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ISCR Case 15-03551.h1 — CASE

ISCR Case 15-03551.h1granted

Case Headnote

ISCR Case No. 15-03551.h1

grantedNov 7, 2017· Hon. Nichole L. Noel· hearing

Summary

A pipe fitter employed by a federal contractor was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The Statement of Reasons (SOR) alleged the applicant defaulted on a mortgage loan in 2013 and owed $32,500 to two creditors for delinquent accounts related to a voluntary trailer home repossession. These issues raised disqualifying conditions under AG ¶ 19(b).

However, the applicant successfully mitigated these concerns. He settled the deficiency balance of his mortgage loan, which the creditor accepted as full satisfaction of the debt. The administrative judge found that the financial issues were an isolated incident, not indicative of poor judgment or reliability.

The applicant demonstrated no history of financial problems beyond those detailed in the SOR, satisfying mitigating conditions under AG ¶ 20(a) and AG ¶ 20(c). Consequently, the security clearance was granted, consistent with national interest.

Why the Applicant Prevailed

Applicant settled the deficiency balance of his mortgage loan, which was accepted by the creditor as satisfaction of the debt.
The financial issues were determined to be an isolated incident and not indicative of poor judgment or reliability.
Applicant does not have a history of financial problems aside from the matters addressed in the SOR.

Conditions Referenced

Disqualifying

AG ¶ 19(b)raisedInability to Satisfy DebtsApplicant demonstrated an unwillingness to pay his creditors, regardless of his ability to do so.

Mitigating

AG ¶ 20(a)appliedBehavior Unlikely to RecurThe behavior happened so long ago, was infrequent, and occurred under circumstances unlikely to recur.
AG ¶ 20(c)appliedDebt ResolvedApplicant resolved the larger of the two debts alleged in the SOR.

Key Rule Quoted

“Any doubt concerning personnel being considered for national security eligibility will be resolved in favor of the national security.”
— AG ¶ 2(b)

Procedural Posture

SOR issuedDec 13, 2015
Answer filed—Applicant requested a decision without a hearing.
Hearing held—Decision made without a hearing.
Decision dateNov 7, 2017

Cite For

Mitigation of Financial Issues Under Guideline F
Isolated Financial Incidents Not Indicative of Current Reliability
Settlement of Debts as a Mitigating Factor

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 financial concerns related to a mortgage default and a judgment for lot rent. The applicant settled the deficiency balance of the mortgage, and the remaining debt was deemed unlikely to pose a security risk, leading to a favorable decision for the applicant.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant defaulted on his mortgage loan in 2013. $13,500	For Applicant	Mortgage or Home Loan Debt	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly	Documented Debt Paid in Full
1.b	Applicant is indebted to two creditors for $32,500 in delinquent accounts related to the voluntary repossession of a trailer home. $747	For Applicant	Unspecified Financial	Admitted	—	—	Claimed Other

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. 15-03551 ) Applicant for Security Clearance )

For Government: Alison O’Connell, Esq., Department Counsel For Applicant: Pro se 11/07/2017 ______________

STATEMENT OF CASE

______________

NOEL, Nichole L., Administrative Judge:

Applicant contests the Department of Defense’s (DOD) intent to deny his eligibility for a security clearance. Applicant mitigated concerns raised by his decision to default on his mortgage loan in 2013. He has since settled the deficiency balance, which the creditor accepted as satisfaction of the debt. Clearance is granted.

Statement of the Case

On December 13, 2015, the DOD issued a Statement of Reasons (SOR) detailing security concerns under the financial considerations guideline.1 DOD adjudicators were unable to find that it is clearly consistent with the national interest to grant Applicant’s security clearance and recommended his case be submitted to an administrative judge for consideration. Applicant answered the SOR and requested a decision without a hearing.2 The Government submitted its written case on February 26, 2016. A complete copy of the file of relevant material (FORM) and the Directive were provided to Applicant. He received the FORM on March 18, 2016, and provided a response. The documents appended to the FORM are admitted as Government’s Exhibits (GE) 1 through 8. The document provided by Applicant is admitted as Applicant’s Exhibit (AE) A. On October 25, 2017, I opened the record to allow the parties to submit additional information. Applicant’s submission is admitted as AE B. All documents are admitted without objection.

