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ISCR Case 14-05533.h1 — CASE

ISCR Case 14-05533.h1denied

Case Headnote

ISCR Case No. 14-05533.h1

deniedJul 31, 2015· Hon. Mark W. Harvey· hearing

Summary

A 40-year-old technician was denied a security clearance under Guideline F (Financial Considerations) due to 13 delinquent accounts totaling $41,693. The Statement of Reasons cited a $10,199 judgment, an $8,999 charged-off debt, and a $6,759 credit card debt used for living expenses. Disqualifying conditions under AG ¶ 19(a) and AG ¶ 19(c) were raised.

While mitigating conditions AG ¶ 20(b) and AG ¶ 20(d) were applied, the applicant admitted to all 13 delinquent, charged-off, or collection accounts. The denial was based on his failure to provide sufficient documentation of progress in resolving his financial problems.

Ultimately, the applicant did not demonstrate a good-faith effort to repay overdue creditors or resolve his debts, leading to the denial of his security clearance.

Why the Applicant Was Denied

The applicant admitted to 13 delinquent, charged-off, or collection accounts totaling $41,693.
He failed to provide sufficient documentation of his progress in resolving his financial problems.
The applicant did not demonstrate a good-faith effort to repay overdue creditors or resolve debts.

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(b)rejectedConditions Largely Beyond the Person's ControlWhile some circumstances were beyond his control, the applicant did not provide proof of acting responsibly under those circumstances.
AG ¶ 20(d)rejectedGood-faith Effort to Repay Overdue CreditorsThe applicant did not provide evidence of any payments made to SOR creditors.

Key Rule Quoted

“Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the adjudicative guidelines.”

Procedural Posture

SOR issuedFeb 7, 2015
Answer filedFeb 28, 2015
Hearing heldJun 25, 2015
Decision dateJul 31, 2015

Cite For

Failure to Provide Documentation of Financial Progress Under Guideline F
Insufficient Evidence of Good-faith Efforts to Resolve Debts
Impact of Financial Difficulties on Security Clearance Eligibility

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: denied

The judge found against the applicant on the majority of financial allegations, citing a history of delinquent debts totaling $41,693. The applicant's failure to provide sufficient documentation of efforts to resolve these debts led to the denial of his security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	judgment for $10,199 $10,199	Against Applicant	Judgment Against Applicant	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	charged-off debt for $8,999 $8,999	For Applicant	Unspecified Financial	Admitted	—	—	—
1.c	debt for $6,759 resulted from a credit-card account used to pay living expenses $6,759	Against Applicant	Credit Card Debt	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: ) ) ---------------------- ) ISCR Case No. 14-05533 ) ) Applicant for Security Clearance

For Government: Pamela Benson, Esq., Department Counsel For Applicant: Pro se

07/31/2015 __________

STATEMENT OF CASE

__________

HARVEY, Mark, Administrative Judge:

Applicant’s statement of reasons (SOR) alleges 13 delinquent, charged-off, or collection accounts totaling $41,693. He failed to provide sufficient documentation of his progress resolving his financial problems. Financial considerations concerns are not mitigated. Eligibility for access to classified information is denied.

Statement of the Case

On April 7, 2014, Applicant submitted an Electronic Questionnaires for Investigations Processing (e-QIP) version of a security clearance application (SF 86). (Government Exhibit (GE) 1) On February 7, 2015, the Department of Defense (DOD) Consolidated Adjudications Facility (CAF) issued an SOR to Applicant, pursuant to Executive Order 10865, Safeguarding Classified Information Within Industry, dated February 20, 1960, as amended; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (Directive), dated January 2, 1992, as amended; and the adjudicative guidelines (AG), which became effective on September 1, 2006.

