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ISCR Case 16-00682.h1 — CASE

ISCR Case 16-00682.h1granted

Case Headnote

ISCR Case No. 16-00682.h1

grantedAug 11, 2017· Hon. Robert Robinson Gales· hearing

Summary

A 44-year-old geospatial analyst working for a defense contractor was granted a security clearance despite concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The Statement of Reasons (SOR) detailed several financial issues and an omission on her e-QIP form.

Specifically, the applicant failed to disclose a state tax lien from October 2014 for $1,051 on her June 2015 e-QIP, though she did report an HOA lien. This tax lien, stemming from a 2010 tax error, was paid in full in December 2015 after an investigator brought it to her attention. Additionally, a cellular telephone account with a $349 past-due balance, placed for collection, was resolved in March 2016. A consolidated student loan account, with a past-due balance of $73,412, was placed for collection in November 2014. The applicant entered a repayment plan for this debt in July 2016, agreeing to $150 monthly payments.

The judge found that the applicant had taken significant steps to mitigate the concerns. She assumed control of her finances, resolved two of the three delinquent debts, and demonstrated a good-faith effort to repay the remaining student loan debt. Based on these actions, her eligibility for a security clearance was granted.

Why the Applicant Prevailed

The applicant took control of her finances after recognizing her husband's mismanagement.
She resolved two of the three delinquent debts identified in the SOR.
The applicant demonstrated a good-faith effort to repay her remaining debt.

Conditions Referenced

Disqualifying

F.19(a)raisedInability to Satisfy Debts
F.19(c)raisedHistory of Not Meeting Financial Obligations
F.19(b)rejectedUnwillingness to Satisfy Debts Regardless of Ability to Do So
F.19(e)rejectedConsistent Spending Beyond One's Means

Mitigating

F.20(a)appliedBehavior Happened Long Ago or Infrequently
F.20(b)appliedConditions Largely Beyond the Person's Control
F.20(c)rejectedReceived Financial Counseling
F.20(d)appliedGood-faith Effort to Repay Overdue Creditors
F.20(e)rejectedReasonable Basis to Dispute Legitimacy of Debt

Key Rule Quoted

“Eligibility for a security clearance and access to classified information is granted.”

Procedural Posture

SOR issuedJul 1, 2016
Answer filedJul 28, 2016Applicant elected to proceed without a hearing.
Hearing held—Written record decision.
Decision dateAug 11, 2017

Cite For

Mitigation of Financial Issues Under Guideline F
Personal Conduct Disclosures in Security Clearance Applications
Good-faith Efforts to Resolve Debts as a Mitigating Factor

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 E (Personal Conduct) · descriptive summary of a decided case

Posture: Decision on RecordDecided: granted

The judge found that the applicant mitigated the personal conduct concerns related to her financial disclosures. The applicant was granted eligibility for a security clearance and access to classified information.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
2.a	On June 3, 2015, when Applicant completed her e-QIP, she responded to certain questions pertaining to her financial record. The questions in Section 26 – Financial Record asked if, in the past seven years, she had: defaulted on any type of loan; bills or debts turned over to a collection agency; or if any debts are or were 120 or more days delinquent. Applicant answered “no” to those questions. In the same e-QIP section, there was another question that asked if, in the past seven years, she had a lien placed against her property for failing to pay taxes or other debts. While she answered “yes” to the question, she identified a home owner’s association (HOA) lien, but she failed to disclose the existence of a state tax lien. She certified that the responses were “true, complete, and correct” to the best of her knowledge and belief, but the responses to those questions were, in fact, false.	Against Applicant	Omission or Failure to DiscloseFOUND DELIBERATE	Criminal Conduct	Denied	—	—	—
2.b	specific text not stated in this decision	Unknown	Unspecified Personal Conduct	—	Unknown	—	—	—

Descriptive standardized rendering of a decided public case (Guideline E). The verbatim source decision is shown in full below.

