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ISCR Case 14-00420.h1 — CASE

ISCR Case 14-00420.h1granted

Case Headnote

ISCR Case No. 14-00420.h1

grantedAug 1, 2014· Hon. Richard A. Cefola· hearing

Summary

A 40-year-old defense contractor painter was initially flagged for security concerns under Guideline F (Financial Considerations) due to several past-due debts. These financial issues originated from a 2006 separation and a 2008 divorce. The Statement of Reasons detailed six specific allegations, including two debts to Creditor A totaling approximately $10,051, for which the applicant was making $100 monthly payments.

Other debts included about $700 to Creditor C, which was paid; approximately $266 to Creditor D, which the applicant was actively trying to resolve despite its absence from recent credit reports; and about $700 to Creditor E, which was settled in full. The final debt was approximately $6,840 to Creditor F, towards which the applicant was making monthly payments of $105.95.

The judge ultimately granted the security clearance, finding that the applicant's financial difficulties stemmed from circumstances beyond his control. The applicant demonstrated a good-faith effort to repay and resolve his debts and now maintains a positive monthly cash flow, living within his means.

Why the Applicant Prevailed

Applicant's financial difficulties were largely due to circumstances beyond his control, specifically a divorce and separation.
He demonstrated a good-faith effort to repay overdue creditors and resolve debts.
The applicant now lives within his means and has a positive monthly cash flow.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability or Unwillingness to Satisfy Debts
AG ¶ 19(c)raisedHistory 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)appliedIndividual 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 issuedMar 21, 2014
Answer filedApr 16, 2014
Hearing heldJun 24, 2014
Decision dateJul 25, 2014

Cite For

Mitigating Conditions for Financial Considerations Under Guideline F
Whole-person Concept in Security Clearance Determinations
Good-faith Efforts to Resolve Financial Issues as a Mitigating Factor

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 several past-due debts primarily resulting from his separation and divorce. All debts were either being paid, had been settled, or were being actively addressed, leading to a decision in favor of the applicant under Guideline F.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	These two debts are to Creditor A in an amount totaling about $10,051. Applicant is making monthly payment of $100 to Creditor A, as evidenced by a letter from Creditor A and a money order receipt. $10,051	For Applicant	Unspecified Financial	Denied	—	—	—
1.b	These two debts are to Creditor A in an amount totaling about $10,051. Applicant is making monthly payment of $100 to Creditor A, as evidenced by a letter from Creditor A and a money order receipt. $10,051	For Applicant	Unspecified Financial	Admitted	—	—	—
1.c	This debt is to Creditor C in the amount of about $700. Applicant has paid this debt, as evidenced by correspondence from the creditor. $700	For Applicant	Unspecified Financial	Denied	—	—	—
1.d	This debt is to Creditor D in the amount of about $266. Applicant is making a good-faith effort to track down and pay this small debt, but it no longer appears on his most recent credit reports. $266	For Applicant	Unspecified Financial	Admitted	—	—	—
1.e	This debt is to Creditor E in the amount of about $700. Applicant has “settled in full” this debt, as evidenced by correspondence from the successor creditor of this debt. $700	For Applicant	Unspecified Financial	Admitted	—	—	—
1.f	This last debt is to Creditor F in the amount of about $6,840. Applicant has to make monthly payments of $105.95 towards this debt, as evidenced by correspondence from the successor creditor of this debt. $6,840	For Applicant	Unspecified Financial	Admitted	—	—	—

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. 14-00420 ) ) Applicant for Security Clearance )

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

August 1, 2014

______________

STATEMENT OF CASE

______________

CEFOLA, Richard A., Administrative Judge:

Applicant submitted his Electronic Questionnaires for Investigations Processing (e-QIP) on February 29, 2008. On March 21, 2014, the Department of Defense (DOD) issued a Statement of Reasons (SOR) detailing the security concerns under Guideline F for 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.

