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ISCR Case 15-01176.h1 — CASE

ISCR Case 15-01176.h1denied

Case Headnote

ISCR Case No. 15-01176.h1

deniedJun 15, 2016· Hon. Jennifer I. Goldstein· hearing

Summary

A 45-year-old defense contractor and Army veteran was denied a security clearance due to financial considerations under Guideline F. The applicant faced concerns stemming from approximately $37,164 in unresolved financial debts. These debts included a $10,511 charged-off account, a $7,395 collection account, a $5,701 bank debt placed for collection, and a $1,322 delinquent charged-off credit card debt.

Additionally, the applicant had two judgments against him, one for $6,339 and another for $1,873, along with a $4,023 charged-off credit card account. While the applicant attributed these financial difficulties to a divorce and periods of unemployment, these explanations did not sufficiently mitigate the security concerns.

The denial was based on the applicant remaining indebted to seven creditors for the stated total amount. Crucially, the applicant failed to provide evidence of addressing or resolving these delinquent debts and did not demonstrate responsible behavior or financial counseling to mitigate the security concerns.

Why the Applicant Was Denied

Applicant remains indebted to seven creditors for a total of approximately $37,164.
Applicant failed to provide evidence of addressing or resolving his delinquent debts.
The applicant did not demonstrate responsible behavior or financial counseling to mitigate security concerns.

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

“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.”

Procedural Posture

SOR issuedNov 2, 2015
Answer filedDec 1, 2015
Hearing held—Decided without a hearing
Decision dateJun 15, 2016

Cite For

Denial of Security Clearance Due to Unresolved Financial Obligations
Insufficient Evidence of Financial Responsibility Under Guideline F
Failure to Mitigate Financial Concerns Despite Personal Circumstances

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 was found to have significant financial issues, including multiple delinquent debts totaling approximately $37,164. The judge ruled against the applicant on all allegations under Guideline F, concluding that the applicant failed to mitigate the security concerns related to his financial situation.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	a charged-off account in the amount of $10,511 $10,511	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	a collection account in the amount of $7,395 $7,395	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	a debt owed to a bank in the amount of $5,701 that was placed for collection $5,701	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	a delinquent charged-off credit card debt in the amount of $1,322 $1,322	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	a judgment in the amount of $6,339 $6,339	Against Applicant	Judgment Against Applicant	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	another judgment in the amount of $1,873 $1,873	Against Applicant	Judgment Against Applicant	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	a charged-off credit card account in the amount of $4,023 $4,023	Against Applicant	Credit Card Debt	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: ) ) ) ISCR Case No. 15-01176 ) ) Applicant for Security Clearance )

For Government: Ray T. Blank, Jr., Esq., Department Counsel For Applicant: Pro se

June 15, 2016 ______________

STATEMENT OF CASE

______________

GOLDSTEIN, Jennifer I., Administrative Judge:

Applicant remains indebted to seven creditors for judgments, and charged-off or collection accounts, in the total approximate amount of $37,164. Resulting security concerns were not mitigated. Based on a review of the pleadings and exhibits, eligibility for access to classified information is denied.

Statement of the Case

Applicant submitted a security clearance application on May 21, 2013. (Item 4.) On November 2, 2015, the Department of Defense Consolidated Adjudications Facility (DoD CAF) issued a Statement of Reasons (SOR) to Applicant, detailing security concerns under Guideline F (Financial Considerations). 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 that came into effect in the Department of Defense on September 1, 2006. Applicant submitted a written response to the SOR, dated December 1, 2015 (Item 2), and requested that his case be decided by an administrative judge on the written record without a hearing. Department Counsel submitted the Government’s written case on January 4, 2016, containing nine Items. A complete copy of the File of Relevant Material (FORM) was received by Applicant on January 18, 2016, and he was afforded an opportunity to file objections and submit material in refutation, extenuation, or mitigation within 30 days of his receipt of the FORM.

Applicant signed the document acknowledging receipt of his copy of the FORM on January 18, 2016. He failed to submit additional material in response to the FORM by the due date of February 15, 2016. I received the case assignment on April 26, 2016.

FINDINGS OF FACT

Applicant is 45 years old, and has worked for a defense contractor since April 2013. He served on active duty in the Army from 1989 through 2009 and received an honorable discharge. After his discharge, Applicant was unemployed from September 2009 through November 2009. From December 2009 to April 2011, he worked for various government contractors. From April 2011 to May 2011, he was unemployed. He resumed work for several government contractors between June 2011 and April 2013, when he was hired by his current employer. He has been divorced since 2001 and has no children. (Item 4.)

