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ISCR Case 16-02643.h1 — CASE

ISCR Case 16-02643.h1granted

Case Headnote

ISCR Case No. 16-02643.h1

grantedAug 25, 2017· Hon. Matthew E. Malone· hearing

Summary

This case concerns a 42-year-old female applicant with an information technology and military background, whose security clearance was reviewed under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The Statement of Reasons alleged she owed $72,214 across 27 delinquent or past-due debts. These included $68,391 for student loans, a $700 collection account from a 2013 civil judgment, and $3,123 in unpaid medical bills. Disqualifying conditions under AG ¶ 19(a) and AG ¶ 19(c) were raised.

However, the judge applied mitigating conditions under AG ¶ 20(b), AG ¶ 20(c), and AG ¶ 20(d). It was determined that the applicant's financial difficulties largely stemmed from an abusive marriage and subsequent divorce, circumstances deemed beyond her control. She demonstrated responsible efforts to address these issues, including enrolling in repayment programs for her student loans.

The applicant's current financial situation was found to be stable, reflecting a commitment to resolving her outstanding debts. Based on these mitigating factors and her responsible actions, the security clearance was GRANTED.

Why the Applicant Prevailed

The applicant's financial problems were largely due to circumstances beyond her control, including an abusive spouse and divorce.
She demonstrated responsible actions in addressing her debts, including entering repayment programs for her student loans.
The applicant's current financial situation is stable, and she has shown a commitment to resolving her financial issues.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(b)appliedConditions Largely Beyond Control
AG ¶ 20(c)appliedReceiving Financial Counseling
AG ¶ 20(d)appliedGood-faith Effort to Repay Debts

Key Rule Quoted

“A security clearance decision is intended only to resolve whether it is clearly consistent with the national interest for an applicant to either receive or continue to have access to classified information.”

Procedural Posture

SOR issuedJun 15, 2016
Answer filed—
Hearing heldJun 15, 2017
Decision dateAug 25, 2017

Cite For

Mitigation of Financial Issues Under Guideline F Due to Circumstances Beyond Control
Responsible Actions Taken to Address Debts in the Context of Personal Hardship
Application of Mitigating Conditions Related to Financial Counseling and Good-faith Efforts to Repay Debts

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 addressed allegations under Guideline E but ultimately ruled in favor of the applicant, granting her security clearance. The allegations were withdrawn by Department Counsel, and thus no findings were made under Guideline E.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
1.a–1.b	2 sub-charges — specific text not stated in this decision (for the applicant).	For Applicant		—		—	—	—

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's financial difficulties were largely due to circumstances beyond her control, including an abusive marriage and subsequent financial mismanagement by her estranged husband. The applicant demonstrated responsible actions to address her debts, leading to a decision to grant her security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant owed $72,214 for 27 delinquent or past-due debts. $68,391	For Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Claimed Debt Paid in Full Claimed Financial Counseling Claimed Other
1.b	The debts alleged at SOR 1.a – 1.d are for delinquent student loan accounts totaling $68,391. $68,391	For Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Claimed Debt Paid in Full Claimed Financial Counseling Claimed Other
1.c	The $700 debt at SOR 1.aa is for a collection account pursuant to a civil judgment against Applicant in 2013. $700	For Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Claimed Other
1.d	The remaining 22 allegations represent unpaid medical bills totaling $3,123. $3,123	For Applicant	Medical Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	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

APPEARANCES

DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS

In the matter of: ) ) ) [NAME REDACTED] ) ISCR Case No. 16-02643 ) ) ) Applicant for Security Clearance

For Government: Chris Morin, Esq., Department Counsel For Applicant: Pro se

08/25/2017 ______________

STATEMENT OF CASE

______________

MALONE, Matthew E., Administrative Judge:

Applicant’s financial problems arose from circumstances beyond her control. She established that she has acted responsibly under the circumstances in addressing her debts. Applicant’s financial difficulties are not reflective of her judgment and reliability. She has mitigated the security concerns about her debts, and her request for a security clearance is granted.

Statement of the Case

On April 24, 2015, Applicant submitted an Electronic Questionnaire for Investigations Processing (EQIP) to obtain a security clearance required for her employment with a defense contractor. Based on the results of the ensuing background investigation, Department of Defense (DOD) adjudicators could not determine that it is clearly consistent with the interests of national security for Applicant to have a security clearance.1

On June 15, 2016, DOD issued a Statement of Reasons (SOR) alleging facts that raise security concerns under the adjudicative guidelines2 for financial considerations (Guideline F) and personal conduct (Guideline E). Applicant timely responded to the SOR (Answer) and requested a hearing.

