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ISCR Case 02-30603.h1 — CASE

ISCR Case 02-30603.h1denied

Case Headnote

ISCR Case No. 02-30603.h1

deniedNov 18, 2003· Hon. James A. Young· hearing

Summary

A 58-year-old former U.S. Navy service member was denied a security clearance due to concerns under Guidelines E (Personal Conduct), F (Financial Considerations), and J (Criminal Conduct). The denial stemmed from a history of financial irresponsibility and the deliberate falsification of information regarding his bankruptcy status.

Specifically, the applicant received a bankruptcy discharge in February 1988 and later entered a Chapter 13 wage-earner's payment plan in January 2002. This plan was dismissed in March 2002 due to his failure to make required payments. Additionally, his wages were garnished for failing to pay a judgment entered in May 2001.

A key factor in the denial was the applicant's false sworn statement, dated July 24, 2002, in which he claimed to be making payments on his Chapter 13 plan. This deliberate falsification, which violated 18 U.S.C. § 1001, demonstrated a lack of trustworthiness and reliability, leading to the ultimate denial of his security clearance.

Why the Applicant Was Denied

The applicant failed to make required payments under a Chapter 13 bankruptcy plan, leading to its dismissal.
The applicant deliberately falsified a sworn statement regarding his bankruptcy payments to a Defense Security Service agent.
The applicant's financial irresponsibility and dishonesty raised significant security concerns.

Conditions Referenced

Disqualifying

E2.A6.1.2.1raisedFinancial Considerations
E2.A5.1.1raisedPersonal Conduct
E2.A10.1.1raisedCriminal Conduct

Mitigating

E2.A5.1.2.5rejectedPersonal ConductAlthough the applicant expressed remorse and claimed he would not compromise national security, the judge found the falsification of the statement too serious to mitigate.
E2.A10.1.3.2rejectedCriminal ConductThe judge acknowledged the criminal act as an isolated incident but still found it disqualifying.

Key Rule Quoted

“"No one has a 'right' to a security clearance."”
— Department of the Navy v. Egan, 484 U.S. 518, 528 (1988)

Procedural Posture

SOR issuedApr 16, 2003
Answer filedMay 3, 2003
Hearing heldOct 28, 2003
Decision dateNov 18, 2003

Cite For

Denial of Security Clearance Due to Financial Irresponsibility Under Guideline F
Disqualification Based on Deliberate Falsification of Information Under Guideline E
Impact of Criminal Conduct on Security Clearance Eligibility Under Guideline J

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 the personal conduct allegation under Guideline E. The applicant deliberately falsified a sworn statement regarding his financial obligations, which raised significant security concerns. As a result, the applicant's request for a security clearance was denied.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
2.a	Applicant falsified material facts in a sworn statement, dated 24 July 2002, by claiming he was making payments on his Chapter 13 wage-earner's plan.	Against Applicant	Lack of Candor in InterviewFOUND DELIBERATE	Financial	Admitted	(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.

Standardized Decision Profile

SEAD-4 Guideline F · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The judge found multiple financial concerns under Guideline F, including a history of bankruptcy and failure to meet financial obligations. The applicant's lack of effort to address his debts and a false statement regarding his financial situation led to a denial of his security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant received a discharge in bankruptcy in February 1988	Against Applicant	Bankruptcy Filing	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.b	Applicant entered a wage-earner's payment plan under Chapter 13 bankruptcy in January 2002	Against Applicant	Unspecified Financial	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.c	Applicant had his wage-earner's payment plan dismissed in March 2002 for failing to make payments	Against Applicant	Unspecified Financial	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.d	Applicant had his wages garnished for failing to pay a judgment entered in May 2001	Against Applicant	Judgment Against Applicant	Admitted	(b) unwillingness to satisfy debts regardless of ability (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.

Standardized Decision Profile

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

Posture: Decision on RecordDecided: denied

The judge found against the applicant on the criminal conduct allegation, determining that the applicant had deliberately falsified a sworn statement to a Defense Security Service agent regarding his bankruptcy payments. This conduct raised significant concerns about the applicant's judgment and trustworthiness, leading to the denial of the security clearance.

