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ISCR Case 09-00200.h1 — CASE

ISCR Case 09-00200.h1granted

Case Headnote

ISCR Case No. 09-00200.h1

grantedMar 19, 2010· Hon. Claude R. Heiny II· hearing

Summary

A 45-year-old IT technician was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The applicant faced allegations regarding approximately $10,500 in unpaid debts, including two judgments and a state tax lien. Specific debts included multiple medical and hospital bills, credit card accounts, utility bills, a telephone account, a bank account placed for collection, and unpaid tuition. Additionally, a Chapter 7 bankruptcy was filed in August 2003 and discharged in August 2004.

Disqualifying conditions under Guideline F were raised, but mitigating conditions were applied. The applicant demonstrated a commitment to resolving his financial issues by paying most of his outstanding debts. He also provided evidence of financial counseling and received support from his community and family.

The decision to grant the clearance was further supported by positive character references, which attested to the applicant's reliability and trustworthiness. These factors collectively led to a favorable outcome, with the security clearance being granted.

Why the Applicant Prevailed

Applicant paid most of his debts and demonstrated a commitment to resolving financial issues.
He provided evidence of financial counseling and support from his community and family.
The applicant's positive character references indicated reliability and trustworthiness.

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(c)appliedThe 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
AG ¶ 20(d)appliedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts

Key Rule Quoted

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

Procedural Posture

SOR issuedMay 29, 2009
Answer filedJun 18, 2009
Hearing heldAug 24, 2009
Decision dateMar 19, 2010

Cite For

Mitigating Conditions Under Guideline F for Financial Issues
Evidence of Community Support in Financial Matters
Importance of Demonstrating Good-faith Efforts to Resolve Debts

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, including unpaid judgments and a state tax lien, totaling approximately $10,500. However, the applicant demonstrated efforts to mitigate these concerns by paying most of the debts and providing evidence of financial counseling. Ultimately, the judge ruled in favor of the applicant, granting the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	$2,525 hospital debt $2,525	For Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	$2,003 hospital debt $2,003	For Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	$452 medical debt $452	For Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	$2,554 judgment by a medical creditor $2,554	For Applicant	Judgment Against Applicant	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	$202 judgment by a dental creditor $202	For Applicant	Judgment Against Applicant	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	$681 account placed for collection $681	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	$1,607 credit card debt $1,607	For Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	$369 electric and power company account $369	For Applicant	Utility or Phone Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i	$1,083 credit card account $1,083	For Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.j	$226 state tax lien $226	For Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.k	$302 telephone account $302	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.l	$437 medical debt $437	For Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.m	$665 credit card account $665	For Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.n	$217 bank account placed for collection $217	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.o	$666 unpaid tuition debt $666	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.p	Chapter 7 bankruptcy filed in August 2003, discharged in August 2004	For Applicant	Bankruptcy Filing	Admitted	—	—	—

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. 09-00200 ) ) Applicant for Security Clearance )

For Government: Fahryn Hoffman, Esquire, Department Counsel For Applicant: Pro Se

March 19, 2010 ______________

STATEMENT OF CASE

______________

HEINY, Claude R., Administrative Judge:

Applicant had two unpaid judgments, a state tax lien, and twelve accounts placed for collection, which totaled approximately $10,500. Applicant has paid most of the debts and has rebutted or mitigated the government’s security concerns under financial considerations. Clearance is granted.

Statement of the Case

Applicant contests the Defense Department’s intent to deny or revoke his eligibility for an industrial security clearance. Acting under the relevant Executive Order and DoD Directive,1 the Defense Office of Hearings and Appeals (DOHA) issued a Statement of Reasons (SOR) on May 29, 2009, detailing security concerns under financial considerations.

On June 18, 2009, Applicant answered the SOR, and requested a hearing. On July 15, 2009, I was assigned the case. On July 27, 2009, DOHA issued a notice of hearing scheduling the hearing which was held on August 24, 2009.

