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ISCR Case 00-0378.h1 — CASE

ISCR Case 00-0378.h1denied

Case Headnote

ISCR Case No. 00-0378.h1

deniedApr 25, 2001· Hon. Robert Robinson Gales· hearing

Summary

A 51-year-old defense contractor employee was denied a security clearance under Guideline F (Financial Considerations) due to a history of unresolved financial delinquencies. The Statement of Reasons detailed eight specific debts, including multiple charged-off credit cards and accounts referred to collection.

These debts included approximately $1,500 owed to a bank since September 1993, $241 to a department store charged off around March 1993, and $64 to a health clinic referred for collection prior to 1998. Further allegations included approximately $485 for unspecified services referred for collection prior to March 1999, approximately $1,000 to a bank charged off prior to January 1996, and approximately $700 to a medical center referred for collection prior to January 1996. Additionally, approximately $430 was owed to another medical center referred for collection prior to August 1999, and $565 to a bank charged off prior to November 2000.

The denial was based on the applicant's long-standing pattern of failing to meet financial obligations, with numerous accounts charged off or sent to collection. Although the applicant expressed intentions to resolve these debts, a consistent lack of action and follow-through, despite personal circumstances, raised significant concerns about her reliability and security eligibility.

Why the Applicant Was Denied

Applicant has a long-standing history of not meeting financial obligations, with numerous accounts charged off or sent to collection.
Despite declaring intentions to pay off debts, the applicant failed to take action to resolve her financial issues.
The applicant's financial difficulties were exacerbated by personal circumstances, but her lack of follow-through on promises to pay debts raised doubts about her reliability.

Conditions Referenced

Disqualifying

F1raisedHistory of Not Meeting Financial Obligations
F3raisedInability or Unwillingness to Satisfy Debts

Key Rule Quoted

“An individual who is financially overextended is at risk of having to engage in illegal acts to generate funds.”

Procedural Posture

SOR issuedSep 25, 2000
Answer filedNov 1, 2000
Hearing heldMar 27, 2001
Decision dateApr 25, 2001

Cite For

Denial Based on Financial Considerations Under Guideline F
Importance of Follow-through on Financial Obligations
Impact of Personal Circumstances on Financial Reliability

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 multiple financial concerns under Guideline F, including a history of unpaid debts and failure to meet financial obligations. While some debts were found to be satisfied, the overall pattern of financial irresponsibility led to a decision against the applicant's security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant owed an outstanding balance of approximately $1,500.00 to a bank for a bad debt, described as an unpaid credit card, since September 1993. $1,500	For Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.b	Applicant is indebted to a department store in the amount of approximately $241.00, for a bad debt, not further described, which was charged off in about March 1993. $241	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.c	Applicant is indebted to a health clinic in the amount of approximately $64.00, for professional services rendered prior to 1998, when the account was referred for collection. $64	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.d	Applicant is indebted to an entity, not otherwise specified, in the amount of approximately $485.00, for unspecified service or commodities received prior to March 1999, when the accounts were referred for collection. $485	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.e	Applicant is indebted to a bank in the amount of approximately $1,000.00, for a bad debt, described as an unpaid credit card since prior to January 1996, when the account was charged off. $1,000	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.f	Applicant is indebted to a medical center in the amount of approximately $700.00, for a bad debt, described as professional services rendered prior to January 1996, when the account was referred to collection. $700	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.g	Applicant is indebted to another medical center in the amount of approximately $430.00, for a bad debt, described as professional services rendered prior to August 1999, when the account was referred to collection. $430	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.h	Applicant owed an outstanding balance of $565.00 to a bank for a bad debt, for unspecified service or commodities received prior to November 2000, when the account was charged off. $565	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—

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

DATE: April 25, 2001

In Re:

---------------

SSN: -----------

Applicant for Security Clearance

ISCR Case No. 00-0378

DECISION OF ADMINISTRATIVE JUDGE

ROBERT ROBINSON GALES

SYNOPSIS

Fifty-one year old Applicant's continuing history of not meeting her financial obligations, including long-standing accounts charged off or sent to collection, despite an apparent ability and repeated declared intentions to pay them off by the end of December 2000, accompanied by her subsequent inaction, with few exceptions, raises grave questions and doubts as to her security eligibility and suitability. Clearance is denied.

