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ISCR Case 18-00259 · CASE

ISCR Case 18-00259denied

Case Headnote

ISCR Case No. 18-00259

deniedOct 10, 2018· Hon. Shari Dam· hearing

Synopsis

The applicant, a 31-year-old defense contractor and Army National Guard member, faced security concerns under Guideline F due to a history of 10 delinquent debts totaling over $29,031. Despite acknowledging his financial issues and expressing intent to resolve them, he failed to provide evidence of payments or financial management, leading to the denial of his security clearance.

Why the Applicant Was Denied

Applicant admitted to having 10 delinquent debts totaling over $29,031.
He did not provide evidence of payments or a current budget to demonstrate financial reliability.
The applicant failed to mitigate the financial concerns despite being given opportunities to do so.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability to Satisfy Debts
AG ¶ 19(b)raisedUnwillingness to Satisfy Debts
AG ¶ 19(c)raisedHistory of Not Meeting Financial Obligations

Key Rule Quoted

“Failure to live within one’s means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual’s reliability, trustworthiness, and ability to protect classified or sensitive information.”
AG ¶ 18

Procedural Posture

SOR issuedFeb 6, 2018
Answer filedMar 10, 2018Requested decision on the written record without a hearing.
Hearing held—No hearing; decision made on the written record.
Decision dateOct 10, 2018

Cite For

Failure to Provide Evidence of Financial Management Under Guideline F
Importance of Demonstrating Good-faith Efforts to Resolve Debts
Impact of Financial Irresponsibility on National Security 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 failed to mitigate financial concerns related to a history of delinquent debts totaling over $29,031, which included an automobile repossession, unpaid credit cards, and medical debt. All ten debts remained unresolved, leading to a decision against the applicant under Guideline F.

1.a Applicant has a history of being unable or unwilling to meet financial obligations, which began in 2011 and continues into the present.
$29,031
Finding: Against Applicant
Type: Unspecified Financial
Response: Admitted
Disqualifying (¶19):
(a) inability to satisfy debts
(b) unwillingness to satisfy debts regardless of ability
(c) a history of not meeting financial obligations
Mitigating applied (¶20): —
Mitigation: —
1.b–1.j 9 sub-charges: specific text not stated in this decision (against the applicant).
Finding: Against Applicant
Type:
Response:
Disqualifying (¶19): —
Mitigating applied (¶20): —
Mitigation: —

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant has a history of being unable or unwilling to meet financial obligations, which began in 2011 and continues into the present. $29,031	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.b–1.j	9 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

DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS

In the matter of: )

)

) ISCR Case No: 18-00259

) Applicant for Security Clearance )

Appearances

For Government: David F. Hayes, Esquire, Department Counsel For Applicant: Pro se

______________

Decision ______________

DAM, Shari, Administrative Judge:

Applicant failed to mitigate the financial considerations security concerns related to his history of delinquent debts. Based upon a review of the pleadings and exhibits, national security eligibility for access to classified information is denied.

Statement of Case

On February 6, 2018, the Department of Defense (DOD) issued Applicant a Statement of Reasons (SOR), detailing security concerns under Guideline F (Financial Considerations). Applicant answered the SOR on March 10, 2018, and requested his case be decided by an administrative judge on the written record without a hearing (Answer). On April 9, 2018, Department Counsel submitted the Government’s written case. A complete copy of the File of Relevant Material (FORM), containing six Items, was mailed to Applicant and received by him on May 15, 2018. The FORM notified Applicant that he had an opportunity to file objections and submit material in refutation, extenuation, or mitigation within 30 days of receipt of the FORM. Applicant did not submit a response to the FORM or object to the Government’s evidence. Items 1 through 6 are admitted into 10/10/2018

evidence without objection. The Defense Office of Hearings and Appeals (DOHA) assigned this case to me on September 14, 2018.

Findings of Fact

Applicant admitted the 10 delinquent debts alleged in the SOR. (Item 1) His admissions are incorporated into these findings.

