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ISCR Case 14-00396.h1 — CASE

ISCR Case 14-00396.h1denied

Case Headnote

ISCR Case No. 14-00396.h1

deniedSep 16, 2014· Hon. Mark W. Harvey· hearing

Summary

A 34-year-old veterinary technician was denied a security clearance under Guideline F, Financial Considerations, due to significant financial issues. The applicant had 16 delinquent, collection, or charged-off accounts, totaling $23,242. These included three judgments—one for a repossessed vehicle, one to a local government, and another unspecified—along with thirteen medical collection debts.

The applicant acknowledged her debts and attributed some of her financial difficulties to her husband's job loss. However, she failed to provide sufficient documentation to demonstrate progress in resolving her financial problems. Specifically, she did not show a legitimate track record of debt repayment or financial stability.

Disqualifying conditions under Guideline F were raised, while mitigating conditions were considered but ultimately not applied. The Adjudicator concluded that the applicant's financial considerations were not mitigated, leading to the denial of her security clearance.

Why the Applicant Was Denied

The applicant had 16 delinquent, collection, or charged-off accounts totaling $23,242.
She failed to provide sufficient documentation of her financial situation and efforts to resolve her debts.
The applicant did not demonstrate a legitimate track record of debt repayment or financial stability.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(b)rejectedConditions Largely Beyond the Person's ControlWhile the applicant cited her husband's unemployment as a factor, she did not act responsibly to address her debts.
AG ¶ 20(d)rejectedGood-faith Effort to Repay Overdue CreditorsThe applicant did not provide evidence of any payments or attempts to negotiate with creditors.

Key Rule Quoted

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

Procedural Posture

SOR issuedMar 20, 2014
Answer filedMar 30, 2014Applicant waived her right to a hearing.
Hearing held—
Decision dateSep 16, 2014

Cite For

Denial of Security Clearance Due to Unresolved Financial Issues Under Guideline F
Insufficient Documentation of Financial Stability as a Basis for Denial
Importance of Demonstrating Good-faith Efforts to Resolve Debts in Security Clearance Cases

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 16 delinquent, collection, or charged-off accounts totaling $23,242, which raised significant financial concerns under Guideline F. The applicant's failure to provide sufficient documentation to resolve these debts led to a decision against her eligibility for a security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	is a judgment owed to a bank resulting from a repossessed vehicle $11,694	Against Applicant	Judgment Against Applicant	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	is a judgment $822	Against Applicant	Judgment Against Applicant	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	is a judgment owed to a local government $6,034	Against Applicant	Judgment Against Applicant	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	is a medical collection debt $594	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	is a medical collection debt $392	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	is a medical collection debt $1,428	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	is a medical collection debt $465	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	is a medical collection debt $430	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i	is a medical collection debt $234	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.j	is a medical collection debt $219	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.k	is a medical collection debt $207	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.l	is a medical collection debt $185	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.m	is a medical collection debt $164	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.n	is a medical collection debt $129	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.o	is a medical collection debt $123	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.p	is a medical collection debt $122	Against Applicant	Medical 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. 14-00396 ) ) Applicant for Security Clearance

For Government: Richard Stevens, Esquire, Department Counsel For Applicant: Pro se

09/16/2014 __________

STATEMENT OF CASE

__________

HARVEY, Mark, Administrative Judge:

Applicant’s statement of reasons (SOR) alleges 16 delinquent, collection, or charged-off accounts totaling $23,242. She failed to provide sufficient documentation of the cause of and progress to resolve her financial problems. Financial considerations concerns are not mitigated. Eligibility for access to classified information is denied.

Statement of the Case

On September 23, 2013, Applicant submitted Electronic Questionnaires for Investigations Processing (e-QIP) versions of security clearance applications (SF 86). (Item 4) On March 20, 2014, the Department of Defense (DOD) Consolidated Adjudications Facility (CAF) issued an SOR to Applicant, pursuant to Executive Order 10865, Safeguarding Classified Information Within Industry, dated February 20, 1960, as amended; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (Directive), dated January 2, 1992, as amended; and the adjudicative guidelines (AG) promulgated by the President on December 29, 2005.

