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ISCR Case 16-03358.h1 — CASE

ISCR Case 16-03358.h1denied

Case Headnote

ISCR Case No. 16-03358.h1

deniedOct 3, 2017· Hon. Robert Robinson Gales· hearing

Summary

A 44-year-old defense contractor employee was denied a security clearance under Guideline F, Financial Considerations, due to ten unresolved delinquent debts totaling approximately $126,331. The Statement of Reasons detailed these financial issues, including a first mortgage with a past-due balance of $33,641 and a remaining balance of $97,338, for which foreclosure had begun.

Other significant debts included a home equity mortgage with a past-due balance of $1,639, a state tax lien for $1,844 from 2008, and several collection accounts for utility bills, cellular telephone services, and medical expenses. The judge applied Disqualifying Conditions AG ¶ 19(a), AG ¶ 19(b), and AG ¶ 19(c), while also considering Mitigating Condition AG ¶ 20(b).

The denial was based on the applicant's admission to the ten delinquent debts without demonstrating a good-faith effort to resolve them. The applicant failed to provide evidence of contacting creditors, establishing repayment plans, submitting a Personal Financial Statement, or seeking financial counseling, leading to concerns about his reliability and trustworthiness.

Why the Applicant Was Denied

The applicant admitted to ten delinquent debts totaling approximately $126,331, which he failed to address or resolve.
There was no evidence of a good-faith effort to contact creditors or establish a repayment plan for the debts.
The applicant did not provide a Personal Financial Statement or evidence of financial counseling.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(b)appliedConditions That Resulted in the Financial Problem Were Largely Beyond the Person's Control

Key Rule Quoted

“A person who seeks access to classified information enters into a fiduciary relationship with the Government predicated upon trust and confidence.”
— Department of the Navy v. Egan, 484 U.S. 518, 528 (1988)

Procedural Posture

SOR issuedDec 9, 2016
Answer filedDec 23, 2016Applicant elected to proceed without a hearing.
Hearing held—Written record decision.
Decision dateOct 3, 2017

Cite For

Failure to Demonstrate Good-faith Effort to Resolve Financial Obligations Under Guideline F
Impact of Unresolved Debts on Security Clearance Eligibility
Consideration of the Whole-person Concept in Security Clearance Decisions

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: denied

The judge found against the applicant on all financial allegations under Guideline F, citing a significant number of delinquent debts totaling approximately $126,331. The applicant failed to demonstrate any efforts to resolve these debts, leading to a denial of his security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	a first mortgage with a high credit of $107,920, a past-due balance of $33,641, and a remaining balance of $97,338, for which the foreclosure process has started $97,338	Against Applicant	Mortgage or Home Loan Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.b	a gas utility account with an unpaid balance of $230 that was placed for collection $230	Against Applicant	Utility or Phone Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.c	a power utility account with an unpaid balance of $212 that was placed for collection $212	Against Applicant	Utility or Phone Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.d	a state tax lien for $1,844 that was entered against Applicant in 2008 $1,844	Against Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.e	a home equity mortgage with a high credit of $26,980, a past-due balance of $1,639, and a remaining balance of $25,132 $25,132	Against Applicant	Mortgage or Home Loan Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.f	a cellular telephone account with an unpaid balance of $968 that was placed for collection $968	Against Applicant	Utility or Phone Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.g	a cellular telephone account with an unpaid balance of $368 that was placed for collection and sold to a debt purchaser $368	Against Applicant	Utility or Phone Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.h	an unspecified type of account with an unpaid balance of $100 that was placed for collection $100	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.i	two medical accounts with unpaid balances of $74 and $65 that were placed for collection $74	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.j	two medical accounts with unpaid balances of $74 and $65 that were placed for collection $65	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (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

DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS

In the matter of: ) ) --- ) ISCR Case No. 16-03358 ) Applicant for Security Clearance )

For Government: Julie R. Mendez, Esquire, Department Counsel For Applicant: Pro se

10/03/2017 ______________

STATEMENT OF CASE

______________

GALES, Robert Robinson, Administrative Judge:

Applicant failed to mitigate the security concerns regarding financial considerations. Eligibility for a security clearance and access to classified information is denied.

