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ISCR Case 01-15168.h1 — CASE

ISCR Case 01-15168.h1granted

Case Headnote

ISCR Case No. 01-15168.h1

grantedJan 12, 2004· Hon. James A. Young· hearing

Summary

A U.S. Navy veteran's security clearance was granted despite initial concerns under Guideline F (Financial Considerations). The Statement of Reasons detailed several financial issues, including a $292 collection account, a $207 delinquent account, a $2,248 charged-off account, and $2,416 in delinquent child support. Additional allegations included a foreclosure, a $500 collection account for cable, a $199 collection account for telephone, a $174 delinquent debt to the Department of Defense, and a $1,200 judgment for credit card debt.

Disqualifying conditions related to financial irresponsibility and an inability to meet financial obligations were raised. However, the judge applied mitigating conditions, noting that the applicant's financial difficulties largely stemmed from circumstances beyond his control, specifically his wife's credit card spending while he was deployed.

Following his divorce, the applicant made significant good-faith efforts to resolve most of his debts, reduced his support obligations, and demonstrated an understanding of financial management. These actions sufficiently mitigated the security concerns, leading to the granting of his security clearance.

Why the Applicant Prevailed

Applicant made good-faith efforts to resolve most of his debts.
His financial difficulties were largely due to circumstances beyond his control, such as his wife's spending while he was deployed.
Applicant demonstrated an understanding of the importance of managing his financial obligations.

Conditions Referenced

Disqualifying

E2.A6.1.2.1raisedFinancial Considerations - History of Not Meeting Financial Obligations
E2.A6.1.2.3raisedFinancial Considerations - Unable or Unwilling to Satisfy Debts

Mitigating

E2.A6.1.3.3appliedFinancial Considerations - Conditions That Resulted in the Behavior Were Beyond the Applicant's Control
E2.A6.1.3.1appliedFinancial Considerations - the Applicant Has Made a Good-faith Effort to Repay Overdue Creditors
E2.A6.1.3.2appliedFinancial Considerations - the Applicant Has a Reasonable Plan to Resolve Debts

Key Rule Quoted

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

Procedural Posture

SOR issuedMay 16, 2003
Answer filedJun 12, 2003
Hearing heldDec 9, 2003
Decision dateJan 12, 2004

Cite For

Mitigation of Financial Issues Under Guideline F
Impact of Personal Circumstances on Financial Obligations
Good-faith Efforts in Debt Resolution

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: granted

The judge found that the applicant had several financial issues primarily stemming from debts incurred by his ex-wife during his military deployment. Despite these challenges, the applicant made significant progress in addressing his debts and demonstrated good-faith efforts to resolve his financial obligations, leading to a decision to grant his security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Collection acct $292 $292	For Applicant	Unspecified Financial	Unknown	—	—	—
1.b	Delinq acct $207 $207	For Applicant	Unspecified Financial	Unknown	—	—	—
1.c	Charged off acct $2,248 $2,248	For Applicant	Unspecified Financial	Unknown	—	—	—
1.d	Delinq child support $2,416 $2,416	For Applicant	Child Support Debt	Unknown	—	—	—
1.e	Foreclosure for failure to pay	For Applicant	Unspecified Financial	Unknown	—	—	—
1.f	Collection acct television cable $500 $500	For Applicant	Utility or Phone Debt	Unknown	—	—	—
1.g	Collection acct telephone $199 $199	For Applicant	Utility or Phone Debt	Unknown	—	—	—
1.h	Delinq debt to DOD $174 $174	For Applicant	Unspecified Financial	Unknown	—	—	—
1.i	Judgment credit card debt $1,200 $1,200	For Applicant	Credit Card Debt	Unknown	—	—	—

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: January 12, 2004

In re: ----------------- SSN: ----------- Applicant for Security Clearance

ISCR Case No. 01-15168 DECISION OF ADMINISTRATIVE JUDGE JAMES A. YOUNG

SYNOPSIS

Applicant incurred several debts when his wife ran up credit card expenses while he was deployed at sea with the U.S. Navy. His subsequent separation and divorce, and the initial support payments of $28,000 a year, put Applicant further in debt. He has paid off most of the delinquent debts, had his support obligations reduced to $14,000 a year, and made good-faith efforts to resolve the others. Applicant sufficiently mitigated the financial considerations security concerns. Clearance is granted.