¶	Allegation	Finding	Offense	Criminal disposition	Response	Disqualifying (¶31)	Mitigating applied (¶32)	Mitigation
3.a	Applicant violated 18 U.S.C. § 1001 by making a false sworn statement as to the whether he was making payments on his Chapter 13 wage-earner's plan.	Against Applicant	Fraud or Deception Criminal	Conduct No Charge	Admitted	(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: November 18, 2003

In re:

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

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

Applicant for Security Clearance

ISCR Case No. 02-30603

DECISION OF ADMINISTRATIVE JUDGE

JAMES A. YOUNG

SYNOPSIS

Applicant, who had debts discharged in bankruptcy in 1988, filed a Chapter 13 repayment plan in 2001. The Chapter 13 was dismissed because Applicant failed to make the required payments. Applicant deliberately falsified a signed, sworn statement made to a Defense Security Service agent after the dismissal, by claiming he was making his Chapter 13 payments. Clearance is denied.

STATEMENT OF CASE

The Defense Office of Hearings and Appeals (DOHA) declined to grant or continue a security clearance for Applicant. On 16 April 2003, DOHA issued a Statement of Reasons (SOR), under the applicable Executive Order (1) and Department of Defense Directive, (2) detailing the basis for its decision-security concerns raised under Guideline F (Financial Considerations), Guideline E (Personal Conduct), and Guideline J (Criminal Conduct) of the Directive. Applicant answered the SOR in writing on 3 May 2003 and elected to have a hearing before an administrative judge. The case was assigned to me on 10 September 2003. On 28 October 2003, 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 transcript (Tr.) of the proceeding on 4 November 2003. I left the record open for 15 days so Applicant could submit additional evidence concerning his financial situation. Without objection from department counsel, I admitted Ex. A which was submitted within the 15-day period.

FINDINGS OF FACT

Applicant is 58 years old. In 1990, he retired from the U.S. Navy after 25 years of service. He has worked for his current employer since 1997.

In 1987, while he was still in the Navy, Applicant filed for bankruptcy under Chapter 7. His debts were discharged in February 1988, and he made a fresh financial start. In August 2001, Applicant filed a Chapter 13 bankruptcy, and the court set up a payment plan for his over $32,000 of debts. The plan called for Applicant to pay the trustee $802 a month for 48 months to pay off his creditors. The bankruptcy was dismissed in May and terminated in June 2002 because Applicant failed to make the payments to the trustee. As a result of the dismissal, Applicant was still responsible for paying off 15 debts totaling more than $17,500. Since the dismissal of the Chapter 13 bankruptcy Applicant paid one of the debts for approximately $350. In addition to the delinquent accounts, Applicant owes an additional $6,600 in credit card debt.

In February 2002, Applicant completed his security clearance application (SCA) in which he listed his Chapter 13 bankruptcy. A Defense Security Service agent interviewed Applicant about his financial situation on 24 July 2002. In a signed, sworn statement he gave to the agent, Applicant claimed he was making payments of $802 per month to the trustee, but that he had made partial payments on two occasions. He asserted the bankruptcy would be paid off in four years. Ex. 2 at 4. Applicant's personal financial statement, completed on 24 July 2002, alleged his monthly income exceeded his expenses, even after paying $802 to the trustee, by over $1,600. Ex. 2 at 3. Although Applicant appears to have sufficient resources to pay off at least some of these debts (Ex. 2 at 3), he made no effort to do so until the SOR was issued.

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 has restricted eligibility for access to classified information to United States citizens "whose personal and professional history affirmatively indicates loyalty to the United States, strength of character, trustworthiness, honesty, reliability, discretion, and sound judgment, as well as freedom from conflicting allegiances and potential for coercion, and willingness and ability to abide by regulations governing the use, handling, and protection of classified information." Exec. Or. 12968, Access to Classified Information § 3.1(b) (Aug. 4, 1995). Eligibility for a security clearance is predicated upon the applicant meeting the security guidelines contained in the Directive.

Enclosure 2 of the Directive sets forth personal 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 that the applicant has not met the strict guidelines the President and the Secretary of Defense have established for issuing a clearance.

Initially, the Government must establish, by substantial evidence, conditions in the personal or professional history of the applicant that disqualify, or may disqualify, the applicant from being eligible for access to classified information. See Egan, 484 U.S. at 531. The Directive presumes a nexus or rational connection between proven conduct under any of the disqualifying conditions listed in the guidelines and an applicant's security suitability. See ISCR Case No. 95-0611 at 2 (App. Bd. May 2, 1996).

