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ISCR Case 12-03238.h1 — CASE

ISCR Case 12-03238.h1denied

Case Headnote

ISCR Case No. 12-03238.h1

deniedSep 26, 2013· Hon. Edward W. Loughran· hearing

Summary

A 49-year-old defense contractor employee was denied a security clearance due to concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The denial stemmed from a history of financial instability, including bankruptcy and numerous delinquent debts.

Specific allegations included a 2011 judgment for $1,702, which the applicant denied owing, and 23 state tax liens filed in March 2009 totaling approximately $25,227. Additionally, the applicant admitted owing a portion of an $1,864 debt to a telecommunications company.

Despite demonstrating good character and job performance, the applicant did not sufficiently mitigate the financial concerns. The applicant's claims of being unaware of certain debts lacked sufficient substantiation, leading to the denial of the security clearance.

Why the Applicant Was Denied

The applicant did not mitigate financial considerations security concerns despite demonstrating good character and job performance.
The applicant had a history of financial instability, including bankruptcy and numerous delinquent debts.
The applicant's claims of being unaware of certain debts were not substantiated with sufficient evidence.

Conditions Referenced

Disqualifying

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

Mitigating

F.2.brejectedConditions That Resulted in the Financial Problem Were Largely Beyond the Person’s ControlWhile the applicant faced personal challenges, she did not act responsibly under the circumstances to resolve her debts.
F.2.crejectedThe Person Has Received or Is Receiving Counseling for the ProblemThe applicant's financial counseling was insufficient to demonstrate resolution of her financial issues.
F.2.drejectedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve DebtsThe applicant's efforts to resolve debts were inconsistent and lacked sufficient documentation.

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 issuedMay 6, 2013
Answer filedJun 18, 2013
Hearing heldSep 5, 2013
Decision dateSep 26, 2013

Cite For

Denial of Security Clearance Due to Unresolved Financial Obligations
Impact of Personal Conduct on Financial Stability
Insufficient Evidence of Good-faith Efforts to Resolve Debts

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 refuted personal conduct security concerns under Guideline E. The formal finding for subparagraph 2.a was for the applicant, indicating that the judge did not find any personal conduct issues that would disqualify her from holding a security clearance.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
2.a	specific text not stated in this decision	For 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 significant financial issues, including multiple delinquent debts and unpaid judgments, which raised security concerns under Guideline F. Although some debts were mitigated, the overall financial situation was deemed insufficient to grant the security clearance, resulting in a denial.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	specific text not stated in this decision	For Applicant	Unspecified Financial	Unknown	—	—	—
1.b	Applicant denied owing the underlying debt that resulted in a $1,702 judgment awarded in 2011 $1,702	Against Applicant	Judgment Against Applicant	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	23 state tax liens filed in March 2009 totaling about $25,227 $25,227	Against Applicant	Tax Unpaid	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d–1.y	22 sub-charges — specific text not stated in this decision (18 against, 4 for the applicant).	Mixed			—	—	—
1.z	Applicant admitted owing a portion of the $1,864 debt to a telecommunications company $1,864	Against Applicant	Utility or Phone 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: ) ) ) ISCR Case No. 12-03238 ) Applicant for Security Clearance )

For Government: Alison O’Connell, Esq., Department Counsel For Applicant: Pro se

09/26/2013 ______________

STATEMENT OF CASE

______________

LOUGHRAN, Edward W., Administrative Judge:

Applicant refuted personal conduct security concerns, but she has not mitigated financial considerations security concerns. Eligibility for access to classified information is denied.

Statement of the Case

On May 6, 2013, the Department of Defense (DOD) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guidelines E (personal conduct) and F (financial considerations). The action was taken under Executive Order (EO) 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG) implemented by the DOD on September 1, 2006.

