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ISCR Case 11-12534.h1 — CASE

Case record

A decided public DOHA case, shown for research, not advice or a prediction.

Decision Date10/25/2013
Statusdenied
LevelHEARING
TypeSTANDARD ISCR
Participants
Judge: Michael H. Leonard
Applicant Representation: Pro Se
Guidelines Evaluated
- Guideline EPersonal Conduct · Unknown Outcome
- Guideline FFinancial Considerations · Unknown Outcome
- Guideline KHandling Protected Information · Unknown Outcome
- Guideline MUse of Information Technology · Unknown Outcome

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ISCR Case 11-12534.h1denied

Case Headnote

ISCR Case No. 11-12534.h1

deniedOct 25, 2013· Hon. Michael H. Leonard· hearing

Summary

A 35-year-old software engineer sought to retain her security clearance but was ultimately denied due to a pattern of irresponsible conduct, encompassing both financial difficulties and security infractions. The decision was based on Guidelines E (Personal Conduct), F (Financial Considerations), K (Handling Protected Information), and M (Use of Information Technology).

The applicant's financial issues included a mortgage loan foreclosed in late 2011 with an $11,417 past-due amount, a charged-off home equity line of credit with a $72,922 balance, and two other delinquent loans from a foreclosed home. While three collection accounts totaling $318 were noted, they did not raise a security concern. These financial problems were deemed insufficiently mitigated.

Additionally, the applicant committed several security infractions. In January 2012, she received a written warning for inadvertently misplacing a classified document. Later that year, in early December, she was found responsible for sending a classified server password via unclassified means, and in later December, she was culpable for leaving a security container unsecured. The judge concluded that her history of financial problems and security infractions, without sufficient evidence of reform, did not meet the standards for clearance eligibility.

Why the Applicant Was Denied

The applicant had a history of financial problems, including a foreclosure and multiple delinquent accounts.
The applicant committed several security infractions, including mishandling classified information.
The applicant failed to present sufficient evidence of reform or mitigation regarding her financial and security issues.

Conditions Referenced

Disqualifying

AG ¶ 19raisedFinancial Considerations
AG ¶ 20raisedHandling Protected Information
AG ¶ 18raisedPersonal Conduct
AG ¶ 19raisedMisuse of Information Technology Systems

Key Rule Quoted

“no one has a right to a security clearance”
— Department of Navy v. Egan, 484 U.S. 518, 528 (1988)

Procedural Posture

SOR issuedApr 12, 2013
Answer filed—
Hearing heldAug 7, 2013via video teleconference
Decision dateOct 25, 2013

Cite For

Pattern of Irresponsible Conduct Under Guideline K
Failure to Mitigate Financial Issues Under Guideline F
Security Clearance Denial Due to Multiple Infractions and Financial Instability

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 against the applicant on the personal conduct concerns under Guideline E, specifically citing a pattern of irresponsible conduct. The applicant did not provide sufficient evidence to mitigate the security concerns related to her personal conduct.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
3.a	specific text not stated in this decision	Against Applicant	Unspecified Personal Conduct	—	Unknown	—	—	—

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 that the applicant had a history of financial problems, including a foreclosure and delinquent loans, which raised security concerns under Guideline F. While some debts were found to be mitigated, others were ruled against the applicant, leading to a denial of the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
4.a	The applicant has a mortgage loan that was foreclosed upon in late 2011, with a past due amount of $11,417. $11,417	Against Applicant	Mortgage or Home Loan Debt	Unknown	—	—	—
4.b	The applicant has a home equity line of credit (HELOC) that was charged off with a balance of $72,922. $72,922	For Applicant	Unspecified Financial	Unknown	—	—	—
4.c	The applicant has three collection accounts totaling $318, which do not raise a security concern. $318	Against Applicant	Unspecified Financial	Unknown	—	—	—
4.d	The applicant has two delinquent loans stemming from a home that was foreclosed upon.	For Applicant	Unspecified Financial	Unknown	—	—	—
4.e	The applicant has a history of financial problems that have not been sufficiently mitigated.	For Applicant	Unspecified Financial	Unknown	—	—	—

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

Standardized Decision Profile

SEAD-4 Guideline K (Handling Protected Information) · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The judge found that the applicant had a history of security infractions under Guideline K, including multiple incidents of mishandling classified information. Despite the applicant's claims of regret and subsequent training, the judge ruled against the applicant, determining that the evidence did not sufficiently mitigate the security concerns.

