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ISCR 16-00539.h1: Guideline F security clearance hearing, granted (2017) · CASE

ISCR Case 16-00539.h1granted

Case headnote

ISCR Case No. 16-00539.h1

grantedOct 23, 2017· Hon. David M. White· hearing

Summary

A 46-year-old married father of two was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The Statement of Reasons (SOR) cited a $47,071 balance on a charged-off home equity line of credit and multiple delinquent medical bills, each totaling $1,252. These issues raised disqualifying conditions under Adjudicative Guidelines (AG) ¶ 19(a) and AG ¶ 19(c).

However, the applicant demonstrated a good-faith effort to resolve these financial issues. He established repayment arrangements for his debts prior to the SOR being issued and consistently adhered to these plans. His financial situation was stable, and significant progress had been made toward resolving the outstanding obligations.

The decision to grant the clearance was based on the application of mitigating conditions AG ¶ 20(a) and AG ¶ 20(d). Most of the delinquent debts were either repaid or in active repayment plans, indicating a commitment to financial responsibility. Ultimately, the applicant's security clearance was granted.

Why the applicant prevailed

Applicant's financial situation is stable and he has made significant progress in resolving his debts.
He initiated good-faith repayment arrangements before the SOR was issued and adhered to them.
Most of the delinquent debts have been or are close to being resolved.

Conditions referenced

Disqualifying

AG ¶ 19(a)raisedInability to Satisfy Debts
AG ¶ 19(c)raisedHistory of Not Meeting Financial Obligations

Mitigating

AG ¶ 20(a)appliedBehavior Unlikely to Recur
AG ¶ 20(d)appliedGood-faith Effort to Repay Debts

Key rule quoted

“Any doubt concerning personnel being considered for national security eligibility will be resolved in favor of the national security.”

Procedural posture

SOR issuedJun 10, 2016
Answer filedJul 14, 2016Applicant requested a decision on the written record.
Hearing held—No hearing; decision made on the written record.
Decision dateOct 23, 2017

Cite for

Mitigation of Financial Concerns Under Guideline F
Good-faith Repayment Efforts as a Mitigating Factor
Stability in Financial Situation as a Basis for Granting Clearance

Editorial summary generated for research. Not legal advice; not a prediction. Verify against the full decision before relying on any quoted language.

From the decision

Facts this decision states, each with the exact sentence it comes from. Descriptive of the record, not an assessment.

Age at decision: 46: “Applicant is 46 years old.”
Tenure: ~21 years: “He has worked for two defense contractors in his current position as a ground support equipment mechanic since February 1996, and seeks national security eligibility in connection with that employment.”
Delinquent debt cited: $48,323 (on a payment plan): “Applicant admitted that, as recently as October 2015, he had seven delinquent debts totaling $48,323.”

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 incurred some delinquent medical debts and defaulted on a home equity loan, but most of these debts have been resolved, and his financial situation is now stable. The judge determined that the applicant successfully mitigated the financial security concerns, leading to a decision to grant national security eligibility.

The sub-allegation breakdown is part of the Professional plan. See what it includes.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation

Descriptive standardized rendering of a decided public case. 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: 16-00539 ) Applicant for Security Clearance )

For Government: Tovah Minster, Esquire, Department Counsel For Applicant: Pro se

10/23/2017 ______________

STATEMENT OF CASE

______________

WHITE, David M., Administrative Judge:

Applicant incurred some delinquent medical debts and defaulted on a home equity loan after experiencing unexpected medical issues. Most of those debts have been or are close to being resolved, and his financial situation is stable. Resulting security concerns were mitigated. Based upon a review of the pleadings and exhibits, national security eligibility is granted.

On October 17, 2015, Applicant submitted a security clearance application (SF- 86). On June 10, 2016, the Department of Defense Consolidated Adjudications Facility (DoD CAF) issued Applicant a Statement of Reasons (SOR), detailing security concerns under Guideline F, Financial Considerations. (Item 1.) The action was taken under Executive Order 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 for Determining Eligibility for Access to Classified Information, effective within the DoD after September 1, 2006. Applicant answered the SOR on July 14, 2016. He admitted all of the SOR allegations concerning delinquent debts, with explanations, and requested that his case be decided by an administrative judge on the written record without a hearing. (Item 1.) On August 9, 2016, Department Counsel submitted the Government’s written case. A complete copy of the File of Relevant Material (FORM), containing five Items, was mailed to Applicant on August 10, 2016, and received by him on August 17, 2016. The FORM notified Applicant that he had an opportunity to file objections and submit material in refutation, extenuation, or mitigation within 30 days of his receipt of the FORM.

Applicant responded to the FORM in writing, with additional evidence, on August 31, 2016. He did not object to Items 1 through 5, which are admitted into evidence. Applicant’s FORM response, to which Department Counsel had no objection, is marked Exhibit (AE) A and admitted into evidence. DOHA assigned the case to me on May 22, 2017.

