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ISCR Case 06-12650.h1 — CASE

ISCR Case 06-12650.h1denied

Case Headnote

ISCR Case No. 06-12650.h1

deniedDec 1, 2006· Hon. Martin H. Mogul· hearing

Summary

This case concerns a 40-year-old defense contractor whose application for a security clearance was denied under Guideline F, Financial Considerations. The applicant had a long history of financial difficulties and admitted to significant outstanding debts that remained unresolved.

The Statement of Reasons detailed fourteen specific unpaid debts, including amounts of $321, $216, $1,908, $642, $971, $784, $139, $751, $237, $3,300, $689, $883, $836, and $9,674. These issues raised disqualifying conditions E2.A6.1.2.1 and E2.A6.1.2.3.

Ultimately, the clearance was denied because the applicant's financial difficulties were long-standing, he had not resolved his significant outstanding debts, and he failed to demonstrate a stable and mature outlook regarding his finances.

Why the Applicant Was Denied

Applicant has a long history of financial difficulties.
Applicant admitted to having significant outstanding debts that remain unpaid.
Applicant failed to demonstrate a stable and mature outlook about his finances.

Conditions Referenced

Disqualifying

E2.A6.1.2.1appliedInability or Unwillingness to Satisfy Debts
E2.A6.1.2.3appliedHistory of Not Meeting Financial Obligations

Key Rule Quoted

“"the clearly consistent standard indicates that security-clearance determinations should err, if they must, on the side of denials."”
— Department of the Navy v. Egan, 484 U.S. 518, 531 (1988)

Procedural Posture

SOR issuedJul 15, 2006
Answer filedDec 20, 2005Response to SOR allegations
Hearing heldOct 25, 2006
Decision dateDec 1, 2006

Cite For

Denial Based on Significant Unpaid Debts Under Guideline F
Failure to Demonstrate Financial Responsibility
Application of Disqualifying Conditions Related to Financial Considerations

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 a significant amount of outstanding debt and a long history of financial difficulties, which he has not resolved. The judge found that the applicant failed to demonstrate a stable and mature outlook about his finances, leading to a denial of his security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	$321 unpaid $321	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	$216 unpaid $216	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	$1,908 unpaid $1,908	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	$642 unpaid $642	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	$971 unpaid $971	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	$784 unpaid $784	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	$139 unpaid $139	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	$751 unpaid $751	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i	$237 unpaid $237	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.j	$3,300 unpaid $3,300	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.k	$689 unpaid $689	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.l	$883 unpaid $883	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.m	$836 unpaid $836	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.n	$9,674 unpaid $9,674	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (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

APPEARANCES

DATE: December 1, 2006

In Re: ----------------------- SSN: ---------------- Applicant for Security Clearance

CR Case No. 06-12650 DECISION OF ADMINISTRATIVE JUDGE MARTIN H. MOGUL

FOR GOVERNMENT Candace Le'i, Esq., Department Counsel FOR APPLICANT Pro Se SYNOPSIS Applicant has had a long history of financial difficulties. He currently has a significant amount of outstanding debt which he has not yet resolved. Based on his tenuous financial situation and his history of financial irresponsibility, Applicant has failed to demonstrate a stable and mature outlook about his finances. Mitigation has not been shown. Clearance is denied.

STATEMENT OF CASE

On July 15, 2006, the Defense Office of Hearings and Appeals (DOHA), pursuant to Executive Order 10865 and Department of Defense Directive 5220.6 (Directive), dated January 2, 1992, issued a Statement of Reasons (SOR) to Applicant which detailed reasons why DOHA could not make the preliminary affirmative finding under the Directive that it is clearly consistent with the national interest to grant or continue a security clearance for Applicant and recommended referral to an Administrative Judge to determine whether clearance should be denied or revoked. In a signed and sworn statement, dated December 20, 2005, Applicant responded in writing to the SOR allegations. He requested a clearance decision based on a hearing record. On September 19, 2006, this case was assigned to this Administrative Judge to conduct a hearing and issue a written decision. A Notice of Hearing was issued to the parties on September 20, 2006, and the hearing was held on October 25, 2006. At the hearing, Department Counsel offered seven documentary exhibits (Government Exhibits 1 through 7), and no witnesses were called. Applicant offered one documentary exhibit, (Applicant Exhibit A) and offered his own testimony. He also offered two post hearing documents which have been entered without objection (Applicant Exhibits B and C). The transcript (Tr) was received on November 13, 2006.

