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ISCR Case 12-12149.h1 — CASE

ISCR Case 12-12149.h1denied

Case Headnote

ISCR Case No. 12-12149.h1

deniedMar 9, 2016· Hon. Darlene Lokey Anderson· hearing

Summary

A 50-year-old electronic technician employed by a defense contractor was denied a security clearance under Guideline F, Financial Considerations. The denial stemmed from six delinquent debts totaling approximately $29,000. These debts included three charged-off credit card accounts with banks, amounting to approximately $10,812, $6,232, and $3,957, respectively.

Additional delinquent debts included a $136 collection account, another charged-off bank account for approximately $8,241, and a charged-off department store account for approximately $265. Disqualifying conditions 19.(a) and 19.(c) were raised due to these financial issues.

The applicant, despite being employed full-time since 2011, had made no payments toward resolving any of these debts. This lack of effort and the significant financial irresponsibility led to concerns about his judgment and reliability, ultimately resulting in the denial of his security clearance.

Why the Applicant Was Denied

The applicant has six delinquent debts totaling approximately $29,000, indicating financial irresponsibility.
He has not made any payments toward resolving his delinquent debts, demonstrating a lack of good faith effort.
The applicant's financial issues raise concerns about his judgment and reliability, which are critical for security clearance.

Conditions Referenced

Disqualifying

19.(a)appliedInability or Unwillingness to Satisfy Debts
19.(c)appliedA History 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 filedJul 1, 2015Applicant elected to proceed without a hearing.
Hearing held—Determined on written record.
Decision dateMar 9, 2016

Cite For

Financial Irresponsibility as a Disqualifying Factor Under Guideline F
Lack of Good Faith Effort to Resolve Debts as a Basis for Denial
The Importance of Demonstrating Financial Responsibility for 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 judge found that the applicant had multiple delinquent debts totaling approximately $29,000, which he failed to address despite being employed full-time since 2011. The judge ruled against the applicant on all financial allegations, concluding that he demonstrated poor judgment and financial irresponsibility, which raised security concerns under Guideline F.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	a delinquent credit card debt owed to a bank for an account that was charged off in the approximate amount of $10,812. $10,812	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	a delinquent credit card debt owed to a bank for an account that was charged off in the approximate amount of $6,232. $6,232	Against Applicant	Credit Card Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	a delinquent credit card debt owed to a bank for an account that was charged off in the approximate amount of $3,957. $3,957	Against Applicant	Credit Card Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	a delinquent debt owed to a creditor for an account that was placed for collection in the amount of $136. $136	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	a delinquent debt owed to a bank for an account that was charged off in the approximate amount of $8,241. $8,241	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	a delinquent debt owed to a department store for an account that has been charged off in the approximate amount of $265. $265	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. 12-12149 ) ) Applicant for Security Clearance )

For Government: Gregg A. Cervi, Department Counsel For Applicant: Pro se

March 9, 2016

______________

STATEMENT OF CASE

______________

LOKEY ANDERSON, Darlene D., Administrative Judge:

Applicant submitted his Electronic Questionnaire for Investigations Processing (e-QIP) on July 5, 2012. (Government Exhibit 3.) On June 10, 2015, the Department of Defense (DoD), pursuant to Executive Order 10865 and Department of Defense Directive 5220.6 (Directive), dated January 2, 1992 (as amended), issued a Statement of Reasons (SOR) to the Applicant, which detailed reasons why the DoD could not make the preliminary affirmative finding under the Directive that it is clearly consistent with the national interest to grant or continue a security clearance for Applicant and recommended referral to an Administrative Judge to determine whether clearance should be denied or revoked.

Applicant responded to the SOR in writing on July 1, 2015, and elected to have the case determined on a written record in lieu of a hearing. Department Counsel submitted the Government’s File of Relevant Material (FORM) to Applicant on or about November 3, 2015. Applicant received the FORM on November 15, 2015. Applicant was instructed to submit information in rebuttal, extenuation or mitigation within 30 days of receipt. Applicant did not submit a reply to the FORM. This case was assigned to the undersigned on February 19, 2016. Based upon a review of the pleadings and exhibits, eligibility for access to classified information is denied.

FINDINGS OF FACT

Applicant is 50 years old, and is divorced. He is employed for a defense contractor as an Electronic Technician. He is seeking to obtain a security clearance in connection with this employment.

