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ISCR Case 16-01203.h1 — CASE

ISCR Case 16-01203.h1granted

Case Headnote

ISCR Case No. 16-01203.h1

grantedSep 27, 2017· Hon. LeRoy F. Foreman· hearing

Summary

This case concerns a 49-year-old claims customer-service advocate for a defense contractor whose eligibility for a public trust position was reviewed under Guideline F (Financial Considerations). The Statement of Reasons detailed several delinquent debts, including a January 2012 judgment for $11,202 from a credit card, an $8,399 deficiency after a May 2012 vehicle repossession, and a charged-off credit card for $3,509. Additionally, there were collection accounts for a $263 medical bill from September 2009, and two credit card accounts totaling $8,113 and $5,351 from April and July 2009, respectively.

Disqualifying conditions under Guideline F were raised, but the judge applied several mitigating conditions. The applicant demonstrated a good-faith effort to repay and resolve her debts, including negotiating payment agreements and disputing certain amounts. Her financial difficulties were largely attributed to circumstances beyond her control, specifically her husband's reduced work hours.

The judge also considered the applicant's long-term employment and her history of holding a public trust position without incident, which supported her overall reliability. Based on these mitigating factors and her proactive efforts to address the financial issues, the applicant was GRANTED eligibility for a public trust position.

Why the Applicant Prevailed

The applicant demonstrated a good-faith effort to repay overdue creditors and resolve debts.
The applicant's financial difficulties were largely due to circumstances beyond her control, such as her husband's reduced work hours.
The applicant's long-term employment and history of holding a public trust position without incident supported her reliability.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability to Satisfy Debts
AG ¶ 19(b)raisedUnwillingness to Satisfy Debts Regardless of the Ability to Do So

Mitigating

AG ¶ 20(b)appliedConditions Largely Beyond the Person's Control
AG ¶ 20(d)appliedGood-faith Effort to Repay Debts
AG ¶ 20(e)appliedReasonable Basis to Dispute Debts

Key Rule Quoted

“A trustworthiness adjudication is an evaluation of an individual’s judgment, reliability, and trustworthiness. It is not a debt-collection procedure.”

Procedural Posture

SOR issuedJul 19, 2016
Answer filedAug 22, 2016
Hearing held—Decision made without a hearing, pro se applicant.
Decision dateSep 27, 2017

Cite For

Mitigating Conditions Under Guideline F for Financial Considerations
Evaluation of Financial Issues in the Context of the Whole-person Concept
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 F · descriptive summary of a decided case

Posture: Decision on RecordDecided: granted

The judge found that the applicant's financial issues, including several delinquent debts, were mitigated by her efforts to make payments and resolve disputes. Ultimately, the judge ruled in favor of the applicant, granting her eligibility for a public trust position.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	judgment for $11,202, filed in January 2012 for a delinquent credit-card account. $11,202	For Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.b	deficiency after repossession of a motor vehicle, charged off in May 2012 for $8,399. $8,399	Against Applicant	Auto Loan Debt	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.c	delinquent credit-card account charged off for $3,509. $3,509	For Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.d	medical bill placed for collection of $263 in September 2009. $263	For Applicant	Medical Debt	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.e	credit-card accounts placed for collection of $8,113 in April 2009. $8,113	For Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	(e) reasonable, documented basis to dispute the debt	—
1.f	credit-card accounts placed for collection of $5,351 in July 2009. $5,351	For Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	(e) reasonable, documented basis to dispute the debt	—

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: ) ) [Redacted] ) ADP Case No. 16-01203 ) Applicant for Public Trust Position )

For Government: David F. Hayes, Esq., Department Counsel For Applicant: Pro se

09/27/2017 ______________

STATEMENT OF CASE

______________

FOREMAN, LeRoy F., Administrative Judge:

This case involves trustworthiness concerns raised under Guideline F (Financial Considerations). Eligibility for a public trust position is granted.

Statement of the Case

Applicant submitted an application to continue her eligibility for a public trust position on October 22, 2015. On July 19, 2016, the Department of Defense (DOD) sent her a Statement of Reasons (SOR), citing trustworthiness concerns under Guideline F. DOD acted under DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); DOD Regulation 5200.2-R, Personnel Security Program (January 1987), as amended (Regulation);1 and the adjudicative guidelines (AG) implemented by DOD on September 1, 2006.2 Applicant answered the SOR on August 22, 2016, and requested a decision on the administrative record, without a hearing before an administrative judge. Department Counsel submitted the Government’s written case on September 22, 2016. On September 23, 2016, a complete copy of the file of relevant material (FORM) was sent to Applicant, who was given an opportunity to file objections and submit material to refute, extenuate, or mitigate the Government’s evidence. She received the FORM on October 5, 2016, but did not respond. The case was assigned to me on September 7, 2017.