STATEMENT OF CASE

On September 25, 2000, the Defense Office of Hearings and Appeals (DOHA), pursuant to Executive Order 10865, "Safeguarding Classified Information Within Industry, dated February 20, 1960, as amended and modified, and Department of Defense Directive 5220.6, "Defense Industrial Personnel Security Clearance Review Program (Directive), dated January 2, 1992, as amended and modified, issued a Statement of Reasons (SOR) to Applicant which detailed reasons why DOHA could not make the preliminary affirmative finding under the Directive that it is clearly consistent with the national interest to grant or continue a security clearance for Applicant, and recommended referral to an Administrative Judge to determine whether a clearance should be granted, continued, denied, or revoked.

In a sworn written statement, dated November 1, 2000, Applicant responded to the allegations set forth in the SOR, and requested a hearing. The case was initially assigned to Administrative Judge John G. Metz, Jr. on January 19, 2001, but, due to caseload considerations, was subsequently reassigned to, and received by, this Administrative Judge on February 2, 2001. A notice of hearing was issued on March 13, 2001, and the hearing was held before me on March 27, 2001. During the course of the hearing, one Joint exhibit, seven Government exhibits, and one Applicant exhibit, (1) along with the testimony of one Applicant witness (the Applicant), were received. The transcript (Tr.) was received on April 13, 2001.

RULINGS ON PROCEDURE During the proceeding, Department Counsel moved to amend the SOR to conform to the evidence presented. Specifically, he sought to amend subparagraph 1.f. thereof by deleting the words "credit card" from the first sentence. There being no objection by Applicant, the motion was granted, and the SOR was amended as described above.

FINDINGS OF FACT

Applicant has admitted all but one of the factual allegations pertaining to financial matters under Guideline F. Those admissions are incorporated herein as findings of fact. She denied the sole factual allegation pertaining to personal conduct under Guideline E; and failed to respond to the conclusory allegation pertaining to criminal conduct under Guideline J.

After a complete and thorough review of the evidence in the record, and upon due consideration of same, I make the following additional findings of fact:

Applicant is a 51 year old female employed by a defense contractor, and she is seeking to retain the SECRET security clearance which was initially granted to her in November 1993.

Applicant has seemingly been financially overextended since approximately 1993, and as a consequence, has demonstrated a history of not meeting her financial obligations. Because of her failure to address those financial obligations in a timely fashion, a substantial number of her creditors referred the overdue accounts to collection or simply charged them off.

Applicant owed an outstanding balance of approximately $1,500.00 to a bank (identified in the SOR in subparagraph 1.a.) for a bad debt, described as an unpaid credit card, since September 1993. A report of credit, dated December 1, 1999, (2) seemingly confirmed the nature of the debt but disputed the amount of the unpaid balance. (3) Confusion over this debt was further generated by Applicant on a number of occasions. For example, on three different instances, in January 2000, (4) July 2000, (5) and November 2000, (6) Applicant admitted the accuracy of the amount and unpaid status of the obligation. In July 2000, she vowed to write the creditor and pay off the debt by the end of the year, (7) and as recently as November 2000, she acknowledged that it had not yet been satisfied. (8)

However, during the hearing in March 2001, Applicant altered her position, contending that she had actually already paid off the debt as far back as July 1994--some six and one-half years earlier, and offered documentation in support of her contention. (9) Applicant offered no explanation as to the discrepancies in her positions regarding this particular indebtedness. There are negative references to another (non-alleged) outstanding account with the same creditor in the more recent reports of her credit, (10) but no reference to the one which is the subject of the allegation. In light of the absence of any other Government evidence to rebut Applicant's new contention, it appears that this particular indebtedness had been satisfied in 1994--long before the June 1999 date alleged in the SOR.

