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ISCR Case 09-02954.h1 — CASE

ISCR Case 09-02954.h1denied

Case Headnote

ISCR Case No. 09-02954.h1

deniedOct 8, 2009· Hon. John Grattan Metz, Jr.· hearing

Summary

A 52-year-old truck driver for a defense contractor was denied a security clearance under Guideline F (Financial Considerations) due to significant delinquent debts totaling over $21,000. The Statement of Reasons cited several specific issues, including an automobile note exceeding $15,000 that the applicant co-signed for a friend, two separate debts each totaling $365, and a judgment for unpaid rent.

The denial was based on the presence of Disqualifying Conditions F.19(a) and F.19(c). The adjudicator found that the applicant had significant delinquent debt dating back to 2002 without a timely or effective plan for resolution. Furthermore, the applicant did not seek credit counseling or create a budget to manage his financial obligations.

Although some payments were made to creditors after the hearing, these were deemed insufficient to demonstrate a good-faith effort to resolve the debts. Ultimately, the applicant failed to demonstrate responsible financial management, leading to the conclusion that granting a clearance was not consistent with national interest.

Why the Applicant Was Denied

The applicant has significant delinquent debt dating back to 2002 without a timely or effective plan to address it.
The applicant did not seek credit counseling or create a budget to manage his financial obligations.
Belated payments to creditors were deemed insufficient to demonstrate a good-faith effort to resolve debts.

Conditions Referenced

Disqualifying

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

Key Rule Quoted

“The government has a compelling interest in ensuring each applicant possesses the requisite judgement, reliability, and trustworthiness of those who must protect national interests as their own.”
— Department of the Navy v. Egan, 484 U.S. 518 (1988)

Procedural Posture

SOR issuedJun 30, 2009
Answer filedUndated
Hearing heldOct 8, 2009
Decision dateNot specified

Cite For

Denial of Clearance Due to Significant Financial Issues Under Guideline F
Failure to Demonstrate Responsible Financial Management
Insufficient Evidence of Good-faith Efforts to Resolve Debts

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 significant financial concerns under Guideline F, with multiple delinquent debts totaling over $21,000. While one debt was found for the applicant, the majority were ruled against him, leading to the denial of his security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	specific text not stated in this decision	For Applicant	Unspecified Financial	Unknown	—	—	—
1.b	over $15,000 for an automobile note he co-signed for a friend $15,000	Against Applicant	Auto Loan Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	totaling $365 $365	For Applicant	Unspecified Financial	Admitted	—	—	—
1.d	a judgment for unpaid rent	Against Applicant	Judgment Against Applicant	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e–1.i	5 sub-charges — specific text not stated in this decision (against the applicant).	Against Applicant			—	—	—
1.j	totaling $365 $365	For 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. 09-02954 SSN: ) ) Applicant for Security Clearance )

For Government: Eric Borgstrom, Esquire, Department Counsel For Applicant: Pro se

______________

STATEMENT OF CASE

______________

METZ, John Grattan, Jr., Administrative Judge:

On 30 June 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. Applicant provided an undated answer, requesting a hearing. DOHA assigned the case to me 9 September 2009, and I convened a hearing 8 October 2009. DOHA received the transcript (Tr.) 13 October 2009.

FINDINGS OF FACT

Applicant denied the SOR allegations, except for 1.c. and 1.j. He is a 52-year-old truck driver employed by a defense contractor since May 2008. He has not previously held a clearance. The SOR originally alleged, and government exhibits confirmed, 10 delinquent debts totaling nearly $22,000. However, record evidence revealed that debt 1.a. was a duplicate of 1.e. Consequently, I find 1.a. for Applicant, and the resulting debt to be discussed is nine debts totaling over $21,000. Applicant admitted two debts (1.c. and 1.j.) totaling $365—both of which he claimed to be paying. He also claimed, and documents confirmed, he paid debt 1.g. just before receiving the SOR and he paid debt 1.h. just after receiving the SOR. The bulk of the remaining debts he denies because they no longer appear on his credit report. Applicant paid debts 1.i. and 1.j. after the hearing (AE J).

Applicant experienced financial problems as a result of his divorce in 1996. He filed a chapter 13 bankruptcy petition, made the required payments, and received a discharge in 1999. However, his financial problems resumed in 2002, and continue to date.