The SOR alleged security concerns under Guideline F (financial considerations). (Item 1) The SOR detailed reasons why 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 Applicant’s clearance should be granted, continued, denied, or revoked. (Item 1)

On March 30, 2014, Applicant responded to the SOR allegations and waived her right to a hearing. (Item 3) A complete copy of the file of relevant material (FORM), dated May 12, 2014, was provided to her on May 20, 2014.1 Applicant did not respond to the FORM. The case was assigned to me on September 12, 2014.

Findings of Fact2

In Applicant’s SOR response, she admitted responsibility for the debts in SOR ¶¶ 1.a-1.p.3 She also provided some extenuating and mitigating information. Applicant’s admissions are accepted as findings of fact.

Applicant is a 34-year-old veterinary technician, who has worked for a defense contractor since January 2012.4 In 1998, she graduated from high school. She attended community college from 1999 to 2000 and received a certificate. In 2006, Applicant married. Her children were born in 2007 and 2008.

Applicant has never served in the military. Applicant did not describe any periods of her own unemployment. From August 2009 to December 2011, she worked in the private sector as a veterinary technician. From November 1998 to July 2009, she worked as an office manager. There is no evidence of security violations, criminal conduct, use of illegal drugs, or alcohol abuse. She disclosed her financial problems on her 2013 SF 86.

Financial Considerations

Applicant’s credit report and SOR allege 16 delinquent, collection, or charged-off accounts totaling $23,242 as follows: (1) ¶ 1.a ($11,694) is a judgment owed to a bank resulting from a repossessed vehicle; (2) ¶ 1.b ($822) is a judgment; (3) ¶ 1.c ($6,034) is a judgment owed to a local government; (4)-(6) ¶¶ 1.d ($594), 1.e ($392), and 1.h ($430); and (7)–(16) ¶¶ 1.f ($1,428), 1.g ($465), 1.i ($234), 1.j ($219), 1.k ($207), 1.l ($185), 1.m ($164), 1.n ($129), 1.o ($123), and 1.p ($122) are medical collection debts. (Items 1, 4)

information is available in the cited exhibits. Applicant explained that her husband’s pay decreased, and in 2010, her husband lost his job. Her family lost their ability to pay their mortgage and other debts. On May 30, 2014, Applicant said that they were “now trying to repair our financial situation and repay debts.” (SOR response) She said she was going to start making payments on several debts on September 13, 2013. (Item 4)

Notice to Applicant of Necessity for Additional Information

The FORM states:

Applicant's recent history of financial difficulties, and her apparent inability to resolve them, cast doubt as to her suitability to have access to classified information at this time. Absent significant evidence of mitigation or extenuation, this doubt must be resolved against the Applicant. In the absence of documentary evidence submitted in response to this FORM to show that Applicant has been able to regain some measure of financial stability through resolution of some of her delinquent debts and establish a legitimate track record of debt repayment, this concern must be decided against her in evaluating her suitability to have access to classified information.5

Applicant’s FORM in its concluding paragraph repeated the admonition about the absence of corroborating documentation and other mitigating information and explained that Applicant had 30 days from the receipt of the FORM “in which to submit a documentary response setting forth objections, rebuttal, extenuation, mitigation, or explanation, as appropriate. . . If you do not file any objections or submit any additional information . . . your case will be assigned to an Administrative Judge for a determination based solely” on this FORM. (FORM at 6) Applicant did not respond to the FORM.

POLICIES

The U.S. Supreme Court has recognized the substantial discretion of the Executive Branch in regulating access to information pertaining to national security emphasizing, “no one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). As Commander in Chief, the President has the authority to control access to information bearing on national security and to determine whether an individual is sufficiently trustworthy to have access to such information.” Id. at 527. The President has authorized the Secretary of Defense or his designee to grant applicant’s eligibility for access to classified information “only upon a finding that it is clearly consistent with the national interest to do so.” Exec. Or. 10865, Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960), as amended.

Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the adjudicative guidelines. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, these guidelines are applied in conjunction with an evaluation of the whole person. An administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. An administrative judge must consider all available, reliable information about the person, past and present, favorable and unfavorable.

