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ISCR Case 14-02742.h1 — CASE

ISCR Case 14-02742.h1denied

Case Headnote

ISCR Case No. 14-02742.h1

deniedSep 15, 2015· Hon. Shari Dam· hearing

Summary

A 50-year-old defense contractor and former Navy service member was denied a security clearance under Guideline F (Financial Considerations) due to nine delinquent debts totaling $22,495, which included six judgments. The Statement of Reasons alleged that the applicant failed to provide evidence of resolving any of these debts or demonstrating financial responsibility.

Specifically, the applicant did not submit proof of payment or resolution for any of the nine debts, nor did he provide evidence of resolving the three debts he addressed in his Answer or proof that he was not responsible for the remaining six. There was no indication that he sought credit counseling or assistance from a debt consolidation company, nor did he provide a budget or a plan to resolve the outstanding debts.

The denial was based on the applicant's failure to provide evidence of resolving any of the delinquent debts, demonstrate financial responsibility, or show good-faith efforts to repay overdue creditors. The applicant also did not submit evidence regarding his professional performance or track record with sensitive information.

Why the Applicant Was Denied

The applicant did not provide evidence of resolving any of the nine delinquent debts.
He failed to demonstrate financial responsibility or a plan to address his debts.
There was no evidence of credit counseling or good-faith efforts to repay overdue creditors.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability or Unwillingness to Satisfy Debts
AG ¶ 19(c)raisedHistory 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 issuedJul 24, 2014
Answer filedSep 14, 2014
Hearing held—Decided on the written record without a hearing.
Decision dateSep 15, 2015

Cite For

Denial of Security Clearance Due to Unresolved Financial Obligations
Failure to Demonstrate Financial Responsibility Under Guideline F
Lack of Mitigating Evidence for Financial Considerations

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 unresolved delinquent debts, including six judgments, which raised significant financial security concerns. The applicant failed to demonstrate any efforts to address these debts, leading to a denial of eligibility for a security clearance under Guideline F.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant failed to provide evidence that he has paid or resolved any of the alleged nine delinquent debts, which include six judgments. $22,495	Against Applicant	Unspecified Financial	Denied	—	—	—
1.b	Applicant did not provide proof that he is resolving the three debts that he addressed in his Answer, or proof that he is not responsible for the other six debts.	Against Applicant	Unspecified Financial	Denied	—	—	—
1.c	There is no evidence that Applicant obtained credit counseling or sought assistance with a debt consolidation company within the past couple years.	Against Applicant	Unspecified Financial	Denied	—	—	—
1.d	He did not provide a budget or a plan to resolve the delinquent debts.	Against Applicant	Unspecified Financial	Denied	—	—	—
1.e	He submitted no evidence concerning the quality of his professional performance, the level of responsibility his duties entail, or his track record with respect to handling sensitive information and observation of security procedures.	Against Applicant	Unspecified Financial	Denied	—	—	—
1.f	Applicant is making payments on the allegation contained in Paragraph 1.g, and was working on a resolution of the allegation contained in Paragraph 1.f.	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.g–1.i	3 sub-charges — specific text not stated in this decision (against the applicant).	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: ) ) ) ISCR Case: 14-02742 ) ) Applicant for Security Clearance

For Government: David F. Hayes, Esquire, Department Counsel For Applicant: Pro se

09/15/2015 ______________

STATEMENT OF CASE

______________

DAM, Shari, Administrative Judge:

Applicant failed to provide evidence that he has paid or resolved any of the alleged nine delinquent debts, which include six judgments. Resulting financial security concerns were not mitigated. Eligibility for access to classified information is denied.

On December 16, 2013, Applicant submitted a security clearance application (SF-86) for a reinvestigation. On July 24, 2014, the Department of Defense (DoD) issued 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 for Determining Eligibility for Access to Classified Information (AG), effective within the DoD after September 1, 2006.

Applicant submitted an answer to the SOR on September 14, 2014, and on October 7, 2014 (Answer). He requested that his case be decided by an administrative judge on the written record without a hearing. (Item 1.) On April 23, 2015, Department Counsel submitted the Government’s written case. A complete copy of the File of Relevant Material (FORM), containing seven Items, was provided to Applicant on May 29, 2015, and he was afforded an opportunity to file objections and submit material in refutation, extenuation, or mitigation within 30 days of his receipt of the FORM.

Applicant signed the document acknowledging receipt of his copy of the FORM on June 5, 2015, and timely returned the receipt to the Defense Office of Hearings and Appeals (DOHA). He provided no additional information in response to the FORM within the 30-day period. DOHA assigned the case to me on July 30, 2015.

