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ISCR Case 03-10301.h1 — CASE

ISCR Case 03-10301.h1denied

Case Headnote

ISCR Case No. 03-10301.h1

deniedJun 22, 2005· Hon. Jacqueline T. Williams· hearing

Summary

A 55-year-old electrical lab mechanic was denied a security clearance under Guideline F (Financial Considerations) due to significant unmitigated financial concerns. Between 1997 and 1999, the applicant incurred approximately $22,681 in delinquent debts, which remain unpaid. These debts included $459 owed to a bank, $1,131 and $14,021 turned over for collection, and a $7,079 past due debt.

Despite filing for Chapter 13 bankruptcy, the applicant failed to demonstrate sufficient mitigation of these financial obligations. Key reasons for the denial included the outstanding nature of the $22,681 in delinquent debts, a negative monthly income net remainder of approximately $900, and the applicant's inability to provide a clear bankruptcy payment plan or evidence of debt resolution.

The decision highlighted the applicant's ongoing financial difficulties and the lack of a credible plan to address them, leading to the denial of the security clearance.

Why the Applicant Was Denied

Applicant has significant delinquent debts totaling approximately $22,681 that remain outstanding.
Applicant has a negative monthly income net remainder of approximately $900.
Applicant failed to provide a clear bankruptcy payment plan or evidence of debt resolution.

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 underlying financial situation is the basis for denials; bankruptcies are merely evidence of how an applicant's financial situation has changed, or not, as a result of exercising this option.”

Procedural Posture

SOR issuedSep 21, 2004
Answer filedOct 14, 2004Applicant requested a decision without a hearing.
Hearing held—
Decision dateJun 22, 2005

Cite For

Denial Based on Significant Delinquent Debts Under Guideline F
Failure to Mitigate Financial Obligations
Impact of Bankruptcy on Security Clearance Eligibility

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 applicant incurred significant delinquent debts totaling approximately $22,681, which remain outstanding. Despite filing for Chapter 13 bankruptcy, the judge found that the applicant failed to mitigate the financial concerns, leading to a denial of the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	$459 to a bank $459	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.b	$1,131 turned over for collection $1,131	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.c	$14,021 turned over for collection $14,021	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.d	$7,079 past due debt $7,079	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.e–1.f	2 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, 2005

In re: -------------------- SSN: ----------- Applicant for Security Clearance

ISCR Case No. 03-10301 DECISION OF ADMINISTRATIVE JUDGE JACQUELINE T. WILLIAMS

SYNOPSIS Between 1997 and 1999, Applicant incurred debts totaling approximately $22,681. These delinquent debts are still outstanding. Along with these outstanding debts, he has a negative monthly income net remainder of approximately $900. On or about June 1, 2004, he filed for Chapter 13 bankruptcy. Applicant has failed to successfully mitigate the security concern stemming from his history of not meeting financial obligations. Clearance is denied.

STATEMENT OF CASE

The Defense Office of Hearings and Appeals (DOHA) declined to grant or continue a security clearance for Applicant under Executive Order 10865, Safeguarding Classified Information Within Industry (Feb. 20, 1960), as amended and modified, and Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (Jan. 2, 1992), as amended and modified (the "Directive"). On September 21, 2004, DOHA issued a Statement of Reasons (SOR) detailing the basis for its decision: security concerns under Guideline F (Financial Considerations). Applicant answered the SOR on October 14, 2004 and requested a decision without a hearing. Department Counsel submitted the government's written case on January 20, 2005. Department Counsel provided a complete copy of the file of relevant material (FORM) to Applicant, along with notice of his opportunity to file objections and submit material to refute, extenuate, or mitigate the allegations. Applicant received the FORM on February 22, 2005. He responded to the FORM on March 7, 2005. The case was assigned to me on March 16, 2005.

FINDINGS OF FACT

Applicant admitted all of the allegations contained in the SOR. Those admissions are incorporated herein as findings of fact, and I make the following additional findings of fact: Applicant is a 55-year-old electrical lab mechanic for a federal contractor. He has been in that position since 1985 and has had security clearances in the past. Applicant served 10 years in the Army. He is divorced and has one child. During the period between 1997 and 1999, Applicant incurred debts totaling approximately $22,681. The following delinquent debts are still outstanding: $459 to a bank; $1,131 turned over for collection; $14,021 turned over for collection; $7,079 past due debt. He has a negative monthly income net remainder of approximately $900. On or about June 1, 2004, he filed for Chapter 13 bankruptcy. Applicant indicates he had no knowledge of the existence of the outstanding debts on his credit report. He states that his ex-wife incurred these debts without his knowledge while they were separated in 1994; they were divorced in November 2001. Although Applicant filed a Chapter 13 bankruptcy, the record does not specify what the payment plan will be. Applicant submitted a Verification of Mailing List from the bankruptcy court but this seven-page document lists names and addresses of company's with no explanation as to who they are or what, if anything, he owes each of them.

