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ISCR Case 18-02970 — CASE

ISCR Case 18-02970granted

Case Headnote

ISCR Case No. 18-02970

grantedDec 9, 2019· Hon. Richard A. Cefola· hearing

Summary

This case concerns a 37-year-old defense contractor employee whose eligibility for a security clearance was reviewed under Guideline F (Financial Considerations). The applicant faced concerns due to multiple past-due financial obligations, primarily stemming from two failed marriages. Disqualifying conditions under AG ¶ 19(a) and AG ¶ 19(c) were raised.

The Statement of Reasons detailed several debts, including approximately $15,152 owed to health providers, a $6,295 debt to Creditor E settled for $1,098, and debts to Creditor F ($1,037) and Creditor H ($1,960) being addressed through a debt-consolidation service. Other debts, including $179 to Creditor G, $52 to Creditor I, $6,701 to Creditor K (from an automobile repossession), $296 to Creditor M, and $96 to Creditor N, were paid. The applicant also made good-faith efforts to address two charged-off debts of $838 and $815.

The administrative judge applied mitigating conditions AG ¶ 20(b) and AG ¶ 20(d), finding that the applicant made a good-faith effort to address all past-due debts. The financial difficulties were largely attributed to personal circumstances, and the applicant demonstrated responsible behavior in managing debts. Consequently, eligibility for access to classified information was GRANTED.

Why the Applicant Prevailed

The applicant made a good-faith effort to address all past-due debts.
Financial difficulties were largely attributed to personal circumstances, including two failed marriages.
The applicant demonstrated responsible behavior in managing debts through a debt-consolidation service.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability to Satisfy Debts
AG ¶ 19(c)raisedA History 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 protection of the national security is the paramount consideration.”

Procedural Posture

SOR issuedMay 3, 2019
Answer filedJul 2, 2019
Hearing heldSep 24, 2019
Decision dateDec 9, 2019

Cite For

Mitigation of Financial Concerns Under Guideline F
Good-faith Efforts in Addressing Debts
Impact of Personal Circumstances on Financial Obligations

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 several past-due debts but determined that she had made significant efforts to address them, including settling some debts and utilizing a debt-consolidation service. Ultimately, the judge concluded that the applicant mitigated the financial concerns raised under Guideline F, resulting in a favorable decision for her.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant has past-due debts to health providers in an amount totaling about $15,152. $15,152	For Applicant	Unspecified Financial	Unknown	—	(b) conditions largely beyond the person’s control; acted responsibly	Documented Debt Settlement
1.e	Applicant has a past-due debt to Creditor E in the amount of about $6,295, which she has settled for $1,098. $6,295	For Applicant	Unspecified Financial	Unknown	—	(b) conditions largely beyond the person’s control; acted responsibly	Documented Debt Settlement
1.f	Applicant has a past-due debt to Creditor F in the amount of about $1,037, which she is addressing through a debt-consolidation service. $1,037	For Applicant	Unspecified Financial	Unknown	—	(b) conditions largely beyond the person’s control; acted responsibly	Documented Financial Counseling
1.g	Applicant has paid the $179 past-due debt to Creditor G. $179	For Applicant	Unspecified Financial	Unknown	—	—	—
1.h	Applicant has a past-due debt to Creditor H in the amount of about $1,960, which she is addressing through a debt-consolidation service. $1,960	For Applicant	Unspecified Financial	Unknown	—	(b) conditions largely beyond the person’s control; acted responsibly	Documented Financial Counseling
1.i	Applicant has paid the $52 past-due debt to Creditor I. $52	For Applicant	Unspecified Financial	Unknown	—	—	—
1.j	Applicant has made a good-faith effort to address this charged-off debt for $838. $838	For Applicant	Unspecified Financial	Unknown	—	—	—
1.k	Applicant has paid the $6,701 past-due debt to Creditor K, as the result of an automobile repossession. $6,701	For Applicant	Auto Loan Debt	Unknown	—	—	—
1.l	Applicant has made a good-faith effort to address this charged-off debt for $815. $815	For Applicant	Unspecified Financial	Unknown	—	—	—
1.m	Applicant has paid the $296 past-due debt to Creditor M. $296	For Applicant	Unspecified Financial	Unknown	—	—	—
1.n	Applicant has paid the $96 past-due debt to Creditor N. $96	For Applicant	Unspecified Financial	Unknown	—	—	—

