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ISCR Case 15-04138.h1 — CASE

ISCR Case 15-04138.h1granted

Case Headnote

ISCR Case No. 15-04138.h1

grantedSep 21, 2016· Hon. Richard A. Cefola· hearing

Summary

A 48-year-old retired Navy E-6 and current federal contractor was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The applicant's financial difficulties stemmed primarily from a prolonged divorce.

The Statement of Reasons detailed several debts, including approximately $10,777 to Creditor A after surrendering a vehicle, about $1,629 to Creditor B, and roughly $614 to Creditor C. Additionally, a small electric bill of about $79 to Creditor D was acknowledged and confirmed as paid. Two larger debts, approximately $10,629 to Creditor E and $11,139 to Creditor F, were settled through a debt management corporation (DMC) for about $4,913 and $5,458, respectively, with ongoing monthly payments. The applicant was also making good-faith efforts through his DMC to address past-due debts of about $173 to Creditor G and about $315 to Creditor H.

The clearance was granted because the applicant admitted to the debts, provided credible explanations, and demonstrated a good-faith effort to resolve them. His enrollment in a debt management program significantly reduced his past-due obligations, and the financial issues were largely attributed to circumstances beyond his control, specifically his divorce.

Why the Applicant Prevailed

The applicant admitted to his financial difficulties but provided credible explanations and evidence of efforts to resolve them.
He enrolled in a debt management program, significantly reducing his past-due debts.
The financial issues were largely attributed to circumstances beyond his control, specifically a divorce.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability or Unwillingness to Satisfy Debts
AG ¶ 19(c)raisedHistory of Not Meeting Financial Obligations

Mitigating

AG ¶ 20(b)appliedConditions Largely Beyond the Person's ControlThe applicant's financial problems were largely due to a divorce, and he acted responsibly to address them.

Key Rule Quoted

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

Procedural Posture

SOR issuedDec 16, 2015
Answer filedFeb 10, 2016
Hearing heldMay 24, 2016
Decision dateSep 21, 2016

Cite For

Mitigating Conditions Under Guideline F Due to Financial Difficulties Stemming From Divorce
Good-faith Efforts to Resolve Financial Issues Through a Debt Management Program
Whole-person Concept Applied in Evaluating Security Clearance Eligibility

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 several financial debts but made a good-faith effort to address them through a debt management corporation. All debts were either settled or in the process of being resolved, leading to a decision in favor of the applicant under Guideline F.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant admits that he is indebted to Creditor A in the amount of about $10,777. He was unable to make car payments; and as a result, he “surrendered” his vehicle back to Creditor A. $10,777	For Applicant	Auto Loan Debt	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly	Claimed Debt Paid in Full
1.b	Applicant admits that he is indebted to Creditor B in the amount of about $1,629. $1,629	For Applicant	Unspecified Financial	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly	Claimed Debt Paid in Full
1.c	Applicant admits that he is indebted to Creditor C in the amount of about $614. $614	For Applicant	Unspecified Financial	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly	Claimed Debt Paid in Full
1.d	Applicant admits that he was indebted to Creditor D in the amount of about $79. He avers, credibly, that this very-small electric bill has been paid, an averment accepted by Department Counsel. $79	For Applicant	Utility or Phone Debt	Admitted	—	—	Documented Debt Paid in Full
1.e	These admitted debts are one and the same debt to Creditor E in the amount of about $10,629. Through his DMC, Applicant has settled this debt for $4,913, and is making monthly payments towards this settlement, as evidenced by documentation from his DMC. $10,629	For Applicant	Unspecified Financial	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly	Claimed Debt Paid in Full
1.f	These admitted debts are one and the same debt to Creditor F in the amount of about $11,139. Through his DMC, Applicant has settled this debt for $5,458, and is making monthly payments towards this settlement, as evidenced by documentation from his DMC. $11,139	For Applicant	Unspecified Financial	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly	Claimed Debt Paid in Full
1.g	Applicant admits that he was indebted to Creditor G in the amount of about $173. Through his DMC, he is making a good-faith effort to address this past-due debt. $173	For Applicant	Unspecified Financial	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly	Claimed Debt Paid in Full
1.h	Applicant admits that he is indebted to Creditor H in the amount of about $315. Through his DMC, he is making a good-faith effort to address this past-due debt, as evidenced by documentation from his DMC. $315	For Applicant	Unspecified Financial	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly	Claimed Debt Paid in Full
1.i–1.j	2 sub-charges — specific text not stated in this decision (for the applicant). (low confidence)	For Applicant			—	—	—

