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ISCR Case 15-08887.h1 — CASE

ISCR Case 15-08887.h1granted

Case Headnote

ISCR Case No. 15-08887.h1

grantedMay 31, 2017· Hon. Eric H. Borgstrom· hearing

Summary

This case involved a 29-year-old applicant, employed by a DOD contractor, whose security clearance was initially questioned under Guideline F (Financial Considerations). The Statement of Reasons cited ten delinquent debts, totaling approximately $18,342, which included multiple student loan accounts, medical accounts, and other collection accounts. These issues raised concerns under Disqualifying Conditions AG ¶ 19(a) and AG ¶ 19(c).

However, the applicant demonstrated substantial mitigating efforts. He entered into payment arrangements for his delinquent debts and maintained current payments on all obligations for over 12 months. The applicant also sought and received financial counseling.

The judge determined that the applicant's financial issues were largely due to circumstances beyond his control and that he had taken responsible and consistent actions to address them. Applying Mitigating Conditions AG ¶ 20(a), AG ¶ 20(b), AG ¶ 20(c), and AG ¶ 20(d), the judge concluded that the applicant's improved financial situation and proactive measures warranted granting the security clearance.

Why the Applicant Prevailed

The applicant initiated a payment arrangement for delinquent debts and made consistent payments.
He has been current on all monthly obligations for over 12 months.
The applicant's financial issues were largely due to circumstances beyond his control, and he has taken responsible actions to address them.

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)appliedThe Behavior Happened so Long Ago, Was so Infrequent, or Occurred Under Such Circumstances That It Is Unlikely to Recur
AG ¶ 20(b)appliedThe Conditions That Resulted in the Financial Problem Were Largely Beyond the Person’s Control
AG ¶ 20(c)appliedThe Person Has Received or Is Receiving Counseling for the Problem
AG ¶ 20(d)appliedThe Individual Initiated 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 issuedJun 10, 2016
Answer filedAug 29, 2016
Hearing heldMar 9, 2017
Decision dateMay 31, 2017

Cite For

Mitigation of Financial Issues Under Guideline F
Good-faith Efforts to Resolve Debts
Consideration of Circumstances Beyond the Applicant's Control in Financial Matters

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 the financial concerns stemming from ten delinquent debts totaling approximately $18,342. The applicant demonstrated responsible actions to address these debts, including entering payment arrangements and maintaining current payments on monthly obligations, leading to a favorable decision for security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	three delinquent student-loan accounts	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	Claimed Debt Paid in Full Documented Payment Plan with Creditor Documented Financial Counseling
1.b	three delinquent student-loan accounts	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	Claimed Debt Paid in Full Documented Payment Plan with Creditor Documented Financial Counseling
1.c	three delinquent student-loan accounts	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	Claimed Debt Paid in Full Documented Payment Plan with Creditor Documented Financial Counseling
1.d	four medical accounts	For Applicant	Medical 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 Payment Plan with Creditor Documented Financial Counseling
1.e	four medical accounts	For Applicant	Medical 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 Payment Plan with Creditor Documented Financial Counseling
1.f	three other collection accounts	For Applicant	Unspecified Financial	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	Claimed Debt Paid in Full Documented Payment Plan with Creditor
1.g	three other collection accounts	For Applicant	Unspecified Financial	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 Payment Plan with Creditor
1.h	four medical accounts	For Applicant	Medical 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 Payment Plan with Creditor Documented Financial Counseling
1.i	four medical accounts	For Applicant	Medical 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 Payment Plan with Creditor Documented Financial Counseling
1.j	three other collection accounts	For Applicant	Unspecified Financial	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	Claimed Debt Paid in Full Documented 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: ) ) [NAME REDACTED] ) ISCR Case No. 15-08887 ) ) Applicant for Security Clearance

For Government: Carroll Connelley, Esq., Department Counsel For Applicant: Pro se

05/31/2017 ______________

STATEMENT OF CASE

______________

BORGSTROM, Eric H., Administrative Judge:

Applicant mitigated the security concerns stemming from his financial problems. Eligibility for access to classified information is granted.

