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ISCR Case 10-01802.h1 — CASE

ISCR Case 10-01802.h1denied

Case Headnote

ISCR Case No. 10-01802.h1

deniedNov 28, 2011· Hon. LeRoy F. Foreman· hearing

Summary

A 34-year-old logistics specialist and former U.S. Air Force member was denied a security clearance under Guideline F, Financial Considerations. The denial stemmed from numerous unresolved delinquent debts totaling approximately $35,345. These debts included multiple medical bills, cable and telephone charges, several bad checks, credit card balances, a car loan, bank overdrafts, and college tuition.

Specific allegations detailed 22 separate delinquent debts. Disqualifying conditions under Guideline F were raised, indicating a history of not meeting financial obligations and an inability or unwillingness to satisfy debts.

Despite some efforts to reduce expenses and settle a few debts after the hearing, the applicant failed to demonstrate a consistent pattern of financial responsibility or effective debt resolution. The decision concluded that the applicant's financial issues were ongoing and likely to recur, leading to the determination that granting a security clearance was not in the national interest.

Why the Applicant Was Denied

The applicant had numerous unresolved delinquent debts totaling approximately $35,345.
The applicant failed to demonstrate a consistent pattern of financial responsibility or effective debt resolution.
The applicant's financial issues were ongoing and did not occur under circumstances making them unlikely to recur.

Conditions Referenced

Disqualifying

AG ¶ 19(a)appliedInability or Unwillingness to Satisfy Debts
AG ¶ 19(c)appliedA History of Not Meeting Financial Obligations

Key Rule Quoted

“Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the AG.”

Procedural Posture

SOR issuedMar 25, 2011
Answer filedMay 24, 2011
Hearing heldOct 25, 2011
Decision dateNov 28, 2011

Cite For

Denial of Security Clearance Due to Unresolved Financial Obligations Under Guideline F
Failure to Demonstrate Good Faith Efforts to Resolve Debts
Ongoing Financial Issues Impacting 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 that the applicant had numerous unresolved debts totaling approximately $35,345, which raised significant security concerns under Guideline F. Despite some admissions and attempts to settle certain debts, the applicant's overall financial situation was deemed insufficiently managed, leading to a denial of her security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Medical $29 $29	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Cable TV $296 $296	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	Medical $230 $230	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	Bad check $35 $35	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	Bad check $35 $35	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	Credit card $424 $424	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	Car loan $28,543 $28,543	Against Applicant	Auto Loan Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	Credit card $1,117 $1,117	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i	Bad check $109 $109	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.j	Cell phone $400 $400	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.k	Telephone $50 $50	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.l	Bad check $84 $84	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.m	Bad check $108 $108	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.n	Medical $36 $36	Against Applicant	Medical Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.o	Cell phone $1,255 $1,255	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.p	Bank overdraft $300 $300	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.q	Book club $85 $85	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.r	Bad check $56 $56	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.s	Medical $153 $153	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.t	College Tuition $2,214 $2,214	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.u	Tuition $100 $100	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.v	Medical $86 $86	Against Applicant	Medical Debt	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: ) ) [Redacted]1 ) ISCR Case No. 10-01802 ) Applicant for Security Clearance )

For Government: Eric Borgstrom, Esq., Department Counsel For Applicant: Pro se

November 28, 2011 ______________

STATEMENT OF CASE

______________

FOREMAN, LeRoy F., Administrative Judge:

This case involves security concerns raised under Guideline F (Financial Considerations). Eligibility for access to classified information is denied.

Statement of the Case

Applicant submitted a security clearance application on December 3, 2009. On March 25, 2011, the Defense Office of Hearings and Appeals (DOHA) sent her a Statement of Reasons (SOR) detailing the basis for its preliminary decision to deny her application, citing security concerns under Guideline F. DOHA acted 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) implemented by the Department of Defense on September 1, 2006. Applicant received the SOR on March 31, 2011; answered it on May 24, 2011; and requested a decision on the record without a hearing before an administrative judge. On June 9, 2011, she requested a hearing. Department Counsel was ready to proceed on June 30, 2011, and the case was assigned to me on July 25, 2011. DOHA issued a notice of hearing on September 15, 2011, scheduling it for October 25, 2011.2 I convened the hearing as scheduled. Government Exhibits (GX) 1 through 5 were admitted in evidence without objection. Department Counsel submitted a demonstrative exhibit summarizing the evidence, which is attached to the record as Hearing Exhibit (HX) I. Applicant testified and submitted Applicant’s Exhibits (AX) A through C, which were admitted without objection. I kept the record open until November 14, 2011, to enable her to obtain a signed copy of AX A and to submit additional documentary evidence. DOHA received the transcript (Tr.) on November 1, 2011.

