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ISCR 04-03907.h1: Guideline F security clearance hearing, denied (2006) · CASE

ISCR Case 04-03907.h1denied

Case headnote

ISCR Case No. 04-03907.h1

deniedMar 31, 2006· Hon. James A. Young· hearing

Summary

A 42-year-old self-employed subcontractor was denied a security clearance under Guideline F, Financial Considerations, due to significant unresolved financial issues. The Statement of Reasons detailed two judgments against her totaling over $9,000, a state tax lien exceeding $2,800, and multiple charged-off accounts amounting to more than $17,600. Additionally, accounts placed for collection totaled $2,692.

Disqualifying conditions related to financial irresponsibility and a history of not meeting financial obligations were raised. While mitigating conditions concerning the circumstances surrounding the debt, such as the applicant's husband's alcoholism and the challenges of raising special needs children, were considered, they were not sufficient to overcome the concerns.

The denial was ultimately based on the applicant's failure to demonstrate good-faith efforts to resolve her debts. No payments had been made on any of the delinquent accounts, and she had not initiated a plan to repay her overdue creditors.

Why the applicant was denied

Applicant has two judgments totaling over $9,000 and a state tax lien for over $2,800.
Applicant has charged-off accounts totaling more than $17,600 and accounts placed for collection amounting to $2,692.
No payments have been made on any of her delinquent debts, and she has not initiated a good-faith effort to repay overdue creditors.

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.A6.1.3.3raisedFinancial Considerations - Financial Situation Resulted From Conditions Largely Beyond Control
E2.A6.1.3.4rejectedFinancial Considerations - Received Counseling and the Problem Is Being Resolved or Under ControlAlthough the applicant consulted a CPA, no payment plans were established or payments made.
E2.A6.1.3.6rejectedFinancial Considerations - Initiated Good-faith Effort to Repay Overdue CreditorsThe applicant did not demonstrate any good-faith efforts to resolve her 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 issuedSep 27, 2005
Answer filedNov 1, 2005
Hearing heldFeb 23, 2006
Decision dateMar 31, 2006

Cite for

Financial Obligations Under Guideline F
Good-faith Efforts to Resolve Debts
Impact of Personal Circumstances on Financial Stability

Editorial summary generated for research. Not legal advice; not a prediction. Verify against the full decision before relying on any quoted language.

From the decision

Facts this decision states, each with the exact sentence it comes from. Descriptive of the record, not an assessment.

Age at decision: 42: “Applicant is a 42-year-old self-employed subcontractor for defense contractors.”
Clearance at issue: Secret: “has held a secret security clearance since 1994.”
Held a clearance before: Yes: “has held a secret security clearance since 1994.”
Delinquent debt cited: $17,600 (on a payment plan): “Applicant has two judgments against her totaling more than $9,000 (¶ 1.a-1.b), a state tax lien for more than $2,800 (¶ 1.c), accounts placed for collection in the amount of $2,692 (¶¶ 1.d-1.f), and charged off accounts totaling more than $17,600 (¶¶ 1.g-1.i, 1.k-1.m).”

Standardized Decision Profile

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

Posture: Decision on RecordDecided: denied

The judge found multiple financial concerns against the applicant, including two judgments totaling over $9,000, a state tax lien exceeding $2,800, accounts placed for collection amounting to $2,692, and charged off accounts totaling more than $17,600. Despite some financial difficulties being attributed to circumstances beyond her control, the applicant failed to demonstrate good-faith efforts to resolve her debts, leading to a denial of her security clearance.

The sub-allegation breakdown is part of the Professional plan. See what it includes.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation

Descriptive standardized rendering of a decided public case. 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 two judgments against her totaling more than $9,000, a state tax lien for more than $2,800, accounts placed for collection in the amount of $2,692, and charged off accounts totaling more than $17,600. Although some of the delinquent debts may be attributable to conditions that were largely beyond her control, she failed to demonstrate that she is making good-faith efforts to resolve the debts. Clearance is denied.

CASENO: 04-03907.h1

DATE: 03/31/2006

DATE: March 31, 2006

In re:

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

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

Applicant for Security Clearance

ISCR Case No. 04-03907

DECISION OF ADMINISTRATIVE JUDGE

JAMES A. YOUNG SYNOPSIS

Applicant has two judgments against her totaling more than $9,000, a state tax lien for more than $2,800, accounts placed for collection in the amount of $2,692, and charged off accounts totaling more than $17,600. Although some of the delinquent debts may be attributable to conditions that were largely beyond her control, she failed to demonstrate that she is making good-faith efforts to resolve the debts. Clearance is denied.