The government offered Exhibits (Ex.) 1 through 4, which were admitted into evidence. Four individuals testified on Applicant’s behalf. Applicant testified on his own behalf and submitted Exhibits A through P, which were admitted into evidence. The record was held open to allow additional information from Applicant. On September 3, 2009, additional material was submitted. Department Counsel had no objection to the material, which was admitted into the record as Ex. Q and R. On January 19, 2010, additional material was submitted. Department Counsel had no objection to the material, which was admitted into the record as Ex. S through W. On March 1, 2010, additional material was submitted. Department Counsel had no objection to the material, which was admitted into the record as Ex. X through UU. On September 1, 2009, the transcript (Tr.) was received.

Procedural

At the start of the hearing, Department Counsel moved to amend the SOR. There being no objection, the following changes were made: SOR ¶ 1.dwas amended by adding the words “in the amount of $2,554”; ¶ 1.e was amended by adding the words “in the amount of $202”; and, ¶ 1.jwas amended deleting the word “Texas” and replacing it with the word “Utah.” (Tr. 20-22)

FINDINGS OF FACT

In Applicant’s Answer to the SOR, he admitted all of the factual allegations, with explanations. Applicant’s admissions to the SOR allegations are incorporated herein. After a thorough review of the record, pleadings, exhibits, and testimony, I make the following additional findings of fact:

Applicant is a 45-year-old information technology (IT) technician and help desk analysts who has worked for a defense contractor since August 2008, and is seeking to obtain a security clearance. (Tr. 119) Applicant’s co-workers, supervisors, and friends state: Applicant is hard working, intelligent, dedicated, compassionate, honest, and trustworthy. He places the value of his employer and work assignment at the same level as his personal wants and needs. (Ex. A, B, F) He has tenacity, a positive attitude, and is an effective team builder who creates a positive work environment. (Ex. C) Applicant is a solid, dedicated, determined person who serves as a role model for his children and associates. (Ex. D, E, G) Applicant is “a man of quiet confidence with a desire to succeed.” (Ex. H) He has received a certificate of recognition and appreciation for his duty performance from September 2000 to June 2003. (Ex. P) At his home group 12-step program, Applicant provides substance when relating his past mistakes and hardships. (Tr. 40) Applicant knows how important it is to make amends for his shortcomings concerning his finances. (Tr. 41) Applicant is serious about correcting his financial problems. (Tr. 45) A month prior the hearing, Applicant received assistance from his church to pay a $215 electrical utility bill. (Tr. 51, 52) Applicant’s pastor believes Applicant will follow through on promises made. (Tr. 57) His church has a detailed program addressing financial problems and providing financial counseling. However, Applicant had yet to start the counseling. (Tr. 55, 199) In his June 2009, response to the SOR, Applicant stated he would enroll in a personal finance course offered by the local community college and provided a copy of the course syllabus. He never enrolled.

Applicant’s sponsor in a 12-step program believes Applicant is sincere, hard working, responsible, and focused. (Tr. 66, 85) His sponsor states Applicant has a firm resolve to satisfy his debts as quickly as possible. (Tr. 71) Applicant’s father said there is property from an estate, a home, which is being sold. When it sells, Applicant’s portions would be at least $15,000. (Ex. L, M, N, Tr. 98, 114) the house was just being put on the market. (Tr. 100) In the past, his father has given him $1,500 twice. (Tr. 106)

In August 2003, Applicant and his wife filed for Chapter 7 bankruptcy protection. In August 2004, the bankruptcy was discharged. In 2003 or 2003, Applicant was working in the IT field making twice what other employees at the company were making. (Tr. 187) Instead of firing him, his pay was cut. (Tr. 187)

Applicant submitted four pages of his Chapter 7 Schedule F, a list of creditors holding unsecured nonpriority claims. The total unsecured debt as listed on page 3 was $51,998.65, however, the four pages add up to only $47,752.65 a difference of $4,246. No explanation was provided for the missing creditors. A page may be missing from the Schedule F. The schedule lists six medical debts: three hospital debts ($2,525, $2,003, and $858); a neonatal associates’ debt ($443); and two credit services related to medical ($63 and $858). The SOR lists two medically related judgments: a $2,554 judgment (SOR ¶ 1.d) and a $202 dental bill judgment (SOR ¶ 1.e). Two other medical accounts are also listed in the SOR: a $452 debt (SOR ¶ 1.c), and a $437 debt (SOR ¶ 1.l).

