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ISCR 01-27178.h1: Guideline F security clearance hearing, denied (2003) · CASE

ISCR Case 01-27178.h1denied

Case headnote

ISCR Case No. 01-27178.h1

deniedMar 5, 2003· Hon. James A. Young· hearing

Summary

A 28-year-old defense contractor employee was denied a security clearance under Guideline F (Financial Considerations) due to multiple unpaid debts and a lack of demonstrated ability to resolve them. The Statement of Reasons detailed six specific financial allegations.

These included two debts to Northwest Chase and Northwest First Union, for approximately $3,589 and $2,664 respectively, which the applicant admitted not paying, though they no longer appeared on his credit report. A First USA Bank debt of approximately $486 was alleged, which the applicant believed he paid but could not substantiate. Additionally, a $203 debt to Auburn Associates for apartment damages was paid in full on May 2, 2001.

The most significant outstanding debts were to Chrysler Credit Corporation for approximately $5,465, resulting from a judgment, and Chrysler Financial for approximately $4,704, which was part of the larger Chrysler Credit debt. The applicant had not paid these. The denial was based on the applicant's several unpaid debts, lack of immediate means to pay them, failure to utilize financial counseling, and the likelihood of a worsening financial situation due to impending student loan payments.

Why the applicant was denied

Applicant has several unpaid debts and no means to pay them in the near future.
Applicant did not take advantage of available financial counseling services.
Applicant's financial situation is likely to worsen with upcoming student loan payments.

Conditions referenced

Disqualifying

E2.A6.1.2.1raisedA History of Not Meeting Financial Obligations.
E2.A6.1.2.3raisedInability or Unwillingness to Satisfy Debts.

Key rule quoted

“An applicant's good-faith efforts to repay overdue creditors or otherwise resolve debts could mitigate the security concern.”

Procedural posture

SOR issuedOct 3, 2002
Answer filedOct 28, 2002
Hearing heldFeb 21, 2003
Decision dateMar 5, 2003

Cite for

Financial Considerations Under Guideline F
Impact of Unpaid Debts on Security Clearance Eligibility
Importance of Demonstrating Good-faith Efforts to Resolve Financial Issues

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

From the decision

Facts this decision states, each with the exact sentence it comes from. Descriptive of the record, not an assessment.

Age at decision: 28: “Applicant, a 28-year-old employee of a defense contractor, has several debts which he has not paid and has no means of paying in the near future.”
Delinquent debt cited: $3,589: “(a) Northwest Chase for approximately $3,589.00.”

Standardized Decision Profile

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

Posture: Decision on RecordDecided: denied

The judge found multiple financial debts against the applicant, indicating a history of not meeting financial obligations and an inability to satisfy debts. The applicant's financial situation was deemed a security concern, leading to the denial of the security clearance.

The sub-allegation breakdown is part of the Professional plan. See what it includes.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation

Standardized Decision Profile

SEAD-4 Guideline G (Alcohol Consumption) · descriptive summary of a decided case

Posture: Decision on RecordDecided: deniedAUD DIAGNOSEDTREATMENT COMPLETED · FAVORABLE

The judge ruled against the applicant on multiple allegations related to alcohol consumption under Guideline G. Specifically, the applicant was found to have a pattern of alcohol-related issues, but some allegations were mitigated, leading to a mixed outcome.

¶	Allegation	Finding	Incident	Response	Disqualifying (¶22)	Mitigating applied (¶23)	Mitigation

Descriptive standardized rendering of a decided public case. 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: March 5, 2003

In Re:

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

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

Applicant for Security Clearance

ISCR Case No. 01-27178

DECISION OF ADMINISTRATIVE JUDGE

JAMES A. YOUNG

SYNOPSIS

Applicant, a 28-year-old employee of a defense contractor, has several debts which he has not paid and has no means of paying in the near future. Applicant failed to mitigate the security concerns resulting from his financial situation. Clearance is denied.

STATEMENT OF CASE

Applicant, an employee of a defense contractor, applied for a security clearance. The Defense Office of Hearings and Appeals (DOHA), the federal agency tasked with determining an applicant's eligibility for access to classified information, declined to grant the Applicant a clearance. In accordance with the applicable Executive Order (1) and Department of Defense Directive, (2) DOHA issued a Statement of Reasons (SOR) on 3 October 2002 detailing why a clearance was not granted and recommending Applicant's case be referred to an administrative judge to determine whether the clearance should be denied/revoked. In the SOR, DOHA alleged Applicant failed to meet the financial considerations (Guideline F) security guideline.

Applicant answered the SOR in writing on 28 October 2002. The case was assigned to me on 27 December 2002. On 21 February 2003, I convened a hearing to consider whether it is clearly consistent with the national interest to grant Applicant's security clearance. The Government's case consisted of five exhibits. Applicant testified on his own behalf and submitted 26 exhibits. A transcript (Tr.) of the proceeding was received on 3 March 2003.

