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ISCR Case 02-01341.h1 — CASE

ISCR Case 02-01341.h1denied

Case Headnote

ISCR Case No. 02-01341.h1

deniedOct 31, 2002· Hon. Darlene Lokey Anderson· hearing

Summary

A 47-year-old defense contractor was denied a security clearance due to concerns under Guideline F (Financial Considerations) and Guideline J (Criminal Conduct). The government alleged the applicant was financially overextended and at risk of engaging in illegal acts for funds, citing two Chapter 7 bankruptcies. The first, filed in September 1991, discharged approximately $40,000 in debt by December 1991. The second, filed in March 1999, discharged approximately $22,000 in debt by June 1999.

Additionally, the government alleged the applicant engaged in criminal conduct. On December 29, 2000, the applicant was arrested and charged with Theft/Third Degree.

The judge determined that the applicant's history of excessive indebtedness, including two bankruptcies within eleven years, and recent criminal conduct involving theft, demonstrated poor judgment and unreliability. The applicant did not provide evidence in mitigation or rebuttal to the government's case. Consequently, the security clearance was DENIED.

Why the Applicant Was Denied

The applicant has a history of excessive indebtedness, including two Chapter 7 bankruptcies within eleven years.
The applicant engaged in criminal conduct, specifically theft, which reflects poor judgment and unreliability.
The applicant failed to provide evidence in mitigation or rebuttal to the government's case.

Conditions Referenced

Disqualifying

AG ¶ 19.araisedFinancial Considerations - History of Not Meeting Financial Obligations
AG ¶ 19.braisedFinancial Considerations - Inability or Unwillingness to Satisfy Debts
AG ¶ 30.araisedCriminal Conduct - Allegations or Admissions of Criminal Conduct
AG ¶ 30.braisedCriminal Conduct - A Single Serious Crime or Multiple Lesser Offenses

Key Rule Quoted

“The adjudicative process is an examination of a sufficient period of a person's life to make an affirmative determination that the person is an acceptable security risk.”

Procedural Posture

SOR issuedApr 10, 2002
Answer filedApr 22, 2002Applicant elected to have the case determined on a written record.
Hearing held—No hearing; case determined on written record.
Decision dateOct 31, 2002

Cite For

Financial Irresponsibility Leading to Security Clearance Denial
Criminal Conduct Reflecting Poor Judgment Under Guideline J
Lack of Mitigating Evidence 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 F · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The applicant's financial history includes two Chapter 7 bankruptcies, indicating a pattern of excessive indebtedness and poor financial management. The judge found that the applicant failed to provide sufficient evidence to mitigate the financial concerns, resulting in a denial of the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	The Government alleges that the Applicant is ineligible for clearance because he is financially overextended and at risk to engage in illegal acts to generate funds.	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	In September 1991, he filed for Chapter 7 bankruptcy and by December 1991 his debts of approximately $40,000.00 were discharged. $40,000	Against Applicant	Bankruptcy Filing	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	In March 1999, he filed for Chapter 7 bankruptcy again and by June 1999, his debts of approximately $22,000.00 were discharged. $22,000	Against Applicant	Bankruptcy Filing	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
2.a	The Government alleges that the Applicant is ineligible for clearance because he has engaged in criminal conduct.	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts	—	—
2.b	The Applicant was arrested on December 29, 2000, and charged with Theft/Third Degree.	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts	—	—

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

Standardized Decision Profile

SEAD-4 Guideline J (Criminal Conduct) · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The Applicant's criminal conduct, including a theft charge, was found to be disqualifying. The judge ruled against the Applicant on all allegations related to criminal conduct, concluding that the Applicant's behavior demonstrated poor judgment and unreliability, which are inconsistent with the national interest for security clearance.

¶	Allegation	Finding	Offense	Criminal disposition	Response	Disqualifying (¶31)	Mitigating applied (¶32)	Mitigation
2.a	The Government alleges that the Applicant is ineligible for clearance because he has engaged in criminal conduct.	Against Applicant	Theft or Larceny	Dismissed or Nolle Prossed	Denied	(a) pattern of minor offenses casting doubt on judgment/reliability (b) evidence of criminal conduct, regardless of charge or conviction	—	—
2.b	The Applicant was arrested on December 29, 2000, and charged with (1) Theft/Third Degree.	Against Applicant	Theft or Larceny	Dismissed or Nolle Prossed	Denied	(a) pattern of minor offenses casting doubt on judgment/reliability (b) evidence of criminal conduct, regardless of charge or conviction	—	—

Descriptive standardized rendering of a decided public case (Guideline J). 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: October 31, 2002

In Re:

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

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

Applicant for Security Clearance

ISCR Case No. 02-01341

DECISION OF ADMINISTRATIVE JUDGE

DARLENE LOKEY ANDERSON

SYNOPSIS

Applicant's history of excessive indebtedness including two Chapter 7 Bankruptcies within the past eleven years, and his recent pattern of criminal conduct has not been mitigated. Clearance is denied.

