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ISCR Case 16-01616.h1 — CASE

ISCR Case 16-01616.h1granted

Case Headnote

ISCR Case No. 16-01616.h1

grantedOct 6, 2017· Hon. Robert J. Kilmartin· hearing

Summary

A 55-year-old female applicant was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The Statement of Reasons (SOR) detailed five allegations of delinquent debts totaling over $47,000, all of which the applicant admitted. These issues raised disqualifying conditions under Adjudicative Guidelines (AG) ¶ 19(a), (b), and (c).

However, the applicant successfully mitigated these concerns. She provided evidence of payment agreements and demonstrated that she was making payments on the alleged debts, with some obligations satisfied after the SOR was issued. The judge noted her good-faith effort to resolve her financial obligations.

Crucially, the financial difficulties were largely attributed to circumstances beyond her control, specifically periods of unemployment. Based on these mitigating factors, including AG ¶ 20(a), (b), and (d), the security clearance was granted.

Why the Applicant Prevailed

The applicant provided evidence of payment agreements and satisfaction of debts after the SOR was issued.
She demonstrated a good-faith effort to resolve her financial obligations.
The financial difficulties were largely due to circumstances beyond her control, such as unemployment.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability to Satisfy Debts
AG ¶ 19(b)raisedUnwillingness to Satisfy Debts Regardless of the Ability to Do So
AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations

Mitigating

AG ¶ 20(a)appliedBehavior Happened so Long Ago or Under Circumstances Unlikely to Recur
AG ¶ 20(b)appliedConditions Resulting in Financial Problems Were Largely Beyond the Person's Control
AG ¶ 20(d)appliedIndividual Initiated and Is Adhering to a Good-faith Effort to Repay Overdue Creditors

Key Rule Quoted

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

Procedural Posture

SOR issuedJul 30, 2016
Answer filedDec 10, 2016Applicant elected to proceed without a hearing.
Hearing held—Decided on the written record.
Decision dateOct 6, 2017

Cite For

Mitigation of Financial Concerns Under Guideline F
Good-faith Efforts to Resolve Debts
Impact of Unemployment 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: Decision on RecordDecided: granted

The judge found that the applicant mitigated the financial concerns under Guideline F, as she had made payments on her debts and provided evidence of settlement agreements. The applicant's eligibility for a security clearance was granted, indicating that her financial issues were resolved satisfactorily.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant admitted all of the five allegations in SOR and claimed that she was making payments on the debt alleged in SOR ¶ 1.a.	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	(a) behavior happened long ago / infrequent / unlikely to recur (b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full Documented Payment Plan with Creditor
1.b	Applicant admitted all of the five allegations in SOR and claimed that she was making payments on the debt alleged in SOR ¶ 1.a.	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	(a) behavior happened long ago / infrequent / unlikely to recur (b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full Documented Payment Plan with Creditor
1.c	Applicant admitted all of the five allegations in SOR and claimed that she was making payments on the debt alleged in SOR ¶ 1.a.	For Applicant	Judgment Against Applicant	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	(a) behavior happened long ago / infrequent / unlikely to recur (b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full Documented Payment Plan with Creditor
1.d	Applicant admitted all of the five allegations in SOR and claimed that she was making payments on the debt alleged in SOR ¶ 1.a.	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	(a) behavior happened long ago / infrequent / unlikely to recur (b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full Documented Payment Plan with Creditor
1.e	Applicant admitted all of the five allegations in SOR and claimed that she was making payments on the debt alleged in SOR ¶ 1.a.	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	(a) behavior happened long ago / infrequent / unlikely to recur (b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full Documented Payment Plan with Creditor

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. 16-01616 ) Applicant for Security Clearance )

For Government: Aubrey M. De Angelis, Esq., Department Counsel For Applicant: Pro se

10/06/2017 ______________

STATEMENT OF CASE

______________

KILMARTIN, Robert J., Administrative Judge:

Applicant mitigated the security concerns under Guideline F, financial considerations. Applicant’s eligibility for a security clearance is granted.

Statement of the Case

On July 30, 2016, the Department of Defense (DOD) issued to Applicant a Statement of Reasons (SOR) detailing security concerns under Guideline F, financial considerations. The action was taken 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 (AGs) effective within the DOD for SORs issued after September 1, 2006.

On December 10, 2016, Director of National Intelligence issued Security Executive Agent Directive 4, which revised and replaced the 2006 AGs and became effective for all decisions issued on or after June 8, 2017. Accordingly, I have applied the newly revised AGs to this decision.1 Applicant timely answered the SOR, and elected to have her case decided on the written record in lieu of a hearing. Department Counsel submitted the Government’s file of relevant material (FORM) on December 19, 2016. Applicant received the FORM on January 4, 2017, and had 30 days to file objections and submit material in refutation, extenuation, or mitigation. Applicant did not object to the Government’s evidence and she provided a detailed response to the FORM dated January 29, 2017, with 14 pages of attachments. The Government’s exhibits (GE) 1 through 8 were admitted into evidence without objection. The case was assigned to me on October 1, 2017.

