CLE Presentation: Brian Kaveney, Litigation Partner at Armstrong Teasdale The choice of a lawyer is an important decision and should not be based solely on this presentation. All rights are reserved and content may not be reproduced, disseminated or transferred, in any form or by means, except with the prior written consent of Armstrong Teasdale.

1. PREVENTING SECURITY CONCERNS FOR KEY
INDIVIDUALS DURING THE DoD CAF
CONSOLIDATION
Brian Kaveney
bkaveney@armstrongteasdale.com
Phone: 1-800-243-5070 x7685
Date: April 11, 2013 Security in the Real World
Von Braun
Center, Huntsville, AL

2. ―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
2

3. An Effective FSO Must:
 Prevent Problems
 Anticipate issues to be more efficient in your job
 FSO saves time, money, and frustration
 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
3

4. Sequestration and Security
 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
4

5. Sequestration and Security
 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
5

6. 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
6

7. 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.
7

8. Who are we protecting?
 Everyone associated with NCMS has a responsibility
to the warfighter
8

9. Transition of DISCO to the Department of
Defense Central Adjudicative Facility
(DoD CAF)
• Complete consolidation of the functions, resources,
and assets into a single organization under the
Director of Administration and Management.
− 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 FY149

10. DoD CAF Status
 Total Pending Cases as of March 1, 2013
• 15,500 industry backlog
• Personnel Security Adjudicative Function
Consolidation for Greater Efficiency
10

11. 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 time11

12. What is the $ of a mistake?
 Waste of government resources
 Increases government costs
 Create backlog in the process to the detriment of
others
12

13. 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
13

14. 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
14

15. Adjudicative Guidelines cont.
• Alcohol Consumption
• Drug Involvement
• Emotional, Mental, and Personality Disorders
• Criminal Conduct
• Handling Protected Information
• Outside Activities
• Misuse of Information Technology Systems
15

16. 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
16

17. 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
17

18. Reporting Logistics
 What do you Report?
• Arrests
• Financial Issues
• Foreign Contacts
• Foreign Military
• Change in Marital Status
• Foreign Travel
• Cohabitation
• Drug Involvement
18

19. 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
19

20. 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
20

21. 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
21

22. 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
22

23. SF 86
23

24. SF 86
24

25. SF 86
Additional comments
Prevention
opportunity
OR
TROUBLE
25

26. 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
26

27. 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)
27

28. Loss of Clearance: Causes
 Busy Executive = Inadvertent failure to disclose
 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 small bank accounts to prevent an
allegation in a Statement of Reasons
28

29. NISPOM
29

30. 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)NISPOM
30

31. Completing the Electronic
Version 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.
31

32. 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
 Provide sample Statement of Reasons, opinion from
an Administrative Judge denying a clearance, and
interrogatories from DOHA
32

33. STATEMENT OF REASONS
33

34. STATEMENT OF REASONS
Allegation A
34

35. STATEMENT OF REASONS
Allegation B
35

36. STATEMENT OF REASONS
Result of the failure to disclose by the employee
36

37. How will the DOHA Judge view this?
37

38. 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.”
38

39. 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.”
39

40. 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.”
40

41. How DOHA Judges View
―Failure-to-Disclose‖ Cases
Someone who has lied on his or her SF 86
should not hold a clearance.
The only people who can prevent the failure to
disclose are the FSO and the employee.
41

42. 42

43. 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
43

44. 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
44

45. 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 what we can help the FSO . . . to reinforce the
message
45

46. 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
46

47. Conditions that May
Mitigate Security Concerns
47

48. FSOs Dealing with 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
48

49. 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
49

50. 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. ‖
50

51. 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.”
51

52. 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
52

53. 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
53

54. 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
54

55. Employment Issues:
Offer Letter Language
John Doe
123 Any Street
St. 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,
55

56. 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).
56

57. Offer Letter Language
57

58. 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
58

59. Armstrong Teasdale Representative
Case
 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
59

60. Return on Investment
 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
60

61. Armstrong Teasdale Representative
Case
 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 a response to the
government
 She was shocked to learn about the revocation because
neither she nor her company had received notice
 In less than six weeks, our security clearance team was
able to gather 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
61

62. Return on Investment (ROI)
 Complex Situation streamlined because . . .
 Saved the reputation of the company with the
government and the prime
 Save 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
62

63. 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 are costly
63

64. It all starts with a form…
 Image Management
 Relationships with your customers
 One form can get you in trouble
 Cost of re-submitting
64

65. What must you have in the current
environment?
 Preventative mindset
 Investigations
 Litigation – objective to resolve quickly and
efficiently
 Corporate – with an understanding of FCL issues
 Former FSOs, former DSS, former DISCO and DOHA,
former Judges
 Full service firm that understands security issues to
achieve the right result
65

66. Brian E. Kaveney, Partner
Armstrong 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
66
Security in the Real World