CASE · Clearance Adjudication Search EngineCASE

Loading case…

ISCR Case 12-11193.h1 — CASE

ISCR Case 12-11193.h1granted

Case Headnote

ISCR Case No. 12-11193.h1

grantedJan 13, 2017· Hon. Michael H. Leonard· hearing

Summary

A 51-year-old data specialist for a federal contractor was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The applicant faced allegations regarding approximately $29,515 in delinquent debts across seven accounts. Specifically, five accounts were settled between 2010 and 2015, including two collection accounts settled in December 2015 for $3,143 and $2,904, respectively. Another charged-off account was cancelled by the creditor in March 2014, discharging $2,442 of the debt. Two additional charged-off accounts were settled in December 2010 and December 2015 for $1,405 and $3,000. Two collection accounts, totaling $1,011 and $4,194, remained unresolved.

Disqualifying conditions under Adjudicative Guidelines (AG) ¶ 19(a) and AG ¶ 19(c) were raised. However, the decision applied mitigating conditions AG ¶ 20(b), AG ¶ 20(c), and AG ¶ 20(d).

The clearance was granted because the applicant demonstrated a good-faith effort by resolving five of the seven delinquent accounts. Her financial situation had improved, evidenced by current open accounts and a credit score of 690. The applicant's financial difficulties were largely attributed to her husband's illness and death, circumstances deemed beyond her control.

Why the Applicant Prevailed

The applicant resolved five of the seven delinquent accounts, demonstrating a good-faith effort to repay debts.
The applicant's financial situation showed improvement, with current open accounts and a good credit score of 690.
The applicant's financial difficulties were largely attributed to her husband's illness and death, which were beyond her control.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(b)appliedConditions That Resulted in the Financial Problem Were Largely Beyond the Person's Control
AG ¶ 20(c)appliedClear Indications That the Problem Is Being Resolved or Is Under Control
AG ¶ 20(d)appliedInitiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts

Key Rule Quoted

“No one has a 'right' to a security clearance.”
— Department of Navy v. Egan, 484 U.S. 518, 528 (1988)

Procedural Posture

SOR issuedNov 15, 2015
Answer filedJan 4, 2016
Hearing held—Decided on the written record.
Decision dateJan 13, 2017

Cite For

Good-faith Efforts to Resolve Financial Issues Under Guideline F
Impact of Personal Circumstances on Financial Difficulties
Criteria for Evaluating Financial Responsibility in Security Clearance Cases

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 a problematic financial history due to circumstances largely beyond her control, including the death of her husband. However, she demonstrated a good-faith effort to resolve her debts, successfully settling five of the seven delinquent accounts, and her financial situation was deemed to be under control, leading to a decision in her favor.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	settled a $6,287 collection account for $3,143 in December 2015 $6,287	For Applicant	Unspecified Financial	Admitted	—	—	—
1.b	settled a $4,841 collection account for $2,904 in December 2015 $4,841	For Applicant	Unspecified Financial	Admitted	—	—	—
1.c	a $3,069 charged-off account was cancelled by the creditor in March 2014, the amount of debt discharged was $2,442 $3,069	For Applicant	Unspecified Financial	Admitted	—	—	—
1.d	settled a $3,869 charged-off account for $1,405 in December 2010 $3,869	For Applicant	Unspecified Financial	Admitted	—	—	—
1.e	settled a $6,244 charged-off account for $3,000 in December 2015 $6,244	For Applicant	Unspecified Financial	Admitted	—	—	—
1.f	unresolved collection account for $1,011 $1,011	For Applicant	Unspecified Financial	Unknown	—	—	—
1.g	unresolved collection account for $4,194 $4,194	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. 12-11193 ) Applicant for Security Clearance )

For Government: Ray T. Blank Jr., Esq., Department Counsel For Applicant: Pro se

01/13/2017 ______________

STATEMENT OF CASE

______________

LEONARD, Michael H., Administrative Judge:

Applicant contests the Defense Department’s intent to revoke her eligibility for access to classified information. She presented sufficient documentary evidence to establish that she has made a good-faith effort to repay delinquent debts and her financial situation is under control. Accordingly, this case is decided for Applicant.

