CASE · Clearance Adjudication Search EngineCASE

Loading case…

ISCR Case 16-03284.h1 — CASE

ISCR Case 16-03284.h1granted

Case Headnote

ISCR Case No. 16-03284.h1

grantedAug 2, 2017· Hon. Robert Robinson Gales· hearing

Summary

A 55-year-old senior electrician, employed by a defense contractor, was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The Statement of Reasons alleged a failure to pay county property taxes for several years, though this was unrelated to income taxes. Disqualifying conditions F.19.a and F.19.c were raised.

The applicant successfully mitigated these concerns by demonstrating a good-faith effort to resolve the debt. He obtained a personal loan and made a lump-sum payment to the county for the delinquent property taxes. His financial difficulties were primarily attributed to circumstances beyond his control, specifically a period of prolonged unemployment, rather than irresponsible spending.

Furthermore, the applicant showed a history of otherwise responsible financial behavior, with no other delinquencies reported and a current credit score of 735. Mitigating conditions F.20.a, F.20.b, F.20.d, and F.20.g were applied, leading to the decision to grant the security clearance.

Why the Applicant Prevailed

The applicant took significant steps to resolve his delinquent property taxes by obtaining a personal loan and making a lump-sum payment to the county.
He demonstrated a history of responsible financial behavior and no other delinquencies, with a current credit score of 735.
The applicant's financial issues were largely due to circumstances beyond his control, including prolonged unemployment.

Conditions Referenced

Disqualifying

F.19.araisedInability to Satisfy Debts
F.19.craisedHistory of Not Meeting Financial Obligations

Mitigating

F.20.aappliedBehavior Happened Long Ago or Infrequently
F.20.bappliedConditions Largely Beyond the Person's Control
F.20.dappliedGood-faith Effort to Repay Overdue Creditors
F.20.gappliedArrangements with Tax Authority

Key Rule Quoted

“Clearance decisions are aimed at evaluating an applicant’s judgment, reliability, and trustworthiness. They are not a debt-collection procedure.”

Procedural Posture

SOR issuedDec 8, 2016
Answer filedJan 13, 2017
Hearing heldMar 14, 2017
Decision dateAug 2, 2017

Cite For

Mitigation of Financial Considerations Under Guideline F
Good-faith Efforts to Resolve Debts
Impact of Unemployment on Financial Obligations

Editorial summary generated for research. Not legal advice; not a prediction. Verify against the full decision before relying on any quoted language.

Standardized Decision Profile

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

Posture: Decision on RecordDecided: granted

The judge found that the applicant mitigated the financial concerns under Guideline F, resulting in a decision to grant the security clearance. The applicant successfully resolved his delinquent property taxes and demonstrated responsible financial behavior despite previous hardships.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant failed to pay county property taxes for several years, but his actions had nothing to do with income taxes. $34,937	For Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(a) behavior happened long ago / infrequent / unlikely to recur (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 (g) arrangements made with the tax authority; in compliance	Documented Debt Paid in Full 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: ) ) --- ) ISCR Case No. 16-03284 ) Applicant for Security Clearance )

For Government: Allison Marie, Esquire, Department Counsel For Applicant: Pro se

08/02/2017 ______________

STATEMENT OF CASE

______________

GALES, Robert Robinson, Administrative Judge:

Applicant mitigated the security concerns regarding financial considerations. Eligibility for a security clearance and access to classified information is granted.

Statement of the Case

On September 24, 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 8, 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 national interest 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.

Applicant received the SOR on December 29, 2016. On January 13, 2017, he responded to the SOR and requested a hearing before an administrative judge. Department Counsel indicated the Government was prepared to proceed on March 7, 2017. The case was assigned to me on September 19, 2016. A Notice of Hearing was issued on February 21, 2017. I convened the hearing as scheduled on March 14, 2017.

During the hearing, one Government exhibit (GE) 1 and one Applicant exhibit (AE) A were admitted into evidence without objection. Applicant testified. The transcript (Tr.) was received on June 30, 2017. I kept the record open to enable Applicant to supplement it. He took advantage of that opportunity and timely submitted several documents, which were marked and admitted as AE B through AE L, without objection. The record closed on July 13, 2017.

FINDINGS OF FACT

In his Answer to the SOR, Applicant admitted, without comments, the sole factual allegation pertaining to financial considerations (¶ 1.a.) of the SOR. Applicant’s admission is incorporated herein as a finding 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 55-year-old employee of a defense contractor. He has been a senior electrician or facilities maintenance electrician with the company or previous contractors on the same contract, at an overseas location, since October 2010. He previously held a position with another employer as an electrician from May 2000 until September 2008. He was unemployed from September 2008 until October 2010. He is a June 1980 high school graduate, and he has a trade certificate, received in June 1981. Applicant served briefly in the U.S. Coast Guard inactive reserve from September 1981 until November 1981. He was granted a secret security clearance in August 2005. Applicant was married in December 2007. He has a stepdaughter (born in 1979) and one stepson (born in 1980). Financial Considerations3

It is unclear what Applicant’s personal finances were like before they deteriorated. His wife owned a trucking business for eight years and they owned 11 acres of vacant real estate upon which they intended to operate a hotel for horses traveling between various regions during certain seasons. Unfortunately, he ran out of funds sufficient to start the project. As noted above, Applicant was unemployed for an extensive period, commencing in September 2008 – during a period when the national economy was in distress. His employer, at the time, had been established to work on a specific contract, and when that contract ended, the employer company was dissolved, and Applicant was laid off. Applicant’s annual salary during the last year before he was laid off was $78,000. It plummeted to $14,300. He did the best he could to keep his house afloat, but he could not afford to pay his county property taxes for the vacant property after he was laid off.

