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ISCR Case 08-07898.h1 — CASE

ISCR Case 08-07898.h1denied

Case Headnote

ISCR Case No. 08-07898.h1

deniedJul 1, 2008· Hon. Robert J. Tuidar· hearing

Summary

A 46-year-old project manager was denied a security clearance due to financial considerations under Guideline F, despite having previously held a clearance. The denial stemmed from five delinquent debts totaling approximately $16,184, along with a Chapter 7 bankruptcy filing in 1997.

The applicant disputed several of the alleged debts. One debt was scheduled to fall off his credit report by the second quarter of 2009, and another was no longer on his current credit report. A third debt was also in dispute and expected to fall off by the second quarter of 2009, while a fourth was disputed as not being his account. The final debt related to a vehicle returned to the bank, with the account closed in 2003.

The denial was based on the applicant's significant and ongoing history of delinquent debt, which was not considered isolated. The applicant failed to provide sufficient documentation to dispute the legitimacy of the debts or demonstrate efforts to resolve them, ultimately not showing financial responsibility or control over his financial situation.

Why the Applicant Was Denied

Applicant has a significant history of delinquent debt that is ongoing and not isolated.
Applicant failed to provide documentation to dispute the legitimacy of the debts or evidence of efforts to resolve them.
Applicant did not demonstrate financial responsibility or take control of his financial situation.

Conditions Referenced

Disqualifying

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

Key Rule Quoted

“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.”

Procedural Posture

SOR issuedJan 23, 2009
Answer filedMar 11, 2009Applicant elected to have the case decided on the written record.
Hearing held—
Decision dateJun 2, 2009

Cite For

Failure to Mitigate Financial Considerations Under Guideline F
Importance of Providing Evidence to Dispute Debts
Impact of Ongoing Financial Issues on 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 F · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The judge found that the applicant had multiple delinquent debts totaling approximately $13,110.00, which he admitted to but failed to adequately address or mitigate. The applicant's financial history raised significant concerns under Guideline F, leading to a denial of his security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant filed for chapter 7 bankruptcy in 1997.	Against Applicant	Bankruptcy Filing	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	The debt in SOR ¶ 1.b. was currently in dispute and scheduled to fall off credit report by 2nd qtr 2009.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	The debt in SOR ¶ 1.c. was not on [his] current credit report.	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	The debt in SOR ¶ 1.d. was currently in dispute and scheduled to fall off credit report by 2nd qtr 2009.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	The debt in SOR ¶ 1.e. is under dispute, this was not my account.	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	The debt in SOR ¶ 1.f. was for a vehicle that was returned to bank and account closed 2003.	Against Applicant	Auto 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: ) ) XXXXXXXXXX, XXXXX ) ISCR Case No. 08-07898 SSN: XXX-XX-XXXX ) ) Applicant for Security Clearance )

For Government: Jennifer I. Goldstein, Department Counsel For Applicant: Pro Se

June 29, 2009 __________

STATEMENT OF CASE

__________

TUIDER, Robert J., Administrative Judge:

Applicant failed to mitigate Guideline F (Financial Considerations) security concerns. Clearance is denied.

Statement of the Case

On April 17, 2008, Applicant submitted an Electronic Questionnaires for Investigations Processing (e-QIP).1 On January 23, 2009, the Defense Office of Hearings and Appeals (DOHA) issued a Statement of Reasons (SOR) to him, pursuant to Executive Order 10865, Safeguarding Classified Information Within Industry, dated February 20, 1960, as amended and modified, and Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (Directive), dated January 2, 1992, as amended, modified and revised.2 The SOR alleges security concerns under Guideline F (Financial Considerations). The SOR detailed 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 him, and recommended referral to an administrative judge to determine whether a clearance should be granted, continued, denied, or revoked.

On March 11, 2009, Applicant responded to the SOR allegations, and elected to have his case decided on the written record in lieu of a hearing. A complete copy of the file of relevant material (FORM), dated April 7, 2009, was provided to him, and he was afforded an opportunity to file objections and submit material in refutation, extenuation, or mitigation.3 The case was assigned to me on June 2, 2009.

FINDINGS OF FACT

In his responses to the SOR, Applicant admitted SOR ¶¶ 1.a., 1.b., 1.d., and 1.f. He denied SOR ¶¶ 1.c., and 1.e. His admissions are incorporated herein as findings of fact. After a thorough review of the evidence of record, I make the following additional findings of fact.

