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ISCR Case 08-11870.h1 — CASE

ISCR Case 08-11870.h1denied

Case Headnote

ISCR Case No. 08-11870.h1

deniedJan 13, 2010· Hon. Mary E. Henry· hearing

Summary

A 25-year-old security analyst for a Department of Defense contractor was denied a security clearance due to financial considerations under Guideline F. The applicant faced concerns stemming from unpaid debts and a history of not meeting financial obligations.

The applicant acknowledged multiple debts, including two credit card accounts used to pay her boyfriend’s legal bills, which he failed to repay. These accounts were subsequently sold to collection agencies. Additionally, her car was voluntarily repossessed after mechanical issues arose and she could not afford repairs or payments, with the car company treating it as a voluntary repossession. Her financial problems were exacerbated by an eight-month period of unemployment in 2008, during which she did not receive unemployment benefits, and her boyfriend covered living expenses but not credit card payments.

Despite paying current monthly expenses, the applicant lives paycheck to paycheck and has not paid any of her past debts. While she plans to use future childcare assistance to repay debts and is working with a friend on budgeting, she has not received financial counseling, developed, or complied with a debt payment plan. The judge found that she had not demonstrated sufficient financial stability or a concrete plan to resolve her debts, leading to the denial.

Why the Applicant Was Denied

The applicant admitted to all allegations in the SOR, including a history of unpaid debts.
The applicant has not shown a track record for payment of her past debts, despite being able to pay current expenses.
The applicant did not receive financial counseling or develop a payment plan for her debts.

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(b)appliedConditions That Resulted in the Financial Problem Were Largely Beyond the Person's ControlThe applicant's financial problems arose during her relationship with her daughter's father and her unemployment.

Key Rule Quoted

“Any doubt concerning personnel being considered for access to classified information will be resolved in favor of national security.”

Procedural Posture

SOR issuedAug 21, 2009
Answer filedSep 1, 2009
Hearing heldNov 3, 2009
Decision dateJan 13, 2010

Cite For

Denial Based on Financial Considerations Under Guideline F
Impact of Unresolved Debts on Security Clearance Eligibility
Mitigating Conditions Related to Financial Difficulties and Personal Circumstances

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 multiple financial concerns under Guideline F, including the applicant's inability to satisfy debts and a history of not meeting financial obligations. Despite some circumstances being beyond her control, the applicant failed to demonstrate sufficient mitigation, leading to a denial of her security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant opened two credit card accounts with one bank, which she used to pay her boyfriend’s legal bills. He agreed to pay these charges, but did not.	Against Applicant	Credit Card Debt	Admitted	—	—	—
1.b	Applicant acknowledged all the debts listed in the SOR. She admitted to two charge accounts and one account with the same bank. The bank sold these accounts to collection agencies.	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.c	Applicant’s car broke down in late 2007 or 2008. She did not have the money to pay for the car repairs and for her monthly car payment. She learned that a class action lawsuit with the car company was proceeding through the courts because of mechanical problems like hers. She asked the car company to repair the car, but it declined, indicating it would repay her if the lawsuit settled and payments were required. Based on advice from her father, she voluntarily returned the car to the car company. The car company treated this as a voluntary repossession.	Against Applicant	Auto Loan Debt	Admitted	—	—	—
1.d	Applicant has not received financial counseling, nor has she developed a payment plan which would resolve her delinquent debts. While her current monthly expenses are paid, she lacks the financial ability to pay her past debts.	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.e	Applicant lives paycheck to paycheck. She pays her current monthly expenses. Since she does not have any additional funds each month, she has not paid any of the debts listed in the SOR.	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.f	Applicant’s financial problems arose during her relationship with her daughter’s father, who failed to repay Applicant for debts incurred on his behalf, and when she was unemployed for eight months in 2008. Her debts arose from circumstances beyond her control. She lacked the financial resources to pay her debts when she was unemployed, and still lacks income to pay her past due debts. Thus, her debts remained unresolved.	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.g	Applicant has not challenged the validity of the additional account or otherwise provided information which reflects that the account is not hers.	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.h	Applicant did not receive unemployment benefits. During her unemployment, her boyfriend paid her normal living expenses, but did not make any payments on her credit accounts.	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.i	Applicant has not shown a track record for payment of her past debts.	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.j	Applicant applied for a government program to help pay her child care costs. She expects to receive financial assistance early in 2010, which would eliminate her monthly child care costs. She plans to use this extra income to repay her debts.	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.k	Applicant is working with a friend on her budget, looking for ways to cut small expenses. Since ending her relationship with her daughter’s father, her monthly expenses have stabilized.	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.l	Applicant has not developed and complied with a debt payment plan.	Against Applicant	Unspecified Financial	Admitted	—	—	—

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. 08-11870 SSN: ) ) Applicant for Security Clearance )

For Government: Caroline H. Jeffreys, Esquire, Department Counsel For Applicant: Pro Se

January 13, 2010 ______________

STATEMENT OF CASE

______________

HENRY, Mary E., Administrative Judge:

Based upon a review of the case file, pleadings, exhibits, and testimony, I conclude that Applicant’s eligibility for access to classified information is denied.

