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ISCR Case 12-10255.h1 — CASE

ISCR Case 12-10255.h1granted

Case Headnote

ISCR Case No. 12-10255.h1

grantedNov 21, 2015· Hon. Edward W. Loughran· hearing

Summary

A 29-year-old defense contractor employee was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The Statement of Reasons detailed numerous financial issues, including deficiencies on two repossessed vehicle loans, one settled for $1,512 with $79 monthly payments and another with a stipulated judgment for $6,827 requiring $300 monthly payments. Other allegations involved various debts, some with payment agreements, some placed in a debt-management program (DMP), and several that were either stated as paid without documentation, settled, or deleted from credit reports. Some debts were not listed on recent credit reports, and one remained unresolved.

The disqualifying conditions raised were AG ¶ 19(a) and AG ¶ 19(c). However, the judge applied mitigating conditions AG ¶ 20(c) and AG ¶ 20(d), noting the applicant's significant actions to resolve her financial problems. She demonstrated a good-faith effort to repay overdue creditors and actively participated in a debt-management program.

Ultimately, the judge determined that the applicant's financial issues were unlikely to recur and did not cast doubt on her current reliability. Consequently, her security clearance was granted.

Why the Applicant Prevailed

The applicant took significant action to implement a plan to resolve her financial problems.
She demonstrated a good-faith effort to repay overdue creditors and enrolled in a debt-management program.
The applicant's financial issues were unlikely to recur and did not cast doubt on her current reliability.

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 administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision.”

Procedural Posture

SOR issuedApr 15, 2015
Answer filedMay 13, 2015
Hearing heldAug 17, 2015
Decision dateNov 21, 2015

Cite For

Mitigation of Financial Considerations Under Guideline F
Good-faith Efforts to Resolve Debts
Whole-person Concept in Security Clearance Evaluations

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 considerations security concerns under Guideline F. Despite a history of financial problems, the applicant demonstrated a commitment to resolving her debts through a debt management program and additional employment, leading to a favorable decision for her security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Deficiency on loan after vehicle was repossessed. May 2015 settlement agreement for $1,512, payable through $79 monthly payments. $4,879	For Applicant	Auto Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor
1.b	April 2015 payment agreement for $114 monthly payments. Placed in DMP. $1,492	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor
1.c	Paid $182 toward $365 settlement in May 2015. Placed in DMP. $522	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor
1.d	Unidentified debt not listed on 2015 credit report. $161	For Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	Stated that debt paid. No documentation. $133	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	Paid May 2015. $29	For Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.g	Paid May 2015. $35	For Applicant	Utility or Phone Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.h	Deficiency on loan after vehicle was repossessed. Stipulated judgment with balance of $6,827 and $300 monthly payments. $12,114	For Applicant	Auto Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor
1.i	Creditor deleted account from credit report. $302	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.j	Creditor deleted account from credit report. $168	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.k	Stated that debt paid. No documentation. $808	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.l	Settled. $474	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.m	Payment arrangements. Placed in DMP. $705	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor
1.n	Stated paid. Not listed on two most recent credit reports. $219	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.o	Placed in DMP. $426	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor
1.p	Settlement agreement. Placed in DMP. $415	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor
1.q	Stated paid. Not listed on two most recent credit reports. $406	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.r	Unresolved. Not listed on two most recent credit reports. $333	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.s	Payment plan. Not listed on two most recent credit reports. $925	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor
1.t	Placed in DMP. $1,061	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor
1.u	Placed in DMP. $1,487	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor

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. 12-102551 ) ) Applicant for Security Clearance )

For Government: Robert J. Kilmartin, Esq., Department Counsel For Applicant: Pro se

11/21/2015 ______________

STATEMENT OF CASE

______________

LOUGHRAN, Edward W., Administrative Judge:

Applicant mitigated the financial considerations security concerns. Eligibility for access to classified information is granted.

Statement of the Case

On April 15, 2015, the Department of Defense (DOD) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline F, financial considerations. The action was taken under Executive Order (EO) 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG) implemented by the DOD on September 1, 2006.

Applicant responded to the SOR on May 13, 2015, and requested a hearing before an administrative judge. The case was assigned to me on July 13, 2015. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on July 15, 2015, scheduling the hearing for August 17, 2015. The hearing was convened as scheduled. Government Exhibits (GE) 1 through 4 were admitted in evidence without objection. Applicant testified and submitted Applicant’s Exhibits (AE) A - C, F - N, Q, S, and U - Y, which were admitted without objection. DOHA received the hearing transcript (Tr.) on August 25, 2015.

FINDINGS OF FACT

Applicant is a 29-year-old employee of a defense contractor. She has worked for her current employer since 2006. She seeks to retain a security clearance, which she has held since about 2007. She attended college for a period, but she did not earn a degree. She is married with a child and three stepchildren.2

Applicant has a history of financial problems. Her husband is a disabled veteran who is unable to work. Applicant admitted that she was irresponsible, and she neglected her financial obligations. The adjudicative process caused her to reevaluate her priorities, and she set about correcting her financial mess. She attempted to pay her debts on her own for a period. She then engaged the services of a credit-counseling company. She enrolled eight debts in the company’s debt-management program (DMP). She pays the company $268 per month. She is also paying other debts outside the plan.3

The SOR alleges 22 delinquent debts, but two of the debts are duplicates. Applicant was unable to admit or deny owing the unidentified $161 medical debt alleged in SOR ¶ 1.d. She admitted owing all of the remaining debts at one point. Credit reports from March 2012 and October 2014 substantiate the debts. Applicant submitted a credit report from April 2015.4 The debts are addressed in the table below.

