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ISCR Case 08-05602.h1 — CASE

ISCR Case 08-05602.h1granted

Case Headnote

ISCR Case No. 08-05602.h1

grantedMay 7, 2009· Hon. Michael H. Leonard· hearing

Summary

A 61-year-old security officer for a federal contractor was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The Statement of Reasons cited two primary issues: a delinquent car loan of $13,249, which resulted in a voluntary repossession, and six unpaid medical accounts totaling $801 that had been sent to collections. These issues raised Disqualifying Conditions 1 and 3.

However, the applicant demonstrated significant mitigating factors. He settled a substantial portion of his delinquent debt, including the car loan, showcasing a good-faith effort to repay his creditors. His long-term employment also contributed to the mitigation of his financial issues.

Ultimately, Mitigating Condition 4 was applied, acknowledging the applicant's efforts to resolve the debts. Based on these actions and his demonstrated commitment to financial responsibility, the security clearance was granted.

Why the Applicant Prevailed

The applicant settled a significant portion of his delinquent debt, including a car loan, demonstrating a good-faith effort to repay creditors.
The applicant's financial issues were mitigated by his long-term employment and efforts to resolve debts.

Conditions Referenced

Disqualifying

DC 1raisedInability or Unwillingness to Satisfy Debts
DC 3raisedA History of Not Meeting Financial Obligations

Mitigating

MC 4appliedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts

Key Rule Quoted

“No one has a right to a security clearance.”
— Department of Navy v. Egan, 484 U.S. 518, 528 (1988)

Procedural Posture

SOR issuedOct 27, 2008
Answer filedJan 9, 2009
Hearing held—Decision made without a hearing.
Decision dateMay 1, 2009

Cite For

Mitigation of Financial Issues Under Guideline F
Good-faith Efforts to Resolve Debts
Whole-person Concept in Security Clearance Decisions

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 problems, primarily due to a delinquent car loan and several medical debts. However, the applicant's efforts to resolve the car loan debt were deemed sufficient to mitigate the financial concerns, leading to a favorable decision for the applicant.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Owes a delinquent car loan for $13,249, which ended with a voluntary repossession. $13,249	For Applicant	Auto Loan Debt	Denied	(b) unwillingness to satisfy debts regardless of ability (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	Owes six unpaid medical accounts totaling $801 placed for collection. $801	For Applicant	Medical Debt	Admitted	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.c–1.g	5 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. 08-05602 SSN: ------------------- ) ) Applicant for Security Clearance )

For Government: Braden M. Murphy, Esquire, Department Counsel For Applicant: Pro Se

May 7, 2009 ______________

STATEMENT OF CASE

______________

LEONARD, Michael H., Administrative Judge:

Applicant contests the Defense Department’s intent to deny or revoke his eligibility for an industrial security clearance. Acting under the relevant Executive Order, DoD Directive, and Revised Guidelines, the Defense Office of Hearings and Appeals (DOHA) issued a statement of reasons (SOR) to Applicant on October 27, 2008. The SOR is equivalent to an administrative complaint and it details the factual basis for the

dated after the effective date. action. The issues in this case fall under Guideline F for financial considerations based on a history of financial problems.

Applicant’s Answer to the SOR was received by DOHA on January 9, 2009, and he elected a decision without a hearing. Accordingly, the case will be decided based on the written record in lieu of a hearing.

On January 30, 2009, the government submitted its written case consisting of all relevant and material information that could be adduced at a hearing. This so-called file of relevant material (FORM) was mailed to Applicant and received by him on February 9, 2009. He replied to the FORM within the allowed 30-day period, and his reply consists of a one-page letter from his facility security officer and a one-page letter from a creditor. Department counsel, via a memorandum dated April 8, 2009, raised no objections, and so those matters are admitted as Exhibit A. The case was assigned to me on May 1, 2009.

FINDINGS OF FACT

Under Guideline F, the SOR alleges that Applicant owes seven creditors the total sum of approximately $14,050 in delinquent debt. The vast majority of the debt stems from a delinquent car loan for $13,249, and the balance of $801 stems from six medical accounts placed for collection. In his Answer to the SOR, Applicant admitted the medical accounts and denied the car loan because he had begun making monthly payments on the debt.

Applicant is a 61-year-old security officer for a federal contractor. He has worked for his current employer since 1994. It appears the Defense Department granted him a security clearance in 1998. He has a history of financial problems as established by the credit reports in the FORM.

According to a March 2008 credit report, the car loan is a joint contractual liability for $13,249 (Exhibit 5), and so Applicant is not solely responsible for the debt. The loan ended with a voluntary repossession. By March 2009, the balance had been reduced to $5,689, and Applicant settled the account with a lump-sum payment of $1,500 (Exhibit A). Accordingly, the account is resolved.

The six unpaid medical accounts for a total of $801 are based on a October 2008 credit report (Exhibit 8). Applicant did not present any information on these debts. Accordingly, these accounts are unresolved.

POLICIES

This section sets forth the general principles of law and policies that apply to an industrial security clearance case. To start, no one has a right to a security clearance.3 As noted by the Supreme Court in 1988 in the case of Department of Navy v. Egan, “the clearly consistent standard indicates that security clearance determinations should err, if they must, on the side of denials.” A favorable decision establishes eligibility of an applicant to be granted a security clearance for access to confidential, secret, or top- secret information. An unfavorable decision: (1) denies any application; (2) revokes any existing security clearance; and (3) prevents access to classified information at any level and retention of any existing security clearance. Under Egan, Executive Order 10865, and the Directive, any doubt about whether an applicant should be allowed access to classified information will be resolved in favor of protecting national security.

