CASE · Clearance Adjudication Search EngineCASE

Loading case…

ISCR Case 08-11509.h1 — CASE

ISCR Case 08-11509.h1denied

Case Headnote

ISCR Case No. 08-11509.h1

deniedAug 31, 2011· Hon. Paul J. Mason· hearing

Summary

A 45-year-old cable installation technician was denied a security clearance due to concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The applicant had a history of financial difficulties, including a Chapter 7 bankruptcy discharge in January 2009. However, two delinquent student loan accounts remained unresolved, forming a key part of the Statement of Reasons.

Disqualifying conditions related to financial mismanagement and a lack of candor were raised. While mitigating conditions concerning personal conduct improvements were acknowledged, they were ultimately outweighed by the financial issues. The applicant failed to provide credible documentation of payments on the student loans, and no clear plan to address these debts was presented.

The judge determined that the applicant's ongoing financial mismanagement and the unresolved student loan debt were significant factors. Despite improvements in personal conduct over time, the persistent financial concerns led to the denial of the security clearance.

Why the Applicant Was Denied

The applicant has two delinquent student loan accounts that remain unresolved despite a Chapter 7 bankruptcy discharge.
The applicant failed to provide credible documentation supporting his claims of making payments on the student loans.
The applicant's financial mismanagement and lack of a plan to address debts were significant factors in the denial.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(c)appliedThe Person Has Received or Is Receiving Counseling for the ProblemLimited mitigation due to the applicant receiving financial counseling prior to bankruptcy.
AG ¶ 20(d)appliedThe Individual Initiated a Good-faith Effort to Repay Overdue CreditorsLimited mitigation due to the resolution of some debts through bankruptcy.

Key Rule Quoted

“The administrative judge's ultimate goal is to reach a fair and impartial decision that is based on commonsense.”

Procedural Posture

SOR issuedApr 18, 2011
Answer filedMay 10, 2010Notarized response submitted.
Hearing heldJul 20, 2011Hearing held as scheduled.
Decision dateAug 31, 2011

Cite For

Denial of Security Clearance Due to Unresolved Financial Obligations Under Guideline F
Mitigating Factors Related to Personal Conduct Under Guideline E
Impact of Financial Mismanagement 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 E (Personal Conduct) · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The judge found in favor of the applicant on all allegations under Guideline E, indicating that the personal conduct concerns were mitigated by the passage of time and credible explanations provided by the applicant. The overall decision denied the applicant eligibility for a security clearance, but specifically under Guideline E, the findings were favorable.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
2.a–2.d	4 sub-charges — specific text not stated in this decision (for the applicant).	For Applicant		—		—	—	—

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 against the applicant under Guideline F due to unresolved delinquent student loans, despite a prior Chapter 7 bankruptcy discharge. The applicant's financial mismanagement and failure to address the remaining debts raised significant security concerns.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	specific text not stated in this decision	For Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	two delinquent student loan accounts that have not been mitigated	Against Applicant	Student Loan Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Claimed Financial Counseling

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. 08-11509 ) ) Applicant for Security Clearance )

For Government: William T. O’Neil, Esquire, Department Counsel For Applicant: Pro se

August 31, 2011 ______________

STATEMENT OF CASE

______________

MASON, Paul J., Administrative Judge:

Even though Applicant received a Chapter 7 bankruptcy discharge in January 2009, he still has two delinquent student loan accounts that have not been mitigated. The adverse personal conduct is mitigated by the passage of more than five years without the recurrence of acts of poor judgment. Eligibility for access to classified information is denied.