After he obtained his new position, Applicant approached the county tax collector to explore a possible resolution, but his efforts were repeatedly rebuffed when the county demanded that he make a lump-sum payment of the entire outstanding balance. He had insufficient funds to do so. The delinquencies continued to increase each year. In about 2011, Applicant’s mother called him seeking financial assistance because, although she was receiving Social Security, she had no money to pay her bills. She had run up $35,000 in credit card debt. As a result, much of what Applicant was earning was diverted from a possible resolution of his delinquent property taxes to pay off his mother’s debts. In an effort to resolve his taxes, Applicant put the property up for sale on three separate occasions. There was no interest and there were no offers. Applicant stated that the county obtained a judgment for the delinquent taxes in 2013 or 2014, but there is no documentary evidence to support that statement. The county revenue division bill history does not reflect anything about a judgment.4 Applicant candidly acknowledged having some property tax difficulties with the county when he completed his e-QIP.

On March 8, 2017, Applicant obtained a $32,000 bank personal loan to pay off the delinquent property taxes.5 He is expected to make 84 fixed monthly payments of $737.35 unless the loan is paid off before then. On March 17, 2017, Applicant paid the county revenue division $34,937.47 in the following amounts for each of the delinquent tax years: $6,730.56 (2008); $5,814.39 (2009); $4,932.70 (2010); $4,424.43 (2011); $3,918.48 (2012); $3,661.78 (2013); $2,579.99 (2014); $1,613.63 (2015); and $1,261.51 (2016).6 The debts have been resolved. Applicant’s property tax bill for 2017 is not due until October 2017. On June 12, 2017, Applicant and a purchaser signed a vacant land sales contract with an intended settlement date on June 23, 2017. The agreed sales price was $65,000.7 It was Applicant’s intention to use the proceeds from the sale to pay off the loan and put the remainder into his 401(k). Unfortunately, without any notice, the would-be purchaser failed to appear at the closing and chose to withdraw his offer. The sale failed to go through.8 Nevertheless, Applicant has taken positive steps to resolve his only delinquent account.

In 2016, Applicant’s salary increased to $52,000, and the anticipated amount for 2017 is about $54,000. He is eligible for both salary and overtime pay, and he generally receives biweekly checks for $1,450. After a year and one-half of unemployment, for the past year, Applicant’s wife has been employed as a pool cleaner, earning $240 per week. Applicant has no other delinquencies, and his current credit score is 735. Although I had requested that Applicant submit a Personal Financial Statement to reflect his monthly income; monthly expenses; or any monthly remainder that might be available for discretionary spending or savings, he failed to do so. There is no evidence of Applicant having received financial counseling. His finances are under control.

Character References

The physical security manager for Applicant’s employer has known Applicant for approximately 13 years. He characterized Applicant as honest, trustworthy, well respected, and a good worker who possesses an outstanding work ethic and skillset.9 The electrical shop supervisor opined that Applicant is an honest, hardworking and capable employee who is willing to help others and respect their opinions.10 A colleague who has worked with Applicant for seven years, and two neighbors who have known him for over a decade, all note how helpful he is in lending a hand in repairs and remodeling, and they consider him to be trustworthy, intelligent, responsible, caring, and responsible.11 Applicant’s sister-in-law described Applicant as a good person who is always kind and generous with others. He has a strong sense of duty, and he possesses a great deal of integrity.12

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.”13 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.”14

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.”15 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.16

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.”17

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.”18 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 ¶ 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 ¶ 19(a), an “inability to satisfy debts” is potentially disqualifying. In addition, ¶ 19(b) may apply if there is an “unwillingness to satisfy debts regardless of the ability to do so.” Similarly, under ¶ 19(c), “a history of not meeting financial obligations” may raise concerns. “Consistent spending beyond one's means or frivolous or irresponsible spending, which may be indicated by excessive indebtedness, significant negative cash flow, a history of late payments or of non-payment, or other negative financial indicators” may raise concerns under ¶ 19(e). In addition, under ¶ 19(f), “failure to file or fraudulently filing annual Federal, state, or local income tax returns or failure to pay annual Federal, state, or local income tax as required” may raise concerns. Applicant failed to pay county property taxes for several years, but his actions had nothing to do with income taxes. ¶¶ 19(a) and 19(c) apply. ¶¶ 19(b), 19e), and 19(f) do not apply.

