CASEClearance Adjudication Search EngineCASE

Loading case…

ISCR Case 96-0469.h1 — CASE

ISCR Case 96-0469.h1denied

Case Headnote

ISCR Case No. 96-0469.h1

deniedApr 17, 1997· Hon. John Grattan Metz, Jr.· hearing

Summary

A 47-year-old defense contractor employee was denied a security clearance under Guideline F (Financial Considerations) due to a history of financial irresponsibility. The Statement of Reasons detailed numerous financial issues, including a car repossession in 1972 or 1973, and multiple charged-off debts. Specifically, one creditor charged off a $2,883.00 debt in April 1991, and another charged off $320.00 in October 1990. Between 1992 and June 1995, three additional debts were charged off.

The applicant also faced multiple judgments, including one for $71.84 plus costs obtained on October 16, 1991, and another related to a motorcycle. Overall, four debts went into collection, and three debts were reduced to judgment. The applicant stated an intent to pay some creditors, including one with a judgment on his motorcycle, but also indicated an intent not to pay ten creditors whose debts totaled approximately $16,218.00.

The judge found that the applicant's explanations did not mitigate the ongoing financial issues. The denial was based on the applicant's failure to demonstrate good-faith efforts to repay or resolve outstanding debts, noting that financial problems persisted even after securing better employment.

Why the Applicant Was Denied

The applicant has a history of financial irresponsibility, including multiple charged-off debts and a bankruptcy.
The applicant failed to demonstrate good-faith efforts to repay overdue creditors or resolve outstanding debts.
The applicant's financial issues continued even after obtaining better employment.

Conditions Referenced

Disqualifying

F.1raisedHistory of Not Meeting Financial Obligations
F.3raisedInability or Unwillingness to Satisfy Debts

Mitigating

F.3rejectedConditions That Resulted in the Behavior Were Largely Beyond the Person's ControlThe applicant's explanations did not apply to debts that were past due before his divorce and loss of employment.

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 issuedDec 2, 1996
Answer filedDec 27, 1996Requested an administrative decision on the record.
Hearing held—
Decision dateApr 17, 1997

Cite For

Denial Based on Financial Irresponsibility Under Guideline F
Failure to Demonstrate Good-faith Efforts to Resolve Debts
Impact of Ongoing Financial Issues on Security Clearance Eligibility

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 judge found that the applicant had a significant history of financial irresponsibility, including multiple charged-off debts and judgments against him. Despite some explanations for his financial difficulties, the applicant failed to demonstrate any meaningful efforts to address his debts, leading to a decision against granting a security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant has a history of financial irresponsibility. In 1972 or 1973, Applicant's bills got out of hand; he fell behind in his payments and had his car repossessed.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.b	Applicant has stated an intent to pay--at some undefined time in the future--one creditor owed an undetermined amount.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.c	In April 1991, a second creditor charged off a debt of $2,883.00. $2,883	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.d	Between 1992 and June 1995--when he went to work for his present employer--three debts were charged off.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.e	In October 1990, one creditor charged off a debt of $320.00. $320	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.f	On 16 October 1991, a third creditor obtained a judgement for $71.84 plus costs. $71	Against Applicant	Judgment Against Applicant	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.g	Applicant intends to pay one creditor (subparagraph 1.g.) who has obtained a judgment on Applicant's motorcycle.	Against Applicant	Judgment Against Applicant	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.h	Four debts went into collection.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.i	Four debts went into collection.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.j	Three debts were reduced to judgment.	Against Applicant	Judgment Against Applicant	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.k	Three debts were reduced to judgment.	Against Applicant	Judgment Against Applicant	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.l	Three debts were reduced to judgment.	Against Applicant	Judgment Against Applicant	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.m	Applicant has stated an intent to not pay ten creditors whose debts total approximately $16,218.00. $16,218	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.n	Applicant has stated an intent to not pay ten creditors whose debts total approximately $16,218.00. $16,218	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—

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: April 17, 1997 __________________________________________ In Re: ----------------------- SSN: ----------- Applicant for Security Clearance __________________________________________ ISCR OSD Case No. 96-0469 DECISION OF ADMINISTRATIVE JUDGE JOHN G. METZ, JR.

FOR THE GOVERNMENT Carla Conover, Esquire Department Counsel FOR THE APPLICANT Pro Se

STATEMENT OF CASE

On 2 December 1996, the Defense Office of Hearings and Appeals (DOHA) issued a Statement of Reasons (SOR) to Applicant, stating that DOHA could not make the preliminary affirmative finding(1) that it is clearly consistent with the national interest to grant or continue a security clearance for Applicant. On 27 December 1996, Applicant answered the SOR and requested an administrative decision on the record. Applicant did not respond to the Government's File of Relevant Material (FORM)--issued 9 January 1997; the record in this case closed 23 February 19976, the day the response was due at DOHA. The case was originally assigned to a different administrative judge, but was reassigned to me because of workload considerations on 11 April 1997. I received the case on 14 April 1996 to determine whether clearance should be granted, continued, denied or revoked. The SOR is attached to this Decision and incorporated by reference.

