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ISCR Case 14-01840.h1 — CASE

ISCR Case 14-01840.h1granted

Case Headnote

ISCR Case No. 14-01840.h1

grantedNov 24, 2014· Hon. Robert Robinson Gales· hearing

Summary

A 44-year-old network administrator for a defense contractor was granted a security clearance despite concerns under Guideline F (Financial Considerations). The applicant's financial difficulties stemmed from various life events, including job loss and family issues.

Specific allegations included a mortgage on a rental property that became delinquent due to late rent payments from a family member, resulting in a $979 arrearage as of November 2013. This account was in the process of being resolved, with the applicant consistently making monthly mortgage payments since January 2014. Additionally, a credit card with a $4,794 balance was 90 days past due, but a new repayment plan of $100 monthly was established in November 2014. Student loans totaling $13,358 were in collection but were rehabilitated and transferred after the applicant made consistent $100 monthly payments. Two other credit cards, each with a $506 balance and 30 days past due, were paid off in November 2014.

The clearance was granted because the applicant demonstrated a good-faith effort to resolve his financial issues through consistent payments and financial counseling. His financial difficulties were largely due to circumstances beyond his control, and his financial accounts are now current, with a budget established to manage his finances.

Why the Applicant Prevailed

The applicant demonstrated a good-faith effort to resolve his financial issues through consistent payments and financial counseling.
The applicant's financial difficulties were largely due to circumstances beyond his control, such as job loss and family emergencies.
The applicant's financial accounts are now current, and he has established a budget to manage his finances.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability or Unwillingness to Satisfy Debts
AG ¶ 19(c)raisedHistory of Not Meeting Financial Obligations

Mitigating

AG ¶ 20(a)appliedBehavior Occurred Long Ago or Infrequently
AG ¶ 20(b)appliedFinancial Problems Largely Beyond the Person's Control
AG ¶ 20(c)appliedReceiving Counseling and Evidence of Resolution
AG ¶ 20(d)appliedGood-faith Effort to Repay Creditors

Key Rule Quoted

“Eligibility for a security clearance and access to classified information is granted.”

Procedural Posture

SOR issuedJun 18, 2014
Answer filedJul 7, 2014
Hearing heldOct 31, 2014via video teleconference
Decision dateNov 24, 2014

Cite For

Mitigation of Financial Concerns Under Guideline F
Impact of Personal Circumstances on Financial Stability
Importance of Financial Counseling in Security Clearance Cases

