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ISCR Case 12-03941.h1 — CASE

ISCR Case 12-03941.h1denied

Case Headnote

ISCR Case No. 12-03941.h1

deniedJun 17, 2014· Hon. Nichole L. Noel· hearing

Summary

A 49-year-old analyst for a federal contractor was denied a security clearance under Guideline F, Financial Considerations. The denial stemmed from approximately $65,000 in unresolved delinquent debt. Specifically, the Statement of Reasons cited two primary debts: one for approximately $49,971 and another for approximately $17,882.

While the applicant had resolved other debts totaling approximately $20,000, this was insufficient to mitigate the remaining financial concerns. The decision highlighted that the applicant failed to provide updated financial information or adequate evidence of financial rehabilitation.

The denial was ultimately based on the persistence of the applicant's financial problems over several years, which raised doubts about her reliability and judgment. Despite some efforts to address certain debts, the significant amount of unresolved debt and the lack of a clear plan for resolution led to the conclusion that her financial issues posed a security risk.

Why the Applicant Was Denied

Applicant has approximately $65,000 in unresolved delinquent debt.
Applicant failed to provide updated financial information or evidence of financial rehabilitation.
The applicant's financial problems have persisted for several years, raising doubts about her reliability and judgment.

Conditions Referenced

Disqualifying

AG ¶ 19raisedFinancial ConsiderationsApplicant has a history of unresolved financial difficulties that may make her more vulnerable to financial pressures.

Mitigating

AG ¶ 20rejectedFinancial ConsiderationsWhile Applicant resolved approximately $20,000 in debts, this was insufficient to mitigate the concerns raised by the remaining unresolved debts.

Key Rule Quoted

“Any doubt concerning personnel being considered for access to classified information will be resolved in favor of national security.”
— AG ¶ 2(b)

Procedural Posture

SOR issuedJan 2, 2014
Answer filed—Applicant requested a decision without a hearing.
Hearing held—Decision made based on written record.
Decision dateJun 17, 2014

Cite For

Denial of Security Clearance Due to Unresolved Financial Issues
Insufficient Evidence of Financial Rehabilitation
Impact of Financial Difficulties on Security Clearance Eligibility

Editorial summary generated for research. Not legal advice; not a prediction. Verify against the full decision before relying on any quoted language.

Standardized Decision Profile

SEAD-4 Guideline F · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The applicant has unresolved delinquent debts totaling approximately $65,000, which raised significant security concerns under Guideline F. While the applicant resolved some debts, the judge found that the remaining debts and the applicant's overall financial situation did not mitigate the concerns, leading to a denial of the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant owes approximately $49,971 in unresolved delinquent debt. $49,971	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.b	Applicant owes approximately $17,882 in unresolved delinquent debt. $17,882	Against Applicant	Unspecified Financial	Admitted	—	—	Claimed Payment Plan with Creditor
1.c	Applicant has resolved debts totaling approximately $20,000. $20,000	For Applicant	Unspecified Financial	Denied	—	(a) behavior happened long ago / infrequent / unlikely to recur	Documented Debt Paid in Full
1.d–1.e	2 sub-charges — specific text not stated in this decision (for the applicant). (low confidence)	For Applicant			—	—	—

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. 12-03941 ) Applicant for Security Clearance )

For Government: Gina L. Marine, Esq., Department Counsel For Applicant: Pro se

06/17/2014 ______________

STATEMENT OF CASE

______________

NOEL, Nichole L., Administrative Judge:

Applicant contests the Department of Defense’s (DOD) intent to deny her eligibility for a security clearance. Applicant owes approximately $65,000 in unresolved delinquent debt. Clearance is denied.

Statement of the Case

On January 2, 2014, the Department of Defense (DOD) issued a Statement of Reasons (SOR) detailing security concerns under the financial considerations guideline.1 DOD adjudicators were unable to find that it is clearly consistent with the national interest to grant Applicant’s security clearance. Applicant answered the SOR and requested a decision without a hearing. The Government submitted its written case on April 2, 2014. A complete copy of the file of relevant material (FORM) was provided to Applicant. In addition, Applicant was also provided a copy of the Directive.2 Applicant received the FORM on April 15, 2014. She was afforded an opportunity to file objections and submit material to refute, extenuate, or mitigate the security concerns. Applicant did not respond. Accordingly, the items appended to the Government’s brief are admitted as Government’s Exhibits (GE) 1 through 7. The case was assigned to me on June 9, 2014.

