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ISCR Case 09-06224.h1 — CASE

ISCR Case 09-06224.h1denied

Case Headnote

ISCR Case No. 09-06224.h1

deniedSep 28, 2010· Hon. Carol G. Ricciardello· hearing

Summary

A 44-year-old former Marine Corps officer was denied a security clearance under Guideline F, Financial Considerations, due to multiple unresolved delinquent debts and tax liens. The Statement of Reasons detailed several specific financial obligations, including a credit card debt of $10,182, a foreclosed debt of $14,613 that was written off, and $10,291 owed for 2008 federal income taxes.

Additional financial concerns included an $11,800 federal tax lien, a $3,461 debt incurred in 1998 and delinquent by 2001, and another credit card debt of $17,879 from approximately 1995. The judge identified disqualifying conditions F.19(a) and F.19(c) related to these issues.

Despite the applicant's claims of financial hardship due to job loss and natural disasters, the judge found these insufficient to mitigate the concerns. The denial was based on the applicant having multiple delinquent debts totaling over $43,000 that remained unpaid, a failure to demonstrate responsible action in addressing these obligations, and the insufficient mitigation of his financial difficulties by his hardship claims. Mitigating conditions F.20(b) and F.20(d) were considered but not applied.

Why the Applicant Was Denied

Applicant has multiple delinquent debts totaling over $43,000 that remain unpaid.
Applicant failed to demonstrate responsible action in addressing his financial obligations.
The applicant's financial difficulties were not sufficiently mitigated by his claims of hardship.

Conditions Referenced

Disqualifying

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

Mitigating

F.20(b)rejectedConditions That Resulted in the Financial Problem Were Largely Beyond the Person's ControlApplicant did not act responsibly under the circumstances.
F.20(d)rejectedGood-faith Effort to Repay Overdue CreditorsApplicant continues to owe all debts alleged in the SOR.

Key Rule Quoted

“The protection of the national security is the paramount consideration.”

Procedural Posture

SOR issuedApr 28, 2010
Answer filedJun 16, 2010
Hearing heldAug 31, 2010
Decision dateSep 28, 2010

Cite For

Denial of Security Clearance Due to Unresolved Financial Obligations
Insufficient Evidence of Responsible Action in Mitigating Financial Concerns
Impact of Financial History 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 F · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The judge found against the applicant on several financial allegations, indicating a significant history of unpaid debts and unresolved financial obligations. Although some debts were acknowledged as being in the process of resolution, the applicant failed to demonstrate sufficient progress or responsibility in managing his financial situation, leading to the denial of his security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a–1.b	2 sub-charges — specific text not stated in this decision (for the applicant).	For Applicant			—	—	—
1.c	The debt in SOR ¶ 1.c ($10,182) is a credit card debt. $10,182	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Other
1.d	The debt in SOR ¶ 1.d ($14,613) was foreclosed and later written-off by the company as a bad debt. $14,613	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	The debt in SOR ¶ 1.e ($10,291) is for taxes Applicant owed for his 2008 federal income taxes. $10,291	For Applicant	Tax Unpaid	Admitted	—	(g) arrangements made with the tax authority; in compliance	Documented Payment Plan with IRS
1.f	The debt in SOR ¶ 1.f ($11,800) is a federal tax lien. $11,800	Against Applicant	Tax Unpaid	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	The debt in SOR ¶ 1.g ($3,461) was incurred in 1998 and became delinquent in 2000 or 2001. $3,461	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	The debt in SOR ¶ 1.h ($17,879) is a credit card debt incurred in approximately 1995. $17,879	Against Applicant	Credit Card Debt	Unknown	(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. 09-06224 ) ) Applicant for Security Clearance )

For Government: Ray T. Blank, Esq., Department Counsel For Applicant: Pro se

September 28, 2010 ______________

STATEMENT OF CASE

______________

RICCIARDELLO, Carol G., Administrative Judge:

Applicant failed to mitigate the Government’s security concerns under Guideline F, Financial Considerations. Applicant’s eligibility for a security clearance is denied.

