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ISCR Case 10-03971.h1 — CASE

ISCR Case 10-03971.h1granted

Case Headnote

ISCR Case No. 10-03971.h1

grantedJul 1, 2010· Hon. Robert E. Coacher· hearing

Summary

A 39-year-old business process analyst was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The Statement of Reasons cited three delinquent debts totaling approximately $31,153: a state tax lien for $20,761, a real estate agency judgment for $9,556, and another judgment for $836. These issues raised disqualifying conditions under Adjudicative Guidelines (AG) ¶ 19(a) and AG ¶ 19(c).

However, the applicant successfully mitigated these concerns. They demonstrated resolution of two of the debts and provided supporting evidence for disputing the third. Mitigating conditions applied included AG ¶ 20(c), AG ¶ 20(d), and AG ¶ 20(e).

The decision to grant the clearance was based on the applicant's good faith efforts to manage their financial obligations. This was further supported by character references attesting to their trustworthiness and good judgment, alongside evidence of a stable and responsible current financial situation.

Why the Applicant Prevailed

Applicant resolved two debts and disputed a third with supporting evidence.
Character references indicated the applicant's trustworthiness and good judgment.
The applicant's current financial situation is stable and responsible.

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
AG ¶ 20(e)appliedThe 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 Provided Evidence of Actions to Resolve the Issue

Key Rule Quoted

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

Procedural Posture

SOR issuedAug 9, 2010
Answer filedAug 27, 2010
Hearing heldOct 29, 2010
Decision dateMar 29, 2011

Cite For

Mitigation of Financial Concerns Under Guideline F
Good Faith Efforts to Resolve Debts
Character References Supporting Trustworthiness

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 mitigated the financial concerns under Guideline F, resulting in a favorable decision for all alleged debts. The applicant demonstrated good-faith efforts to resolve debts and provided evidence disputing one of the debts, leading to the conclusion that he is eligible for a security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	a state tax lien in the amount of $20,761. $20,761	For Applicant	Tax Unpaid	Denied	—	(c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.b	a judgment for a real estate agency in the amount of $9,556. $9,556	For Applicant	Judgment Against Applicant	Denied	(a) inability to satisfy debts	(e) reasonable, documented basis to dispute the debt	Documented Debt Disputed with Creditor
1.c	a judgment in the amount of $836. $836	For Applicant	Judgment Against Applicant	Denied	—	(c) received/receiving counseling; problem being resolved (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. 10-03971 ) Applicant for Security Clearance )

For Government: Marc G. Laverdiere, Esq., Department Counsel For Applicant: Richard L. Morris, Esq.

March 29, 2011 ______________

STATEMENT OF CASE

______________

COACHER, Robert E., Administrative Judge:

Applicant mitigated the Financial Considerations security concerns. Eligibility for access to classified information is granted.

Statement of the Case

On August 9, 2010, the Defense Office of Hearings and Appeals (DOHA) issued Applicant a Statement of Reasons (SOR) detailing security concerns under Guideline F, Financial Considerations. DOHA acted under Executive Order (EO) 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) implemented by the Department of Defense on September 1, 2006.

Applicant answered the SOR on August 27, 2010, and requested a hearing before an administrative judge. The case was assigned to me on October 8, 2010. DOHA issued a notice of hearing on October 13, 2010, and the hearing was convened as scheduled on October 29, 2010. The Government offered exhibits (GE) 1 through 6, which were admitted into evidence without objection. Department Counsel’s exhibit index is marked as Hearing Exhibit (HE) I. Applicant testified, called a witness, and offered exhibits (AE) A and B that were admitted into evidence. Applicant’s exhibit list was marked as HE II. I received faxed documents from the Applicant on November 2, 2010, asking for an expedited decision in his case. These documents were marked as HE III. DOHA received the hearing transcript (Tr.) on November 8, 2010.

FINDINGS OF FACT

Applicant is a 39-year-old business process analyst employed by a government contractor. He has worked for his current employer since June 2009. He has a bachelor’s degree in business management and a master’s in marketing. He is married and has one son. He also cares for his elderly mother.1

The SOR alleges three delinquent debts for about $31,153. The debts were listed on credit reports obtained on July 28, 2010, and February 19, 2010.

