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ISCR Case 18-02017 — CASE

ISCR Case 18-02017granted

Case Headnote

ISCR Case No. 18-02017

grantedMar 7, 2019· Hon. Richard A. Cefola· hearing

Summary

A 53-year-old defense contractor employee was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The Statement of Reasons cited two primary financial issues: a past-due landscaping debt and a foreclosure.

The applicant admitted to owing approximately $33,000 for landscaping to Creditor A. This debt was subsequently settled for $15,000, and the applicant provided documentation showing the first of three $5,000 payments had been made. The second financial concern involved a past-due debt to Creditor B resulting from a foreclosure. This debt was satisfied more than six years prior to the review, as confirmed by a July 2012 credit report.

The decision to grant the clearance was based on the successful mitigation of these issues. The applicant demonstrated responsible financial behavior by settling the landscaping debt and adhering to the payment plan. The significant time elapsed since the foreclosure also indicated a resolution of past financial difficulties. Additionally, testimony from family members regarding the applicant's good character further supported the favorable outcome.

Why the Applicant Prevailed

The applicant settled a significant landscaping debt and made payments as agreed.
The foreclosure was satisfied over six years ago, demonstrating resolution of past financial issues.
The applicant's family members testified to his good character, supporting his reliability.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(a)appliedBehavior Unlikely to Recur
AG ¶ 20(b)appliedConditions Largely Beyond Control
AG ¶ 20(d)appliedGood-faith Effort to Repay Debts

Key Rule Quoted

“The protection of the national security is the paramount consideration.”

Procedural Posture

SOR issuedAug 24, 2018
Answer filedOct 4, 2018
Hearing heldDec 4, 2018
Decision dateMar 7, 2019

Cite For

Mitigation of Financial Concerns Under Guideline F
Importance of Demonstrating Good-faith Efforts to Resolve Debts
Consideration of Family Character Testimony in Security Clearance Cases

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 addressed his financial issues, including a landscaping debt that was settled and a foreclosure that was satisfied over six years ago. As a result, the judge concluded that the applicant mitigated the financial concerns and granted the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant admits a past-due debt for landscaping to Creditor A in the amount of about $33,000. He has settled this debt for $15,000, and has made the first of three $5,000 payments as evidenced by documentation from Creditor A. $33,000	For Applicant	Personal Loan Debt	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly	Documented Debt Paid in Full
1.b	Applicant admits a past-due debt as the result of a foreclosure to Creditor B. This debt was satisfied more than six years ago through the foreclosure, as evidenced by the Government’s July 2012 credit report.	For Applicant	Unspecified Financial	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly	Documented Passage of Time

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. 18-02017

)

) Applicant for Security Clearance )

For Government: Tara Karoian, Esq., Department Counsel For Applicant: Pro se

March 7, 2019 ______________

STATEMENT OF CASE

______________

CEFOLA, Richard A., Administrative Judge:

Statement of the Case

On August 24, 2018, 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. 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 October 4, 2018, and requested a hearing before an administrative judge. (Answer.) The case was assigned to me on November 14, 2018. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on November 14, 2018, scheduling the hearing for December 4, 2018. The hearing was convened as scheduled. The Government offered Exhibits (GXs) 1 through 6, which were admitted into evidence. Applicant testified on his own behalf and called three witnesses, his wife, his father, and his brother. Applicant presented seven documents, which I marked Applicant’s Exhibits (AppXs) A through G, which were

admitted into evidence. The record was left open until February 4, 2019, for receipt of additional documentation. On February 4, 2019, Applicant offered one additional document, which was marked as AppX H and admitted into evidence. DOHA received the transcript of the hearing (TR) on December 13, 2018.

FINDINGS OF FACT

Applicant admitted the two allegations of the SOR, ¶¶ 1.a., and 1.b. After a thorough and careful review of the pleadings, exhibits, and testimony, I make the following findings of fact.

Applicant is a 53-year-old employee of a defense contractor. (GX 1 at pages 5 and 10.) He has been employed with the defense contractor since August of 2014. (AppX 1 at page 10.) He is married, and has three adult children. (GX 1 at pages 21, and 24–25.) Applicant attributes his alleged financial difficulties to the crash of the housing market in 2008, and to a year of unemployment prior to his present employment. (TR at page 25 line 25 to page 29 at line 13, and GX 1 at page 11.)

Guideline F - Financial Considerations

1.a Applicant admits a past-due debt for landscaping to Creditor A in the amount of about $33,000. (TR at page 62 line 23 to page 64 line 12.) He has settled this debt for $15,000, and has made the first of three $5,000 payments as evidenced by documentation from Creditor A. (AppX H.) This allegation is found for Applicant.

1.b. Applicant admits a past-due debt as the result of a foreclosure to Creditor B. (TR at 66 line 3 to page 68 line 12.) This debt was satisfied more than six years ago through the foreclosure, as evidenced by the Government’s July 2012 credit report. (GX 4 at page 4.) This allegation is found for Applicant.

Applicant’s wife corroborated his testimony, and his father and brother testified as to Applicant’s good character. (TR at page 40 line 15 to page 49 line 6, at page 78 line 6 to page 80 line 19, and at page 82 line 3 to page 84 line 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 a foreclosure and a significant past-due landscaping debt. 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’s financial problems have been addressed. His foreclosure was satisfied years ago, and he his addressing his landscaping debt through agreed settlement payments. Applicant has thus demonstrated that future financial problems are unlikely. Mitigation under AG ¶ 20 has been established.

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. 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

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