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ISCR Case 15-01218.h1 — CASE

ISCR Case 15-01218.h1granted

Case Headnote

ISCR Case No. 15-01218.h1

grantedMar 30, 2016· Hon. Robert Robinson Gales· hearing

Summary

A 41-year-old sheet metal mechanic employed by a defense contractor was granted a security clearance despite concerns under Guideline F (Financial Considerations). The applicant's financial difficulties primarily stemmed from co-signing student loans for his disabled sister, which he did not intend to financially support.

The Statement of Reasons detailed a 2013 judgment for $55,070, along with nine separate Sallie Mae/Navient student loans charged off in August 2010, with a combined high credit of $41,760 and an increased unpaid balance of $50,116. Additional charged-off student loans included amounts with high credits of $19,096, $20,206, $19,081, $15,871, $7,789, and $6,438. Other financial issues included a department store charge account with a past-due balance of $1,602, charged off in 2014, and two other charged-off accounts with high credits of $4,436 and $2,298.

The decision to grant the clearance was based on several mitigating factors. The applicant demonstrated that the financial problems were largely beyond his control, as they originated from co-signing loans for his sister. He took proactive steps to manage his finances, including distancing himself from his family due to the financial strain and completing financial education courses. The applicant also showed a stable income and responsible financial management, leading to the favorable outcome.

Why the Applicant Prevailed

The applicant's financial issues were primarily due to co-signing loans for his sister, which he did not intend to support her financially.
The applicant distanced himself from his family due to the financial strain and took proactive steps to manage his finances.
The applicant completed financial education courses and demonstrated a stable income and responsible financial management.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(a)appliedBehavior Happened Long Ago or Infrequently
AG ¶ 20(b)appliedConditions Largely Beyond the Person's Control
AG ¶ 20(c)appliedReceived Counseling and Evidence of Resolution

Key Rule Quoted

“Eligibility for a security clearance and access to classified information is granted.”

Procedural Posture

SOR issuedAug 21, 2015
Answer filedSep 15, 2015
Hearing heldNov 19, 2015
Decision dateMar 30, 2016

Cite For

Mitigation of Financial Issues Under Guideline F
Impact of Family Obligations on Financial Stability
Importance of Proactive Financial Management and Education in Security Clearance Cases

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 mitigated the financial concerns raised under Guideline F, resulting in a decision to grant eligibility for a security clearance. The applicant's financial issues stemmed from co-signing student loans for a family member, which were ultimately resolved through a disability discharge program.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	2013 judgment for $55,070 on a loan with a high credit of $47,700 and an unpaid balance of $59,869 $55,070	For Applicant	Judgment Against Applicant	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Nine separate student loans with Sallie Mae/Navient that had been charged off in August 2010 with a high credit of $41,760, a past-due balance of $14,260, and a charged-off amount of $41,928, with an increased unpaid balance of $50,116 $50,116	For Applicant	Student Loan Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	Charged off student loan with a high credit of $19,096, a past-due balance of $8,409, and a charged-off amount of $24,382, with an increased unpaid balance of $25,204 $25,204	For Applicant	Student Loan Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	Charged off student loan with a high credit of $20,206, a past-due balance of $6,900, and a charged-off amount of $23,705, with an increased unpaid balance of $24,249 $24,249	For Applicant	Student Loan Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	Charged off student loan with a high credit of $19,081, a past due balance of $7,406, and a charged off amount of $23,404, with an increased unpaid balance of $24,073 $24,073	For Applicant	Student Loan Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	Charged off student loan with a high credit of $15,871, a past-due balance of $6,160, and a charged-off amount of $15,956, with an increased unpaid balance of $20,022 $20,022	For Applicant	Student Loan Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	Charged off student loan with a high credit of $7,789, a past-due balance of $3,891, and a charged-off amount of $7,820, with an increased unpaid balance of $9,346 $9,346	For Applicant	Student Loan Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	Charged off student loan with a high credit of $6,438, a past-due balance of $1,838, and a charged-off amount of $7,322, with an increased unpaid balance of $7,460 $7,460	For Applicant	Student Loan Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i	Department store charge account with a past-due balance of $1,602 and an unpaid balance of $6,509, charged off in 2014 $6,509	For Applicant	Credit Card Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.j	Charged off account with a high credit of $4,436, a past-due balance of $1,870, and a charged-off amount of $5,045, with an increased unpaid balance of $5,139 $5,139	For Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.k	Charged off account with a high credit of $2,298, a past-due balance of $1,067, and a charged-off amount of $2,733, with an increased unpaid balance of $2,800 $2,800	For Applicant	Unspecified Financial	Denied	(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. 15-01218 ) Applicant for Security Clearance )

