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ISCR Case 18-00478 · CASE

ISCR Case 18-00478denied

Case Headnote

ISCR Case No. 18-00478

deniedSep 17, 2018· Hon. Matthew E. Malone· hearing

Synopsis

The applicant, a 45-year-old employee of a defense contractor, faced security concerns under Guideline F due to a history of financial problems, including $125,394 in delinquent debts primarily related to child support. The judge found that the applicant failed to demonstrate responsible management of his debts, leading to a denial of his security clearance application.

Why the Applicant Was Denied

The applicant has a long history of financial problems, including significant delinquent debts.
The only payments being made on his debts are through involuntary wage garnishments, indicating a lack of proactive financial management.
The applicant did not provide sufficient evidence of efforts to address his financial issues or seek professional assistance.

Conditions Referenced

Disqualifying

AG ¶ 19(a)appliedInability to Satisfy Debts
AG ¶ 19(b)appliedUnwillingness to Satisfy Debts Regardless of the Ability to Do So
AG ¶ 19(c)appliedA History of Not Meeting Financial Obligations

Key Rule Quoted

“A person who has access to such information enters into a fiduciary relationship with the Government based on trust and confidence.”
Department of the Navy v. Egan, 484 U.S. 518 (1988)

Procedural Posture

SOR issuedMar 6, 2018
Answer filedMar 20, 2018
Hearing held—Applicant requested a decision without a hearing.
Decision dateJul 27, 2018

Cite For

Failure to Mitigate Financial Concerns Under Guideline F
Impact of Involuntary Wage Garnishments on Security Clearance Eligibility
Importance of Proactive Financial Management in Security Clearance Determinations

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 significant financial concerns, including multiple delinquent debts totaling over $125,000, primarily related to child support. The applicant's financial issues were deemed ongoing and unresolved, leading to a denial of his security clearance application.

1.a Applicant owes $125,394 for five delinquent or past-due debts.
$116,087
Finding: Against Applicant
Type: Child Support Debt
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 Three of the five allegations address delinquent child support accounts totaling $116,087.
$116,087
Finding: Against Applicant
Type: Child Support Debt
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.c The debts at SOR 1.c and 1.d, which total $9,307, remain unpaid.
$9,307
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.d The account is listed on his credit report as 'closed.'
Finding: Against Applicant
Type: Unspecified Financial
Response: Denied with Explanation
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.e The child support debt at SOR 1.e is the same account alleged at SOR 1.b.
Finding: Against Applicant
Type: Unspecified Financial
Response: Denied with Explanation
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: —

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant owes $125,394 for five delinquent or past-due debts. $116,087	Against Applicant	Child Support Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.b	Three of the five allegations address delinquent child support accounts totaling $116,087. $116,087	Against Applicant	Child Support Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.c	The debts at SOR 1.c and 1.d, which total $9,307, remain unpaid. $9,307	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.d	The account is listed on his credit report as 'closed.'	Against Applicant	Unspecified Financial	Denied with Explanation	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.e	The child support debt at SOR 1.e is the same account alleged at SOR 1.b.	Against Applicant	Unspecified Financial	Denied with Explanation	(a) inability to satisfy debts (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

DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS

In the matter of: )

) )

[NAME REDACTED] ) ISCR Case No. 18-00478

)

) Applicant for Security Clearance )

Appearances

For Government: Ross Hyams, Esq., Deputy Chief Department Counsel For Applicant: Pro se

______________

Decision ______________

MALONE, Matthew E., Administrative Judge:

Applicant failed to mitigate the security concerns raised by his past-due and delinquent debts. He has a long history of financial problems and the only payments currently being made on his debts are the result of involuntary wage garnishments. Applicant’s request for eligibility for access to classified information is denied.

Statement of the Case

On May 9, 2017, Applicant submitted an Electronic Questionnaire for Investigations Processing (e-QIP) to obtain or renew eligibility for access to classified information as part of his job with a defense contractor. After reviewing the completed background investigation, adjudicators at the Department of Defense Consolidated 09/17/2018

Adjudications Facility (DOD CAF) could not determine that it was clearly consistent with the interests of national security for Applicant to have access to classified information.1

On March 6, 2018, the DOD CAF issued a Statement of Reasons (SOR) alleging facts that raise security concerns addressed under Guideline F (Financial Considerations).2 Applicant timely responded to the SOR (Answer) and requested a decision without a hearing. On May 10, 2018, Department Counsel for the Defense Office of Hearings and Appeals (DOHA) issued a File of Relevant Material (FORM)3 in support of the SOR. Applicant received the FORM on May 16, 2018, and had 30 days from the date of receipt to object to the use of the information included in the FORM and to submit additional information in response to the FORM.4 The record closed on June 15, 2018, after Applicant did not submit any response to the FORM, or object to any of the information presented therein. I received this case for decision on July 27, 2018.

