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ISCR Case 15-05437.h1 — CASE

ISCR Case 15-05437.h1granted

Case Headnote

ISCR Case No. 15-05437.h1

grantedJun 6, 2017· Hon. Juan J. Rivera· hearing

Summary

A 34-year-old sheet metal worker’s security clearance was initially questioned under Guideline E (Personal Conduct) and Guideline F (Financial Considerations) due to a history of delinquent debts and an alleged omission of this information from his 2015 security clearance application. The Statement of Reasons detailed eleven specific delinquent accounts, including debts to banks, retailers, a credit card company, and for rent and medical services. These debts ranged from $110 to $7,304.

The applicant addressed these concerns by establishing payment plans and making payments on several of his outstanding debts. He demonstrated an understanding of the importance of financial responsibility for security clearance eligibility.

Ultimately, the judge determined that the applicant had not deliberately falsified his application and had taken sufficient steps to mitigate the financial concerns. Based on his record of debt payments and commitment to financial responsibility, the applicant was granted his security clearance.

Why the Applicant Prevailed

The applicant established a sufficient record of debt payments to mitigate financial concerns.
He demonstrated an understanding of the need to maintain financial responsibility for clearance eligibility.
The judge found no deliberate falsification of the security clearance application.

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(a)appliedBehavior Happened so Long Ago, Was Infrequent, or Unlikely to Recur
AG ¶ 20(b)appliedConditions That Resulted in Financial Problems Were Largely Beyond the Person's Control
AG ¶ 20(d)appliedIndividual Initiated a Good-faith Effort to Repay Overdue Creditors

Key Rule Quoted

“Eligibility for access to classified information may be granted only upon a finding that it is clearly consistent with the national interest to do so.”
— Exec. Or. 10865, Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960), as amended.

Procedural Posture

SOR issuedMar 12, 2016
Answer filedJun 22, 2016Requested decision based on written record.
Hearing held—
Decision dateJun 6, 2017

Cite For

Mitigation of Financial Considerations Under Guideline F
Non-deliberate Omissions in Security Clearance Applications Under Guideline E
Good-faith Efforts to Resolve 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 E (Personal Conduct) · descriptive summary of a decided case

Posture: Decision on RecordDecided: granted

The judge found that the applicant did not deliberately falsify his security clearance application and that the personal conduct concerns were mitigated. The applicant's omissions regarding financial problems were not made with the intent to mislead the government, leading to a favorable outcome for the applicant.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
2.a	Applicant omitted relevant and material information from his 2015 SCA when he failed to disclose that he had financial problems that included numerous delinquent accounts.	For Applicant	Omission or Failure to DiscloseNOT DELIBERATE	Financial	Admitted	—	(a) prompt, good-faith correction before being confronted (b) omission/refusal followed advice of counsel; later cooperated fully (c) offense is minor, long ago, infrequent, or unique circumstances (d) acknowledged the behavior; counseling/positive steps taken	—

Descriptive standardized rendering of a decided public case (Guideline E). The verbatim source decision is shown in full below.

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 a history of financial problems but established a sufficient record of debt payments to mitigate the financial concerns. The applicant admitted to most debts and demonstrated efforts to resolve them, leading to a decision in favor of granting the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	$3,140 delinquent debt to a bank $3,140	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.b	$1,065 delinquent debt to a bank in collection $1,065	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Claimed Payment Plan with Creditor
1.c	$1,868 delinquent rent account in collection $1,868	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.d	$464 delinquent debt to a bank $464	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.e	$7,304 delinquent debt to a retailer $7,304	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Claimed Payment Plan with Creditor
1.f	$464 delinquent debt to a bank (same as 1.d) $464	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.g	$315 delinquent debt to a retailer $315	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.h	$110 delinquent medical account $110	For Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i	$395 delinquent account owing to a retailer $395	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor
1.j	$473 delinquent debt to a credit card company $473	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.k	$7,304 delinquent debt to a retailer (same as 1.e) $7,304	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Claimed Payment Plan with Creditor

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. 15-05437 ) ) Applicant for Security Clearance

For Government: Robert J. Kilmartin, Esq., Department Counsel For Applicant: Pro se

06/06/2017 ___________

STATEMENT OF CASE

___________

RIVERA, Juan J., Administrative Judge:

After he was made aware of the security concerns raised by his financial problems, Applicant established a sufficient record of debt payments to mitigate the financial considerations concerns. He understands that he has to maintain his financial responsibility to be eligible for a clearance. He did not deliberately falsify his 2014 security clearance application (SCA). The financial considerations and personal conduct security concerns are mitigated. Eligibility for access to classified information is granted.

