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ISCR Case 02-16504.h1 — CASE

ISCR Case 02-16504.h1denied

Case Headnote

ISCR Case No. 02-16504.h1

deniedJan 22, 2004· Hon. Joseph Testan· hearing

Summary

A 46-year-old data control technician was denied a security clearance under Guideline E (Personal Conduct) due to unresolved financial difficulties. The Statement of Reasons detailed two Chapter 13 bankruptcy filings: one in 1993 and another in July 2001.

Further allegations included an ambiguous response regarding a creditor, with the applicant claiming the debt was satisfied in 2001, though its current status could not be determined from the record. A mortgage debt of $84,789.00 was settled when the applicant sold a previous home. Additionally, a Personal Financial Statement from December 12, 2001, indicated a negative monthly cash flow of $453.00.

The denial was based on the applicant's history of not meeting financial obligations and the two bankruptcy filings. The judge found that the applicant did not provide credible evidence that his financial issues were resolved or likely to be resolved in the near future, concluding that granting clearance was not consistent with national interest.

Why the Applicant Was Denied

Applicant has a history of not meeting financial obligations.
Applicant has filed for bankruptcy protection twice since 1993.
Applicant failed to provide credible evidence that financial difficulties have been resolved.

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

“Once the Government met its burden of showing that applicant is experiencing significant financial problems, which is cognizable as a security concern under Guideline F of the Directive, the burden shifted to applicant to show that his financial problems have been resolved.”

Procedural Posture

SOR issuedMay 2, 2003
Answer filedJun 11, 2003Applicant elected to have case determined on written record.
Hearing held—No hearing; case determined on written record.
Decision dateJan 22, 2004

Cite For

Denial of Clearance Due to Unresolved Financial Issues Under Guideline E
Impact of Multiple Bankruptcy Filings on Security Clearance Eligibility
Burden of Proof on Applicant to Demonstrate Resolution of Financial Difficulties

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 all allegations under Guideline E, indicating that the applicant's financial difficulties reflect adversely on his judgment and reliability. The applicant failed to provide credible evidence to demonstrate that his financial problems have been resolved, leading to the denial of his security clearance.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
1.a	Applicant filed for bankruptcy protection under Chapter 13 of the Bankruptcy Code in July 2001.	Against Applicant	Rules Violation at Workplace	—	Unknown	(a) deliberate omission, concealment, or falsification on a security form (b) deliberately providing false information to an investigator or official	—	—
1.b	Applicant filed for bankruptcy protection under Chapter 13 of the Bankruptcy Code in 1993.	Against Applicant	Rules Violation at Workplace	—	Unknown	(a) deliberate omission, concealment, or falsification on a security form (b) deliberately providing false information to an investigator or official	—	—
1.c	Applicant's response to this allegation is ambiguous. He appears to be admitting that he once was indebted to this creditor, but claims the debt was satisfied in 2001.	Against Applicant	Rules Violation at Workplace	—	Unknown	(a) deliberate omission, concealment, or falsification on a security form (b) deliberately providing false information to an investigator or official	—	—
1.d	The debt to this creditor was made part of applicant's 2001 bankruptcy case. The current status of the debt cannot be determined from the record.	Against Applicant	Rules Violation at Workplace	—	Unknown	(a) deliberate omission, concealment, or falsification on a security form (b) deliberately providing false information to an investigator or official	—	—
1.e	This mortgage debt in the amount of $84,789.00 was settled when applicant sold his previous home.	Against Applicant	Rules Violation at Workplace	—	Unknown	(a) deliberate omission, concealment, or falsification on a security form (b) deliberately providing false information to an investigator or official	—	—
1.f	A Personal Financial Statement (PFS) prepared by applicant on December 12, 2001 indicates he has a negative monthly cash flow of $453.00, not a positive monthly cash flow as alleged.	Against Applicant	Rules Violation at Workplace	—	Unknown	(a) deliberate omission, concealment, or falsification on a security form (b) deliberately providing false information to an investigator or official	—	—

Descriptive standardized rendering of a decided public case (Guideline E). 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 22, 2004 In Re: --------------------- SSN: ----------- Applicant for Security Clearance ISCR Case No. 02-16504 DECISION OF ADMINISTRATIVE JUDGE JOSEPH TESTAN

SYNOPSIS Applicant offered no credible evidence from which I can conclude his financial difficulties have been resolved, or are likely to be resolved anytime soon. Clearance is denied.

