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ISCR Case 14-03279.h1 — CASE

ISCR Case 14-03279.h1granted

Case Headnote

ISCR Case No. 14-03279.h1

grantedOct 21, 2015· Hon. Marc E. Curry· hearing

Summary

A 55-year-old female applicant was granted a security clearance under Guideline F (Financial Considerations), despite facing allegations of over $47,000 in delinquent debt. These debts included multiple loans totaling $11,800, a $15,700 deficiency from a foreclosed mobile home, approximately $3,160 in delinquent medical bills, and about $17,000 in delinquent student loan debt. Additional allegations cited an unfiled 2010 federal tax return, an outstanding loan to an insurance company, and various delinquent utility and medical bills.

The applicant's financial difficulties were largely attributed to circumstances beyond her control, specifically her husband's death in 2002, a two-year period of unemployment from 2011 to 2013, and a serious car accident in 2012.

Since securing full-time employment in 2014, the applicant has demonstrated a good-faith effort to repay her creditors and resolve her debts. The decision to grant the clearance was based on her significant progress in addressing these financial issues, her efforts to resolve the debts, and the determination that the problems were largely due to unforeseen events.

Why the Applicant Prevailed

The applicant demonstrated a good-faith effort to repay overdue creditors and resolve debts.
The financial problems were largely beyond the applicant's control, including loss of employment and a serious medical emergency.
The applicant has shown clear indications that her financial problems are being resolved.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability or Unwillingness to Satisfy Debts
AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations
AG ¶ 19(g)raisedFailure to File Annual Federal, State, or Local Income Tax Returns as Required

Mitigating

AG ¶ 20(b)appliedThe Conditions That Resulted in the Financial Problem Were Largely Beyond the Person’s Control
AG ¶ 20(c)appliedThere Are Clear Indications That the Problem Is Being Resolved or Is Under Control
AG ¶ 20(d)appliedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts

Key Rule Quoted

“"the entire process is a conscientious scrutiny of a number of variables known as the 'whole-person concept.'"”

Procedural Posture

SOR issuedOct 7, 2014
Answer filedNov 5, 2014Applicant admitted some allegations and denied others.
Hearing held—Decision made on the written record.
Decision dateJun 16, 2015

Cite For

Mitigating Conditions Under Guideline F Due to Circumstances Beyond Control
Good-faith Efforts in Debt Repayment
Whole-person Concept in Security Clearance Evaluations

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 incurred over $47,000 in delinquent debt, primarily due to circumstances beyond her control, including the death of her husband and a serious car accident. Despite these challenges, the applicant demonstrated a good-faith effort to repay her debts and filed her 2010 federal income tax return, leading to a decision in her favor regarding financial considerations under Guideline F.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	multiple loans totaling $11,800 $11,800	For Applicant	Personal Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(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	Documented Debt Paid in Full
1.b	did not file her 2010 federal income tax return when it was due $47	For Applicant	Tax Filing Failure	Denied	(g) unexplained affluence	—	—
1.c	deficiency stemming from the foreclosed mobile home totaling $15,700 $15,700	For Applicant	Mortgage or Home Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(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	—
1.d	delinquent medical bills totaling approximately $3,160 $3,160	For Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(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	—
1.e	delinquent student loan debt totaling approximately $17,000 $17,000	For Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(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	Documented Payment Plan with Creditor
1.f–1.g	2 sub-charges — specific text not stated in this decision (for the applicant). (low confidence)	For Applicant			—	—	—
1.h	delinquent utilities	For Applicant	Utility or Phone Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(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	—
1.i	specific text not stated in this decision	For Applicant	Unspecified Financial	Unknown	—	—	—
1.j	delinquent medical bill totaling $369 $369	For Applicant	Medical Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.k	specific text not stated in this decision	For Applicant	Unspecified Financial	Unknown	—	—	—
1.l	delinquent student loan debt	For Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(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	Documented Payment Plan with Creditor
1.m–1.o	3 sub-charges — specific text not stated in this decision (for the applicant). (low confidence)	For Applicant			—	—	—
1.p	delinquent medical bills	For Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.q	specific text not stated in this decision	For Applicant	Unspecified Financial	Unknown	—	—	—
1.r	delinquent utilities	For Applicant	Utility or Phone Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.s–1.v	4 sub-charges — specific text not stated in this decision (for the applicant). (low confidence)	For Applicant			—	—	—
1.w	loan owed to an insurance company (low confidence)	For Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.x–1.z	3 sub-charges — specific text not stated in this decision (for the applicant). (low confidence)	For Applicant			—	—	—
1.aa	delinquent utilities	For Applicant	Utility or Phone Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.ab	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: ) ) ) ADP Case No. 14-03279 ) ) Applicant for Position of Trust )