On April 28, 2010, the Defense Office of Hearings and Appeals (DOHA) issued Applicant a Statement of Reasons (SOR) detailing the security concerns under Guideline F. 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) effective within the Department of Defense for SORs issued after September 1, 2006.

Applicant answered the SOR in writing on June 16, 2010, and requested a hearing before an administrative judge. The case was assigned to me on July 14, 2010. DOHA issued a Notice of Hearing on July 15, 2010. I convened the hearing as scheduled on August 31, 2010. The Government offered Exhibits (GE) 1 through 9. Applicant did not object and they were admitted. Applicant and two witnesses testified on his behalf. Applicant offered Exhibits (AE) A through H, which were admitted without objections. The record remained open until September 14, 2010, to allow Applicant an opportunity to provide additional documents, which he did. The document was marked as AE I. Department Counsel had no objection and it was admitted.1 DOHA received the hearing transcript (Tr.) on September 8, 2010.

FINDINGS OF FACT

Applicant admitted the SOR allegations ¶¶ 1.a through 1.h, with explanations. After a thorough and careful review of the pleadings, exhibits, and testimony, I make the following findings of fact.

Applicant is 44 years old. He enlisted in the Marine Corps in 1986 and served until 1989, when he was honorably discharged. He is college graduate. He was commissioned a Marine Corps Officer and served on active duty from 1989 to 1993. He remained in the Marine Corps Reserve. He was recalled in December 2001 and remained on active duty until March 2006. He has since retired from the Marine Corps.2

Applicant married in 1993 and divorced in 1999. He has two children, ages 16 and 14 years old from the marriage. He remarried in 2001 and divorced in 2006. He married again in 2008. Applicant pays $1,400 in monthly child support.3

On July 14, 2004, the DON CAF issued to Applicant a Letter of Intent to deny his security clearance raising security concerns under Personal Conduct, Criminal Conduct, and Financial Considerations Guidelines. Applicant answered the LOI on October 6, 2004. In his answer he acknowledged the debt that is alleged in SOR ¶ 1.c.4 He stated:

I was contacted by them and attempted to work out a payment plan. Although I tried to make it clear that I have every intention of paying this off, they were rude and unwilling to work with me. Currently I am paying off other debts and have informed them that I will pay them as soon as I am able. DFAS currently owes me over $14,000, which I am expecting to receive soon. It is my intention to make an offer and compromise in order to settle this debt.5

On October 22, 2004, Applicant was granted a Conditional Security Clearance. The determination letter stated: We have reviewed reference (c) and have granted you a Top Secret security clearance. Although this matter has been settled in your favor, you are cautioned that future receipt of derogatory information or your failure to comply fully with the following conditions will be cause for immediate reconsideration. CONDITIONS: You must follow through with your intent to resolve your delinquent debt with [creditor in SOR ¶ 1.c], and provide documentation to your security manager as proof of your progress.6

The debt in SOR ¶ 1.c ($10,182) is a credit card debt. Applicant incurred the debt from 1995 to 1999. It was charged off in approximately 2002. Applicant explained the credit card was used to take trips and buy gifts for his children. When he and his wife divorced in 1999, he decided he was not going to pay it because he believed half of the debt belonged to his wife. He stated that he made some payments on the debt, but not enough to keep it current. He stopped making any payments in 2005. In 2006, he hired a debt remedy company to help him resolve three of his debts. They were to negotiate and settle the debts. He made monthly payments to the company for a period of time. He later learned that the company was not reputable and they had not settled any of his debts. His last payment to the debt remedy company was in January 2007. He wrote them a letter in May 2007 terminating his relationship with the company and demanding to be reimbursed. He did not recall the exact amount, but estimated the company returned approximately $1,100 to $1,200. He did not use this money to pay any of the amount owed for the debt in SOR ¶ 1.c, but rather used it to pay other debts. Applicant has not paid this debt. He provided a payment plan with options for how he intends to repay this debt in the future, but has not yet executed it.7