¶	Allegation	Finding	Type	Response	Disqualifying (¶34)	Mitigating applied (¶35)	Mitigation
1.a	In January 2012, she inadvertently placed a classified document in the wrong container and received a written warning.	Against Applicant	Failure to Safeguard or Secure	Admitted	—	—	—
1.b	In early December 2012, she was found responsible for sending a password for a classified server via unclassified means.	Against Applicant	Unauthorized Disclosure	Admitted	—	—	—
1.c	In later December 2012, she was found culpable for leaving a security container unsecured.	Against Applicant	Failure to Safeguard or Secure	Admitted	—	—	—
1.d–1.e	2 sub-charges — specific text not stated in this decision (against the applicant). (low confidence)	Against Applicant			—	—	—

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

Standardized Decision Profile

SEAD-4 Guideline M (Use of Information Technology) · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The judge found that the applicant had a history of security infractions related to the misuse of information technology systems. The allegations under Guideline M were ruled against the applicant, indicating that the applicant did not sufficiently mitigate the security concerns associated with her conduct.

¶	Allegation	Finding	Type	Response	Disqualifying (¶40)	Mitigating applied (¶41)	Mitigation
2.a–2.b	2 sub-charges — specific text not stated in this decision (against the applicant).	Against Applicant			—	—	—

Descriptive standardized rendering of a decided public case (Guideline M). 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. 11-12534 ) Applicant for Security Clearance )

For Government: Caroline Jeffreys, Esq., Department Counsel For Applicant: Pro se

10/25/2013 ______________

STATEMENT OF CASE

______________

LEONARD, Michael H., Administrative Judge:

Applicant contests the Defense Department’s intent to revoke her eligibility for a security clearance to work in the defense industry. Her recent history of security infractions or violations coupled with a history of financial problems equate to a pattern of irresponsible, lax, or negligent conduct. She did not present sufficient evidence to explain, extenuate, and mitigate the security concerns. Accordingly, this case is decided against Applicant.

Statement of the Case

On April 12, 2013, the Department of Defense (DOD) sent Applicant a statement of reasons (SOR), explaining it was unable to find that it was clearly consistent with the national interest to grant or continue access to classified information. The SOR is similar to a complaint, and it detailed the reasons for the action under the security guidelines known as Guideline K for handling protected information, Guideline M for misuse of information technology systems, Guideline E for personal conduct, and Guideline F for financial considerations.

Applicant timely answered the SOR and requested a hearing. The case was assigned to me on July 3, 2013. The hearing took place by video teleconference as scheduled on August 7, 2013. The transcript was received on August 15, 2013.

The record was kept open until August 20, 2013, to allow Applicant to submit documentary matters. Those matters were timely received and they are admitted without objections as Exhibits A and B.

FINDINGS OF FACT

Applicant is a 35-year-old employee of a federal contractor, and she is seeking to retain a security clearance. With a background in software engineering, she has worked for the same company, a major defense contractor, since mid-2000. She worked as a software engineer programmer for several years before moving into the field of software-configuration management. Her educational background includes a bachelor’s degree in computer engineer technology and a master’s degree in technology management.

Married in 2003, Applicant and her husband had twin sons in 2006. Her husband’s residential landscaping business failed in about 2010. He now works as an administrator at the church they attend. His annual income, which includes military retired pay, is about $30,000 to $35,000. She earns an annual salary of about $78,000. They have no other sources of income. She stated that she has a 401(k) account with a balance of about $136,000 (with a loan against the account), an IRA account with about $6,000, no savings account, and a checking account with a minimal balance as of the day of the hearing.

There is substantial evidence establishing that Applicant has a history of financial problems or difficulties. The five delinquent accounts in the SOR fall into two categories: (1) three collection accounts totaling $318; and (2) two delinquent loans stemming from a home that was foreclosed upon.