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, resulting in a favorable decision for the applicant. The applicant demonstrated efforts to resolve debts, including paying off a state tax lien and establishing a repayment plan for student loans, which contributed to the overall assessment of her financial responsibility.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	This is a state tax lien for $1,051 that was placed for collection in October 2014. Applicant contended that her husband made a mistake on their 2010 taxes when he accidentally omitted a form related to income. The Internal Revenue Service notified Applicant and her husband, and she took care of the larger federal bill and asked her husband to handle the smaller state bill. She presumed that he did so, but he apparently did not. She said she was unaware of the lien until it was brought to her attention by the investigator from the U.S. Office of Personnel Management (OPM) in November 2015. On December 8, 2015 – seven months before the SOR was issued – Applicant paid the state comptroller $1,051.64, and the lien was released as satisfied. The account has been resolved. $1,051	For Applicant	Tax Unpaid	Admitted	—	—	—
1.b	This is a combined student loan account with a high credit of $55,917 that was placed for collection in November 2014 with a past-due and unpaid balance of $73,412. There initially were separate student loans in a deferred status, and then apparently in a default status. The loans were transferred to a variety of servicing agents and the U.S. Government before being returned to another servicing agent and a collection agency. Applicant’s husband had the loans consolidated in his name with Applicant’s name listed as the secondary borrower. Applicant was not aware that he had failed to make the payments on the loans until the OPM investigator told her. In July 2016, Applicant and the collection agent set up a repayment plan under which she agreed to make $150 monthly payments, commencing on August 15, 2016. Applicant failed to submit any documentation such as receipts, cancelled checks, account statements, or creditor acknowledgments that supports her contention that she is paying the account. In the absence of such documentation, it is difficult to determine if Applicant is adhering to a good-faith effort to repay the overdue debt. The account has not been resolved. $73,412	For Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	This is a cellular telephone account with a past-due and unpaid balance of $349 that was placed for collection. Applicant stated that in March 2015, she switched carriers and continued making monthly payments to her old carrier to cover usage fees. According to the contract with the new carrier, that carrier was supposed to pay the termination fee of the old carrier. It failed to do so. After months of arguing with the new carrier, the termination fee was finally paid in mid-March 2016 – three months before the SOR was issued. The old carrier, which is once again her present carrier, acknowledged that payment had been received, and it instructed the credit reporting agencies to correct the information in Applicant’s credit reports. The account has been resolved. $349	For Applicant	Utility or Phone Debt	Admitted	—	—	—

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. 16-00682 ) Applicant for Security Clearance )

For Government: Alison O’Connell, Esquire, Department Counsel For Applicant: Pro se

08/11/2017 ______________

STATEMENT OF CASE

______________

GALES, Robert Robinson, Administrative Judge:

Applicant mitigated the security concerns regarding financial considerations and personal conduct. Eligibility for a security clearance and access to classified information is granted.

Statement of the Case

On June 3, 2015, Applicant applied for a security clearance and submitted an Electronic Questionnaire for Investigations Processing (e-QIP) version of a Security Clearance Application.1 On July 1, 2016, the Department of Defense (DOD) Consolidated Adjudications Facility (CAF) issued a Statement of Reasons (SOR) to her, under Executive Order 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended and modified; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended and modified (Directive); and the Adjudicative Guidelines for Determining Eligibility For Access to Classified Information (December 29, 2005) applicable to all adjudications and other determinations made under the Directive, effective September 1, 2006.2 The SOR alleged security concerns under Guideline F (Financial Considerations) and Guideline E (Personal Conduct), and detailed reasons why the DOD adjudicators were unable to find that it is clearly consistent with the national interest to grant or continue a security clearance for Applicant. The SOR recommended referral to an administrative judge to determine whether a clearance should be granted, continued, denied, or revoked.

Applicant received the SOR on July 18, 2016. In a sworn statement, dated July 28, 2016, Applicant responded to the SOR and elected to have her case decided on the written record in lieu of a hearing.3 A complete copy of the Government’s file of relevant material (FORM) was mailed to Applicant by the Defense Office of Hearings and Appeals (DOHA) on September 20, 2016, and she was afforded an opportunity, within a period of 30 days after receipt of the FORM, to file objections and submit material in refutation, extenuation, or mitigation. In addition to the FORM, Applicant was furnished a copy of the Directive as well as the previous Adjudicative Guidelines applicable to her case. Applicant received the FORM on September 26, 2016. Applicant’s response was due on October 26, 2016. Applicant timely submitted a number of documents, to which there was no objection. The case was assigned to me on July 3, 2017.

