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ISCR Case 14-02346.h1 — CASE

ISCR Case 14-02346.h1denied

Case Headnote

ISCR Case No. 14-02346.h1

deniedMar 30, 2016· Hon. Edward W. Loughran· hearing

Summary

A 63-year-old defense contractor employee was denied a security clearance due to concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The Statement of Reasons included allegations of unresolved debts and falsifying his security clearance application.

Specifically, the applicant was identified as an authorized user on one account and admitted to a $26 medical debt, which he claimed was billed in error. Disqualifying conditions under Guideline F, including AG ¶ 16(a), AG ¶ 19(a), and AG ¶ 19(c), were raised. While mitigating condition AG ¶ 20(e) was applied, it was insufficient to overcome the concerns.

The denial was based on the applicant's failure to provide evidence disputing the legitimacy of the alleged debts, his failure to report delinquent debts on his SF-86 application (constituting falsification), and his lack of action to resolve the debts or provide documentation post-hearing. The judge concluded that the applicant did not mitigate these concerns.

Why the Applicant Was Denied

The applicant did not provide evidence to dispute the legitimacy of the debts alleged in the SOR.
The applicant failed to report delinquent debts on his SF 86, which constituted falsification.
The applicant did not take action to resolve the debts or provide documentation post-hearing.

Conditions Referenced

Disqualifying

AG ¶ 16(a)appliedDeliberate Omission, Concealment, or Falsification of Relevant Facts
AG ¶ 19(a)appliedInability or Unwillingness to Satisfy Debts
AG ¶ 19(c)appliedA History of Not Meeting Financial Obligations

Mitigating

AG ¶ 20(e)rejectedThe Individual Has a Reasonable Basis to Dispute the Legitimacy of the Past-due DebtThe applicant did not provide documented proof to substantiate the basis of the dispute.

Key Rule Quoted

“Any doubt concerning personnel being considered for access to classified information will be resolved in favor of national security.”

Procedural Posture

SOR issuedFeb 27, 2015
Answer filedApr 6, 2015
Hearing heldDec 9, 2015
Decision dateMar 30, 2016

Cite For

Failure to Mitigate Personal Conduct Concerns Under Guideline E
Failure to Resolve Financial Obligations Under Guideline F
Falsification of Security Clearance Application Due to Undisclosed Debts

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 E (Personal Conduct) · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The judge found that the applicant did not mitigate the personal conduct concerns. The applicant was found to have intentionally falsified his SF 86 by failing to report delinquent debts, which raised significant questions about his reliability and trustworthiness.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
2.a	specific text not stated in this decision	Against Applicant	Unspecified Personal ConductFOUND DELIBERATE	—	Unknown	(a) deliberate omission, concealment, or falsification on a security form (b) deliberately providing false information to an investigator or official (c) credible adverse information across areas supporting a whole-person concern	—	—

Descriptive standardized rendering of a decided public case (Guideline E). The verbatim source decision is shown in full below.

Standardized Decision Profile

SEAD-4 Guideline F · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The judge found multiple financial concerns under Guideline F, including six delinquent debts totaling approximately $31,700, which the applicant claimed belonged to his son. The applicant admitted to a $26 medical debt but argued it was billed in error. Ultimately, the judge ruled against the applicant on most allegations, citing a lack of evidence to mitigate the financial issues.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a–1.c	3 sub-charges — specific text not stated in this decision (against the applicant).	Against Applicant			—	—	—
1.d	Applicant was only an authorized user of the account identified in SOR ¶ 1.d.	For Applicant	Unspecified Financial	Unknown	—	—	—
1.e	Applicant admitted the $26 medical debt alleged in SOR ¶ 1.e, but he stated it had been billed to him in error. $26	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts	—	—
1.f–1.h	3 sub-charges — specific text not stated in this decision (2 against, 1 for the applicant).	Mixed			—	—	—

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. 14-02346 ) Applicant for Security Clearance )

For Government: Robert J. Kilmartin, Esq., Department Counsel For Applicant: Pro se

03/30/2016 ______________

STATEMENT OF CASE

______________

LOUGHRAN, Edward W., Administrative Judge:

Applicant did not mitigate the personal conduct and financial considerations security concerns. Eligibility for access to classified information is denied.

Statement of the Case

On February 27, 2015, the Department of Defense (DOD) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guidelines E (personal conduct) and F (financial considerations). The action was taken under Executive Order (EO) 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG) implemented by the DOD on September 1, 2006.

Applicant responded to the SOR on April 6, 2015, and requested a hearing before an administrative judge. The case was assigned to me on November 4, 2015. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on November 13, 2015, scheduling the hearing for December 9, 2015. The hearing was convened as scheduled. Government Exhibits (GE) 1 through 4 were admitted in evidence without objection. Applicant testified, but he did not submit any documentary evidence. The record was held open until February 9, 2016, for Applicant to submit additional information. He did not submit anything. DOHA received the hearing transcript (Tr.) on December 16, 2015.

