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ISCR Case 14-03726.h1 — CASE

ISCR Case 14-03726.h1granted

Case Headnote

ISCR Case No. 14-03726.h1

grantedMar 18, 2016· Hon. Marc E. Curry· hearing

Summary

This case concerns a 40-year-old single man with a high school education whose security clearance was initially jeopardized under Guideline F (Financial Considerations). The Statement of Reasons detailed several financial delinquencies, including a $10,673 delinquent mortgage, a $171 medical bill, two state income tax bills each for $6,040, a $49 debt to a music streaming company, an $890 debt to a satellite television provider, and $136 owed to a DVD provider. These issues arose following a wage reduction.

Disqualifying conditions under Adjudicative Guidelines (AG) ¶ 19(a) and AG ¶ 19(c) were raised due to these financial obligations. However, the applicant successfully resolved all alleged debts.

Consequently, mitigating conditions AG ¶ 20(b), AG ¶ 20(c), and AG ¶ 20(d) were applied, acknowledging the applicant's responsible actions in addressing his financial difficulties. As all debts were satisfied, the security clearance was GRANTED.

Why the Applicant Prevailed

Applicant satisfied all debts alleged in the Statement of Reasons (SOR).
All mitigating conditions under AG ¶ 20 were applied, demonstrating responsible actions taken to resolve financial issues.

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 Largely Beyond the Person's Control
AG ¶ 20(c)appliedReceived Counseling or Indications of Control Over the Problem
AG ¶ 20(d)appliedGood-faith Effort to Repay Creditors

Key Rule Quoted

“"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

Procedural Posture

SOR issuedAug 29, 2014
Answer filedSep 9, 2014Applicant requested a decision on the record.
Hearing held—No hearing; decision made on the record.
Decision dateMar 18, 2016

Cite For

Resolution of Financial Obligations Under Guideline F
Application of Mitigating Conditions for Financial Issues
Whole-person Concept in Security Clearance Determinations

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 satisfied all debts alleged under Guideline F, concluding that there were no longer any security concerns regarding his financial stability. As a result, the applicant was granted eligibility for a security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	a delinquent mortgage, totalling $10,673 $10,673	For Applicant	Mortgage or Home Loan Debt	Denied	(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	a delinquent medical bill, totalling $171 $171	For Applicant	Medical Debt	Denied	(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.c	a state income tax bill, totalling $6,040 $6,040	For Applicant	Tax Unpaid	Denied	(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.d	a state income tax bill, totalling $6,040 $6,040	For Applicant	Tax Unpaid	Denied	(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.e	a debt owed to a music streaming company for $49 $49	For Applicant	Unspecified Financial	Denied	(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.f	a debt owed to a satellite television provider, totalling $890 $890	For Applicant	Unspecified Financial	Denied	(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.g	$136 owed to a DVD provider $136	For Applicant	Unspecified Financial	Denied	(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

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. 14-03726 ) Applicant for Security Clearance )

For Government: John Bayard Glendon, Esq., Department Counsel For Applicant: Pro se

03/18/2016 ______________

STATEMENT OF CASE

______________

CURRY, Marc E., Administrative Judge:

Given that Applicant has satisfied all of the debts alleged in the Statement of Reasons (SOR), I conclude that there are no longer any security concerns about his financial stability. Clearance is granted.

Statement of the Case

On August 29, 2014, the Department of Defense Consolidated Adjudications Facility (DOD CAF) issued an SOR to Applicant detailing security 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 (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG) implemented by the DOD on September 1, 2006.

On September 9, 2014, Applicant answered the SOR, denying all of the allegations, and requesting a decision on the record rather than a hearing. On June 4, 2015, Department Counsel prepared a File of Relevant Material (FORM) consisting of documents supporting the Government’s allegations. Applicant received the file on June 30, 2015, and was informed that he had until July 30, 2015 to submit a response. Applicant did not reply, and the case was subsequently assigned to me on October 23, 2015.

FINDINGS OF FACT

Applicant is a 40-year-old single man. He has a high school education. Since 2006, he has worked for a defense contractor as a service technician.

In 2008, Applicant’s employer reduced its employees’ wages by ten percent. (Item 6 at 1) Subsequently, Applicant began struggling to make ends meet. He considered taking a part-time job to supplement his income, but was unable to find one compatible with his full-time schedule, as he was frequently on-call when he was not officially working. (Item 6 at 1)

Later that year, Applicant cashed in his IRA in an effort to make ends meet; however, this led to additional problems. Specifically, Applicant thought the penalties and the income taxes were deducted up front from the amount that he received, when in fact, only the penalty was deducted. Consequently, Applicant incurred a state income tax bill, totalling $6,040, as alleged in SOR subparagraph 1.cand duplicated in SOR subparagraph 1.d, that he was unable to pay on time.

As time passed, Applicant incurred other delinquencies, including a delinquent mortgage, totalling $10,673 (SOR subparagraph 1.a), a delinquent medical bill, totalling $171 (subparagraph 1.b), a debt owed to a music streaming company for $49 (SOR subparagraph 1.e), a debt owed to a satellite television provider, totalling $890 (SOR subparagraph 1.f), and $136 owed to a DVD provider (SOR subparagraph 1.g). Applicant voluntarily allowed the mortgage on his home to be foreclosed upon. The post-foreclosure resale of the home exceeded the remaining balance that Applicant owed. (Item 3 at 3)

In 2012, Applicant satisfied an unlisted delinquent debt, totalling $300. (Item 6 at 3) By April 2014, Applicant had satisfied the tax delinquency through a wage garnishment, prompting the release of the lien. Also that month, he satisfied all of the remaining SOR debts, including the debt owed to the satellite television company, which he paid through a negotiated agreement. (Item 3 at 1 - 3) Currently, none of Applicant’s bills are delinquent.

POLICIES

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, they 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.

The protection of the national security is the paramount consideration. AG ¶ 2(b) requires that “[a]ny doubt concerning personnel being considered for access to classified information will be resolved in favor of 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 applicant or proven by department counsel. . . .” The applicant has the ultimate burden of persuasion for obtaining a favorable security decision.

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

(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.

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) Between 2008 and 2010, Applicant incurred approximately $18,000 of outstanding delinquent debt, including a mortgage delinquency and an income tax delinquency. AG ¶ 19(a), “inability or unwillingness to satisfy debts,” and AG ¶ 19(c), “a history of not meeting financial obligations,” apply.

The following mitigating conditions are potentially applicable 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; (c) the person has received or is receiving counseling for the problem and/or there are clear indications that the problem is being resolved or is under control; and

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

Applicant’s financial problems began in 2008 after his employer cut his wages. Cashing out his IRA that year may have alleviated his financial difficulties over a short- term period, but ultimately compounded his problems as he miscalculated the income tax consequences, leading to a tax debt that he was unable to pay.

Applicant’s mortgage debt was satisfied through the foreclosure process, and he has paid the remainder of his delinquent debts. I conclude that all of the mitigating conditions apply.

WHOLE PERSON CONCEPT

Department Counsel argues that despite the fact Applicant has satisfied the SOR delinquencies, there is not enough record evidence of the circumstances surrounding the origin of the debts to conclude in Applicant’s favor. I agree with Department Counsel that the record is scant. However, I consider that the evidence presented, particularly the cause of the delinquencies, and Applicant’s payment of them, is sufficient for Applicant to carry the burden.

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.g: 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 eligibility for a security clearance. Eligibility for access to classified information is granted.

MARC E. CURRY Administrative Judge