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ISCR Case 15-08424.h1 — CASE

ISCR Case 15-08424.h1granted

Case Headnote

ISCR Case No. 15-08424.h1

grantedSep 27, 2017· Hon. LeRoy F. Foreman· hearing

Summary

This case concerns a 50-year-old defense contractor and former U.S. Navy service member whose security clearance was initially questioned under Guideline F, Financial Considerations. The Statement of Reasons (SOR) alleged a single charged-off debt of $21,249, raising a disqualifying condition under Adjudicative Guideline (AG) ¶ 19(b).

However, the applicant successfully demonstrated that the debt was disputed and subsequently resolved in his favor. Evidence provided confirmed the debt's deletion from his credit report, indicating a complete resolution of the financial issue.

Applying mitigating conditions under AG ¶ 20(e), the Adjudicator also considered the applicant's long history of honorable service and employment within the defense sector as part of a favorable whole-person assessment. Based on these factors, the security clearance was GRANTED.

Why the Applicant Prevailed

The applicant provided evidence that the disputed debt was resolved in his favor.
The debt was deleted from his credit report, indicating successful resolution of the issue.
The applicant's long history of honorable service and employment in the defense sector contributed to a favorable whole-person assessment.

Conditions Referenced

Disqualifying

AG ¶ 19(b)raisedUnwillingness to Satisfy Debts Regardless of the Ability to Do So

Mitigating

AG ¶ 20(e)appliedThe Individual Has a Reasonable Basis to Dispute the Legitimacy of the Past-due DebtThe applicant provided documented proof that the debt was disputed and resolved.

Key Rule Quoted

“Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the adjudicative guidelines.”
— Exec. Or. 10865 § 2.

Procedural Posture

SOR issuedJun 8, 2016
Answer filedJun 27, 2016
Hearing held—Decision made on written record without a hearing.
Decision dateSep 27, 2017

Cite For

Resolution of Disputed Debts Under Guideline F
Whole-person Assessment in Security Clearance Decisions
Criteria for Mitigating Financial Considerations in Security Clearance 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 had a financial concern due to a charged-off debt of $21,249, which was disputed and ultimately resolved in the applicant's favor. The judge ruled for the applicant, concluding that the financial issues were mitigated by the applicant's actions to dispute the debt and the absence of any further negative reporting.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	The SOR alleges one debt for $21,249 that has been charged off. $21,249	For Applicant	Unspecified Financial	Admitted	(b) unwillingness to satisfy debts regardless of ability	(e) reasonable, documented basis to dispute the debt	Documented Debt Disputed 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: ) ) [Redacted] ) ISCR Case No. 15-08424 ) Applicant for Security Clearance )

For Government: Candace L. Garcia, Esq., Department Counsel For Applicant: Pro se

09/27/2017 ______________

STATEMENT OF CASE

______________

FOREMAN, LeRoy F., 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 submitted a security clearance application on November 13, 2014. On June 8, 2016, the Department of Defense (DOD) sent him a Statement of Reasons (SOR) alleging security concerns under Guideline F. The DOD acted under Executive Order (Exec. Or.) 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 DOD on September 1, 2006.1 Applicant answered the SOR on June 27, 2016, and requested a decision on the written record without a hearing. Department Counsel submitted the Government’s written case on October 19, 2016. On October 20, 2016, a complete copy of the file of relevant material (FORM) was sent to Applicant, who was given an opportunity to file objections and submit material to refute, extenuate, or mitigate the Government’s evidence. He received the FORM on October 26, 2016, and he responded by asserting that the debt alleged in the SOR was resolved. The case was assigned to me on September 7, 2017.

The FORM included Item 4, a summary of a personal subject interview (PSI) conducted on June 9, 2015. The PSI was not authenticated as required by Directive ¶ E3.1.20. Department Counsel informed Applicant that he was entitled to comment on the accuracy of the PSI summary; make any corrections, additions, deletions or updates; or object to consideration of the PSI on the ground that it was not authenticated. Applicant submitted a response to the FORM, but he did not comment on the accuracy or completeness of the PSI summary, nor did he object to it. I conclude that he waived any objections to the PSI summary. Although pro se applicants are not expected to act like lawyers, they are expected to take timely and reasonable steps to protect their rights under the Directive. ISCR Case No. 12-10810 at 2 (App. Bd. Jul. 12, 2016).

