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ISCR Case 08-04529.h1 — CASE

ISCR Case 08-04529.h1denied

Case Headnote

ISCR Case No. 08-04529.h1

deniedMar 31, 2009· Hon. Darlene Lokey Anderson· hearing

Summary

A 31-year-old defense contractor was denied a security clearance under Guideline F, Financial Considerations. The Statement of Reasons alleged that the applicant was financially overextended and at risk of engaging in illegal acts to generate funds, citing ten specific instances (1.a through 1.j) of this concern.

The denial was based on the applicant's admission of being financially overextended, with debts exceeding $20,000. The applicant failed to provide evidence of financial rehabilitation or a concrete plan to resolve these delinquent debts.

The judge concluded that the applicant's financial irresponsibility demonstrated poor judgment and unreliability. The applicant's promise of future financial management was not supported by documentary evidence, leading to the denial of the security clearance. Disqualifying conditions 19(a) and 19(c) were raised in this case.

Why the Applicant Was Denied

The applicant is financially overextended with debts exceeding $20,000.
The applicant failed to provide evidence of a plan to resolve her delinquent debts.
The applicant's promise of future financial management was not supported by documentary evidence.

Conditions Referenced

Disqualifying

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

Key Rule Quoted

“The adjudicative process is an examination of a sufficient period of a person’s life to make an affirmative determination that the person is an acceptable security risk.”

Procedural Posture

SOR issuedOct 31, 2008
Answer filedNov 25, 2008Applicant elected to have the case determined on a written record.
Hearing held—No hearing; case determined on written record.
Decision dateMar 31, 2009

Cite For

Financial Irresponsibility as a Basis for Denial Under Guideline F
Lack of Evidence for Financial Rehabilitation
Importance of Documentary Evidence in Mitigating Financial Concerns

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 was financially overextended, with debts exceeding $20,000 and no evidence of repayment or financial rehabilitation. All allegations under Guideline F were ruled against the applicant, leading to the denial of her security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	The Applicant is ineligible for a security clearance because she is financially overextended and at risk to engage in illegal acts to generate funds.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	The Applicant is ineligible for a security clearance because she is financially overextended and at risk to engage in illegal acts to generate funds.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	The Applicant is ineligible for a security clearance because she is financially overextended and at risk to engage in illegal acts to generate funds.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	The Applicant is ineligible for a security clearance because she is financially overextended and at risk to engage in illegal acts to generate funds.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	The Applicant is ineligible for a security clearance because she is financially overextended and at risk to engage in illegal acts to generate funds.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	The Applicant is ineligible for a security clearance because she is financially overextended and at risk to engage in illegal acts to generate funds.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	The Applicant is ineligible for a security clearance because she is financially overextended and at risk to engage in illegal acts to generate funds.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	The Applicant is ineligible for a security clearance because she is financially overextended and at risk to engage in illegal acts to generate funds.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i	The Applicant is ineligible for a security clearance because she is financially overextended and at risk to engage in illegal acts to generate funds.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.j	The Applicant is ineligible for a security clearance because she is financially overextended and at risk to engage in illegal acts to generate funds.	Against Applicant	Unspecified Financial	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. 08-04529 SSN: ------------------ ) ) Applicant for Security Clearance )

For Government: Emilio Jaksetic, Department Counsel For Applicant: Pro Se

March 31, 2009 ______________

STATEMENT OF CASE

______________

LOKEY ANDERSON, Darlene D., Administrative Judge:

Applicant submitted her Electronic Questionnaire for Investigations Processing (e-QIP) dated November 2, 2007. On October 31, 2008, the Defense Office of Hearings and Appeals (DOHA), pursuant to Executive Order 10865 (as amended), and Department of Defense Directive 5220.6 (Directive), dated January 2, 1992, issued a Statement of Reasons (SOR) to the Applicant, which detailed the reasons why DOHA could not make the preliminary affirmative finding under the Directive that it is clearly consistent with the national interest to grant or continue a security clearance for the Applicant and recommended referral to an Administrative Judge to determine whether a clearance should be denied or revoked.

The Applicant responded to the SOR in writing on November 25, 2008, in which he elected to have the case determined on a written record in lieu of a hearing. Department Counsel submitted the Government’s File of Relevant Material (FORM) to the Applicant on January 7, 2009. The Applicant was instructed to submit information in rebuttal, extenuation or mitigation within 30 days of receipt. Applicant received the FORM on January 14, 2009 and she submitted no reply. The case was assigned to the undersigned for resolution on March 26, 2009.

