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ISCR Case 15-04221.h1 — CASE

ISCR Case 15-04221.h1granted

Case Headnote

ISCR Case No. 15-04221.h1

grantedFeb 17, 2017· Hon. Marc E. Curry· hearing

Summary

This case concerns a 44-year-old single female accountant whose security clearance was initially challenged under Guideline F (Financial Considerations) due to significant delinquent student loan debt and other financial issues. The Statement of Reasons cited approximately $31,000 in delinquent student loans from Ph.D. studies and about $122,000 in delinquent student loans from graduate education. Additionally, two miscellaneous delinquencies totaling approximately $6,000 were noted.

The applicant's financial difficulties were largely attributed to circumstances beyond her control, specifically a job layoff and a period of homelessness. However, after stabilizing her employment and living situation, she actively addressed her financial obligations.

The judge found that the applicant had mitigated the security concerns by demonstrating significant progress in repaying her debts, including satisfying her daughter's student loans and the two miscellaneous delinquencies. She also received financial counseling and exhibited responsible budgeting and savings behavior. Consequently, the security clearance was GRANTED.

Why the Applicant Prevailed

The applicant's financial problems were largely due to circumstances beyond her control, including a job layoff and homelessness.
She has made significant progress in repaying her debts, including satisfying her daughter's student loans and two miscellaneous delinquencies.
The applicant received financial counseling and demonstrated responsible budgeting and savings behavior.

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(c)appliedReceived Counseling for the Problem And/or Clear Indications That the Problem Is Being Resolved
AG ¶ 20(d)appliedInitiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts

Key Rule Quoted

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

Procedural Posture

SOR issuedDec 8, 2015
Answer filedJan 14, 2016
Hearing heldOct 26, 2016
Decision dateFeb 17, 2017

Cite For

Mitigating Conditions Under Guideline F Due to Circumstances Beyond Control
Evidence of Financial Counseling and Responsible Debt Management
Whole-person Concept Applied in Financial Considerations Cases

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's financial issues stemmed from a job layoff and a period of homelessness, which were largely beyond her control. Since stabilizing her employment, the applicant has made significant progress in addressing her debts, leading to a decision to grant her security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant has approximately $31,000 in delinquent student loans that she incurred to help pay for her Ph.D studies. $31,000	For Applicant	Student Loan Debt	Admitted	(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	Documented Financial Counseling Documented Debt Paid in Full
1.b	Applicant has approximately $122,000 in delinquent student loans that she incurred to help pay for her graduate education. $122,000	For Applicant	Student Loan Debt	Admitted	(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	Documented Financial Counseling Documented Debt Paid in Full
1.cc	Applicant has satisfied two miscellaneous delinquencies totaling approximately $6,000. $6,000	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. 15-04221 ) Applicant for Security Clearance )

For Government: Tovah Minster, Esq., Department Counsel For Applicant: Pro se

02/17/2017 ______________

STATEMENT OF CASE

______________

CURRY, Marc E., Administrative Judge:

Applicant’s financial problems were caused by a job layoff and a corresponding period of homelessness several years ago. Since her employment and living situation have stabilized, she has gradually been satisfying her delinquent debts. Applicant has mitigated the security concern. Clearance is granted.

Statement of the Case

On December 8, 2015, the Department of Defense Consolidated Adjudications Facility (DOD CAF) issued a Statement of Reasons (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 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 14, 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 August 11, 2016. DOHA issued a notice of hearing on September 14, 2016, scheduling the hearing for October 26, 2016. The hearing was held as scheduled. At the hearing, I received four Government exhibits (GE 1 - GE 4), and nine Applicant exhibits (AE A - AE I). Also, I considered the testimony of Applicant and three character witnesses. At the close of the hearing, I held the record open at Applicant’s request, without objection, to allow her to submit additional exhibits. Within the time allotted, she submitted seven additional exhibits that I incorporated into the record as AE J through AE P. DOHA received the transcript (Tr.) on November 2, 2016.

FINDINGS OF FACT

Applicant is a 44-year-old single woman with an adult child. A marriage, lasting from 1992 to 1998, ended in divorce. In 1990, Applicant declined an admission to an Ivy League school, choosing instead, to enlist in the U.S. Marine Corps. (AE C) She served in the Marines through 1998 when she was honorably discharged. After leaving the Marines, she pursued a higher education, earning an undergraduate degree in 2003, a master’s of business administration in 2006, and working towards a Ph.D between 2006 and 2008. (GE 1 at 11; Tr. 26)

Applicant is an accountant. Since December 2009, she has been working for a defense contractor on its audit readiness team.(GE 1 at 12) She has held a security clearance during her entire stint with this employer. (GE 1 at 40) Applicant worked for her previous employer between October 2007 and August 2008. (GE 1 at 14) She was laid off after testifying against her supervisor in an embezzlement case. (GE 1 at 14; Tr. 32) For the next 16 months, Applicant was either underemployed or unemployed.