The FORM included Item 3, a summary of a personal subject interview (PSI) conducted on December 15, 2015. The PSI was not authenticated as required by Directive ¶ E3.1.20. Department Counsel informed Applicant that she was entitled to comment on the accuracy of the PSI summary; make any corrections, additions, deletions or updates; or object to consideration of the PSI on the ground that it was not authenticated. I conclude that she waived any objections to the PSI summary by failing to respond to the FORM. Although pro se applicants are not expected to act like lawyers, they are expected to take timely and reasonable steps to protect their rights under the Directive. ISCR Case No. 12-10810 at 2 (App. Bd. Jul. 12, 2016).

FINDINGS OF FACT

In Applicant’s answer to the SOR, she admitted the allegations in SOR ¶¶ 1.a and 1.c, but she denied the allegations in SOR ¶¶ 1.b, 1.d, 1.e, and 1.f. Her admissions are incorporated in my findings of fact.

Applicant is a 49-year-old claims customer-service advocate employed by a defense contractor since July 1996. She has a high-school education. She married in November 1986, divorced in October 1993, and married her current spouse in February 1998. She has two adult children, an adult stepdaughter, and has legal custody of two grandchildren, ages five and six. She was cleared for a public trust position in August 2004 and is seeking to continue her eligibility.

The six delinquent debts alleged in the SOR are reflected in a credit report from November 2015 (FORM Item 4.) The evidence concerning these debts is summarized below.

SOR ¶ 1.a: judgment for $11,202, filed in January 2012 for a delinquent credit-card account. In March 2015, Applicant entered into a payment agreement providing for monthly $350 payments. She was continuing to make payments as of the date of the PSI. As of the date of her answer to the SOR, she had reduced the balance to $6,808. (Attachment A to SOR Answer.)

SOR ¶ 1.b: deficiency after repossession of a motor vehicle, charged off in May 2012 for $8,399. In the PSI, Applicant stated that she contacted the creditor in October 2015, and the creditor offered to settle this debt for $2,300, but she could not afford to accept the settlement. (Item 3 at 7.) In her answer to the SOR, she stated that the vehicle was repossessed after her husband’s work hours were reduced and they could not afford the payments. She arranged to borrow funds from another lender and pay off the loan, but the original creditor refused to accept payment and sold the vehicle at auction. A credit report from November 2015 reflects that she disputed this debt and the dispute was resolved against her. (Item 4 at 5.) The debt is reflected as unresolved in a credit report from June 2016. (Item 5 at 3.)

SOR ¶ 1.c: delinquent credit-card account charged off for $3,509. This debt is included in the judgment alleged in SOR ¶ 1.a.

SOR ¶ 1.d: medical bill placed for collection of $263 in September 2009. In the PSI, Applicant stated that she had been paying $10 per month on this debt since about June 2015. The debt is not reflected in a June 2016 credit report. (FORM Item 5.)

SOR ¶¶ 1.e and 1.f: credit-card accounts placed for collection of $8,113 in April 2009 and placed for collection of $5,351 in July 2009. In the PSI, Applicant stated that she never had credit cards from these two creditors and that she intended to dispute the debts. (Item 3 at 6, 8.) The November 2015 credit report reflects that she disputed both debts and that reinvestigations were in process. Neither debt is reflected in the June 2016 credit report, indicating that the disputes were resolved in her favor.

POLICIES

The Under Secretary of Defense’s Memorandum of November 19, 2004, treats ADP positions as sensitive positions, and it entitles applicants for ADP positions to the procedural protections in the Directive before any final unfavorable access determination may be made. The standard set out in the Manual and the adjudicative guidelines for assignment to sensitive duties is that the person’s loyalty, reliability, and trustworthiness are such that assigning the person to sensitive duties is clearly consistent with the interests of national security. Manual ¶ 7.1a(2); AG ¶ 2.b.

A person who seeks access to sensitive 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. Decisions include, by necessity, consideration of the possible risk the applicant may deliberately or inadvertently fail to safeguard sensitive information.

When evaluating an applicant’s suitability for a public trust position, the administrative judge must consider the disqualifying and mitigating conditions in the AG. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, these guidelines are applied in conjunction with an evaluation of the whole person. The administrative judge’s overarching adjudicative goal is a fair, impartial and commonsense decision. An administrative judge must consider all available, reliable information about the person, past and present, favorable and unfavorable.

The protection of the national security is the paramount consideration. Under AG ¶ 2(b), “[a]ny doubt concerning personnel being considered for access to [sensitive] information will be resolved in favor of national security.” The Government must present substantial evidence to establish controverted facts alleged in the SOR. Directive ¶ E3.1.14. Once the Government establishes a disqualifying condition by substantial evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the facts. Directive ¶ E3.1.15. An applicant has the burden of proving a mitigating condition, and the burden of disproving it never shifts to the Government. See ISCR Case No. 02- 31154 at 5 (App. Bd. Sep. 22, 2005). An applicant has the ultimate burden of demonstrating that it is clearly consistent with national security to grant or continue eligibility for a public trust position.

