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ISCR Case 05-04332.h1 — CASE

ISCR Case 05-04332.h1denied

Case Headnote

ISCR Case No. 05-04332.h1

deniedJan 17, 2006· Hon. LeRoy F. Foreman· hearing

Summary

A 37-year-old functional analyst for a defense contractor was denied a security clearance due to concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The applicant had a history of delinquent debts totaling over $43,000 and admitted to providing false answers on his SF-86 security clearance application regarding these financial obligations. Specifically, he answered "no" to questions 38 and 39, which pertained to delinquent debts, and later admitted to these falsifications without offering an explanation.

The judge determined that the applicant's financial issues were not mitigated by any efforts to resolve them until after he received the Statement of Reasons (SOR). This lack of proactive resolution, combined with the deliberate falsification of information on a federal form, led to the denial.

No mitigating conditions were found applicable to either his financial issues or his personal conduct, resulting in the denial of his security clearance.

Why the Applicant Was Denied

Applicant has a history of delinquent debts totaling over $43,000.
He took no action to resolve his debts until he received the SOR.
Applicant falsely answered 'no' to questions regarding delinquent debts on his SF 86.
He admitted to falsifying his answers without providing an explanation.
The judge found no mitigating conditions applicable to his financial issues or personal conduct.

Conditions Referenced

Disqualifying

E2.A5.1.2.2appliedDeliberate Omission or Falsification of Relevant and Material Facts From Any Personal Security Questionnaire.
E2.A6.1.2.1appliedHistory of Not Meeting Financial Obligations.
E2.A6.1.2.3appliedInability or Unwillingness to Satisfy Debts.

Key Rule Quoted

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

Procedural Posture

SOR issuedJul 25, 2005
Answer filedAug 29, 2005Applicant elected to have the case decided on the written record.
Hearing held—No hearing; decided on written record.
Decision dateJan 17, 2006

Cite For

Denial Based on Unresolved Financial Obligations Under Guideline F
Falsification of Information on Security Clearance Application Under Guideline E
Lack of Mitigating Conditions for Financial Irresponsibility and Personal Conduct 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 that the applicant engaged in personal conduct that raised security concerns, specifically admitting to falsifying answers on his security clearance application regarding delinquent debts. The judge concluded that the applicant did not mitigate these concerns, resulting in a denial of the security clearance.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
2.a	Applicant admitted giving false answers to questions 38 and 39 on his SF 86.	Against Applicant	Falsification Security FormFOUND DELIBERATE	Financial	Admitted	(b) deliberately providing false information to an investigator or official	—	—
2.b	specific text not stated in this decision	Against Applicant	Unspecified Personal Conduct	—	Unknown	—	—	—

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 a history of delinquent debts totaling over $43,000, which he admitted but failed to resolve until confronted with the Statement of Reasons (SOR). The judge found that the applicant's financial issues were not mitigated by any conditions, leading to a denial of his security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a–1.j	10 sub-charges — specific text not stated in this decision (against the applicant).	Against Applicant			—	—	—

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 a history of delinquent debts. He took no action to resolve them until he received the SOR. He is financially overextended and likely to remain so for a long time. He falsely answered "no" to two questions on his security clearance application (SF 86) about delinquent debts. Security concerns based on financial considerations and personal conduct are not mitigated. Clearance is denied.

CASENO: 05-04332.h1

DATE: 01/17/2006

DATE: January 17, 2006

In Re:

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

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

Applicant for Security Clearance

ISCR Case No. 05-04332

DECISION OF ADMINISTRATIVE JUDGE

LEROY F. FOREMAN

APPEARANCES

SYNOPSIS

Applicant has a history of delinquent debts. He took no action to resolve them until he received the SOR. He is financially overextended and likely to remain so for a long time. He falsely answered "no" to two questions on his security clearance application (SF 86) about delinquent debts. Security concerns based on financial considerations and personal conduct are not mitigated. Clearance is denied.

