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ISCR Case 16-03437.h1 — CASE

ISCR Case 16-03437.h1granted

Case Headnote

ISCR Case No. 16-03437.h1

grantedJul 1, 2016· Hon. Robert J. Tuidar· hearing

Summary

A 35-year-old support technician and former U.S. Air Force staff sergeant was granted a security clearance under Guideline F, Financial Considerations. Disqualifying conditions were raised regarding his financial history, specifically concerning delinquent debts.

However, the applicant successfully demonstrated mitigating factors. He provided evidence that most of his delinquent debts had been resolved and admitted to only one remaining debt. His financial difficulties were largely attributed to periods of unemployment and underemployment, circumstances deemed beyond his control.

The applicant further showed a commitment to financial responsibility and a modest lifestyle. Based on these actions and the context of his financial issues, the judge determined that the applicant had taken significant steps to address his debts, leading to the decision to grant the security clearance.

Why the Applicant Prevailed

The applicant provided evidence of resolving most of his delinquent debts.
He demonstrated a commitment to financial responsibility and a modest lifestyle.
The financial issues were largely due to periods of unemployment and underemployment.

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(a)appliedBehavior Happened so Long Ago, Was Infrequent, or Unlikely to Recur
AG ¶ 20(b)appliedConditions That Resulted in Financial Problems Were Largely Beyond the Person's Control
AG ¶ 20(d)appliedIndividual Initiated and Is Adhering to a Good-faith Effort to Repay Overdue Creditors
AG ¶ 20(e)appliedIndividual Has a Reasonable Basis to Dispute the Legitimacy of the Past-due Debt

Key Rule Quoted

“Any doubt concerning personnel being considered for access to classified information will be resolved in favor of the national security.”
— Directive, Enclosure 2 ¶ 2(b)

Procedural Posture

SOR issuedDec 16, 2016
Answer filedJan 24, 2017Applicant elected to have the case decided on the written record.
Hearing held—No hearing; decided on the written record.
Decision dateOct 16, 2017

Cite For

Mitigation of Financial Issues Under Guideline F
Consideration of Whole-person Factors in Security Clearance Decisions
Impact of Unemployment on Financial Responsibility Assessments

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 favorable decision for all subparagraphs. The applicant demonstrated efforts to resolve his debts, with only one outstanding medical collection account remaining.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a–1.h	8 sub-charges — specific text not stated in this decision (for the applicant).	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. 16-03437 ) Applicant for Security Clearance )

For Government: Tara R. Karoian, Esq., Department Counsel For Applicant: Pro se

11/09/2017 __________

STATEMENT OF CASE

__________

TUIDER, Robert, Administrative Judge:

Applicant mitigated security concerns regarding Guideline F (financial considerations). Clearance is granted.

Statement of the Case

On December 16, 2016, the Department of Defense (DOD) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline F. On January 24, 2017, Applicant responded to the SOR, and elected to have the case decided on the written record in lieu of a hearing.

On February 28, 2017, the Government submitted its written case. On March 16, 2017, Applicant received a complete copy of the file of relevant material (FORM). He was afforded 30 days to file objections and submit material in refutation, extenuation, or mitigation. Applicant timely submitted additional information.

On October 1, 2017, the case was assigned to another administrative judge, and on October 16, 2017, the case was reassigned to me. The Government exhibits, Items 1 through 6, included in the FORM, are admitted in evidence. Applicant’s post-FORM submission was marked as Item 7, and is admitted in evidence. After reviewing the FORM to include Applicant’s FORM response, I reopened the record until November 4, 2017, to provide Applicant an opportunity to submit additional information. Applicant timely submitted Items 8 through 21, and they are admitted in evidence.

FINDINGS OF FACT

Applicant denied all the SOR allegations, except SOR ¶ 1.b, which he admitted. He provided explanations for the debts he denied as well as for the debt he admitted. His admission and explanations are accepted as a finding of fact. Additional findings of fact follow.

Background Information

Applicant is a 35-year-old support technician employed by a defense contractor since December 2015. He seeks a security clearance in conjunction with his current employment. He previously held a security clearance while employed by a former defense contractor.

Applicant graduated from high school in July 2000. He served in the U.S. Air Force from January 2003 to July 2012, and was honorably discharged as a staff sergeant (pay grade E-5). Applicant married in November 2004, and has a 12-year-old son.

