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ISCR Case 16-01172.h1 — CASE

ISCR Case 16-01172.h1granted

Case Headnote

ISCR Case No. 16-01172.h1

grantedJun 15, 2017· Hon. Noreen A. Lynch· hearing

Summary

A 57-year-old defense contractor employee was granted a security clearance despite allegations under Guideline F (Financial Considerations) concerning approximately $42,000 in delinquent debts. The Statement of Reasons cited three specific debts: one charged off at $26,621, a collection account for $9,333, and another charged off at $6,063. Disqualifying conditions AG ¶ 19(a) and AG ¶ 19(c) were raised.

However, the judge determined that the applicant's financial issues were largely beyond her control, stemming primarily from her deceased husband's terminal illness and the associated loss of income. Mitigating conditions AG ¶ 20(a), AG ¶ 20(b), AG ¶ 20(d), and AG ¶ 20(e) were applied.

The applicant demonstrated responsible behavior by disputing medical debts and actively attempting to negotiate with creditors. Her prior good credit history and ongoing efforts to rebuild her credit were also significant factors in the decision. Ultimately, the security clearance was granted.

Why the Applicant Prevailed

The applicant's financial difficulties were primarily due to her husband's terminal illness and loss of income.
She demonstrated responsible behavior by disputing medical debts and attempting to negotiate with creditors.
The applicant's prior good credit history and current efforts to rebuild her credit were considered.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(a)appliedBehavior Occurred Under Circumstances Unlikely to Recur
AG ¶ 20(b)appliedConditions Largely Beyond the Person's Control
AG ¶ 20(e)appliedReasonable Basis to Dispute Legitimacy of Debts
AG ¶ 20(d)appliedGood-faith Effort to Repay Debts

Key Rule Quoted

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

Procedural Posture

SOR issuedJul 1, 2016
Answer filed—Applicant requested a decision based on the written record.
Hearing held—No hearing; decision based on written record.
Decision dateJun 15, 2017

Cite For

Mitigating Conditions Under Guideline F Due to Extraordinary Circumstances
Consideration of the Whole-person Concept in Financial Cases
Impact of Personal Crises on Financial Obligations

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 several delinquent debts totaling approximately $42,000, primarily due to financial difficulties stemming from her husband's terminal illness. Despite these debts, the judge credited the applicant's explanations and circumstances, ultimately ruling in her favor under Guideline F, granting her security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	charged off in the amount of $26,621 $26,621	For Applicant	Credit Card Debt	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 (e) reasonable, documented basis to dispute the debt	Claimed Other
1.b	a collection account in the amount of $9,333 $9,333	For Applicant	Unspecified Financial	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 (e) reasonable, documented basis to dispute the debt	Claimed Other
1.c	charged off in the amount of $6,063 $6,063	For Applicant	Credit Card Debt	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 (e) reasonable, documented basis to dispute the debt	Claimed Other
1.d–1.p	13 sub-charges — specific text not stated in this decision (for the applicant). (low confidence)	For Applicant			—	—	—

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.16-01172 ) ` ) Applicant for Security Clearance )

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

06/15/2017 ______________

STATEMENT OF CASE

______________

LYNCH, Noreen, A., Administrative Judge:

The Department of Defense (DOD) issued a Statement of Reasons (SOR) to Applicant alleging security concerns arising under Guideline F (Financial Considerations). The SOR was dated July 1, 2016. The action was taken under Executive Order (EO) 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; DOD 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the Adjudicative Guidelines (AG) implemented June 8, 2017. 1

Applicant timely answered the SOR and requested a decision based on the written record in lieu of a hearing. Department Counsel submitted a File of Relevant Material (FORM), dated August 15, 2016. Applicant received the FORM on September 8, 2016, Applicant did not respond to the FORM. The case was assigned to me on June 1, 2017. Based on a review of the case file, eligibility for access to classified information is granted.

