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ISCR Case 01-10559.h1 — CASE

ISCR Case 01-10559.h1denied

Case Headnote

ISCR Case No. 01-10559.h1

deniedMay 30, 2002· Hon. Roger C. Wesley· hearing

Summary

A 32-year-old senior engineering analyst was denied a security clearance under Guideline F, Financial Considerations. The denial stemmed from a history of unpaid debts exceeding $15,000 across six loan and credit card accounts, which had become delinquent. The applicant attributed these financial difficulties to periods of unemployment and family medical issues.

Despite acknowledging his financial challenges, the applicant failed to provide sufficient documentation demonstrating concrete efforts to resolve his outstanding debts. Furthermore, a post-hearing bankruptcy petition was not adequately substantiated with supporting evidence.

The decision highlighted the applicant's history of not meeting financial obligations and an inability or unwillingness to satisfy debts. Consequently, the adjudicator found that the applicant did not mitigate the financial concerns, leading to the denial of his security clearance.

Why the Applicant Was Denied

The applicant has a history of not meeting financial obligations.
He demonstrated an inability or unwillingness to satisfy debts.
The applicant failed to provide documentation of efforts to address his debts or to substantiate his bankruptcy petition.

Conditions Referenced

Disqualifying

DC 1raisedA History of Not Meeting Financial Obligations.
DC 3raisedInability or Unwillingness to Satisfy Debts.

Mitigating

MC 3appliedThe Conditions That Resulted in the Behavior Were Largely Beyond the Person's Control.The applicant's financial difficulties were exacerbated by unemployment and medical issues.

Key Rule Quoted

“A decision to grant or continue an Applicant's request for security clearance may be made only upon a threshold finding that to do so is clearly consistent with the national interest.”

Procedural Posture

SOR issuedNov 28, 2001
Answer filedDec 19, 2001
Hearing heldMar 1, 2002
Decision dateMay 30, 2002

Cite For

Financial Responsibility Under Guideline F
Impact of Medical Issues on Financial Stability
Insufficient Documentation of Debt Resolution Efforts

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 has a history of financial difficulties, including multiple delinquent debts totaling over $15,000, attributed to unemployment and family medical issues. Despite these extenuating circumstances, the applicant failed to demonstrate sufficient efforts to address these debts, leading to a denial of the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant is alleged to have accumulated numerous debts on creditor accounts that have become delinquent and are yet to be paid: They comprise six loan and credit card debts exceeding $15,000.00 in delinquent accounts. $15,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.b	Applicant is alleged to have accumulated numerous debts on creditor accounts that have become delinquent and are yet to be paid: They comprise six loan and credit card debts exceeding $15,000.00 in delinquent accounts. $15,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.c	Applicant is alleged to have accumulated numerous debts on creditor accounts that have become delinquent and are yet to be paid: They comprise six loan and credit card debts exceeding $15,000.00 in delinquent accounts. $15,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.d	Applicant is alleged to have accumulated numerous debts on creditor accounts that have become delinquent and are yet to be paid: They comprise six loan and credit card debts exceeding $15,000.00 in delinquent accounts. $15,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.e	Applicant is alleged to have accumulated numerous debts on creditor accounts that have become delinquent and are yet to be paid: They comprise six loan and credit card debts exceeding $15,000.00 in delinquent accounts. $15,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.f	Applicant is alleged to have accumulated numerous debts on creditor accounts that have become delinquent and are yet to be paid: They comprise six loan and credit card debts exceeding $15,000.00 in delinquent accounts. $15,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.g	Applicant is alleged to have accumulated numerous debts on creditor accounts that have become delinquent and are yet to be paid: They comprise six loan and credit card debts exceeding $15,000.00 in delinquent accounts. $15,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.h	Applicant is alleged to have accumulated numerous debts on creditor accounts that have become delinquent and are yet to be paid: They comprise six loan and credit card debts exceeding $15,000.00 in delinquent accounts. $15,000	Against 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: May 30, 2002

In re:

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

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

Applicant for Security Clearance

ISCR Case No. 01-10559

DECISION OF ADMINISTRATIVE JUDGE

ROGER C. WESLEY

SYNOPSIS

Applicant with a long history of debts attributable to both periods of unemployment and family medical problems (evidence of extenuating circumstances) provides no documented efforts to either pay on the bulk of his debts or resolve his debts by consolidation or repayment plan consistent with his ability to pay on his old debts and fails to provide sufficient documentation and discharge assurances of his post-hearing bankruptcy petition to carry his evidentiary burden at this time. Clearance is denied.

