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ISCR Case 15-00820.h1 — CASE

ISCR Case 15-00820.h1granted

Case Headnote

ISCR Case No. 15-00820.h1

grantedMar 15, 2016· Hon. Mark W. Harvey· hearing

Summary

A 40-year-old defense contractor employee’s security clearance was granted despite concerns under Guideline F (Financial Considerations). The applicant had a history of financial difficulties, including a Chapter 7 bankruptcy discharge in October 2007 and multiple delinquent debts totaling $22,648. These debts included various education, telecommunications, medical, and bank debts, as well as an alleged mortgage debt for $15,077.

The applicant demonstrated a commitment to resolving her financial issues. She had paid several debts, established payment plans for others, and made good faith efforts to communicate with creditors. The judge found that the applicant's financial problems were largely beyond her control, primarily due to serious medical issues, including cancer.

Ultimately, the applicant established a track record of debt payment and resolution, and her financial issues were attributed to circumstances largely outside her control. These mitigating factors led to the decision to grant the security clearance.

Why the Applicant Prevailed

The applicant established a track record of debt payment and resolution.
The financial issues were largely due to serious medical problems, including cancer.
The applicant demonstrated good faith efforts to communicate with creditors and 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(a)appliedThe Behavior Happened so Long Ago, Was so Infrequent, or Occurred Under Such Circumstances That It Is Unlikely to Recur
AG ¶ 20(b)appliedThe Conditions That Resulted in the Financial Problem Were Largely Beyond the Person’s Control
AG ¶ 20(d)appliedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts

Key Rule Quoted

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

Procedural Posture

SOR issuedAug 24, 2015
Answer filedSep 17, 2015
Hearing heldFeb 24, 2016Applicant waived her right to 15 days of notice.
Decision dateMar 11, 2016

Cite For

Mitigation of Financial Issues Under Guideline F Due to Medical Circumstances
Good Faith Efforts in Debt Repayment
Whole-person Concept in Security Clearance Evaluations

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, including a bankruptcy discharge and multiple delinquent debts, were mitigated by her efforts to manage her finances and the circumstances surrounding her financial difficulties. The applicant demonstrated a commitment to resolving her debts, leading to a decision to grant her security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant’s nonpriority unsecured debts were discharged under Chapter 7 of the Bankruptcy Code in October 2007.	For Applicant	Bankruptcy Filing	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	Claimed Other
1.b	Four education debts that are past due in the following amounts: $374; $225; $91; and $153. $374	For Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor
1.c	Four education debts that are past due in the following amounts: $374; $225; $91; and $153. $225	For Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor
1.d	A telecommunications debt for $911. $911	For Applicant	Utility or Phone Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor
1.e	An alleged mortgage debt for $15,077. $15,077	For Applicant	Mortgage or Home Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly	Claimed Other
1.f	A medical debt for $132. $132	For Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.g	A medical debt for $95. $95	For Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.h	A medical debt for $261. $261	For Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly	Claimed Other
1.i	A debt resulting from an online university course for $541. $541	For Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.j	A telecommunications debt for $786. $786	For Applicant	Utility or Phone Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor
1.k	A medical debt for $102. $102	For Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly	Claimed Other
1.l	A telecommunications debt for $912. $912	For Applicant	Utility or Phone Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly	Claimed Other
1.m	A medical debt for $177. $177	For Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly	Claimed Other
1.n	An education debt for $585. $585	For Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor
1.o	An education debt for $352. $352	For Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor
1.p	An education debt for $648. $648	For Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor
1.q	An education debt for $3,398. $3,398	For Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor
1.r	A bank debt for $175. $175	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.s	A bank debt for $140. $140	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.t	specific text not stated in this decision	For Applicant	Unspecified Financial	Unknown	(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. 15-00820 ) ) Applicant for Security Clearance

For Government: Benjamin Dorsey, Esq., Department Counsel For Applicant: Pro se

03/15/2016 ___________

STATEMENT OF CASE

___________

HARVEY, Mark, Administrative Judge:

Applicant’s statement of reasons (SOR) alleges discharge of her nonpriority unsecured debts in October 2007 through Chapter 7 of the Bankruptcy Code, and 19 delinquent debts totaling $22,648. Applicant’s delinquent debts were the result of limited income while on short-term disability and her serious medical problems. She paid four SOR debts, and five SOR debts are in payment plans. Five SOR debts do not have payment plans and remain unresolved. The balance owed on her SOR debts is $16,799. Several non-SOR debts are paid or are in current payment plans. She is communicating with her creditors, and has assured she intends to pay her debts. While additional sustained financial effort is necessary, she has established a track record of debt payment and resolution. Financial considerations security concerns are mitigated. Access to classified information is granted.