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 concerns under Guideline F, resulting in a decision to grant eligibility for a security clearance. The applicant demonstrated efforts to resolve his financial issues, including establishing repayment plans and maintaining communication with creditors.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	From April 1997 until mid-2012, Applicant resided in one particular house, the one which had sustained the hurricane damage. When he eventually vacated it and moved into another residence, he rented his old residence to a niece and her family. After the lease was signed, Applicant’s monthly mortgage payment increased, but Applicant simply absorbed responsibility for the extra amount each month thereafter. Applicant’s niece was unable to work for several months, and in September 2012, her child passed away. Applicant helped with the funeral arrangements and received no rent payment that month. Thus, he found himself responsible for the mortgage payments on two houses (his own residence and the rental property) and that put him in a bind with his other accounts. Applicant’s niece and her husband both work, and they have been paying rent, albeit sometimes late, each month since October 2012. As a result of receiving late rent payments, Applicant has been making some late mortgage payments. As of November 2013, his account was 30 days or $979 past due. In his Answer to the SOR, Applicant indicated the arrearage would be cleared up before August 15, 2014. However, during the hearing, he acknowledged he was still delinquent on a little over one full payment. His niece also informed him that she would make two payments in November 2014 in an effort to bring the account current. It has been a continuing struggle for Applicant to make his monthly payments, for it seems that shortly after he makes one payment, the next payment is due. Nevertheless, since January 2014, Applicant has routinely made his monthly mortgage payments of $951.91 or $859.44, depending on the required payment specified by the lender. There is no documentary evidence that Applicant’s niece had yet made her two rent payments. Nevertheless, it appears that the account is in the process of being resolved. $979	For Applicant	Mortgage or Home Loan Debt	Admitted	—	—	—
1.b	There is a credit card with a credit limit of $5,000 and a remaining balance of $4,794 that was 90 days past due in the amount of $557. In September 2013, Applicant stated he was paying the creditor $150 bi-weekly until November 2013, at which time he would start paying $125 per month. During the hearing, Applicant acknowledged that he had not complied with the agreement because he was falling behind with some other bills, so he stopped any automatic payments. He could not recall if he made any such payments. On November 12, 2014, the collection agent agreed to a new repayment plan under which it would electronically debit $100 each month from Applicant’s checking account. The initial such payment is to be made on December 12, 2014. The account is in the process of being resolved. $557	For Applicant	Credit Card Debt	Admitted	—	—	—
1.c	Applicant obtained student loans when he was attending college. The loans, totaling what he thought was about $10,800, were deferred for some time after he graduated. He made monthly payments of $150 for an unspecified period, and in early 2012, he stopped those payments when he received a collection notice. He immediately called the loan servicing organization to determine what had happened because he had been making his monthly payments. He then learned that his student loans had not been consolidated as he had thought, and that he had been making payments on only one student loan. Applicant’s November 2013 credit report reflects two separate student loans in collection, totaling $13,358. In December 2013, Applicant and the collection agent agreed to a repayment/rehabilitation plan under which Applicant was to make monthly payments of $100 for his student loans, which at that point had a balance of $13,396.79. He made his monthly payments and the student loans were rehabilitated and transferred. The accounts have been resolved. $13,358	For Applicant	Student Loan Debt	Admitted	—	—	—
1.d	There is a credit card with a credit limit of $500 and a remaining balance of $506 that was 30 days past due in the amount of $65. In September 2013, Applicant stated that the account became delinquent 'a few times' when he forgot to make a payment, but that the account was now current. In his Answer to the SOR, he admitted the account was still delinquent, and he promised to pay the account in full before August 15, 2014. During the hearing, Applicant acknowledged that he had not paid off the account and that there was still a balance. On November 7, 2014, Applicant paid the creditor the final $342.89. The account has not been resolved. $65	For Applicant	Credit Card Debt	Admitted	—	—	—
1.e	There is a credit card with a credit limit of $500 and a remaining balance of $506 that was 30 days past due in the amount of $65. In September 2013, Applicant stated that the account became delinquent 'a few times' when he forgot to make a payment, but that the account was now current. In his Answer to the SOR, he admitted the account was still delinquent, and he promised to pay the account in full before August 15, 2014. During the hearing, Applicant acknowledged that he had not paid off the account and that there was still a balance. On November 7, 2014, Applicant paid the creditor the final $342.89. The account has not been resolved. $65	For Applicant	Credit Card Debt	Admitted	—	—	—
1.f	specific text not stated in this decision	Withdrawn	Unspecified Financial	Unknown	—	—	—

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. 14-01840 ) Applicant for Security Clearance )

For Government: Richard A. Stevens, Esquire, Department Counsel For Applicant: Pro se

11/24/2014 ______________

STATEMENT OF CASE

______________

GALES, Robert Robinson, Administrative Judge:

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

Statement of the Case

On September 30, 2013, Applicant applied for a security clearance and submitted an Electronic Questionnaire for Investigations Processing (e-QIP) version of a Security Clearance Application (SF 86).1 On June 18, 2014, the Department of Defense (DOD) Consolidated Adjudications Facility – Division A (CAF) issued a Statement of Reasons (SOR) to him, under Executive Order 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended and modified; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended and modified (Directive); and the Adjudicative Guidelines for Determining Eligibility For Access to Classified Information (December 29, 2005) (AG) applicable to all adjudications and other determinations made under the Directive, effective September 1, 2006. The SOR alleged security concerns under Guideline F (Financial Considerations), and detailed reasons why the DOD adjudicators were unable to find that it is clearly consistent with the national interest to grant or continue a security clearance for Applicant. The SOR recommended referral to an administrative judge to determine whether a clearance should be granted, continued, denied, or revoked.

Applicant received the SOR on July 7, 2014. On an unspecified date, Applicant responded to the SOR allegations and requested a hearing before an administrative judge. Department Counsel indicated the Government was prepared to proceed on August 28, 2014. The case was assigned to me on September 3, 2014. A Notice of Hearing was issued on October 14, 2014, amended on October 20, 2014, and I convened the hearing by video teleconference, as scheduled, on October 31, 2014.2

During the hearing, three Government exhibits (GE 1 through GE 3) and one Applicant exhibit (AE A) were admitted into evidence without objection. Applicant and four other witnesses testified. The transcript (Tr.) was received on November 10, 2014. I kept the record open to enable Applicant to supplement it. Applicant took advantage of that opportunity. He submitted ten additional documents which were marked as AE B through AE K and admitted into evidence without objection. The record closed on November 14, 2014.

