How to Guide Your Employee During the Clearance Process

Brian Kaveney

bkaveney@armstrongteasdale.com

Phone: 1-800-243-5070 x7685

“But the SF 86 is just a form, right? I can provide more information later...” Bad Idea!

It all starts with a form

What is the cost of a mistake? • Damage to your reputation with your customers

• Indelible mark to your reputation

• One person, one comment on a form…

• Lost profits

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An Effective FSO saves time, money, and frustration Anticipate issues to be more efficient in your job

Prevent Problems

Best Practice: −Have employee draft and revise complete and

accurate information tied to mitigating conditions and whole person concept to explain or mitigate

−Consider most efficient way to navigate the DoD CAF

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Effective FSO’s Tools to Preempt Personnel Clearance Issues Provide SF 86 worksheet to employee as early as possible Encourage the use of the SF 86 Additional Comments

Section Provide a sample Statement of Reasons Provide a sample Interrogatory Identify and apply relevant mitigating conditions Show Applicant link to DOHA cases

Sequestration and Security - Industry

Downturn and reduction in funding for future and existing contracts:

• Result: Reduced personnel • Remaining employees receive more responsibility • Increased Security Violations and Classified Spills • Security will become more active:

−More investigations and more computer sanitizations

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Sequestration and Security – Government

DSS changed the PR process from 90 days to 30 days prior to the expiration date of the investigation

• More changes in the coming months Salary Creep – affects company profits

• Downgrades and reductions Furloughs Reduced Funding:

• Example: More Hearings by VTC rather than in person • Consequence: Less persuasive by VTC rather than in

person?

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Top Reasons for Rejection by DSS and OPM Lack of correct employment information No SSN for spouse or co-habitant Lack of complete and accurate information for relatives Missing Selective Service registration info. Lack of complete information concerning debts or

bankruptcy Discrepancy with applicant’s place of birth and DoB Missing or Discrepancy in Reference Information Missing or Discrepancy in Employment Information

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Better to disclose

Failure to disclose will trigger additional adjudicative guidelines

• Example: Even though the employee thinks he will resolve the potential lien on his house, it is better to disclose

• Avoids triggering additional adjudicative guidelines • The Truth is ALWAYS Best • If RESOLVED, inform the government, and it can be a non-

issue.

Who are we protecting?

Everyone associated with NCMS has a responsibility to the warfighter

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Transition of DISCO to the Department of Defense Central Adjudicative Facility (DoD CAF)

• Complete consolidation into a single organization:− The Defense Industrial Security Clearance Office (DISCO),−Army Central Clearance Facility, −Department of the Navy CAF, −Air Force CAF, −Joint Staff CAF, Washington Headquarters (WHS) CAF, and

DOHA

• Initial operational capability by the beginning of FY13• Full operational capability by the start of FY14

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DoD CAF Status

Total Pending Cases as of Spring of 2013

• 15,000 industry backlog

• Personnel Security Adjudicative Function Consolidation for Greater Efficiency

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What is the $ of a mistake?

Rework to an SF 86 from a missing SSN to a key security concern that could have been mitigated or explained:

• Based on a blended avg. salary for an FSO and executive or key employee:

−4-8 man hours or $140.00 - $160.00 = $560.00 - $1,280.00 −Extra costs for the FSO, employee, and admin. costs −Employee must “redo” the questions section and the relative

section and print out the new signature forms −FSO will then have to review the submission, load forms,

and spend additional time in JPAS, etc. Can pull individuals away from direct charge time (profit)

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What is the $ of a mistake?

Waste of government resources

Increases government costs

Create backlog in the process to the detriment of others

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Given the current environment, how can an FSO be effective during the Adjudication Process

Government’s Examination of the Applicant’s Life Weighs a Number of Variables Known as the “Whole

Person Concept” Evaluates the Relevance of the Individual’s Conduct Considers the Nature, Extent and Seriousness of the

Conduct Considers the Frequency and Recency of the Conduct Considers the Age and Maturity of the Individual at the

Time

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Consider Adjudicative Guidelines

DoD CAF Relies on 13 Adjudicative Guidelines when Determining Eligibility

• Allegiance To The U.S.• Foreign Influence• Foreign Preference• Sexual Behavior• Personal Conduct• Financial Considerations

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Adjudicative Guidelines cont.

