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ISCR Case 02-21773.h1 — CASE

ISCR Case 02-21773.h1denied

Case Headnote

ISCR Case No. 02-21773.h1

deniedMar 28, 2005· Hon. John Grattan Metz, Jr.· hearing

Summary

A 32-year-old defense contractor employee was denied a security clearance under Guideline F (Financial Considerations) due to significant financial irresponsibility. The applicant admitted to six debts totaling nearly $9,000 and acknowledged insufficient cash flow to address them. Her financial difficulties were found to date back to at least 1996, stemming from a history of irresponsible money management.

Specific concerns included the applicant's inability to provide proof of payment for a claimed debt and her failure to contact or locate several creditors, including one for a debt outstanding since 1996. Two specific debts remained unpaid, and the applicant did not corroborate her claims of being unable to locate a particular creditor.

The judge determined that the applicant's financial issues were largely self-inflicted. The applicant did not present evidence of financial counseling or other stability measures to mitigate the concerns, leading to the denial of her security clearance.

Why the Applicant Was Denied

Applicant admitted to six debts totaling nearly $9,000 and insufficient cash flow to address them.
Financial difficulties date back to at least 1996, attributed to irresponsible handling of money.
Applicant failed to provide proof of payment for several debts and did not demonstrate financial stability or counseling.

Conditions Referenced

Disqualifying

F1raisedFinancial Considerations
F3raisedFinancial Considerations

Key Rule Quoted

“The government has a compelling interest in ensuring each Applicant possesses the requisite judgement, reliability, and trustworthiness of those who must protect national interests as their own.”
— Department of the Navy v. Egan, 484 U.S. 518 (1988)

Procedural Posture

SOR issuedAug 18, 2003
Answer filed09/2003Initially requested a decision on the record.
Hearing heldAug 16, 2004
Decision dateMar 28, 2005

Cite For

Financial Irresponsibility as a Basis for Clearance Denial
Lack of Mitigating Factors in Financial Cases
Importance of Demonstrating Financial Stability for Security Clearance

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 judge found that the applicant's financial irresponsibility and substantial indebtedness made her unsuitable for a security clearance. While one debt was found for the applicant, the majority of the debts were against her, leading to a denial of the clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant admitted six debts totaling nearly $9,000.00 and having insufficient cash flow to address those debts. $9,000	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Applicant has a history of financial difficulties and irresponsibility dating back to at least 1996.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	Applicant reported being unable to contact or locate the other three creditors, including the creditor for debt 1.f. that she had previously been in contact with.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	The debts at 1.d. and 1.f. remain unpaid.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	Applicant claims payment on a fourth debt, but is unable to provide proof of that payment.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	The fact that the creditor at 1.d. is now defunct does not completely diminish the security significance of Applicant's failure to pay this debt since 1996.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	Applicant has not corroborated her claim of being unable to locate the creditor at 1.f.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—

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

SYNOPSIS

KEYWORD: Financial DIGEST: Applicant's financial irresponsibility makes her unsuitable for a security clearance. Clearance denied. CASENO: 02-21773.h1 DATE: 03/28/2005

DATE: March 28, 2005 In Re: ------------- SSN: -----------

Applicant for Security Clearance

ISCR Case No. 02-21773 DECISION OF ADMINISTRATIVE JUDGE JOHN GRATTAN METZ, JR.

APPEARANCES

SYNOPSIS

Applicant's financial irresponsibility makes her unsuitable for a security clearance. Clearance denied.

STATEMENT OF CASE

Applicant challenges the 18 August 2003 Defense Office of Hearings and Appeals (DOHA) Statement of Reasons (SOR) recommending denial or revocation of her clearance because of financial considerations. (1) Applicant answered the SOR in September 2003 and initially requested a decision on the record. However, in June 2004 she changed her mind and requested a hearing. DOHA assigned the case to me 7 July 2004 and I heard it 16 August 2004. DOHA received the transcript 24 August 2004.

FINDINGS OF FACT

Applicant admitted six debts totaling nearly $9,000.00 (2) and having insufficient cash flow to address those debts. She is a 32-year-old employee of a defense contractor who has not previously held a clearance.

Applicant has a history of financial difficulties and irresponsibility dating back to at least 1996. She attributes her financial problems to her irresponsible handling of money, not asking for help when she got in over her head financially, and not seeking credit counseling to address her debts. Applicant's November 2001 sworn statement acknowledged the debts alleged at 1.a., 1.b., 1.d., 1.e., and 1.f., and described payment options offered to her by creditors 1.e. and 1.f. (3) that she was unable to accept because of the state of her finances then.

Nevertheless, by the time she answered DOHA interrogatories in June 2003, she had addressed only the debt at 1.a. When she answered the SOR in September 2003, she claimed to have paid the debt at 1.e. but has provided no proof. She also reported paying on the debt at 1.b. by garnishment with an expected payoff in October 2003. (4) She reported being unable to contact or locate the other three creditors, including the creditor for debt 1.f. that she had previously been in contact with. (5) In addition to the debts alleged in the SOR, Applicant had two educational loans that were referred to collection and ultimately paid by Applicant by garnishment.

Applicant's employment reference considers her an honest and competent employee who presents no security risk. However, the reference does not indicate any knowledge of Applicant's financial issues.

