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ISCR Case 16-01904.h1 — CASE

ISCR Case 16-01904.h1granted

Case Headnote

ISCR Case No. 16-01904.h1

grantedJun 20, 2017· Hon. Nichole L. Noel· hearing

Summary

A special police officer was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The applicant's financial difficulties, which included unresolved debts totaling $46,000, were primarily attributed to a divorce and periods of unemployment, circumstances deemed beyond his control.

Disqualifying conditions were raised regarding a history of not meeting financial obligations and an inability to satisfy debts. However, the judge applied mitigating conditions, noting the applicant's good-faith efforts to resolve his financial issues. Since returning to full employment, he has resolved several delinquent accounts and engaged a credit repair service.

Crucially, the applicant has not incurred new debt and does not possess any open credit cards, demonstrating a commitment to financial responsibility. The judge concluded that the financial difficulties did not indicate irresponsibility, leading to the favorable outcome of a granted security clearance.

Why the Applicant Prevailed

The applicant's financial issues stemmed from circumstances beyond his control, including a divorce and unemployment.
He has made a good-faith effort to repay creditors and has resolved several delinquent accounts since returning to full employment.
The applicant does not have any open credit cards and has not incurred new debt.

Conditions Referenced

Disqualifying

AG ¶ 19 (a)raisedInability to Satisfy Debts
AG ¶ 19 (c)raisedHistory of Not Paying Bills

Mitigating

AG ¶ 20 (b)appliedGood-faith Effort to Repay Debts
AG ¶ 20 (d)appliedDebt Resolved Since Returning to Full Employment

Key Rule Quoted

“Any doubt concerning personnel being considered for access to classified information will be resolved in favor of national security.”

Procedural Posture

SOR issuedAug 29, 2016
Answer filed—
Hearing heldApr 6, 2017
Decision dateJun 20, 2017

Cite For

Mitigating Factors for Financial Considerations Under Guideline F
Good-faith Efforts in Resolving Delinquent Debts
Impact of Personal Circumstances on Financial Responsibility Assessments

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's financial issues stemmed from circumstances beyond his control, including a divorce and periods of unemployment. Despite some unresolved debts, the applicant demonstrated a commitment to resolving his financial obligations, leading to a decision to grant the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a–1.y	25 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. 16-01904 ) Applicant for Security Clearance )

For Government: Gatha Manns, Esq., Department Counsel For Applicant: Pro se 06/20/2017 ______________

STATEMENT OF CASE

______________

NOEL, Nichole L., Administrative Judge:

Applicant contests the Department of Defense’s (DOD) intent to deny his eligibility for a security clearance to work in the defense industry. Applicant’s financial problems were caused by his divorce as well as an extensive period of unemployment and underemployment. He has made a good-faith effort to repay his creditors and has engaged a credit-repair service. Although many debts remain unresolved, Applicant has demonstrated a track record of repayment. Clearance is granted.

Statement of the Case

On August 29, 2016, the DOD issued a Statement of Reasons (SOR) detailing security concerns under the financial considerations guideline.1 DOD adjudicators were unable to find that it is clearly consistent with the national interest to continue Applicant’s security clearance and recommended that the case be submitted to an administrative judge for a determination whether to revoke his security clearance. Applicant timely answered the SOR and requested a hearing. On March 13, 2017, I issued a prehearing order to the parties regarding the exchange and submission of discovery, the filing of motions, and the disclosure of any witnesses, and the parties complied.2 At the hearing, convened on April 6, 2017, I admitted Government’s Exhibits (GE) 1 through 5 and Applicant’s Exhibits (AE) A through H, without objection. After the hearing, Applicant submitted AE I through L, which were also admitted without objection.3 I received the transcript (Tr.) on April 14, 2017.

PROCEDURAL MATTERS

Implementation of Revised Adjudicative Guidelines

While the case was pending decision, the Security Executive Agent Directive 4 was issued establishing the National Security Adjudicative Guidelines (AG) applicable to all covered individuals who require initial or continued eligibility for access to classified information or eligibility to hold a sensitive position. The 2017 AG superseded those implemented in September 2006, and they are effective for any adjudication made on after June 8, 2017. Accordingly, I have decided this case under the 2017 AG.

Discovery

As required by the Directive, Department Counsel sent discovery to Applicant in October 2016 to Applicant’s address of record, which he confirmed at hearing. Although he received all other communications from DOHA related to his adjudication, Applicant claimed not to have received the Government’s discovery letter and proposed exhibits. Before the hearing, Department Counsel provided Applicant another copy of the documents to review. After doing so, Applicant indicated that he was prepared to continue with the hearing as scheduled. I left the record open to give Applicant time to submit additional documentation.4