STATEMENT OF CASE

On April 10, 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, (as amended) 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 clearance should be denied or revoked.

The Applicant responded to the SOR in writing on April 22, 2002, in which he elected to have the case determined on a written record in lieu of a hearing. Department Counsel submitted the Government's File of Relevant Material (FORM) to the Applicant on July 30, 2002. The Applicant was instructed to submit information in rebuttal, extenuation or mitigation within 30 days of receipt. Applicant received the FORM on August 14, 2002, and he submitted no reply.

The case was assigned to the undersigned for resolution on September 24, 2002.

FINDINGS OF FACT

The Applicant is 47 years old. He is employed by a defense contractor and is applying for a security clearance in connection with his employment.

The Government opposes the Applicant's request for a continued security clearance, on the basis of allegations set forth in the Statement of Reasons (SOR). The following findings of fact are entered as to each paragraph and guideline in the SOR:

Paragraph 1 (Guideline F - Financial Considerations) The Government alleges that the Applicant is ineligible for clearance because he is financially overextended and at risk to engage in illegal acts to generate funds.

In September 1990, the Applicant and his wife divorced. As part of the divorce decree, the Applicant took over the responsibility for all of the debts from the marriage, including the house payments, in addition to the cost of renting another residence for himself to live in after the divorce. His wife remained in the house while it was on the market to be sold. When the house finally sold, the Applicant had anticipated a larger profit from the sale than he actually received, and did not have enough money to cover his debts. As a result, his credit card bills and his ex-wife's leased vehicle payments fell behind. At the time he felt that his only recourse was to file bankruptcy. In September 1991, he filed for Chapter 7 bankruptcy and by December 1991 his debts of approximately $40,000.00 were discharged. (See, Government Exhibits 3 and 8).

Eight years later, the Applicant was still unable to properly handle his financial affairs. By this time he had lent his girlfriend money for a down payment on a house. In order to help her fix up the house, he put numerous home improvement items and furniture on his credit cards. He also paid for dinners and a trip for his girlfriend. (See, Government Exhibit 5). Before he realized it, he had financially over extended himself, and could not afford to pay his bills. As an easy and efficient way out, he filed for Chapter 7 bankruptcy again in March 1999, and by June 1999, his debts of approximately $22,000.00 were discharged. (See, Government Exhibits 3 and 7).

The Applicant stated that, " If I had not filed for bankruptcy the first time and realized how easy it was, I would not have done it again this past year. It seems a way for me to start over with a clean slate and get out of my credit card debt. I did not know it would reflect on me as far as my security clearance and my job." (See, Government Exhibit 5).

The Applicant claims that he is now back on track with his finances. He states that he has learned from his mistakes of the past. He is presently living in the home with his girlfriend and they are sharing the expenses.

Paragraph 2 (Guideline J - Criminal Conduct). The Government alleges that the Applicant is ineligible for clearance because he has engaged in criminal conduct.

The Applicant was arrested on December 29, 2000, and charged with (1) Theft/Third Degree. On that day the Applicant and his girlfriend (who was the cashier at a department store) had given him a list of things she wanted him to obtain from the store. He knew that she planned to charge him for only some of the items. He put the items in his cart as she requested, and his girlfriend did not charge him for all of the items. He was apprehended by the store security. (See, Government Exhibits 6, 9 and 10).

Since the Applicant had no prior criminal record, the Applicant was offered a deal by the prosecutor to have the charges dismissed if he agreed to make a donation of $150.00 to a non-profit organization. The Applicant made the donation and the charge was dismissed. (See, Government Exhibit 6).

Prior to his arrest, on at least three other occasions, the Applicant committed the same criminal offense, but was not arrested for it. On those occasions, the Applicant contends that he did not realize that he had not paid for all of his items until later. In total, the merchandise stolen by the Applicant from this department store amounts to between $400.00 and $500.00 dollars. (See, Government Exhibit 6).

The Applicant states that he is embarrassed and ashamed of his past behavior.

POLICIES

Enclosure 2 of the Directive sets forth adjudication policies divided into "Disqualifying Factors" and "Mitigating Factors." The following Disqualifying Factors and Mitigating Factors are found to be applicable in this case:

Guideline F (Financial Considerations) Conditions that could raise a security concern:

1. A history of not meeting financial obligations;

3. Inability or unwillingness to satisfy debts.

Conditions that could mitigate security concerns include:

None.

Guideline J (Criminal Conduct)

Conditions that could raise a security concern:

1. Allegations or admissions of criminal conduct, regardless of whether the person was formally charged;

2. A single serious crime or multiple lesser offenses.

Conditions that could mitigate security concerns:

None.

In addition, as set forth in Enclosure 2 of the Directive at pages 16-17, in evaluating the relevance of an individual's conduct, the Administrative Judge should consider the following general factors:

a. The nature and seriousness of the conduct and surrounding circumstances

b. The circumstances surrounding the conduct, to include knowledgeable participation

c. The frequency and recency of the conduct

d. The individual's age and maturity at the time of the conduct

e. The voluntariness of participation

f. The presence or absence of rehabilitation and other pertinent behavior changes

g. The motivation for the conduct

h. The potential for pressure, coercion, exploitation or duress

i. The likelihood of continuation or recurrence.