STATEMENT OF CASE

On November 28, 2001, the Defense Office of Hearings and Appeals (DOHA), pursuant to Executive Order 10865 and Department of Defense Directive 5220.6 (Directive), dated January 2, 1992, 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 clearance should be granted, continued, denied or revoked.

Applicant responded to the SOR on December 19, 2001, and requested a hearing. The case was assigned to this Administrative Judge on February 6, 2002, and on February 11, 2002, was scheduled for hearing (amended on February 20, 2002 as to location). A hearing was convened on March 1, 2002, for the purpose of considering whether it would be clearly consistent with the national interest to grant, continue, deny or revoke Applicant's security clearance. At hearing, the Government's case consisted of ten exhibits; Applicant relied on two witnesses (including himself) and one exhibit. The transcript (R.T.) of the proceedings was received on March 12, 2002.

PROCEDURAL ISSUES

Prior to the close of the hearing, Applicant requested leave for the record to be kept open to permit him the opportunity to supplement the record with documentation of consulting with Consumer Credit Counseling ("CCC") and character references. There being no objections, and good cause being shown, Applicant was granted an additional seven (7) days in which to supplement the record. Government was granted two (2) days to respond. Within the time permitted to supplement the record, Applicant elected not to supplement the record with either CCC documentation or character references. He did, however (albeit beyond the permitted time for supplementing) provide a cover note and confirming notice of filing a Chapter 7 bankruptcy petition in April 2002: copies of the petition of Applicant and his spouse and accompanying schedules were not provided. Government interposed no objection to Applicant's notice of filing for Chapter 7 relief under the US Bankruptcy Code. Applicant's faxed correspondence and attached notice of petition are accepted as exhibit B.

STATEMENT OF FACTS

Applicant is a 32-year old senior engineering analyst for a defense contractor who seeks a security clearance.

Summary of Allegations and Responses

Applicant is alleged to have accumulated numerous debts on creditor accounts that have become delinquent and are yet to be paid: They comprise six loan and credit card debts exceeding $15,000.00 in delinquent accounts, and additional delinquent obligation owed to a veterinarian group in the amount of $236.00.

For his response to the SOR, Applicant admitted each of the allegations without any accompanying explanations.

Relevant and Material Factual Findings

The allegations covered in the SOR and admitted to by Applicant are incorporated herein by reference adopted as relevant and material findings. Additional findings follow.

Beginning in 1993, Applicant was laid off from his engineering job. After looking for work in his career field for over six months, and finding no success, he exhausted his savings and ultimately became too strapped for finances to pay his accrued his accrued debts: six loan and credit card debts exceeding $15,000.00 in the aggregate and a vet bill of $236.00. Facing a career change in lower paying work, he elected to allocate his scarce money to paying for the vehicles he needed for acceptance of job bids: This meant putting his old debts on hold.

After consulting with Credit Counseling Services ("CCC") on a possible debt consolidation several years ago, Applicant was told he didn't make enough money to fashion a workable debt consolidation program.

In 1994, Applicant accepted a position with a local contractor at a significantly reduced level of compensation: $16,000.00 a year, an annual package considerably below the $24,000.00 he was accustomed to earning before his layoff.

Applicant married in 1996 and accepted the caring responsibility for his new spouse's daughter from another marriage. He and his spouse, in turn, produced a little girl from their own marriage. His spouse remained home to care for the two children. Besides the additional burdens of normal child rearing Applicant assumed, he soon became financially responsible for the medical expenses associated with a series of debilitating nasal polyps suffered by his stepdaughter that required medicinal treatment. Other medical problems have also confronted Applicant following his marriage. His spouse, for instance, continues to experience bi-polar depression that requires matching co-payments as a condition of their medical insurance. These expenses, along with his other health care and current expenses associated with his taking care of his general family needs and vehicle purchased for work purposes, have precluded his addressing any of his older debts with his current income sources.