The foreclosure on Applicant’s home occurred in late 2011. She reported the incident to her company’s security office in May 2012 as follows:

In November 2011 my husband and I had a foreclosure on our home, [street address]. For at least two years, my husband and I attempted to work with [a large national bank] to do a loan modification. We were $150,000 in the rear on our [loan], and we could not keep up with the payments along with child care and other housing expenses. After several efforts to do a modification, we attempted a short sale, but once again we were denied. After much thought, we decided to walk away from [the] house, we couldn’t get any form of credit not even store credit. Since then we have moved into a rental home, we are slowly getting back up on our financial feet.4

The two loans associated with the home were both obtained or opened in April 2006. The mortgage loan had a high credit of $272,469, and the home equity line of credit (HELOC) had a high credit of $68,118. A July 2011 credit report shows that both loans were late over 120 days; the mortgage loan was $11,417 past due; and the HELOC was $8,690 past due. Both loans continued to deteriorate. A December 2012 credit report shows that the mortgage loan was a foreclosure with a $0 balance, and the HELOC was a charged-off account with a balance of $72,922. And a June 2013 credit report shows the same information for both loans.

Applicant has had no communication with the lender since walking away from the property. She was unaware of the status of either loan and presented no documentary information on either. She made no effort to resolve the HELOC, choosing instead to address medical bills and current debts. Whether she is still liable or responsible for the either loan is a difficult question and is governed by state law. The only way to know for certain that a debt has been forgiven is if a debtor is issued a Form 1099-C, Cancellation of Debt, or receives a letter or other document from a creditor stating that the account has been resolved in their favor. There is no documentary information showing that either has occurred here.

In addition to her financial difficulties, there is substantial evidence establishing Applicant has a history of security infractions or violations while working for her current employer. There are five incidents that occurred between 2009–2012 that form the basis for the SOR allegations under Guideline K. Most recent, she was found culpable for three security incidents during a 12-month period as follows: (1) in January 2012, she inadvertently placed a classified document in the wrong container and received a written warning; (2) in early December 2012, she was found responsible for sending a password for a classified server via unclassified means; and (3) in later December 2012, she was found culpable for leaving a security container unsecured. As a result of the two December incidents, she received a written reprimand and was suspended from work for five days without pay. None of the five incidents resulted in the actual or probable compromise of classified information. Applicant admits the incidents were careless mistakes that she regrets. Since returning from the five-day suspension, she received additional security training and she was moved to another program where she does not work with classified information.

Applicant presented character evidence in the form of two letters of recommendation from coworkers who were also former managers or supervisors. Both letters are highly favorable. Law and Policies

It is well-established law that no one has a right to a security clearance. As noted by the Supreme Court in Department of Navy v. Egan, “the clearly consistent standard indicates that security clearance determinations should err, if they must, on the side of denials.” Under Egan, Executive Order 10865, and the Directive, any doubt about whether an applicant should be allowed access to classified information will be resolved in favor of protecting national security.

A favorable clearance decision establishes eligibility of an applicant to be granted a security clearance for access to confidential, secret, or top-secret information. An unfavorable decision (1) denies any application, (2) revokes any existing security clearance, and (3) prevents access to classified information at any level.

There is no presumption in favor of granting, renewing, or continuing eligibility for access to classified information. The Government has the burden of presenting evidence to establish facts alleged in the SOR that have been controverted. An applicant is responsible for presenting evidence to refute, explain, extenuate, or mitigate facts that have been admitted or proven. In addition, an applicant has the ultimate burden of persuasion to obtain a favorable clearance decision. In Egan, the Supreme Court stated that the burden of proof is less than a preponderance of the evidence.24 The DOHA Appeal Board has followed the Court’s reasoning, and a judge’s findings of fact are reviewed under the substantial-evidence standard.25

The AG set forth the relevant standards to consider when evaluating a person’s security clearance eligibility, including disqualifying conditions and mitigating conditions for each guideline. In addition, each clearance decision must be a commonsense decision based upon consideration of the relevant and material information, the pertinent criteria and adjudication factors, and the whole-person concept.

The Government must be able to have a high degree of trust and confidence in those persons to whom it grants access to classified information. The decision to deny a person a security clearance is not a determination of an applicant’s loyalty. Instead, it is a determination that an applicant has not met the strict guidelines the President has established for granting eligibility for access.

DISCUSSION

In analyzing this case, I considered the evidence as a whole under Guideline F for financial considerations and Guideline K for handling protected information. That evidence shows a history of financial problems coupled with a history of security infractions or violations. Taken together, those facts and circumstances equate to a pattern of irresponsible, lax, or negligent conduct. Such a pattern is wholly inconsistent with being a suitable candidate for a security clearance. Although I am persuaded that Applicant is a good, decent, and hard-working person, the financial problems and the recent series of lapses in her security responsibilities undermine her security suitability.

