CASE · Clearance Adjudication Search EngineCASE

Loading case…

ISCR Case 14-05074.h1 — CASE

ISCR Case 14-05074.h1denied

Case Headnote

ISCR Case No. 14-05074.h1

deniedDec 7, 2015· Hon. Robert E. Coacher· hearing

Summary

The applicant, a 41-year-old federal contractor with significant delinquent debts totaling approximately $109,000, faced security concerns under Guideline F for financial considerations. The judge found that the applicant failed to provide sufficient evidence to mitigate these concerns, leading to a denial of his security clearance.

Under Guideline F (Financial Considerations), the Statement of Reasons alleged the following: SOR ¶ 1.a (past due $84,554): Applicant purchased a home in 2009 (1.a). SOR ¶ 1.b (judgment $2,419): This debt arose from the homeowners fees associated with his residence (1.b). SOR ¶ 1.c (collection account for $1,435): Applicant denied this debt, but it remains on his credit report (1.c). SOR ¶ 1.d (collection account for $4,200): Applicant denied this debt, but it remains on his credit report (1.d). SOR ¶ 1.e (collection account for $3,908): Applicant denied this debt, but it remains on his credit report (1.e). SOR ¶ 1.f (collection account for $8,686): Applicant denied this debt, but it remains on his credit report (1.f). SOR ¶ 1.g (collection account for $976): Applicant denied this debt, but it remains on his credit report (1.g).

The judge denied the clearance. The government raised disqualifying conditions F.1.a, F.1.c. The decision turned on the following: The applicant has unresolved delinquent debts totaling approximately $109,000; He did not provide evidence of payment plans or financial counseling; The applicant's financial issues were recent and not shown to be unlikely to recur.

Why the Applicant Was Denied

The applicant has unresolved delinquent debts totaling approximately $109,000.
He did not provide evidence of payment plans or financial counseling.
The applicant's financial issues were recent and not shown to be unlikely to recur.

Conditions Referenced

Disqualifying

F.1.araisedInability or Unwillingness to Satisfy Debts
F.1.craisedA History of Not Meeting Financial Obligations

Key Rule Quoted

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

Procedural Posture

SOR issuedMar 28, 2015
Answer filedApr 27, 2015
Hearing held—Decided on the written record.
Decision dateDec 7, 2015

Cite For

Failure to Mitigate Financial Considerations Under Guideline F
Impact of Unresolved Debts on Security Clearance Eligibility
Importance of Providing Evidence of Financial Stability in 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 unresolved financial issues, including a significant mortgage debt and a judgment against him, which raised security concerns under Guideline F. The applicant failed to provide sufficient evidence to mitigate these concerns, leading to a denial of his security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	SOR ¶ 1.a (past due $84,554): Applicant purchased a home in 2009. $84,554	Against Applicant	Mortgage or Home Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	SOR ¶ 1.b (judgment $2,419): This debt arose from the homeowners fees associated with his residence. $2,419	Against Applicant	Judgment Against Applicant	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	SOR ¶ 1.c (collection account for $1,435): Applicant denied this debt, but it remains on his credit report. $1,435	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	SOR ¶ 1.d (collection account for $4,200): Applicant denied this debt, but it remains on his credit report. $4,200	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	SOR ¶ 1.e (collection account for $3,908): Applicant denied this debt, but it remains on his credit report. $3,908	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	SOR ¶ 1.f (collection account for $8,686): Applicant denied this debt, but it remains on his credit report. $8,686	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	SOR ¶ 1.g (collection account for $976): Applicant denied this debt, but it remains on his credit report. $976	Against Applicant	Unspecified Financial	Denied	(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. 14-05074 ) ) Applicant for Security Clearance )

For Government: Alison O’Connell, Esq., Department Counsel For Applicant: Pro se

12/07/2015 ______________

STATEMENT OF CASE

______________

COACHER, Robert E., Administrative Judge:

Applicant has not mitigated the financial considerations security concern. Eligibility for access to classified information is denied.

Statement of the Case

On March 28, 2015, the Department of Defense Consolidated Adjudications Facility (DOD CAF) issued Applicant a Statement of Reasons (SOR) detailing security concerns under Guideline F, financial considerations. DOD CAF acted under Executive Order (EO) 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; DOD 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG).