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. 15-04138 ) ) Applicant for Security Clearance )

For Government: Andrew Henderson, Esquire, Department Counsel For Applicant: Arran S. Treadway, Esquire

September 21, 2016

______________

STATEMENT OF CASE

______________

CEFOLA, Richard A., Administrative Judge:

Applicant submitted his Electronic Questionnaires for Investigations Processing (e-QIP) on July 15, 2014. On December 16, 2015, the Department of Defense (DOD) issued a Statement of Reasons (SOR) detailing the security concerns under Guideline F for Applicant. 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), effective within the Department of Defense after September 1, 2006.

Applicant acknowledged receipt of the SOR on December 29, 2015. He answered the SOR in writing on February 10, 2016, and requested a hearing before an Administrative Judge (AJ). The Defense Office of Hearings and Appeals (DOHA) received the request soon thereafter, and it was assigned to another AJ on April 19, 2016. DOHA issued a notice of hearing on May 3, 2016. I received the case assignment on May 24, 2016, and I convened the hearing that same day. The Government offered Exhibits (GXs) 1 through 5, which were received without objection. Applicant testified on his own behalf, as did two Navy lieutenants and his Facility Security Officer (FSO). He submitted Exhibits (AppXs) A through C, which were received without objection. DOHA received the transcript of the hearing (TR) on June 2, 2016. I granted Applicant’s request to keep the record open until June 24, 2016, to submit additional matters. On June 9, 2016, he submitted Exhibits D and E, which were received without objection. The record closed on June 24, 2016. Based upon a review of the pleadings, exhibits, and testimony, eligibility for access to classified information is granted.

FINDINGS OF FACT

In his Answer to the SOR, Applicant admitted the factual allegations in all the Subparagraphs of the SOR, with explanations. He also provided additional information to support his request for eligibility for a security clearance.

Guideline F - Financial Considerations

Applicant is a 48-year-old retired Navy “E-6 Aviation Electronics Mate,” (TR at page 51 lines 1–5, and GX 1 at page 5.) He is a “Federal Contractor,” employed as a “Technical Systems Representative.” (GX 1 at page 12.) He attributes his current financial difficulties to a long, drawn-out divorce. (TR at page 22 line 14 to page 29 line 22.) In October of 2015, prior to the issuance of the SOR, Applicant hired a debt management corporation (DMC) to address his past-due indebtedness. (TR at page 43 line 24 to page 50 line 11, and AppX B.) Since his enrollment with the DMC, he has greatly reduced his past-due indebtedness, and it is anticipated the “remaining balances will be settled in full [in] the next 24-30 months,” as of May 12, 2016. (AppX B.)

1.a. Applicant admits that he is indebted to Creditor A in the amount of about $10,777. He was unable to make car payments; and as a result, he “surrendered” his vehicle back to Creditor A. (TR at page 21 line 15 to page 22 line 13.) Through his DMC, he is making a good-faith effort to address this past-due debt, as evidenced by documentation from his DMC. (AppXs A and B.)

1.b. Applicant admits that he is indebted to Creditor B in the amount of about $1,629. (TR at page 29 line 23 to page 30 line 15, and at page 37 lines 5–14.) Through his DMC, he is making a good-faith effort to address this past-due debt, as evidenced by documentation from his DMC. (AppXs A and B.)

1.c. Applicant admits that he is indebted to Creditor C in the amount of about $614. (TR at page 30 line 20 to page 32 line 2.) Through his DMC, he is making a good-faith effort to address this past-due cell phone debt, as evidenced by documentation from his DMC. (AppXs A and B.)

