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ISCR Case 15-03449.h1 — CASE

ISCR Case 15-03449.h1granted

Case Headnote

ISCR Case No. 15-03449.h1

grantedDec 27, 2016· Hon. Edward W. Loughran· hearing

Summary

A 45-year-old defense contractor and military veteran was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The Statement of Reasons (SOR) cited a Chapter 7 bankruptcy in 2004 and delinquent debts totaling $29,909, including a $25,216 loan for a repossessed car. These debts were confirmed by the applicant's admissions and credit reports.

However, no debts became delinquent after 2008. The applicant paid two of the SOR debts in 2013 and resolved or settled the remaining debts by March 2016. The applicant's current finances were found to be in order.

The decision to grant the clearance was based on several mitigating factors. All delinquent debts were resolved or settled before the decision, and the financial issues were largely attributed to circumstances beyond the applicant's control, specifically his second wife's past drug addiction. The absence of any new delinquent debts after 2008 demonstrated improved financial management, leading to the clearance being granted.

Why the Applicant Prevailed

All delinquent debts were resolved or settled prior to the decision.
The financial issues were largely due to circumstances beyond the applicant's control, specifically his second wife's drug problem.
No delinquent debts were reported after 2008, indicating improved financial management.

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(a)appliedBehavior Happened Long Ago or Infrequently
AG ¶ 20(b)appliedConditions Largely Beyond the Person's Control
AG ¶ 20(c)appliedReceived Counseling or Indications of Resolution
AG ¶ 20(d)appliedGood-faith Effort to Repay Creditors

Key Rule Quoted

“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.”

Procedural Posture

SOR issuedNov 2, 2015
Answer filedDec 15, 2015Applicant elected to proceed without a hearing.
Hearing held—Written record decision.
Decision dateDec 27, 2016

Cite For

Mitigation of Financial Issues Under Guideline F
Impact of Personal Circumstances on Financial Stability
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 mitigated the financial considerations security concerns. All debts were either paid or settled, and the applicant's current finances are in order, leading to a decision to grant eligibility for a security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Chapter 7 bankruptcy case in 2004	For Applicant	Bankruptcy Filing	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(c) received/receiving counseling; problem being resolved	Claimed Other
1.b	Delinquent debts totaling $29,909 $29,909	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.c	Largest debt ($25,216) for the loan on a repossessed car $25,216	For Applicant	Auto Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.d	Debts were established by Applicant’s admissions and credit reports	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Other
1.e	None of the debts alleged in the SOR became delinquent after 2008	For Applicant	Unspecified Financial	Unknown	—	—	—
1.f	Applicant paid two of the SOR debts in 2013	For Applicant	Unspecified Financial	Unknown	—	—	—
1.g	Applicant paid or settled the remaining debts in March 2016	For Applicant	Unspecified Financial	Unknown	—	—	—
1.h	Applicant’s current finances are in order	For Applicant	Unspecified Financial	Unknown	—	—	—
1.i	The timing of his payments does not create a perfect case in mitigation	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. 15-03449 ) Applicant for Security Clearance )

For Government: Alison O’Connell, Esq., Department Counsel For Applicant: Pro se

12/27/2016 ______________

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 2, 2015, 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 15, 2015, and elected to have the case decided on the written record in lieu of a hearing. The Government’s written case was submitted on February 22, 2016. A complete copy of the file of relevant material (FORM) was provided to Applicant, who was afforded an opportunity to file objections and submit material to refute, extenuate, or mitigate the security concerns. Applicant received the FORM on March 7, 2016. He responded with documents that I have marked collectively as Applicant’s Exhibit (AE) 1. The case was assigned to me on September 12, 2016. The Government exhibits included in the FORM and AE 1 are admitted in evidence without objection.

FINDINGS OF FACT

Applicant is a 45-year-old employee of a defense contractor. He has worked for his current employer since March 2010. He served on active duty in the U.S. military from 1989 until he retired with an honorable discharge in 2010. He married in 1995 and divorced in 1999; married again in 2000 and divorced in 2010; and married for the third time in 2010. He has three children and three stepchildren.1

Applicant’s second wife had a drug problem. Applicant gave her money to pay the bills, but she spent the money on drugs. He resolved the resulting financial problems through a Chapter 7 bankruptcy case in 2004. He gave his second wife another chance after the bankruptcy discharge. She was clean for a period, but then fell back into her old habits, which caused additional financial issues.2

The SOR alleges the 2004 Chapter 7 bankruptcy case and eight delinquent debts totaling $29,909. The largest debt ($25,216) is for the loan on a repossessed car. The debts are established by Applicant’s admissions and credit reports.3

None of the debts alleged in the SOR became delinquent after 2008. The two most recent credit reports do not report the SOR debts or any other delinquent debts. Applicant paid two of the SOR debts in 2013, and he paid or settled the remaining debts in March 2016. Applicant’s current finances are in order.4

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 in this case:

(a) inability or unwillingness to satisfy debts; and

Applicant was unable or unwilling to pay his debts. The evidence is sufficient to raise AG ¶¶ 19(a) and 19(b) as disqualifying conditions.

Conditions that could mitigate the 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; and

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

Applicant’s financial problems were caused by his second wife’s drug problem and his willingness to give her a second chance. None of the delinquent debts alleged in the SOR were accrued after 2008. It took him until after he received the FORM to resolve most of the debts, but they are all paid or settled. While the timing of his payments does not create a perfect case in mitigation (See ISCR Case No. 11-13949 at 3 (App. Bd. Sep. 5, 2013)), I am satisfied that Applicant’s finances are in order. AG ¶ 20(c) is applicable; AG ¶¶ 20(a), 20(b), and 20(d) are partially applicable.

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 this whole-person analysis.

I considered Applicant’s honorable military service. I also considered the cause of Applicant’s financial problems and that the problems are resolved.

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.i: 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

FOOTNOTES

1 Items 5, 11. 2 Items 5, 6, 11-14; AE 1. 3 Items 4, 7-10; AE 1. 4 Items 4, 7-10; AE 1.