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ISCR Case 14-06592.h2 — CASE

ISCR Case 14-06592.h2granted

Case Headnote

ISCR Case No. 14-06592.h2

grantedMay 12, 2016· Hon. Philip S. Howe· hearing

Summary

A 34-year-old married male applicant with one child and six years of U.S. Air Force service was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The Statement of Reasons detailed six financial delinquencies. These included past-due mortgage payments totaling $19,204 on a $247,990 home mortgage, and $2,833 on a $146,274 real estate mortgage.

Additionally, the applicant owed $622 on one credit card, $1,274 to a debt collector for another credit card, $1,157 to a university for tuition, and $810 to a bank. All these debts were subsequently resolved. The $19,204 mortgage delinquency was resolved in June 2012, and the $2,833 mortgage delinquency was paid as specified by September 28, 2015. The credit card, debt collector, university, and bank debts were all reported as paid or resolved.

The judge determined that all debts were resolved or in the process of resolution by the time of the decision. The applicant demonstrated good-faith efforts to repay these debts, even during periods of unemployment. Consequently, the security clearance was granted.

Why the Applicant Prevailed

All debts were resolved or in the process of being resolved by the time of the decision.
The applicant demonstrated good-faith efforts to repay debts despite periods of unemployment.

Conditions Referenced

Disqualifying

F.1.araisedInability or Unwillingness to Satisfy Debts
F.1.craisedA History of Not Meeting Financial Obligations

Mitigating

F.2.bappliedConditions That Resulted in the Financial Problem Were Largely Beyond the Person's Control
F.2.dappliedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts

Key Rule Quoted

“The protection of the national security is the paramount consideration.”

Procedural Posture

SOR issuedMay 9, 2015
Answer filedAug 12, 2015Applicant requested decision on written record.
Hearing held—No hearing; decision made on written record.
Decision dateApr 20, 2016Decision on remand.

Cite For

Resolution of Multiple Financial Debts Under Guideline F
Good-faith Efforts to Repay Debts as a Mitigating Factor
Impact of Unemployment on Financial Obligations

Editorial summary generated for research. Not legal advice; not a prediction. Verify against the full decision before relying on any quoted language.

Standardized Decision Profile

SEAD-4 Guideline F · descriptive summary of a decided case

Posture: Decision on RecordDecided: granted

The judge found that the applicant had financial concerns under Guideline F but ultimately ruled in favor of the applicant, determining that the applicant had resolved his debts and acted responsibly during periods of unemployment. The applicant's efforts to repay debts and the resolution of financial obligations were credited as mitigating factors.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant owed a bank on a home mortgage. The mortgage balance is $247,990, and the monthly payments were past due in the amount of $19,204. The debt was resolved in June 2012. $247,990	For Applicant	Mortgage or Home Loan Debt	Admitted	—	—	—
1.b	Applicant owed $622 on a credit card. The credit report states the account was charged off and paid. This debt is resolved. $622	For Applicant	Credit Card Debt	Admitted	—	—	—
1.c	Applicant owed a debt collector $1,274 on a credit card. The debt became delinquent when Applicant was unemployed. The credit report shows that the debt is paid. This debt is resolved. $1,274	For Applicant	Credit Card Debt	Admitted	—	—	—
1.d	Applicant owed a university for tuition the amount of $1,157. The credit report states this debt is a paid charge off. This debt is resolved. $1,157	For Applicant	Student Loan Debt	Admitted	—	—	—
1.e	Applicant owed a bank $810. The credit report shows Applicant disputed the debt and the creditor charged it off. The debt is now showing as a paid charge off account. It is resolved according to the latest credit report. $810	For Applicant	Unspecified Financial	Admitted	—	—	—
1.f	Applicant owed a bank on a real estate mortgage with a loan balance of $146,274 and a past-due monthly payment of $2,833. The September 28, 2015 credit report shows the account is paid as specified in the loan agreement. This debt is resolved. $146,274	For Applicant	Mortgage or Home Loan Debt	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. 14-06592 ) ) Applicant for Security Clearance )

