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ISCR Case 16-00478.h1 — CASE

ISCR Case 16-00478.h1granted

Case Headnote

ISCR Case No. 16-00478.h1

grantedSep 1, 2017· Hon. Nichole L. Noel· hearing

Summary

A 32-year-old federal contractor was granted a security clearance after successfully mitigating concerns under Guideline F (Financial Considerations). The Department of Defense had initially intended to deny his clearance due to approximately $66,000 in delinquent debt, citing Disqualifying Condition AG ¶ 19(a).

The Statement of Reasons detailed eleven specific allegations of financial delinquency, including amounts of $19,776, $26,739, $1,880, and $657, among others. In response, the applicant demonstrated a good-faith effort to resolve these issues. He successfully settled eight of the eleven delinquent accounts and established payment plans for the remaining three.

The judge applied Mitigating Condition AG ¶ 20(d), finding that the applicant had acknowledged his past irresponsible behavior and taken concrete steps to rehabilitate his financial situation. This proactive approach to resolving his debts led to the security clearance being granted.

Why the Applicant Prevailed

The applicant demonstrated a good-faith effort to resolve his delinquent debt.
He successfully settled eight of the eleven delinquent accounts and entered into payment plans for the remaining accounts.
The applicant acknowledged his past irresponsible behavior and took steps to rehabilitate his financial situation.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedFinancial ConsiderationsThe applicant has a history of not meeting his financial obligations.

Mitigating

AG ¶ 20(d)appliedFinancial ConsiderationsThe applicant's efforts to resolve his delinquent accounts demonstrate a good-faith effort to repay his creditors.

Key Rule Quoted

“Any doubt concerning personnel being considered for national security eligibility will be resolved in favor of the national security.”
— AG ¶ 2(b)

Procedural Posture

SOR issuedJun 13, 2016
Answer filedSep 1, 2017Requested a decision without a hearing.
Hearing held—N/A, decision made without a hearing.
Decision dateSep 1, 2017

Cite For

Good-faith Efforts to Resolve Delinquent Debt Under Guideline F
Mitigation of Financial Concerns Through Proactive Measures
Consideration of Whole-person Factors in Security Clearance Decisions

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 history of financial mismanagement but demonstrated a good-faith effort to resolve his delinquent debts. By November 2016, the applicant had resolved 8 of the 11 accounts and entered into payment plans for the remaining debts, leading to a decision to grant eligibility for a security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	SOR ¶ 1.a ($19,776) $19,776	For Applicant	Unspecified Financial	Unknown	—	—	—
1.b	SOR ¶ 1.b ($26,739) $26,739	For Applicant	Unspecified Financial	Unknown	—	—	—
1.c	SOR ¶ 1.c	For Applicant	Unspecified Financial	Unknown	—	—	—
1.d	SOR ¶ 1.d ($26,739) $26,739	For Applicant	Unspecified Financial	Unknown	—	—	—
1.e	SOR ¶ 1.e ($1,880) $1,880	For Applicant	Unspecified Financial	Unknown	—	—	—
1.f	SOR ¶ 1.f ($657) $657	For Applicant	Unspecified Financial	Unknown	—	—	—
1.g	SOR ¶ 1.g	For Applicant	Unspecified Financial	Unknown	—	—	—
1.h	SOR ¶ 1.h	For Applicant	Unspecified Financial	Unknown	—	—	—
1.i	SOR ¶ 1.i	For Applicant	Unspecified Financial	Unknown	—	—	—
1.j	SOR ¶ 1.j	For Applicant	Unspecified Financial	Unknown	—	—	—
1.k	SOR ¶ 1.k	For Applicant	Unspecified Financial	Unknown	—	—	—

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. 16-00478 ) Applicant for Security Clearance )

For Government: Charles C. Hale, Esq., Department Counsel For Applicant: Pro se 09/01/2017 ______________

STATEMENT OF CASE

______________

NOEL, Nichole L., Administrative Judge:

Applicant contests the Department of Defense’s (DOD) intent to deny his eligibility for a security clearance. Applicant is making a good-faith effort to resolve his delinquent debt. Clearance is granted.