Statement of the Case

Applicant submitted an SCA on December 5, 2014. After reviewing it and the information gathered during a background investigation, the Department of Defense (DOD) on March 12, 2016, issued Applicant a Statement of Reasons (SOR) detailing security concerns under Guideline F (financial considerations) and Guideline E (personal conduct).1 Applicant answered the SOR on June 22, 2016, and requested a decision based on the written record. A copy of the Government’s file of relevant material (FORM), submitting the evidence prompting the security concerns, was provided to Applicant by transmittal letter dated August 17, 2016. Applicant received the FORM on August 31, 2016. He was allowed 30 days to submit any objections to the FORM and to provide material to refute, extenuate, and mitigate the concerns. Applicant timely responded to the FORM and submitted nine pages (marked and admitted as Applicant Exhibit (AE) 1) addressing some of the accounts alleged in the SOR. The case was assigned to me on May 23, 2017.

Procedural Issue

In the FORM, Department Counsel advised Applicant that the FORM included his unauthenticated summary of interview with a government background investigator from March 30, 2015. Applicant was informed he could object to the summary of his interview and it would not be admitted, or that he could make corrections, additions, deletions, and update the document to make it accurate. Applicant was informed that his failure to respond to the FORM or to raise any objections could be construed as a waiver, and the evidence would be considered by me. Applicant responded to the FORM by submitting documents showing contact with creditors and payments made. He raised no objections. I admitted the FORM and Applicant’s evidence, and considered them.

FINDINGS OF FACT

In Applicant’s response, he admitted all of the SOR allegations, except for SOR ¶ 1.h, which he denied. He also submitted comments in explanation and mitigation. He stated that he was making monthly payments on the accounts alleged in SOR ¶¶ 1.a, 1.e (same as 1.k), and 1.i. That he would call the creditor of the account alleged in SOR ¶ 1.bto set up a payment plan, and that he was currently saving money to settle the account alleged in SOR ¶ 1.c. He averred he paid the accounts alleged in SOR ¶¶ 1.d (same as 1.f), 1.g, and 1.j. Applicant admitted he did not list his delinquent accounts on his 2014 SCA (SOR ¶ 2.a), but then stated that “at the time of hire, knowledge of my debt situation was zero.” I considered his response a denial to deliberately falsifying his 2014 SCA.

Applicant’s SOR admissions are incorporated into my findings of fact. After a thorough review of the record evidence, I make the following additional findings of fact:

Applicant is a 33-year-old sheet metal worker employed with a federal contractor. He completed high school in 2000, and attended community college for some time, but did not earn a degree. He attended a technical school and earned a training certificate in 2003. He married his first wife in April 2006, and they have two children, ages 10 and 9.

Applicant’s employment history shows that he was employed between January 2004 and November 2009. He was unemployed between December 2009 and January 2010; employed between February 2010 and March 2011; and unemployed between April 2011 and July 2011. He started working for federal contractors in August 2011. He has worked for his current employer and security sponsor since September 2014. Applicant submitted his SCA in December 2014. In response to Section 26 (Financial Record) of the SCA, Applicant disclosed no delinquent accounts.

A government background investigator interviewed Applicant in March 2015. During the interview, Applicant volunteered that he had financial problems that included a number of delinquent debts. He explained that he was his family’s main source of income, but his wife was in charge of managing the household finances. He stated that when he was younger he misused his credit because he did not have the knowledge to handle his finances. When the accounts became delinquent, he did not have the financial resources to pay them. Applicant also struggled to pay the family’s living expenses and their debts because of his periods of unemployment.

As of his March 2015 interview, Applicant had not participated in financial counseling. He claimed he was living within his financial means, and believed he was capable of meeting his financial obligations. Applicant promised the investigator to contact his creditors and start making payment arrangements to resolve his delinquent debts. He claimed that he had learned his lesson and had no intentions on repeating his financial mistakes.

In his response to the FORM, Applicant submitted documentary evidence showing payments made and ongoing payment arrangements with a number of the creditors alleged in the SOR. The status of his SOR debts is as follows:

SOR ¶ 1.a alleged a $3,140 delinquent debt to a bank. Applicant claimed he was making $25 a month payments, but failed to present any documentary evidence to corroborate his claim.

SOR ¶ 1.balleged a $1,065 delinquent debt to a bank in collection. Applicant averred he would call the bank and set up a payment plan. He failed to present any documentary evidence to corroborate he set up a payment plan.

