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ISCR Case 10-02819.h1 — CASE

ISCR Case 10-02819.h1denied

Case Headnote

ISCR Case No. 10-02819.h1

deniedDec 6, 2012· Hon. Martin H. Mogul· hearing

Summary

A 50-year-old defense contractor and former Air Force member was denied a security clearance due to concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The applicant's financial history included a Chapter 7 bankruptcy in 2005, which discharged approximately $12,000 in debt. He also accumulated approximately $95,000 in additional overdue debts. The applicant attributed some of his financial difficulties to poor credit card use and car purchases prior to his bankruptcy, and a period of unemployment from June 2005 to October 2009 following a motorcycle accident.

A key factor in the denial was the applicant's untruthful disclosures on his security clearance application, certified on December 15, 2009. He falsely answered "No" to questions regarding tax issues, liens, judgments, collections, charge-offs, and debts over 90 or 180 days delinquent, despite admitting to these debts in his response to the Statement of Reasons.

The judge found that the applicant failed to resolve the approximately $95,000 in overdue debts and knowingly provided false information on his application. These issues raised significant concerns about his reliability and trustworthiness, leading to the denial of his security clearance.

Why the Applicant Was Denied

The applicant failed to resolve approximately $95,000 in overdue debts, which raised concerns about his reliability and trustworthiness.
The applicant knowingly provided untruthful information on his security clearance application regarding his financial obligations.

Conditions Referenced

Disqualifying

AG ¶ 19(a)appliedInability or Unwillingness to Satisfy Debts
AG ¶ 19(c)appliedA History of Not Meeting Financial Obligations
AG ¶ 16(a)appliedDeliberate Omission, Concealment, or Falsification of Relevant Facts

Key Rule Quoted

“Any doubt concerning personnel being considered for access to classified information will be resolved in favor of national security.”

Procedural Posture

SOR issuedJul 3, 2012
Answer filedJul 23, 2012Requested decision on written record.
Hearing held—No hearing; decided on written record.
Decision dateDec 6, 2012

Cite For

Denial of Security Clearance Due to Significant Financial Issues Under Guideline F
Untruthful Disclosures on Security Clearance Applications Under Guideline E
Failure to Mitigate Financial Concerns Despite Claims of Hardship

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 E (Personal Conduct) · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The judge found that the applicant knowingly furnished untruthful information on his Security Clearance Application regarding his overdue debts. The applicant's lack of honesty and candor led to a conclusion against him under Guideline E, resulting in a denial of his security clearance.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
2.a	The SOR alleges that Applicant furnished incomplete, untruthful information on a Security Clearance Application (SCA) that he completed and certified on December 15, 2009. Applicant answered, “No,” to the questions in section 26, subsections c., d., e., g., h., m., and n., regarding failure to file taxes, as well as the presence of tax liens, judgements, collections, charge-offs, and debts that were over 180 days delinquent, or that are currently over 90 days delinquent.	Against Applicant	Falsification Security FormFOUND DELIBERATE	Financial	Denied	(a) deliberate omission, concealment, or falsification on a security form	—	—

Descriptive standardized rendering of a decided public case (Guideline E). The verbatim source decision is shown in full below.

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, noting that the applicant had accumulated approximately $95,000 in delinquent debts and had previously filed for bankruptcy. The applicant's failure to provide evidence of resolving these debts or acting responsibly led to a decision against granting the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant admitted in his RSOR that he filed a Chapter 7 bankruptcy in 2005, and that the bankruptcy was discharged in 2006, as alleged in 1.a. Approximately $12,000 of debt was discharged. $12,000	Against Applicant	Bankruptcy Filing	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Applicant also admitted in his RSOR all of the debts, listed on the SOR as 1.b. through 1.ppp, which totaled approximately $95,000. $95,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	Applicant cited a number of reasons for his financial difficulties. Applicant explained that prior to his 1995 Chapter 7 bankruptcy, he had made several poor financial decisions, including abusing credit cards and spending money on cars of poor value.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	Applicant was unemployed from June 2005 through October 2009, after he was involved in a motorcycle accident that occurred in June 2005.	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. 10-02819 ) ) Applicant for Security Clearance )

For Government: Tovah A. Minster, Esq., Department Counsel For Applicant: Pro se

December 6, 2012

______________

STATEMENT OF CASE

______________

MOGUL, Martin H., Administrative Judge:

On July 3, 2012, the Defense Office of Hearings and Appeals (DOHA) issued a Statement of Reasons (SOR) detailing the security concerns under Guidelines F and E for Applicant. (Item 1.) 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.

On July 23, 2012, Applicant replied to the SOR (RSOR) in writing, and he requested that his case be decided on the written record in lieu of a hearing. (Items 4 and 5.) On August 13, 2012, Department Counsel issued the Department's written case. A complete copy of the file of relevant material (FORM) was provided to Applicant. In the FORM, Department Counsel offered 12 documentary exhibits. (Items 1-12.) Applicant was given the opportunity to file objections and submit material in refutation, extenuation, or mitigation. A response was due on September 23, 2012. Applicant submitted no documents. The case was assigned to this Administrative Judge on October 29, 2012. Based upon a review of the pleadings and exhibits, eligibility for access to classified information is denied.