For Government: Richard Stevens, Esquire, Department Counsel For Applicant: Pro se

03/30/2016 ______________

STATEMENT OF CASE

______________

GALES, Robert Robinson, Administrative Judge:

Applicant mitigated the security concerns regarding financial considerations. Eligibility for a security clearance and access to classified information is granted.

Statement of the Case

On April 23, 2014, Applicant applied for a security clearance and submitted an Electronic Questionnaire for Investigations Processing (e-QIP) version of a Security Clearance Application.1 On August 21, 2015, the Department of Defense (DOD) Consolidated Adjudications Facility (CAF) issued a Statement of Reasons (SOR) to him, under Executive Order 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended and modified; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended and modified (Directive); and the Adjudicative Guidelines for Determining Eligibility For Access to Classified Information (December 29, 2005) (AG) applicable to all adjudications and other determinations made under the Directive, effective September 1, 2006. The SOR alleged security concerns under Guideline F (Financial Considerations), and detailed reasons why the DOD adjudicators were unable to find that it is clearly consistent with the national interest to grant or continue a security clearance for Applicant. The SOR recommended referral to an administrative judge to determine whether a clearance should be granted, continued, denied, or revoked.

Applicant received the SOR on August 25, 2015. On September 15, 2015, Applicant responded to the SOR allegations and requested a hearing before an administrative judge. Department Counsel indicated the Government was prepared to proceed on October 19, 2015. The case was assigned to me on October 26, 2015. A Notice of Hearing was issued on October 28, 2015. I convened the hearing as scheduled on November 19, 2015.

During the hearing, four Government exhibits (GE 1 through GE 4) and two Applicant exhibits (AE A and AE B) were admitted into evidence without objection.2 Applicant testified. The transcript (Tr.) was received on December 2, 2015. I kept the record open to enable Applicant to supplement it. Applicant took advantage of that opportunity. He timely submitted a number of documents, which were marked as Applicant exhibits (AE) C through AE O and admitted into evidence without objection. The record closed on January 27, 2016.

FINDINGS OF FACT

In his Answer to the SOR, while not specifically using the terms “admit” or “deny,” Applicant superficially acknowledged and generally addressed, through a statement from his sister, the factual allegations pertaining to financial considerations in the SOR (¶¶ 1.a. through 1.k.). During the hearing, Applicant entered denials for all of the allegations.3 Applicant’s answers are incorporated herein as findings of fact. After a complete and thorough review of the evidence in the record, and upon due consideration of same, I make the following additional findings of fact:

Applicant is a 41-year-old employee of a defense contractor. He has been a sheet metal mechanic since April 2014.4 A 1993 high school graduate,5 Applicant subsequently completed one year of a technical course, but did not complete the requirements for a degree.6 He enlisted in the U.S. Naval Reserve in August 1993 and served honorably on active duty until he was released in August 1995 and transferred to the U.S. Naval Reserve (inactive) where he remained until August 2000.7 He has never held a security clearance.8 Applicant has never been married, but he has resided with his fiancée/cohabitant since March 2005.9 He has two children, born in 1997 and 2002, respectively.10

Military Service

During his military service, Applicant deployed to the Persian Gulf for six months in 1994.11 He was awarded the National Defense Service Medal, the Sea Service Deployment Ribbon, and the Southwest Asia Service Medal with Bronze Star.12