FINDINGS OF FACT

Applicant is a 63-year-old employee of a defense contractor. He has worked for his current employer or a predecessor contractor since 1988. He seeks to retain a security clearance, which he has held for decades. He attended college for a period, but he did not earn a degree. He is married, but he has been separated for 19 years. He has four adult children.1

The SOR alleges eight delinquent debts, but credit reports indicate that Applicant was only an authorized user of the account identified in SOR ¶ 1.d. He admitted the $26 medical debt alleged in SOR ¶ 1.e, but he stated it had been billed to him in error. He denied the six remaining delinquent debts totaling about $31,700. He stated that those debts belong to his son who has the same first, middle, and last name as Applicant. All of the debts are listed on a combined credit report from April 2013, an Equifax credit report from April 2014, or both credit reports.2

Applicant submitted a Questionnaire for National Security Positions (SF 86) in April 2013. He reported that he once owed the IRS for back taxes from tax years 2006 through 2010.3 He wrote that he had been making monthly payments for a number of years, and his taxes would be completely paid within a month. He did not list any of the delinquent debts alleged in the SOR under any of the pertinent financial questions.4

Applicant was interviewed for his background investigation in April 2013. He discussed his back taxes. He was confronted with delinquent debts from the April 2013 credit report. He stated that he was unaware of the debts and they must belong to his son. He told the investigator that he would contact his son and have him contact the creditors and provide them the necessary information to put the accounts in his son’s name. Applicant stated that he would pull a credit report, contact the creditors, and ask them to remove the accounts from his credit report.5 Applicant testified that the six accounts belong to his son, but he had done nothing to dispute the debts. He was informed that the DOD relies on credit reports,6 and the debts are on his credit report. He was informed that the debts not only affected the financial aspect of the case, but they also formed the basis for the allegation that he falsified the SF 86. Applicant was provided 60 days after the hearing to submit evidence to substantiate his dispute of the legitimacy of the debts. He did not submit anything post-hearing.7

POLICIES

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines. In addition to brief introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which are to be 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, administrative judges apply the guidelines 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.”

Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, the applicant is responsible for presenting “witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by the applicant or proven by Department Counsel.” The applicant has the ultimate burden of persuasion to obtain 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 safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation of potential, rather than actual, risk of compromise of classified information.

Section 7 of EO 10865 provides that adverse 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

Guidelines E (Personal Conduct) and F (Financial Considerations)

The security concerns for personal conduct and financial considerations are set out in AG ¶¶ 15 and 18, as follows:

15. Conduct involving questionable judgment, lack of candor, dishonesty, or unwillingness to comply with rules and regulations can raise questions about an individual’s reliability, trustworthiness and ability to protect classified information. Of special interest is any failure to provide truthful and candid answers during the security clearance process or any other failure to cooperate with the security clearance process.

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.

AG ¶¶ 16 and 19 describe conditions that could raise a security concern and may be disqualifying. The following disqualifying conditions are potentially applicable:

16(a) deliberate omission, concealment, or falsification of relevant facts from any personnel security questionnaire, personal history statement, or similar form used to conduct investigations, determine employment qualifications, award benefits or status, determine security clearance eligibility or trustworthiness, or award fiduciary responsibilities;

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

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

Applicant was only an authorized user of the account identified in SOR ¶ 1.d. The $26 medical debt alleged in SOR ¶ 1.fhas no security significance. Those allegations are concluded for Applicant. Applicant denied owing the remaining six debts, claiming they belong to his son who has the same first, middle, and last name as Applicant. This case is relatively simple. If the debts belong to his son, Applicant does not have financial problems and he did not falsify the SF 86. If the debts belong to Applicant, then he has unresolved financial problems, he falsified the SF 86, he lied during his background investigation, and he lied during his hearing.

Applicant told the background investigator in April 2013 that he would contact his son, and he would have his son contact the creditors and provide them the necessary information to put the accounts in his son’s name. Applicant also stated that he would pull a credit report, contact the creditors, and ask them to remove the accounts off his credit report. Applicant did none of the above. He was given two months after the hearing to submit evidence to substantiate his dispute. He did not submit anything. I also note that Applicant’s financial history was not otherwise spotless. He did not pay his taxes on time for tax years 2006 through 2010.

I find by substantial evidence8 that Applicant is responsible for the six debts alleged in the SOR. I further find that he intentionally falsified his SF 86 when he failed to report the debts. AG ¶¶ 16(a), 19(a), and 19(c) are applicable.

I have considered all the mitigating conditions, particularly AG ¶ 20(e),9 but none of them are applicable.

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 relevant 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

8 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 same record.” ISCR Case No. 10-09035 at 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 Guidelines E and F in my whole-person analysis.

Overall, the record evidence leaves me with questions and doubts as to Applicant’s eligibility and suitability for a security clearance. I conclude Applicant has not mitigated the personal conduct and financial considerations security concerns.

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.c: Against Applicant Subparagraphs 1.d: For Applicant Subparagraph 1.e: Against Applicant Subparagraph 1.f: For Applicant Subparagraphs 1.g-1.h: Against Applicant

Paragraph 2, Guideline E: For Applicant

Subparagraph 2.a: For 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 continue Applicant’s eligibility for a security clearance. Eligibility for access to classified information is denied.

________________________ Edward W. Loughran Administrative Judge

FOOTNOTES

1 Tr. at 33-34; GE 1, 2.

2 Applicant’s response to SOR; GE 3, 4.

3 The SOR does not allege that Applicant did not pay his taxes, and that will not be used for disqualification purposes. It may be considered in gauging Applicant’s credibility. It is relevant in that it shows that Applicant had financial problems independent of the disputed debts alleged in the SOR. 4 GE 1.

5 GE 2. 6 “Credit reports are generally sufficient to establish the Government’s prima facie case of Guideline F security concerns.” See ISCR Case No. 10-03668 at 2 (App. Bd. Oct. 5, 2012). 7 Tr. at 19-38. 5 (App. Bd. Jun. 13, 2014) (citing Directive ¶¶ E3.1.14; 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); ISCR Case No. 04-07187 at 5 (App. Bd. Nov. 17, 2006). 9 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.