DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ------------------------------------- ) ADP Case No. 13-01252 ) ) Applicant for Public Trust Position ) Appearances For Government: Melvin A. Howry, Esquire, Department Counsel For Applicant: Pro se ______________ Decision ______________ WESLEY, Roger C., Administrative Judge: Based upon a review of the case file, pleadings, and exhibits, Applicant did not mitigate financial concerns. Eligibility for holding a public trust position is denied. Statement of Case On December 19, 2013, the Department of Defense (DoD) issued a Statement of Reasons (SOR) detailing reasons why the DoD could not make the affirmative determination of eligibility for holding a public trust position and recommended referral to an administrative judge to determine whether eligibility to hold a public trust position should be granted, continued, denied, or revoked. The action was taken under Executive Order 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); DoD regulation 5200.2-R, Personnel Security Program (January 1987), as amended (Regulation); and the Adjudicative Guidelines (AGs), implemented by the Department of Defense on September 1, 2006. Applicant responded to the SOR on January 13, 2014, and requested a hearing. The case was assigned to me on February 20, 2014, and was scheduled for hearing on 2 April 23, 2014. The hearing was convened on that date. At hearing, the Government’s case consisted of six exhibits (GEs 1-6). Applicant relied on one witness (herself) and five exhibits (A-E). The transcript (Tr.) was received on May 2, 2014. Procedural Issues Before the close of the hearing, Applicant asked for leave to amend her answer to withdraw her admission of subparagraph 1.e and substitute a denial based on her recollection of filing a return for 2010. Department Counsel indicated his willingness to accept Applicant’s request to the extent of her filing her federal tax return for tax years 2010 and 2013, subject to appropriate documentation for tax year 2010, but not as to tax years 2011 and 2012. Applicant, in turn, requested leave to keep the record open to permit her the opportunity to supplement the record with documented filed federal tax returns for tax years 2010 and 2013, and debt payments on several of her listed debts. For good cause shown, Applicant’s request to amend her answer was granted without prejudice to the Government to renew its objection in the event Applicant did not produce any filed tax returns for 2010 and 2013. Applicant was granted 14 days to supplement the record. (Tr. 57-58) The Government was afforded two days to respond. Within the time permitted, Applicant supplemented the record with a credit consulting agreement, a filed federal tax return for tax year 2010, and correspondence from her tax preparer covering her income levels for tax years 2011 and 2012. Applicant’s submissions were admitted without objection as AEs F through H. Based on Applicant’s post-hearing submission of her 2010 tax return, her admission of subparagraph 1.e of the SOR is amended to reflect her filing of her 2010 federal tax return. (Tr. 55-59) Because Applicant did not file her 2013 federal tax return until after she completed her SOR response (but before the hearing), her failure to provide a copy of her 2013 return does not affect her previous admission to subparagraph 1.e. (Tr. 55-58) Summary of Pleadings Under Guideline F, Applicant allegedly accumulated two judgments, one for $3,329 and another for $2,509, and two delinquent debts exceeding $16,000. Allegedly, she failed to file federal tax returns for tax years 2010 through 2013. In her response to the SOR, Applicant admitted each of the allegations in the SOR. She provided no explanations. Findings of Fact Applicant is a 40-year-old licensed clinical social worker for a health care firm who seeks a determination of eligibility to hold a public trust position with a health care firm with whom she has been employed since September 2013. (GE 2 and AEs A and C; Tr. 51, 75, 91) The allegations covered in the SOR and admitted by Applicant are adopted as relevant and material findings. Additional findings follow. 3 Background Applicant married in May 2009 and separated from her husband in May 2013. (GE 1) She filed for divorce in January 2014, and awaits final disposition. (Tr. 48) Applicant has one child from this marriage. (GEs 1 and 3; Tr. 78-79) She earned a bachelors degree from a recognized university in May 1995 and was awarded a masters degree in social work from another recognized university in May 2002. (GE 1) She has no military service. (GE 1) Following their marriage, Applicant’s husband completed an internship in Costa Rica in the summer of 2010. (AE A; Tr. 81-82) During the summer of 2010, Applicant (who had joined her husband in Costa Rica for part of the summer) and ultimately relocated to Costa Rica to work and raise a family. (AE A; Tr. 78-83) Both she and her husband were granted permanent resident cards in 2012-2013 following the birth of their daughter in March 2011. (Tr. 78-79) Between 2010 and May 2013, Applicant and her husband resided in Costa Rica where her husband started an interior design business. (GEs 1 and 3 and AE A; Tr. 39, 84) Applicant’s finances Applicant first experienced financial difficulties in 2009 after she accompanied her husband