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ISCR Case 07-17961.h1 — CASE

ISCR Case 07-17961.h1granted

Case Headnote

ISCR Case No. 07-17961.h1

grantedSep 17, 2008· Hon. Darlene D. Lokey-Anderson· hearing

Summary

A 42-year-old engineer technician with an Associate Degree in Electronics was subject to a security clearance review under Guideline F (Financial Considerations). The applicant faced allegations concerning financial overextension and delinquent debts totaling approximately $17,278, admitting to multiple specific allegations from the Statement of Reasons. Disqualifying conditions 19(a), 19(c), and 19(e) were raised.

The applicant attributed these financial difficulties to a business loss, a period of disability, and a divorce. In response, mitigating conditions 20(b), 20(c), and 20(d) were applied. The applicant demonstrated a good faith effort to resolve the debts through repayment plans and family support.

Evidence presented showed financial rehabilitation, with the applicant being current on all other financial obligations and having established payment plans for outstanding debts. The financial issues were largely attributed to circumstances beyond the applicant's control. Based on these factors, the applicant's security clearance was GRANTED.

Why the Applicant Prevailed

The applicant provided evidence of financial rehabilitation and a good faith effort to resolve debts.
The financial issues were largely attributed to circumstances beyond the applicant's control, including a business loss and a divorce.
The applicant is current with all other financial obligations and has established payment plans for outstanding debts.

Conditions Referenced

Disqualifying

19(a)raisedInability or Unwillingness to Satisfy Debts
19(c)raisedA History of Not Meeting Financial Obligation
19(e)raisedConsistent Spending Beyond One’s Means

Mitigating

20(b)appliedConditions Largely Beyond the Person's Control
20(c)appliedReceiving Counseling for the Problem
20(d)appliedGood-faith Effort to Repay Overdue Creditors

Key Rule Quoted

“The adjudicative process is the careful weighing of a number of variables known as the whole person concept.”

Procedural Posture

SOR issuedNov 26, 2007
Answer filedApr 8, 2008
Hearing heldJun 17, 2008
Decision dateSep 17, 2008

Cite For

Mitigating Conditions for Financial Difficulties Under Guideline F
Good Faith Efforts in Debt Resolution
Impact of Personal Circumstances on Financial Responsibility

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 irresponsibility, including multiple debts totaling approximately $17,278. However, the applicant demonstrated a good faith effort to resolve these debts through payment plans and financial counseling. Ultimately, the judge ruled in favor of the applicant, concluding that he had overcome the government's concerns regarding his financial situation.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	The Applicant admits allegations 1(a) of the SOR.	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 (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	—
1.b	The Applicant admits allegations 1(b) of the SOR.	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 (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	—
1.c–1.d	2 sub-charges — specific text not stated in this decision (for the applicant).	For Applicant			—	—	—
1.e	The Applicant admits allegations 1(e) of the SOR.	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 (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	—
1.f	The Applicant admits allegations 1(f) of the SOR.	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 (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	—
1.g	The Applicant admits allegations 1(g) of the SOR.	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 (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	—
1.h–1.i	2 sub-charges — specific text not stated in this decision (for the applicant).	For Applicant			—	—	—
1.j	The Applicant admits allegations 1(j) of the SOR.	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 (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	—
1.k	The Applicant admits allegations 1(k) of the SOR.	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 (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	—
1.l	The Applicant admits allegations 1(l) of the SOR.	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 (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	—
1.m	The Applicant admits allegations 1(m) of the SOR.	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 (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	—
1.n	The Applicant admits allegations 1(n) of the SOR.	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 (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	—
1.o	specific text not stated in this decision	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. 07-17961 SSN: ----------------- ) ) Applicant for Security Clearance )

For Government: Jennifer I. Goldstein , Esquire, Department Counsel For Applicant: Pro Se

September 17, 2008

______________

STATEMENT OF CASE

______________

Lokey-Anderson, Darlene D., Administrative Judge:

Applicant submitted his Electronic Questionnaire for Investigations Processing (e-QIP) on April 2, 2007. On November 26, 2007, the Defense Office of Hearings and Appeals (DOHA), pursuant to Executive Order 10865 and Department of Defense Directive 5220.6 (Directive), dated January 2, 1992, (as amended) issued a Statement of Reasons (SOR) to the Applicant, which detailed reasons why DOHA could not make the preliminary affirmative finding under the Directive that it is clearly consistent with the national interest to grant or continue a security clearance for the Applicant and recommended referral to an Administrative Judge to determine whether clearance should be denied or revoked.

The Applicant responded to the SOR in writing on April 8, 2008, and requested a hearing before a DOHA Administrative Judge. This case was assigned to another Administrative Judge on May 2, 2008. It was transferred to the undersigned on May 5, 2008. A notice of hearing was issued on May 13, 2008, scheduling the hearing for June 17, 2008. At the hearing the Government presented five exhibits, referred to as Government Exhibits 1 through 5. The Applicant presented eleven exhibits, referred to as Applicant’s Exhibits A through K. The Applicant called two witnesses and testified on his own behalf. The record remained open until July 21, 2008, to allow the Applicant to submit additional supporting documentation. The Applicant submitted nine Post- Hearing Exhibits, referred to as Applicant’s Post-Hearing Exhibits 1 through 9. The official transcript (Tr.) was received on June 27, 2008. Based upon a review of the case fille, pleadings, exhibits and testimony eligibility for access to classified information is granted.

