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ISCR Case 16-02914.h1 — CASE

ISCR Case 16-02914.h1granted

Case Headnote

ISCR Case No. 16-02914.h1

grantedOct 24, 2017· Hon. Gregg A. Cervi· hearing

Summary

This case concerns a 39-year-old environmental coordinator working for a defense contractor, whose security clearance was initially questioned under Guideline F (Financial Considerations). The Statement of Reasons cited two primary allegations: delinquency on three small medical debts and a delinquent auto loan judgment. These issues raised concerns under Disqualifying Conditions F.19(a) and F.19(c).

However, the applicant successfully demonstrated mitigating factors. She took direct responsibility for her past financial issues, specifically paying off the delinquent medical debts. Furthermore, she established current financial stability, evidenced by a positive budget and a lack of recent delinquencies.

The decision to grant the security clearance was based on the finding that the applicant's previous financial difficulties were largely beyond her control and have since been resolved. The applicant's proactive steps to address and rectify her financial history, coupled with her current stable financial situation, satisfied the concerns raised under Guideline F. As a result, the security clearance was granted.

Why the Applicant Prevailed

The applicant took responsibility for her past financial issues and paid off the delinquent medical debts.
She demonstrated current financial stability with a positive budget and no recent delinquencies.
The applicant's previous financial difficulties were largely beyond her control and have been resolved.

Conditions Referenced

Disqualifying

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

Mitigating

F.20(a)appliedThe Behavior Happened so Long Ago, Was so Infrequent, or Occurred Under Such Circumstances That It Is Unlikely to Recur
F.20(b)appliedThe Conditions That Resulted in the Financial Problem Were Largely Beyond the Person's Control
F.20(d)appliedThe Individual Initiated and Is Adhering to a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts

Key Rule Quoted

“An administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision.”

Procedural Posture

SOR issuedOct 25, 2016
Answer filedNov 21, 2016Applicant elected to have the case decided on the written record.
Hearing held—No hearing; decided on the written record.
Decision dateOct 24, 2017

Cite For

Demonstrating Financial Responsibility Under Guideline F
Mitigating Financial Issues Due to Circumstances Beyond Control
The Whole-person Concept in Security Clearance Determinations

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 had resolved her financial delinquencies and is currently in a sound financial position. The applicant's past debts, including small medical debts and an auto loan judgment, were deemed unlikely to recur, leading to a decision in favor of granting her security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Delinquent on three small medical debts	For Applicant	Medical Debt	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 (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.b	Delinquent on an auto loan judgment	For Applicant	Unspecified Financial	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 (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.c–1.d	2 sub-charges — specific text not stated in this decision (for the applicant). (low confidence)	For Applicant			—	—	—

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

Full decision

The complete, official text — footnotes and signatures included — is in the original PDF.

Decision text, by section

DEFENSE OFFICE OF HEARINGS AND APPEALS

HEARING

APPEARANCES

DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS

In the matter of: ) ) ) ISCR Case No. 16-02914 ) Applicant for Security Clearance )

For Government: Robert J. Kilmartin, Esq., Department Counsel For Applicant: Pro se

10/24/2017 ______________

STATEMENT OF CASE

______________

CERVI, Gregg A., Administrative Judge

This case involves security concerns raised under Guideline F (Financial Considerations). Eligibility for access to classified information is granted.

Statement of the Case

Applicant submitted a security clearance application (SCA) on May 13, 2015. On October 25, 2016, the Department of Defense Consolidated Adjudications Facility (DOD CAF) sent her a Statement of Reasons (SOR) alleging security concerns under Guideline F.1 Applicant answered the SOR on November 21, 2016, and elected to have the case decided on the written record in lieu of a hearing. The Government’s written brief with supporting documents, known as the File of Relevant Material (FORM), was submitted by Department Counsel on December 22, 2016. A complete copy of the FORM was provided to Applicant, who was afforded an opportunity to file objections and submit material to refute, extenuate, or mitigate the security concerns. Applicant received the FORM on January 11, 2017. She submitted a response to the FORM, marked as Applicant Exhibit (AE) A. The Government’s exhibits included in the FORM (Items 1 to 5) and AE A are admitted into evidence. The case was assigned to me on October 1, 2017.

FINDINGS OF FACT

Applicant is a 39-year-old environmental coordinator employed by a defense contractor since 2013. She received her high school diploma in 1996 with vocational training in computer technology. She has been married since 1999 and has two children, 10 and 11 years old. She has held a DOD security clearance since 2007.

The SOR alleges Applicant is delinquent on three small medical debts and an auto loan judgment. She admitted the SOR allegations. Applicant was unaware of the SOR debts until her clearance reinvestigation. She paid the small medical debts in 2016 and January of 2017, and provided evidence of the payments. The auto loan judgment in 2009 stems from a repossession in approximately 2009. She was a data entry clerk at the time, and did not have sufficient income to cover her auto loan payments when due. Applicant believed that she received a loan payoff notice when the car was repossessed and sold, and there have been no efforts to collect on the debt. Her 2015 credit bureau report (CBR) shows the debt was charged-off in 2009, but also an unverified judgment. Her 2016 CBR no longer shows a judgment on this loan, and no longer reports the original creditor and charge-off.