who was pursuing advanced education in another state. (Tr. 77-80) For most of the time she spent in this other state she could not find employment. Following their relocation to Costa Rica, Applicant’s husband opened a first bank account in August 2011 with a foreign-based banking institution. (AE A) The account was designed to enable him to pay bills and finance his start-up interior design business after his initial sales position with an interior design firm fell through. (AE A) Ensuing financial hardships and marital difficulties caused Applicant to fall behind with her bills. (AE A) Out of concern for the welfare of her daughter, Applicant deferred her desired return to the United States and did not return to the United States with her daughter until May 2013. (Tr. 39, 84) For most of their two and a half years in Costa Rica, Applicant was either unemployed or earned little money as a partner in her husband’s interior design business. (AEs A and F) Prior to purchasing an existing interior design business in August 2012, she and her husband were living “hand to mouth,” trying to make ends meet and provide for her daughter on the income they earned from the small interior design projects her husband was working on out of his home office. (AE A) Credit reports reveal that Applicant accumulated several delinquent debts during her years in residence in Costa Rica. (GEs 2, 3, and 6 and AE A; Tr. 50-64) She incurred debts with creditors 1.a and 1.b that were subsequently reduced to judgment. One of the judgments relates to a creditor holding a delinquent credit card account. This judgment was taken in March 2013 for $3,329 and was reportedly nullified. (GE 2 and AEs B and G; Tr. 63) The underlying debt remains outstanding, though, and Applicant’s credit counselor is working with creditor 1.a to “come to a 4 mutual agreement.” (AE B) Current prospects for a settlement are promising but not fulfilled to date. When interviewed by an investigator from the Office of Personnel Management (OPM) in September 2013, Applicant promised to address this judgment and resume making payments or pay it off in full. (GE 3) Applicant’s other judgment (creditor 1.b) involves a homeowners association who obtained a judgment against Applicant in August 2011 for $2,509. (GEs 2, 3, and 6) This judgment preceded the foreclosure of Applicant’s first mortgage in July 2012 and remains unsatisfied unless assumed and discharged by the foreclosing first trust deed holder, whose recorded trust deed preceded the judgment holder’s recorded judgment. This creditor 1.b judgment was removed from Applicant’s April 2014 credit report for reasons not entirely clear, and is currently being addressed by Applicant’s credit counselor as well. (Tr. 63-64) Whether it was absorbed by the foreclosed first trust deed is unclear, but unlikely, based on lien priority rules in place in Applicant’s state of residence. (GEs 2 and 6). When asked about this debt by an OPM investigator in September 2013, she committed to working on “correcting this.” (GE 3) Applicant engaged a credit consulting firm in January 2014 to help her implement strategies designed to improve her financial outlook, pay her debts, and build good credit. (AEs B and G; Tr. 46-47) Her financial consultant credited Applicant with being conscientious, hard-working, and serious minded, and positioned to continue her efforts to improve and strengthen her finances. (Tr. 65) Applicant’s credit counselor committed to working with her in resolving her creditor 1.a and creditor 1.b debts. Her credit counselor also confirmed in her April 2014 letter that Applicant was not aware she owed fees to her home owners association until recently. (AE B) This recited time line is at odds with what Applicant told the OPM investigator who interviewed her in September 2013. (GE 3) Inferentially aware of the mistaken information she provided her credit counselor, she submitted an updated letter from her counselor that contained no reference to owed home owners fees. (AE G) Although, Applicant has committed to paying the home owners association judgment in the event it is validated by her credit counselor (AEs B and G; Tr. 64-65, 91), she has never documented payment progress with this debt in the time afforded her to supplement the record. Absent probative evidence to the contrary, creditor 1.b’s listed judgment remains an outstanding debt. Several years before they moved to Costa Rica, Applicant and her husband purchased a town home in her current state of residence. (GE 3 and AEs A and G; Tr. 40) Her credit reports reveal that she and her husband purchased a home in July 2005 for approximately $155,000 and financed their purchase with an 80-20 secured loan that consisted of a first trust deed of $138,000 and a second trust deed (considered a purchase money mortgage) of $17,250. (GEs 2 and 6; Tr. 42) When they relocated to Costa Rica in 2010, they leased their home to renters. (Tr. 44) At some point in Applicant’s residential lease, her tenants ceased making rental payments. (AE A; Tr. 45) Unable to arrange a short sale or continue to cover the mortgage without their rental income, they defaulted on both mortgages. (GE 3 and AE A; Tr. 43-45) The first mortgage was foreclosed by the first trust deed holder in July 5 2012 without sufficient proceeds left over to satisfy the loan