POLICIES

The Directive, Enclosure 2 lists adjudicative guidelines to be considered in evaluating an Applicant's suitability for access to classified information. Administrative Judges must assess both disqualifying and mitigating conditions under each adjudicative issue fairly raised by the facts and circumstances presented. Each decision must also reflect a fair and impartial common sense consideration of the factors listed in Section 6.3. of the Directive. The presence or absence of a disqualifying or mitigating condition is not determinative for or against Applicant. However, specific adjudicative guidelines should be followed whenever a case can be measured against them, as they represent policy guidance governing the grant or denial of access to classified information. Considering the SOR allegations and the evidence as a whole, the relevant, applicable, adjudicative guideline is Guideline F (Financial Considerations).

BURDEN OF PROOF

Security clearance decisions resolve whether it is clearly consistent with the national interest to grant or continue an Applicant's security clearance. The government must prove, by something less than a preponderance of the evidence, controverted facts alleged in the SOR. If it does so, it establishes a prima facie case against access to classified information. Applicant must then refute, extenuate, or mitigate the government's case. Because no one has a right to a security clearance, the Applicant bears a heavy burden of persuasion.

Persons with access to classified information enter into a fiduciary relationship with the government based on trust and confidence. Therefore, the government has a compelling interest in ensuring each Applicant possesses the requisite judgement, reliability, and trustworthiness of those who must protect national interests as their own. The "clearly consistent with the national interest" standard compels resolution of any reasonable doubt about an Applicant's suitability for access in favor of the government. (6)

CONCLUSION

The Government established a Guideline F case. Applicant's substantial indebtedness was acquired largely through her own irresponsibility. While Applicant has documented payment on three of the debts, only one was paid before the SOR was issued and another was paid in May 2004, just before Applicant requested a hearing in this case. The third was paid by garnishment. Applicant claims payment on a fourth debt, but is unable to provide proof of that payment--even though that debt is to a creditor (1.e.) that offered her a repayment schedule in November 2001 that she could not accept. The debts at 1.d. and 1.f. remain unpaid. Applicant has not corroborated her claim of being unable to locate the creditor at 1.f (even though she was in contact with the creditor in November 2001. The fact that the creditor at 1.d. is now defunct does not completely diminish the security significance of Applicant's failure to pay this debt since 1996. Disqualifying Factors 1 and 3 apply.

Applicant meets none of the mitigating factors for financial considerations. Her financial difficulties are both recent and not isolated; indeed they may be ongoing. They were not due to circumstances beyond her control. While Applicant has paid some of her delinquent debt, she has not presented evidence of financial counseling or other steps taken to ensure that her finances are stable and remain so. I conclude Guideline F against Applicant.

FORMAL FINDINGS

Paragraph 1. Guideline F: AGAINST THE APPLICANT

Subparagraph a: For the Applicant Subparagraph b: Against the Applicant Subparagraph c: Against the Applicant Subparagraph d: Against the Applicant Subparagraph e: Against the Applicant Subparagraph f: Against the Applicant Subparagraph g: 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.

John G. Metz, Jr. Administrative Judge 1. Required by Executive Order 10865 and Department of Defense Directive 5220.6, as amended (Directive). 2. The government acknowledged that Applicant had provided proof of payment of the debt at 1.a. in her June 2003 interrogatories, well before the SOR was issued, and asked that I find that allegation for her. I do so. 3. This creditor offered to discount her nearly-$4,000.00 debt to $3,500.00 if she could make two payments of $1,750.00 within three weeks; alternatively, the creditor was willing to accept 10% down and monthly payments of $200.00. 4. A.E. E confirmed payment in full on this debt in November 2003. 5. However, she produced proof of payment on the debt at 1.c. (A.E. B) in May 2004. I take official notice that the creditor at 1.d. was a major retailer that went bankrupt in approximately 2000. 6. See, Department of the Navy v. Egan, 484 U.S. 518 (1988).

FOOTNOTES

FOR GOVERNMENT Braden M. Murphy, Esquire, Department Counsel

FOR APPLICANT Pro Se file:///usr.osd.mil/...omputer/Desktop/DOHA%20transfer/DOHA-Kane/dodogc/doha/industrial/Archived%20-%20HTML/02-21773.h1.htm[6/24/2021 11:03:11 AM] file:///usr.osd.mil/...omputer/Desktop/DOHA%20transfer/DOHA-Kane/dodogc/doha/industrial/Archived%20-%20HTML/02-21773.h1.htm[6/24/2021 11:03:11 AM] file:///usr.osd.mil/...omputer/Desktop/DOHA%20transfer/DOHA-Kane/dodogc/doha/industrial/Archived%20-%20HTML/02-21773.h1.htm[6/24/2021 11:03:11 AM] file:///usr.osd.mil/...omputer/Desktop/DOHA%20transfer/DOHA-Kane/dodogc/doha/industrial/Archived%20-%20HTML/02-21773.h1.htm[6/24/2021 11:03:11 AM] file:///usr.osd.mil/...omputer/Desktop/DOHA%20transfer/DOHA-Kane/dodogc/doha/industrial/Archived%20-%20HTML/02-21773.h1.htm[6/24/2021 11:03:11 AM]