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ISCR 06-17919.h1: Guideline F security clearance hearing, granted (2007) · CASE

ISCR Case 06-17919.h1granted

Case headnote

ISCR Case No. 06-17919.h1

grantedMar 30, 2007· Hon. Charles D. Ablard· hearing

Summary

A 45-year-old defense contractor employee was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). These concerns stemmed from a Chapter 13 bankruptcy discharged in 2000, a tax lien, and several delinquent credit card debts. The applicant also incurred additional debt during a period of unemployment in 2002.

The Statement of Reasons detailed a bankruptcy filed in 1997 and discharged in 2000, along with a $167 tax lien from 1998, which was later confirmed to be no longer outstanding. Several credit card debts were also cited, including one for $1,823, reduced to $800 through consistent payments; another for $4,021, settled for a lesser amount with ongoing payments; and a $1,883 debt, initially believed to be part of the bankruptcy but now under a settlement agreement. Additionally, debts of $1,089, $628, and a $56 dental bill were all stipulated by the government as having been paid.

Clearance was granted because the applicant demonstrated a good faith effort to repay creditors and resolve outstanding debts. Most financial issues were resolved, and the applicant had implemented new budgeting practices, including discontinuing credit card use.

Why the applicant prevailed

The applicant demonstrated a good faith effort to repay overdue creditors and resolve debts.
The applicant's financial issues were largely resolved, with most creditors satisfied.
The applicant has changed his budgeting practices and does not use credit cards.

Conditions referenced

Disqualifying

E2.A6.1.2.1raisedHistory of Not Meeting Financial Obligations
E2.A6.1.2.3raisedEvidence of Inability or Unwillingness to Satisfy Debts

Mitigating

E2.A6.1.3.6appliedGood Faith Effort to Repay Overdue Creditors

Key rule quoted

“An applicant is not required to prove that all delinquent debts are resolved to be granted a security clearance, but only that efforts be made to resolve the debts and to show that the matters are being diligently pursued with an ability to resolve them.”

Procedural posture

SOR issuedAug 29, 2006
Answer filedNov 6, 2006
Hearing heldJan 26, 2007
Decision dateMar 30, 2007

Cite for

Mitigation of Financial Concerns 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.

From the decision

Facts this decision states, each with the exact sentence it comes from. Descriptive of the record, not an assessment.

Age at decision: 45: “Applicant is a 45-year-old employee of a defense contractor where he has been employed since December 2004 as a security guard.”
Tenure: ~3 years: “Applicant is a 45-year-old employee of a defense contractor where he has been employed since December 2004 as a security guard.”
Delinquent debt cited: $10,000 (on a payment plan; bankruptcy discharged): “Applicant admitted the specifics of all of the SOR allegations relating to bankruptcy and eight delinquent debts of almost $10,000.”

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 financial security concerns related to delinquent debts and a Chapter 13 bankruptcy discharged in 2000. The applicant demonstrated efforts to resolve his debts and changed his budgeting practices, leading to a favorable decision for the security clearance.

The sub-allegation breakdown is part of the Professional plan. See what it includes.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation

Descriptive standardized rendering of a decided public case. 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

SYNOPSIS

KEYWORD: Financial

DIGEST: Applicant mitigated financial security concerns relating to delinquent debts and his Chapter 13 bankruptcy discharged in 2000. He was in bankruptcy process since 1997, and incurred additional debt that became delinquent during a one year period of unemployment in 2002 after the bankruptcy was completed. Clearance is granted.

CASENO: 06-17919.h1

DATE: 03/30/2007

DATE: March 30, 2007

) ) In Re: ) ) ISCR Case No. 06-17919 ---------------- ) SSN: ----------- ) ) Applicant for Security Clearance )

DECISION OF ADMINISTRATIVE JUDGE CHARLES D. ABLARD

APPEARANCES

SYNOPSIS

Applicant mitigated financial security concerns relating to delinquent debts and his Chapter 13 bankruptcy discharged in 2000. He was in bankruptcy process since 1997, and incurred additional debt that became delinquent during a one year period of unemployment in 2002 after the bankruptcy was completed. Clearance is granted.

STATEMENT OF CASE

On August 29, 2006, the Defense Office of Hearings and Appeals (DOHA), pursuant to Executive Order 10865, Safeguarding Classified Information Within Industry, as amended and modified, and Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (Directive), dated January 2, 1992, as amended and modified, issued a Statement of Reasons (SOR) to Applicant which detailed reasons why DOHA could not make the preliminary affirmative finding under the Directive that it is clearly consistent with the national interest to grant or continue a security clearance for Applicant. DOHA recommended the case be referred to an administrative judge to determine whether a clearance should be granted, continued, denied, or revoked.

On November 6, 2006, Applicant responded to the SOR allegations and requested a hearing. The case was assigned to me on January 8, 2007. A notice of hearing was issued on January 10, 2007, for a hearing on January 26, 2007, and held that day. The government offered in evidence six exhibits and Applicant offered seven. All were admitted. The transcript was received on February 5, 2007. The record was left open until March 2,2007, for the submission of additional materials. Two post-hearing submissions were received and admitted without objection. The first consisted of seven items and the second of three.

FINDINGS OF FACT

Applicant admitted the specifics of all of the SOR allegations relating to bankruptcy and eight delinquent debts of almost $10,000. After a complete review of the record, I make the following additional findings of fact:

Applicant is a 45-year-old employee of a defense contractor where he has been employed since December 2004 as a security guard. In 1997 he filed for Chapter 13 bankruptcy and after a number of payments under a plan for $9,000 in debts, his bankruptcy was converted to Chapter 7 in April 1999, and discharged in March 2000 (Exh. F). Since then he was unemployed for almost a year in 2002 during which time other debts accumulated and became delinquent leading to this matter.