SOR AMOUNT STATUS EVIDENCE Tr. at 41-42; 1.a Auto loan $4,879 Deficiency on loan after vehicle was Response to repossessed. May 2015 settlement SOR; AE A. agreement for $1,512, payable through $79 monthly payments. 1.b Payday loan $1,492 April 2015 payment agreement for Response to $114 monthly payments. Placed in SOR; AE B, X. DMP. 1.c & 1.i (duplicate $522 Paid $182 toward $365 settlement Response to accounts) Satellite in May 2015. Placed in DMP. SOR; AE C, I, television X. 1.d Medical debt $161 Unidentified debt not listed on 2015 Response to credit report. SOR; AE W. 1.e Debt $133 Stated that debt paid. No Response to documentation. SOR. 1.f Collection $29 Paid May 2015. Response to company/medical SOR; AE F. debt 1.g Utility company $35 Paid May 2015. Response to SOR; AE G. Tr. at 33, 40- 1.h Auto loan $12,114 Deficiency on loan after vehicle was 41; Response repossessed. Stipulated judgment to SOR; AE H. with balance of $6,827 and $300 monthly payments. 1.j Collection $302 Creditor deleted account from credit Response to company/medical report. SOR; GE 3, 4; debt AE J, W. 1.k Collection $168 Creditor deleted account from credit Response to company report. SOR; GE 3, 4; AE K, W. Response to $808 Stipulated judgment with settlement 1.l Collection SOR; AE L, X. of $912 and $100 monthly company/medical payments. Placed in DMP. debt 1.m Collection $474 Settled. Response to company SOR; AE M. 1.n Collection $705 Payment arrangements. Placed in Response to company DMP. SOR; AE N, X. 1.o Collection $219 Stated paid. Not listed on two most Response to company recent credit reports. SOR; GE 3, 4; AE W. $426 Placed in DMP. Response to 1.p. Collection SOR; AE X. company/ apartment 1.q Collection $415 Settlement agreement. Placed in Response to company/bank DMP. SOR; AE Q, X. 1.r Collection $406 Stated paid. Not listed on two most Tr. at 43; company/ recent credit reports. Response to telecommunications SOR; GE 3, 4; company AE W. 1.s Collection $333 Unresolved. Not listed on two most Response to company/cable recent credit reports. SOR; GE 3, 4; company AE W. 1.t Collection $925 Payment plan. Not listed on two Tr. at 44; company/gym most recent credit reports. Response to membership SOR; GE 3, 4; AE W. 1.u Collection $1,061 Placed in DMP. Response to company/medical SOR; AE U, V, debt X. 1.v Collection $1,487 Placed in DMP. Response to company SOR; AE X.

Applicant works a second job to assist in her efforts to address her financial problems. She uses the income from her second job to pay her delinquent debts. She credibly testified that she will continue to pay her debts until they are all resolved.5

Applicant submitted several letters attesting to her excellent job performance, leadership, work ethic, honesty, trustworthiness, dependability, dedication, reliability, and integrity.6

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, which 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.”

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 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 safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation of 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 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. The following are potentially applicable in this case:

(a) inability or unwillingness to satisfy debts; and

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

Conditions that could mitigate the financial considerations security concerns are provided under AG ¶ 20. The following 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; and

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

Applicant’s financial problems resulted from her irresponsibility and not from events that were beyond her control. AG ¶ 20(b) is not applicable.

Applicant matured and realized she had to address her financial problems. She obtained a second job and started repaying her debts. She required additional assistance and contracted with a credit-counseling company. She enrolled eight debts in the company’s DMP. She credibly testified that she will continue with her payment plans until the debts are paid.

I find that Applicant established a plan to resolve her financial problems, and she took significant action to implement that plan. She acted responsibly and made a good- faith effort to pay her debts. There are clear indications that her financial problems are being resolved and are under control. They occurred under circumstances that are unlikely to recur and do not cast doubt on her current reliability, trustworthiness, and good judgment. AG ¶¶ 20(c) and 20(d) are applicable. AG ¶ 20(a) is not yet completely applicable because Applicant is still in the process of paying her 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 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 the facts and circumstances surrounding this case. I have incorporated my comments under Guideline F in my whole-person analysis. Applicant has matured from the irresponsible person who did not pay her debts. She is working two jobs and is a highly regarded and trusted employee. She was a credible witness. I am satisfied that she is committed to paying her debts.

Overall, the record evidence leaves me without questions or doubts as to Applicant’s eligibility and suitability for a security clearance. 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.v: 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 continue Applicant’s eligibility for a security clearance. Eligibility for access to classified information is granted.

________________________ Edward W. Loughran Administrative Judge

FOOTNOTES

1 The ISCR number was misidentified in the SOR. The above number is correct. 2 Tr. at 30, 33-34, 36; GE 1, 2. 3 Tr. at 29-34, 36-39; Applicant’s response to SOR; GE 1, 2. 4 GE 2-5. 5 Tr. at 33-35, 39-40, 44-50. 6 AE Y.