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ISCR Case 14-06963.h1 — CASE

ISCR Case 14-06963.h1granted

Case Headnote

ISCR Case No. 14-06963.h1

grantedMay 23, 2016· Hon. Nichole L. Noel· hearing

Summary

A 40-year-old heavy truck driver and former Air Force member was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The applicant faced allegations regarding approximately $16,000 in delinquent debts, which were primarily attributed to a serious car accident and a period of unemployment between July and November 2013.

The applicant demonstrated significant efforts to resolve these financial obligations. This included rehabilitating a $1,630 student loan, making a $125 down payment in May 2015, and maintaining timely monthly payments since December 2015. Two payday loans totaling $1,600, incurred during unemployment, were paid off in November 2015. Additionally, other accounts totaling $396 were paid.

For medical debts from the accident, initially totaling $12,600, the applicant consolidated several accounts with a creditor, agreeing to a $5,400 settlement. He made a $3,000 down payment and is resolving the remaining $2,200 through $250 monthly payments, which have been timely since January 2016. The judge found that the applicant's actions reflected a good-faith effort to manage his financial obligations, noting that the debts were caused by events beyond his control and that he is now current on all obligations and lives within his means.

Why the Applicant Prevailed

The applicant's delinquent debts were caused by events beyond his control.
He demonstrated a good-faith effort to resolve his delinquent accounts.
The applicant is current on all financial obligations and lives within his means.

Conditions Referenced

Mitigating

AG ¶ 20(b)appliedConditions That May Mitigate Security ConcernsThe applicant's actions demonstrate a good-faith effort to resolve his delinquent accounts.
AG ¶ 20(d)appliedConditions That May Mitigate Security ConcernsThe applicant's finances appear to be under control.

Key Rule Quoted

“Unresolved delinquent debt is a serious security concern because failure to satisfy debts 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.”
— AG ¶ 18

Procedural Posture

SOR issuedJun 10, 2015
Answer filed—
Hearing heldJan 14, 2016Applicant appeared pro se.
Decision dateMay 23, 2016

Cite For

Good-faith Efforts to Resolve Financial Issues Under Guideline F
Impact of Personal Circumstances on Financial Responsibility
Consideration of the Whole-person Concept in Security Clearance Decisions

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's financial issues stemmed from circumstances beyond his control, including a serious car accident and a period of unemployment. The applicant demonstrated a good-faith effort to resolve his debts, leading to a decision to grant his security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant incurred the student loan in 2010 after taking college classes. He began rehabilitating the student loan alleged in SOR ¶ 1.a ($1,630). Applicant made a $125 down payment on the account in May 2015 and has made timely monthly payments since December 2015. The account is in good standing. $1,630	For Applicant	Student Loan Debt	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly	Documented Debt Paid in Full
1.b	The debts alleged in SOR ¶¶ 1.b and 1.g, totaling $1,600, were for two pay-day loans Applicant took out during a short period of unemployment between July and November 2013. Applicant paid them off in November 2015. $1,600	For Applicant	Unspecified Financial	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly	Documented Debt Paid in Full
1.c	Applicant has also paid the accounts alleged in SOR ¶¶ 1.c, 1.i, and 1.j, totaling $396. $396	For Applicant	Unspecified Financial	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly	Documented Debt Paid in Full
1.d	The debts in SOR ¶¶ 1.d, 1.e, 1.f, and 1.h, totaling $12,600, were unpaid bills from the accident. The creditor consolidated the medical debts alleged in SOR ¶¶ 1.d, 1.f, 1.h and agreed to settle the accounts for $5,400. Applicant made a $3,000 down payment on the account and will resolve the remaining balance, now $2,200, through $250 monthly payments. Applicant has made timely payments since January 2016. $12,600	For Applicant	Medical Debt	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly	Documented Payment Plan with Creditor
1.e	In November 2015, Applicant settled SOR ¶ 1.e.	For Applicant	Unspecified Financial	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly	Documented Debt Paid in Full
1.f	The debts in SOR ¶¶ 1.d, 1.e, 1.f, and 1.h, totaling $12,600, were unpaid bills from the accident. The creditor consolidated the medical debts alleged in SOR ¶¶ 1.d, 1.f, 1.h and agreed to settle the accounts for $5,400. Applicant made a $3,000 down payment on the account and will resolve the remaining balance, now $2,200, through $250 monthly payments. Applicant has made timely payments since January 2016. $12,600	For Applicant	Medical Debt	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly	Documented Payment Plan with Creditor
1.g	The debts alleged in SOR ¶¶ 1.b and 1.g, totaling $1,600, were for two pay-day loans Applicant took out during a short period of unemployment between July and November 2013. Applicant paid them off in November 2015. $1,600	For Applicant	Unspecified Financial	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly	Documented Debt Paid in Full
1.h	The debts in SOR ¶¶ 1.d, 1.e, 1.f, and 1.h, totaling $12,600, were unpaid bills from the accident. The creditor consolidated the medical debts alleged in SOR ¶¶ 1.d, 1.f, 1.h and agreed to settle the accounts for $5,400. Applicant made a $3,000 down payment on the account and will resolve the remaining balance, now $2,200, through $250 monthly payments. Applicant has made timely payments since January 2016. $12,600	For Applicant	Medical Debt	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly	Documented Payment Plan with Creditor
1.i	Applicant has also paid the accounts alleged in SOR ¶¶ 1.c, 1.i, and 1.j, totaling $396. $396	For Applicant	Unspecified Financial	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly	Documented Debt Paid in Full
1.j	Applicant has also paid the accounts alleged in SOR ¶¶ 1.c, 1.i, and 1.j, totaling $396. $396	For Applicant	Unspecified Financial	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly	Documented Debt Paid in Full

