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ISCR Case 08-07574.h1 — CASE

ISCR Case 08-07574.h1granted

Case Headnote

ISCR Case No. 08-07574.h1

grantedApr 28, 2010· Hon. Wilford H. Ross· hearing

Summary

A 60-year-old divorced male defense contractor employee sought to retain his security clearance, which was challenged under Guideline F (Financial Considerations). The applicant's financial difficulties were primarily attributed to a contentious divorce.

The Statement of Reasons detailed several financial allegations. The applicant successfully demonstrated that a $7,929 credit card judgment and a $146 utility bill had been paid in full. He also provided evidence that a $174 bank debt and a $4,712 payday loan debt were the result of his ex-wife forging his name and had since been deleted from his credit report. Furthermore, a $3,275 credit card account was confirmed by the bank to be solely his ex-wife's responsibility. For an admitted $8,378 past-due credit card account, the applicant established a payment arrangement and had been making consistent monthly payments since December 2008.

The judge found that the applicant had made serious attempts to resolve his legitimate debts and acted responsibly in disputing those that were not his. His current financial situation was deemed stable, with timely payments on outstanding obligations. Consequently, the applicant's security clearance was GRANTED.

Why the Applicant Prevailed

The applicant documented serious attempts to resolve his past due debts.
He acted responsibly in disputing debts that were not his and paid legitimate debts.
The applicant's current financial situation is stable, with timely payments on debts.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability or Unwillingness to Satisfy Debts
AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations

Mitigating

AG ¶ 20(a)appliedBehavior Happened Long Ago or Infrequently
AG ¶ 20(b)appliedConditions Largely Beyond the Person's Control
AG ¶ 20(c)appliedProblem Is Being Resolved or Is Under Control
AG ¶ 20(d)appliedGood-faith Effort to Pay Off Creditors

Key Rule Quoted

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

Procedural Posture

SOR issuedApr 30, 2009
Answer filedMay 26, 2009
Hearing heldSep 10, 2009
Decision dateApr 28, 2010

Cite For

Mitigation of Financial Issues Due to Divorce Under Guideline F
Stability of Current Financial Situation as a Factor in Security Clearance Decisions
Responsible Behavior in Addressing Disputed Debts and Payments

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 financial difficulties primarily due to a contentious divorce but demonstrated responsible behavior in addressing his debts. The applicant's current financial situation is stable, and he has made significant efforts to resolve his past due debts, leading to a decision in his favor regarding financial considerations.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant denied that he currently owed a credit card company $7,929 for a judgment. The record shows that a garnishment was issued against Applicant’s pay and documentary evidence shows that this debt was paid in full. $7,929	For Applicant	Credit Card Debt	Denied	—	—	—
1.b	Applicant denied that he currently owed a utility company $146 for a past due account. He submitted a paid receipt from the creditor, showing they had been paid in full in May 2009. $146	For Applicant	Utility or Phone Debt	Denied	—	—	—
1.c	Applicant admitted that he owed $8,378 for a past due credit card account. The current collection agency had obtained a judgment, but the Applicant made a payment arrangement with the creditor. He submitted evidence showing that since December 2008 he had been making consistent monthly payments to the creditor in fulfilment of that arrangement. $8,378	For Applicant	Credit Card Debt	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.d	Applicant denied that he owed $174 for a debt to a bank. Applicant’s ex-wife forged his name on an instant loan check from his bank. He disputed this debt to the credit reporting agencies, and it has been deleted. $174	For Applicant	Unspecified Financial	Denied	—	—	—
1.e	Applicant denied owing a bank $3,275 on a past due credit card account. He disputed the account to the bank, stating that he was not the owner of the account. The bank has confirmed in writing that his ex-wife is the sole owner of the account. $3,275	For Applicant	Credit Card Debt	Denied	—	—	—
1.f	Applicant denied that he owed $4,712 for a debt to a payday loan company. Applicant’s ex-wife forged his name on an instant loan check from this company. He disputed this debt to the credit reporting agencies, and it has been deleted. $4,712	For Applicant	Unspecified Financial	Denied	—	—	—
1.g	This is the same debt as that set forth in 1.c., above.	For Applicant	Credit Card Debt	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. 08-07574 SSN: ------------------ ) ) Applicant for Security Clearance )