There is no presumption in favor of granting, renewing, or continuing eligibility for access to classified information. The government has the burden of presenting evidence to establish facts alleged in the SOR that have been controverted. An applicant is responsible for presenting evidence to refute, explain, extenuate, or mitigate facts that have been admitted or proven. In addition, an applicant has the ultimate burden of persuasion to obtain a favorable clearance decision. In Egan, the Supreme Court stated that the burden of proof is less than a preponderance of the evidence.11 The agency appellate authority has followed the Court’s reasoning, and a judge’s findings of fact are reviewed under the substantial-evidence standard.12

The Revised Guidelines set forth adjudicative guidelines to consider when evaluating a person’s security clearance eligibility, including disqualifying conditions (DC) and mitigating conditions (MC) for each guideline. In addition, each clearance decision must be a fair and impartial commonsense decision based upon consideration of all the relevant and material information, the pertinent criteria and adjudication factors, and the whole-person concept. A person granted access to classified information enters into a special relationship with the government. The government must be able to have a high degree of trust and confidence in those persons to whom it grants access to classified information. The decision to deny a person a security clearance is not a determination of an applicant’s loyalty. Instead, it is a determination that the applicant has not met the strict guidelines the President has established for granting eligibility for a security clearance.

ANALYSIS

Under Guideline F for financial considerations, a security concern typically exists due to significant unpaid debts. “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.” Similarly, an individual who is financially irresponsible may also be irresponsible, unconcerned, negligent, or careless in properly handling and safeguarding classified information.

The record evidence supports a conclusion that Applicant has a history of financial problems. His history of financial problems is a security concern because it indicates inability or unwillingness to satisfy debts and a history of not meeting financial obligations within the meaning of Guideline F. The record evidence is more than sufficient to establish these two disqualifying conditions.

The guideline also provides that certain conditions may mitigate security concerns:

MC 1–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; MC 2–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;

MC 3–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;

MC 4–the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts;

MC 5–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; or

MC 6–the affluence resulted from a legal source of income.

All the mitigating conditions have been considered and the most pertinent here is MC 4, which concerns initiating a good-faith effort to repay.

Applicant receives credit under MC 4 because of his efforts to resolve the car loan. The debt was settled in full in March 2009. By doing so, he resolved approximately 94% of the delinquent debt alleged in the SOR. Although he did not resolve the medical debts, which constitute a minor part of the SOR, his efforts are sufficient to qualify for mitigation within the meaning of MC 4.

Under the whole-person concept, an administrative judge must evaluate a person’s eligibility for a security clearance by considering the totality of the person’s conduct and all the circumstances. An administrative judge should consider the nine adjudicative process factors listed in the Revised Guidelines as follows: (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. After weighing the record evidence as a whole and giving it due consideration under the whole-person concept, Applicant did present sufficient evidence to explain, extenuate, or mitigate the security concerns. He did not present a perfect case in mitigation by resolving all of the delinquent debts, but it is sufficient to overcome the security concerns. Applicant met his ultimate burden of persuasion to obtain a favorable clearance decision. This case is decided for Applicant.

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.g: For Applicant

CONCLUSION

In light of all the circumstances, it is clearly consistent with the interests of national security to grant Applicant eligibility for a security clearance. Eligibility for access to classified information is granted.

Michael H. Leonard Administrative Judge

FOOTNOTES

This case is adjudicated under Executive Order 10865, Safeguarding Classified Information within Industry, dated February 20, 1960, as amended, and DoD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program, dated January 2, 1992, as amended (Directive). In addition to the Executive Order and Directive, this case is also adjudicated under the revised Adjudicative Guidelines for Determining Eligibility for Access to Classified Information (Revised Guidelines) approved by the President on December 29, 2005. The Revised Guidelines were then modified by the Defense Department, effective September 1, 2006. They supersede or replace the guidelines published in Enclosure 2 to the Directive. They apply to all adjudications and other determinations where an SOR has been issued on September 1, 2006, or thereafter. The Directive is pending revision or amendment. The Revised Guidelines apply here because the SOR is The government’s brief includes several attachments referred to as items. They are referred to as exhibits herein. Department of Navy v. Egan, 484 U.S. 518, 528 (1988) (“it should be obvious that no one has a ‘right’ to a th security clearance”); Duane v. Department of Defense, 275 F.3d 988, 994 (10 Cir. 2002) (“It is likewise plain that there is no ‘right’ to a security clearance, so that full-scale due process standards do not apply to cases such as Duane’s.”).

Egan, 484 U.S. at 531.

Directive, ¶ 3.2.

ISCR Case No. 02-18663 (App. Bd. Mar. 23, 2004).

Directive, Enclosure 3, ¶ E3.1.14.

Directive, Enclosure 3, ¶ E3.1.15.

Egan, 484 U.S. at 531.

ISCR Case No. 01-20700 (App. Bd. Dec. 19, 2002) (citations omitted). Executive Order 10865, § 7.

Revised Guidelines at 13–14 (setting forth the security concern and the disqualifying and mitigating conditions).

Revised Guidelines at 13.

DC 1 is “inability or unwillingness to satisfy debts.”

DC 3 is “a history of not meeting financial obligations.” As an aside, some in the field of personal finance contend that medical debt rarely indicates if a borrower is high risk and question if such debts belong on credit reports. See Liz Pulliam W eston, Why Medical Debts Shouldn’t Count, http://articles.moneycentral.msn.com/Banking/YourCreditRating/WhyMedicalDebtsShouldn’t Count, published Nov. 19, 2007.

Revised Guidelines at 1–2.