FINDINGS OF FACT

In his Answer to the SOR, Applicant admitted nearly all of the factual allegations pertaining to financial considerations (¶¶ 1.a., 1.b., 1.d., and 1.e.). He denied one allegation (¶ 1.c.), contending it was a duplicate of another allegation, and was unable to address the remaining allegation (¶ 1.f.) as he could not identify the creditor from any information furnished by the Government or from any other source. At one point during the hearing, the Department Counsel moved to amend the SOR by withdrawing SOR ¶ 1.f. There being no objection, the SOR was amended and the allegation was withdrawn.3 Applicant’s answers and explanations are incorporated herein as findings of fact. After a complete and thorough review of the evidence in the record, and upon due consideration of same, I make the following additional findings of fact:

Applicant is a 44-year-old employee of a defense contractor, for which, since September 2006, he has served as a network administrator.4 Applicant was unemployed on several occasions for a variety of reasons: from August 2001 until January 2004 as a result of job-related injuries; from September 2005 until October 2005 when his employer was beset by Hurricane Katrina-related damage; and from August 2006 until September 2006 while relocating to a new residence when his wife’s military deployment ended.5

He served on active duty in an enlisted capacity with the U.S. Air Force from September 1991 until December 1991, and was transferred to the Air Force Reserve where he remained until September 1999. Because Applicant’s weight apparently exceeded Air Force standards, he was entered into the Air Force Weight Management Program.6 Although Applicant lost weight while in the program, he failed to lose sufficient weight to become successful.7 As a result, his initial unit commander refused to allow him to drill because he was overweight, and his next unit commander processed him for discharge for failure to drill and missing too many sessions.8 Applicant was initially issued a general discharge under honorable conditions, but the characterization of the discharge was eventually upgraded to an honorable discharge.9 Applicant was granted a secret security clearance in August 1991.10

Applicant attended a community college from August 2001 until May 2003, and was awarded an associate’s degree in applied science in May 2003.11 He was married in December 1994, and he and his wife have two children, a son born in 1994, and a daughter born in 1996.12

Financial Considerations

There was nothing unusual about Applicant’s finances until about 2012 or 2013. Applicant attributed most of his financial problems to difficulties obtaining rent on a rental property, on the budget sequestration in 2013 during which his wife, a registered civilian nurse with the U.S. Navy as well as a U.S. Army Reservist, lost 20 percent of her salary, and the sequestration’s impact on his own salary. He also noted that his residence had sustained significant damage as a result of Hurricane Katrina in August 2005, and that while insurance covered most of the damage, he did not receive any government assistance.13

(SOR ¶ 1.a.): From April 1997 until mid-2012, Applicant resided in one particular house, the one which had sustained the hurricane damage. When he eventually vacated it and moved into another residence, he rented his old residence to a niece and her family. After the lease was signed, Applicant’s monthly mortgage payment increased, but Applicant simply absorbed responsibility for the extra amount each month thereafter. Applicant’s niece was unable to work for several months, and in September 2012, her child passed away. Applicant helped with the funeral arrangements and received no rent payment that month. Thus, he found himself responsible for the mortgage payments on two houses (his own residence and the rental property) and that put him in a bind with his other accounts. Applicant’s niece and her husband both work, and they have been paying rent, albeit sometimes late, each month since October 2012.14 As a result of receiving late rent payments, Applicant has been making some late mortgage payments.

As of November 2013, his account was 30 days or $979 past due.15 In his Answer to the SOR, Applicant indicated the arrearage would be cleared up before August 15, 2014.16 However, during the hearing, he acknowledged he was still delinquent on a little over one full payment.17 His niece also informed him that she would make two payments in November 2014 in an effort to bring the account current.18 It has been a continuing struggle for Applicant to make his monthly payments, for it seems that shortly after he makes one payment, the next payment is due.19 Nevertheless, since January 2014, Applicant has routinely made his monthly mortgage payments of $951.91 or $859.44, depending on the required payment specified by the lender.20 There is no documentary evidence that Applicant’s niece had yet made her two rent payments. Nevertheless, it appears that the account is in the process of being resolved.