POLICIES

Enclosure 2 of the Directive sets forth adjudicative guidelines to be considered in evaluating a person's eligibility to hold a security clearance. Included in the guidelines are disqualifying conditions (DC) and mitigating conditions (MC) applicable to each specific guideline. Considering the evidence as a whole, Guideline F, pertaining to financial consideration, with its respective DC and MC, applies in this case. Additionally, each security clearance decision must be a fair and impartial commonsense decision based on the relevant and material facts and circumstances, the whole- person concept, along with the factors listed in the Directive. Specifically, these are: (1) the nature and seriousness of the conduct and surrounding circumstances; (2) the frequency and recency of the conduct; (3) the age of the applicant; (4) the motivation of the applicant, and the extent to which the conduct was negligent, willful, voluntary, or undertaken with knowledge of the consequences; (5) the absence or presence of rehabilitation, and (6) the probability that the circumstances or conduct will continue or recur in the future. Although the presence or absence of a particular condition or factor for or against clearance is not outcome determinative, the adjudicative guidelines should be followed whenever a case can be measured against this policy guidance. The sole purpose of a security clearance decision is to decide if it is clearly consistent with the national interest to grant or continue a security clearance for an applicant. (1) The government has the burden of proving controverted facts. (2) The burden of proof in a security clearance case is less than a preponderance of the evidence. (3) Once the government has met its burden, the burden shifts to an applicant to present evidence of refutation, extenuation, or mitigation sufficient to overcome the case against him. (4) Additionally, an applicant has the ultimate burden of persuasion to obtain a favorable clearance decision. (5)

No one has a right to a security clearance (6) and "the clearly consistent standard indicates that security clearance determinations should err, if they must, on the side of denials." (7) Any reasonable doubt about whether an applicant should be allowed access to sensitive information must be resolved in favor of protecting such sensitive information. (8) The decision to deny an individual a security clearance is not necessarily a determination as to the loyalty of an applicant. (9) 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. Based upon consideration of all the evidence, I find the following adjudicative guideline most pertinent to the evaluation of the facts in this case: Guideline F - Financial Considerations: a security concern exists when a person has significant delinquent debts. 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. Conditions that could raise a security concern and may be disqualifying, as well as those which would mitigate security concerns, pertaining to the adjudicative guidelines are set forth and discussed in the conclusions below.

CONCLUSION

I have carefully considered all the facts in evidence and the legal standards. The government has established a case for disqualification under Guideline F. Based on all the evidence as a whole, Financial Considerations Disqualifying Conditions (FC DC) E2.A6.1.2.1 (a history of not meeting financial obligations) and FC DC E2.A6.1.2.3 (inability or unwillingness to satisfy debts), apply in this case. Applicant accumulated significant delinquent debt totaling approximately $22,681. He has a negative monthly net balance of about $900. Applicant filed the Chapter 13 bankruptcy to give himself some breathing room, but I do not know what the bankruptcy payment plan is and if all of the debts in the SOR were paid. Regardless, applicants are not denied security clearances because they file for bankruptcy. It is the underlying financial situation that is the basis for denials. The bankruptcies are merely evidence of how Applicant's financial situation has changed, or not, as a result of his exercise of this option. (10)

None of the Financial Considerations Mitigating Conditions, I am unable to conclude that these debts were incurred due to the marital separation of Applicant and his wife. I have considered all the evidence in this case. I have also considered the "whole person" concept in evaluating Applicant's risk and vulnerability in protecting our national interests. I am also persuaded by the totality of the evidence in this case that Applicant should not have a security clearance. Applicant has not mitigated the security concerns caused by his financial considerations. Accordingly, subparagraphs 1.a through 1.fof the SOR are decided against Applicant.

FORMAL FINDINGS

Formal Findings for or against Applicant on the allegations set forth in the SOR, as required by Section E3.1.25 of Enclosure 3 of the Directive, are: Paragraph 1., Financial Considerations (Guideline F) AGAINST THE APPLICANT Subparagraph 1.a Against the Applicant Subparagraph 1.b Against the Applicant Subparagraph 1.c Against the Applicant Subparagraph 1.d Against the Applicant Subparagraph 1.e Against the Applicant Subparagraph 1.f Against the 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. Jacqueline T. Williams Administrative Judge 1. ISCR Case No. 96-0277 (July 11, 1997) at 2. 2. ISCR Case No. 97-0016 (December 31, 1997) at 3; Directive, Enclosure 3, ¶ E3.1.14. 3. Dep't of Navy v. Egan, 484 U.S. 518, 531 (1988). 4. ISCR Case No. 94-1075 (August 10, 1995) at 3-4; Directive, Enclosure 3, ¶ E3.1.15. 5. ISCR Case No. 93-1390 (January 27, 1995) at 7-8; Directive, Enclosure 3, ¶ E3.1.15. 6. Egan, 484 U.S. at 531. 7. Id. 8. Id.; Directive, Enclosure 2, ¶ E2.2.2. 9. Executive Order 10865 § 7. 10. See ISCR Case No. 97-0016, 1997 DOHA LEXIS 885 at **10-11 (App. Bd. Dec. 31, 1997).

FOOTNOTES

03-10301.h1 FOR GOVERNMENT Robert E. Coacher, Esq., Department Counsel FOR APPLICANT Pro Se file:///usr.osd.mil/...Computer/Desktop/DOHA%20transfer/DOHA-Kane/dodogc/doha/industrial/Archived%20-%20HTML/03-10301.h1.html[6/24/2021 3:17:26 PM] 03-10301.h1