Applicant is indebted to a department store (identified in the SOR in subparagraph 1.b.) in the amount of approximately $241.00, for a bad debt, not further described, which was charged off in about March 1993. (11) The report of credit, dated December 1, 1999, confirmed both the nature of the debt and the amount of the unpaid balance. Although Applicant admitted the accuracy of the amount and unpaid status of the obligation on four different occasions--in January 2000, July 2000, and November 2000, (12) as well as during the hearing in March 2001--at the hearing she also professed a belief that it had been paid, (13) but could offer no documentation to substantiate her belief.

She acknowledged that despite intending to follow up on the obligation when she was interviewed by a special agent with the Defense Security Service (DSS) in January 2000, after one telephone call, she failed to otherwise do so. (14) In July 2000, she vowed to write the creditor and pay off the debt by the end of the year. This, too, she failed to do. In fact, Applicant did not make any payment arrangements with the particular creditor, and made no payments. Adding confusion to the situation is the fact this particular indebtedness is not specifically identified by negative references in the three more recent reports of her credit. (15) Applicant is indebted to a health clinic (identified in the SOR in subparagraph 1.c.) in the amount of approximately $64.00, for professional services rendered prior to 1998, when the account was referred for collection. The report of credit, dated December 1, 1999, confirmed both the nature of the debt and the amount of the unpaid balance. Applicant has admitted the accuracy of the amount and unpaid status of the obligation on four different occasions. Furthermore, she acknowledged that despite her repeated promises to follow up on the obligation, she has made no effort to do so. (16) Applicant has made no payment arrangements with the particular creditor, and has made no payments.

Applicant is indebted to an entity, not otherwise specified, (identified in the SOR in subparagraph 1.d.) in the amount of approximately $485.00, for unspecified service or commodities received prior to March 1999, when the accounts were referred for collection. The report of credit, dated December 1, 1999, confirmed both the nature of the debts and the combined amounts of the unpaid balances. (17) Applicant has admitted the accuracy of the amount and unpaid status of the obligations on three different occasions. Despite her repeated promises to follow up on the obligations, she has made no effort to do so, claiming that she has no idea who the creditor is or what the debts were for. (18) Applicant has made no payment arrangements with the particular creditor, and has made no payments.

Applicant is indebted to a bank (identified in the SOR in subparagraph 1.e.) in the amount of approximately $1,000.00, for a bad debt, described as an unpaid credit card since prior to January 1996, when the account was charged off. The report of credit, dated December 1, 1999, confirmed both the nature of the debt and the amount of the unpaid balance. Applicant has admitted the accuracy of the amount and unpaid status of the obligation on four different occasions. Furthermore, she acknowledged that despite her repeated promises to follow up on the obligation, she has been unable to contact the creditor by telephone. (19) Applicant has made no payment arrangements with the particular creditor, and has made no payments.

Applicant is indebted to a medical center (identified in the SOR in subparagraph 1.f.) in the amount of approximately $700.00, for a bad debt, described as professional services rendered prior to January 1996, when the account was referred to collection. The report of credit, dated December 1, 1999, confirmed both the nature of the debt and the amount of the unpaid balance. Applicant has admitted the accuracy of the amount and unpaid status of the obligation on four different occasions. Furthermore, she acknowledged that despite her repeated promises to follow up on the obligation, she has made no effort to contact the creditor by telephone. (20) Applicant has made no payment arrangements with the particular creditor, and has made no payments.

