1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) --- ) ISCR Case No. 16-00468 ) Applicant for Security Clearance ) Appearances For Government: Chris Morin, Esquire, Department Counsel For Applicant: Pro se ______________ Decision ______________ 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 5, 2015, Applicant applied for a security clearance and submitted an Electronic Questionnaire for Investigations Processing (e-QIP) version of a Security Clearance Application.1 On June 21, 2016, 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) applicable to all adjudications and other determinations made under the Directive, effective September 1, 2006.2 The SOR 1 GE 1 (e-QIP, dated April 5, 2015). 2 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 June 30, 2016. On July 7, 2016, he responded to the SOR and requested a hearing before an administrative judge. Department Counsel indicated the Government was prepared to proceed on August 12, 2016. The case was assigned to me on September 19, 2016. A Notice of Hearing was issued on February 21, 2017. I convened the hearing as scheduled on March 14, 2017. During the hearing, 3 Government exhibits (GE) 1 through GE 3, 1 Administrative exhibit, and 21 Applicant exhibits (AE) A through AE U were admitted into evidence without objection. Applicant and one witness testified. The transcript (Tr.) was received on March 23, 2017. I kept the record open to enable Applicant to supplement it. He took advantage of that opportunity and timely submitted several documents, which were marked and admitted as AE V through AE AB, without objection. The record closed on May 22, 2017. Findings of Fact In his Answer to the SOR, Applicant admitted, with comments, all of the factual allegations pertaining to financial considerations (¶¶ 1.a. through 1.d.) of the SOR. Applicant’s admissions and comments 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 59-year-old employee of a defense contractor. He has been an inspection technician with the company since February 2015. He previously held positions with other employers: security guard (June 2014 until February 2015); and electronic line installer (August 2013 until June 2014). He was the owner of a concrete finishing company (January 2005 until December 2012). He was unemployed from December 2012 until July 2013. He is a June 1976 high school graduate, and he has two years of college credits, but no degree. Applicant has never served in the U.S. military. He was granted an interim secret security clearance in April 2015. Applicant was married in November 1993. He has no children. 2 Effective June 8, 2017, by Directive 4 of the Security Executive Agent (SEAD 4), dated December 10, 2016, National Security Adjudicative Guidelines for all covered individuals who require initial or continued eligibility for access to classified information or eligibility to hold a sensitive position, were established to supersede all previously issued national security adjudicative criteria or guidelines. Accordingly, those guidelines previously implemented on September 1, 2006, under which this security clearance review case was initiated, no longer apply. In comparing the two versions, there is no substantial difference that might have a negative effect on Applicant in this case. 3 Financial Considerations3 It is unclear what Applicant’s personal finances were like before they deteriorated. Applicant built his concrete finishing company into a very successful enterprise that employed approximately 35 employees, had a substantial quantity of equipment, did work all over a large multi-state region, and grossed $5,000,000 between 2005 and 2011. His wife handled all of the administrative and financial paper work (including payroll and billing) concerning the business, and maintained business records in both hardcopy and computerized form. Nevertheless, when Applicant’s wife became sick, he found that her record-keeping system was in complete disarray, and he found “boxes of stuff stacked up.” Applicant attributed his financial problems to five distinct factors: the unsteady national economy; competitive underbidding by other contractors because of the unsteady economy; poor weather conditions that resulted in reworking multiple jobs at additional costs; the chaotic record system; and his wife’s deteriorating medical condition. In October 2011, she underwent knee replacement surgery. In 2012, in anticipation of closing the business, Applicant’s wife was afflicted with a number of other medical conditions that led to depression and anxiety. She had uncontrolled diabetes mellitus with neurological manifestations, uncontrolled. In 2013, she began having seizures due to scar tissue from brain surgery she had previously had several years earlier. She took a large number of daily medications.4 Those factors had a cascading negative impact on Applicant’s financial problems. His wife was unable to focus on financial requirements of addressing the business finances, filing federal or state income tax returns, or locating the documentation to do either. She subsequently and candidly said that she was sick at that time and simply did not care. Applicant was dealing with a combination of lost income, his wife’s medical conditions, and income tax filings. They obtained filing extensions, and were confident that the extensions had been granted, but when the designated assistant income tax preparer encountered marital problems, things got sidetracked, and the extended deadlines were not met. In April 2013, Applicant and his wife filed for bankruptcy under Chapter 7 of the U.S. Bankruptcy Code.5 That same month, a would-be purchaser of the house that Applicant used for his business moved into the building. The bank mortgage lender was already in the loan process, and the building was pending foreclosure, but it withheld approval of both the foreclosure and the new loan while awaiting a decision in the bankruptcy case. The would- be purchaser began to have second thoughts about buying the property because of the bank’s actions, and in September 2013, the would-be purchaser vacated the property without making a single mortgage payment during the nearly six months in which he 3 General source information pertaining to the financial accounts discussed below can be found in the following exhibits: GE 1, supra note 1; GE 2 (Personal Subject Interview, dated October 29, 2015); GE 3 (Combined Experian, TransUnion, and Equifax Credit Report, dated May 15, 2015); and Applicant’s Answer to the SOR, dated July 7, 2016. 