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ISCR Case 03-13152.h1 — CASE

ISCR Case 03-13152.h1denied

Case Headnote

ISCR Case No. 03-13152.h1

deniedFeb 17, 2005· Hon. James A. Young· hearing

Summary

A 45-year-old systems engineer was denied a security clearance under Guideline F (Financial Considerations) due to delinquent debts exceeding $27,000. The Statement of Reasons (SOR) detailed multiple financial issues, including two medical accounts totaling over $1,300 that were placed for collection. Additionally, four other accounts, totaling more than $26,000, were charged off as bad debts. One allegation in the SOR incorrectly identified the holder of a bad debt.

Disqualifying conditions E2.A6.1.2.1 and E2.A6.1.2.3 were raised, indicating a history of not meeting financial obligations and an inability or unwillingness to satisfy debts. While mitigating condition E2.A6.1.3.3 was applied, suggesting the applicant had initiated a good-faith effort to resolve the debts, this was ultimately insufficient.

The denial was based on the applicant's outstanding delinquent debts, his failure to provide documentation to support claims of having paid off some debts, and his stated intent to allow other debts to dissolve from his credit report rather than actively resolve them. This demonstrated a lack of good faith effort to address the financial concerns.

Why the Applicant Was Denied

Applicant has delinquent debts totaling more than $27,000.
He failed to provide documentation to support his claims of having paid off debts.
Applicant's intent to let debts dissolve rather than resolve them demonstrated a lack of good faith effort.

Conditions Referenced

Disqualifying

E2.A6.1.2.1appliedFinancial Considerations - History of Not Meeting Financial Obligations
E2.A6.1.2.3appliedFinancial Considerations - Unable or Unwilling to Satisfy Debts

Mitigating

E2.A6.1.3.3rejectedFinancial Considerations - Conditions Beyond the Applicant's ControlWhile the applicant's divorce contributed to his financial issues, he made no good faith effort to resolve his debts.

Key Rule Quoted

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

Procedural Posture

SOR issuedMay 27, 2004
Answer filedJun 29, 2004
Hearing held—Decided on written record.
Decision dateFeb 17, 2005

Cite For

Denial of Clearance Due to Significant Delinquent Debts Under Guideline F
Lack of Corroborating Evidence for Debt Payments
Failure to Demonstrate Good Faith Efforts to Resolve Financial Issues

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 has delinquent debts totaling more than $27,000, including two medical accounts and four charged-off accounts. The judge found against the applicant on five allegations related to financial considerations, citing a lack of effort to resolve the debts, while ruling in favor of the applicant on one allegation due to a misidentification of the creditor. Consequently, the applicant's security clearance was denied.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant had two medical accounts placed for collection totaling more than $1,300. $1,300	Against Applicant	Medical Debt	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.b	Applicant had two medical accounts placed for collection totaling more than $1,300. $1,300	Against Applicant	Medical Debt	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.c	Applicant had four other accounts totaling more than $26,000 that were charged off as bad debts. $26,000	Against Applicant	Unspecified Financial	Unknown	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.d	Applicant had four other accounts totaling more than $26,000 that were charged off as bad debts. $26,000	Against Applicant	Unspecified Financial	Unknown	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.e	Applicant had four other accounts totaling more than $26,000 that were charged off as bad debts. $26,000	Against Applicant	Unspecified Financial	Unknown	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.f	The SOR incorrectly identified the holder of the bad debt in ¶ 1.f. $5,110	For Applicant	Unspecified Financial	Unknown	—	—	—

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 has delinquent debts totaling more than $27,000. He asserts he paid two of the debts totaling about $1,300, but failed to produce any documents to corroborate this claim. Rather than resolve the remaining charged off accounts, Applicant intends to let them "dissolve" from his credit report. Applicant failed to mitigate security concerns raised by his financial situation. Clearance is denied.

