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ISCR Case 02-28727.h1 — CASE

ISCR Case 02-28727.h1denied

Case Headnote

ISCR Case No. 02-28727.h1

deniedJun 22, 2004· Hon. John Grattan Metz, Jr.· hearing

Summary

A 33-year-old defense contractor employee was denied a security clearance under Guideline F (Financial Considerations) due to a persistent history of financial irresponsibility. The applicant's financial difficulties dated back to 1995 and included 11 delinquent credit accounts totaling over $15,000, which became past due between November 1995 and July 2001. She admitted to 10 of these debts, totaling over $7,000, but disputed an $8,000 debt, citing an expired statute of limitations.

Further issues included a deficiency balance from a co-signed automobile loan that resulted in repossession. In August 1997, the applicant filed a Chapter 13 bankruptcy plan, listing over $23,000 in debt, with a proposed repayment of $50 per week over 52 months. However, this plan was dismissed in June 1999 due to her failure to make the required payments.

Although the applicant entered debt counseling in July 2003 to address seven of the alleged debts and three new debts totaling over $4,500, there was no evidence that she had begun the proposed repayment plan. The denial was based on her long-standing financial difficulties, the numerous delinquent accounts, the dismissed bankruptcy, and the lack of demonstrated progress in resolving her financial issues.

Why the Applicant Was Denied

The applicant has a history of financial difficulties dating back to 1995.
She has 11 delinquent credit accounts totaling over $15,000.00.
The applicant's chapter 13 bankruptcy plan was dismissed for failure to make payments.
There is no evidence that the applicant has begun the repayment plan proposed by the credit counselor.

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

“"the clearly consistent standard indicates that security-clearance determinations should err, if they must, on the side of denials."”
— Department of the Navy v. Egan, 484 U.S. 518, 531 (1988)

Procedural Posture

SOR issuedJun 3, 2003
Answer filedJul 8, 2003
Hearing held—Applicant requested an administrative decision without a hearing.
Decision dateJun 22, 2004

Cite For

Denial of Security Clearance Due to Financial Irresponsibility Under Guideline F
Impact of Ongoing Financial Difficulties on Security Clearance Eligibility
Failure to Demonstrate Mitigation of Financial Issues 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 judge found that the applicant's financial irresponsibility and substantial indebtedness raised significant security concerns under Guideline F. Despite some attempts at credit counseling, the applicant failed to demonstrate effective management of her debts, leading to a denial of her security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant has a history of financial difficulties and irresponsibility dating back to 1995.	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.b	She has 11 delinquent credit accounts totaling over $15,000.00, that fell past due between November 1995 and July 2001. $15,000	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.c	Applicant admits 10 debts totaling over $7,000.00; she denies a debt of nearly $8000.00 because the state statute of limitations for bringing suit on the debt has expired. $7,000	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.d	Applicant co-signed an automobile note for her sister. The car was later repossessed when her brother-in-law failed to make the payments, leaving Applicant with a deficiency balance.	Against Applicant	Auto Loan Debt	Admitted	—	—	—
1.e	She filed a chapter 13 wage-earner bankruptcy plan in August 1997 listing a total of over $23,000.00 in secured and unsecured debt that she was to repay at the rate of $50.00 per week over 52 months. The plan was dismissed in June 1999 for failure to make the required payments. $23,000	Against Applicant	Bankruptcy Filing	Admitted	—	—	—
1.f	Applicant's answer demonstrated that she had entered into debt counseling in July 2003 to repay seven of the debts alleged in the SOR, but also to address three new debts totaling over $4,500.00. $4,500	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.g–1.l	6 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 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: June 22, 2004 In Re: ------------------- SSN: ----------- Applicant for Security Clearance CR Case No. 02-28727 DECISION OF ADMINISTRATIVE JUDGE JOHN G. METZ, JR.

SYNOPSIS Applicant's pattern of financial irresponsibility renders her an unsuitable candidate for a security clearance. Clearance denied.

STATEMENT OF CASE

Applicant challenges the 3 June 2003 Defense Office of Hearings and Appeals (DOHA) Statement of Reasons (SOR) (1) recommending denial or revocation of Applicant's clearance. Applicant answered the SOR and requested an administrative decision without a hearing on 8 July 2003 and 1 December 2003. She did not respond to the Government's File of Relevant Material (FORM), issued 15 April 2004; the record in this case closed 2 June 2004, the day her response was due. The case was assigned to me on 8 June 2004 to decide if clearance should be granted, continued, denied, or revoked.