A single mother who was raising her then teenage daughter, Applicant struggled to make ends meet. Applicant spent much of this employment hiatus either homeless or in transition, moving from one friend’s residence to another. Correspondingly, Applicant struggled to pay her bills.

By 2013, Applicant had incurred approximately $160,000 of delinquent debt, as alleged in the SOR. Nearly all of the debts constitute delinquent student loans that she incurred to help pay for her Ph.D studies (subparagraphs 1.a - 1.g), totalling $31,000 as of the date of the SOR, or to pay for Applicant’s graduate education (subparagraphs 1.h - 1.aa), totalling $122,000, as of the SOR date.

Applicant’s student loans were deferred while she was unemployed. (Answer at 1) After Applicant gained full-time employment in 2009, she successfully applied for a temporary hardship forbearance for the loans alleged in subparagraphs 1.hthrough 1.aa. This enabled her to focus on her unsettled housing situation. By February 2011, Applicant had secured a stable residence, and began focusing on her debt repayment. Applicant “hit a roadblock” when the student loans for her daughter became due in 2013. (Answer at 1; AE 4 at 4) They are not alleged in the SOR and total approximately $16,600. (Tr. 25) Applicant satisfied them in May 2015. (Tr. 25; AE G at 2)

In 2013, Applicant completed a comprehensive financial counseling course through her church. The course met two hours each week for 13 weeks. (AE A) Per the counselor, Applicant eagerly participated, coming to each session with her budget, adhering to her plan, and making steady progress. (AE A) She was equally committed to generating extra income, as she obtained a part-time job as a Zumba instructor, and she organized a rummage sale for her and her classmates. Using the proceeds from the sale, Applicant and her classmates collectively reduced their debts.

By September 2016, Applicant had satisfied the two miscellaneous delinquencies alleged in the SOR (subparagraphs 1.bb and 1.cc), totaling approximately $6,000, in their entirety. (AEs E - F, M) As for the consolidated student loans set forth in subparagraphs 1.a through 1.g, Applicant paid them approximately $680 per month through a wage garnishment from August 2013 to October 2016. (AE L at 5-6 ) As of October 2016, Applicant was in the process of removing the wage garnishment so that she “can make payments on her own.” (Tr. 29) Using the federal loan rehabilitation program, Applicant’s payments will be reduced to $11 monthly from November 2016 to July 2017. (AE I at 7) Once she completes these payments, a new lender will purchase the loan and establish a new payment based on the remaining balance. (AE I at 1) Since the SOR date, Applicant has reduced the balance from approximately $31,000 to $25,000. (AE I at 1)

Applicant’s delinquent student loans alleged in subparagraphs 1.hthrough 1.gg remain in forbearance. (Tr. 27) Payments were scheduled to have resumed in January 2017. (AE G)

Applicant earns $78,500 per year. (Tr. 17) Recently, she began saving approximately $600 per month of discretionary income. (Tr. 32) She has accrued $1,000 in savings. (Tr. 32)

According to a co-worker who has become a friend of Applicant over the years, she is a hard worker who at times works “countless overtime hours,” and has “take[n] on multiple jobs as a means to helping her get caught up on payments due,” in the past.

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.

Applicant’s financial problems were not the result of foolish or irresponsible overspending. Instead, they occurred after a layoff and a lengthy period of unemployment and underemployment. Applicant’s financial distress was severe, as she was homeless for much of the time that she was unemployed. Since gaining full-time work in 2009, her living situation has stabilized, and with the help of a counselor, she has been addressing her debts. Currently, she has satisfied her daughter’s student loans, unalleged in the SOR, totaling $16,600, together with subparagraphs 1.cc and 1.dd, totalling approximately $6,000. The remaining SOR debts are student loans. Applicant has been steadily making payments for the student loans alleged in subparagraph 1.a through1.g, and the debts alleged in subparagraphs 1.hthrough 1.aa are in forbearance. Applicant maintains a budget, and judging by the amount that she is depositing into a savings account each month, appears to be managing her money responsibly. All of the mitigating conditions, as referenced earlier in the decision, 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.

Considering the circumstances surrounding Applicant’s financial problems, and the significant presence of rehabilitation, I conclude she has mitigated the security concerns. In reaching this conclusion, I was particularly impressed with the reference from Applicant’s financial counselor.

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.cc: 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’s employment downturn also corresponded with the period that she stopped pursuing her Ph.D. (GE 1 at 11)