History of the Case

On August 6, 2014, Applicant completed and signed a Questionnaire for National Security Positions (SF 86). (Government Exhibit (GE) 1) On August 24, 2015, the Department of Defense (DOD) Consolidated Adjudications Facility (CAF) issued an SOR to Applicant pursuant to Executive Order (Exec. Or.) 10865, Safeguarding Classified Information within Industry; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (Directive); and the adjudicative guidelines (AG), which became effective on September 1, 2006. The SOR detailed reasons why the DOD CAF did not find under the Directive that it is clearly consistent with the national interest to grant or continue a security clearance for her, and recommended referral to an administrative judge to determine whether a clearance should be granted, continued, denied, or revoked. (HE 2) Specifically, the SOR set forth security concerns arising under the financial considerations guideline.

On September 17, 2015, Applicant responded to the SOR, and she requested a hearing. On December 4, 2015, Department Counsel was ready to proceed. On January 28, 2016, the case was assigned to me. On February 8, 2016, the Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing, setting the hearing for February 24, 2016. (HE 1) Applicant waived her right to 15 days of notice of the date, time, and location of her hearing. (Tr. 14) The hearing was held as scheduled.

During the hearing, Department Counsel offered five exhibits, and Applicant offered six exhibits, which were admitted into evidence without objection. (Transcript (Tr.) 16-20; Government Exhibit (GE) 1-5; Applicant Exhibit (AE) A-F) On March 3, 2015, DOHA received a copy of the transcript of the hearing. On March 7, 2015, Applicant provided 17 additional exhibits, which were admitted without objection. (AE G- W) The record closed on March 11, 2016. (Tr. 74)

FINDINGS OF FACT

In Applicant’s SOR response, she admitted the SOR allegations in ¶¶ 1.a through 1.t. She also provided extenuating and mitigating information. Applicant’s admissions are accepted as findings of fact.

Applicant is a 40-year-old employee of a defense contractor. (Tr. 6, 20) She has served as a special police officer and held a security clearance for the previous 15 years. (Tr. 8, 23) In 1995, Applicant graduated from high school. (Tr. 6) She needs two additional courses to obtain her associate’s degree in criminal justice. (Tr. 6-8, 21) In 1998, she married, and she has five children, who are ages 8, 11, 16, 22, and 25. (Tr. 6- 7, 20-21; GE 1) Three of her children continue to live in her home. (Tr. 7, 21) Her husband works in construction. (Tr. 8) She has never served in the military. (Tr. 7)

Financial Considerations

Prior to 2007, Appellant was ill, and it was necessary for her to go on short-term disability, significantly reducing her income. After Applicant’s nonpriority unsecured debts were discharged under Chapter 7 of the Bankruptcy Code, Applicant was again ill and had to take several months off from work. (Tr. 33) In August 2015, she was diagnosed with cancer. (Tr. 38) She had cancer treatments and major surgery. (Tr. 38, 69; SOR response) She is currently taking medication to ensure her cancer remains in remission. (Tr. 68)

Applicant’s gross monthly salary is about $4,500 and her net monthly income is about $3,200. (Tr. 24) Her husband’s net monthly income is about $2,800. (Tr. 24) Their monthly rent is $1,500. (Tr. 26) They are making car payments on two vehicles. (Tr. 27) She estimated that she and her husband have a remainder of about $1,000 at the end of each month. (Tr. 28)

Applicant’s SOR alleges 19 delinquent debts totaling $22,648. Their status is as follows:

SOR ¶ 1.a indicates, and Applicant agreed, that her nonpriority unsecured debts were discharged under Chapter 7 of the Bankruptcy Code in October 2007. Applicant had pregnancy-related medical problems, and she was unable to work. (Tr. 30) She was receiving short-term disability, which was about half of her pay. (Tr. 30)