The Government alleged that Applicant is ineligible for a clearance because he made financial decisions that indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which raise questions about his reliability, trustworthiness and ability to protect classified information. The SOR alleged that Applicant is delinquent on debts and judgments owed to seven creditors in the total amount of $37,164. In Item 2, Applicant admitted the delinquent debts as set forth in SOR ¶¶ 1.a through 1.g. Applicant’s delinquent accounts appeared on his credit reports dated May 23, 2013; September 15, 2014; August 7, 2015; and December 30, 2015. (GE 5; GE 6; GE 7; GE 8.)

Applicant’s delinquent debt consists of a charged-off account in the amount of $10,511 (SOR ¶ 1.a); a collection account in the amount of $7,395 (SOR ¶ 1.b); a debt owed to a bank in the amount of $5,701 that was placed for collection (SOR ¶ 1.c); a delinquent charged-off credit card debt in the amount of $1,322 (SOR ¶ 1.d); a judgment in the amount of $6,339 (SOR ¶ 1.e); another judgment in the amount of $1,873 (SOR ¶ 1.f); and a charged-off credit card account in the amount of $4,023 (SOR ¶ 1.g). Applicant attributed these debts to his 2001 divorce and unemployment, stating “Most of the debt was incurred through interest and part was from my divorce. Have had trouble paying since my retirement in 2009, due to times of unemployment.” (Item 2). He offered no documentation that establishes he addressed any of these debts. Applicant provided three pages of documentation to show he contacted a debt settlement firm in December 2015 to address his debts. However, the documentation he provided does not identify which debts he planned to enroll in the program; whether he has made any payments to this company; or whether he has received any financial counseling from the debt settlement firm. He also averred that one credit card debt was forgiven by the creditor after charge-off, and included in his 2015 Income tax return. He failed to provide documentation to support this claim. (Item 2.)

The record lacks evidence concerning the quality of Applicant’s professional performance, the level of responsibility his duties entail, or his track record with respect to handling sensitive information and observation of security procedures. No character witnesses provided statements describing his judgment, trustworthiness, integrity, 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 (DCs) and mitigating conditions (MCs), 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, these guidelines are applied 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(a) and 2(c), the entire process is a conscientious scrutiny of applicable guidelines in the context 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 the 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. Likewise, I have avoided drawing inferences grounded on mere speculation or conjecture.

Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, “[t]he 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.” Section 7 of Executive Order 10865 provides: “[a]ny determination under this order adverse to an applicant shall be a determination in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.”

A person applying for access to classified information seeks to enter 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.

ANALYSIS

Guideline F, Financial Considerations

The security concerns under the guideline for financial considerations are set out in AG ¶ 18, which reads in pertinent part:

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.

Department Counsel asserted, and the record evidence established, security concerns under two Guideline F DCs, as set forth in AG ¶ 19:

(a) inability or unwillingness to satisfy debts; and

Applicant has a long history of delinquent debt. He traces these debts back to his 2001 divorce, and he has been unable to resolve the underlying debts and growing interest since that time. His ongoing pattern of delinquent debt, and history of inability to pay his lawful debts, raise security concerns under DCs 19(a) and (c), and shift the burden to Applicant to rebut, extenuate, or mitigate those concerns.

The guideline includes five conditions in AG ¶ 20 that could mitigate security concerns arising from Applicant’s financial difficulties:

(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.

Applicant failed to produce sufficient evidence that he has addressed any of his delinquencies. While he documented that he contacted a debt management company and claimed one account was forgiven, he offered little evidence from which to establish a track record of debt resolution. He claimed that conditions beyond his control, such as two brief periods of unemployment and a divorce, contributed to his financial problems but failed to show that he acted responsibly under such circumstances. He did not produce evidence that he received financial counseling. MC 20(e) requires documented proof to substantiate the basis of a dispute concerning an alleged debt, and Applicant failed to provide such evidence. Accordingly, the record is insufficient to establish mitigation under any of the foregoing provisions.

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 pertinent facts and circumstances surrounding this case. Applicant is an accountable adult, who is responsible for his voluntary choices and conduct that underlie the security concerns expressed in the SOR. His SOR-listed delinquent debts arose over the past 15 years and appear to remain unresolved. He offered insufficient evidence of financial counseling, rehabilitation, better judgment, or responsible conduct in other areas of his life to offset resulting security concerns. The potential for pressure, coercion, and duress from his financial situation remains undiminished. Overall, the record evidence leaves me with substantial doubt as to Applicant’s present eligibility and suitability for a security clearance. He did not meet his burden to mitigate the security concerns arising from his 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 through 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.

Jennifer I. Goldstein Administrative Judge