Statement of the Case

On May 26, 2015, Applicant applied for a security clearance and submitted an Electronic Questionnaire for Investigations Processing (e-QIP) version of a Security Clearance Application.1 On December 9, 2016, the Department of Defense (DOD) Consolidated Adjudications Facility (CAF) issued a Statement of Reasons (SOR) to him, under Executive Order 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended and modified; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended and modified (Directive); and the Adjudicative Guidelines for Determining Eligibility For Access to Classified Information (December 29, 2005) applicable to all adjudications and other determinations made under the Directive, effective September 1, 2006.2 The SOR alleged security concerns under Guideline F (Financial Considerations), and detailed reasons why the DOD adjudicators were unable to find that it is clearly consistent with the interests of national security to grant or continue a security clearance for Applicant. The SOR recommended referral to an administrative judge to determine whether a clearance should be granted, continued, denied, or revoked.

It is unclear when Applicant received the SOR as there is no receipt in the case file. In a sworn statement, dated December 23, 2016, Applicant responded to the SOR and elected to have his case decided on the written record in lieu of a hearing. A complete copy of the Government’s file of relevant material (FORM) was mailed to Applicant by the Defense Office of Hearings and Appeals (DOHA) on January 25, 2017, and he was afforded an opportunity, within a period of 30 days after receipt of the FORM, to file objections and submit material in refutation, extenuation, or mitigation. In addition to the FORM, Applicant was furnished a copy of the Directive as well as the previous Adjudicative Guidelines applicable to his case. Applicant received the FORM on February 6, 2017. Applicant’s response was due on March 8, 2017. As of October 1, 2017, Applicant had not submitted any response to the FORM. The case was assigned to me on October 1, 2017.

FINDINGS OF FACT

In his Answer to the SOR, Applicant admitted all of the factual allegations pertaining to financial considerations (¶¶ 1.a. through 1.j.) of the SOR. Applicant’s admissions are incorporated herein as findings of fact. After a complete and thorough review of the evidence in the record, and upon due consideration of same, I make the following additional findings of fact:

Applicant is a 44-year-old employee of a defense contractor. He has served as a solid state technician since March 2004. He attended a university for two years, but did not receive a degree. Applicant enlisted in the U.S. Army inactive reserve in 1992, and he was honorably discharged in 1996. He was granted a secret security clearance in March 1993, while in the U.S. Army. Applicant was married the first time in 1994 and divorced in 1996. He married the second time in 2001 and divorced in 2014. He has resided with a cohabitant since 2015. He has one son, born in 2000, and two daughters, born in 1998 and 2005. Financial Considerations3

It appears that Applicant’s finances became an issue in 2008 when a state tax lien was filed against him. However, Applicant claims his finances became a problem only after he was divorced in 2014, at which time he lost his ex-wife’s income, and incurred child support expenses. As a result, he was unable to make timely payments on his first and second mortgages, as well as for other accounts, because he had insufficient funds to do so. He indicated that he is currently trying to get back on his feet financially.

The SOR identified ten purportedly delinquent debts that had been placed for collection, as generally reflected by his 2015 and 2016 credit reports. Those debts, totaling approximately $126,331, their current status, according to the credit reports, other evidence submitted by the Government, and Applicant’s comments regarding same, are described below.

(SOR ¶¶ 1.a. and 1.e.): These are a first mortgage with a high credit of $107,920, a past-due balance of $33,641, and a remaining balance of $97,338, for which the foreclosure process has started (SOR ¶ 1.a.); and a home equity mortgage with a high credit of $26,980, a past-due balance of $1,639, and a remaining balance of $25,132 (SOR ¶ 1.e.), that were placed for collection. Applicant admitted in his Answer to the SOR that the accounts remain delinquent. There is no evidence to indicate that Applicant has made any efforts to contact the creditors or collection agents to resolve them. The accounts have not been resolved.