SOR ¶ 1.calleged a $1,868 delinquent rent account in collection. In his SOR answer, Applicant claimed he was saving money to settle the account. In his response to the FORM, he submitted documentary evidence showing he paid the debt in July 2016.

SOR ¶¶ 1.dand 1.falleged the same account, owing $464 to a bank. Applicant’s documentary evidence shows he paid the account in February 2015.

SOR ¶¶ 1.e and 1.kalleged the same account, owing $7,304 to a retailer. Applicant’s documentary evidence shows he entered into a payment agreement and made the first $270 payment in April 2015. He presented no evidence of additional payments since then.

SOR ¶ 1.galleged s $315 delinquent debt to a retailer. Applicant’s documentary evidence shows he paid the debt in March 2015. SOR ¶ 1.halleged a $110 delinquent medical account. Applicant disputed the debt and claimed he did not know anything about it.

SOR ¶ 1.i alleged a delinquent account, owing $395 to a retailer. Applicant’s documentary evidence shows he entered into a payment agreement and made four $71 payments, starting in April 2016. The last documented payment was made in August 2016.

SOR ¶ 1.jalleged a $473 delinquent debt to a credit card company. Applicant’s documentary evidence shows he paid the debt in March 2015.

The record evidence documents Applicant’s history of delinquent debt. However, Applicant presented documentary evidence to show that he has been in contact with his creditors, and that he resolved 8 of his 11 delinquent debts.

POLICIES

Eligibility for access to classified information may be granted “only upon a finding that it is clearly consistent with the national interest to do so.” Exec. Or. 10865, Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960), as amended. The U.S. Supreme Court has recognized the substantial discretion of the Executive Branch in regulating access to information pertaining to national security, emphasizing that “no one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988).

The AG list disqualifying and mitigating conditions for evaluating a person’s suitability for access to classified information. Any one disqualifying or mitigating condition is not, by itself, conclusive. However, the AG should be followed where a case can be measured against them, as they represent policy guidance governing access to classified information. Each decision must reflect a fair, impartial, and commonsense consideration of the whole person and the factors listed in AG ¶ 2(a). All available, reliable information about the person, past and present, favorable and unfavorable, must be considered.

Security clearance decisions resolve whether it is clearly consistent with the national interest to grant or continue an applicant’s security clearance. The Government must prove, by substantial evidence, controverted facts alleged in the SOR. If it does, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the facts. The applicant bears the heavy burden of demonstrating that it is clearly consistent with the national interest to grant or continue his or her security clearance.

Persons with access to classified information enter into a fiduciary relationship with the Government based on trust and confidence. Thus, the Government has a compelling interest in ensuring each applicant possesses the requisite judgment, reliability, and trustworthiness of those who must protect national interest as their own. The “clearly consistent with the national interest” standard compels resolution of any reasonable doubt about an applicant’s suitability for access in favor of the Government. “[S]ecurity clearance determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531; AG ¶ 2(b). Clearance decisions are not a determination of the loyalty of the applicant concerned. They are merely an indication that the applicant has or has not met the strict guidelines the Government has established for issuing a clearance.

ANALYSIS

Financial Considerations

AG ¶ 18 articulates the security concern relating to financial problems:

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.

Applicant’s history of financial problems is documented in the file record. AG ¶ 19 provides two disqualifying conditions that could raise a security concern and may be disqualifying in this case: “(a) inability or unwillingness to satisfy debts” and “(c) a history of not meeting financial obligations.” The record established the disqualifying conditions in AG ¶¶ 19(a) and 19(c), requiring additional inquiry about the possible applicability of mitigating conditions.

Five mitigating conditions under AG ¶ 20 are potentially applicable:

(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, 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;

(d) the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts;2 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.

The Appeal Board concisely explained Applicant’s responsibility for proving the applicability of mitigating conditions as follows:

Once a concern arises regarding an Applicant’s security clearance eligibility, there is a strong presumption against the grant or maintenance of a security clearance. See Dorfmont v. Brown, 913 F. 2d 1399, 1401 (9th Cir. 1990), cert. denied, 499 U.S. 905 (1991). After the Government presents evidence raising security concerns, the burden shifts to the applicant to rebut or mitigate those concerns. See Directive ¶ E3.1.15. The standard applicable in security clearance decisions is that articulated in Egan, supra. “Any doubt concerning personnel being considered for access to classified information will be resolved in favor of the national security.” Directive, Enclosure 2 ¶ 2(b).