Applicant answered the SOR on April 27, 2015, and elected to have his case decided on the written record. Department Counsel submitted the Government’s File of Relevant Material (FORM) on July 1, 2015. The evidence included in the FORM is identified as Items 5-12 (Items 1-4 are pleadings and transmittal information). The FORM was mailed to Applicant who received it on April 10, 2015. Applicant was given an opportunity to file objections and submit material in refutation, extenuation, or mitigation. He chose not to submit any further information. Items 5-12 are admitted into evidence. The case was assigned to me on November 10, 2015.

FINDINGS OF FACT

In Applicant’s answer to the SOR, he admitted ¶¶ 1.a and 1.b. He denied ¶¶ 1.cthrough 1.g. The admissions are adopted as findings of fact. After a careful review of the pleadings and evidence, I make the following additional findings of fact.

Applicant is 41 years old. He is married and has two children. He has worked for a federal contractor since March 2002. He is a high school graduate. He has never served in the military.1

The SOR lists seven delinquent debts totaling approximately $109,000. The largest delinquent debt is a mortgage account that he admits. The debts are supported by credit reports from August 2014 and December 2013, and by Applicant’s admissions.2

The status of the debts is as follows:

SOR ¶ 1.a (past due $84,554):

Applicant purchased a home in 2009. The original mortgage amount was approximately $310,000 with monthly payments of $2,300. The date of last activity was June 2010. In his security clearance interview he stated that he stopped living there in 2011 or 2012 and his ex-wife was to make the payments. He moved back into the property in 2012 and began seeking a home loan modification. There is no documentation supporting any modification agreement. He provided no proof of payment or evidence of a payment plan. This debt is unresolved.3

SOR ¶ 1.b (judgment $2,419):

This debt arose from the homeowners fees associated with his residence. A judgment was obtained in 2012. Applicant presented no proof of payment or evidence of a payment plan. This debt is unresolved.4 SOR ¶¶ 1.c - 1.g (four collection accounts and a charged-off account for $1,435; $4,200; $3,908; $8,686; $976):

Applicant denied all these debts, but they remain on his credit reports. He presented no proof of payment, evidence of payment plans, or evidence supporting disputes of the debts. These debts are unresolved.5

Applicant did not provide any information about his current financial status or a budget. There is no evidence that he sought financial counseling.6

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 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 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.” In reaching this decision, I have drawn only those conclusions that are reasonable, logical, and based on the evidence contained in the record.

Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, an “applicant is responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by applicant or proven by Department Counsel, and 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 that an applicant may deliberately or inadvertently fail to safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation about 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

AG ¶ 18 expresses the security concern for financial considerations:

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. I have considered all of them under AG ¶ 19 and the following potentially apply:

(a) inability or unwillingness to satisfy debts; and

Applicant has delinquent debts that remain unpaid or unresolved. I find both the disqualifying conditions are raised.

The guideline also includes conditions that could mitigate security concerns arising from financial difficulties. I have considered all of the mitigating conditions under AG ¶ 20 and the following potentially apply:

(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 debts 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 debts are recent and remain unresolved. He did not provide sufficient evidence to show that financial problems are unlikely to recur. AG ¶ 20(a) does not apply. Applicant did not present evidence that the debts were due to circumstances beyond his control. I find AG ¶ 20(b) does not apply. He did not provide documentation showing that any debts had been paid or that he established any payment plans. There is no evidence of credit counseling or evidence supporting disputes of any of the debts. AG ¶¶ 20(c), 20(d), and 20(e) do not apply.

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. 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 guideline and the whole-person concept. I considered the potentially disqualifying and mitigating conditions in light of all the facts and circumstances surrounding this case. Applicant has not shown a track record of financial stability.

Overall, the record evidence leaves me with questions and doubts as to Applicant’s eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant failed to mitigate the security concerns arising under Guideline F, 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 Subparagraphs 1.a – 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.

_____________________________ Robert E. Coacher Administrative Judge

FOOTNOTES

1 Item 5. 2 Items 2, 4-5. 3 Items 6, 12. 4 Items 6, 12. 5 Items 6-7, 12. 6 Item 4, 12.