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ISCR Case 03-15479.h1 — CASE

ISCR Case 03-15479.h1denied

Case Headnote

ISCR Case No. 03-15479.h1

deniedAug 6, 2004· Hon. Charles D. Ablard· hearing

Summary

A 29-year-old defense contractor employee was denied a security clearance due to concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The applicant had accumulated over $3,500.00 in delinquent debts following a 1997 bankruptcy and failed to fully disclose these obligations on her security clearance application (SF 86), submitted in May 2002. While she reported her two largest debts, she omitted others, including those over 90 days delinquent.

Although the applicant began making monthly payments on her largest debt in January 2004, other smaller debts remained unpaid. She had previously been dropped from a consumer credit counseling service for failing to make payments. While one debt cited in the Statement of Reasons was found to be due to identity theft, and her supervisors highly regarded her integrity and work ethic, these factors were insufficient to mitigate the concerns.

The judge found that the applicant's omissions on her SF 86 were not deliberate falsification, but her explanation for these omissions was not credible. Ultimately, the clearance was DENIED due to insufficient efforts to resolve her financial obligations and the incomplete disclosure of her debts.

Why the Applicant Was Denied

Applicant incurred over $3,500.00 in delinquent debts after a bankruptcy and failed to disclose all debts on her SF 86.
Only one of the delinquent debts was being paid, and other debts remained unpaid.
The applicant's explanation for omissions on her application was not credible, despite not being deemed deliberate falsification.

Conditions Referenced

Disqualifying

E2.A5.1.1raisedQuestionable Judgment, Unreliability, and Unwillingness to Comply with Rules and Regulations
E2.A6.1.2.1raisedHistory of Not Meeting Financial Obligations
E2.A6.1.2.3raisedEvidence of Inability or Unwillingness to Satisfy Debts

Mitigating

E2.A6.1.3.6rejectedGood Faith Effort to Repay Overdue Creditors or Resolve DebtsApplicant's efforts were insufficient and not undertaken early enough.

Key Rule Quoted

“"[N]o one has a 'right' to a security clearance."”
— Department of the Navy v. Egan, 484 U.S. 518, 528 (1988)

Procedural Posture

SOR issuedNov 10, 2003
Answer filedDec 8, 2003Applicant requested a hearing.
Hearing heldMay 27, 2004
Decision dateAug 6, 2004

Cite For

Denial of Clearance Due to Financial Irresponsibility Under Guideline F
Failure to Disclose Debts on Security Clearance Application Under Guideline E
Insufficient Mitigation of Financial Issues Despite Some Efforts to Repay Debts

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 that the applicant did not deliberately falsify information on her security clearance application regarding delinquent debts. The applicant was credited for providing information on the two largest debts, and the omissions were not deemed intentional. The overall finding under Guideline E was for the applicant, indicating that the personal conduct concerns were mitigated.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
2.a–2.b	2 sub-charges — specific text not stated in this decision (for the applicant).	For Applicant		—		—	—	—

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 applicant faced multiple financial concerns under Guideline F, including over $3,500 in delinquent debts following a bankruptcy. The judge found that while one debt was mitigated due to identity theft, the majority of the debts were not satisfactorily addressed, leading to a denial of the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	incurred over $3,500.00 in delinquent debts $3,500	Against Applicant	Unspecified Financial	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.b	failed to fully answer questions relating to the debts on her application for a security clearance (SF 86)	Against Applicant	Unspecified Financial	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.c	the largest delinquent debt is being paid in monthly payments that began only in January 2004	Against Applicant	Unspecified Financial	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.d	other small debts have not been paid	Against Applicant	Unspecified Financial	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.e	Applicant provided information on the largest two debts on her SF 86 and the omission of the others was not deliberate	Against Applicant	Unspecified Financial	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.f	one debt cited on the SOR (Par. 1.f.) was in error because of identity theft	For Applicant	Unspecified Financial	Admitted	—	(e) reasonable, documented basis to dispute the debt	—
1.g	Applicant had been enrolled in a consumer credit counseling service but was dropped from the program for failure 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.h	Applicant failed to report all delinquent debts at on her security clearance application (SF 86) when she submitted it in May 2002	Against Applicant	Unspecified Financial	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.i	She did report the two largest debts on Question 38 relating to debts that were 180 days delinquent but none on Question 39 relating to 90 day delinquencies	Against Applicant	Unspecified Financial	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.j	Applicant is highly regarded by her supervisors for her integrity, dependability, and work ethic	Against Applicant	Unspecified Financial	Admitted	—	—	—

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; Personal Conduct

DIGEST: Applicant is a 29-year-old employee of a defense contractor who, after a 1997 bankruptcy, incurred over $3,500.00 in delinquent debts and failed to fully answer questions relating to the debts on her application for a security clearance (SF 86). While the largest delinquent debt is being paid in monthly payments that began only in January 2004, other small debts have not been paid. Applicant provided information on the largest two debts on her SF 86 and the omission of the others was not deliberate. Clearance is denied.