Applicant submitted a notarized response to the SOR on June 18, 2013, and requested a hearing before an administrative judge. The case was assigned to me on July 31, 2013. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on August 12, 2013, scheduling the hearing for September 5, 2013. The hearing was convened as scheduled. Government Exhibits (GE) 1 through 6 were admitted in evidence without objection. Applicant testified, called a witness, and submitted Applicant’s Exhibits (AE) A through N, which were admitted without objection. The record was held open for Applicant to submit additional information. She submitted documents that were marked AE O through W and admitted without objection. DOHA received the hearing transcript (Tr.) on September 13, 2013.

FINDINGS OF FACT

Applicant is a 49-year-old employee of a defense contractor. She has worked for her current employer since June 2010. She is applying for a security clearance for the first time. She has a bachelor’s degree. She married in 1991 and divorced in 2000. She married again in 2001 and divorced in 2011. She has three children from her first marriage, ages 21, 17, and 16.1

Applicant has had custody of her three children since her first divorce. Her first husband rarely pays child support.2

In about 2002, Applicant and her second husband bought a business that included a restaurant and a retail store. They made it a limited liability company (LLC),3 which included the restaurant and the store. Her second husband managed the finances, and she worked in the store. Her second husband was physically abusive and controlling. They separated in about 2004. Her second husband continued to manage the finances of the business, and he continued to use her name and Social Security number while conducting the LLC’s business. He did not pay all the debts and taxes owed from the business. The restaurant was ultimately unsuccessful and closed in about 2005. Applicant continued to work in the store after the restaurant closed.4

Applicant was concerned about all the debt that was incurred in her name for the business. She followed her lawyer’s advice and filed Chapter 7 bankruptcy in March 2007. Under Schedule D, Creditors Holding Secured Claims, Applicant listed a $15,872 loan for her 2006 car. Under Schedule E, Creditors Holding Unsecured Priority Claims, she listed a $148 student loan. Under Schedule F, Creditors Holding Unsecured Nonpriority Claims, the petition listed 11 debts totaling $1,053,188. Among the debts were five debts for returned checks totaling about $876; a judgment of $213,000 for a note on a business debt; a $824,558 debt on which Applicant was “guarantor on surety bond issued to husband’s corporation”; credit card debts ($3,833 and $1,805); and judgments ($4,915 and $4,200). Her debts were discharged in November 2007.5

Applicant continued to operate the store after the bankruptcy, but that part of the business also faltered. She closed the store in about 2008 and moved to another state. Her employment was sporadic, with an extended period of unemployment in 2008 and 2009, before she started her current job in June 2010. A number of debts became delinquent.6 The SOR alleges Applicant’s bankruptcy and 54 delinquent debts, unpaid judgments, and state tax liens. All of the debts appear on at least one credit report. Individual allegations are discussed below.

Applicant denied owing the underlying debt that resulted in a $1,702 judgment awarded in 2011 (SOR ¶ 1.b). She stated that she moved into a house in September 2008, and she paid $2,800 as a security deposit. Mr. X moved into the house with his son in November 2008, and they shared the house with Applicant and her children. Applicant stated that Mr. X caused damage to the property, but she disputes that it was more than the $2,800 security deposit. She does not dispute that a judgment was issued against her. The credit reports list the judgment as a joint responsibility, so Mr. X was likely also named in the suit. Applicant has made no payments toward the judgment, but she indicated that she will figure out a way to resolve the matter.7

SOR ¶¶ 1.cthrough 1.yallege 23 state tax liens filed in March 2009. The total of the 23 liens is about $25,227. The liens are listed by their case number on credit reports obtained in November 2011 and November 2012. The tax liens alleged in SOR ¶¶ 1.c ($483), 1.g ($428), 1.i ($483), 1.j ($269), 1.m ($2,484), 1.o ($253), 1.q ($333), 1.v ($320), and 1.y ($384) are not listed on the May 2013 Experian credit report submitted by Applicant. The other 14 tax liens are listed on the report. SOR ¶¶ 1.qq through 1.yy allege another nine state tax liens filed in March 2009. The total of the nine liens is about $1,011. The nine liens are listed on the 2011 credit report as reported without case numbers by Experian. They are not listed on the 2012 and 2013 credit reports.8