SOR ¶¶ 1.b, 1.c, 1.n, and 1.o allege four education debts that are past due in the following amounts: $374; $225; $91; and $153. (Tr. 59-60) The four accounts were transferred and consolidated into the education debts in SOR ¶¶ 1.pand 1.qfor $585 and $352. (Tr. 33-35; SOR response) Applicant has been consistently making $50 monthly payments since November 2014 to address the two student loans. (SOR response at 7-9, 15; AE G) On January 5, 2016, the creditor wrote the balance owed is $648, and the debt is in current status. (AE A) She also owes $3,398 and $1,883 on two other education accounts that are in current status, as she pays $65 monthly to the creditor. (Tr. 60-61; AE S-U)

SOR ¶ 1.dis a telecommunications debt for $911, and SOR ¶ 1.lis a telecommunications debt for $912. (Tr. 35-37) SOR ¶ 1.lis a duplication of the debt in SOR ¶ 1.d. (Tr. 58; SOR response) She purchased a phone for her daughter, who was living in another state. (Tr. 39) Her daughter was involved in an abusive marriage, and Applicant wanted to support her daughter. (Tr. 39-40) Her son-in-law was arrested for the attempted murder of his girlfriend. (Tr. 39-40) Applicant said she made a payment of $160 and brought her account to current status. (AE G)

SOR ¶ 1.e is an alleged mortgage debt for $15,077. Her 2014 credit report shows a Federal Housing Administration (FHA) insured mortgage loan with a balance of $159,962, high credit of $150,460, and past due amount of $15,077. (GE 5) In 2010, Applicant signed a mortgage to enable her to purchase her residence. (AE F at 6) Applicant was unable to pay her mortgage because she was out of work and on short- term disability. She requested a loan modification; however, it was not approved. (Tr. 38-39) Her residence was foreclosed in May 2015.

A lawyer sent Applicant a suggested audit statement indicating as follows: her property was sold for $182,383; the mortgage company charged her $2,500 in attorney fees; she was charged a five percent trustee commission of $9,119; she was also charged more than $10,000 in interest from July 2013 to May 2015; and she owed a deficiency of $7,613. (SOR response at 13-14)1 The suggested audit did not ask her to pay the deficiency. (Tr. 41; SOR response) Her 2015 credit report does not show this debt. Applicant disputed the claim in the letter that she had not paid her mortgage from July 2013 to May 2015. (Tr. 43-45)

The lawyer who generated the suggested audit advised Applicant that he did not seek a deficiency, and the debt was transferred to another entity. (AE G) On February 26, 2016, she contacted the entity. She was advised that her account did not show a deficiency. (AE G) She did not make any payments on this debt because she was unsure of the current holder of the debt. (Tr. 47) In the state where her home was located, the court must approve the audit report, and then the creditor has three years to seek a deficiency judgment.2 There is no evidence that a court approved the deficiency or that a deficiency judgment has been sought. Applicant has maintained contact with the creditor. (Tr. 47-50)

SOR ¶ 1.gis a medical debt for $95. In November 2014, she paid this debt in full. (Tr. 50-51; SOR response at 10; AE C; GE 4)

SOR ¶ 1.his a medical debt for $261. (Tr. 52) Applicant contacted the creditor; however, the creditor wanted a payment over the telephone, and she wanted a letter from the creditor. (Tr. 51-53) She wanted to be sure the bill was not covered by her medical insurance. (Tr. 52)

SOR ¶ 1.i is a debt resulting from an online university course for $541. On September 9, 2015, the university provided an account statement indicating Applicant made multiple payments over several years, and a zero balance was currently owed. (Tr. 53-54; SOR response at 3-6; AE D; AE E) She is enrolling in additional classes at this university to enable her to complete her associate’s degree.