To resolve his old debts, Applicant actively considered bankruptcy and worked as much overtime as his employer will allow. Furnished credit reports have enlightened him considerably on the poor state of his finances. He has managed to cobble together enough money to make a couple of payments on one of his covered credit card debts, but he is basically able at this time with his present income to do no more than take care of his current debts, to include his ongoing medical obligations. He rents a townhouse and owns a 1989 vehicle outright (worth about $2,500.00), as he continues to make payments on a mini van he is purchasing. He also has an IRA worth approximately $3,500.00. Applicant still is unable to provide any documentation of his medical expenses for his wife and stepdaughter and fails to provide any documentation of his expenses within the time permitted. So, just what kind of a debt load he has been carrying with his medical commitments is less than clear. This is not to doubt his claims of medical assistance, just the relative level of monetary commitment he has been obligated to these past few years.

To date, Applicant has made no visible efforts to contact his old creditors about working out individual payment plans and has failed to return to CCC for counseling advice for resolving his old debts. While considering bankruptcy, he had until his post-hearing election declined to take any affirmative steps towards any filing for bankruptcy relief under either a Chapter 13 or Chapter 7 regime: leaving himself at the close of the hearing with essentially no plan in place for resolving his old debts in the foreseeable future.

Since the hearing, Applicant has reconsidered and petitioned for Chapter 7 relief under the US Bankruptcy Code. Because he provided no copy of his petition and accompanying schedules listing his assets and debts, it is impossible without much conjecture to know what debts he seeks to discharge, much less to predict with any degree of reasonable accuracy whether he can be relied upon to follow through with a discharge. Without more in the record to evaluate the scope of his Chapter 7 petition and his likelihood of emerging with a successful discharge, favorable inferences are not feasible at this late stage of the proceedings.

POLICIES

The Adjudicative Guidelines of the Directive (Change 4) lists "binding" policy considerations to be made by Judges in the decision making process covering DOHA cases. The term "binding," as interpreted by the DOHA Appeal Board, requires the Judge to consider all of the "Conditions that could raise a security concern and may be disqualifying" (Disqualifying Conditions), if any, and all of the "Mitigating Conditions," if any, before deciding whether or not a security clearance should be granted, continued or denied. The Guidelines do not require the Judge to assess these factors exclusively in arriving at a decision. In addition to the relevant Adjudicative Guidelines, judges must take into account the pertinent considerations for assessing extenuation and mitigation set forth in E2.2 of Enclosure 2 of the Directive, which are intended to assist the judges in reaching a fair and impartial common sense decision.

Viewing the issues raised and evidence as a whole, the following adjudication policy factors are pertinent herein:

Financial Considerations

Concern: An individual who is financially overextended is at risk at having to engage in illegal acts to generate funds. Unexplained influence is often linked to proceeds from financially profitable criminal acts.

Disqualifying Conditions

DC 1. A history of not meeting financial obligations.

DC 3. Inability or unwillingness to satisfy debts.

Mitigating Conditions

MC 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).

Burden of Proof

By dint of the precepts framed by the Directive, a decision to grant or continue an Applicant's request for security clearance may be made only upon a threshold finding that to do so is clearly consistent with the national interest. Because the Directive requires Administrative Judges to make a common sense appraisal of the evidence accumulated in the record, the ultimate determination of

an applicant's eligibility for a security clearance depends, in large part, on the relevance and materiality of that evidence. As with all adversary proceedings, the Judge may draw only those inferences which have a reasonable and logical basis from the evidence of record. Conversely, the Judge cannot draw factual inferences that are grounded on speculation or conjecture.

The Government's initial burden is twofold: (1) It must prove any controverted fact[s] alleged in the Statement of Reasons and (2) it must demonstrate that the facts proven have a nexus to the applicant's eligibility to obtain or maintain a security clearance. The required showing of nexus, however, does not require the Government to affirmatively demonstrate that the applicant has actually mishandled or abused classified information before it can deny or revoke a security clearance. Rather, consideration must take account of accessible risks that an applicant may deliberately or inadvertently fail to safeguard classified information.

Once the Government meets its initial burden of proof of establishing admitted or controverted facts, the burden of proof shifts to the applicant for the purpose of establishing

his or her security worthiness through evidence of refutation, extenuation or mitigation of the Government's case.