STATEMENT OF CASE

The Defense Office of Hearings and Appeals (DOHA) declined to grant or continue a security clearance for Applicant. On 16 May 2003, under the applicable Executive Order (1) and Department of Defense Directive, (2) DOHA issued a Statement of Reasons (SOR), detailing the basis for its decision-security concerns raised under Guideline F (Financial Considerations) of the Directive. Applicant answered the SOR in writing on 12 June 2003 and elected to have a hearing before an administrative judge. The case was originally assigned to another administrative judge, but was transferred to me on 12 November 2003. On 9 December 2003, I convened a hearing to consider whether it is clearly consistent with the national interest to grant or continue a security clearance for Applicant. DOHA received the transcript (Tr.) of the proceeding on 30 December 2003.

FINDINGS OF FACT

Applicant served in the US. Navy as a fire control technician. Tr. 29. He entered the service in May 1990. He married in July 1992 and had three children with his wife. Ex. 1 at 5. Applicant's wife, using a power of attorney Applicant gave her so she could manage the family finances while he was deployed on extended sea duty, ran up tens of thousands of dollars of credit card debt. Tr. 10. On 30 October 1998, Applicant signed a separation agreement obligating him to pay $28,000 a year in child and spousal support. Tr. 10-11. Applicant separated from the Navy in January 1999. Ex. 1 at 5. Applicant is now divorced. Applicant is no longer responsible for spousal support, only child support, thus reducing his payments to $14,000 a year. The following chart summarizes the status of the allegations alleged by DOHA:

¶ Nature and Amount Status Record 1.a. Collection acct $292 Paid 3 Nov 2003 Ex. E at 4 1.b. Delinq acct $207 Debt transferred-unpaid Tr. 23 1.c. Charged off acct $2,248 Paid $2,200-owes $1,000 Tr. 23, Ex. E at 4 1.d. Delinq child support $2,416 Father paid $22,000 Ex. C 1.e. Foreclosure for failure to pay No resulting debt Tr. 24, 33 1.f. Collection acct television cable $500 Unpaid Tr. 25 1.g. Collection acct telephone $199 Paid 30 Oct 2003 Ex. F 1.h. Delinq debt to DOD $174 Unpaid Tr. 26-27 1.i. Judgment credit card debt $1,200 Unpaid Tr. 37

The debt in ¶ 1.f. resulted from his failure to turn in the electronic box for his cable television when he moved. He is looking for the box. If he doesn't find it, he will pay the debt. Tr. 25. The debt alleged in ¶ 1.d. was actually some $22,000 and consisted of a combination of delinquent child and spousal support. Applicant's father paid the debt as a gift to his son. Applicant does not owe any money as a result of the foreclosure on his home. Tr. 24.

