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ISCR Case 14-06592.h1 — CASE

ISCR Case 14-06592.h1denied

Case Headnote

ISCR Case No. 14-06592.h1

deniedJul 1, 2014· Hon. Philip S. Howe· hearing

Summary

A 34-year-old married male with one child and six years of U.S. Air Force service was denied a security clearance under Guideline F (Financial Considerations) due to unresolved financial issues. The Statement of Reasons cited two primary allegations: an outstanding home mortgage and an $810 bank debt.

While the $247,990 home mortgage, with $19,204 in past-due payments, was resolved through the sale of the house, the $810 bank debt remained unresolved and was a charged-off account. The applicant attributed his inability to repay this debt to four-month unemployment periods within his current work scheme.

Despite the resolution of some debts, the applicant still had unresolved obligations totaling $146,274 and the $810. The adjudicator found that his claims of unemployment did not sufficiently mitigate these issues, and he failed to provide adequate evidence of his financial situation or efforts to resolve his outstanding debts. Consequently, concerns about his reliability and trustworthiness led to the denial of his security clearance.

Why the Applicant Was Denied

Applicant had unresolved debts totaling $146,274 and $810, which were not mitigated by his claims of unemployment.
Applicant did not provide sufficient evidence of his financial situation or efforts to resolve his debts.
The applicant's financial issues raised questions about his reliability and trustworthiness.

Conditions Referenced

Disqualifying

AG ¶ 19 (a)appliedInability or Unwillingness to Satisfy Debts
AG ¶ 19 (c)appliedA History of Not Meeting Financial Obligations

Mitigating

AG ¶ 20 (b)rejectedConditions Beyond the Person's ControlApplicant did not demonstrate that his unemployment was beyond his control or that he acted responsibly.

Key Rule Quoted

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

Procedural Posture

SOR issuedMay 9, 2015
Answer filedAug 12, 2015Applicant requested a decision on the written record.
Hearing held—No hearing; decision made on the written record.
Decision dateFeb 3, 2016

Cite For

Denial of Security Clearance Due to Unresolved Financial Obligations
Failure to Demonstrate Responsible Financial Management
Impact of Financial Issues on Reliability and Trustworthiness Under Guideline F

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 two unresolved debts, which raised significant security concerns under Guideline F. While some debts were resolved, the applicant failed to demonstrate responsible management of his financial obligations, leading to a denial of his security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant owed a bank on a home mortgage. The mortgage balance is $247,990 and the monthly payments were past due in the amount of $19,204. The credit report states the house was sold and the balance owed has been paid. This debt is resolved. $247,990	For Applicant	Mortgage or Home Loan Debt	Admitted	—	—	—
1.e	Applicant owes a bank $810. He admitted the debt and attributed his inability to repay it to the four month unemployment periods in his work scheme with his current employer. The credit report shows this debt is not resolved and is a charged off account. $810	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Other

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. 14-06592 ) ) Applicant for Security Clearance )

For Government: Adrienne Strzelczyk, Esquire, Department Counsel For Applicant: Pro se

02/03/2016 ______________

STATEMENT OF CASE

______________

HOWE, Philip S., Administrative Judge:

On February 28, 2012, Applicant submitted his Electronic Questionnaires for Investigations Processing (e-QIP). On May 9, 2015, the Department of Defense Consolidated Adjudications Facility (DODCAF) issued Applicant a Statement of Reasons (SOR) detailing security concerns under Guideline F. 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 on September 1, 2006.

Applicant answered the SOR in writing on August 12, 2015. Applicant requested his case be decided on the written record in lieu of a hearing.

On September 28, 2015, Department Counsel submitted the Department's written case. A complete copy of the file of relevant material (FORM), consisting of Items 1 to 6, was provided to the Applicant on September 28, 2015. He was given the opportunity to file objections and submit material in refutation, extenuation, or mitigation. Applicant received the file on October 13, 2015.

Applicant did not file a Response to the FORM within the 30 day time allowed that would have expired on November 12, 2015.

Department Counsel submitted six 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 by an interviewer from the Office of Personnel Management on April 23, 2012. Applicant did not adopt it as his own statement, or otherwise certify it to be accurate. Under Directive ¶ E3.1.20, this Report of Investigation summary is inadmissible in the absence of an authenticating witness. In light of Applicant’s admissions, it is also cumulative.

I received the case assignment on December 18, 2015. Based upon a review of the pleadings and exhibits, eligibility for access to classified information is denied.