Applicant incurred the debt in SOR ¶ 1.g ($3,461) in 1998. It became delinquent sometime in 2000 or 2001. It was charged off in March 2006. He did not recall when he made his last payment on the debt. He doubted he has made any payments in the last five years. He explained that he did not have the money to pay the debt. This debt was included in the debt remedy plan that he terminated because the company was not resolving his debts. He has not paid the debt. He provided a payment plan with options for how he intends to repay this debt in the future, but has not yet executed it.8

The debt in SOR ¶ 1.h ($17,879) is a credit card debt incurred in approximately 1995. He used the credit card for travel and gifts for his children. He believes a judgment has been entered against him on this account. This account was included in the debt remedy plan that was later terminated. He believes he made some payments on the account over the years, but does not remember if he made the minimum payment required. He believes he last made a payment on the debt in August 2006. When he terminated the debt remedy plan, he did not take any action to resolve this debt. It remains unpaid. He provided a payment plan with options for how he intends to repay this debt in the future, but has not yet executed it.9

In December 2001, Applicant incurred a delinquent state tax lien in the amount of $852. He later paid the lien and it was released.10

In May 2002, Applicant incurred a delinquent state tax lien in the amount of $841. He later paid the lien and it was released.11

In August 2004, Applicant incurred a delinquent state tax lien in the amount of $5,762. He later paid the lien and it was released.12

In February 2005, Applicant incurred a delinquent state tax lien in the amount of $868. He later paid the lien and it was released.13

In May 2007, Applicant was notified of a delinquent federal tax lien in the amount of $11,800 (SOR ¶ 1.f). He stated at his hearing he was surprised to receive the notice. In his interview with an Office of Personnel Management (OPM) investigator in May 2009, he explained that he was not able to pay his taxes in 1999 and 2000 because he went from being employed as a financial planner to being recalled to active duty in 2001. His explanation was that his income decreased and he was not able to pay his taxes for those two years. At the time of his interview he stated he was working to repay this debt, but had not yet paid it. At the hearing, Applicant stated he is trying to determine why he owes this debt. He believes it is from a joint tax return for tax year 2004. This differs from his earlier statement to the OPM investigator. He believes his ex-wife filed an “innocent spouse claim.” He explained his accountant is trying to advise him and they are retrieving documents to analyze the claim. He stated that the Internal Revenue Service’s (IRS) position is that it is a civil matter. He stated he is working with the IRS to negotiate a payment plan. He has a proposed payment plan and he intends to sell a timeshare unit he owns to satisfy the tax debt. He has not yet attempted to sell the unit.14 Applicant explained that in 2007 he did not attempt to pay the tax debt at that time because he had other tax liens to satisfy. He admitted that over the years he had tax liens imposed because he did not pay his taxes when the returns were filed. He was aware he owed the taxes, and in some years he did not pay them until a lien was imposed. Some years his tax refund would be used by the IRS to automatically offset any taxes owed. He admitted that for the years 2006, 2007, 2008, and 2009, he did not pay the taxes he owed beyond what was withheld from his income.15 His explanation was that he did not have the money to pay the taxes. He attributed this to a decrease in income from when he was recalled to active duty in 2001 through 2006. He also explained that when he was released from active duty he began working for a company and was laid off in September 2006 and did not have the money to pay the debts. He explained that he is working with the IRS and his accountant to resolve his tax issues.16

The debt in SOR ¶ 1.e ($10,291) is for taxes Applicant owed for his 2008 federal income taxes. Applicant did not have the money to pay the taxes. The IRS contacted him about the debt and advised him his wife’s wages would be garnished. His wife withdrew money from her pension plan ($56,936) and did not withhold the required taxes from it or pay the required penalty. She used the money to pay off her car, pay credit card debts, and home improvements. Applicant filed an amended return in June 2010. Applicant and his wife’s combined income for 2008 was $184,745. Applicant testified that the taxes owed have been recalculated to $7,913. Applicant has made payments of $3,555 on March 22, 2010, and $1,000 on May 7, 2010. He has an installment agreement with the IRS to pay $300 a month beginning in July 2010 until the balance is paid. He provided documents to support that he made a payment in June, July, and August, 2010, each for $300.17

