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ISCR Case 08-09661.h1 — CASE

ISCR Case 08-09661.h1denied

Case Headnote

ISCR Case No. 08-09661.h1

deniedAug 24, 2009· Hon. Marc E. Curry· hearing

Summary

This case concerns a 37-year-old single woman working in information technology whose security clearance was denied under Guideline F (Financial Considerations). The Statement of Reasons alleged approximately $17,000 in delinquent debt, including two sets of utility bills totaling about $580 each, medical bills from a single provider amounting to approximately $500, a credit card account with a balance of approximately $9,875, and a $951 debt owed to a collection agent.

Disqualifying conditions related to financial issues were raised, while mitigating conditions concerning good-faith efforts and financial counseling were considered. However, the judge ultimately found these insufficient to overcome the security concerns.

The denial was based on the applicant's failure to demonstrate that her financial condition no longer posed a security risk. Despite some attempts to address her debts, sporadic payments and a recent car repossession indicated ongoing instability. The judge concluded that her financial difficulties were largely self-inflicted and not adequately mitigated by her recent actions.

Why the Applicant Was Denied

The applicant failed to demonstrate that her financial condition no longer poses a security concern.
Despite some efforts to address her debts, the applicant's sporadic payments and recent car repossession indicated ongoing financial instability.
The applicant's financial difficulties were largely self-inflicted and not sufficiently mitigated by her recent actions.

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(c)appliedThe Person Has Received or Is Receiving Counseling for the Problem
AG ¶ 20(d)appliedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts

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 issuedFeb 12, 2009
Answer filedMar 30, 2009
Hearing heldJun 23, 2009
Decision dateAug 24, 2009

Cite For

Evaluation of Financial Considerations Under Guideline F
Impact of Financial Instability on Security Clearance Eligibility
Importance of Demonstrating Sustained Financial Rehabilitation Efforts

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 significant financial issues, including unpaid utility and medical bills, and a delinquent credit card debt. Despite some efforts to address these debts, the applicant's financial situation was deemed insufficiently mitigated, leading to a denial of the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	utility bills, collectively totalling approximately $580 $580	Against Applicant	Utility or Phone Debt	Admitted	(a) inability to satisfy debts	—	—
1.b	utility bills, collectively totalling approximately $580 $580	Against Applicant	Utility or Phone Debt	Admitted	(a) inability to satisfy debts	—	—
1.c	specific text not stated in this decision	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts	—	—
1.d	medical bills for different medical services that Applicant received from the same medical provider, approximately $500 $500	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts	(c) received/receiving counseling; problem being resolved	Documented Payment Plan with Creditor
1.e	specific text not stated in this decision	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts	—	—
1.f	a credit card account that is delinquent in the approximate amount of $9,875 $9,875	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts	(c) received/receiving counseling; problem being resolved	Documented Payment Plan with Creditor
1.i–1.m	5 sub-charges — specific text not stated in this decision (against the applicant). (low confidence)	Against Applicant			—	—	—
1.n	a collection agent whom Applicant owes $951 $951	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts	—	—
1.o	specific text not stated in this decision	For Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts	—	—

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. 08-09661 SSN: ----------- ) ) Applicant for Security Clearance )

For Government: Fahryn E. Hoffman, Esquire, Department Counsel For Applicant: Pro se

August 24, 2009 ______________

STATEMENT OF CASE

______________

CURRY, Marc E., Administrative Judge:

Applicant failed to mitigate the government’s financial considerations security concern. Clearance is denied.

On February 12, 2009, the Defense Office of Hearings and Appeals (DOHA) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline F, financial considerations. 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 March 30, 2009, and admitted all of the allegations except SOR subparagraphs 1.c, 1.g, 1.h, 1.j, and 1.o. She requested a hearing, and the case was assigned to me on May 13, 2009. On June 4, 2009, a notice of hearing was issued scheduling the case for June 23, 2009. The hearing was conducted as scheduled. I received five government exhibits, nine Applicant exhibits, and Applicant’s testimony. At Applicant’s request, I left the record open at the end of the hearing for her to submit additional exhibits. She timely submitted six additional exhibits that I incorporated into the record. The transcript was received on June 29, 2009.

Preliminary Ruling

At the beginning of the hearing, Department Counsel stipulated that Applicant satisfied the debts listed in SOR subparagraphs 1.g, 1.h, 1.j, and 1.o, totalling $4,563. I resolve these allegations in Applicant’s favor.

FINDINGS OF FACT

Applicant is a 37-year-old single woman with no children. In 2004, she earned an associate’s degree in microcomputer technologies (Tr. 28). Before then, she had earned approximately a year and a half of credit toward a bachelor’s degree in early childhood development.

Applicant works for an information technology defense contractor specializing in network security management. She travels to various military bases across the country installing computers and integrating systems information (Tr. 28). She has been working for this employer since 2006 (Exhibit 1 at 10). She also does some independent consulting for personal clients in her spare time (Tr. 33).

Before Applicant began working with her current employer, the majority of her previous jobs were low-paying. She did not earn more than a minimum wage salary until 2005 (Tr. 84). She had frequent periods of unemployment including three to four months in 2005, eight months in 2004, and four months in 2001 (Tr. 82, 90; Exhibit 1 at 18).

