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ISCR Case 16-00395.h1 — CASE

ISCR Case 16-00395.h1granted

Case Headnote

ISCR Case No. 16-00395.h1

grantedAug 21, 2017· Hon. Carol G. Ricciardello· hearing

Summary

A 53-year-old federal contractor was granted a security clearance despite concerns under Guideline F (Financial Considerations). The Statement of Reasons cited a past-due mortgage debt of $73,926, which the applicant attributed to a period of unemployment. This raised a disqualifying condition under F.1.a.

However, the judge applied several mitigating conditions. The applicant actively engaged with her mortgage lender to resolve the debt and participated in financial counseling, establishing a budget. It was determined that her financial difficulties were largely beyond her control due to unemployment.

Ultimately, the judge found that the applicant demonstrated responsible behavior in addressing her financial obligations, leading to the decision to grant her security clearance.

Why the Applicant Prevailed

The applicant actively engaged with her mortgage lender to resolve her debt.
She participated in financial counseling and established a budget.
The financial difficulties were largely beyond her control due to unemployment.

Conditions Referenced

Disqualifying

F.1.araisedInability to Satisfy Debts

Mitigating

F.2.bappliedConditions That Resulted in the Financial Problem Were Largely Beyond the Person's Control
F.2.cappliedThe Individual Has Received or Is Receiving Financial Counseling
F.2.dappliedThe Individual Initiated and Is Adhering to a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts

Key Rule Quoted

“A security clearance adjudication is not a debt collection procedure. It is a procedure designed to evaluate an applicant’s judgment, reliability, and trustworthiness.”

Procedural Posture

SOR issuedMay 20, 2016
Answer filedJun 7, 2016
Hearing held—Decided on the written record.
Decision dateAug 21, 2017

Cite For

Mitigation of Financial Issues Under Guideline F
Consideration of Circumstances Beyond the Applicant's Control
Evaluation of Financial Responsibility and Engagement with Creditors

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 under Guideline F, primarily related to a mortgage debt of $73,926 attributed to a period of unemployment. The applicant demonstrated responsible behavior by actively engaging with the lender to modify the loan and resolve the arrearages, leading to a decision granting eligibility for a security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant attributed the debt in SOR ¶ 1.a ($73,926) to a period of unemployment. $73,926	For Applicant	Mortgage or Home Loan Debt	Denied	(a) inability to satisfy debts	(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 Debt Settlement Documented Financial Counseling 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: ) ) ) ISCR Case No. 16-00395 ) ) Applicant for Security Clearance

For Government: Pamela C. Benson, Esq., Department Counsel For Applicant: Pro se

08/21/2017 ______________

STATEMENT OF CASE

______________

RICCIARDELLO, Carol G., Administrative Judge:

Applicant mitigated the security concerns under Guideline F, financial considerations. Eligibility for access to classified information is granted.

Statement of the Case

On May 20, 2016, the Department of Defense Consolidated Adjudications Facility (DOD CAF) issued to Applicant a Statement of Reasons (SOR) 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) effective within the DOD on September 1, 2006. On June 8, 2017, new AG were implemented and are effective for decisions issued after that date.1 Applicant answered the SOR on June 7, 2016, and elected to have her case decided on the written record in lieu of a hearing. Department Counsel submitted the Government’s file of relevant material (FORM). Applicant received it on October 6, 2016. The Government’s evidence is identified as Items 1 through 5. She was afforded an opportunity to file objections and submit material in refutation, extenuation, or mitigation within 30 days of receipt of the FORM. Applicant did not object to the Government’s Items and provided documents marked as Applicant Exhibits (AE) A though D. There were no objections and the evidence for both parties was admitted. The case was assigned to me on July 21, 2017.

FINDINGS OF FACT

Applicant did not admit or deny the sole allegation in the SOR. It will be considered a denial. After a thorough and careful review of the pleadings and exhibits submitted, I make the following findings of fact.

Applicant is 53 years old. She continues to attend college, but has not earned a degree. She has two adult children. She was married from 1994 to 1999. She has held different levels of security clearances since approximately 1990. Applicant has worked for federal contractors for many years throughout her career. She has worked for her current employer, a federal contractor, since February 2013.2

Applicant attributed the debt in SOR ¶ 1.a ($73,926) to a period of unemployment. In December 2012, Applicant lost her job. She contacted her mortgage lender immediately because she was unable to make the payments, and was given a three-month forbearance. She resumed working in February 2013 and applied for a loan modification. The completion of the loan modification has been repeatedly delayed for a variety of reasons, including multiple loan officers being assigned to her case; claims of incomplete paperwork; and changes to the terms of the modification by the lender that were unacceptable to Applicant. Documents provided by Applicant show that she has been actively engaged with the mortgage lender to resolve her mortgage debt. She was finally approved in April 2016 to enter a trial period plan under a modification program, which she accepted. At the time Applicant completed her answer to the SOR, she had not yet completed the trial period under the plan. Credit reports from November 2014 and May 2016, reflect the mortgage debt.3