FINDINGS OF FACT

In her Answer to the SOR, Applicant admitted, with comments, two of the factual allegations pertaining to financial considerations (¶¶ 1.a. and 1.b.) and both of the factual allegations pertaining to personal conduct (¶¶ 2.a. and 2.b.) of the SOR. She also furnished comments regarding the remaining allegations. Applicant’s admissions and comments are incorporated herein as findings of fact. After a complete and thorough review of the evidence in the record, and upon due consideration of same, I make the following additional findings of fact:

Applicant is a 44-year-old employee of a defense contractor. She has been a geospatial analyst with the company since August 2009, with the exception of the period from July 2014 until November 2014, when she was laid off during a reduction in force. She previously held a similar position with another company from July 2004 until July 2009. She is a June 1992 high school graduate, and she received a bachelor’s degree in an unspecified discipline in June 1997. Applicant has never served in the U.S. military. She was granted a secret security clearance in 2001. Applicant was married in July 1998. She has two sons, born in 2002 and 2005. Financial Considerations4

It is unclear what Applicant’s finances were like before they deteriorated. In October 2000, because of a reduction in force, Applicant’s employer laid her off. She remained unemployed until May 2001. During that period, she was supported by bi- weekly state unemployment compensation of between $200 and $300. In 2002, Applicant and her family relocated from one state (with a moderate cost of living) to another state (with a much higher cost of living). In March 2004, Applicant and her husband filed a petition for bankruptcy under Chapter 7 of the Bankruptcy Code. An unspecified number of debts was discharged in June 2004, and except for the accounts that were reaffirmed, they were furnished a clean financial slate. Applicant candidly acknowledged that the debts that they had accrued were the result of the higher costs of living and living beyond their means. Although she did not specifically identify other possible factors, she acknowledged that both of her children have a variety of dysfunctions, learning disabilities, and therapy needs.

During the earlier years of their marriage, Applicant’s husband managed all of their bills and their taxes. She handled the child-related activities such as medical appointments and extra-curricular activities. In December 2012, with the exception of the student loans, Applicant took control over all the family bills. She explained that over the past few years, leading up to 2015, she learned from experience that her husband is not good at handling the family finances, and that she needed to do so. In order to prevent any further future financial issues, Applicant has now taken control over all financial aspects of their life with the exception of the family health insurance that is derived through her husband’s employer.

In addition to the Chapter 7 bankruptcy, the SOR identified three purportedly delinquent debts that had been placed for collection, as generally reflected by her September 2007 credit report, the June 2015 credit report, or her June 2016 credit report. Those debts, totaling approximately $74,812, their current status, according to the credit reports, other evidence submitted by the Government, and Applicant’s comments regarding same, are described below.

(SOR ¶ 1.a.): This is a state tax lien for $1,051 that was placed for collection in October 2014. Applicant contended that her husband made a mistake on their 2010 taxes when he accidentally omitted a form related to income. The Internal Revenue Service notified Applicant and her husband, and she took care of the larger federal bill and asked her husband to handle the smaller state bill. She presumed that he did so, but he apparently did not. She said she was unaware of the lien until it was brought to her attention by the investigator from the U.S. Office of Personnel Management (OPM) in November 2015. On December 8, 2015 – seven months before the SOR was issued – Applicant paid the state comptroller $1,051.64, and the lien was released as satisfied.5 The account has been resolved.

(SOR ¶ 1.b.): This is a combined student loan account with a high credit of $55,917 that was placed for collection in November 2014 with a past-due and unpaid balance of $73,412. There initially were separate student loans in a deferred status, and then apparently in a default status. The loans were transferred to a variety of servicing agents and the U.S. Government before being returned to another servicing agent and a collection agency. Applicant’s husband had the loans consolidated in his name with Applicant’s name listed as the secondary borrower.

Applicant was not aware that he had failed to make the payments on the loans until the OPM investigator told her. In July 2016, Applicant and the collection agent set up a repayment plan under which she agreed to make $150 monthly payments, commencing on August 15, 2016.6 Applicant failed to submit any documentation such as receipts, cancelled checks, account statements, or creditor acknowledgments that supports her contention that she is paying the account. In the absence of such documentation, it is difficult to determine if Applicant is adhering to a good-faith effort to repay the overdue debt. The account has not been resolved.