Applicant asserts he will check the SOR debts against his bankruptcy to determine if any of the SOR debts were included in the bankruptcy. In March 2010, Applicant asserted, but failed to provide documentation, that the $665 credit card debt (SOR ¶ 1.m) was included in his bankruptcy. (Ex. X)

Applicant asserts, but fails to document, that the three accounts placed for collection in SOR ¶ 1.f ($681), SOR ¶ 1.h ($369), and SOR ¶ 1.i ($1,083) are duplications of the same debt. Applicant’s May 2009 credit bureau report (Ex. 3) lists the same firm and identification code for the three debts, which means a single collection firm is attempting to collect the three debts. The $1,048 debt is a bank credit card account, the $369 debt is past due electric and power utility bill, and the $665 is the same debt as listed in (SOR ¶ 1.m). (Ex. 3, 4)

In October 1989, a $226 state tax lien (SOR ¶ 1. j) was filed against him, which his mother paid. Court records show the lien was satisfied in 1989. (Ex. U) A $2,554 judgment (SOR ¶ 1.d) was filed against Applicant by a medical provider. A dentist obtained a $202 judgment (SOR ¶ 1.e) against him. (Ex. 2)

Applicant and his wife have five children. (Tr. 72, 120) His wife makes $11 per hour working at a grocery store. (Ex. J, K) He is paid $24 per hour at his job and contributes two percent of this salary to a savings plan. (Ex. J, R) He currently has $1,700 in the plan. (Ex. R) He obtained a part-time job working at a restaurant to help pay his debts, which paid $10 per hour. (Ex. 2) At the time of the hearing, he no longer had his part-time job. (Tr. 125) His annual salary is $50,000 per year. (Tr. 185) His monthly income was $3,500 and his wife’s monthly income was $800. (Tr. 160) Applicant’s net monthly discretionary income (gross income less expenses and bill payment) is $20 to $30 each month. (Tr. 170)

Applicant drives a 1995 Honda. (Tr. 215) When he gets home from work, he takes his wife to her evening job at the supermarket and returns four hours later to pick her up. (Tr. 216) His current job is the first job that provided him and his family medical coverage. (Tr. 220)

In September 2008, Applicant was interviewed about his finances. (Tr. 141) On March 31, 2009, Applicant answered written interrogatories. (Ex. 2) At that time, Applicant’s net monthly income was $4,146; his monthly expenses were $3,945, which included payment of $173 to a credit solution company, which left a net monthly remainder of $28. However, Applicant did not make any payments to the credit solution company. (Tr. 130)

In September 2008, when questioned about his finances, Applicant stated his financial situation was the result of his own financial irresponsibility and was not caused by events beyond his control. (Ex. 2) He planned to enroll in the employee assistance program offered by his employer and seek credit counseling and debt consolidation service assistance. (Ex. 2) Much of his debt is five years old, and he went to the debt consolidation company six months prior to or before the hearing. (Tr. 148)

On March 31, 2009, Applicant sought the services of a credit solutions company to help him with his debt and completed an enrollment package. (Tr. 2) This was through his company’s emergency assistance program (EAP). (Tr. 113) The plan covered seven debts, which totaled $9,682 and required Applicant to make $174 monthly payments. (Ex. 2) The covered debts include: a $2,554 judgment by a medical creditor (SOR ¶ 1.d); a $1,607 credit card debt (SOR ¶ 1.g); miscellaneous medical bill, the $202 judgment by a medical creditor (¶ 1.e); the collection agency attempting to collect a $1,083 credit card debt (SOR ¶ 1.i); a $665 credit card debt (SOR ¶ 1.m); and, a $217 debt (SOR ¶ 1.n). The plan also includes a $1,024 credit card (SOR ¶ 1.i, $1,083) debt. Applicant’s September 13, 2008 credit bureau report (CBR) (Ex. 4) lists the original creditor with a high credit of $1,024, but the CBR indicates the debt was sold to another creditor. The same CBR lists a $1,024 high credit amount listed under the collection agency referenced in SOR ¶¶ 1.f, 1.h, and 1.i.

