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ISCR Case 02-20459.h1 — CASE

ISCR Case 02-20459.h1granted

Case Headnote

ISCR Case No. 02-20459.h1

grantedFeb 15, 2005· Hon. Claude R. Heiny II· hearing

Summary

This case concerns a 36-year-old defense contractor whose security clearance was initially questioned under Guideline F (Financial Considerations) due to approximately $12,000 in past debts. The Statement of Reasons detailed four specific financial allegations: a credit card account with an initial balance of $4,685, a military credit card for $1,925, an auto store credit card for $1,196, and a department store account for $4,443.

The applicant successfully addressed three of these debts. The military credit card and auto store credit card accounts were paid in full, and the department store account was settled, resulting in a zero balance. For the remaining credit card debt, which had a current balance of $3,754.09, the applicant was making consistent monthly payments of $125.07.

The judge determined that the applicant's actions demonstrated a good-faith effort to resolve his financial obligations. This consistent effort to pay down or settle the debts was sufficient to mitigate the security concerns raised by the initial financial issues. Consequently, the applicant's security clearance was GRANTED.

Why the Applicant Prevailed

The applicant paid three of the four debts and is making monthly payments on the remaining debt.
The applicant demonstrated a good-faith effort to resolve his financial obligations.

Conditions Referenced

Disqualifying

E2.A6.1.2.1raisedA History of Not Meeting Financial Obligations.
E2.A6.1.2.3raisedInability or Unwillingness to Satisfy Debts.

Mitigating

E2.A6.1.3.6appliedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts.

Key Rule Quoted

“An applicant is not required to be debt free, but is required to manage his finances so as to meet his financial obligations.”

Procedural Posture

SOR issuedDec 4, 2003
Answer filedFeb 6, 2004
Hearing heldSep 22, 2004
Decision dateFeb 15, 2005

Cite For

Mitigation of Financial Issues Under Guideline F
Good-faith Efforts to Repay Debts
Consideration of Overall Financial Management in Security Clearance Determinations

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 applicant had four debts totaling approximately $12,000, of which three have been paid and he is making monthly payments on the remaining debt. The judge found sufficient evidence to mitigate the financial concerns, resulting in a decision to grant the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	$4,685 on a credit card account, making $125.07 monthly payments. Current balance $3,754.09. $4,685	For Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(c) received/receiving counseling; problem being resolved	Documented Payment Plan with Creditor
1.b	$1,925 on a military credit card account, paid. $1,925	For Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	$1,196 on an auto store credit card account, paid. $1,196	For Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	$4,443 on a department store account, account settled. Balance 0. $4,443	For Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	specific text not stated in this decision	For Applicant	Unspecified Financial	Unknown	—	—	—

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

SYNOPSIS

KEYWORD: Financial

DIGEST: Applicant owed four debts totaling approximately $12,000. He has paid three of the debts and is making monthly payments on the remaining debt. The record evidence is sufficient to mitigate or extenuate the negative security implications stemming from Applicant's finances. Clearance is granted.

CASENO: 02-20459.h1

DATE: 02/15/2005

DATE: February 15, 2005

In Re:

----------------------

SSN: -----------

Applicant for Security Clearance

ISCR Case No. 02-20459

DECISION OF ADMINISTRATIVE JUDGE

CLAUDE R. HEINY

APPEARANCES

SYNOPSIS

Applicant owed four debts totaling approximately $12,000. He has paid three of the debts and is making monthly payments on the remaining debt. The record evidence is sufficient to mitigate or extenuate the negative security implications stemming from Applicant's finances. Clearance is granted.

STATEMENT OF CASE

On December 4, 2003, the Defense Office of Hearings and Appeals (DOHA) issued a Statement of Reasons (SOR) to Applicant, stating that DOHA could not make the preliminary affirmative finding (1) it is clearly consistent with the national interest to grant or continue a security clearance for Applicant. On February 6, 2004, Applicant's answer to the SOR and request for a hearing was received. On September 1, 2004, I was assigned the case. On September 1, 2004, a Notice of Hearing was issued scheduling the hearing which was held on September 22, 2004. The transcript (tr.) of the hearing was received on September 30, 2004. The record was kept open to allow Applicant to submit additional documents, which were received on October 13, 2005. Department Counsel having no objection, the documents were admitted into evidence.

FINDINGS OF FACT

The SOR alleges Financial Considerations. The Applicant admits owing four debts and being declined a debt consolidation loan. Those admissions are incorporated herein as findings of fact. After a thorough review of the whole record, I make the following additional findings of fact:

The Applicant is 36 years old, has worked for a defense contractor since June 1999, and is seeking to maintain a secret security clearance. The SOR alleges Applicant owed four debts totaling approximately $ 12,000. A summary of those debts follows:

Creditor Amount Current Status 1a credit card $4,685 Making $125.07 monthly payments. (App Exs A, M) Current balance $3,754.09. 1b. military credit card $1,925 Paid (App Ex E) 1cauto store credit card $1,196 Paid (App Ex N) 1ddepartment store $4,443 Account Settled. Balance 0.(App Exs G and N) Total debt alleged in $12,249 SOR

In August 2003, Applicant applied for a debt consolidation loan, but was turned down due to past delinquencies, garnishment, and current credit obligations.

In 1998, Applicant's finances became worse when he was overseas in an unaccompanied status. His wife was handling their finances, but did a poor job. Applicant acknowledges he should have taken care of their finances. Also, in 1998, Applicant retired from the Army. Following retirement, the only job he could get paid minimum wages. His wife was unable to work due to medical problems. He has now paid three of the debts he accrued as a result of his income reduction and is making monthly payments on the remaining debt.