balance claimed by the second trust deed holder. (GEs 1 and 3; Tr. 43) The deficiency balance reported to be owed to creditor 1.d in Appellant’s credit reports is $16,683. (GEs 1 and 6) Applicant’s credit reports show this debt to be charged off with no indications of whether debt enforcement was statutorily barred for any reason. She never received a 1099 form from the second trust deed holder creditor and was told by the IRS that a 1099 was not issued in tax year 2012. (AE H; Tr. 63) During her two-plus years in Costa Rica, Applicant filed her federal tax return only for the 2010 tax year. (AE F) She and her husband did not file returns for the 2011 and 2012 tax years. She relied on the mistaken advice that a foreign tax exemption was available to her and shielded up to $120,000 of potentially taxable income. (AE A; Tr. 49, 101) Applicant later came to learn that she was mistaken in the advice she received. For while a foreign earned income exclusion credit might have been available to her, she was not exempted from filing tax returns for the covered years. (GE 4, at 7) However, depending on the level of her reported net income, Applicant could still potentially be exempt from filing federal tax returns for the subject years of 2011-2012. According to the IRS tax guide in evidence, married tax payers filing jointly in 2013 are required to file a federal tax return only if their gross income exceeded $20,000. (GE 4) Single tax payers must file only if their gross income exceeded $10,000 for the tax year. Based on the gross income reported by Applicant in the 2010 tax return she filed as a single tax payer, Applicant earned $13,844, which consisted of reported earned interest and unemployment insurance. (AE F) Her adjusted gross income for 2010 was less than $4,000 (i.e., $3,975) While earned income tables are not available for Applicant’s tax years of 2011-2012, she credibly assured she was unemployed for most of the years she spent in Costa Rica and earned less than $10,000 a year working for her husband in his design business. (Tr. 86-88, 93-95) Her post-hearing submission from her tax specialist confirmed her earning too little income in 2011 and 2012 to meet the minimum IRS requirements for filing federal tax returns. (AE H) Without any evidence in the record that Applicant ever earned as much as $10,000 during her years of residence in Costa Rica, no inferences are warranted that she earned $10,000 or more for either of the 2011 and 2012 tax years. Even if Applicant’s individual or joint income was enough to trigger federal tax filing requirements, she likely would owe the IRS no back taxes based on her deductions taken in her 2010 federal tax return. Based on the mistaken filing advice she received about her being exempt from federal tax return filing requirements, no inferences of knowing and wilful failure to file federal tax returns for 2011 and 2012 can fairly be attributed to Applicant. Although Applicant’s pre-hearing filing of her 2013 federal tax return is not in issue, the $6,000 tax refund she received before the hearing has relevance to her ability to address her remaining debts with the resources available to her. (Tr. 74) Less than clear is Applicant’s gross income for 2013 and the basis of the $6,000 tax refund she received. Quite likely, her $6,000 refund is linked to her receipt of an earned income credit based on her adjusted gross income for 2013. Without a copy of her tax return, 6 this likely outcome cannot be accurately verified. Whether Applicant collected any unemployment insurance following her return to the United States in May 2013 is unclear. More than likely, though, she grossed more than $10,000 for the months she worked for her current contractor between September 2013 and January 2014. All that can be inferred from her 2013 federal tax return, though, without evidence of the return itself is the likelihood that her gross income for 2013 exceeded the $10,000 filing threshold. Applicant’s only other listed delinquent debt is a $35 debt covered by subparagraph 1.c. Applicant credibly assured that she mailed a check in 2012 to cover her purchase of a wallet for her husband’s birthday. Applicant’s credit reports corroborate her assurances and reveal that this debt was paid as claimed and removed from her credit report in February 2013. (GEs 2 and 6; Tr. 115-118) In her April 2014 personal financial statement, Applicant listed net monthly income of $3,670, monthly expenses of $3,287, monthly debt payments of $49, and a net monthly remainder of $841. (AE E; Tr. 69-74) She listed just two assets: a vehicle valued at $5,100 and a 401(k) account valued at $1,108. (AE E; Tr. 75) Applicant supplemented her income with a part-time job with another health services firm. (Tr. 76) After consulting a bankruptcy attorney in January 2014, the bankruptcy attorney advised her that she was not a good candidate for bankruptcy because her debts were not substantial enough to warrant bankruptcy relief. (AE A; Tr. 41) Endorsements Applicant provided character references from her supervisor, former colleague, and friend. (AE C) Each of her references characterize Applicant as reliable and trustworthy. Her supervisor credited her with demonstrated professional demeanor and timeliness and an employee who consistently displays honesty and a disposition for protecting