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. 18-02970

)

) Applicant for Security Clearance )

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

December 9, 2019 ______________

STATEMENT OF CASE

______________

CEFOLA, Richard A., Administrative Judge:

Statement of the Case

On May 3, 2019, 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 July 2, 2019, and requested a hearing before an administrative judge. (Answer.) The case was assigned to me on August 29, 2019. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on August 29, 2019, scheduling the hearing for September 24, 2019. The hearing was convened as scheduled. The Government offered Exhibits (GXs) 1 through 8, which were admitted into evidence. Applicant testified on her own behalf. Applicant presented 12 documents, which I marked Applicant’s Exhibits (AppXs) A through L, and admitted into evidence. DOHA received the transcript of the hearing (TR) on October 2, 2019.

FINDINGS OF FACT

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

Applicant is a 37-year-old employee of a defense contractor. (GX 1 at pages 5 and 12.) She has been employed with the defense contractor since June of 2017. (GX 1 at page 12.) She is twice divorced, and has five children. (TR at page 29 line 1 to page 31 line 11, and GX 1 at pages 29–31.) She attributes the alleged financial difficulties to her failed marriages.

Guideline F - Financial Considerations

1.a.~1.d. Applicant has past-due debts to health providers in an amount totaling about $15,152. Applicant is addressing these debts through a debt-consolidation service, as evidenced by documentation from that service. (TR at page 31 line 19 to page 35 line 5, and AppX A.) These allegations are found for Applicant.

1.e. Applicant has a past-due debt to Creditor E in the amount of about $6,295. Applicant has settled this debt for $1,098; and is making monthly payments towards this settlement, as evidenced by documentation from Creditor E. (TR at page 35 line 6 to page 36 line 22, and AppX B.) This allegation is found for Applicant.

1.f. Applicant has a past-due debt to Creditor F in the amount of about $1,037. Applicant is addressing this debt through the before-mentioned debt-consolidation service, as evidenced by documentation from that service. (TR at page 31 line 19 to page 35 line 5, and AppX A.) This allegation is found for Applicant.

1.g. Applicant has paid the $179 past-due debt to Creditor G, as evidenced by Creditor G’s successor creditor. (TR at page 36 line 23 to page 39 line 19, and AppX B at pages 6–7.) This allegation is found for Applicant.

1.h. Applicant has a past-due debt to Creditor H in the amount of about $1,960. Applicant is also addressing this debt through the before-mentioned debt-consolidation service, as evidenced by documentation from that service. (TR at page 31 line 19 to page 35 line 5, and AppX A.) This allegation is found for Applicant.

1.i. Applicant has paid the $52 past-due debt to Creditor I, as evidenced by documentation from Creditor I. (TR at page 39 line 22 to page 40 line 9, and AppX B at page 10.) This allegation is found for Applicant.

1.j. Applicant has made a good-faith effort to address this charged-off debt for $838. (TR at page 40 line 10 to page 41 line 11, and AppX B at page 11.) This allegation is found for Applicant.

1.k. Applicant has paid the $6,701 past-due debt to Creditor K, as the result of an automobile repossession, as evidenced by documentation referencing Creditor K. (TR at page 43 line 18 to page 46 line 1, and AppX B at page 12.) This allegation is found for Applicant.

1.l. Applicant has made a good-faith effort to address this charged-off debt for $815. (TR at page 42 line 12 to page 43 line 14, and AppX B at page 11.) This allegation is found for Applicant.

1.m. Applicant has paid the $296 past-due debt to Creditor M, as evidenced by documentation from Creditor M. (TR at page 46 lines 3–9, and AppX B at page 13.) This allegation is found for Applicant.

1.n. Applicant has paid the $96 past-due debt to Creditor N, as evidenced by documentation from Creditor N. (TR at page 46 lines 3–9, and AppX B at page 13.) This allegation is found for Applicant.

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 has significant alleged past-due 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 has made a good-faith effort to address all of her alleged past-due indebtedness, which can be attributed to two failed marriages. 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. Some of the factors in AG ¶ 2(d) were addressed under those guidelines, but some warrant additional comment. 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

Subparagraphs 1.a.~1.n:

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