Applicant submitted her Security Clearance Application (SF 86) on August 28, 2008. The Defense Office of Hearings and Appeals (DOHA) issued Applicant a Statement of Reasons (SOR) detailing security concerns under Guideline F on August 21, 2009. 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 acknowledged receipt of the SOR on August 26, 2009. She answered the SOR in writing on September 1, 2009, and requested a hearing before an administrative judge. DOHA received the request on September 8, 2009. Department Counsel was prepared to proceed on September 18, 2009, and I received the case assignment on October 8, 2009. DOHA issued a notice of hearing on October 19, 2009, and I convened the hearing as scheduled on November 3, 2009. The government offered five exhibits (GE) 1 through 5, which were received and admitted into evidence without objection. Applicant testified on her own behalf. She did not submit any exhibits. The record closed on November 3, 2009. DOHA received the transcript of the hearing (Tr.) on November 12, 2009.

Procedural and Evidentiary Rulings

Notice

At the hearing, Applicant indicated she received the hearing notice less than 15 days before the hearing. (Tr. 9.) I advised Applicant of her right under ¶ E3.1.8 of the Directive to receive the hearing notice 15 days before the hearing. Applicant affirmatively waived her right to 15 days notice. (Tr. 9.)

FINDINGS OF FACT

In her Answer to the SOR, Applicant admitted all the factual allegations in the SOR. Her admissions are included as part of my findings of fact discussed below.

Applicant, who is 25 years old, works as a security analyst for a Department of Defense contractor. She began her employment in August 2008.

Applicant graduated from high school in 2002. She plans to start college through online classes in January 2010. Approximately four years ago, Applicant began a relationship with a man with whom she lived for several years. They never married, but she has a two-year-old daughter from this relationship. Applicant ended the relationship in January 2009. Applicant now lives in an apartment with two co-workers and her daughter.2

In 2006, Applicant opened two credit card accounts with one bank, which she used to pay her boyfriend’s legal bills. He agreed to pay these charges, but did not. She also had a bank account at this same banking institution. She opened two other store accounts and had a car loan. Applicant worked as a sales representative until January 2008. From January 2008 until August 2008, she was unemployed. She did not receive unemployment benefits. During her unemployment, her boyfriend paid her normal living expenses, but did not make any payments on her credit accounts. Applicant’s car broke down in late 2007 or 2008. She did not have the money to pay for the car repairs and for her monthly car payment. She learned that a class action lawsuit with the car company was proceeding through the courts because of mechanical problems like hers. She asked the car company to repair the car, but it declined, indicating it would repay her if the lawsuit settled and payments were required. Based on advice from her father, she voluntary returned the car to the car company. The car company treated this as a voluntary repossession.4

Applicant’s monthly net pay is $1,669. She does not receive any child support from her daughter’s father. Her monthly expenses include $433 for rent, $400 for food, $200 for utilities, $75 for cell phone, $100 for transportation, and $100 for entertainment. At the time of the hearing, Applicant’s former boyfriend provided child care for their daughter. She paid him $200 a month for child care and she purchased food for her daughter while in his care. Applicant decided to end this arrangement. She enrolled her daughter in a child care program, which began a week after the hearing. This program included three meals a day and cost $163 a week, for a total monthly cost of $652. She plans to pay this expense with the $200 child care expense she paid her former boyfriend and half of her monthly food expenses. Applicant lives paycheck to paycheck.

Applicant pays her current monthly expenses. Since she does not have any additional funds each month, she has not paid any of the debts listed in the SOR. In May 2009, she applied for a government program to help pay her child care costs. She expects to receive financial assistance early in 2010, which would eliminate her monthly child care costs. She plans to use this extra income to repay her debts. She has not consulted with a financial counseling agency. She is, however, working with a friend on her budget, looking for ways to cut small expenses. Since ending her relationship with her daughter’s father, her monthly expenses have stabilized.7

Applicant acknowledged all the debts listed in the SOR. She admitted to two charge accounts and one account with the same bank. The bank sold these accounts to collection agencies. Through the selling process, the account numbers changed and one additional account with this bank appeared on the credit reports. Applicant has not challenged the validity of the additional account or otherwise provided information which reflects that the account is not hers.

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 used 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 commonsense 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.

