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ISCR Case 16-00687.h1 — CASE

ISCR Case 16-00687.h1granted

Case Headnote

ISCR Case No. 16-00687.h1

grantedMar 8, 2017· Hon. Jennifer I. Goldstein· hearing

Summary

A 26-year-old defense contractor employee was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The Statement of Reasons (SOR) alleged 15 debts totaling $29,174. These included six delinquent student loan accounts amounting to approximately $27,048, along with nine other collection accounts ranging from $35 to $777.

To address these concerns, the applicant resolved nine of the 15 debts listed in the SOR. For the remaining six student loans, she entered into a rehabilitation agreement and demonstrated a commitment to financial responsibility by making consistent payments.

The judge determined that the applicant's financial issues were under control and unlikely to recur. This demonstrated improved reliability and judgment, leading to the decision to grant her security clearance.

Why the Applicant Prevailed

Applicant resolved 9 of the 15 debts listed in the SOR.
She entered into a rehabilitation agreement for the remaining student loans and made consistent payments.
The judge found her past financial irresponsibility unlikely to recur, indicating improved reliability and judgment.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability or Unwillingness to Satisfy Debts
AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations

Mitigating

AG ¶ 20(a)appliedBehavior Happened Long Ago or Infrequently
AG ¶ 20(c)appliedReceived Counseling or Indications That the Problem Is Being Resolved
AG ¶ 20(d)appliedGood-faith Effort to Repay Overdue Creditors

Key Rule Quoted

“The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision.”

Procedural Posture

SOR issuedAug 12, 2016
Answer filedAug 31, 2016
Hearing heldNov 28, 2016
Decision dateMar 8, 2017

Cite For

Mitigation of Financial Issues Under Guideline F
Importance of Rehabilitation Agreements for Student Loans
Consideration of the Whole-person Concept 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 indebtedness but had resolved nine of the fifteen debts listed in the Statement of Reasons (SOR). The applicant entered into a rehabilitation agreement for the remaining student loans and demonstrated a commitment to resolving her financial issues, leading to a decision in her favor under Guideline F.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	indebted on six delinquent student loan accounts in the approximate amount of $27,048 $27,048	For Applicant	Student Loan Debt	Unknown	—	(a) behavior happened long ago / infrequent / unlikely to recur (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	—
1.b	indebted on six delinquent student loan accounts in the approximate amount of $27,048 $27,048	For Applicant	Student Loan Debt	Unknown	—	(a) behavior happened long ago / infrequent / unlikely to recur (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	—
1.c	indebted on six delinquent student loan accounts in the approximate amount of $27,048 $27,048	For Applicant	Student Loan Debt	Unknown	—	(a) behavior happened long ago / infrequent / unlikely to recur (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	—
1.d	indebted on six delinquent student loan accounts in the approximate amount of $27,048 $27,048	For Applicant	Student Loan Debt	Unknown	—	(a) behavior happened long ago / infrequent / unlikely to recur (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	—
1.e	indebted on six delinquent student loan accounts in the approximate amount of $27,048 $27,048	For Applicant	Student Loan Debt	Unknown	—	(a) behavior happened long ago / infrequent / unlikely to recur (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	—
1.f	indebted on six delinquent student loan accounts in the approximate amount of $27,048 $27,048	For Applicant	Student Loan Debt	Unknown	—	(a) behavior happened long ago / infrequent / unlikely to recur (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	—
1.g	indebted on a collection account in the amount of $120 $120	For Applicant	Unspecified Financial	Unknown	—	—	—
1.h	indebted to a collection agent in the amount of $777 $777	For Applicant	Unspecified Financial	Unknown	—	—	—
1.i	indebted to a collection agent in the amount of $54 $54	For Applicant	Unspecified Financial	Unknown	—	—	—
1.j	indebted to a collection agent in the amount of $258 $258	For Applicant	Unspecified Financial	Unknown	—	—	—
1.k	indebted to a collection agent in the amount of $35 $35	For Applicant	Unspecified Financial	Unknown	—	—	—
1.l	indebted to a collection agent in the amount of $194 $194	For Applicant	Unspecified Financial	Unknown	—	—	—
1.m	indebted to a collection agent in the amount of $162 $162	For Applicant	Unspecified Financial	Unknown	—	—	—
1.o	indebted to a collection agent in the amount of $261 $261	For Applicant	Unspecified Financial	Unknown	—	—	—
1.p	indebted to a collection agent in the amount of $265 $265	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. 16-00687 ) ) Applicant for Security Clearance )

For Government: Andrew Henderson, Esq., Department Counsel For Applicant: Pro se

March 8, 2017 ______________

STATEMENT OF CASE

______________

GOLDSTEIN, Jennifer I., Administrative Judge:

Applicant is a 26-year-old employee of a defense contractor. She has a history of financial indebtedness demonstrated by numerous delinquencies. She has fully resolved 9 of the 15 debts listed on the Statement of Reasons (SOR). She has entered into a rehabilitation agreement on the remaining six debts, all student loans, and credibly avers that she will make payments on these debts until they are repaid. Eligibility for access to classified information is granted.