STATEMENT OF CASE

On July 25, 2005, the Defense Office of Hearings and Appeals (DOHA) issued a Statement of Reasons (SOR) detailing the basis for its decision to not grant a security clearance to Applicant. This action was taken under Executive Order 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). The SOR alleges security concerns under Guidelines F (Financial Considerations) and E (Personal Conduct). Applicant answered the SOR in writing on August 29, 2005, and elected to have the case decided on the written record in lieu of a hearing. Applicant admitted all the allegations in the SOR. Department Counsel submitted the Government's written case on October 7, 2005. A complete copy of the file of relevant material (FORM) was sent to Applicant on October 13, 2005, and he was afforded an opportunity to file objections and submit material to refute, extenuate, or mitigate the disqualifying conditions. Applicant received the FORM on October 21, 2005, and responded on October 27, 2005. The case was assigned to me on November 28, 2005.

FINDINGS OF FACT

Based on the entire record, I make the following findings of fact:

Applicant is a 37-year-old functional analyst for a defense contractor. He has worked for his current employer since May 2003. He served in the U.S. Air Force from April 1988 to September 2001. He held a security clearance in the Air Force. His response to the FORM suggests he currently holds a clearance.

Applicant executed a SF 86 on November 14, 2003. He answered "no" to question 38, asking if he was more than 180 days delinquent on any debt during the last seven years, and to question 39, asking if he was currently more than 90 days delinquent on any debt. His credit report dated July 12, 2005, reflected 10 delinquent debts totaling more than $43,000. All delinquent debts were charged off or referred to collection agencies and all were more than two years old. In his answer to the SOR, he admitted falsifying his answers to questions 38 and 39, and he offered no explanation or excuse.

Applicant admitted all the delinquent debts but contended the two debts alleged in SOR ¶¶ 1.c. and 1.d. were only one single debt. It cannot be determined from the record whether they are actually a single debt, and Applicant furnished no documentary corroboration of his contention.

After receiving the SOR, Applicant settled one debt for $2,517 (SOR ¶ 1.e.). He made arrangements to pay $150 per month on two debts, one of which is alleged in the SOR ¶ 1.d. The remaining debts remain unpaid. He states he intends to keep paying $300 per month on his delinquent debts until they are all paid. There is no evidence he has sought credit counseling or professional assistance in settling his delinquent debts. His explanation for not beginning to pay his debts earlier was, "I guess I figured my debts would just wait till I was ready to pay them."

In a statement to a security investigator on December 6, 2004, he attributed his financial difficulties to his unsuccessful attempt to start his own business after he left the Air Force. He did not describe the circumstances that caused his business to fail, except to state he was unable to keep up with his payments on credit cards and loans.

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. 10865, Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960), as amended and modified. 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.

The Directive sets forth adjudicative guidelines for determining eligibility for access to classified information, and it lists the disqualifying conditions (DC) and mitigating conditions (MC) for each guideline. Each clearance decision must be a fair, impartial, and commonsense decision based on the relevant and material facts and circumstances, the whole person concept, and the factors listed in the Directive ¶¶ 6.3.1 through 6.3.6.

In evaluating an applicant's conduct, an administrative judge should consider: (1) the nature, extent, and seriousness of the conduct; (2) the circumstances surrounding the conduct, to include knowledgeable participation; (3) the frequency and recency of the conduct; (4) the applicant's age and maturity at the time of the conduct; (5) the voluntariness of participation; (6) the presence or absence of rehabilitation and other pertinent 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 ¶¶ E2.2.1.1 through E2.2.1.9.

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.

Initially, the government must establish, by substantial evidence, conditions 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. "[T]he Directive presumes there is a nexus or rational connection between proven conduct under any of the Criteria listed therein and an applicant's security suitability." ISCR Case No. 95-0611 at 2 (App. Bd. May 2, 1996) (quoting DISCR Case No. 92-1106 (App. Bd. Oct. 7, 1993)).

Once the government establishes a disqualifying condition by substantial evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the facts. ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002); see Directive ¶ E3.1.15. 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 (App. Bd. Dec. 19, 2002). "[S]ecurity clearance determinations should err, if they must, on the side of denials." Egan, 484 U.S. at 531; see Directive ¶ E2.2.2.

CONCLUSION

Guideline F (Financial Considerations)

Under Guideline F, "[a]nindividual who is financially overextended is at risk of having to engage in illegal acts to generate funds." Directive ¶ E2.A6.1.1. A person who fails or refuses to pay long-standing debts or is financially irresponsible may also be irresponsible or careless in his or her duty to protect classified information. Two disqualifying conditions (DC) under this guideline could raise a security concern and may be disqualifying in this case. DC 1 applies where an applicant has a history of not meeting his or her financial obligations. Directive ¶ E2.A6.1.2.1. DC 3 applies where an applicant has exhibited inability or unwillingness to satisfy debts. Directive ¶ E2.A6.1.2.3. Applicant's financial history establishes DC 1 and DC 3.