Findings of Fact

Under Guideline F, the Government alleged in the SOR that Applicant owes $125,394 for five delinquent or past-due debts (SOR 1.a – 1.e). Three of the five allegations address delinquent child support accounts totaling $116,087. Applicant admitted, with explanations, all five allegations; however, in his response to SOR 1.d, he avers that the account is listed on his credit report as “closed.” In his response to SOR 1.e, he claimed that the child support debt at SOR 1.e is the same account alleged at SOR 1.b. I have entered his responses to SOR 1.dand 1.e as denials, thus requiring the Government to present information to prove those allegations as controverted issues of fact.5 With his Answer, Applicant provided documentation in support of claims made in his responses. (FORM, Item 3)

The SOR allegations, including SOR 1.dand 1.e, are supported by Applicant’s admissions in his Answer, by his disclosures and statements in two e-QIPs and a personal subject interview (PSI) on August 8, 2017, by three credit reports, and by information from the court where the civil judgment alleged in SOR 1.dwas entered. Applicant’s information regarding his child support debts does not support his claim that SOR 1.e is a duplicate of SOR 1.b. The information in his two most recent credit reports and in the summary of his PSI reflect at least three delinquent child support debts. (FORM, Items 3 – 6, and 8 – 11) In addition to the facts thus established, I make the following findings of fact.

Applicant is a 45-year-old employee of a defense contractor, for whom he has worked since May 2017. He also worked for the same contractor, first as a temporary

1 Required by Executive Order 10865, as amended, and by DOD Directive 5220.6 (Directive). 2 See Directive, Enclosure 2. 3 See Directive, Section E3.1.7. In the FORM, Department Counsel relies on 11 enclosed exhibits (Items 1 – 11). 4 See Directive, Section E3.1.7.

5 See Directive, E3.1.14.

agency hire, then as a permanent employee, from February 2009 until December 2012. At that time, the contract he worked on expired and he was laid off and unemployed for seven months. In July 2013, he started his own small business, which was his only source of income until he was re-hired by his current employer. (FORM, Items 4 and 6)

Applicant served in the United States Army National Guard and Reserve from March 1997 until April 2001. Thereafter, he served on regular active duty in the Army until March 2004, when he was honorably discharged. In August 2004, he was hired as a systems analyst by a defense contractor in State A, where he was stationed when he left active duty. He held that job until moving to his current residence in State B in December 2008. Applicant was unemployed in State B until February 2009. (FORM, Items 4 and 6)

Applicant first received a security clearance in June 1997. In September 2013, his clearance was revoked after he failed to respond to an SOR alleging security concerns about his finances. Specifically, it was alleged that he owed $44,874 for 16 delinquent or past-due debts, including one delinquent child support account and two delinquent car loans. Applicant re-applied for a security clearance when he submitted an e-QIP on November 30, 2009. In that application, he disclosed ten delinquent or past-due debts, including two child support accounts, totaling $6,189. (FORM, Items 4, 5 and 7)

Applicant and his first wife were married from February 1995 until divorcing in December 1999. They had two children, now ages 20 and 23. He and his second wife were married in October 2002, but separated in January 2011. The record does not reflect a divorce from his second wife. They had three children, now ages 10, 12, and 15. As of May 2017, Applicant had been living with his girlfriend since March 2011. (FORM, Items 4 – 6)

Available information shows that Applicant is obligated to pay child support to both of his ex-wives. It does not show any allocation for each child, or how much of his debt is attributable to arrearages and how much is the original monthly obligation. Applicant’s pay is being involuntarily garnished for two child support accounts, one originating in State A, the other from State B. From each paycheck, $818.31 is withheld. This equates to about one-half of Applicant’s pay, leaving him with about $1,770 in monthly take home pay.6 At the monthly rate at which his pay is being garnished to satisfy $116,087 in unpaid child support, the debts at SOR 1.a, 1.b, and 1.e will be paid off in 65 months. As of March 2018, statements about two of his child support accounts showed balances totaling $105,988.05. (FORM, Items 3 and 6)

Applicant did not provide any other information about his personal finances. He attributes his child support and other debts to seven months of unemployment in 2013. He also stated that the income from his small business enterprise between July 2013 and May 2017 was insufficient to meet his child support obligations, as well as to resolve his other debts. Applicant did not document his income during that period and he did not explain or document his efforts to communicate with any of his creditors. The debts at SOR 1.cand 1.d, which total $9,307, remain unpaid. Applicant has not sought assistance

6 Assuming he is paid every other week, or 26 times annually.

from any financial counselor or other professional service to resolve his financial problems.

