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ISCR Case 14-01167.h1 — CASE

ISCR Case 14-01167.h1denied

Case Headnote

ISCR Case No. 14-01167.h1

deniedNov 14, 2014· Hon. Robert J. Tuidar· hearing

Summary

A 35-year-old general clerk, employed by a defense contractor, was denied a security clearance under Guideline F, Financial Considerations, due to a history of significant financial problems. The Statement of Reasons detailed 15 delinquent debts totaling $25,913.

These debts included two judgments filed in April 2008 for $1,370 and in January 2006 for $605. Additionally, there were seven collection accounts ranging from $45 to $5,585, four charged-off accounts between $807 and $5,375, and two past-due accounts for $450 and $3,464. The applicant admitted to all 15 debts.

The denial was based on the applicant's failure to provide documentation of any payments, settlements, or resolutions for these debts. Furthermore, the applicant did not present a plan to address the financial issues or demonstrate significant actions to mitigate the security concerns, leading to the conclusion that the concerns were not mitigated.

Why the Applicant Was Denied

The applicant admitted to having 15 delinquent debts totaling $25,913.
He failed to provide any documentation showing that the debts were paid, settled, or otherwise resolved.
The applicant did not demonstrate a plan to address his financial issues or take significant actions to mitigate the concerns.

Conditions Referenced

Disqualifying

19(a)raisedInability or Unwillingness to Satisfy Debts
19(c)raisedA 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 issuedMay 6, 2014
Answer filedMay 21, 2014
Hearing heldJun 8, 2014decided on the written record
Decision dateNov 14, 2014

Cite For

Failure to Mitigate Financial Considerations Under Guideline F
Importance of Demonstrating a Plan to Resolve Financial Issues
Impact of Delinquent Debts 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 a history of financial problems, including multiple delinquent debts totaling $25,913. The judge found that the applicant failed to mitigate the security concerns related to these financial issues, resulting in a denial of the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	two judgments filed in April 2008 in the amount of $1,370, and in January 2006 in the amount of $605 $1,975	Against Applicant	Judgment Against Applicant	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	seven collections accounts in the amounts of $982, $863, $121, $45, $52, $67, and $5,585 $6,820	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	four charged-off accounts in the amounts of $807, $3,355, $2,772, and $5,375 $12,109	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	two past-due accounts in the amounts of $450 and $3,464 $3,914	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e–1.o	11 sub-charges — specific text not stated in this decision (against the applicant). (low confidence)	Against 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: ) ) XXXXXXXXXX, XXXXX ) ISCR Case No. 14-01167 ) Applicant for Security Clearance )

For Government: Julie R. Mendez, Esq., Department Counsel For Applicant: Pro se

11/14/2014 __________

STATEMENT OF CASE

__________

TUIDER, Robert J., Administrative Judge:

Applicant failed to mitigate security concerns regarding Guideline F (financial considerations). Clearance is denied.

Statement of the Case

On May 16, 2012, Applicant submitted an Electronic Questionnaire for Investigations Processing (e-QIP). On May 6, 2014, the Department of Defense (DOD) issued a Statement of Reasons (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). The SOR detailed reasons why DOD was unable to find that it is clearly consistent with the national interest to continue a security clearance for Applicant, and it recommended that his case be submitted to an administrative judge for a determination whether his clearance should be continued or revoked.

Applicant answered the SOR on May 21, 2014, and on June 8, 2014 elected to have his case decided on the written record in lieu of a hearing. A complete copy of the file of relevant material (FORM), dated June 20, 2014, was provided to him by letter dated June 24, 2014. Applicant received the FORM on June 28, 2014. He was afforded a period of 30 days to file objections and submit material in refutation, extenuation, or mitigation. Applicant did not submit any information within the allotted period of 30 days after receipt of copy of the FORM. The case was assigned to me on November 3, 2014.

FINDINGS OF FACT

In his answer to the SOR, Applicant admitted all the allegations. His admissions are incorporated in my findings of fact.

Background Information

Applicant is a 35 year-old general clerk, who has been employed by a defense contractor since May 2012. He seeks a security clearance in conjunction with his current employment. (Item 5.)

Applicant graduated from high school in June 1997. He served in the U.S. Navy as an enlisted member from August 1997 to May 2007. From May 2008 to the present, he has attended several institutions of higher learning, but does not have a degree. Applicant was awarded a legal administrative assistant certificate in December 2009. Applicant married in November 2003, and has two minor children. The FORM contains no further information regarding his military service. (Item 5, Item 8.)

Financial Considerations

There is substantial evidence to support the SOR allegations that Applicant has a history of financial problems. In his SOR answer, Applicant admitted to having 15 delinquent debts totaling $25,913. The debts consist of the following: (1) two judgments filed in April 2008 in the amount of $1,370, and in January 2006 in the amount of $605, respectively; (2) seven collections accounts in the amounts of $982, $863, $121, $45, $52, $67, and $5,585; (3) four charged-off accounts in the amounts of $807, $3,355, $2,772, and $5,375; and (4) two past-due accounts in the amounts of $450 and $3,464. (SOR ¶¶ 1.a – 1.o, SOR response.)

