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ISCR Case 04-10381.h1 — CASE

ISCR Case 04-10381.h1denied

Case Headnote

ISCR Case No. 04-10381.h1

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

Summary

A 39-year-old secretary for a defense contractor was denied a security clearance under Guideline F, Financial Considerations. The denial stemmed from approximately $25,000 in delinquent debt, with some obligations dating back to 1996. Specific allegations included a $282 car rental debt charged off in 1996, an outstanding balance of $7,800 charged off in 1997, and other debts in collection status, one of which was offered to settle for $92.54. Additionally, a $368 debt was paid by the applicant, and a $755 debt was asserted as paid but lacked corroboration. Another debt was in collection status with an unspecified amount.

The judge identified disqualifying conditions related to a history of not meeting financial obligations and an inability or unwillingness to satisfy debts. While a mitigating condition was applied for the applicant's good-faith efforts to resolve some debts, it was insufficient to overcome the concerns.

The denial was ultimately based on the applicant's substantial delinquent debt, her lack of a personal budget, and her failure to enroll in credit counseling. These factors led to a finding that the applicant had not resolved her financial issues, raising significant concerns about her reliability and trustworthiness.

Why the Applicant Was Denied

Applicant has approximately $25,000 in delinquent debt, some dating back to 1996.
Applicant does not have a budget and is not enrolled in credit counseling.
Applicant has not resolved her debts, raising concerns about her reliability and trustworthiness.

Conditions Referenced

Disqualifying

E2.A6.1.2.1raisedHistory of Not Meeting Financial Obligations
E2.A6.1.2.3raisedInability or Unwillingness to Satisfy Debts

Mitigating

E2.A6.1.3.3appliedFinancial Situation Resulted From Conditions Largely Beyond ControlApplicant's divorce in 1995 affected her financial situation, but it was over 10 years ago.

Key Rule Quoted

“An applicant who is financially overextended is at risk of having to engage in illegal acts to generate funds.”
— Directive ¶ E2.A6.1.1.

Procedural Posture

SOR issuedJul 12, 2005
Answer filedJul 20, 2005
Hearing heldApr 25, 2006
Decision dateMay 31, 2006

Cite For

Financial Considerations Under Guideline F
Impact of Unresolved Debts on Security Clearance Eligibility
Mitigating Conditions Related to Financial Difficulties

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 approximately $25,000 in delinquent debt, with some debts dating back to 1996. The judge found that the applicant failed to demonstrate sufficient financial responsibility, leading to a denial of the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	$282 debt from a car rental company, charged off in 1996. $282	Against Applicant	Unspecified Financial	Denied	—	—	—
1.b	$7,800 outstanding balance charged off in 1997. $7,800	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.c	specific text not stated in this decision	Against Applicant	Unspecified Financial	Unknown	—	—	—
1.d	debt in collection status, offered to settle for $92.54. $92	Against Applicant	Unspecified Financial	Denied	—	—	—
1.e	$368 debt paid by applicant. $368	For Applicant	Unspecified Financial	Admitted	—	—	—
1.f	specific text not stated in this decision	Against Applicant	Unspecified Financial	Unknown	—	—	—
1.g	$755 debt, applicant asserts paid but provided no corroboration. $755	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.h–1.i	2 sub-charges — specific text not stated in this decision (against the applicant). (low confidence)	Against Applicant			—	—	—
1.j	debt in collection status, amount not specified. (low confidence)	Against Applicant	Unspecified Financial	Denied	—	—	—

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 approximately $25,000 in delinquent debt, some of which was charged off as far back as 1996. Applicant does not have a budget, is not enrolled in any credit counseling, and is not resolving her debts. Clearance is denied.

CASENO: 04-10381.h1

DATE: 05/31/2006

DATE: May 31, 2006

In re:

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

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

Applicant for Security Clearance

ISCR Case No. 04-10381

DECISION OF ADMINISTRATIVE JUDGE

JAMES A. YOUNG SYNOPSIS

Applicant has approximately $25,000 in delinquent debt, some of which was charged off as far back as 1996. Applicant does not have a budget, is not enrolled in any credit counseling, and is not resolving her 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. As required by Department of Defense Directive 5220.6 ¶ E3.1.2 (Jan. 2, 1960), as amended, DOHA issued a Statement of Reasons (SOR) on 12 July 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 20 July 2005 and elected to have a hearing before an administrative judge. The case was assigned to me on 14 February 2006. On 25 April 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 (R.) on 5 May 2006. I held the record open so that Applicant could make copies of original documents she needed for her personal files, but wanted to present as evidence. By letter dated 10 May 2006, she submitted nine documents, which are admitted into evidence as Exhibit A.