Financial Considerations13

Although Applicant was the youngest sibling, he was generally considered the most stable family member – an easy target – because he had good credit, money saved, and a good job. In that vein, there was nothing unusual about Applicant’s finances until he responded positively to the request of his wheelchair-bound disabled older sister in 2006 that he co-sign on educational loans for what he was told were grants for disabled students.14 It was his intention to help her, but never to support her.15 After his sister withdrew from college in 2011, he learned that the grants were actually loans.16 He first learned that the loans were not being addressed when he started to receive delinquency letters from Sallie Mae and its successor organization Navient. Applicant tried to persuade his sister to resolve her student loans, but she informed him that she was unable to do so because she was disabled and could not find a good job to generate funds sufficient to pay her loans. At that point, it appears that she was eligible for forbearance – a cessation of payment for a limited period of time for borrowers experiencing short-term problems managing student loan payments – or even other possible alternatives. But, she took no action. In addition, Applicant’s mother kept cautioning, pleading, and begging him to be patient, and to give her daughter the opportunity to resolve the issue. Applicant was in no position to take over the debts because of his own family obligations.

As a result of his sister’s withdrawal from school and her failure to make the required monthly payments on her student loans, those loans became delinquent and were placed into a default status. Loans were churned: charged off and transferred to other servicing agents, repeatedly. Applicant’s May 2014 and December 2014 credit reports reflect nine separate student loans with Sallie Mae/Navient that had been charged off in August 2010: (SOR ¶ 1.b.) with a high credit of $41,760, a past-due balance of $14,260, and a charged-off amount of $41,928, with an increased unpaid balance of $50,116; (SOR ¶ 1.c.) with a high credit of $19,096, a past-due balance of $8,409, and a charged-off amount of $24,382, with an increased unpaid balance of $25,204; (SOR ¶ 1.d.) with a high credit of $20,206, a past-due balance of $6,900, and a charged-off amount of $23,705, with an increased unpaid balance of $24,249; (SOR ¶ 1.e.) with a high credit of $19,081, a past due balance of $7,406, and a charged off amount of $23,404, with an increased unpaid balance of $24,073; (SOR ¶ 1.f.) with a high credit of $15,871, a past-due balance of $6,160, and a charged-off amount of $15,956, with an increased unpaid balance of $20,022; (SOR ¶ 1.g.) with a high credit of $7,789, a past-due balance of $3,891, and a charged-off amount of $7,820, with an increased unpaid balance of $9,346; (SOR ¶ 1.h.) with a high credit of $6,438, a past- due balance of $1,838, and a charged-off amount of $7,322, with an increased unpaid balance of $7,460; (SOR ¶ 1.j.) with a high credit of $4,436, a past-due balance of $1,870, and a charged-off amount of $5,045, with an increased unpaid balance of $5,139; and (SOR ¶ 1.k.) with a high credit of $2,298, a past-due balance of $1,067, and a charged-off amount of $2,733, with an increased unpaid balance of $2,800.

Those same credit reports list student loans with a variety of lenders and servicing agents reflecting accounts that were charged off, transferred to other servicing agents, transferred to recovery, returned as government claims, or sold, for which there are no remaining balances. There are three separate education loan accounts with National Collegiate Trust, not a lender or a guarantor, but an entity that files student loan lawsuits on private student loans against borrowers. There is a 2013 judgment for $55,070 on a loan with a high credit of $47,700 and an unpaid balance of $59,869 (SOR ¶ 1.a.).

In early 2014, Applicant’s sister returned to school, and Applicant did not hear anything further about the loans. As a result of his sister’s actions and subsequent inaction, as well as his mother’s attitude in protecting her daughter but not caring about Applicant’s credit and good name, relations between Applicant and his mother and sister became strained. He distanced himself from them and found it too uncomfortable to visit the family home where his mother and sister resided.

It is unclear when Applicant’s sister became aware of the possibility of loan forgiveness, cancellation, and discharge options. She advised Applicant that she was working with a government agency that would assist her in getting the student loans resolved. In June 2014, she was directed to seek medical confirmation of a total and permanent disability (TPD). On November 3, 2015, Applicant’s sister applied for relief under the TPD discharge program, claiming to be disabled and on disability. Under that program, a physician must certify that the borrower (Applicant’s sister) is unable to engage in any substantial gainful activity by reason of a medically determinable physical or mental impairment that (1) can be expected to result in death; (2) has lasted for a continuous period of not less than 60 months; or (3) can be expected to last for a continuous period of not less than 60 months. On December 11, 2015, the student loans were placed into a forbearance status until November 18, 2018.17 On December 28, 2015, the application under TPD was approved.18 The effect of the discharge is as follows:19

After being notified that the Department has approved [the] discharge request, [the borrower’s] loan holders will transfer [the] loans . . . to [the Department] for discharge. [The borrower] will then be subject to a 3-year post-discharge monitoring period that begins on the date the discharge is approved. There are requirements that [the borrower] must meet during the post-discharge monitoring period. . . .