The agreement required Applicant to pay $174 each month for April, May, and June 2009. Starting in July 2009, he was required to pay the credit solutions company $72 monthly. (Ex. 2) There is no evidence Applicant has made any payments in accord of this agreement. Applicant states shortly after entering into the agreement his second job ended and he made no payments. (Tr. 150) Applicant completed a debt management worksheet with a different company. (Ex I) Applicant’s monthly net remainder (income less expenses) was $28. (Ex. I, Tr. 113)

Applicant’s use of alcohol contributed to his financial problems. Applicant stated, “I suffer from the disease of alcoholism. When I drink, unfortunately, the majority of my money goes to that. That’s how the debt occurred.” (Tr. 155) In the past, alcohol consumption has been a problem for Applicant, but he is active in recovery. He last drank in October 2008. (Tr. 158) In 1989, Applicant was in a seven-day detoxification and treatment program. Followed by a 30-day inpatient program during which he attended counseling and received education. He entered the program as a requirement for his parent’s bailing him out of jail. In February 2007, he entered into a seven-day inpatient program. (Ex. 2) He admitted himself because he wanted to stop drinking and could not stop by himself. Applicant describes the 2007 treatment as “active addiction” not “active recovery.” (Tr. 159) He states that it was not until last year that the actual true recovery process started. (Tr. 207)

At the end of 2009, Applicant’s sister sent him $7,000 with which to pay his debts. (Ex. S) He failed to explain why he needed to borrow $7,000 from his sister when, at the hearing he had asserted he would “soon” receive an inheritance of $17,552. (Answer to SOR) As of January 10, 2010, Applicant has received offers to settle from some of his creditors. He was attempting to negotiate with other creditors to lower the amount owed and was attempting to locate the remaining creditors. On March 1, 2010, Applicant provided documentation that he had paid approximately $4,300 on his debts. (Ex. X – UU) The use of the balance of the $7,000 is not part of the record.

Applicant has been through financial credit counseling several times. One period of counseling that lasted six months, one that had seven sessions, and counseling that lasted a year. (Tr. 193) He learned to live within his means, to scale back spending, establish a budget, and accumulate savings. A summary of his 15 debts and their current status follows:

Creditor Amount Current Status a Apartment complex debt placed $426 Paid. Settled for $385. (Ex. CC, BB, S, for collection. Tr. 127) Creditor Amount Current Status b Account placed for collection. $670 Unpaid. Applicant is unsure the nature of the original debt. (Tr. 127) Creditor will to settle for $401, which is 60% of the debt. (Ex. S) In March 2010, Applicant asserted creditor will remove it from his CBR. (Ex. X) c Medical creditor. #3372 $452 Unpaid. In January 2010, Applicant requested copies of the judgments against him. (Ex. T, DD) In March 2010, Applicant asserted he would contact the hospital and set up payments. (Ex. X) d Medical creditor judgement.(Ex. $2,554 Unpaid. In January 2010, Applicant FF) requested copies of the judgments against him. (Ex. T, DD) In March 2010, Applicant asserted he would contact the hospital and set up payments. (Ex. X) e Medical creditor judgment for $202 Unpaid. In March 2010, Applicant dental services. (Ex. EE) asserts he paid this debt and will contact the dentist to determine if it is yet owed. (Ex. X) He will pay it if it is owed. F Account placed for collection. $681 Paid. Applicant asserts he paid $535 on this debt. (Ex. X) A letter from the creditor states, “This document is not proof of payment on this account and should not be used or accepted by any party as proof of payment on this account. Please contact us to obtain proof of payment.”(Ex. II) Same debt as SOR ¶ 1.m. (Ex 3) g Credit card account placed for $1,607 Paid. (Ex. S, JJ, KK) No actual proof collection. of payment from creditor was presented. h Electric and power company $369 Paid. Settled for $184. (Ex. V, LL, account. MM) Debt was incurred five years ago and is not the same electrical bill recently paid by Applicant’s church. (Tr. 135) Creditor Amount Current Status Credit card account. I $1,083 Paid. Applicant asserts he paid $950 on this debt. (Ex. X) A letter from the creditor states, “This document is not proof of payment on this account and should not be used or accepted by any party as proof of payment on this account. Please contact us to obtain proof of payment.” (Ex. NN, OO) State of tax lien. J $226 Paid. (Ex. U, Tr. 140) Telephone account. k $302 Included in bankruptcy. Applicant disputed the debt as having been paid and said the creditor was investigating the claim. (Ex. S) A $202 telephone bill with this creditor was included in his Chapter 7. $437 medical debt. L $437 Unpaid. At the hearing, Applicant asserted, if valid he will attempt to negotiate the debt before paying it. (Ex. S) Following the hearing, Applicant asserts this was a duplication of another debt, but provided no supporting documentation. m Credit card account placed for $665 Unpaid. Applicant asserts at the collection. hearing the creditor is willing to settle for $566. (Ex. S) Following the hearing, Applicant asserts this was included in his bankruptcy, but provided no supporting documentation. Bank account placed for n Paid. (Ex. S, TT) $217 collection. Unpaid tuition debt from 2003 o $666 Paid. (Ex. S, UU) or 2004 placed for collection. (Tr. 141) Chapter 7 bankruptcy. p In August 2004, the bankruptcy discharged $52,000 in nonpriority claims. Total debt listed in SOR $10,557

POLICIES

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the revised adjudicative guidelines (AG). In addition to brief introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which must be considered 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.

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 obtain 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. Decisions include, by necessity, consideration of the possible risk the applicant may deliberately or inadvertently fail 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.

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

ANALYSIS

Guideline F, Financial Considerations

Revised Adjudicative Guideline (AG) ¶ 18 articulates the security concerns relating to financial problems:

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.

Additionally, an individual who is financially irresponsible may also be irresponsible, unconcerned, negligent, or careless in properly handling and safeguarding classified information. Behaving responsibly or irresponsibly in one aspect of life provides an indication of how a person may behave in other aspects of life.

A person’s relationship with his creditors is a private matter until evidence is uncovered demonstrating an inability or unwillingness to repay debts as agreed. Absent substantial evidence of extenuating or mitigating circumstances, an applicant with a history of serious or recurring financial difficulties is in a position of risk that is inconsistent with holding a security clearance. An applicant is not required to be debt free, but is required to manage his finances so as to meet his financial obligations.

The record evidence supports a conclusion Applicant has a history of financial problems. In 2004, Applicant had $52,000 of debt discharged. The SOR lists two unpaid judgments, a state tax lien, and twelve additional accounts placed for collection, which together totaled approximately $10,500. Disqualifying Conditions AG ¶ 19(a), “inability or unwillingness to satisfy debts” and AG ¶ 19(c), “a history of not meeting financial obligations,” apply.

Five financial considerations mitigating conditions under AG ¶¶ 20(a) – (e) are potentially applicable:

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

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

(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’s delinquent debts are “a continuing course of conduct” under the Appeal Board’s jurisprudence because he had two large delinquent debts from November 2008 until December 2009. See ISCR Case No. 07-11814 at 3 (App. Bd. Aug. 29, 2008) (citing ISCR Case No. 01-03695 (App. Bd. Oct. 16, 2002)). Applicant does not receive credit under AG ¶ 20(a) because the debts are recent and numerous.