CASENO: 03-13152.h1

DATE: 02/17/2005

DATE: February 17, 2005

In re:

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

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

Applicant for Security Clearance

ISCR Case No. 03-13152

DECISION OF ADMINISTRATIVE JUDGE

JAMES A. YOUNG SYNOPSIS

Applicant has delinquent debts totaling more than $27,000. He asserts he paid two of the debts totaling about $1,300, but failed to produce any documents to corroborate this claim. Rather than resolve the remaining charged off accounts, Applicant intends to let them "dissolve" from his credit report. Applicant failed to mitigate security concerns raised by his financial situation. 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 27 May 2004, DOHA issued a Statement of Reasons (1) (SOR) detailing the basis for its decision-security concerns raised under Guideline F (Financial Considerations) of the Directive. Applicant answered the SOR in writing on 29 June 2004 and elected to have the case decided on the written record in lieu of a hearing. Department Counsel submitted the Government's written case on 17 November 2004. A complete copy of the file of relevant material (FORM) was provided to Applicant, who was afforded an opportunity to file objections and submit material to refute, extenuate, or mitigate the disqualifying conditions. Applicant received the FORM on 24 November 2004, but did not responded. The case was assigned to me on 19 January 2005.

FINDINGS OF FACT

Applicant is a 45-year-old systems engineer for defense contractor. Item 4 at 1, 2. He divorced his first wife in August 1996. Id. at 4. He has since remarried. Id. at 3.

Applicant had two medical accounts placed for collection totaling more than $1,300. Applicant admitted these delinquent debts and claims he paid them. Item 3 at 1. He provided no evidence to corroborate that claim despite notification in the FORM that his failure to provide such documentation was a concern. FORM at 4.

Applicant had four other accounts totaling more than $26,000 that were charged off as bad debts. The SOR incorrectly identified the holder of the bad debt in ¶ 1.f. Applicant admitted he had delinquent accounts with the other four creditors, but he contests their current status. Most of the debts appear to have become delinquent around the time of his divorce. Applicant's intent was to "let the accounts dissolve from [his] credit report over time." Item 5 at 2. On 15 August 2002, Applicant provided a Defense Security Service agent with a personal financial statement that showed he had $812 a month after paying his monthly bills. Id. at 6. Applicant has no plans to resolve these debts, but claim he will pay if a court of law orders him to do so. Id. at 2; Item 3 at 1-2.

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 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. § 2. 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 that 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 six delinquent debts, two had been placed for collection (¶¶ 1.a, 1.b) totaling more than $1,300, and four that were charged off as bad debts (¶¶ 1.c-1f) totaling more than $26,000. An applicant who is financially overextended is at risk of having to engage in illegal acts to generate funds. Directive ¶ E2.A6.1.1.

The Government established each of the allegations in the SOR, except ¶ 1.f. The Applicant's credit report upon which the Government based the allegation in ¶ 1.fshows the debt of $5,110 is to a different creditor. From Applicant's answer, it appears he was misled about the nature of the debt. As Applicant was not properly notified of the allegation against which he had to defend, I find for him on ¶ 1.f.

Applicant has a history of not meeting his financial obligations (DC E2.A6.1.2.1) and is unable or unwilling to satisfy his debts (DC E2.A6.1.2.3). Most of these delinquent debts may have arisen, in large measure from conditions beyond his control-his 1996 divorce (see MC E2.A6.1.3.3), but he has made no good faith effort since then to resolve these debts despite having the financial assets to establish a payment plan. Instead, he intends to wait until the debts "dissolve" from his credit report. Under all the circumstances of this case, I find against Applicant on ¶¶ 1.a-1.e.

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

Subparagraph 1.e: Against Applicant

Subparagraph 1.f: For Applicant

DECISION

In light of all of the circumstances 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. Required by Exec. Or. 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 (Directive).

FOOTNOTES

APPEARANCES

FOR GOVERNMENT file:///usr.osd.mil/...Computer/Desktop/DOHA%20transfer/DOHA-Kane/dodogc/doha/industrial/Archived%20-%20HTML/03-13152.h1.htm[6/24/2021 3:22:05 PM] Jason Perry, Esq., Department Counsel FOR APPLICANT Pro Se