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ISCR Case 15-00275.h1 — CASE

ISCR Case 15-00275.h1denied

Case Headnote

ISCR Case No. 15-00275.h1

deniedMar 28, 2016· Hon. Robert J. Tuidar· hearing

Summary

A 50-year-old shipfitter employed by a defense contractor was denied a security clearance under Guideline F, Financial Considerations. The denial stemmed from significant financial issues, specifically ten delinquent debts totaling approximately $117,000. These debts primarily consisted of mortgage, credit card, and medical obligations.

The Statement of Reasons detailed multiple instances of delinquent debt, all referencing the approximate $117,000 total across various categories. Disqualifying conditions under Guideline F were raised due to the applicant's financial irresponsibility.

The denial was based on the applicant's failure to provide sufficient evidence of mitigation efforts. Specifically, the applicant did not submit documentation of debt repayment, present a credible plan to resolve the financial issues, or demonstrate any attempts to seek financial counseling or communicate with creditors. Consequently, granting a security clearance was deemed inconsistent with national interest.

Why the Applicant Was Denied

The applicant had ten delinquent debts totaling approximately $117,000, indicating financial irresponsibility.
The applicant did not provide documentation of debt repayment or a credible plan to resolve financial issues.
The applicant failed to demonstrate any efforts to seek financial counseling or communicate with creditors.

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

“An applicant has the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue her security clearance.”
— ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002)

Procedural Posture

SOR issuedJul 30, 2015
Answer filedSep 14, 2015Applicant elected to have the case decided on the written record.
Hearing held—No hearing; decided on the written record.
Decision dateMar 28, 2016

Cite For

Failure to Mitigate Financial Considerations Under Guideline F
Importance of Demonstrating a Credible Plan for Debt Resolution
Burden of Proof Lies with the Applicant to Show National Interest Alignment for Clearance

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 faced significant financial concerns under Guideline F, with ten delinquent debts totaling approximately $117,000, primarily consisting of mortgage, credit card, and medical debts. The judge ruled against the applicant, finding that he failed to provide sufficient evidence to mitigate these financial issues, leading to the denial of his security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Delinquent debt totaling approximately $117,000, primarily mortgage, credit card, and medical debt.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Delinquent debt totaling approximately $117,000, primarily mortgage, credit card, and medical debt.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	Delinquent debt totaling approximately $117,000, primarily mortgage, credit card, and medical debt.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	Delinquent debt totaling approximately $117,000, primarily mortgage, credit card, and medical debt.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	Delinquent debt totaling approximately $117,000, primarily mortgage, credit card, and medical debt.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	Delinquent debt totaling approximately $117,000, primarily mortgage, credit card, and medical debt.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	Delinquent debt totaling approximately $117,000, primarily mortgage, credit card, and medical debt.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	Delinquent debt totaling approximately $117,000, primarily mortgage, credit card, and medical debt.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i	Delinquent debt totaling approximately $117,000, primarily mortgage, credit card, and medical debt.	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.j	Delinquent debt totaling approximately $117,000, primarily mortgage, credit card, and medical debt.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.k	Delinquent debt totaling approximately $117,000, primarily mortgage, credit card, and medical debt.	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.l	Delinquent debt totaling approximately $117,000, primarily mortgage, credit card, and medical debt.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.m	Delinquent debt totaling approximately $117,000, primarily mortgage, credit card, and medical debt.	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: ) ) XXXXXXXXXX, XXXXX ) ISCR Case No. 15-00275 ) Applicant for Security Clearance )

For Government: Benjamin R. Dorsey, Esq., Department Counsel For Applicant: Pro se

03/28/2016 __________

STATEMENT OF CASE

__________

TUIDER, Robert J., Administrative Judge:

Applicant failed to mitigate security concerns regarding Guideline F (financial considerations). Clearance is denied.

Statement of the Case

On July 24, 2014, Applicant submitted a Questionnaire for National Security Positions (SF-86). On July 30, 2015, the Department of Defense Consolidated Adjudications Facility (DOD CAF) issued a Statement of Reasons (SOR) to Applicant, under Executive Order 10865, Safeguarding Classified Information within Industry, dated February 20, 1960, as amended; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (Directive), dated January 2, 1992, as amended; and the adjudicative guidelines (AG), which became effective on September 1, 2006.

The SOR alleged security concerns under Guideline F. The SOR detailed reasons why DOD CAF was unable to find that it is clearly consistent with the national interest to grant or continue a security clearance for Applicant, and referred his case to an administrative judge for a determination whether his clearance should be granted or denied.

