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ISCR Case 17-02198.h1 — CASE

ISCR Case 17-02198.h1granted

Case Headnote

ISCR Case No. 17-02198.h1

grantedOct 25, 2018· Hon. Richard A. Cefola· hearing

Summary

A 28-year-old defense contractor and former U.S. Navy member was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The applicant's financial history included a Chapter 7 bankruptcy filed in September 2015, which discharged unsecured debts by December 2015 but did not cover student loans.

The applicant demonstrated significant efforts to resolve remaining financial issues. This included seeking and paying for financial counseling. The applicant had outstanding student loans to Creditor B, totaling approximately $16,843, which were consolidated and paid. Additionally, student loans to Creditor D, totaling about $6,076, were consolidated, and the applicant is currently making monthly payments of $94.41.

The decision to grant the clearance was based on the applicant's successful mitigation of all outstanding debts through counseling and repayment plans. The applicant's financial difficulties were deemed resolved, indicating responsible behavior and a low likelihood of recurrence. Furthermore, the applicant's supervisor provided positive testimony regarding job performance.

Why the Applicant Prevailed

The applicant addressed all outstanding debts through financial counseling and repayment plans.
The applicant's financial difficulties were resolved, demonstrating responsible behavior and unlikely recurrence of issues.
The applicant's job performance was positively attested to by his supervisor.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(a)appliedBehavior Happened Long Ago or Infrequently
AG ¶ 20(b)appliedConditions Largely Beyond the Person's Control
AG ¶ 20(c)appliedReceived Financial Counseling
AG ¶ 20(d)appliedGood-faith Effort to Repay Debts

Key Rule Quoted

“The protection of the national security is the paramount consideration.”

Procedural Posture

SOR issuedJul 1, 2017
Answer filedAug 17, 2017
Hearing heldDec 5, 2017
Decision dateOct 25, 2018

Cite For

Mitigation of Financial Concerns Under Guideline F
Importance of Financial Counseling in Security Clearance Cases
Whole-person Concept in Evaluating Security Clearance Eligibility

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 addressed his financial concerns, including a Chapter 7 bankruptcy and outstanding student loans, through financial counseling and repayment efforts. As a result, all allegations under Guideline F were resolved in favor of the applicant, leading to the granting of his security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant filed for the protection of a Chapter 7 Bankruptcy in September of 2015; and as a result, his unsecured debts were discharged in December of 2015. This bankruptcy, however, did not discharge Applicant’s student loans. He sought out and had paid for financial counseling to address his outstanding debts.	For Applicant	Bankruptcy Filing	Admitted	—	(c) received/receiving counseling; problem being resolved	Documented Financial Counseling
1.b	Applicant had outstanding student loans to Creditor B totaling about $16,843. He has consolidated and paid these two student loan accounts, as evidenced by documentation from Creditor B and by tax forms. $16,843	For Applicant	Student Loan Debt	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.c	Applicant had outstanding student loans to Creditor D totaling about $6,076. He has consolidated these student loan accounts, and is making monthly payments of $94.41, as evidenced by documentation from Creditor D. $6,076	For Applicant	Student Loan Debt	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor
1.d	specific text not stated in this decision	For Applicant	Unspecified Financial	Unknown	—	—	—

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. 17-02198 ) ) Applicant for Security Clearance )

For Government: Aubrey De Angelis, Esq., Department Counsel For Applicant: Pro se

October 25, 2018 ______________

STATEMENT OF CASE

______________

CEFOLA, Richard A., Administrative Judge:

Statement of the Case

On July 1, 2017, in accordance with DoD Directive 5220.6, as amended (Directive), the Department of Defense issued Applicant a Statement of Reasons (SOR) alleging facts that raise security concerns under Guideline F. The SOR further informed Applicant that, based on information available to the government, DoD adjudicators could not make the preliminary affirmative finding it is clearly consistent with the national interest to grant or continue Applicant’s security clearance.