confidential information. (AE C) Applicant’s former colleague extolled her strong work ethic, teamwork, and “rare quality of putting another’s needs ahead of her own.” (AE C) Applicant’s friend who has known her professionally and personally for over eight years described her as “a very diligent, conscientious, trustworthy, and compassionate social worker.” (AE C) Policies Positions designated as ADP I and II are classified as” sensitive positions.” (Regulation ¶¶ C3.1.2.1.1.7 and C3.1.2.1.2.3) “The standard that must be met for assignment to sensitive duties is that, based on all available information, the person’s loyalty, reliability, and trustworthiness are such that . . . assigning the person to sensitive duties is clearly consistent with the interests of national security.” (Regulation ¶ C6.1.1.1) DoD contractor personnel are afforded the right to the procedures contained in the directive before any final unfavorable access determination may be made. (Regulation ¶ C8.2.1) 7 The AGs list guidelines to be used by administrative judges in the decision- making process covering public trust eligibility cases. These guidelines take into account factors that could create a potential conflict of interest for the individual applicant, as well as considerations that could affect the individual’s reliability, trustworthiness, and ability to hold a public trust position. These guidelines include "[c]onditions that could raise a security concern [trustworthiness concerns] and may be disqualifying” (disqualifying conditions), as well as any of the "[c]onditions that could mitigate trustworthiness concerns.” These guidelines must be considered before deciding whether or not eligibility to hold a public trust position should be granted, continued, or denied. The guidelines do not require administrative judges to place exclusive reliance on the enumerated disqualifying and mitigating conditions in the guidelines in arriving at a decision. Each of the guidelines is to be evaluated in the context of the whole person in accordance with AG ¶ 2(c). In addition to the relevant AGs, administrative judges must take into account the pertinent considerations for assessing extenuation and mitigation set forth in AG ¶ 2(a) of the AGs, which are intended to assist the judges in reaching a fair and impartial commonsense decision based upon a careful consideration of the pertinent guidelines within the context of the whole person. The adjudicative process is designed to examine a sufficient period of an applicant’s life to enable predictive judgments to be made about whether the applicant is an acceptable trust risk. When evaluating an applicant’s conduct, the relevant guidelines are to be considered together with the following AG ¶ 2(a) factors: (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 chances; (7) the motivation for the conduct; (8) the potential for pressure, coercion, exploitation, or duress; and (9) the likelihood of continuation or recurrence. Viewing the issues raised and evidence as a whole, the following individual guidelines are pertinent in this case: Financial Considerations The Concern: “Failure or inability to live within one’s means, satisfy debts 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 [sensitive] information. An individual who is financially overextended is at risk of having to engage in illegal acts to generate funds. Compulsive gambling is a concern as it may lead to financial crimes including espionage. Affluence that cannot be explained by known sources of income is also a security concern. It may indicate proceeds from financially profitable criminal acts.” AG, ¶ 18. Burden of Proof 8 By virtue of the principles and policies framed by the AGs, a decision to grant or continue an applicant's eligibility to hold a public trust position may be made only upon a threshold finding that to do so is clearly consistent with the national interest. Because the Directive requires administrative judges to make a commonsense appraisal of the evidence accumulated in the record, the ultimate determination of an applicant's eligibility to hold a public trust position depends, in large part, on the relevance and materiality of that evidence. See Kungys v. United States, 485 U.S. 759, 792-800 (1988). As with all adversarial proceedings, the judge may draw only those inferences which have a reasonable and logical basis from the evidence of record. Conversely, the judge cannot draw factual inferences that are grounded on speculation or conjecture. The Government's initial burden is twofold: (1) it must prove by substantial evidence any controverted facts alleged in the SOR; and (2) it must demonstrate that the facts proven have a material bearing to the applicant's eligibility to hold or maintain a public trust position. The required materiality showing, however, does not require the Government to affirmatively demonstrate that the applicant has actually mishandled or abused a position requiring trust and reliability before it can deny or revoke eligibility to hold a public trust position. Rather, the judge must consider and weigh the cognizable risks that an applicant may deliberately or inadvertently fail to demonstrate good judgment and trustworthiness. Once the Government meets its initial burden of proof of establishing admitted or controverted facts, the