POLICIES

"[N]o one has a 'right' to a security clearance." Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). As Commander in Chief, the President has "the authority to . . . control access to information bearing on national security and to determine whether an individual is sufficiently trustworthy to occupy a position . . . that will give that person access to such information." Id. at 527. The President has restricted eligibility for access to classified information to United States citizens "whose personal and professional history affirmatively indicates loyalty to the United States, strength of character, trustworthiness, honesty, reliability, discretion, and sound judgment, as well as freedom from conflicting allegiances and potential for coercion, and willingness and ability to abide by regulations governing the use, handling, and protection of classified information." Exec. Or. 12968, Access to Classified Information § 3.1(b) (Aug. 4, 1995). Eligibility for a security clearance is predicated upon the applicant meeting the security guidelines contained in the Directive. Enclosure 2 of the Directive sets forth personal security guidelines, as well as the disqualifying conditions (DC) and mitigating conditions (MC) under each guideline. In evaluating the security worthiness of an applicant, the administrative judge must also assess the adjudicative process factors listed in ¶ 6.3 of the Directive. The decision to deny an individual a security clearance is not necessarily a determination as to the loyalty of the applicant. See Exec. Or. 10865 § 7. It is merely an indication that the applicant has not met the strict guidelines the President and the Secretary of Defense have established for issuing a clearance. Initially, the Government must establish, by substantial evidence, conditions in the personal or professional history of the applicant that disqualify, or may disqualify, the applicant from being eligible for access to classified information. See Egan, 484 U.S. at 531. The Directive presumes a nexus or rational connection between proven conduct under any of the disqualifying conditions listed in the guidelines and an applicant's security suitability. See ISCR Case No. 95-0611 at 2 (App. Bd. May 2, 1996). Once the Government establishes a disqualifying condition by substantial evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the facts. ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002); see Directive ¶ E3.1.15. An applicant "has the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue his security clearance." ISCR Case No. 01-20700 at 3.

CONCLUSION

In the SOR, DOHA alleged Applicant had delinquent financial accounts (¶ 1.a.-1.c., 1.f.-1.i.); delinquent child support obligations (¶ 1.d.); and a foreclosure action (¶ 1.e.). An applicant who is financially overextended is at risk of having to engage in illegal acts to generate funds. Directive ¶ E2.A6.l.l.

The Government established through substantial evidence and Applicant's admissions each of the allegations contained in the SOR. The facts establish that Applicant has a history of not meeting his financial obligations (DC E2.A6.1.2.1.) and was unable or unwilling to satisfy his debts (DC E2.A6.1.2.3.). However, the conditions that resulted in this behavior were largely beyond Applicant's control (MC E2.A6.1.3.3)-his wife ran up considerable credit card debt while he was deployed at sea and his separation agreement required him to pay such a substantial portion of his income that he was unable to address some of his wife's debts. While Applicant has not quite finished paying off all of his delinquent debts, he is well on the road to resolving his financial problems. There is little likelihood of a recurrence of these problems and no potential Applicant would be exploited for the few remaining debts. Applicant is an honorable man who recognizes the need to pay off his debts. Although he considered filing for bankruptcy, he decided to weather the storm and pay these debts off. Applicant fully understands that failure to keep his financial affairs in order could lead to the revocation of a security clearance. Under all the circumstances of this case, Applicant has sufficiently mitigated the financial considerations and does not represent a security risk. I find for Applicant.

FORMAL FINDINGS

The following are my conclusions as to each allegation in the SOR: Paragraph 1. Guideline F: FOR APPLICANT Subparagraph 1.a.: For Applicant Subparagraph 1.b.: For Applicant Subparagraph 1.c.: For Applicant Subparagraph 1.d.: For Applicant Subparagraph 1.e.: For Applicant Subparagraph 1.f.: For Applicant

Subparagraph 1.g.: For Applicant Subparagraph 1.h.: For Applicant Subparagraph 1.i.: For Applicant

DECISION

In light of all of the circumstances presented by the record in this case, it is clearly consistent with the national interest to grant or continue a security clearance for Applicant. Clearance is granted. James A. Young Administrative Judge

1. Exec. Or. 10865, Safeguarding Classified Information within Industry (Feb. 20, 1960), as amended and modified. 2. Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (Jan. 2, 1992), as amended and modified.

FOOTNOTES

01-15168.h1 FOR GOVERNMENT Jennifer I. Campbell, Esq., Department Counsel FOR APPLICANT Pro Se file:///usr.osd.mil/...yComputer/Desktop/DOHA%20transfer/DOHA-Kane/dodogc/doha/industrial/Archived%20-%20HTML/01-15168.h1.html[7/2/2021 2:22:23 PM] 01-15168.h1