The SOR alleges security concerns under Guideline F (financial considerations). (Hearing Exhibit (HE) 2) The SOR detailed reasons why DOD could not make the affirmative finding under the Directive that it is clearly consistent with the national interest to grant or continue a security clearance for Applicant and recommended referral to an administrative judge to determine whether Applicant’s clearance should be granted, continued, denied, or revoked. (HE 2)

On February 28, 2015, Applicant responded to the SOR allegations, and he requested a hearing. (GE 3) On May 4, 2015, Department Counsel was ready to proceed. On May 7, 2015, the case was assigned to me. On June 10, 2015, the Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing, setting Applicant’s hearing for June 25, 2015. (HE 1) Applicant said he received 15 days of notice of the date, time, and location of his hearing. (Transcript Tr. 15-16) Applicant’s hearing was held as scheduled. Department Counsel offered four exhibits into evidence, and Applicant provided seven exhibits. (Tr. 18-21; GE 1-4; AE A-G) All exhibits were admitted without objection. (Tr. 18, 21; GE 1-4; AG A-G) On July 6, 2015, DOHA received the transcript of Applicant’s hearing.

Findings of Fact1

In Applicant’s SOR response, he admitted SOR debts ¶¶ 1.a through 1.m.2 He also provided extenuating and mitigating information. Applicant’s admissions are accepted as findings of fact.

Applicant is a 40-year-old technician, who has worked for a defense contractor since January 2014.3 (Tr. 22-23, 29) In 1993, he graduated from high school. (Tr. 6) From 1994 to 1998, he served in the Air Force; he was a senior airman (E-4) when he left active duty; and he received an honorable discharge. (Tr. 7; AE G) In 1995, he married, and in 2010, he divorced. (Tr. 8) His child from his first marriage is 16, and his monthly child support is currently $920. (Tr. 8) In December 2015, his monthly child support payment will revert to $798 because his $756 arrearage will be paid. (Tr. 8, 33- 34) The child support payments are being garnished from Applicant’s pay. (Tr. 66) In 2010, he married his current spouse. (Tr. 8) He has three children, who are ages 1, 3, and 4, and two step-children, who are 10 and 13, in his current household. (Tr. 8-9) His spouse does not work outside their home. (Tr. 9)

Applicant first received a security clearance in the 1990swhen he served in the Air Force. (Tr. 25) He held a security clearance when he worked for a defense contractor from January 2000 to July 2001 and from August 2001 to September 2013, when he worked for the Air Force as a civilian technician, (Tr. 26-28) He earned about $48,000 annually when he left his Air Force civilian technician employment in 2013. (Tr. 27-28) In 2013, he moved to a different state to gain increased support from his family. (Tr. 28) Applicant was unemployed between October 2013 and November 2013. In December 2013, he obtained employment in a call center, where he earned $10 an hour. (Tr. 28-29)

Financial Considerations

In 2010, Applicant withdrew $10,000 from his Thrift Savings Plan (TSP), and he was unaware that he had to pay taxes on the early withdrawal. (Tr. 35) The Internal Revenue Service (IRS) issued a tax lien for $2,498. (Tr. 36) Applicant’s tax refunds for 2011 and 2012 were intercepted and applied to his 2010 tax debt. (Tr. 36) He started making $43 monthly payments in October 2012 in compliance with the IRS payment plan, and the lien is now paid. (Tr. 36-37; AE C) Applicant filed his state taxes; however, he owes about $600 to a state for income taxes for tax year 2012 and $780 for tax year 2013. (Tr. 38-39; GE 1) He is considering starting a payment plan to address his state income tax debts when his child support is reduced to $756 in December 2015. (Tr. 39- 40; AE A-B)

Applicant’s financial problems were worse in 2012. (Tr. 30) The family’s bathroom flooded; car and washer repairs were necessary; sewage backed up into their home; and no child support was received for Applicant’s stepchildren. (Tr. 30) In 2013, Applicant lost 10 days of pay due to the furlough or about $2,000 in income. (Tr. 61-63) In August or September 2014, Applicant’s spouse began receiving $710 monthly in child support. (Tr. 57)

