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ISCR Case 12-07211.h1 — CASE

ISCR Case 12-07211.h1granted

Case Headnote

ISCR Case No. 12-07211.h1

grantedJan 20, 2015· Hon. Matthew E. Malone· hearing

Summary

A 44-year-old defense contractor's security clearance was initially questioned under Guideline F (Financial Considerations) due to six delinquent debts totaling $82,207, along with two past-due medical bills for $459 and $25. These issues raised concerns under Disqualifying Conditions AG ¶ 19(a) and AG ¶ 19(c).

However, the applicant demonstrated a proactive approach to resolving his financial problems, beginning in 2011. He established a meaningful track record of repayment and currently maintains sound finances.

The applicant's consistent efforts and current financial stability were recognized as mitigating factors, specifically under AG ¶ 20(a), AG ¶ 20(c), and AG ¶ 20(d). Consequently, the security clearance was GRANTED.

Why the Applicant Prevailed

The applicant has been proactive in resolving his financial problems since 2011.
He has established a meaningful track record of repayment and currently has sound finances.
The applicant's proactive approach and current financial stability mitigated the security concerns.

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)appliedThe Behavior Happened so Long Ago, Was so Infrequent, or Occurred Under Such Circumstances That It Is Unlikely to Recur
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

“A security clearance decision is intended only to resolve whether it is clearly consistent with the national interest for an applicant to either receive or continue to have access to classified information.”
— Department of the Navy v. Egan, 484 U.S. 518 (1988)

Procedural Posture

SOR issuedJul 30, 2014
Answer filed—
Hearing heldDec 17, 2014
Decision dateJan 20, 2015

Cite For

Proactive Resolution of Financial Issues Under Guideline F
Establishing Sound Financial Stability as a Mitigating Factor
Good-faith Efforts to Repay Debts as a Basis for Granting Security Clearance

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, including several delinquent debts, were mitigated by his proactive efforts to resolve them and his current sound financial situation. The applicant's debts did not indicate poor judgment or a lack of trustworthiness, leading to a decision to grant his security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant owes $82,207 for six delinquent or past-due debts	For Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(a) behavior happened long ago / infrequent / unlikely to recur (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Claimed Debt Paid in Full Documented Payment Plan with Creditor
1.b	Applicant owes $82,207 for six delinquent or past-due debts	For Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(a) behavior happened long ago / infrequent / unlikely to recur (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Claimed Debt Paid in Full Documented Payment Plan with Creditor
1.c	Applicant owes $82,207 for six delinquent or past-due debts	For Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(a) behavior happened long ago / infrequent / unlikely to recur (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Claimed Debt Paid in Full Documented Payment Plan with Creditor
1.d	Applicant owes $82,207 for six delinquent or past-due debts	For Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(a) behavior happened long ago / infrequent / unlikely to recur (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Claimed Debt Paid in Full Documented Payment Plan with Creditor
1.e	Applicant owes two past-due medical bills for $459 $459	For Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(a) behavior happened long ago / infrequent / unlikely to recur (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Claimed Debt Paid in Full
1.f	Applicant owes two past-due medical bills for $25 $25	For Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(a) behavior happened long ago / infrequent / unlikely to recur (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Claimed 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: ) ) ) [NAME REDACTED] ) ISCR Case No. 12-07211 ) ) Applicant for Security Clearance )

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

01/20/2015 ______________

STATEMENT OF CASE

______________

MALONE, Matthew E., Administrative Judge:

Applicant’s debts do not indicate poor judgment or a lack of trustworthiness. He has been proactive in resolving his financial problems, and has established a meaningful track record of repayment since 2011. His current finances are sound and do not present a security concern. His request for continued access to classified information is granted.

Statement of the Case

On March 1, 2012, Applicant submitted an Electronic Questionnaire for Investigations Processing (EQIP) to obtain a security clearance required for his work as a defense contractor. Based on the results of the ensuing background investigation, Department of Defense (DOD) adjudicators could not determine that it is clearly consistent with the national interest for Applicant to hold a security clearance.1

On July 30, 2014, DOD adjudicators issued to Applicant a Statement of Reasons (SOR) alleging facts which raise security concerns addressed under the adjudicative guideline for financial considerations (Guideline F). Applicant timely responded to the SOR (Answer) and requested a hearing.

The case was assigned to me on November 18, 2014, and I convened a hearing on December 17, 2014. Department Counsel for the Defense Office of Hearings and Appeals (DOHA) presented Government Exhibits (Gx.) 1 - 4. Applicant testified and presented Applicant’s Exhibits (Ax.) A - E. All exhibits were admitted without objection. DOHA received the hearing transcript (Tr.) on January 5, 2015.

FINDINGS OF FACT

Under Guideline F, the Government alleged that Applicant owes $82,207 for six delinquent or past-due debts (SOR 1.a - 1.f). Applicant admitted, with explanations, all of the allegations. In addition to the facts established by Applicant’s admissions, I make the following findings of fact.

Applicant is 44 years old and was married for 18 years before he and his ex-wife divorced in November 2011. They have three children, ages 17, 14, and 12, who live with their mother. Applicant pays his ex-wife about $1,000 each month in child support.