FINDINGS OF FACT

Applicant admitted the SOR allegations, except for the debt at subparagraph 1.g. Accordingly, I incorporate her admissions as findings of fact. Applicant--a 33-year-old employee of a defense contractor--seeks access to classified information. She has not previously had a clearance. Applicant has a history of financial difficulties and irresponsibility dating back to 1995. She has 11 delinquent credit accounts totaling over $15,000.00, that fell past due between November 1995 and July 2001. None of these debts were caused by circumstances beyond Applicant's control. Applicant admits 10 debts totaling over $7,000.00; she denies a debt of nearly $8000.00 because the state statute of limitations for bringing suit on the debt has expired. However, Applicant admits she co-signed an automobile note for her sister. The car was later repossessed when her brother-in-law failed to make the payments, leaving Applicant with a deficiency balance. Applicant attributes her financial difficulties to co-signing the automobile note for her sister and being sole obligor on a loan used to purchase a satellite dish for her brother in 1995. When she experienced some medical expenses, she fell behind in her payments on the two notes and on the medical expenses as well. She filed a chapter 13 wage-earner bankruptcy plan in August 1997 listing a total of over $23,000.00 in secured and unsecured debt that she was to repay at the rate of $50.00 per week over 52 months. The plan was dismissed in June 1999 for failure to make the required payments. She had paid approximately 25% of the required amount at the time the plan was dismissed. Applicant's answer demonstrated that she had entered into debt counseling in July 2003 to repay seven of the debts alleged in the SOR, but also to address three new debts totaling over $4,500.00. However, there is no evidence that she has begun the payment plan proposed by the credit counselor.

POLICIES

Enclosure 2 of the Directive sets forth adjudicative guidelines to be considered in evaluating an individual's security eligibility. The Administrative Judge must take into account the conditions raising or mitigating security concerns in each area applicable to the facts and circumstances presented. Each adjudicative decision must also assess the factors listed in Section 6.3. and in Enclosure (2) of the Directive. Although the presence or absence of a particular condition for or against clearance is not determinative, the specific adjudicative guidelines should be followed whenever a case can be measured against this policy guidance, as the guidelines reflect consideration of those factors of seriousness, recency, motivation, etc. Considering the evidence as a whole, the following adjudication policy factors are most pertinent to this case: FINANCIAL CONSIDERATIONS (GUIDELINE F) E2.A6.1.1. The Concern: An individual who is financially overextended is at risk of having to engage in illegal acts to generate funds. Unexplained affluence is often linked to proceeds from financially profitable criminal acts. E2.A6.1.2. Conditions that could raise a security concern and may be disqualifying include: E2.A6.1.2.1. A history of not meeting financial obligations; E2.A6.1.2.3. Inability or unwillingness to satisfy debts; E2.A6.1.3. Conditions that could mitigate security concerns include: E2.A6.1.3.3. The conditions that resulted in the behavior were largely beyond the person's control (e.g. loss of employment. . . divorce or separation). Burden of Proof Initially, the Government must prove controverted facts alleged in the SOR. If the Government meets that burden, the burden of persuasion then shifts to an applicant to establish security suitability through evidence of refutation, extenuation or mitigation sufficient to demonstrate that, despite the existence of disqualifying conduct, it is nevertheless clearly consistent with the national interest to grant or continue the security clearance. A person who seeks access to classified information enters into a fiduciary relationship with the Government predicated upon trust and confidence. Where facts proven by the Government raise doubts about an applicant's judgment, reliability or trustworthiness, the applicant has a heavy burden of persuasion to demonstrate that he or she is nonetheless security worthy. As noted by the United States Supreme Court in Department of the Navy v. Egan, 484 U.S. 518, 531 (1988), "the clearly consistent standard indicates that security-clearance determinations should err, if they must, on the side of denials."

CONCLUSION

The Government has established its case under Guideline F. The record demonstrates Applicant's substantial indebtedness, acquired largely through her own irresponsibility, and largely ignored since the dismissal of her chapter 13 plan in June 1999. She sought credit counseling in July 2003--apparently in response to the SOR--but there is no evidence that she has begun any repayment plan suggested by the credit counselor. Further, the counseling record includes three new debts totaling over $4,500.00. Applicant meets none of the mitigating factors for financial considerations. Her financial difficulties are both recent and not isolated; indeed they are ongoing. They do not appear to be due to circumstances beyond her control. It does not appear that Applicant has stopped digging herself into a financial hole, much less started to pull herself out of it. I conclude Guideline F against Applicant.

FORMAL FINDINGS

Paragraph 1. Guideline F: AGAINST THE APPLICANT Subparagraph a: Against 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 Subparagraph h: Against the Applicant Subparagraph i: Against the Applicant Subparagraph j: Against the Applicant Subparagraph k: Against the Applicant Subparagraph l: 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, as amended and Department of Defense Directive 5220.6, as amended (Directive).

FOOTNOTES

02-28727.h1 FOR GOVERNMENT Jason Perry, Esquire, Department Counsel FOR APPLICANT Pro Se file:///usr.osd.mil/...omputer/Desktop/DOHA%20transfer/DOHA-Kane/dodogc/doha/industrial/Archived%20-%20HTML/02-28727.h1.html[6/24/2021 11:13:33 AM] 02-28727.h1