FINDINGS OF FACT

The Applicant is 42 years old and divorced. He has an Associate Degree in Electronics. He is employed by a defense contractor as an Engineer Technician II and is seeking to obtain a security clearance in connection with his employment.

The Government opposes the Applicant's request for a security clearance, on the basis of allegations set forth in the Statement of Reasons (SOR). The following findings of fact are entered as to each paragraph and guideline in the SOR:

Paragraph 1 (Guideline F - Financial Considerations) The Government alleges that the Applicant is ineligible for clearance because he is financially overextended and at risk of having to engage in illegal acts to generate funds.

The Statement of Reasons sets forth fourteen separate creditors totaling approximately $17,278.00. The Applicant admits allegations 1(a), 1(b), 1(e), 1(f), 1(g), 1(I), 1(j), 1(k), 1(l), 1(m) and 1(n) of the SOR. He denies allegations 1(c), 1(d) and 1(h) of the SOR. Credit reports of the Applicant dated April 10, 2007, January 7, 2008, January 24, 2008, and April 24, 2008, reflect each of the delinquent debts listed in the SOR. (See Government Exhibits 2, 3, 4 and 5).

The Applicant testified that as a result of a business loss of $11,000.00 when he was self-employed from May to December of 2006, a period of disability from December 2005 to May 2006, (caused by cracking several vertebrae in his neck), and a divorce in July 2004, he became excessively indebted and could not afford to pay his bills. (See Applicant’s Post-Hearing Exhibits 7 and 8). The divorce decree stated that he and his ex-wife would jointly file bankruptcy to resolve the indebtedness from the marriage. The Applicant’s ex-wife filed Bankruptcy, but the Applicant did not. As a result, all of the debt from the marriage became his sole responsibility.

In an effort to resolve his indebtedness, the Applicant contacted a consumer credit counselor in February 2008, to assist in paying off his outstanding debts. (See Applicant’s Post-Hearing Exhibit 9). He made three initial payments of $219.40 a month which were electronically transferred from his bank account for the service. The consumer counselor had still done nothing to resolve the Applicant’s indebtedness. The Applicant then hired a second firm to assist him in his debt resolution. After paying this firm about $1,100.00, and receiving no service, he terminated his agreement with them and decided to handle his financial situation himself. (Tr. pp. 48 - 53).

Rather than pay his bills piece meal or a little at a time, the Applicant borrowed approximately $14,000.00 from his parents to pay his bills. He has paid all of the debt set forth in the SOR except allegations 1(f), 1(g), 1(j) and 1(k). (See Applicant’s Exhibits A, B, C, D, E, F, G, and H, and Applicant’s Post-Hearing Exhibits 1 and 2). With regard to the outstanding debt, he has set up payment plans and is making regular monthly payments to resolve the indebtedness. (See Applicant’s Post-Hearing Exhibits 3, 4, 5, 6 and 8. He plans to continue with the payments until he is completely debt free. He is current with all of his other monthly expenses, including his child support and alimony. He is working overtime as much as possible to get his bills paid off sooner.

Letters of recommendation from professional colleagues of the Applicant attest to his professionalism, dependability, high level of integrity and good judgment. He is considered to be a valuable asset in the company. (See Applicant’s Exhibit I).

The Applicant’s supervisor and a coworker testified on that the Applicant is considered punctual, responsible, knowledgeable, and a true asset to the company in every respect. (Tr. pp. 87 - 95).

POLICIES

Enclosure 2 of the Directive sets forth adjudication policies divided into "Disqualifying Factors" and "Mitigating Factors." The following Disqualifying Factors and Mitigating Factors are found to be applicable in this case:

Guideline F (Financial Considerations)

18. The Concern. 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.

Conditions that could raise a security concern:

19.(a) inability or unwillingness to satisfy debts;

19.(c) a history of not meeting financial obligation.

Conditions that could mitigate security concerns:

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, or a death, divorce or separation), and the individual acted responsibly under the circumstances;

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

In addition, as set forth in Enclosure 2 of the Directive at pages 16-17, in evaluating the relevance of an individual’s conduct, the Administrative Judge should consider the following general factors:

a. The nature and seriousness of the conduct and surrounding circumstances

b. The circumstances surrounding the conduct, to include knowledgeable participation

c. The frequency and recency of the conduct

d. The individual’s age and maturity at the time of the conduct

e. The voluntariness of participation

f. The presence or absence of rehabilitation and other pertinent behavior changes

g. The motivation for the conduct

h. The potential for pressure, coercion, exploitation or duress

i. The likelihood of continuation or recurrence.

The eligibility criteria established in the DoD Directive identify personal characteristics and conduct which are reasonably related to the ultimate question, posed in Section 2 of Executive Order 10865, of whether it is “clearly consistent with the national interest” to grant an Applicant’s request for access to classified information.