Statement of the Case

On June 10, 2016, the Department of Defense (DOD) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline F (financial considerations). The action was taken 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 (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG) implemented by the DOD on September 1, 2006.

Applicant responded to the SOR on August 29, 2016, and he requested a hearing before an administrative judge. The case was assigned to me on January 25, 2017. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing, scheduling the hearing for March 9, 2017. I convened the hearing as scheduled. Government Exhibits (GE) 1-4 were admitted without objection. Applicant testified and presented documents, and the record remained open until April 10, 2017. Applicant submitted 15 documents, which were admitted into evidence as Applicant’s Exhibits (AE) A-O, without objection. I received the hearing transcript (Tr.) on March 27, 2017.

FINDINGS OF FACT

The SOR alleges three delinquent student-loan accounts (SOR ¶¶ 1.a.-1.c.), four medical accounts (SOR ¶¶ 1.d., 1.e., 1.h, and 1.i.), and three other collection accounts (SOR ¶¶ 1.f., 1.g., and 1.j.). Applicant admitted all 10 alleged debts. After a thorough and careful review of the pleadings and exhibits, I make the following findings of fact:

Applicant is 29 years old. He graduated from high school in June 2006 and attended college from 2006 to 2009. Since March 2007, he has had full-time employment with several different employers without any periods of unemployment. He has been employed by a DOD contractor since September 2014. He also currently supplements his income with part-time employment.1

Applicant’s admissions and his February 2015 and May 2016 credit reports establish the 10 alleged debts. His three student-loan accounts (SOR ¶¶ 1.a.-1.c.) were incurred while in college. He made one or two payments on his school loans in about 2012. In February 2017, he initiated a payment arrangement for the debts in SOR ¶¶ 1.a. and 1.c. As to the student loan in SOR ¶ 1.b., he entered into a Department of Education loan-rehabilitation program. His recent federal tax refund ($526) was applied to his delinquent student loan, he entered into a payment agreement, and he made two payments in accordance with that nine-month rehabilitation plan.2

Applicant’s four medical debts (SOR ¶¶ 1.d., 1.e., 1.h., and 1.i.) are copay amounts for medical expenses incurred from emergency-room visits between April 2010 and January 2015. His minimal health insurance coverage and low-paying jobs contributed to these debts becoming delinquent. With his current employment, he has much better health insurance, and he has automatic payments set up for any medical expenses not covered by insurance. He has also established weekly payments to the collection agency which holds these four delinquent accounts. He has made payments totaling $333 on his medical collection accounts, and he has scheduled payments going forward.3

As to Applicant’s three consumer debts (SOR ¶¶ 1.f., 1.g., and 1.j.), he has fully paid the debts in SOR ¶¶ 1.f. and 1.j. He has made a partial payment on SOR ¶ 1.g., and he has a monthly payment arrangement with the creditor to resolve the remaining balance. 4 Applicant attributed his financial problems to low-paying jobs and inadequate health insurance. More recently, he had a failed personal relationship that required him to find a new residence, and he had to purchase a new vehicle when his previous vehicle broke down. His current pay rate is nearly double his pay rate with previous employers. He has been current on his car payments, rent, and utility payments for at least the past 12 months, and he has attended some financial counseling.5

From 2006 to 2016, Applicant served with his community’s fire department. Between 2011 and 2016, he volunteered approximately 40 hours per week as a deputy fire chief. His fiancée testified as to steps taken by Applicant to be more financially responsible and more proactive with his health care. She further testified that he had financially supported her during 2016 while she finished school. 6

POLICIES

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines. In addition to brief introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which are to be used in evaluating an applicant’s eligibility for access to classified information.

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. 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 the applicant or proven by Department Counsel.” The applicant has the ultimate burden of persuasion to obtain a favorable security decision.

A person who seeks access to classified information enters into a fiduciary relationship with the Government predicated upon trust and confidence. This relationship transcends normal duty hours and endures throughout off-duty hours. The Government reposes a high degree of trust and confidence in individuals to whom it grants access to classified information. Decisions include, by necessity, consideration of the possible risk the applicant may deliberately or inadvertently fail to safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation of potential, rather than actual, risk of compromise of classified information.