4 Applicant’s Answer to the SOR, supra note 3, at 1; AE T (Progress Notes, dated June 29, 2016); GE 2, supra note 3, at 10. 5 Applicant’s Answer to the SOR, supra note 3, at 2; AE AB (Letter, dated April 4, 2017). 4 resided in the building. The bank expected Applicant to pay the missed mortgage payments, and when he was unable to do so, it foreclosed on the property.6 The SOR identified four financial issues. The current status of those issues, according to the May 2015 credit report, other evidence submitted by the Government and Applicant, and Applicant’s comments regarding same, are described below. (SOR ¶ 1.a.): This refers to Applicant’s failure to timely file federal income tax returns for the tax years 2012, 2013, and 2014. As noted above, extension requests were filed, but the deadlines were not met. With the assistance of a certified public accountant (CPA), Applicant filed an individual income tax return (Form 1040) for 2012 (reflecting a total income of $283,859) on July 15, 2016;7 a Form 1040 for 2013 (reflecting a total income of $79,999) on July 15, 2016;8 and a Form 1040 for 2014 (reflecting a total income of $16,336) on July 15, 2016.9 His S corporation federal income tax returns (Form 1120S) were filed for both 2012 and 2013 on the same day.10 On January 4, 2017, Applicant approached the Internal Revenue Service (IRS) and the IRS agreed to a single payment on the Forms 1040 of $64,768.82 by May 4, 2017.11 Applicant actually made the payment on April 24, 2017.12 On January 4, 2017, the IRS was also approached regarding the establishment of an installment agreement covering the Forms 1120S. The IRS agreed to a monthly repayment plan calling for monthly payments of $131 to eventually resolve the $9,493 remaining balance.13 Two initial payments were made in January 2017 ($131) and February 2017 ($225).14 Applicant made a third and final payment ($9,231) on April 24, 2017.15 Applicant’s federal income tax returns have been filed and his federal income tax liabilities have been paid. (SOR ¶ 1.b.): This refers to Applicant’s failure to timely file state income tax returns for the tax years 2012, 2013, and 2014. As noted above, extension requests were filed, but the deadlines were not met. With the assistance of a CPA, Applicant filed an individual 6 Applicant’s Answer to the SOR, supra note 3, at 2; AE U (Letter, dated July 14, 2016). 7 AE D (Form 1040, undated). 8 AE C (Form 1040, undated). 9 AE B (Form 1040, undated). 10 AE G (Form 1120S for 2012, dated July 15, 2016); AE F (Form 1120S for 2013, dated July 15, 2016). 11 AE E (Letter, dated January 13, 2017). 12 AE W (Direct Pay Confirmation, dated April 24, 2017). 13 AE H (Letter, dated January 13, 2017); AE H (Installment Agreement, dated January 25, 2017). 14 AE H (Checks, various dates). 15 AE X (Direct Pay Confirmation, dated April 24, 2017). 5 income tax return for 2012 (reflecting a total due of $3,663) on July 15, 2016;16 an individual income tax return for 2013 (reflecting a total due of $2,542) on July 15, 2016;17 and an individual income tax return for 2014 (reflecting a refund due of $409) on July 15, 2016.18 His state corporate tax returns were filed for both 2012 (reflecting no payment or refund due) and 2013 (reflecting a refund due of $158) on the same day.19 According to the state revenue officer, Applicant’s tax liability for 2012 and 2013 has been resolved and paid in full.20 (SOR ¶ 1.c.): This refers to Applicant’s Chapter 7 Bankruptcy. Applicant had previously had a number of business-related accounts and lines of credit with various suppliers, including one for $400,000 with one concrete supplier, and $200,000 with another supplier. While many of his accounts were not yet past-due, he realized it would be impossible to pay off those accounts. He sought the guidance of an attorney, and following his attorney’s advice, he filed for bankruptcy in April 2013. With the exception of some small accounts that he reaffirmed, Applicant’s debts were discharged on August 5, 2013.21 (SOR ¶ 1.d.): This refers to a bank-issued mortgage loan for $85,000 on the property that Applicant used for his business. Since he was no longer residing in the building when his financial issues arose, it was his lowest priority for monthly payments. It was included in his bankruptcy. The property was foreclosed in late 2013, and on January 22, 2014, the building was sold at public auction at the courthouse for $40,792.22 Since the amount the bank realized from the auction sale was over the $35,099.84 that Applicant had owed, there was no deficiency, and Applicant’s financial obligation to the bank was wiped out.23 In April 2017, Applicant sold his primary residence for $184,250.24 That amount was well over the amount owed on the mortgage that was approximately $70,000. Applicant used the excess funds to pay off his income tax liabilities. On May 13, 2017, Applicant submitted a Personal Financial Statement to reflect his monthly income; monthly expenses; or any monthly remainder that might be available for discretionary spending or savings. The way he reported the various figures is confusing for while he 16 AE L (Individual Income Tax Return, dated July 15, 2016). 