• Alcohol Consumption• Drug Involvement• Emotional, Mental, and Personality Disorders• Criminal Conduct• Handling Protected Information• Outside Activities• Misuse of Information Technology Systems

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Reporting Requirements

Change in Personal Status• Marital status – married, divorced, separated• Cohabitation – living in a spouse-like relationship; intimate

relationship, or engaged Foreign Travel Foreign Contacts Security Violations Suspicious Contacts

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Reporting Requirements

Adverse Information Arrests regardless of whether you were convicted or

charges were dropped Financial difficulties including bankruptcy, garnishment or

judgment against wages, foreclosures, short sales, voluntary repossessions

Emotional or psychological problems Alcoholism or abuse of other legal drugs; use of illegal

drugs Other involvement with the legal system; target of legal

action such as being sued

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Reporting Logistics

What do you Report? • Arrests• Financial Issues• Foreign Contacts• Foreign Military • Change in Marital Status• Foreign Travel• Cohabitation• Drug Involvement

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Problems do not get better with age . . .

Many individuals face problems with inter-personal relationships, depression, alcohol, family issues, or similar difficulties at some point in their lives

The vast majority of those seeking professional help for their problems do not suffer damage to their career

Rather, professional help often allows individuals to recognize problems and take an active step in resolving those problems

EARLY INTERVENTION and thorough reporting are often the keys to early resolution

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FSO Challenges

Implementing proper and effective procedures Working in a FOCI environment Developing a robust and effective security program Ensuring key employees receive required/critical

clearances to support the company Dealing with competing priorities Spearheading deadlines for clearances Serving as the link between employees and the clearance-

granting authority

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FSO’s Tools to Preempt Personnel Clearance Issues Provide SF 86 worksheet to employee as early as possible Encourage the use of the SF 86 Additional Comments

Section Provide a sample Statement of Reasons Provide a sample Interrogatory Identify and apply relevant mitigating conditions Show Applicant link to DOHA cases

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FSO: Saving Government Resources by making the government’s life easier Tools to Assist the Government:

• Provide ALL requested information to adjudicators• Use Additional Comments Section to assist OPM

investigator, particularly where mitigation is compelling• Utilize attachments to provide a complete picture for the

government= DoD CAF . . . DISCO, OPM, & DOHA

Example: Detailed information about Escaping through Iraq

SF 86

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SF 86

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SF 86

Additional comments

Preventionopportunity OR

TROUBLE

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Additional Reasons for e-QIP Rejection

Start date or current employer information incorrect Selective service number missing Status of debts—incomplete information on financial

questions (e.g., names, addresses of creditors) missing Missing entries (or gaps) in employment, education, and/or

residence Missing citizenship information for foreign-born family

members

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Additional Reasons for e-QIP Rejection

Applicant verifying self-employment and/or employment periods

Missing fingerprint cards and/or signed releases Discrepant information between e-QIP and fingerprint

cards (e.g., date or place of birth) and Not providing SSN and/or POB information for adults

currently residing with applicant (co-habitant)

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Loss of Clearance: Main Causes

The Busy Executive = Inadvertent failure to disclose

The young, key Engineer = Non-Disclosure due to lack of attention to detail

• Example: Financial Issue

Overseas Property = Foreign Influence issues• Could be dealt with before submission of SF 86

−Example: Close the bank account to prevent a specific allegation in a Statement of Reasons

−Demonstrate the U.S. Citizen is firmly rooted in the U.S.

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NISPOM

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Complete and Accurate

“The FSO or designee shall … review the application solely to determine its adequacy and to ensure that necessary information has not been omitted. The FSO or designee shall provide the employee with written notification that review of

the information is for adequacy and completeness, information will be used for no other purpose within the company, and that the information provided by the employee is protected by [the Privacy Act]. The FSO or designee shall not share information from the employee’s SF 86 within the company and shall not use the information for any purpose other than determining the adequacy and completeness of the SF 86.” ISL 2006-01 #5. (2-202)NISPOMNISPOM

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Completing the ElectronicVersion of the SF 86

“The electronic version of the SF 86 shall be completed jointly by the employee and the FSO or an equivalent contractor employee(s) who has (have) been specifically designated by the contractor to review an employee’s SF 86. ” Section 2-202.