Once the Government establishes a disqualifying condition by substantial evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the facts. ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002); see Directive ¶ E3.1.15. 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.

CONCLUSION

Guideline F-Financial Considerations

In the SOR, DOHA alleged Applicant received a discharge in bankruptcy in February 1988 (¶ 1.a.) entered a wage- earner's payment plan under Chapter 13 bankruptcy in January 2002 (¶ 1.b.), had his wage-earner's payment plan dismissed in March 2002 for failing to make payments (¶ 1.c.), and had his wages garnished for failing to pay a judgment entered in May 2001 (¶ 1.d.). An applicant who is financially overextended is at risk of having to engage in illegal acts to generate funds. Directive ¶ E2.A6.1.1.

Applicant has a history of not meeting his financial obligations. DC E2.A6.1.2.1. He was unable or unwilling to satisfy his debts. DC E2.A6.1.2.3. Applicant freely admits that he has paid only one of these delinquent debts. Even by the time of the hearing, Applicant had made no effort to pay off his delinquent debts even though his financial statement shows he is able to do so. See Ex. 2 at 3. Finding is against Applicant.

Guideline E-Personal Conduct

In the SOR, DOHA alleged Applicant falsified material facts in a sworn statement, dated 24 July 2002, by claiming he was making payments on his Chapter 13 wage-earner's plan. Conduct involving questionable judgment, lack of candor, or dishonesty could indicate that the person may not properly safeguard classified information. Directive ¶ E2.A5.1.1.

Applicant admits he deliberately lied in his statement to the DSS agent. His only explanation for his failure to tell the truth is "bad judgment." Deliberately providing false or misleading information concerning relevant and material matters to an investigator in connection with a personnel security determination is a condition that could raise a security concerns and may be disqualifying. DC E2.A5.1.2.3. Applicant expressed his remorse for his situation and vowed he would never sell his country out. By admitting deliberately lying in his statement, Applicant has eliminated his vulnerability to coercion, exploitation, or duress. MC E2.A5.1.2.5. However, Applicant did not just falsify a form. He deliberately lied when confronted by a DSS agent about the security concerns raised by his financial situation. Applicant can not be trusted to protect classified information. Finding is against Applicant.

Guideline J-Criminal Conduct

In the SOR, DOHA alleged Applicant violated 18 U.S.C. § 1001 by making a false sworn statement as to the whether he was making payments on his Chapter 13 wage-earner's plan. ¶ 3.a. A history or pattern of criminal activity creates doubt about an applicant's judgment, reliability, and trustworthiness. Directive ¶ E2.A10.1.1.

It is a criminal offense to knowingly and willfully make any materially false, fictitious, or fraudulent statement or representation in any matter within the executive branch of the Government of the United States. 18 U.S.C. § 1001. Security clearances are within the jurisdiction of the executive branch of the Government of the United States. See Egan, 484 U.S. at 527. Applicant deliberately falsified the signed, sworn statement he completed for a DSS agent for the purpose of obtaining a security clearance. An applicant may be disqualified if allegations of criminal conduct are raised against him. DC E2.A10.1.2.1. The criminal offense was an isolated incident. MC E2.A10.1.3.2. Nonetheless, after weighing the disqualifying and mitigating conditions, the finding is against Applicant.

FORMAL FINDINGS

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

Paragraph 1. Guideline F: AGAINST APPLICANT

Subparagraph 1.a.: Against Applicant

Subparagraph 1.b. Against Applicant

Subparagraph 1.c.: Against Applicant

Subparagraph 1.d. Against Applicant

Paragraph 2. Guideline E: AGAINST APPLICANT

Subparagraph 2.a.: Against Applicant

Paragraph 3. Guideline J: AGAINST APPLICANT Subparagraph 3.a.: Against Applicant

DECISION

In light of all of 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. Clearance is denied.

James A. Young

Administrative Judge

1. Exec. Or. 10865, Safeguarding Classified Information within Industry (Feb. 20, 1960), as amended and modified.

2. Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (Jan. 2, 1992), as amended and modified.

FOOTNOTES

02-30603.h1 FOR GOVERNMENT Marc Curry, Esq., Department Counsel FOR APPLICANT Pro Se file:///usr.osd.mil/...omputer/Desktop/DOHA%20transfer/DOHA-Kane/dodogc/doha/industrial/Archived%20-%20HTML/02-30603.h1.html[6/24/2021 11:16:22 AM] 02-30603.h1