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ISCR Case 16-01060.h1 — CASE

ISCR Case 16-01060.h1granted

Case Headnote

ISCR Case No. 16-01060.h1

grantedSep 8, 2017· Hon. Wilford H. Ross· hearing

Summary

A 50-year-old male applicant was granted a security clearance under Guideline F (Financial Considerations) despite initial concerns. The Statement of Reasons cited a past-due credit card debt of $546, a $7,114 tax lien from State A entered in 2013, and a Chapter 7 bankruptcy filing in 2011. These issues raised disqualifying conditions F.1.a, F.1.c, and F.1.f.

However, the judge applied mitigating conditions F.2.a, F.2.b, F.2.d, and F.2.g. The applicant had resolved the $546 credit card debt prior to the hearing. Regarding the tax lien, he hired a tax resolution firm and provided evidence of active progress toward its resolution.

The applicant's financial difficulties were attributed to circumstances beyond his control, specifically a contentious divorce and an economic downturn. Demonstrating a stable financial situation and proactive steps to address his debts, the applicant ultimately had his security clearance granted.

Why the Applicant Prevailed

The applicant resolved his past-due credit card debt before the hearing.
He hired a tax resolution firm to address the tax lien and provided evidence of progress.
The applicant's financial difficulties were primarily due to circumstances beyond his control, including a contentious divorce and economic downturn.

Conditions Referenced

Disqualifying

F.1.araisedInability to Satisfy Debts
F.1.craisedHistory of Not Meeting Financial Obligations
F.1.fraisedFailure to File or Fraudulently Filing Income Tax Returns

Mitigating

F.2.aappliedBehavior Happened Long Ago or Infrequently
F.2.bappliedConditions Largely Beyond the Person's Control
F.2.dappliedGood-faith Effort to Repay or Resolve Debts
F.2.gappliedArrangements with Tax Authority

Key Rule Quoted

“The protection of the national security is the paramount consideration.”

Procedural Posture

SOR issuedJul 1, 2016
Answer filedAug 1, 2016
Hearing heldJan 26, 2017
Decision dateSep 8, 2017

Cite For

Mitigation of Financial Difficulties Under Guideline F
Impact of Personal Circumstances on Financial Issues
Evidence of Rehabilitation and Current Financial Stability

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 past-due credit card debt, an unpaid tax lien, and filed for Chapter 7 bankruptcy, but all were mitigated. The applicant demonstrated a stable financial situation and a credible intent to maintain that stability, leading to a decision in favor of the applicant.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant admitted that he owed a past-due credit card debt in the amount of $546. This debt has been paid and resolved. $546	For Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(a) behavior happened long ago / infrequent / unlikely to recur (d) good-faith effort to repay or otherwise resolve debts	Credited Debt Paid in Full
1.b	Applicant admitted that a tax lien had been entered against him in 2013 by State A in the amount of $7,114. $7,114	For Applicant	Tax Unpaid	Admitted	(f) failure to file / fraudulent filing of tax returns or unpaid tax	(b) conditions largely beyond the person’s control; acted responsibly (g) arrangements made with the tax authority; in compliance	Documented Debt Settlement Documented Financial Counseling Claimed Other
1.c	Applicant admitted that he filed for Chapter 7 bankruptcy protection in 2011.	For Applicant	Bankruptcy Filing	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	Credited Chapter 7 Bankruptcy

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. 16-01060 ) Applicant for Security Clearance )

For Government: Aubrey De Angelis, Esquire, Department Counsel

For Applicant: Pro se

September 8, 2017

______________

STATEMENT OF CASE

______________

ROSS, Wilford H., Administrative Judge:

Statement of the Case

Applicant submitted his Electronic Questionnaire for Investigations Processing (e- QIP) on January 6, 2015. (Government Exhibit 1.) On July 1, 2016, the Department of Defense Consolidated Adjudications Facility (DoD CAF) issued a Statement of Reasons (SOR) to Applicant, detailing security concerns under Guideline F (Financial Considerations). The action was taken under Executive Order 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 for Determining Eligibility for Access to Classified Information, effective within the Department of Defense after September 1, 2006.1

Applicant answered the SOR in writing (Answer) on August 1, 2016, and requested a hearing before an administrative judge. Department Counsel was prepared to proceed on September 6, 2016. The case was assigned to me on September 16, 2016. The Defense Office of Hearings and Appeals (DOHA) issued a Notice of Hearing on November 22, 2016. I convened the hearing as scheduled on January 26, 2017.

The Government offered Government Exhibits 1 through 6, which were admitted without objection. Applicant offered Applicant Exhibits A through C, which were admitted without objection, and testified on his own behalf. DOHA received the final transcript of the hearing (Tr.) on February 3, 2017. Applicant requested that the record remain open until February 28, 2017, for the receipt of additional exhibits. He timely submitted Applicant Exhibits D through J, which were all admitted without objection and the record closed as scheduled.

FINDINGS OF FACT

Applicant is 50 years old, married to his second wife, and has three children. He is seeking to obtain national security eligibility for a security clearance.

Paragraph 1 (Guideline F, Financial Considerations)

The Government alleges in this paragraph that Applicant is ineligible for clearance because he has a past-due debt, has an unpaid tax lien with State A, and filed a Chapter 7 bankruptcy in 2011. Therefore he is potentially unreliable, untrustworthy, or at risk of having to engage in illegal acts to generate funds.