(SOR ¶ 1.c.): This is a cellular telephone account with a past-due and unpaid balance of $349 that was placed for collection. Applicant stated that in March 2015, she switched carriers and continued making monthly payments to her old carrier to cover usage fees. According to the contract with the new carrier, that carrier was supposed to pay the termination fee of the old carrier. It failed to do so. After months of arguing with the new carrier, the termination fee was finally paid in mid-March 2016 – three months before the SOR was issued. The old carrier, which is once again her present carrier, acknowledged that payment had been received, and it instructed the credit reporting agencies to correct the information in Applicant’s credit reports.7 The account has been resolved.

Applicant did not submit a Personal Financial Statement to reflect her net monthly income; monthly expenses; or any monthly remainder that might be available for discretionary spending or savings. There is no evidence of a budget. There is no evidence of any financial counseling. There is also no evidence of any other delinquent accounts. Because the remaining accounts in her most recent credit report are listed as current, and Applicant has taken nearly full responsibility over her finances, it appears that Applicant’s finances are under control. Personal Conduct

On June 3, 2015, when Applicant completed her e-QIP, she responded to certain questions pertaining to her financial record. The questions in Section 26 – Financial Record asked if, in the past seven years, she had: defaulted on any type of loan; bills or debts turned over to a collection agency; or if any debts are or were 120 or more days delinquent. Applicant answered “no” to those questions. In the same e-QIP section, there was another question that asked if, in the past seven years, she had a lien placed against her property for failing to pay taxes or other debts. While she answered “yes” to the question, she identified a home owner’s association (HOA) lien, but she failed to disclose the existence of a state tax lien. She certified that the responses were “true, complete, and correct” to the best of her knowledge and belief, but the responses to those questions were, in fact, false.

Applicant subsequently denied intending to falsify her responses, and explained that, when she completed the e-QIP, she was unaware that the accounts were delinquent or that there was a state tax lien. Before completing the e-QIP, she ran three credit checks on herself but they failed to register the delinquencies.

Community Activities

Applicant is involved in her children’s lives. Her children are involved in activities outside of school. Those extracurricular activities for just one week include three karate classes, a scout meeting, a five-mile scout hike, a student government meeting, a yearbook club meeting, two football practices, one football game, one lacrosse game, one junior fire cadet meeting, and one canine training class.

POLICIES

The U.S. Supreme Court has recognized the substantial discretion of the Executive Branch in regulating access to information pertaining to national security emphasizing, “no one has a ‘right’ to a security clearance.”8 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. The President has authorized the Secretary of Defense or his designee to grant an applicant eligibility for access to classified information “only upon a finding that it is clearly consistent with the national interest to do so.”9

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the guidelines in SEAD 4. In addition to brief introductory explanations for each guideline, the guidelines list potentially disqualifying conditions and mitigating conditions, which are used in evaluating an applicant’s eligibility for access to classified information. An administrative judge need not view the guidelines as inflexible, ironclad rules of law. Instead, acknowledging 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. 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 meaningful decision.

In the decision-making process, facts must be established by “substantial evidence.”10 The Government initially has the burden of producing evidence to establish a potentially disqualifying condition under the Directive, and has the burden of establishing controverted facts alleged in the SOR. Once the Government has produced substantial evidence of a disqualifying condition, under Directive ¶ E3.1.15, the applicant has the burden of persuasion to present evidence in refutation, explanation, extenuation or mitigation, sufficient to overcome the doubts raised by the Government’s case. The burden of disproving a mitigating condition never shifts to the Government.11

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 as well. It is because of this special relationship that the Government must be able to repose a high degree of trust and confidence in those 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 as to potential, rather than actual, risk of compromise of classified information. Furthermore, “security clearance determinations should err, if they must, on the side of denials.”12

Clearance decisions must be “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.”13 Thus, nothing in this decision should be construed to suggest that I have based this decision, in whole or in part, on any express or implied determination as to Applicant’s allegiance, loyalty, or patriotism. It is merely an indication the Applicant has or has not met the strict guidelines the President and the Secretary of Defense have established for issuing a clearance. 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.