Financial Considerations

Applicant’s SOR alleges eight delinquent debts totaling $19,877 to include consumer debt, medical debt, and an overpayment while he was in the Air Force. (SOR ¶¶ 1.a – 1.h) These allegations are established through Applicant’s admissions, in part, and the Government’s exhibits. (Items 2 – 6)

During his January 7, 2016 Office of Personnel Management (OPM) Personal Subject Interview (PSI), Applicant discussed several periods of unemployment that lead to his financial difficulties following his discharge from the Air Force. Those periods are April 2013 to July 2013, March 2014 to June 2014, and July 2015 to December 2015. He also discussed a period of underemployment as a car salesperson from June 2014 to July 2015. (Item 6) Since Applicant began his current job in December 2015, he has been able to address his delinquent debts. (Items 2, 6)

As noted, in Applicant’s SOR response, he denied all but one of his debts, stating that they have been paid in full, resolved, or in a payment plan. (Item 2) However, he only provided documentation showing resolution for two of his SOR debts. (Item 2) In her FORM, Department Counsel discussed the documentation shortcomings of Applicant’s SOR answer. Upon receipt of Department Counsel’s FORM, Applicant provided documentation; however, the documentation he provided only partially addressed SOR debts. (Item 7) After I reopened the record, Applicant provided the documentation corroborating his claims that all of his debts were paid, resolved, or being resolved, as well as whole-person evidence. (Items 8-21) The only debt still outstanding is a medical collection account for $7,190 listed in SOR ¶ 1.h. When Applicant checked his credit report before submitting his SOR answer, “[t]he sum of $3,081.60 was covered but the remaining balance was not and with the item not visible on any of my credit reports unfortunately I assumed this was not valid.” (Item 8) In coordination with the creditor, Applicant submitted an application for financial assistance to determine financial assistance eligibility. In the interim, the account has been removed as being past-due. (Items 8, 13)

Applicant recognizes the adverse effects financial irresponsibility can have on maintaining his clearance and sustaining his employment. His current budget reflects that he is leading a modest lifestyle and it reflects a net monthly remainder of $557. His budget also lists a retirement account with a balance of $3,508, a savings account with a balance of $6,000, and a checking account with a balance of $1,933. (Item 16)

Applicant’s active duty Air Force enlisted performance reports as well as a performance development summary from a previous defense contractor reflect sustained superior performance. (Item 7) His current supervisor submitted a reference letter lauding his performance and professionalism noting that Applicant was instrumental in their company receiving an “exemplary” on a recent key inspection. (Item 18)

POLICIES

This case is adjudicated 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 (AG), which became effective on June 8, 2017.

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 to be used 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, administrative judges apply the guidelines in conjunction with the factors listed in the adjudicative process. The administrative judge’s overarching 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.”

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 the 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 the applicant may deliberately or inadvertently fail to safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation of potential, rather than actual, risk of compromise of classified information.

Section 7 of EO 10865 provides that adverse 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

Financial Considerations

AG ¶ 18 articulates the security concern for financial problems:

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.

AG ¶ 19 provides three disqualifying conditions that could raise a security concern and may be disqualifying in this case: “(a) inability to satisfy debts”; “(b) unwillingness to satisfy debts regardless of the ability to do so”; and “(c) a history of not meeting financial obligations.” The Government established disqualifying conditions AG ¶¶ 19(a), 19(b), and 19(c), requiring additional inquiry about the possible applicability of mitigating conditions.

AG ¶ 20 lists five potential mitigating conditions:

(a) the behavior happened so long ago, was so infrequent, or occurred under such circumstances that it is unlikely to recur and does not cast doubt on the individual's current reliability, trustworthiness, or good judgment;

(b) the conditions that resulted in the financial problem were largely beyond the person's control (e.g., loss of employment, a business downturn, unexpected medical emergency, a death, divorce or separation, clear victimization by predatory lending practices, or identity theft), and the individual acted responsibly under the circumstances;

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

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

(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.