Statement of the Case

On August 12, 2016, the Department of Defense issued an SOR to Applicant detailing security concerns under Guideline F, Financial Considerations. The action was taken under Executive Order (EO) 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG) effective September 1, 2006. Applicant answered the SOR on August 31, 2016. (Answer). The case was assigned to me on October 17, 2016. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on November 2, 2016, scheduling the hearing for November 28, 2016. The hearing was convened as scheduled. The Government offered Exhibits (GE) 1 through 5, which were admitted without objection. Applicant testified on her own behalf, but offered no exhibits. The record was left open for receipt of documents. On January 3, 2017, Applicant presented AE A through AE P. Department Counsel had no objections to AE A through AE P and they were admitted. The record then closed. DOHA received the transcript of the hearing (Tr.) on December 6, 2016.

FINDINGS OF FACT

Applicant is a 26-year-old employee of a defense contractor. She is unmarried and has a two-year-old son. She has worked for her employer since July 2015. (Tr. 18-

As listed in the SOR, Applicant was alleged to be delinquent on 15 debts in the total amount of $29,174.1 Her debts are identified in the credit reports entered into evidence. After a thorough and careful review of the pleadings, exhibits, and testimony, I make the following findings of fact. (Answer; GE 2; GE 3; GE 4.)

Applicant attributed her financial delinquencies to losing track of her accounts and bills after she moved. She testified that, since learning of her delinquent accounts during the security clearance investigation, she has been in contact with all of her creditors and is working to resolve all delinquencies as her funds allow. (Tr. 43.)

Applicant is indebted on six delinquent student loan accounts in the approximate amount of $27,048, as alleged in SOR ¶¶ 1.a through 1.f. Applicant used these student loans to finance her college education. She graduated in 2011, and applied to have repayment of the loans deferred after graduation. She was granted deferments through May 2013. However, she incorrectly believed that the student loans continued to be deferred until she met with the security clearance investigator, who questioned her about the student loans being placed for collection. Immediately after that interview, she contacted the collection agent. She entered into a rehabilitation agreement with that creditor to pay $5 monthly for a year, to “get them out of collections.” In January 2017 the payments were to increase to $200 per month. She provided a copy of the rehabilitation loan agreement with the collection agent that holds these accounts. Applicant is resolving these debts. (AE A; AE B; AE C; AE D; AE E; AE F; Tr. 21-29, 42.)

Applicant was indebted on a collection account in the amount of $120, as stated in SOR ¶ 1.g. She provided a letter from this creditor, dated January 3, 2017, which reflected this debt has been paid in full. It is resolved. (AE G; AE P; Tr. 30-32.) Applicant was indebted to a collection agent in the amount of $777, as stated in SOR ¶ 1.h. Applicant presented an undated receipt showing $777.90 was paid to the original creditor. This debt is resolved. (AE H; Tr. 32-34, 39.)

Applicant was indebted to a collection agent in the amount of $54, as stated in SOR ¶ 1.i. She presented a letter from the collection agent, dated November 28, 2016, which reflects this debt is paid in full. It is resolved. (AE I; Tr. 34-35.)

Applicant was indebted to a collection agent in the amount of $258, as stated in SOR ¶ 1.j. She presented a letter from the collection agent, dated November 28, 2016, which reflects this debt is paid in full. It is resolved. (AE J; AE P; Tr. 35-36.)

Applicant was indebted to a collection agent in the amount of $35, as stated in SOR ¶ 1.k. This was for the same underlying delinquency as the $194 debt stated in SOR ¶ 1.l. She presented a letter from the collection agent with both account numbers on it, dated September 2, 2016, which reflects this debt is paid in full. It is resolved. (AE K; AE L; AE P; Tr. 36-37.)

Applicant was indebted to a collection agent in the amount of $162, as stated in SOR ¶ 1.m. She presented a statement, which shows she made a $162.80 payment on December 30, 2016. This debt is resolved. (AE M; AE P; Tr. 37-38.)

Applicant was indebted to a collection agent in the amount of $261, as stated in SOR ¶ 1.o. Applicant presented a letter, dated November 25, 2016, which reflects this debt was paid in full. It is resolved. (AE N; Tr. 38-39.)

Applicant was indebted to a collection agent in the amount of $265, as stated in SOR ¶ 1.p. Applicant presented a transaction history, which reflects this debt was paid in full on November 7, 2016. It is resolved. (AE O; Tr. 38.)

Applicant testified that after paying her monthly expenses, she has $200 to $300 left over at the end of the month. (Tr. 41.) She planned to use that money to pay her student loans when her payments increased. (Tr. 42.) She decreased her spending by not “going out.” (Tr. 42.)