Applicant timely submitted a signed copy of AX A. On November 17, 2011, she submitted AX D, E, and F. Department Counsel did not object to the untimely submissions. I admitted the untimely evidence. Department Counsel’s comments regarding the untimely submission are attached to the record as HX II.

FINDINGS OF FACT

In her answer to the SOR, Applicant admitted the allegations in SOR ¶¶ 1.a-1.c, 1.f, 1.h, 1.j, 1.k, 1.p, 1.q, and 1.s-1.v. She denied all the other allegations. Her admissions in her answer and at the hearing are incorporated in my findings of fact.

Applicant is a 34-year-old logistics specialist employed by a defense contractor. She served in the U.S. Air Force from June 1997 to April 2007. She held a security clearance while in the Air Force, and she seeks to continue it. (Tr. 14.)

Applicant married a fellow airman in May 1998, and they divorced in February 2007. (Attachment to Answer; Tr. 42.) She remarried in December 2008 and divorced in October 2010. (GX 1 at 24; Attachment to Answer; Tr. 43.) She has custody of the three children from her first marriage, ages 11, 10, and 8. (Tr. 43, 45.) The oldest child has special educational needs, because he is blind in one eye and has limited vision in the other eye. Applicant incurs extra expenses for his glasses, but his educational expenses have not been significant. (Tr. 44.) The children’s father provides only sporadic child support and is currently unemployed. (Tr. 45.)

Applicant took college courses from July to November 2009 but did not receive a degree. She resumed her college education on a part-time basis in October 2011 and was still taking courses as of the date of the hearing. (AX C; Tr. 40-41.) Under the Post- 9/11 GI Bill, she is receiving $1,923 per month in addition to her tuition. She has about 18 months of eligibility remaining. (AX C; Tr. 50-51.) After leaving the Air Force, Applicant worked for a defense contractor until August 2009. She was unemployed for about two months and then began working for her current employer in October 2009. Her spouse could not find steady employment. (GX 2 at 5.) She submitted a personal financial statement (PFS) in August 2010, reflecting monthly income of $4,287, expenses of $3,745, and a net remainder of $542. Her PFS did not reflect any payments on her delinquent debts. At the hearing, she submitted a budget worksheet reflecting monthly net income of $3,233, expenses of $2,828, and a remainder of $405. (AX B.) She lives with her mother to save money. In lieu of rent, she makes her mother’s mortgage payment of $1,072. (Tr. 47.) She recently negotiated a lower monthly car payment, reducing it from $665 to $488. (Tr. 49.)

As of the hearing date, none of the debts were resolved. After the hearing, Applicant settled the two debts alleged in SOR ¶¶ 1.jand 1.k. She stated that she had negotiated a payment plan for the delinquent car loan alleged in SOR ¶ 1.g, with payments to begin in December 2011, but she submitted no documentation of the payment plan. The table below summarizes the evidence regarding Applicant’s debts:

