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ISCR Case 17-00114 — CASE

ISCR Case 17-00114granted

Case Headnote

ISCR Case No. 17-00114

grantedDec 18, 2018· Hon. Richard A. Cefola· hearing

Summary

This case concerns a 40-year-old defense contractor employee whose eligibility for a security clearance was reviewed under Guideline F (Financial Considerations). The Statement of Reasons alleged multiple past-due debts, including balances with Creditor A (approximately $6,298), Creditor B (approximately $3,189 and $2,607), and Creditor C (approximately $2,054). These allegations raised disqualifying conditions under Adjudicative Guidelines (AG) ¶ 19(a) and AG ¶ 19(c).

However, the applicant demonstrated significant mitigating efforts. Consistent monthly payments were being made towards all outstanding debts, specifically $360 to Creditor A, $101 and $80 to Creditor B, and $130 to Creditor C. Furthermore, the applicant fully resolved a past-due medical debt with Creditor E, providing documentation of its payment. The applicant attributed the financial difficulties to circumstances beyond his control, including a pay cut and family medical issues.

The administrative judge applied mitigating conditions under AG ¶ 20(b) and AG ¶ 20(d), finding that the applicant's consistent payments and resolution of one debt demonstrated a commitment to financial responsibility. These actions effectively mitigated the security concerns. Consequently, the applicant was granted eligibility for access to classified information.

Why the Applicant Prevailed

The applicant made consistent monthly payments towards all but one past-due debt, demonstrating a commitment to financial responsibility.
The applicant resolved one past-due debt entirely, showing proactive efforts to address financial issues.
The applicant's financial difficulties were attributed to circumstances beyond his control, including a pay cut and medical issues in the family.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(b)appliedConditions Largely Beyond the Person's Control
AG ¶ 20(d)appliedGood-faith Effort to Repay Overdue Creditors

Key Rule Quoted

“The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision.”

Procedural Posture

SOR issuedFeb 10, 2017
Answer filedMar 7, 2017
Hearing heldMar 19, 2018
Decision dateDec 18, 2018

Cite For

Mitigation of Financial Concerns Under Guideline F
Consideration of Circumstances Beyond the Applicant's Control in Financial Matters
Good-faith Efforts to Resolve Debts as a Mitigating Factor

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: HearingDecided: granted

The judge found that the applicant had made significant progress in addressing his financial obligations, with all debts either being paid or in repayment plans. As a result, the judge concluded that the financial concerns were mitigated and granted the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant is making monthly payments of $360 towards the past-due debt to Creditor A, which has now been reduced to about $6,298. $6,298	For Applicant	Unspecified Financial	Denied	—	(b) conditions largely beyond the person’s control; acted responsibly	Claimed Payment Plan with Creditor
1.b	Applicant is making monthly payments of $101 towards the past-due debt to Creditor B, which has now been reduced to about $3,189. $3,189	For Applicant	Unspecified Financial	Denied	—	(b) conditions largely beyond the person’s control; acted responsibly	Claimed Payment Plan with Creditor
1.c	Applicant is making monthly payments of $130 towards the past-due debt to Creditor C, which has now been reduced to about $2,054. $2,054	For Applicant	Unspecified Financial	Denied	—	(b) conditions largely beyond the person’s control; acted responsibly	Claimed Payment Plan with Creditor
1.d	Applicant is making monthly payments of $80 towards another past-due debt to Creditor B, which has now been reduced to about $2,607. $2,607	For Applicant	Unspecified Financial	Denied	—	(b) conditions largely beyond the person’s control; acted responsibly	Claimed Payment Plan with Creditor
1.e	Applicant has paid the alleged past-due medical debt to Creditor E, as evidenced by documentation from Creditor E.	For Applicant	Medical Debt	Denied	—	(b) conditions largely beyond the person’s control; acted responsibly	Documented Debt Paid in Full

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

DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS

In the matter of: )

)

ISCR Case No. 17-00114

)

) Applicant for Security Clearance )

For Government: Andrew Henderson, Esq., Department Counsel For Applicant: Pro se

December 18, 2018 ______________

STATEMENT OF CASE

______________

CEFOLA, Richard A., Administrative Judge:

Statement of the Case

On February 10, 2017, in accordance with DoD Directive 5220.6, as amended (Directive), the Department of Defense issued Applicant a Statement of Reasons (SOR) alleging facts that raise security concerns under Guideline F.1 The SOR further informed Applicant that, based on information available to the government, DoD adjudicators could not make the preliminary affirmative finding it is clearly consistent with the national interest to grant or continue Applicant’s security clearance.

Applicant answered the SOR on March 7, 2017, and requested a hearing before an administrative judge. (Answer.) The case was originally assigned to another administrative judge, but reassigned to me on February 20, 2018. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on February 28, 2018, scheduling the hearing for March 19, 2018. The hearing was convened as scheduled.