Applicant acknowledged receipt of the SOR on April 2, 2014. He answered the SOR in writing on April 16, 2014, and requested a hearing before an Administrative Judge. The Defense Office of Hearings and Appeals (DOHA) received the request soon thereafter, and I received the case assignment on May 19, 2014. DOHA issued a notice of hearing on May 21, 2014, and I convened the hearing as scheduled on June 24, 2014. The Government offered Exhibits (GXs) 1 through 7, which were received without objection. Applicant testified on his own behalf and submitted Exhibits (AppXs) A through E, which were received without objection. DOHA received the transcript of the hearing (TR) on July 2, 2014. I granted Applicant’s request to keep the record open until July 24, 2014, to submit additional matters. On June 25 and June 30, 2014, he submitted Exhibits F and G, respectively, which were received without objection. The record closed on July 25, 2014. 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, Applicant admitted the factual allegations in Subparagraphs 1.b., 1.d., and 1.f. of the SOR, with explanations. He denied the factual allegations in Subparagraphs 1.a., 1.c., and 1.e. of the SOR. He also provided additional information to support his request for eligibility for a security clearance.

Guideline F - Financial Considerations

Applicant is 40 years of age, and works as a painter for a defense contractor. (TR at page 27 line 11 to page 29 line 9.) All of his alleged past-due debts can be attributed to his 2006 separation and his 2008 divorce. (TR at page 29 line 10 to page 33 line 2.) He now lives within his means and has a positive monthly cash flow. (TR at page 33 line 6 to page 36 line 15.) The SOR alleges six past-due debts:

1.a. and 1.b. These two debts are to Creditor A in an amount totaling about $10,051. Applicant is making monthly payment of $100 to Creditor A, as evidenced by a letter from Creditor A and a money order receipt. (TR at page 36 line 17 to page 37 line 23, at page 38 line 10 to page 39 line 20, and AppX B at pages 1–8.)

1.c. This debt is to Creditor C in the amount of about $700. Applicant has paid this debt, as evidenced by correspondence from the creditor. (TR at page 39 line 21 to page 42 line 16, and AppX F at page 2.)

1.d. This debt is to Creditor D in the amount of about $266. Applicant is making a good-faith effort to track down and pay this small debt, but it no longer appears on his most recent credit reports. (See GX 7 and AppX F the last two pages.)

1.e. This debt is to Creditor E in the amount of about $700. Applicant has “settled in full” this debt, as evidenced by correspondence from the successor creditor of this debt. (TR at page 43 line 19 to page 44 line 6, and AppX F at page 3.)

1.f. This last debt is to Creditor F in the amount of about $6,840. Applicant has to make monthly payments of $105.95 towards this debt, as evidenced by correspondence from the successor creditor of this debt. (TR at page 44 line 7 to page 45 line 2, and AppX G.)

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 Paragraph 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. Paragraph 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 Paragraph E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive Paragraph 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. Applicant has had difficulty meeting his financial obligations. However, I find two countervailing Mitigating Conditions that are applicable here. Under Subparagraph 20 (b), it may be mitigating where “the conditions that resulted in the financial problem were largely beyond the person’s control (e.g. . . . divorce or separation), and the individual acted responsibly under the circumstances.” Applicant’s past-due indebtedness is directly attributed to his 2006 separation and his 2008 divorce. Under Subparagraph 20 (d), it may also be mitigating where “the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.” Applicant has either paid, is paying or has made a good-faith effort to address all of the alleged 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 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. Those who know Applicant in the workplace speak most highly of him. (AppX A.) The record evidence leaves me without questions and doubts as to Applicant’s eligibility and suitability for a security clearance. For this reason, I conclude Applicant has mitigated the security concerns arising from his Financial Considerations, under the whole-person concept.

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

Subparagraph 1.a. For Applicant

Subparagraph 1.b. For Applicant

Subparagraph 1.c. For Applicant

Subparagraph 1.d. For Applicant

Subparagraph 1.e. For Applicant

Subparagraph 1.f. 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