FINDINGS OF FACT

Applicant's financial difficulties began in the early 1990s. Since then, he has not been able to dig himself out of debt. The following debts are the subject of the SOR:

(a) Northwest Chase for approximately $3,589.00. Applicant admits that he did not pay this debt, but it no longer appears on his credit report. Tr. 21. Although the debtor offered to settle his claim for approximately $1,200.00, Applicant has not settled this debt. Tr. 23-24; Ex 3 at 6.

(b) Northwest First Union for approximately $2,664.00. Applicant admits that he did not pay this debt, but it no longer appears on his credit report. Tr. 21. Applicant has not acted on the debtor's offer to settle this claim for approximately $900. Tr. 23-24; Ex 3 at 6.

(c) First USA Bank, NA, for approximately $486.00. Although Applicant believes he paid this debt, he was unable to provide any substantiation. Tr. 29.

(d) Auburn Associates for approximately $203.00 for damages to an apartment when he was in the military. Applicant paid the debt in full on 2 May 2001. Ex. Y; Tr. 31-32.

(e) Chrysler Credit Corporation for approximately $5,465.00 as a result of a judgment against Applicant. This appears to represent the debt noted in (f) below with the addition of attorneys' fees. Applicant has not paid this debt. Tr. 34.

(f) Chrysler Financial for approximately $4,704.00. This is part of the debt in (e) above.

Applicant is attending school. Once he graduates from school, he will be eligible for a better paying job at his current firm, subject to availability. However, within six months of his graduation, he will be required to start making payments on deferred student loans. This will significantly impair his ability to make any payments on the other outstanding debts. Despite his situation, he has not taken advantage of the free financial counseling services offered at his workplace. Tr. 49.

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.

An evaluation of whether the applicant meets the security guidelines includes consideration of the following factors: (1) the nature, extent, and seriousness of the conduct; (2) the circumstances surrounding the conduct; (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 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. Directive ¶ E2.2.1. Security clearances are granted only when "it is clearly consistent with the national interest to do so." Exec. Or. 10865 § 2. See Exec. Or. 12968 § 3.1(b).

Initially, the Government must establish, by substantial evidence, that conditions exist in the personal or professional history of the applicant which disqualify, or may disqualify, the applicant from being eligible for access to classified information. See Egan, 484 U.S. at 531. All that is required is proof of facts and circumstances that indicate an applicant is at risk for mishandling classified information, or that an applicant does not demonstrate the high degree of judgment, reliability, or trustworthiness required of persons handling classified information. ISCR Case No. 00-0277, 2001 DOHA LEXIS 335 at **6-8 (App. Bd. 2001). Once the Government has established a prima facie case by substantial evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the facts. 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 (App. Bd. 2002). "Any doubt as to whether access to classified information is clearly consistent with national security will be resolved in favor of the national security." Directive ¶ E2.2.2. "[S]ecurity clearance determinations should err, if they must, on the side of denials." Egan, 484 U.S. at 531. See Exec. Or. 12968 § 3.1(b).

CONCLUSION

In the SOR, DOHA alleged under Guideline F that Applicant had five debts which he had not paid.

Under Guideline F, an applicant who is financially overextended may be a security risk because his financial condition may cause him to engage in illegal acts to generate funds. Conditions that could raise a security concern in this case are as follows:

(1) A history of not meeting financial obligations. Directive ¶ E2.A6.1. 2.1.

(2) Inability or unwillingness to satisfy debts. Directive ¶ E2.A6.1.2.3.

An applicant's good-faith efforts to repay overdue creditors or otherwise resolve debts could mitigate the security concern. Directive, ¶ E2.A6.1.3.6.

Applicant is currently in debt and will not be able to settle these debts in the near future. In fact, unless he gets promoted to a job that pays substantially more, he will become deeper in debt, as a result of his student loans coming due six months after he completes his education. He seems rather nonchalant about his financial condition. Applicant has not mitigated the security concerns that exist as a result of his delinquent financial situation.

FORMAL FINDINGS

Conclusions as to each of the allegations in the SOR as required by Executive Order No. 10865 § 3, ¶ 7 and the Directive ¶ E3.1.25, are as follows:

Paragraph 1. Guideline G: AGAINST APPLICANT

Subparagraph 1.a.: Against Applicant

Subparagraph 1.b.: Against Applicant

Subparagraph 1.c.: Against Applicant

Subparagraph 1.d.: For Applicant

Subparagraph 1.e.: Against Applicant

Subparagraph 1.f.: For Applicant

DECISION

In light of all 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 Applicant.

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

01-27178.h1 FOR GOVERNMENT Kathryn D. MacKinnon, Esq., Department Counsel FOR APPLICANT Pro Se file:///usr.osd.mil/...omputer/Desktop/DOHA%20transfer/DOHA-Kane/dodogc/doha/industrial/Archived%20-%20HTML/01-27178.h1.html[6/24/2021 10:45:09 AM] 01-27178.h1