FINDINGS OF FACT

Applicant admitted the allegations in the SOR. There are six financial allegations. (Items 1, 2)

Applicant is 34 years old, married, and has one child. He served six years in the U.S. Air Force. Since leaving active military service in 2007 he has worked for a company that has him work four months, then he is laid off from work for three months during which he collects unemployment from his state of residence, until he is rehired. His debts started being delinquent in 2012. (Items 1, 2)

Applicant owed a bank on a home mortgage (Subparagraph 1.a). The mortgage balance is $247,990 and the monthly payments were past due in the amount of $19,204. Applicant’s Answer states he was told by his mortgage lender that to take advantage of a short sale procedure he would have to stop paying on his mortgage. He did so and the house was sold in a short sale. The credit report of September 28, 2015, states the house was sold and the balance owed has been paid. This debt is resolved. (Items 1, 2, 4-6)

Applicant owed $622 on a credit card (Subparagraph 1.b). The credit report of September 28, 2015, states the account was charged off and paid. Applicant’s Answer states he paid off the debt. This debt is resolved. (Items 1, 2, 4-6)

Applicant owed a debt collector $1,274 on a credit card (Subparagraph 1.c). The debt became delinquent in that unemployed time period. The credit reports and Applicant contend he paid off this debt. It is shown on the September 28, 2015 credit report that the debt is paid. This debt is resolved. (Items 1, 2, 4-6) Applicant owes a university for tuition the amount of $1,157 (Subparagraph 1.d). Applicant admits this debt because the G.I. Bill did not cover this expense and he was unemployed making him unable to pay the debt. It is not resolved. The credit report of October 7, 2014, states this debt is charged off and not paid. The September 28, 2015 credit report states the debt is a paid charge off. This debt is resolved. (Items 1, 2, 4-6)

Applicant owes a bank $810 (Subparagraph 1.e). He admitted the debt and attributed his inability to repay it to the four month unemployment periods in his work scheme with his current employer. The credit report of October 7, 2014, shows this debt is not resolved and is a charged off account. (Items 1, 2, 4-6)

Applicant owes a bank on a real estate mortgage with a loan balance of $146,274 and a past-due monthly payment of $2,833 (Subparagraph 1.f). The credit reports in the FORM do not show that this debt is paid. Applicant admits this debt and was not able to pay it because he was unemployed for a four month period. The credit reports show foreclosure proceedings were started. This debt is not resolved. (Item 1, 2, 4-6)

Applicant did not submit any documentation that he has participated in credit counseling or budget education. He provided no evidence concerning the quality of his job performance. He submitted no character references or other evidence tending to establish good judgment, trustworthiness, 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 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, the administrative judge applies the guidelines 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(c), the entire process is a conscientious scrutiny of a number of variables known as the Awhole-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[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.

According to 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 the applicant or proven by Department Counsel, and has the ultimate burden of persuasion as to obtaining a favorable clearance 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. 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 ¶ 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 at AG ¶ 19 contains nine disqualifying conditions that could raise security concerns. From these nine conditions, two conditions are applicable to the facts found in this case:

(a) inability or unwillingness to satisfy debts; and

(c) a history of not meeting financial obligations. From 2012 to the present, Applicant accumulated six delinquent debts, totaling $25,900, which remained unpaid or unresolved when the SOR was issued. These two disqualifying conditions are established.

The guideline in AG ¶ 20 contains six conditions that could mitigate security concerns arising from financial difficulties. Only one mitigating condition might have partial applicability.

(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.

AG ¶ 20 (b) would apply if the loss of employment were shown by Applicant to have a substantial effect on his ability to repay his debts. In the past seven years, Applicant has been unemployed every four months, he claims. He did not submit any documents to show his income or the part-time work for his employer. His work conditions were not beyond his control because he could have found work during the months his regular employer furloughed him. Instead, he collected unemployment insurance. This conduct is not responsible when he has two mortgages to pay and other debts owed. He failed to meet his burden of proof on that issue.

Applicant failed to prove AG ¶ 20 (b) applied because he did not submit sufficient evidence of the conditions that he asserted were beyond his control and that he acted responsibly in resolving his delinquent debts during the time the debts were accumulating.

None of the other mitigating conditions apply. His behavior is recent and continuing. There is no evidence the financial problems, particularly on his mortgage, have been resolved. He has no basis to dispute the debts, or at least none that he demonstrated. Applicant did not demonstrate a good-faith effort to repay all the debts, but he did repay or resolve four of the six debts.

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 facts and circumstances surrounding this case. Applicant was an adult when he incurred the debts. There are two debts that have not been resolved of the six alleged in the SOR. Applicant did not show any efforts to repay all the unresolved debts except to state he was unemployed every four months, but nothing about his income when he was working and whether it was sufficient to pay his mortgage and other debts. He is continuing the same conduct regarding the debts. With these debts there is a likelihood of pressure, coercion, exploitation, or duress as the debts become more delinquent.

Overall, the record evidence leaves me with questions or substantial doubts as to Applicant's eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant did not mitigate the security concerns arising under the guideline for 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 to 1.d: For Applicant

Subparagraphs 1.e and 1.f: 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.

_________________ PHILIP S. HOWE Administrative Judge