SOR Debt Amount Answer Status Evidence 1.a Medical $29 Admit Unpaid GX 3 at 1; GX 5 at 1 1.b Cable TV $296 Admit Unpaid GX 3 at 1 1.c Medical $230 Admit Unpaid GX 3 at 1; GX 4 at 10 1.d Bad check $35 Deny Unpaid GX 2 at 5: GX 3 at 1; GX 4 at 10 1.e Bad check $35 Deny Unpaid GX 2 at 5; GX 3 at 1; GX 4 at 10 1.f Credit card $424 Admit Unpaid GX 3 at 2; GX 4 at 8; GX 5 at 2 1.g Car loan $28,543 Deny Unresolved GX 2 at 5; GX 3 at 2; GX 4 at 8- 9; GX 5 at 2; Tr. 58-61; AX D 1.h Credit card $1,117 Admit Unpaid GX 3 at 2; GX 4 at 5 1.i Bad check $109 Deny Unpaid GX 2 at 5; GX 4 at 4; 1.j Cell phone $400 Admit Settled GX 4 at 5; AX F 1.k Telephone $50 Admit Settled GX 4 at 6; AX E 1.l Bad check $84 Deny Unpaid GX 2 at 5; GX 4 at 7 1.m Bad check $108 Deny Unpaid GX 2 at 5; GX 4 at 7 1.n Medical $36 Deny Unpaid GX 4 at 9 1.o Cell phone $1,255 Deny Unpaid GX 4 at 10 1.p Bank $300 Admit Unpaid GX 4 at 10 overdraft 1.q Book club $85 Admit Unpaid GX 4 at 11 1.r Bad check $56 Deny Unpaid GX 2 at 5; GX 4 at 11 1.s Medical $153 Admit Unpaid GX 4 at 11 1.t College $2,214 Admit Unpaid GX 4 at 12 Tuition 1.u Tuition $100 Admit Unpaid GX 4 at 12 1.v Medical $86 Admit Unpaid GX 4 at 13 Applicant denied the bad checks alleged in SOR ¶¶ 1.d, 1.e, 1.l, 1.m, and 1.r; because the checks were written by her ex-husband before they divorced in 2007. At the hearing, she admitted that she was a joint owner of the account on which the checks were drawn. (GX 2 at 5; Tr. 56.),

Applicant’s February 2011 credit report reflects that the debts alleged in SOR ¶¶ 1.a, 1.g, and 1.hare disputed, but it does not reflect the basis for the dispute. (GX 4 at 1-2.) Applicant denied the delinquent car loan alleged in SOR ¶ 1.g, because she disagreed with the amount alleged. The car was repossessed in November 2005, but she was able to redeem it. Shortly thereafter, the car was destroyed in an accident. As a result of the accident, she was charged with reckless driving and paid a fine. She received no insurance money because the insurance on the car lapsed two weeks before the accident. (Tr. 59.) The debt for the balance of the payments on the car loan is unsatisfied. (GX 2 at 5.)

Applicant received credit counseling while in the Air Force, but has not sought or received any counseling since her discharge. (Tr. 76-77.) She has taken no significant actions to dispute, validate, or resolve any of the debts alleged in the SOR. (Tr. 52-71.)

One of Applicant’s coworkers, who has known her since October 2009, submitted a letter on her behalf. He described her as “an extremely competent worker with great attention to detail” and a “great team player. (AX A.)

POLICIES

“[N]o one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). As Commander in Chief, the President has the authority to “control access to information bearing on national security and to determine whether an individual is sufficiently trustworthy to have access to such information.” Id. at 527. The President has authorized the Secretary of Defense or his designee to grant applicants eligibility for access to classified information “only upon a finding that it is clearly consistent with the national interest to do so.” Exec. Or. 10865, Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960), as amended.

Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the AG. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, an administrative judge applies these guidelines in conjunction with an evaluation of the whole person. An administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. An administrative judge must consider all available, reliable information about the person, past and present, favorable and unfavorable.

The Government reposes a high degree of trust and confidence in persons with access to classified information. This relationship transcends normal duty hours and endures throughout off-duty hours. 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 about potential, rather than actual, risk of compromise of classified information.

Clearance decisions must be made “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See Exec. Or. 10865 § 7. Thus, a decision to deny a security clearance is merely an indication the applicant has not met the strict guidelines the President and the Secretary of Defense have established for issuing a clearance.

Initially, the Government must establish, by substantial evidence, conditions in the personal or professional history of the applicant that may disqualify the applicant from being eligible for access to classified information. The Government has the burden of establishing controverted facts alleged in the SOR. See Egan, 484 U.S. at 531. “Substantial evidence” is “more than a scintilla but less than a preponderance.” See v. Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994). The guidelines presume a nexus or rational connection between proven conduct under any of the criteria listed therein and an applicant’s security suitability. See ISCR Case No. 92-1106 at 3, 1993 WL 545051 at *3 (App. Bd. Oct. 7, 1993).

Once the Government establishes a disqualifying condition by substantial evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the facts. Directive ¶ E3.1.15. An applicant has the burden of proving a mitigating condition, and the burden of disproving it never shifts to the Government. See ISCR Case No. 02- 31154 at 5 (App. Bd. Sep. 22, 2005).

An applicant “has the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue his security clearance.” ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002). “[S]ecurity clearance determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531; see AG ¶ 2(b).

ANALYSIS

Guideline F, Financial Considerations

The SOR alleges 22 delinquent debts totaling about $35,345. Applicant admitted 13 debts and denied 9. The evidence establishes all the alleged delinquent debts.