evidentiary burden shifts to the applicant for the purpose of establishing his or her eligibility to hold a public trust position through evidence of refutation, extenuation, or mitigation. Based on the requirement of the Directive and the Regulation that all public trust positions be clearly consistent with the national interest, the applicant has the ultimate burden of demonstrating his or her trust eligibility. Like security clearance determinations, public trust eligibility decisions“ should err, if they must, on the side of denials.” See Department of the Navy v. Egan, 484 U.S. 518, 531 (1988). Analysis Applicant is a licensed clinical social worker who accumulated delinquent debts while living in Costa Rica for several years (i.e., 2010 through May 2013) Her reported delinquent debts are comprised of a $3,329 delinquent debt (once covered by a judgment that has since been nullified), a still outstanding judgment for $2,509, and two delinquent debts exceeding $16,000. Her debt accruals, and alleged failure to file federal tax returns (i.e., 2010-2012), warrant the application of three disqualifying conditions (DC): ¶ 19(a), “inability or unwillingness to satisfy debts,” ¶ 19(c) “a history of not meeting financial obligations,” and ¶ 19(g), “failure to file annual federal, state, or local income tax returns as required or the fraudulent filing of the same.” Holding a public trust position involves a fiduciary relationship between the Government and the public trust position holder. Quite apart from any agreement the trust holder may have signed with the Government, the nature of the public trust 9 position holder’s duties necessarily imposes important duties of trust and candor on the holder that are considerably higher than those typically imposed on Government employees and contractors involved in other lines of Government business. See Snepp v. United States, 444 U.S. 507, 511 n.6 (1980). Failure of the applicant to make concerted efforts to pay or resolve her debts when able to do so raises concerns about whether the applicant has demonstrated the trust and judgment necessary to safeguard sensitive information. Among Applicant’s two listed judgments, only one remains a valid one. The $3,329 judgment obtained by creditor 1.a in March 2013 was nullified and now lies outstanding as an unsecured delinquent debt. Creditor 1.b’s reported judgment, although since removed from her latest credit report, presumably was never absorbed by the foreclosing first trust deed holder in July 2012 and remains outstanding. Only Applicant’s $35 creditor 1.c debt is fully paid and removed from her creditor report. This leaves the second mortgage debt with creditor 1.d as the only other potentially outstanding debt. And Applicant disputes the validity of this debt: She claims that the mortgage debt associated with the second mortgage assumed by Applicant with the purchase of her town home is covered by her state’s anti-deficiency law. Applicant’s state anti-deficiency law is a substantive statute (unlike statutes of limitation) that bars any enforcement actions for the recovery of a deficiency, unless a suit is commenced within 60 days of the public sale of the underlying property. Because the foreclosing lender never availed itself of the judicial remedy to recover its deficiency balance (reported to be $16,683), Applicant does not have any legal exposure to enforcement actions to recover the deficiency. See Title 33, Chapter 6.1 of the A Rev. Stats. Looking for potential tax liability arising from Applicant’s failure to file federal tax returns for the tax years of 2011 and 2012, Applicant owes no discernable federal taxes for the years in question. Not only does she have potential tax exemptions covering her two and a half years of residency in Costa Rica, but she likely is exempt from filing federal tax returns for those tax years due to her lack of discernible income over the $10,000 threshold for triggering federal tax-filing requirements. Applicant’s mistaken understanding of her legal obligations to file federal tax returns notwithstanding her likely eligibility to obtain federal tax exemptions for whatever income she earned in Costa Rica is further reason for mitigating any judgment concerns over her failure to file federal tax returns for 2011-2012. Any such misunderstanding would have no application to Applicant’s 2013 taxes. Since becoming a full-time employee of her current U.S. employer, she has filed a 2013 federal tax return and received a $6,000 tax refund. While the Appeal Board has never required an applicant to repay all of his or her debts in demonstrating a return to financial stability, it does require some good- faith payment initiatives. See ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008). Applicant’s documented payment efforts are minimal and remain a work-in- progress. With only a $35 payment to support her repayment initiatives, she provides 1 Irrespective of whether Applicant’s application for approval of public trust eligibility is disapproved, the Government can re-validate her financial status in the future through credit reports, investigation, and additional interrogatories. An administrative judge does not have authority to grant a conditional clearance, or by the same logic a trustworthiness application. ISCR Case No. 99-0901, 2000 W L 288429 at *3 (App. Bd. Mar. 1, 2000). See also ISCR Case No. 04-03907 at 2 (stating, “The Board has no authority to grant [a]pplicant a conditional or probationary security clearance to allow her the opportunity to have a security clearance while she works on her financial problems.” and citing ISCR Case No. 03-07418 at 3 (App. Bd. Oct. 13, 2004)). 