ANALYSIS

Guideline F, Financial Considerations

The security concern relating to the guideline for Financial Considerations is set out in ¶ 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.

The guideline notes several conditions that could raise security concerns. Under ¶ 19(a), an “inability to satisfy debts” is potentially disqualifying. In addition, ¶ 19(b) may apply if there is an “unwillingness to satisfy debts regardless of the ability to do so.” Similarly, under ¶ 19(c), “a history of not meeting financial obligations” may raise concerns. “Consistent spending beyond one's means or frivolous or irresponsible spending, which may be indicated by excessive indebtedness, significant negative cash flow, a history of late payments or of non-payment, or other negative financial indicators” may raise concerns under ¶ 19(e). Applicant’s earlier period of sometimes living beyond her means before 2004, and her inability to satisfy all of her debts allowed them to become delinquent. In June 2004 most of her debts were discharged under Chapter 7 of the U.S. Bankruptcy Code. Subsequently, a state tax lien was filed, student loans went into default, and another account became delinquent. ¶¶ 19(a) and 19(c) apply; ¶ 19(e) partially applies; and ¶19(b) does not apply.

The guideline also includes examples of conditions that could mitigate security concerns arising from financial difficulties. Under ¶ 20(a), the disqualifying condition may be mitigated where “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.” Also, under ¶ 20(b), financial security concerns may be mitigated where “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.” Evidence that “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” is potentially mitigating under ¶ 20(c). Similarly, ¶ 20(d) applies where the evidence shows “the individual initiated and is adhering to a good- faith effort to repay overdue creditors or otherwise resolve debts.”14 In addition, ¶ 20(e) may apply if “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.”

I have concluded that ¶¶ 20(a), 20(b), 20(c), and 20(d) partially apply. ¶ 20(e) does not apply. Applicant’s financial issues arose for two different reasons separated by a substantial period of time. The earlier situation generally arose because of several factors. Applicant was unemployed from October 2000 until May 2001; Applicant and her husband had to relocate to a higher cost of living location; and they were sometimes living beyond her means. Things essentially changed in 2004 when Applicant’s liabilities were discharged by bankruptcy. There did not appear to be anything unusual about Applicant’s finances for several years thereafter. Applicant’s husband was purportedly managing the family finances, but issues arose that he failed to properly address. When Applicant learned of his mismanagement of their finances, she took control over them – before the SOR was issued. She contacted her creditors in a good-faith effort to resolve her delinquent accounts, and she either set up repayment arrangements or paid the outstanding balances. While there is no evidence of a budget or financial counseling, there is also no evidence of other delinquent accounts. There is no evidence of any disputes being made. Applicant’s efforts resulted in the successful resolution of two of the three listed SOR accounts. The one remaining, and largest account, is in a repayment plan, but without documentation to confirm that Applicant has been making the required monthly payments, it is difficult to determine that she is adhering to the plan.

Clearance decisions are aimed at evaluating an applicant’s judgment, reliability, and trustworthiness. They are not a debt-collection procedure. The guidelines do not require an applicant to establish resolution of each and every debt alleged in the SOR. An applicant needs only to establish a plan to resolve financial problems and take significant actions to implement the plan. There is no requirement that an applicant immediately resolve or make payments on all delinquent debts simultaneously; nor is there a requirement that the debts alleged in an SOR be paid first. Rather, a reasonable plan and concomitant conduct may provide for the payment of such debts one at a time. Under the circumstances, Applicant acted responsibly by addressing her delinquent accounts and by initiating efforts to work with her creditors.15 Applicant’s actions under the circumstances no longer cast doubt on her current reliability, trustworthiness, and good judgment.16

Guideline E, Personal Conduct

The security concern relating to the guideline for Personal Conduct is set out in ¶ 18:

Conduct involving questionable judgment, lack of candor, dishonesty, or unwillingness to comply with rules and regulations can raise questions about an individual's reliability, trustworthiness, and ability to protect classified or sensitive information. Of special interest is any failure to cooperate or provide truthful and candid answers during national security investigative or adjudicative processes. The following will normally result in an unfavorable national security eligibility determination, security clearance action, or cancellation of further processing for national security eligibility:

(a) refusal, or failure without reasonable cause, to undergo or cooperate with security processing, including but not limited to meeting with a security investigator for subject interview, completing security forms or releases, cooperation with medical or psychological evaluation, or polygraph examination, if authorized and required; and

(b) refusal to provide full, frank, and truthful answers to lawful questions of investigators, security officials, or other official representatives in connection with a personnel security or trustworthiness determination.

