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ISCR Case 12-10933.h1 — CASE

ISCR Case 12-10933.h1granted

Case Headnote

ISCR Case No. 12-10933.h1

grantedFeb 18, 2016· Hon. Wilford H. Ross· hearing

Summary

This case concerns a 53-year-old defense contractor who sought to retain his security clearance despite admitted financial difficulties under Guideline F (Financial Considerations). The Statement of Reasons alleged the applicant owed $13,002 and $8,116 to two separate creditors for past-due credit card debts. Additionally, the applicant admitted to not filing his 2008 and 2009 state income tax returns until 2012, and his 2010 state income tax return in a timely fashion. These issues raised Disqualifying Conditions AG ¶ 19(a), AG ¶ 19(c), and AG ¶ 19(g).

However, the judge applied Mitigating Conditions AG ¶ 20(c) and AG ¶ 20(d). The applicant demonstrated a good-faith effort to repay overdue creditors and resolve his debts, and his financial issues were under control and being resolved at the time of the decision.

Ultimately, the judge found no potential for pressure or coercion due to the applicant's improved financial situation. Based on these mitigating factors, the applicant's security clearance was GRANTED.

Why the Applicant Prevailed

Applicant demonstrated a good-faith effort to repay overdue creditors and resolve debts.
Applicant's financial issues were under control and being resolved at the time of the decision.
The judge found no potential for pressure or coercion due to the applicant's improved financial situation.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability or Unwillingness to Satisfy Debts
AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations
AG ¶ 19(g)raisedFailure to File Annual Federal, State, or Local Income Tax Returns as Required

Mitigating

AG ¶ 20(c)appliedThere 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 issuedApr 26, 2015
Answer filedMay 28, 2015
Hearing held—Decision made without a hearing.
Decision dateFeb 18, 2016

Cite For

Mitigation of Financial Issues 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 had financial concerns under Guideline F, including two past-due credit card debts and failure to file state income tax returns. However, the applicant demonstrated a good-faith effort to resolve these issues, leading to a decision in favor of granting the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant admitted that he was indebted to a creditor for a past-due credit card debt in the amount of $13,002. $13,002	For Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations (g) unexplained affluence	(d) good-faith effort to repay or otherwise resolve debts (c) received/receiving counseling; problem being resolved	Claimed Debt Paid in Full Documented Payment Plan with Creditor
1.b	Applicant admitted that he was indebted to a creditor for a past-due credit card debt in the amount of $8,116. $8,116	For Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations (g) unexplained affluence	(d) good-faith effort to repay or otherwise resolve debts (c) received/receiving counseling; problem being resolved	Claimed Debt Paid in Full Documented Payment Plan with Creditor
1.c	Applicant admitted that he did not file his 2008 and 2009 state income tax returns until 2012.	For Applicant	Tax Filing Failure	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations (g) unexplained affluence	(d) good-faith effort to repay or otherwise resolve debts (c) received/receiving counseling; problem being resolved	Documented Tax Returns Filed Late
1.d	Applicant admitted that he did not file his 2010 state income tax return in a timely fashion.	For Applicant	Tax Filing Failure	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations (g) unexplained affluence	(d) good-faith effort to repay or otherwise resolve debts (c) received/receiving counseling; problem being resolved	Documented Tax Returns Filed Late

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. 12-10933 ) Applicant for Security Clearance )

For Government: Braden M. Murphy, Esquire, Department Counsel For Applicant: Pro se

February 18, 2016

______________

STATEMENT OF CASE

______________

ROSS, Wilford H., Administrative Judge:

Applicant submitted his Electronic Questionnaire for Investigations Processing (e-QIP), on May 22, 2012. (Item 4.) On April 26, 2015, the Department of Defense issued a Statement of Reasons (SOR) detailing the security concerns under Guideline F (Financial Considerations) regarding 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 on September 1, 2006.

Applicant answered the SOR in writing, with supporting documentation, on May 28, 2015, and requested a decision by an administrative judge without a hearing. (Answer.) Department Counsel submitted the Government’s written case (FORM) to Applicant on August 11, 2015. Applicant acknowledged receipt of the FORM August 21, 2015. He was given 30 days from receipt of the FORM to submit any additional documentation. Applicant elected not to submit any additional information. The case was assigned to me on October 13, 2015. Based upon a review of the pleadings and exhibits, eligibility for access to classified information is granted.

FINDINGS OF FACT

Applicant is 53, and married. He is employed by a defense contractor, and seeks to retain a security clearance in connection with his employment.

Paragraph 1 (Guideline F, Financial Considerations)

The Government alleges in this paragraph that Applicant is ineligible for clearance because he is financially overextended, or failed to file tax returns as required, and therefore potentially unreliable, untrustworthy, or at risk of having to engage in illegal acts to generate funds. Applicant admitted all four allegations (1.a through 1.d) in the SOR. He also submitted additional information to support his request for a security clearance.