In his Answer, Applicant admitted all three allegations with explanations. He also submitted additional evidence to support his request for a finding of national security eligibility.

Applicant was married to his first wife from 1996 until 2010. They lived in State A that entire time. Applicant’s wife was abusive, and a drug and alcohol abuser with a criminal record. Applicant received sole custody of his two children from his first wife during the divorce. He also was able to obtain an order of protection from the court to have her stay away from the children, and permission to move to State B. Applicant’s wife has paid very little in child support, and has had very limited visitation with the children since the divorce. (Applicant Exhibits I, J; Tr. 20-22, 41-43.) Applicant moved to State B for work in 2012. He continues to live in State B. Applicant’s ex-wife has never lived in State B, yet she fraudulently uses Applicant’s address in State B in order to avoid bill collectors. Applicant provided documentary proof of this fact. This has caused Applicant problems. (Applicant Exhibits C, J; Tr. 31-33.)

1.a. Applicant admitted that he owed a past-due credit card debt in the amount of $546. This debt has been paid and resolved. (Applicant Exhibit E; Tr. 25-29, 47-50.)

1.b. Applicant admitted that a tax lien had been entered against him in 2013 by State A in the amount of $7,114. Applicant’s ex-wife was an accountant, and handled all of the tax issues for the two of them. She did not do a good job. Applicant testified that he did not know about the tax lien until he was interviewed by an investigator from the Office of Personnel Management in January 2016. That same month he hired a reputable tax resolution firm to represent him and resolve his issues with the taxing authorities. He submitted a letter from the enrolled agent with the IRS who is working with him. Her letter, dated February 2, 2017, states that her company has been working to “resolve his problems with taxes dated back to 2006. We are wrapping up his [State A] taxes and he will not have a balance due to [State A]. We are on the last phase of removing any liens from the [State A] Department of Revenue, in essence clearing his credit report from liens.” He recognizes his personal responsibility to make sure his taxes are filed in a timely fashion in the future. This tax lien is being resolved. (Applicant Exhibit H; Tr. 29-38.)

1.c. Applicant admitted that he filed for Chapter 7 bankruptcy protection in 2011. At that time he was in financial difficulty because of his ex-wife’s financial chicanery, and the down-turn in the economy, which affected his income severely. He had an adjusted gross income of $207 in 2008; -$1,136 in 2009; and $3,086 in 2010. In 2011 he was collecting welfare, as shown in Schedule I of his bankruptcy petition. He received a discharge from his debts on May 31, 2011. (Government Exhibit 3; Tr. 22-23, 38-40.)

Applicant’s current financial situation is stable. He makes a substantial income, is able to maintain his household without problems, and the most recent credit reports in the record show no new delinquent accounts. (Government Exhibits 5, and 6; Tr. 43-45.)

Mitigation

Applicant provided three letters of recommendation from people who know him in the defense industry in State B. The CEO of Applicant’s current employer describes Appellant’s work as “exemplary,” and says, “[Applicant] has been one of our most trustworthy and dedicated employees we have had.” (Applicant Exhibit A.) A civilian government employee who has worked with Appellant for three years describes Appellant as a person of “insight and professionalism.” (Applicant Exhibit D.) A senior project manager for Applicant’s employer states, “His [Applicant’s] performance on all projects was excellent and his work product was of the highest quality.” (Applicant Exhibit G.)

POLICIES

When evaluating an applicant’s suitability for a national security eligibility and a security clearance, 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, “Any 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, “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, and has the ultimate burden of persuasion as to obtaining 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 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, “Any 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

Paragraph 1 (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 personal 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;

(f) failure to file or fraudulently filing annual Federal, state, or local income tax returns or failure to pay annual Federal, state, or local income tax as required.

Applicant had one past-due debt, a tax lien, and filed for bankruptcy protection in 2011. All three of these conditions apply, thereby shifting the burden to Applicant to mitigate them.

The guideline includes four 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;

(b) the conditions that resulted in the financial problem were largely beyond the person’s control (e.g., loss of employment, a business downturn, unexpected medical emergency, a death, divorce or separation, clear victimization by predatory lending practices, or identity theft), and the individual acted responsibly under the circumstances; (d) the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts; and

(g) the individual has made arrangements with the appropriate tax authority to file or pay the amount owed and is in compliance with those arrangements.

Applicant paid the single past-due debt alleged in the SOR. He has hired a reputable firm to represent him before the tax authorities, and submitted evidence that they have been working to resolve his tax issues since shortly after he was informed of them. He presented compelling evidence that his financial situation in 2011 was primarily because of his bitter and contentious divorce, and the severe economic downturn. His income virtually disappeared for several years while he had to take care of his children by himself. He appropriately used bankruptcy to resolve his past-due debts. His current financial status is stable, and he evinces a credible intent and ability of being able to maintain that stability into the future. He has fully mitigated all the allegations in the SOR. Paragraph 1 is found for Applicant.

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.

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 pertinent facts and circumstances surrounding this case. Applicant has mitigated the concerns regarding his financial situation. Overall, the record evidence does not create substantial doubt as to Applicant's present suitability for national security eligibility, and a security clearance.

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.c: 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 or continue Applicant's national security eligibility. Eligibility for access to classified information is granted.

WILFORD H. ROSS Administrative Judge

FOOTNOTES

1 I considered the previous Adjudicative Guidelines, effective September 1, 2006; as well as the new Adjudicative Guidelines, effective June 8, 2017. My decision would be the same if the case was considered under the previous Adjudicative Guidelines.