The guideline notes a condition that could raise security concerns. Under ¶ 16(a), it is potentially disqualifying if there is a

deliberate omission, concealment, or falsification of relevant facts from any personnel security questionnaire, personal history statement, or similar form used to conduct investigations, determine employment qualifications, award benefits or status, determine national security eligibility or trustworthiness, or award fiduciary responsibilities. As noted above, on June 3, 2015, when Applicant completed her e-QIP, she responded to questions pertaining to her financial record. One set of questions in Section 26 – Financial Record asked if, in the past seven years, she had: defaulted on any type of loan; bills or debts turned over to a collection agency; or if any debts are or were 120 or more days delinquent. Applicant answered “no” to those questions. She certified that the response was “true, complete, and correct” to the best of her knowledge and belief, but the response to those questions was, in fact, false. Applicant subsequently denied intending to falsify her response, and offered one explanation for her response: at the time she completed her e-QIP, she was unaware that her student loans were delinquent because she was under the impression that her husband had been making the necessary payments. She only learned the truth when the OPM investigator informed her that the student loans were delinquent.

In the same e-QIP section, there was another question that asked if, in the past seven years, she had a lien placed against her property for failing to pay taxes or other debts. While she answered “yes” to the question, she identified an HOA lien, but she failed to disclose the existence of a state tax lien. She certified that the response was “true, complete, and correct” to the best of her knowledge and belief, but the response to that question was, in fact, false. Once again, Applicant subsequently denied intending to falsify her response, and explained that, when she completed the e-QIP, she was unaware that there was a state tax lien. When Applicant first learned about her husband’s mistake that led to the tax problem, she took care of the federal issue and her husband was supposed to take care of the lesser state issue. He apparently failed to do so, and his failure resulted in the tax lien about which she knew nothing.

Applicant’s comments provide sufficient evidence to examine if her submission was a deliberate falsification, as alleged in the SOR, or merely an omission that was the result of oversight or misunderstanding of the true facts on her part. Proof of an omission, standing alone, does not establish or prove an applicant’s intent or state of mind when the falsification or omission occurred. As an administrative judge, I must consider the record evidence as a whole to determine whether there is a direct or circumstantial evidence concerning Applicant’s intent or state of mind at the time the alleged falsification or omission occurred. I have considered the entire record.17 Her statements are

of persuasion had shifted to the applicant to present evidence to explain the omission. unwavering and consistent. In the e-QIP, Applicant acknowledged the existence of the HOA lien, thus placing the issue of a potential financial problem on the table for investigation and discussion. Based on the evidence presented, I have concluded that there is no negative direct or circumstantial evidence concerning Applicant’s intent or state of mind at the time the omission occurred. She candidly explained her reasons for her e-QIP responses, and recognizing the Government’s burden of proving falsification, I have concluded that Department Counsel has failed to carry that burden. Applicant’s actions, under the circumstances, do not cast doubt on her current reliability, trustworthiness, and good judgment. In this instance, ¶ 16(a) has not been established.

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 SEAD 4, App. A, ¶ 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 SEAD 4, App. A, ¶ 2(c), the ultimate determination of whether to grant a security clearance must be an overall commonsense judgment based upon careful consideration of the guidelines and the whole-person concept. Moreover, I have evaluated the various aspects of this case in light of the totality of the record evidence and have not merely performed a piecemeal analysis.18

There is some evidence against mitigating Applicant’s conduct. During an unspecified period before 2004, Applicant sometimes lived beyond her means. Her inability to satisfy all of her debts allowed them to become delinquent. In June 2004, most of her debts were discharged in bankruptcy. Subsequently, a state tax lien was filed, student loans went into default, and another account became delinquent. She submitted no financial information to indicate her current financial status, and she failed to submit documentation to reflect that she is adhering to a good-faith effort to pay her student loans. There is no evidence of financial counseling.