I received the case on March 21, 2017, and I convened the requested hearing on June 15, 2017. The parties appeared as scheduled. At the outset of the hearing, Department Counsel withdrew the allegations under Guideline E. They originally were addressed in SOR paragraph 1 and subparagraphs 1.a and 1.b. Accordingly, I amended the SOR so that the Guideline F allegations originally listed in SOR paragraph 2 and subparagraphs 2.a – 2.aa are now addressed in SOR paragraph 1 and 1.a – 1.aa.3

Department Counsel proffered three items identified as Government Exhibits (Gx.) 1 – 3. Applicant testified and proffered nine items identified as Applicant Exhibit (Ax.) A.4 I received a transcript of the hearing (Tr.) on June 23, 2017.

FINDINGS OF FACT

Under Guideline F, the Government alleged that Applicant owed $72,214 for 27 delinquent or past-due debts (SOR 1.a - 1.aa). The debts alleged at SOR 1.a – 1.dare for delinquent student loan accounts totaling $68,391. The $700 debt at SOR 1.aa is for a collection account pursuant to a civil judgment against Applicant in 2013. The remaining 22 allegations represent unpaid medical bills totaling $3,123. In response, Applicant admitted responsibility for SOR 1.a – 1.d, and explained she thought she had resolved the SOR 1.aa debt. Applicant denied responsibility for the medical debts, averring that her estranged husband is responsible for them. (Answer) In addition to any facts thus established, I make the following additional findings of fact. Applicant is 42 years old. She and her now-estranged husband were married in 1992 and are currently in the midst of contentious litigation over division of marital assets and debts, child custody, and financial support obligations. They separated in 2016. Of their three children, one is still a minor and lives with Applicant. Applicant served in the United States Army and Army Reserve from August 2008 until March 2010, when the Army administratively discharged her. Applicant could not document a plan for the care of her child in the event of deployment because her estranged husband was not available or willing to do so. (Answer; Gx. 1; Gx. 2; Ax. A, D – H; Tr. 46, 60)

Applicant obtained her bachelor’s and master’s degrees in 2007 and 2009, respectively. As of the hearing, she had completed studies for her doctorate in information systems and organization management, and she was finishing her doctoral thesis. After working part-time in information technology (IT) positions while in school, and after leaving the Army, Applicant worked for defense contractors until May 2013, when she left a job due to incompatibility with her supervisor. Unfortunately, Applicant could not find additional work until February 2015. She has worked for her current employer since February 2016. (Answer; Gx. 1; Gx. 2; Ax. B; Tr. 61 – 62)

Applicant’s marriage deteriorated because her husband did not work and had developed a substance abuse problem, to include cocaine and prescription painkillers. Starting in August 1997, he physically and emotionally abused Applicant and their children, resulting in multiple interactions with law enforcement and the family court system, as well as requests for restraining orders. After they separated, Applicant’s husband retained control over their bank accounts and was still on Applicant’s health insurance policy. He would routinely empty their checking account without telling her. Additionally, he accrued the medical debts alleged in SOR 1.e – 1.zto obtain prescription painkillers. Applicant’s credit report attributes those debts to her because the medical coverage is in her name. (Answer; Gx. 1; Gx. 2; Ax. A, C – H; Tr. 40 – 41, 46 – 48)

The debts alleged at SOR 1.a – 1.dare for student loans she obtained to pay her tuition. They became delinquent while Applicant was unemployed and because of her husband’s abuse of their bank accounts. She recently entered into three different student loan repayment and rehabilitation programs. She makes modest payment based on her income and will be back in good standing with those creditors by the end of 2017. (Answer; Gx. 1 - 3; Ax. K – M; Tr. 37 – 39, 43, 62 - 63)

Applicant denied the debt alleged at SOR 1.aa. She argued that she believes it arose from a compromise of her PayPal account information. While she has spoken with the judgment creditor on the phone, she has not pursued the matter to resolution because she is still pre-occupied with her ongoing divorce proceedings. Applicant did document her claimed dispute of this debt. (Answer; Ax. I; Tr. 51 – 53, 63) Applicant’s current finances are sound and she is frugal in her lifestyle. Most important, her husband no longer controls their finances. She and her child moved into lower-cost housing, and they have made several sacrifices to make ends meet and avoid future debts. Applicant sometimes receives food donations from her church, where she also has enrolled in a financial counseling class. The class helps her learn how to negotiate with creditors, manage her monthly budget, and plan for the future. Applicant’s husband has not complied with court-ordered support payments, but Applicant still has a modest positive cash flow after monthly expenses, and she has started a retirement savings plan. She files and pays her taxes on time (her last federal refund was used for divorce-related legal fees), and she meets all of her regular obligations. In her testimony, she exhibited a good command of her finances and an understanding of what will be required to resolve her financial problems. (Answer; Ax. J; Ax. N; Tr. 48 – 49, 54 – 57, 64 – 66)

POLICIES

Each security clearance decision must be a fair, impartial, and commonsense determination based on examination of all available relevant and material information,5 and consideration of the pertinent criteria and adjudication policy in the adjudicative guidelines (AG). Decisions must also reflect consideration of the factors listed in ¶ 2(d) of the guidelines. Commonly referred to as the “whole-person” concept, those factors are:

(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.