Under Directive ¶ E3.1.14, the government must present evidence to establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, an applicant is responsible for presenting “witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by applicant or proven by Department Counsel. . . .” An applicant has the ultimate burden of persuasion as to obtaining a favorable security decision.

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 an 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 EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive information).

ANALYSIS

Guideline F, Financial Considerations

The security concern relating to the guideline for Financial Considerations is set out 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.

The guideline notes several conditions that could raise security concerns. Under AG ¶ 19(a), an Ainability or unwillingness to satisfy debts@ is potentially disqualifying. Similarly under AG ¶ 19(c), Aa history of not meeting financial obligations@ may raise security concerns. Applicant accumulated some delinquent debt and has been unable to pay these obligations for a period of time. The evidence is sufficient to raise these potentially disqualifying conditions.

The guideline also includes examples of conditions that could mitigate security concerns arising from financial difficulties. Under AG ¶ 20(a), mitigation may occur when Athe 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.@ Applicant's financial worries arose about two years ago and are ongoing. This mitigating condition is not applicable.

Under AG ¶ 20(b), it may be mitigating where Athe 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.@ Applicant’s financial problems arose during her relationship with her daughter’s father, who failed to repay Applicant for debts incurred on his behalf, and when she was unemployed for eight months in 2008. Her debts arose from circumstances beyond her control. She lacked the financial resources to pay her debts when she was unemployed, and still lacks income to pay her past due debts. Thus, her debts remained unresolved. I find this mitigating condition has some applicability.

Evidence that Athe 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@ is potentially mitigating under AG ¶ 20(c). Similarly, AG ¶ 20(d) applies where the evidence shows Athe individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.@ Applicant has not received financial counseling, nor has she developed a payment plan which would resolve her delinquent debts. While her current monthly expenses are paid, she lacks the financial ability to pay her past debts. These mitigating conditions are not applicable. AG ¶¶ 20(e) and 20(f) mitigating conditions are not applicable in this case.

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 an applicant’s conduct and all relevant 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.

Under AG ¶ 2(c), 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. The decision to grant or deny a security clearance requires a careful weighing of all relevant factors, both favorable and unfavorable. In so doing, an administrative judge must review all the evidence of record, not a single item in isolation, to determine if a security concern is established and then whether it is mitigated. A determination of an applicant’s eligibility for a security clearance should not be made as punishment for specific past conduct, but on a reasonable and careful evaluation of all the evidence of record to decide if a nexus exists between established facts and a legitimate security concern.

The evidence in support of denying a security clearance to applicant under the whole person concept is more substantial than the evidence in support of a grant. In reaching this conclusion, I considered the potentially disqualifying and mitigating conditions in light of all the facts and circumstances surrounding this case. Applicant’s financial problems began when she developed a relationship with her daughter’s father. She obtained credit cards to help pay his legal fees, believing that he would pay the debt. In 2008, she did not work for eight months. Although her boyfriend paid living expenses, she did not have any income to pay her bills, including her debts. She returned to work in August 2008 and ended the relationship with her daughter’s father in January 2009. For the last year, she has been able to pay her current expenses, but lacks sufficient income to pay her past debts, even the small debts. A friend is helping her evaluate her monthly expenses and look for ways to decrease her spending. She applied for a government program to help with child care expenses, and if accepted, will use this money to pay her past debts. At this time, Applicant has not shown a track record for payment of her past debts. Under the Directive, a sponsored Applicant can apply for her security clearance one year from the date of this decision. If she can show that she has developed and complied with a debt payment plan, she would be a good candidate for being granted a security clearance, assuming no other issues of a security concern arise.

Overall, the record evidence leaves me with questions and doubts as to Applicant’s eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant has not mitigated the security concerns arising from her finances under Guideline F.

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: Against Applicant Subparagraph 1.b: Against Applicant Subparagraph 1.c: Against Applicant Subparagraph 1.d: Against Applicant Subparagraph 1.e: Against Applicant Subparagraph 1.f: Against Applicant Subparagraph 1.g: Against Applicant Subparagraph 1.h: Against Applicant Subparagraph 1.i: Against Applicant Subparagraph 1.j: Against Applicant Subparagraph 1.k: Against Applicant Subparagraph 1.l: Against 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.

MARY E. HENRY Administrative Judge

FOOTNOTES

GE 1; Tr. 16. GE 1; Tr. 15-16, 20. Tr. 16-29. GE 3; Tr. 16-29. Applicant is paid weekly. Eight months of the year, she receives four paychecks. Four months of the year, she receives five paychecks. I have calculated her monthly income on the basis of four weeks a month. See Tr. 29. GE 3; Tr. 31-35. GE 3; Tr. 27, 35-39. GE 4; GE 5; Tr. 20-27.