Statement of the Case

Applicant completed and submitted a Questionnaire for National Security Positions (SF 86 Format) on May 31, 2012. More than three years later on November 15, 2015, after reviewing the application and information gathered during a background investigation, the Department of Defense (DOD) sent Applicant a statement of reasons (SOR), explaining it was unable to find that it was clearly consistent with the national interest to grant her eligibility for access to classified information. The SOR is similar to a complaint. It detailed the reasons for the action under the security guideline known as Guideline F for financial considerations. Applicant answered the SOR with a three-page memorandum and supporting documentation on January 4, 2016.

Neither Applicant nor Department Counsel requested a hearing, and so the case will be decided on the written record. On March 23, 2016, Department Counsel submitted all relevant and material information that could be adduced at a hearing. The file of relevant material (FORM) was mailed to Applicant, who received it on March 31, 2016. She replied within the 30-day period from receipt of the FORM, and those matters are admitted as Exhibits A, B, and C. The case was assigned to me on December 7, 2016.

PROCEDURAL MATTERS

Department Counsel’s FORM includes Exhibit 8, which is a report of investigation (ROI) summarizing Applicant’s interview that took place during the June 2012 background investigation. The ROI is not authenticated as required under ¶ E3.1.20 of the Directive. Department Counsel’s written brief includes a footnote advising Applicant that the ROI was not authenticated and that failure to object may constitute a waiver of the authentication requirement. In her response to the FORM, Applicant objected to Exhibit 8 due to lack of authentication. Her objection is sustained. Accordingly, Exhibit 8 is inadmissible and I have not considered the information in the ROI.

FINDINGS OF FACT

Applicant is a 51-year-old employee who requires a security clearance for her job working as a data specialist for a federal contractor. She has held a security clearance for many years. She has been employed by the same company since 1984 after completing high school in 1983. She married in 1985, and she was widowed in June 2010 after 25 years of marriage. She has an adult daughter from the marriage.

Under Guideline F, the SOR alleged a history of financial problems or difficulties consisting of several collection or charged-off accounts for a total of about $29,515. In general, Applicant does not dispute the financial problems, and she attributes her situation to her husband’s serious illness during 2008–2010 that preceded his death due to liver failure in 2010. As a result, he was unable to work full-time, which reduced their household income. She described her husband’s death as a life-changing event, and she delayed addressing many bills as she was dealing with her husband’s passing.

In her answer to the SOR, Applicant presented documentation showing she resolved five of the seven delinquent accounts in the SOR for a total amount of $12,894 (SOR ¶¶ 1.a–1.e). In particular, the documentation shows as follows: (1) she settled a $6,287 collection account for $3,143 in December 2015; (2) she settled a $4,841 collection account for $2,904 in December 2015; (3) a $3,069 charged-off account was cancelled by the creditor in March 2014, the amount of debt discharged was $2,442, and an IRS Form 1099-C was issued to her for tax year 2014, which she addressed with her 2014 tax return; (4) she settled a $3,869 charged-off account for $1,405 in December 2010: and (5) she settled a $6,244 charged-off account for $3,000 in December 2015. Concerning the two unresolved collection accounts for $1,011 and $4,194 (SOR ¶¶ 1.fand 1.g), she explained that she could neither admit nor deny the debts as they did not appear on a December 2015 credit report she included with her answer. Likewise, neither debt appears on an April 2016 credit report she included with her reply to the FORM.10

