- Posted on: Aug 15 2014
For many government contractors and federal employees, their security clearance is their livelihood. Yet most individuals with a security clearance do little to protect this valuable asset until a reinvestigation is upon them.
After the Edward Snowden leaks and the tragic Navy Yard shootings, USIS and the current security clearance system have been under increased scrutiny. Legislation has been proposed to tighten the security clearance process, and the Pentagon has threatened to take the entire process back from USIS. In addition, anecdotal accounts from many insiders indicate that clearance scrutiny has already been intensified, regardless of these potential systemic changes. Despite this increased scrutiny, most government employees and contractors with security clearances don’t think much about maintaining their clearance until a reinvestigation is on the horizon.
What Is Due Diligence?
Due diligence is a familiar concept to corporate lawyers but is a somewhat foreign concept in the world of security clearances. In the corporate world, due diligence is a necessary task in protecting any investment or asset. Given that the loss of a security clearance can cost a person his or her livelihood, it is important to consider taking steps to protect that asset well in advance of any reinvestigation.
In the most simple terms, due diligence implies making sure that what you are buying is worth what you plan to pay for it, but in more complex transactions, due diligence necessarily entails risk mitigation. If you are purchasing a business and see that there is a potential problem that may arise in the future that creates risk for the business, you might take actions today to try to mitigate or insure against that risk.
For example, if you are reviewing the accounting records of a potential business acquisition and notice some creative bookkeeping that could result in a tax audit and potential IRS penalties, you might take steps to correct the problem or improve the company’s position if a future audit were to happen. Doing so requires you to look at the business’s records through the eyes of the IRS to try to see the situation as they would see it.
These same principles can be applied in the security clearance context. Individuals with a security clearance should consider present day decisions from the perspective of how they might be viewed by a Security Officer.
Step One: Investigation
As any investor knows, the first step to any due diligence is investigation, as you must know what the situation is before you can consider risk mitigation measures. In the world of security clearances, this means looking at what the Security Officer might look at during a reinvestigation. Clearance hearings can consider a wide variety of information, depending on the type of clearance and the nature of the investigation, so a comprehensive investigation is challenging. However, at a minimum, an individual with a security clearance should know what the information in the public record says about him or her.
Accordingly, an individual holding a security clearance should be familiar with any information that would come up in a standard background check. As financial issues are often a concern for Security Officers, you should regularly monitor any changes to your credit report and take appropriate action to correct any false information and mitigate against any accurate but negative information. Individuals with clearances should also be aware of any judicial records concerning them, from civil claims or judgments, criminal proceedings including misdemeanors, and even traffic offenses.
Step Two: Risk Mitigation
A person with a security clearance simply cannot deal with financial or legal matters in the same way as other civilians. Whereas a couple late credit card payments might not be particularly significant to some, depending on the circumstances, they might raise a flag for a Security Officer. Similarly, whereas many folks can just pay a speeding ticket (which is an admission of guilt), a person with a clearance may want to consider other items on his or her driving record–and how the driving record as a whole will be viewed by the Security Officer–before making that decision.
Risk mitigation begins with addressing what is already in the public record. If there are any negative items on a credit report, an individual with a security clearance should have a file with a written explanation of the facts and circumstances, accompanied by any supporting documentation. Ideally, the written explanation would have been prepared contemporaneous with the event and–for significant events–with the assistance of counsel.
In addition, if there is any information that is incorrect or not entirely accurate, steps should be taken to correct the information or note that it is disputed. The efforts to correct or dispute should be made as soon as the individual learns of the incorrect information and should be done in writing. For example, an incorrect notation regarding a late payment on one’s credit report would ideally be dealt with by a written letter of dispute or verification request made to the credit card company pursuant to the Fair Debt Collections Practices Act, and also a letter to the applicable credit reporting agency requesting that the item be marked as dispute on the credit report. Copies of all such correspondence should be retained in the individual’s own files for future reference.
When new matters arise that can potentially affect a security clearance, caution should be taken to address them on two parallel tracks: first addressing the problem itself, and second taking care to ensure that the resolution to the problem is conducted in such a way as to not have a negative effect on one’s clearance. For example, a client recently came to me with what most people would think is an insignificant problem: his car loan bank was taking six to eight weeks to post his car payments to his account. [Note: The facts of this example have been altered to preserve client confidentiality.] If this person did not have a job that was contingent on a top secret clearance, he might have been counseled that no action needs be taken; as long as he can prove he paid the mortgage on time, he will have the evidence to dispute any late fees, negative credit items, or foreclosure actions.
For an individual with a clearance, however, that approach could potentially trigger an early reinvestigation and possibly a costly and risky hearing. Accordingly, even though there had only been a couple of late-credited payments and no negative items had yet appeared on the client’s credit report, swift action was taken to not only dispute the practice but to document the facts of what was happening and the dispute efforts that were being undertaken. Such documentation will significantly improve the client’s position if a reinvestigation hearing is ever conducted and that particular issue is raised.
For individuals with a security clearance, the loss of their clearance could mean financial ruin. In the current political climate, such individuals must take great care to safeguard their clearance by making efforts today to better position themselves for a reexamination tomorrow. It is therefore important for such individuals to conduct due diligence of their legal and financial affairs and to do so with the counsel of an attorney who specializes in security clearance investigations and hearings.
Posted in: Security Clearance