The guideline also includes examples of conditions that could mitigate security concerns arising from financial difficulties. Under ¶ 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 ¶ 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 ¶ 20(c). Similarly, ¶ 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.”19 In addition, ¶ 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.” In those instances where “the individual has made arrangements with the appropriate tax authority to file or pay the amount owed and is in compliance with those arrangements,” ¶ 20(g), may apply.

I have concluded that ¶¶ 20(a), 20(b), 20(c), 20(d), and 20(g) apply, and ¶ 20(e) does not apply. In September 2008, Applicant was laid off and he remained unemployed for an extensive period, factors that were largely beyond his control. He did the best he could to keep his house afloat, but he could not afford to pay his county property taxes for the vacant property after he was laid off. Applicant did not ignore his financial situation, and he did not dispute his tax delinquencies. After he obtained his new position, in a good- faith effort to resolve the property tax delinquencies, Applicant approached the county tax collector, but his efforts were repeatedly rebuffed when the county demanded that he make a lump-sum payment of the entire outstanding balance. He had insufficient funds to do so. The delinquencies continued to increase each year. In about 2011, Applicant diverted funds from a possible resolution of his delinquent property taxes to pay off his mother’s debts. In an effort to resolve his taxes, Applicant put the property up for sale on three separate occasions. There was no interest and there were no offers. On March 8, 2017, Applicant obtained a $32,000 bank personal loan to pay off the delinquent property taxes. On March 17, 2017, Applicant paid the county revenue division $34,937.47. An anticipated sale of the property in June 2017 fell through at the last moment.

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 every debt or issue 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 issues or make payments on all delinquent debts simultaneously, nor is there a requirement that the debts or issues alleged in an SOR be resolved first. Rather, a reasonable plan and concomitant conduct may provide for the payment of such debts, or resolution of such issues, one at a time.

Applicant has no other delinquencies, and his current credit score is 735. There is evidence to reflect that Applicant’s financial problems are under control. When confronted with the issues that caused his financial problems, Applicant acted responsibly by repeatedly attempting to work with the county and by trying to sell the property.20 Applicant’s actions under the circumstances no longer cast doubt on his current reliability, trustworthiness, and good judgment.21

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.22

There is some evidence against mitigating Applicant’s conduct. Applicant failed to timely pay his county property taxes for the tax years 2008 through 2016.

The mitigating evidence under the whole-person concept is simply more substantial. There is no evidence of misuse of information technology systems, or mishandling protected information. Applicant candidly acknowledged having some property tax difficulties with the county when he completed his e-QIP. Applicant owned some vacant real estate upon which he intended to operate a hotel for horses traveling between various regions during certain seasons. Unfortunately, he ran out of funds sufficient to start the project when he became unemployed for an extensive period. He did the best he could to keep his house afloat, but he could not afford to pay his county property taxes for the vacant property after he was laid off. On March 17, 2017, Applicant paid the county revenue division $34,937.47, resolving the entire delinquent balance.

The Appeal Board has addressed a key element in the whole-person analysis in financial cases stating:23

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 positive track record of debt reduction and elimination efforts. His efforts were initially hindered by his lengthy period of unemployment. Overall, the evidence leaves me without questions and doubts as to Applicant’s eligibility and suitability for a security clearance. For all of these reasons, I conclude Applicant has mitigated 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: FOR APPLICANT

Subparagraph 1.a.: For Applicant

CONCLUSION

In light of all of the circumstances presented by the record in this case, it is clearly consistent with the interests of national security to grant Applicant eligibility for a security clearance. Eligibility for access to classified information is granted.

________________________ ROBERT ROBINSON GALES Administrative Judge

FOOTNOTES

1 GE 1 (e-QIP, dated September 24, 2015). 2 Effective June 8, 2017, by Directive 4 of the Security Executive Agent (SEAD 4), dated December 10, 2016, National Security Adjudicative Guidelines 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 issues discussed below can be found in GE 1, supra note 1.

4 AE A (Bill History, dated June 22, 2017).

5 AE F (Truth-In-Lending Disclosures, dated March 8, 2017); AE B (e-mail, dated July 12, 2017).

6 AE A, supra note 4. 7 AE E (Vacant Land Contract, dated June 12, 2017); AE C (Certificate of Authenticity, dated June 12, 2017); AE D (Settlement Statement (HUD-1), undated).

8 AE B, supra note 5.

9 AE I (Character Reference, dated July 6, 2017).

10 AE H (Character Reference, dated June 29, 2017).

11 AE G (Character Reference, undated); AE J (Character Reference, undated); and AE K (Character Reference, undated).

12 AE L (Character Reference, dated June 25, 2017). 13 Department of the Navy v. Egan, 484 U.S. 518, 528 (1988).

14 Exec. Or. 10865, Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960), as amended and modified.

15 “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).

16 See ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 2005). 17 Egan, 484 U.S. at 531.

18 See Exec. Or. 10865 § 7. 19 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)). 20 “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.

21 See ISCR Case No. 09-08533 at 3-4 (App. Bd. Oct. 6, 2010). 22 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).

23 ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008) (internal citations omitted).