Applicant is 31 years old. He is married to his second wife and has two children. He has served in the Army National Guard since 2005. He has worked for his current employer, a defense contractor since 2016. (Items 2, 3)

On September 29, 2016, Applicant submitted a security clearance application (SCA). In April 2017, a government investigator interviewed Applicant about information in his SCA and other background issues. During the interview, Applicant was asked about numerous delinquent debts. Applicant did not recognize several debts mentioned during the interview, but did recognize others. He said he would investigate the debts and resolve them if necessary. (Item 3)

Based on credit bureau reports (CBR) from October 2016, August 2017, and January 2018, the SOR alleged 10 debts that became delinquent between 2011 and 2017, and totaled over $29,031. They included an automobile repossession, unpaid credit cards, a medical debt, and miscellaneous bills. In his Answer, he admitted that he is responsible for resolving his debts and intended to do that. He said that he is paying the $23,314 automobile repossession debt through a garnishment. He indicated that the debt arose after he co-signed a car loan for his brother-in-law, who defaulted on the loan. He stated that he intended to pay three alleged debts after he received an income tax refund. He was attempting to correct his financial mistakes that occurred when he was younger and did not know how to manage his finances. (Items 1, 4, 5)

Applicant did not include any evidence confirming his assertions that he was making payments on the repossession or had resolved any of the other debts. He did not provide a current budget or other information related to his financial obligations from which to determine his current financial reliability, compliance with payment agreements, or ability to maintain payments on the debts.

Policies

This case is adjudicated under Executive Order (EO) 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the National Security Adjudicative Guidelines for Determining Eligibility for Access to Classified Information or Eligibility to Hold a Sensitive Position (AG), effective within the DOD on June 8, 2017.

When evaluating an applicant’s suitability for national security eligibility, the administrative judge must consider the pertinent AG. In addition to brief introductory explanations of the security concern, the guidelines list potentially disqualifying conditions and mitigating conditions, which are to be used in evaluating an applicant’s national security eligibility.

These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, these guidelines are applied in conjunction with the factors listed in AG ¶ 2 describing the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. The entire process is a conscientious scrutiny of applicable guidelines in the context of a number of variables known as the whole-person concept. The administrative judge must consider all available, reliable information about the person, past and present, favorable and unfavorable, in making a decision.

The protection of the national security is the paramount consideration. AG ¶ 2(b) requires that “[a]ny doubt concerning personnel being considered for national security eligibility will be resolved in favor of the national security.” In reaching this decision, I have drawn only those conclusions that are reasonable, logical, and based on the evidence contained in the record. I have not drawn inferences based on mere speculation or conjecture.

Directive ¶ E3.1.14 requires the Government to present evidence to establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, an “applicant is responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by the applicant or proven by Department Counsel, and has the ultimate burden of persuasion as to obtaining a favorable clearance decision.”

A person applying for national security eligibility seeks to enter into a fiduciary relationship with the Government predicated upon trust and confidence. This relationship transcends normal duty hours and endures throughout off-duty hours. The Government reposes a high degree of trust and confidence in individuals to whom it grants national security eligibility. Decisions include, by necessity, consideration of the possible risk the applicant may deliberately or inadvertently fail to protect or safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation as to potential, rather than actual, risk of compromise of classified or sensitive information.

Analysis

Guideline F: Financial Considerations

The security concerns relating to the guideline for financial considerations are set out in AG ¶ 18, which reads in pertinent part:

Failure to live within one’s means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual’s reliability, trustworthiness, and ability to protect classified or sensitive information. Financial distress can also be caused or exacerbated by, and thus can be a possible indicator of, other issues of personal security concern such as excessive gambling, mental health conditions, substance misuse, or alcohol abuse or dependence. An individual who is financially overextended is at greater risk of having to engage in illegal or otherwise questionable acts to generate funds.