Along with his admissions, the delinquent accounts are established by credit reports from May 2012 and January 2014 as well as his February 2014 Response to DOHA Interrogatories. (Items 6 – 8.) Applicant stated that “he has no reason for not paying his debts,” that his inaction was “not malicious,” but he “just did not pay” the debts. (Item 8.) As of June 2012, he stated that he did not have the money to pay his debts. (Item 8.) Applicant’s February 2014 personal financial statement lists a monthly net remainder of $737, with no payments towards his delinquent debts. (Item 8.) When these shortcomings were pointed out to Applicant in Department Counsel’s FORM, he failed to submit any documentation that addressed the Government’s concerns. The 15 delinquent accounts remain unaddressed, as Applicant has not provided any documentation showing that they are paid, settled, in a payment plan, cancelled, forgiven, or otherwise resolved.

POLICIES

When evaluating an Applicant’s suitability for a security clearance, the administrative judge must consider the AGs. 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. 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.

In the decision-making process, the Government has the initial burden of establishing controverted facts alleged in the SOR by “substantial evidence,”1 demonstrating, in accordance with the Directive, that it is not clearly consistent with the national interest to grant or continue an applicant’s access to classified information. Once the Government has produced substantial evidence of a disqualifying condition, the burden shifts to Applicant to produce evidence “to rebut, explain, extenuate, or mitigate facts admitted by applicant or proven by Department Counsel, and [applicant] has the ultimate burden of persuasion as to obtaining a favorable clearance decision.” Directive ¶ E3.1.15. 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).2

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 Executive Order 12968 (Aug. 2, 1995), Section 3.

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 his credit reports.

The evidence establishes 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; 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.

Considering the record evidence as a whole,3 I conclude none of the five financial considerations mitigating conditions above are applicable or partially applicable to explain, extenuate, or mitigate the security concern. The available information shows that Applicant has taken little affirmative action to resolve his delinquent debts.

With that said, a security clearance case is not aimed at collecting debts or enforcing tax laws.4 Rather the purpose is to evaluate an applicant’s judgment, reliability, and trustworthiness consistent with the security guidelines in the Directive. In evaluating F cases, the Appeal Board has established the following standard:

The Board has previously noted that the concept of a meaningful track record necessarily includes evidence of actual debt reduction through payment of debts. However, an applicant is not required, as a matter of law, to establish that he has paid off each and every debt listed in the SOR. All that is required is that an applicant demonstrate that he has established a plan to resolve his financial problems and taken significant actions to implement that plan. The Judge can reasonably consider the entirety of an applicant’s financial situation and his actions in evaluating the extent to which that applicant’s plan for the reduction of his outstanding indebtedness is credible and realistic. There is no requirement that a plan provide for payments on all outstanding debts simultaneously. Rather, a reasonable plan (and concomitant conduct) may provide for the payments of such debts one at a time. Likewise, there is not requirement that the first debts actually paid in furtherance of a reasonable debt plan be the ones listed in the SOR.5

Based on the available evidence, Applicant has not taken enough significant actions to mitigate the security concern under Guideline F. In light of the circumstances here, the record evidence presents uncertainty, and that uncertainty equates to doubt about Applicant’s fitness for access to classified information.

After weighing the relevant disqualifying and mitigating conditions and evaluating the evidence in light of the whole-person concept,6 I conclude Applicant did not present sufficient evidence to explain, extenuate, and mitigate the Guideline F security concern. Accordingly, Applicant has not met his ultimate burden of persuasion to show that it is clearly consistent with the national interest to grant him eligibility for access to classified information.

FORMAL FINDINGS

The formal findings on the SOR are as follows:

Paragraph 1, Guideline F: AGAINST APPLICANT

Subparagraphs 1.a-1.o: Against Applicant

CONCLUSION

In light of all of the record as a whole, it is not clearly consistent with the national interest to grant Applicant eligibility for a security clearance. Clearance is denied.

_________________ ROBERT J. TUIDER Administrative Judge

FOOTNOTES

1 See Directive ¶ E3.1.14. “Substantial evidence [is] such relevant evidence as a reasonable mind might accept as adequate to support a conclusion in light of all the contrary evidence in the record.” ISCR Case No. 04-11463 at 2 (App. Bd. Aug. 4, 2006) (citing Directive ¶ E3.1.32.1). “This is something less than the weight of the evidence, and the possibility of drawing two inconsistent conclusions from the evidence does not prevent [a Judge’s] finding from being supported by substantial evidence.” Consolo v. Federal Maritime Comm’n, 383 U.S. 607, 620 (1966). “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). 2 “The Administrative Judge [considers] the record evidence as a whole, both favorable and unfavorable, evaluate[s] Applicant’s past and current circumstances in light of pertinent provisions of the Directive, and decide[s] whether Applicant ha[s] met his burden of persuasion under Directive ¶ E3.1.15.” ISCR Case No. 04-10340 at 2 (App. Bd. July 6, 2006). 3 See ISCR Case No. 03- 02374 at 4 (App. Bd. Jan. 26, 2006) (citing ISCR Case No. 02-22173 at 4 (App. Bd. May 26, 2004)). When making a recency analysis for AG ¶ 20(a), all debts are considered as a whole.

4 ISCR Case No. 09-02160 (App. Bd. Jun. 21, 2010). 5 ISCR Case No. 07-06482 at 3 (App. Bd. May 21, 2008) (citations and quotations omitted).

6 AG ¶ 2(a) (1)-(9).