Applicant is indebted to another medical center (identified in the SOR in subparagraph 1.g.) in the amount of approximately $430.00, for a bad debt, described as professional services rendered prior to August 1999, when the account was referred to collection. The report of credit, dated December 1, 1999, confirmed both the nature of the debt and the amount of the unpaid balance. Applicant has admitted the accuracy of the amount and unpaid status of the obligation on four different occasions. Furthermore, she acknowledged that despite her repeated promises to follow up on the obligation, she has made no effort to contact the creditor but did attempt to contact her insurance provider by telephone to obtain photocopies of her explanations of benefits. (21) Applicant has made no payment arrangements with the particular creditor, and has made no payments.

Applicant owed an outstanding balance of $565.00 to a bank (identified in the SOR in subparagraph 1.h.) for a bad debt, for unspecified service or commodities received prior to November 2000, when the account was charged off. While the report of credit, dated December 1, 1999, confirmed the existence of the account with the creditor, with a high credit of $129.00, the account was reflected as "pays as agreed," with a zero balance. When Applicant completed the financial interrogatories previously submitted to her by DOHA, she listed this account as having an outstanding balance, with the highest credit listed as $129.00. She acknowledged the outstanding balance, which was not quantified, was 30 days delinquent. (22) There are negative references to the this outstanding account in the more recent reports of her credit, and they generally reflect an outstanding balance of $565.00. (23) Applicant has admitted the accuracy of the $129.00 amount and unpaid status of the obligation on two different occasions.

However, during the hearing in March 2001, Applicant altered her position, contending that she had actually already paid off the debt as far back as December 2000. She subsequently submitted a Western Union Money Transfer, in the amount of $451.95--including a service charge of $11.95--drawn to the attention of a third party, without any specified connection with the creditor other than the testimony and handwritten note from Applicant as to the purported payee. (24) In light of the absence of any other Government evidence to rebut Applicant's new contention, it appears that this particular indebtedness had been satisfied in 2000.

By her own admission, Applicant has been delinquent on a number of different accounts, including those alleged in the SOR. To her credit, several of those accounts have been satisfied since her DSS interview in January 2000. (25)

Applicant attributed her overall financial condition to a variety of contributing factors: her position with her employer was reduced to a lower-salaried one in 1993; (26) she had back surgery in September 1994, and "had a lot of medical bills to pay;" (27) she was out of work for awhile but only received short-term disability for one week; (28) she was a single mother with two children in school; (29) and, she overextended herself financially. (30) Despite repeatedly promising to satisfy all of her outstanding financial obligations by the end of 2000, and failing to do so, or even contacting some of her creditors, during the hearing in March 2001, Applicant again expressed her intentions to pay off all of her debts.

Her reasons for not resolving all of those outstanding financial obligations are also varied, and are attributed primarily to her frequent and lengthy temporary duty out of the state and out of the country, as well as her inability to contact several creditors or collection agencies. Lack of money is apparently not a current reason for Applicant's not having paid off her remaining outstanding financial obligations. Each month, after her current bills are paid, Applicant generally has around $200.00 left over. (31)

On August 16, 1999, Applicant completed her Questionnaire for National Security Positions (SF 86), (32) and in response to an inquiry pertaining to financial delinquencies, ("In the last 7 years, have you ever been over 180 days delinquent on any debt(s)?"), (33) Applicant responded "no." She certified that her response was true, complete, and accurate. It was false. She had omitted and concealed the truth regarding a number of outstanding financial obligations which fell within that category, as described above. Applicant subsequently denied intending to deceive, and explained that she had completed the handwritten version of the SF 86 and simply signed the electronic version without paying much attention to it. (34) She agreed that upon reviewing the response it was erroneous and the answer should have been "yes."

Applicant has been employed by the same company since February 1985. The quality of her performance has not been revealed.

POLICIES

Enclosure 2 of the Directive sets forth adjudicative guidelines which must be considered in the evaluation of security suitability. In addition to brief introductory explanations for each guideline, the adjudicative guidelines are divided into those that may be considered in deciding whether to deny or revoke an individual's eligibility for access to classified information (Disqualifying Conditions) and those that may be considered in deciding whether to grant an individual's eligibility for access to classified information (Mitigating Conditions).