Applicant is a 46-year-old project manager, who has been employed by his defense contractor employer since June 2003.4 His e-QIP indicates he has been attending an on-line college since January 2008. The FORM does not contain any further information regarding Applicant’s educational background. He has been married since October 1987, and has a 19-year-old daughter and a 10-year-old son. Applicant did not serve in the military. His e-QIP disclosed no police record; no use of illegal drugs; and no alcohol-related problems, counseling or treatment. Applicant successfully held a secret security clearance from 1990 to 2003.

Applicant’s background investigation addressed his financial problems and included the review of his Response to SOR, April 2008 e-QIP, May 2008, August 2008, April 2009 credit reports, and two October 2008 Answers to Interrogatories.5

The SOR alleged Applicant has five delinquent debts approximating $16,184.00. In addition to those debts admitted by Applicant, all alleged debts are independently supported by Applicant’s e-QIP, and his May 2008, August 2008, and April 2009 credit reports.6 As noted above, Applicant’s Answer denied he owes the debts alleged in SOR ¶¶ 1.c., and 1.e.; however, he has provided no evidence to prove or support his assertions. Even if Applicant’s assertions are correct, the delinquent debts alleged in the SOR to which he admits are $13,110.00.

Applicant filed for chapter 7 bankruptcy in 1997. (SOR ¶ 1.a.) In his Response to SOR, he stated he did so under advice of counsel “to protect (an) active security clearance which was active from 1990 to 2000.”

Applicant’s Response to SOR stated the debt in SOR ¶ 1.b. was “currently in dispute and . . . scheduled to fall of[f] credit report by 2nd qtr 2009,” the debt in SOR ¶ 1.c. was “[n]ot on [his] current credit report,” the debt in SOR ¶ 1.d. was “currently in dispute and . . . scheduled to fall of[f] of credit report by 2nd qtr 2009,” the debt in SOR ¶ 1.e. “is under dispute, this was not my account. Unable to close with . . . because acct is not in the . . . system,” and the debt in SOR ¶ 1.f. “was for a vehicle that was returned to bank and account closed 2003. No agreement to pay balance required from original bank due to value of vehicle was higher tha[n] outstanding balance. I was 60 day[s] behind on this account.”7

Applicant’s Response to SOR failed to adequately address any of his delinquent debts. He failed to provide sufficient information as to how he acquired the debts, why they became delinquent, what efforts he took, if any, to resolve his debts, documentation to support his Response to SOR, and what measures he has taken to avoid similar financial problems in the future.

Applicant did not submit any character references or performance evaluations.

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 controlling 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.” 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.

In the decision-making process, the Government has the initial burden of establishing controverted facts alleged in the SOR by “substantial evidence,”8 demonstrating, in accordance with the Directive, that it is not clearly consistent with the national interest to grant or continue an applicant’s access to classified information. Once the Government has produced substantial evidence of a disqualifying condition, the burden shifts to Applicant to produce evidence “to rebut, explain, extenuate, or mitigate facts admitted by applicant or proven by Department Counsel, and [applicant] has the ultimate burden of persuasion as to obtaining a favorable clearance decision.” Directive ¶ E3.1.15. The burden of disproving a mitigating condition never shifts to the Government. See ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 2005).9

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 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 Executive Order 12968 (Aug. 2, 1995), Section 3.

ANALYSIS

Upon consideration of all the facts in evidence, and after application of all appropriate legal precepts, factors, and conditions, including those described briefly above, I conclude the relevant security concern is under Guideline F (Financial Considerations). AG ¶ 18 articulates the security concern relating to financial problems:

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.

AG ¶ 19 provides two Financial Considerations Disqualifying Conditions that could raise a security concern and may be disqualifying in this case, “(a) inability or unwillingness to satisfy debts,” and “(c) a history of not meeting financial obligations.” Applicant’s history of delinquent debt is documented in his credit reports, his answers to DOHA interrogatories, and his SOR response.

Applicant has submitted no documentation to show he has a reasonable basis to dispute the legitimacy of the debts alleged, that he has attempted to contact those or other creditors to settle or resolve the debts alleged in the SOR, or that he is receiving counseling or has ever received financial counseling to assist him with his financial difficulties.

Applicant also has not produced convincing evidence showing that he acted responsibly or prudently in managing his financial affairs over several years, and it is clear from the record evidence that Applicant’s financial problems are longstanding, are not isolated, and appear likely to be a continuing concern in the future.

Applicant admitted three of the five debts alleged and those three debts approximate $13,110.00, although he disputed two of those admitted debts without explanation. The Government established the disqualifying conditions in AG ¶¶ 19(a) and 19(c). Absent favorable evidence and considering the record as a whole, I conclude his five SOR debt are still valid, delinquent debts, and that Applicant is responsible for them.

