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ISCR Case 14-03874.h1 — CASE

ISCR Case 14-03874.h1granted

Case Headnote

ISCR Case No. 14-03874.h1

grantedApr 23, 2015· Hon. Edward W. Loughran· hearing

Summary

This DOHA security clearance decision involved a 46-year-old defense contractor employee whose eligibility was initially questioned under Guideline F (Financial Considerations). The concerns arose from several financial issues, which the applicant attributed to a work injury and subsequent unemployment.

The Statement of Reasons detailed eight specific debts. These included a $14,604 bank debt cancelled in September 2014, a $5,481 auto loan deficiency being paid at $20 per month since December 2014, and a $3,316 medical debt paid in December 2014. Other debts, ranging from $43 to $930, were also addressed, with five of them paid between July and November 2014. One $528 medical debt with a collection company was disputed, as the company had no record of the account, and it was not on the applicant's most recent credit report.

The applicant successfully mitigated the security concerns by demonstrating a good-faith effort to resolve his financial obligations. He paid five of the debts and effectively disputed another. The decision noted that his financial difficulties were largely due to circumstances beyond his control. Consequently, the applicant was granted eligibility for a security clearance.

Why the Applicant Prevailed

Applicant demonstrated a good-faith effort to repay overdue creditors.
He successfully paid five debts and disputed one debt's legitimacy.
His financial issues were largely due to circumstances beyond his 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(d)appliedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts
AG ¶ 20(e)appliedThe Individual Has a Reasonable Basis to Dispute the Legitimacy of the Past-due Debt

Key Rule Quoted

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

Procedural Posture

SOR issuedNov 8, 2014
Answer filedDec 1, 2014
Hearing heldMar 30, 2015
Decision dateApr 23, 2015

Cite For

Mitigation of Financial Considerations Under Guideline F
Good-faith Efforts to Resolve Debts
Impact of Circumstances Beyond Control on Financial Issues

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 mitigated the financial considerations security concerns. All eight subparagraphs under Guideline F were ruled in favor of the applicant, indicating that his financial issues were resolved and unlikely to recur.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Bank $14,604 Bank issued an IRS Form 1099-C (Cancellation of Debt) in September 2014, which cancelled the debt. $14,604	For Applicant	Unspecified Financial	Unknown	(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.b	Auto loan $5,481 Deficiency on loan after vehicle was repossessed. Per agreement, paying $20 per month since December 2014. $5,481	For Applicant	Auto Loan Debt	Unknown	(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.c	Medical debt $3,316 Paid December 2014. $3,316	For Applicant	Medical Debt	Unknown	(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	Collection company/bank $930 Paid July 2014. $930	For Applicant	Unspecified Financial	Unknown	(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	Collection company/medical debt $528 Contacted collection company. No record of account. Debt not listed on most recent credit report. $528	For Applicant	Unspecified Financial	Unknown	(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.f	Collection company/medical debt $255 Paid November 2014. $255	For Applicant	Medical Debt	Unknown	(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.g	Collection company/medical debt $44 Paid October 2014. $44	For Applicant	Medical Debt	Unknown	(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.h	Collection company/medical debt $43 Paid November 2014. $43	For Applicant	Medical Debt	Unknown	(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	—

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. 14-03874 ) Applicant for Security Clearance )

For Government: Robert J. Kilmartin, Esq., Department Counsel For Applicant: Pro se

04/23/2015 ______________

STATEMENT OF CASE

______________

LOUGHRAN, Edward W., Administrative Judge:

Applicant mitigated the financial considerations security concerns. Eligibility for access to classified information is granted.

Statement of the Case

On November 8, 2014, the Department of Defense (DOD) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline F, financial considerations. The action was taken under Executive Order (EO) 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; DOD 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.

Applicant responded to the SOR on December 1, 2014, and requested a hearing before an administrative judge. The case was assigned to me on February 27, 2015. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on March 4, 2015, scheduling the hearing for March 30, 2015. The hearing was convened as scheduled. Government Exhibits (GE) 1 through 3 were admitted in evidence without objection. Applicant testified and submitted Applicant’s Exhibits (AE) A through G, which were admitted without objection. DOHA received the hearing transcript (Tr.) on April 7, 2015.