1.d. Applicant admits that he was indebted to Creditor D in the amount of about $79. He avers, credibly, that this very-small electric bill has been paid, an averment accepted by Department Counsel. (TR at page 32 lines 3–16, and to page 59 lines 4–13.)

1.e. and 1.i. These admitted debts are one and the same debt to Creditor E in the amount of about $10,629. (TR at page 32 line 17 to page 43 line 13, and at page 42 lines 7–24.) Through his DMC, Applicant has settled this debt for $4,913, and is making monthly payments towards this settlement, as evidenced by documentation from his DMC. (AppXs A and B.) I find that Applicant is making a good-faith effort to address this debt.

1.f. and 1.j. These admitted debts are one and the same debt to Creditor F in the amount of about $11,139. (TR at page 32 line 17 to page 43 line 13, and at page 42 lines 7–24.) Through his DMC, Applicant has settled this debt for $5,458, and is making monthly payments towards this settlement, as evidenced by documentation from his DMC. (AppXs A and B.) I find that Applicant is making a good-faith effort to address this debt.

1.g. Applicant admits that he was indebted to Creditor G in the amount of about $173. Through his DMC, he is making a good-faith effort to address this past-due debt. (TR at page 38 line17 to page 39 line 14, and at page 60 line 14 to page 61 line 7.)

1.h. Applicant admits that he is indebted to Creditor H in the amount of about $315. (TR at page 39 line 15 to page 40 line 16.) Through his DMC, he is making a good-faith effort to address this past-due debt, as evidenced by documentation from his DMC. (AppXs A and B.)

1.i. and 1.j. These allegations have already been discussed, above.

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 useful 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, these guidelines are applied in conjunction with the factors listed in the adjudicative process. The administrative judge’s over-arching adjudicative goal is a fair, impartial and commonsense decision. According to AG Paragraph 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. Paragraph 2(b) requires that “[a]ny doubt concerning personnel being considered for access to classified information 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. Likewise, I have avoided drawing inferences grounded on mere speculation or conjecture.

Under Directive Paragraph E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive Paragraph 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 as to obtaining 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 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 10865 provides that 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 Paragraph 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 conditions that could raise security concerns. Under Subparagraphs 19(a) and 19(c) an “inability or unwillingness to satisfy debts” and “a history of not meeting financial obligations” may raise security concerns. Applicant has had substantial past-due indebtedness. However, I find a countervailing Mitigating Condition that is applicable here. Under Subparagraph 20(b), it may be mitigating where “the conditions that resulted in the financial problem were largely beyond the person’s control (e.g., . . . divorce or separation), and the individual acted responsibly under the circumstances.” Applicant’s alleged past-due indebtedness can be attributed to his drawn-out divorce. Through his DMC, except for a $79 debt he has paid, Applicant has now addressed all of the alleged past-due debts. Financial Considerations is found for Applicant.

Under the whole-person concept, the administrative judge must evaluate an applicant’s eligibility for a security clearance by considering the totality of Applicant’s conduct and all the circumstances. Under Paragraph 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.

The administrative judge should also consider the nine adjudicative process factors listed at AG Paragraph 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.

I considered all of the evidence, including the potentially disqualifying and mitigating conditions surrounding this case. Applicant is highly respected in the work place. (TR at page 63 line 12 to page 75 line 14.) The record evidence leaves me without questions or doubts as to Applicant’s eligibility and suitability for a security clearance. For this reason, I conclude Applicant has mitigated the security concerns arising from his Financial Considerations, under the whole-person concept.

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. For Applicant

Subparagraph 1.b. For Applicant Subparagraph 1.c. For Applicant

Subparagraph 1.d. For Applicant

Subparagraph 1.e. For Applicant

Subparagraph 1.f. For Applicant

Subparagraph 1.g. For Applicant

Subparagraph 1.h. For Applicant

Subparagraph 1.i. For Applicant

Subparagraph 1.j. 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