CASE · Clearance Adjudication Search EngineCASE

Loading case…

ISCR Case 12-11202.h1 — CASE

ISCR Case 12-11202.h1denied

Case Headnote

ISCR Case No. 12-11202.h1

deniedJun 21, 2016· Hon. Richard A. Cefola· hearing

Summary

A 54-year-old federal contractor was denied a security clearance under Guideline F (Financial Considerations) due to a history of significant financial issues, including multiple bankruptcies and delinquent debts. The applicant admitted to several financial concerns, such as a 2012 wage garnishment of approximately $380 for delinquent state taxes, which has since been paid. However, he also acknowledged an outstanding federal tax debt of about $4,338 for tax year 2009, for which he claimed a payment plan but provided no supporting evidence.

Additionally, the applicant admitted to misusing a company-issued credit card in December 2007, though a similar allegation from December 2010 was attributed to a $10 clerical error and not disputed by the government. His 2010 Chapter 13 Bankruptcy was dismissed in 2012, which he attributed to attorney malfeasance without providing substantiation.

The denial was based on the applicant's failure to provide sufficient evidence to mitigate the security concerns. His explanations for financial issues were deemed unsubstantiated, and he did not adequately address the government's concerns regarding his financial obligations, leading to doubts about his reliability and trustworthiness.

Why the Applicant Was Denied

The applicant admitted to significant past-due debts and multiple bankruptcies without providing supporting documentation to demonstrate resolution.
The applicant's explanations for his financial issues were deemed insufficient and unsubstantiated, raising doubts about his reliability and trustworthiness.
The applicant failed to address the government's concerns regarding his financial obligations adequately.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability or Unwillingness to Satisfy Debts
AG ¶ 19(c)raisedHistory of Not Meeting Financial Obligations

Key Rule Quoted

“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.”

Procedural Posture

SOR issuedJun 10, 2015
Answer filedAug 7, 2015Applicant submitted without supporting documentation.
Hearing held—
Decision dateJun 21, 2016

Cite For

Insufficient Evidence to Mitigate Financial Concerns Under Guideline F
Impact of Multiple Bankruptcies on Security Clearance Eligibility
Importance of Supporting Documentation in Addressing Financial Issues

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 multiple financial concerns against the applicant, including delinquent taxes and a history of bankruptcy. However, some allegations were mitigated, such as a state tax debt that was paid and a minor clerical error regarding a credit card misuse. Overall, the applicant's financial issues were deemed significant enough to deny the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.h	Applicant admits that his wages were garnished in 2012, in the amount of about $380, to pay delinquent state taxes. This state tax debt is paid; and as such, this allegation is found for Applicant. $380	For Applicant	Tax Unpaid	Admitted	—	—	—
1.i	Applicant admits that he is indebted to the Federal Government for delinquent taxes in the amount of about $4,338 for tax year 2009. He avers that he is 'currently on a monthly payment plan to pay' this debt, but has offered nothing in support of his bare averment. This allegation is found against Applicant. $4,338	Against Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.j	In December of 2007 and again in December of 2010, Applicant admits misusing his company issued credit card, although he avers that allegation 1.j. only involved a $10 clerical error. The Government does not dispute Applicant’s explanation as to the 2010 alleged misuse; and as such, allegation 1.j. is found for Applicant. $10	For Applicant	Credit Card Debt	Admitted	—	—	—
1.k	Applicant admits that his 2010 Chapter 13 Bankruptcy was dismissed in 2012. He attributes this dismissal to the malfeasance of his bankruptcy attorney, but has offered nothing in support of this bare averment. This allegation is found against Applicant.	Against Applicant	Bankruptcy Filing	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. 12-11202 ) ) Applicant for Security Clearance )

For Government: Adrienne Strzelczyk, Esquire, Department Counsel For Applicant: Pro se

June 21, 2016

______________

STATEMENT OF CASE

______________

CEFOLA, Richard A., Administrative Judge:

Applicant submitted his Electronic Questionnaires for Investigations Processing (e-QIP) on May 17, 2012. On June 10, 2015, the Department of Defense (DOD) issued a Statement of Reasons (SOR) detailing the security concerns under Guideline F for Applicant. 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 after September 1, 2006.