The Government opposes Applicant's request for a security clearance, on the basis of allegations set forth in the Statement of Reasons (SOR). The following findings of fact are entered as to each paragraph and guideline in the SOR:

Paragraph 1 (Guideline F - Financial Considerations) The Government alleges that Applicant is ineligible for clearance because he is financially overextended and at risk of having to engage in illegal acts to generate funds.

There are six delinquent debts set forth in the SOR totaling approximately $29,000. Applicant admitted the allegations, except 1.b., 1.c., and 1.e. under this guideline. Credit reports of the Applicant dated December 8, 2014; and July 25, 2012, which includes information from all three credit reporting agencies, indicates that Applicant is indebted to each of the creditors listed in the SOR. (Government Exhibits 4 and 5.)

Applicant attributes his financial problems to being laid off on three separate occasions in the past, and being unemployed for long periods of time. Since November 2011 he has been working full time for his current employer.

At the time of his background interview in August 2012, Applicant’s financial situation was strained. He explained that he tries to pay all of his current monthly bills on time, but does not have much money left over at the end of the month to put toward his delinquent debt. His wife only works part-time. He is currently working to get back on his feet and attempt to resolve his delinquent debts. His ultimate goal is to contact each of the creditors and set up a payment plan to resolve the debt.

At this time, however, the following delinquent debts are overdue and owing:

1.a., a delinquent credit card debt owed to a bank for an account that was charged off in the approximate amount of $10,812. Applicant admits the debt.

1.b., a delinquent credit card debt owed to a bank for an account that was charged off in the approximate amount of $6,232. Applicant denies the debt, but the debt is reflected as owing on his most recent credit report. (Government Exhibit 4.)

1.c., a delinquent credit card debt owed to a bank for an account that was charged off in the approximate amount of $3,957. Applicant denies the debt, but the debt is reflected as owing on his most recent credit report. (Government Exhibit 4.) 1.d., a delinquent debt owed to a creditor for an account that was placed for collection in the amount of $136. Applicant admits the debt.

1.e., a delinquent debt owed to a bank for an account that was charged off in the approximate amount of $8,241. Applicant failed to admit or deny the debt. The debt appears on his most recent credit report as owing. (Government Exhibit 4.)

1.f., a delinquent debt owed to a department store for an account that has been charged off in the approximate amount of $265. Applicant admits the debt.

There is no evidence in the record to show that Applicant has done anything to address any of the delinquent debts set forth in the SOR, even the smallest debt owed in the amount of $265. Based upon the evidence presented, each of the delinquent debts listed in the SOR remain owing.

POLICIES

Enclosure 2 of the Directive sets forth adjudication policies divided into "Disqualifying Factors" and "Mitigating Factors." The following Disqualifying Factors and Mitigating Factors are found to be applicable in this case:

Guideline F (Financial Considerations)

18. The Concern. 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.

Conditions that could raise a security concern:

19.(a) inability or unwillingness to satisfy debts; and

19.(c) a history of not meeting financial obligations.

Conditions that could mitigate security concerns:

None.

In addition, as set forth in Enclosure 2 of the Directive at pages 18-19, in evaluating the relevance of an individual’s conduct, the Administrative Judge should consider the following general factors:

a. the nature, extent, and seriousness of the conduct; b. the circumstances surrounding the conduct, to include knowledgeable participation;

c. the frequency and recency of the conduct;

d. the individual’s age and maturity at the time of the conduct;

e. the extent to which participation is voluntary;

f. the presence or absence of rehabilitation and other permanent behavioral changes;

g. the motivation for the conduct;

h. the potential for pressure, coercion, exploitation, or duress; and

i. the likelihood of continuation or recurrence.

The eligibility criteria established in the DoD Directive identify personal characteristics and conduct, which are reasonably related to the ultimate question, posed in Section 2 of Executive Order 10865, of whether it is “clearly consistent with the national interest” to grant an applicant’s request for access to classified information.

The DoD Directive states, “The adjudicative process is an examination of a sufficient period of a person’s life to make an affirmative determination that the person is an acceptable security risk. Eligibility for access to classified information is predicated upon the individual meeting these personnel security guidelines. The adjudicative process is the careful weighing of a number of variables known as the whole-person concept. Available, reliable information about the person, past and present, favorable and unfavorable, should be considered in reaching a determination.” The Administrative Judge can draw only those inferences or conclusions that have reasonable and logical basis in the evidence of record. The Judge cannot draw inferences or conclusions based on evidence that is speculative or conjectural in nature. Finally, as emphasized by President Eisenhower in Executive Order 10865, “Any determination under this order adverse to an applicant shall be a determination in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.”