Applicant notes that she has taken responsibility for not making payments on-time, but she was unable to keep up with the payments with her income. She expressed her pride and degree of responsibility in her work, and provided work evaluations showing she has been a good performer during the past two years. Her personal financial statement shows she is now able to meet her financial obligations and has almost $3,000 net remainder per month after paying expenses.

Law and Policies

The Director of National Intelligence (DNI) issued revised adjudicative guidelines (AG) in a Security Executive Agent Directive, effective on June 8, 2017. These AGs are applicable to this decision.

“[N]o one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). 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.” Id. at 527. The President has authorized the Secretary of Defense or his designee to grant applicants eligibility for access to classified information “only upon a finding that it is clearly consistent with the national interest to do so.” Exec. Or. 10865 § 2. National security eligibility is predicated upon the applicant meeting the criteria contained in the adjudicative guidelines. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, an administrative judge applies these guidelines in conjunction with an evaluation of the whole person. An administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. An administrative judge must consider a person’s stability, trustworthiness, reliability, discretion, character, honesty, and judgment. AG ¶ 1(b).

The Government reposes a high degree of trust and confidence in persons with access to classified information. This relationship transcends normal duty hours and endures throughout off-duty hours. 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.

Clearance decisions must be made “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” Exec. Or. 10865 § 7. Thus, a decision to deny a security clearance is merely an indication the applicant has not met the strict guidelines the President and the Secretary of Defense have established for issuing a clearance.

Initially, the Government must establish, by substantial evidence, conditions in the personal or professional history of the applicant that may disqualify the applicant from being eligible for access to classified information. The Government has the burden of establishing controverted facts alleged in the SOR. See Egan, 484 U.S. at 531. “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). The guidelines presume a nexus or rational connection between proven conduct under any of the criteria listed therein and an applicant’s security suitability. See ISCR Case No. 92-1106 at 3, 1993 WL 545051 at *3 (App. Bd. Oct. 7, 1993).

Once the Government establishes a disqualifying condition by substantial evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the facts. Directive ¶ E3.1.15. An applicant has the burden of proving a mitigating condition, and the burden of disproving it never shifts to the Government. See ISCR Case No. 02- 31154 at 5 (App. Bd. Sep. 22, 2005).

An applicant “has the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue his security clearance.” ISCR Case No. 01- 20700 at 3 (App. Bd. Dec. 19, 2002). “[S]ecurity clearance determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531; see AG ¶ 1(d).

ANALYSIS

Financial Considerations

The security concern 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.

The guideline notes several conditions that could raise security concerns under AG ¶ 19. The relevant disqualifying conditions under AG ¶ 19 include:

(a) inability to satisfy debts; and

Applicant’s admissions and the documentary evidence supporting the SOR allegations are sufficient to establish the disqualifying conditions.

Conditions that could mitigate the financial considerations security concerns are provided under AG ¶ 20. The following mitigating conditions are potentially relevant:

(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; and

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

Applicant was unaware of the SOR debts until her reinvestigation raised the concerns. She investigated and paid the medical debts in 2016 and January 2017, and believes her 2009 vehicle repossession was resolved. Her current CBR does not reflect a judgment or charged-off debt, likely because of the age of the debt. There have been no collection efforts, and Applicant believes the debt was discharged when the vehicle was sold.

Appellant’s financial condition that led to the SOR debts was largely outside of her control as she had insufficient income to meet her financial obligations at the time. She took action to resolve the medical debts and believes the judgment or charged-off car loan is resolved. Applicant’s current budget shows that she is on sound financial footing, and that she can meet all of her financial needs. She has not incurred any significant financial delinquencies since 2009 and sufficient time has passed to suggest that it is unlikely to recur. AG ¶¶ 20 (a), (b), and (d) apply.

Applicant’s resolved debts and showing of current financial responsibility leave me without doubts about her overall financial condition and ability or willingness to face her financial responsibilities. They no longer cast doubt on her current reliability, trustworthiness, and good judgment.

WHOLE PERSON CONCEPT

Under AG ¶¶ 2(a), 2(c), and 2(d), the ultimate determination of whether to grant national security eligibility must be an overall commonsense judgment based upon careful consideration of the guidelines and the 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 relevant circumstances. The administrative judge should consider the nine adjudicative process factors listed at AG ¶ 2(d). Although adverse information concerning a single criterion may not be sufficient for an unfavorable eligibility determination, the individual may be found ineligible if available information reflects a recent or recurring pattern of questionable judgment, irresponsibility, or unstable behavior. AG ¶ 2(e).

I considered all of the potentially disqualifying and mitigating conditions in light of all the facts and circumstances surrounding this case. I have incorporated my findings of fact and comments under Guideline F in my whole-person analysis. Applicant has taken sufficient action to resolve her financial delinquencies, and is currently financially sound.

Accordingly, I conclude she has carried her burden of showing that it is clearly consistent with the national security interests of the United States to grant her eligibility for access to classified information.

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

Subparagraphs 1.a – 1.d: For Applicant

CONCLUSION

I conclude that it is clearly consistent with the national security interests of the United States to grant Applicant eligibility for access to classified information. Clearance is granted.

_______________________ Gregg A. Cervi Administrative Judge

FOOTNOTES

1 The DOD CAF acted under Executive Order (Exec. Or.) 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 (AG) implemented by the DOD on September 1, 2006.