For Government: Jennifer I. Goldstein, Esq., Department Counsel

For Applicant: Pro se

April 28, 2010

______________

STATEMENT OF CASE

______________

ROSS, Wilford H., Administrative Judge:

Applicant submitted his Security Clearance Application (SF-86) on June 21, 2005 (Government Exhibit 1). On April 30, 2009, the Defense Office of Hearings and Appeals (DOHA) issued a Statement of Reasons (SOR) 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 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 May 26, 2009, and requested a hearing before an administrative judge. Department Counsel was prepared to proceed on June 29, 2009. This case was assigned to me on July 2, 2009. DOHA issued a notice of hearing on July 14, 2009. I convened the hearing as scheduled on September 10, 2009. The Government offered Government Exhibits 1 through 9, which were received without objection. Applicant testified on his own behalf, and submitted Applicant Exhibits A through K, also without objection. Applicant asked that the record remain open for the receipt of additional documents. The Applicant submitted Applicant Exhibit L on September 21, 2009, and it was admitted without objection. DOHA received the transcript of the hearing on September 21, 2009, and the record closed on that date. Based upon a review of the case file, pleadings, exhibits, and testimony, eligibility for access to classified information is granted.

FINDINGS OF FACT

Applicant is 60 and divorced. He is employed by a defense contractor and seeks to retain a security clearance in connection with his employment.

Guideline F, Financial Considerations

The Government alleges that Applicant is ineligible for clearance because he is financially overextended and, therefore, at risk of having to engage in illegal acts to generate funds. Applicant admits the factual allegations in SOR ¶¶ 1.c., and 1.g. Those admissions are hereby deemed findings of fact. He denies SOR ¶¶ 1.a., 1.b., 1.d., 1.e., and 1.f.

Applicant testified that the majority of his financial problems occurred in connection with the divorce from his ex-wife. (Applicant Exhibits D, F, G, and L at 45-54; Transcript at 75-79.)

1.a. Applicant denied that he currently owed a credit card company $7,929 for a judgment. The record shows that a garnishment was issued against Applicant’s pay and documentary evidence shows that this debt was paid in full. (Applicant Exhibits H, and L at 3-4; Transcript at 38-46.)

1.b. Applicant denied that he currently owed a utility company $146 for a past due account. He submitted a paid receipt from the creditor, showing they had been paid in full in May 2009. (Applicant Exhibit B; Transcript at 46-47.)

1.c. Applicant admitted that he owed $8,378 for a past due credit card account. The current collection agency had obtained a judgment, but the Applicant made a payment arrangement with the creditor. He submitted evidence showing that since December 2008 he had been making consistent monthly payments to the creditor in fulfilment of that arrangement. (Applicant Exhibit C, and L at 5-14; Transcript at 47-57.)

1.d. Applicant denied that he owed $174 for a debt to a bank. Applicant’s ex- wife forged his name on an instant loan check from his bank. He disputed this debt to the credit reporting agencies, and it has been deleted. (Applicant Exhibit D; Transcript at 57-58.)

1.e. Applicant denied owing a bank $3,275 on a past due credit card account. He disputed the account to the bank, stating that he was not the owner of the account. The bank has confirmed in writing that his ex-wife is the sole owner of the account. (Applicant Exhibit E; Transcript at 47-53, 82-85.)

1.f. Applicant denied that he owed $4,712 for a debt to a payday loan company. Applicant’s ex-wife forged his name on an instant loan check from this company. He disputed this debt to the credit reporting agencies, and it has been deleted. (Applicant Exhibit D; Transcript at 59-60.)

1.g. This is the same debt as that set forth in 1.c., above. (Government Exhibit 9 at 1; Transcript at 47-57.)