Applicant answered the SOR on August 17, 2017, and requested a hearing before an administrative judge. (Answer.) The case was originally assigned to another judge, but was reassigned to me on December 4, 2017. The Defense Office of Hearings and Appeals (DOHA) had already issued a notice of hearing on November 20, 2017, scheduling the hearing for December 5, 2017. The hearing was convened as scheduled. The Government offered Exhibits (GXs) 1 through 5, which were admitted into evidence. Applicant testified on his own behalf and called one witness. Applicant presented two documents, which I marked Applicant’s Exhibits (AppXs) A and B, and were admitted into evidence. The record was left open until February 5, 2018, for receipt of additional documentation. On February 5, 2018, Applicant offered AppX C, which was also admitted into evidence. DOHA received the transcript of the hearing (TR) on December 13, 2017.

FINDINGS OF FACT

Applicant admitted to all four allegations in SOR. After a thorough and careful review of the pleadings, exhibits, and testimony, I make the following findings of fact.

Applicant is a 28-year-old employee of a defense contractor. (GX 1 at pages 5 and 12.) He has been employed with the defense contractor since March of 2011. (TR at page 14 line 13 to page 16 line 23.) Applicant is married, and has three children. (Id.) He served in the U.S. Navy from “1999 to 2003,” obtaining the rank of “E-5,” and attributes the Government’s alleged financial concerns to his transition to civilian life. (TR at page 17 line 19 to page 20 line 18.)

1.a. Applicant filed for the protection of a Chapter 7 Bankruptcy in September of 2015; and as a result, his unsecured debts were discharged in December of 2015. (TR at page 16 line 24 to page 20 line 18.) This bankruptcy, however, did not discharge Applicant’s student loans. He sought out and had paid for financial counseling to address his outstanding debts. (Id.)

1.b. and 1.c. Applicant had outstanding student loans to Creditor B totaling about $16,843. He has consolidated and paid these two student loan accounts, as evidenced by documentation from Creditor B and by tax forms. (TR at page 20 line 21 to page 25 line 8, at page 30 lines 2–16, AppX B, and AppX C at pages 3–5.) Applicant has addressed this alleged outstanding debt.

1.d. Applicant had outstanding student loans to Creditor D totaling about $6,076. He has consolidated these student loan accounts, and is making monthly payments of $94.41, as evidenced by documentation from Creditor D. (TR at page 28 line 2 to page 30 line 1, AppX A, and AppX C at pages 1–2.) Applicant is also addressing this alleged outstanding debt.

POLICIES

When evaluating an applicant’s national security eligibility, the administrative judge must consider the adjudicative guidelines (AG). 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 national security eligibility.

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 AG ¶ 2 describing 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.” In reaching this decision, I have drawn only those conclusions that are reasonable, logical, and based on the evidence contained in the record.

Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Directive ¶ E3.1.15 states 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, and has the ultimate burden of persuasion as to obtaining a favorable clearance decision.”

A person who applies for access to classified information seeks to enter 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 protect or 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.

Section 7 of Executive Order (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

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. Two are potentially applicable in this case:

(a) inability to satisfy debts; and

Applicant had substantial outstanding student loan debts. The evidence is sufficient to raise these disqualifying conditions.

AG ¶ 20 provides conditions that could mitigate security concerns. I considered all of the mitigating conditions under AG ¶ 20 including:

(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; and

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

Applicant’s financial difficulties have been addressed. With the aid of financial counseling, he has either paid or is paying his student loans to the satisfaction of his creditors. He has demonstrated that future financial problems are unlikely. Mitigation under AG ¶ 20 has been established.

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):

(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 AG ¶ 2(c), 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.

I considered the potentially disqualifying and mitigating conditions in light of all facts and circumstances surrounding this case. I have incorporated my comments under Guideline F in my whole-person analysis. Some of the factors in AG ¶ 2(d) were addressed under those guidelines, but some warrant additional comment. Applicant performs his job well, as attested to by his supervisor. (TR at page 33 line 12 to page 36 line 3.)

Overall, the record evidence leaves me without questions or doubts as to Applicant’s eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant mitigated the Financial Considerations security concerns.

FORMAL FINDINGS

Formal findings for or against Applicant on the allegations set forth in the SOR, as required by ¶ E3.1.25 of the Directive, are:

Paragraph 1, Guideline F: FOR APPLICANT

Subparagraph 1.a: For Applicant Subparagraph 1.b: For Applicant Subparagraph 1.c: For Applicant Subparagraph 1.d: For Applicant

CONCLUSION

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

________________________ Richard A. Cefola Administrative Judge