Applicant attributes his financial problems to being recalled to active duty in 2001 and a reduction in his income. He was a victim in Hurricane Katrina in August 2005, which had a devastating impact on him financially. He admitted that prior to Hurricane Katrina he was experiencing financial problems. He incurred about $120,000 in personal property losses and his insurance only covered approximately $30,000. He and his wife divorced in May 2006, and he paid $5,000 in attorney’s fees. Applicant and his current wife choose to maintain two residences in different states. He explained he could not find a job where she lives. He also incurred medical expenses of $1,121. He used credit cards when he was unemployed to pay for his day-to-day living expenses.18 Applicant purchased a timeshare property in approximately 1999 or 2000. He paid for it in its entirety and received it in the divorce settlement. He believed it cost about $13,500. After leaving active duty in March 2006, he worked for a civilian company. In September 2006, he contracted to buy another timeshare. He paid $300 for the closing fee to purchase this property for $13,500. Shortly after he signed the contract, he lost his job. He was unaware that the company that he worked for was having financial difficulties. The balance owed for the timeshare property was due in a year. When the note became due, Applicant attempted to refinance the property and the company refused. The property (SOR ¶ 1.d) was foreclosed and later written-off by the company in the amount of $14,613, as a bad debt. The property was later sold. Applicant was issued an IRS Substitute Form 1099-A for $13,500. Applicant testified he filed the form with his 2008 taxes. When asked, Applicant admitted that after he lost his property in Hurricane Katrina in 2005, in September 2006 he contracted to buy the timeshare. He was aware at the time that he had delinquent debts.19

After Applicant lost his job, he was hired by another company, but his salary was half of what he had previously earned. He was laid off from this job in January 2008, when it was discovered one of the partners in the company was embezzling money from it. He was unemployed until May 2008, waiting to find a job commensurate with his earning potential.20

Applicant stated in his answer:

The bottom-line, is that while I still owe money, I have been and continue to make significant strides to pay it off. Additionally, the ability for me to continue to pay my bills on time and ahead of schedule cannot be ignored. I ask that you take into consideration the good debt that I have been paying as you weigh the bad debt that I am facing. The purpose of this explanation is not to provide an excuse, but an explanation as to why I have not been able to follow through with the conditions of my October 2004 security clearance direction. It is not that I am unwilling to satisfy this debt, it [is] that I have been unable to completely eliminate it.21

Applicant stated that since 2004, he paid approximately $27,000 for other debt he owed and that is why he did not have the money to pay the debts in the SOR. He provided a budget that lists nine credit cards that he and his wife have that they are currently making payments on. The total amount of the debt is approximately $11,044. He also has a $14,817 credit union overdraft loan that he owes and he is making payments on. They are also repaying $4,500 to Applicant’s wife’s parents for a personal loan they obtained so they could pay some of their 2008 tax debt. They are also making installment payments toward a $1,350 debt for car repairs. It is estimated that he has approximately a total of $30,000 of debt that he is currently making some type of payments on. He estimated that he has $1,500 in savings and checking accounts and about $2,000 in cash. He estimated his wife had about $7,000 in liquid assets.22

Applicant stated he received financial counseling from a military service program and through the debt remedy company. He stated he sought counseling through the IRS case agent and taxpayer advocate.23

Applicant provided character letters, awards, performance evaluations, medal citations, and letters of endorsement. I have considered all of this information.24