Statement of the Case

Applicant completed and certified a Standard Form 86 (SCA, GE 1) on June 24, 2008. He was interviewed by an investigator from the Office of Personnel Management (OPM) on August 5, 2008. A summary of this interview appears at pages 209 through 219 of GE 3 (page numbers appear in the lower right corner of page) dated June 17, 2010. On page 102 of GE 3, Applicant acknowledged his agreement with the interview summary, and indicated the summary could be used in a security clearance hearing to determine his security suitability. (Id. at 103)

On April 18, 2011, DOHA issued a Statement of Reasons (SOR) detailing security concerns under financial considerations (Guideline F) and personal conduct (Guideline E). The 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 adjudicative guidelines (AG) implemented by the Department ofd Defense on September 1, 2006.

Applicant’s answer to the SOR was notarized and submitted on May 10, 2010. DOHA issued a Notice of Hearing on July 1, 2011, for a hearing on July 20, 2011. The hearing was held as scheduled. At the hearing, eight exhibits (GE 1 through 8) were admitted in evidence in support of the Government’s case. Applicant testified and offered one exhibit (AE A). All exhibits were admitted in evidence without objection. He was granted time after the hearing to submit additional evidence regarding his delinquent financial obligations. He submitted one exhibit (AE B), which was admitted into evidence without objection. DOHA received the transcript on August 4, 2011. The record closed on August 4, 2011.

FINDINGS OF FACT

The SOR lists six allegations under the financial considerations guideline. Applicant denied subparagraphs 1.a, 1.b, 1.c, 1.d, and 1.e. He admitted subparagraph 1.fthat he filed a Chapter 13 petition on May 9, 2008, and received a Chapter 7 discharge on January 12, 2009. Applicant admitted all allegations under the personal conduct guideline.

Applicant is 45 years old and has been married for about a year. He has one child from this marriage and two from a previous marriage. He served in the United States Navy from February 1998 until his honorable discharge in January 2000. In the same month, he was hired by his current employer a cable installation technician, and has been working there since then. In February 2011, he accepted a lateral transfer for a job in the local area where he supervises projects. (Tr. 37-39) In 2004 and 2005, Applicant applied for and received student loans (subparagraphs 1.e and 1.f) for attending information technology training. He is two classes away from completing the training. (Tr. 42) Applicant has held a security clearance since 1998. (Tr. 37)

Financial Considerations

Applicant believes his financial problems were caused during his temporary work relocation to Florida for six months between February and July 2010. (Tr. 56) Before Applicant left, he and his brother agreed to take care of Applicant’s house in another location and pay the utilities during the temporary duty period in the local area. Applicant’s brother breached the agreement by permitting guests in the house and failing to keep the house clean. Applicant returned to find the house dirty, and the utilities unpaid or shut off. (Tr. 56-58) While on temporary duty, Applicant occasionally called his brother and returned to the location where his brother was taking care of the house to renew his auto license. He realized his house was not being maintained, but did not have time to deal with the problems because of his temporary work assignment. (Tr. 58)

Applicant has never had financial counseling other than the counseling required as a condition precedent to filing bankruptcy in May 2008. (GE 3)

The credit bureau reports show his financial problems appeared between October 2004 and February 2008 when five debts listed in the SOR became delinquent. (GE 6-8) Ten additional unlisted debts that had become delinquent during the foregoing period were discharged under a Chapter 7 bankruptcy petition in January 2009. (SOR 1.f) AE B reflects that SOR 1.a, 1.b, and 1.c, were also discharged in the Chapter 7 bankruptcy.

SOR 1.dand 1.e are student loans Applicant received in 2004 to pay for the information technology training he received in 2004. He explained that he originally applied and received eight student loans. Some of the loans were held by private companies and others were managed by Student Loan Marketing Association (Sallie Mae). (Tr. 43-44) Applicant disregarded Sallie Mae’s payment request notices because he mistakenly believed he had consolidated all the loans with another company. Applicant observed that the Sallie Mae and other loans were currently being processed by other companies. (Tr. 42-44) He stated he had bank statements to support his claim of making payments to Sallie Mae for three years. (AE 15) Applicant provided no documentary support to support his contention that all student loans were current. (Tr. 44)