CONCLUSION

In the defense industry, the security of classified industrial secrets is entrusted to civilian workers who must be counted upon to safeguard such sensitive information twenty-four hours per day, seven days per week. The Government is therefore appropriately concerned when available information indicates that an applicant for clearance may be involved in instances of financial irresponsibility, which demonstrates poor judgment or unreliability. It is the Government’s responsibility to present substantial evidence to support the finding of a nexus, or rational connection, between the applicant’s conduct and the holding of a security clearance. If such a case has been established, the burden then shifts to the applicant to go forward with evidence in rebuttal, explanation or mitigation, which is sufficient to overcome or outweigh the Government’s case. The applicant bears the ultimate burden of persuasion in proving that it is clearly consistent with the national interest to grant him or her a security clearance.

In this case the Government has met its initial burden of proving that Applicant has been financially irresponsible (Guideline F). This evidence indicates poor judgment, unreliability and untrustworthiness on the part of Applicant. Because of the scope and nature of Applicant's conduct, I conclude there is a nexus or connection with his security clearance eligibility.

The evidence presented shows that Applicant incurred a number of delinquent debts that he cannot afford to pay. He states that he was laid off from work and unemployed for an extended period and could not pay his debts. Since November 2011 he has been working full time without interruption. Despite this fact, he has not addressed even one of the delinquent debts set forth in the SOR. Without compelling documentation showing that Applicant has made financial arrangements and followed these arrangements to meet his past-due financial obligations, he has not shown the requisite good judgment, reliability, or trustworthiness that is necessary in order to be eligible for access to classified information.

Under the particular circumstances of this case, Applicant has not met his burden of proving that he is worthy of a security clearance. He does not have a concrete understanding of his financial responsibilities and has not addressed any of his delinquent debts set forth in the SOR. Thus, it cannot be said that he has made a good- faith effort to resolve his past-due indebtedness. He has not shown that he is or has been reasonably, responsibly, or prudently addressing his financial situation. Thus, Applicant has not demonstrated that he can properly handle his financial affairs. He must demonstrate a history and pattern of financial responsibility, including the fact he has not acquired any new debt that he is unable to pay. Considering all of the evidence, Applicant has not introduced persuasive evidence in rebuttal, explanation, or mitigation that is sufficient to overcome the Government's case.

Under Guideline F (Financial Considerations), Disqualifying Conditions 19.(a) inability or unwillingness to satisfy debts; and 19.(c) a history of not meeting financial obligations, apply. None of the mitigating conditions are applicable. Applicant has been working for his current employer since 2011. He has not made even one payment toward resolving any of the delinquent debts set forth in the SOR. He not shown efforts to obtain financial counseling. In fact, there is no evidence to show a sufficient ratio of current income to debt and expenses to avoid future financial delinquencies. He has not made a good-faith effort to satisfy his delinquent debts. In fact, he has shown that he is not financially responsible. Accordingly, I find against Applicant under Guideline F (Financial Considerations). I have also considered the “whole-person concept” in evaluating Applicant’s eligibility for access to classified information. Under the particular facts of this case, the totality of the conduct set forth above, when viewed under all of the guidelines as a whole, support a whole-person assessment of poor judgement, untrustworthiness, unreliability, an unwillingness to comply with rules and regulations, and/or other characteristics indicating that the person may not properly safeguard classified information.

I have considered all of the evidence presented. It does not mitigate the negative effects of his history of financial indebtedness and the effects that it can have on his ability to safeguard classified information. On balance, it is concluded that Applicant has failed to overcome the Government's case opposing his request for a security clearance. Accordingly, the evidence supports a finding against Applicant as to the factual and conclusionary allegations expressed in Paragraph 1 of the SOR.

FORMAL FINDINGS

Formal findings For or Against the applicant on the allegations in the SOR, as required by Paragraph E3.1.25 of Enclosure 3 of the Directive are:

Paragraph 1: Against Applicant. Subpara. 1.a. Against Applicant. Subpara. 1.b. Against Applicant. Subpara. 1.c. Against Applicant. Subpara. 1.d. Against Applicant. Subpara. 1.e. Against Applicant. Subpara. 1.f. Against Applicant.

DECISION

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

Darlene Lokey Anderson Administrative Judge