Applicant’s former employer and friend testified on his behalf and confirmed that he unexpectedly lost his job in September 2006. She also confirmed he was laid off from his job in January 2008 and the circumstances surrounding it. She considered Applicant an outstanding individual and a good hire because he had good sales experience and she considered him the epitome of a good Marine. She trusted him implicitly and asked him to mentor her nephew who is a young adult.25

Applicant’s former commander testified on his behalf. He has known Applicant since 1994. While a commander, he had 600 Marines who served under him in combat. Applicant was his operations officer, and he valued Applicant’s courage under dangerous circumstances. He believes Applicant is as “solid as a rock.” Because of his performance the commander requested he serve with him again in a special program. He performed superbly. He believes Applicant to be an outstanding individual. Applicant lived with the commander and his family for a period of time. The commander trusted him with his small children. He never had a reason to question him on any security-related matter.26

POLICIES

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines. 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 and has the ultimate burden of persuasion to obtain 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 safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation of 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 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. I have considered all of the disqualifying conditions under AG ¶ 19 and especially considered:

(a) inability or unwillingness to satisfy debts; and

Applicant has four delinquent debts totaling more than $43,000 that are unpaid. Three of the debts have been owed since 1998 and 1999. He has delinquent tax debts that he owes. I find there is sufficient evidence to raise these disqualifying conditions.

The guideline also includes conditions that could mitigate security concerns arising from financial difficulties. I have considered the following mitigating conditions under 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 current reliability, trustworthiness, or good judgment;

(b) the 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;

(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;

(d) the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts; and

(e) the individual has a reasonable basis to dispute the legitimacy of the past-due debt which is the cause of the problem and provides documented proof to substantiate the basis of the dispute or provides evidence of actions to resolve the issue. Applicant continues to owe all of the debts alleged in the SOR, although he is making payments on the debt in SOR ¶ 1(e). I find AG ¶ 20(a) does not apply because he has five delinquent debts that are unpaid and unresolved.

Applicant and his wife divorced, he was a victim of Hurricane Katrina, he was recalled to active duty, and he had periods of unemployment and underemployment. These were conditions that were largely beyond his control. However, for the full application of AG ¶ 20(b), the individual must show that he acted responsibly under the circumstances. Applicant has failed to meet that burden. Two of the debts alleged in the SOR related to his failure to pay his federal income taxes. He admitted that over the years he had tax liens imposed because he did not pay his taxes when the returns were filed and due. He was aware he owed the taxes, and in some years he did not pay them until a lien was imposed. Some years his tax refund would be used to automatically off- set any taxes owed. He admitted that he did not pay additional tax that was owed for 2006, 2007, 2008, and 2009. Applicant admitted that he did not pay his taxes because he did not have the money. He attributed this to being recalled to active duty. However, the taxes are based on the income he earned, whether it was as a civilian or as a military member. He was recalled to active duty in 2001. His income tax problems occurred in subsequent years. In addition, he began making payments on the tax lien listed in SOR ¶ 1(e) because the IRS advised his wife that it would begin garnishing her wages to satisfy the debt. Applicant has owed three credit card debts since 1998 and 1999. He has not paid them. He began a debt remedy plan but stopped it because of its questionable practices. He knows he incurred these debts, he knows he owes them, yet he has not paid them. Applicant failed to establish that he acted responsibly under the circumstances. I find AG ¶ 20(b) only partially applies.