AG ¶ 19 describes three conditions that could raise security concerns and may be disqualifying in this case:

(a) inability to satisfy debts;

(b) unwillingness to satisfy debts regardless of the ability to do so; and

This concern is broader than the possibility that an individual might knowingly compromise classified information in order to raise money. It encompasses concerns about an individual’s self-control, judgment, and other qualities essential to protecting classified information. An individual who is financially irresponsible may also be irresponsible, unconcerned, or negligent in handling and safeguarding classified information.1

Based on his admissions and CBRs, Applicant has a history of being unable or unwilling to meet financial obligations, which began in 2011 and continues into the present. The evidence raises security concerns under the above disqualifying conditions, and shifts the burden to Applicant to rebut, extenuate, or mitigate those concerns.

The guideline includes conditions in AG ¶ 20 that could mitigate security concerns arising from Applicant’s financial problems. Four are potentially applicable:

(a) the behavior happened so long ago, was so infrequent, or occurred under such circumstances that it is unlikely to recur and does not cast doubt on the individual’s current reliability, trustworthiness, or good judgment;

(b) the conditions that resulted in the financial problem were largely beyond the person’s control (e.g., loss of employment, a business downturn, unexpected medical emergency, or a death, divorce or separation, clear

1 See ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012).

victimization by predatory lending practices, or identity theft), and the individual acted responsibly under the circumstances;

(c) the individual has received or is receiving financial counseling for the problem from a legitimate and credible source, such as a non-profit credit counseling service, and there are clear indications that the problem is being resolved or is under control; and

(d) the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts.

There is insufficient evidence in the record to establish mitigation under any of the above mitigating conditions. The delinquent debts alleged in the SOR arose between 2011 and 2017; all 10 remain unresolved. AG ¶ 20 (a) does not apply. Applicant attributed his largest debt, the automobile repossession, to his brother-in-law, who defaulted on a loan that Applicant co-signed for him. His other debts occurred when he was younger and financially irresponsible. Both of those circumstances were within his control. He did not provide evidence that he has attempted to responsibly manage his financial obligations. AG ¶ 20(b) does not apply. There is no evidence that Applicant participated in credit or financial counseling, and that his delinquent debts are being resolved and are under control. AG ¶ 20(c) does not apply. He did not provide evidence that he has made-good faith efforts to repay or resolve his debts. AG ¶ 20(d) does not apply.

Whole-Person Concept

Under the whole-person concept, the administrative judge must evaluate an applicant’s national security eligibility by considering the totality of the applicant’s conduct and all relevant circumstances. The administrative judge should consider the nine adjudicative process factors listed at AG ¶ 2(d):

(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 individual’s age and maturity at the time of the conduct; (5) the extent to which participation is voluntary; (6) the presence or absence of rehabilitation and other permanent 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.

According to AG ¶ 2(c), the ultimate determination of whether to grant national security eligibility must be an overall commonsense judgment based upon careful consideration of the applicable guidelines and the whole-person concept.

I considered the potentially disqualifying and mitigating conditions in light of all pertinent facts and circumstances surrounding this case. I have incorporated my

comments under Guideline F in my whole-person analysis. Some of the factors in AG ¶ 2(d) were addressed under that guideline, but some warrant additional comment.

Applicant is a mature individual, who has been serving in the National Guard since 2005. He began working for a defense contractor in 2016. During an April 2017 background interview, Applicant discussed his delinquent debts. In the February 2018 SOR, the Government placed him on notice that his debts raised security concerns. After reviewing his Answer to the SOR, Department Counsel notified him in the FORM that he failed to submit sufficient documentation to address the status of the debts and to mitigate the financial allegations. Despite that notice, he did not provide additional evidence to confirm that he was resolving the largest alleged debt as he stated in his Answer or any of the other smaller debts. At this time, he has failed to present sufficient evidence of mitigation, including a track record of responsibly managing debts and financial obligations. He failed to meet his burden to mitigate the security concerns arising under the guideline for financial considerations.

Formal Findings

Formal findings for or against Applicant on the allegations set forth in the SOR, as required by ¶ E3.1.25 of Enclosure 3 of the Directive, are:

Paragraph 1, Guideline F:

AGAINST APPLICANT

Subparagraphs 1.a through 1.j:

Against Applicant

Conclusion

In light of all of the circumstances presented by the record in this case, it is not clearly consistent with the national interest to grant Applicant access to classified information. National security eligibility is denied.

SHARI DAM Administrative Judge