Applicant also experienced another financial problem because of the actions of his mother and his sister. In 1996, he opened and briefly used a department store charge account with a low credit limit. He routinely paid it off. His mother had access to the account card and he thought she had closed it. However, at some point, Applicant’s mother shared his personal data, and possibly the card, with his sister, and without his knowledge or permission, his sister either reopened the account or simply used the account card to make substantial purchases without Applicant’s knowledge or authorization. Applicant’s sister apparently failed to make any payments, and the account, with a past-due balance of $1,602 and an unpaid balance of $6,509 was charged off in 2014 (SOR ¶ 1.i.). When Applicant learned what had happened, he threatened to press charges against his sister, but his mother urged him not to and talked him out of it. The two credit reports list three accounts with the same department store, all with different account numbers, and all opened in 1996. One of the cards was apparently reported lost and the account was closed in 2009. On November 18, 2015, the department store reported that Applicant’s account, with an account number different from the three in the credit reports, had been closed with a zero balance.20

In December 2015, Applicant completed a series of finance-related courses: wise use of credit; road map to financial freedom; preventing foreclosure; understanding credit reports; budget 911; identity theft prevention; budgeting 101; and power of paycheck planning.21

On December 16, 2015, Applicant completed a Personal Financial Statement which reflected a net monthly income of $4,862.40; normal monthly expenses of $1,653; and other financial obligations (credit cards and a loan) of $314. His net monthly remainder was approximately $3,291.70, available for discretionary savings or spending.22 He noted that because he is not married, he did not include the finances of his fiancée/cohabitant. He has no other delinquent accounts.

Work Performance and Character References

Applicant’s 2015 annual performance evaluation indicates that he has met or exceeded all goals.23 A project supervisor is effusive in his praise for Applicant. He characterized Applicant as sticking out from the crowd because of his dedication and astute execution of duties, who can be trusted with anything he says.24 Other individuals describe Applicant’s importance to the community, especially dealing with children, where he mentors and volunteers as the head coach of his son’s basketball team.25

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.”26 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. The President has authorized the Secretary of Defense or his designee to grant an applicant eligibility for access to classified information “only upon a finding that it is clearly consistent with the national interest to do so.”27

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the AG. In addition to brief introductory explanations for each guideline, the AG list potentially disqualifying conditions and mitigating conditions, which are used in evaluating an applicant’s eligibility for access to classified information.

An administrative judge need not view the guidelines as inflexible, ironclad rules of law. Instead, acknowledging the complexities of human behavior, these guidelines are applied in conjunction with the factors listed in the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. 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 meaningful decision.

In the decision-making process, facts must be established by “substantial evidence.”28 The Government initially has the burden of producing evidence to establish a potentially disqualifying condition under the Directive, and has the burden of establishing controverted facts alleged in the SOR. Once the Government has produced substantial evidence of a disqualifying condition, under Directive ¶ E3.1.15, the applicant has the burden of persuasion to present evidence in refutation, explanation, extenuation or mitigation, sufficient to overcome the doubts raised by the Government’s case. The burden of disproving a mitigating condition never shifts to the Government.29

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 as well. It is because of this special relationship that the Government must be able to repose a high degree of trust and confidence in those 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 as to potential, rather than actual, risk of compromise of classified information. Furthermore, “security clearance determinations should err, if they must, on the side of denials.”30 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.”31 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 as to Applicant’s allegiance, loyalty, or patriotism. It is merely an indication the Applicant has or has not met the strict guidelines the President and the Secretary of Defense have established for issuing a clearance. In reaching this decision, I have drawn only those conclusions that are reasonable, logical, and based on the evidence contained in the record. Likewise, I have avoided drawing inferences grounded on mere speculation or conjecture.

