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ISCR Case 02-29003.h1 — CASE

ISCR Case 02-29003.h1granted

Case Headnote

ISCR Case No. 02-29003.h1

grantedJan 23, 2006· Hon. James A. Young· hearing

Summary

A 32-year-old computer support center analyst was granted a security clearance despite concerns under Guideline F (Financial Considerations). The Statement of Reasons alleged over $30,000 in delinquent and charged-off debts, including multiple collection accounts each exceeding $6,300, an IRS debt over $4,400, a defaulted lease for $4,100, and an account delinquent over 120 days for $399. These issues raised Disqualifying Conditions E2.A6.1.2.1 and E2.A6.1.2.3.

However, the judge applied Mitigating Conditions E2.A6.1.3.1, E2.A6.1.3.3, and E2.A6.1.3.4. It was determined that much of the delinquent debt originated during her first marriage and was incurred without her knowledge.

Crucially, the applicant demonstrated consistent financial stability for over five years. She had also been advised by an attorney against filing for bankruptcy due to the age of the debts. Based on these mitigating factors, the security clearance was GRANTED.

Why the Applicant Prevailed

The applicant demonstrated financial stability for over five years.
Much of the delinquent debt was incurred without her knowledge during her first marriage.
The applicant was advised by an attorney not to file for bankruptcy due to the age of the debts.

Conditions Referenced

Disqualifying

E2.A6.1.2.1raisedHistory of Not Meeting Financial Obligations
E2.A6.1.2.3raisedUnable or Unwilling to Satisfy Delinquent Debts

Mitigating

E2.A6.1.3.1appliedBehavior Was Not Recent
E2.A6.1.3.3appliedDelinquent Debts Resulted From Conditions Beyond Her Control
E2.A6.1.3.4appliedEvidence the Problem Is Being Resolved or Under Control

Key Rule Quoted

“An individual who is financially overextended is at risk of having to engage in illegal acts to generate funds.”

Procedural Posture

SOR issuedMay 20, 2004
Answer filedJun 22, 2004
Hearing heldNov 16, 2005
Decision dateJan 23, 2006

Cite For

Mitigation of Financial Issues Under Guideline F Due to Lack of Knowledge of Debts
Consideration of Financial Stability Over Time
Impact of Legal Advice on Financial Decisions

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: granted

The applicant incurred over $30,000 in delinquent debt, much of which was without her knowledge. Despite this, she has been financially stable for over five years and was advised against filing for bankruptcy. The judge found the applicant's financial issues largely beyond her control and ruled in her favor, granting her security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	more than $6,300 in delinquent debts placed for collection $6,300	For Applicant	Unspecified Financial	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	(c) received/receiving counseling; problem being resolved	—
1.b	more than $6,300 in delinquent debts placed for collection $6,300	For Applicant	Unspecified Financial	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	(c) received/receiving counseling; problem being resolved	—
1.c	more than $6,300 in delinquent debts placed for collection $6,300	For Applicant	Unspecified Financial	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	(c) received/receiving counseling; problem being resolved	—
1.d	more than $6,300 in delinquent debts placed for collection $6,300	For Applicant	Unspecified Financial	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	(c) received/receiving counseling; problem being resolved	—
1.e	more than $6,300 in delinquent debts placed for collection $6,300	For Applicant	Unspecified Financial	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	(c) received/receiving counseling; problem being resolved	—
1.f	more than $6,300 in delinquent debts placed for collection $6,300	For Applicant	Unspecified Financial	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	(c) received/receiving counseling; problem being resolved	—
1.g	indebted to the IRS for more than $4,400 $4,400	For Applicant	Tax Unpaid	Denied	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.h	delinquent more than 120 days on an account for $399 $399	For Applicant	Unspecified Financial	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.i	more than $6,300 in delinquent debts placed for collection $6,300	For Applicant	Unspecified Financial	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	(c) received/receiving counseling; problem being resolved	—
1.j	debts charged off totaling more than $16,000 $16,000	For Applicant	Unspecified Financial	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.k	debts charged off totaling more than $16,000 $16,000	For Applicant	Unspecified Financial	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.l	debts charged off totaling more than $16,000 $16,000	For Applicant	Unspecified Financial	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.m	debts charged off totaling more than $16,000 $16,000	For Applicant	Unspecified Financial	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.n	debts charged off totaling more than $16,000 $16,000	For Applicant	Unspecified Financial	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.o	debts charged off totaling more than $16,000 $16,000	For Applicant	Unspecified Financial	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.p	indebted for a defaulted lease in the amount of $4,100 $4,100	For Applicant	Unspecified Financial	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.q	more than $6,300 in delinquent debts placed for collection $6,300	For Applicant	Unspecified Financial	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	(c) received/receiving counseling; problem being resolved	—