The Appeal Board concisely explained Applicant’s responsibility for proving the applicability of mitigating conditions as follows:

Once a concern arises regarding an Applicant’s security clearance eligibility, there is a strong presumption against the grant or maintenance of a security clearance. See Dorfmont v. Brown, 913 F. 2d 1399, 1401 (9th Cir. 1990), cert. denied, 499 U.S. 905 (1991). After the Government presents evidence raising security concerns, the burden shifts to the applicant to rebut or mitigate those concerns. See Directive ¶ E3.1.15. The standard applicable in security clearance decisions is that articulated in Egan, supra. “Any doubt concerning personnel being considered for access to classified information will be resolved in favor of the national security.” Directive, Enclosure 2 ¶ 2(b).

ISCR Case No. 10-04641 at 4 (App. Bd. Sept. 24, 2013). Applicant’s conduct does not warrant full application of AG ¶ 20(a) because there is more than one delinquent debt and his financial problems are not isolated. His debt is a “continuing course of conduct” under the Appeal Board’s jurisprudence. See ISCR Case No. 07-11814 at 3 (App. Bd. Aug. 29, 2008) (citing ISCR Case No. 01-03695 (App. Bd. Oct. 16, 2002)). Nevertheless, he receives credit under AG ¶ 20(a) because the debts occurred under circumstances that are unlikely to recur and his behavior does not cast doubt on his current reliability, trustworthiness, or good judgement.

Full application of AG ¶ 20(b) is warranted because of Applicant’s unemployment and underemployment following his Air Force service. AG ¶¶ 20(c) is partially applicable and 20(d) and 20(e) are fully applicable. Although Applicant did not receive financial counseling, all but one of his eight debts are paid or resolved, and there are clear indications that his medical collection account is being resolved.1

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 AG ¶ 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.

The ultimate determination of whether to grant eligibility for a security clearance must be an overall commonsense judgment based upon careful consideration of the guidelines and the whole-person concept. AG ¶ 2(c). The discussion in the Analysis section under Guideline F is incorporated in this whole-person section. However, further comments are warranted.

Both the mitigating conditions under Guideline F and the whole-person analysis support a favorable decision. Applicant’s Air Force service and employment with a defense contractor weigh in his favor. He is a law-abiding citizen and a productive member of society. He recognizes the importance of maintaining financial responsibility and to that end has made a substantial effort to see to it that his SOR debts are resolved or are being resolved. The Appeal Board has addressed a key element in the whole-person analysis in financial cases stating:

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

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

Applicant understands what he needs to do to establish and maintain his financial responsibility. His efforts at debt resolution have established a “meaningful track record” of debt re-payment. I am confident he will resolve his remaining medical collection debt and maintain his financial responsibility.2

I take this position based on the law, as set forth in Department of Navy v. Egan, 484 U.S. 518 (1988), my careful consideration of the whole-person factors and supporting evidence, my application of the pertinent factors under the adjudicative process, and my interpretation of my responsibilities under the adjudicative guidelines.

FORMAL FINDINGS

The formal findings on the SOR are as follows:

Paragraph 1, Guideline F: FOR APPLICANT Subparagraphs 1.a – 1.h: For Applicant

CONCLUSION

In light of all of the record as a whole, it is clearly consistent with the national interest to grant Applicant eligibility for a security clearance. Clearance is granted.

_________________ ROBERT TUIDER Administrative Judge

FOOTNOTES

1 “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 maintained contact with his creditors and attempted to negotiate partial payments to keep his debts current. 2 Failure to comply with payment plans or other delinquent debt will raise a security concern. The Government has the option of following-up with more questions about Applicant’s finances. The Government can re-validate Applicant’s financial status at any time through credit reports, investigation, and interrogatories. Approval of a clearance now does not bar the Government from subsequently revoking it, if warranted. “The Government has the right to reconsider the security significance of past conduct or circumstances in light of more recent conduct having negative security significance.” ISCR Case No. 10-06943 at 4 (App. Bd. Feb. 17, 2012). An administrative judge does not have “authority to grant an interim, conditional, or probationary clearance.” ISCR Case No. 10-06943 at 4 (App. Bd. Feb. 17, 2012) (citing ISCR Case No. 10-03646 at 2 (App. Bd. Dec. 28, 2011)). See also ISCR Case No. 04-03907 at 2 (App. Bd. Sep. 18, 2006) (stating, “The Board has no authority to grant [a]pplicant a conditional or probationary security clearance to allow her the opportunity to have a security clearance while she works on her financial problems.”). This footnote does not imply that this decision to grant Applicant’s security clearance is conditional.