FINDINGS OF FACT

In her answer to the SOR, Applicant admitted three allegations (SOR 1.a-1.c), and disputed the medical account allegations (SOR 1.d-1-p.) She provided explanations for the allegations under Guideline F (Financial Considerations). (Item 1)

Applicant is a 57-year-old employee of a defense contractor. She graduated from high school in 1978. Her first marriage ended in divorce in 1985. She remarried in September 1985 and her second husband died in June 2009. She has one daughter. Applicant has worked for her current employer since 2015. She completed a security clearance application in 2015, and she reported that she obtained a security clearance in 1992. (Item 2)

Financial Considerations

The SOR alleges 16 delinquent debts that total approximately $42,000. The items are three consumer accounts and the remainder are medical accounts. (Item 5)

In her answer to the SOR, Applicant stated that she does not deny the financial issues, which were due to the nature of her now deceased husband’s illness. He had stage IV colon cancer. He lost his job and his insurance. During the illness she was the sole care giver and that resulted in the loss of income for the family. Applicant acknowledged that she lived on credit cards, with the hope that the credit cards would be paid when her husband became well. The credit cards reached the maximum limit in 2008, and she had no way of repaying them. Applicant also had medical bills. She lost her home and her good credit after her husband’s death in June 2009. (Item 1)

Applicant was self-employed from 2003 until 2012. She worked freelance but during the end stage of his illness, she cared for him 24/7. She was emphatic when she reported that the charges were for life necessities (food, clothing, and medicine). She explained that she did this out of survival, necessity and love for her fragile family. Applicant spent the last 40 days of her husband’s life when he was in ICU, living in her car parked at the hospital.

Applicant acknowledged that it was wrong to incur unpayable debt, but it was unavoidable. There was no frivolous spending. She does not understand how this could be mistaken for poor judgement and lack of trustworthiness. She lost everything she had worked for her entire life. She stated that she would never compromise the security of the United States. This personal crisis does not mean that she lived beyond her means. Applicant submitted a credit report from 2016, which reflects many accounts that are current. (Item 6 )

During her 2015 investigative interview, Applicant stated that she used two credit cards from the same company (SOR 1.a and 1.c) and worked with the bank to satisfy the account. She was told by the bank representative that the account would be written off in 2016. She understood this to mean that they would not accept payments from her. (Item 3) She owned this account with her deceased husband jointly. Her plan was to contact the bank and make monthly payments. She acknowledged that she did not seek financial counseling. As to her mortgage payment, she was told to keep paying, but eventually she could not maintain the payments. As described above, the house was sold in 2013, and she does not have any further financial obligation. As to the majority of medical accounts, she had no knowledge of them at the time. She assumed that insurance would pay the bills. She learned that the medical accounts were not paid in 2015, and she is disputing them. This is reflected on the 2016 credit report that was submitted by the Government in Item 5. All of the medical bills relate to her husband’s illness. (Item 3) One or two of them do not appear on her current credit report.

As to SOR allegations 1.a-1.c, Applicant admits that they are not resolved. She has paid smaller accounts that are reflected in the credit reports. (Items 4 and 5) Allegation SOR 1.a was charged off in the amount of $26,621. SOR allegation 1.bwas a collection account in the amount of $9,333. A note referring to this account states that “Consumer disputes after resolution.” Allegation SOR 1.cwas charged off in the amount of $6,063. There are numerous accounts that have zero balance due, including a paid car loan. (Item 5)

As to SOR allegations 1.dthrough 1.p, Applicant disputed the medical accounts as reflected in the 2016 credit report. She checks her credit reports weekly and finds new medical accounts. (Item 2) She stated that she will pay the accounts if they are her responsibility.

Applicant’s credit report, obtained in 2015, reflects that the majority of her accounts are noted “pays as agreed.” However, the SOR accounts 1.a through 1.cstill appear as closed or charged-off accounts.

There is nothing in the record that shows Applicant’s current financial earnings or any attempts to obtain financial counseling, She did not respond to the FORM to supplement the record.