Applicant does not dispute that the state filed liens against her, but she denied owing the state taxes. She stated that they “were all business sales taxes and not personal ones that were incurred through a business that was closed in September 2008.” The credit reports list a significant amount of tax liens filed in 2007 and 2008 as released. Applicant stated that she hopes the liens in the SOR will also be released. She applied for relief to the state as an innocent spouse, but it was apparently denied. She retained an accountant who is working on obtaining an offer in compromise, a payment plan, or a reduction in amount owed. The accountant indicated that her accounting firm works with the state all the time and that the firm is confident that it “can get these issues cleared up in an expeditious manner.” The accounting firm will also provide financial counseling and planning.9

Applicant admitted owing a portion of the $1,864 debt to a telecommunications company, as alleged in SOR ¶ 1.z. She stated in her response to the SOR that she had come to a payment arrangement with the collection company handling the debt. Her testimony was inconsistent with her SOR response. She testified that she was disputing the debt. She indicated that her last bill was for $700, and she is disputing the remaining amount. She admitted that she does not have a payment arrangement with the collection company. The May 2013 Experian credit report lists a balance of $1,864. In her post-hearing submission, Applicant wrote that there was a balance of $732, but she did not submit any other documents or information about how she arrived at that figure.10

Applicant stated that the debts alleged in SOR ¶¶ 1.aa, and 1.hh through 1.ll, were discharged in her bankruptcy. The debts alleged in SOR ¶¶ 1.aa ($105), 1.ii ($215), 1.jj ($156), 1.kk ($145), and 1.ll ($55) are medical debts that are listed on the November 2012 Equifax credit report without naming the creditors. The $452 debt to a collection company on behalf of a telephone company (SOR ¶ 1.hh) is also listed on the 2012 Equifax credit report. None of the debts are specifically listed on Applicant’s bankruptcy petition. The May 2013 Experian credit report lists the telephone company debt and several named medical debts as discharged in Applicant’s bankruptcy.11

Applicant established that the two $85 debts alleged in SOR ¶¶ 1.bb and 1.cc were paid in January 2013 and July 2013. She credibly stated that the medical debts alleged in SOR ¶¶ 1.dd ($15), 1.ff ($544), and 1.gg ($65) were paid. The May 2013 Experian credit report supports her testimony.12

Applicant admitted owing the $185 medical debt alleged in SOR ¶ 1.ee. She wrote in her response to the SOR that she contacted the creditor to pay the debt. She has not yet paid the debt.13

Applicant admitted owing the $461 debt to a bank, as alleged in SOR ¶ 1.mm. She stated that she sent a check to a collection company, but the company returned the money, stating it did not hold the debt. In her post-hearing submission, Applicant wrote that she made a payment directly to the bank on September 15, 2013. She did not state how much she paid, and she did not submit any documentary proof of the payment.14 Applicant is unfamiliar with the creditor listed in SOR ¶ 1.nn ($133). It is not listed on the May 2013 Experian credit report. In her post-hearing submission, Applicant wrote that a debt of a similar amount was paid.15

SOR ¶ 1.oo alleges a $1,101 debt to a bank for an overdrawn checking account. Applicant entered into a settlement agreement with the collection company handling the debt to pay $66 per month until the settlement amount is paid. A payment receipt from February 7, 2013, shows a previous balance of $660, a payment of $66, and a new balance of $594. Applicant testified that she made the monthly payments. However, a payment receipt from July 29, 2013, shows a previous balance of $528, a payment of $66, and a new balance of $462. That indicates that only two payments were made between February 7, 2013, and July 29, 2013. Applicant made the $66 payments in August and September 2013. The current balance is $329.16

Applicant admitted owing the $22,429 debt to a collection company, as alleged in SOR ¶ 1.pp. The debt is for the deficiency balance owed on a car loan after Applicant’s car was repossessed. She settled the debt for $9,706, payable in monthly payments of $150. She wrote that the current balance is $8,906.17