The mitigating evidence under the whole-person concept is simply more substantial. There is no evidence of misuse of information technology systems, or mishandling protected information. As noted above, Applicant was laid off and unemployed from July 2014 until November 2014, before being brought back by her employer. When Applicant learned of her husband’s mismanagement of their finances, she took control over them – before the SOR was issued. She contacted her creditors in a good-faith effort to resolve her delinquent accounts, and she either set up repayment arrangements or paid the outstanding balances. Applicant’s efforts resulted in the successful resolution of two of the three listed SOR accounts. The one remaining, and largest account, is in a repayment plan. Unfortunately, Applicant failed to submit documentation to confirm that she has been making the required monthly payments. There is also no evidence of other delinquent accounts. She candidly acknowledged having a financial issue when she completed her e-QIP.

The Appeal Board has addressed a key element in the whole-person analysis in financial cases stating:19

In evaluating Guideline F cases, the Board has previously noted that the concept of “meaningful track record” necessarily includes evidence of actual debt reduction through payment of debts. However, an applicant is not required, as a matter of law, to establish that he [or she] has paid off each and every debt listed in the SOR. All that is required is that an applicant demonstrate that he [or she] has “. . . established a plan to resolve his [or her] financial problems and taken significant actions to implement that plan.” The Judge can reasonably consider the entirety of an applicant’s financial situation and his [or her] actions in evaluating the extent to which that applicant’s plan for the reduction of his outstanding indebtedness is credible and realistic. See Directive ¶ E2.2(a) (“Available, reliable information about the person, past and present, favorable and unfavorable, should be considered in reaching a determination.”) There is no requirement that a plan provide for payments on all outstanding debts simultaneously. Rather, a reasonable plan (and concomitant conduct) may provide for the payment of such debts one at a time. Likewise, there is no requirement that the first debts actually paid in furtherance of a reasonable debt plan be the ones listed in the SOR.

Applicant has demonstrated a positive track record of debt reduction and elimination efforts, addressing her debts and taking control of her finances from her husband, and she started to do so before the SOR was issued. This decision should serve as a warning that Applicant’s failure to continue her resolution efforts with respect to her student loans, or the actual accrual of new delinquent debts, will adversely affect her future eligibility for a security clearance.20 Overall, the evidence leaves me without questions and doubts as to Applicant’s eligibility and suitability for a security clearance. For all of these reasons, I conclude Applicant has mitigated the security concerns arising from her financial considerations and personal conduct. See SEAD 4, App. A, ¶ 2(d)(1) through AG ¶ 2(d)(9).

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. through 1.d: For Applicant

Paragraph 2, Guideline E: FOR APPLICANT

Subparagraphs 1.a. and 1.b: 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.

________________________ ROBERT ROBINSON GALES Administrative Judge

FOOTNOTES

1 Item 5 (e-QIP, dated June 3, 2015). 2 Effective June 8, 2017, by Directive 4 of the Security Executive Agent (SEAD 4), dated December 10, 2016, National Security Adjudicative Guidelines for all covered individuals who require initial or continued eligibility for access to classified information or eligibility to hold a sensitive position, were established to supersede all previously issued national security adjudicative criteria or guidelines. Accordingly, those guidelines previously implemented on September 1, 2006, under which this security clearance review case was initiated, no longer apply. In comparing the two versions, there is no substantial difference that might have a negative effect on Applicant in this case.

3 Item 4 (Answer to the SOR, dated July 28, 2016). 4 General source information pertaining to the financial accounts discussed below can be found in the following exhibits: Item 5, supra note 1; Item 4, supra note 3; Item 8 (Combined Experian, TransUnion, and Equifax Credit Report, dated September 7, 2007); Item 7 (Combined Experian, TransUnion, and Equifax Credit Report, dated June 10, 2015); Item 6 (Equifax Credit Report, dated June 8, 2016). 5 Release of [State] Tax Lien, dated December 8, 2015, attached to Applicant’s Response to the FORM.

6 Letter, dated July 28, 2016, attached to Applicant’s Response to the FORM.

7 E-mail, dated October 25, 2016, attached to Applicant’s Response to the FORM. 8 Department of the Navy v. Egan, 484 U.S. 518, 528 (1988).