(SOR ¶¶ 1.b. and 1.c.): Applicant obtained student loans when he was attending college. The loans, totaling what he thought was about $10,800, were deferred for some time after he graduated. He made monthly payments of $150 for an unspecified period, and in early 2012, he stopped those payments when he received a collection notice. He immediately called the loan servicing organization to determine what had happened because he had been making his monthly payments. He then learned that his student loans had not been consolidated as he had thought, and that he had been making payments on only one student loan.21 Applicant’s November 2013 credit report reflects two separate student loans in collection, totaling $13,358.22 In December 2013, Applicant and the collection agent agreed to a repayment/rehabilitation plan under which Applicant was to make monthly payments of $100 for his student loans, which at that point had a balance of $13,396.79.23 He made his monthly payments and the student loans were rehabilitated and transferred.24 The accounts have been resolved.

(SOR ¶ 1.d.): There is a credit card with a credit limit of $5,000 and a remaining balance of $4,794 that was 90 days past due in the amount of $557.25 In September 2013, Applicant stated he was paying the creditor $150 bi-weekly until November 2013, at which time he would start paying $125 per month.26 During the hearing, Applicant acknowledged that he had not complied with the agreement because he was falling behind with some other bills, so he stopped any automatic payments. He could not recall if he made any such payments.27 On November 12, 2014, the collection agent agreed to a new repayment plan under which it would electronically debit $100 each month from Applicant’s checking account. The initial such payment is to be made on December 12, 2014.28 The account is in the process of being resolved.

(SOR ¶ 1.e.): There is a credit card with a credit limit of $500 and a remaining balance of $506 that was 30 days past due in the amount of $65.29 In September 2013, Applicant stated that the account became delinquent “a few times” when he forgot to make a payment, but that the account was now current.30 In his Answer to the SOR, he admitted the account was still delinquent, and he promised to pay the account in full before August 15, 2014.31 During the hearing, Applicant acknowledged that he had not paid off the account and that there was still a balance.32 On November 7, 2014, Applicant paid the creditor the final $342.89.33 The account has not been resolved.

Applicant started receiving financial counseling in early November 2014, and there will be another meeting in 30 days to review his spending diary and determine the effectiveness of his overall payment plan.34 As part of his counseling, Applicant established a monthly household budget. A review of the document reveals a total family monthly net income of $7,207. With routine monthly living expenses and debt obligations of $6,888.07, he has an estimated $318.93 available for discretionary spending or savings.35 With the exception of an installment agreement Applicant and his wife have with the Internal Revenue Service (IRS) for unpaid income taxes, all his other accounts are now current. He estimates that a loan will be taken from his wife’s Thrift Savings Plan (TSP) in December to pay off the income tax balance.36

Work Performance and Character References

Applicant’s former supervisor has known Applicant for eight to ten years as their relationship evolved from a manager, co-worker, to friend and pastor. He evaluated Applicant’s work performance. He characterized Applicant as honest, reliable, and professionally skilled.37 One of Applicant’s co-workers has known him professionally for eight years. She characterized him as very reliable, honest, and trustworthy.38 Applicant’s mother and wife noted that he is honest, loyal, and a very good father, and that he is very involved in his church and community.39

POLICIES

The U.S. Supreme Court has recognized the substantial discretion of the Executive Branch in regulating access to information pertaining to national security emphasizing, “no one has a ‘right’ to a security clearance.”40 As Commander in Chief, the President has the authority to control access to information bearing on national security and to determine whether an individual is sufficiently trustworthy to have access to such information. The President has authorized the Secretary of Defense or his designee to grant an applicant eligibility for access to classified information “only upon a finding that it is clearly consistent with the national interest to do so.”41

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the AG. In addition to brief introductory explanations for each guideline, the AG list potentially disqualifying conditions and mitigating conditions, which are used in evaluating an applicant’s eligibility for access to classified information.

An administrative judge need not view the guidelines as inflexible, ironclad rules of law. Instead, acknowledging the complexities of human behavior, these guidelines are applied in conjunction with the factors listed in the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. 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 meaningful decision.