1 I considered the previous Adjudicative Guidelines, effective September 1, 2006, as well as the new Adjudicative Guidelines, effective June 8, 2017. My decision would be the same if the case was considered under the previous Adjudicative Guidelines, effective September 1, 2006.

The Government offered Exhibits (GXs) 1 through 5, which were admitted into evidence. Applicant testified on his own behalf and called one witness. Applicant presented one document, which I marked Applicant’s Exhibits (AppX) A and admitted into evidence. The record was left open until April 19, 2018, for receipt of additional documentation. On April 18, 2018, Applicant presented an additional packet of documents, which I marked AppX B and admitted into evidence. DOHA received the transcript of the hearing (TR) on March 26, 2018.

FINDINGS OF FACT

Applicant denied all five SOR allegations with explanations. After a thorough and careful review of the pleadings, exhibits, and testimony, I make the following findings of fact.

Applicant is a 40-year-old employee of a defense contractor. (GX 1 at pages 5 and 9.) He has been employed with the defense contractor since April of 2016. (GX 1 at page 9.) He is married, and has three children. (TR at page 13 line 25 to page 14 line 16.) Applicant attributes his past financial difficulties to a substantial cut in his pay, and to medical issues for both his spouse and his 14-year old daughter. (TR at page 25 line 23 to page 26 line 11.) He is addressing the Government’s concerns, listed below, and lives within his family budget. (TR at page 332 lines 5–11, and AppX B the last three pages.)

1.a. Applicant is making monthly payments of $360 towards the past-due debt to Creditor A, which has now been reduced to about $6,298. (TR at page 20 line 22 to page 25 line 2.) This is evidenced by documentation from Creditor A. (GX B at page 2.)

1.b. Applicant is making monthly payments of $101 towards the past-due debt to Creditor B, which has now been reduced to about $3,189. (TR at page 26 line 15 to page 27 line 13.) This is evidenced by documentation from Creditor B. (GX B at page 4.)

1.c. Applicant is making monthly payments of $130 towards the past-due debt to Creditor C, which has now been reduced to about $2,054. (TR at page 27 line 4 to page 30 line 3.) This is evidenced by documentation from Creditor C. (GX A.)

1.d. Applicant is making monthly payments of $80 towards another past-due debt to Creditor B, which has now been reduced to about $2,607. (TR at page 32 line 18 to page 33 line 4.) This is evidenced by documentation from Creditor B. (GX B at page 3.)

1.e. Applicant has paid the alleged past-due medical debt to Creditor E, as evidenced by documentation from Creditor E. (AppX B at page 5.)

POLICIES

When evaluating an applicant’s national security eligibility, the administrative judge must consider the adjudicative guidelines (AG). In addition to brief introductory explanations for each guideline, the adjudicative 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, administrative judges apply the guidelines 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. According to AG ¶ 2(a), the entire process is a conscientious scrutiny 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.

Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Directive ¶ E3.1.15 states the “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 who applies for access to classified information 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 access to classified information. 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 information.

Section 7 of Executive Order (EO) 10865 provides that adverse decisions shall be “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive information).

ANALYSIS

Guideline F - Financial Considerations

The security concern relating to the guideline for Financial Considerations is set out in 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.

The guideline notes several conditions that could raise security concerns under AG ¶ 19. Two are potentially applicable in this case:

(a) inability to satisfy debts; and

Applicant had significant past-due indebtedness. The evidence is sufficient to raise these disqualifying conditions.

AG ¶ 20 provides conditions that could mitigate security concerns. I considered all of the mitigating conditions under AG ¶ 20 including:

(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, a death, divorce or separation, clear victimization by predatory lending practices, or identity theft), and the individual acted responsibly under the circumstances; and

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

Applicant is addressing, through making monthly payments, all but one of the alleged past-due debts that are of concern to the Government. The other alleged past- due debt he has paid.

WHOLE PERSON CONCEPT

Under the whole-person concept, the administrative judge must evaluate an applicant’s eligibility for a security clearance 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.

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

I considered the potentially disqualifying and mitigating conditions in light of all facts and circumstances surrounding this case. I have incorporated my comments under Guideline F in my whole-person analysis. Applicant has a distinguished history of working in the defense industry and is respected by his supervisor. (TR at page 35 line 16 to page 37 line 1.) He performs well at his job.

Overall, the record evidence leaves me without questions or doubts as to Applicant’s eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant mitigated the Financial Considerations security concerns.

FORMAL FINDINGS

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

Paragraph 1, Guideline F:

FOR APPLICANT

Subparagraph 1.a:

For Applicant Subparagraph 1.b:

For Applicant Subparagraph 1.c:

For Applicant Subparagraph 1.d:

For Applicant Subparagraph 1.e:

For Applicant

CONCLUSION

In light of all of the circumstances presented by the record in this case, it is clearly consistent with the national interest to grant Applicant national security eligibility for a security clearance. Eligibility for access to classified information is granted.

Richard A. Cefola Administrative Judge