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 notes several conditions that could raise security concerns. Under AG ¶ 19(a), an “inability or unwillingness to satisfy debts” is potentially disqualifying. Similarly, under AG ¶ 19(c), a “history of not meeting financial obligations” may raise security concerns. Applicant’s financial problems arose after he agreed to co-sign educational loans for his older sister. The loans became delinquent and were charged off and placed into a default status. A charge account also became delinquent. AG ¶¶ 19(a) and 19(c) apply.

The guideline also includes examples of conditions that could mitigate security concerns arising from financial difficulties. Under AG ¶ 20(a), the disqualifying condition may be mitigated where “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.” Also, under AG ¶ 20(b), financial security concerns may be mitigated where “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.” Evidence that “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” is potentially mitigating under AG ¶ 20(c). Similarly, AG ¶ 20(d) applies where the evidence shows “the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.”32 Under AG ¶ 20(e) it is potentially mitigating if “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.”

AG ¶¶ 20(a), 20(b), 20(c), 20(d), and 20(e) apply. Applicant’s financial problems were not caused by his frivolous or irresponsible spending, and he did not spend beyond his means. Instead, those financial problems were largely beyond his control. The youngest sibling, he was generally considered the most stable family member – an easy target – because he had good credit, money saved, and a good job. In that vein, there was nothing unusual about Applicant’s finances until he responded positively to the request of his wheelchair-bound disabled older sister in 2006 that he co-sign on educational loans for what he was told were grants for disabled students. It was his intention to help her, but never to support her. He subsequently learned that the grants were actually loans. Applicant tried to persuade his sister to resolve her student loans, but she could not. His mother kept pleading with him to be patient in dealing with his sister, and he tried. The loans were churned. Different lenders and servicing agents entered the picture, making his credit reports reflect many more loans than there actually were. Eventually, his sister learned of some alternative resolution plans and she applied for discharge under the federal TPD discharge program. Her application was granted, and the student loans were discharged, along with Applicant’s responsibility under them.

Applicant also experienced problems when his mother allowed his sister to gain access to his personal data or gave her one of Applicant’s department store charge cards. Applicant had not given them permission to share his information or account. His sister’s actions in using the card and running up the balance was without Applicant’s knowledge or permission. The account is now closed and the balance is zero. While it does not appear that Applicant made any payments on the student loans or the department store account, he seemingly managed to motivate his sister to somehow resolve everything.

Applicant received financial counseling on a number of different issues. He has no other delinquent accounts in his name. There are clear indications that Applicant’s financial problems are under control. Applicant’s actions, under the circumstances confronting him, do not cast doubt on his current reliability, trustworthiness, or good judgment.33

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. Moreover, I have evaluated the various aspects of this case in light of the totality of the record evidence and have not merely performed a piecemeal analysis.34

There is some evidence against mitigating Applicant’s conduct. Applicant co- signed student loans and was presumed to be aware of his responsibilities as a co- signer. When those loans became delinquent, he became jointly and severally responsible for satisfying the repayment conditions. The loans were placed into a default status. A department store charge account also became delinquent.

The mitigating evidence under the whole-person concept is more substantial. Applicant is a military veteran, a good and involved parent, and a family member who offered assistance to his wheelchair-bound disabled older sister. Applicant has an outstanding reputation in the workplace and in the community in which he has resided. Upon learning of his financial situation, Applicant urged his sister to address and resolve it. He received financial counseling. The student loans and the department store charge account delinquencies have been resolved. There are clear indications that Applicant’s financial problems are under control for there are no other delinquencies. His actions under the circumstances confronting him do not cast doubt on his current reliability, trustworthiness, or good judgment. Applicant was, and is, generally considered the most stable family member because he had good credit, money saved, and a good job. Nothing discussed above has caused that reputation to change. Overall, the evidence leaves me without questions and doubts as to Applicant’s eligibility and suitability for a security clearance. For all of these reasons, I conclude Applicant has mitigated the security concerns arising from his financial considerations. See AG ¶ 2(a)(1) through AG ¶ 2(a)(9).