Applicant was divorced in 2002 and remarried in 2003. His annual salary is $26,000 and his wife’s is $35,000. They work for the same government contractor. He has four children two of whom are adults by his first wife and two small children by his second wife.

The following is an analysis of the delinquent debts alleged in the SOR and their current status: 1. Par. 1.a.: Bankruptcy filed in 1997 and discharged in 2000.

2. Par. 1.b: Tax lien for $167 filed in 1998. Exh. B indicates that there is no outstanding tax lien.

3. Par. 1.c.: Credit card debt of $1,823. Payments of $60 per month made over a year reducing debt to $800 (Exh. G and Exhs. B and C of Second Post-Hearing Submission).

4. Par. 1.d.:Card debt for $4,021. Settled for less and payments made of $50 per month (Exh. E).

5. Par. 1.e.:Credit card debt of $1,883. Applicant erroneously believed it was included in bankruptcy but is now paid under a settlement agreement (Exhs. B and C. of Second Post Hearing Submission).

6. Par. 1.f.: Credit card debt of $1,089. Government stipulated debt has been paid (Exh. C).

7. Par. 1.g.:Credit card debt of $628. Paid in full (Exh. D).

8. Par. 1.h.:Account for $56 dental bill and government stipulated that it had been paid (Tr. 50).

Applicant is well regarded by his company for his work as a well-motivated, competent performer who meets objectives (Exhs. F, Second Post Hearing Submission). He is active in his church and tithes regularly. He wife and he have a budget plan to which they adhere. He does not now have a credit card. He and his wife have rental payments with a housing facility that bases the payments on their income. He has modest auto payments. He recently received a $5,000 tax refund which permits him to settle in full the remaining accounts on which he is making payment.

Applicant served on active duty with the Army for ten years and was discharged as an E 5. He hoped to stay in the Army but was discharged for unsatisfactory performance.

POLICIES

“[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 occupy a position that will give that person access to such information.” Id. at 527.

An evaluation of whether the applicant meets the security guidelines includes consideration of the following factors: (1) the nature, extent, and seriousness of the conduct; (2) the circumstances surrounding the conduct; (3) the frequency and recency of the conduct; (4) the individual’s age and maturity at the time of the conduct; (5) the voluntariness of participation; (6) the presence or absence of rehabilitation and other 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. Directive, ¶ E2.2.1. Security clearances are granted only when “it is clearly consistent with the national interest to do so.” Executive Order No. 10865 § 2. See Executive Order No. 12968 § 3.1(b).

Initially, the Government must establish, by something less than a preponderance of the evidence, that conditions exist in the personal or professional history of the applicant which disqualify, or may disqualify, the applicant from being eligible for access to classified information See Egan, 484 U.S. at 531. The applicant then bears the burden of demonstrating it is clearly consistent with the national interest to grant or continue a security clearance. “Any doubt as to whether access to classified information is clearly consistent with national security will be resolved in favor of the national security.” Directive, ¶ E2.2.2. “[S]ecurity clearance determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531.

CONCLUSION

Upon consideration of all the facts in evidence, and after application of all appropriate adjudicative factors, I conclude the following with respect to all allegations set forth in the SOR:

Applicant’s delinquent debts prompted the allegation of security concerns under Guideline F since an individual who is financially overextended is at risk of having to engage in illegal acts to generate funds. (E2.A6.1.1.) Conditions that could raise a security concern and may be disqualifying include a history of not meeting financial obligations (E2.A6.1.2.1.), and evidence of inability or unwillingness to satisfy debts. (E2.A6.1.2.3.) Mitigating Conditions (MC) might include the fact that the person has initiated a good faith effort to repay overdue creditors or otherwise resolve debts. (E2.A6.1.3.6.)

While Applicant had one bankruptcy that was discharged seven years ago, he incurred other debts because of his unemployment. He now has changed his practices regarding budgeting and does not use credit cards, which led to his recent problems. He is a responsible family man.

Mitigating conditions apply since the problems have now been resolved to the satisfaction of nearly all the creditors with the ability to resolve those that remain through payment programs in effect. An applicant is not required to prove that all delinquent debts are resolved to be granted a security clearance, but only that efforts be made to resolve the debts and to show that the matters are being diligently pursued with an ability to resolve them. From the documentation submitted by Applicant, I have no difficulty in making that determination.

In all adjudications the protection of our national security is of paramount concern. Persons who have access to classified information have an overriding responsibility for the security concerns of the nation. The objective of the security clearance process is the fair-minded, commonsense assessment of a person’s trustworthiness and fitness for access to classified information.

After considering all the evidence in its totality, I conclude that a security clearance should be granted.

FORMAL FINDINGS

Formal findings as required by the Directive (Par. E3.1.25) are as follows: 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 Subparagraph 1.e.: For Applicant Subparagraph 1.f.: For Applicant Subparagraph 1.g.: For Applicant Subparagraph 1.h.: For Applicant

DECISION

In light of all of the circumstances presented by the record in this case, it is clearly consistent with the national interest to grant or renew a security clearance for Applicant. Clearance is granted.

Charles D. Ablard Administrative Judge

FOOTNOTES

FOR GOVERNMENT Eric H. Borgstrom, Esq., Department Counsel

FOR APPLICANT Pro Se