Applicant’s annual income is $40,000. (Tr. 23) From March to July 2014, Applicant had a second job, earned $8.10 an hour, and worked 20 to 30 hours weekly. (Tr. 23) Applicant’s employment has been his family’s sole means of financial support. (Tr. 23, 30)

In February 2014, Applicant began employment with his current employer, and that same month, his court-ordered child support was finalized resulting in an arrearage determination that he owed his former spouse $4,612. (Tr. 33; AE A-B) In 2014, Applicant’s federal income tax refund was intercepted and applied to his child-support arrearage. (Tr. 34)

In 2011, Applicant borrowed about $103,000 to purchase his residence, and his mortgage was partially guaranteed by the Department of Veteran’s Affairs (VA). (Tr. 64) His home sustained considerable damage from electrical and sewage problems; the roof leaked; and a pipe broke. (Tr. 64-65) During the defense furlough, Applicant was three months behind on his mortgage. (GE 1) Applicant decided to move to a different state. Around October 2013, he left his home and “let it go” back to the mortgage company. (Tr. 42) On December 3, 2013, Applicant’s house was sold at auction; however, Applicant was unaware of the auction sale price and whether there was a deficiency. (Tr. 43; GE 1)4 Applicant’s credit reports and SOR allege 13 delinquent, charged-off, or collection accounts totaling $41,693. (GE 2-4) Applicant’s budget shows a monthly remainder of $151. (Tr. 40; AE D)

Applicant said he believed the two debts in SOR ¶¶ 1.a (judgment for $10,199) and 1.b (charged-off debt for $8,999) are the same debt, as both debts originated from the same creditor; they are approximately the same magnitude; and Applicant only had one credit-card account with this creditor. (Tr. 45-46) The debt in SOR ¶ 1.cfor $6,759 resulted from a credit-card account used to pay living expenses. (Tr. 46) The debt in SOR ¶ 1.d (charged-off debt for $5,805) resulted from a repossessed vehicle, which was sold at auction.

The debts in SOR ¶¶ 1.e for $3,598, 1.ffor $2,283, and 1.gfor $1,393 resulted from use of two bank credit cards and one bank loan. (Tr. 48-50; GE 4) The debts in SOR ¶¶ 1.hfor $639, 1.i for $596, and 1.jfor $352 resulted from two telecommunications accounts and one utility account. (Tr. 51-53; GE 4) The debts in SOR ¶¶ 1.kfor $188, 1.lfor $120, and 1.mfor $42 resulted from copays that medical insurance did not cover. (Tr. 53-56; GE 2, 4)

In May 2014, Applicant withdrew the remaining funds in his TSP account, which totaled about $14,000 or $15,000. (Tr. 56, 68) He used the funds for living expenses. (Tr. 58-59)

In 2014, Applicant considered filing for bankruptcy; however, he did not have the funds to pay a bankruptcy attorney at that time. (Tr. 41; GE 1) Starting in December 2015, he intends to use the extra $122 available after his child support arrearage is paid to start paying his delinquent SOR debts. He is also considering bankruptcy to resolve his debts. (Tr. 42, 61)

Applicant did not contact any of the SOR creditors after receiving the SOR. (Tr. 47) He has not received financial counseling. (Tr. 47) He has not made any payments to any of the SOR creditors.

Character Evidence

Applicant received the following awards, citations, and ribbons: Air Force Achievement Medal with one device; Air Force Training Ribbon; National Defense Service Medal; Air Force Outstanding Unit Ribbon; Air Force Good Conduct Medal; and Air Force Longevity Service Award. (AE G)

Applicant provided three letters from co-workers and friends. (AE E) They describe him as a committed and diligent worker, responsible, trustworthy, family- oriented, conscientious, loyal, and honorable. (AE E) His 2014 employer’s evaluation indicated he met or exceeded expectations in all categories. (AE F)

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.” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). 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.” Id. at 527. The President has authorized the Secretary of Defense or his designee to grant applicant’s eligibility for access to classified information “only upon a finding that it is clearly consistent with the national interest to do so.” Exec. Or. 10865, Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960), as amended.

Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the adjudicative guidelines. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, these guidelines are applied in conjunction with an evaluation of the whole person. An administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. An administrative judge must consider all available, reliable information about the person, past and present, favorable and unfavorable.

The Government reposes a high degree of trust and confidence in persons with access to classified information. This relationship transcends normal duty hours and endures throughout off-duty hours. 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 about potential, rather than actual, risk of compromise of classified information. 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.” See Exec. Or. 10865 § 7. See also Executive Order 12968 (Aug. 2, 1995), § 3.1. 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 about applicant’s allegiance, loyalty, or patriotism. It is merely an indication the applicant has not met the strict guidelines the President and the Secretary of Defense have established for issuing a clearance.

Initially, the Government must establish, by substantial evidence, conditions in the personal or professional history of the applicant that may disqualify the applicant from being eligible for access to classified information. The Government has the burden of establishing controverted facts alleged in the SOR. See Egan, 484 U.S. at 531. “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). The guidelines presume a nexus or rational connection between proven conduct under any of the criteria listed therein and an applicant’s security suitability. See ISCR Case No. 95-0611 at 2 (App. Bd. May 2, 1996). Once the Government establishes a disqualifying condition by substantial evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the facts. Directive ¶ E3.1.15. An applicant “has the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue his [or her] security clearance.” ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002). The burden of disproving a mitigating condition never shifts to the Government. See ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 2005). “[S]ecurity clearance determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531; see AG ¶ 2(b).

ANALYSIS

Financial Considerations

AG ¶ 18 articulates the security concern relating to financial problems:

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.

AG ¶ 19 provides two disqualifying conditions that could raise a security concern and may be disqualifying in this case: “(a) inability or unwillingness to satisfy debts”; and “(c) a history of not meeting financial obligations.” In ISCR Case No. 08-12184 at 7 (App. Bd. Jan. 7, 2010), the Appeal Board explained:

It is well-settled that adverse information from a credit report can normally meet the substantial evidence standard and the government’s obligations under [Directive] ¶ E3.1.14 for pertinent allegations. At that point, the burden shifts to applicant to establish either that [he or] she is not responsible for the debt or that matters in mitigation apply.

(internal citation omitted). Applicant’s history of delinquent debt is documented in his credit reports and SOR response. Applicant’s SOR alleges 13 delinquent, charged-off, or collection accounts totaling $41,693. The Government established the disqualifying conditions in AG ¶¶ 19(a) and 19(c), requiring additional inquiry about the possible applicability of mitigating conditions.5 Five mitigating conditions under AG ¶ 20 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;

(d) the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts;6 and

(e) the individual has a reasonable basis to dispute the legitimacy of the past-due debt which is the cause of the problem and provides documented proof to substantiate the basis of the dispute or provides evidence of actions to resolve the issue.

The Appeal Board concisely explained Applicant’s responsibility for proving the applicability of mitigating conditions as follows:

Once a concern arises regarding an Applicant’s security clearance eligibility, there is a strong presumption against the grant or maintenance of a security clearance. See Dorfmont v. Brown, 913 F. 2d 1399, 1401 (9th Cir. 1990), cert. denied, 499 U.S. 905 (1991). After the Government presents evidence raising security concerns, the burden shifts to the applicant to rebut or mitigate those concerns. See Directive ¶ E3.1.15. The standard applicable in security clearance decisions is that articulated in Egan, supra. “Any doubt concerning personnel being considered for access to classified information will be resolved in favor of the national security.” Directive, Enclosure 2 ¶ 2(b).

