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ISCR Case 15-06033.h1 — CASE

ISCR Case 15-06033.h1granted

Case Headnote

ISCR Case No. 15-06033.h1

grantedDec 15, 2017· Hon. Gregg A. Cervi· hearing

Summary

This security clearance decision involved a 51-year-old production manager whose application raised concerns under Guideline F (Financial Considerations). Specifically, Disqualifying Conditions F.19(a) and F.19(c) were cited due to 16 delinquent debts totaling approximately $34,000.

However, the applicant demonstrated substantial mitigating efforts. She actively worked to resolve her financial issues, including engaging with a credit counselor, making payments on her obligations, and consolidating debts. The judge applied Mitigating Conditions F.20(a), F.20(b), F.20(c), and F.20(d), noting her significant steps toward resolution and her current financial stability, evidenced by a savings buffer and timely payments on her remaining debts.

Ultimately, the judge determined that the applicant's past financial difficulties no longer cast doubt on her reliability and trustworthiness. Consequently, her security clearance was GRANTED.

Why the Applicant Prevailed

The applicant took significant steps to resolve her delinquent debts, including payments and consolidations.
She demonstrated financial stability with a savings buffer and current payments on debts.
The applicant's past financial issues no longer cast doubt on her reliability and trustworthiness.

Conditions Referenced

Disqualifying

F.19(a)raisedInability to Satisfy Debts
F.19(c)raisedA History of Not Meeting Financial Obligations

Mitigating

F.20(a)appliedBehavior Happened Long Ago or Infrequently
F.20(b)appliedConditions Largely Beyond the Person's Control
F.20(c)appliedReceiving Financial Counseling
F.20(d)appliedGood-faith Effort to Repay Debts

Key Rule Quoted

“An administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision.”

Procedural Posture

SOR issuedApr 9, 2016
Answer filedJun 24, 2016
Hearing heldApr 6, 2017via in-person hearing
Decision dateDec 15, 2017

Cite For

Mitigating Conditions Under Guideline F for Financial Considerations
Demonstrating Financial Stability After Prior Delinquencies
The Whole-person Concept in Security Clearance Determinations

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 resolved most of her financial issues, including paying off several debts and consolidating her student loans. The applicant demonstrated financial stability and responsibility, leading to a decision to grant her security clearance under Guideline F.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a–1.p	16 sub-charges — specific text not stated in this decision (for the applicant).	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. 15-06033 ) Applicant for Security Clearance )

For Government: Ross Hyams, Esq., Department Counsel For Applicant: Pro se

12/15/2017 ______________

STATEMENT OF CASE

______________

CERVI, Gregg A., Administrative Judge

This case involves security concerns raised under Guideline F (Financial Considerations). Eligibility for access to classified information is granted.

Statement of the Case

Applicant completed a Questionnaire for National Security Positions (SF 86)1 on September 24, 2014. On April 9, 2016, 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.2 Applicant responded to the SOR on June 24, 2016, and requested a hearing before an administrative judge. The Defense Office of Hearings and Appeals issued a notice of hearing on March 8, 2017, and the hearing was convened on April 6, 2017. Government Exhibits (GE) 1 through 4, and Applicant’s exhibits (AE) A through N were admitted in evidence without objection. After the hearing, Applicant submitted additional documents, marked as AE O, and admitted into the record without objection. DOHA received the hearing transcript (Tr.) on April 17, 2017.

FINDINGS OF FACT

Applicant is a 51-year-old production manager employed by a defense contractor since 1999. She earned a bachelor’s degree in 2010. She is unmarried and has one child, 15 years old. She currently holds a security clearance, granted in 2005.

The SOR alleges Applicant has 16 delinquent debts, totaling approximately $34,000. Five of the debts are for student loans. In her answer to the SOR, Applicant noted the debts that she resolved through payments, payment plans, and consolidations.

In 2008, Applicant began caring for her aging mother. She incurred unexpected expenses and costs for in-home services, and supplemented her mother’s income by approximately $8,000 per year until her mother passed away in 2015. As a result, Applicant allowed some of her debts to become delinquent and took out a personal loan in 2014 to pay her living expenses.

In 2016, Applicant began working with a credit counselor and debt-consolidation company to resolve her outstanding debts. She paid the $2,200 personal loan, which was not alleged in the SOR. Her student loans were consolidated and rehabilitated, and she is making payments on them through a payment plan. (SOR ¶¶ 1.c, d, i, j, k, l.) Debts noted in SOR ¶¶ 1.a, e, f, h, m, o, and phave been paid-in-full. Applicant is making monthly payments on the debts in SOR ¶¶ 1.band n. She was unable to locate a creditor or collection agent for a small debt alleged in SOR ¶ 1.g.

Applicant’s most recent credit report shows she is largely current on her debts and paying debts as expected, with some minor discrepancies among the various credit reporting agencies. Applicant provided sufficient documentation to demonstrate that she has a handle on her debts and credit status, and is financially stable. She has been working closely with her facility security officer, who provided a letter of support. She also uses a budget, and has a savings and investment buffer of about $10,000.

