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ISCR Case 14-04192.h1 — CASE

ISCR Case 14-04192.h1denied

Case Headnote

ISCR Case No. 14-04192.h1

deniedMay 29, 2015· Hon. David M. White· hearing

Summary

A 36-year-old defense contractor's security clearance application was denied under Guideline F, Financial Considerations, due to approximately $21,000 in unresolved delinquent debts. The Statement of Reasons detailed several financial issues, including about $21,000 in delinquent debts incurred over the past seven years, with no documented resolution.

Specific allegations included two unpaid judgments from 2008 for $326 and 2011 for $9,071. Additionally, two delinquent accounts for cellular telephone service ($1,857) and a utility bill ($566) were placed for collection in 2012 and 2014. An outstanding balance of $8,587 from an automobile repossession was charged off in 2013, and a $546 utility debt from October 2008 was also charged off. The applicant filed for Chapter 13 bankruptcy in June 2007, which was dismissed and closed in March 2008.

The denial was based on the applicant's failure to document resolution for any of the approximately $21,000 in delinquent debts incurred over seven years, and the lack of evidence demonstrating responsible financial conduct or counseling. The judge found no mitigating circumstances, leading to the denial of the security clearance.

Why the Applicant Was Denied

Applicant incurred about $21,000 in delinquent debts over the past seven years.
Applicant failed to document resolution of any of the debts.
No evidence was provided to show responsible conduct or financial counseling.

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.”
— AG ¶ 18

Procedural Posture

SOR issuedSep 25, 2014
Answer filedUndated
Hearing heldN/ADecided on the written record without a hearing.
Decision dateMay 29, 2015

Cite For

Denial Based on Unresolved Financial Obligations Under Guideline F
Lack of Evidence for Mitigating Financial Conditions
Importance of Demonstrating Responsible Financial Behavior for 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 incurred approximately $21,000 in delinquent debts over the past seven years, failing to document any resolution of these debts. The judge found that the applicant did not provide sufficient evidence to mitigate the financial concerns, resulting in a denial of eligibility for a security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant incurred about $21,000 in delinquent debts over the past seven years, and failed to document resolution of any of them. $21,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Two judgments entered against Applicant in 2008 ($326) and 2011 ($9,071) that remain unpaid. $9,347	Against Applicant	Judgment Against Applicant	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	Two delinquent accounts, for cellular telephone service ($1,857) and a utility bill ($566), were placed for collection in 2012 and 2014. $2,423	Against Applicant	Utility or Phone Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	The $8,587 outstanding balance due after an automobile repossession was charged off in 2013. $8,587	Against Applicant	Auto Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	A different utility supplier charged off the $546 debt that Applicant failed to pay in October 2008. $546	Against Applicant	Utility or Phone Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	Applicant filed for Chapter 13 bankruptcy relief on June 1, 2007, but that case was dismissed and closed on March 1, 2008.	Against Applicant	Bankruptcy Filing	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	Applicant offered no evidence that these debts were not his, or that he had otherwise taken any steps to resolve any of them.	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. 14-04192 ) ) Applicant for Security Clearance )

For Government: Chris Morin, Esq., Department Counsel For Applicant: Pro se

05/29/2015 ______________

STATEMENT OF CASE

______________

WHITE, David M., Administrative Judge:

Applicant incurred about $21,000 in delinquent debts over the past seven years, and failed to document resolution of any of them. Resulting security concerns were not mitigated. Based on a review of the pleadings and exhibits, eligibility for access to classified information is denied.

Statement of the Case

Applicant submitted a security clearance application on February 25, 2013. On September 25, 2014, the Department of Defense Consolidated Adjudications Facility (DoD CAF) issued a Statement of Reasons (SOR) to Applicant, 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 that came into effect in the Department of Defense on September 1, 2006.

Applicant submitted an undated written response to the SOR, and requested that his case be decided by an administrative judge on the written record without a hearing.3 Department Counsel submitted the Government’s written case on February 18, 2015. A complete copy of the File of Relevant Material (FORM) was provided to Applicant, 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 March 6, 2015. He submitted no additional material in response to the FORM, made no objection to consideration of any contents of the FORM, and did not request additional time to respond. I received the case assignment on April 27, 2015.

FINDINGS OF FACT

Applicant is 36 years old, and has worked for a defense contractor since February 2013. He has never married, and is the custodial parent of his nine-year-old daughter. He earned a GED certificate in 1996, has no military service, and has never held a security clearance.

