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ISCR Case 21-01492 — CASE

ISCR Case 21-01492granted

Case Headnote

ISCR Case No. 21-01492

grantedNov 29, 2022· Hon. Gina L. Marine· hearing

Summary

A 53-year-old defense contractor was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The Statement of Reasons (SOR) alleged a default on a home equity line of credit (HELOC), which was subsequently forgiven by the creditor, resulting in an IRS Form 1099-C issued in tax year 2015. Credit reports from 2020, 2021, and 2022 documented the HELOC's status, showing an initial balance, a dispute and zero balance, and its eventual removal from the report, respectively.

The judge applied mitigating conditions, finding that the applicant had established financial hardship leading to the debt forgiveness. Furthermore, the applicant demonstrated responsible financial management following the debt's resolution.

Crucially, no other delinquent debts were reported in recent credit reports, reinforcing the applicant's improved financial stability. Based on these factors, the security clearance was granted.

Why the Applicant Prevailed

The applicant established financial hardship that led to debt forgiveness.
The applicant demonstrated responsible financial management post-debt forgiveness.
No other delinquent debts were reported in recent credit reports.

Conditions Referenced

Mitigating

AG ¶ 20(a)appliedThe Conditions That Led to the Financial Difficulties Were Beyond the Applicant's Control.
AG ¶ 20(b)appliedThe Applicant Has Shown a Track Record of Financial Responsibility Since the Debt Was Forgiven.

Key Rule Quoted

“I conclude that Applicant has met his burden of persuasion to show that it is clearly consistent with the interests of national security to grant him eligibility for access to classified information.”

Procedural Posture

SOR issuedDec 7, 2021
Answer filed—
Hearing heldOct 19, 2022via video conference
Decision dateNov 29, 2022

Cite For

Establishment of Financial Hardship Leading to Debt Forgiveness Under Guideline F
Demonstration of Responsible Financial Management Post-debt Forgiveness
Application of Mitigating Conditions in Financial Consideration 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 defaulted on a home equity line of credit (HELOC), which was later forgiven and reported as canceled debt. The applicant demonstrated responsible financial management, leading to a decision to grant the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	defaulted on the home equity line of credit (HELOC)	For Applicant	Mortgage or Home Loan Debt	Unknown	—	(a) behavior happened long ago / infrequent / unlikely to recur (b) conditions largely beyond the person’s control; acted responsibly	Claimed Other
1.b	the creditor forgave the HELOC debt and issued an IRS Form 1099-C (Cancellation of Debt) in tax year 2015	For Applicant	Unspecified Financial	Unknown	—	(a) behavior happened long ago / infrequent / unlikely to recur (b) conditions largely beyond the person’s control; acted responsibly	Claimed Other
1.c	the 2020 credit report corroborated the HELOC balance alleged in the SOR	For Applicant	Unspecified Financial	Unknown	—	(a) behavior happened long ago / infrequent / unlikely to recur (b) conditions largely beyond the person’s control; acted responsibly	Claimed Other
1.d	the 2021 credit report reflected the dispute and a $0 balance on the HELOC debt	For Applicant	Unspecified Financial	Unknown	—	(a) behavior happened long ago / infrequent / unlikely to recur (b) conditions largely beyond the person’s control; acted responsibly	Claimed Other
1.e	the HELOC debt did not appear on the 2022 credit report	For Applicant	Unspecified Financial	Unknown	—	(a) behavior happened long ago / infrequent / unlikely to recur (b) conditions largely beyond the person’s control; acted responsibly	Claimed Other

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: )

)

[REDACTED]

)

ISCR Case No. 21-01492

) Applicant for Security Clearance )

Appearances

For Government: Brian Farrell, Esq., Department Counsel For Applicant: Pro se

11/29/2022

______________

Decision ______________

MARINE, Gina L., Administrative Judge:

On December 7, 2021, the Defense Counterintelligence and Security Agency Consolidated Adjudications Facility (CAF) sent Applicant a Statement of Reasons (SOR) alleging security concerns under Guideline F (Financial Considerations). Applicant answered the SOR and requested a hearing. I convened the hearing on October 19, 2022, via video conference, during which Applicant testified and the Government submitted exhibits that I admitted to the record. Post-hearing, Applicant submitted exhibits that I admitted to the record. After I received the transcript on October 31, 2022, I notified the Government’s counsel that I intended to issue a summary decision, to which he did not object.

Applicant, age 53, has been employed on the same defense contract with two different employers since April 2021. He has maintained a Department of Defense (DOD) security clearance since about 2015. He struggled with his finances due to the unemployment and underemployment he experienced from about 2012 through 2018, when he was unable to find consistent work as a defense contractor. During that period, he defaulted on the home equity line of credit (HELOC) alleged in the SOR. After Applicant established hardship, the creditor forgave the HELOC debt and issued an IRS Form 1099-C (Cancellation of Debt) in tax year 2015. Applicant discussed the HELOC

and debt forgiveness with the investigator during his April 8, 2020 security clearance interview. On about April 23, 2020, he gave the investigator a copy of the 1099-C, which was appended to the summary of that interview.

Credit reports from December 2020, November 2021, and October 2022 were included among the Government exhibits admitted to the record. The 2020 credit report corroborated the HELOC balance alleged in the SOR; however, it also reflected that Applicant had disputed the debt. The 2021 credit report reflected the dispute and a $0 balance on the HELOC debt. The HELOC debt did not appear on the 2022 credit report. Those credit reports revealed no other delinquent debts. The Government included summaries of Applicant’s two April 2020 security clearance interviews and the appended 1099-C among the exhibits admitted to the record. After the hearing, Applicant provided documents which demonstrated that he was then living within his means and managing his finances responsibly.

I considered the applicable disqualifying and mitigating conditions, as well as the whole-person concept. Specifically, I find that the mitigating conditions under Guideline F Adjudicative Guidelines ¶¶ 20(a) and 20(b) were established by the record evidence. I conclude that Applicant has met his burden of persuasion to show that it is clearly consistent with the interests of national security to grant him eligibility for access to classified information. Clearance is granted.

Gina L. Marine Administrative Judge