ISCR Case 15-03305.h1

Case Headnote

ISCR Case No. 15-03305.h1

deniedApr 5, 2016· Hon. Michael H. Leonard· hearing

Summary

A 46-year-old fuels specialist with military service was denied a security clearance due to concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The applicant faced allegations of 14 delinquent debts totaling approximately $30,000, including collection accounts, charged-off accounts, and an unpaid judgment, dating back to at least 2013. While the applicant did not deliberately falsify information on his June 2013 security clearance application regarding these delinquencies, the judge found insufficient evidence to mitigate the financial issues.

The applicant provided documentation of current earnings, a request for a 401(k) lump-sum distribution, and correspondence with creditors to attempt settlements. However, he did not submit documentation showing that any of the 14 delinquent debts were paid, settled, subject to a repayment agreement, in dispute, cancelled, forgiven, or otherwise resolved. The record indicated a "hands-off" approach to household finances and a lack of follow-through on resolving these issues, including how the 401(k) funds were spent.

Ultimately, the security clearance was denied because the applicant did not present sufficient evidence to mitigate his financial problems, lacked a reasonable plan to resolve the debts, and failed to demonstrate a firm commitment to such a plan. These unresolved financial issues raised significant concerns about his reliability, trustworthiness, and judgment.

Why the Applicant Was Denied

The applicant did not present sufficient evidence to mitigate the financial problems.
The applicant has a history of excessive indebtedness and did not demonstrate a reasonable plan to resolve the debts.
Concerns about the applicant's reliability and judgment were raised due to the financial issues.

Conditions Referenced

Disqualifying

FraisedFinancial Considerations
EraisedPersonal Conduct

Mitigating

FrejectedFinancial ConsiderationsThe applicant did not demonstrate a good-faith effort to repay debts.
EappliedPersonal ConductThe judge found the omission of financial issues was not deliberate.

Key Rule Quoted

“The clearly consistent standard indicates that security clearance determinations should err, if they must, on the side of denials.”
— Department of Navy v. Egan, 484 U.S. 518, 528 (1988)

Procedural Posture

SOR issuedApr 5, 2016
Answer filedNov 16, 2015
Hearing held—Case decided on written record.
Decision dateMar 29, 2016

Cite For

Insufficient Evidence to Mitigate Financial Issues Under Guideline F
Non-deliberate Omission of Financial Problems Under Guideline E
The Burden of Proof in Security Clearance Cases Rests with the Applicant.

Editorial summary generated for research. Not legal advice; not a prediction. Verify against the full decision before relying on any quoted language.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
2.a	The SOR alleged that Applicant falsified material facts in response to three questions concerning delinquency involving routine accounts in Section 26 of his June 2013 security clearance application.	For Applicant	Omission or Failure to DiscloseNOT DELIBERATE	Financial	Denied	—	(c) offense is minor, long ago, infrequent, or unique circumstances	—

Allegation

Finding

Conduct

Concealed Issue

Response

Disqualifying (¶16)

Mitigating applied (¶17)

Mitigation

2.a

The SOR alleged that Applicant falsified material facts in response to three questions concerning delinquency involving routine accounts in Section 26 of his June 2013 security clearance application.

For Applicant

Omission or Failure to DiscloseNOT DELIBERATE

Financial

Denied

—

(c) offense is minor, long ago, infrequent, or unique circumstances

—

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	A history of financial problems consisting of 14 delinquent debts for a total of about $30,000. $30,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	The debts are based on collection accounts, charged-off accounts, and an unpaid judgment.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	The written record does not establish by substantial evidence that Applicant resolved any of the 14 delinquent debts.	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	Applicant submitted documentation showing earnings from his job as well as a part-time job, a request to receive a lump-sum distribution from his 401(k) account, and correspondence with creditors in an attempt to reach settlements.	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	Applicant did not submit documentation showing that the 14 delinquent accounts in the SOR are paid, settled, subject to a repayment agreement, in dispute, cancelled, forgiven, or otherwise resolved.	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	Applicant has not done enough to persuade that he has a good handle on his overall financial situation and that he will resolve the delinquent debts in the foreseeable future.	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	Applicant's financial problems date back to at least 2013 when he completed the security clearance application.	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	Applicant took a hands-off approach to his household finances and became deliberately ignorant of his household finances.	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i	The totality of the written record does not show that Applicant has a reasonable plan to resolve the delinquent debts and has demonstrated a firm commitment to adhering to that plan.	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.j	The facts do not support application of AG ¶ 20(c), the problem is being resolved or is under control, or AG ¶ 20(d), making a good-faith effort to repay.	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.k	Applicant's financial irresponsibility raises questions about his reliability, trustworthiness, and ability to protect classified information.	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.l	The evidence supports a conclusion that Applicant has a problematic financial history within the meaning of Guideline F.	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.m	Applicant did not follow through on matters related to his financial problems, such as how the 401(k) money was spent and settlements of delinquent accounts.	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.n	Applicant's overall financial situation and lack of resolution of debts create doubt about his current reliability and trustworthiness.	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

A history of financial problems consisting of 14 delinquent debts for a total of about $30,000.

$30,000

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.b

The debts are based on collection accounts, charged-off accounts, and an unpaid judgment.

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.c

The written record does not establish by substantial evidence that Applicant resolved any of the 14 delinquent debts.

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.d

Applicant submitted documentation showing earnings from his job as well as a part-time job, a request to receive a lump-sum distribution from his 401(k) account, and correspondence with creditors in an attempt to reach settlements.

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.e

Applicant did not submit documentation showing that the 14 delinquent accounts in the SOR are paid, settled, subject to a repayment agreement, in dispute, cancelled, forgiven, or otherwise resolved.

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.f

Applicant has not done enough to persuade that he has a good handle on his overall financial situation and that he will resolve the delinquent debts in the foreseeable future.

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.g

Applicant's financial problems date back to at least 2013 when he completed the security clearance application.

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.h

Applicant took a hands-off approach to his household finances and became deliberately ignorant of his household finances.

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.i

The totality of the written record does not show that Applicant has a reasonable plan to resolve the delinquent debts and has demonstrated a firm commitment to adhering to that plan.

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.j

The facts do not support application of AG ¶ 20(c), the problem is being resolved or is under control, or AG ¶ 20(d), making a good-faith effort to repay.

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.k

Applicant's financial irresponsibility raises questions about his reliability, trustworthiness, and ability to protect classified information.

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.l

The evidence supports a conclusion that Applicant has a problematic financial history within the meaning of Guideline F.

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.m

Applicant did not follow through on matters related to his financial problems, such as how the 401(k) money was spent and settlements of delinquent accounts.

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.n

Applicant's overall financial situation and lack of resolution of debts create doubt about his current reliability and trustworthiness.

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

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Case Profile

Summary

Why the Applicant Was Denied

Conditions Referenced

Key Rule Quoted

Procedural Posture

Cite For

Full decision

DEFENSE OFFICE OF HEARINGS AND APPEALS

HEARING

APPEARANCES

STATEMENT OF CASE

PROCEDURAL MATTERS

FINDINGS OF FACT

DISCUSSION

FORMAL FINDINGS

CONCLUSION

FOOTNOTES