Due Process Denied — The LOJ Problem

In April 2014 a DOD Inspector General report (DODIG-2014-060) found that agencies were avoiding the “due process” requirement of Executive Order 12968, “Access to Classified Information,” in situations where a clearance applicant’s need for access to classified information was terminated.  The report stated:

We recommend that. . . in substantiated misconduct cases personnel security clearance adjudicative actions continue, even if the contractor employee has been terminated and/or no longer has access to classified information.

This recommendation by the DOD Inspector General pertains to DOD agencies’ use of “Loss of Jurisdiction” (LOJ) as justification for not adjudicating potential clearance eligibility issues.  But LOJ not only affects people with eligibility issues, it also affects anyone who loses clearance sponsorship before their clearance eligibility is adjudicated.  In many cases LOJ has the same effect as a clearance denial or revocation without the “due process” required for these actions.   This leaves many people in security clearance limbo

LOJ is a major problem affecting thousands of former DOD contractor, civilian, and military personnel each year.  For contractor personnel the number of LOJs may significantly exceed the number of clearance denials and revocations each year.  The mere existence of LOJ in a clearance database record often results in a qualified job applicant being non-selected for a position requiring a security clearance.  Job applicants are unable to receive a clearance eligibility determination and have the LOJ removed without clearance sponsorship, and they are unable to obtain sponsorship due to the stigma of LOJ.

LOJ occurs when an individual’s clearance sponsorship is withdrawn while any clearance adjudication is pending.  An employer must withdraw clearance sponsorship when the employment of a cleared individual or clearance applicant is terminated or when a written offer of employment for a cleared position is rescinded.  LOJ permits DOD Central Adjudication Facilities (CAFs) to avoid making clearance decisions even when no further investigation is needed.  This results in people being denied the normal “due process” of having a decision made regarding their clearance eligibility.  LOJ can be an almost insurmountable obstacle for people trying to obtain employment that requires a federal security clearance.

Some LOJ cases involve completely clean cases where applicants are merely victims of poor timing, but most LOJ cases involve admissions or allegations of misconduct or other security concerns.  LOJ prevents people from submitting and having information considered by a DOD CAF that might refute or mitigate the security concern.  The alleged security concern can be minor or major or completely bogus and can arise from an initial personnel security investigation, a periodic reinvestigation, or a report of unfavorable information (Incident Report).   LOJs commonly fall into two categories:

A.  Clearance sponsorship is withdrawn after the applicant’s clearance investigation has been completed, but before a final clearance eligibility determination is made.  This usually occurs when:

1. an employer cannot continue employing an individual in an uncleared position while waiting for a final clearance determination,
2. an employer rescinds a conditional offer of employment because the clearance process takes longer than acceptable to fill a job vacancy, or
3. an individual is laid off due to a reduction-in-force or is separated from the Armed Forces.  This can include situations where an applicant had a Secret clearance and was pending adjudication for a Top Secret clearance.

B.   Clearance sponsorship of a cleared individual is withdrawn due to employment termination and:

1. an Incident Report, which may contain inaccurate or biased information, was submitted by the employer to a DOD CAF shortly before or after employment termination, or
2. the individual’s clearance was temporarily suspended pending further adjudicative action.

When clearance sponsorship is withdrawn under any of these circumstances, DOD CAFs annotate LOJ in the person’s Joint Personnel Adjudication System (JPAS) record.  If there’s an unresolved Incident Report or a clearance suspension, the individual’s name in his/her JPAS record is highlighted in red.

When a person applies for a new position that requires a security clearance, the prospective employer’s security officer will immediately see the LOJ in the person’s JPAS record.  Because LOJ strongly suggest the existence of a clearance eligibility problem that may require considerable time to resolve, potential employers often reject these job applicants in favor of other candidates with readily reinstatable clearances or with no prior clearance.

For people in category A (above) LOJs occur primarily because of delays in clearance adjudication caused by security issues present in their cases.  If LOJ did not occur, most would ultimately receive a security clearance.  Some of these people are able to obtain a subsequent job offer, clearance sponsorship, and have their completed background investigation favorably adjudicated in a timely manner.  Most others, who are equally qualified, will not receive a job offer and new sponsorship, because prospective employers will view their clearance eligibility as being problematic and requiring too much time to resolve.  People in category B rarely receive a job offer for a cleared position.  The red flag in their JPAS record alerts the prospective employer’s security officer that the clearance has been suspended or an unresolved Incident Report exists and that any attempt to have the clearance reinstated will probably encounter significant delays.

LOJ not only affects individuals.  It affects Government and private employers by discouraging them from hiring qualified people, because of potential delays in putting them to work in cleared positions.  The Government has already paid the vast majority of the cost of security clearance vetting for these people.  If they are unable to obtain new sponsorship within a reasonable period of time, this is money that will be wasted.  It also will result in the loss of valuable human capital.

The current DOD LOJ policy needs to be changed.  DOD should provide all clearance applicants “due process” and make clearance eligibility determinations, even if the applicant’s employment and need for access to classified information was terminated.

By William H. Henderson
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