17 AE K (Individual Income Tax Return, dated July 15, 2016). 18 AE J (Individual Income Tax Return, dated July 15, 2016). 19 AE N (Corporation Tax Return for 2012, dated July 15, 2016); AE M (Corporation Tax Return for 2013, dated July 15, 2016). 20 AE O (Letter, dated November 30, 2016). 21 AE Y (Discharge of Debtor, dated August 5, 2013); GE 2, supra note 3, at 7.. 22 AE R (Report of Foreclosure Sale/Resale, dated January 22, 2014); AE AA is a duplicate of AE R. 23 AE Z (Acquisition or Abandonment of Secured Property (Form 1099-A), dated January 21, 2015). 24 AE P (Offer to Purchase and Contract, dated March 10, 2017). 6 listed one particular expense ($550 for mortgage or rent) as a liability, he neglected to reflect it as a monthly expense. Recalculations indicate that his combined monthly income is $3,685; and monthly expenses are $1,175; leaving a monthly remainder of $2,510.25 Much of the monthly remainder is deposited into their saving account. Now that Applicant’s wife’s health has significantly improved, she maintains the family budget. Other than the required financial counseling associated with his bankruptcy, Applicant denied receiving any other financial counseling. Applicant has no other delinquent accounts. Because Applicant has taken positive steps to resolve all of his accounts, his finances are under control and improving. 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 guidelines in SEAD 4. In addition to brief introductory explanations for each guideline, the guidelines 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 25 AE V (Personal Financial Statement, dated May 13, 2017). 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). 7 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 ¶ 18: Failure 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 or sensitive information. Financial distress can also be caused or exacerbated by, and thus can be a possible indicator of, other 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. 8 issues of personnel security concern such as excessive gambling, mental health conditions, substance misuse, or alcohol abuse or dependence. An individual who is financially overextended is at greater risk of having to engage in illegal or otherwise questionable acts to generate funds. Affluence that cannot be explained by known sources of income is also a security concern insofar as it may result from criminal activity, including espionage. The guideline notes several conditions that could raise security concerns. Under ¶ 19(a), an “inability to satisfy debts” is potentially disqualifying. In addition, ¶ 19(b) may apply if there is an “unwillingness to satisfy debts regardless of the ability to do so.” Similarly, under ¶ 19(c), “a history of not meeting financial obligations” may raise concerns. “Consistent spending beyond one's means or frivolous or irresponsible spending, which may be indicated by excessive indebtedness, significant negative cash flow, a history of late payments or of non-payment, or other negative financial indicators” may raise concerns under ¶ 19(e). In addition, under ¶ 19(f), “failure to file or fraudulently filing annual Federal, state, or local income tax returns or failure to pay annual Federal, state, or local income tax as required” may raise concerns. Applicant failed to timely file federal and state income tax returns for the tax years 2012 through 2014; his financial liabilities were discharged by his 2013 Chapter 7 bankruptcy; and his business property mortgage was foreclosed. ¶¶ 19(a), 19(c), 19(e), and 19(f) apply. ¶ 19(b) does not apply. The guideline also includes examples of conditions that could mitigate security concerns arising from financial difficulties. Under ¶ 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 ¶ 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, a death, divorce or separation, clear victimization by predatory lending practices, or identity theft), and the individual acted responsibly under the circumstances.” Evidence that “the individual has received or is receiving financial counseling for the problem from a legitimate and credible source, such as a non-profit credit counseling service, and there are clear indications that the problem is being resolved or is under control” is potentially mitigating under ¶ 20(c). Similarly, ¶ 20(d) applies where the evidence shows “the individual initiated and is adhering to a good- faith effort to repay overdue creditors or otherwise resolve debts.”32 In addition, ¶ 20(e) 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 [or statute of limitations]) in order to claim the benefit of [the “good-faith” mitigating condition]. 9 may apply 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.” In those instances where “the individual has made arrangements with the appropriate tax authority to file or pay the amount owed and is in compliance with those arrangements,” ¶ 20(g), may apply. I have concluded that ¶¶ 20(a), 20(b), 20(c), 20(d), and 20(g) apply, and ¶ 20(e) does not apply. Applicant built his concrete finishing company into a very successful enterprise that employed approximately 35 employees and grossed $5,000,000 between 2005 and 2011. Things deteriorated from there. The nature, frequency, and recency of Applicant’s financial difficulties during 2012 until early 2017 make it difficult to conclude that it occurred “so long ago” or “was so infrequent.” His financial situation was caused by a combination of circumstances, most of which were largely beyond Applicant’s control, that are unlikely to recur: the unsteady national economy; competitive underbidding by other contractors because of the unsteady economy; poor