FINDINGS OF FACT

After a complete and thorough review of the evidence in the record, including Applicant's RSOR, the admitted documents, and the FORM, and upon due consideration of that evidence, I make the following findings of fact:

Applicant is 50 years old. He is divorced and has two children. Applicant served in the United States Air Force from 1980 to 1992. He served in the Air National Guard from 1992 through 2003. (Items 5 and 6.) Applicant is employed by a defense contractor, and he seeks a DoD security clearance in connection with his employment in the defense sector.

Paragraph 1 Guideline F, Financial Considerations

The SOR lists 68 allegations (1.a. through 1.ppp.) regarding a bankruptcy and overdue, unpaid debts, under Adjudicative Guideline F.

Applicant admitted in his RSOR that he filed a Chapter 7 bankruptcy in 2005, and that the bankruptcy was discharged in 2006, as alleged in 1.a. Approximately $12,000 of debt was discharged. (Item 12.)

Applicant also admitted in his RSOR all of the debts, listed on the SOR as 1.b. through 1.ppp, which totaled approximately $95,000. He wrote that he is currently filing a Chapter 13 bankruptcy. (Item 5.)

As stated above, Applicant was given the opportunity to submit a response to the FORM, and to furnish information regarding the debts that were alleged to be overdue in the SOR, and the current status of the bankruptcy that he indicated he planned to file. Applicant failed to respond to the FORM. No evidence was introduced to establish the status of this bankruptcy. I find that the full amount of the debts cited on the SOR of approximately $95,000 is still outstanding.

Applicant cited a number of reasons for his financial difficulties. Applicant explained that prior to his 1995 Chapter 7 bankruptcy, he had made several poor financial decisions, including abusing credit cards and spending money on cars of poor value. (Item 8.) Additionally, Applicant was unemployed from June 2005 through October 2009, after he was involved in a motorcycle accident that occurred in June 2005. (Item 6.)

Paragraph 2 Guideline E, Personal Conduct

The SOR alleges that Applicant furnished incomplete, untruthful information on a Security Clearance Application (SCA) that he completed and certified on December 15, 2009. Applicant answered, “No,” to the questions in section 26, subsections c., d., e., g., h., m., and n., regarding failure to file taxes, as well as the presence of tax liens, judgements, collections, charge-offs, and debts that were over 180 days delinquent, or that are currently over 90 days delinquent. In his RSOR, Applicant denied this allegation and wrote, “I hadn’t gotten all of my bills at that time.” I find that Applicant should have given affirmative responses to each of these questions and included 43 of the delinquent debts listed on the SOR. While Applicant may not have been aware of all of the overdue debts, it is inconceivable that he was not aware of any of these debts. Therefore, I find that Applicant knowingly furnished untruthful information to the Government.

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 common sense 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, 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 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 and could potentially apply in this case. Under AG ¶ 19 (a), “an inability or unwillingness to satisfy debts” is potentially disqualifying. Similarly under AG ¶ 19 (c), “a history of not meeting financial obligations” may raise security concerns. I find that both of these disqualifying conditions apply to Applicant in this case. The evidence has established that Applicant accumulated significant delinquent debts totaling approximately $95,000.

AG ¶ 20 provides conditions that could mitigate security concerns from financial difficulties. Under AG ¶ 20(b), it may be mitigating where “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.” As reviewed above, Applicant claimed that his poor finances were because of a significant period of unemployment. However, no evidence was introduced to establish that Applicant has resolved any of his considerable overdue debt, or acted responsibly. While Applicant contends that he is planning to resolve his debts by the legal remedy of bankruptcy, which he had used previously in 2005 and 2006, Applicant introduced no documentation to establish that he has taken any action toward resolving his debt in bankruptcy. Therefore, I do not find that this potentially mitigating condition is a factor for consideration in this case, nor do I find that any other mitigating condition applies.

I conclude that until Applicant is able to significantly reduce his overdue debt, he has not mitigated the financial concerns of the Government. Guideline E, Personal Conduct

With respect to Guideline E, I find that Applicant knew or should have known of his extensive overdue debts that had been acquired over several years, and he should have included these overdue debts when he completed his SCA. Because of his lack of honesty and candor regarding very clearly written questions, I find that Applicant did intend to mislead the Government.

The Government relies heavily on the honesty and integrity of individuals seeking access to our nation’s secrets. If such an individual intentionally falsifies material facts, it is extremely difficult to conclude that he nevertheless possesses the judgment and honesty, necessary for an individual given a clearance.

In reviewing the disqualifying conditions under Guideline E, I conclude that because of Applicant’s “deliberate omission, concealment, or falsification of relevant facts from any personnel security questionnaire” that ¶ 16(a) applies against Applicant. I find no mitigating conditions can be applied. I therefore, resolve Guideline E against Applicant.

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, including all of the reasons cited above as to why the disqualifying conditions apply and no mitigating condition is applicable under Guideline F `or E. Therefore, I find that the record evidence leaves me with significant questions and doubts as to Applicant’s eligibility and suitability for a security clearance under the whole-person concept. For all these reasons, I conclude Applicant has not mitigated the security concerns under the whole-person concept.

FORMAL FINDINGS

Formal findings for or against Applicant on the allegations set forth in the SOR, as required by ¶ E3.1.25 of Enclosure 3 of the Directive, are:

Paragraph 1, Guideline F: AGAINST APPLICANT

Subparagraphs 1.a. through 1.ppp.: Against Applicant

Paragraph 2, Guideline E: AGAINST APPLICANT

Subparagraphs 2.a.: Against Applicant

CONCLUSION

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

Martin H. Mogul Administrative Judge