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ISCR Case 10-08719.h1 — CASE

ISCR Case 10-08719.h1granted

Case Headnote

ISCR Case No. 10-08719.h1

grantedJan 25, 2012· Hon. Richard A. Cefola· hearing

Summary

A pro se applicant sought a security clearance, facing concerns under Guideline F (Financial Considerations). The Statement of Reasons alleged five outstanding student loans: four owed to Creditor A totaling approximately $41,534, and one owed to Creditor E for about $17,802. These allegations raised disqualifying conditions under Adjudicative Guidelines (AG) ¶ 19(a) and ¶ 19(c).

The applicant's financial difficulties primarily arose from his wife's significant income reduction and his daughter's failure to repay student loans. However, the applicant ultimately resolved all outstanding debts by settling them.

The judge applied mitigating conditions under AG ¶ 20(b) and ¶ 20(d), finding that the applicant acted responsibly and made good-faith efforts to resolve his financial obligations. The financial issues were largely due to circumstances beyond his control. Consequently, the security concerns were mitigated, and the security clearance was GRANTED.

Why the Applicant Prevailed

The applicant settled all past due debts, demonstrating responsible financial behavior.
The financial issues were largely due to circumstances beyond the applicant's control, including his wife's income reduction.
The applicant initiated good-faith efforts to resolve his financial obligations.

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(b)appliedConditions That Resulted in the Financial Problem Were Largely Beyond the Person’s Control
AG ¶ 20(d)appliedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts

Key Rule Quoted

“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.”

Procedural Posture

SOR issuedJun 15, 2011
Answer filedJul 15, 2011
Hearing heldSep 15, 2011
Decision dateJan 25, 2012

Cite For

Mitigation of Financial Issues Under Guideline F Due to Circumstances Beyond Control
Good-faith Efforts to Resolve Debts as a Mitigating Factor
Application of the 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's financial issues stemmed from his wife's significant reduction in income and their daughter's failure to pay her student loans. All debts were settled in full, leading to a decision in favor of the Applicant under Guideline F.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	The first four student loans were owed to Creditor A in the amount of about $41,534. $41,534	For Applicant	Student Loan Debt	Denied	—	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	—
1.b	The first four student loans were owed to Creditor A in the amount of about $41,534. $41,534	For Applicant	Student Loan Debt	Denied	—	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	—
1.c	The first four student loans were owed to Creditor A in the amount of about $41,534. $41,534	For Applicant	Student Loan Debt	Denied	—	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	—
1.d	The first four student loans were owed to Creditor A in the amount of about $41,534. $41,534	For Applicant	Student Loan Debt	Denied	—	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	—
1.e	The last student loan was owed to Creditor E in the amount of about $17,802. $17,802	For Applicant	Student Loan Debt	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	—

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. 10-08719 ) ) Applicant for Security Clearance )

For Government: Jeff Nagel, Esquire, Department Counsel For Applicant: Pro se

January 25, 2012

______________

STATEMENT OF CASE

______________

CEFOLA, Richard A., Administrative Judge:

The Applicant submitted his Electronic Questionnaires for Investigations Processing (e-QIP) on May 5, 2010. On June 15, 2011, the Defense Office of Hearings and Appeals (DOHA) issued a Statement of Reasons (SOR) detailing the security concerns under Guideline F for the Applicant. 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), effective within the Department of Defense after September 1, 2006.

The Applicant acknowledged receipt of the SOR on June 27, 2011. He answered the SOR in writing (Response) on July 15, 2011, and requested a hearing before an Administrative Judge. DOHA received the request on July 20, 2011, and I received the case assignment on September 1, 2011. DOHA issued a notice of hearing the next day, on September 2, 2011, and I convened the hearing as scheduled on September 15, 2011. The Government offered Exhibits (GXs) 1 through 7, which were received without objection. The Applicant testified on his own behalf. DOHA received the transcript of the hearing (TR) on September 28, 2011. I granted the Applicant’s two requests, one made at his hearing and the other subsequent to his hearing, to keep the record open until January 16, 2012, to submit additional matters. On January 10, 2012, he submitted Exhibit (AppX) A, which was received without objection. The record closed on January 16, 2011. Based upon a review of the pleadings, exhibits, and testimony, eligibility for access to classified information is granted.

FINDINGS OF FACT

In his Answer to the SOR, the Applicant admitted the factual allegations in Subparagraph 1.e. of the SOR. He denied the factual allegations in Subparagraphs 1.a through 1.d. of the SOR, with explanations. He also provided additional information to support his request for eligibility for a security clearance.

Guideline F - Financial Considerations

The Applicant’s wife “is a real estate agent”; and with the collapse of the real estate market in 2008, her “salary went from . . . about $105,000 a year - - until the last couple of years - - she’s averaged about $10,000.” (TR at page 25 line 5 to page 28 line 3.) All of the alleged past due debts are for student loans that the Applicant and his wife co-signed for one of their daughters. (TR at page 35 line 19 to page 38 line 7.) Their daughter failed to make payments on her student loans; and as a result, the burden of paying them fell on the Applicant and his spouse. (Id.)

1.a.~1.d. The first four student loans were owed to Creditor A in the amount of about $41,534. (GX 7.) These debts have been “settled in full,” as evidenced by a letter from Creditor A’s legal counsel. (TR at page 45 line 18 to page 47 line 8, and Response at page 4.)

1.e. The last student loan was owed to Creditor E in the amount of about $17,802. (GX 7.) This debt “has been satisfied by payment/settlement in full,” as evidenced by letters from Creditor E’s collection company. (TR at page 45 line 18 to page 47 line 8, and AppX A.)

POLICIES

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines (AG). In addition to brief introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which are useful 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 over-arching 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 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. Decisions include, by necessity, consideration of the possible risk 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.

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

The security concern relating to the guideline for Financial Considerations is set out in Paragraph 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 Subparagraph 19(a), an “inability or unwillingness to satisfy debts@ is potentially disqualifying. Similarly under Subparagraph 19(c), “a history of not meeting financial obligations@ may raise security concerns.

However, the countervailing second and fourth Mitigation Conditions are clearly applicable here. The Mitigating Condition found in Subparagraph 20(b) is applicable where, “the conditions that resulted in the financial problem were largely beyond the person’s control (e.g., . . . a business downturn . . . ), and the individual acted responsibly under the circumstances.@ Here, the Applicant’s debts are related to his wife’s significant reduction of income, and to his daughter’s failure to pay her student loans. He now addressed all of the alleged past due debts. Subparagraph 20(d) is applicable where, “the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.” The Applicant has settled and paid all of the past due debts.

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. Under Paragraph 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 also 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) 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 all of the evidence, including the potentially disqualifying and mitigating conditions surrounding this case. 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 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, Guideline F: FOR APPLICANT

Subparagraphs 1.a.~1.e. 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.

_________________ Richard A. Cefola Administrative Judge