FINDINGS OF FACT

Applicant admitted all the allegations of the SOR; accordingly, I incorporate those admissions as findings of fact. Applicant is a 47-year old employee of a defense contractor seeking a confidential clearance. Applicant has a history of financial irresponsibility. In 1972 or 1973, Applicant's bills got out of hand; he fell behind in his payments and had his car repossessed. He later filed for bankruptcy. (FORM, Item 5). In the early 1990s, Applicant again began to experience financial difficulties: in October 1990, one creditor charged off a debt of $320.00 (subparagraph 1.e.); in April 1991, a second creditor charged off a debt of $2,883.00 (subparagraph 1.c.); on 16 October 1991, a third creditor obtained a judgement for $71.84 plus costs (subparagraph 1.f). In 1992, Applicant went through a divorce, was in a motorcycle accident, and lost his job. Between 1992 and June 1995--when he went to work for his present employer--three debts were charged off (subparagraphs 1.a., b., d.); four went into collection (subparagraphs 1.h., i., k., m., n); and three were reduced to judgment (subparagraphs 1.g., j., l.). Of the fourteen debts alleged in the SOR, Applicant has stated an intent to not pay ten creditors whose debts total approximately $16, 218.00 (subparagraphs 1.c., d., e., h., i., j., k., l., m., n.)(FORM, Item 6; Answer). He has stated an intent to pay--at some undefined time in the future--two creditors owed less than $100.00 each (subparagraphs 1.a., f.) and one creditor owed an undetermined amount (subparagraph 1.b.). Applicant intends to pay one creditor (subparagraph 1.g.) who has obtained a judgment on Applicant's motorcycle.

POLICIES

Enclosure 2 of the Directive sets forth adjudicative guidelines to be considered in evaluating an individual's security eligibility. The Administrative Judge must take into account the conditions raising or mitigating security concerns in each area applicable to the facts and circumstances presented. Each adjudicative decision must also assess the factors listed in Section F.3. and in Enclosure (2) of the Directive. 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. Considering the evidence as a whole, the following adjudication policy factors are most pertinent to this case: FINANCIAL CONSIDERATIONS (CRITERION F) An individual who is financially overextended is at risk of having to engage in illegal acts to generate funds. Unexplained affluence is often linked to proceeds from financially profitable criminal acts. Conditions that could raise a security concern and may be disqualifying include: (1) a history of not meeting financial obligations; (3) inability or unwillingness to satisfy debts; Conditions that could mitigate security concerns include: (3) the conditions that resulted in the behavior were largely beyond the person's control (e.g, loss of employment. . . divorce). 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 the 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. A person who seeks access to classified information enters into a fiduciary relationship with the Government predicated upon trust and confidence. Where facts proven by the Government raise doubts about an applicant's judgment, reliability or trustworthiness, the 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

The Government has established its case under criterion F. The record evidence clearly establishes Applicant's indebtedness and his irresponsible handling of that indebtedness. While the Applicant's divorce and loss of employment in 1992 provides some explanation for many of his debts, those explanations do not apply to three debts which had become past due before those events. Further, his divorce and loss of employment may serve to explain why many of Applicant's accounts became delinquent in 1992 and 1993, but they do not explain why accounts continued to fall into delinquency after 1994--when Applicant was again employed. Nor do they explain why Applicant has not made any efforts to satisfy any of these debts after obtaining better employment in June 1995. Applicant's Answer to the SOR claims that for several years after his divorce, motorcycle accident, and loss of job, he felt sorry for himself and did not care about anything; he claims in the past year to have started to get his life back together again. Yet, getting his life back together has not included addressing his indebtedness in any meaningful way. He asserts payment of debts--not alleged in the SOR--but provides no corroboration. Further, other mitigating factors which might come to his aid are not available: his irresponsible behavior is recent; with fourteen past due accounts, his behavior is certainly not isolated; and most important, he has not initiated good-faith efforts to repay overdue creditors or otherwise resolve his outstanding debts. I find criterion F. against Applicant.

FORMAL FINDINGS

Paragraph 1. Criterion F: Against THE APPLICANT Subparagraph a: Against the Applicant Subparagraph b: Against the Applicant Subparagraph c: Against the Applicant Subparagraph d: Against the Applicant Subparagraph e: Against the Applicant Subparagraph f: Against the Applicant Subparagraph g: Against the Applicant Subparagraph h: Against the Applicant Subparagraph i: Against the Applicant Subparagraph j: Against the Applicant Subparagraph k: Against the Applicant Subparagraph l: Against the Applicant Subparagraph m: Against the Applicant Subparagraph n: Against the 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 or continue a security clearance for Applicant. John G. Metz, Jr. Administrative Judge 1. Required by Executive Order 10865, as amended and Department of Defense Directive 5220.6, dated January 2, 1992--and amended by Change 3 dated 16 February 1996 (Directive).

FOOTNOTES

96-0469.h1 file:///usr.osd.mil/...yComputer/Desktop/DOHA%20transfer/DOHA-Kane/dodogc/doha/industrial/Archived%20-%20HTML/96-0469.h1.html[7/2/2021 3:57:44 PM] 96-0469.h1 file:///usr.osd.mil/...yComputer/Desktop/DOHA%20transfer/DOHA-Kane/dodogc/doha/industrial/Archived%20-%20HTML/96-0469.h1.html[7/2/2021 3:57:44 PM] 96-0469.h1 file:///usr.osd.mil/...yComputer/Desktop/DOHA%20transfer/DOHA-Kane/dodogc/doha/industrial/Archived%20-%20HTML/96-0469.h1.html[7/2/2021 3:57:44 PM] 96-0469.h1 file:///usr.osd.mil/...yComputer/Desktop/DOHA%20transfer/DOHA-Kane/dodogc/doha/industrial/Archived%20-%20HTML/96-0469.h1.html[7/2/2021 3:57:44 PM]