CASE · Clearance Adjudication Search EngineCASE

Loading case…

ISCR Case 16-02788.h1 — CASE

ISCR Case 16-02788.h1denied

Case Headnote

ISCR Case No. 16-02788.h1

deniedSep 14, 2017· Hon. Elizabeth M. Matchinski· hearing

Summary

A 36-year-old human resources and security assistant was denied a security clearance under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The denial stemmed from significant delinquent debts totaling over $16,000, which included multiple charged-off accounts and collection balances.

Specifically, the applicant had a $795 charged-off bank debt, a $331 charged-off utility debt, and another unspecified charged-off bank debt. Additional collection balances included $10,355 and $985 for credit cards, $321 for gas services, $124 for a resort, $91 for cable services, $78 for an electric company, and a $5,832 credit card debt.

The judge determined that the applicant failed to demonstrate sufficient progress in resolving these outstanding debts, despite opportunities to do so. Furthermore, the applicant did not acknowledge or take responsibility for several of the debts listed in the Statement of Reasons, leading to the denial of the security clearance.

Why the Applicant Was Denied

The applicant owed a total of $16,167 in delinquent credit card debt and additional past-due utility debts.
The applicant failed to demonstrate sufficient progress in resolving her outstanding debts despite being given opportunities to do so.
The applicant did not acknowledge or take responsibility for several debts listed in the Statement of Reasons.

Conditions Referenced

Disqualifying

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

Key Rule Quoted

“An applicant is not required to be debt free, but is required to manage her finances in a way as to exhibit sound judgment and responsibility.”

Procedural Posture

SOR issuedOct 15, 2016
Answer filedNov 10, 2016
Hearing heldMar 29, 2017
Decision dateMay 10, 2017

Cite For

Financial Responsibility Under Guideline F
Impact of Unresolved Debts on Security Clearance Eligibility
Consideration of Personal Conduct in Financial Matters Under Guideline E

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: denied

The judge found that the allegations under Guideline E were withdrawn by the government, resulting in no findings against the applicant under this guideline. Therefore, there were no personal conduct concerns adjudicated in this case.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
2.a–2.g	7 sub-charges — specific text not stated in this decision (rulings shown).	Mixed		—		—	—	—

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: denied

The judge found multiple financial concerns under Guideline F, including several charged-off debts and significant credit card collections. Ultimately, the judge ruled against the applicant on most allegations, citing ongoing delinquency and insufficient evidence of debt resolution efforts.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	$795 charged off by a bank $795	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	$331 charged off by a utility provider $331	Against Applicant	Utility or Phone Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	a debt (no amount alleged) charged off by a bank	For Applicant	Unspecified Financial	Denied	—	—	—
1.d	credit card collection balances of $10,355 $10,355	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	$985 credit card collection balance $985	For Applicant	Unspecified Financial	Denied	—	—	—
1.f	$321 placed for collection by a gas services company $321	Against Applicant	Utility or Phone Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	$124 in collection by a resort $124	For Applicant	Unspecified Financial	Denied	—	—	—
1.h	$91 in collection for cable services $91	Against Applicant	Utility or Phone Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i	$78 in collection by an electric company $78	For Applicant	Utility or Phone Debt	Unknown	—	—	—
1.j	$5,832 credit card debt placed for collection $5,832	Against Applicant	Credit Card Debt	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—

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

In the matter of: ) ) (Redacted) ) ISCR Case No. 16-02788 ) Applicant for Security Clearance )

For Government: Carroll J. Connelley, Esq., Department Counsel For Applicant: Pro se

09/14/2017 ______________

STATEMENT OF CASE

______________

MATCHINSKI, Elizabeth M., Administrative Judge:

Applicant owed delinquent credit card debt totaling $16,167, past-due utility services (electric and gas) debt of $730, a charged-off bank debt of $795, and a $91 cable services debt in collection as of October 2016. More progress is needed toward resolving her past- due debts. Clearance is denied.