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

Guideline F, Financial Considerations

The security concern for financial considerations is set out in AG ¶ 18:

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.

The guideline notes several conditions that could raise security concerns under AG ¶ 19. The following are potentially applicable in this case:

(a) inability or unwillingness to satisfy debts; and

Applicant’s 10 delinquent debts total approximately $18,342. These debts became delinquent between 2010 and 2014. The Government produced substantial evidence to raise the disqualifying conditions in AG ¶¶ 19(a) and 19(c), thereby shifting the burden to Applicant to produce evidence to rebut, explain, extenuate, or mitigate the facts.7 Conditions that could mitigate the financial considerations security concerns are provided under AG ¶ 20. The following 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; and

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

Applicant’s delinquent debts were incurred between 2010 and 2014, while he was employed with low-paying jobs and had inadequate health insurance coverage. He has since found employment at nearly double his previous pay rate, taken steps to be proactive with his health care, and has acquired part-time employment to supplement his income. These positive changes in circumstances and Applicant’s actions to address his delinquent debts remove doubts as to his current reliability, trustworthiness, and judgment. AG ¶ 20(a) applies.

The application of AG ¶ 20(b) requires both that (1) Applicant’s financial indebtedness resulted from circumstances beyond his control, and (2) Applicant acted responsibly under the circumstances. Applicant’s medical issues, inadequate health insurance, and low-paying jobs contributed to his financial problems. These events may constitute circumstances beyond his control in the context of AG ¶ 20(b).

AG ¶ 20(b) also requires that an applicant act responsibly under the circumstances. Applicant paid two of the alleged debts (SOR ¶¶ 1.f. and 1.j.). He developed a reasonable debt-resolution plan addressing all of the alleged debts, entered into several payment agreements, and made payments in accordance with each of these agreements.8 AG ¶ 20(b) applies.

Applicant has received some financial counseling. He credibly testified that he has remained current on his monthly expenses for over 12 months. AG ¶ 20(c) applies.

The concept of good faith Arequires a showing that a person acts in a way that shows reasonableness, prudence, honesty, and adherence to duty or obligation.”9 Applicant paid two debts (SOR ¶¶ 1.f. and 1.j.) and made payment arrangements and payments on all of the alleged delinquent debts. AG ¶ 20(d) applies. Applicant’s low-paying employment hindered his ability to address and resolve his delinquent debts. Within the last year, he has found additional income through supplemental employment and taken significant steps towards resolving his delinquent debts. I find that Applicant mitigated the financial considerations security concerns.

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(a):

(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.

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. I considered the potentially disqualifying and mitigating conditions in light of all the facts and circumstances surrounding this case. I have incorporated my comments under Guideline F and the factors in AG ¶ 2(c) in this whole-person analysis.

Applicant generously volunteered his time on his community’s fire department for several years. He has developed and implemented a debt-resolution plan and is responsibly handling his current monthly obligations. The totality of the record evidence leaves me with no doubts as to his financial responsibility and suitability for a security clearance. I conclude Applicant mitigated the financial considerations security concerns.

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.j.: 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.

________________________ Eric H. Borgstrom Administrative Judge

FOOTNOTES

1 GE 1; Tr. 26, 43. 2 AE C; AE D; AE F, AE N; Tr. 43, 46-48. 3 AE A; AE B; AE O; Tr. 31-32. 4 AE E; AE H; AE I; Tr. 39-42, 53. 5 Tr. 37-38, 54-55, 57, 65. 6 Tr. 27, 61, 69-70. 7 Directive ¶ E3.1.15. See ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 2005) (An applicant has the burden of proving a mitigating condition, and the burden of disproving it never shifts to the Government.). 8 See ISCR Case No. 08-06567 at 3 (App. Bd. Oct. 29, 2009) (“All that is required is that an applicant act responsibly given his circumstances and develop a reasonable plan for repayment, accompanied by ‘concomitant conduct,’ that is, actions which evidence a serious intent to effectuate the plan.”). 9 See ISCR Case No. 08-12184 at 10 (App. Bd. Jan. 7, 2010) (Good-faith effort to resolve debts must be evidenced by a meaningful track record of repayment).