The Government reposes a high degree of trust and confidence in persons with access to classified information. This relationship transcends normal duty hours and endures throughout off-duty hours. 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 about potential, rather than actual, risk of compromise of classified information. Clearance decisions must be “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See Exec. Or. 10865 § 7. See also Executive Order 12968 (Aug. 2, 1995), § 3.1. Thus, nothing in this Decision should be construed to suggest that I have based this decision, in whole or in part, on any express or implied determination about applicant’s allegiance, loyalty, or patriotism. It is merely an indication the applicant has not met the strict guidelines the President and the Secretary of Defense have established for issuing a clearance.

Initially, the Government must establish, by substantial evidence, conditions in the personal or professional history of the applicant that may disqualify the applicant from being eligible for access to classified information. The Government has the burden of establishing controverted facts alleged in the SOR. See Egan, 484 U.S. at 531. “Substantial evidence” is “more than a scintilla but less than a preponderance.” See v. Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994). The guidelines presume a nexus or rational connection between proven conduct under any of the criteria listed therein and an applicant’s security suitability. See ISCR Case No. 95-0611 at 2 (App. Bd. May 2, 1996).

Once the Government establishes a disqualifying condition by substantial evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the facts. Directive ¶ E3.1.15. An applicant “has the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue his [or her] security clearance.” ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002). The burden of disproving a mitigating condition never shifts to the Government. See ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 2005). “[S]ecurity clearance determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531; see AG ¶ 2(b).

ANALYSIS

Financial Considerations

AG ¶ 18 articulates the security concern relating to financial problems:

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.

AG ¶ 19 provides two disqualifying conditions that could raise a security concern and may be disqualifying in this case: “(a) inability or unwillingness to satisfy debts;” and “(c) a history of not meeting financial obligations.” In ISCR Case No. 08-12184 at 7 (App. Bd. Jan. 7, 2010), the Appeal Board explained:

It is well-settled that adverse information from a credit report can normally meet the substantial evidence standard and the government’s obligations under [Directive] ¶ E3.1.14 for pertinent allegations. At that point, the burden shifts to applicant to establish either that [he or] she is not responsible for the debt or that matters in mitigation apply.

(internal citation omitted). Applicant’s history of delinquent debt is documented in her credit report and SOR response. Applicant’s SOR alleges 16 delinquent, collection, or charged-off accounts totaling $23,242. The Government established the disqualifying conditions in AG ¶¶ 19(a) and 19(c), requiring additional inquiry about the possible applicability of mitigating conditions.

Five mitigating conditions under AG ¶ 20 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;6 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.

The Appeal Board concisely explained Applicant’s responsibility for proving the applicability of mitigating conditions as follows:

Once a concern arises regarding an Applicant’s security clearance eligibility, there is a strong presumption against the grant or maintenance of a security clearance. See Dorfmont v. Brown, 913 F. 2d 1399, 1401 (9th Cir. 1990), cert. denied, 499 U.S. 905 (1991). After the Government presents evidence raising security concerns, the burden shifts to the applicant to rebut or mitigate those concerns. See Directive ¶ E3.1.15. The standard applicable in security clearance decisions is that articulated in Egan, supra. “Any doubt concerning personnel being considered for access to classified information will be resolved in favor of the national security.” Directive, Enclosure 2 ¶ 2(b).

ISCR Case No. 10-04641 at 4 (App. Bd. Sept. 24, 2013).

Applicant’s conduct in resolving her delinquent debt does not warrant full application of any mitigating conditions to any debts. She did not provide sufficient information about her finances to establish her inability to make greater progress paying her creditors. Applicant’s husband’s unemployment and some medical expenses damaged the family finances and are circumstances largely beyond her control; however, she did not act responsibly under the circumstances. She did not establish how long he was unemployed or the amount of her income. She presented insufficient evidence about what she did over the last two years to pay her SOR debts.

Applicant did not provide any of the following documentation relating to the SOR creditors: (1) proof of payments such as checking account statements, photocopies of checks, or a letter from the creditor proving that she paid or made any payments to the creditor; (2) correspondence to or from the creditor to establish maintenance of contact with the creditor;7 (3) a credible debt dispute; (4) attempts to negotiate payment plans, such as settlement offers or agreements to show that she was attempting to resolve these SOR debts; (5) evidence of financial counseling; or (6) other evidence of progress or resolution of her SOR debts. There is insufficient evidence that her financial problems are being resolved, are under control, and will not recur in the future.