Statement of the Case

On October 15, 2016, the Department of Defense Consolidated Adjudications Facility (DOD CAF) issued a Statement of Reasons (SOR) to Applicant, detailing the security concerns under Guideline F, financial considerations, and Guideline E, personal conduct. The SOR explained why it was unable to find it clearly consistent with the national interest to grant or continue security clearance eligibility for her. The DOD CAF took the action 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 for Determining Eligibility for Access to Classified Information (AG) effective within the DOD on September 1, 2006. On November 10, 2016, Applicant answered the SOR allegations and requested a hearing before an administrative judge from the Defense Office of Hearings and Appeals (DOHA). On March 2, 2017, the case was assigned to me to conduct a hearing to determine whether it is clearly consistent with the national interest to grant or continue a security clearance for Applicant. On March 10, 2017, I scheduled a hearing for March 29, 2017.

I convened the hearing as scheduled. Before the introduction of any evidence, the Government withdrew the Guideline E allegation. Four Government exhibits (GEs 1-4) and six Applicant exhibits (AEs A-G) were admitted into evidence without objection. Applicant testified, as reflected in a transcript (Tr.) received on April 6, 2017.

I held the record open until April 28, 2017, for Applicant to submit additional documentation. No further exhibits were submitted by the deadline. Accordingly, the record closed on April 28, 2017.

While this case was pending a decision, the Director of National Intelligence (DNI) issued Security Executive Agent Directive 4 establishing the National Security Adjudicative Guidelines (AG) applicable to all covered individuals who require national security eligibility or eligibility to hold a sensitive position. The AG supersede the adjudicative guidelines implemented in September 2006 and are effective for any adjudication made on or after June 8, 2017. Accordingly, I have adjudicated Applicant’s security clearance eligibility under the new AG.1

Summary of Pleadings

The SOR alleges under Guideline F that, as of October 2016, Applicant owed eight delinquent debts: $795 charged off by a bank (SOR ¶ 1.a); $331 charged off by a utility provider (SOR ¶ 1.b); a debt (no amount alleged) charged off by a bank (SOR ¶ 1.c); credit card collection balances of $10,355 (SOR ¶ 1.d), $985 (SOR ¶ 1.e), and $5,832 (SOR ¶ 1.j); $321 placed for collection by a gas services company (SOR ¶ 1.f); $124 in collection by a resort (SOR ¶ 1.g); $91 in collection for cable services (SOR ¶ 1.h); and $78 in collection by an electric company (SOR ¶ 1.i). Applicant provided a detailed response to the SOR allegations in which she admitted the debts in SOR ¶¶ 1.a-1.b, 1.d, 1.f, and 1.h- 1.j. She indicated that she would contact her creditors to either pay or establish repayment plans for her debts. Applicant denied SOR ¶¶ 1.cand 1.e because she had not been able to verify the debts. She denied owing the debt in SOR ¶ 1.gbecause it had been paid. Applicant attributed her delinquencies to making poor financial decisions regarding retail credit cards and overdraft protection when she was in college; using a credit card to cover expenses after she bought a house with a longtime boyfriend and not receiving any correspondence from the creditor after she moved in October 2015; and being a single mother receiving $24 a week in child support only occasionally.

FINDINGS OF FACT

After considering the pleadings, exhibits, and transcript, I make the following findings of fact.

Applicant is a 36-year-old college graduate who began working for a defense contractor as a human resources and security assistant in September 2015. Applicant has never been married. She has a six-year-old daughter. (GE 1; Tr. 30, 32.)

The summer following high school, Applicant opened a bank account that had overdraft protection (SOR ¶ 1.a). (Tr. 23, 33.) She was extended $3,000 in credit to be repaid at $20 a month. (GE 3.) She worked part time while in college and did not completely understand overdraft protection. She used the credit beyond what she could afford to repay, and her entire paycheck went to pay charges on the overdraft account. (Tr. 33-34.)