AG ¶ 20(b) does not apply. September 2008, when questioned about his finances, Applicant stated his financial situation was the result of his own financial irresponsibility and was not caused by events beyond his control. He also stated his use of alcohol contributed to his financial problems. Applicant stated, “I suffer from the disease of alcoholism. When I drink, unfortunately, the majority of my money goes to that. That’s how the debt occurred.” In the past, alcohol consumption has been a problem for Applicant, but he is active in recovery. He last drank in October 2008. Under AG ¶ 20(b), Applicant's financial problems were not contributed to by factors beyond his control. Applicant meets none of the factors set forth in AG ¶ 20(b) such as loss of employment, a business downturn, unexpected medical emergency, or a death, divorce or separation.

AG ¶ 20(c) does not apply because Applicant had yet to start financial counseling. AG ¶ 20(d) does apply. Applicant has paid eight of his debts, which indicates a good-faith effort to repay overdue creditors or otherwise resolve debts. Another account placed for collection was included in his bankruptcy. Those debts total approximately $5,500. Applicant asserts, but fails to provide documentation that four additional debts have been addressed. He asserts, without documentation, that the $202 dentist bill (SOR 1.e) was paid; the $437 medical debt (SOR 1.l) was a duplication of another debt; the $665 credit card debt (SOR 1.m) was included in his bankruptcy; and the creditor had agreed to remove the $670 bank debt placed for collection (SOR 1.b) from his CBR.

Applicant has agreed to pay the remaining two debts ($452, SOR 1.cand $2,554, SOR 1.d). Having paid the majority of his debts coupled with the character references provided attesting to Applicant’s good character, it is likely he will pay the two remaining debts, which total approximately $3,000. Neither the remaining unpaid debt, nor his having to have resorted to bankruptcy protection raise concerns about his current reliability, trustworthiness, or good judgment.

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 circumstances. 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.

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 debts incurred were not the type that indicates poor self-control, lack of judgment, or unwillingness to abide by rules and regulations. Applicant has paid the majority of his debts. Of course, the issue is not simply whether all his debts are paid—it is whether his financial circumstances raise concerns about his fitness to hold a security clearance. (See AG ¶ 2(a)(1).)

The Appeal Board has addressed a key element in the whole person analysis in financial cases stating:

In evaluating Guideline F cases, the Board has previously noted that the concept of “‘meaningful track record’ necessarily includes evidence of actual debt reduction through payment of debts.” However, an applicant is not required, as a matter of law, to establish that he has paid off each and every debt listed in the SOR. All that is required is that an applicant demonstrate that he has ‘. . . established a plan to resolve his financial problems and taken significant actions to implement that plan.’ The Judge can reasonably consider the entirety of an applicant’s financial situation and his actions in evaluating the extent to which that applicant’s plan for the reduction of his outstanding indebtedness is credible and realistic. See Directive ¶ E2.2 (a) (‘Available, reliable information about the person, past and present, favorable and unfavorable, should be considered in reaching a determination.’) There is no requirement that a plan provide for payments on all outstanding debts simultaneously. Rather, a reasonable plan (and concomitant conduct) may provide for the payment of such debts one at a time. Likewise, there is no requirement that the first debts actually paid in furtherance of a reasonable debt plan be the ones listed in the SOR.

ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008) (internal citations omitted).

Applicant understands he needs to maintain his financial responsibility. Clearly, he could have acted more aggressively to resolve his debts. There is, however, simply no reason not to trust him. Moreover, he has established a “meaningful track record” of debt payments. He has promised to pay the two remaining debts.2 I found his hearing statement to be candid, forthright, and credible. His character witnesses laud his responsibility, trustworthiness, and integrity.

Overall, the record evidence leaves me without questions or doubts as to Applicant’s eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant mitigated the security concerns arising from his financial considerations.

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, Financial Considerations: FOR APPLICANT

Subparagraph 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 eligibility for a security clearance. Eligibility for access to classified information is granted.

_______________________ CLAUDE R. HEINY II Administrative Judge

FOOTNOTES

1 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. 2 Of course, the government can re-validate Applicant’s financial status at any time through credit reports, investigation and/or additional interrogatories. Approval of a clearance now does not bar the government from subsequently revoking it, if warranted. This footnote does not imply that this clearance is conditional.