CASE · Clearance Adjudication Search EngineCASE

Loading case…

ISCR Case 08-03936.h1 — CASE

ISCR Case 08-03936.h1granted

Case Headnote

ISCR Case No. 08-03936.h1

grantedJan 23, 2009· Hon. Joseph Testan· hearing

Summary

This case concerns a 44-year-old defense contractor and U.S. military veteran whose security clearance was initially questioned under Guideline F (Financial Considerations) due to several financial delinquencies. The Statement of Reasons (SOR) alleged three specific debts: $9,519.00 to Bank of America, $2,228.00 to Chase, and approximately $5,705.00 to WFFINANCE.

Before the SOR was issued, the applicant had already taken steps to resolve these issues. He settled the Bank of America debt for $3,253.29, payable in three monthly installments starting December 2008. The Chase debt was settled for $1,671.00 in September 2008, with confirmation of payment received in October 2008. For the WFFINANCE debt, which had varying amounts reported, the applicant disputed multiple accounts, resulting in a single remaining debt of $1,049.00 on his most recent credit report. He subsequently settled this debt for $950.00 in December 2008.

The decision to grant the clearance was based on the applicant's proactive efforts to address his financial issues. He successfully settled two of the three alleged debts and established a repayment agreement for the third. His financial problems were being resolved prior to the SOR's issuance, and his remaining past-due indebtedness was deemed manageable and expected to be resolved promptly. Consequently, the security clearance was GRANTED.

Why the Applicant Prevailed

The applicant settled two of the three debts and reached a repayment agreement for the third.
The applicant's financial issues were being addressed prior to the issuance of the SOR.
The applicant's current past-due indebtedness was manageable and expected to be resolved shortly.

Conditions Referenced

Disqualifying

AG ¶ 19.araisedInability or Unwillingness to Satisfy Debts
AG ¶ 19.craisedA History of Not Meeting Financial Obligations

Mitigating

AG ¶ 20.aappliedBehavior Happened Long Ago or Infrequently
AG ¶ 20.cappliedReceived Counseling or Problem Is Under Control
AG ¶ 20.dappliedGood-faith Effort to Repay Debts

Key Rule Quoted

“"Any doubt as to whether access to classified information is clearly consistent with national security will be resolved in favor of the national security."”
— Directive, Paragraph E2.2.2.

Procedural Posture

SOR issuedJul 31, 2008
Answer filedSep 11, 2008
Hearing held—Applicant represented himself.
Decision dateJan 23, 2009

Cite For

Mitigation of Financial Issues Under Guideline F
Good-faith Efforts to Resolve Debts
Whole Person Analysis in Security Clearance Cases

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 few debts but successfully settled two of them and reached a repayment agreement for the third. The applicant's current past-due indebtedness was deemed manageable, leading to a conclusion that the financial concerns were mitigated, and eligibility for a security clearance was granted.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant is indebted to Bank of America (BA) in the amount of $9,519.00. In August 2008, he contacted the bank and suggested two options to settle the debt. In December 2008, he settled the debt for $3,253.29, which is to be paid in three monthly installments of $1,084.43 beginning on December 31, 2008. $9,259	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.b	Applicant was indebted to Chase in the amount of $2,228.00 on an account that had been placed for collection. Applicant settled this debt for $1,671.00 in September 2008. A letter dated October 3, 2008 from the creditor confirms applicant paid the settlement amount. $2,228	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.c	Applicant was indebted to WFFINANCE (WF). He admitted the SOR Allegation that the debt was in the approximate amount of $5,705.00, and that the debt had been charged off. However, there were different WF accounts listed in his old credit reports, and it appears that after applicant disputed the number of accounts with various credit reporting agencies in early 2008, long before the SOR was issued, all but one was removed. The most recent credit report in evidence that Department Counsel relies on (Exhibit 7) indicates a WF debt of $1,049.00. In his response to the FORM, applicant submitted a December 2008 letter from the current assignee of the debt who reported that the debt stood at $1,244.14 and that the debt was settled with applicant for $950.00. Applicant stated he made the $950.00 payment. Based on the evidence presented, I find that applicant is no longer indebted to WF. $5,705	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full

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. 08-03936 SSN: ----------- ) ) Applicant for Security Clearance )

For Government: Gregg A. Cervi, Department Counsel For Applicant: Pro Se

January 23, 2009

______________

STATEMENT OF CASE

______________

TESTAN, Joseph, Administrative Judge:

On July 31, 2008, the Defense Office of Hearings and Appeals (DOHA) issued a Statement of Reasons (SOR) to applicant detailing the security concerns under Guideline F. 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 revised adjudicative guidelines (AG) promulgated by the President on December 29, 2005, and effective within the Department of Defense for SORs issued after September 1, 2006.

Applicant answered the SOR in writing on September 11, 2008, and requested an Administrative Determination by an Administrative Judge (AJ). Department Counsel issued a File of Relevant Material (FORM) on October 28, 2008. Applicant filed a response to the FORM on December 3, 2008. The case was assigned to me on December 12, 2008. Based upon a review of the case file, pleadings, and exhibits, eligibility for access to classified information is granted.

FINDINGS OF FACT

Applicant is a 44 year old employee of a defense contractor. He served honorably for over twenty years in the U.S. military.

SOR Allegation 1a: Applicant is indebted to Bank of America (BA) in the amount of $9,519.00. In August 2008, he contacted the bank and suggested two options to settle the debt. In December 2008, he settled the debt for $3,253.29, which is to be paid in three monthly installments of $1,084.43 beginning on December 31, 2008.

SOR Allegation 1b: Applicant was indebted to Chase in the amount of $2,228.00 on an account that had been placed for collection. Applicant settled this debt for $1,671.00 in September 2008. A letter dated October 3, 2008 from the creditor confirms applicant paid the settlement amount.