For Government: Braden M. Murphy, Esq., Department Counsel For Applicant: Pro se

10/21/2015 ______________

STATEMENT OF CASE

______________

CURRY, Marc E., Administrative Judge:

Applicant’s financial problems began after her husband died in 2002 and were compounded by a two-year unemployment from 2011 to 2013, together with a serious car accident in 2012 that required extensive, costly medical treatment. Since gaining a job in 2013, Applicant has begun paying her bills. Also, she filed suit against both the driver of the van in which she was passenger and the driver who hit the van. Under these circumstances, I conclude Applicant has mitigated the concerns regarding her eligibility for access to the sensitive information required to hold an automated data position (ADP).

Statement of the Case

On October 7, 2014, the Department of Defense Consolidated Adjudications Facility (DOD CAF) issued Applicant a Statement of Reasons (SOR) detailing trustworthiness concerns under Guideline F, financial considerations. The action was taken under Executive Order 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (Directive) (January 2, 1992), as amended, and the adjudicative guidelines (AG) implemented on September 1, 2006.

Applicant answered the SOR on November 5, 2014, admitting subparagraphs 1.a through 1.e, subparagraphs 1.gthough 1.j, subparagraphs 1.lthrough 1.o, and subparagraphs 1.rthrough 1.s. She denied the remainder and requested a decision on the written record. On February 27, 2015, Department Counsel prepared a File of Relevant Materials (FORM). Applicant received the FORM on April 20, 2015, and submitted a reply on June 10, 2015, whereupon, the case was assigned to me on June 16, 2015.

FINDINGS OF FACT

Applicant is a 55-year-old woman with an adult child. Since January 2013, Applicant has been working as a data processor for an insurance company. She began as a part-time employee, and she was promoted to full-time employment in March 2014. (Item 3 at 3) Applicant earned a bachelor’s degree in 1997. (Item 4 at 11)

In 2002, Applicant’s husband died. She could not support herself on her income alone. (Item 3 at 3) Her debts gradually mounted and increasingly became delinquent. In 2007, her mobile home was foreclosed. (Item 4 at 10) She then had to live with other people. (Item 3 at 3)

Applicant continued to attempt to support herself, working full-time in a custodial position and part-time as a math instructor at a local community college. In 2007, she lost her custodial job, and in 2011, the grant that paid her instructor salary ended, leaving her unemployed. Subsequently, she was unemployed for the next two years. (Item 4 at 12)

In 2012, Applicant moved into a homeless shelter. In May 2012, while living at the shelter, she was involved in a serious car accident while being transported from church in a van, driven by a homeless shelter employee, that collided in an intersection with another automobile. (Item 3 at 3) She suffered severe facial injuries, including a fractured right orbital bone, together with orbital hemorrhaging, and traumatic optic neuropathy. (Item 3 at 11)

By January 2013, Applicant had recovered enough from the car accident to begin working part-time for her current employer. By then, however, she had incurred approximately $47,000 of delinquent debt, including multiple loans totalling $11,800 (subparagraphs 1.a, 1.d-1.e, 1.h-1.I, and 1.s), a deficiency stemming from the foreclosed mobile home totalling $15,700 (subparagraph 1.c), delinquent medical bills totalling approximately $3,160 (subparagraphs 1.p, 1.q, 1.t-1.v, 1.x, and 1.y ), approximately $17,000 of delinquent student loan debt (subparagraphs 1.l-1.o), delinquent utilities (1.r, 1.aa), and a loan owed to an insurance company (1.was duplicated in 1.z). Also, she had not filed her 2010 federal income tax return, as listed in subparagraph 1.b.

Shortly after Applicant’s accident, she entered into a payment agreement to satisfy the debt owed to the hospital that treated her. The debts totalled $11,781. (Item 3 at 9) It is unclear from the record whether this amount included any or all of the bills alleged in the SOR. Under the agreement, she was to pay the hospital $25 per month, beginning in June 2012. There is no record evidence of whether Applicant made any of these payments.

