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ISCR Case 01-15856.h1 — CASE

ISCR Case 01-15856.h1denied

Case Headnote

ISCR Case No. 01-15856.h1

deniedDec 23, 2002· Hon. Richard A. Cefola· hearing

Summary

A 60-year-old defense contractor was denied a security clearance due to concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The denial stemmed from a history of financial instability, including three bankruptcies, and a failure to disclose a prior denial of Sensitive Compartmented Information (SCI) access on his May 2000 Security Clearance Application (SCA).

Specifically, the Applicant petitioned for Chapter 13 bankruptcy in 1972, followed by Chapter 7 bankruptcies in May 1981 and March 1998, which discharged his debts. Additionally, on his 2000 SCA, the Applicant knowingly and willfully failed to disclose that his SCI access had been suspended and subsequently denied in 1985.

The Administrative Judge determined that the Applicant did not mitigate the disqualifying conditions related to his repeated financial difficulties and his lack of candor regarding the past access denial. Consequently, the Applicant's security clearance was denied.

Why the Applicant Was Denied

The Applicant has a history of not meeting financial obligations, evidenced by multiple bankruptcies.
The Applicant was less than candid on his Security Clearance Application regarding past access denial.

Conditions Referenced

Disqualifying

F1raisedA History of Not Meeting Financial Obligations
F2raisedInability or Unwillingness to Satisfy Debts
E2raisedThe Deliberate Omission, Concealment; or Falsification of Relevant and Material Facts

Key Rule Quoted

“The Government must make out a case under Guidelines E (personal conduct), and F (financial considerations); which establishes doubt about a person's judgment, reliability and trustworthiness.”

Procedural Posture

SOR issuedJun 4, 2002
Answer filedJun 18, 2002
Hearing held—Determined on a written record
Decision dateDec 23, 2002

Cite For

Financial Instability and Multiple Bankruptcies Under Guideline F
Lack of Candor in Security Clearance Applications Under Guideline E
The Burden of Persuasion in Security Clearance Cases.

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 E (Personal Conduct) · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The judge found against the applicant on personal conduct concerns, specifically regarding a deliberate omission on his security clearance application. The applicant failed to disclose that his SCI access had been suspended and denied in the past, which the judge deemed a knowing and willful omission. As a result, the applicant did not mitigate the personal conduct concerns, leading to a denial of his security clearance.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
2.a	In answering question 32 on his May 2000 Security Clearance Application (SCA), the Applicant knowingly and wilfully failed to disclose that his SCI access was suspended and later denied in 1985.	Against Applicant	Omission or Failure to DiscloseFOUND DELIBERATE	—	Denied	—	—	—
2.b–2.c	2 sub-charges — specific text not stated in this decision (against the applicant). (low confidence)	Against Applicant		—		—	—	—

Descriptive standardized rendering of a decided public case (Guideline E). The verbatim source decision is shown in full below.

Standardized Decision Profile

SEAD-4 Guideline F · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The Applicant has a significant history of financial difficulties, including multiple bankruptcies, which the judge found raised security concerns under Guideline F. The judge ruled against the Applicant on all financial allegations, concluding that he did not meet the burden of persuasion to mitigate these concerns.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	The Applicant petitioned for a Chapter 13 bankruptcy in 1972	Against Applicant	Bankruptcy Filing	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.b	In May of 1981, the Applicant's debts were discharged by way of a Chapter 7 bankruptcy $14,797	Against Applicant	Bankruptcy Filing	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.c	In March of 1998, the Applicant's debts were again discharged by way of a Chapter 7 bankruptcy $101,990	Against Applicant	Bankruptcy Filing	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
2.a	specific text not stated in this decision	Against Applicant	Unspecified Financial	Unknown	(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: December 23, 2002 In Re: ---------------------- SSN: ----------- Applicant for Security Clearance ISCR Case No. 01-15856 DECISION OF ADMINISTRATIVE JUDGE RICHARD A. CEFOLA

SYNOPSIS The Applicant has a history of not meeting his financial obligations, as evidenced by a Chapter 13 bankruptcy petition in 1972, a Chapter 7 discharge in 1981, and another Chapter 7 discharge in 1998. He was also less than candid on his May 2000 Security Clearance Application when asked if he "ever had . . . access authorization denied, suspended or revoked." Due to financial considerations, his SCI access was suspended and later denied in 1985. Clearance is denied.

STATEMENT OF CASE

On June 4, 2002, 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 the 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 the Applicant and recommended referral to an Administrative Judge to determine whether a clearance should be denied or revoked. Applicant filed an Answer to the SOR on or about June 18, 2002. Applicant elected to have this case determined on a written record in lieu of a hearing. Department Counsel submitted the Government's File of Relevant aterial (FORM) on August 1, 2002. Applicant was instructed to submit objections or information in rebuttal, extenuation or mitigation within 30 days of receipt of the FORM. Applicant received his copy on August 13, 2002, and Applicant's reply was received on October 2, 2002. The case was received by the undersigned for resolution on December 20, 2002. The issues raised here are whether the Applicant's financial difficulties and personal conduct militate against the granting of a security clearance.

