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ISCR Case 16-02268.h1 — CASE

ISCR Case 16-02268.h1granted

Case Headnote

ISCR Case No. 16-02268.h1

grantedJun 23, 2017· Hon. Nichole L. Noel· hearing

Summary

A 29-year-old federal contractor was granted a security clearance despite initial concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The Statement of Reasons alleged that the applicant deliberately failed to disclose $24,000 in delinquent debts on his May 2016 security clearance application. This raised disqualifying conditions related to personal conduct and financial considerations.

However, the applicant demonstrated significant mitigating factors. He made a good-faith effort to resolve his delinquent debts, successfully settling all but one account prior to the final decision. The judge found these financial rehabilitation efforts to be credible and sufficient.

Ultimately, the applicant's proactive steps to address his financial irresponsibility outweighed the initial concerns. The security clearance was granted, reflecting a finding that the mitigating conditions applied were sufficient to overcome the disqualifying conditions.

Why the Applicant Prevailed

Applicant demonstrated a good-faith effort to resolve delinquent debts.
All but one of the delinquent accounts were settled prior to the decision.
The applicant's financial rehabilitation efforts were deemed credible and sufficient.

Conditions Referenced

Disqualifying

AG ¶ 19raisedFinancial ConsiderationsThe Government established a prima facie case of unresolved delinquent debt.
AG ¶ 15raisedPersonal ConductAllegation of failure to disclose delinquent debts on the security clearance application.

Mitigating

AG ¶ 20(d)appliedFinancial ConsiderationsApplicant is making a good-faith effort to resolve his delinquent debt.
AG ¶ 2(d)appliedWhole Person ConceptApplicant's overall character and efforts to correct financial issues were considered.

Key Rule Quoted

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

Procedural Posture

SOR issuedAug 20, 2016
Answer filed—
Hearing heldApr 12, 2017
Decision dateJun 23, 2017

Cite For

Good-faith Efforts to Resolve Financial Issues Under Guideline F
Consideration of Whole-person Factors in Security Clearance Decisions
Credibility of Applicant's Financial Rehabilitation Efforts in Mitigating Concerns

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 E (Personal Conduct) · descriptive summary of a decided case

Posture: Decision on RecordDecided: granted

The judge found that the applicant did not deliberately fail to disclose his delinquent debts on his security clearance application. The applicant's efforts to resolve his financial issues and his candor during the background interview were noted positively. Ultimately, the judge ruled in favor of the applicant regarding personal conduct concerns.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
2.a	Applicant deliberately failed to disclose his delinquent debt on his May 2016 security clearance application.	For Applicant	Lack of Candor in InterviewNOT DELIBERATE	Financial	Admitted	—	—	—

Descriptive standardized rendering of a decided public case (Guideline E). The verbatim source decision is shown in full below.

Standardized Decision Profile

SEAD-4 Guideline F · descriptive summary of a decided case

Posture: Decision on RecordDecided: granted

The judge found that the applicant had made a good-faith effort to resolve his delinquent debts, successfully settling most of them prior to the hearing. Ultimately, the judge ruled in favor of the applicant on all financial considerations, concluding that his efforts demonstrated a commitment to financial rehabilitation.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a–1.e	5 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. 16-02268 ) Applicant for Security Clearance )

For Government: Tovah Minster, Esq., Department Counsel For Applicant: Pro se 06/23/2017 ______________

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 has demonstrated a good-faith effort to resolve his delinquent debts. He has resolved all but one of the accounts alleged in the SOR. Clearance is granted.

Statement of the Case

On August 20, 2016, the DOD issued a Statement of Reasons (SOR) detailing security concerns under the financial considerations and personal conduct guidelines.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 12, 2017, I admitted Government’s Exhibits (GE) 1 through 3 and Applicant’s Exhibits (AE) A and B, without objection. After the hearing, Applicant submitted AE C through D, which were also admitted without objection.3 DOHA received the transcript (Tr.) on April 20, 2017.

PROCEDURAL MATTERS

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 the AG implemented in September 2006, and they are effective for any adjudication made on after June 8, 2017. Accordingly, I have applied them in this case.

