CASEClearance Adjudication Search EngineCASE

Loading case…

ISCR Case 14-00489.h1 — CASE

ISCR Case 14-00489.h1denied

Case Headnote

ISCR Case No. 14-00489.h1

deniedSep 18, 2014· Hon. Carol G. Ricciardello· hearing

Summary

A 47-year-old applicant was denied a security clearance under Guideline F, Financial Considerations, due to unresolved delinquent debts and a dismissed Chapter 13 bankruptcy. The Statement of Reasons (SOR) alleged the applicant owed approximately $23,816 across multiple delinquent debts (SOR ¶¶ 1.a through 1.g, 1.i, and 1.j), which the applicant admitted. Additionally, the applicant claimed to have paid off a separate debt (SOR ¶ 1.h) in March 2014 but provided no supporting documentation.

The total amount of unresolved delinquent debts was approximately $36,027. The applicant's Chapter 13 bankruptcy was dismissed due to non-payment, further contributing to the financial concerns.

The judge found that the applicant failed to provide sufficient evidence to mitigate these concerns. Specifically, no documentation was submitted to support claims of debt resolution, and the dismissal of the bankruptcy due to non-payment indicated a continued pattern of financial irresponsibility. Consequently, the security clearance was denied.

Why the Applicant Was Denied

Applicant failed to provide evidence of resolving delinquent debts.
Applicant's Chapter 13 bankruptcy was dismissed due to non-payment.
No documentation was submitted to support claims of debt resolution.

Conditions Referenced

Disqualifying

F.1.aappliedInability or Unwillingness to Satisfy Debts
F.1.cappliedA 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 issuedMar 19, 2014
Answer filedApr 14, 2014Applicant elected to have case decided on written record.
Hearing held—No hearing; case decided on written record.
Decision dateSep 18, 2014

Cite For

Failure to Provide Evidence of Financial Resolution Under Guideline F
Dismissal of Chapter 13 Bankruptcy as a Disqualifying Factor
Inability to Mitigate Financial Concerns Impacting 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 failed to mitigate financial concerns under Guideline F, with multiple delinquent debts totaling approximately $36,027. The applicant admitted to owing these debts but did not provide sufficient evidence of resolution or financial stability, leading to a denial of security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant admitted he owed the delinquent debts in SOR ¶¶ 1.a through 1.g and 1.i and 1.j, totaling approximately $23,816. $23,816	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Applicant admitted he owed the delinquent debts in SOR ¶¶ 1.a through 1.g and 1.i and 1.j, totaling approximately $23,816. $23,816	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	Applicant admitted he owed the delinquent debts in SOR ¶¶ 1.a through 1.g and 1.i and 1.j, totaling approximately $23,816. $23,816	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	Applicant admitted he owed the delinquent debts in SOR ¶¶ 1.a through 1.g and 1.i and 1.j, totaling approximately $23,816. $23,816	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	Applicant admitted he owed the delinquent debts in SOR ¶¶ 1.a through 1.g and 1.i and 1.j, totaling approximately $23,816. $23,816	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	Applicant admitted he owed the delinquent debts in SOR ¶¶ 1.a through 1.g and 1.i and 1.j, totaling approximately $23,816. $23,816	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	Applicant admitted he owed the delinquent debts in SOR ¶¶ 1.a through 1.g and 1.i and 1.j, totaling approximately $23,816. $23,816	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	Applicant indicated he recently paid off the debt in SOR ¶ 1.h in March 2014, but failed to provide any documents to support his statement.	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i	Applicant admitted he owed the delinquent debts in SOR ¶¶ 1.a through 1.g and 1.i and 1.j, totaling approximately $23,816. $23,816	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.j	Applicant admitted he owed the delinquent debts in SOR ¶¶ 1.a through 1.g and 1.i and 1.j, totaling approximately $23,816. $23,816	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. 14-00489 ) ) Applicant for Security Clearance

For Government: Richard Stevens, Esq., Department Counsel For Applicant: Pro se

09/18/2014 ______________

STATEMENT OF CASE

______________

RICCIARDELLO, Carol G., Administrative Judge:

Applicant failed to mitigate the security concerns under Guideline F, financial considerations. Applicant’s eligibility for a security clearance is denied.

Statement of the Case

On March 19, 2014, the Department of Defense (DOD) issued to Applicant a Statement of Reasons (SOR) detailing security concerns under Guideline F, financial considerations. 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 effective within the DOD for SORs issued after September 1, 2006.