(SOR ¶ 1.b.): This is a gas utility account with an unpaid balance of $230 that was placed for collection. In his Answer to the SOR, Applicant admitted that the account remains delinquent. There is no evidence to indicate that Applicant has made any efforts to contact the creditor or collection agent to resolve it. The account has not been resolved.

(SOR ¶ 1.c.): This is a power utility account with an unpaid balance of $212 that was placed for collection. In his Answer to the SOR, Applicant admitted that the account remains delinquent. There is no evidence to indicate that Applicant has made any efforts to contact the creditor or collection agent to resolve it. The account has not been resolved.

(SOR ¶ 1.d.): This is a state tax lien for $1,844 that was entered against Applicant in 2008. In his Answer to the SOR, Applicant admitted that the account remains delinquent. There is no evidence to indicate that Applicant has made any efforts to contact the state to resolve it. The account has not been resolved.

(SOR ¶ 1.f.): This is a cellular telephone account with an unpaid balance of $968 that was placed for collection. In his Answer to the SOR, Applicant admitted that the account remains delinquent. There is no evidence to indicate that Applicant has made any efforts to contact the creditor or collection agent to resolve it. The account has not been resolved.

(SOR ¶ 1.g.): This is a cellular telephone account with an unpaid balance of $368 that was placed for collection and sold to a debt purchaser. In his Answer to the SOR, Applicant admitted that the account remains delinquent. There is no evidence to indicate that Applicant has made any efforts to contact the creditor, collection agent, or debt purchaser to resolve it. The account has not been resolved.

(SOR ¶ 1.h.): This is an unspecified type of account with an unpaid balance of $100 that was placed for collection. In his Answer to the SOR, Applicant admitted that the account remains delinquent. There is no evidence to indicate that Applicant has made any efforts to contact the creditor or collection agent to resolve it. The account has not been resolved.

(SOR ¶¶ 1.i. and 1.j.): These are two medical accounts with unpaid balances of $74 and $65 that were placed for collection with the different collection agents. Applicant admitted in his Answer to the SOR that the accounts remain delinquent. There is no evidence to indicate that Applicant has made any efforts to contact the creditors or collection agents to resolve them. The accounts have not been resolved.

It is not known what Applicant’s financial resources may be because he did not submit a Personal Financial Statement to reflect his net monthly income; monthly expenses; and any monthly remainder that might be available for discretionary spending or savings. There is no evidence of a budget. There is no evidence of any financial counseling. There is no evidence that Applicant ever contacted his creditors or collection agents either to research or validate the accounts, or to arrange repayment plans. There is no evidence that Applicant ever disputed the accounts either with the creditors or the credit reporting agencies. Applicant offered no evidence to indicate that his financial situation is now under control.

POLICIES

The U.S. Supreme Court has recognized the substantial discretion of the Executive Branch in regulating access to information pertaining to national security emphasizing, “no one has a ‘right’ to a security clearance.”4 As Commander in Chief, the President has the authority to control access to information bearing on national security and to determine whether an individual is sufficiently trustworthy to have access to such information. The President has authorized the Secretary of Defense or his designee to grant an applicant eligibility for access to classified information “only upon a finding that it is clearly consistent with the national interest to do so.”5 When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the guidelines in SEAD 4. In addition to brief introductory explanations for each guideline, the guidelines list potentially disqualifying conditions and mitigating conditions, which are used in evaluating an applicant’s eligibility for access to classified information.

An administrative judge need not view the guidelines as inflexible, ironclad rules of law. Instead, acknowledging the complexities of human behavior, these guidelines are applied in conjunction with the factors listed in the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. 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 meaningful decision.