On September 14, 2015, Applicant answered the SOR and elected to have his case decided on the written record in lieu of a hearing. A complete copy of the file of relevant material (FORM), dated November 2, 2015, was provided to him by letter dated November 6, 2015. Applicant received the FORM on November 13, 2015. He was afforded a period of 30 days to file objections and submit material in refutation, extenuation, or mitigation. Applicant timely submitted additional information within the 30-day period, which was received without objection.1 On December 28, 2015, the case was assigned to me.

FINDINGS OF FACT

Applicant admitted all of the SOR allegations except SOR ¶¶ 1.i and 1.k, to which he pled “unknown,” and SOR ¶ 1.m, which he denied.

Background Information2

Applicant is a 50-year-old shipfitter employed by a defense contractor since September 2014. He seeks a security clearance in conjunction with his current employment. (Items 3, 4)

Applicant graduated from high school in June 1983 and was awarded an associate’s degree in July 1986. He did not serve in the armed forces. (Items 3, 4) Applicant married in September 1994 and divorced in June 2008. He has a 19-year-old daughter. Applicant did not pay child support, but was required to pay a lump-sum child support payment of $20,000 in February 2015.3 (Items 3, 4)

Financial Considerations

Applicant’s SOR lists ten delinquent debts totally approximately $117,000. The delinquencies are comprised of primarily mortgage, credit card, and medical debt. (SOR ¶¶ 1.a – 1.m; Item 3)

In Applicant’s SOR answer, he claimed that he paid SOR ¶ 1.m, but provided no documentation that the debt was paid. He further claimed that he was working with an attorney to file bankruptcy. Department Counsel noted that Applicant had not filed bankruptcy as of the FORM date. Applicant stated the reason for his financial problems is lack of work, adding that he would be able to meet his financial obligations once he began work. He stated that his debts were tied to events beyond his control such as the failing economy. (Item 4) A review of Applicant’s August 2014 and July 2015 credit reports indicate that his indebtedness began in approximately 2011. (Items 5, 6) Applicant’s SF-86 indicated that he was a self-employed carpenter from May 2003 to July 2014 before beginning his current employment. (Item 3) The FORM does not contain facts that discuss Applicant’s cash-flow situation as a self-employed carpenter or his cash-flow situation since being employed as a shipfitter.

Applicant’s FORM response did little to enhance his situation. He provided a copy of his SOR and his September 15, 2014 Office of Personnel Management Personal Subject Interview (OPM PSI) that were annotated with hand written notes, but did not provide any substantiating documentation that would have supported his case. (FORM response)

There is no record evidence documenting any attempt by Applicant to contact any of his creditors or documentation that he paid or settled any of his debts. There is no record evidence that Applicant sought financial counseling nor does the FORM contain any character evidence.

POLICIES

The U.S. Supreme Court has recognized the substantial discretion of the Executive Branch in regulating access to information pertaining to national security emphasizing, “no one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). As Commander in Chief, the President has the authority to control access to information bearing on national security and to determine whether an individual is sufficiently trustworthy to have access to such information.” Id. at 527. The President has authorized the Secretary of Defense or his designee to grant applicant’s eligibility for access to classified information “only upon a finding that it is clearly consistent with the national interest to do so.” Exec. Or. 10865, Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960), as amended.

Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the adjudicative guidelines. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, these guidelines are applied in conjunction with an evaluation of the whole person. An administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. An administrative judge must consider all available, reliable information about the person, past and present, favorable and unfavorable.

The Government reposes a high degree of trust and confidence in persons with access to classified information. This relationship transcends normal duty hours and endures throughout off-duty hours. 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 about potential, rather than actual, risk of compromise of classified information. Clearance decisions must be “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See Exec. Or. 10865 § 7. See also Executive Order 12968 (Aug. 2, 1995), § 3.1. Thus, nothing in this Decision should be construed to suggest that I have based this decision, in whole or in part, on any express or implied determination about applicant’s allegiance, loyalty, or patriotism. It is merely an indication the applicant has not met the strict guidelines the President and the Secretary of Defense have established for issuing a clearance.

Initially, the Government must establish, by substantial evidence, conditions in the personal or professional history of the applicant that may disqualify the applicant from being eligible for access to classified information. The Government has the burden of establishing controverted facts alleged in the SOR. See Egan, 484 U.S. at 531. “Substantial evidence” is “more than a scintilla but less than a preponderance.” See v. Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994). The guidelines presume a nexus or rational connection between proven conduct under any of the criteria listed therein and an applicant’s security suitability. See ISCR Case No. 95-0611 at 2 (App. Bd. May 2, 1996).