Policies

Each security clearance decision must be a fair, impartial, and commonsense determination based on examination of all available relevant and material information,7 and consideration of the pertinent criteria and adjudication policy in the adjudicative guidelines. Decisions must also reflect consideration of the factors listed in ¶ 2(d) of the new guidelines. Commonly referred to as the “whole-person” concept, those factors are:

(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.

The presence or absence of a disqualifying or mitigating condition is not determinative of a conclusion for or against an applicant. However, specific applicable guidelines should be followed whenever a case can be measured against them as they represent policy guidance governing the grant or denial of access to classified information. A security clearance decision is intended only to resolve whether it is clearly consistent with the national interest8 for an applicant to either receive or continue to have access to classified information. Department Counsel must produce sufficient reliable information on which DOD based its preliminary decision to deny or revoke a security clearance for an applicant. Additionally, Department Counsel must prove controverted facts alleged in the SOR.9 If the Government meets its burden, it then falls to the applicant to refute, extenuate, or mitigate the case for disqualification.10

Because no one is entitled to a security clearance, applicants bear a heavy burden of persuasion to establish that it is clearly consistent with the national interest for them to have access to protected information. A person who has access to such information enters into a fiduciary relationship with the Government based on trust and confidence. Thus, there is a compelling need to ensure each applicant possesses the requisite judgment, reliability, and trustworthiness of one who will protect the nation’s interests as his or her own. The “clearly consistent with the national interest” standard compels

7 See Directive, 6.3. 8 See Department of the Navy v. Egan, 484 U.S. 518 (1988). 9 See Directive, E3.1.14. 10 See Directive, E3.1.15.

resolution of any reasonable doubt about an applicant’s suitability for access to classified information in favor of the Government.11

Analysis

Financial Considerations

Available information shows Applicant still owes more than $114,295 in delinquent or past-due debts. This record reasonably raises the security concern expressed at AG ¶ 18:

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 personnel 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. Affluence that cannot be explained by known sources of income is also a security concern insofar as it may result from criminal activity, including espionage.

Applicant has experienced significant financial problems since at least 2003. This is not the first time the government has expressed concerns about his debts. The debts examined in this current investigation and adjudication have not been actively addressed by the Applicant, despite a previous revocation of his security clearance for the same reasons alleged in this SOR. This information requires application of the disqualifying condition at AG ¶¶ 19(a) (inability to satisfy debts); 19(b) (unwillingness to satisfy debts regardless of the ability to do so); and 19(c) (a history of not meeting financial obligations).

By contrast, Applicant did not produce any information that warrants consideration of any of the AG ¶ 20 mitigating conditions. His financial problems are recent and ongoing. Although Applicant reasonably cites loss of employment and insufficient income as a circumstances beyond his control underlying his debts, he did not show that he has acted responsibly in the face of those circumstances. To the contrary, the only repayment documented in this record consists of involuntary garnishment of half of his pay by two different states. Although in his Answer he avers he is acting “in good faith” to address his debts, the record suggests otherwise. Applicant did not adequately support claims about negotiating with his creditors, and he did not present any information that shows his financial problems are under control. Applicant has not sought help through financial counseling or other professional assistance, and he has not provided any information about his current finances that would support a positive, predictive conclusion that his

11 See Egan, 484 U.S. at 528, 531.

finances will not continue to pose a security concern in the future. Applicant did not mitigate the security concerns under this guideline raised by the Government’s information.

In addition to my evaluation of the facts and application of the appropriate adjudicative factors under Guideline F, I have reviewed the record before me in the context of the whole-person factors listed in AG ¶ 2(d). Applicant’s information did not resolve the doubts about his suitability for access to classified information that were raised by his financial problems. Because protection of the national interest is the principal focus of these adjudications, any remaining doubts must be resolved against the individual.

Formal Findings

Formal findings on the allegations set forth in the SOR, as required by section E3.1.25 of Enclosure 3 of the Directive, are:

Paragraph 1, Guideline F: AGAINST APPLICANT

Subparagraphs 1.a – 1.e: Against Applicant

Conclusion

In light of all available information, it is not clearly consistent with the interests of national security for Applicant to have access to classified information. Applicant’s request for security clearance eligibility is denied.

MATTHEW E. MALONE Administrative Judge