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ISCR Case 09-03336.h1 — CASE

ISCR Case 09-03336.h1denied

Case Headnote

ISCR Case No. 09-03336.h1

deniedJun 14, 2010· Hon. John Grattan Metz, Jr.· hearing

Summary

A 47-year-old prospective defense contractor employee was denied a security clearance under Guideline F, Financial Considerations, due to a history of significant financial difficulties. The Statement of Reasons cited 20 delinquent debts totaling over $33,000, including an $8,200 delinquent educational loan. These issues raised disqualifying conditions F.1.a and F.1.c.

While mitigating conditions F.2.a, F.2.b, F.2.c, and F.2.d were considered, they were not sufficient to overcome the concerns. The applicant's financial problems dated back to at least 2005, and she had not established repayment agreements with any creditors, nor did she demonstrate the means to address her outstanding debts.

Ultimately, the denial was based on the finding that the applicant's financial problems were not largely due to circumstances beyond her control, and she failed to present a satisfactory plan for repayment or demonstrate financial stability. Therefore, granting a clearance was deemed inconsistent with national interest.

Why the Applicant Was Denied

The applicant has a history of financial difficulties dating back to at least 2005.
She has not reached repayment agreements with any creditors and lacks the means to address her debts.
The applicant's financial problems are not largely due to circumstances beyond her control.

Conditions Referenced

Disqualifying

F.1.araisedInability or Unwillingness to Satisfy Debts
F.1.craisedA History of Not Meeting Financial Obligations

Mitigating

F.2.arejectedThe Behavior Happened so Long Ago, Was so Infrequent, or Occurred Under Such Circumstances That It Is Unlikely to Recur
F.2.brejectedThe Conditions That Resulted in the Financial Problem Were Largely Beyond the Person’s Control
F.2.crejectedThe 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
F.2.drejectedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts

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 issuedDec 23, 2009
Answer filedFeb 2, 2010
Hearing heldMar 31, 2010
Decision dateJun 14, 2010

Cite For

Denial of Security Clearance Due to Financial Considerations Under Guideline F
Failure to Demonstrate a Satisfactory Plan for Debt Repayment
Impact of Personal Circumstances on Financial Obligations

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 a total of 20 delinquent debts exceeding $33,000, with only one debt admitted by the applicant. The judge ruled against the applicant on all subparagraphs except for one, concluding that the applicant did not mitigate the financial issues and that granting a security clearance was not consistent with the national interest.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a–1.h	8 sub-charges — specific text not stated in this decision (against the applicant).	Against Applicant			—	—	—
1.i	$8,200 delinquent educational loan $8,200	For Applicant	Student Loan Debt	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.j–1.t	11 sub-charges — specific text not stated in this decision (against the applicant).	Against Applicant			—	—	—

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. 09-03336 SSN: ) ) Applicant for Security Clearance )

For Government: Gina L. Marine, Esquire, Department Counsel For Applicant: Pro se

June 14, 2010 ______________

STATEMENT OF CASE

______________

METZ, John Grattan, Jr., Administrative Judge:

On 23 December 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. On 2 February 2010, Applicant answered the SOR, and requested a hearing. DOHA assigned the case to me 7 March 2010, and I convened a hearing 31 March 2010. DOHA received the transcript (Tr.) 6 April 2010.

FINDINGS OF FACT

Applicant denied the SOR allegations, except for SOR 1.n., a $8,200 delinquent educational loan. However, she now believes that she denied the allegations based on incorrect advice she received (Tr. 81-82). Her clearance application (GE 1) and answers to two sets of interrogatories (GE 2, 3) contain her acknowledgments of the debts in the SOR. She is a 47-year-old prospective employee of a defense contractor who requires a clearance to begin work. She has never married, but has an adult daughter (age 28) and a minor daughter (age 12). She has not previously held a clearance, although it appears that she had a background investigation in October 2008.

The SOR alleges, and government exhibits substantiate, 20 delinquent debts attributable to Applicant, totaling over $33,000. Applicant admits one debt totaling nearly $8,200. Of the remaining 18 debts, four are less than $100 each and another eight are less than $500 each.