Applicant answered the SOR on April 14, 2014. He elected to have his case decided on the written record. On May 19, 2014, Department Counsel submitted the Government’s file of relevant material (FORM). The FORM was mailed to Applicant, and it was received on May 29, 2014. Applicant was afforded an opportunity to file objections and submit material in refutation, extenuation, or mitigation. Applicant did not submit any additional information. The case was assigned to me on September 15, 2014.

FINDINGS OF FACT

Applicant admitted all the allegations in SOR except ¶ 1.h. These admissions are considered findings of fact. After a thorough and careful review of the pleadings and exhibits submitted, I make the following findings of fact.

Applicant is 47 years old. He has been married twice, most recently in October 2002. He has two children, ages 17 and 10. He has held a security clearance since 2003, without incident. He has worked for the same employer since 1989.

In 2011, Applicant filed Chapter 13 bankruptcy. At the time, and not considering existing home mortgage liabilities, Applicant reported unsecured consumer debt totaling approximately $37,081, including student loans and seven delinquent credit cards.1

Applicant and his wife reported in their Chapter 13 filing a combined monthly gross income of $7,884 and a net monthly take home of pay of about $5,375. Under a Chapter 13 wage-earner plan confirmed and ordered in November 2011, Applicant was to make required monthly payments of $1,460 for 60 months. Applicant failed to make the required payments and the bankruptcy was ordered dismissed in February 2013.2

Applicant admitted he owed the delinquent debts in SOR ¶¶ 1.a through 1.gand 1.i and 1.j, totaling approximately $23,816. He indicated he recently paid off the debt in SOR ¶ 1.hin March 2014, but failed to provide any documents to support his statement.3

In his answer to the SOR, Applicant did not provide any explanation, documentation, or evidence for his financial difficulties or actions he has taken to resolve them.4

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 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, these guidelines are applied 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 contained in the record. Likewise, I have avoided drawing inferences grounded on mere speculation or conjecture.

Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, an “applicant is responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by applicant or proven by Department Counsel, and 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 that an applicant may deliberately or inadvertently fail to 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 ¶ 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. I have considered the following under AG ¶ 19:

(a) inability or unwillingness to satisfy debts; and

Applicant filed for Chapter 13 bankruptcy in 2011, which was dismissed in 2013 for failure to make the required payments. Applicant has nine delinquent debts totaling approximately $36,027. He did not provide any evidence that he has resolved any of the delinquent debts. I find the above disqualifying conditions apply to these facts.

The guideline also includes examples of conditions that could mitigate security concerns arising from financial difficulties. I have considered the following mitigating conditions under AG ¶ 20:

(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. In his answer to the SOR, Applicant stated he paid the debt in SOR ¶ 1.h. He did not provide any documents to support his statement. Applicant did not provide evidence that he has made any payment on any of his delinquent debts. The debts are recent and unpaid. AG ¶ 20(a) does not apply because Applicant’s debts are still owed. Under the circumstances, I cannot find future financial problems are unlikely to recur and that it does not cast doubt on his reliability, trustworthiness, and good judgment. Applicant did not provide any evidence as to what caused his financial problems or actions he is taking to resolve them. AG ¶ 20(b) does not apply.

There is no evidence that Applicant received financial counseling. There are not clear indications that his financial problem is being resolved or is under control. There is no evidence he made a good-faith effort to repay his overdue creditors or otherwise resolve his debts. AG ¶¶ 20(c) and 20(d) do not apply. Applicant stated he paid the debt in SOR ¶ 1.h, but failed to provide documentation to substantiate his dispute or evidence of actions to resolve the issue. AG ¶ 20(e) does not apply.

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 considered the potentially disqualifying and mitigating conditions in light of all the facts and circumstances surrounding this case. I have incorporated my comments under Guideline F in my whole-person analysis. Some of the factors in AG ¶ 2(a) were addressed under that guideline, but some warrant additional comment.

Applicant is 47 years old. He has been employed by the same employer since 1989. He filed Chapter 13 bankruptcy in 2011, which was dismissed in 2013 for failure to make the required payments. He has approximately $36,027 of delinquent debt that remains unpaid and unresolved. No additional mitigating evidence was provided. Applicant failed to meet his burden of persuasion. The record evidence leaves me with questions and doubts as to Applicant’s eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant failed to mitigate the security concerns arising under Guideline F, 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.j: 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’s eligibility for a security clearance. Eligibility for access to classified information is denied.

_____________________________ Carol G. Ricciardello Administrative Judge

FOOTNOTES

1 Item 5 at 12, 13. 2 Item 5 at 14. 3 Item 3. 4 Item 3.