Statement of the Case

On June 13, 2016, the DOD issued a Statement of Reasons (SOR) detailing security concerns under the financial considerations guideline.1 DOD adjudicators were unable to find that it is clearly consistent with the national interest to grant Applicant’s security clearance and recommended his case be submitted to an administrative judge for consideration. Applicant answered the SOR and requested a decision without a hearing.2 The Government submitted its written case on September 23, 2016. A complete copy of the file of relevant material (FORM) and the Directive were provided to Applicant. He received the FORM on October 20, 2016, and provided a response. The items appended to the FORM and Applicant’s response are admitted as Government’s Exhibits (GE) 1 through 5 and Applicant’s Exhibits (AE) A through I, without objection.

PROCEDURAL MATTERS

While the case was pending decision, the Director of National Intelligence (DNI) issued Security Executive Agent Directive 4, establishing the National Security Adjudicative Guidelines (AG) applicable to all covered individuals who require initial or continued eligibility for access to classified information or eligibility to hold a sensitive position. The 2017 AG superseded the AG implemented in September 2006, and they are effective for any adjudication made on or after June 8, 2017. Accordingly, I have applied them in this case.

FINDINGS OF FACT

Applicant has worked for his employer, a federal contractor since 2011. In the past six years, he was worked on a number of contracts throughout the Middle East and Asia. Applicant was initially granted a security clearance in 2005 in connection with his military service. He served in the U.S. Army from June 2005 to December 2010, when he was medically discharged. On his most recent security clearance application, Applicant disclosed several delinquent accounts. The ensuing investigation revealed additional delinquent accounts, which formed the basis of the SOR allegations that Applicant was indebted to 11 creditors for approximately $66,000. Applicant, 32, admits that his financial problems were the result of his irresponsible spending habits and immaturity after he separated from the military. In his response to the FORM, Applicant indicated that the security clearance adjudication process provided a catalyst to reform his financial habits. To that end, Applicant began working to resolve his delinquent accounts.3

In August 2016, Applicant entered into a 45-month agreement with a debt-relief organization to negotiate and settle three of the alleged accounts, SOR ¶¶ 1.a ($19,776), 1.e ($1,880), and 1.f ($657). The most recent documentation available as of November 2016, shows that Applicant paid over $1,000 to the service and the smallest of the enrolled accounts, SOR ¶ 1.f, has been resolved. Applicant also provided documentation showing that he has resolved SOR ¶¶ 1.c, and 1.gthrough 1.k, totaling approximately $2,600. He has also entered into a $400-per-month payment plan to resolve SOR ¶ 1.d ($26,739), which is the same account as SOR ¶ 1.b.4

POLICIES

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines. 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. 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.

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.

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

Failure to live within one’s means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgement, or willingness 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. . . . An individual who is financially overextended is at a greater risk of having to engage in illegal or otherwise questionable acts to generate funds.5

Applicant’s admissions and the credit report establish the Government’s prima facie case, that Applicant has a history of not meeting his financial obligations.6 However, Applicant has presented sufficient information to mitigate the concerns raised by his delinquent debt. By November 2016, he had resolved 8 of the 11 accounts and entered into payment plans for the remaining three accounts. His efforts constitute a good-faith effort to resolve his delinquent accounts and repay his creditors.7

Applicant has mitigated the security concerns raised by his history of financial mismanagement. In reaching this conclusion, I have also considered the whole-person factors at AG ¶ 2(d). Applicant acknowledges that irresponsible behavior in his twenties caused his financial problems. This acknowledgement and the steps Applicant has taken to rehabilitate his finances show an increased level of maturity. He now understands the importance of maintaining favorable financial history and the consequences of failing to do so. Accordingly, I am confident that Applicant is unlikely to engage irresponsible financial behavior in the future.

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, Financial Considerations: FOR APPLICANT

Subparagraphs 1.a – 1.k: For Applicant

CONCLUSION

Based on the record, it is clearly consistent with the national interest to grant Applicant eligibility for a security clearance. Eligibility for access to classified information is granted.

________________________ Nichole L. Noel Administrative Judge

FOOTNOTES

1 The DOD CAF acted under Executive Order (EO) 10865, Safeguarding Classified Information within Industry, signed by President Eisenhower on February 20, 1960, as amended; as well as DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program, dated January 2, 1992, as amended (Directive), and the Adjudicative Guidelines for Determining Eligibility for Access to Classified Information, implemented on September 1, 2006. 2 GE 1.

3 GE 1-5.

4 GE 2; AE A-I. 5 AG ¶ 18.

6 AG ¶ 19(a). 7 AG ¶ 20(d).