10 no meaningful track record to demonstrate her commitment to stabilizing her finances following her return to full-time employment. Based on Applicant’s demonstrated years of unemployment and underemployment, while residing in Costa Rica with her husband, considerable extenuating circumstances are associated with her inability to pay off or otherwise resolve her outstanding debts earlier in time and avert the foreclosure of her residence. Available to Applicant is MC ¶ 20(b), “the conditions that resulted in the behavior 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.” Extenuating circumstances alone are not enough to enable Applicant to mitigate trust concerns over her past failures to address her debts. See ISCR Case No. 05- 11366, at 4 n.9 (App. Bd. Jan. 12, 2007)(citing other ISCR case authorities)). To date, she has documented progress with the repaying or resolving of just one small debt among her listed debts (i.e., creditor 1.c), while successfully disputing the second mortgage debt (creditor 1.d) associated with the foreclosure of her first mortgage. To her credit, Applicant engaged a credit counselor to help her resolve her two remaining debts, and has the resources available to her with her monthly remainder from her employment and a $6,000 earned income tax credit to address her remaining creditors (creditors 1.a and 1.b). A responsible repayment plan could reasonably be expected to include the repayment of at least one of her remaining judgment creditors. This would have enabled her to initiate a meaningful repayment track record. As it is, she can claim only the $35 payment to creditor 1.c as a start to financial recovery. While her efforts to date represent a small start, they include no payments to her two remaining creditors, despite her promises to repay these creditors. 1 Applicant’s limited repayment efforts merit partial application of three of the mitigating conditions for financial considerations. MC ¶ 20(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,” MC ¶ 20(c) “the individual 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,” and MC ¶ 20(d), “the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts,” apply to Applicant’s situation 11 Based on Applicant’s successful disputing of her creditor 1.d second mortgage debt, she may take advantage of MC ¶ 20(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.” Barring the receipt of any probative information that invalidates the legitimacy of either or both of the creditor 1.a and 1.b debts, they remain outstanding debts, still to be resolved by Applicant. A whole-person assessment enables Applicant to surmount the judgment questions raised by her accumulation of delinquent debts and failure to take earlier steps to address them. Quite clearly, recurrent unemployment and underemployment problems played a considerable role in her accumulation of debts while she and her husband were living in Costa Rica, and is a source of some continuing trustworthiness and judgment concerns. Important to a whole-person assessment is the trust and confidence that Applicant has earned from her supervisor, former colleague, and friend who have either worked with her or know her personally. Also worthy of additional credit are her working consultations to date with her consulting program designed to help restore her finances to stable levels necessary to satisfy minimum eligibility criteria for holding a public trust position. Applicant can also point to the credible efforts of her credit counselor, who continues to work on the settlement of Applicant’s creditor 1.a credit card debt before turning her professional efforts to Applicant’s creditor 1.b judgment debt. Applicant claims available income sources to resolve these debts once they are verified and reduced to communicated offers from the respective creditors. More time is needed, though, to develop a sensible, viable plan for addressing these two debts Considered together, Applicant has made some progress with her finances since she returned from Costa Rica, but not enough at this time to stabilize them in accordance with the minimum requirements for meeting public trust position eligibility criteria. Unfavorable conclusions warrant with respect to the allegations covered by subparagraphs 1.a and 1.b. Favorable conclusions are warranted with respect to creditors 1.c-1.e. Formal Findings In reviewing the allegations of the SOR and ensuing conclusions reached in the context of the findings of fact, conclusions, conditions, and the factors listed above, I make the following formal findings: GUIDELINE F (FINANCIAL CONSIDERATIONS): AGAINST APPLICANT Subparagraphs 1.a and 1.b: Against Applicant Subparagraphs 1.c-1.e: For Applicant 12 Conclusions In light of all the circumstances presented by the record in this case, it is not clearly consistent with the national interest to grant or continue Applicant’s eligibility to hold a public trust position. Eligibility is denied. Roger C. Wesley Administrative Judge 13