Law and Policies

The Director of National Intelligence (DNI) issued revised adjudicative guidelines (AG) in a Security Executive Agent Directive, effective on June 8, 2017. These AGs are applicable to this decision. “[N]o one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). As Commander in Chief, the President has the authority to “control access to information bearing on national security and to determine whether an individual is sufficiently trustworthy to have access to such information.” Id. at 527. The President has authorized the Secretary of Defense or his designee to grant applicants eligibility for access to classified information “only upon a finding that it is clearly consistent with the national interest to do so.” Exec. Or. 10865 § 2.

National security eligibility is predicated upon the applicant meeting the criteria contained in the adjudicative guidelines. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, an administrative judge applies these guidelines in conjunction with an evaluation of the whole person. An administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. An administrative judge must consider a person’s stability, trustworthiness, reliability, discretion, character, honesty, and judgment. AG ¶ 1(b).

The Government reposes a high degree of trust and confidence in persons with access to classified information. This relationship transcends normal duty hours and endures throughout off-duty hours. Decisions include, by necessity, consideration of the possible risk that the applicant may deliberately or inadvertently fail to safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation about potential, rather than actual, risk of compromise of classified information.

Clearance decisions must be made “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” Exec. Or. 10865 § 7. Thus, a decision to deny a security clearance is merely an indication the applicant has not met the strict guidelines the President and the Secretary of Defense have established for issuing a clearance.

Initially, the Government must establish, by substantial evidence, conditions in the personal or professional history of the applicant that may disqualify the applicant from being eligible for access to classified information. The Government has the burden of establishing controverted facts alleged in the SOR. See Egan, 484 U.S. at 531. “Substantial evidence” is “more than a scintilla but less than a preponderance.” See v. Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994). The guidelines presume a nexus or rational connection between proven conduct under any of the criteria listed therein and an applicant’s security suitability. See ISCR Case No. 92-1106 at 3, 1993 WL 545051 at *3 (App. Bd. Oct. 7, 1993).

Once the Government establishes a disqualifying condition by substantial evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the facts. Directive ¶ E3.1.15. An applicant has the burden of proving a mitigating condition, and the burden of disproving it never shifts to the Government. See ISCR Case No. 02- 31154 at 5 (App. Bd. Sep. 22, 2005). An applicant “has the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue his security clearance.” ISCR Case No. 01- 20700 at 3 (App. Bd. Dec. 19, 2002). “[S]ecurity clearance determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531; see AG ¶ 1(d).

ANALYSIS

Financial Considerations

The security concern 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.

The guideline notes several conditions that could raise security concerns under AG ¶ 19. The relevant disqualifying conditions include:

(a) inability to satisfy debts; and

Applicant’s admissions and the documentary evidence supporting the SOR allegations are sufficient to establish the disqualifying conditions.

Conditions that could mitigate the financial considerations security concerns are provided under AG ¶ 20. The following mitigating conditions are potentially relevant:

(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 incurred delinquent debts after spending years caring for her mother before her death in 2015. Once she realized her financial situation was impacting her security clearance, she took significant efforts to investigate and negotiate settlements of her debts, consolidate and rehabilitate her student loans, and pay off a significant number of debts. She now has a positive financial status, has a savings buffer, and has retained a steady employment history. She satisfactorily resolved most of the SOR debts, and sufficient time has passed with no new delinquencies to suggest that she has satisfactory control of her finances and that additional delinquencies are unlikely to recur. AG ¶¶ 20(a), (b), (c) and (d) apply.

Applicant’s resolved debts and current financial status leave me without doubts about her overall financial condition and ability to meet her financial responsibilities in the future. Her past financial delinquencies no longer cast doubt on his current reliability, trustworthiness, and good judgment.

WHOLE PERSON CONCEPT

Under AG ¶¶ 2(a), 2(c), and 2(d), the ultimate determination of whether to grant national security eligibility must be an overall commonsense judgment based upon careful consideration of the guidelines and the 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). Although adverse information concerning a single criterion may not be sufficient for an unfavorable eligibility determination, the individual may be found ineligible if available information reflects a recent or recurring pattern of questionable judgment, irresponsibility, or unstable behavior. (AG ¶ 2(e)).

I considered all of the potentially disqualifying and mitigating conditions in light of all the facts and circumstances surrounding this case. I have incorporated my findings of fact and comments under Guideline F in my whole-person analysis. Applicant has taken sufficient action to resolve her debts and is on a solid financial footing. Accordingly, I conclude she has carried her burden of showing that it is clearly consistent with the national security interests of the United States to grant her eligibility for access to classified information.

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.p: For Applicant

CONCLUSION

I conclude that it is clearly consistent with the national security interests of the United States to grant Applicant eligibility for access to classified information. Clearance is granted.

_______________________ Gregg A. Cervi Administrative Judge

FOOTNOTES

1 Also known as a Security Clearance Application (SCA).

2 The action was taken under Executive Order (Exec. Or.) 10865, Safeguarding Classified Information Within Industry (February 20, 1960), as amended; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (Directive) (January 2, 1992), as amended; and the Adjudicative Guidelines for Determining Eligibility for Access to Classified Information (AG), implemented by the DOD on September 1, 2006.