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ISCR Case 14-04557.h1 — CASE

ISCR Case 14-04557.h1granted

Case Headnote

ISCR Case No. 14-04557.h1

grantedAug 27, 2015· Hon. Matthew E. Malone· hearing

Summary

A 28-year-old draftsman for a defense contractor was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The Statement of Reasons (SOR) alleged the applicant owed $11,631 across three delinquent debts, including a jointly held car loan and a tax debt incurred in 2012. These issues raised disqualifying conditions under Adjudicative Guidelines (AG) ¶ 19(a) and ¶ 19(c).

However, the applicant demonstrated mitigating factors that led to the favorable outcome. He actively repaid his tax debt through an agreement with the IRS. The delinquent car loan, for which he was jointly liable, stemmed from his mother's failure to make payments, and no collection efforts had been initiated against him personally.

Crucially, the applicant's current financial situation was deemed sound, exhibiting a positive cash flow. These proactive measures and stable finances satisfied the mitigating conditions under AG ¶ 20(a) and ¶ 20(c), resulting in the granting of his security clearance.

Why the Applicant Prevailed

Applicant is actively repaying a tax debt through an agreement with the IRS.
The delinquent car loan arose from his mother's failure to pay, with no collection efforts against him.
Applicant's current finances are sound, with a positive cash flow.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(a)appliedThe Behavior Was Not Recent and the Applicant Has Taken Positive Steps to Address the Issues
AG ¶ 20(c)appliedThe Applicant Has Demonstrated a Good Faith Effort to Repay Debts

Key Rule Quoted

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

Procedural Posture

SOR issuedOct 14, 2014
Answer filedNov 28, 2012Applicant submitted EQIP.
Hearing held—Applicant requested a decision without a hearing.
Decision dateJul 31, 2015Case assigned to judge.

Cite For

Mitigating Conditions Under Guideline F for Proactive Debt Repayment
Consideration of Financial Stability in Security Clearance Decisions
Impact of Familial Financial Obligations on Applicant's Credit History

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 related to three debts, including a tax debt and a car loan. However, the applicant was actively repaying the tax debt and had no ongoing collection efforts against him for the car loan, leading to a decision in favor of granting the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant owes $11,631 for three delinquent debts (SOR 1.a - 1.c).	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Applicant is jointly liable for the delinquent car loan at SOR 1.b.	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	Applicant incurred the SOR 1.c tax debt in 2012.	For Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—

Descriptive standardized rendering of a decided public case (Guideline F). The verbatim source decision is shown in full below.

Full decision

The complete, official text — footnotes and signatures included — is in the original PDF.

Decision text, by section

DEFENSE OFFICE OF HEARINGS AND APPEALS

HEARING

APPEARANCES

DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS

In the matter of: ) ) ) [NAME REDACTED] ) ISCR Case No. 14-04557 ) ) Applicant for Security Clearance )

For Government: Gregg A. Cervi, Esq., Department Counsel For Applicant: Pro se

08/27/2015 ______________

STATEMENT OF CASE

______________

MALONE, Matthew E., Administrative Judge:

Applicant is repaying a tax debt incurred in 2012. Another debt arose from circumstances beyond his control. His current finances are sound and he is not likely to experience financial problems in the future. His request for a security clearance is granted.

Statement of the Case

On November 28, 2012, Applicant submitted an Electronic Questionnaire for Investigations Processing (EQIP) to obtain a security clearance required for his job with a defense contractor. After reviewing the completed background investigation, which included Applicant’s responses to interrogatories from Department of Defense (DOD) adjudicators, it could not be determined that it is clearly consistent with the national interest for Applicant to have access to classified information.

On October 14, 2014, DOD issued a Statement of Reasons (SOR) alleging facts that raise security concerns addressed under Guideline F (Financial Considerations).3 Applicant timely responded to the SOR and requested a decision without a hearing. On April 22, 2015, Department Counsel issued a File of Relevant Material (FORM) in support of the SOR. Applicant received the FORM on May 22, 2015, and was advised he had 30 days from the date of receipt to submit additional information in response to the FORM. The record closed on June 21, 2015, without any response to the FORM from Applicant. The case was assigned to me on July 31, 2015.

FINDINGS OF FACT

Under Guideline F, the Government alleged that Applicant owes $11,631 for three delinquent debts (SOR 1.a - 1.c). Applicant admitted all of the SOR allegations. (FORM, Items 1 and 2) In addition to his admissions, I make the following findings of fact.

Applicant is a 28-year-old employee of a defense contractor. He requires a security clearance for his job as a draftsman with a defense contractor, where he has worked since October 2012. Applicant is the oldest of seven children raised by a single mother. He obtained an associate’s degree in 2010, paying his own way with money from work and small student loans, all of which have been paid off. Even while attending school since 2006, Applicant has been steadily employed. (FORM, Items 2 - 4)

When he submitted his EQIP, Applicant disclosed the debt alleged at SOR 1.b. In 2007, he wanted to help his mother by co-signing a loan to buy a car. The expectation was that she would make the monthly payments; however, his mother lost the car to repossession in 2009. Applicant has not lived with his mother since 2008 and was unaware of the delinquency until 2012, but there have been no efforts to recoup from him any balance remaining after resale. (FORM, Items 2 - 4)

The debt alleged at SOR 1.a is for a delinquent cell phone account. Although it was listed in interrogatories sent to Applicant by DOD adjudicators, it is not listed in either credit report in the record. It also was not discussed in Applicant’s subject interview on July 13, 2014. (FORM, Items 4 - 6) The debt alleged at SOR 1.cis for unpaid taxes in 2012. The welder’s job Applicant held that year was the first time any of his employers did not withhold federal income taxes. He was not aware of this when the tax bill came due, and he was unable to pay the full amount right away. In his response to interrogatories, he provided documentation of his repayment plan with the IRS. This debt is not reflected in either of the credit reports provided with the FORM.