FINDINGS OF FACT

In the SOR, the Government alleges that a security risk may exist under Adjudicative Guideline F (Financial Considerations) of the Directive. After a complete and thorough review of the evidence in the record, including Applicant's Answer to the SOR, the documents and the live testimony, and upon due consideration of that evidence, I make the following Findings of Fact: Applicant is a 40 year old employee of a defense contractor who seeks access to classified information. He is married and has three children. He served for twenty years in the United States Navy. Paragraph 1 (Guideline F - Financial Considerations) The SOR contains 14 allegations, 1.a. through 1.n., under Guideline F regarding debts owed by Applicant. In his Response to the SOR (RSOR) and during his testimony, Applicant admitted all of the SOR allegations, and he confirmed that none of these debts had been paid at the time of the hearing. The table below presents details about each debt as they were listed in the SOR: Debt Amount Owed Current Status Record 1.a $321 unpaid RSOR, (Tr at 46) 1.b. $216 unpaid RSOR, (Tr at 46) 1.c. $1,908 unpaid RSOR, (Tr at 46) 1.d. $642 unpaid RSOR, (Tr at 46) 1.e. $ 971 unpaid RSOR, (Tr at 46) 1.f. $784 unpaid RSOR, (Tr at 46) 1.g. $139 unpaid RSOR, (Tr at 46) 1.h. $751 unpaid RSOR, (Tr at 46) 1.i. $237 unpaid RSOR, (Tr at 46) 1.j. $3,300 unpaid RSOR, (Tr at 46) 1.k. $689 unpaid RSOR, (Tr at 46) 1.l. $883 unpaid RSOR, (Tr at 46) 1.m. $836 unpaid RSOR, (Tr at 46) 1.n. $9,674 unpaid RSOR, (Tr at 46) In addition to these debts listed on the SOR, Applicant testified at the hearing that he owes his brother and sister-in-law $5,000 on a personal loan that was made to Applicant in approximately Jan 2003 (Tr at 26-27). Applicant testified that he started making payments to a credit counseling company in August 2006. Exhibit B shows that Applicant has $345 available for settlement and that he has made two payments of $224 to one of his creditors. Applicant cited several reasons for his history of failure to resolve his debts. These included: his youth and immaturity when he first received credit cards at 19 years of age, that he had to pay $1,200 for his mother-in-law's funeral, and that he had to pay additional money to aid his father-in-law. Finally, he was involved in an automobile accident, wherein he had to pay $8,000 to the other driver's insurance company. However, this occurred because of his less than responsible financial behavior, as he was driving his vehicle without current automobile insurance.

POLICIES

Enclosure 2 of the Directive sets forth adjudicative guidelines that must be carefully considered in evaluating an individual's security eligibility and making the overall common sense determination required. The Administrative Judge must take into account the conditions raising or mitigating security concerns in each area applicable to the facts and circumstances presented. Although the presence or absence of a particular condition for or against clearance is not determinative, the specific adjudicative guidelines should be followed whenever a case can be measured against this policy guidance, as the guidelines reflect consideration of those factors of seriousness, recency, motivation, etc. The adjudication process is based on the whole person concept. All available, reliable information about the person, past and present, is to be taken into account in reaching a decision as to whether a person is an acceptable security risk. Each adjudicative decision must also include an assessment of: (1) the nature, extent, and seriousness of the conduct; (2) the circumstances surrounding the conduct, and the extent of knowledgeable participation; (3) how recent and frequent the behavior was; (4) the individual'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 (See Directive, Section E2.2.1. of Enclosure 2). BURDEN OF PROOF Initially, the Government must prove controverted facts alleged in the Statement of Reasons. If the Government meets that burden, the burden of persuasion then shifts to Applicant to establish his security suitability through evidence of refutation, extenuation or mitigation sufficient to demonstrate that, despite the existence of disqualifying conduct, it is nevertheless clearly consistent with the national interest to grant or continue the security clearance. Assessment of Applicant's fitness for access to classified information requires evaluation of the whole person, and consideration of such factors as the recency and frequency of the disqualifying conduct, the likelihood of recurrence, and evidence of rehabilitation. A person who seeks access to classified information enters into a fiduciary relationship with the U.S. Government that is predicated upon trust and confidence. Where facts proven by the Government raise doubts about Applicant's judgment, reliability, or trustworthiness, Applicant has a heavy burden of persuasion to demonstrate that he or she is nonetheless security worthy. As noted by the United States Supreme Court in Department of the Navy v. Egan, 484 U.S. 518, 531 (1988), "the clearly consistent standard indicates that security-clearance determinations should err, if they must, on the side of denials."

CONCLUSION

Having considered the evidence of record in light of the appropriate legal precepts and factors, I conclude the following: With respect to Guideline F, the Government has established that Applicant has had a long history of financial difficulties. The evidence has shown that Applicant has only recently started to take action to pay off these debts. Clearly, he has a long way to go before his debts are resolved. Based on his tenuous financial situation and his history of financial irresponsibility, it is too soon to determine that Applicant has demonstrated a stable and mature outlook about his finances. I, therefore, resolve Guideline F against Applicant. Regarding the Disqualifying Conditions (DC) under Guideline F, I conclude both DC E2.A6.1.2.1., and DC E2.A6.1.2.3 apply, because of Applicant's history of not meeting financial obligations and his inability and unwillingness to satisfy his debts. I find that none of the Mitigating Conditions (MC) apply.

FORMAL FINDINGS

Formal Findings as required by Section E3.1.25 of Enclosure 3 of the Directive are hereby rendered as follows: Financial Considerations, 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.: 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 Subparagraph 1.k.: Against Applicant Subparagraph 1.l.: Against Applicant Subparagraph 1.m.: Against Applicant Subparagraph 1.n.: Against Applicant

DECISION

In light of all the circumstances and facts presented by the record in this case, it is not clearly consistent with the national interest to grant or continue a security clearance for Applicant. Martin H. Mogul Administrative Judge

FOOTNOTES

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