Applicant obtained joint student loans of $5,347 in September 1999, $5,882 in September 2000, $5,882 in September 2001, and $5,000 in September 2002 to pay for college. She obtained individual student loans of $1,076 and $1,549 in October 1999 that were paid as of September 2008. She also opened a few credit card accounts. (GE 3.) In May 2003, Applicant earned her bachelor’s degree. (GE 1.)

In September 2003, Applicant and her then significant other purchased a home. They obtained a first mortgage of $249,600 and a second mortgage of $62,400. Applicant was employed as an account manager for a commercial printing company from April 2004 to February 2010 earning about $75,000 annually by the end of her employment. She obtained additional credit cards, some of which were used for home improvements. (GEs 1, 3; Tr. 23, 38-39.) When Applicant and her boyfriend ended their relationship, he assumed legal liability for the mortgage debt but for repaying none of the credit card debts incurred for the house. (GE 1; Tr. 23.)

Applicant lost her job when the printing company closed down in approximately March 2010. (Tr. 39.) She was unemployed through December 2012. Her daughter was born in January 2011, and Applicant decided not to look for work. In January 2013, Applicant began working part time as a consultant for a public assistance program, but she resigned after nine months because of difficulty finding daycare for her daughter that could accommodate her schedule. A friend offered to watch Applicant’s daughter for her, so Applicant and her daughter moved across the country. Applicant earned $10 an hour working in retail sales, but the cost of living was much lower. (GE 1; Tr. 54-55.)

In August 2015, Applicant moved back to her present area to be near family. Applicant and her daughter stayed with her sister until November 2015, when Applicant began renting her own apartment. (Tr. 48-49.) In September 2015, Applicant started her current employment at $19 an hour. (GE 1; AE C; Tr. 54.) On October 26, 2015, Applicant completed a Questionnaire for National Security Positions (SF 86) for a DOD secret clearance so that she could perform duties as an alternate facility security officer (FSO) for her employer. (GE 1; AE B; Tr. 32.) On November 11, 2015, a check of Applicant’s credit revealed that her old overdraft account had been charged off for $795 in January 2013 after six months of inactivity (SOR ¶ 1.a). A $331 utility debt had been charged off in August 2009 (SOR ¶ 1.b). A retail charge account reportedly had a zero balance after having been charged off in September 2012 (SOR ¶ 1.c). A $615 debt placed by an optical retailer had been placed for collection in May 2012 (SOR ¶ 1.e).2 A $10,355 credit card debt was placed for collection in September 2013 (SOR ¶ 1.d), but there had been activity on the account as recently as August 2015. (GE 3.) Applicant testified that she made payments of $25-$50 when she could afford to do so from approximately October 2013 to August 2015, when she moved back home. (Tr. 21, 23, 39-40.) She “lost track of it” after she moved and made no further payments. (Tr. 40.)

A cable services collection debt of $91 from April 2009 had not been paid (SOR ¶ 1.h) as of November 2015. An electric utility balance of $78 from July 2013 was in collection (SOR ¶ 1.i). A gas company had placed a $321 debt for collection in January 2014 (SOR ¶ 1.f). Applicant apparently did not receive the final bills for those services after she moved. (Answer; Tr. 19.) A former landlord placed a $124 debt for collection (SOR ¶ 1.g), which she learned was for cleaning services for an apartment that she had cleaned before moving. Applicant had inquired about any outstanding charges in July 2015 and received no response. (AE G.) Applicant’s credit report also showed that she had repaid some credit card balances under terms acceptable to her creditors. Likewise, she had no history of late payments on her student loans, although it is unclear whether she or the co- marker was making the payments. Applicant was making timely payments of approximately $212 per month on a car lease obtained for $7,625 in May 2015. (GE 3.)