In Applicant’s response to the FORM, she stated that she had successfully completed the trial period under the plan, but then was told by the mortgage lender that she did not qualify for a final modification because it had not received her documents within the required timeframe. She disputed this and provided copies of fax sheets presumably showing that the documents were timely submitted. Applicant provided a document that shows the issue was to be resolved through mediation at a hearing scheduled in December 2016.4

Applicant stated that she has been financially responsible by continuing to work with her mortgage lender, while pursuing a resolution that would not jeopardize her financial future. Although the process has been lengthy and time-consuming, she is attempting to hold the mortgage lender accountable to complete the modification process in accordance with the rules.5

Applicant provided a document to show she sought financial counseling in June 2014, and established a budget. She stated that she has never lived beyond her means. She is not an excessive spender and plans for purchases. She has no car payments and that she has always responsibly managed her finances and debts.6

POLICIES

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the AG. In addition to brief introductory explanations for each guideline, the AG list potentially disqualifying conditions and mitigating conditions, which are 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, these guidelines are applied 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 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 contained in the record. Likewise, I have avoided drawing inferences grounded on mere speculation or conjecture.

Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Directive ¶ E3.1.15 states that an “applicant is responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by applicant or proven by Department Counsel, and has the ultimate burden of persuasion as to obtaining 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 that an applicant may deliberately or inadvertently fail to safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation as to potential, rather than actual, risk of compromise of classified information.

Section 7 of EO 10865 provides that 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 relating to the guideline 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. Affluence that cannot be explained by known sources of income is also a security concern insofar as it may result from criminal activity, including espionage.

AG ¶ 19 provides conditions that could raise security concerns. The following is potentially applicable:

(a) inability to satisfy debts.

Applicant has a past-due mortgage debt that is unresolved. There is sufficient evidence to support the application of the above disqualifying condition. The guideline also includes conditions that could mitigate security concerns arising from financial difficulties. The following 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, 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 experienced financial difficulty when she was unemployed from December 2012 to February 2013. She took immediate action and contacted her mortgage lender and was granted a forbearance on her loan. She has been actively engaged with the lender to modify the loan and resolve the arrearages, but it has been repeatedly delayed for a variety of reasons. Applicant actions show that she has not ignored her financial responsibility. This issue is ongoing so AG ¶ 20(a) does not apply. Applicant’s unemployment and lack of money at the time caused her mortgage to become past-due. This was beyond her control. There is some evidence that the lender made it difficult for her to modify the loan because it repeatedly changed the terms of the modification, changed loan officers, and claimed it had not received documents timely, when it had. Although the debt is not yet resolved, Applicant has acted responsibly in addressing it. AG ¶ 20(b) applies.

Applicant participated in financial counseling and had a mediation hearing scheduled in December 2016 to resolve the past-due mortgage. She has been actively engaged with the mortgage lender to resolve the debt and has adhered to its numerous requirements. This is not a case of her ignoring her financial responsibility, but rather she has legitimate concerns that she be granted the proper modification to which she believes she is legally entitled. AG ¶¶ 20(c) and 20(d) apply. Applicant does not dispute owing the debt and is engaged with the mortgage lender to resolve it. AG¶ 20(e) does not apply.

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 the circumstances. The administrative judge should consider the nine adjudicative process factors listed at AG ¶ 2(d):

(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 in my whole-person analysis. Some of the factors in AG ¶ 2(d) were addressed under that guideline, but some warrant additional comment.

Applicant is 53 years old and has been steadily employed by federal contractors for most of her career, except for a short period of unemployment. During that time, she was unable to pay her mortgage. She has been actively engaged with the lender to modify her mortgage. She stated she has met the qualifications and has never ignored her financial responsibility to the lender. The debt was being resolved through mediation.

A security clearance adjudication is not a debt collection procedure. It is a procedure designed to evaluate an applicant’s judgment, reliability, and trustworthiness. See ISCR Case No. 09-02160 (App. Bd. Jun. 21, 2010). An applicant is not required, as a matter of law, to establish resolution of every debt alleged in the SOR. An applicant need only establish a plan to resolve the financial problems and take significant actions to implement the plan. See ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008). There is also no requirement that an applicant pay every debt listed in the SOR, only that she remove concerns about her reliability and trustworthiness raised by those debts. See ISCR Case No. 14-00504 at 3 (App. Bd. August 4, 2014). The record evidence leaves me with no questions or doubts as to Applicant’s eligibility and suitability for a security clearance. For these reasons, I conclude Applicant mitigated the security concerns arising under Guideline F, financial considerations.

FORMAL FINDINGS

Formal findings for or against Applicant on the allegations set forth in the SOR, as required by ¶ E3.1.25 of Enclosure 3 of the Directive, are:

Paragraph 1, Guideline F: FOR APPLICANT

Subparagraph 1.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 security to grant Applicant eligibility for a security clearance. Eligibility for access to classified information is granted.

_____________________________ Carol G. Ricciardello Administrative Judge

FOOTNOTES

1 I considered the previous AG, effective September 1, 2006, as well as the new AG, effective June 8, 2017. My decision would be the same if the case was considered under the previous AG. 2 Item 2. 3 Items 1, 3, 4, 5. 4 AE A, B, C, D. 5 Item 1; AE A. 6 Item 1; AE A.