Applicant presented three letters of recommendation. Her task leader stated that Applicant is a “quick learner” with a “solid reputation.” A coworker reflected that Applicant is “diligent, responsible, and a go getter.” A former coworker noted that Applicant is devoted and takes initiative. (AE P.)

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 adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which are to be used in evaluating an applicant’s eligibility for access to classified information. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, administrative judges apply the guidelines in conjunction with the factors listed in AG ¶ 2 describing the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶ 2(c), the entire process is a conscientious scrutiny of a number of variables known as the “whole-person concept.” The administrative judge must consider all available, reliable information about the person, past and present, favorable and unfavorable, in making a decision.

The protection of the national security is the paramount consideration. AG ¶ 2(b) requires that “[a]ny doubt concerning personnel being considered for access to classified information will be resolved in favor of national security.” In reaching this decision, I have drawn only those conclusions that are reasonable, logical, and based on the evidence contained in the record.

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 clearance decision.

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

Section 7 of EO 10865 provides that adverse decisions shall be “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive information).

ANALYSIS

Guideline F, Financial Considerations

The security concern for Financial Considerations is set out in AG ¶ 18, as follows:

Failure or inability to live within one’s means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual’s reliability, trustworthiness and ability to protect classified information. An individual who is financially overextended is at risk of having to engage in illegal acts to generate funds.

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

(a) inability or unwillingness to satisfy debts; and

Applicant had a history of financial indebtedness and inability to satisfy her debts, demonstrated by the six delinquent student loans and nine delinquent collection accounts identified on her August 2015, July 2016, and October 2016 credit reports. The evidence raises the above two security concerns, thereby shifting the burden to Applicant to rebut, extenuate, or mitigate those concerns.

The guideline includes five conditions in AG ¶ 20 that could mitigate security concerns arising from Applicant’s financial difficulties. Three apply:

(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;

(c) the person has received or is receiving counseling for the problem and/or there are clear indications that the problem is being resolved or is under control; and

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

Applicant’s financial problems are under control. She has resolved nine formerly delinquent accounts. She has a rehabilitation agreement with the collection agent that holds her student loans and has made the required payments, albeit minimal, for a year. She has matured and understands the importance of maintaining accounts in good standing. She has decreased her spending in order to pay her bills on her income. She credibly testified that she will continue to pay her student loans until they are resolved. Her past financial irresponsibility is unlikely to recur and does not cast doubt on her current reliability, trustworthiness, or good judgment. AG ¶ 20(a) offers mitigation. Similarly, Applicant made a good-faith effort to address all of her debts, and all of her delinquent financial obligations are under control. Mitigation under AG ¶¶ 20(c) and 20(d) has been fully 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 relevant circumstances. The administrative judge should consider the nine adjudicative process factors listed at AG ¶ 2(a):

(1) the nature, extent, and seriousness of the conduct; (2) the circumstances surrounding the conduct, to include knowledgeable participation; (3) the frequency and recency of the conduct; (4) the individual’s age and maturity at the time of the conduct; (5) the extent to which participation is voluntary; (6) the presence or absence of rehabilitation and other permanent behavioral changes; (7) the motivation for the conduct; (8) the potential for pressure, coercion, exploitation, or duress; and (9) the likelihood of continuation or recurrence.

Under AG ¶ 2(c), the ultimate determination of whether to grant eligibility for a security clearance must be an overall commonsense judgment based upon careful consideration of the guidelines and the whole-person concept.

I considered the potentially disqualifying and mitigating conditions in light of all the facts and circumstances surrounding this case. I have incorporated my comments under Guideline F in my whole-person analysis. Some of the factors in AG ¶ 2(a) were addressed under that guideline, but some warrant additional comment. Applicant is respected by her present and former colleagues and performs well at work. She has worked hard to address her delinquencies. She has demonstrated reasonable and responsible actions with respect to her debts by either resolving them or rehabilitating student loan accounts to the satisfaction of her creditors. Overall, the record evidence leaves me without questions and doubts as to Applicant’s eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant mitigated the Financial Considerations security concerns. After listening to her testimony and observing her demeanor, I find no reason to conclude that she will not continue making payments on her student loans.

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

Subparagraph 1.a: For Applicant Subparagraph 1.b: For Applicant Subparagraph 1.c: For Applicant Subparagraph 1.d: For Applicant Subparagraph 1.e: For Applicant Subparagraph 1.f: For Applicant Subparagraph 1.g: For Applicant Subparagraph 1.h: For Applicant Subparagraph 1.i: For Applicant Subparagraph 1.j: For Applicant Subparagraph 1.k: For Applicant Subparagraph 1.l: For Applicant Subparagraph 1.m: For Applicant Subparagraph 1.o: For Applicant Subparagraph 1.p: 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.

________________________ Jennifer I. Goldstein Administrative Judge

FOOTNOTES

1 Applicant’s debts are alleged in SOR ¶¶ 1.a through 1.m, 1.o, and 1.p. There is no SOR ¶ 1.n.