The concern under this guideline 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. Two disqualifying conditions under this guideline are established by the evidence: AG ¶ 19(a) (“inability or unwillingness to satisfy debts”) and AG ¶ 19(c) (“a history of not meeting financial obligations”). Thus, the burden shifted to Applicant to explain, refute, extenuate, or mitigate the facts.

Security concerns based on financial problems can be mitigated by showing that “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.” AG ¶ 20(a). This mitigating condition is not established because Applicant’s delinquent debts are ongoing, numerous, and did not occur under circumstances making them unlikely to recur.

Security concerns under this guideline also can be mitigated by showing that “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.” AG ¶ 20(b). Applicant’s first spouse was unable to obtain steady work. She has gone through two marital breakups and is solely responsible for her three children. However, the car loan debt alleged in SOR ¶ 1.gwas the result of her reckless driving and letting the insurance lapse, which were not circumstances beyond her control. Furthermore, she has not acted responsibly. Instead, she has responded to her financial problems with inaction. I conclude that AG ¶ 20(b) is not established.

Security concerns under this guideline also can be mitigated by showing that “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.” AG ¶ 20(c). This mitigating condition is not established because, notwithstanding her credit counseling while in the Air Force, her financial situation is not under control.

Security concerns under this guideline also can be mitigated by showing that “the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.” AG ¶ 20(d). Good faith means acting in a way that shows reasonableness, prudence, honesty, and adherence to duty or obligation. ISCR Case No. 99-0201, 1999 WL 1442346 at *4 (App. Bd. Oct. 12, 1999). Applicant took virtually no action to resolve her debts until after the hearing, when she settled the debts in SOR ¶¶ 1.jand 1.k. After the hearing, she stated that she had negotiated a payment plan on the car loan, but she provided no documentation of the plan and had made no payments on the car loan. Resolution of debts motivated by the pressure of keeping a security clearance does not establish good faith. I conclude that AG ¶ 20(d) is not established.

Security concerns under this guideline also can be mitigated by showing “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.” AG ¶ 20(e). Applicant’s most recent credit report reflects that she disputed the three debts alleged in SOR ¶¶ 1.a, 1.g, and 1.h, but she provided no proof of the basis of the disputes of evidence or actions to resolve them.

WHOLE PERSON CONCEPT

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. In applying the whole- person concept, an administrative judge must evaluate an applicant’s eligibility for a security clearance by considering the totality of the applicant’s conduct and all relevant circumstances.

An 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.

I have incorporated my comments under Guideline F in my whole-person analysis. Some of the factors in AG ¶ 2(a) were addressed under that guideline, but some warrant additional comment.

Applicant has served honorably in the Air Force, held a security clearance, and worked successfully for defense contractors. She presented herself at the hearing as an intelligent, articulate woman. She was candid and sincere at the hearing. She has taken some steps to reduce her monthly expenses, and she appears to be living within her means. However, she has little progress in resolving her long-standing delinquent debts, even though she has been employed almost continuously since her discharge from the Air Force and has a modest remainder at the end of each month. Many of the debts are for less than $100, but she has taken no action to resolve them. A payment plan on the car loan would be a step in the right direction, but she needs to establish a track record of financial responsibility to mitigate the security concerns raised by her financial history.

After weighing the disqualifying and mitigating conditions under Guideline F, and evaluating all the evidence in the context of the whole person, I conclude Applicant has not mitigated the security concerns based on financial considerations. Accordingly, I conclude she has not carried her burden of showing that it is clearly consistent with the national interest to continue her eligibility for access to classified information.

FORMAL FINDINGS

I make the following formal findings on the allegations in the SOR:

Paragraph 1, Guideline F (Financial Considerations): AGAINST APPLICANT

Subparagraphs 1.a-1.v: Against Applicant

CONCLUSION

I conclude that it is not clearly consistent with the national interest to continue Applicant’s eligibility for a security clearance. Eligibility for access to classified information is denied.

LeRoy F. Foreman Administrative Judge

FOOTNOTES

1 Applicant’s last name is reflected on her security clearance application and in the case database as [redacted], and on the Statement of Reasons as [redacted]. At the time of the hearing, she had divorced and resumed use of her maiden name, reflected in the caption of this decision. 2 Scheduling was delayed to permit consolidation of the docket at the hearing location.