CASE · Clearance Adjudication Search EngineCASE

Loading case…

ISCR Case 15-03847.h1 — CASE

ISCR Case 15-03847.h1granted

Case Headnote

ISCR Case No. 15-03847.h1

grantedMar 2, 2017· Hon. Marc E. Curry· hearing

Summary

A 38-year-old married man with two children was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The Statement of Reasons (SOR) detailed three delinquent debts totaling approximately $14,300. These included a $13,941 car loan he cosigned in 2009, a $100 medical bill from a job-related injury, and a $300 early termination fee from a cell phone contract.

The applicant successfully mitigated these financial concerns. He paid the $100 medical bill in November 2016 and settled the cell phone early termination fee for $195. For the remaining $13,941 car loan, he demonstrated good-faith efforts by actively working with an attorney toward its resolution.

Additionally, the applicant received credit counseling and developed a personal budget. The judge concluded that these actions, along with the resolution of two debts and ongoing efforts for the third, indicated that his financial issues were not reflective of poor judgment or reliability. Consequently, the security clearance was granted.

Why the Applicant Prevailed

Applicant paid two of the three debts alleged in the SOR.
He is actively working with an attorney to resolve the remaining debt.
He has received credit counseling and developed a budget.

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)rejectedConditions Largely Beyond the Person's ControlThe delinquency was not caused by circumstances beyond his control.
AG ¶ 20(c)appliedReceived or Receiving Counseling
AG ¶ 20(d)appliedGood-faith Effort to Repay or Resolve Debts

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 issuedNov 13, 2015
Answer filedJan 19, 2016
Hearing heldDec 20, 2016
Decision dateMar 2, 2017

Cite For

Mitigation of Financial Considerations Under Guideline F
Good-faith Efforts to Resolve Debts
Impact of Credit Counseling on Financial Responsibility

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 mitigated the financial concerns under Guideline F by paying two of the three debts and making good-faith efforts to resolve the remaining debt. The applicant's financial situation was deemed stable, and he was granted eligibility for a security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	The most significant delinquency, totaling $13,941, stems from a car loan that Applicant cosigned with his sister in 2009. $13,941	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 Claimed Debt Settlement
1.b	A medical bill, totaling $100, for a job-related injury. The hospital submitted the bill initially to his employer, who did not pay it. Applicant satisfied this bill in November 2016. $100	For Applicant	Medical Debt	Admitted	—	—	Documented Debt Paid in Full
1.c	An early termination fee that Applicant incurred when he switched cell phone providers before the expiration of his contract, totaling $300. Applicant contacted the cell phone company and settled this bill for $195. $300	For Applicant	Unspecified Financial	Admitted	—	—	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. 15-03847 ) Applicant for Security Clearance )

For Government: Candace Garcia, Esq., Department Counsel For Applicant: Pro se

03/02/2017 ______________

STATEMENT OF CASE

______________

CURRY, Marc E., Administrative Judge:

Applicant has paid two of the three debts alleged in the Statement of Reasons (SOR) and is working with an attorney to resolve the one that remains outstanding. I conclude he has mitigated the financial considerations security concern. Clearance is granted.

Statement of the Case

On November 13, 2015, 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 (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. On January 19, 2016, Applicant answered the SOR, admitting the allegations and requesting a hearing before an administrative judge from the Department of Defense Office of Hearings and Appeals (DOHA), and the case was assigned to me on October 19, 2016. DOHA issued a notice of hearing on December 8, 2016, scheduling the hearing for December 20, 2016. The hearing was held as scheduled. At the hearing, I received six Government exhibits (GE 1 - GE 6), and three Applicant exhibits (AE A - AE C). DOHA received the transcript (Tr.) on December 28, 2016.