On April 5, 2016, Applicant was interviewed by an authorized investigator for the Office of Personnel Management (OPM). Applicant was asked about the adverse credit information on her credit report, including the debts in SOR ¶¶ 1.a-h. Applicant did not recognize them, but she indicated that she would make repayment arrangements for those debts she could verify. She described her financial situation as fair in that she lives from paycheck to paycheck. Applicant volunteered that she would soon be filing for full custody of her daughter. (GE 2.)

On April 6, 2016, Applicant contacted the collection entity that she believed was holding her credit card debt in SOR ¶ 1.d. Applicant was advised that the debt would be transferred for collection to an entity in her area. She had heard nothing further as of her hearing in March 2017, but she indicated that she would continue her efforts to locate the debt so that she could make payments. (AE E; Tr. 21.) Applicant’s income tax refunds for tax year 2015 went to pay the lawyer that represented her in her custody battle for her daughter. She paid $3,500 to her attorney in 2016, but was successful in gaining full custody of her daughter in September 2016. (Tr. 26-27, 30.) As of late March 2017, Applicant had not received a bill, which may or may not be forthcoming, for the services of a private investigator hired to find her daughter’s father. (Tr. 30.)

As of September 2, 2016, Equifax was reporting that Applicant owed a $5,832 credit card debt placed for collection in April 2011 (SOR ¶ 1.j). That account first became delinquent in January 2010. An old account from her college days, she attributed the debt to having only part-time income at that time. (Answer; Tr. 46.) The past-due debts in SOR ¶¶ 1.a ($795), 1.e ($615), and 1.f ($321) were still on her credit report. Applicant’s student loans had a total balance of $10,415 and were being repaid on time at $200 per month. Applicant was making timely payments on her car lease and had reduced the balance to $4,444. (GE 4.) Applicant opened a credit card account with a clothing retailer in December 2016 to purchase clothing for her growing daughter. As of late February 2017, her account had a $125 current balance, which Applicant paid during the next billing cycle. (AE G; Tr. 22-23.) She has no other open credit card accounts. (Tr. 47.)

At her annual performance evaluation in September 2016, Applicant was promoted to the position of human resource administrator at an hourly wage of almost $23. (Tr. 54.) According to the company’s human resource officer, Applicant was promoted because of her excellent work performance and dedication to her duties. (AE C.) After the SOR was issued, Applicant’s interim secret clearance was withdrawn in October 2016. Applicant continued to perform as an “instrumental member” of the human resources team, but she no longer served as alternate FSO. (AE B.)

On November 10, 2016, Applicant indicated in response to the SOR that she began to rectify her debts after meeting with the OPM investigator and that she would have payment plans in place for all her debts by March 2017. (Answer.) As of late February 2017, Applicant’s student loans (total balance $9,222) and car lease (balance $3,189) had no history of late payments. However, there had been no reported progress toward resolving her past-due debts, including those in SOR ¶¶ 1.a, 1.i, and 1.g. (AE G.)

Applicant paid $85 on March 27, 2017, to fully satisfy the debt in SOR ¶ 1.i. (Tr. 19- 20, 45.) On March 28, 2017, Applicant sent an email to the creditor in SOR 1.gto inquire about payment of the debt for cleaning services. (AE G; Tr. 43-44.) She had not received any response as of her hearing. Applicant had not made any effort to contact the creditor in SOR ¶ 1.a about the $795 in overdraft debt that was charged off. She thought that because the debt had been written off by the creditor, there was nothing that she could do about the debt which would remain as a strike against her credit. (Tr. 35, 53.) Similarly, Applicant had not reached out to the utility company about the $331 debt in SOR ¶ 1.b, to the bank in SOR ¶ 1.c, or to the collection entity about the credit card debt in SOR ¶ 1.jbecause they had been charged off or were closed. (Tr. 36-38, 47-48.) Applicant did not recognize the credit grantor in SOR ¶ 1.e, so she made no payments on that debt. (Tr. 42.) She acknowledged the $321 natural gas debt (SOR ¶ 1.f) as being the last bill from her apartment before she moved in July 2014, but she had made no payments as of late March 2017. (Tr. 42.) She had also not made any payments toward her old cable bill in SOR ¶ 1.h. (Tr. 45.) Applicant presented no documentation of progress toward some of the debts in the SOR despite the opportunity for post-hearing submissions.