FINDINGS OF FACT

In his Answer to the SOR, Applicant admitted the allegation contained in Paragraph 1.hof the SOR. He stated that he is making payments on the allegation contained in Paragraph 1.g, and was working on a resolution of the allegation contained in Paragraph 1.f. He denied the remaining six allegations. (Item 1.) Those admissions are incorporated into these findings.

Applicant is 50 years old and has worked for a defense contractor since July 2003. He is married. He served on active duty in the U.S. Navy from 1983 to 2003. He received an honorable discharge. He has held a security clearance from approximately 1997 to the present. (Item 6.)

Based on credit bureau reports (CBR) from December 2013, June 2014, and April 2015, SOR alleged nine delinquent debts totaling $22,495, and dating back to 2010. They included six judgments, an automobile loan, a credit card debt, and delinquent payments to a mortgage company. (Items 3, 4, and 5.) Applicant did not provide proof that he is resolving the three debts that he addressed in his Answer, or proof that he is not responsible for the other six debts.

There is no evidence that Applicant obtained credit counseling or sought assistance with a debt consolidation company within the past couple years. He did not provide a budget or a plan to resolve the delinquent debts. He submitted no evidence concerning the quality of his professional performance, the level of responsibility his duties entail, or his track record with respect to handling sensitive information and observation of security procedures. He provided no character references describing his judgment, trustworthiness, integrity, or reliability.

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 (AG) 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, these guidelines are applied in conjunction with the factors listed in AG ¶ 2 describing the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶¶ 2(a) and 2(c), the entire process is a conscientious scrutiny of applicable guidelines in the context 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 the 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, “[t]he 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, and has the ultimate burden of persuasion as to obtaining a favorable clearance decision.” Section 7 of Executive Order 10865 provides: “[a]ny 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.”

A person applying for access to classified information seeks to enter 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.

ANALYSIS

Guideline F, Financial Considerations

The security concerns relating to the guideline for financial considerations are set out in AG ¶ 18, which reads in pertinent part: 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 describes two conditions that could raise security concerns and may be disqualifying in this case:

(a) inability or unwillingness to satisfy debts; and

Applicant’s delinquent debts began accumulating in 2010. He has been unable or unwilling to satisfy or resolve them over the past four years. The evidence raises both security concerns, thereby shifting the burden to Applicant to rebut, extenuate, or mitigate those concerns.

The guideline includes five conditions in AG ¶ 20 that could mitigate security concerns arising from Applicant’s financial difficulties:

(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. Applicant’s delinquent debts started accumulating in or about 2010 and continue to be unresolved. Because Applicant failed to submit proof that he is addressing any of the debts, he did not demonstrate that such problems are unlikely to continue or recur. His reliability and trustworthiness in managing delinquent debts remain of concern. The evidence does not support the application of AG ¶ 20(a).

Applicant did not submit evidence to demonstrate that his financial problems arose as a result of circumstances beyond his control. He failed to provide evidence that he acted responsibly while the debts were accumulating. AG ¶ 20(b) has no application.

Applicant has not participated in financial or credit counseling, and there are no clear indications that his delinquent debts are under control; thus, AG ¶ 20(c) does not apply. He did not provide documentation to demonstrate that he has made a good-faith effort to resolve any of the nine SOR-listed debts. Hence, AG ¶ 20(d) has no application. There is no evidence that Applicant had a reasonable basis to dispute any delinquent debts and successfully resolved them through the dispute process. AG ¶ 20(e) has no application.

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 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.

According to 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 pertinent facts and circumstances surrounding this case. Applicant is 50 years old. He honorably served in the Navy for 20 years and has participated in the security clearance process two or three times. He has been employed with a defense contractor since July 2003. Although he acknowledged that he is responsible for three of the nine debts, he did not present evidence that he is resolving them. He did not present a budget or plan for addressing his debts. There is a likelihood that similar problems will continue, raising questions about his judgment and reliability. Overall, the record evidence leaves me with doubt as to Applicant’s eligibility and suitability for a security clearance. He did not meet his burden to mitigate the security concerns arising under the guideline for financial considerations.

FORMAL FINDINGS

Formal findings for or against Applicant on the allegations set forth in the SOR, as required by ¶ E3.1.25 of Enclosure 3 of the Directive, are:

Paragraph 1, Guideline F: AGAINST APPLICANT

Subparagraphs 1.a through 1.i: 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 eligibility for a security clearance. Eligibility for access to classified information is denied.

SHARI DAM Administrative Judge