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 and her first husband incurred more than $30,000 in delinquent debt. Much of the debt was incurred without her knowledge. She has been financially stable for more than five years and was advised by an attorney not to file for bankruptcy. Applicant is not a security threat. Clearance is granted.

CASENO: 02-29003.h1

DATE: 01/23/2006

DATE: January 23, 2006

In re:

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

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

Applicant for Security Clearance

ISCR Case No. 02-29003

DECISION OF ADMINISTRATIVE JUDGE

JAMES A. YOUNG

APPEARANCES

FOR GOVERNMENT

Robert E. Coacher, Esq., Department Counsel FOR APPLICANT

Pro Se

SYNOPSIS

Applicant and her first husband incurred more than $30,000 in delinquent debt. Much of the debt was incurred without her knowledge. She has been financially stable for more than five years and was advised by an attorney not to file for bankruptcy. Applicant is not a security threat. Clearance is granted.

STATEMENT OF CASE

The Defense Office of Hearings and Appeals (DOHA) declined to grant or continue a security clearance for Applicant. On 20 May 2004, DOHA issued a Statement of Reasons (SOR) detailing the basis for its decision (1)-security concerns raised under Guideline F (Financial Considerations) of the Directive. Applicant answered the SOR in writing on 22 June 2004, 12 December 2004, and 7 January 2005 and elected to have a hearing before an administrative judge. The case was assigned to me on 17 June 2005. On 16 November 2005, I convened a hearing to consider whether it is clearly consistent with the national interest to grant or continue a security clearance for Applicant. DOHA received the hearing transcript (Tr.) on 2 December 2005.

FINDINGS OF FACT

Applicant is a 32-year-old computer support center analyst for a defense contractor. Applicant married in 1996. Applicant and her first husband were unemployed for some time and were unable to pay their debts. In 1997, her husband had heart surgery and the couple separated. She had two children with him, the first in 1994 and the second in 1998. The couple accumulated more than $30,000 in delinquent debt.

Applicant admitted each of the debts alleged in the SOR, except the debt of approximately $4,500 owed to the IRS. Applicant claims she did not have actual knowledge of the items giving rise to the delinquency, and was separated from her husband at the time. She paid more than her share of the tax debt when her income tax refund was withheld by the IRS. The IRS granted her relief from having to pay the full amount.

Applicant completed training at a vocational school, which she attended from July 1999 to February 2000. Ex. 1 at 2. Applicant started her present job in September 2000 and applied for a security clearance that same month. She divorced her first husband in 2001. In May 2002, Applicant completed a signed, sworn statement for a Defense Security Service agent. In her statement, Applicant stated she intended to contact all of the creditors and attempt to make payment arrangements by August 2002. Applicant admits she has not paid any of the debts, nor has she made any effort to contact the creditors. She checked with an attorney about filing for bankruptcy protection, but he suggested that the debts were so old they would no longer be enforceable. He recommended she do nothing about them.

Applicant married her second husband in December 2003. The couple have a child of their own and our raising Applicant's children of her first marriage. Applicant's first husband was ordered to pay child support, but his payments are sporadic. Applicant and her current husband appear to have all of their current debts under control. They purchased a home and have been current on their mortgage payments. They own two cars, on which they are also current.