SOR ¶ 1.jand 1.sare two telecommunications debts owed to the same company for $786 and $1,559. Applicant has a payment arrangement with the creditor to pay $62 monthly. (Tr. 54-57, 62) She believed the debt for $1,559 was going to be paid by her new cell phone carrier; however, it was not paid. (Tr. 63) She contacted the creditor, and she is waiting for a settlement offer on the $1,559 debt. (Tr. 63)

SOR ¶¶ 1.f, 1.k, and 1.mare three medical debts for $132, $102, and $177. (SOR response) SOR ¶¶ 1.fand 1.krelated to the same debt. (Tr. 58) Applicant said she paid the medical debt in ¶ 1.fand 1.k; however, she was unable to locate the debt in SOR ¶ 1.m. (Tr. 57-59; AE G) She believed her medical debts were current as she is able to see the doctor, and her doctor’s office advises that she has a zero balance owed. (Tr. 59)

SOR ¶¶ 1.rand 1.tare bank debts for $175 and $140. SOR ¶ 1.ris a duplication of the debt in SOR ¶ 1.t. In November 2015, she paid a $285 debt owed to a bank. (Tr. 61, 64; AE B; AE V) In sum, Applicant’s seven SOR education debts in SOR 1.b., 1.c, 1.i, 1.n, 1.o, 1.p, and 1.qare actually five debts for $5,929 with one being paid and the other four being in current payment plans. The two bank debts in SOR ¶¶ 1.rand 1.tare paid. The three medical debts in SOR ¶¶ 1.f, 1.g, and 1.kare paid, and the two medical debts in SOR ¶¶ 1.hand 1.mare unresolved. The four telecommunications debts in SOR ¶ 1.d, 1.j, 1.l, and 1.sare actually three debts totaling $3,257. One of the telecommunications debts is in a payment plan, and she has not addressed the other two telecommunications debts. SOR ¶ 1.e is a possible $7,613 deficiency resulting from the repossession of her residence.

Applicant’s SOR does not allege Applicant failed to pay her taxes in full when due. Applicant’s federal taxes were delinquent in the amount of $4,000 for the 2014 tax year because she made a mistake on her tax return. (Tr. 65, 70-71) She is paying $100 monthly to the Internal Revenue Service (IRS) and $69 monthly to address state taxes owed for 2014. (Tr. 66) She did not provide any documentation to show the situation concerning her state and federal taxes. (Tr. 67) She was unable to explain the mistake she made on her tax return. (Tr. 65-71)

Applicant has not received financial counseling. (Tr. 68) Her 2015 credit report shows five collection accounts with a total balance of $1,591. (GE 4) One debt for $912 is a telecommunications account, and the other four debts totaling $672 are medical debts. (GE 4) Her 2015 credit report also shows the following past-due debts: education debts for $91, $153, $585, and $352; a credit card debt for $175 and $140; and telecommunications debts for $1,559 and $786. (GE 4) Her 2015 credit report shows numerous accounts in paid or paid-as-agreed status. Her two most prominent debts are for two vehicles in the amounts of $41,910 and $34,867, with monthly payments of $886 and $638 respectively. (GE 4)

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 revised 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. Thus, nothing 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.” Applicant’s history of delinquent debt is documented in her credit reports, SF 86, SOR response, and hearing record. Applicant’s SOR alleges a bankruptcy discharge of her nonpriority unsecured debts in October 2007, and 19 delinquent debts totaling $22,648. Seven of the debts on the SOR were duplications, and the amounts of several debts were different than the amounts alleged on the SOR. The Government established the disqualifying conditions in AG ¶¶ 19(a) and 19(c) requiring additional inquiry about the possible applicability of mitigating conditions.

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;3 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).

AG ¶¶ 20(a) through 20(d) apply. Applicant’s financial problems resulted from Applicant’s serious medical problems including cancer and major surgery. Her medical problems, in turn, resulted in medical debts and loss of income from her employer, as she went from full-time employment to periods of short-term disability.

Applicant’s nonpriority unsecured debts were discharged in October 2007 through Chapter 7 of the Bankruptcy Code. She paid four SOR debts, and five SOR debts are in payment plans. Five SOR debts do not have payment plans and remain unresolved. The balance owed on her SOR debts is $16,799. Several non-SOR debts are paid or are in current payment plans. She is communicating with her creditors, and has assured she intends to pay her debts. She has established a track record of debt payment and resolution.