Applicant’s finances are sound. There is no information in this record that suggests Applicant is not meeting his regular obligations or that he has incurred any additional unpaid debts. After accounting for all of his monthly expenses, Applicant has about $450 in positive cash flow. (FORM, Item 4)

POLICIES

Each security clearance decision must be a fair, impartial, and commonsense determination based on examination of all available relevant and material information,5 and consideration of the pertinent criteria and adjudication policy in the adjudicative guidelines. Decisions must also reflect consideration of the factors listed in ¶ 2(a) of the new guidelines. Commonly referred to as the “whole-person” concept, those factors are:

(1) The nature, extent, and seriousness of the conduct; (2) the circumstances surrounding the conduct, to include knowledgeable participation; (3) the frequency and recency of the conduct; (4) the individual's age and maturity at the time of the conduct; (5) the extent to which participation is voluntary; (6) the presence or absence of rehabilitation and other permanent behavioral changes; (7) the motivation for the conduct; (8) the potential for pressure, coercion, exploitation, or duress; and (9) the likelihood of continuation or recurrence.

The presence or absence of a disqualifying or mitigating condition is not determinative of a conclusion for or against an applicant. However, specific applicable guidelines should be followed whenever a case can be measured against them as they represent policy guidance governing the grant or denial of access to classified information. A security clearance decision is intended only to resolve whether it is clearly consistent with the national interest for an applicant to either receive or continue to have access to classified information. Department Counsel must produce sufficient reliable information on which DOD based its preliminary decision to deny or revoke a security clearance for an applicant. Additionally, Department Counsel must prove controverted facts alleged in the SOR. If the Government meets its burden, it then falls to the applicant to refute, extenuate, or mitigate the case for disqualification. Because no one is entitled to a security clearance, applicants bear a heavy burden of persuasion to establish that it is clearly consistent with the national interest for them to have access to protected information. A person who has access to such information enters into a fiduciary relationship with the Government based on trust and confidence. Thus, there is a compelling need to ensure each applicant possesses the requisite judgment, reliability, and trustworthiness of one who will protect the nation’s interests as his or her own. The “clearly consistent with the national interest” standard compels resolution of any reasonable doubt about an applicant’s suitability for access to classified information in favor of the Government.10

ANALYSIS

Financial Considerations

Available information supports the allegations in the SOR. The facts established herein raise a security concern addressed, in relevant part, at AG ¶ 18 as follows:

Failure or inability to live within one's means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual's reliability, trustworthiness and ability to protect classified information. An individual who is financially overextended is at risk of having to engage in illegal acts to generate funds.

More specifically, available information requires application of the disqualifying conditions at AG ¶¶ 19(a) (inability or unwillingness to satisfy debts) and 19(c) (a history of not meeting financial obligations). Applicant incurred the SOR 1.ctax debt in 2012 and he is jointly liable for the delinquent car loan at SOR 1.b. The validity of the SOR 1.a cell phone is questionable.

By contrast, Applicant is repaying the tax debt through an agreement with the IRS. The car repossession debt arose from his mother’s failure to pay and is not the subject of any identifiable collection effort against Applicant. Applicant’s action to resolve his tax debt was proactive. Along with the health of his current finances, the record suggests that these purported financial problems will not recur. The security concerns about Applicant’s finances are mitigated.

In addition to my evaluation of the facts and application of the appropriate adjudicative factors under Guideline F, I have reviewed the record before me in the context of the whole-person factors listed in AG ¶ 2(a). A fair and commonsense assessment of all available information shows that any doubts about Applicant’s suitability for access to classified information have been resolved.

FORMAL FINDINGS

Formal findings on the allegations set forth in the SOR, as required by section E3.1.25 of Enclosure 3 of the Directive, are:

Paragraph 1, Guideline F: FOR APPLICANT

Subparagraphs 1.a - 1.c: For Applicant

CONCLUSION

In light of all available information, it is clearly consistent with the national interest for Applicant to have access to classified information. Applicant’s request for a security clearance is granted.

MATTHEW E. MALONE Administrative Judge

FOOTNOTES

See DOD Directive 5220.6 (Directive), as amended, Section E3.1.2.2. Required by Executive Order 10865, as amended, and by the Directive. See Directive, Enclosure 2. See also 32 C.F.R. § 154, Appendix H (2006). See Directive, Enclosure 3, Section E3.1.7. The FORM included six exhibits (Items 1 - 6) proffered in support of the Government’s case. Directive. 6.3. See Department of the Navy v. Egan, 484 U.S. 518 (1988). Directive, E3.1.14. Directive, E3.1.15. See Egan, 484 U.S. at 528, 531. See Egan; Adjudicative Guidelines, ¶ 2(b).