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ISCR Case 09-03164.h1 — CASE

ISCR Case 09-03164.h1denied

Case Headnote

ISCR Case No. 09-03164.h1

deniedJun 14, 2010· Hon. Richard A. Cefola· hearing

Summary

A 76-year-old Vietnam War veteran was denied a security clearance under Guideline F (Financial Considerations) due to significant and unresolved financial issues. The applicant's history included a Chapter 7 bankruptcy filing in July 2002, with debts discharged in November of that year, stemming from periods of unemployment or underemployment between 1992 and 2002.

Despite this prior bankruptcy, the applicant accumulated new debts, including approximately $5,003 owed to Creditor B, $1,287 to Creditor C, $2,593 to Creditor D, $6,355 to Creditor E, $9,304 to Creditor F, and $1,782 to Creditor G. The applicant admitted these debts and, in an April 23, 2010 writing, indicated an intent to file for bankruptcy again to address them.

The denial was based on the applicant's significant past-due debts that he was unable or unwilling to resolve. The persistence of financial issues after a previous bankruptcy indicated a lack of responsible financial management, and the contemplation of a new bankruptcy filing shortly after the hearing was considered insufficient to mitigate concerns about reliability and trustworthiness.

Why the Applicant Was Denied

The applicant has significant past due debts that he is unable or unwilling to resolve.
The applicant's financial issues persisted after a previous bankruptcy, indicating a lack of responsible financial management.
The applicant's contemplation of bankruptcy shortly after the hearing was deemed too little, too late.

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 issuedOct 9, 2009
Answer filedNov 5, 2009
Hearing heldFeb 22, 2010rescheduled due to transportation difficulties
Decision dateJun 14, 2010

Cite For

Financial Irresponsibility Under Guideline F
Impact of Bankruptcy on Security Clearance Eligibility
Whole-person Concept in Evaluating Security Clearance Cases

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, including multiple admitted debts totaling over $26,000, which the applicant intended to include in a future bankruptcy. The judge ruled against the applicant on all allegations, concluding that the applicant had not mitigated the security concerns related to his financial situation.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	The Applicant is a Viet Nam War Veteran, who had difficulty finding employment upon his discharge from the military in 1968. For example, from 1992 until 2002, he was either unemployed or under employed, which caused him to file for the protection of a Chapter 7 Bankruptcy in July of 2002. His debts were discharged in November of that year.	Against Applicant	Bankruptcy Filing	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	The Applicant is indebted to Creditor B in the amount of about $5,003. The Applicant now admits this credit card debt, and by a writing dated April 23, 2010, avers, “I have decided to file Bankruptcy in my case regarding base clearance case #0903164.” $5,003	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	The Applicant is indebted to Creditor C in the amount of about $1,287. The Applicant now admits this debt, and intends to include it in a future Bankruptcy. $1,287	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	The Applicant is indebted to Creditor D in the amount of about $2,593. The Applicant now admits this debt, and intends to include it in a future Bankruptcy. $2,593	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	The Applicant is indebted to Creditor E in the amount of about $6,355. The Applicant now admits this debt, and intends to include it in a future Bankruptcy. $6,355	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	The Applicant is indebted to Creditor F in the amount of about $9,304. The Applicant admits this debt, and intends to include it in a future Bankruptcy. $9,304	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	The Applicant is indebted to Creditor G in the amount of about $1,782. The Applicant admits this debt, and intends to include it in a future Bankruptcy. $1,782	Against Applicant	Unspecified Financial	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: ) ) ) ISCR Case No. 09-03164 SSN: ) ) Applicant for Security Clearance )

For Government: Jeff A. Nagel, Esquire, Department Counsel For Applicant: Pro se

June 14, 2010

______________

STATEMENT OF CASE

______________

CEFOLA, Richard A., Administrative Judge:

The Applicant submitted his Electronic Questionnaires for Investigations Processing (e-QIP) on April 28, 2008. On October 9, 2009, the Defense Office of Hearings and Appeals (DOHA) issued a Statement of Reasons (SOR) detailing the security concerns under Guideline F for the Applicant. 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 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.