Applicant and the father of her daughter initially agreed that he would pay $25 a month for child support deposited into a bank account that she can access by debit card. His payments have been irregular, and he and Applicant have had no contact in the last two years. She does not rely on his child support payments. (Tr. 50.) Applicant’s rent is $900 a month. Daycare for her daughter costs $460 a month. After paying her monthly expenses, Applicant has only $20 a month in discretionary income.3 (AE D; Tr. 22.) In March 2017, she received her federal and state income tax refunds totaling $4,000 for tax year 2016. She expressed her intention to use half of her refund to resolve her outstanding debts, including the credit card debt in SOR ¶ 1.d, and to save the other half for unexpected expenses. Her daughter needed to be evaluated for behavioral issues, and Applicant’s insurance would not completely cover the cost. (Tr. 27-29.)

Character References

Applicant’s manager considers Applicant to be a responsible person with strong ethics and integrity who does not pose a security risk. Applicant received two awards at work in addition to her promotion. Applicant’s living situation was discussed in the office and this manager knows that it was important for Applicant to find an apartment that she could afford on her salary. Applicant advised her manager that she had old debt and needed to be able to support herself without incurring any new delinquency. Based on her observations and conversations with Applicant, this manager believes Applicant is doing all that she can to get back on track financially while providing a comfortable childhood for her daughter. (AE A.)

Another co-worker in human resources highly recommends Applicant for security clearance eligibility. From her first day, Applicant showed herself to be “a responsible dedicated employee with excellent communication skills, highly motivated, [and] eager to learn new tasks . . . .” Aware that Applicant is raising her daughter with no involvement from her daughter’s father, this human resource officer indicates that Applicant occasionally works from home without any issues. (AE C.)

The assistant FSO described Applicant as “an instrumental member of the Human Resources team.” A trusted employee, Applicant has been reliable and punctual in her attendance and always willing to assist her colleagues to ensure goals are met. (AE B.)

POLICIES

The U.S. Supreme Court has recognized the substantial discretion the Executive Branch has in regulating access to information pertaining to national security, emphasizing that “no one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). 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 required to be considered 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 overall adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶ 2(a), 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. 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 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 that the applicant may deliberately or inadvertently fail to safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation about potential, rather than actual, risk of compromise of classified information. Section 7 of EO 10865 provides that 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

The security concerns about financial considerations are articulated 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 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.

An applicant is not required to be debt free, but is required to manage her finances in a way as to exhibit sound judgment and responsibility. Applicant exhibited poor financial judgment in some aspects. Several years ago, she overextended herself financially on an overdraft account and some credit cards. More recently, Applicant moved from some apartments without paying final bills for natural gas, electricity, and cable services. Apparently, she was unaware of some of those debts, but there is no evidence that she acted promptly to follow up with her creditors to ensure that she owed no outstanding balances. Applicant does not dispute her liability for the delinquencies in SOR ¶¶ 1.a-1.b, 1.d, 1.f, and 1.h-1.j. Disqualifying conditions AG ¶ 19(a), “inability to satisfy debts,” and AG ¶ 19(c), “a history of not meeting financial obligations,” apply.

