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ISCR Case 19-01540 — CASE

ISCR Case 19-01540granted

Case Headnote

ISCR Case No. 19-01540

grantedNov 13, 2019· Hon. Edward W. Loughran· hearing

Summary

A 37-year-old defense contractor was granted a security clearance despite initial concerns under Guideline F, Financial Considerations. The Statement of Reasons alleged that the applicant had defaulted on four student loans totaling $37,522, raising disqualifying conditions related to financial irresponsibility.

However, the administrative judge found that mitigating conditions applied. The applicant demonstrated a consistent, good-faith effort to repay his debts, having made payments on all student loans since 2017. He further showed commitment by increasing his monthly payments over time.

Additionally, favorable character evidence supported the applicant's reliability and trustworthiness. Based on these factors, the judge concluded that granting the security clearance was consistent with the national interest.

Why the Applicant Prevailed

The applicant consistently made payments on his student loans since 2017, demonstrating a good-faith effort to repay his debts.
He increased his monthly payments over time, showing commitment to resolving his financial obligations.
Favorable character evidence supported his reliability and trustworthiness.

Conditions Referenced

Disqualifying

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

Mitigating

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 issuedJun 11, 2019
Answer filed—
Hearing heldOct 30, 2019
Decision dateNov 13, 2019

Cite For

Mitigation of Financial Concerns Under Guideline F
Good-faith Effort to Repay Debts
Whole-person Concept in Security Clearance Evaluations

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 defaulted on four student loans totaling $37,522 but determined that the applicant had mitigated the financial concerns. The applicant demonstrated a commitment to repaying the loans and had made consistent payments since 2017, leading to a favorable decision regarding his security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant defaulted on four student loans with balances totaling $37,522. $37,522	For Applicant	Student Loan Debt	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor
1.b–1.d	3 sub-charges — specific text not stated in this decision (for the applicant).	For 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

APPEARANCES

______________ ______________

DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS

In the matter of: )

)

ISCR Case No. 19-01540

) Applicant for Security Clearance )

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

11/13/2019

STATEMENT OF CASE

LOUGHRAN, Edward W., Administrative Judge: Applicant mitigated the financial considerations security concerns. Eligibility for access to classified information is granted. Statement of the Case On June 11, 2019, the Department of Defense (DOD) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline F, financial considerations. Applicant responded to the SOR and requested a hearing before an administrative judge. The case was assigned to me on September 10, 2019. The hearing was convened as scheduled on October 30, 2019. Government Exhibits (GE) 1 through 4 were admitted in evidence without objection. Applicant testified and submitted Applicant’s Exhibits (AE) A and B, which were admitted without objection.

FINDINGS OF FACT

Applicant is a 37-year-old employee of a defense contractor. He has worked for his current employer since May 2018. He is applying for a security clearance for the first time. He has associate’s, bachelor’s, and master’s degrees, which were awarded in 2003, 2006, and 2010. He is married without children. (Transcript (Tr.) at 17, 23-24; GE 1, 2)

The SOR alleges four defaulted student loans with balances totaling $37,522. Applicant admitted owing the loans, but he stated that he is paying them.

Applicant funded his education with student loans. He is current on a number of loans that were not alleged in the SOR. The four SOR loans were taken out between 2003 and 2005 from the same bank. Applicant provided his payment history for the four loans. He made payments from 2007 through 2009, but then no additional payments until 2013. (Tr. at 20-21; Applicant’s response to SOR; GE 2-4; AE A)

Applicant made five payments to the loans in 2013; seven payments in 2014; five payments in 2015; and four payments in 2016. With the exception of a few months in which there were no payments, he has consistently made monthly payments to the bank since October 2017. The bank distributes the funds between the four loans. He increased the amount of his payments to $200 per month in July 2018 and $250 per month in June 2019. His payments from October 2017 through August 2019 total $2,860. He credibly testified that he intends to continue paying all his student loans. (Tr. at 17-24; Applicant’s response to SOR; GE 2-4; AE A)

Applicant submitted letters attesting to his excellent job performance. He is praised for his work ethic, trustworthiness, dedication, professionalism, dependability, and integrity. (AE B)

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 adjudicative guidelines (AG), which became effective on June 8, 2017.

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines. 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 eligibility for access to classified information.

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 the adjudicative process. The administrative judge’s

overarching adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶ 2(c), 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.”

Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, 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.” The applicant has the ultimate burden of persuasion to obtain a favorable security decision.

A person who seeks access to classified information enters 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 safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation of potential, rather than actual, risk of compromise of classified information.

Section 7 of 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 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.

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

(a) inability to satisfy debts; and

Applicant defaulted on four student loans. The evidence is sufficient to raise the above disqualifying conditions.

Conditions that could mitigate the financial considerations security concerns are provided under AG ¶ 20. The following is potentially applicable:

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

Except for a few missed months, Applicant has been consistently paying his student loans for about two years. He increased the amount of his payments to $200 per month in July 2018 and $250 per month in June 2019. His payments from October 2017 through August 2019 total $2,860. He credibly testified that he intends to continue paying all his student loans. AG ¶ 20(d) is applicable. Concerns about Applicant’s finances are mitigated.

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 have incorporated my comments under Guideline F in my whole-person analysis. I also considered Applicant’s favorable character evidence.

Overall, the record evidence leaves me without questions or doubts about Applicant’s eligibility and suitability for a security clearance. 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 section E3.1.25 of Enclosure 3 of the Directive, are:

Paragraph 1, Guideline F:

For Applicant

Subparagraphs 1.a-1.d:

For Applicant

CONCLUSION

It is clearly consistent with the national interest to grant Applicant eligibility for a security clearance. Eligibility for access to classified information is granted.

________________________ Edward W. Loughran Administrative Judge