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ISCR Case 15-01753.h1 — CASE

ISCR Case 15-01753.h1denied

Case Headnote

ISCR Case No. 15-01753.h1

deniedFeb 22, 2016· Hon. Robert E. Coacher· hearing

Summary

A 44-year-old federal contractor was denied a security clearance under Guideline F (Financial Considerations) due to 11 unresolved delinquent debts totaling approximately $26,057. The applicant attributed these financial difficulties to medical expenses for his children's chronic illnesses.

However, the applicant failed to provide sufficient documentation or evidence of efforts to resolve these debts. Specific allegations included judgments entered in February 2012 and October 2010, with no evidence of payment or settlement for either. For all 11 debts, the applicant admitted owing them but had not made payments or established payment plans.

The judge denied the application, citing the unresolved debts and insufficient evidence of responsible financial management. The judge found the applicant's financial problems to be recent and unresolved, raising concerns about reliability and trustworthiness.

Why the Applicant Was Denied

Applicant has 11 delinquent debts totaling approximately $26,057 that remain unpaid or unresolved.
Applicant did not provide documentation to support claims of financial responsibility or efforts to resolve debts.
The judge found that the applicant's financial problems were recent and unresolved, raising concerns about reliability and trustworthiness.

Conditions Referenced

Disqualifying

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

Mitigating

F.2.bappliedConditions That Resulted in the Financial Problem Were Largely Beyond the Person's ControlApplicant's financial issues were attributed to medical expenses for his children's chronic illnesses.
F.2.arejectedBehavior Happened so Long Ago, Was Infrequent, or Occurred Under Circumstances Unlikely to Recur
F.2.crejectedReceived or Is Receiving Counseling for the Problem
F.2.drejectedInitiated a Good-faith Effort to Repay Overdue Creditors

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 issuedOct 16, 2015
Answer filedNov 5, 2015
Hearing held—Decided on the written record.
Decision dateFeb 22, 2016

Cite For

Denial of Security Clearance Due to Unresolved Financial Obligations
Impact of Financial Instability on Security Clearance Eligibility
Consideration of Mitigating Factors Related to Financial Difficulties

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 multiple delinquent debts totaling approximately $26,057, which raised significant security concerns under Guideline F. Despite the applicant's claims of financial difficulties due to medical expenses, the judge concluded that the applicant failed to provide sufficient evidence of responsible financial management or mitigation, resulting in a denial of the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant admitted he owed these judgments. The judgment for ¶ 1.a was entered in February 2012. There is no evidence of payment or settlement. These debts are unresolved. $6,685	Against Applicant	Judgment Against Applicant	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	The judgment for ¶ 1.b was entered in October of 2010. There is no evidence of payment or settlement. These debts are unresolved. $2,076	Against Applicant	Judgment Against Applicant	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	Applicant admitted that he owed these debts. He has not paid any of these debts or set up any payment plans. These debts are unresolved. $320	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	Applicant admitted that he owed these debts. He has not paid any of these debts or set up any payment plans. These debts are unresolved. $55	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	Applicant admitted that he owed these debts. He has not paid any of these debts or set up any payment plans. These debts are unresolved. $210	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	Applicant admitted that he owed these debts. He has not paid any of these debts or set up any payment plans. These debts are unresolved. $2,468	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	Applicant admitted that he owed these debts. He has not paid any of these debts or set up any payment plans. These debts are unresolved. $1,436	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	Applicant admitted that he owed these debts. He has not paid any of these debts or set up any payment plans. These debts are unresolved. $3,106	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i	Applicant admitted that he owed these debts. He has not paid any of these debts or set up any payment plans. These debts are unresolved. $446	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.j	Applicant admitted that he owed these debts. He has not paid any of these debts or set up any payment plans. These debts are unresolved. $1,082	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.k	Applicant admitted that he owed these debts. He has not paid any of these debts or set up any payment plans. These debts are unresolved. $8,173	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: ) ) ) ISCR Case No. 15-01753 ) ) Applicant for Security Clearance )

For Government: Gregg A. Cervi, Esq., Department Counsel For Applicant: Pro se

02/22/2016 ______________

STATEMENT OF CASE

______________

COACHER, Robert E., Administrative Judge:

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

Statement of the Case

On October 16, 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. The 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 November 5, 2015, and elected to have his case decided on the written record. Department Counsel submitted the Government’s File of Relevant Material (FORM) on December 22, 2015. The evidence included in the FORM is identified as Items 3-6 (Items 1 and 2 include pleadings and transmittal information). The FORM was mailed to Applicant, who received it on January 2, 2016. Applicant was given an opportunity to file objections and submit material in refutation, extenuation, or mitigation. He submitted Applicant exhibit (AE) A, which was admitted without objection. He did not object to any of the Government’s evidence. Items 3-6 are admitted into evidence. The case was assigned to me on February 8, 2016.

FINDINGS OF FACT

In Applicant’s answer to the SOR, he admitted all the SOR allegations. 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 44 years old. He is married and has three children. He has worked for federal contractors since August 2000. He is a high school graduate. He served in the Army from 1990 to 1995 and received an honorable discharge. He has held a security clearance since at least 2004.1

The SOR lists 11 delinquent debts totaling approximately $26,057. The debts include two judgments, seven collection accounts, and two charged-off accounts. The debts are supported by credit reports from September 2015 and August 2014, Applicant’s statement to a defense investigator in October 2014, and by Applicant’s admissions.2

Applicant attributes his financial problems to medical bills incurred because of his children’s chronic illnesses. He stated that he paid these medical bills in lieu of his other obligations. He did not provide supporting documentation. He also stated he would be paying his car loan soon, which would free up funds for his other debts. He further stated that he was selling some property soon and would put $10,000 toward his debts when this transaction happened. He did not provide documentation of his ownership interest.3

The status of the debts is as follows:

SOR ¶¶ 1.a – 1.b (judgments: $6,685 and $2,076):

Applicant admitted he owed these judgments. The judgment for ¶ 1.a was entered in February 2012. The judgment for ¶ 1.bwas entered in October of 2010. There is no evidence of payment or settlement. These debts are unresolved.4 SOR ¶¶ 1.c – 1.k (collection and charged-off accounts: $320; $55; $210; $2,468; $1,436; $3,106; $446; $1,082; $8,173):

Applicant admitted that he owed these debts. He has not paid any of these debts or set up any payment plans. 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, other than talking to a friend about his financial problems.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 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; and

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

Applicant’s debts are recent and remain unresolved. He did not provide sufficient evidence to show that his financial problems are unlikely to recur. AG ¶ 20(a) does not apply. Applicant presented some evidence that the debts were due to circumstances beyond his control (medical expenses), but he failed to provide documentation showing that he acted responsibly under the circumstances. I find AG ¶ 20(b) partially applies. 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. AG ¶¶ 20(c) and 20(d) 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. I considered Applicant’s military and federal contractor service. Although Applicant stated his intent to pay the debts in the near future, those promises do not equate to 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.k: 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 3. 2 Items 3-5. 3 AE A. 4 Items 2, 4-5. 5 Items 2, 4-5. 6 Items 1-2.