SOR ¶¶ 1.zz through 1.bbb allege three debts totaling about $1,833 to the same furniture store for rent-to-own furniture. The three debts were consolidated and paid.18

Applicant disputed owing the $112 debt to a cable television provider (SOR ¶ 1.aaa. The debt is not listed on the May 2013 Experian credit report.19

Applicant paid about $11,000 to resolve a delinquent student loan that was not alleged in the SOR.20 She paid the student loan, even though she mistakenly thought it was discharged in her bankruptcy, because it was adversely affecting her ability to help her children receive student loans. She borrowed $4,000 from her 401(k) retirement account in order to pay the student loan and several other accounts.21

In December 2012, Applicant entered into an installment agreement with the Internal Revenue Service (IRS) to pay $150 a month to pay her tax debt of $2,611 for tax year 2011. She stated that she currently owes about $1,800. Applicant also owes the IRS about $2,200 tor tax year 2012.22

Applicant received financial counseling as a requirement of her bankruptcy, and her father gave her financial advice. She stated that her finances are improving. She now has a good job, and she receives periodic raises and bonuses that can be used to pay her debts. She stated that she would have been further along in his her payments, but her daughter developed medical problems and she had unexpected car repairs. She stated that she intends to pay her debts one at a time until they are paid.23

Applicant submitted a Questionnaire for National Security Positions (SF 86) in October 2011. She was required to answer the following questions under Section 26:

For the following, answer for the last 7 years, unless otherwise specified in the question. Disclose all financial obligations, including those for which you are a cosigner or guarantor.

a. Have you filed a petition under any chapter of the bankruptcy code? If “yes,” indicate Chapter 7, 11, or 13.

b. Have you had any possessions or property voluntarily or involuntarily repossessed or foreclosed?

c. Have you failed to pay Federal, State, or other taxes, or to file a tax return, when required by law or ordinance?

d. Have you had a lien placed against your property for failing to pay taxes or other debts?

e. Have you had a judgment entered against you?

f. Have you defaulted on any type of loan?

g. Have you had bills or debts turned over to a collection agency?

h. Have you had any account or credit card suspended, charged off, or cancelled for failing to pay as agreed?

k. Have you had your wages, benefits, or assets garnished or attached for any reasons?

m. Have you been over 180 days delinquent on any debts?

23 Tr. at 22, 48-51, 93, 95-97, 103-104; Applicant’s response to SOR; GE 2, 3; AE P. Applicant answered “Yes” in response to questions 26a, 26g, and 26k; and she listed her bankruptcy and two debts. She answered “No” to the remaining questions under Section 26.24

Applicant credibly denied intentionally falsifying the SF 86. She stated that she did not obtain a credit report before she filled out the SF 86. Having considered all the evidence, including Applicant’s age, background, character, demeanor, testimony, and that she submitted potentially derogatory information under another question (Section 22), I find that she did not intentionally falsify the SF 86.25

A vice president from Applicant’s company testified about Applicant’s excellent job performance, trustworthiness, reliability, work ethic, dedication, and honesty. Applicant submitted a number of letters and documents attesting to her job performance and strong moral character.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 to be 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, administrative judges apply the guidelines 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.”

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 the applicant or proven by Department Counsel.” The applicant has the ultimate burden of persuasion to obtain a favorable security decision.

24 GE 1. 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 EO 10865 provides that adverse 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 under AG ¶ 19. Two are potentially applicable in this case:

(a) inability or unwillingness to satisfy debts; and

Applicant accumulated a number of delinquent debts and was unable or unwilling to pay her financial obligations. The evidence is sufficient to raise the above disqualifying conditions.

Conditions that could mitigate financial considerations security concerns are provided under AG ¶ 20. The following are potentially applicable:

(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’s first husband rarely pays child support for their three children. Her second husband was physically abusive and controlling. He managed the finances of their business, and he continued to use her name and Social Security number while conducting the LLC’s business after they separated in about 2004. Those events were beyond her control. To be fully applicable, AG ¶ 20(b) also requires that the individual act responsibly under the circumstances.

