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ISCR Case 15-03553.h1 — CASE

ISCR Case 15-03553.h1granted

Case Headnote

ISCR Case No. 15-03553.h1

grantedAug 31, 2017· Hon. Richard A. Cefola· hearing

Summary

A 37-year-old defense contractor and U.S. Navy veteran was granted a security clearance despite concerns under Guideline F (Financial Considerations) related to past-due debts. The Statement of Reasons (SOR) alleged multiple past-due medical bills totaling approximately $3,015, a $2,439 debt for a wedding ring, and several other smaller debts ranging from $58 to $4,259.

The applicant successfully addressed many of these allegations. Several debts, including amounts of $58, $192, and $277, were documented as satisfied between 2013 and 2016. Another account was satisfied on October 28, 2016. The applicant denied two alleged debts of $4,259 and $329, which were not present on the government's last three credit reports. For a $460 medical account, the applicant provided documentation of ongoing monthly payments.

The judge found that the applicant made a good-faith effort to resolve his financial issues, which were largely due to unemployment and unforeseen medical expenses. The applicant also utilized a credit consolidation service to manage his debts. Based on these mitigating factors and the resolution of many alleged debts, the security clearance was granted.

Why the Applicant Prevailed

The applicant demonstrated a good-faith effort to address past-due debts through a credit consolidation service.
The financial issues were largely attributed to unemployment and unforeseen medical expenses.
The applicant's contested debts did not appear on recent credit reports, supporting his claims of non-ownership.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability to Satisfy Debts
AG ¶ 19(b)raisedUnwillingness to Satisfy Debts Regardless of the Ability to Do So
AG ¶ 19(c)raisedHistory of Not Meeting Financial Obligations

Mitigating

AG ¶ 20(b)appliedConditions Largely Beyond the Person's Control
AG ¶ 20(d)appliedGood-faith Effort to Repay Overdue Creditors
AG ¶ 20(e)appliedReasonable Basis to Dispute Legitimacy of Past-due Debt

Key Rule Quoted

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

Procedural Posture

SOR issuedNov 19, 2015
Answer filedJan 26, 2016
Hearing heldNov 22, 2016
Decision dateAug 31, 2017

Cite For

Good-faith Efforts to Resolve Financial Issues Under Guideline F
Impact of Uncontrollable Circumstances on Financial Stability
Consideration of the Whole-person Concept in Security Clearance Decisions

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 significant past-due indebtedness but demonstrated a good-faith effort to address these debts through monthly payments and financial counseling. Ultimately, the judge concluded that the applicant mitigated the financial concerns and granted eligibility for a security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	These are the past-due medical bills totaling about $3,015. $3,015	For Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor
1.b	These are the past-due medical bills totaling about $3,015. $3,015	For Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor
1.c	These are the past-due medical bills totaling about $3,015. $3,015	For Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor
1.d	These are the past-due medical bills totaling about $3,015. $3,015	For Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor
1.e	This is a past-due debt to a jeweler, for the purchase of his wife's wedding ring, in the amount of about $2,439. $2,439	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor
1.f	This account was satisfied on 10-28-2016, as evidenced by documentation from this creditor. $1,127	For Applicant	Unspecified Financial	Admitted	—	—	—
1.g	This $58 debt was satisfied 02/26/2016, as evidenced by documentation from this creditor. $58	For Applicant	Unspecified Financial	Admitted	—	—	—
1.h	This $277 debt has been PAID in full, as of November 16, 2016, as evidenced by documentation from this creditor's Collection Agency. $277	For Applicant	Unspecified Financial	Admitted	—	—	—
1.i	This $192 debt was paid on December 09, 2013, as evidenced by documentation from this creditor. $192	For Applicant	Unspecified Financial	Admitted	—	—	—
1.j	Applicant denies this alleged past-due debt for about $4,259, and it does not appear on the Government's last three credit reports. $4,259	For Applicant	Unspecified Financial	Denied	—	—	—
1.k	Applicant denies this alleged past-due debt for about $329, and it does not appear on the Government's last three credit reports. $329	For Applicant	Unspecified Financial	Denied	—	—	—
1.l	Applicant is making monthly payments towards this $460 medical account, as evidenced by documentation from this creditor. $460	For Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor

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. 15-03553 ) ) Applicant for Security Clearance )

For Government: Jeff Nagel, Esq., Department Counsel For Applicant: Pro se

August 31, 2017 ______________

STATEMENT OF CASE

______________

CEFOLA, Richard A., Administrative Judge:

Statement of the Case

On November 19, 2015, in accordance with DoD Directive 5220.6, as amended (Directive), the Department of Defense issued Applicant a Statement of Reasons (SOR) alleging facts that raise security concerns under Guideline F.1 The SOR further informed Applicant that, based on information available to the government, DoD adjudicators could not make the preliminary affirmative finding it is clearly consistent with the national interest to grant or continue Applicant’s security clearance.

Applicant answered the SOR on January 26, 2016, and requested a hearing before an administrative judge. (Answer.) The case was assigned to me on November 14, 2016. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on November 14, 2016, scheduling the hearing for November 22, 2016. The hearing was convened as scheduled. The Government offered Exhibits (GXs) 1 through 5, which were admitted without objection. Applicant testified on his own behalf and presented 11 documents, which I marked Applicant’s Exhibits (AppXs) A through K. The record was left open until January 23, 2017, for receipt of additional documentation. On January 18, 2017, Applicant offered AppX L, which was admitted without objection. DOHA received the transcript of the hearing (TR) on November 30, 2016.

FINDINGS OF FACT

Applicant admitted to the allegations in SOR ¶¶ 1.a.~1.j., and 1.o. He denied SOR allegations ¶¶ 1.k.~1.n. After a thorough and careful review of the pleadings, exhibits, and testimony, I make the following findings of fact.

Applicant is a 37-year-old employee of a defense contractor. (GX 1 at page 5 and TR at page 54 line 17 to page 55 line 16.) He has been employed with the defense contractor since December of 2012. (Id.) Applicant served in the U.S. Navy “for 14 years,” and is on “40 percent” Veterans Administration Disability. (TR at page 28 lines 4–11, and AppX L at page 9.) He has held a security clearance while serving in the Navy. He is married, and has five children. (TR at page 26 lines 10–23.)

Guideline F - Financial Considerations

Applicant attributes much of his admitted past-due indebtedness to his four months of unemployment from August 2012 to December of 2012, when he left active duty and obtained his present employment; to his wife losing “her employment in 2013; and to unforeseen medical bills. (TR at page 30 line 16 to page 31 line 7, GX 1 at pages 12–13.

1.a.~1.d., and 1.f.~1.h. These are the past-due medical bills totaling about $3,015. Prior to Applicant’s wife losing her employment in 2013, these co-pay medical costs used to be covered by his wife’s medical insurance. (TR at page 32 line 10 to page 35 line 22, at page 38 line 2 to page 39 line 25, and at page 40 lines 12–24.) Through the auspices of a credit consolidation service (CCS), Applicant is making monthly payments of $75 towards these medical debts, and the debt to be discussed under ¶ 1.e., as evidenced by documentation from his CCS and his credit union. (Id., and AppXs E and L at page 2.) I find that Applicant is making a good-faith effort to address these past-due debts.

1.e. This is a past-due debt to a jeweler, for the purchase of his “wife’s wedding ring,” in the amount of about $2,439. (TR at page 35 line 23 to page 38 line 1.) The original purchase price was $5,000. (Id.) Through the auspices of his CCS, Applicant is making monthly payments of $75 towards this debt, and the before mentioned medical debts, as evidenced by documentation from his CCS and his credit union. (TR at page 35 line 23 to page 38 line 1, and AppXs E and L at page 2.) I find that Applicant is making a good-faith effort to address this past-due debt. 1.i. Through monthly payments of $60, “this [$1,127] account was satisfied on 10-28-2016,” as evidenced by documentation from this creditor. (TR at page 40 line 25 to page 42 line 3, AppX F, and AppX L at page 3.)

1.j. This $58 debt was satisfied “02/26/2016,” as evidenced by documentation from this creditor. (TR at page 43 lines 3–9, and AppX D.)

1.k. Applicant denies this alleged past-due debt for about $4,259, and it does not appear on the Government’s last three credit reports accessed in March of 2015, October of 2015, and most recently in November of 2016. (TR at page 42 line 10 to page 45 line 22, and GXs 3–5.) I find that Applicant does not owe this alleged past-due debt.