FINDINGS OF FACT

Applicant is a 46-year-old employee of a defense contractor. He has worked for his current employer since February 2014. He is applying for a security clearance. He has two years of college, but he did not earn a degree. He has never married, and he has no children.1

Applicant was injured at work on two occasions. He was paid workers’ compensation, but there was a dispute over the payment of medical bills. He initiated a lawsuit, which resulted in a $10,000 settlement. He was unemployed from May 2012 until he obtained his current job in February 2014. He was unable to pay all his bills, and a number of accounts became delinquent.2

The SOR alleges eight delinquent debts with balances totaling about $25,200. The debts are addressed in the table below.

SOR AMOUNT STATUS EVIDENCE Tr. at 31-33; 1.a Bank $14,604 Bank issued an IRS Form 1099-C Response to (Cancellation of Debt) in September SOR; AE F. 2014, which cancelled the debt. Tr. at 33-35; 1.b Auto loan $5,481 Deficiency on loan after vehicle was Response to repossessed. Per agreement, SOR; AE A, G. paying $20 per month since December 2014. 1.c Medical debt $3,316 Paid December 2014. Tr. at 35; Response to SOR; AE B. 1.d Collection $930 Paid July 2014. Tr. at 35-36; company/bank Response to SOR; AE D, G. 1.e Collection $528 Contacted collection company. No Tr. at 36-37; company/medical record of account. Debt not listed Response to debt on most recent credit report. SOR; GE 3; AE G. 1.f Collection $255 Paid November 2014. Tr. at 37-38; company/medical Response to debt SOR; AE C, D. 1.g Collection $44 Paid October 2014. Tr. at 37-38; company/medical Response to debt SOR; AE E. 1.h Collection $43 Paid November 2014. Tr. at 37-38; company/medical Response to debt SOR; AE D.

In summary, Applicant paid five debts; the creditor forgave one debt; he successfully disputed owing one debt; and he has been making monthly payments since December 2014 on the last debt.

Applicant stated that with his current employment, his finances are back on track. He has not received formal financial counseling. He is aware that the IRS Form 1099-C can have tax consequences, and he is prepared to address them. He credibly testified that he will continue to pay the remaining debt.3

POLICIES

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines. 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 eligibility for access to classified information.

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 the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. 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 the applicant or proven by Department Counsel.” The applicant has the ultimate burden of persuasion to obtain a favorable security decision.

A person who seeks access to classified information enters 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 safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation of potential, rather than actual, risk of compromise of classified information.

Section 7 of 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 for financial considerations is set out in AG ¶ 18:

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. An individual who is financially overextended is at risk of having to engage in illegal acts to generate funds.

The guideline notes several conditions that could raise security concerns under AG ¶ 19. The following are potentially applicable:

(a) inability or unwillingness to satisfy debts; and

Applicant was unable to pay his financial obligations. The above disqualifying conditions are applicable.

Conditions that could mitigate financial considerations security concerns are provided under AG ¶ 20. The following are potentially applicable:

(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, 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;

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

(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.

Applicant was injured at work, and he was unemployed for a substantial period. Of the eight debts alleged in the SOR, Applicant paid five debts; the creditor forgave one debt; he successfully disputed owing one debt; and he has been making monthly payments since December 2014 on the last debt. He credibly testified that he will continue with the payment plan until the debt is paid.

I find that Applicant’s financial problems were caused by conditions that were beyond his control. He acted responsibly and made a good-faith effort to pay his debts. There are clear indications that his financial problems are being resolved and are under control. They occurred under circumstances that are unlikely to recur and do not cast doubt on his current reliability, trustworthiness, and good judgment. AG ¶¶ 20(b), 20(c), and 20(d) are applicable. AG ¶ 20(a) is not yet completely applicable because Applicant is still in the process of paying his last debt. AG ¶ 20(e) is applicable to the disputed debt.

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(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. 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 the facts and circumstances surrounding this case. I have incorporated my comments under Guideline F in my whole-person analysis.

Overall, the record evidence leaves me without questions or doubts as to Applicant’s eligibility and suitability for a security clearance. 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 section E3.1.25 of Enclosure 3 of the Directive, are:

Paragraph 1, Guideline F: For Applicant

Subparagraphs 1.a-1.h: 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.

________________________ Edward W. Loughran Administrative Judge