In January 2014, Applicant retained an attorney. (Item 3 at 13) With her attorney’s help, she compiled all of the medical bills. As of July 2014, she had received treatment totalling $31,116. This included the hospital that provided her primary treatment, which by then totalled $25,033, together with treatment from other medical professionals, including ophthalmologists, neurosurgeons, and ear, nose, and throat doctors. (Item 3 at 16)

In October 2014, Applicant sued both the driver of the van in which she was a passenger and the driver of the car that collided with it. (Item 3 at 19) Both drivers were insured when the accident occurred. (Item 3 at 14-15) Applicant denies responsibility for any of the medical bills listed in the SOR (subparagraphs 1.k, 1.q,1.t-1.v, and 1.x-1.y), contending that they are not her responsibility because she was not at fault for the accident that triggered them.

Since being promoted to full-time employment in March 2014, Applicant has been gradually repaying her delinquent debt. (Item 3 of 3) Currently, she has paid the debt listed in subparagraphs 1.h, 1.p, and 1.aa in their entirety, (Response at 8, 30; Item 3 at 3), and has entered an agreement to satisfy the student loans. Per the student loan repayment agreement, she has been making $19 monthly payments since December 2014. (Response at 3-9) By May 2015, she had reduced the balance to $15,615. (Response at 8) In sum, she has reduced her delinquencies by approximately $2,300.

Applicant attributes her failure to file her 2010 federal income taxes on time to the loss of her W-2 forms and other important records when her mobile home was repossessed. In October 2014, Applicant filed her 2010 federal income tax returns. (Item 3 at 4-5) She owed $47. The Internal Revenue Service deducted this amount from the refund that Applicant received for tax year 2014. (Response 37)

Applicant is no longer homeless. (Item 3 at 3) As of May 2015, she earned $10.81 per hour. (Response at 15)

POLICIES

When evaluating an applicant’s trustworthiness, 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.

These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, these guidelines are applied together with the factors listed in the adjudicative process. According to AG ¶ 2(c), 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.

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 applicant or proven by Department Counsel. . . .” The Applicant has the ultimate burden of persuasion as to obtaining a favorable trustworthiness determination.

ANALYSIS

Guideline F, Financial Considerations

Under this guideline, “failure or inability 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 information.” (AG ¶ 18) Over the years, Applicant incurred more than $47,000 of delinquent debt, the majority of which remains outstanding. Also, she did not file her 2010 federal income tax return when it was due. AG ¶ 19(a), “inability or unwillingness to satisfy debts,” AG ¶ 19(c), “a history of not meeting financial obligations,” and AG ¶ 19(g), “failure to file annual federal, state, or local income tax returns as required, or fraudulent filing of the same,” apply.

Applicant’s financial problems began after her husband died in 2002. They were compounded when she lost her full-time job in 2007, and reached their nadir when she lost her part-time job in 2011. Since beginning full-time work with her current employer, Applicant has gradually begun rehabilitating her finances, satisfying three debts in their entirety, and making steady payments on her student loans over a six-month period. Also, she has filed her 2010 federal income tax return and paid the amount owed.

Applicant’s progress is minimal in light of the amount of the delinquent debt. However, given that this progress began while Applicant was living in a homeless shelter and recovering from severe injuries from a car accident, I conclude that it is sufficient to apply the following mitigating conditions under AG ¶ 20:

(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, or a death, divorce, or separation), and the individual acted responsibly under the circumstances;

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

Applicant denies the medical bills listed in the SOR, asserting that she was not at fault for the injuries, and that she retained an attorney to litigate a recovery. Regardless of who is subject to liability for her medical bills, she incurred them. Consequently, AG ¶ 20(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,” does not apply. Nevertheless, Applicant’s consultation with an attorney constitutes additional evidence in support of the application of AG ¶ 20(c).

WHOLE PERSON CONCEPT

Under the whole-person concept, the administrative judge should consider the nine adjudicative process factors listed at AG ¶ 2(a):

(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.

Circumstances beyond Applicant’s control contributed to her inability to pay her debts. Although her debt repayment progress has been limited, it is significant considering the impediments that she has overcome, and her modest salary. Moreover, as the passenger in one of the vehicles in an accident involving two insured motorists, it is reasonable to conclude that, having sued both motorists, she will be compensated for the related medical bills listed in the SOR. Under these circumstances, I conclude that Applicant has mitigated the trustworthiness concerns.

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.aa: For Applicant

CONCLUSION

In light of all of the circumstances presented by the record in this case, it is clearly consistent with the national security to grant Applicant eligibility to occupy an ADP position. Applicant’s eligibility to occupy an ADP position is granted.

MARC E. CURRY Administrative Judge

FOOTNOTES

The SOR caption mistakenly identifies this case as an Industrial Security Clearance Review case. The SOR alleges another delinquent medical bill, as listed in subparagraph 1.j, totaling $369. It predates the vehicle accident.