The creditor holding Applicant’s FHA mortgage-related debt for $7,616 may not be seeking payment. Applicant has the burden of establishing the status of this debt; however, despite making repeated inquiries she has not been able to ascertain the status of this debt. Her most recent credit report does not list this debt. I am confident that if the creditor seeks payment, Applicant will conscientiously endeavor to resolve this debt.

Based on Applicant’s credible and sincere promise to timely pay her debts, future new delinquent debt “is unlikely to recur and does not cast doubt on [Applicant’s] current reliability, trustworthiness, or good judgment,” and “there are clear indications that the problem is being resolved or is under control.” Her payments of some of her debts showed good faith. She has sufficient income to keep her debts in current status and to continue making progress paying her remaining delinquent debts. Her efforts are sufficient to mitigate financial considerations security concerns. Even if Applicant provided insufficient information to mitigate security concerns under AG ¶ 20, she mitigated security concerns under the whole-person concept, infra.

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.

Applicant is a 40-year-old employee of a defense contractor. She has served as a special police officer and held a security clearance for the previous 15 years. She needs two additional courses to obtain her associate’s degree in criminal justice. She has five children, who are ages 8, 11, 16, 22, and 25. Three of her children continue to live in her home. There is no evidence of security violations, abuse of alcohol or drugs, or criminal activity.

Applicant’s nonpriority unsecured debts were discharged in October 2007 through Chapter 7 of the Bankruptcy Code. The SOR alleged 19 delinquent debts totaling $22,648. Seven SOR debts were duplicated by other SOR debts. Her debts were the result of limited income while she was on short-term disability and due to her serious medical problems. She paid four SOR debts, and five SOR debts are in payment plans. Five SOR debts do not have payment plans. The balance owed on her SOR debts is $16,799. Several non-SOR debts are paid or are in current payment plans, including two vehicle loans totaling about $70,000. She is communicating with her creditors, and has assured she intends to pay her debts. She understands that she needs to pay her debts, and the conduct required to retain her security clearance. The Appeal Board has addressed a key element in the whole-person analysis in financial cases stating: . . . 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 has paid off each and every debt listed in the SOR. All that is required is that an applicant demonstrate that he has . . . established a plan to resolve his 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 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.

ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008) (internal citations and quotation marks omitted). Applicant has established a “meaningful track record” of debt re-payment, and I am confident she will maintain her financial responsibility.4

I have carefully applied the law, as set forth in Egan, Exec. Or. 10865, the Directive, and the AGs, to the facts and circumstances in the context of the whole person. Financial considerations security concerns are 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: FOR APPLICANT

Subparagraphs 1.a through 1.t: For Applicant

CONCLUSION

In light of all of the circumstances presented by the record in this case, it is clearly consistent with national security to grant or continue Applicant’s eligibility for a security clearance. Eligibility for access to classified information is granted.

_________________________ MARK HARVEY Administrative Judge

FOOTNOTES

1 Under some programs, FHA will pay some types of closing costs for the sale of real estate in connection with a foreclosure. See United States Department of Housing and Urban Development website, https://portal.hud.gov/hudportal/documents/huddoc?id'DOC 14627.pdf (HE 4). 2General information about the foreclosure process and deficiencies in the state where Applicant lives is available at Nolo Law, http://www.nolo.com/legal-encyclopedia/deficiency-judgments-after- foreclosure-maryland.html. 3The 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)). 4The Government has the option of following-up with more questions about Applicant’s finances. The Government can re-validate Applicant’s financial status at any time through credit reports, investigation, and interrogatories. Approval of a clearance now does not bar the Government from subsequently revoking it, if warranted. “The Government has the right to reconsider the security significance of past conduct or circumstances in light of more recent conduct having negative security significance.” ISCR Case No. 10-06943 at 4 (App. Bd. Feb. 17, 2012). Violation of a promise made in a security context to pay legitimate debts also raises judgment concerns under Guideline E, and may support future revocation of a security clearance. An administrative judge does not have “authority to grant an interim, conditional, or probationary clearance.” 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. 04-03907 at 2 (App. Bd. Sep. 18, 2006) (stating, “The Board has no authority to grant [a]pplicant a conditional or probationary security clearance to allow [the applicant] the opportunity to have a security clearance while [the applicant] works on [his or] her financial problems.”). This footnote does not imply that this decision to grant Applicant’s security clearance is conditional.