POLICIES

When evaluating an applicant’s suitability for a security clearance, an administrative judge must consider the adjudicative guidelines (AG). In addition to brief introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, they are applied in conjunction with the factors listed in the adjudicative process. An administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. Under AG ¶ 2(c), this process is a conscientious scrutiny of a number of variables known as the “whole-person concept.” An 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. Likewise, I have avoided drawing inferences grounded on mere speculation or conjecture.

The Government must present evidence to establish controverted facts alleged in the SOR. An applicant is responsible for presenting “witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by applicant or proven by Department Counsel. . . .” The burden of proof is something less than a preponderance of evidence. The ultimate burden of persuasion is on the applicant.

A person seeking access to classified information enters into a fiduciary relationship with the Government based on 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 classified information. Such decisions entail a certain degree of legally permissible extrapolation of potential, rather than actual, risk of compromise of classified information.

Section 7 of EO 10865 provides that 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.” “The clearly consistent standard indicates that security clearance determinations should err, if they must, on the side of denials.” Any reasonable doubt about whether an applicant should be allowed access to sensitive information must be resolved in favor of protecting such information. The decision to deny an individual a security clearance does not necessarily reflect badly on an applicant’s character. It is merely an indication that the applicant has not met the strict guidelines the President and the Secretary of Defense established for issuing a clearance.

ANALYSIS

Guideline F, Financial Considerations

AG ¶ 18 expresses the security concern pertaining to financial considerations:

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 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 compulsive gambling, mental health conditions, substance misuse, or alcohol abuse or dependence. An individual who is financially over-extended is at grater 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.

AG ¶ 19 describes conditions that could raise a security concern and may be disqualifying:

(a) inability to satisfy debts; and

The Government produced credible evidence to establish that Applicant has delinquent debts. The credit reports confirm the debts. Consequently, the evidence is sufficient to raise disqualifying conditions ¶¶ 19(a) and 19(c).

AG ¶ 20 provides conditions that could mitigate the security concerns:

(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;

(c) the person has received or is receiving 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;

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

(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.

Applicant acknowledged her delinquent debts. She had extraordinary circumstances due to her husband’s loss of income and terminal illness. She worked when she was able and she disputed all the medical bills as reflected in her credit report. She attempted to negotiate with one of the creditors. She paid other non-SOR debts to provide for her family. Before the illness of her husband, she had good credit. She acted responsibly. She lived within her means. She is rebuilding her credit. Applicant receives credit under AG 20(a), 20(b) and 20(e). She receives partial credit under 20(d).

WHOLE PERSON CONCEPT

Under the whole-person concept, the administrative judge must evaluate an applicant’s eligibility for a security clearance by considering the totality of an applicant’s conduct and all the 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. As noted above, the ultimate burden of persuasion is on the applicant seeking a security clearance. I considered the potentially disqualifying and mitigating conditions in light of all the facts and circumstances surrounding this case, as well as the whole-person factors. I have noted Applicant’s years of experience and time holding a security clearance. She had a credit rating that showed she paid her bills before her husband became terminally ill. She disputed medical debts to the credit reporters. She believed the insurance paid those bills. Applicant took care of her husband and at the end could not work. When he became sick, she lost his income. When he died, Applicant began to address delinquent debt. She continues with the process. She has met her burden of proof in this case. Clearance is granted.

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-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 a security clearance. Clearance is granted.

NOREEN A. LYNCH Administrative Judge

FOOTNOTES

In this case, the SOR was issued under Adjudicative Guidelines effective within the Defense Department on September 1, 2006. Revised Adjudicative Guidelines were issued on December 10, 2016, and became effective on June 8, 2017. My decision and Formal Findings under the new Adjudicative Guidelines would not be different from the 2006 Adjudicative Guidelines. The Government submitted five items for the record. Applicant had PMI and the house was sold. She paid the income tax on the difference in the amount of $8,000 in June 2015. See also ISCR Case No. 94-1075 at 3-4 (App. Bd. Aug. 10, 1995). Department of the Navy v. Egan, 484 U.S. 518, 531 (1988). ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995). See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive information), and EO 10865 § 7. ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995). Id.