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ISCR Case 05-04201.h1 — CASE

ISCR Case 05-04201.h1denied

Case Headnote

ISCR Case No. 05-04201.h1

deniedApr 20, 2006· Hon. James A. Young· hearing

Summary

A 49-year-old aviation avionics technician was denied a security clearance due to concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The denial stemmed from over $10,000 in delinquent debt and the deliberate omission of these financial obligations from two separate security clearance applications.

Specifically, the applicant faced allegations of falsifying material facts on questions 38 and 39 of a January 2003 security clearance application, and again on questions 38 and 39 of a June 2004 application. These omissions related to multiple debts, including several placed for collection, each totaling more than $4,800, one charged-off debt over $300, and a delinquency exceeding $4,500 following an automobile repossession.

The judge determined that the applicant had not demonstrated good-faith efforts to resolve his financial issues and had knowingly falsified information on his applications. The denial was based on the applicant's more than $10,000 in delinquent debt, his failure to pay these debts or make plans for their resolution, and the deliberate omission of these debts from his security clearance applications.

Why the Applicant Was Denied

Applicant has more than $10,000 in delinquent debt.
He has neither paid the debts nor made plans to do so.
Applicant deliberately omitted these debts from two security clearance applications.

Conditions Referenced

Disqualifying

E2.A6.1.2.1raisedFinancial Considerations - History of Not Meeting Financial Obligations
E2.A6.1.2.3raisedFinancial Considerations - Unable or Unwilling to Satisfy Debts
E2.A5.1.2.2raisedPersonal Conduct - Deliberate Omission of Relevant and Material Facts

Key Rule Quoted

“The deliberate omission of relevant and material facts from any SCA is a security concern and may be disqualifying.”
— ISCR Case No. 01-06870, 2002 WL 32114535 at *6 (App. Bd. Sep. 13, 2002)

Procedural Posture

SOR issuedOct 12, 2005
Answer filedOct 25, 2005
Hearing heldMar 15, 2006
Decision dateApr 20, 2006

Cite For

Deliberate Omission of Debts in Security Clearance Applications Under Guideline E
Financial Irresponsibility as a Disqualifying Condition Under Guideline F
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 E (Personal Conduct) · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The judge found against the applicant on all allegations under Guideline E, concluding that the applicant deliberately omitted material facts regarding his financial situation on two security clearance applications. The applicant's lack of candor and failure to disclose relevant information were significant concerns that led to the denial of his security clearance.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
2.a	Applicant falsified material facts on questions 38 on a January 2003 SCA.	Against Applicant	Falsification Security FormFOUND DELIBERATE	Financial	Denied	—	—	—
2.b	Applicant falsified material facts on questions 39 on a January 2003 SCA.	Against Applicant	Falsification Security FormFOUND DELIBERATE	Financial	Denied	—	—	—
2.c	Applicant falsified material facts on questions 38 on a June 2004 SCA.	Against Applicant	Falsification Security FormFOUND DELIBERATE	Financial	Denied	—	—	—
2.d	Applicant falsified material facts on questions 39 on a June 2004 SCA.	Against Applicant	Falsification Security FormFOUND DELIBERATE	Financial	Denied	—	—	—

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 has over $10,000 in delinquent debt, which he has neither paid nor made plans to address. The judge found that the applicant's financial issues raised significant security concerns, leading to the denial of his security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant had a debt placed for collection totaling more than $4,800.	Against Applicant	Unspecified Financial	Denied	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.b	Applicant had a debt placed for collection totaling more than $4,800.	Against Applicant	Unspecified Financial	Denied	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.c	Applicant had a debt placed for collection totaling more than $4,800.	Against Applicant	Unspecified Financial	Denied	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.d	Applicant had a debt placed for collection totaling more than $4,800.	Against Applicant	Unspecified Financial	Denied	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.e	Applicant had a debt placed for collection totaling more than $4,800.	Against Applicant	Unspecified Financial	Denied	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.f	Applicant had a debt placed for collection totaling more than $4,800.	Against Applicant	Unspecified Financial	Denied	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.g	Applicant had one debt for more than $300 that was charged off. $300	Against Applicant	Unspecified Financial	Denied	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.h	Applicant had a debt placed for collection totaling more than $4,800.	Against Applicant	Unspecified Financial	Denied	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.i	Applicant is delinquent on a debt of more than $4,500, the balance due after resale of his automobile that had been repossessed for nonpayment. $4,500	Against Applicant	Auto Loan Debt	Denied	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.j	Applicant had a debt placed for collection totaling more than $4,800.	Against Applicant	Unspecified Financial	Denied	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.k	Applicant had a debt placed for collection totaling more than $4,800.	Against Applicant	Unspecified Financial	Denied	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.l	Applicant had a debt placed for collection totaling more than $4,800.	Against Applicant	Unspecified Financial	Denied	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—

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 has more than $10,000 in delinquent debt. He has neither paid the debts nor made plans to do so. He deliberately omitted these debts from two security clearance applications. Clearance is denied.