Once the Government establishes a disqualifying condition by substantial evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the facts. Directive ¶ E3.1.15. An applicant “has the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue her security clearance.” ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002). The burden of disproving a mitigating condition never shifts to the Government. See ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 2005). “[S]ecurity clearance determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531; see AG ¶ 2(b).

ANALYSIS

Financial Considerations

AG ¶ 18 articulates the security concern for financial problems:

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.

AG ¶ 19 provides two disqualifying conditions that could raise a security concern and may be disqualifying in this case: “(a) inability or unwillingness to satisfy debts;” and “(c) a history of not meeting financial obligations.” In ISCR Case No. 08-12184 at 7 (App. Bd. Jan. 7, 2010), the Appeal Board explained:

It is well-settled that adverse information from a credit report can normally meet the substantial evidence standard and the government’s obligations under [Directive] ¶ E3.1.14 for pertinent allegations. At that point, the burden shifts to applicant to establish either that [he or] she is not responsible for the debt or that matters in mitigation apply.

(internal citation omitted). Applicant’s history of financial problems is documented not only in his credit reports, but also in the additional evidence contained in the FORM. The evidence establishes the validity of the allegations and the disqualifying conditions in AG ¶¶ 19(a) and 19(c) requiring additional inquiry about the possible applicability of mitigating conditions.

Five mitigating conditions under AG ¶ 20 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;

(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.

Considering the record evidence as a whole,4 financial considerations security concerns remain. If favorable evidence exists, Applicant did not provide it. None of the five financial considerations mitigating conditions above are applicable or partially applicable to explain, extenuate, or mitigate the SOR allegations. The available information shows that Applicant has taken little or no affirmative action to resolve the financial shortcomings identified in his FORM.

With that said, a security clearance case is not aimed at collecting debts.5 Rather the purpose is to evaluate an applicant’s judgment, reliability, and trustworthiness consistent with the security guidelines in the Directive. In evaluating Guideline F cases, the Appeal Board has established the following standard:

The Board has previously noted that the concept of a meaningful track record necessarily includes evidence of actual debt reduction through payment of debts. However, an applicant is not required, as a matter of law, to establish that he has paid off each and every debt listed in the SOR. All that is required is that an applicant demonstrate that he has established a plan to resolve his financial problems and taken significant actions to implement that plan. The Judge can reasonably consider the entirety of an applicant’s financial situation and his actions in evaluating the extent to which that applicant’s plan for the reduction of his outstanding indebtedness is credible and realistic. There is no requirement that a plan provide for payments on all outstanding debts simultaneously. Rather, a reasonable plan (and concomitant conduct) may provide for the payments of such debts one at a time. Likewise, there is no requirement that the first debts actually paid in furtherance of a reasonable debt plan be the ones listed in the SOR.6

In requesting an administrative determination, Applicant chose to rely on the written record. In so doing, however, he failed to submit sufficient evidence to supplement the record with relevant and material facts regarding his circumstances, articulate his position, and mitigate the financial security concerns. He failed to offer evidence of financial counseling or provide documentation regarding his past efforts to address his delinquent debt. By failing to provide such information, and in relying on an explanation lacking sufficient detail to fully establish mitigation, financial considerations security concerns remain.

After weighing the relevant disqualifying and mitigating conditions and evaluating the evidence in light of the whole-person concept,7 I conclude Applicant did not present sufficient evidence to explain, extenuate, and mitigate the Guideline F security concern. Accordingly, Applicant has not met his ultimate burden of persuasion to show that it is clearly consistent with the national interest to grant his eligibility for access to classified information.

FORMAL FINDINGS

The formal findings on the SOR are as follows:

Paragraph 1, Guideline F: AGAINST APPLICANT

Subparagraphs 1.a – 1.m: Against Applicant

CONCLUSION

In light of all of the record as a whole, it is not clearly consistent with the national interest to grant Applicant eligibility for a security clearance. Clearance is denied.

_________________ ROBERT J. TUIDER Administrative Judge

FOOTNOTES

1 Applicant’s additional information will be referred to as FORM response. 2 The limited background information regarding Applicant was derived from the FORM and was the most current information available. 3 The FORM does not provide information whether this lump-sum child support was paid. 4 See ISCR Case No. 03-02374 at 4 (App. Bd. Jan. 26, 2006) (citing ISCR Case No. 02-22173 at 4 (App. Bd. May 26, 2004)). When making a recency analysis for AG ¶ 20(a), all debts are considered as a whole. 5 ISCR Case No. 09-02160 (App. Bd. Jun. 21, 2010). 6 ISCR Case No. 07-06482 at 3 (App. Bd. May 21, 2008) (citations and quotation marks omitted). 7 AG ¶ 2(a) (1)-(9).