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

Subparagraph 1.a: For Applicant Subparagraph 1.b: For Applicant Subparagraph 1.c: For Applicant Subparagraph 1.d: For Applicant Subparagraph 1.e: For Applicant Subparagraph 1.f: For Applicant Subparagraph 1.g: For Applicant Subparagraph 1.h: For Applicant Subparagraph 1.i: For Applicant Subparagraph 1.j: For Applicant Subparagraph 1.k: 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.

________________________ ROBERT ROBINSON GALES Administrative Judge

FOOTNOTES

1 GE 1 (e-QIP, dated April 23, 2014). 2 AE A was a Discharge Application from the U.S. Department of Education, signed by Applicant’s sister, dated November 3, 2015, consisting of three pages. Because there were no duplicating facilities available in the courthouse and it was unclear if AE A was the original or a duplicate, AE A was returned to Applicant, on loan, to be returned once its significance was established. See Tr. at 58-59. AE A was never returned by Applicant. Nevertheless, while it was never returned, the significance of AE A was minimalized by subsequent documentation reflecting approval of the application that was eventually admitted into evidence without objection. 3 Tr. at 11-12. 4 GE 1, supra note 1, at 9. 5 GE 2 (Personal Subject Interview, dated June 16, 2014), at 3. 6 Tr. at 5. 7 AE H (Certificate of Release or Discharge from Active Duty, dated August 1, 1995); GE 1, supra note 1, at 16-17; GE 2, supra note 5, at 4; Tr. at 29. 8 GE 1, supra note 1, at 29-30.

9 GE 1, supra note 1, at 19. 10 GE 1, supra note 1, at 23-24. 11 Tr. at 49. 12 AE H, supra note 7.

13 General source information pertaining to the financial accounts discussed below can be found in the following exhibits: GE 3 (Combined Experian, TransUnion, and Equifax Credit Report, dated May 17, 2014); GE 4 (Equifax Credit Report, dated December 22, 2014); GE 2, supra note 5. More recent information can be found in the exhibits furnished and individually identified. 14 Tr. at 30-32. 15 Tr. at 33. 16 Tr. at 33. 17 AE C (Account Details – Stafford Loans, dated December 11, 2015); AE D (Account Details – Consolidation Loans, dated December 11, 2015); AE E (Student Loan Obligation Statement, dated December 11, 2015). 18 AE G (Disability Discharge, dated December 28, 2015). 19 U.S. Department of Education, Federal Student Aid website at www.disabilitydischarge.com/faqs, at 6-7. Because there are no consistent, market-wide federal standards for student loan servicing and servicers generally have discretion to determine policies related to many aspects of servicing operations; and because student loan borrowers encounter servicing problems or practices that discourage utilization of alternative repayment plans, including income-driven repayment plans, in September 2015, the Consumer Financial Protection Bureau (CFPB), the U.S. Department of Education, and the U.S. Department of the Treasury issued a Joint Statement of Principles on Student Loan Servicing. That same month, the CFPB issued a lengthy analysis entitled Student Loan Servicing. That analysis discussed many aspects of the problems involved in student loan borrowing and servicing facing borrowers. 20 AE K (Letter, dated November 18, 2015). 21 AE J (Certificates of Achievement, dated December 14, 2015). 22 AE I (Personal Financial Statement, dated December 15, 2015). 23 AE B (Performance Evaluation, dated October 29, 2015). 24 AE O (Character Reference, dated November 19, 2015). 25 AE L (Character Reference, dated July 21, 2015); AE M (Character Reference, dated July 24, 2015); AE N (Character Reference, dated November 23, 2015). 26 Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). 27 Exec. Or. 10865, Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960), as amended and modified. 28 “Substantial evidence [is] such relevant evidence as a reasonable mind might accept as adequate to support a conclusion in light of all contrary evidence in the record.” ISCR Case No. 04-11463 at 2 (App. Bd. Aug. 4, 2006) (citing Directive ¶ E3.1.32.1). “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). 29 See ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 2005). 30 Egan, 484 U.S. at 531. 31 See Exec. Or. 10865 § 7. 32 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)). 33 See ISCR Case No. 09-08533 at 3-4 (App. Bd. Oct. 6, 2010). 34 See U.S. v. Bottone, 365 F.2d 389, 392 (2d Cir. 1966); See also ISCR Case No. 03-22861 at 2-3 (App. Bd. Jun. 2, 2006).