An Administrative Judge need not view the adjudicative guidelines as inflexible ironclad rules of law. Instead, acknowledging the complexities of human behavior, these guidelines, when applied in conjunction with the factors set forth in the Adjudicative Process provision set forth in Section E2.2., Enclosure 2, of the Directive, are intended to assist the Administrative Judge in reaching fair and impartial common sense decisions.

Because the entire process is a conscientious scrutiny of a number of variables known as the "whole person concept," all available, reliable information about the person, past and present, favorable and unfavorable, should be considered in making a meaningful decision. The Adjudicative Process factors which an Administrative Judge should consider are: (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 voluntariness of participation; (6) the presence or absence of rehabilitation and other pertinent 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.

Based upon a consideration of the evidence as a whole, I find the following adjudicative guidelines most pertinent to an evaluation of the facts of this case:

[Guideline F - Financial Considerations]: An individual who is financially overextended is at risk of having to engage in illegal acts to generate funds. Unexplained affluence is often linked to proceeds from financially profitable criminal acts.

Conditions that could raise a security concern and may be disqualifying include:

(1) a history of not meeting financial obligations;

(3) inability or unwillingness to satisfy debts;

Conditions that could mitigate security concerns include:

(3) the conditions that resulted in the behavior were largely beyond the person's control (e.g., loss of employment, a business downturn, unexpected medical emergency, or a death, divorce or separation);

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

[Personal Conduct - Guideline E]: Conduct involving questionable judgment, untrustworthiness, unreliability, lack of candor, dishonesty, or unwillingness to comply with rules and regulations could indicate that the person may not properly safeguard classified information.

Conditions that could raise a security concern and may be disqualifying also include:

(2) the deliberate omission, concealment, or falsification of relevant and material facts from any personnel security questionnaire, personal history statement, or similar form used to conduct investigations, determine employment qualifications, award benefits or status, determine security clearance eligibility or trustworthiness, or award fiduciary responsibilities.

Conditions that could mitigate security concerns include:

(2) the falsification was an isolated incident, was not recent, and the individual has subsequently provided correct information voluntarily;

(5) the individual has taken positive steps to significantly reduce or eliminate vulnerability to coercion, exploitation, or pressure.

[Criminal Conduct - Guideline J]: A history or pattern of criminal activity creates doubt about a person's judgment, reliability and trustworthiness.

Conditions that could raise a security concern and may be disqualifying include:

(1) allegations or admission of criminal conduct, regardless of whether the person was formally charged.

Conditions that could mitigate security concerns include:

(1) the criminal behavior was not recent;

(2) the crime was an isolated incident;

(4) the person did not voluntarily commit the act and /or the factors leading to the violation are not likely to recur. Since the protection of the national security is the paramount consideration, the final decision in each case must be arrived at by applying the standard the issuance of the clearance is "clearly consistent with the interests of national security," (35) or "clearly consistent with the national interest." For the purposes herein, despite the different language in each, I have concluded both standards are one and the same. In reaching this Decision, I have endeavored to draw only those conclusions that are reasonable, logical and based on the evidence contained in the record. Likewise, I have attempted to avoid drawing inferences grounded on mere speculation or conjecture. Robert Robinson Gales

Chief Administrative Judge

1. An additional exhibit, marked as Applicant Exhibit B, was received after the hearing during the period granted for post-hearing submissions, and admitted into evidence in the absence of any objection interposed by Department Counsel.

2. See Government Exhibit 2 (Equifax Report of Credit, dated December 1, 1999), at 2.

3. The balance reflected on the report of credit for this particular account was "zero," with the last action having been taken in September 1993. The $1,500.00 is reflected as the "high credit," not as the balance. The report also included a reference to another overdue account, with the same creditor, in the amount of $1,279.00 (of which only $1,238.00 was past due), but that account is not the one in issue. See ibid.