I reviewed and considered the mitigating conditions under the guidelines in light of the evidence, and none, individually or in combination, is sufficient to explain, extenuate, and mitigate the security concerns. In particular, she did not meet her “very heavy burden” to demonstrate mitigation in a case involving security violations under Guideline K. Applicant did not present sufficient evidence of reform and rehabilitation to demonstrate that her history of financial problems and security violations are safely in the past. In addition, the SOR allegations under Guideline E for personal conduct and Guideline M for information technology, which consist of cross-allegations to matters under Guideline K, are decided against Applicant under the same rationale.

In deciding this case, I have weighed and evaluated the evidence in light of the whole-person concept. In doing so, I gave Applicant credit for her favorable character evidence, but it is not sufficient to justify a favorable decision for Applicant.

FORMAL FINDINGS

The formal findings on the SOR allegations are as follows:

Paragraph 1, Guideline K: Against Applicant

Subparagraphs 1.a–1.e: Against Applicant

Paragraph 2, Guideline M: Against Applicant

Subparagraphs 2.a–2.b: Against Applicant

Paragraph 3, Guideline E: Against Applicant

Subparagraph 3.a: Against Applicant

Paragraph 4, Guideline F: Against Applicant

Subparagraphs 4.a & 4.c: Against Applicant

Subparagraphs 4.b, 4.d, & 4.e: For Applicant

CONCLUSION

In light of the record as a whole, 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.

Michael H. Leonard Administrative Judge

FOOTNOTES

This case is adjudicated under Executive Order 10865, Safeguarding Classified Information within Industry, signed by President Eisenhower on February 20, 1960, as amended, as well as Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program, dated January 2, 1992, as amended (Directive). In addition, the Adjudicative Guidelines for Determining Eligibility for Access to Classified Information (AG), effective within the Defense Department on September 1, 2006, apply here. The AG were published in the Federal Register and codified in 32 C.F.R. § 154, Appendix H (2006). The AG replace the guidelines in Enclosure 2 to the Directive. Exhibits 2,3, 8, 9, and 10. The three collection accounts (for $106, $180, and $32) are so minor that, when viewed individually or in combination with the evidence as a whole, they do not raise a security concern. Accordingly, those matters will not be discussed further. Exhibit 4. Exhibit 10 at 5. Exhibit 9. A charge off is a declaration by a creditor to treat an account receivable as a loss, expense, or bad debt because payment is unlikely. But doing so does not free the debtor of having to pay the debt. A charge off is one of the most adverse factors that can be listed on a credit report. Exhibit 8. Tr. 78. It’s possible that a Form 1099-C would not be issued for a mortgage loan default due to The Mortgage Forgiveness Debt Relief Act of 2007. In general, the Act provides tax relief for cancelled or forgiven mortgage debt, between 2007 and 2012, that was used to buy, build, or substantially improve a principal residence, or to refinance debt incurred for those purposes, and the debt must have been secured by the home. W hether the Act applies to Applicant’s situation is a question beyond the scope of this proceeding, and it is not decided herein. Exhibits 2–6. Exhibit 6. Tr. 104. Tr. 100–101. Exhibits A and B. Department of Navy v. Egan, 484 U.S. 518, 528 (1988) (“it should be obvious that no one has a ‘right’ to th a security clearance”); Duane v. Department of Defense, 275 F.3d 988, 994 (10 Cir. 2002) (no right to a security clearance). 484 U.S. at 531. Directive, ¶ 3.2. Directive, ¶ 3.2. ISCR Case No. 02-18663 (App. Bd. Mar. 23, 2004). Directive, Enclosure 3, ¶ E3.1.14. Directive, Enclosure 3, ¶ E3.1.15. Directive, Enclosure 3, ¶ E3.1.15. Egan, 484 U.S. at 531. ISCR Case No. 01-20700 (App. Bd. Dec. 19, 2002) (citations omitted). Executive Order 10865, § 7. AG ¶¶ 18, 19, and 20 (setting forth the security concern and the disqualifying and mitigating conditions). AG ¶¶ 33, 34, and 35 (setting forth the security concern and the disqualifying and mitigating conditions). See AG ¶¶ 19(a), 19(c), 34(c), 34(g), and 34(h). ISCR Case No. 04-12742 at 4 (App. Bd. Feb. 25, 2011) (citation omitted). AG ¶ 2(a)(1)–(9).