Findings of Fact2

Applicant admitted all of the five allegations in SOR and claimed that she was making payments on the debt alleged in SOR ¶ 1.a.3 Applicant also claimed to have negotiated payments with the creditors in SOR ¶¶ 1.band 1.c, and she was in the process of negotiating payment with the creditors on SOR ¶¶ 1.cand 1.d. She was unable to make the minimum payments required, and late fees and interest accrued on her delinquent debts. The alleged delinquent debts total more than $47,000. No substantiating documents were provided initially to show payment plans, or compliance with payment plans. After a thorough and careful review of the pleadings and exhibits submitted, I make the following additional findings of fact. . Applicant is 55 years old. She obtained her associate’s degree in 1994. She never married and reports no military service. She has been employed by a federal contractor since September 2015. She reports having a security clearance in 2005. Applicant also stated in her Answer to the SOR that she was unemployed from January 30, 2015 through September 8, 2015, and from December 2010 through May 2012, due to lay-offs or reductions in force.

Applicant disclosed one of her delinquent debts (SOR ¶ 1.c) in section 26 of her August 2015 Questionnaire for National Security Positions, also known as her security clearance application (SCA). Applicant claimed to have made a few payments of $100 per month to this creditor in 2014 before the loan was sold in late 2014. She was not able to resume payments since late 2014 because she was unemployed. Now, attached to her Response to the FORM, she has produced evidence in the form of settlement agreements, e-mail confirmations of payments, and an acknowledgement of satisfaction of the sole judgment listed (SOR ¶ 1.c), showing that SOR ¶¶ 1.a through 1.dhave been paid in full or satisfied, albeit after the SOR was issued. She also attached a January 11, 2015 letter from a creditor showing that she entered into a payment agreement regarding SOR ¶ 1.e, and she has been making payments of $100 per month since January 2017 in accordance with that plan.

POLICIES

When evaluating an applicant’s suitability for a security clearance, 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 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, these guidelines are applied 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.” In reaching this decision, I have drawn only those conclusions that are reasonable, logical, and based on the evidence contained in the record. Likewise, I have avoided drawing inferences grounded on mere speculation or conjecture.

Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, an “applicant is responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by applicant or proven by Department Counsel, and has the ultimate burden of persuasion as to obtaining 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 that an applicant may deliberately or inadvertently fail to 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.

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 risk of having to engage in illegal acts to generate funds.

This concern is broader than the possibility that an individual might knowingly compromise classified information in order to raise money. It encompasses concerns about an individual’s self-control, judgment, and other qualities essential to protecting classified information. An individual who is financially irresponsible may also be irresponsible, unconcerned, or negligent in handing and safeguarding classified information.

AG ¶ 19 provides conditions that could raise security concerns. The following apply here:

(a) inability to satisfy debts;

(b) unwillingness to satisfy debts regardless of the ability to do so;

Applicant admitted all five of the delinquent debts or judgments alleged in the SOR. There is sufficient evidence to support the application of the above disqualifying conditions.

The guideline also includes conditions that could mitigate security concerns arising from financial difficulties. The following mitigating conditions under AG ¶ 20 are potentially applicable:

(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 problems 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 disclosed one of her delinquent debts in her SCA, and she has since contacted her creditors to make payment arrangements, satisfy the judgment, or pay off the delinquent debts. These delinquent debts resulted from her periods of unemployment that were beyond her control. Applicant produced evidence that she has followed through on her statements in her Answer to the SOR that she was negotiating payment plans. She provided a satisfaction of the judgment lien (SOR ¶ 1.c) and settlement agreements with confirmation of payments on the others (SOR ¶¶ 1.a, 1.b, and 1.d). Therefore, she has mitigated the allegations in the SOR. AG ¶¶ 20(a), 20(b) and 20(d) apply. I am satisfied that her delinquent debts have been or are being resolved.

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 the 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 the facts and circumstances surrounding this case. I have incorporated my comments under F in my whole-person analysis. Some of the factors in AG ¶ 2(d) were addressed under those guidelines, but some warrant additional comment. Applicant’s finances are no longer a security concern. She endured lay-offs and reductions in force by her employer. Since she has been re-employed there are ample indications that Applicant’s financial problems are under control. She has met her burden of persuasion. The record evidence leaves me with no questions or doubts as to Applicant’s suitability for a security clearance. For all these reasons, I conclude Applicant has mitigated the security concerns arising under Guideline F, financial considerations.

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.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’s eligibility for a security clearance. Eligibility for access to classified information is granted.

_____________________________ Robert J. Kilmartin Administrative Judge

FOOTNOTES

1 Although I have applied the new AGs that became effective on June 8, 2017, to this decision, I have also considered the case under the previous AGs and my decision would be no different under either version. 2 Unless stated otherwise, the source of the information in this section is Applicant’s August 21, 2015 Security Clearance Application (SCA) and her summary of clearance interview of January 20, 2016.

3 GE 3, Answer to SOR.