FINDINGS OF FACT

The following Findings of Fact are based on Applicant's Answer to the SOR, the File of Relevant Material and Applicant's Response. The Applicant is 60 years of age, and is employed by a defense contractor who seeks a security clearance on behalf of the Applicant. Guideline F - Financial Considerations 1.a~1.c. The Applicant petitioned for a Chapter 13 bankruptcy in 1972 (Item 7 at pages 1 and 6). In his answer to the SOR, the Applicant denies this allegation stating: "I do recall speaking to any attorney about bankruptcy, however, I do not recall ever signing any documentation nor, do I recall paying any attorney fees to file for bankruptcy" (Item 3 at page 1). However, this averment is contradicted by the Applicant's response to a February 1985 Letter of Intent to Deny SCI Access Eligibility (Item 7 at pages 1–3). In his response he states, "[t]he bankruptcy in 1972 was bad judgement on my part and after realizing this fact I stopped proceedings on it" (Item 7 at page 6). In May of 1981, the Applicant's debts were discharged by way of a Chapter 7 bankruptcy (Item 7 at page 1). His liabilities totaled about $14,797, and his total assets about $1,235 (id). In March of 1998, the Applicant's debts were again discharged by way of a Chapter 7 bankruptcy (Item 6). This time his liabilities totaled about $101,990, and his total assets about $18,308 (id). Guideline E - Personal Conduct 2.a. In answering question 32 on his May 2000 Security Clearance Application (SCA), the Applicant knowingly and wilfully failed to disclose that his SCI access was suspended and later denied in 1985 (Item 4 at page 6, and Item 7). The Applicant avers that this was a "misunderstanding" on his part. This is not believable. In a February 1985 Letter of Intent, the Applicant was specifically informed that his SCI access was "suspended" (Item 7 at page 2); and in June 1985 Determination Letter, he was specifically informed that his SCI access was "denied" (Item 7 at page 9).

POLICIES

Enclosure 2 and Section E.2.2. of the 1992 Directive set forth both policy factors, and conditions that could raise or mitigate a security concern; which must be given binding consideration in making security clearance determinations. The conditions should be followed in every case according to the pertinent criterion, however, the conditions are neither automatically determinative of the decision in any case, nor can they supersede the Administrative Judge's reliance on his own common sense. Because each security clearance case presents its own unique facts and circumstances, it should not be assumed that these conditions exhaust the realm of human experience, or apply equally in every case. Conditions most pertinent to evaluation of this case are: Financial Considerations Conditions that could raise a security concern: 1. A history of not meeting financial obligations; 2. Inability or unwillingness to satisfy debts; Conditions that could mitigate security concerns: None. Personal Conduct Condition that could raise a security concern: 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 . . . ; Conditions that could mitigate security concerns: None. As set forth in the Directive, each clearance decision must be a fair and impartial common sense determination based upon consideration of all the relevant and material information and the pertinent criteria and adjudication policy in enclosure 2, including as appropriate: a. Nature, extent, and seriousness of the conduct, and surrounding circumstances. b. Frequency and recency of the conduct. c. Age and maturity of the applicant. d. Motivation of the applicant, and the extent to which the conduct was negligent, willful, voluntary, or undertaken with knowledge of the consequence involved. e. Absence or presence of rehabilitation. f. Probability that circumstances or conduct will continue or recur in the future." The Administrative Judge, however, can only draw those inferences or conclusions that have a reasonable and logical basis in the evidence of record. The Judge cannot draw inferences or conclusions based on evidence that is speculative or conjectural in nature. The Government must make out a case under Guidelines E (personal conduct), and F (financial considerations); which establishes doubt about a person's judgment, reliability and trustworthiness. While a rational connection, or nexus, must be shown between an applicant's adverse conduct and his ability to effectively safeguard classified information, with respect to sufficiency of proof of a rational connection, objective or direct evidence is not required. Then, the Applicant must remove that doubt with substantial evidence in refutation, explanation, mitigation or extenuation, which demonstrates that the past adverse conduct is unlikely to be repeated, and that the Applicant presently qualifies for a security clearance. Unacceptable personal conduct is conduct involving questionable judgment, untrustworthiness, unreliability, or unwillingness to comply with rules and regulations. The Government must be able to place a high degree of confidence in a security clearance holder to abide by all security rules and regulations at all times and in all places.

CONCLUSION

Considering first the Applicant's financial difficulties, the Applicant has a history of not meeting his financial obligations, as evidenced by a Chapter 13 bankruptcy petition in 1972, a Chapter 7 discharge in 1981, and another Chapter 7 discharge in 1998. In 1985, the Applicant was put on notice that his financial situation was of concern to the Government when his SCI access was suspended and later denied. Despite this warning, the Applicant again went bankrupt in 1998. Simply stated he is not financially stable; and as such, Guideline F is found against the Applicant. As to his personal conduct, the Applicant was less than candid when he answered question 32 on his May 2000 SCA. The question posited is clear and straight forward, "have you ever had . . . access authorization denied, suspended, or revoked" (Item 4 at page 6, emphasis supplied). Five years prior, his SCI access both suspended and denied, and he was informed of both occurrences. Guideline E is also found against the Applicant. Considering all the evidence, the Applicant has not rebutted the Government's case regarding his financial considerations, and his personal conduct. The Applicant has thus not met the mitigating conditions of Guidelines E and F, and of Section E.2.2. of the Directive. Accordingly, he has not met his ultimate burden of persuasion under Guidelines E and F.

FORMAL FINDINGS

Formal Findings required by paragraph 25 of Enclosure 3 of the Directive are: Paragraph 1: AGAINST THE APPLICANT a. Against the Applicant. b. Against the Applicant. c. Against the Applicant. Paragraph 2: AGAINST THE APPLICANT a. Against the Applicant. Factual support and reasons for the foregoing are set forth in FINDINGS OF FACT and CONCLUSIONS, supra.

DECISION

In light of 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 the Applicant. Richard A. Cefola Administrative Judge

FOOTNOTES

01-15856.h1 FOR GOVERNMENT Henry Lazzaro, Esquire, Department Counsel FOR APPLICANT Pro Se file:///usr.osd.mil/...yComputer/Desktop/DOHA%20transfer/DOHA-Kane/dodogc/doha/industrial/Archived%20-%20HTML/01-15856.h1.html[7/2/2021 2:22:36 PM] 01-15856.h1