CASENO: 03-15479.h1

DATE: 08/06/2004

DATE: August 6, 2004

In Re:

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

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

Applicant for Security Clearance

ISCR Case No. 03-15479

DECISION OF ADMINISTRATIVE JUDGE

CHARLES D. ABLARD

APPEARANCES

SYNOPSIS

Applicant is a 29-year-old employee of a defense contractor who, after a 1997 bankruptcy, incurred over $3,500.00 in delinquent debts and failed to fully answer questions relating to the debts on her application for a security clearance (SF 86). While the largest delinquent debt is being paid in monthly payments that began only in January 2004, other small debts have not been paid. Applicant provided information on the largest two debts on her SF 86 and the omission of the others was not deliberate. Clearance is denied.

STATEMENT OF CASE

On November 10, 2003, the Defense Office of Hearings and Appeals (DOHA) pursuant to Executive Order 10865, Safeguarding Classified Information Within Industry, as amended and modified, and Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (Directive), dated January 2, 1992, as amended and modified, issued a Statement of Reasons (SOR) to Applicant which detailed reasons why DOHA could not make the preliminary affirmative finding under the Directive that it is clearly consistent with the national interest to grant or continue a security clearance for Applicant. DOHA recommended the case be referred to an administrative judge to determine whether a clearance should be granted, continued, denied, or revoked.

On December 8, 2003, Applicant, in a sworn written statement, responded to the allegations set forth in the SOR, and requested a hearing. The matter was assigned to me on May 3, 2004. A notice of hearing was issued on May 10, 2004, and a hearing was held on May 27, 2004. The Government introduced seven exhibits and the Applicant introduced six exhibits in addition to the one exhibit attached to her answer. One post-hearing exhibit was offered. All exhibits were admitted into evidence. The Applicant testified. The transcript was received on June 4, 2004.

FINDINGS OF FACT

Applicant is a 29-year-old employee of a defense contractor who admitted all but one of the specific allegations in the SOR relating to debt and denied those relating to falsification on her application for a security clearance (SF 86). She disagreed with all of the conclusions reached in the SOR based on the allegations.

After a complete review of the evidence in the record and upon due consideration of the record, the following additional findings of fact are made:

Applicant petitioned for Chapter 7 bankruptcy in 1997 because of extensive medical bills as a result of an automobile accident. Her non-secured debts of $20,000.00 were discharged that year.

Since the bankruptcy Applicant has incurred over $3,500.00 in debts ranging in amount from $25 to over $2,000. At the time of the hearing only the largest debt was being paid by five payments of $150.00 each since January 2004. One debt cited on the SOR (Par. 1.f.) was in error because of identity theft (Exh. A). An automobile was paid off in February 2004 but it was not the subject of a debt in the hearing.

Applicant had been enrolled in a consumer credit counseling service but was dropped from the program for failure to make payments.

Applicant failed to report all delinquent debts at on her security clearance application (SF 86) when she submitted it in May 2002. She did report the two largest debts on Question 38 relating to debts that were 180 days delinquent but none on Question 39 relating to 90 day delinquencies.

Applicant is highly regarded by her supervisors for her integrity, dependability, and work ethic (Exh. C-G).

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.

An evaluation of whether the applicant meets the security guidelines includes consideration of the following factors: (1) the nature, extent, and seriousness of the conduct; (2) the circumstances surrounding the conduct; (3) the frequency and recency of the conduct; (4) the individual's age and maturity at the time of the conduct; (5) the voluntariness of participation; (6) the presence or absence of rehabilitation and other behavioral changes; (7) the motivation for the conduct; (8) the potential for pressure, coercion, exploitation, or duress; and (9) the likelihood of continuation or recurrence. Directive, ¶ E2.2.1. Security clearances are granted only when "it is clearly consistent with the national interest to do so." Executive Order No. 10865 § 2. See Executive Order No. 12968 § 3.1(b).