4. See Government Exhibit 3 (Statement of Subject, dated January 23, 2000), at 1.

5. See Government Exhibit 4 (Financial Interrogatories, dated July 13, 2000), at 2.

6. See Response to SOR, dated November 1, 2000, at 1.

7. See Government Exhibit 4, supra note 5, at 2.

8. See Response to SOR, supra note 6, at 1.

9. See Applicant Exhibit A (Credit Card Account Statement, dated July 21, 1994).

10. See Government Exhibit 5 (Experian Report of Credit, dated January 18, 2001), at 2; see also Government Exhibit 6 (Trans Union Report of Credit, dated January 18, 2001), at 1; see also Government Exhibit 7 ( Equifax Report of Credit, dated January 18, 2001), at 2.

11. See Government Exhibit 2, supra note 2, at 3.

12. It should be noted that in her November 2000 Response to SOR, Applicant was apparently confused about the allegation in subparagraph 1.b. of the SOR and incorrectly referred to the creditor reflected in subparagraph 1.a. when addressing the allegation pertaining to the creditor in subparagraph 1.b.

13. See Tr. at 23.

14. Id., at 28.

15. See Government Exhibits 5, 6, and 7, supra note 10.

16. See Tr. at 29. 17. It should be noted that there were three separately numbered overdue accounts with this particular creditor, and the combined balance for two of them is $485.00, with the balance of the third account being an additional $51.00. The third account was not included in the allegation.

18. See Tr. at 29. It should be noted the report of credit, dated December 1, 1999, which was presented to her on January 25, 2000 by DSS contains both the name, address, and telephone number of the creditor or collection agency in question.

19. See Tr. at 32. It should be noted the report of credit, dated December 1, 1999, which was presented to her on January 25, 2000 by DSS contains both the name, address, and telephone number of the creditor in question.

20. Ibid. It should be noted the report of credit, dated December 1, 1999, which was presented to her on January 25, 2000 by DSS contains both the name, address, and telephone number of the collection agency in question.

21. Id., at 33. It should be noted the report of credit, dated December 1, 1999, which was presented to her on January 25, 2000 by DSS contains both the name, address, and telephone number of the collection agency in question.

22. See Government Exhibit 4, supra note 5, at 2.

23. See Government Exhibit 5, supra note 10, at 1; and Government Exhibit 6, supra note 10, at 1. Both of those reports reflect the balance as $565.00. See also Government Exhibit 7, supra note 10, at 2, wherein the amount seems to be reflected as $147.00. Unfortunately, a segment of this entry is not legible.

24. See Applicant Exhibit B (Western Union Money Transfer, dated December 7, 2000), at 2 and 4. See also Tr. at 33.

25. See Tr. at 38-39.

26. See Government Exhibit 3, supra note 4, at 1.

27. Id., at 2.

28. See Government 4, supra note 5, at 4.

29. Ibid.

30. See Response to SOR, supra note 6, at 2.

31. See Tr. at 44.

32. See Government Exhibit 1 (Security Clearance Application, dated August 6, 1999 (but certified by Applicant on August 16, 1999), incorrectly alleged in the SOR as having been executed by Applicant on January 25, 2000.

33. Question 38.

34. See Tr. at 36-37.

35. See, Executive Order 12968, "Access to Classified Information;" as implemented by Department of Defense Regulation 5200.2-R, "Personnel

FOOTNOTES

FOR GOVERNMENT

Melvin A. Howry, Esquire, Department Counsel

FOR APPLICANT

Pro Se

In the decision-making process, the burden of producing evidence initially falls on the Government to establish a case which demonstrates, in accordance with the Directive, it is not clearly consistent with the national interest to grant or continue an applicant's access to classified information. If the Government meets its burden, the heavy burden of persuasion then falls upon the applicant to present evidence in refutation, explanation, extenuation or mitigation sufficient to overcome the doubts raised by the Government's case, and to ultimately demonstrate it is clearly consistent with the national interest to grant or continue the applicant's clearance.