In addition, Applicant presented documentation showing she was approved to refinance her mortgage loan in March 2016. Her home, in which she has lived in since 1997, had an appraised value of $263,000, she obtained a loan amount of $178,500 of which $151,425 was used to pay off first and second mortgage loans, and she used about $18,000 to pay off eight other accounts. A review of her most recent credit report from April 2016 shows an improved overall financial situation, her open accounts are current, and her Experian credit score is 690, which is rated as good.12 Law and Policies

It is well-established law that no one has a right to a security clearance. As noted by the Supreme Court in Department of Navy v. Egan, “the clearly consistent standard indicates that security clearance determinations should err, if they must, on the side of denials.” Under Egan, Executive Order 10865, and the Directive, any doubt about whether an applicant should be allowed access to classified information will be resolved in favor of protecting national security.

A favorable clearance decision establishes eligibility of an applicant to be granted a security clearance for access to confidential, secret, or top-secret information. An unfavorable decision (1) denies any application, (2) revokes any existing security clearance, and (3) prevents access to classified information at any level.

There is no presumption in favor of granting, renewing, or continuing eligibility for access to classified information. The Government has the burden of presenting evidence to establish facts alleged in the SOR that have been controverted. An applicant is responsible for presenting evidence to refute, explain, extenuate, or mitigate facts that have been admitted or proven. In addition, an applicant has the ultimate burden of persuasion to obtain a favorable clearance decision. In Egan, the Supreme Court stated that the burden of proof is less than a preponderance of the evidence.21 The DOHA Appeal Board has followed the Court’s reasoning, and a judge’s findings of fact are reviewed under the substantial-evidence standard.22

The AG set forth the relevant standards to consider when evaluating a person’s security clearance eligibility, including disqualifying conditions and mitigating conditions for each guideline. In addition, each clearance decision must be a commonsense decision based upon consideration of the relevant and material information, the pertinent criteria and adjudication factors, and the whole-person concept.

The Government must be able to have a high degree of trust and confidence in those persons to whom it grants access to classified information. The decision to deny a person a security clearance is not a determination of an applicant’s loyalty. Instead, it is a determination that an applicant has not met the strict guidelines the President has established for granting eligibility for access.

DISCUSSION

Under Guideline F for financial considerations, the suitability of an applicant may be questioned or put into doubt when that applicant has a history of excessive indebtedness or financial problems or difficulties. The overall concern is:

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.

The concern is broader than the possibility that a person might knowingly compromise classified information to obtain money or something else of value. It encompasses concerns about a person’s self-control, judgment, and other important qualities. A person who is financially irresponsible may also be irresponsible, unconcerned, or negligent in handling and safeguarding classified information.

In analyzing this case, I considered the following disqualifying and mitigating conditions under Guideline F:

AG ¶ 19(a) inability or unwillingness to satisfy debts;

AG ¶ 19(c) a history of not meeting financial obligations; 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 [person] acted responsibly under the circumstances;

AG ¶ 20(c) [t]here are clear indications that the problem is being resolved or is under control; and

AG ¶ 20(d) the [person] initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.

The evidence here supports a conclusion that Applicant has a problematic financial history sufficient to raise a security concern under Guideline F. Her financial problems appear to be the result of an over reliance on credit as well as the serious illness and eventual death of her spouse in 2010. This life event encountered by Applicant resulted in a reduction in household income and influenced the way in which she attended to her financial obligations. She is now handling her financial obligations in a mature manner. She resolved five of the seven delinquent accounts in the SOR, and I’m persuaded she would have resolved the remaining two had she been able to locate the creditors. Also, she was recently approved to refinance her mortgage loan, and used the process to pay off $18,000 in debt. Taken together, the totality of circumstances support a conclusion that Applicant’s overall financial situation is on a favorable upward trend. She presented sufficient documentary evidence to establish that she has made a good-faith effort to repay delinquent debts and her financial situation is under control.