Findings of Fact2

The SOR alleges one debt for $21,249 that has been charged off. In Applicant’s answer to the SOR, he admitted that his “name has been associated with this account,” and he offered an explanation of his involvement. His admissions and explanation are incorporated in my findings of fact.

Applicant is a 50-year-old “floater,” employed by a defense contractor since October 1998. He served on active duty in the U.S. Navy from July 1986 to August 1996 and received an honorable discharge. He married in January 1987 and divorced in November 1989. He has no children. He received a security clearance while on active duty and retained it as an employee of a defense contractor.

The debt alleged in the SOR is reflected as a joint debt in a credit report from November 2014. It was opened in March 2008 and charged off in May 2010. (Item 5 at 12.) Applicant was questioned about the debt in the June 2015 PSI, and he told the investigator he knew nothing about it, that it was not his debt, and that he intended to dispute it. (Item 4 at 6.) In his answer to the SOR, he stated that the debt was incurred when he cosigned a loan application for a friend while he was on active duty, but that he was unaware that the loan was delinquent until he was confronted with the credit report during the PSI. He has never been contacted by the creditor or any collection agency about the debt. He contacted his friend for whom he cosigned, who informed him that he had traded the vehicle for another, and the dealer had paid off the loan. In Applicant’s response to the FORM, he stated that he paid $2,000 to a consumer credit counseling agency in November 2015, and that a representative of the agency contacted the creditor to correct the reporting error. The debt is not reflected in a credit report from April 2016. (FORM Item 6.) Deletion of the debt from Applicant’s credit record was not required by the Fair Credit Reporting Act, because the debt was charged off less than seven years before the date of the credit report.3 Its deletion indicates that the dispute was resolved in Applicant’s favor.

POLICIES

“[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.

Eligibility for a security clearance 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 all available and reliable information about the person, past and present, favorable and unfavorable.

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.

ANALYSIS

Guideline F, Financial Considerations

The security concern under this guideline 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. . . .

This concern is broader than the possibility that a person might knowingly compromise classified information to raise money. It encompasses concerns about a person’s self-control, judgment, and other qualities essential to protecting classified information. A person who is financially irresponsible may also be irresponsible, unconcerned, or negligent in handling and safeguarding classified information. See ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012). Applicant’s admissions in his answer to the SOR and the November 2014 credit report are sufficient to raise the disqualifying condition in AG ¶ 19(b) (“unwillingness to satisfy debts regardless of the ability to do so”). The relevant mitigating condition is AG 20(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’s response to the FORM and the April 2016 credit report establish that the debt was disputed and the dispute was resolved in his favor.

WHOLE PERSON CONCEPT

Under AG ¶ 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. In applying the whole- person concept, an 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 and applying the adjudicative factors in AG ¶ 2(d).4

I have incorporated my comments under Guideline F in my whole-person analysis and applied the adjudicative factors in AG ¶ 2(d). I have considered that Applicant served honorably for ten years in the U.S. Navy, worked for a defense contractor for almost 19 years, and has held a security clearance since he enlisted in the Navy. After weighing the disqualifying and mitigating conditions under Guideline F, and evaluating all the evidence in the context of the whole person, I conclude Applicant has mitigated the security concerns raised by the delinquent debt alleged in the SOR.

FORMAL FINDINGS

I make the following formal findings on the allegations in the SOR:

Paragraph 1, Guideline F (Financial Considerations): FOR APPLICANT

Subparagraph 1.a: For Applicant

CONCLUSION

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

LeRoy F. Foreman Administrative Judge

FOOTNOTES

1 Security Executive Agent Directive 4 (SEAD 4) was issued on December 10, 2016, revising the 2006 adjudicative guidelines. The SEAD 4 guidelines apply to all adjudicative decisions issued on or after June 8, 2017. My decision is based on the guidelines in SEAD 4, referred to in this decision as “AG.” The changes resulting from issuance of SEAD 4 did not affect my decision in this case. 2 Applicant’s personal information is extracted from his security clearance application (GX 1) unless otherwise indicated by a parenthetical citation to the record. 3 Under the Fair Credit Reporting Act, a credit report may not list accounts placed for collection, charged off debts, or civil judgments that antedate the credit report by more than seven years, or until the statute of limitations has run, whichever is longer. The exceptions to this prohibition do not apply to this debt. 10 U.S.C. § 1681c. 4 The factors are: (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.