ANALYSIS

Guideline F, Financial Considerations

The trustworthiness concern under this guideline is set out in AG ¶ 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. . . . An individual who is financially overextended is at greater risk of having to engage in illegal or otherwise questionable acts to generate funds. . . .

This concern is broader than the possibility that a person might knowingly compromise classified or sensitive information to raise money. It encompasses concerns about a person’s self-control, judgment, and other qualities essential to protecting classified information. A person who is financially irresponsible may also be irresponsible, unconcerned, or negligent in handling and safeguarding classified or sensitive information. See ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012).

Applicant’s admissions and the documentary evidence in the record establish two disqualifying conditions under this guideline: AG ¶ 19(a) (“inability to satisfy debts”) and AG ¶ 19(b) (“unwillingness to satisfy debts regardless of the ability to do so”). The following mitigating conditions are potentially relevant:

AG ¶ 20(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;

AG ¶ 20(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; AG ¶ 20(d): the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts; and

AG ¶ 20(e): 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.

AG ¶ 20(a) is not established. Applicant delinquent debts are recent, numerous, and were not incurred under circumstances making them unlikely to recur.

AG ¶ 20(b) is established. Applicant fell behind in her debt payments when her husband’s work hours and income were reduced, which was a condition largely beyond her control. She has acted responsibly by staying in contact with her creditors, negotiating payment agreements, and making regular payments under those agreements. Even after being rebuffed by the creditor for the repossessed automobile alleged in SOR ¶ 1.b, she contacted that creditor in October 2015 and received a settlement offer, which she could not afford at the time.

A trustworthiness adjudication is an evaluation of an individual’s judgment, reliability, and trustworthiness. It is not a debt-collection procedure. ISCR Case No. 09- 02160 (App. Bd. Jun. 21, 2010.) The adjudicative guidelines do not require that an individual make payments on all delinquent debts simultaneously, pay the debts alleged in the SOR first, or establish resolution of every debt alleged in the SOR. He or she need only establish a plan to resolve financial problems and take significant actions to implement the plan. See ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008). Although the debt alleged in SOR ¶ 1.bis not yet resolved, Applicant has systematically carried out a plan to resolve her delinquent debts. She has limited education and no legal training, but she is astute enough to realize that eventually she will need to address the adverse information in her credit report regarding the debt alleged in SOR ¶ 1.b. Her responsible conduct regarding the other creditors, her long employment by a defense contractor, and her ability to hold public trust positions for many years without incident make it unlikely that she will trigger the concerns described in AG ¶ 19 about resorting to illegal conduct.

AG ¶ 20(d) is established for the debts alleged in SOR ¶¶ 1.a, 1.c, and 1.d. It is not established for the debt alleged in SOR ¶ 1.b. It is not applicable to the debts alleged in SOR ¶¶ 1.e and 1.f, which Applicant successfully disputed.

AG ¶ 20(e) is established for the debts alleged in SOR ¶¶ 1.e and 1.f. Applicant disputed the debts on the ground that she never had accounts with those creditors, and the debts no longer are reflected in her credit record.

WHOLE PERSON CONCEPT

The ultimate determination of whether to grant eligibility for a public trust position must be an overall commonsense judgment based upon careful consideration of the guidelines and the whole-person concept. In applying the whole-person concept, an administrative judge must evaluate an applicant’s eligibility for a public trust position by considering the totality of the applicant’s conduct and all relevant circumstances. An administrative judge should consider the adjudicative process factors listed at AG ¶ 2(d).3

I have incorporated my comments under Guideline F and applied the factors in AG 2(d) in my whole-person analysis. I have considered the fact that Applicant has worked for her current employer for more than 21 years and held a public trust position for more than 13 years. After weighing the disqualifying and mitigating conditions under Guideline F, and evaluating all the evidence in the context of the whole person, I conclude Applicant has mitigated the trustworthiness concerns raised by her delinquent debts.

FORMAL FINDINGS

Paragraph 1, Guideline F (Financial Considerations): FOR APPLICANT

Subparagraphs1.a-1.f: For Applicant

CONCLUSION

I conclude that it is clearly consistent with the interests of national security to continue Applicant’s eligibility for a public trust position. Eligibility for a public trust position is granted.

LeRoy F. Foreman Administrative Judge

FOOTNOTES

1 On April 3, 2017, DOD Manual 5200.02, Procedures for the DoD Personnel Security Program (PSP), (Manual) was published. It cancelled and incorporated the Regulation, but it did not include the provisions for ADP cases. ADP cases continue to be adjudicated in accordance with the Deputy Under Secretary of Defense’s Memorandum for the Director, Defense Office of Hearings and Appeals, dated November 19, 2004.

2 Security Executive Agent Directive 4 (SEAD 4) was issued on December 10, 2016, revising the 2006 adjudicative guidelines for all adjudicative decisions issued on or after June 8, 2017. The changes resulting from issuance of SEAD 4 did not affect my decision in this case. 3 The factors are: (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.