Applicant was concerned about all the debt that was incurred in her name for the business. She filed Chapter 7 bankruptcy and an extensive amount of business and personal debt was discharged in 2007. The bankruptcy resolved her financial problems up to that point. However, Applicant continued to operate the store after the bankruptcy. The business ultimately failed, and she closed the store in about 2008. Her employment was sporadic, with periods of unemployment, before she started her current job in June 2010. The business failure and her unemployment were also beyond her control.

Applicant did not dispute that the state tax liens alleged in the SOR have been filed, but she did not believe that she was personally liable for them because they “were all business sales taxes and not personal ones that were incurred through a business that was closed in September 2008.” Her accountant indicated that her firm is working on obtaining an offer in compromise, a payment plan, or a reduction in amount owed. The accountant never indicated that Applicant is not personally responsible for the taxes.

I am giving Applicant the benefit of the doubt and crediting her with resolving all the debts that she indicated were paid, disputed, or discharged in her bankruptcy. That leaves more than $25,000 in state taxes (SOR ¶¶ 1.cthrough 1.y, and 1.qq through 1.yy); an unpaid $1,702 judgment (SOR ¶ 1.b); and the debts alleged in SOR ¶¶ 1.z ($1,864), 1.ee ($185), 1.mm ($461), 1.oo ($1,101 - current balance - $329), and 1.pp ($22,429 - current balance after settlement - $8,906). Applicant received financial counseling, and she now has a good job. She paid several debts and is making payments on other debts. She stated that she intends to pay her debts one at a time until they are paid. However, there are remaining concerns. The state taxes are apparently sales taxes that were collected by the retail business but never paid to the state. That is irresponsible behavior. Additionally, Applicant has made some inconsistent statements about her payments, and she has not acted responsibly toward her obligation to pay her federal taxes. She still owes the IRS about $4,000 for tax years 2011 and 2012.

I am unable to find that Applicant acted responsibly under the circumstances or that she made a good-faith effort to pay all her debts. Her finances are not yet under control. Her financial issues are recent and ongoing. I am unable to determine that they are unlikely to recur. They continue to cast doubt on her current reliability, trustworthiness, and good judgment. AG ¶ 20(a) is not applicable. AG ¶ 20(b) is partially applicable. The first section of AG ¶ 20(c) is applicable because of her financial counseling; the second section is not. AG ¶ 20(d) is applicable to the paid debts. It is not applicable to the other debts. AG ¶ 20(e) is applicable to the disputed debts. I find that financial concerns remain despite the presence of some mitigation.

Guideline E, Personal Conduct

The security concern for personal conduct is set out in AG ¶ 15, as follows:

Conduct involving questionable judgment, lack of candor, dishonesty, or unwillingness to comply with rules and regulations can raise questions about an individual’s reliability, trustworthiness and ability to protect classified information. Of special interest is any failure to provide truthful and candid answers during the security clearance process or any other failure to cooperate with the security clearance process.

AG ¶ 16 describes conditions that could raise a security concern and may be disqualifying. The following disqualifying conditions are potentially applicable:

(a) deliberate omission, concealment, or falsification of relevant facts from any personnel security questionnaire, personal history statement, or similar form used to conduct investigations, determine employment qualifications, award benefits or status, determine security clearance eligibility or trustworthiness, or award fiduciary responsibilities.

Applicant did not intentionally provide false information on her SF 86. AG ¶ 16(a) is not applicable. SOR ¶ 2.a is concluded for 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 relevant 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. I have incorporated my comments under Guidelines E and F in my whole-person analysis. Some of the factors in AG ¶ 2(a) were addressed under those guidelines, but some warrant additional comment.