Initially, the Government must establish, by something less than a preponderance of the evidence, that conditions exist in the personal or professional history of the applicant which disqualify, or may disqualify, the applicant from being eligible for access to classified information See Egan, 484 U.S. at 531. The applicant then bears the burden of demonstrating that it is clearly consistent with the national interest to grant or continue the applicant's clearance. "Any doubt as to whether access to classified information is clearly consistent with national security will be resolved in favor of the national security." Directive, ¶ E2.2.2. "[S]ecurity clearance determinations should err, if they must, on the side of denials." Egan, 484 U.S. at 531. See Executive Order No. 12968 § 3.1(b)

CONCLUSION

Applicant's extensive delinquent debts prompted the allegation of violation of Guideline F in that an individual who is financially overextended is at risk of having to engage in illegal acts to generate funds. (E2.A6.1.1.) Conditions that could raise a security concern and may be disqualifying include a history of not meeting financial obligations (E2.A6.1.2.1.) and evidence of inability or unwillingness to satisfy debts. (E2.A6.1.2.3.) Mitigating Conditions (MC) include the fact that the person has initiated a good faith effort to repay overdue creditors or otherwise resolve debts. (E2.A6.1.3.6.) Applicant has not successfully mitigated this issue.

Applicant's inability or unwillingness to completely satisfy even the smallest of the delinquent debts shows a disregard of her financial obligations. Her answer to the SOR indicated that she would contact the creditors but at the hearing six months later she acknowledged that such had not been done. She started payments to the largest creditor, and the only one to be paid, just one month after her answer was filed. Evidence showed that one debt was erroneous because of a documented identify theft.

While Applicant is a trusted and valuable employee, she has not shown the proper response for resolution of her financial obligations. Having once undertaken bankruptcy for good reason, she was obliged to fulfill her financial responsibilities thereafter. She has failed to do so.

Also alleged is Applicant's failure to report certain of the offenses under Guideline E that might indicate questionable judgment, unreliability, and unwillingness to comply with rules and regulations and could indicate that the person may not properly safeguard classified information (E2.A5.1.1.). Specifically, the deliberate omission, concealment, or falsification of relevant and material facts from a personnel security application could raise a security concern and be disqualifying. (E2.A5.1.2.2.)

Her explanation for not answering correctly the questions about debts 90 and 180 days delinquent was that she thought the questions related to current bills. The explanation is not credible since she did list the two largest debts in answer to Question 38 constituting approximately 75% of her delinquent debts. While both questions clearly ask about delinquent debts, I believe that she did not deliberately falsify the information as required by the guideline.

In all adjudications the protection of our national security is of paramount concern. Persons who have access to classified information have an overriding responsibility for the security concerns of the nation. The objective of the security clearance process is the fair-minded, commonsense assessment of a person's trustworthiness and fitness for access to classified information.

The "whole person" concept recognizes that we should view a person by the totality of their acts and omissions. Each case must be judged on its own merits taking into consideration all relevant circumstances, and applying sound judgment, mature thinking, and careful analysis.

After considering all the evidence in its totality and as an integrated whole to focus on the whole person of Applicant, I conclude that while the Applicant has made some efforts to change her habits regarding her financial situation, it has not been sufficiently successful and was not undertaken early enough to justify granting a clearance. It is premature to grant her a clearance.

FORMAL FINDINGS

Formal findings as required by the Directive (Par. E3.1.25) are as follows:

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

Subparagraph 1.g.: Against Applicant

Subparagraph 1.h.: Against Applicant

Subparagraph 1.i.: Against Applicant

Subparagraph 1.j.: Against Applicant

Paragraph 2. Guideline E: FOR APPLICANT

Subparagraph 2.a.: For Applicant

Subparagraph 2.b.: For 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 renew a security clearance for Applicant. Clearance is denied.

Charles D. Ablard

Administrative Judge

FOOTNOTES

FOR GOVERNMENT Erin Hogan, Esq., Department Counsel file:///usr.osd.mil/...Computer/Desktop/DOHA%20transfer/DOHA-Kane/dodogc/doha/industrial/Archived%20-%20HTML/03-15479.h1.htm[6/24/2021 3:23:59 PM] FOR APPLICANT Pro Se