In the decision-making process, facts must be established by “substantial evidence.”6 The Government initially has the burden of producing evidence to establish a potentially disqualifying condition under the Directive, and has the burden of establishing controverted facts alleged in the SOR. Once the Government has produced substantial evidence of a disqualifying condition, under Directive ¶ E3.1.15, the applicant has the burden of persuasion to present evidence in refutation, explanation, extenuation or mitigation, sufficient to overcome the doubts raised by the Government’s case. The burden of disproving a mitigating condition never shifts to the Government.7

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 as well. It is because of this special relationship that the Government must be able to repose a high degree of trust and confidence in those 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 as to potential, rather than actual, risk of compromise of classified information. Furthermore, “security clearance determinations should err, if they must, on the side of denials.”8

Clearance decisions must be “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.”9 Thus, nothing in this decision should be construed to suggest that I have based this decision, in whole or in part, on any express or implied determination as to Applicant’s allegiance, loyalty, or patriotism. It is merely an indication the Applicant has or has not met the strict guidelines the President and the Secretary of Defense have established for issuing a clearance. In reaching this decision, I have drawn only those conclusions that are reasonable, logical, and based on the evidence contained in the record. Likewise, I have avoided drawing inferences grounded on mere speculation or conjecture.

ANALYSIS

Guideline F, Financial Considerations

The security concern relating to the guideline for Financial Considerations is set out in AG ¶ 18:

Failure to live within one's means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual's reliability, trustworthiness, and ability to protect classified or sensitive information. Financial distress can also be caused or exacerbated by, and thus can be a possible indicator of, other issues of personnel security concern such as excessive gambling, mental health conditions, substance misuse, or alcohol abuse or dependence. An individual who is financially overextended is at 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.

The guideline notes several conditions that could raise security concerns. Under AG ¶ 19(a), an “inability to satisfy debts” is potentially disqualifying. In addition, AG ¶ 19(b) may apply if there is an “unwillingness to satisfy debts regardless of the ability to do so.” Similarly, under AG ¶ 19(c), “a history of not meeting financial obligations” may raise concerns. Applicant’s credit reports reflect ten delinquent accounts, and he has admitted that the accounts are still delinquent. AG ¶¶ 19(a), 19(b), and 19(c) apply.

The guideline also includes examples of conditions that could mitigate security concerns arising from financial difficulties. Under AG ¶ 20(a), the disqualifying condition may be mitigated where “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.” Also, under AG ¶ 20(b), financial security concerns may be mitigated where “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.” Evidence that “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” is potentially mitigating under AG ¶ 20(c). Similarly, AG ¶ 20(d) applies where the evidence shows “the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts.”10 In addition, AG ¶ 20(e) may apply if “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.”

AG ¶ 20(b) minimally applies, but none of the remaining mitigating factors apply. Applicant attributed his financial difficulties to his 2014 divorce, and in doing so he ignored his 2008 tax lien. The statement that the divorce resulted in the loss of his ex-wife’s earnings, and the child support added to his financial burdens, without substantially more information, does not support his contentions. There is no evidence of the amount of the lost earnings or the amount of the child support. Rather than addressing the ten accounts, Applicant simply took no action to resolve them, including ones with the modest sums of $65 and $75, claiming he had insufficient funds to do so. The Government is entitled to rely on credit reports in these proceedings as ordinary business record exceptions to the hearsay rule. There was no evidence submitted “to establish that those documents were improperly or irregularly produced, or produced in circumstances that would render their reliability suspect.”11 Moreover, with respect to credit reports, the Appeal Board stated:12

It is well-settled that adverse information from a credit report can normally meet the substantial evidence standard and the government’s obligations under [Directive] ¶ E3.1.14 for pertinent allegations . . . At that point, the burden shifts to Applicant to establish either that [he or she] is not responsible for the debt or that matters in mitigation apply.

Clearance decisions are aimed at evaluating an applicant’s judgment, reliability, and trustworthiness. They are not a debt-collection procedure. The guidelines do not require an applicant to establish resolution of each and every debt alleged in the SOR. An applicant needs only to establish a plan to resolve financial problems and take significant actions to implement the plan. There is no requirement that an applicant immediately resolve or make payments on all delinquent debts simultaneously, nor is there a requirement that the debts alleged in an SOR be paid first. Rather, a reasonable plan and concomitant conduct may provide for the payment of such debts one at a time. Mere promises to pay debts in the future, without further action, are insufficient.