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. 14-06963 ) Applicant for Security Clearance )

For Government: Jeff Nagel, Esq., Department Counsel For Applicant: Pro se 05/23/2016 ______________

STATEMENT OF CASE

______________

NOEL, Nichole L., Administrative Judge:

Applicant contests the Department of Defense’s (DOD) intent to deny his eligibility for a security clearance to work in the defense industry. Applicant’s delinquent debts were caused by events beyond his control and he acted responsibly to resolve them. He has also demonstrated a good-faith effort to resolve his delinquent accounts. Clearance is granted.

Statement of the Case

On June 10, 2015, the DOD issued a Statement of Reasons (SOR) detailing security concerns under the financial considerations guideline.1 DOD adjudicators were unable to find that it is clearly consistent with the national interest to grant or continue Applicant’s security clearance and recommended that the case be submitted to an administrative judge for a determination whether to revoke or deny Applicant’s security clearance. Applicant timely answered the SOR and requested a hearing. On December 29, 2015, I issued a prehearing order to the parties regarding the exchange and submission of discovery, the filing of motions, and the disclosure of any witnesses.2 Department Counsel provided proposed exhibits to the Applicant in advance of the hearing.3 At the hearing, convened on January 14, 2016, I admitted Government’s Exhibits (GE) 1 through 3 and Applicant’s Exhibits (AE) A through H, without objection. After the hearing, Applicant submitted AE I through L, which are also admitted without objection.4 DOHA received the transcript (Tr.) on January 22, 2016.

FINDINGS OF FACT

Applicant, 40, has worked for a federal contractor as a heavy truck driver since May 2014. He served in the Air Force from 1994 to 2000 and held a security clearance, without incident, during his enlistment. He completed a security clearance application in May 2014, disclosing two delinquent accounts. The ensuing investigation revealed that Applicant owed approximately $16,000 on ten delinquent accounts. Each account was alleged on the SOR and Applicant admitted responsibility for them.5

In 2010, Applicant was involved in a serious car accident that required extensive medical care. As he recovered, he believed that his medical bills were taken care of by his insurance or by his parents, who were helping him through the ordeal. During his interview with the background investigator, Applicant learned that the debts in SOR ¶¶ 1.d, 1.e 1.f, and 1.h, totaling $12,600, were unpaid bills from the accident. After the interview, Applicant pulled copies of his credit reports so that he could learn the full extent of his delinquent debt. In November 2015, he contacted an attorney for help resolving the accounts.6

Applicant took a $10,000 withdrawal from his retirement account to pay down the delinquent accounts, including some not alleged in the SOR. At the end of 2015, Applicant began rehabilitating the student loan alleged in SOR ¶ 1.a ($1,630). He incurred the student loan in 2010 after taking college classes. Applicant made a $125 down payment on the account in May 2015 and has made timely monthly payments since December 2015. The account is in good standing. The debts alleged in SOR ¶¶ 1.band 1.g, totaling $1,600, were for two pay-day loans Applicant took out during a short period of unemployment between July and November 2013. The creditor consolidated the accounts along with a third that was not alleged in the SOR and Applicant paid them off in November 2015. The creditor consolidated the medical debts alleged in SOR ¶¶ 1.d, 1.f, 1.hand agreed to settle the accounts for $5,400. Applicant made a $3,000 down payment on the account and will resolve the remaining balance, now $2,200, through $250 monthly payments. Applicant has made timely payments since January 2016. In November 2015, Applicant settled SOR ¶ 1.e. He has also paid the accounts alleged in SOR ¶¶ 1.c, 1.i, and i.j, totaling $396.7

