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ISCR Case 14-04110.h1 — CASE

ISCR Case 14-04110.h1denied

Case Headnote

ISCR Case No. 14-04110.h1

deniedNov 2, 2015· Hon. Richard A. Cefola· hearing

Summary

A 45-year-old federal contractor was denied a security clearance under Guideline F (Financial Considerations) due to significant past-due debts totaling approximately $31,646. The Statement of Reasons detailed multiple financial obligations, including admitted debts to Creditor A for about $14,439, Creditor B for about $7,381, and Creditors I-O for an outstanding judgment and past-due debts totaling about $11,949.

The applicant denied indebtedness to Creditor C for about $7,781, Creditor D for about $5,258, Creditor E for about $7,781, Creditor F for about $5,258, Creditor G for a judgment of about $1,410, and Creditor H for about $1,136. Disqualifying conditions under Guideline F, specifically AG ¶ 19(a) and AG ¶ 19(c), were raised.

The denial was based on the applicant's significant unpaid past-due debts, a failure to fully respond to the Government's concerns regarding these financial obligations, and insufficient evidence to mitigate security concerns under the whole-person concept. The security clearance was ultimately denied.

Why the Applicant Was Denied

The applicant has significant past-due debts totaling about $31,646 that remain unpaid.
The applicant failed to fully respond to the Government's concerns regarding financial obligations.
The applicant did not provide sufficient evidence to mitigate the security concerns under the whole-person concept.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability or Unwillingness to Satisfy Debts
AG ¶ 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 issuedNov 5, 2014
Answer filedMar 2, 2015
Hearing held—Applicant appeared pro se
Decision dateNov 2, 2015

Cite For

Denial Based on Significant Past-due Debts Under Guideline F
Failure to Mitigate Financial Concerns Despite Some Debts Being Addressed
Importance of the Whole-person Concept in Security Clearance Evaluations

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 multiple financial concerns under Guideline F, with significant past-due debts totaling approximately $31,646. While some debts were mitigated, the majority remained unresolved, leading to a denial of the applicant's security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant admits that he is indebted to Creditor A for a past-due debt in the amount of about $14,439. $14,439	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts	—	—
1.b	Applicant admits that he is indebted to Creditor B for a past-due debt in the amount of about $7,381. $7,381	For Applicant	Unspecified Financial	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly	Documented Payment Plan with Creditor
1.c	Applicant denies that he is indebted to Creditor C for past-due debts totaling about $7,781. $7,781	For Applicant	Unspecified Financial	Denied	—	(b) conditions largely beyond the person’s control; acted responsibly	Documented Debt Paid in Full
1.d	Applicant denies that he is indebted to Creditor D for past-due debts totaling about $5,258. $5,258	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts	—	—
1.e	Applicant denies that he is indebted to Creditor E for past-due debts totaling about $7,781. $7,781	For Applicant	Unspecified Financial	Denied	—	(b) conditions largely beyond the person’s control; acted responsibly	Documented Debt Paid in Full
1.f	Applicant denies that he is indebted to Creditor F for past-due debts totaling about $5,258. $5,258	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts	—	—
1.g	Applicant denies that he is indebted to Creditor G as the result of a judgment for about $1,410. $1,410	For Applicant	Judgment Against Applicant	Denied	—	(b) conditions largely beyond the person’s control; acted responsibly	Documented Debt Paid in Full
1.h	Applicant denies that he is indebted to Creditor H for a past-due debt in the amount of about $1,136. $1,136	For Applicant	Unspecified Financial	Denied	—	(b) conditions largely beyond the person’s control; acted responsibly	Documented Debt Paid in Full
1.i	Applicant admits that he is indebted to Creditors I~O for an outstanding judgment and for past-due debts totaling about $11,949. $11,949	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts	—	—
1.j–1.o	6 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: ) ) ) ISCR Case No. 14-04110 ) ) Applicant for Security Clearance )

For Government: Stephanie C. Hess, Esquire, Department Counsel For Applicant: Pro se

November 2, 2015

______________

STATEMENT OF CASE

______________

CEFOLA, Richard A., Administrative Judge:

Applicant submitted his Electronic Questionnaires for Investigations Processing (e-QIP) on February 20, 2013. On November 5, 2014, the Department of Defense (DOD) issued a Statement of Reasons (SOR) detailing the security concerns under Guideline F for Applicant. 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 (AG), effective within the Department of Defense after September 1, 2006.