Applicant paid the SOR 1.l. debt in January 2010 (AE C). Applicant has not entered into repayment plans with any of her other creditors and appears to lack the means of satisfying the bulk of her debts at this time. The education loan at SOR 1.n. has grown to at least $10,000 (AE D), and is for loans she obtained 30 years ago. (Tr. 84). Applicant made a $6 payment on the SOR 1.o. debt in March 2010 (AE E), and was offered the opportunity to discuss a settlement amount, but she was unable to take advantage of the offer. Similarly, in August 2009, the SOR 1.kcreditor offered to settle the account for 50% of the amount due. Also in August 2009, the SOR 1.i. creditor offered to settle the account for 35% of the amount due (GE 3). Applicant has drafted a letter to 10 of her creditors (AE B) to attempt settlement of the delinquent debts, and intends to send them a good-faith payment (AE A). However, she has not stated when she will send the letters, and she has not stated what she considers to be a good-faith payment. Her post-hearing submission (AE H ) contains copies of dated letters to the SOR 1.g., 1.g. and 1.j. creditors. She recites making a token payment to each creditor, but neither the letter nor other documentation substantiates the amount of the payment. She claims without corroboration to have brought her mortgage current (SOR 1.m.). She also claims without corroboration to be disputing or investigating three accounts. One creditor (SOR 1.a.) seeks to reduce the debt to judgment. Applicant intends to pay the SOR 1.p. creditor immediately.

Applicant states that she had no financial problems until July 2005, when she was fired from her job. Although she also states that she did not deserve to be fired, she was denied unemployment compensation by the state unemployment commission and that denial was upheld at her unemployment compensation hearing. She has provided no corroboration of her claim that her termination for cause was unfounded. Applicant claims, again without corroboration, to have been in telephone contact with her creditors when her accounts first became delinquent, to explain her financial circumstances. Since she was fired, Applicant has been unemployed and underemployed, and been unable to keep current on the SOR debts. Nevertheless, she has not provided a convincing reason for her failure to pay the smallest of her delinquent debts. She has made a so-far-unsuccessful effort to establish an information technology consulting firm. Most of the debt to the SOR 1.i. creditor is for start up costs for her company.

Applicant’s work and character references consider her reliable and trustworthy (AE G). However, none of them appears to be aware of her financial problems.

POLICIES

The adjudicative guidelines (AG) 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 common sense consideration of the factors listed in AG ¶ 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 legally sufficient 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.4

ANALYSIS

The Government established a case for disqualification under Guideline F, and Applicant did not mitigate the security concerns. Applicant has a history of financial difficulties dating to at least 2005. Although she has contacted her creditors to inform them of her financial problems, she has not reached repayment agreements with any of them, has been unable to take advantage of substantial discounts offered by two creditors, and currently lacks the means to devise any plan to address her financial problems.

The mitigating factors for financial considerations provide little help to Applicant. Her financial difficulties are both recent and multiple. Strictly speaking, the problems are not largely due to circumstances beyond her control. Her firing for cause was not a circumstance beyond her control, and Applicant has not documented her efforts to find comparable employment. While the economic downturn may have effected the recent job market, there is no evidence that those circumstances were in effect in July 2005.

Even if I concluded that her firing was beyond her control and that she is willing to satisfy her delinquent debts but simply unable to pay any of them now, her response has been largely unsatisfactory. She has not made contact with her creditors to explore resolution of her debts, including not being able to resolve the four debts that are under $100 each. There is no evidence that Applicant has undertaken effective financial counseling. She has not demonstrated that the problem has been brought substantially under control. Except for paying off the SOR 1.l. debt in January 2010 and a $6 payment to the SOR 1.o. creditor, she has not made any payments to her creditors.9 Given that Applicant does not yet have a job that pays enough to cover her current living expenses, the record cannot indicate when, if ever, her financial situation will be settled enough for her to make clear progress on her delinquent debts. I conclude Guideline F against Applicant. Consideration of the whole person factors yields no different result.

FORMAL FINDINGS

Paragraph 1. Guideline F: AGAINST APPLICANT

Subparagraph a–t: Against Applicant (except for SOR 1.i.)

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 adjudicative guidelines (AG) effective within the DoD on 1 September 2006. Record evidence indicates that the debt at SOR 1.i. and 1.s. are the same debt. Accordingly, I find SOR 1.i. for Applicant to avoid unnecessary multiplication of allegations.

The last five pages of AE H are blank, and Applicant did not respond to Department Counsel’s attempts to contact her. Consequently, I cannot determine what, if any, information Applicant intended to present. 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.