The eligibility criteria established in the DoD Directive identify personal characteristics and conduct which are reasonably related to the ultimate question, posed in Section 2 of Executive Order 10865, of whether it is "clearly consistent with the national interest" to grant an Applicant's request for access to classified information.

The DoD Directive states, "The adjudicative process is an examination of a sufficient period of a person's life to make an affirmative determination that the person is an acceptable security risk. Eligibility for access to classified information is predicted upon the individual meeting these personnel security guidelines. The adjudicative process is the careful weighing of a number of variables known as the whole person concept. Available, reliable information about the person, past and present, favorable and unfavorable should be considered in reaching a determination." The Administrative Judge can draw only those inferences or conclusions that have reasonable and logical basis in the evidence of record. The Judge cannot draw inferences or conclusions based on evidence which is speculative or conjectural in nature. Finally, as emphasized by President Eisenhower in Executive Order 10865, "Any determination under this order . . . shall be a determination in terms of the national interest and shall in no sense be a determination as to the loyalty of the Applicant concerned."

CONCLUSION

In the defense industry, the security of classified industrial secrets is entrusted to civilian workers who must be counted upon to safeguard such sensitive information twenty-four hours per day, seven days per week. The Government is therefore appropriately concerned when available information indicates that an Applicant for clearance may be involved in financial irresponsibility and criminal conduct which demonstrates poor judgment or unreliability.

It is the Government's responsibility to present substantial evidence to support the finding of a nexus, or rational connection, between the Applicant's conduct and the continued holding of a security clearance. If such a case has been established, the burden then shifts to the Applicant to go forward with evidence in rebuttal, explanation or mitigation which is sufficient to overcome or outweigh the Government's case. The Applicant bears the ultimate burden of persuasion in proving that it is clearly consistent with the national interest to grant him or her a security clearance.

In this case the Government has met its initial burden of proving that the Applicant has been financially irresponsible (Guideline F) and engaged in criminal conduct (Guideline J). This evidence indicates poor judgment, unreliability and untrustworthiness on the part of the Applicant. Because of the scope and nature of the Applicant's conduct, I conclude there is a nexus or connection with his security clearance eligibility.

Considering all of the evidence, the Applicant has not introduced persuasive evidence in rebuttal, explanation or mitigation that is sufficient to overcome the Government's case.

Following his divorce in 1990, the Applicant has continued to incur excessive indebtedness by repeatedly financially overextending himself. To state this more simply, his financial problems have been caused solely by his own poor financial management. To solve his excessive indebtedness, he has filed for Chapter 7 bankruptcy twice in the past eleven years. He has not shown a systematic pattern of payment or an ability to properly manage his finances. Instead, he states that he found bankruptcy to be "the easy and efficient way out" of his indebtedness. The Applicant has shown poor judgment and unreliability by his repeated failure to get his debts under control. Although he states that he is now back on track with his finances, his past behavior shows that it will probably not be long before he again has a serious financial problem.

Furthermore, the Applicant has failed to submit a reply to the FORM, and has not provided this Administrative Judge with any evidence in mitigation that would mitigate the negative impact his financial situation has on his security clearance worthiness. Accordingly, Guideline F (Financial Considerations) is found against the Applicant.

The Applicant's recent arrest for Theft in 2000 is a further indication that the Applicant is not sufficiently responsible or trustworthy to hold a security clearance. His criminal behavior was immature and completely unacceptable for an individual who is eligible for access to classified information. Accordingly, Guideline J (Criminal Conduct) is found against him.

On balance, it is concluded that the Applicant has failed to overcome the Government's case opposing his request for a security clearance. Accordingly, the evidence supports a finding against the Applicant as to the factual and conclusionary allegations expressed in Paragraphs 1 and 2 of the Government's Statement of Reasons.

FORMAL FINDINGS

Formal findings For or Against the Applicant on the allegations in the SOR, as required by Paragraph 25 of Enclosure 3 of the Directive are:

Paragraph 1: Against the Applicant.

Subpara. 1.a.: Against the Applicant.

Subpara. 1.b.: Against the Applicant. Subpara. 1.c.: Against the Applicant.

Paragraph 2: Against the Applicant.

Subpara. 2.a.: Against the Applicant.

Subpara. 2.b.: Against 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 the Applicant.

DARLENE LOKEY ANDERSON

Administrative Judge

FOOTNOTES

02-01341.h1 FOR GOVERNMENT Martin H. Mogul, Department Counsel FOR APPLICANT Pro Se file:///usr.osd.mil/...omputer/Desktop/DOHA%20transfer/DOHA-Kane/dodogc/doha/industrial/Archived%20-%20HTML/02-01341.h1.html[6/24/2021 10:46:05 AM] 02-01341.h1