In the decision-making process, facts must be established by “substantial evidence.”42 The Government initially has the burden of producing evidence to establish a potentially disqualifying condition under the Directive, and has the burden of establishing controverted facts alleged in the SOR. Once the Government has produced substantial evidence of a disqualifying condition, under Directive ¶ E3.1.15, the applicant has the burden of persuasion to present evidence in refutation, explanation, extenuation or mitigation, sufficient to overcome the doubts raised by the Government’s case. The burden of disproving a mitigating condition never shifts to the Government.43

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 as well. It is because of this special relationship that the Government must be able to repose a high degree of trust and confidence in those 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 as to potential, rather than actual, risk of compromise of classified information. Furthermore, “security clearance determinations should err, if they must, on the side of denials.”44 Clearance decisions must be “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.”45 Thus, nothing in this decision should be construed to suggest that I have based this decision, in whole or in part, on any express or implied determination as to Applicant’s allegiance, loyalty, or patriotism. It is merely an indication the Applicant has or has not met the strict guidelines the President and the Secretary of Defense have established for issuing a clearance. 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.

ANALYSIS

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 inability or unwillingness to satisfy debts is potentially disqualifying. Similarly, under AG ¶ 19(c), a history of not meeting financial obligations may raise security concerns. Although Applicant experienced a drain on his resources as early as 2001, his most significant financial problems arose in 2012 or 2013. He was unable to continue making his routine monthly payments, and various accounts became delinquent and were placed for collection. AG ¶¶ 19(a) and 19(c) apply.

The guideline also includes examples of conditions that could mitigate security concerns arising from financial difficulties. Under AG ¶ 20(a), the disqualifying condition may be mitigated where 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. Also, under AG ¶ 20(b), financial security concerns may be mitigated where 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. Evidence that 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 is potentially mitigating under AG ¶ 20(c). Similarly, AG ¶ 20(d) applies where the evidence shows the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.46

AG ¶¶ 20(a), 20(b), 20(c), and 20(d) apply. As noted above, Applicant’s initial financial problems started in August 2001 and lasted until January 2004 as a result of unemployment occasioned by job-related injuries. Additional financial problems occurred in September 2005 and October 2005 when his employer sustained Hurricane Katrina-caused damage. When Applicant’s wife’s military deployment ended in 2006, they relocated and he was again unemployed for two months. Applicant apparently overcame those earlier financial problems, only to be confronted by new ones. His financial problems were not caused by frivolous or irresponsible spending, and he did not spend beyond his means. Instead, his more recent financial problems were also largely beyond Applicant’s control. Applicant attributed his financial problems to a variety of causes, including the death of his niece’s child, the assistance he gave her with funeral arrangements, her initial inability to pay rent on the house he was renting to her and her family, the increased post-rental agreement mortgage payments, and her subsequent late payments. There was also the misunderstanding regarding the failure to consolidate his student loans, and his mistaken belief that he was making monthly payments for consolidated loans when, in fact, he was only making payments on one loan.

Applicant approached his creditors in an effort to set up repayment arrangements. While some of those efforts resulted in initial failures to comply with the conditions of the arrangements, Applicant’s overall repayment strategy has been successful, and he has resolved, or is in the process of resolving, all of his delinquent debts.

He is receiving counseling from a financial counselor, and the counselor is guiding him on how to pay some of his accounts and how to reduce his debt. All of Applicant’s newer accounts are current. A review of his monthly household budget reveals that he now has approximately $318.93 each month available for discretionary spending or savings. Applicant acted responsibly by addressing all of his delinquent accounts, and working with his creditors.47 There are clear indications that Applicant’s financial problems are under control. Applicant’s actions under the circumstances confronting him, do not cast doubt on his current reliability, trustworthiness, or good judgment.48

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. 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. Moreover, I have evaluated the various aspects of this case in light of the totality of the record evidence and have not merely performed a piecemeal analysis.49

There is some evidence against mitigating Applicant’s conduct. His handling of his finances permitted a number of accounts to become delinquent. As a result, various accounts became delinquent and were placed for collection.

The mitigating evidence under the whole-person concept is more substantial. He has an outstanding reputation in the workplace and in the community. Applicant’s financial problems were not caused by frivolous or irresponsible spending, and he did not spend beyond his means. Rather, his problems were largely beyond Applicant’s control. He helped his niece financially when he could really not afford to do so. Applicant has resolved, or is in the process of resolving, all of the accounts identified in the SOR, as well as one not listed in the SOR. There are clear indications that Applicant’s financial problems are under control. His actions under the circumstances confronting him do not cast doubt on his current reliability, trustworthiness, or good judgment.