SOR Allegation 1c: Applicant was indebted to WFFINANCE (WF). He admitted the SOR Allegation that the debt was in the approximate amount of $5,705.00, and that the debt had been charged off. However, there were different WF accounts listed in his old credit reports, and it appears that after applicant disputed the number of accounts with various credit reporting agencies in early 2008, long before the SOR was issued, all but one was removed. The most recent credit report in evidence that Department Counsel relies on (Exhibit 7) indicates a WF debt of $1,049.00. In his response to the FORM, applicant submitted a December 2008 letter from the current assignee of the debt who reported that the debt stood at $1,244.14 and that the debt was settled with applicant for $950.00. Applicant stated he made the $950.00 payment. Based on the evidence presented, I find that applicant is no longer indebted to WF.

Applicant and his wife have been separated since 2004 and are now in the process of getting divorced. In his response to the SOR, applicant stated some of his financial obligations were not addressed because of a failure of communication with his soon to be ex-wife, as well as her failure to satisfy “divided debts” as she had agreed.

A letter from one of applicant’s coworkers was admitted into evidence. In it, he stated applicant is reliable and trustworthy.

POLICIES

The President has “the authority to . . . control access to information bearing on national security and to determine whether an individual is sufficiently trustworthy to occupy a position that will give that person access to such information.” (Department of the Navy v. Egan, 484 U.S. 518,527 (1988).) In Executive Order 10865, Safeguarding Classified Information Within Industry (February 20, 1960), the President set out guidelines and procedures for safeguarding classified information within the executive branch. The President authorized the Secretary of Defense or his designee to grant applicants eligibility for access to classified information “only upon a finding that it is clearly consistent with the national interest to do so.” (Exec. Ord. 10865, Section 2.) To be eligible for a security clearance, an applicant must meet the security guidelines contained in the Directive. Enclosure 2 of the Directive sets forth personnel security guidelines, as well as the disqualifying conditions and mitigating conditions under each guideline.

Initially, the Government must present evidence to establish controverted facts in the SOR that disqualify or may disqualify the applicant from being eligible for access to classified information. (Directive, Paragraph E3.1.14.) Thereafter, the applicant is responsible for presenting evidence to rebut, explain, extenuate, or mitigate the facts. (Directive, Paragraph E3. 1.15.) An applicant “has the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue his security clearance.” (ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002).) “Any doubt as to whether access to classified information is clearly consistent with national security will be resolved in favor of the national security.” (Directive, Paragraph E2.2.2.)

A person granted access to classified information enters into a special relationship with the government. The government must be able to repose a high degree of trust and confidence in those individuals to whom it grants access to classified information. The decision to deny an individual a security clearance is not a determination as to the loyalty of the applicant. (Exec. Ord. 10865, Section 7.) It is merely an indication that the applicant has not met the strict guidelines the President has established for issuing a clearance.

ANALYSIS

Guideline F, Financial Considerations

The security concern relating to Financial Considerations is set forth in Paragraph 18 of the new AG, and is as follows:

Failure or inability to live within one*smeans, 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*sreliability, 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.

The AG note several conditions that could raise security concerns. Under Paragraph 19.a., an “inability or unwillingness to satisfy debts” is potentially disqualifying. Under Paragraph 19.c., “a history of not meeting financial obligations” may raise security concerns. The evidence shows applicant did have a few debts go delinquent. Accordingly, these disqualifying conditions are applicable.

The guidelines also set out mitigating conditions. Paragraph 20.a. may apply where “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*scurrent reliability, trustworthiness, or good judgment.” Applicant has satisfied two of the three alleged debts and has reached a settlement agreement with the third creditor, which leaves his current delinquent indebtedness at $3,253.29. The little derogatory financial evidence the Government offered does not cast doubt on applicant’s current reliability, trustworthiness, or good judgment. Accordingly, this mitigation condition is applicable.

Under Paragraph 20.b., it may be mitigating where “the conditions that resulted in the financial problem were largely beyond the person*scontrol (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.” Applicant stated his financial problems were caused by his wife from whom he has been separated since 2004. However, he provided insufficient specific evidence to conclude his financial problems were caused by factors largely beyond his control. Accordingly, this mitigating condition is not applicable.

Evidence that “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” is potentially mitigating under Paragraph 20.c. It is clear the problem is under control. This mitigating condition is applicable.

Paragraph d. applies where the evidence shows “the individual initiated a good- faith effort to repay overdue creditors or otherwise resolve debts.” Applicant has either satisfied or settled all three debts. This mitigating condition is applicable.

“Whole Person” Analysis

Under the whole person concept, the AJ must evaluate an applicant’s security eligibility by considering the totality of the applicant’s conduct and all the circumstances. An AJ should consider the nine adjudicative process factors listed at AG Paragraph 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) 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 Paragraph 2c, the ultimate determination of whether to grant a security clearance must be an overall common sense 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. Applicant is a mature man who, after honorably serving his country for over twenty years, fell behind on three financial obligations. Whether these delinquencies were caused by him or his wife is not entirely clear. What is clear, however, is that applicant began addressing these three delinquencies before the SOR was issued, and since then has paid off two of the debts and has reached a repayment agreement with the third creditor. His current past-due indebtedness stands at a manageable $3,253.29, and it should be paid off by February 2009. Based on the evidence presented, I conclude applicant mitigated the security concerns arising from Guideline F.

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

CONCLUSION

In light of all of the circumstances presented by the record in this case, it is clearly consistent with national security to grant applicant eligibility for a security clearance. Eligibility for access to classified information is granted.

JOSEPH TESTAN Administrative Judge