CONCLUSION

Applicant comes to these proceedings with a history of debt delinquencies that raise security concerns about not only his vulnerability to pressures and influence to raise money to discharge his debts, but his overall reliability and trustworthiness in regaining control of his finances.

What is at issue in this proceeding is Applicant's reliability and trustworthiness in light of his debt history, which to date he has not been able to seriously address. Security determinations have never confined risk considerations to the elimination of debts that result from isolated payment lapses linked to exigent circumstances, but rather it has looked to the applicant's overall financial history to shed light on his most recent conduct as an indicator of his recurrence risks. This the Government has done in its underscoring of Applicant's still ongoing financial difficulties associated with his continued inability to address his old debts.

Appraising the security significance of Applicant's financial deficiencies, a number of Disqualifying Conditions (DC) of the Adjudicative Guidelines (for financial consideration) are applicable. With respect to his covered debts, DC 1 (history of not meeting financial obligations) and DC 2 (inability or unwillingness to satisfy debts) apply.

To be fair, Applicant may rightfully claim extenuation under the Adjudicative Guidelines. Each of the listed debts were extenuated some by Applicant's financial circumstances attending his layoff and ensuing medical problems, and are partially absorbed of security concerns by application of MC 3 (circumstances beyond Applicant's control, such as unemployment and medical emergency). But with his present employment, more effort could reasonably have been expected of Applicant to pursue debt consolidation or even bankruptcy to address his old debts. This, he has not been able to demonstrate, even within the time permitted to supplement the record.

Overall assessment of Appellant's finances is extenuating, but not mitigating enough to make any safe predictions he can be entrusted to stabilize his finances in the foreseeable future. Payment efforts are still very limited and necessarily invite considerable unpredictability over the core issue of whether he will be able to sustain his repayment assurances of addressing his old debts any time soon. His post-hearing election to seek Chapter 7 relief under the US Bankruptcy Code is encouraging, but with too little documentation of the details and necessary progress in the petition to warrant the safe assurances of follow-through necessary to facilitate positive, predictive judgments at this time about his success probabilities. Applicant may certainly take some advantage of one of the itigating Conditions of the Adjudicative Guidelines (for financial): MC 3 (behavior largely beyond the person's control, such as unemployment), but no more at this time given the insufficiency of visible steps to resolve his old debts, and not enough overall mitigation to absolve him of continuing security concerns.

Everything considered, Applicant's lack of any repayment efforts or other measures to take control of his old debts by resolution means short of individual payment (such as consolidation and petitioned for bankruptcy that either produces a discharge or is demonstrably likely to produce one) are insufficient at this time to successfully mitigate any residual judgment and reliability concerns associated with his debt delinquencies, extenuated though most of them appear to be. Unfavorable conclusions warrant, accordingly, with respect to the allegations covered by sub-paragraphs 1.a through 1.hof Guideline F.

In reaching my recommended decision, I have considered the evidence as a whole, including each of the factors and conditions enumerated in E.2.2 of the Adjudicative Process of Enclosure 2 of the Directive.

FORMAL FINDINGS

In reviewing the allegations of the SOR in the context of the FINDINGS OF FACT, CONCLUSIONS and the FACTORS and CONDITIONS listed above, this Administrative Judge makes the following separate FORMAL FINDINGS with respect to Appellant's eligibility for a security clearance.

GUIDELINE F (FINANCIAL): AGAINST APPLICANT

Sub-para. 1.a: AGAINST APPLICANT

Sub-para. 1.b: AGAINST APPLICANT

Sub-para. 1.c: AGAINST APPLICANT

Sub-para. 1.d: AGAINST APPLICANT

Sub-para. 1.e: AGAINST APPLICANT

Sub-para. 1.f: AGAINST APPLICANT

Sub-para. 1.g: AGAINST APPLICANT

Sub-para. 1.h: AGAINST 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 Applicant's security clearance.

Roger C. Wesley

Administrative Judge

FOOTNOTES

01-10559.h1 FOR GOVERNMENT William S. Fields, Department Counsel FOR APPLICANT Pro Se file:///usr.osd.mil/...yComputer/Desktop/DOHA%20transfer/DOHA-Kane/dodogc/doha/industrial/Archived%20-%20HTML/01-10559.h1.html[7/2/2021 2:19:34 PM] 01-10559.h1