POLICIES

The Adjudicative Guidelines in the Directive are not a set of inflexible rules of procedure. Instead they are to be applied by Administrative Judges on a case-by-case basis with an eye toward making determinations that are clearly consistent with the interests of national security. In making overall common sense determinations, Administrative Judges must consider, assess, and analyze the evidence of record, both favorable and unfavorable, not only with respect to the relevant Adjudicative Guidelines, but in the context of factors set forth in section E 2.2.1. of the Directive. The government has the burden of proving any controverted fact(s) alleged in the SOR, and the facts must have a nexus to an Applicant's lack of security worthiness.

The adjudication process is based on the whole person concept. All available, reliable information about the person, past and present, is to be taken into account in reaching a decision as to whether a person is an acceptable security risk. Although the presence or absence of a particular condition for or against clearance is not determinative, the specific adjudicative guidelines should be followed whenever a case can be measured against this policy guidance.

BURDEN OF PROOF

As noted by the United States Supreme Court in Department of Navy v. Egan, 484 U.S. 518, 528 (1988), "no one has a 'right' to a security clearance." 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 occupy a position . . . that will give that person access to such information." Id. at 527. The President has restricted eligibility for access to classified information to "United States citizens . . . whose personal and professional history affirmatively indicates loyalty to the United States, strength of character, trustworthiness, honesty, reliability, discretion, and sound judgment, as well as freedom from conflicting allegiances and potential for coercion, and willingness and ability to abide by regulations governing the use, handling, and protection of classified information." Executive Order 12968, Access to Classified Information § 3.1(b) (Aug. 4, 1995). Eligibility for a security clearance is predicated upon the applicant meeting the security guidelines contained in the Directive.

Initially, the Government must establish, by substantial evidence, that conditions exist in the personal or professional history of the applicant which disqualify, or may disqualify, the applicant from being eligible for access to classified information. See Egan, 484 U.S. at 531. All that is required is proof of facts and circumstances which indicate an applicant is at risk for mishandling classified information, or that an applicant does not demonstrate the high degree of judgment, reliability, or trustworthiness required of persons handling classified information. Where the facts proven by the Government raise doubts about an applicant's judgment, reliability or trustworthiness, then the applicant has the ultimate burden of establishing his security suitability with substantial evidence in explanation, mitigation, extenuation, or refutation, sufficient to demonstrate that despite the existence of guideline conduct, it is clearly consistent with the national interest to grant or continue his security clearance.

Security clearances are granted only when "it is clearly consistent with the national interest to do so." See Executive Orders 10865 § 2 and 12968 § 3.1(b). "Any doubt as to whether access to classified information is clearly consistent with national security will be resolved in favor of the national security." Directive ¶ E2.2.2 "The clearly consistent standard indicates that security clearance determinations should err, if they must, on the side of denials." See Egan, 484 U.S. at 531. Doubts are to be resolved against the applicant.

CONCLUSION

The Government has satisfied its initial burden of proof under Guideline F, (Financial Considerations). A person's relationship with his creditors is a private matter until evidence is uncovered demonstrating an inability or unwillingness to repay debts under agreed upon terms. Absent evidence of strong extenuating or mitigating circumstances, an applicant with a history of serious or recurring financial difficulties is in a position of risk that is inconsistent with the holding of a security clearance. Under Guideline F, an Applicant is not required to be debt free, but is required to manage his finances so as to meet his financial obligations.

The Applicant owed four debts totaling approximately $12,000. Disqualifying Condition (DC) 1. (E2.A6.1.2.1. A history of not meeting financial obligations.) and DC 3. (E2.A6.1.2.3. Inability or unwillingness to satisfy debts.) apply.

Applicant has paid three of the debts (SOR paragraphs 2b, 2.c, and 2.d) and is making $125 monthly payments on the remaining debt (SOR paragraph 1.a), which now has a balance of $3,754.09. Mitigating Conditions (MC) 6. (E2.A6.1.3.6. The individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.) applies.

In August 2003, Applicant was denied a consolidation loan due to the status of his finances at that time. Despite this set back, he has been able to make significant progress in satisfying his debts. I find for Applicant as to financial considerations.

In reaching my conclusions I have also considered: the nature, extent, and seriousness of the conduct; the Applicant's age and maturity at the time of the conduct; the circumstances surrounding the conduct; the Applicant's voluntary and knowledgeable participation; the motivation for the conduct; the frequency and recency of the conduct; presence or absence of rehabilitation; potential for pressure, coercion, exploitation, or duress; and the probability that the circumstance or conduct will continue or recur in the future.

FORMAL FINDINGS

Formal Findings as required by Section 3., Paragraph 7., of Enclosure 1 of the Directive are hereby rendered as follows:

Paragraph 1 Financial Considerations: FOR THE APPLICANT

Subparagraph 1.a.: For the Applicant Subparagraph 1.b.: For the Applicant

Subparagraph 1.c.: For the Applicant

Subparagraph 1.d.: For the Applicant

Subparagraph 1.e.: For the Applicant

DECISION

In light of all the circumstances presented by the record in this case, it is clearly consistent with the national interest to grant or continue a security clearance for the Applicant. Clearance is granted.

Claude R. Heiny

Administrative Judge

1. Required by Executive Order 10865, as amended, and Department of Defense Directive 5220.6 (Directive), dated January 2, 1992, as amended.

FOOTNOTES

FOR GOVERNMENT Edward W. Loughran, Esquire, Department Counsel FOR APPLICANT file:///usr.osd.mil/...omputer/Desktop/DOHA%20transfer/DOHA-Kane/dodogc/doha/industrial/Archived%20-%20HTML/02-20459.h1.htm[6/24/2021 11:01:48 AM] Pro Se