Personal Conduct

Applicant explained that the four incidents cited in paragraph 2 of the SOR occurred during a troublesome part of his life that began in 1999 when his first wife left him after five months of marriage. His wife’s departure caused him to leave the Navy. Applicant’s association with the wrong people led to marijuana use in April 2004, his possession of marijuana charge and driving on a suspended license in August 2004. His marijuana use was brief in 2004. (Tr. 49) He has changed his lifestyle by no longer associating with the wrong people. Instead, he spends more time at home engaging in family activities like camping with his children. (Tr. 55)

In September 2004, Applicant got into an altercation with his girlfriend and hit her before immediately calling the police. (Tr. 18) In September 2005, he was convicted of driving while under the influence (DUI) and driving with a suspended license. (Tr. 51-53) Applicant indicated he does not have a history of violence and has a clean record since September 2005. (Id.)

In October 1997, Applicant certified an SCA. (GE 4) On the last page of the exhibit, he noted that he had used marijuana three times and had no intention of using the drug in the future. On at least two occasions in 2004, Appellant used marijuana while holding a security clearance. He indicated his choice to resume marijuana use several years later in 2004 was not a good choice. (Tr. 53)

Character Evidence

Applicant provided no character evidence regarding his job performance or his lifestyle in the community where he lives.

POLICIES

When evaluating an applicant's suitability for a security clearance, the administrative judge must consider the AG. Each guideline lists potentially disqualifying conditions and mitigating conditions, which are useful in evaluating an applicant's eligibility for access to classified information.

The administrative judge's ultimate goal is to reach a fair and impartial decision that is based on commonsense. The decision should also include a careful, thorough evaluation of a number of variables known as the "whole-person concept" that brings together all available, reliable information about the person, past and present, favorable and unfavorable, in making a decision. Likewise, I have avoided drawing inferences grounded on speculation or conjecture. 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 the potential, rather than actual, risk of compromise of classified information.

Under Directive ¶ E3.1.14., the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.l5., 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

Financial Considerations

The security concern for financial considerations is set forth in AG ¶ 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. 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.

The Government has the responsibility of presenting sufficient information to support all allegations of the SOR. Based on the credit reports, Applicant’s interrogatory responses, and his answers to the SOR, the Government has presented sufficient information to establish the financial allegations in the SOR. AG ¶ 19(a) (inability or unwillingness to satisfy debts) applies to Applicant’s inability to satisfy or address delinquent student loans under the first paragraph of the SOR. The accumulation of delinquent accounts between 2004 and 2008, culminated in the filing of a Chapter 13 petition in May 2008, a Chapter 7 discharge in January 2009, with two delinquent student loan accounts remaining, constitutes a history of not meeting financial obligations with the scope of AG ¶ 19(c) (a history of not meeting financial obligations).

Four mitigating conditions under AG ¶ 20 are potentially applicable. AG ¶ 20(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 reliability, trustworthiness, and good judgment) does not apply. Though Applicant received the student loans in 2004, both accounts continued to be delinquent. Applicant’s claim of payments to Sallie Mae and the successor collection agency is not credible because he did not produce supporting documentation. The failure to articulate a plan to resolve the student loan debt after receiving the loans in 2004 rules out the application of AG ¶ 20(a).

AG ¶ 20(b) (the conditions that resulted in the financial problem were largely beyond the person's control and the individual acted responsibly under the circumstances) does not apply because there was no unforeseen event beyond his control and close in time to his financial problems. Applicant separated from his first wife in 1999. He did not begin accumulating delinquent debt until five years later in 2004. While he accumulated 15 delinquent accounts between 2004 and 2008, he was employed throughout the period. AG ¶ 20(b) does not apply.

Applicant received financial counseling in advance of filing his May 2008 Chapter 13 petition. Even though three of the delinquent accounts have been resolved through the Chapter 7 discharge in January 2009, more than two years have passed since the discharge and Appellant has not indicated what he intends to do about the two student loans. 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 on a limited basis.

