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ISCR Case 14-05499.h1 — CASE

ISCR Case 14-05499.h1denied

Case Headnote

ISCR Case No. 14-05499.h1

deniedFeb 19, 2016· Hon. John Grattan Metz, Jr.· hearing

Summary

A 36-year-old welder employed by a U.S. defense contractor was denied a security clearance under Guideline F (Financial Considerations). The denial stemmed from significant financial issues, including 13 admitted delinquent debts totaling over $70,000. The applicant had also filed for Chapter 7 bankruptcy in September 2004, receiving a discharge in December 2004.

Further concerns included the applicant's lack of contact with any of his current creditors and no documented efforts to resolve these outstanding debts since completing his clearance application in November 2013. The applicant also stated an intent to file for bankruptcy again but provided no evidence of initiating this process.

The judge noted that the applicant had not sought credit counseling or debt consolidation, and provided no work or character references, or evidence of community involvement. Given the applicant's failure to demonstrate efforts to resolve his financial obligations, the judge concluded that granting a clearance was not consistent with national interest, and the clearance was denied.

Why the Applicant Was Denied

The applicant admitted to 13 delinquent debts totaling over $70,000.
The applicant filed for Chapter 7 bankruptcy in 2004 and has not resolved his current debts.
The applicant provided no evidence of efforts to contact creditors or to address his financial obligations.

Conditions Referenced

Disqualifying

F.1raisedFinancial Considerations
F.2raisedFinancial Considerations

Key Rule Quoted

“The Government has a compelling interest in ensuring each applicant possesses the requisite judgement, reliability, and trustworthiness of those who must protect national interests as their own.”
— Department of the Navy v. Egan, 484 U.S. 518 (1988)

Procedural Posture

SOR issuedMay 9, 2015
Answer filedMay 9, 2015Applicant requested a decision without hearing.
Record closedOct 22, 2015Deadline for response to FORM.
Decision dateFeb 19, 2016

Cite For

Denial of Clearance Due to Unresolved Financial Obligations
Failure to Demonstrate Good-faith Efforts to Address Debts
Impact of Financial History on 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 judge found that the applicant had multiple financial issues, including 13 delinquent debts totaling over $70,000 and a prior Chapter 7 bankruptcy. The applicant's failure to take action to resolve these debts led to a decision against granting a security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant admitted 13 delinquent debts totaling over $70,000. $70,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Applicant filed a Chapter 7 bankruptcy petition in September 2004, and received a discharge of his dischargeable debts in December 2004.	Against Applicant	Bankruptcy Filing	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	Applicant has not been in contact with any of his creditors.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	Applicant stated his intent to file for bankruptcy protection again within the next month, but submitted no evidence indicating that he had begun the process.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	Applicant has not documented any contact with his creditors since completing his clearance application in November 2013.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	Applicant has not received any credit counseling or debt consolidation.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	Applicant provided no work or character references, or any evidence of community involvement.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	Applicant's financial problems appear to date from at least 2004, when he first obtained bankruptcy relief.	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: ) ) XXXXXX, Xxxxxxx Xxxxxxx XXX ) ISCR Case No. 14-05499 ) Applicant for Security Clearance )

For Government: Pamela C. Benson, Esquire, Department Counsel For Applicant: Pro se

02/19/2016 ______________

STATEMENT OF CASE

______________

METZ, John Grattan, Jr., Administrative Judge:

Based on the record in this case, I deny Applicant’s clearance.

On 9 May 2015, the Department of Defense (DoD) sent Applicant a Statement of Reasons (SOR) raising security concerns under Guideline F, Financial Considerations.2 Applicant timely answered the SOR, requesting a decision without hearing by the Defense Office of Hearings and Appeals (DOHA). The record in this case closed 22 October 2015, when Applicant’s response to the FORM was due. Applicant provided no additional documents. DOHA assigned the case to me 23 December 2015.

FINDINGS OF FACT

Applicant admitted the SOR financial allegations. He is a 36-year-old welder employed by a U.S. defense contractor since August 2013. He has not previously held a clearance. He has been married since September 2005, and has two children. His wife works outside the home.

The SOR alleges, Government exhibits (Items 3-4) substantiate, and Applicant admits 13 delinquent debts totaling over $70,000. Applicant also admits filing a Chapter 7 bankruptcy petition in September 2004, and receiving a discharge of his dischargeable debts in December 2004. Applicant has not been in contact with any of his creditors. In his May 2015 Answer to the SOR, Applicant stated his intent to file for bankruptcy protection again within the next month. He submitted no evidence indicating that he had begun the process.

Applicant’s November 2013 clearance application (Item 4) reported the two delinquent credit card debts alleged at SOR 1.i and 1.j. He discussed these two debts, his bankruptcy, and six other SOR debts listed on his January 2014 credit report (Item 3) during a March 2014 subject interview with a Government investigator (Item 5). Applicant acknowledged owing these debts. His plan was to enter into payment plans with his creditors or enter a debt consolidation plan once his income was more stable.