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Proactive Measures for the FSO

Explain the adjudicative guidelines to identify concerns Conduct a Prescreen interview Explain the investigation and adjudication process Use security education and awareness training program Encourage honesty and full disclosure

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Proactive Measures for the FSO

Provide:• (1) Sample Statement of Reasons, • (2) Sample Interrogatories • (3) Opinion from an Administrative Judge denying a

clearance, • (4) Opinion from an Administrative Judge denying a

clearance, and

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STATEMENT OF REASONS

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STATEMENT OF REASONS

Allegation A

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STATEMENT OF REASONS

Allegation B

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STATEMENT OF REASONS

Result of the failure to disclose by the employee

Triggers the Criminal Conduct Guideline

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How will the DOHA Judge view this?

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DECISION OF JUDGE

“Applicant has worked for government contractors and held a clearance for about 22 years. Her misconduct was not the product of immaturity or inexperience.”

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DECISION OF JUDGE

“She is very dedicated to her job and she performs it with dedication and skill. Unfortunately, she has demonstrated that she will engage in deception to protect her job.”

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DECISION OF JUDGE“Applicant claimed that she omitted mention of her departure from XTON Systems in April of 2010 because she forgot about it. I find this explanation implausible and unconvincing.”“Applicant claimed that she omitted mention of her departure from XTON Systems in April of 2010 because she forgot about it. I find this explanation implausible and unconvincing.”

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How DOHA Judges View “Failure-to-Disclose” Cases The only people who can prevent the failure to disclose are

the FSO and the employee. Someone who has lied on his or her SF 86 should not hold a

clearance.

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years in prison.

Today, at 42, he is out of prison and working in a white-collar job in the defense industry. He remains on parole until 2006. As a convicted felon, he can’t vote in many states. But under federal law, he can and does hold a government-issued security clearance, a privilege that allows access to sensitive classified information off-limits to most Americans.

Continued from Page 1B

USA TODAY

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Where are we today?

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COMMON PROBLEM: Inadvertent Failure to Disclose by Busy Executive Raises Guideline E – Personal Conduct

• A. In 2005, you failed to properly inform your Chairman & CEO that you had worked with a non-profit entity which created a potential conflict of interest for you and your work with your current employer at the time

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Could This Have Been Avoided?…YES!!

FSO - Get the SF 86 (and worksheet) to the key employee, including executives, as early as possible

FSO - Advise the key employee to allow sufficient time to gather information and complete the SF 86

FSO - Advise the key employee to use the Additional Comments section of the SF 86

FSO - Show example Statement of Reasons to the key employee

Here is where we can help the FSO . . . to reinforce the message

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Could This Have Been Avoided?

Our Clients and companies that use this approach . . . • Never have received Interrogatories • Never have received a Statement of Reasons • Never gone to a hearing

Save their company time, money and frustration

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Conflicting Facts: Conditions that MayMitigate Security Concerns

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FSOs Advising Executives

Encounter multiple attempts to receive a “complete” SF 86 RECOGNIZE CLUES:

• Having to initiate the investigation multiple times• May show that the executive does not want to deal with a

situation• Could be a difficult situation for the executive to reveal

−“ABC Company’s CEO Heard the Clock Tick.” −“XYZ Company’s CFO Pushed Out after acquisition.”

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FSO SOLUTIONS

Be diplomatic Have an early dialogue Ask for supporting documents Convey that more information is often better Reference the mitigating conditions

• Example: Foreign Influence• Explain how mitigating conditions apply

Recommend outside counsel • Attorney Client Privileged Communications

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INTERROGATORIES – What to do

“Additional information is needed from you to assist this office to determine whether granting or continuing a security clearance eligibility is in the national interest. You must respond and answer the interrogatories within twenty (20) calendar days from your receipt of this letter. ”

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INTERROGATORIES

Use this Opportunity to Address all Security Concerns• Provide all requested documentation;• Explain any disqualifying conditions including

inconsistencies in the record; and• Prove that Applicant has mitigated security concerns and

should receive clearance.

“Prompted by information from employee given during the interview with the Authorized Investigator for the Department of Defense.”

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Why wait? There is no reason to wait: Explain & Mitigate

Spot Recurring Problems:• Example: Young engineers in college

New Hires and Executives:• Provide SF 86 well before clearance

is needed

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Pre-employment Clearance Action

“If access to classified information is required by a potential employee immediately upon commencement of their employment, a PCL application may be submitted to the CSA by the contractor prior to the date of employment provided a written commitment for employment has been made by the contractor, and the candidate has accepted the offer in writing. The commitment for employment will indicate that employment shall commence within 30 days of the granting of eligibility for a PCL.”