Applicant earned a bachelor’s degree in computer science in 1997. Since about 1990, he has worked in jobs requiring a security clearance. (Gx. 1; Tr. 5, 8)

In about 2006, Applicant started a collection of antique firearms and other historic collectibles. To finance his purchases, he responded to credit card offers he received in the mail. The accounts alleged in SOR 1.a - 1.dare four of the credit accounts he opened. Although Applicant accrued high balances on each card, he was able to stay current in his monthly payments until sometime in 2010, when the combined principal and interest of each account surpassed his ability to pay. He started working with the creditors listed in SOR 1.a - 1.d. Since Between January 2011 and September 2011, he reached agreements with each creditor and has been making monthly payments of between $200 and $700 on those accounts to date. (Answer; Ax. A - D)

Applicant also owes two past-due medical bills for $459 (SOR 1.e) and $25 (SOR 1.f). He has the means to pay each one, but he has been unable to determine who holds each account. He was unaware of those debts until he received the Government’s information in advance of hearing. (Answer; Tr. 40 - 41)

Applicant’s current finances are sound. He earns about $102,000 annually and estimates that after all of his monthly expenses, including his child support and debt payments, he has about $1,500 remaining. He also has about $60,000 in a retirement savings account. Applicant has been candid and forthcoming about his finances. In his EQIP, he disclosed the debts alleged in SOR 1.a - 1.d, as well as other debts that were already resolved. At hearing, Applicant disclosed that because of his divorce, he was unable to pay his taxes in 2011 and 2012. However, he filed his returns on time and immediately established repayment plans with the IRS whereby he pays $150 each month to satisfy a total of $14,000 in unpaid taxes for those two years. Those debts were never delinquent. (Gx. 1; Tr. 44 - 45)

Applicant has a good reputation in the community for volunteer work at his church. He also works with a local boy scout troop, and his reputation at work is solid. (Ax. E)

POLICIES

Each security clearance decision must be a fair, impartial, and commonsense determination based on examination of all available relevant and material information,3 and consideration of the pertinent criteria and adjudication policy in the adjudicative guidelines (AG). Decisions must also reflect consideration of the factors listed in ¶ 2(a) of the guidelines. Commonly referred to as the “whole-person” concept, those factors are:

(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.

The presence or absence of a disqualifying or mitigating condition is not determinative of a conclusion for or against an applicant. However, specific applicable guidelines should be followed whenever a case can be measured against them as they represent policy guidance governing the grant or denial of access to classified information. A security clearance decision is intended only to resolve whether it is clearly consistent with the national interest for an applicant to either receive or continue to have access to classified information. The Government bears the initial burden of producing admissible information on which it based the preliminary decision to deny or revoke a security clearance for an applicant. Additionally, the Government must be able to prove controverted facts alleged in the SOR. If the Government meets its burden, it then falls to the applicant to refute, extenuate or mitigate the Government’s case. Because no one has a “right” to a security clearance, an applicant bears a heavy burden of persuasion.

A person who has access to classified information enters into a fiduciary relationship with the Government based on trust and confidence. Thus, the Government has a compelling interest in ensuring each applicant possesses the requisite judgment, reliability and trustworthiness of one who will protect the national interests as his or her own. The “clearly consistent with the national interest” standard compels resolution of any reasonable doubt about an applicant’s suitability for access in favor of the Government.6

ANALYSIS

Financial Considerations

Available information is sufficient to support all of the SOR allegations. The facts established raise a security concern about Applicant’s finances that is addressed at 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. Compulsive gambling is a concern as it may lead to financial crimes including espionage. Affluence that cannot be explained by known sources of income is also a security concern. It may indicate proceeds from financially profitable criminal acts.

More specifically, available information requires application of the disqualifying conditions at AG ¶¶ 19(a) (inability or unwillingness to satisfy debts); and 19(c) (a history of not meeting financial obligations). I have also concluded that the following AG ¶ 20 mitigating conditions apply:

(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;

(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; and

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

Applicant became overextended on four credit cards he used to fund his collecting hobby. After staying current for a few years, he started falling behind on his monthly payments and his accounts were closed for non-payment. In late 2010 and early 2011, Applicant negotiated with the creditors listed in SOR 1.a - 1.dand was able to establish agreements for monthly payments. He has been repaying all four accounts in a substantial way and is likely to continue those efforts. As to SOR 1.e and 1.f, Applicant has the means to quickly pay them. Based on his record of debt resolution, he likely will do so when he obtains accurate information about who owns the debts. Applicant exhibited good judgment in his proactive response to his financial problems. His current finances are sound, as shown by a significant positive monthly cash flow after paying his debts and his regular expenses. Applicant has not incurred any new delinquent debts, and his current circumstances show his financial problems are not likely to recur.

In addition to evaluating the facts presented, and having applied the appropriate adjudicative factors under Guideline F, I have reviewed the record before me in the context of the whole-person factors listed in AG ¶ 2(a). Applicant has been candid about his debts, and he has dealt with those difficulties in a way that reflects positively on his judgment and reliability. The information about his work in the community also supports a conclusion that Applicant is a mature, responsible individual who can be trusted with sensitive information. On balance, he has mitigated the security concerns raised by the Government’s information.

FORMAL FINDINGS

Formal findings 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.f: For Applicant

CONCLUSION

It is clearly consistent with the national interest for Applicant to have access to classified information. Applicant’s request for a security clearance is granted.

MATTHEW E. MALONE Administrative Judge

FOOTNOTES

Required by Executive Order 10865, as amended, and by DOD Directive 5220.6 (Directive), as amended. The adjudicative guidelines were implemented by the Department of Defense on September 1, 2006. These guidelines were published in the Federal Register and codified through 32 C.F.R. § 154, Appendix H (2006). See Directive. 6.3. See Department of the Navy v. Egan, 484 U.S. 518 (1988). See Egan, 484 U.S. at 528, 531. See Egan; AG ¶ 2(b).