Applicant also discussed his employment history. From April 2006 until he obtained his current job in December 2013, Applicant had 11 full-time jobs. He obtained these jobs through his union; his employers paid him directly. All of these jobs, except for one job that lasted from May 2007 to December 2008, lasted less than a year. Consequently, between October 2004 and January 2013, Applicant experienced 11 separate periods of unemployment. Most of the periods of unemployment were a few months. One exception was the eight months’ unemployment he experienced from October 2004 to May 2005, just as he was filing for his 2004 bankruptcy. The second exception was the year’s unemployment he experienced from May 2009 to May 2010. During his unemployment periods, he lived off unemployment benefits and his savings.

Applicant has not documented any contact with his creditors since completing his clearance application in November 2013 and discussing his delinquent debts with the Government investigator in March 2014. He has stated no plan for addressing his delinquent debts, beyond the promised bankruptcy filing. He provided no budget or financial statement. Applicant has not received any credit counseling or debt consolidation. He provided no work or character references, or any evidence of community involvement.

POLICIES

The adjudicative guidelines (AG) list factors for evaluating a person’s suitability for access to classified information. Administrative judges must assess disqualifying and mitigating conditions under each issue fairly raised by the facts and situation presented. Each decision must also reflect a fair, impartial, and commonsense consideration of the factors listed in AG ¶ 2(a). Any one disqualifying or mitigating condition is not, by itself, conclusive. However, specific adjudicative guidelines should be followed where a case can be measured against them, as they represent policy guidance governing access to classified information. Considering the SOR allegations and the evidence as a whole, the relevant adjudicative guideline is Guideline F (Financial Considerations).

Security clearance decisions resolve whether it is clearly consistent with the national interest to grant or continue an applicant’s security clearance. The Government must prove, by substantial evidence, controverted facts alleged in the SOR. If it does, the burden shifts to applicant to refute, extenuate, or mitigate the Government’s case. Because no one has a right to a security clearance, the applicant bears a heavy burden of persuasion.

Persons with access to classified information enter into a fiduciary relationship with the Government based on trust and confidence. Therefore, the Government has a compelling interest in ensuring each applicant possesses the requisite judgement, reliability, and trustworthiness of those who must protect national interests as their own. The “clearly consistent with the national interest” standard compels resolution of any reasonable doubt about an applicant’s suitability for access in favor of the Government.4

ANALYSIS

The Government established a case for disqualification under Guideline F, and Applicant failed to submit sufficient evidence to mitigate the security concerns. Applicant has a history of financial difficulties, which are ongoing and unlikely to be resolved any time soon. Applicant’s financial problems appear to date from at least 2004, when he first obtained bankruptcy relief. They were exacerbated by Applicant’s employment situation from October 2004 to December 2013, with its multiple unemployment periods, particularly the year he was unemployed from May 2009 to May 2010. However, despite steady employment since November 2013, there is no evidence of any efforts by Applicant to resolve the debts.

Applicant meets none of the mitigating conditions for financial considerations. His financial difficulties are both recent and multiple; although the immediate causes of his problems may be unlikely to recur if he retains stable employment. Applicant’s unemployment periods were certainly beyond his control, but they were also essentially a condition of his employment situation and he has not shown that he has been responsible in addressing his debt, either during his career as an intermittent welder or since he obtained a regular work schedule.7

Applicant submitted no evidence to show that he received credit or financial counseling, and his debts are clearly not being resolved. There are no signs that Applicant has been in contact with any of the creditors alleged in the SOR, and thus he cannot establish that he has made a good-faith effort to address his debts. Moreover, Applicant has mostly disregarded these financial obligations since obtaining his most recent job in November 2013. His documented inaction for nearly a year raises significant security concerns that Applicant has not begun to address. Accordingly, I conclude Guideline F against Applicant.

FORMAL FINDINGS

Paragraph 1. Guideline F: AGAINST APPLICANT

Subparagraphs a-h: Against Applicant

CONCLUSION

Under the circumstances presented by the record in this case, it is not clearly consistent with the national interest to grant or continue a security clearance for Applicant. Clearance denied.

JOHN GRATTAN METZ, JR Administrative Judge

FOOTNOTES

Consisting of the File of Relevant Material (FORM), Items 1-5.

DoD acted under Executive Order 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) effective within the DoD on 1 September 2006. SOR 1.b, 1.e-1.g, and 1.i-1.l. See, Department of the Navy v. Egan, 484 U.S. 518 (1988).

¶19(a) inability or unwillingness to satisfy debts; (c) a history of not meeting financial obligations; ¶20(a) the behavior happened so long ago, was so infrequent, or occurred under such circumstances that it is unlikely to recur . . .

¶20(b) the conditions that resulted in the financial problem were largely beyond the person’s control . . . and the individual acted responsibly under the circumstances;

¶20(c) the person has received or is receiving counseling for the problem and there are clear indications that the problem is being resolved or is under control;

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