Applicant was unemployed briefly from January–June 2002. He has been continuously employed since then, although he did have to work reduced hours May–September 2008 when his father had health issues. Other than these two circumstances, Applicant offers no explanation for his inability to stay current on his finances.

The largest debt (1.b., over $15,000) is for an automobile note he co-signed for a friend knowing that there was a substantial likelihood she would default on the note. The next most significant debt (1.d.) is a judgment for unpaid rent. Applicant states his intent to pay his debts, but he was not doing so as of the date of the hearing. AE J reflects payments to two other creditors just before, and just after, the hearing, but Applicant has not correlated the payments to any of the SOR debts and the account numbers on the checks do not match the account numbers of any of the SOR debts.

Applicant provided no work or character references. He does not have a budget and has not received financial counseling.

POLICIES

The Revised Adjudicative Guidelines (RAG) list factors to be considered in evaluating an Applicant’s suitability for access to classified information. Administrative judges must assess both disqualifying and mitigating conditions under each issue fairly raised by the facts and circumstances presented. Each decision must also reflect a fair and impartial commonsense consideration of the factors listed in RAG ¶ 2(a). The presence or absence of a disqualifying or mitigating condition is not determinative for or against applicant. However, specific adjudicative guidelines should be followed where a case can be measured against them, as they represent policy guidance governing the grant or denial of access to classified information. Considering the SOR allegations and the evidence as a whole, the relevant, applicable, adjudicative guideline is Guideline F (Financial Considerations).

Security clearance decisions resolve whether it is clearly consistent with the national interest to grant or continue an applicant’s security clearance. The government must prove, by something less than a preponderance of the evidence, controverted facts alleged in the SOR. If it does so, it establishes a prima facie case against access to classified information. Applicant must then refute, extenuate, or mitigate the government’s case. Because no one has a right to a security clearance, the applicant bears a heavy burden of persuasion.

Persons with access to classified information enter into a fiduciary relationship with the government based on trust and confidence. Therefore, the government has a compelling interest in ensuring each applicant possesses the requisite judgement, reliability, and trustworthiness of those who must protect national interests as their own. The “clearly consistent with the national interest” standard compels resolution of any reasonable doubt about an applicant’s suitability for access in favor of the government.3

ANALYSIS

The government established a case for disqualification under Guideline F, and Applicant did not mitigate the security concerns. Applicant has significant delinquent debt dating back to 2002 for which he has no ameliorating explanation. Applicant’s brief period of unemployment may have contributed to his financial difficulties, as may have his father’s health issues. However, he did not act to get his finances in order in a timely and effective manner.

Applicant satisfies none of the mitigating factors for financial concerns. His financial difficulties are both recent and multiple. The debts do not appear to be due to circumstances beyond his control, and he has not acted responsibly in addressing his debts. He has not sought credit counseling, made a budget, or devised a plan to address his debts, so I cannot conclude he has brought the problem under control. His belated and sporadic payments to creditors do not constitute a good-faith effort to satisfy his debts. DOHA is not the collection agent of last resort. Outwaiting your creditors until your delinquent debts fall off a credit report is not a repayment plan. Nor does it relieve an applicant’s responsibility for the debt. Applicants are expected to honor their financial commitments voluntarily entered into. I conclude Guideline F against Applicant.

FORMAL FINDINGS

Paragraph 1. Guideline F: AGAINST APPLICANT

Subparagraph a: For Applicant Subparagraph b-j: 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 a security clearance for Applicant. Clearance denied.

JOHN GRATTAN METZ, JR Administrative Judge

FOOTNOTES

DOHA acted under Executive Order 10865, Safeguarding Classified Information within Industry (February 20, 1990), as amended; Department of Defense (DoD)Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive), and the revised adjudicative guidelines (RAG) effective within the DoD on September 1, 2006. However, Applicant’s Exhibit (AE) J reflects that he paid the debt at 1.jwith a single payment after the hearing. See, Department of the Navy v. Egan, 484 U.S. 518 (1988).

¶ 19.(a) inability or unwillingness to satisfy debts; (c) a history of not meeting financial obligations.

¶ 20.(a) the behavior happened so long ago, was so infrequent, or occurred under such circumstances that it is unlikely to recur .

¶ 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.

¶ 20.(c) the person has received or is receiving counseling for the problem and there are clear indications that the problem is being resolved or is under control. ¶ 20.(d) the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.