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. 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 have incorporated my comments under Guideline F in my whole-person analysis. Some of the factors in AG ¶ 2(a) were addressed under Guideline F, but some warrant additional comment.

There is some evidence supporting approval of Applicant’s clearance. Applicant is a 34-year-old veterinary technician, who has worked for a defense contractor since January 2012. In 1998, she graduated from high school, and from 1999 to 2000, she attended community college and received a certificate. In 2006, Applicant married; and her children were born in 2007 and 2008. She did not describe any periods of her unemployment. Her husband’s decrease in pay and unemployment in 2010 contributed to her financial problems. She has several delinquent medical debts. Unemployment, underemployment, and medical problems are circumstances beyond her control. There is no evidence of security violations, criminal conduct, use of illegal drugs, or alcohol abuse. She disclosed her financial problems on her 2013 SF 86.

The financial evidence against approval of Applicant’s clearance is more substantial at this time. Applicant has a history of financial problems. Her SOR alleges 16 delinquent, collection, or charged-off accounts totaling $23,242. She failed to provide sufficient documentation of the cause of and progress to resolve her financial problems. She was well aware of her financial problems, as she listed them in her September 23, 2013 SF 86. Her failure to provide more corroborating documentation shows lack of financial responsibility and lack of judgment and raises unmitigated questions about Applicant’s reliability, trustworthiness, and ability to protect classified information. See AG ¶ 18. More information about inability to pay debts or documented financial progress is necessary to mitigate security concerns.

I have carefully applied the law, as set forth in Department of Navy v. Egan, 484 U.S. 518 (1988), Exec. Or. 10865, the Directive, and the AGs, to the facts and circumstances in the context of the whole person. Financial considerations concerns are not mitigated. For the reasons stated, I conclude Applicant is not eligible for access to classified information at this time.

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.p: Against Applicant

CONCLUSION

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

_________________________ Mark Harvey Administrative Judge

FOOTNOTES

1 The Defense Office of Hearings and Appeals (DOHA) transmittal letter is dated May 14, 2014, and Applicant’s receipt is dated May 20, 2014. The DOHA transmittal letter informed Applicant that she had 30 days after her receipt to submit information.

2 Some details have not been included in order to protect Applicant’s right to privacy. Specific

3 The source for the information in this paragraph is Applicant’s SOR response. (Item 3) 4 Unless stated otherwise, Applicant’s September 23, 2013 SF 86 is the source for the facts in this paragraph and the next paragraph. (Item 4) 5FORM at 5 (emphasis in original; internal footnotes omitted). 6The Appeal Board has previously explained what constitutes a good-faith effort to repay overdue creditors or otherwise resolve debts: In order to qualify for application of [the good-faith mitigating condition], an applicant must present evidence showing either a good-faith effort to repay overdue creditors or some other good-faith action aimed at resolving the applicant’s debts. The Directive does not define the term “good-faith.” However, the Board has indicated that the concept of good- faith “requires a showing that a person acts in a way that shows reasonableness, prudence, honesty, and adherence to duty or obligation.” Accordingly, an applicant must do more than merely show that he or she relied on a legally available option (such as bankruptcy) in order to claim the benefit of [the good-faith mitigating condition]. (internal citation and footnote omitted) ISCR Case No. 02-30304 at 3 (App. Bd. Apr. 20, 2004) (quoting ISCR Case No. 99-9020 at 5-6 (App. Bd. June 4, 2001)). 7 “Even if Applicant’s financial difficulties initially arose, in whole or in part, due to circumstances outside his [or her] control, the Judge could still consider whether Applicant has since acted in a reasonable manner when dealing with those financial difficulties.” ISCR Case No. 05-11366 at 4 n.9 (App. Bd. Jan. 12, 2007) (citing ISCR Case No. 99-0462 at 4 (App. Bd. May 25, 2000); ISCR Case No. 99-0012 at 4 (App. Bd. Dec. 1, 1999); ISCR Case No. 03-13096 at 4 (App. Bd. Nov. 29, 2005)). A component is whether he or she maintained contact with creditors and attempted to negotiate partial payments to keep debts current.