The Appeal Board has addressed a key element in the whole-person analysis in financial cases stating:50

In evaluating Guideline F cases, the Board has previously noted that the concept of “‘meaningful track record’ necessarily includes evidence of actual debt reduction through payment of debts.” However, an applicant is not required, as a matter of law, to establish that he [or she] has paid off each and every debt listed in the SOR. All that is required is that an applicant demonstrate that he [or she] has “. . . established a plan to resolve his [or her] financial problems and taken significant actions to implement that plan.” The Judge can reasonably consider the entirety of an applicant’s financial situation and his [or her] actions in evaluating the extent to which that applicant’s plan for the reduction of his outstanding indebtedness is credible and realistic. See Directive ¶ E2.2(a) (“Available, reliable information about the person, past and present, favorable and unfavorable, should be considered in reaching a determination.”) There is no requirement that a plan provide for payments on all outstanding debts simultaneously. Rather, a reasonable plan (and concomitant conduct) may provide for the payment of such debts one at a time. Likewise, there is no requirement that the first debts actually paid in furtherance of a reasonable debt plan be the ones listed in the SOR.

Applicant has demonstrated a “meaningful track record” of debt reduction and elimination efforts. Nevertheless, this decision should serve as a warning that his failure to continue his debt resolution efforts or the actual accrual of new delinquent debts will adversely affect his future eligibility for a security clearance.51 Overall, the evidence leaves me without questions and doubts as to Applicant’s eligibility and suitability for a security clearance. For all of these reasons, I conclude Applicant has mitigated the security concerns arising from his financial considerations. See AG ¶ 2(a)(1) through AG ¶ 2(a)(9).

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: Withdrawn

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.