PROCEDURAL MATTERS

While the case was pending decision, the Director of National Intelligence (DNI) issued Security Executive Agent Directive 4, establishing the National Security Adjudicative Guidelines (AG) applicable to all covered individuals who require initial or continued eligibility for access to classified information or eligibility to hold a sensitive position. The 2017 AG superseded the AG implemented in September 2006, and they are effective for any adjudication made on or after June 8, 2017. Accordingly, I have applied them in this case.

FINDINGS OF FACT

Applicant, a pipe fitter, has worked for a federal contractor since December 2003. He completed a security clearance application in July 2014. The ensuing investigation revealed that Applicant is indebted to two creditors for $32,500 in delinquent accounts. Both accounts are related to the voluntary repossession of a trailer home.

Applicant purchased the trailer home in 1998 for $40,000. In 2013, Applicant decided he wanted to purchase another home. When he tried to sell the trailer home, Applicant claims that he learned that the property was secured by an interest-only loan. After 13 years of payments, he still owed the full principal balance on the loan. He also discovered that the trailer was worth less than he owed. When Applicant purchased his current home in November 2013, he stopped paying the mortgage loan and lot rent and voluntarily surrendered the trailer to the lender. Before surrendering the property, Applicant made sure the lot rent was current. He believed the bank would be responsible for any future rent. Applicant believes the bank sold the trailer in April 2014. He did not learn of the $747 judgment for the lot rent until after he completed the security clearance application.

In April 2016, Applicant received a settlement offer for the deficiency balance on the loan. He accepted the offer, settling the debt for $13,500 the same month. The creditor considers the account paid in full. Aside from the accounts alleged in the SOR, Applicant does not have a history of financial problems.

POLICIES

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines. 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. 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 the national security.” In reaching this decision, I have drawn only those conclusions that are reasonable, logical, and based on the evidence.

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.

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

Failure to live within one’s means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgement, or willingness 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.3

In deciding to default on his mortgage loan and lot rent, Applicant demonstrated an “unwillingness to pay his creditors, regardless of his ability to do so.”4 He has since resolved the deficiency balance on the mortgage by accepting a settlement offer made by the creditor. Applicant does not have a history of financial problems. The circumstances that led to Applicant’s default were not borne of financial difficulty, but confusion as he sought to sell one home and purchase another. Applicant’s decision was an isolated financial incident that happened almost four years ago. His actions do not cast doubt on his current reliability, trustworthiness, and good judgment.5

After reviewing the record, I find that Applicant is a suitable candidate for access to classified information. In reaching this conclusion, I have also considered the whole- person factors at AG ¶ 2(d). Applicant has resolved the larger of the two SOR debts. Although the second debt remains unresolved, it is unlikely that such a small account, $747, can be used as a source of vulnerability or exploitation.

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, Financial Considerations: FOR APPLICANT

Subparagraphs 1.a – 1.b: For Applicant

CONCLUSION

Based on the record, it is clearly consistent with the national interest to grant Applicant eligibility for a security clearance. Eligibility for access to classified information is granted.

________________________ Nichole L. Noel Administrative Judge

FOOTNOTES

1 The DOD CAF acted under Executive Order (EO) 10865, Safeguarding Classified Information within Industry, signed by President Eisenhower on February 20, 1960, as amended; as well as DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program, dated January 2, 1992, as amended (Directive), and the Adjudicative Guidelines for Determining Eligibility for Access to Classified Information, implemented on September 1, 2006. 2 GE 1. 3 AG ¶ 18.

4 AG ¶ 19(b). 5 AG ¶ 20(a) the behavior happened so long ago, was so infrequent, or occurred under such circumstances that is unlikely to recur and does not cast doubt on the individual’s current reliability, trustworthiness, or good judgment.