A person who seeks access to classified information enters into a fiduciary relationship with the Government predicated upon trust and confidence. It is a relationship that transcends normal duty hours and endures throughout off-duty hours as well. It is because of this special relationship the Government must be able to repose a high degree of trust and confidence in those individuals to whom it grants access to classified information. Decisions under this Directive include, by necessity, consideration of the possible risk an 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.

One additional comment is worthy of note. Applicant's allegiance, loyalty, and patriotism are not at issue in these proceedings. Section 7 of Executive Order 10865 specifically provides industrial security clearance 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." Security clearance decisions cover many characteristics of an applicant other than allegiance, loyalty, and patriotism. Nothing in this Decision should be construed to suggest I have based this decision, in whole or in part, on any express or implied decision as to Applicant's allegiance, loyalty, or patriotism.

CONCLUSION

Upon consideration of all the facts in evidence, an assessment of the witness credibility, and after application of all appropriate legal precepts, factors, and conditions, including those described briefly above, I conclude the following with respect to each allegation set forth in the SOR:

With respect to Guideline F, the Government has established its case. Applicant has approximately eight years of financial difficulties exacerbated by: (1) the reduction of her salaried position in 1993; (2) back surgery in September 1994, and subsequent medical bills; (3) absence from work due to surgery, but with short-term disability for only one week; (4) she was a single mother with two children in school; and (5) she overextended herself financially. That combination of circumstances eventually resulted in a number of accounts being charged off or sent to collection.

Applicant is currently delinquent on a number of different accounts. Despite asserting in January 2000, July 2000, and again in November 2000 she would contact all of her creditors to work out payment arrangements; and pledging to satisfy those debts by the end of the year, with certain exceptions, she has failed to do so. She indicated she would write each creditor, but in some instances merely called them. In the majority of other instances, she made no effort whatsoever to contact her creditors. In arch 2001, the same promise was made, but it no longer carries the weight of earlier promises.

With little positive action having been taken on her assertions or pledges, Applicant still has outstanding financial obligations to the department store (subparagraph 1.b.), the health clinic (subparagraph 1.c.), an unspecified entity (subparagraph 1.d.), a bank (subparagraph 1.e.), and a medical center (subparagraph 1.g.). In addition, there are the other outstanding financial obligations which were not alleged in the SOR.

There are those former outstanding financial obligations for which Applicant provided documentary evidence to support her contentions that they had been fully satisfied. Applicant offered proof that, in July 1994, she paid the bank (subparagraph 1.a.) the remaining balance of her credit card; and in December 2000, she paid another bank (subparagraph 1.h.) the remaining balance of that account.

In the absence of confirmed payment arrangements, or actual payments diminishing the outstanding financial obligations, Applicant's overall conduct pertaining to her financial obligations clearly falls within Financial Considerations Disqualifying Condition (DC) E2.A6.1.2.1., and DC E2.A6.1.2.3.

Applicant's contention that some of her financial difficulties arose from conditions, over a protracted period, which were largely beyond her control--the reduction of her salaried position in 1993; back surgery in September 1994, and subsequent medical bills; absence from work due to surgery, but with short-term disability for only one week; being a single mother with two children in school; and being on temporary duty out of state and out of the country--could be convincing grounds for possible mitigation, with further explanation as to their significance, but they overlook the realities of life. Applicant's only efforts to prepare for potential financial difficulties, or address the actual ones, were to avoid her

financial obligations to the degree her actions became a security concern. In this instance, it becomes difficult to apply Financial Considerations Mitigating Condition (MC) E2.A6.1.3.3.

Applicant's relative inaction in addressing most of her financial difficulties cannot be overlooked. Despite her repeated promises to resolve her outstanding debts--promises which commenced in January 2000--and which remained unfulfilled, it cannot be persuasively argued she had initiated a good-faith effort to do so, thus negating the applicability of MC E2.A6.1.3.6. Under these circumstances, I believe Applicant has failed to mitigate or overcome the Government's case, for the evidence leaves me with grave questions and doubts as to Applicant's continued security eligibility and suitability. Accordingly, allegations 1.b. through 1.g., of the SOR are concluded against Applicant.