There is no evidence of a good-faith effort to contact the creditors to resolve the accounts.13 There is little evidence that the conditions that may have resulted in the financial issues were largely beyond Applicant's control. There is no evidence of financial counseling, a budget, or any disputes. Applicant offered no evidence to indicate that his financial situation is now under control. Equally as important, there is no evidence that Applicant acted responsibly under the circumstances, and that failure to do so continues to cast doubt on his current reliability, trustworthiness, and good judgment.14

WHOLE PERSON CONCEPT

Under the whole-person concept, the administrative judge must evaluate an applicant’s eligibility for a security clearance by considering the totality of the applicant’s conduct and all the circumstances. The administrative judge should consider the nine adjudicative process factors listed at SEAD 4, App. A, ¶ 2(d):

(1) the nature, extent, and seriousness of the conduct; (2) the circumstances surrounding the conduct, to include knowledgeable participation; (3) the frequency and recency of the conduct; (4) the individual’s age and maturity at the time of the conduct; (5) the extent to which participation is voluntary; (6) the presence or absence of rehabilitation and other permanent behavioral changes; (7) the motivation for the conduct; (8) the potential for pressure, coercion, exploitation, or duress; and (9) the likelihood of continuation or recurrence.

Under SEAD 4, App. A, ¶ 2(c), the ultimate determination of whether to grant a security clearance must be an overall commonsense judgment based upon careful consideration of the guidelines and the whole-person concept. Moreover, I have evaluated the various aspects of this case in light of the totality of the record evidence and have not merely performed a piecemeal analysis.15 There is some evidence mitigating Applicant’s conduct. There is no evidence of misuse of information technology systems, or mishandling protected information. He was honorably discharged from the U.S. Army. He has been employed by the same employer continuously since 2004.

The disqualifying evidence under the whole-person concept is simply more substantial. There are ten delinquent accounts alleged in the SOR with a combined unpaid balance of $126,331. Although Applicant received the SOR in December 2016, and he was aware of his delinquent debts for a period even before he received the SOR, he made no efforts since that time to address any of his delinquent accounts, including ones with the modest sums of $65 and $75. He failed to dispute any of them. It appears that he simply ignored the debts. Considering the lack of evidence regarding his current finances, and the absence of character evidence regarding Applicant’s honesty, integrity, and trustworthiness, I am unable to reach a positive conclusion pertaining to Applicant’s eligibility for a security clearance.

The Appeal Board has addressed a key element in the whole-person analysis in financial cases stating:16

In evaluating Guideline F cases, the Board has previously noted that the concept of “meaningful track record” necessarily includes evidence of actual debt reduction through payment of debts. However, an applicant is not required, as a matter of law, to establish that he [or she] has paid off each and every debt listed in the SOR. All that is required is that an applicant demonstrate that he [or she] has “. . . established a plan to resolve his [or her] financial problems and taken significant actions to implement that plan.” The Judge can reasonably consider the entirety of an applicant’s financial situation and his [or her] actions in evaluating the extent to which that applicant’s plan for the reduction of his outstanding indebtedness is credible and realistic. See Directive ¶ E2.2(a) (“Available, reliable information about the person, past and present, favorable and unfavorable, should be considered in reaching a determination.”) There is no requirement that a plan provide for payments on all outstanding debts simultaneously. Rather, a reasonable plan (and concomitant conduct) may provide for the payment of such debts one at a time. Likewise, there is no requirement that the first debts actually paid in furtherance of a reasonable debt plan be the ones listed in the SOR.

Applicant has demonstrated a very poor track record of debt reduction and elimination efforts, avoiding the debts in his name, and failing to promise to take any corrective actions. Overall, the evidence leaves me with substantial questions and doubts as to Applicant’s eligibility and suitability for a security clearance. For all of these reasons, I conclude Applicant has failed to mitigate the security concerns arising from his financial considerations. See SEAD 4, App. A, ¶¶ 2(d)(1) through AG 2(d)(9).