The Applicant acknowledged receipt of the SOR on October 27, 2009. He answered the SOR in writing on November 5, 2009, and requested a hearing before an Administrative Judge. DOHA received the request on November 9, 2009, and I received the case assignment on December 7, 2009. DOHA initially issued a notice of hearing on December 7, 2009, for a hearing on January 13, 2010. However, due to transportation difficulties the Applicant was unable to attend; and as a result, it was rescheduled and heard February 22, 2010, at a venue closer to the 76 year old Applicant. The Government offered Exhibits (GXs) 1 through 8, which were received without objection. The Applicant testified on his own behalf, as did his wife of 26 years. DOHA received the transcript of the hearing (TR) on March 8, 2010. I granted the Applicant’s two requests, one at the hearing and the other one subsequent to the hearing, to keep the record open until April 22, 2010, to submit additional matters. On March 22, 2010, April 8, 2010, and April 23, 2010 he submitted Exhibits (AppXs) A, B, and C, respectively, which were received without objection. The record closed on April 23, 2010. Based upon a review of the case file, pleadings, exhibits, and testimony, eligibility for access to classified information is denied.

FINDINGS OF FACT

In his Answer to the SOR, the Applicant admitted the factual allegations in Subparagraphs 1.a., 1.f., and 1.g. of the SOR, without explanations. He denied the factual allegations in Subparagraphs 1.b.~1.e. of the SOR.

Guideline F - Financial Considerations

1.a. The Applicant is a Viet Nam War Veteran, who had difficulty finding employment upon his discharge from the military in 1968. (TR at page 22 line 20 to page 27 line 21.) For example, from 1992 until 2002, he was either unemployed or under employed, which caused him to file for the protection of a Chapter 7 Bankruptcy in July of 2002. (TR at page 41 line 16 to page 42 line 11, and GX 2.) His debts were discharged in November of that year. (Id.)

1.b. The Applicant is indebted to Creditor B in the amount of about $5,003. (GX 8 at page 1.) The Applicant now admits this credit card debt, and by a writing dated April 23, 2010, avers, “I have decided to file Bankruptcy in my case regarding base clearance case #0903164.” (TR at page 42 line 12 to page 43 line 11, and AppX C.)

1.c. The Applicant is indebted to Creditor C in the amount of about $1,287. (GX 5 at page 13.) The Applicant now admits this debt, and intends to include it in a future Bankruptcy. (TR at page 43 line 13 to page 44 line 15, and AppX C.)

1.d. The Applicant is indebted to Creditor D in the amount of about $2,593. (GX 8 at page 2.) The Applicant now admits this debt, and intends to include it in a future Bankruptcy. (TR at page 44 lines 17–24, and AppX C.)

1.e. The Applicant is indebted to Creditor E in the amount of about $6,355. (GX 8 at page 2.) The Applicant now admits this debt, and intends to include it in a future Bankruptcy. (TR at page 44 line 25 to page 45 line 8, and AppX C.) 1.f. The Applicant is indebted to Creditor F in the amount of about $9,304. (GX 8 at page 3.) The Applicant admits this debt, and intends to include it in a future Bankruptcy. (TR at page 45 lines 9–16, at page 46 lines 9–11, and AppX C.)

1.g. The Applicant is indebted to Creditor G in the amount of about $1,782. (GX 8 at page 3.) The Applicant admits this debt, and intends to include it in a future Bankruptcy. (TR at page 45 line 18 to page 46 line 16, and AppX C.)

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 over-arching adjudicative goal is a fair, impartial and commonsense decision. According to Paragraph 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. Paragraph 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 Paragraph E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive Paragraph 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.

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 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 Paragraph 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 Subparagraph 19(a), an “inability or unwillingness to satisfy debts@ is potentially disqualifying. Similarly under Subparagraph 19(c), “a history of not meeting financial obligations@ may raise security concerns. The Applicant has significant past due debts, which he is unable or unwilling to resolve.

I can find no countervailing Mitigation Condition that is applicable. The Mitigating Condition found in Subparagraph 20(b) is applicable where “the conditions that resulted in the financial problem were largely beyond the person’s control (e.g., loss of employment, . . .), and the individual acted responsibly under the circumstances.@ Here, although the Applicant was unemployed or under employed prior to his 2002 Bankruptcy filing, since then he has accumulated additional past due debt. Now, at the 12 hour, two months after his hearing, he is again contemplating Bankruptcy. This is too little, too late.

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. Under Paragraph 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 Administrative Judge should also consider the nine adjudicative process factors listed at AG Paragraph 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.

I considered all of the evidence, including the potentially disqualifying and mitigating conditions surrounding this case. Here, he has the unqualified support of those with whom he works and know him in the community. (AppXs A and B.) He also served his country honorably in the military. However, the record evidence leaves me with questions or 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 his 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

Subparagraph 1.a.~1.g. Against Applicant

CONCLUSION

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

Richard A. Cefola Administrative Judge