Applicant does not acknowledge that she had a charged off account with the creditor bank in SOR ¶ 1.c, or that she owes the $985 collection debt in SOR ¶ 1.e or the $124 cleaning fee in SOR ¶ 1.g. A review of available credit reports indicates that the debt in SOR ¶ 1.e was placed for collection by an optical retailer in May 2012 for $615. As of November 2015, the collection agency was claiming a $985 balance. The debt for cleaning services was listed on her November 2015 and March 2017 credit reports. Concerning SOR ¶ 1.c, the creditor bank reported a zero balance as of November 2015, but after a charge off in September 2012. The Appeal Board has held that adverse information from a credit report is normally sufficient to meet the substantial evidence standard to establish a debt. See, e.g., ISCR Case No. 14-03612 (App. Bd. Aug. 25, 2015.) Available credit report information is sufficient to establish the $615 and $124 collection balances and to apply AG ¶¶ 19(a) and 19(c) because of those debts. Applicant’s belated inquiry about the debt in SOR ¶ 1.gis not enough to disprove her liability for the debt. However, there is a reasonable basis to dispute that Applicant owes an outstanding balance to the creditor in SOR ¶ 1.c. AG ¶ 20(e) applies, but only to that debt. It provides:

(e) the individual has a reasonable basis to dispute the legitimacy of the past-due debt which is the cause of the problem and provides documented proof to substantiate the basis of the dispute or provides evidence of actions to resolve the issue.

Applicant has the burden of presenting evidence of explanation, extenuation, or mitigation to overcome the security concerns raised by her delinquent debts. Under the AG effective for any adjudication on or after June 8, 2017, a record of consumer delinquency may be mitigated under one or more of the following conditions under ¶ 20: (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 person has received or is receiving 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.

AG ¶ 20(a) does not mitigate the security concerns raised by ongoing delinquency. Applicant made inquiries around July or August 2015 about the debts in SOR ¶ 1.dand 1.g, but then did nothing while waiting to hear from the creditors. She did not recognize the debts on her credit report when questioned by the OPM investigator in April 2016, but she indicated that she would take steps to verify her debts and make repayment arrangements. In response to the SOR, she indicated in November 2016 that she would have repayment plans in place by March 2017. Yet, by her hearing in late March 2017, she had not reached out to most of her creditors and had not made any payments on most of her past-due debts. She had resolved only the debt in SOR ¶ 1.i.

AG ¶ 20(b) has some applicability because of Applicant’s lengthy unemployment from March 2010 through December 2012 and her limited income after she returned to work. No information was provided about her income while she was employed as a part- time consultant for a public assistance entity from January 2013 to September 2013, but her wage was only $10 an hour in retail sales from October 2013 to August 2015. Applicant testified that she made some payments of $25-$50 when she could afford to do so toward the credit card debt in SOR ¶ 1.d. It is unclear how many payments she made on that debt. Applicant is unlikely to have made much progress on that debt given her limited income at the time. Applicant’s employment with a defense contractor in September 2015 provided stable income at $19 an hour initially, but she also had daycare, rent, and other living expenses with little to no financial assistance from her daughter’s father. The custody battle for her daughter cost her $3,500 in legal fees that she paid with her income tax refund for 2015. While acknowledging that her income tax refund could instead have been applied to her old delinquencies, Applicant was seemingly unaware of some of the debts or, in the case of the credit card debt in SOR ¶ 1.d, was waiting to hear about the transfer of her account for collection to a local entity. AG ¶ 20(c) and AG ¶ 20(d) have limited applicability. Despite her promotion at work in September 2016, which raised her hourly wage to $23, Applicant had satisfied only the smallest debt in the SOR, i.e., the $78 utility debt in SOR ¶ 1.i.

WHOLE PERSON CONCEPT

In the whole-person evaluation, the administrative judge must consider the totality of an applicant’s conduct and all relevant circumstances in light of the nine adjudicative process factors in AG ¶ 2(d).4 Some of the factors in AG ¶ 2(d) were addressed under Guideline F, but some warrant additional comment.