A security concern based on financial problems can be mitigated by showing the delinquent debts were not recent (MC 1) or an isolated incident (MC 2). Directive ¶ E2.A6.1.3.1., E2.A6.1.3.2. Applicant has multiple delinquent debts that are unresolved. I conclude MC 1 and MC 2 are not established.

Security concerns arising from financial problems can be mitigated by showing they are the result of conditions beyond the person's control (MC 3). A business failure because of conditions beyond an applicant's control could establish MC 3. In this case, however, Applicant has not shown any factors beyond his control that caused his business to fail. The record shows only excessive borrowing. Applicant has the burden of proving a mitigating condition, and the burden of disproving it is never shifted to the government. See ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 2005). I conclude Applicant has not carried his burden of establishing MC 3.

A security concern arising from financial problems can be mitigated by showing a good-faith effort to resolve debts (MC 6). Directive ¶ E2.A6.1.3.6. The concept of good faith "requires a showing that a person acts in a way that shows reasonableness, prudence, honesty, and adherence to duty or obligation." ISCR Case No. 99-0201, 1999 WL 1442346 at *4 (App. Bd. Oct. 12, 1999). Evidence of past irresponsibility is not mitigated by payment of debts only under pressure of qualifying for a security clearance. Applicant took no significant action to resolve his indebtedness until he received the SOR and realized his security clearance was in jeopardy. As he admits, his attitude before receiving the SOR was, "I guess I figured my debts would just wait till I was ready to pay them." I conclude MC 6 is not established.

It is too soon to tell whether Applicant will adhere to his promise to pay $300 per month until all his delinquent debts are resolved. He is still financially overextended, with no hope of recovery for many years at his current rate of repayment. After considering the disqualifying conditions and the absence of mitigating conditions, and evaluating the evidence in the context of the whole person, I conclude Applicant has not mitigated the security concern based on financial considerations.

Guideline E (Personal Conduct)

Under Guideline E, conduct involving questionable judgment, untrustworthiness, unreliability, lack of candor, dishonesty, or unwillingness to comply with rules and regulations could indicate that the person may not properly safeguard classified information. Directive ¶ E2.A5.l.l. A disqualifying condition (DC 2) applies where there has been a deliberate omission or falsification of relevant and material facts from any personal security questionnaire. Directive ¶E2.A5.1.2.2.. Applicant admitted giving false answers to questions 38 and 39 on his SF 86.

Two mitigating conditions (MC) are relevant to this case. MC 2 applies when the falsification was an isolated incident, was not recent, and the individual has subsequently provided correct information voluntarily. Directive ¶ E2.A5.1.3.2. MC 3 applies when the individual made prompt, good-faith efforts to correct the falsification before being confronted with the facts. Directive ¶ E2.A5.1.3.3. Neither mitigating condition is established. Applicant's falsification was recent, and there is no evidence Applicant made any effort to correct the falsification until he was questioned by a security investigator.

After considering Applicant's lack of explanation for his falsification and the absence of mitigating conditions, I conclude Applicant has not mitigated the security concern based on falsification of his SF 86.

FORMAL FINDINGS

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

Paragraph 1. Guideline F (Financial Considerations): 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.: Against 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 (Personal Conduct): AGAINST APPLICANT

Subparagraph 2.a.: Against Applicant

Subparagraph 2.b.: Against Applicant

DECISION

In light of all the circumstances presented by the record in this case, it is not clearly consistent with the national interest to grant Applicant a security clearance. Clearance is denied.

LeRoy F. Foreman

Administrative Judge

FOOTNOTES

FOR GOVERNMENT file:///usr.osd.mil/...yComputer/Desktop/DOHA%20transfer/DOHA-Kane/dodogc/doha/industrial/Archived%20-%20HTML/05-04332.h1.htm[7/2/2021 3:46:56 PM] Robert E. Coacher, Esq., Department Counsel FOR APPLICANT Pro Se