FINDINGS OF FACT

Applicant, 29, has worked for a federal contractor since 2011 and was granted access to classified information that same year. He completed a security clearance application in May 2016, but did not disclose any derogatory information. The resulting investigation revealed several delinquent accounts. The SOR alleges Applicant owes five delinquent accounts, totaling $24,000, and that he failed to disclose those accounts on his security clearance application.4 Applicant admits that he did not disclose his delinquent debts on his May 2016 security clearance application. Due to time constraints, he completed the form quickly with the intention of disclosing the debt during his background interview. Eight days before Applicant’s signed and certified the security clearance application at issue, he had an interview with an investigator. According to the interview summary, AE B, Applicant volunteered information about SOR ¶¶ 1.a, 1.b, and 1.dand discussed the debts Applicant disclosed on another security clearance application. That application is not identified by date and is not part of the record.5 Applicant’s financial problems started during his marriage. When Applicant married in August 2008, he was 21 and his wife was 19 years old. For the duration of their marriage, Applicant was the sole source of income for his family of three. To maintain the lifestyle his wife desired, they lived beyond their means. When their finances became strained, Applicant prioritized the family’s necessities and allowed some of his financial obligations to become delinquent. The couple separated in September 2015. They do not have a formal separation agreement, but share custody of their eight-year-old daughter. Applicant continues to pay off debt incurred during the marriage. He also pays his ex-wife’s car note, car insurance, and cell phone bills because he believes doing so benefits his daughter.6 In the almost two years since separating from his wife, Applicant has been working to resolve marital debt. He eliminated housing expenses by moving into his parent’s home in September 2015. He eliminated childcare expense by arranging his work schedule to accommodate his custody schedule. Applicant works 20 hours during his custodial weeks and makes up the remaining 60 hours during his non-custodial weeks. Applicant also has two part-time jobs. Since August 2014, he has worked for second federal contractor. This job also requires a security clearance. He is guaranteed four hours a week, but often picks up additional hours when others are unavailable. He has also worked as a waiter since February 2012. He works Friday through Sunday nights on his non-custodial weekends. Applicant also works during his custodial weekends when his mother is available to watch his daughter.7 Before the issuance of the SOR, Applicant resolved more than $5,000 in non- SOR marital debt. The five debts alleged in the SOR are all accounts accumulated during the marriage. Before the hearing, he resolved SOR ¶¶ 1.c, 1,d, and 1.e, totaling approximately $3,000. The remaining debts, SOR ¶¶ 1.a and 1.b, are the largest accounts. Applicant contacted each creditor, but each wanted more than Applicant could afford to settle the accounts. Since the hearing, he has been able to negotiate an affordable settlement with the creditor in SOR ¶1.b ($4, 570), with payments to begin in May 2017. He also retained a credit-repair service, which advised him that the debt in SOR 1.a was uncollectible and that the derogatory account could no longer be reported to credit reporting agencies after June 2017.8 Applicant’s father-in-law testified as a character witness. He spoke of the problems created in the marriage by his daughter’s desire for a particular lifestyle. He considers Applicant to be of good character, trustworthy, and reliable. Now that Applicant and his daughter are separated, Applicant’s father in-law believes that Applicant lives within his means and is making a concerted effort to repay his 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 Government established its prima facie case that Applicant has a history of not paying his debts and that he had an inability to do so.11 However, Applicant has provided sufficient evidence to mitigate the financial considerations concerns. Applicant is making a good-faith effort to resolve his delinquent debt.12 He has enacted a series of austerity measures to ensure that as much of his income as possible is directed his debt. His resolution of non-SOR debt, three of the SOR debts ¶¶ 1.c. – 1.e, and his establishment of a payment plan for SOR ¶ 1.bshow a commitment to financial rehabilitation as well as provides a positive track record of repayment.

Personal Conduct

The SOR alleges that Applicant deliberately failed to disclose his delinquent debt on his May 2016 security clearance application. Conduct involving a lack of candor or dishonesty, particularly, a failure to provide truthful and candid answers during the security process, raises questions about an individual’s reliability, trustworthiness, and ability to protect classified information.13 However, the conflicting information in the record does not support the allegation. Applicant volunteered information about the debts alleged in the SOR during a background interview that occurred days before he signed the security application at issue. It defies commonsense that Applicant later attempted to omit the same information from the May 2016 security clearance application with the intent to mislead of the Government.

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(d). Applicant’s financial situation is far from perfect, but his efforts to correct it speaks volumes about his good character, trustworthiness, and reliability and outweigh the concerns raised by his past record of financial irresponsibility.

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, Financial Considerations: FOR APPLICANT

Subparagraphs 1.a – 1.e: For Applicant

Paragraph 2, Personal Conduct: FOR APPLICANT

Subparagraph 2.a 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, apply to this case. 2 The prehearing scheduling order and the discovery letter are appended to the record as Hearing Exhibit (HE) I and II, respectively. 3 Correspondence regarding Applicant’s post-hearing submission is appended to the record as HE III. 4 GE 1-3. 5 Tr. 32-34, 52-56; AE B. 6 Tr. 17-18, 22-23, 35, 48. 7 Tr. 17, 24-25, 38, 46, 50. 8 Tr. 19-21, 26; AE C-D. 9 Tr. 57-65. 10 AG ¶ 18. 11 AG ¶¶ 19(a) and (c). 12 AG ¶ 20(d). 13 AG ¶ 15.