access to classified information will be resolved in favor of 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 applicant or proven by department counsel. . . .” The applicant has the ultimate burden of persuasion as to obtaining a favorable security decision.

ANALYSIS

Guideline F, Financial Considerations

Under this guideline, “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” (AG ¶ 18). Here, Applicant satisfied SOR subparagraphs 1.e and 1.gthrough 1.j. I conclude they do not constitute a security concern. Applicant’s remaining delinquencies trigger the application of AG ¶¶ 19(a), “inability or unwillingness to satisfy debts,” and 19(c), “a history of not meeting financial obligations.”

Applicant’s financial instability has been exacerbated by her husband’s erratic employment. Absent two steady incomes, Applicant has neither been able to pay her debts timely, nor adhere to payment plans. She has paid some of her creditors and contacted others. She maintains a budget. She has not, however, followed through with any financial counseling. Consequently, 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, or a death, divorce, or separation), and the individual acted responsibly under the circumstances,” applies, but has limited probative value given her failure to complete financial counseling.

Although Applicant’s efforts at eliminating her delinquencies have been, at best, only moderately successful, they are sufficient to trigger the application of AG ¶ 20(d), “the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.” Because the largest delinquencies remain unpaid, however, I cannot conclude that AG ¶ 20(c), “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,” applies. Applicant has not mitigated the Guideline F security concerns.

Personal Conduct

Under this guideline, “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 information” (AG ¶ 15). Applicant’s omissions from her security clearance application raise the issue of whether 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 security clearance eligibility or trustworthiness, or award fiduciary responsibilities,” applies.

Although Applicant did not specifically disclose the debts listed in the SOR, she did disclose a judgment in response to another question about her finances. Also, she noted that she incurred debt in 2001 that she characterized as “unknown.” I conclude that Applicant’s omissions indicate disorganization rather than duplicity, and that she did not intentionally omit any financial information. AG ¶ 16(a) does not apply. There are no personal conduct security concerns.

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 the circumstances. The administrative judge should consider the nine adjudicative process factors listed at AG ¶ 2(a): “(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) 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.”

Applicant’s financial problems were not caused by extravagant spending. Instead, they were caused largely by her husband’s employment woes. She has contacted creditors, attended a financial counseling session, and paid some of her creditors. However, she currently has not begun satisfying the two largest delinquencies, SOR subparagraphs 1.fand 1.n.

Applicant deserves credit for her excellence on the job. Also, she demonstrated tremendous character by completing college while working two part-time jobs and helping her grandmother raise her siblings. These positive attributes are not enough at this time, however, to overcome the security concern generated by her continuing financial difficulties. Upon considering Applicant’s case in the context of the whole person concept, I conclude that her application for a security clearance must be denied.

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.d: Against Applicant

Subparagraph 1.e: For Applicant

Subparagraph 1.f: Against Applicant

Subparagraphs 1.g - 1.j: For Applicant

Subparagraphs 1.k - 1.n: Against Applicant

Paragraph 2, Guideline E: FOR APPLICANT

Subparagraphs 2.a - -2.b: 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.

MARC E. CURRY Administrative Judge

FOOTNOTES

ISCR Case No. 03-07826 (App. Board June 17, 2005 at 3).