Mitigation

Applicant submits that his current financial situation is stable. The most recent credit report in the record shows that Applicant has no past due debts, other than 1.c., which he is currently paying. (Government Exhibit 9; Transcript at 60-76.)

POLICIES

Security clearance decisions are not made in a vacuum. When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines. In addition to brief introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which are to be used as appropriate in evaluating an applicant’s eligibility for access to classified information.

These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, these guidelines are applied in conjunction with the factors listed in the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶ 2(c), the entire process is a conscientious scrutiny of a number of variables known as the “whole-person concept.” The administrative judge must consider all available, reliable information about the person, past and present, favorable and unfavorable, in making a decision. In addition, the administrative judge may also rely on his own common sense, as well as his knowledge of the law, human nature, and the ways of the world, in making a reasoned 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.

Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, the 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 applicant has the ultimate burden of persuasion as to obtaining a favorable security decision.

A person who seeks access to classified 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. The Government reposes a high degree of trust and confidence in individuals to whom it grants access to classified information. Security clearance decisions include, by necessity, consideration of the possible risk that the applicant may deliberately or inadvertently fail to protect or safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation as to potential, rather than actual, risk of compromise of classified information.

Finally, as emphasized in Section 7 of 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.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive information).

ANALYSIS

Guideline F, Financial Considerations

The security concern for Financial Considerations is set out in AG ¶ 18:

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.

The guideline notes several conditions that could raise security concerns. Under AG ¶ 19(a), an Ainability or unwillingness to satisfy debts@ is potentially disqualifying. Similarly under AG ¶ 19(c), Aa history of not meeting financial obligations@ may raise security concerns. Applicant, by his own admission, and supported by the documentary evidence, had substantial past-due debts. The evidence is sufficient to raise these potentially disqualifying conditions.

The guideline also includes examples of conditions that could mitigate security concerns arising from financial difficulties. Under AG ¶ 20(a), the disqualifying condition may be mitigated where Athe 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.@ In addition, AG ¶ 20(b) states that the disqualifying conditions may be mitigated where “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.” Applicant's financial difficulties arose primarily because of a contentious divorce. He documented serious and long-standing attempts to resolve his past due debts. The record shows that he has paid his legitimate debts, and that he has properly disputed debts, which are paid or are not his. At all times he has acted responsibly. These two mitigating conditions apply.

Applicant has initiated a good-faith effort to pay off his creditors. As stated above, several have been paid. Accordingly, AG ¶ 20(d) is applicable. Applicant’s current financial situation is stable. He is able to pay his current indebtedness in a timely manner. I find that “there are clear indications that the problem is being resolved or is under control,” as required by AG ¶ 20(c).

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 the applicant’s conduct and all the relevant circumstances. 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. The administrative judge should consider the nine adjudicative process factors listed at AG ¶ 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) 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.

I considered the potentially disqualifying and mitigating conditions in light of all the relevant facts and circumstances surrounding this case. Applicant had some financial problems, but his current financial condition is stable. Under AG ¶ 2(a)(2), I have considered the facts of the Applicant’s debt history. As stated at length above, much of this was brought about because of a divorce. Based on the record, I find that there have been permanent behavioral changes under AG ¶ 2(a)(6). Accordingly, I find that there is little to no potential for pressure, coercion, exploitation, or duress (AG ¶ 2(a)(8)); and that there is no likelihood of recurrence (AG ¶ 2(a)(9)). Overall, the record evidence leaves me with no questions or doubts as to Applicant’s eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant has mitigated the security concerns arising from his financial situation.

On balance, I conclude that Applicant has successfully overcome the Government's case opposing his request for a security clearance. Accordingly, the evidence supports granting his request for a security clearance.

FORMAL FINDINGS

Formal findings for or against Applicant on the allegations set forth in the SOR, as required by ¶ E3.1.25 of Enclosure 3 of the Directive, are:

Paragraph 1, Guideline F: FOR APPLICANT

Subparagraphs 1.a. through 1.g.: For Applicant

CONCLUSION

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

WILFORD H. ROSS Administrative Judge