The remaining two debts have been satisfied, with the bank credit card (subparagraph 1.a.) having been paid off in July 1994--long before the issuance of the SOR--and the other bank (subparagraph 1.h.) having been paid off in December 2000--nearly three months following the issuance of the SOR, but before the hearing. Thus, I conclude that Applicant has, through evidence of extenuation and explanation, successfully mitigated and overcome the Government's case with respect to this aspect of her financial delinquencies. Accordingly, allegations 1.a., and 1.h., of the SOR are concluded in favor of Applicant.

With respect to Guideline E, the Government case has not been established. Examination of Applicant's actions related to her answer on the SF 86 in August 1999, pertaining to her outstanding financial obligations, reveals that her response was, in fact, false, but also that it was unintentional or as the result of careless oversight, rather than a calculated and deliberate omission of information. There is no credible direct, circumstantial, or rebuttal evidence supporting the contention Applicant intentionally or knowingly intended to deceive anyone with her response. Thus, I conclude that Applicant has, through evidence of explanation, successfully refuted, rebutted, and overcome the Government's case with respect to her personal conduct. I have considered the mitigating conditions of Guideline E but do not therefore have to reach a conclusion as to their applicability. Accordingly, allegation 2.a. of the SOR is concluded in favor of Applicant.

With respect to Guideline J, the Government case has not been established. It is true that statements made by an applicant for access to classified information encompass matters within the jurisdiction of the Department of Defense, as provided for under Title 18, United States Code, Section 1001. It is also accurate to characterize Applicant's response to the inquiry pertaining to her outstanding financial obligations, as false. But the analysis does not stop there.

In light of Applicant's explanation for failing to accurately relate her correct financial status, I find she did not intentionally falsify the response. Thus, I conclude that Applicant has, through evidence of explanation, successfully refuted, rebutted, and overcome the Government's case with respect to her alleged criminal conduct. I have considered the mitigating conditions of Guideline J but do not therefore have to reach a conclusion as to their applicability. Accordingly, allegation 3.a. of the SOR is concluded in favor of Applicant.

For the reasons stated, I conclude Applicant is not eligible for access to classified information.

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 THE APPLICANT

Subparagraph 1.a.: For the Applicant

Subparagraph 1.b.: Against the Applicant

Subparagraph 1.c.: Against the Applicant

Subparagraph 1.d.: Against the Applicant

Subparagraph 1.e.: Against the Applicant

Subparagraph 1.f.: Against the Applicant

Subparagraph 1.g.: Against the Applicant

Subparagraph 1.h.: For the Applicant

Paragraph 2. Guideline E: FOR THE APPLICANT

Subparagraph 2.a.: For the Applicant

Paragraph 3. Guideline J: FOR THE APPLICANT

Subparagraph 3.a.: For the Applicant

DECISION

In light of all the circumstances presented by the record in this case, it is not clearly consistent with the national interest to grant or continue a security clearance for Applicant.

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Security Program," dated January 1987, as amended by Change 3, dated November 8, 1995, and further modified by memorandum, dated November 10, 1998. However, the Directive, as amended by Change 4, dated April 20, 1999, uses both "clearly consistent with the national interest" (see, Sec. 2.3.; Sec.2.5.3.; Sec. 3.2.; and Sec. 4.2.; Enclosure 3, Sec. E3.1.1.; Sec. E3.1.2.; Sec. E3.1.25.; Sec. E3.1.26.; and Sec. E3.1.27.), and "clearly consistent with the interests of national security" (see, Enclosure 2, Sec. E2.2.3.); and "clearly consistent with national security" (see, Enclosure 2, Sec. E2.2.2.)