Applicant’s first husband is a deadbeat father, and her second husband was physically abusive and controlling. Her 2007 bankruptcy should have provided her a fresh start, but her financial problems continued. She now has a good job where she is highly regarded, and she has made some strides in addressing her delinquent debts. However, her federal tax obligations have suffered while she attempted to pay other debts. Applicant is headed in the right direction, but shirking her tax responsibilities is not the way to get there.

Overall, the record evidence leaves me with questions and doubts as to Applicant’s eligibility and suitability for a security clearance. I conclude Applicant refuted personal conduct security concerns, but she has not mitigated financial considerations security concerns.

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

Subparagraph 1.a: For Applicant Subparagraphs 1.b-1.z: Against Applicant Subparagraphs 1.aa-1.dd: For Applicant Subparagraph 1.ee: Against Applicant Subparagraphs 1.ff-1.ll: For Applicant Subparagraph 1.mm: Against Applicant Subparagraph 1.nn: For Applicant Subparagraphs 1.oo-1.yy: Against Applicant Subparagraphs 1.zz-1.ccc: For Applicant

Paragraph 2, Guideline E: For Applicant

Subparagraph 2.a: For 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.

________________________ Edward W. Loughran Administrative Judge

FOOTNOTES

1 Tr. at 18, 29-30, 33, 51-52; GE 1, 2. 2 Tr. at 24, 29-36; GE 2. 3 A limited liability company (LLC) is a business entity organized in the United States under state law. Unlike a partnership, all of the members of an LLC have limited personal liability for its debts. See http://www.irs.gov/pub/irs-pdf/p3402.pdf. Depending on elections made by the LLC and the number of owners, the IRS will treat an LLC as either a corporation, partnership, or as part of the LLC’s owner’s tax return (a “disregarded entity”). See http://www.irs.gov/Businesses/Small-Businesses-&-Self- Employed/Limited-Liability-Company-(LLC). 4 Tr. at 30-33, 40, 44-47, 52-54; Applicant’s response to SOR; GE 1, 2; AE I, M, N, P. 5 Tr. at 24, 35-36, 47; Applicant’s response to SOR; GE 2, 3. 6 Tr. at 25, 40, 44-48, 54, 58-61, 67-69; Applicant’s response to SOR; GE 1, 2. 7 Tr. at 56-58, 64-66; Applicant’s response to SOR; GE 2, 4, 5; AE G, Q. 8 Applicant’s response to SOR; GE 4, 5; AE G, Q. 9 Tr. at 36-44, 67; Applicant’s response to SOR; GE 2; AE H, R. 10 Tr. at 69-71; Applicant’s response to SOR; GE 4, 5; AE G, Q. 11 Tr. at 71-74, 77; Applicant’s response to SOR; GE 4, 5; AE G, Q. 12 Tr. at 74-77; Applicant’s response to SOR; GE 4, 5; AE G, Q, T. 13 Tr. at 75; Applicant’s response to SOR; GE 4, 5; AE G, Q. 14 Tr. at 77-78; Applicant’s response to SOR; GE 2, 4, 5; AE G, Q. 15 Tr. at 78; Applicant’s response to SOR; GE 4, 5; AE G, Q. 16 Tr. at 78-81; Applicant’s response to SOR; GE 2, 4, 5; AE E, G, J, Q, W. 17 Tr. at 81-85; Applicant’s response to SOR; GE 2, 4, 5; AE G, L, Q. 18 Tr. at 85-87; Applicant’s response to SOR; GE 4, 5; AE F, G, Q. 19 Tr. at 87-88; Applicant’s response to SOR; GE 4, 5; AE G, Q. 20 Any debt that was not alleged in the SOR will not be used for disqualification purposes. They may be considered in assessing Applicant’s overall financial situation, in the application of mitigating conditions, and in analyzing the “whole person.” 21 Tr. at 25-28, 88-90; AE A, K, Q, U. 22 Tr. at 88-89, 95-96; Applicant’s response to SOR; GE 2. 25 Tr. at 23-24, 94-95; Applicant’s response to SOR; GE 1; AE B. 26 Tr. at 18-23; AE I.