STATEMENT OF CASE

On May 2, 2003, 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 denied or revoked. Applicant responded to the SOR in writing on June 11, 2003, and elected to have his case determined on a written record in lieu of a hearing. Department Counsel submitted the Government's written case (FORM) on or about September 8, 2003. Applicant did not file a response to the FORM. The case was assigned to me on October 27, 2003.

FINDINGS OF FACT

Applicant is 46 years of age and is employed as a data control technician by a defense contractor. SOR Allegation 1a: Applicant filed for bankruptcy protection under Chapter 13 of the Bankruptcy Code in July 2001. His petition listed $202,263.00 in total assets and $176,342.00 in total liabilities. The bankruptcy court approved a plan requiring applicant to pay $390.00 per month for 59 months to the bankruptcy trustee. In a signed, sworn statement dated December 12, 2001 (Exhibit 5), applicant stated that the bankruptcy filing was necessitated by (1) previous medical and surgical bills that he and his daughter incurred, (2) a job change which ended up reducing his pay by $400.00 per pay period, and (3) the purchase of a home which "rapidly became too much" for he and his wife to handle. He further stated that even with the bankruptcy filing and payment plan he and his wife "remain in debt at the end of every month." There is no evidence in the record concerning the current status of the bankruptcy case. SOR Allegation 1b: Applicant filed for bankruptcy protection under Chapter 13 of the Bankruptcy Code in 1993. Applicant attributes his financial problems at the time to a reduction in his pay. Neither party offered any evidence concerning the resolution of this bankruptcy case. SOR Allegation 1c: Applicant's response to this allegation is ambiguous. He appears to be admitting that he once was indebted to this creditor, but claims the debt was satisfied in 2001. The only other evidence in the record is a credit report (Exhibit 6). Because this credit report is not credible, this allegation is found for applicant. SOR Allegation 1d: The debt to this creditor was made part of applicant's 2001 bankruptcy case. The current status of the debt cannot be determined from the record. SOR Allegation 1e: This mortgage debt in the amount of $84,789.00 was settled when applicant sold his previous home (Exhibit 6). (1) SOR Allegation 1f: A Personal Financial Statement (PFS) prepared by applicant on December 12, 2001 indicates he has a negative monthly cash flow of $453.00, not a positive monthly cash flow as alleged.

POLICIES

Enclosure 2 of the Directive sets forth Guidelines (divided into Disqualifying Factors and Mitigating Factors) which must be followed by the Administrative Judge. Based on the foregoing Findings of Fact, the following Disqualifying Factors and Mitigating Factors are applicable: Financial Considerations Disqualifying Factors E2.A6.1.2.1: A history of not meeting financial obligations. E2.A6.1.2.3: Inability or unwillingness to satisfy debts. Mitigating Factors None.

CONCLUSION

The evidence establishes that applicant has experienced significant financial difficulties since at least 1993, and that these financial difficulties have resulted in applicant filing for bankruptcy protection twice since 1993. Applicant's long- standing financial problems reflect adversely on his judgment and reliability, and suggest he cannot be relied upon to safeguard classified information. Once the Government met its burden of showing that applicant is experiencing significant financial problems, which is cognizable as a security concern under Guideline F of the Directive, the burden shifted to applicant to show that his financial problems have been resolved. Applicant failed to meet his burden. He offered no credible evidence from which I can conclude his financial difficulties have been resolved, or are likely to be resolved anytime soon. Accordingly, it is not clearly consistent with the national interest to grant him access to classified information at the present time.

FORMAL FINDINGS

PARAGRAPH 1: 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 applicant. ____________________________ Joseph Testan Administrative Judge 1. It appears that the misplaced comma in SOR Allegation 1.e. confused applicant. His response to this allegation was directed toward a credit card debt to the same creditor, which was not alleged in the SOR.

FOOTNOTES

02-16504.h1 FOR GOVERNMENT Jennifer I. Campbell, Department Counsel FOR APPLICANT Pro Se file:///usr.osd.mil/...omputer/Desktop/DOHA%20transfer/DOHA-Kane/dodogc/doha/industrial/Archived%20-%20HTML/02-16504.h1.html[6/24/2021 10:58:50 AM] 02-16504.h1