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 authorized the Secretary of Defense or his designee to grant applicants eligibility for access to classified information "only upon a finding that it is clearly consistent with the national interest to do so." Exec. Or. 10865, Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960). Eligibility for a security clearance is predicated upon the applicant meeting the security guidelines contained in the Directive. 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.

Enclosure 2 of the Directive sets forth personnel security guidelines, as well as the disqualifying conditions (DC) and mitigating conditions (MC) under each guideline. In evaluating the security worthiness of an applicant, the administrative judge must also assess the adjudicative process factors listed in ¶ 6.3 of the Directive. The decision to deny an individual a security clearance is not necessarily a determination as to the loyalty of the applicant. See Exec. Or. 10865 § 7. It is merely an indication the applicant has not met the strict guidelines the President and the Secretary of Defense have established for issuing a clearance.

CONCLUSION

In the SOR, DOHA alleged Applicant had more than $6,300 in delinquent debts placed for collection (¶¶ 1.a-1.f, 1.i, 1.q); is indebted to the IRS for more than $4,400 (¶ 1.g); is delinquent more than 120 days on an account for $399 (¶ 1.h); has debts charged off totaling more than $16,000 (¶ 1.j-1.o); and is indebted for a defaulted lease in the amount of $4,100 (¶ 1.p). Applicant admitted each of the allegations, except that in ¶ 1.g. An individual who is financially overextended is at risk of having to engage in illegal acts to generate fund's. Directive ¶ E2.A6.1.1.

The Government's evidence established potentially disqualifying conditions under Guideline F. Applicant has a history of not meeting her financial obligations (DC E2.A6.1.2.1) and is unable or unwilling to satisfy her delinquent debts (DC E2.A6.1.2.3).

An applicant may mitigate such disqualifying conditions by establishing the behavior was not recent (MC E2.A6.1.3.1), the delinquent debts resulted in large part by conditions beyond her control (MC E2.A6.1.3.3), there is evidence the problem is being resolved or under control (MC E2.A6.1.3.4), and the applicant initiated a good-faith effort to resolve her debts (MC E2.A6.1.3.6). Applicant's delinquent debts were not incurred recently. Normally, an applicant is not entitled to consideration of this mitigating condition when the delinquent debts are still outstanding. ISCR Case No. 01- 3695, 2002 DOHA LEXIS 453 at *7 (App. Bd. Oct. 16, 2002). Nevertheless, under the circumstances of this case, I believe some small credit should be granted because Applicant was unaware of the debts and, since she has been on her own the past five years, appears to have been financially stable. As the delinquent debts arose from her husband's misuse of his credit cards and his failure to pay his federal income taxes, I find the debts resulted from conditions largely beyond Applicant's control. Thus, MC E2.A6.1.3.3 applies.

Applicant sought out advice from a bankruptcy attorney about her debts. He advised her not to file bankruptcy as the debts were so old and no longer enforceable. At the same time, Applicant entered a relationship with her new husband that is financially stable. I have considered all the evidence, the disqualifying and mitigating conditions, as well as the adjudicative process factors. Under the circumstances of this case, I find for Applicant.

FORMAL FINDINGS

The following are my conclusions as to each allegation in the SOR:

Paragraph 1. Guideline F: FOR APPLICANT

Subparagraph 1.a-1.q: For Applicant

DECISION

In light of all of the circumstances in this case, it is clearly consistent with the national interest to grant or continue a security clearance for Applicant. Clearance is granted.

James A. Young

Administrative Judge

1. As required by Exec. Or. 10865 (Feb. 20, 1960), as amended and modified, and Department of Defense Directive 5220.6 (Jan. 2, 1992), as amended and modified (Directive).

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Case Profile

Summary

Why the Applicant Prevailed

Conditions Referenced

Key Rule Quoted

Procedural Posture

Cite For

Full decision

DEFENSE OFFICE OF HEARINGS AND APPEALS

HEARING

SYNOPSIS

APPEARANCES

STATEMENT OF CASE

FINDINGS OF FACT

POLICIES

CONCLUSION

FORMAL FINDINGS

DECISION

FOOTNOTES