FINDINGS OF FACT

The following Findings of Fact are based on the Applicant’s Answer to the SOR, the FORM and the exhibits. The Applicant is 31 years old. She is employed by a defense contractor and is seeking to obtain a security clearance in connection with her employment.

The Government opposes the Applicant's request for a security clearance, on the basis of allegations set forth in the Statement of Reasons (SOR). After a complete and thorough review of the evidence in the record, and upon due consideration of the same, the following findings of fact are entered as to each paragraph and guideline in the SOR:

Paragraph 1 (Guideline F - Financial Considerations) The Government alleges that the Applicant is ineligible for a security clearance because she is financially overextended and at risk to engage in illegal acts to generate funds.

The Applicant admits each of the allegations set forth in the SOR under this guideline, except one, a debt for an unpaid medical account in the amount of $1,258.00. She believes that the debt is an error on her credit report. Credit Reports of the Applicant dated November 21, 2007, May 6, 2008, and July 24, 2008 collectively reflect each of the delinquent debts set forth in the SOR. These reports indicate that the Applicant is currently indebted to at least nine separate creditors totaling in excess of $20,000.00. (Government Exhibits 8, 9 and 10).

Applicant states that she is presently in the process of putting into place a strict budget plan which will eliminate all of her debt within two to four years. Since the beginning of her security clearance background investigation, she has made several major changes in her life to get prepared for a more fugal lifestyle. She paid off her car, moved into an affordable apartment, became a junior deaconess in her church, and went back to college. She states that she no longer eats in restaurants, but carries her lunch from home. She does not often buy clothing, and she is a smart shopper who uses coupons. She always makes sure her monthly expenses are paid on time.

Applicant’s performance appraisal for the period from August 2008 through August 2009, reflects two “poor” ratings, four “excellent” ratings, and two “exceptional” ratings. Her overall rating is “very good”. (Applicant’s Response to the FORM). Applicant claims that as a result of her work ethic, she received a 10% pay raise this year. This pay raise will help her pay her delinquent debts and become fiscally solvent.

POLICIES

Enclosure 2 of the Directive sets forth adjudication policies divided into "Disqualifying Factors" and "Mitigating Factors." The following Disqualifying Factors and Mitigating Factors are found to be applicable in this case:

Guideline F (Financial Considerations)

18. The Concern. 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. Compulsive gambling is a concern as it may lead to financial crimes including espionage. Affluence that cannot be explained by known sources of income is also a security concern. It may indicate proceeds from financially profitable criminal acts.

Conditions that could raise a security concern:

19(a) inability or unwillingness to satisfy debts;

19(c) a history of not meeting financial obligations.

Conditions that could mitigate security concerns:

None.

In addition, as set forth in Enclosure 2 of the Directive at pages 16-17, in evaluating the relevance of an individual’s conduct, the Administrative Judge should consider the following general factors:

a. The nature and seriousness of the conduct and surrounding circumstances

b. The circumstances surrounding the conduct, to include knowledgeable participation

c. The frequency and recency of the conduct

d. The individual’s age and maturity at the time of the conduct

e. The voluntariness of participation

f. The presence or absence of rehabilitation and other pertinent behavior changes

g. The motivation for the conduct h. The potential for pressure, coercion, exploitation or duress

i. The likelihood of continuation or recurrence.

The eligibility criteria established in the DoD Directive identify personal characteristics and conduct which are reasonably related to the ultimate question, posed in Section 2 of Executive Order 10865, of whether it is “clearly consistent with the national interest” to grant an Applicant’s request for access to classified information.

The DoD Directive states, “The adjudicative process is an examination of a sufficient period of a person’s life to make an affirmative determination that the person is an acceptable security risk. Eligibility for access to classified information is predicted upon the individual meeting these personnel security guidelines. The adjudicative process is the careful weighing of a number of variables known as the whole person concept. Available, reliable information about the person, past and present, favorable and unfavorable should be considered in reaching a determination.” The Administrative Judge can draw only those inferences or conclusions that have reasonable and logical basis in the evidence of record. The Judge cannot draw inferences or conclusions based on evidence which is speculative or conjectural in nature. Finally, as emphasized by President Eisenhower in Executive Order 10865, “Any determination under this order . . . shall be a determination in terms of the national interest and shall in no sense be a determination as to the loyalty of the Applicant concerned.”