FINDINGS OF FACT

Applicant is a 39-year-old secretary for a defense contractor for which she has worked since 2002. Before that she had worked for a temporary employment agency. She has two daughters, 21 and 19 years old, who still live with her. She divorced her husband in 1995. She married another man in March 2004, but he never lived with her. She is getting ready to divorce him. R. 17-18. Applicant is attending college part-time, and expects to graduate in 2007. She is supporting her younger daughter who is a college student. She is providing financial assistance to her older daughter, who is also taking college courses part-time. R. 19.

DOHA alleged applicant had seven debts totaling more than $25,000 that had been charged off as bad debts (¶¶ 1.a-1.c, 1.f-1.i) and three debts totaling more than $660 that were in collection status (¶¶ 1.d, 1.e, 1.j). In her answer, Applicant denied the debt alleged in ¶ 1.a, was unsure the debts alleged in ¶¶ 1.dand 1.j were hers, and admitted the rest.

The $282 debt alleged in ¶ 1.a is from a car rental company. In 1996, the transmission failed on her car, which was covered by warranty. Applicant was provided a vehicle while hers was being repaired. R. 25. She elected to accept an offer of additional insurance coverage on the vehicle she was loaned, but refused to pay for it. R. 38-39. The debt was charged off in 1996. Her own vehicle was later repossessed. The $7,800 outstanding balance was charged off in 1997 and is represented in the allegation in ¶ 1.b. R. 26.

The creditor alleged in ¶ 1.doffered to settle Applicant's debt for $92.54. She presented no evidence that she has acted on the offer. Applicant submitted evidence establishing that she paid the $368 debt alleged in ¶ 1.e. Ex. A at 4. She asserts she also paid the $755 debt alleged in ¶ 1.g, but provided no corroboration. R. 28. The other debts remain unpaid.

Applicant consulted a credit counseling service in 2004, but was unable to enroll in the program because she had insufficient financial resources. R. 31, 44. Applicant was earning less than $28,000 at the time. She now earns more than $37,900 a year. R. 21. She is unsure how much money she has remaining each month after paying her monthly bills. She estimated it was $100 (R. 50) or $240 (R. 52).

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 (Jan. 6, 1993). 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

An applicant who is financially overextended is at risk of having to engage in illegal acts to generate funds. Directive ¶ E2.A6.1.1. Failure or inability to live within one's means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual's reliability, trustworthiness and ability to protect classified information. It is potentially disqualifying for an applicant to have a history of not meeting financial obligations (DC E2.A6.1.2.1) and by her inability or unwillingness to satisfy her debts (DC E2.A6.1.2.3). The evidence established both of these disqualifying conditions. Applicant provided proof of payment of only one of the delinquent debts alleged in the SOR.

Among the ways an applicant may mitigate financial considerations security concerns is to establish that her financial situation resulted from conditions largely beyond her control. MC E2.A6.1.3.3. Applicant's divorce in 1995 appears to have affected her financial situation, so I have applied that mitigating condition. Nevertheless, that divorce was over 10 years ago. She still has delinquent debts totaling approximately $25,000 and her ability to make any meaningful payments on these debts is in question. Applicant does not appear to have a budget. She could only estimate her monthly bills and the amount she has remaining at the end of the month that could be put toward those bills. She is not enrolled in any credit counseling service, and her debts are not being resolved. Under the circumstances, I find against Applicant on all allegations, except that in ¶ 1.e, which she paid.

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: For Applicant

Subparagraph 1.f: Against Applicant

Subparagraph 1.g: Against Applicant

Subparagraph 1.h: Against Applicant

Subparagraph 1.i: Against Applicant

Subparagraph 1.j: Against 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 Ray T. Blank Jr., Esq., Department Counsel file:///usr.osd.mil/...yComputer/Desktop/DOHA%20transfer/DOHA-Kane/dodogc/doha/industrial/Archived%20-%20HTML/04-10381.h1.htm[7/2/2021 3:37:35 PM] FOR APPLICANT Pro Se