CASE · Clearance Adjudication Search EngineCASE

Loading case…

ISCR Case 05-06567.h1 — CASE

ISCR Case 05-06567.h1denied

Case Headnote

ISCR Case No. 05-06567.h1

deniedApr 19, 2006· Hon. James A. Young· hearing

Summary

A 41-year-old applicant for a government contractor position was denied a security clearance under Guideline F (Financial Considerations) due to over $50,000 in delinquent debt. The Statement of Reasons detailed multiple financial issues, including more than $10,500 in charged-off debts, several accounts totaling more than $38,000 each in collection status, and a delinquent debt exceeding $2,680 from an automobile repossession.

The decision cited disqualifying conditions related to a history of not meeting financial obligations and an inability or unwillingness to satisfy debts. While mitigating conditions concerning the debt being caused by circumstances beyond the applicant's control, the debt being resolved, or the applicant demonstrating a good-faith effort to resolve the debt were considered, they were not sufficient to overcome the concerns.

The denial was based on the applicant's substantial delinquent debt, a complete lack of effort to repay creditors, and the ongoing nature of the financial problems, indicating they were not isolated incidents.

Why the Applicant Was Denied

Applicant incurred more than $50,000 in delinquent debt.
Applicant has not made any effort to pay off his creditors.
The applicant's financial problems were ongoing and not isolated incidents.

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

Mitigating

E2.A6.1.3.1rejectedFinancial Considerations - the Behavior Was Not RecentAlthough debts were incurred several years ago, they remain outstanding.
E2.A6.1.3.2rejectedFinancial Considerations - the Behavior Was an Isolated IncidentThe number of delinquent debts over several years negates a finding of isolation.
E2.A6.1.3.3appliedFinancial Considerations - Conditions Contributing to the Debts Were Beyond the Applicant's ControlSome weight was given to this condition due to the applicant's illness in 2003.

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 issuedOct 31, 2005
Answer filedNov 12, 2005
Hearing heldMar 14, 2006
Decision dateApr 19, 2006

Cite For

Denial of Clearance Due to Significant Delinquent Debt Under Guideline F
Lack of Effort to Repay Creditors as a Basis for Denial
Rejection of 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 incurred over $50,000 in delinquent debt, including charged off debts and accounts in collection status. Despite some debts being attributed to circumstances beyond his control, the applicant made no significant effort to pay off his creditors, leading to a denial of his security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	more than $10,500 in charged off debts $10,500	Against Applicant	Unspecified Financial	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.b	more than $38,000 in collection status $38,000	Against Applicant	Unspecified Financial	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.c	more than $38,000 in collection status $38,000	Against Applicant	Unspecified Financial	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.d	a delinquent debt of more than $2,680, the balance owed after resale of an automobile that had been repossessed $2,680	Against Applicant	Auto Loan Debt	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.e	more than $38,000 in collection status $38,000	Against Applicant	Unspecified Financial	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.f	more than $10,500 in charged off debts $10,500	Against Applicant	Unspecified Financial	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.g	more than $38,000 in collection status $38,000	Against Applicant	Unspecified Financial	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.h	more than $38,000 in collection status $38,000	Against Applicant	Unspecified Financial	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.i	more than $38,000 in collection status $38,000	Against Applicant	Unspecified Financial	Admitted	(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

DIGEST: Applicant incurred more than $50,000 in delinquent debt. Although some of the debt was incurred as a result of circumstances beyond his control, he has made no effort to pay off his creditors. Clearance is denied.

CASE NO: 05-06567.h1

DATE: 04/19/2006

DATE: April 19, 2006

In re:

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

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

Applicant for Security Clearance

ISCR Case No. 05-06567

DECISION OF ADMINISTRATIVE JUDGE

JAMES A. YOUNG SYNOPSIS

Applicant incurred more than $50,000 in delinquent debt. Although some of the debt was incurred as a result of circumstances beyond his control, he has made no effort to pay off his creditors. 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 31 October 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 12 November 2005 and elected to have a hearing before an administrative judge. The case was originally assigned to another administrative judge, but was reassigned to me on 14 February 2006 because of caseload considerations. On 14 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 41 years old. He has been hired by a government contractor for service overseas, contingent upon him getting a security clearance. He expects the job will pay approximately $80,000 a year.

In his answer, Applicant admitted having more than $10,500 in charged off debts, accounts for more than $38,000 in collection status, and a delinquent debt of more than $2,600. Applicant has not paid those debts. His most recent credit report shows delinquent debts that were not listed in the SOR: an additional collection account for $75 and a debt of $6,258 that was charged off.

Applicant claims his financial problems started in the late 1990s. He obtained a job that paid up to $46,000 a year. He was living with his fiancée and their total income was approximately $70,000. He was inundated with credit card offers, which he accepted. He used the cards to live well and usually paid only the minimum required. In 2001, he was laid off from his job. Four to six weeks later, his fiancée asked him to move out. He ran up additional credit card debt while he was unemployed, and was unable to pay these debts. Over the next couple of years he worked sporadically and moved several times. A friend advised him that if he let his debts go to collection status, the creditors would make settlement offers that would reduce his debts significantly. That is what happened, but Applicant was not making sufficient money to pay on the offers.

In 2003, Applicant felt depressed and tired. He stopped eating and drinking. He ended up in a hospital for five days after bleeding ulcers caused him to lose a lot of blood. He has since recovered. He is now living with his mother and earns no more than $12 an hour for 15 hours a week. He believes the most he has made in any of the last three months is between $300 and $400. He has $76 in savings. He has not tried any credit counseling.

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 has debts totaling more than $10,500 that were charged off as bad debts (¶¶ 1.a, 1.f), debts totaling more than $38,000 in collection status (¶¶ 1.b, 1.c, 1.e, 1.g-1.i), and a delinquent debt of more than $2,680, the balance owed after resale of an automobile that had been repossessed (¶ 1.d). In his 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. 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 claims he has mitigated these disqualifying conditions because his debts are not recent (MC E2.A6.1.3.1); the behavior was an isolated incident (MC E2.A6.1.3.2), and the conditions that resulted in the debts were largely beyond his control (MC E2.A6.1.3.3). After reviewing all of the evidence, I conclude Applicant did not mitigate the financial conditions security concern. Although he incurred most of these debts several years ago, they are still outstanding. Therefore, his debts are still recent. The number of delinquent debts over several years negates a finding this was an isolated incident. Therefore, MC E2.A6.1.3.1 and MC E2.A6.1.3.2 do not apply. Applicant was ill in 2003 and unable to work. Therefore, I have given some weight to MC E2.A6.1.3.3. But Applicant has been able to work for the past almost three years and has not made any significant effort to pay off his debts. Instead of trying to find full-time employment, he put all of his efforts into obtaining the job for which he seeks the security clearance. He has not consulted a credit counseling service or other agencies that could help him get a handle on his debt problem. I conclude none of the other mitigating conditions listed under the guideline apply. I find against Applicant.

FORMAL FINDINGS

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

Paragraph 1. Guideline F: AGAINST APPLICANT

Subparagraph 1.a-1.i: 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/05-06567.h1.htm[7/2/2021 3:48:13 PM] FOR APPLICANT Pro Se