weather conditions that resulted in reworking multiple projects at additional costs; his wife’s chaotic record system; and his wife’s deteriorating medical condition. Added to those factors was the issue involving their assistant income tax preparer. Applicant did not ignore his financial situation. He sought guidance and assistance from an attorney and a CPA. Business and some personal liabilities were discharged by bankruptcy; the foreclosure of his business property left him without any deficiency; and his arrangements with the IRS and state revenue authorities were made, and Applicant was in full compliance with the established filing requirements and repayment arrangements. He filed his federal and state income tax returns, and he paid his income taxes. Clearance decisions are aimed at evaluating an applicant’s judgment, reliability, and trustworthiness. They are not a debt-collection procedure. The guidelines do not require an applicant to establish resolution of every debt or issue alleged in the SOR. An applicant needs only to establish a plan to resolve financial problems and take significant actions to implement the plan. There is no requirement that an applicant immediately resolve issues or make payments on all delinquent debts simultaneously, nor is there a requirement that the debts or issues alleged in an SOR be resolved first. Rather, a reasonable plan and concomitant conduct may provide for the payment of such debts, or resolution of such issues, one at a time. It is clear that Applicant now has funds remaining at the end of each month for discretionary use or savings, and there is evidence to reflect that Applicant’s financial problems are under control. When confronted with the combined issues that caused his financial problems, Applicant acted responsibly by seeking guidance from his attorney and a CPA, and by seeking assistance from his mortgage lender.33 Applicant’s actions (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 “Even if Applicant’s financial difficulties initially arose, in whole or in part, due to circumstances outside his [or her] control, the Judge could still consider whether Applicant has since acted in a reasonable manner when dealing with those financial difficulties.” ISCR Case No. 05-11366 at 4 n.9 (App. Bd. Jan. 12, 2007) (citing ISCR Case No. 99- 0462 at 4 (App. Bd. May 25, 2000); ISCR Case No. 99-0012 at 4 (App. Bd. Dec. 1, 1999); ISCR Case No. 03-13096 at 10 under the circumstances no longer cast doubt on his current reliability, trustworthiness, and good judgment.34 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 SEAD 4, App. A, ¶ 2(d): (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 SEAD 4, App. A, ¶ 2(c), the ultimate determination of whether to grant 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.35 There is some evidence against mitigating Applicant’s conduct. Applicant failed to timely file his federal and state income tax returns for 2012 through 2014. He failed to timely pay his federal and state incomes taxes for those years as well. His business expenses and some personal expenses were too substantial for him to cover, so he obtained a bankruptcy discharge under Chapter 7 of the Bankruptcy Code. He defaulted on a mortgage, and his business property was foreclosed. The mitigating evidence under the whole-person concept is simply more substantial. There is no evidence of misuse of information technology systems, or mishandling protected information. He was the founder and owner of a successful business. His financial situation was caused by a combination of circumstances, most of which were largely beyond Applicant’s control, that are unlikely to recur. He did not ignore his financial situation. Instead, he sought guidance and assistance from an attorney and a CPA. Financial liabilities were discharged by bankruptcy; the foreclosure of his business property left him without any deficiency; and he has resolved all federal and state income 4 (App. Bd. Nov. 29, 2005)). A component is whether he or she maintained contact with creditors and attempted to negotiate partial payments to keep debts current. 34 See ISCR Case No. 09-08533 at 3-4 (App. Bd. Oct. 6, 2010). 35 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). 11 tax return and unpaid income tax issues. He candidly acknowledged having some financial difficulties with several creditors when he completed his e-QIP. The Appeal Board has addressed a key element in the whole-person analysis in financial cases stating:36 In evaluating Guideline F cases, the Board has previously noted that 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 [or she] has paid off each and every debt listed in the SOR. All that is required is that an applicant demonstrate that he [or she] has “. . . established a plan to resolve his [or her] 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 [or her] 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. Applicant has demonstrated a positive track record of debt reduction and elimination efforts. His efforts were initially hindered by his wife’s medical issues and the chaotic situation related to his business and financial records. 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 SEAD 4, App. A, ¶ 2(d)(1) through AG ¶ 2(d)(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 Subparagraphs 1.a. through 1.d: For Applicant 36 ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008) (internal citations omitted). 12 Conclusion In light of all of the circumstances presented by the record in this case, it is clearly consistent with the interests of national security to grant Applicant eligibility for a security clearance. Eligibility for access to classified information is granted. ________________________ ROBERT ROBINSON GALES Administrative Judge