Applicant contracted for the services of a debt remedy company. He indicated that he received some type of financial counseling from the company. His letters to the IRS and his contract with a tax professional in 2010 to assist him in resolving his tax problems are marginally considered financial counseling. Applicant has not paid the debts alleged in the SOR, except for SOR ¶ 1(e) that he is making installment payments on to resolve. Applicant has had many years to begin paying his delinquent debts. In 2004, he received a Conditional Top Secret security clearance. He was specifically advised that his security clearance was conditioned upon him resolving the debt in SOR ¶ 1(c). Applicant admitted he did not want to pay this debt because he believed his ex- wife should share in the payment of it. He indicated he made some inconsistent payments, but after 2005, he stopped making any payments on the debt. Applicant stated he intended to pay this debt and the others in the SOR in the future. Based on Applicant’s past track record and promises to pay, I am not convinced that he will resolve these debts. Applicant is making payments on one SOR debt, but only after the IRS threatened to garnish his wife’s wages. I do not find this is a good-faith effort to pay his overdue creditors or resolve his debts. AG ¶¶ 20(c) partially applies because of his financial counseling, but I cannot find there are clear indications his financial problems are resolved or under control. AG ¶ 20(d) does not apply because Applicant has not made a good-faith effort to resolve his debts. The debts alleged are old, and although he may have had other debts to pay, he has had many years and opportunities to address these and he has not. AG ¶ 20(e) does not apply because Applicant has not provided documentation disputing the legitimacy of any debts.

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. 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.

I considered the potentially disqualifying and mitigating conditions in light of all the facts and circumstances surrounding this case. Applicant provided substantial documentary evidence and testimony of his outstanding service in the Marine Corps. I have considered that some of his service occurred under combat conditions. Applicant and his wife earn a substantial income. They have nine credit cards that they are currently paying. They choose to live in different cities which impacts their finances and their expenses. Applicant chose not to pay his income taxes. He stated he did not pay his taxes because he did not have the money. It appears he failed to grasp that his tax liability is based on his current income. He repeatedly failed to plan each year for paying his taxes. Applicant incurred three credit card debts that became delinquent in 1998 and 1999. He has provided examples of issues that impacted his finances, but many of the events occurred years after he defaulted on the credit cards. Based on Applicant’s failure to make payments on his delinquent credit cards, and his repeated promise to pay the debts without any proof of action, I am not convinced he intends on paying them in the future. Most telling is that in 2004, Applicant was granted a security clearance conditioned upon him paying the debt in SOR ¶ 1(e). He has not paid this delinquent debt, yet promises to do so in the future. Applicant claimed that he was and is unable and not unwilling to pay his debts. In 2006, he contracted to buy a timeshare. He intended to complete the sale until he lost his job. It is unclear why he would obligate himself to buy a second timeshare when he had delinquent credit card debts. Applicant’s explanations for why he failed to pay his tax debts or make payments on credit card debts that are more than ten years old are not credible. Applicant failed to provide a realistic plan on how he is going to pay his delinquent debts. Overall the record evidence leaves me with questions and doubts about Applicant’s eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant failed to mitigate the security concerns arising under the guideline for 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

Subparagraphs 1.a-1.b: For Applicant Subparagraphs 1.c-1.d: Against Applicant Subparagraph 1.e: For Applicant Subparagraphs 1.f-1.h: Against 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 a security clearance. Eligibility for access to classified information is denied.

_____________________________ Carol G. Ricciardello Administrative Judge

FOOTNOTES

1 Department Counsel’s Memorandum was marked Hearing Exhibit I. 2 Tr. 150-151. 3 Tr. 152-153. 4 GE 4. 5 Id. 6 GE 4; AE C. 7 Tr. 28-50; GE 2; AE C, G. 8 Tr. 108-117; GE 2, 5, 7; AE G. 9 Tr. 108-123; GE 2, AE G. 10 The state tax liens that Applicant has paid are not considered for disqualifying purposes, but will be considered when analyzing the whole person. GE 3. 11 GE 3. 12 Id 13 Id. 14 Tr. 85-94. 15 It is unknown if Applicant had a tax liability in 2006. 16 Tr. 75-83, 92-105; AE C. 17 Tr. 66-84, 164-168; AE D, I. 18 Tr. 124-140, 142-148, 156-160. 19 Tr. 50-66; GE 6 page 7-8. 20 Answer; GE 5, 6. 21 Answer. 22 Tr. 124-128, 161-165, 169; Answer; AE B, D. 23 Tr. 133-134, 147-148. 24 Tr. 124-140; AE C. 25 Tr. 172-182. 26 Tr. 185-195.