Applicant answered the SOR in writing (Answer) on March 2, 2015, and requested an Administrative Determination by an administrative judge. Department Counsel issued a File of Relevant Material (FORM) on March 31, 2015. Applicant has not responded to the FORM. The case was assigned to me on August 5, 2015. Based upon a review of the pleadings and exhibits, eligibility for access to classified information is denied.

FINDINGS OF FACT

In his Answer to the SOR, Applicant admitted the factual allegations in Paragraphs 1.a., 1.b., and 1.i~1.o. of the SOR, with explanations. He denied the factual allegations in Paragraphs 1.c.~1.h. of the SOR.

Guideline F - Financial Considerations

Applicant is a 45 year old “Federal Contractor,” and has been such since February of 2010. (Item 4 at pages 5 and 10.) He fails to note the cause of his current financial difficulties, but notes that he was unemployed from June of 2007 until beginning his current employment in 2010. (Item 4 at pages 10–11.)

1.a. Applicant admits that he is indebted to Creditor A for a past-due debt in the amount of about $14,439. As he offers nothing further in this regard, I find that it is still past due and find against Applicant as to this allegation.

1.b. Applicant admits that he is indebted to Creditor B for a past-due debt in the amount of about $7,381. He is addressing this debt by way of a garnishment, as evidenced by a payroll document. (Item 3 at page 6.) This allegation is found for Applicant.

1.c. and 1.e. Applicant denies that he is indebted to Creditor C for past-due debts totaling about $7,781. These debts were settled and paid, as evidenced by his submitted March 2015 credit report. (Item 3 at pages 9–11.) These allegations are found for Applicant.

1.d. and 1.f. Applicant denies that he is indebted to Creditor D for past-due debts totaling about $5,258. In his Answer Applicant avers that he is “not familiar with this company,” but offers nothing further in this regard. (Item 3 at page 3.) As these past- due debts appear on the Government’s most recent July 2014 credit report (Item 5 at page 2), these allegations are found against Applicant.

1.g. Applicant denies that he is indebted to Creditor G as the result of a judgment for about $1,410. This judgment has been “satisfied” as evidenced by a “Judgment Release” (Item 3 at page 5); and as such, this allegation is found for Applicant.

1.h. Applicant denies that he is indebted to Creditor H for a past-due debt in the amount of about $1,136. This debt has been paid, as evidenced by a letter from a successor creditor to this debt (Item 3 at page 7); and as such, this allegation is found for Applicant.

1.i.~1.o Applicant admits that he is indebted to Creditors I~O for an outstanding judgment and for past-due debts totaling about $11,949. As he offers nothing further in this regard, I find that the judgment is still outstanding, and the debts are still past due; and as such, I find against Applicant as to these allegations.

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 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. (AG Paragraph 2.) The administrative judge’s over-arching adjudicative goal is a fair, impartial and commonsense decision. According to AG Paragraph 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 Paragraph 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 Paragraph E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive Paragraph E3.1.15, the applicant is responsible for presenting “witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by applicant or proven by Department Counsel. . . .” The applicant 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 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 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 Paragraph 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. Under Subparagraph 19(a), an “inability or unwillingness to satisfy debts@ is potentially disqualifying. Similarly under Subparagraph 19(c), “a history of not meeting financial obligations@ may raise security concerns. Applicant has significant past-due debts, totaling about $31,646, that remain past due. I can find no countervailing Mitigating Condition that is applicable here.

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. Under AG Paragraph 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.

The Administrative Judge should also consider the nine adjudicative process factors listed at AG Paragraph 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.

I considered all of the evidence, including the potentially disqualifying and mitigating conditions surrounding this case. The record evidence leaves me with questions and doubts as to his eligibility and suitability for a security clearance. Applicant has failed to fully respond to the Government’s concerns; and as such, has failed to address all the alleged past-due debts and an outstanding judgment. For this reason, I conclude Applicant has not mitigated the security concerns under the whole- person concept arising from his 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

Subparagraph 1.a. Against Applicant

Subparagraph 1.b. For Applicant

Subparagraph 1.c. For Applicant

Subparagraph 1.d. Against Applicant

Subparagraph 1.e. For Applicant

Subparagraph 1.f. Against Applicant

Subparagraph 1.g. For Applicant

Subparagraph 1.h. For Applicant

Subparagraph 1.i. Against Applicant

Subparagraph 1.j. Against Applicant

Subparagraph 1.k. Against Applicant

Subparagraph 1.l. Against Applicant

Subparagraph 1.m. Against Applicant

Subparagraph 1.n. Against Applicant

Subparagraph 1.o. 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.

Richard A. Cefola Administrative Judge