Her employment outlook gradually stabilized after she earned the associate’s degree in 2004. Nevertheless, by 2008, she had accrued approximately $17,000 of delinquent debt.

SOR subparagraphs 1.a and 1.bare utility bills, collectively totalling approximately $580. Applicant accrued the debts after a roommate moved from their shared apartment without paying her portion of the bills (Tr. 70).

SOR subparagraph 1.c, another utility, is a duplicate of 1.e (Exhibit B). Approximately $250 is outstanding.

SOR subparagraphs 1.dand 1.kare medical bills for different medical services that Applicant received from the same medical provider (Tr. 50). The amount due is approximately $500 (Tr. 67). Applicant consolidated the accounts, and is paying the creditor approximately $100 monthly (Tr. 67). The debts should be satisfied in five months.

The debt listed in SOR subparagraph 1.fis a credit card account that is delinquent in the approximate amount of $9,875. By February 2009, Applicant had negotiated a settlement agreement and begun making sporadic monthly payments (Exhibit C at 5; Tr. 105). The current balance is $9,575 (Id.).

The record is unclear as to the identity of the creditors listed in SOR subparagraphs 1.i and 1.l. These bills total approximately $300. They remain unpaid.

The creditor listed in SOR subparagraph 1.nis a collection agent whom Applicant owes $951. The amount due constitutes the amount that Applicant had overdrawn on an old checking account, in addition to penalties (Tr. 93). On June 25, 2009, Applicant negotiated a settlement agreement for $475 (Exhibit N). Under the payment plan, Applicant is to pay the creditor $40 monthly (Id.).

In January 2009, Applicant began consulting with a credit counselor (Tr. 70). With the counselor’s help, Applicant developed a budget and a payment plan (Exhibit E). Applicant has been satisfying the SOR debts under the plan. Specifically, Applicant has started with the larger debts such as SOR subparagraph 1.f. When the larger debts are satisfied, she will then address the smaller ones such as SOR subparagraphs 1.i and 1.l (Tr. 70-72). Applicant has met with the credit counselor four times since their first meeting (Tr. 70). At each session, they review Applicant’s budget and discuss her day- to-day spending habits (Tr. 72). Applicant contends that naivete about debt contributed to the accrual of her delinquencies. With the help of the credit counselor, she now manages money more responsibly (Tr. 105).

Currently, Applicant has satisfied approximately one-third of the debts listed in the SOR. However, a car that Applicant leased was recently involuntarily repossessed (Tr. 93). She owes the creditor $10,000, the deficiency remaining from the resale (Tr. 94; Exhibit 2 at 3). She has notified her credit counselor of this debt, and is negotiating a settlement arrangement (Id.)

Applicant earns approximately $2,115 of net monthly income. After expenses are paid, she has approximately $256 remaining (Tr. 104). She has been applying this amount to the debts listed in the SOR (Id.).

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. 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, the “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). Applicant’s history of financial problems triggers 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 difficulties were caused, in part, by her inability to find a secure job. Also, a former roommate moved from a shared apartment, and did not pay her share of the bills. Applicant’s job options improved after returning to school and earning an associate’s degree. Also, she has consulted a credit counselor, organized her finances, and began satisfying her delinquencies. She has paid nearly a third of the debt listed in the SOR.

Applicant admits that lack of education about credit contributed to the accrual of her financial delinquencies. Also, the debts that she incurred when her roommate reneged on her joint responsibility to pay joint bills constituted only a small portion of Applicant’s delinquent debt. 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,” does not apply. Nevertheless, Applicant’s efforts at rehabilitating her finances, including retaining a credit counselor and developing a payment plan, are sufficient to trigger the application of AG ¶¶ 20(c), “the person has received or is receiving counseling for the problem . . . , and 20(d), “the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.”

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.

Throughout the early part of this decade, Applicant struggled with low-paying, unstable jobs. Realizing that she was neither growing professionally, nor thriving financially, she returned to school and earned an associate’s degree. As her employment marketability improved, the quality of her jobs improved, enabling her to begin satisfying her debts. The initiative she demonstrated weighs in her favor.

Applicant also deserves credit for organizing her finances, seeking professional credit advice, and implementing a payment plan. I am not convinced, however, that her finances are under control. Although she organized a payment plan for one of her most significant debts (SOR subparagraph 1.f), she has made sporadic payments. Also, since the issuance of the SOR, Applicant’s automobile was repossessed. Consequently, Applicant’s effort at rehabilitation constitutes a step in the right direction, but it is too soon to conclude that her financial condition no longer poses a security concern.

The awarding of a security clearance is not a once in a lifetime occurrence, but is based on applying the factors, both disqualifying and mitigating, as set forth in the Directive, to the evidence presented. Should Applicant be afforded the opportunity to reapply for a security clearance in the future, she may well demonstrate persuasive evidence of her security worthiness. Presently, however, I conclude Applicant has not mitigated the financial considerations security concern.

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.f: Against Applicant Subparagraphs1.g - 1.h: For Applicant Subparagraph 1.i - 1.o: Against Applicant Subparagraph 1.o: 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

SOR subparagraphs 1.dand 1.mare duplicates.