1.l. Applicant denies this alleged past-due debt for about $329, and it does not appear on the Government’s last three credit reports accessed in March of 2015, October of 2015, and most recently in November of 2016. (TR at page 46 line 4 to page 47 line 11, and GXs 3–5.) I find that Applicant does not owe this alleged past-due debt.

1.m. This $277 debt “has been PAID in full,” as of “November 16, 2016,” as evidenced by documentation from this creditor’s “Collection Agency.” (TR at page 47 lines 12–24, and AppX B.)

1.n. This $192 debt ”was paid . . . on December 09, 2013,” as evidenced by documentation from this creditor. (TR at page 47 line 25 to page 48 line 8, and AppX C.)

1.o. Applicant is making monthly payments towards this $460 medical account, as evidenced by documentation from this creditor. (TR at page 48 lines 9–24, and AppX L at page 4.) I find that Applicant is making a good-faith effort to address this debt.

POLICIES

When evaluating an applicant’s suitability for a security clearance, 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, 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 AG ¶ 2 describing the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶ 2(a), 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 national security eligibility will be resolved in favor of national security.” In reaching this decision, I have drawn only those conclusions that are reasonable, logical, and based on the evidence contained in the record.

Directive ¶ E3.1.14, requires 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, and has the ultimate burden of persuasion as to obtaining a favorable clearance decision.”

A person who applies for access to classified information seeks to enter 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 protect or safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation as to potential, rather than actual, risk of compromise of classified information.

Section 7 of Executive Order (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 relating to the guideline for Financial Considerations is set out in AG ¶ 18:

Failure 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 or sensitive information. Financial distress can also be caused or exacerbated by, and thus can be a possible indicator of, other issues of personnel security concern such as excessive gambling, mental health conditions, substance misuse, or alcohol abuse or dependence. An individual who is financially overextended is at greater risk of having to engage in illegal or otherwise questionable acts to generate funds. Affluence that cannot be explained by known sources of income is also a security concern insofar as it may result from criminal activity, including espionage. The guideline notes several conditions that could raise security concerns under AG ¶ 19. Three are potentially applicable in this case:

(a) inability to satisfy debts;

(b) unwillingness to satisfy debts regardless of the ability to do so; and

Applicant had significant past-due indebtedness. The evidence is sufficient to raise these disqualifying conditions.

AG ¶ 20 provides conditions that could mitigate security concerns. I considered all of the mitigating conditions under AG ¶ 20 including:

(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, a death, divorce or separation, clear victimization by predatory lending practices, or identity theft), and the individual acted responsibly under the circumstances;

(c) the individual has received or is receiving financial counseling for the problem from a legitimate and credible source, such as a non-profit credit counseling service, and there are clear indications that the problem is being resolved or is under control;

(d) the individual initiated and is adhering to 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 has addressed all of his admitted past-due indebtedness. The two debts he contests, ¶¶ 1.k. and 1.l., do not appear on the Government’s last three credit reports, which gives credence to his averment that they are not owed. Now that he is employed, Applicant has demonstrated that future financial problems are unlikely. Mitigation under AG ¶¶ 20(a)~20(e) has been established.

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(d):

(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 facts and circumstances surrounding this case. I have incorporated my comments under Guideline F in my whole-person analysis. Some of the factors in AG ¶ 2(d) were addressed under those guidelines, but some warrant additional comment.

Applicant has a distinguished history of working in the defense industry and is highly respected in the work place. (AppX A, and AppX L at pages 5–8.) He performs well at his job. (Id.)

Overall, the record evidence leaves me without questions or doubts as to Applicant’s eligibility and suitability for a security clearance. For all these reasons, 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 ¶ E3.1.25 of the Directive, are:

Paragraph 1, Guideline F: FOR APPLICANT

Subparagraphs 1.a.~1.o: 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.

________________________ Richard A. Cefola Administrative Judge

FOOTNOTES

1 I considered the previous Adjudicative Guidelines, effective September 1, 2006, as well as the new Adjudicative Guidelines, effective June 8, 2017. My decision would be the same if the case was considered under the previous Adjudicative Guidelines, effective September 1, 2006.