CASE NO: 05-04201.h1

DATE: 04/20/2006

DATE: April 20, 2006

In re:

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

SSN: ---------

Applicant for Security Clearance

ISCR Case No. 05-04201

DECISION OF ADMINISTRATIVE JUDGE

JAMES A. YOUNG SYNOPSIS

Applicant has more than $10,000 in delinquent debt. He has neither paid the debts nor made plans to do so. He deliberately omitted these debts from two security clearance applications. 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 12 October 2005 detailing the basis for its decision-security concerns raised under Guideline F (Financial Considerations) and Guideline E (Personal Conduct) of the Directive. Applicant answered the SOR in writing on 25 October 2005 and 16 November 2005 and elected to have a hearing before an administrative judge. The case was assigned to me on 14 February 2006. On 15 March 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 24 March 2006.

FINDINGS OF FACT

Applicant is a 49-year-old aviation avionics technician for a defense contractor. Ex. 2 at 1; Tr. 25. He lives with his wife and three children. He first obtained a security clearance in 1992.

In the SOR, DOHA alleged Applicant had 10 debts totaling more than $4,800 that had been placed for collection (¶¶ 1.a-1.f, 1.h, 1.j-1.l); had one debt for more than $300 that was charged off (¶ 1.g); and is delinquent on a debt of more than $4,500, the balance due after resale of his automobile that had been repossessed for nonpayment (¶ 1.i). At the hearing, Applicant opined that all of the debts, were his, with the possible exception that one (unspecified) may be his son's debt. Although he consulted with an attorney who offered to establish a payment plan, Applicant did not hire him. Applicant has not made any payments on these debts nor has he any firm plans to do so.

Applicant submitted a security clearance application on 8 January 2003 that was electronically submitted on 10 January 2003. Ex. 1. Question 38 asked if, in the previous seven years, Applicant had been delinquent more than 180 days on any debts. Question 39 asked if Applicant was then delinquent more than 90 days on any debt. Applicant answered "no" to both questions.

Applicant completed another security clearance application (SCA) dated 1 March 2004, but signed on 2 March and 8 June 2004, by certifying that his statements therein were "true, complete, and correct" to the best of his knowledge and belief and by acknowledging that a knowing and willful false statement could be punished by fine and/or imprisonment under 18 U.S.C. § 1001. Ex. 2 at 10. In answer to question 38, Applicant admitted one delinquent debt to a mobile phone service for $300. He continued to deny that any debts were then delinquent more than 90 days.

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

Guideline F-Financial Considerations

In the SOR, DOHA alleged Applicant had 10 debts totaling more than $4,800 that had been placed for collection (¶¶ 1.a-1.f, 1.h, 1.j-1.l); had one debt for more than $300 that was charged off (¶ 1.g); and is delinquent on a debt of more than $4,500, the balance due after resale of his automobile that had been repossessed for nonpayment (¶ 1.i). In his 25 October 2005 Answer, Applicant denied all of the allegations, except ¶ 1.g. In his amended Answer of 16 November 2005, Applicant denied the allegations in ¶ 1.g, as well as ¶¶ 1.a, 1.i, 1.k, 1.l, and admitted the others. 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. 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). Applicant failed to produce any persuasive evidence from which I could apply any of the mitigating conditions listed under Guideline F. I conclude Applicant did not initiate good-faith efforts to pay his overdue creditors or resolve his debts. There is no indication he has either the ability or willingness to pay these debts. I find against him on ¶ 1.

Guideline E-Personal Conduct

In the SOR, DOHA alleged Applicant falsified material facts on questions 38 (¶ 2.a) and 39 (¶ 2.b) on a January 2003 SCA, and questions 38 (¶ 2.c) and 39 (¶ 2.d) on a June 2004 SCA. Applicant denied each of the allegations in both his 25 October and 16 November 2005 Answers. Conduct involving questionable judgment, untrustworthiness, unreliability, lack of candor, dishonesty, or unwillingness to comply with rules and regulations could indicate the applicant may not properly safeguard classified information. Directive ¶ E2.A5.1.1.

The Government's evidence established that Applicant failed to accurately answer questions 38 and 39 on both of his SCAs. Applicant contends he did not intentionally lie, but was merely unaware of his debts. After listening to his testimony and carefully observing his demeanor, I am convinced he knowingly and willfully falsified both SCAs.

The deliberate omission of relevant and material facts from any SCA is a security concern and may be disqualifying. DC E2.A5.1.2.2. Information is material if it would affect a final agency decision or, if incorrect, would impede a thorough and complete investigation of an applicant's background. ISCR Case No. 01-06870, 2002 WL 32114535 at *6 (App. Bd. Sep. 13, 2002). An applicant's financial history is a matter that could affect a final agency decision on whether to grant the applicant a clearance, and his failure to disclose it would impede a thorough investigation of the applicant's background. I have considered the mitigating conditions listed under Guideline E and conclude none apply. After considering all of the evidence, the disqualifying and mitigating conditions, as well as the adjudicative process factors, I find against Applicant on ¶ 2.

FORMAL FINDINGS

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

Paragraph 1. Guideline F: AGAINST APPLICANT

Subparagraph 1.a-1.l: Against Applicant

Paragraph 2. Guideline E: AGAINST APPLICANT

Subparagraph 2.a-2.d: 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 Francisco J. Mendez Jr., Esq., Department Counsel file:///usr.osd.mil/...yComputer/Desktop/DOHA%20transfer/DOHA-Kane/dodogc/doha/industrial/Archived%20-%20HTML/05-04201.h1.htm[7/2/2021 3:46:38 PM] FOR APPLICANT Roger A. Montoya, Esq.