The first debt listed in the SOR (¶ 1.a) is a state tax lien in the amount of $20,761. Applicant initially disputed this debt because it was a business debt for which he had no ownership interest. Applicant was the registered business agent for the company in question. Sometime in the mid-2000’s, state tax liability accrued to the business. The taxes were not paid by the business owners and the state filed a tax lien against the owners and the Applicant as the business agent. Applicant first became aware of the lien in 2005. He disputed his liability with the state and also attempted to contact the business owners to no avail. Ultimately Applicant paid a settlement amount ($13,446) to the state and the lien was released in August 2010. This debt is resolved.2

The second debt listed in the SOR (¶ 1.b) is a judgment for a real estate agency in the amount of $9,556. Applicant disputes this debt. Applicant’s brother was a partner in a business that owed commercial property. The company sought to lease the property. Applicant introduced his brother to the real estate agency in question. He has not an owner or partner in his brother’s company. A dispute arose concerning payment for services between the real estate agency and Applicant’s brother’s company. The real estate agency filed a lawsuit and Applicant was named as a co-defendant. A default judgment was entered against Applicant. Applicant claims he was unaware of the judgment until informed of it through the security clearance process in 2010. The most recent credit report in evidence does not list this judgment. His brother provided corroboration about Applicant’s limited involvement in the business transaction with the real estate agency. Applicant hired an attorney to pursue any legal remedies available to him. This debt is unresolved, but disputed.3 The last debt listed in the SOR (¶ 1.c) is a judgment in the amount of $836. Applicant explains this debt was the result of a misunderstanding with a friend about the creation of a webpage. He was unaware of this debt until notified about it through the security clearance process. Applicant paid a settlement amount to resolve this debt in August 2010. This debt is resolved.4

Applicant’s current financial situation is stable. His wife works as a nurse, they rent their home, and the only long-term financial obligation he has is his student loan debt which is current. Applicant’s co-workers, family members, and his current vice- president provided character letters stating that Applicant is an honest, trustworthy person and shows good judgment.5

POLICIES

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 that are to be used 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, administrative judges apply the guidelines 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.

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 the applicant or proven by Department Counsel.” The applicant has the ultimate burden of persuasion to obtain a favorable 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 to safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation about potential, rather than actual, risk of compromise of classified information.

Section 7 of EO 10865 provides that adverse 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 Executive Order 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 as follows:

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. Two are potentially applicable in this case:

(a) inability or unwillingness to satisfy debts; and

Applicant had three delinquent debts that he was unable or unwilling to satisfy. The evidence is sufficient to raise the above disqualifying conditions.

Several Financial Considerations mitigating conditions under AG ¶ 20 are potentially applicable:

(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; and (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 provided evidence of actions to resolve the issue.

Applicant’s payments to satisfy the debts listed at SOR ¶¶ 1.a and 1.c, demonstrate clear indications that the problem is being resolved. They also amount to good-faith efforts to repay overdue creditors. AG ¶¶ 20(c) and 20(d) are applicable to those debts.

Applicant supplied documented proof to dispute the debt listed at SOR ¶ 1.b. The statements from Applicant’s brother and Applicant’s act of hiring an attorney to dispute the default judgment substantiate his dispute. AG ¶ 20(e) applies.

Applicant met his burden to establish sufficient mitigation evidence under AG ¶¶ 20(c), 20(d), and 20(e) on the debts listed in the SOR.

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 relevant 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.

I considered the potentially disqualifying and mitigating conditions in light of all relevant facts and circumstances surrounding this case. I have incorporated my comments under Guideline F in my whole-person analysis. Some of the factors in AG ¶ 2(a) were addressed under that guideline, but some warrant additional comment.

I considered Applicant’s excellent work record, his character references, and the support from his vice-president. Applicant paid the debts that he owed and disputed that debt that he believes is not valid. Overall, the record evidence leaves me without questions or doubts about Applicant’s eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant mitigated the Financial Considerations security concerns.

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.c: 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.

________________________ Robert E. Coacher Administrative Judge