9 Exec. Or. 10865, Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960), as amended and modified. 10 “Substantial evidence [is] such relevant evidence as a reasonable mind might accept as adequate to support a conclusion in light of all contrary evidence in the record.” ISCR Case No. 04-11463 at 2 (App. Bd. Aug. 4, 2006) (citing Directive ¶ E3.1.32.1). “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).

11 See ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 2005).

12 Egan, 484 U.S. at 531.

13 See Exec. Or. 10865 § 7. 14 The Appeal Board has previously explained what constitutes a good-faith effort to repay overdue creditors or otherwise resolve debts:

In order to qualify for application of [the “good-faith” mitigating condition], an applicant must present evidence showing either a good-faith effort to repay overdue creditors or some other good-faith action aimed at resolving the applicant’s debts. The Directive does not define the term ‘good-faith.’ However, the Board has indicated that the concept of good-faith ‘requires a showing that a person acts in a way that shows reasonableness, prudence, honesty, and adherence to duty or obligation.’ Accordingly, an applicant must do more than merely show that he or she relied on a legally available option (such as bankruptcy [or statute of limitations]) in order to claim the benefit of [the “good-faith” mitigating condition].

(internal citation and footnote omitted) ISCR Case No. 02-30304 at 3 (App. Bd. Apr. 20, 2004) (quoting ISCR Case No. 99-9020 at 5-6 (App. Bd. June 4, 2001)). 15 “Even if Applicant’s financial difficulties initially arose, in whole or in part, due to circumstances outside his [or her] control, the Judge could still consider whether Applicant has since acted in a reasonable manner when dealing with those financial difficulties.” ISCR Case No. 05-11366 at 4 n.9 (App. Bd. Jan. 12, 2007) (citing ISCR Case No. 99- 0462 at 4 (App. Bd. May 25, 2000); ISCR Case No. 99-0012 at 4 (App. Bd. Dec. 1, 1999); ISCR Case No. 03-13096 at 4 (App. Bd. Nov. 29, 2005)). A component is whether he or she maintained contact with creditors and attempted to negotiate partial payments to keep debts current.

16 See ISCR Case No. 09-08533 at 3-4 (App. Bd. Oct. 6, 2010). 17 The Appeal Board has cogently explained the process for analyzing falsification cases, stating:

(a) when a falsification allegation is controverted, Department Counsel has the burden of proving falsification; (b) proof of an omission, standing alone, does not establish or prove an applicant’s intent or state of mind when the omission occurred; and (c) a Judge must consider the record evidence as a whole to determine whether there is direct or circumstantial evidence concerning the applicant’s intent or state of mind at the time the omission occurred. [Moreover], it was legally permissible for the Judge to conclude Department Counsel had established a prima facie case under Guideline E and the burden

ISCR Case No. 03-10380 at 5 (App. Bd. Jan. 6, 2006) (citing ISCR Case No. 02-23133 (App. Bd. June 9, 2004)). See also ISCR Case No. 08-05637 at 3 (App. Bd. Sept. 9, 2010) (noting an applicant’s level of education and other experiences are part of entirety-of-the-record evaluation as to whether a failure to disclose past-due debts on a security clearance application was deliberate). 18 See U.S. v. Bottone, 365 F.2d 389, 392 (2d Cir. 1966); See also ISCR Case No. 03-22861 at 2-3 (App. Bd. Jun. 2, 2006). 19 ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008) (internal citations omitted).

20 While this decision should serve as a warning to Applicant as security officials may continue to monitor his finances, this decision, including the warning, should not be interpreted as a conditional eligibility to hold a security clearance. DOHA has no authority to attach limiting conditions to an applicant’s security clearance. See, e.g., ISCR Case No. 10-06943 at 4 (App. Bd. Feb. 17, 2012) (citing ISCR Case No. 10-03646 at 2 (App. Bd. Dec. 28, 2011)). See also ISCR Case No. 06-26686 at 2 (App. Bd. Mar. 21, 2008); ISCR Case No. 04-03907 at 2 (App. Bd. Sep. 18, 2006); ISCR Case No. 04-04302 at 5 (App. Bd. June 30, 2005); ISCR Case No. 03-17410 at 4 (App. Bd. Apr. 12, 2005); ISCR Case No. 99-0109 at 2 (App. Bd. Mar. 1, 2000).