The SOR and FORM in this case were issued under the adjudicative guidelines that came into effect within the DoD on September 1, 2006. Security Executive Agent Directive (SEAD) 4, National Security Adjudicative Guidelines, implements new adjudicative guidelines, effective June 8, 2017. All national security eligibility decisions1 issued on or after June 8, 2017, are to be decided using the new National Security Adjudicative Guidelines for Determining Eligibility for Access to Classified Information or Eligibility to Hold a Sensitive Position (AG), as implemented by SEAD 4. I considered the previous eligibility guidelines, as well as the new SEAD 4 AG, in adjudicating Applicant’s national security eligibility. My decision would be the same under either set of guidelines, although this decision is issued pursuant to the currently effective SEAD 4 AG.

FINDINGS OF FACT

Applicant is 46 years old. He is married, and has two children. He graduated from high school in 1989, and worked as a Federal employee from 1989 to 1996. He has worked for two defense contractors in his current position as a ground support equipment mechanic since February 1996, and seeks national security eligibility in connection with that employment. (Item 2.)

Applicant admitted that, as recently as October 2015, he had seven delinquent debts totaling $48,323. One of these debts was a $47,071 balance due on a charged-off home equity line of credit (SOR ¶ 1.a). Applicant had been making payments to this creditor from August 2014 to April 2015 before the SOR was issued, reducing the original June 2014 charged-off balance of $48,231. (Item 2; Item 3; Item 5; AE A.) During June 2016, Applicant and this creditor entered a formal repayment agreement requiring him to make a $200 down payment at the end of that month, followed by monthly payments of $150. Applicant documented that he made all required payments until the record closed. Further interest and late fees were not to be assessed under this repayment agreement, and all future monthly payments are to be applied to the remaining balance due. (Item 1; AE A.)

The remaining six formerly delinquent debts involved medical bills ranging from $20 to $505, and totaled $1,252 (SOR ¶¶ 1.bthrough 1.g). As of the close of the record, he had fully repaid all of those debts, except for the $505 (originally $580) account alleged in SOR ¶ 1.b. He has been making payments toward this debt, and had reduced the outstanding balance due to $443 by June 29, 2016. (Item 1; Item 4; Item 5.)

POLICIES

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

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 AG ¶ 2 describing the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. The entire process is a conscientious scrutiny of applicable guidelines in the context 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. I have not drawn inferences based on mere speculation or conjecture.

Directive ¶ E3.1.14, requires the Government to present evidence to establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, an “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, and has the ultimate burden of persuasion as to obtaining a favorable clearance decision.”

A person applying for national security eligibility seeks to enter 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 national security eligibility. Decisions include, by necessity, consideration of the possible risk the applicant may deliberately or inadvertently fail to protect or safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation as to potential, rather than actual, risk of compromise of classified or sensitive information. Finally, as emphasized in Section 7 of Executive Order 10865, “[a]ny determination under this order adverse to an applicant shall be a determination in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See also Executive Order 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive information.)

ANALYSIS

Guideline F: Financial Considerations

The security concerns relating to the guideline for financial considerations are set out in AG ¶ 18, which reads in pertinent part:

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.

AG ¶ 19 describes three conditions that could raise security concerns and may be disqualifying in this case:

(a) inability to satisfy debts;

(b) unwillingness to satisfy debts regardless of the ability to do so; and

Applicant was temporarily unable or unwilling to repay his formerly delinquent medical and home equity loan debts, creating a history of not meeting financial obligations. These facts establish prima facie support for the foregoing disqualifying conditions, and shift the burden to Applicant to mitigate those concerns. The guideline includes two conditions in AG ¶ 20 that could mitigate the security concerns arising from Applicant’s alleged financial difficulties:

(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; and

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

Applicant’s financial issues were not attributed to any single cause, but with the exception of the home equity line of credit debt were relatively small medical bills. He has steadily maintained his current employment, and has fully repaid all but one of his formerly delinquent medical debts. He initiated good-faith repayment arrangements before his SOR was issued to address the largest medical and the home equity loan debts, and has been adhering to them to steadily reduce his outstanding balances. The home equity loan no longer appears as a delinquency on his most recent record credit report (Item 4).

Applicant has successfully addressed his former delinquencies, and demonstrated clear indications that his financial issues are unlikely to recur. The record establishes full mitigation of financial security concerns under the provisions of AG ¶¶ 20(a) and 20(d).

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(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.

According to AG ¶ 2(c), the ultimate determination of whether to grant national security eligibility must be an overall commonsense judgment based upon careful consideration of the applicable guidelines and the whole-person concept. I considered the potentially disqualifying and mitigating conditions in light of all pertinent facts and circumstances surrounding this case. Applicant is a mature adult, who took reasonable and effective action to resolve the relatively minor financial issues he encountered over the past several years. The likelihood that financial problems will recur is small. The potential for pressure, coercion, or duress is minimized by the resolution of all of Applicant’s formerly outstanding debts through repayment or ongoing agreed repayment plans. Overall, the record evidence leaves me without doubt as to Applicant’s judgment, eligibility, and suitability for a security clearance. He fully met his burden to mitigate the security concerns arising under the guideline for 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

Subparagraphs 1.a through 1.g: 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 national security eligibility and a security clearance. National security eligibility is granted.

DAVID M. WHITE Administrative Judge

FOOTNOTES

1 SEAD 4 ¶ D.7 defines “National Security Eligibility” as, “Eligibility for access to classified information or eligibility to hold a sensitive position, to include access to sensitive compartmented information, restricted data, and controlled or special access program information.”