For Government: Adrienne Strzelczyk, Esquire, Department Counsel For Applicant: Pro se

05/12/2016 ______________

Decision on Remand ______________

HOWE, Philip S., Administrative Judge:

On February 28, 2012, Applicant submitted his Electronic Questionnaires for Investigations Processing (e-QIP). On May 9, 2015, the Department of Defense Consolidated Adjudications Facility (DODCAF) issued Applicant a Statement of Reasons (SOR) detailing security concerns under Guideline F. The action was taken under Executive Order 10865, Safeguarding Classified Information Within Industry (February 20, 1960), as amended; Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG) effective within the Department of Defense on September 1, 2006.

Applicant answered the SOR in writing on August 12, 2015. Applicant requested his case be decided on the written record in lieu of a hearing. On September 28, 2015, Department Counsel submitted the Department's written case. A complete copy of the file of relevant material (FORM), consisting of Items 1 to 6, was provided to the Applicant on September 28, 2015. He was given the opportunity to file objections and submit material in refutation, extenuation, or mitigation. Applicant received the file on October 13, 2015.

Applicant did not file a Response to the FORM within the 30 day time allowed that would have expired on November 12, 2015.

Department Counsel submitted six Items in support of the SOR allegations. Item 3 is inadmissible. It will not be considered or cited as evidence in this case. It is the summary of an unsworn interview of Applicant conducted by an interviewer from the Office of Personnel Management on April 23, 2012. Applicant did not adopt it as his own statement, or otherwise certify it to be accurate. Under Directive ¶ E3.1.20, this Report of Investigation summary is inadmissible in the absence of an authenticating witness. In light of Applicant’s admissions, it is also cumulative.

I received the case assignment on December 18, 2015. I issued a decision on February 3, 2016, finding Applicant was not eligible for a security clearance.

PROCEDURAL MATTERS

Applicant appealed the denial to the DOHA Appeal Board (Board). On April 20, 2016, the Board remanded the decision for reconsideration of the documents submitted as Items 4-6 to determine which debts were paid. Based upon reconsideration of the pleadings and exhibits, eligibility for access to classified information is granted.

FINDINGS OF FACT

Applicant admitted the allegations in the SOR. There are six financial allegations. (Items 1, 2)

Applicant is 34 years old, married, and has one child. He served six years in the U.S. Air Force, from December 2001 to December 2007. Since leaving active military service in 2007 he worked for a company that terminated him when he took a job with another defense contractor. At his first civilian job he would work four months and be unemployed for three months. He would collect unemployment insurance and have any money he saved from working the four months. Therefore, he would work eight months of every year. The only e-QIP in the file is from September 2012 and Applicant states in it his “current employment” is from October 2007 to “present” which would mean September 2012, His debts started being delinquent in 2012. Applicant did not provide any information about the current terms and conditions of his present employment. However, in his Answer dated August 12, 2015, he reiterated he was unemployed for four months. (Answer; Items 1, 2)

Applicant owed a bank on a home mortgage (Subparagraph 1.a). The mortgage balance is $247,990, and the monthly payments were past due in the amount of $19,204. Applicant’s Answer states he was told by his mortgage lender that to take advantage of a short sale procedure he would have to stop paying on his mortgage. He did so and the house was sold in a short sale. The credit report of September 28, 2015, states the house was sold and the balance owed has been paid. The debt was resolved in June 2012. This debt is resolved. (Items 1, 2, 4-6)

Applicant owed $622 on a credit card (Subparagraph 1.b). The credit report of September 28, 2015, states the account was charged off and paid. Applicant’s Answer states he paid off the debt. This debt is resolved. (Items 1, 2, 4-6)

Applicant owed a debt collector $1,274 on a credit card (Subparagraph 1.c). The debt became delinquent in that time period when Applicant was unemployed. The credit reports and Applicant contend he paid off this debt. The September 28, 2015 credit report shows that the debt is paid. This debt is resolved. (Items 1, 2, 4-6)