The SOR lists two delinquent debts (1.a and 1.b), totaling approximately $21,118. The existence and amount of the debts is supported by a credit report dated November 17, 2014. (Item 6.) The SOR also alleges that Applicant did not file his 2010 state income tax return, and that he was late filing his 2008 and 2009 state income tax returns (1.cand 1.d).

The current status of the debts, and tax returns, is as follows:

1.a. Applicant admitted that he was indebted to a creditor for a past-due credit card debt in the amount of $13,002. He stated that he has a payment arrangement with the collection agent on this account, and has been making timely payments of $250 per month for over two years as of the date of his Answer. According to Applicant, “Original charge-off was over $17000. It is below $12000 now.” He also submitted written confirmation of the agreement and that he is making timely payments. (Answer at 3, 13.) This debt is being resolved.

1.b. Applicant admitted that he was indebted to a creditor for a past-due credit card debt in the amount of $8,116. Applicant states, “Two years ago [the bank] was willing to let me make direct payments to them through automatic debit. I have been doing so consistently.” He also submitted bank records showing that he is making timely payments of $200 a month. (Answer at 3-5.) This debt is being resolved.

1.c. Applicant admitted that he did not file his 2008 and 2009 state income tax returns until 2012. He further states, “There is no excuse.” (Item 5 at Section 26; Answer at 3.)

1.d. Applicant admitted that he did not file his 2010 state income tax return in a timely fashion. Applicant provided a copy of the tax return and his check paying the taxes he owed. The return was filed in May 2015. (Answer at 3, 6-12.)

POLICIES

Security clearance decisions are not made in a vacuum. 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 to be used as appropriate 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 AG ¶ 2 describing 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. In addition, the administrative judge may also rely on his or her own common sense, as well as knowledge of the law, human nature, and the ways of the world, in making a reasoned decision.

The protection of the national security is the paramount consideration. AG ¶ 2(b) requires that, “Any 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 the applicant or proven by Department Counsel, and has the ultimate burden of persuasion as to obtaining a favorable clearance 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. Security clearance decisions include, by necessity, consideration of the possible risk that 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.

Finally, as emphasized in Section 7 of Executive Order 10865, “Any determination under this order adverse to an applicant shall be a determination 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

Paragraph 1 (Guideline F, Financial Considerations)

The security concern relating to the guideline 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(a), an Ainability or unwillingness to satisfy debts@ is potentially disqualifying. Similarly under AG ¶ 19(c), Aa history of not meeting financial obligations@ may raise security concerns. Applicant, by his own admission, and supported by the documentary evidence, had two delinquent accounts that he formerly could not resolve. The evidence is sufficient to raise these potentially disqualifying conditions. In addition, AG ¶ 19(g) also applies, “failure to file annual Federal, state, or local income tax returns as required or fraudulent filing of the same.”

The guideline also includes examples of conditions that could mitigate security concerns arising from financial difficulties. As shown above, the debts set forth in subparagraphs 1.a and 1.bare being resolved. Applicant has filed his state income tax returns for years 2008 and 2009, and paid the applicable taxes and interest, mitigating 1.c The 2010 tax return has been filed, mitigating subparagraph 1.d. Based on the particular facts of this case, I find that Applicant has “initiated a good-faith effort to repay overdue creditors or otherwise resolve debts,” as required by AG ¶ 20(d). I also find that “there are clear indications that the problem is being resolved or is under control,” as required by AG ¶ 20(c). Guideline F is found for Applicant.

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 relevant circumstances. 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 administrative judge must 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.

I considered the potentially disqualifying and mitigating conditions in light of all the relevant facts and circumstances surrounding this case. The discussion under Guideline F, above, applies here as well. While Applicant has had financial problems in the past, they have been resolved.

Under AG ¶ 2(a)(2), I have considered the facts of Applicant’s debt history. Based on the record, I find that there have been permanent behavioral changes under AG ¶ 2(a)(6). Accordingly, I find that there is little to no potential for pressure, coercion, exploitation, or duress (AG ¶ 2(a)(8)); and that there is a low likelihood of recurrence (AG ¶ 2(a)(9)).

Overall, 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 situation. Accordingly, the evidence supports granting his request for a security clearance.

FORMAL FINDINGS

Formal findings for or against Applicant on the allegations set forth in the SOR, as required by ¶ E3.1.25 of Enclosure 3 of the Directive, are:

Paragraph 1, Guideline F: FOR APPLICANT

Subparagraphs 1.a through 1.d: 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.

WILFORD H. ROSS Administrative Judge

FOOTNOTES

Department Counsel submitted six Items in support of the SOR allegations. Item 5 is inadmissible and will not be considered or cited as evidence in this case. It is the summary of an unsworn interview of Applicant conducted by an interviewer from the Office of Personnel Management on June 20, 2012. It was never adopted by Applicant as his own statement, or otherwise certified by him to be accurate. Under Directive ¶ E3.1.20, this Report of Investigation summary is inadmissible in the absence of an authenticating witness. Given Applicant’s admissions, it is also cumulative.