NISPOM 2-205

NISPOM 2-205

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Timing the SF 86 Submission

As soon as the offer letter is signed, send the SF 86 See NISPOM 2-205 Pre-employment Clearance Action

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Employment Issues:Offer Letter Language

John Doe123 Any StreetSt. Louis, MO 63102

Dear Mr. Doe:

This position requires that your Top Secret clearance transfer to (Company) within a reasonable period of time (approximately two weeks) and that you maintain your Top Secret clearance. If your clearance is denied, suspended or revoked for any reason or does not transfer, you will not be able to work in this position. Your continued employment with (Company) in a position not requiring a security clearance would depend on the availability of such a position for which (Company) will determine if you are qualified.

Very truly yours,

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Offer Letter Language:Start Date and Background Investigation

We would like your employment to begin within 30 days of you being issued the appropriate personnel clearance.  This offer is contingent upon a favorable completed Single Scope Background Investigation (SSBI) and Top Secret clearance (or favorable completed National Agency Check (NAC) and Secret clearance) granted through Defense Security Services (DSS).  Before (Company) can conduct a background investigation, we must receive your signed offer of employment and your signed Consent Form.  For that reason, please carefully read, “A Summary of Your Rights Under the Fair Credit Reporting Act” and carefully read, sign, and return the “Disclosure and Consent Concerning Consumer and Investigative Consumer Reports” to Human Resources at (Address).

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Offer Letter Language

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FSO’s Proactive Steps

As soon as the offer letter is signed, send the SF 86; and• See NISPOM 2-205• Include this in the offer letter

Send the link and a worksheet as soon as the offer letter is sent

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Representative Case:Foreign Influence and Foreign Preference Allegations

Mother diagnosed with cancer in Taiwan • Renewed Taiwan ID Card & Passport to access accounts in

Taiwan for parents −Purpose: to provide medical care for mother

• Applicant did not have a clearance at the time Mitigation:

• Closed the accounts opened by his father • FSO maintains passport • Traveled on his US passport

Key: FSO and managers were proactive from the beginning

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Representative Case: Effective Chief Security Officers & FSOs

Government issued a favorable security clearance ruling for a key engineer employed by an engineering client

A naturalized U.S. citizen originally from Middle East Ties to foreign nations, including real estate holdings Demonstrated deep loyalty to the United States in various

ways Demonstrated strong compliance program at company and

history of strong industrial security program

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What are the benefits for the company and the country? Effective engineer to continue to work on key programs

FSO demonstrated strength of security program to the government

Knowledge preserved for certain key programs

Saved time and resources with the existing and future contracts

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Representative Case:Providing Clear Evidence in a Complex Situation

A field service engineer, who had been deployed to combat zones in Iraq and Afghanistan

Won reinstatement of her revoked security clearance within 72 hours of submitting evidence to the government

Shocked to learn about the revocation because neither she nor her company had received notice

In less than six weeks, gathered dozens of sworn statements from personnel all over the world and prepare a detailed, 20-page response

Convinced government of the young engineer’s integrity and suitability to handle classified information

The government quickly restored the clearance in August 2011 without requiring a hearing or any further documentation to obtain the right result

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Return on Investment (ROI)

Complex Situation streamlined

Saved the reputation of the company with the government and the prime

Saved costs by avoiding further adjudication (hearing)

Demonstrated to the company employees that the company will stand by those who deserve assistance in the right situations

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Proactive Approach during Sequestration

Saves your company money and resource

Reinforces you as a leader to your leadership that you are cost-effective and forward thinking

Saves the company time, money and frustration

The consequences of a delay and damage to a reputation are costly

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It all starts with a form…

Image Management Relationships with your customers One form can get you in trouble Cost of re-submitting

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What must you have in the current environment? Preventative mindset Investigation Capabilities Resolve issues quickly and efficiently Advisors who understand of FCL issues, including FOCI

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Brian E. Kaveney, PartnerArmstrong Teasdale LLP

7700 Forsyth Blvd., Suite 1800

St. Louis, MO 63105

Direct: 314.259.4757 | Fax: 314.552.4830

Main Office: 314.621.5070

1-800-243-5070

bkaveney@armstrongteasdale.com

An effective FSO strives to save time, money, and

frustration