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. through 1.j: Against Applicant

CONCLUSION

In light of all of the circumstances presented by the record in this case, it is not clearly consistent with the interests of national security to grant Applicant eligibility for a security clearance. Eligibility for access to classified information is denied.

________________________ ROBERT ROBINSON GALES Administrative Judge

FOOTNOTES

1 Item 3 (e-QIP, dated May 26, 2015). 2 Effective June 8, 2017, by Directive 4 of the Security Executive Agent (SEAD 4), dated December 10, 2016, National Security Adjudicative Guidelines (AG) for all covered individuals who require initial or continued eligibility for access to classified information or eligibility to hold a sensitive position, were established to supersede all previously issued national security adjudicative criteria or guidelines. Accordingly, those guidelines previously implemented on September 1, 2006, under which this security clearance review case was initiated, no longer apply. In comparing the two versions, there is no substantial difference that might have a negative effect on Applicant in this case. 3 General source information pertaining to the financial accounts discussed below can be found in the following exhibits: Item 3, supra note 1; Item 4 (Combined Experian, TransUnion, and Equifax Credit Report, dated June 20, 2015; Item 5 (Equifax Credit Report, dated September 16, 2016); and Item 2 (Applicant’s Answer to the SOR, dated December 23, 2016). 4 Department of the Navy v. Egan, 484 U.S. 518, 528 (1988).

5 Exec. Or. 10865, Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960), as amended and modified. 6 “Substantial evidence [is] such relevant evidence as a reasonable mind might accept as adequate to support a conclusion in light of all contrary evidence in the record.” ISCR Case No. 04-11463 at 2 (App. Bd. Aug. 4, 2006) (citing Directive ¶ E3.1.32.1). “Substantial evidence” is “more than a scintilla but less than a preponderance.” See v. Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994).

7 See ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 2005).

8 Egan, 484 U.S. at 531.

9 See Exec. Or. 10865 § 7. 10 The Appeal Board has previously explained what constitutes a good-faith effort to repay overdue creditors or otherwise resolve debts:

In order to qualify for application of [the “good-faith” mitigating condition], an applicant must present evidence showing either a good-faith effort to repay overdue creditors or some other good-faith action aimed at resolving the applicant’s debts. The Directive does not define the term ‘good-faith.’ However, the Board has indicated that the concept of good-faith ‘requires a showing that a person acts in a way that shows reasonableness, prudence, honesty, and adherence to duty or obligation.’ Accordingly, an applicant must do more than merely show that he or she relied on a legally available option (such as bankruptcy [or statute of limitations]) in order to claim the benefit of [the “good-faith” mitigating condition].

(internal citation and footnote omitted) ISCR Case No. 02-30304 at 3 (App. Bd. Apr. 20, 2004) (quoting ISCR Case No. 99-9020 at 5-6 (App. Bd. June 4, 2001)).

11 ISCR Case No. 07-08925 at 3 (App. Bd. September 15, 2008).

12 ISCR Case No. 08-12184 at 7 (App. Bd. Jan. 7, 2010); ISCR Case No. 03-20327 at 3 (App. Bd. Oct. 26, 2006). 13 “Even if Applicant’s financial difficulties initially arose, in whole or in part, due to circumstances outside his [or her] control, the Judge could still consider whether Applicant has since acted in a reasonable manner when dealing with those financial difficulties.” ISCR Case No. 05-11366 at 4 n.9 (App. Bd. Jan. 12, 2007) (citing ISCR Case No. 99- 0462 at 4 (App. Bd. May 25, 2000); ISCR Case No. 99-0012 at 4 (App. Bd. Dec. 1, 1999); ISCR Case No. 03-13096 at 4 (App. Bd. Nov. 29, 2005)). A component is whether he or she maintained contact with creditors and attempted to negotiate partial payments to keep debts current.

14 See ISCR Case No. 09-08533 at 3-4 (App. Bd. Oct. 6, 2010).

15 See U.S. v. Bottone, 365 F.2d 389, 392 (2d Cir. 1966); See also ISCR Case No. 03-22861 at 2-3 (App. Bd. Jun. 2, 2006). 16 ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008) (internal citations omitted).