STATEMENT OF CASE

The Defense Office of Hearings and Appeals (DOHA) declined to grant or continue a security clearance for Applicant. In accordance with Department of Defense Directive 5220.6 ¶ E3.1.2 (Jan 2. 1992), as amended, DOHA issued a Statement of Reasons (SOR) on 27 September 2005 detailing the basis for its decision-security concerns raised under Guideline F (Financial Considerations) of the Directive. Applicant answered the SOR in writing on 1 November 2005 and elected to have a hearing before an administrative judge. The case was assigned to me on 29 November 2005. On 23 February 2006, 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 6 March 2006. I kept the record open until 9 March 2006 so Applicant could photocopy her pay stubs (Ex. C) for the record.

FINDINGS OF FACT

Applicant is a 42-year-old self-employed subcontractor for defense contractors. She has been in the military environment all her life. Her father retired from the military and became a government contractor. Her mother is a federal civil servant and her brother is a member of the U.S. Air Force Reserve. Applicant has been involved with the government contracting process since 1980 and has held a secret security clearance since 1994.

Applicant admits being in a bad financial situation for the past 10-15 years. She is married and has two special needs children. Her husband is a recovering alcoholic who has been sober for two years. Before his recovery, he took money from his wife's account and spent it without notifying her. In 2002, she established her own business. He has degenerative arthritis and has not worked in almost three years.

She was awarded a subcontract from a defense contractor in November 2004. Her monthly gross is now $12-18,000. She pays herself about $5,000 a month to pay her living expenses.

Applicant has two judgments against her totaling more than $9,000 (¶ 1.a-1.b), a state tax lien for more than $2,800 (¶ 1.c), accounts placed for collection in the amount of $2,692 (¶¶ 1.d-1.f), and charged off accounts totaling more than $17,600 (¶¶ 1.g-1.i, 1.k-1.m). Her monthly income now exceeds her monthly expenses. Applicant has consulted with a certified public accountant for more than two years. He is going to help her set up a payment plan to resolve her debts. No payments have been made on any of her delinquent debts. She does not want to make settlement arrangements on her delinquent accounts because she believes it could affect her security clearance and her future credit status. At the present time, she does not have any credit cards. If she loses her security clearance, it will greatly affect her family's financial health and her ability to pay her delinquent debts.

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 two judgments totaling more than $9,000 (¶ 1.a-1.b), a state tax lien for more than $2,800 (¶ 1.c), accounts placed for collection in the amount of $2,692 (¶¶ 1.d-1.f), charged off accounts totaling more than $17,600 (¶¶ 1.g-1.i, 1.k-1.m), and her monthly expenses exceed her monthly income by more than $3,500 (¶ 1.n). In her answer, Applicant admitted each of the allegations. 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 by substantial evidence each of the allegations in the SOR, except ¶ 1.n. Applicant has a history of not meeting her financial obligations (DC E2.A6.1.2.1.) and is unable or unwilling to satisfy her debts (DC E2.A6.1.2.3.). An applicant may mitigate financial considerations security concerns by establishing that her financial situation resulted from conditions that were largely beyond her control (MC E2.A6.1.3.3); she received counseling and the problem is being resolved or is under control (MC E2.A6.1.3.4); or she initiated a good-faith effort to repay overdue creditors or otherwise resolve her debts (MC E2.A6.1.3.6).

Some of Applicant's financial problems are directly attributable to her husband's alcoholism and his withdrawing money from her account without notifying her. And, although she did not establish any direct correlation to her debts, I have considered the special costs often associated with raising special needs children. At the same time, Applicant must bear some responsibility for not closing out those accounts her husband was abusing. Some of her delinquent debts are as low as $40, $52, and $56, but Applicant has neither paid them nor contacted the creditors. Although her CPA acknowledges he is in the process of making payment plans with the creditors on her personal accounts, no payments have been made and no plans established. After considering all of the evidence, the disqualifying and mitigating conditions, as well as the adjudicative process factors, I find against Applicant. She has not demonstrated she is on the road to satisfying her delinquent debts. Applicant did establish that she is now making considerably more each month than she spends. I find for Applicant on ¶ 1.n.

FORMAL FINDINGS

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

Paragraph 1. Guideline F: AGAINST APPLICANT

Subparagraph 1.a-1.m: Against Applicant

Subparagraph 1.n: 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

FOOTNOTES

APPEARANCES

FOR GOVERNMENT file:///usr.osd.mil/...yComputer/Desktop/DOHA%20transfer/DOHA-Kane/dodogc/doha/industrial/Archived%20-%20HTML/04-03907.h1.htm[7/2/2021 3:28:09 PM] Ray T. Blank Jr., Esq., Department Counsel FOR APPLICANT Pro Se