The presence or absence of a disqualifying or mitigating condition is not determinative of a conclusion for or against an applicant. However, specific applicable guidelines should be followed whenever a case can be measured against them as they represent policy guidance governing the grant or denial of access to classified information. A security clearance decision is intended only to resolve whether it is clearly consistent with the national interest6 for an applicant to either receive or continue to have access to classified information. The Government bears the initial burden of producing admissible information on which it based the preliminary decision to deny or revoke a security clearance for an applicant. Additionally, the Government must be able to prove controverted facts alleged in the SOR. If the Government meets its burden, it then falls to the applicant to refute, extenuate or mitigate the Government’s case. Because no one has a “right” to a security clearance, an applicant bears a heavy burden of persuasion.7 A person who has access to classified information enters into a fiduciary relationship with the Government based on trust and confidence. Thus, the Government has a compelling interest in ensuring each applicant possesses the requisite judgment, reliability and trustworthiness of one who will protect the national interests as his or her own. The “clearly consistent with the national interest” standard compels resolution of any reasonable doubt about an applicant’s suitability for access in favor of the Government.8

ANALYSIS

Financial Considerations

The Government’s information reasonably raised a security concern about Applicant’s finances. That concern is stated at AG ¶ 18, as follows:

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. Affluence that cannot be explained by known sources of income is also a security concern insofar as it may result from criminal activity, including espionage.

More specifically, the record as a whole requires application of the disqualifying conditions at AG ¶¶ 19(a) (inability to satisfy debts) and 19(c) (a history of not meeting financial obligations). Available information documented the SOR allegations that Applicant owes or owed a significant level of past-due or delinquent debt. As of the hearing, those debts had not been addressed.

I have also considered the following pertinent AG ¶ 20 mitigating conditions:

(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 problem 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;

(c) the individual has received or is receiving financial counseling for the problem from a legitimate and credible source, such as a non-profit credit counseling service, and there are clear indications that the problem is being resolved or is under control; and

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

Applicant’s financial problems are the result of the deterioration of her marriage to an abusive spouse. Her estranged husband physically and emotionally abused her and her children, while taking money to support his drug problem and running up unpaid medical bills to obtain prescription painkillers. In the last year, while trying to finalize their divorce, Applicant has taken reasonable actions regarding her student loan debts, and in the absence of court-ordered financial support from her husband, she has cut expenses to make sure she can meet all of her ongoing financial obligations. Her efforts under these circumstances to resolve her debts reflect well on her judgment and reliability. In view of all of the foregoing, the continued presence of unresolved debts is not disqualifying. All of the above-named mitigating conditions apply, and Applicant has mitigated the security concerns raised by adverse information about her finances.

I also have evaluated this record in the context of the whole-person factors listed in AG ¶ 2(d). Applicant’s actions to resolve her debts are sufficient to satisfy the security concerns raised by her financial problems. A fair and commonsense assessment of the record as a whole shows that the Government’s security concerns are mitigated.

FORMAL FINDINGS

Formal findings 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.aa: For Applicant

CONCLUSION

In light of all of the foregoing, it is clearly consistent with the interests of national security for Applicant to have access to classified information. Applicant’s request for a security clearance is granted.

MATTHEW E. MALONE Administrative Judge

FOOTNOTES

1 Required by Executive Order 10865, as amended, and by DOD Directive 5220.6 (Directive), as amended.

2 At the time they issued the SOR, DOD adjudicators applied the adjudicative guidelines implemented by the Department of Defense on September 1, 2006. On December 10, 2016, the Director of National Intelligence issued a new version of the adjudicative guidelines, to be effective for all adjudications on or after June 8, 2017. In this decision, I have considered and applied the new adjudicative guidelines. My decision in this case would have been the same under either version.

3 See Tr. 9 – 10, 15 – 22, 24 - 36.

4 A copy of Department Counsel’s January 19, 2017 “discovery letter” and a Government Exhibit List also are included as Hearing Exhibits (Hx.) I and II, respectively. See Tr. 13 – 14. 5 See Directive. 6.3. 6 See Department of the Navy v. Egan, 484 U.S. 518 (1988).

7 See Egan, 484 U.S. at 528, 531.

8 See Egan; AG ¶ 2(b).