FINDINGS OF FACT

Applicant, 49, has worked as an analyst for a federal contractor since November 2010. Married since 2009, Applicant is the mother of one adult child from a previous marriage and four adult step-children.3

The SOR alleges that Applicant is indebted to five creditors for approximately $91,223. Applicant blames her financial problems on her husband’s employment history. During the course of their courtship and marriage, Applicant’s husband has been either unemployed or underemployed. Before the couple married, Applicant’s husband was unemployed for a period of time beginning in 2007. However, Applicant did not provide specific dates for his unemployment. At some point Applicant’s husband returned to work, but became unemployed again in May 2012. He returned to work after an unspecified amount of time, earning significantly less money. Applicant began working a second job to help make ends meet, but it was not enough to cover the deficit. In addition to the debts alleged in the SOR, Applicant discussed other delinquent accounts and financial problems dating back to 2007 in her January and June 2011 background interviews. According to a personal financial statement Applicant completed in August 2013, she has a negative net remainder of $156 after paying her recurring financial obligations each month. She has no liquid assets or retirement savings. Her only asset is an interest in a piece of unspecified real estate. Applicant has not provided any current information regarding her finances.4

Applicant denies owing three of the five accounts alleged in the SOR, ¶¶ 1.cthrough 1.e, because they have been resolved. Applicant provided documentation that the accounts, totaling approximately $20,000, have been a paid in full or settled. She admits owing the debts alleged in ¶¶ 1.a ($49,971) and 1.b. ($17,882) In her Answer, Applicant claims that she has been making $300 monthly payments towards the debt alleged in ¶ 1.b. She did not provide any details regarding this payment arrangement. According to financial records she provided, Applicant paid a total of $876 to several creditors between August and September 2013. She did not specify which of these payments, if any, were related to debts alleged in the SOR. The debt alleged in ¶ 1.a remains unresolved. Applicant did not offer any information on her plans to resolve this debt.5

According to Applicant, there is no reason for anyone to question her finances or her ability to pay her debts.6

POLICIES

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines. 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.” In reaching this decision, I have drawn only those conclusions that are reasonable, logical, and based on the evidence.

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.

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

Financial Considerations

Unresolved delinquent debt is a security concern because “an individual who is financially over extended is at risk of having to engage in illegal acts to generate funds.”7 Financial difficulties have proven to be a significant motivating factor for espionage or attempted espionage.8 The Government does not have to prove that an applicant poses a clear and present danger to national security,9 or that an applicant poses an imminent threat of engaging in criminal acts. Instead, it is sufficient to show that an applicant has a history of unresolved financial difficulties that may make her more vulnerable to financial pressures.10

The SOR alleges that Applicant owes approximately $91,223 in delinquent debt. The record also illustrates that Applicant has financial problems spanning a number of years that extend beyond debts listed in the SOR. The allegations are supported by the record, establishing the Government’s prima facie case.11 Applicant has demonstrated an inability to pay her debts as well as a history of not doing so.12 While Applicant’s resolution of almost $20,000 in delinquent debt shows good-faith efforts to resolve her delinquent debt, this is not sufficient to mitigate the security concern raised by the remaining $65,000 of unresolved delinquent debts and her history of financial problems.

The record does not contain enough evidence to determine that Applicant’s financial problems were caused by events beyond her control and that she acted responsibly to resolve them. Since at least 2007, Applicant accumulated over $90,000 in delinquent debt, which she attributes to her husband’s unemployment and underemployment over the past seven years. However, the record does not contain sufficient information about her husband’s employment history and its effect on their finances to support a finding that Applicant’s financial problems were largely caused by events beyond her control or by liberal use of credit cards. Because Applicant has not provided updated financial information, to include where she obtained the funds to resolve $20,000 of delinquent debt, I find that Applicant’s financial problems are ongoing. Based on the available information, Applicant is unable to meet her recurring financial obligations, let alone resolve her remaining $65,000 in delinquent debt. Applicant’s finances are not under control. As such, Applicant’s unresolved delinquent debts continue to cast doubt on her current reliability, trustworthiness, and good judgment.

I considered the potentially disqualifying and mitigating conditions in light of all the facts and circumstances surrounding this case. Applicant failed to meet her burdens of production and persuasion. In requesting an administrative determination, Applicant chose to rely on the written record. In doing so, however, she failed to submit sufficient information or evidence to supplement the record with relevant and material facts regarding her circumstances, articulate her position, and mitigate the financial concerns. She failed to offer evidence to address her delinquent debt. By failing to provide such information, Applicant failed to establish financial rehabilitation or the mitigation of the financial considerations concerns. Following Egan13 and the clearly-consistent standard, I resolve these doubts in favor of protecting national security.

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, Financial Considerations: AGAINST APPLICANT

Subparagraphs 1.a – 1.b: Against Applicant

Subparagraphs 1.c – 1.e: For Applicant

CONCLUSION

Based on the record, 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.

________________________ Nichole L. Noel Administrative Judge

FOOTNOTES

1 This case is adjudicated under Executive Order (EO) 10865, Safeguarding Classified Information within Industry, signed by President Eisenhower on February 20, 1960, as amended; as well as DOD 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 to this case. 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. 2 FORM cover letter, dated April 9, 2014. 3 GE 5. 4 GE 5 – 6. 5 GE 6 – 7; Answer. 6 GE 6. 7 AG ¶ 18. 8 ISCR Case No. 96-0454 (App. Bd. Feb. 7, 1997). 9 See Smith v. Schlesinger, 513 F.2d 463, 476 n. 48 (D.C. Cir. 1975). 10 See ISCR Case No. 87-1800 (App. Bd. Feb. 14, 1989) 11 GE 8-10; Answer. 12 AG ¶¶ 19(a) and (c). 13 Navy v. Egan, 484 U.S. 518 (1988).