Five Financial Considerations Mitigating Conditions under AG ¶¶ 20(a)-(e) 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, or a death, divorce or separation), and the individual acted responsibly under the circumstances;

(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;

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

(e) the individual has a reasonable basis to dispute the legitimacy of the past-due debt which is the cause of the problem and provides documented proof to substantiate the basis of the dispute or provides evidence of actions to resolve the issue.

Considering the record evidence as a whole,10 I conclude that none of the mitigating conditions apply and Applicant’s sparse favorable information fails to establish the applicability of any of the mitigating conditions. Applicant’s debts were incurred after his 1997 chapter 7 bankruptcy discharge. Having been relieved of debt liability in 1997, he subsequently incurred substantial debt as discussed supra. His stated intention of waiting for debts to “fall off credit report” does not demonstrate financial responsibility.

Accordingly, Applicant’s financial history and lack of favorable evidence preclude a finding that he has established a track record of financial responsibility, or that he has taken control of his financial situation. Based on the available evidence, his financial problems are recent, not isolated, and are likely to be a concern in the future. He has not carried his burden of proving his financial responsibility. His overall financial behavior casts doubt on his current reliability, trustworthiness, and good judgment.

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) 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.

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. AG ¶ 2(c).

Applicant’s record of employment working for a government contractor weighs in his favor. He previously held a security clearance without any known security violations. Aside from his delinquent debts, which are a civil, non-criminal issue, he is a law- abiding citizen. These factors show some responsibility and mitigation.

The evidence against mitigating Applicant’s conduct is more substantial. He has a significant history of delinquent debt that has been ongoing. Applicant has submitted no documentation to show he has a reasonable basis to dispute the legitimacy of the debts, that he has attempted to contact those or other creditors to settle or resolve debts alleged in the SOR, or that he is receiving or has ever received financial counseling to assist him with his financial difficulties. Applicant has not produced convincing evidence showing that he has acted responsibly or prudently in managing his financial affairs over several years, and it is clear from the record that Applicant’s financial problems are longstanding, not isolated, and appear likely to be a continuing concern in the future. Accordingly, Applicant has not mitigated the security concerns caused by the financial considerations in his case.

After weighing the disqualifying and mitigating conditions, and all the facts and circumstances, in the context of the whole person, I conclude he has not mitigated the security concerns pertaining to 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. to 1.f.: Against Applicant

CONCLUSION

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

____________________________ ROBERT J. TUIDER Administrative Judge

FOOTNOTES

1 Item 4.

2 On Aug. 30, 2006, the Under Secretary of Defense (Intelligence) published a memorandum directing application of revised Adjudicative Guideline to all adjudications and other determinations made under the Directive and Department of Defense (DoD) Regulation 5200.2-R, Personnel Security Program (Regulation), dated Jan. 1987, as amended, in which the SOR was issued on or after Sep. 1, 2006. 3 The DOHA transmittal letter is dated April 7, 2009. Applicant signed the receipt for the DOHA transmittal letter on April 13, 2008. The DOHA transmittal letter informed Applicant that he had 30 days after receipt of the FORM to submit information. Applicant did not submit any additional information. 4 Item 5 (e-QIP) is the source for the facts in this paragraph, unless stated otherwise.

5 Items 4 - 9. 6 Items 7 and 8.

7 Item 3. 8 See Directive ¶ E3.1.14. “Substantial evidence [is] such relevant evidence as a reasonable mind might accept as adequate to support a conclusion in light of all the contrary evidence in the record.” ISCR Case No. 04-11463 at 2 (App. Bd. Aug. 4, 2006) (citing Directive ¶ E3.1.32.1). “Substantial evidence” is “more than a scintilla but less than a preponderance.” See v. Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994).

9 “The Administrative Judge [considers] the record evidence as a whole, both favorable and unfavorable, evaluate[s] Applicant’s past and current circumstances in light of pertinent provisions of the Directive, and decide[s] whether Applicant ha[s] met his burden of persuasion under Directive ¶ E3.1.15.” ISCR Case No. 04-10340 at 2 (App. Bd. July 6, 2006). 10 See ISCR Case No. 03- 02374 at 4 (App. Bd. Jan. 26, 2006) (citing ISCR Case No. 02-22173 at 4 (App. Bd. May 26, 2004)). When making a recency analysis for AG ¶ 20(a), all debts are considered as a whole.