CONCLUSION

In the defense industry, a security clearance is entrusted to civilian workers who must be counted upon to safeguard such sensitive information twenty-four hours per day, seven days per week. The Government is therefore appropriately concerned when available information indicates that an Applicant for such access may be involved in instances of financial irresponsibility which demonstrates poor judgment or unreliability.

It is the Government’s responsibility to present substantial evidence to support the finding of a nexus, or rational connection, between the Applicant’s conduct and the holding of a security clearance. If such a case has been established, the burden then shifts to the Applicant to go forward with evidence in rebuttal, explanation or mitigation which is sufficient to overcome or outweigh the Government’s case. The Applicant bears the ultimate burden of persuasion in proving that it is clearly consistent with the national interest to grant her a security clearance.

In this case the Government has met its initial burden of proving that the Applicant has been financially irresponsible (Guideline F). This evidence indicates poor judgment, unreliability and untrustworthiness on the part of the Applicant. Because of the scope and nature of the Applicant's conduct, I conclude there is a nexus or connection with her security clearance eligibility.

Applicant states that she has set up a strict budget plan which will eliminate her debt within two to four years, however, she failed to provide any documentary evidence to support her contention. She failed to explain how her delinquent debts will be paid. Although it appears that she understands the importance of financial management, in that she has made some changes to reduce her expenses, she has failed to pay any of her delinquent debt. A promise to take remedial measures in the future is not evidence of reform and rehabilitation. Furthermore, there is no evidence in the record to demonstrate that she can make her regular monthly payments in addition to making payments on her delinquent debts. Considering all of the evidence, the Applicant has not introduced persuasive evidence in rebuttal, explanation or mitigation that is sufficient to overcome the Government's case.

With respect to her finances, the Applicant remains excessively indebted in the amount in excess of $20,000.00. As of yet, none of the delinquent debts in the SOR have been paid. She is just starting the financial rehabilitation process and obviously has a long way to go before her delinquent debts are resolved. At the present time, she has not presented sufficient evidence to demonstrate a track record of financial responsibility or that she has resolved her financial indebtedness.

I have also considered the “whole person concept” in evaluating the Applicant’s eligibility for access to classified information. Under the particular facts of this case, the totality of the conduct set forth under all of the guidelines viewed as a whole, support a whole person assessment of questionable judgement, untrustworthiness, unreliability, lack of candor, unwillingness to comply with rules and regulations, or other characteristics indicating that the person may not properly safeguard classified information.

Other than her favorable performance appraisal, the record is void as to any evidence in mitigation. There is no evidence of financial rehabilitation at this time. Under Guideline F (Financial Considerations), Disqualifying Conditions 19(a) inability or unwillingness to satisfy debts and, 19(c) a history of not meeting financial obligations apply. None of the mitigating conditions apply. Her financial problems remain current and they are not isolated. The Applicant had not initiated a prompt, good faith effort to repay her overdue creditors or otherwise resolve her debts. Accordingly, I find against the Applicant under Guideline F (Financial Considerations).

On balance, it is concluded that the Applicant has failed to overcome the Government's case opposing her request for a security clearance. Accordingly, the evidence supports a finding against the Applicant as to the factual and conclusionary allegations expressed in Paragraph 1 of the Government's Statement of Reasons.

FORMAL FINDINGS

Formal findings For or Against the Applicant on the allegations in the SOR, as required by Paragraph 25 of Enclosure 3 of the Directive are:

Paragraph 1: Against the Applicant. Subpara. 1.a.: Against the Applicant. Subpara. 1.b.: Against the Applicant. Subpara. 1.c.: Against the Applicant. Subpara. 1.d.: Against the Applicant. Subpara. 1.e.: Against the Applicant. Subpara. 1.f.: Against the Applicant. Subpara. 1.g.: Against the Applicant. Subpara. 1.h.: Against the Applicant. Subpara. 1.i.: Against the Applicant. Subpara. 1.j.: Against the Applicant.

DECISION

In light of the circumstances presented by the record in this case, it is not clearly consistent with the national interests to grant or continue a security clearance for the Applicant.

Darlene Lokey Anderson Administrative Judge