ISCR Case No. 10-04641 at 4 (App. Bd. Sept. 24, 2013).

The financial considerations mitigating conditions in AG ¶¶ 20(a) through 20(d) apply and mitigate the security concerns. Applicant’s documentary evidence shows that he contacted his creditors, established payment plans, and resolved 6 of the 11 debts alleged in the SOR before the SOR was issued. He subsequently resolved two additional debts. I find that his financial problems are under control.

Applicant’s periods of unemployment likely contributed to or aggravated his financial situation. However, he candidly admitted he was negligent managing his finances because he was young and immature. After realizing the security concerns raised by his financial problems, Applicant initiated good-faith efforts to resolve them. He has established a track record of debt payments and promised to continue resolving his remaining delinquent accounts. On balance, Applicant presented sufficient information to establish that he has learned his lesson and has responsibly addressed his financial situation. He understands that he has to maintain his financial responsibility to be eligible for a security clearance. The financial considerations security concerns are mitigated. Guideline E, Personal Conduct

AG ¶ 15 articulates the security concern for personal conduct:

Conduct involving questionable judgment, lack of candor, dishonesty, or unwillingness to comply with rules and regulations can raise questions about an individual’s reliability, trustworthiness and ability to protect classified information. Of special interest is any failure to provide truthful and candid answers during the security clearance process or any other failure to cooperate with the security clearance process.

Applicant omitted relevant and material information from his 2015 SCA when he failed to disclose that he had financial problems that included numerous delinquent accounts.

Applicant’s omissions, if deliberate, would trigger the applicability the following disqualifying condition under AG ¶ 16:

(a) deliberate omission, concealment, or falsification of relevant facts from any personnel security questionnaire, personal history statement, or similar form used to conduct investigations, determine employment qualifications, award benefits or status, determine security clearance eligibility or trustworthiness, or award fiduciary responsibilities.

Proof of an omission, standing alone, does not establish or prove an applicant’s intent or state of mind when the omission occurred. (ISCR Case No. 03-10380 at 5 (App. Bd. Jan. 6, 2006)). Considering the evidence as a whole, including Applicant’s age, education, experience working for government contractors, his 2015 statement to a government investigator, and his positive behavior after the background interview, I find that Applicant’s omissions were not deliberate or made with the intent to mislead the Government. AG ¶ 16(a) is not applicable.

WHOLE PERSON CONCEPT

I considered the potentially disqualifying and mitigating conditions in light of all the facts and circumstances surrounding this case, and under the whole-person concept. AG ¶ 2(c). I have incorporated my comments under Guidelines F and E in my whole-person analysis, but some warrant additional comment.

Applicant is a 34-year-old sheet metal worker employed with a federal contractor since September 2014. He presented some evidence of circumstances beyond his control that contributed to, or aggravated his financial situation (periods of unemployment); however, he also admitted to his own financial irresponsibility due to his age and immaturity.

After he was made aware of the security concerns raised by his financial problems, Applicant established a sufficient record of debt payments to mitigate the security concerns. He also promised to resolved his remaining delinquent accounts. On balance, Applicant presented sufficient information to establish that he has learned his lesson and responsibly addressed his financial situation. He understands that he has to maintain his financial responsibility to be eligible for a security clearance. Financial considerations and personal conduct security concerns are mitigated.

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.k: For Applicant

Paragraph 2, Guideline E: FOR APPLICANT

Subparagraph 2.a: 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 or continue Applicant’s eligibility for a security clearance. Eligibility for access to classified information is granted.

_________________________ JUAN J. RIVERA Administrative Judge

FOOTNOTES

1 The DOD acted under Executive Order (EO) 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. 2 The Appeal Board has previously explained what constitutes a “good faith” effort to repay overdue creditors or otherwise resolve debts:

In order to qualify for application of [the “good faith” mitigating condition], an applicant must present evidence showing either a good-faith effort to repay overdue creditors or some other good-faith action aimed at resolving the applicant’s debts. The Directive does not define the term “good-faith.” However, the Board has indicated that the concept of good- faith “requires a showing that a person acts in a way that shows reasonableness, prudence, honesty, and adherence to duty or obligation.” Accordingly, an applicant must do more than merely show that he or she relied on a legally available option (such as bankruptcy) in order to claim the benefit of [the “good faith” mitigating condition].

(internal citation and footnote omitted) ISCR Case No. 02-30304 at 3 (App. Bd. Apr. 20, 2004) (quoting ISCR Case No. 99-9020 at 5-6 (App. Bd. June 4, 2001)).