Applicant owed a university for tuition the amount of $1,157 (Subparagraph 1.d). Applicant admits this debt because the G.I. Bill did not cover this expense and he was unemployed making him unable to pay the debt. The credit report of October 7, 2014, states this debt is charged off and not paid. The September 28, 2015 credit report states the debt is a paid charge off. This debt is resolved. (Items 1, 2, 4-6)

Applicant owed a bank $810 (Subparagraph 1.e). He admitted the debt and attributed his inability to repay it to the four month unemployment period between his job with his current employer and his former employer. The debt delinquency started in December 2012. The credit report of September 28, 2015, shows Applicant disputed the debt and the creditor charged it off. The debt is now showing as a paid charge off account. It is resolved according to the latest credit report. (Items 1, 2, 4 (at account #7, and 5, 6)

Applicant owed a bank on a real estate mortgage with a loan balance of $146,274 and a past-due monthly payment of $2,833 (Subparagraph 1.f). Applicant admits this debt and was not able to pay it because he was unemployed for a four month period. The September 28, 2015 credit report shows the account is paid as specified in the loan agreement. This debt is resolved. (Items 1, 2, 4 (at account #7, 5, 6)

Applicant did not submit any documentation that he has participated in credit counseling or budget education. He provided no evidence concerning the quality of his job performance. He submitted no character references or other evidence tending to establish good judgment, trustworthiness, or reliability. I was unable to evaluate his credibility, demeanor, or character in person since he elected to have his case decided without a hearing.

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, the administrative judge applies the guidelines in conjunction with the factors listed in AG ¶ 2 describing the adjudicative process. The administrative judge's overarching adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶ 2(c), the entire process is a conscientious scrutiny of a number of variables known as the Awhole-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. AG ¶ 2(b) requires that A[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.

According to Directive & E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive & E3.1.15, an “applicant is responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by the applicant or proven by Department Counsel, and has the ultimate burden of persuasion as to obtaining a favorable clearance decision.” A person who seeks access to classified information enters into a fiduciary relationship with the Government predicated upon trust and confidence. This relationship transcends normal duty hours and endures throughout off-duty hours. The Government reposes a high degree of trust and confidence in individuals to whom it grants access to classified information. 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. 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 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 at AG ¶ 19 contains nine disqualifying conditions that could raise security concerns. From these nine conditions, two conditions are applicable to the facts found in this case:

(a) inability or unwillingness to satisfy debts; and

From 2012 to the present, Applicant accumulated six delinquent debts, totaling $25,900, which remained unpaid or unresolved when the SOR was issued. These two disqualifying conditions are established.

The guideline in AG ¶ 20 contains six conditions that could mitigate security concerns arising from financial difficulties. Two mitigating conditions may apply: (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; and

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

AG ¶ 20 (b) would apply if the loss of employment were shown by Applicant to have a substantial effect on his ability to repay his debts. In the past seven years, Applicant was unemployed for four months at some time, he claims. The termination of employment by his previous employer when he obtained a position with a defense contractor was unforeseen and beyond his control. He had the new job commitment and was awaiting his security clearance. He continued to pay what debts he could. He met his burden of proof of acting responsibly under the circumstances.

Applicant proved AG ¶ 20 (d) applied because he did show that he made good- faith efforts to repay the debts with what funds he had during his four months of unemployment. The three credit reports show his continuing efforts to pay his debts for the past several years. This mitigating condition applies.

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 relevant 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 considered the potentially disqualifying and mitigating conditions in light of all facts and circumstances surrounding this case. Applicant was an adult when he incurred the debts. He suffered an unforeseen four month period of unemployment when he changed employers that adversely affected his ability to repay his debts at that time. Now he has rectified the situation and has resolved or is resolving his remaining debts.

Overall, the record evidence leaves me without questions or substantial doubts as to Applicant's eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant mitigated the security concerns arising under the guideline for Financial Considerations.

FORMAL FINDINGS

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

Paragraph 1, Guideline F: FOR APPLICANT

Subparagraphs 1.a to 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.

_________________ PHILIP S. HOWE Administrative Judge