FINDINGS OF FACT

Applicant has worked as a special police officer for a federal contractor since January 2015. He completed a security clearance application, his first, in August 2015. The investigation revealed a recent bankruptcy and the subsequent accumulation of delinquent accounts. The resulting SOR alleged that Applicant owed $46,000 on 24 delinquent accounts and that he received bankruptcy protection in September 2009 from a June 2009 petition.5 Applicant’s financial problems began during the dissolution of his marriage, which ended in divorce in August 2009. Applicant left the marriage with all the debt in his name. However, he could not repay it on his income alone. Applicant filed for bankruptcy protection in June 2009 and the court discharged Applicant’s debts in September 2009. In May 2011, the court ordered Applicant to pay $1,100 monthly in child support for his four children. At the time, the obligation amounted to almost half of Applicant’s take home pay. In March 2012, Applicant was laid off from his job of 12 years. He was unemployed from March to September 2012. From September 2012 to November 2014, Applicant was only able to find part-time employment earning minimum wage as a grocery store cashier. Applicant found full-time employment in November 2014 as a receptionist at a nursing home, where he worked for two months before starting his current job. In the wake of his financial hardship, his ex-wife petitioned the court to terminate Applicant’s child support obligation and forgive any arrearage. The court issued an order to that effect in October 2012.6

Applicant incurred the majority of the delinquent debt alleged in the SOR between December 2010 and December 2014. Since returning to full employment in January 2015, Applicant has taken steps to resolve his delinquent accounts. In June 2016, Applicant settled SOR ¶ 1.h ($1,005). In September 2016, Applicant engaged a credit repair service. The service, for which Applicant pays approximately $100 monthly, is contractually obligated to examine Applicant’s credit reports from the three major reporting agencies, to verify the reported information is correct and in compliance with federal reporting laws, and to remove inaccurate or erroneous information. Applicant remains responsible for contacting verified creditors to resolve the accounts. To date, the credit repair service has had 39 entries removed from Applicant’s credit reports. Each month, the credit repair service provides Applicant a report listing disputed and verified accounts.7 Between September 2016 and March 2017, Applicant resolved SOR ¶¶ 1.b ($4,568), 1.j ($499), and 1.v ($83).8

Currently, Applicant earns approximately $46,000 annually. He lives within his means and does not use credit cards. After taxes, he brings home $2,800 per month. Applicant spends $1,100 per month, or 39% of his income, on medication necessary to treat a serious, chronic medical condition, leaving $1,700 each month to pay for his other recurring living expenses, any financial assistance he provides to his children, and to resolve his delinquent accounts. Applicant plans to continue resolving his delinquent accounts as the credit repair service verifies his outstanding debts.9

POLICIES

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 access to classified information will be resolved in favor of 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. 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

Unresolved delinquent debt is a serious security concern because failure to “satisfy debts [or] 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 information.”10 Similarly, an individual who is financially irresponsible may also be irresponsible, unconcerned, or negligent in handling and safeguarding classified information.

The SOR alleges that Applicant declared bankruptcy in June 2009 and accumulated $46,000 in debt on 24 delinquent accounts between December 2010 and December 2014. The record supports a prima facie case that Applicant has a history of not paying his bills and, that for several years, he had an inability to do so.11 However, Applicant’s financial problems were not caused by behavior that suggests reckless or irresponsible behavior, but by events beyond his control: a 2009 divorce and 7 months of unemployment between March and September 2012, followed by almost 2.5 years of underemployment. Applicant’s decision to file for bankruptcy protection in 2009 was reasonable given his circumstances. Upon returning to full employment, Applicant acted responsibly by addressing his delinquent debt and engaging a credit repair service to help him do so.12 Acting in good-faith, Applicant has resolved four SOR accounts totaling $6,100. Applicant does not have any open credit cards and he has not incurred any new debt.

After reviewing the record, I have no doubts about Applicant’s suitability for access to classified information. In reaching this conclusion, I have also considered the whole-person factors at AG ¶ 2(a). While many of the SOR debts remain unpaid, this does not ultimately resolve the question of Applicant’s security worthiness. Applicant has not exhibited behaviors that are indicative of an inability to properly handle or safeguard classified information. Given the length of Applicant’s underemployment, his financial recovery will require a significant amount of time. Taking this into account, Applicant’s resolution of 13% of the SOR debts since his return to full employment is sufficient evidence that Applicant is committed to resolving his delinquent accounts and I am confident he will continue to do so as he is able.

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.y: For Applicant

CONCLUSION

In light of all of the circumstances presented, it is clearly consistent with the national interest to grant Applicant a security clearance. Eligibility for access to classified information is granted.

________________________ Nichole L. Noel Administrative Judge

FOOTNOTES

1 This case is adjudicated under Executive Order (EO) 10865, Safeguarding Classified Information within Industry, signed by President Eisenhower on February 20, 1960, as amended; as well as DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program, dated January 2, 1992, as amended (Directive). In addition, the Adjudicative Guidelines for Determining Eligibility for Access to Classified Information (AG), effective within the Defense Department on June 8, 2017. 2 The prehearing scheduling order and the discovery letter are appended to the record as Hearing Exhibits (HE) I and II. 3 Correspondence regarding Applicant’s post-hearing submission is appended to the record as HE III. 4 Tr. 10-12. 5 Tr. 28, GE 1-2, 4. 6 Tr. 27-34, 41, 54-62; GE 1; AE E-H. 7 After examining the report, AE L, there is not enough information about the deleted account to match them to the accounts alleged in the SOR. 8 Tr. 40, 43, 62, 66-68, 70-74; Ans; GE 3-4; AE B-D, I, L. 9 Tr. 48-53, 63-65. 10 AG ¶ 18. 11 AG ¶¶ 19 (a) and (c). 12 AG ¶¶ 20 (b)-(d).