________________________ ROBERT ROBINSON GALES Administrative Judge

FOOTNOTES

1 GE 1 ((SF 86), dated September 30, 2013). 2 The Directive established that notification as to the date, time, and place of a hearing be furnished to an applicant at least 15 days in advance of the time of the hearing. See, Directive, Encl. 3, § E3.1.8. In this instance, Department Counsel and Applicant were in discussions regarding the potential time and location long before the actual Notice of Hearing was issued. The Notice of Hearing was issued on October 14, 2014, and Applicant acknowledged receipt of the Notice on October 15, 2014. The Amended Notice of Hearing was issued on October 20, 2014, and Applicant acknowledged receipt of the Amended Notice that same day. Thus, the period between the issuance of the Notice and the hearing was approximately 17 days, and the period between the issuance of the Amended Notice and the hearing was approximately 11 days. I inquired of Applicant if he had any objection to proceeding and he responded “no.” See, Tr. at 15-17. 3 Tr. at 14-15. 4 GE 1, supra note 1, at 10. 5 GE 2 (Personal Subject Interview, dated December 4, 2013), at 2; GE 1, supra note 1, at 11, 13. 6 See Air Force Instruction (AFI) 40-502, The Weight Management Program (November 7, 1994). 7 Although the height and weight of an individual are measured under the program, a significant consideration is the body fat percentage of any individual who exceeds their maximum allowable weight, and who appears to exceed the body fat standard, or who doesn’t present a professional military appearance. 8 GE 2, supra note 5, at 3; Tr. at 71-74. 9 Tr. at 73, 77. 10 GE 1, supra note 1, at 32-33. 11 GE 2, supra note 5, at 2. 12 GE 1, supra note 1, at 20-21. 13 Tr. at 88-90; GE 2 (Investigator’s Note, dated January 22, 2014), at 1-2. 14 Tr. at 79-81, 117-118. 15 GE 3 (Combined Experian, TransUnion, and Equifax Credit Report, dated November 20, 2013), at 5. 16 Applicant’s Answer to the SOR, undated. 17 Tr. at 83-84; AE F (Mortgage Loan Statement, dated October 20, 2014). 18 Tr. at 83. 19 Tr. at 85. 20 AE E (Account Transaction History, undated); AE K (Account Transaction History, undated). . 21 GE 2, supra note 5, at 6; Tr. at 92-95, 114. 22 GE 3, supra note 15, at 5. 23 AE A (Letter, dated December 9, 2013); Tr. at 114. 24 Tr. at 95-97, 115; AE G (Payment History, dated November 12, 2014); AE H (Loan Detail, dated November 2014). 25 GE 3, supra note 15, at 6. 26 GE 1, supra note 1, at 35-36. 27 Tr. at 99. 28 AE I (Letter, dated November 12, 2014). 29 GE 3, supra note 15, at 6. 30 GE 2, supra note 5, at 6. 31 Applicant’s Answer to the SOR, supra note 16. 32 Tr. at 122. 33 AE D (Payment Confirmation, dated November 7, 2014); AE B (E-mail, dated November 12, 2014), at 1. 34 AE B, supra note 33, at 1. 35 AE J (Monthly Household Budget, undated). 36 AE B, supra note 33, at 1; AE C (IRS Installment Agreement, dated October 10, 2014). 37 Tr. at 38-46. 38 Tr. at 48-51. 39 Tr. at 54-56, 67-68. 40 Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). 41 Exec. Or. 10865, Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960), as amended and modified. 42 “Substantial evidence [is] such relevant evidence as a reasonable mind might accept as adequate to support a conclusion in light of all contrary evidence in the record.” ISCR Case No. 04-11463 at 2 (App. Bd. Aug. 4, 2006) (citing Directive ¶ E3.1.32.1). “Substantial evidence” is “more than a scintilla but less than a preponderance.” See v. Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994). 43 See ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 2005). 44 Egan, 484 U.S. at 531. 45 See Exec. Or. 10865 § 7. 46 The Appeal Board has previously explained what constitutes a good-faith effort to repay overdue creditors or otherwise resolve debts: In order to qualify for application of [the “good-faith” mitigating condition], an applicant must present evidence showing either a good-faith effort to repay overdue creditors or some other good-faith action aimed at resolving the applicant’s debts. The Directive does not define the term ‘good-faith.’ However, the Board has indicated that the concept of good-faith ‘requires a showing that a person acts in a way that shows reasonableness, prudence, honesty, and adherence to duty or obligation.’ Accordingly, an applicant must do more than merely show that he or she relied on a legally available option (such as bankruptcy) in order to claim the benefit of [the “good-faith” mitigating condition]. (internal citation and footnote omitted) ISCR Case No. 02-30304 at 3 (App. Bd. Apr. 20, 2004) (quoting ISCR Case No. 99-9020 at 5-6 (App. Bd. June 4, 2001)). 47 “Even if Applicant’s financial difficulties initially arose, in whole or in part, due to circumstances outside his [or her] control, the Judge could still consider whether Applicant has since acted in a reasonable manner when dealing with those financial difficulties.” ISCR Case No. 05-11366 at 4 n.9 (App. Bd. Jan. 12, 2007) (citing ISCR Case No. 99-0462 at 4 (App. Bd. May 25, 2000); ISCR Case No. 99-0012 at 4 (App. Bd. Dec. 1, 1999); ISCR Case No. 03- 13096 at 4 (App. Bd. Nov. 29, 2005)). A component is whether he or she maintained contact with creditors and attempted to negotiate partial payments to keep debts current. 48 See ISCR Case No. 09-08533 at 3-4 (App. Bd. Oct. 6, 2010). 49 See U.S. v. Bottone, 365 F.2d 389, 392 (2d Cir. 1966); See also ISCR Case No. 03-22861 at 2-3 (App. Bd. Jun. 2, 2006). 50 ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008) (internal citations omitted). 51 While this decision should serve as a warning to Applicant, the decision, including the warning, should not be interpreted as being contingent on future monitoring of Applicant’s financial condition. The Defense Office of Hearings and Appeals (DOHA) has no authority to attach conditions to an applicant’s security clearance. See, e.g., ISCR Case No. 10-06943 at 4 (App. Bd. Feb. 17, 2012) (citing ISCR Case No. 10-03646 at 2 (App. Bd. Dec. 28, 2011)). See also ISCR Case No. 06-26686 at 2 (App. Bd. Mar. 21, 2008); ISCR Case No. 04-03907 at 2 (App. Bd. Sep. 18, 2006); ISCR Case No. 04-04302 at 5 (App. Bd. Jun. 30, 2005); ISCR Case No. 03-17410 at 4 (App. Bd. Apr. 12, 2005); ISCR Case No. 99-0109 at 2 (App. Bd. Mar. 1, 2000).