ISCR Case No. 10-04641 at 4 (App. Bd. Sept. 24, 2013).

Applicant’s conduct in resolving his delinquent debt does not warrant full application of any mitigating conditions to all of his SOR debts. He did not provide sufficient information about his finances to establish his inability to make greater progress paying his SOR creditors. Underemployment, unemployment, maintenance problems with his vehicle and home, the defense furlough, substantial child support responsibilities, his spouse’s inability to receive child support, and federal income tax debt resulting from TSP early withdrawals are circumstances partially or largely beyond his control; however, he did not provide proof that he act responsibly under the circumstances.

Applicant is credited with resolving the debt in SOR ¶ 1.b. The two debts in SOR ¶¶ 1.a (judgment for $10,199) and 1.b (charged-off debt for $8,999) are the same debt. He also paid his delinquent federal income taxes from 2010 and will bring his child support debt to current status in December 2015.

Applicant presented insufficient evidence about what he has done since becoming employed with his current employer to pay or resolve his SOR debts or his other debts. Except for the positive information in the previous paragraph, he did not provide any of the following documentation relating to the SOR creditors: (1) proof of payments, such as checking account statements, photocopies of checks, or a letter from the creditor proving that he paid or made any payments to the creditor; (2) correspondence to or from any creditors to establish maintenance of contact with creditors;7 (3) a credible debt dispute indicating he did not believe he was responsible for the debt and why he held such a belief; (4) attempts to negotiate payment plans, such as settlement offers or agreements to show that he was attempting to resolve these SOR debts; (5) evidence of financial counseling; or (6) other evidence of progress or resolution of his SOR debts. Applicant’s failure to prove that he has made more substantial steps to resolve his debts shows a lack of judgment and responsibility that weighs against approval of his security clearance. There is insufficient evidence that he was unable to make greater progress resolving his delinquent debts, or that his financial problems are being resolved, are under control, and will not recur in the future. Under all the circumstances, he failed to establish that financial consideration concerns are mitigated.

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. I have incorporated my comments under Guideline F in my whole-person analysis. Some of the factors in AG ¶ 2(a) were addressed under Guideline F, but some warrant additional comment.

There is some evidence supporting approval of Applicant’s clearance. Applicant is a 40-year-old technician, who has worked for a defense contractor since January 2014. From 1994 to 1998, he served in the Air Force; he was a senior airman when he left active duty; and he received an honorable discharge. Applicant received the following awards, citations, and ribbons: Air Force Achievement Medal with one device; Air Force Training Ribbon; National Defense Service Medal; Air Force Outstanding Unit Ribbon; Air Force Good Conduct Medal; and Air Force Longevity Service Award. Three co-workers and friends lauded his diligence, responsibility, trustworthiness, family- orientation, loyalty, honor, and conscientious attention to his work. His 2014 employer’s evaluation indicated he met or exceeded expectations in all categories.

Applicant’s child from the first marriage is 16, and his monthly child support is currently $920. In December 2015, his child support will revert to $798 because his $756 arrearage will be paid. He paid his delinquent federal income tax debt from 2010. In 2010, he married his current spouse, and he has five minor children in his household. His spouse does not work outside their home. Underemployment, unemployment, maintenance problems with his vehicle and home, the defense furlough, substantial child support responsibilities, his spouse’s inability to receive child support, and federal income tax debt resulting from TSP early withdrawals are circumstances partially or largely beyond his control, which contributed to his financial problems. Applicant has a security clearance for about 20 years, and there is no evidence of security violations, abuse of alcohol, or use of illegal drugs. Applicant disclosed his delinquent debts and state and federal income tax problems on his April 7, 2014 SF 86.