In his response to the SOR, Applicant admitted all but one of the allegations6 concerning his delinquent judgement debts, accounts that have been charged off or placed for collection, and dismissed Chapter 13 bankruptcy. He denied the remaining allegation, claiming that he had no knowledge of that $546 balance. Applicant’s admissions are incorporated into the following findings of fact.

The six SOR-listed delinquent debts, totaling $20,953, appear on one or both record credit reports. Two are judgments entered against Applicant in 2008 ($326) and 2011 ($9,071) that remain unpaid. Two delinquent accounts, for cellular telephone service ($1,857) and a utility bill ($566), were placed for collection in 2012 and 2014. The $8,587 outstanding balance due after an automobile repossession was charged off in 2013, and a different utility supplier charged off the $546 debt that Applicant failed to pay in October 2008. Applicant offered no evidence that these debts were not his, or that he had otherwise taken any steps to resolve any of them.8

Applicant reported two brief periods of part-time employment while between full- time jobs in 2011 and 2012, but mainly attributed his financial difficulties to being a single father with no financial support from his daughter’s mother. The record does not address whether Applicant obtained financial counseling. He offered no evidence showing a budget, from which his ability to resolve these delinquencies or avoid additional debt problems could be predicted with any confidence. He filed for Chapter 13 bankruptcy relief on June 1, 2007, but that case was dismissed and closed on March 1, 2008. Applicant offered no further evidence concerning the debts involved in this bankruptcy, or any payments he may have made pursuant to the plan.

The record lacks evidence concerning the quality of Applicant’s professional performance, the level of responsibility his duties entail, or his track record with respect to handling sensitive information and observation of security procedures. No character witnesses provided statements describing his judgment, trustworthiness, integrity, or reliability. I was unable to evaluate his credibility, demeanor, or character in person since he elected to have his case decided without a hearing.

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 (DCs) and mitigating conditions (MCs), 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 under 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.

Department Counsel asserted, and the record evidence established, security concerns under two Guideline F DCs, as set forth in AG ¶ 19:

(a) inability or unwillingness to satisfy debts; and

(c) a history of not meeting financial obligations. Applicant owes about $21,000 in unresolved delinquent debts that he incurred over the past seven years, following his unsuccessful attempt to resolve earlier debts through Chapter 13 bankruptcy in 2007. He provided no evidence of any effort to repay or otherwise resolve any of them. His ongoing pattern and history of inability or unwillingness to pay lawful debts raises security concerns under DCs 19(a) and (c), and shifts 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 has incurred substantial delinquent debts, totaling almost $21,000, which continue to date. He offered no evidence from which to establish a track record of debt resolution. He failed to demonstrate that conditions beyond his control contributed to his financial problems, or that he acted responsibly under such circumstances. MC 20(e) requires documented proof to substantiate the basis of a dispute concerning an alleged debt, and Applicant failed to provide such evidence. Accordingly, the record is insufficient to establish mitigation under any of the foregoing provisions.

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.

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 pertinent facts and circumstances surrounding this case. Applicant is an accountable adult, who is responsible for his voluntary choices and conduct that underlie the security concerns expressed in the SOR. His SOR-listed delinquent debts arose over the past seven years and remain unresolved despite his employment during the period involved. He offered insufficient evidence of financial counseling, rehabilitation, better judgment, or responsible conduct in other areas of his life to offset resulting security concerns. The potential for pressure, coercion, and duress from his financial situation remains undiminished. Overall, the record evidence leaves me with substantial doubt as to Applicant’s present eligibility and suitability for a security clearance. He did not meet his burden to mitigate the security concerns arising from his 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.g: 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.

DAVID M. WHITE Administrative Judge

FOOTNOTES

Item 2. Item 1. Item 1. Department Counsel submitted five Items in support of the SOR allegations. Item 3 is inadmissible. It will not be considered or cited as evidence in this case. It is the summary of an unsworn interview of Applicant conducted on April 1, 2013, by an investigator from the Office of Personnel Management; but it was never adopted by Applicant as his own statement, or otherwise certified by him to be accurate. Under Directive ¶ E3.1.20, this Report of Investigation summary is inadmissible in the absence of an authenticating witness. Item 2. SOR ¶¶ 1.a through 1.e, and 1.g. SOR ¶ 1.f. Items 1, 4, and 5. Items 1 and 2. Items 1, 4, and 5.