Though Applicant has not made a good-faith effort to repay creditors as set forth in AG ¶ 20(d) (the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts), he has resolved the debts to three creditors through a Chapter 7 bankruptcy. Applicant receives limited mitigation under AG ¶ 20(d). Having weighed the negative evidence under AG ¶¶ 19(a) and 19(c) with the limited mitigating evidence under AG ¶¶ 20(c), and 20(d), the financial considerations guideline is resolved against Applicant.

Personal Conduct

The security concern for personal conduct is set forth in AG ¶ 15:

AG ¶ 15. 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. Of special interest is any failure to provide truthful and candid answers during the security clearance process or any other failure to cooperate with the security clearance process.

The disqualifying condition that may apply is AG ¶ 16(c) (credible adverse information in several adjudicative issue areas that is not sufficient for an adverse determination under any other single guideline, but which, when considered as a whole, supports a whole-person assessment of questionable judgment, 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). The record indicates that Applicant’s 2004 drug use, the 2004 aggravated battery, and the 2005 alcohol-related traffic offenses, fall with the scope of the AG ¶ 16(c).

There are two mitigating conditions under AG ¶ 17 that may apply: AG ¶ 17(c) (the offense was so minor, or so much time has passed, or the behavior is so infrequent, or it happened under such unique circumstances that it is unlikely to recur and does not cast doubt on the individual’s reliability, trustworthiness, or good judgment); and AG ¶ 17(d) (the individual has acknowledged the behavior and obtained counseling to change the behavior or taken other positive steps to alleviate stressors, circumstances, or factors that caused untrustworthy, unreliable or other inappropriate behavior, and such behavior is unlikely to recur). I find the traffic offenses mitigated by Applicant’s admission and the passage of more than five years. I accept Applicant’s explanation that he realizes striking his former girlfriend was inexcusable. Applicant’s choice to use marijuana again in 2004 after he stated his intention in 1997 not to use the drug again is extenuated by the brief nature of his use in 2004 and the passage of six years since Applicant’s most recent use. Applicant’s credible explanations for his misconduct between April 2004 and September 2005 support a finding in Applicant’s favor under the personal conduct guideline.

WHOLE PERSON CONCEPT

I have examined the evidence under the disqualifying and mitigating conditions of the two guidelines. I have found against Applicant under the financial considerations guideline and for him under the personal conduct guideline. I have also weighed the circumstances within the context of nine variables known as the whole-person concept. In evaluating the relevance of an individual's conduct, the administrative judge should consider the following factors:

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 the participation was 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 is 45 years old. His background includes an honorable discharge from the Navy in 2000. Applicant began working for his employer as a technician and became a platform manager of the waterfront in February 2011.

While Applicant stated his financial problems surfaced while he was on temporary duty in 2010, the record reflects Appellant began to have financial problems in 2004 when his first account became delinquent. Because Applicant’s first wife left him five years before his delinquent debts started to accumulate, it is unreasonable for him to blame her for his financial problems. Rather, his financial difficulties occurred because of his poor choices in managing the money he earned from his uninterrupted employment. His financial mismanagement of 15 accounts led to the Chapter 13 petition he filed in May 2008, which he converted to a Chapter 7 before he received a discharge in January 2009. More than two years have passed since his discharge, but he has taken no documented action to pay down the student loan debt. Alternatively, he has not tried to place the loans in forbearance, to provide himself additional time to decide how he wants to resolve the debt. In sum, Applicant’s successful Chapter 7 discharge in January 2009 is insufficient to find in his favor under the financial considerations guideline.

The personal conduct allegations have been mitigated by Applicant’s credible explanations coupled with the passage of five years since the last adverse incident.

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 through 1.c: For Applicant Subparagraphs 1.dthrough 1.f: Against Applicant

Paragraph 2 (Guideline E): FOR APPLICANT

Subparagraphs 2.a through 2.d: For Applicant

CONCLUSION

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

Paul J. Mason Administrative Judge