Applicant’s history of financial problems does not create doubt about her current reliability, trustworthiness, good judgment, and ability to protect classified information. In reaching this conclusion, I weighed the evidence as a whole and considered if the favorable evidence outweighed the unfavorable evidence or vice versa. I also gave due consideration to the whole-person concept. Accordingly, I conclude that she met her ultimate burden of persuasion to show that it is clearly consistent with the national interest to grant her eligibility for access to classified information.

FORMAL FINDINGS

The formal findings on the SOR allegations are:

Paragraph 1, Guideline F: For Applicant

Subparagraphs 1.a–1.g: For Applicant

CONCLUSION

In light of the record as a whole, it is clearly consistent with the national interest to grant Applicant eligibility for access to classified information.

Michael H. Leonard Administrative Judge

FOOTNOTES

Exhibit 4 (this document is commonly known as a security clearance application). The SOR was issued by the DOD Consolidated Adjudications Facility, Fort Meade, Maryland. It is a separate and distinct organization from the Defense Office of Hearings and Appeals, which is part of the Defense Legal Services Agency, with headquarters in Arlington, Virginia. This case is adjudicated under Executive Order 10865, Safeguarding Classified Information within Industry, signed by President Eisenhower on February 20, 1960, as amended, as well as Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program, dated January 2, 1992, as amended (Directive). In addition, the Adjudicative Guidelines for Determining Eligibility for Access to Classified Information (AG), effective within the Defense Department on September 1, 2006, apply here. The AG were published in the Federal Register and codified in 32 C.F.R. § 154, Appendix H (2006). The AG replace the guidelines in Enclosure 2 to the Directive. Directive, Enclosure 3, ¶ E3.1.7. The file of relevant material consists of Department Counsel’s written brief and supporting documents, some of which are identified as evidentiary exhibits in this decision. This exhibit was misidentified as Exhibit 9 in Department Counsel’s written brief, while the exhibit described as Exhibit 8 in the brief (a credit report) does not exist. See generally ISCR Case No. 12-10933 (App. Bd. June 29, 2016) (In a concurring opinion, Judge Ra’anan notes the historical concern about reports of investigation in that they were considered by some to present a heightened problem in providing due process in security clearance cases. Judge Ra’anan raises a number of pertinent questions about using an unauthenticated ROI in a non-hearing case.). th See Black’s Law Dictionary, 1717 (Bryan A. Garner ed., 9 ed., W est 2009), for a definition of waiver. Answer to SOR, Enclosures A–E. Exhibit C. Exhibit B. Exhibit C. Department of Navy v. Egan, 484 U.S. 518, 528 (1988) (“it should be obvious that no one has a ‘right’ to th a security clearance”); Duane v. Department of Defense, 275 F.3d 988, 994 (10 Cir. 2002) (no right to a security clearance). 484 U.S. at 531. Directive, ¶ 3.2. Directive, ¶ 3.2. ISCR Case No. 02-18663 (App. Bd. Mar. 23, 2004). Directive, Enclosure 3, ¶ E3.1.14. Directive, Enclosure 3, ¶ E3.1.15. Directive, Enclosure 3, ¶ E3.1.15. Egan, 484 U.S. at 531. ISCR Case No. 01-20700 (App. Bd. Dec. 19, 2002) (citations omitted). Executive Order 10865, § 7. AG ¶¶ 18, 19, and 20 (setting forth the concern and the disqualifying and mitigating conditions). ISCR Case No. 95-0611 (App. Bd. May 2, 1996) (It is well settled that “the security suitability of an applicant is placed into question when that applicant is shown to have a history of excessive indebtedness or recurring financial difficulties.”) (citation omitted); and see ISCR Case No. 07-09966 (App. Bd. Jun. 25, 2008) (In security clearance cases, “the federal government is entitled to consider the facts and circumstances surrounding an applicant’s conduct in incurring and failing to satisfy the debt in a timely manner.”) (citation omitted). AG ¶ 18. AG ¶ 20(a)–(f). AG ¶ 2(a)(1)–(9).