Applicant lives within his means and is current on all of his financial obligations.8

POLICIES

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines. In addition to brief introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which are to be used 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, administrative judges apply the guidelines in conjunction with the factors listed in 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 “whole-person concept.” The administrative judge must consider all available, reliable information about the person, past and present, favorable and unfavorable, in making a decision.

The protection of the national security is the paramount consideration. AG ¶ 2(b) requires that “[a]ny doubt concerning personnel being considered for access to classified information will be resolved in favor of national security.” In reaching this decision, I have drawn only those conclusions that are reasonable, logical, and based on the evidence contained in the record.

Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, the 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.” The applicant has the ultimate burden of persuasion to obtain a favorable security decision.

A person who seeks access to classified information enters into a fiduciary relationship with the Government predicated upon trust and confidence. This relationship transcends normal duty hours and endures throughout off-duty hours. The Government reposes a high degree of trust and confidence in individuals to whom it grants access to classified information. Decisions include, by necessity, consideration of the possible risk the applicant may deliberately or inadvertently fail to safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation of potential, rather than actual, risk of compromise of classified information. Section 7 of EO 10865 provides that adverse decisions shall be “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive information).

ANALYSIS

Guideline F, Financial Considerations

Unresolved delinquent debt is a serious security concern because failure to “satisfy debts [or] 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.”9 Similarly, an individual who is financially irresponsible may also be irresponsible, unconcerned, or negligent in handling and safeguarding classified information.

The SOR alleges that Applicant owes approximately $16,000 on 10 delinquent accounts. Applicant’s admissions and the credit reports in the record establish the government’s prima facie case that Applicant has a history of not paying his bills.10 Applicant incurred debt due to events beyond his control, a serious car accident in 2010 and a period of unemployment for five months in 2013. He also acted responsibly to resolve the delinquent accounts after he learned of them during his background investigation. Applicant sought professional advice on resolving the accounts. To date, he has rehabilitated the student loan account alleged in SOR ¶ 1.a; arranged a payment plan to his largest creditors holding SOR ¶¶ 1.d, 1.f, and 1.h; settled SOR ¶ 1.b, 1.e, and 1.g; and, paid SOR ¶¶ 1.c, 1.i, and i.jin full. Applicant’s actions also demonstrate a good-faith effort to resolve his delinquent accounts. With the SOR debts resolved, Applicant’s finances appear to be under control.11

After reviewing the record, I have no doubts about his suitability for access to classified information. In reaching this conclusion, I have also considered the whole- person factors at AG ¶ 2(a). Applicant’s delinquent debts are not indicative of reckless or irresponsible behavior. Nor is the delinquent debt and indication that Applicant is incapable of handling, protecting, or safeguarding classified information.

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

Subparagraphs 1.a – 1.j: For Applicant

CONCLUSION

In light of all of the circumstances presented, it is clearly consistent with the national interest to grant Applicant a security clearance. Eligibility for access to classified information is granted.

________________________ Nichole L. Noel Administrative Judge

FOOTNOTES

1 This case is adjudicated under Executive Order (EO) 10865, Safeguarding Classified Information within Industry, signed by President Eisenhower on February 20, 1960, as amended; as well as DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program, dated January 2, 1992, as amended (Directive). In addition, the Adjudicative Guidelines for Determining Eligibility for Access to Classified Information (AG), effective within the Defense Department on September 1, 2006, apply to this case. The AG were published in the Federal Register and codified in 32 C.F.R. § 154, Appendix H (2006). The AG replace the guidelines in Enclosure 2 to the Directive. 2 The prehearing scheduling order is appended to the record as Hearing Exhibit (HE) I. 3 The discovery letter, dated November 30, 2015, is appended to the record as HE II. 4 Correspondence regarding Applicant’s post-hearing submission is appended to the record as HE III. 5 Tr. 19-20, 31; GE 1-3. 6 Tr. 20-23. 7 Tr. 21-22, 31-39, 44; AE A-L. 8 Tr. 29-30. 9 AG ¶ 18. 10 AG ¶19(c). 11 AG ¶¶ 20(b) and (d).