The financial evidence against approval of Applicant’s clearance is more substantial at this time. Applicant has a history of financial problems. His SOR alleges 13 delinquent, charged-off, or collection accounts totaling $41,693. The debt in SOR ¶ 1.b (charged-off debt for $8,999) is mitigated, reducing the SOR debt total to 12 debts for $32,694. His two state tax debts have been delinquent for more than one year with no payments made to the state income tax authority. He failed to provide sufficient documentation of progress to resolve his financial problems. His failure to provide more corroborating documentation shows lack of financial responsibility and judgment and raises unmitigated questions about Applicant’s reliability, trustworthiness, and ability to protect classified information. See AG ¶ 18. More information about inability to pay debts or documented financial progress is necessary to mitigate security concerns.

It is well settled that once a concern arises regarding an applicant’s security clearance eligibility, there is a strong presumption against the grant or renewal of a security clearance. See Dorfmont, 913 F. 2dat 1401. Unmitigated financial considerations concerns lead me to conclude that grant of a security clearance to Applicant is not warranted at this time. This decision should not be construed as a determination that Applicant cannot or will not attain the state of reform necessary to justify the award of a security clearance in the future. With more effort towards documented resolution of his past-due debts, and a track record of behavior consistent with his obligations, he may well be able to demonstrate persuasive evidence of his security clearance worthiness. Based on the facts before me and the adjudicative guidelines that I am required to apply, I conclude that it is not clearly consistent with the national interest to grant Applicant security clearance eligibility at this time.

I have carefully applied the law, as set forth in Department of Navy v. Egan, 484 U.S. 518 (1988), Exec. Or. 10865, the Directive, and the AGs, to the facts and circumstances in the context of the whole person. Financial considerations concerns are not mitigated.

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: AGAINST APPLICANT

Subparagraph 1.a: Against Applicant Subparagraph 1.b: For Applicant Subparagraphs 1.cthrough 1.m: Against Applicant

CONCLUSION

In light of all of the circumstances presented by the record in this case, it is not clearly consistent with the national interest to reinstate Applicant’s eligibility for a security clearance. Eligibility for access to classified information is denied.

_________________________ Mark Harvey Administrative Judge

FOOTNOTES

1 Some details have not been included in order to protect Applicant’s right to privacy. Specific information is available in the cited exhibits.

2 The source for the information in this paragraph is Applicant’s SOR response. (HE 3)

3 Unless stated otherwise, Applicant’s April 7, 2014 Electronic Questionnaires for Investigations Processing (e-QIP) version of security clearance application (SF 86) is the source for the facts in this paragraph and the next paragraph. (GE 1) 4The Department of Veteran’s Affairs home loan guarantee is $36,000, and veterans “usually have no liability to the government following a foreclosure, except in cases involving fraud, misrepresentation, or bad faith, such as allowing an unapproved assumption” of responsibility to repay the loan. In this situation, Applicant’s debt to the creditor could theoretically be $77,000 ($103,000 minus $36,000 which would be paid by the VA). Applicant would be entitled to a credit for the amount received based on the sale of the property. He may also owe state property taxes on this house and legal fees relating to the property’s sale and unpaid interest. 5Applicant’s SOR does not allege that he defaulted on his mortgage and failed to pay his state income taxes in full for two years. In ISCR Case No. 03-20327 at 4 (App. Bd. Oct. 26, 2006), the Appeal Board listed five circumstances in which conduct not alleged in an SOR may be considered stating: (a) to assess an applicant’s credibility; (b) to evaluate an applicant’s evidence of extenuation, mitigation, or changed circumstances; (c) to consider whether an applicant has demonstrated successful rehabilitation; (d) to decide whether a particular provision of the Adjudicative Guidelines is applicable; or (e) to provide evidence for whole person analysis under Directive Section 6.3. Id. (citing ISCR Case No. 02-07218 at 3 (App. Bd. Mar. 15, 2004); ISCR Case No. 00-0633 at 3 (App. Bd. Oct. 24, 2003)). Applicant’s default on his mortgage and state tax debts will not be considered for any purpose, except in the whole-person discussion.

6 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)). 7“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.