The security clearance adjudication is not aimed at collecting an applicant’s personal debts. Rather, it involves an evaluation of an applicant’s judgment, reliability, and trustworthiness in light of the security guidelines in the Directive. See ISCR Case No. 09- 02160 (App. Bd. Jun. 21, 2010). In evaluating Guideline F cases under the whole-person concept, the Appeal Board has established that an applicant is not required to pay off every debt in the SOR:

The Board has previously noted that the concept of a meaningful track record necessarily includes evidence of actual debt reduction through payment of debts. However, an applicant is not require, as a matter of law, to establish that he has paid off each and every debt listed in the SOR. All that is required is that an applicant demonstrate that he has established a plan to resolve his financial problems and taken significant actions to implement that plan. The Judge can reasonably consider the entirety of an applicant’s financial situation and evaluating the extent to which that applicant’s plan for the reduction of his outstanding indebtedness is credible and realistic.

See ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008) (internal citations and quotation marks omitted). In evaluating Applicant’s overall financial situation, Applicant’s outstanding delinquencies total approximately $18,834, and she has little discretionary income to put toward her old debt. It is unclear who is paying her student loans, although she has a track record of timely payments on her car lease. Applicant also demonstrated some financial responsibility by not overspending on consumer credit in recent years. She has opened only one credit card since 2009, which is with a retailer so that she can provide clothes for her growing daughter, and her account is rated as current. There is no evidence of frivolous expenditure that could further compromise her financial situation going forward. Yet, some doubts persist about her commitment and ability to resolve the financial issues of concern to the DOD. As of her hearing in March 2017, Applicant had recently received her income tax refunds totaling $4,000 for tax year 2016. She testified about her intention to set aside half of her refund for paying her old debts. I kept the record open for 30 days after the hearing, but Applicant submitted no additional evidence. Applicant is not required to pay off all her debts, but she can reasonably be expected to make more progress than an eleventh hour payment of $85 to resolve one debt.

Applicant’s manager and co-workers endorse her for security clearance eligibility based on their observations of her work performance and what they know about her efforts to ensure she incurs no new delinquency. This evidence weighs in her favor, but it is also well settled that once a concern arises regarding an applicant’s security clearance eligibility, there is a strong against the grant or renewal of a security clearance. See Dorfmont v. Brown, 913 F. 2d 1399, 1401 (9th Cir. 1990). Her financial problems are not sufficiently resolved. This decision should not be construed as a determination that Applicant cannot or will not show sufficient financial stability and a state of reform necessary to be eligible for a security clearance in the future, but she needs to show more progress toward addressing her old debts. For the reasons noted above, I conclude that it is not clearly consistent with the national interest to grant Applicant security clearance eligibility at this time.

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: AGAINST APPLICANT

Subparagraphs 1.a-1.b: Against Applicant Subparagraph 1.c: For Applicant Subparagraphs 1.d-1.h: Against Applicant Subparagraph 1.i: For Applicant Subparagraph 1.j: Against Applicant

Paragraph 2, Guideline E: Withdrawn

CONCLUSION

In light of all of the circumstances, it is not clearly consistent with the national interest to grant Applicant eligibility for a security clearance. Eligibility for access to classified information is denied.

_____________________ Elizabeth M. Matchinski Administrative Judge

FOOTNOTES

DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS 1 Application of the AGs that were in effect as of the issuance of the SOR would not change my decision in this case. 2 Applicant’s November 2015 credit report showed that a $615 debt from December 2009 had been placed for collection and transferred by an optical retailer to the collection entity in SOR ¶ 1.e. As of October 2015, the collection entity was reporting a $985 balance, possibly due to interest on the unpaid balance. (GE 3.) As of September 2016, the collection entity was reporting a $615 balance on the debt. (GE 4.) 3 Applicant presented a budget (AE D) which did not include any student loan payments. She listed $600 for food and toiletries. Applicant did not elaborate about her student loans, but they are rated as current. 4 The factors under AG ¶ 2(d) are as follows:

(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.