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ISCR Case 14-04759.h1 — CASE

ISCR Case 14-04759.h1denied

Case Headnote

ISCR Case No. 14-04759.h1

deniedFeb 26, 2016· Hon. Edward W. Loughran· hearing

Summary

A 46-year-old defense contractor employee was denied a security clearance under Guideline F (Financial Considerations) due to multiple delinquent debts. The Statement of Reasons detailed four specific student loans, including a defaulted loan of $39,588, another for $38,222, and two placed for collection totaling $34,716 and $54,086 respectively. These issues raised disqualifying conditions under Adjudicative Guidelines paragraphs 19(a) and 19(c).

The applicant admitted to the debts, which collectively exceeded $39,000, and claimed to be making payments. However, he failed to provide any supporting documentation to substantiate these claims or demonstrate overall financial stability.

The judge concluded that the applicant did not mitigate the financial concerns. There was insufficient evidence to show that his financial problems would be resolved within a reasonable timeframe, leading to the denial of his security clearance application.

Why the Applicant Was Denied

Applicant had multiple delinquent debts totaling over $39,000.
He did not provide supporting documentation to demonstrate financial stability or responsible management of debts.
The judge found insufficient evidence to determine that the applicant's financial problems would be resolved in a reasonable period.

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

“The protection of the national security is the paramount consideration.”

Procedural Posture

SOR issuedMar 14, 2015
Answer filedMar 27, 2015Applicant elected to have the case decided on the written record.
Hearing held—No hearing; decided on the written record.
Decision dateFeb 26, 2016

Cite For

Failure to Provide Documentation Supporting Financial Claims Under Guideline F
Insufficient Evidence of Financial Responsibility Leading to Denial of Security Clearance
Importance of Demonstrating Resolution of Financial Issues in Security Clearance Cases

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 delinquent debts, including student loans and medical accounts, which he was unable or unwilling to pay. Although some debts were mitigated due to duplication, the overall financial issues raised significant concerns about the applicant's reliability and trustworthiness, leading to a denial of the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a–1.h	8 sub-charges — specific text not stated in this decision (against the applicant).	Against Applicant			—	—	—
1.i	$39,588 defaulted student loan $39,588	Against Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.j	specific text not stated in this decision	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.k	$38,222 student loan $38,222	For Applicant	Student Loan Debt	Admitted	—	—	—
1.l	specific text not stated in this decision	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.m	$34,716 student loan placed for collection $34,716	For Applicant	Student Loan Debt	Unknown	—	—	—
1.n	$54,086 student loan placed for collection $54,086	For Applicant	Student Loan Debt	Unknown	—	—	—

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. 14-04759 ) Applicant for Security Clearance )

For Government: Gregg A. Cervi, Esq., Department Counsel For Applicant: Pro se

02/26/2016 ______________

STATEMENT OF CASE

______________

LOUGHRAN, Edward W., Administrative Judge:

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

Statement of the Case

On March 14, 2015, the Department of Defense (DOD) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline 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 March 27, 2015, and elected to have the case decided on the written record in lieu of a hearing. The Government’s written case was submitted on September 29, 2015. A complete copy of the file of relevant material (FORM) was provided to Applicant, who was afforded an opportunity to file objections and submit material to refute, extenuate, or mitigate the security concerns. Applicant received the FORM on October 9, 2015. As of November 12, 2015, he had not responded. The case was assigned to me on December 1, 2015. The Government exhibits included in the FORM are admitted in evidence.

FINDINGS OF FACT

Applicant is a 46-year-old employee of a defense contractor. He has worked for his current employer since January 2014. He is applying for a security clearance for the first time. He has an associate’s degree. He is divorced with a 17-year-old child.1

The SOR alleges 14 delinquent dents. Four of the debts are student loans, but there are duplicate accounts. Three debts totaling $1,614 are medical accounts, and the seven remaining miscellaneous debts total $5,910. Applicant admitted owing all the debts, but he stated that he was paying one student-loan account and that several other debts would soon be removed from his credit report.2

Applicant admitted the student-loan allegations, but several of the accounts are duplicates. The $39,588 defaulted student loan identified in SOR ¶ 1.i is a duplicate of the $38,222 student loan identified in SOR ¶ 1.k. Applicant stated that he is paying the account and he is current. He did not submit any supporting documentation. SOR ¶¶ 1.mand 1.nallege student-loan accounts of $34,716 and $54,086 that were placed for collection. The loans do not appear in any credit report in evidence, and they were not discussed during Applicant’s background interview in March 2014.3

Applicant did not report any significant periods of unemployment. He admitted that he did not manage his money well. In the FORM, Department Counsel noted: “[a]bsent documentary evidence in support of resolution of the SOR debts, information on his current financial status and future ability to meet financial obligations, mitigation credit is not appropriate.” Applicant did not respond to the FORM.4

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

Guideline F, Financial Considerations

The security concern for financial considerations is set out in AG ¶ 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 AG ¶ 19. The following are potentially applicable in this case:

(a) inability or unwillingness to satisfy debts; and

Applicant had delinquent debts that he was unable or unwilling to pay. The evidence is sufficient to raise AG ¶¶ 19(a) and 19(c) as disqualifying conditions.

SOR ¶¶ 1.i and 1.kallege the same defaulted student loan. The student loans identified in SOR ¶¶ 1.mand 1.nalso appear to be duplicates of the SOR ¶ 1.i student loan. When the same conduct is alleged twice in the SOR under the same guideline, one of the duplicative allegations should be resolved in Applicant’s favor. See ISCR Case No. 03-04704 (App. Bd. Sep. 21, 2005) at 3 (same debt alleged twice). SOR ¶¶ 1.k, 1.m, and 1.nare concluded for Applicant.

Conditions that could mitigate the financial considerations security concerns are provided under AG ¶ 20. The following 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; and

(d) the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.

Applicant did not report any significant periods of unemployment, and he admitted that he did not manage his money well. He stated that he is paying his student loans, but he did not provide supporting documentation. The Appeal Board has held that “it is reasonable for a Judge to expect applicants to present documentation about the satisfaction of specific debts.” See ISCR Case No. 09-07091 at 2 (App. Bd. Aug 11, 2010) (quoting ISCR Case No. 04-10671 at 3 (App. Bd. May 1, 2006)). Applicant stated that several other debts would fall off his credit report, but there is no indication that he made any effort to pay any of the non-student loan debts. There is insufficient evidence for a determination that Applicant’s financial problems will be resolved within a reasonable period. I am unable to find that he acted responsibly under the circumstances or that he made a good-faith effort to pay his debts. His financial issues are recent and ongoing. They continue to cast doubt on his current reliability, trustworthiness, and good judgment. None of the above mitigating conditions 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 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 Guideline F in this whole-person analysis.

Overall, the record evidence leaves me with questions and doubts about Applicant’s eligibility and suitability for a security clearance. I conclude Applicant did not mitigate the 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.j: Against Applicant Subparagraph 1.k: For Applicant Subparagraph 1.l: Against Applicant Subparagraphs 1.m-1.n: 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 grant Applicant eligibility for a security clearance. Eligibility for access to classified information is denied.

________________________ Edward W. Loughran Administrative Judge

FOOTNOTES

1 Items 3, 6. 2 Item 2. 3 Items 2, 4-6. 4 Items 2-6.