The DoD Directive states, “The adjudicative process is an examination of a sufficient period of a person’s life to make an affirmative determination that the person is an acceptable security risk. Eligibility for access to classified information is predicted upon the individual meeting these personnel security guidelines. The adjudicative process is the careful weighing of a number of variables known as the whole person concept. Available, reliable information about the person, past and present, favorable and unfavorable should be considered in reaching a determination.” The Administrative Judge can draw only those inferences or conclusions that have reasonable and logical basis in the evidence of record. The Judge cannot draw inferences or conclusions based on evidence which is speculative or conjectural in nature. Finally, as emphasized by President Eisenhower in Executive Order 10865, “Any determination under this order . . . 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.”

CONCLUSION

In the defense industry, the security of classified industrial secrets is entrusted to civilian workers who must be counted upon to safeguard such sensitive information twenty-four hours per day, seven days per week. The Government is therefore appropriately concerned when available information indicates that an Applicant for clearance may be involved in instances of financial irresponsibility which demonstrates poor judgment or unreliability.

It is the Government’s responsibility to present substantial evidence to support the finding of a nexus, or rational connection, between the Applicant’s conduct and the holding of a security clearance. If such a case has been established, the burden then shifts to the Applicant to go forward with evidence in rebuttal, explanation or mitigation which is sufficient to overcome or outweigh the Government’s case. The Applicant bears the ultimate burden of persuasion in proving that it is clearly consistent with the national interest to grant his a security clearance.

In this case the Government has met its initial burden of proving that the Applicant has been financially irresponsible (Guideline F). This evidence indicates poor judgment, unreliability and untrustworthiness on the part of the Applicant. Because of the scope and nature of the Applicant's conduct, I conclude there is a nexus or connection with his security clearance eligibility.

Considering all of the evidence, the Applicant has introduced persuasive evidence in rebuttal, explanation or mitigation that is sufficient to overcome the Government's case. The Applicant’s poor financial history was caused by a combination of unfortunate events. A business loss, a period of disability and a divorce caused his excessive indebtedness. With regard to this delinquent debt, the Applicant has now either paid off the debt, or has set up payment plans and is making regular monthly payments to resolve them. He plans to continue paying the debt until it is paid in full. In addition, he has reduced his spending and is working as much overtime as possible to get the debt resolved as quickly as possible. He understands the importance of paying his bills on time and not living beyond his means. Under the circumstances, he has made a good faith effort to resolve his indebtedness, and there is evidence of financial rehabilitation. The Applicant has demonstrated that he can properly handle his financial affairs. In the event that the Applicant does not continue to pay his delinquent debts according to the payment plan or sooner if possible, his security clearance will be in immediate jeopardy.

Under Guideline F (Financial Considerations), Disqualifying Conditions 19.(a) inability or unwillingness to satisfy debts; 19.(c) a history of not meeting financial obligation; and 19.(e) consistent spending beyond one’s means, which may be indicated by excessive indebtedness, significant negative cash flow, high debt-to-income ration, and/or other financial analysis apply. Mitigating Conditions 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, or a death, divorce or separation), and the individual acted responsibly under the circumstances; 20.(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 20.(d) the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts also apply.

I have also considered the “whole person concept” in evaluating the Applicant’s eligibility for access to classified information. Under the particular facts of this case, the totality of the conduct set forth under all of the guidelines viewed as a whole, support a whole person assessment of good judgement, trustworthiness, reliability, candor, a willingness to comply with rules and regulations, and/or other characteristics indicating that the person may properly safeguard classified information.

This Applicant has paid or is currently paying his delinquent debt. He has demonstrated that he is trustworthy, and that he meets the eligibility requirements for access to classified information. Accordingly, I find for the Applicant under Guideline F (Financial Considerations).

On balance, it is concluded that the Applicant has overcome the Government's case opposing his request for a security clearance. Accordingly, the evidence supports a finding for the Applicant as to the factual and conclusionary allegations expressed in Paragraph 1 for the Government's Statement of Reasons.

FORMAL FINDINGS

Formal findings For or Against the Applicant on the allegations in the SOR, as required by Paragraph 25 of Enclosure 3 of the Directive are:

Paragraph 1 For the Applicant. Subpara. 1.a.: For the Applicant. Subpara. 1.b: For the Applicant. Subpara. 1.c: For the Applicant. Subpara. 1.d: For the Applicant. Subpara. 1.e: For the Applicant. Subpara. 1.f: For the Applicant. Subpara. 1.g: For the Applicant. Subpara. 1.h: For the Applicant. Subpara. 1.i: For the Applicant. Subpara. 1.j: For the Applicant. Subpara. 1.k: For the Applicant. Subpara. 1.l: For the Applicant. Subpara. 1.m: For the Applicant. Subpara. 1.n: For the Applicant. Subpara. 1.o: For the Applicant.

DECISION

In light of all the circumstances presented by the record in this case, it is clearly consistent with the national interest to grant or continue a security clearance for the Applicant.

Darlene Lokey Anderson Administrative Judge