Applicant answered the SOR in writing, without submitting any supporting documentation, on August 7, 2015, and requested an Administrative Determination by an administrative judge. Department Counsel issued a File of Relevant Material (FORM) on September 8, 2015. Applicant responded to the FORM (Response), with only written argument, on October 26, 2015. Department Counsel had no objection. The case was assigned to me on January 19, 2016. Based upon a review of the pleadings and exhibits, eligibility for access to classified information is denied.

FINDINGS OF FACT

In his Answer to the SOR, Applicant admitted the factual allegations in Paragraphs 1.a., 1.b., and 1.d.~1.k. of the SOR, with only explanations, and no supporting documentation. He denied the factual allegation in Paragraph 1.c. the SOR, again with only explanation.

Applicant is a 54-year-old employee of a federal contractor. (Item 2 at pages 5 and 11.) He seeks a security clearance in conjunction with his position as a “Multi Discipline System” engineer, and has been so employed since 1984. (Item 2 at page 11.)

1.j. and 1.k. In December of 2007 and again in December of 2010, Applicant admits misusing his company issued credit card, although he avers that allegation 1.j. only involved a $10 clerical error. The Government does not dispute Applicant’s explanation as to the 2010 alleged misuse; and as such, allegation 1.j. is found for Applicant. However, allegation 1.k. is found against Applicant.

1.i. Applicant admits that he is indebted to the Federal Government for delinquent taxes in the amount of about $4,338 for tax year 2009. He avers that he is “currently on a monthly payment plan to pay” this debt, but has offered nothing in support of his bare averment. This allegation is found against Applicant.

1.g. Applicant admits that his 2009 Chapter 13 Bankruptcy was dismissed in 2010. He disputes that he had a late trustee payment, but has offered nothing in support of his bare averment. This allegation is found against Applicant.

1.f. Applicant admits that his 2010 Chapter 13 Bankruptcy was dismissed in 2012. He attributes this dismissal to the malfeasance of his bankruptcy attorney, but has offered nothing in support of this bare averment. This allegation is found against Applicant.

1.h. Applicant admits that his wages were garnished in 2012, in the amount of about $380, to pay delinquent state taxes. This state tax debt is paid; and as such, this allegation is found for Applicant.

1.b.~1.e. Applicant filed for the protection of another Chapter 13 Bankruptcy in August of 2015. This is evidenced by that bankruptcy petition. (Item 8, the first three pages.) This petition was approved, and Applicant was ordered to make monthly trustee payments of $3,863 beginning in September of 2015. (Item 8 at page 13.) While this approved petition appears to cover those past-due debts alleged in subparagraphs 1.b.~1.e., Applicant has submitted nothing other than his bare averment that he is making these payments. This averment is suspect, at best, in light of Applicant’s two prior failed Chapter 13 Bankruptcies. These allegations are found against Applicant. 1.a. Applicant admits that he is indebted to Creditor A in the amount of about $3,238. As he has offered nothing further of substance in this regard, other the general bare averments in his Response, this allegation is found against Applicant.

POLICIES

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the 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. (AG Paragraph 2.) The administrative judge’s over-arching adjudicative goal is a fair, impartial and commonsense decision. According to AG Paragraph 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 Paragraph 2(b) requires that “[a]ny doubt concerning personnel being considered for access to classified information will be resolved in favor of the 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 Paragraph E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive Paragraph 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 Paragraph 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 Subparagraph 19(a), an “inability or unwillingness to satisfy debts@ is potentially disqualifying. Similarly under Subparagraph 19(c), “a history of not meeting financial obligations@ may raise security concerns. Applicant has significant past-due debt, which he has failed to demonstrate he has resolved. I can find no countervailing Mitigating Condition that is applicable here. Financial Considerations are found 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. Under AG Paragraph 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.

The Administrative Judge should also consider the nine adjudicative process factors listed at AG Paragraph 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 considered all of the evidence, including the potentially disqualifying and mitigating conditions surrounding this case. The record evidence leaves me with questions and doubts as to his eligibility and suitability for a security clearance. Applicant has failed to fully respond to the Government’s concerns; and as such, has failed to address the alleged past-due debts. For this reason, I conclude Applicant has not mitigated the security concerns under the whole-person concept arising from his Financial Considerations.

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

Subparagraphs 1.a.~1.g. Against Applicant

Subparagraph 1.h. For Applicant

Subparagraph 1.i. Against Applicant

Subparagraph 1.j. For Applicant

Subparagraph 1.k. 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.

Richard A. Cefola Administrative Judge

FOOTNOTES

The allegations will be discussed chronologically, and not as they appear on the SOR.