FINDINGS OF FACT

Applicant is a 38-year-old married man with two children, ages 19 and 11. He has been married for 13 years, but has been separated from his wife since 2006. He was married previously for six months in 2000. Applicant served in the Marine Corps from 1999 to 2006. He was honorably discharged. (Tr. 12) While in the Marines, he served in two combat deployments. (Tr. 12) Recently, Applicant enrolled in college, where he intends to major in mechanical engineering. (Tr. 13) For the past nine years, Applicant has worked for a defense contractor. His duties include aviation maintenance. (Tr. 13-14)

The SOR alleges three delinquent debts totaling approximately $14,300. SOR subparagraph 1.a, the most significant delinquency, totalling $13,941, stems from a car loan that Applicant cosigned with his sister in 2009. (Tr. 20) In 2010, she defaulted on the loan and voluntarily returned the car. In 2011, Applicant contacted the loan company and attempted to settle the loan. His most recent proposal was a $4,000 settlement offer in 2013. (Tr. 21) The loan company repeatedly rejected his offers, insisting on receiving the total balance of the loan. In December 2016, Applicant retained an attorney to help him resolve this delinquent debt. (AE C) He intends to use part of a life insurance benefit, totaling $8,000 that he received from his recently-deceased mother’s life insurance policy to facilitate the settlement of the car loan delinquency. (Tr. 24)

SOR subparagraph 1.bis a medical bill, totaling $100, for a job-related injury. The hospital submitted the bill initially to his employer, who did not pay it. Applicant satisfied this bill in November 2016. (AE A)

SOR subparagraph 1.c, totaling $300, is an early termination fee that Applicant incurred when he switched cell phone providers before the expiration of his contract. In October 2016, Applicant contacted the cell phone company and settled this bill for $195. He paid the settlement, as agreed. (AE B)

Applicant has received credit counseling over the years. (Tr. 28) With the help of one of his credit counselors, he developed a budget. Per his budget, he has between $800 and $1,200 of monthly discretionary income. (Tr. 30) He earns a salary of $75,000 per year. Applicant is current on all of his revolving debts.

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.

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) Applicant’s delinquent debt triggers the application of AG ¶ 19(a), “inability or unwillingness to satisfy debts,” and AG ¶ 19(c), “a history of not meeting financial obligations.”

The following mitigating conditions under AG ¶ 20 are potentially applicable:

(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. Two of Applicant’s three delinquencies, subparagraphs 1.band 1.c, are nominal bills, collectively less than $500. He has paid them, and I resolve them in his favor. He incurred the most significant debt, the car loan delinquency, when his sister, with whom he cosigned the loan, defaulted. Although his delinquency was triggered by his sister’s default, he contractually obligated himself to pay the loan under these circumstances. Consequently, this delinquency was not caused by circumstances beyond his control. AG ¶ 20(b) does not apply.

Nevertheless, Applicant has been making good-faith efforts to resolve this delinquent car note, most recently, retaining an attorney to negotiate a settlement. He has received credit counseling over the years, and organized a budget. He has monthly discretionary income of between $800 and $1,200, and recently received a windfall of $8,000, as the beneficiary of his late mother’s life insurance policy. I conclude that Applicant has been making good-faith efforts to resolve the problem, and that there are clear indications that the problem is under control. AG ¶¶ 20(c) and 20(d) apply.

WHOLE PERSON CONCEPT

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.

Applicant’s financial problems did not stem from greed or irresponsible spending. Instead, they occurred after his sister, for whom he cosigned a loan, defaulted. Although this does not constitute a circumstance beyond his control, it does somewhat lessen the negative security inferences related to the nature and seriousness of the conduct. Applicant has satisfied two of the SOR delinquencies, and has retained an attorney to negotiate a settlement of the remaining delinquency, an automobile loan. Given Applicant’s robust efforts at rehabilitation, and his stable financial situation, I conclude that Applicant has mitigated the security concern.

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

Subparagraph 1.a - 1.c: 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

FOOTNOTES

Applicant waived his right to 15 days notice of hearing.