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ISCR Case 20-01176 — CASE

ISCR Case 20-01176denied

Case Headnote

ISCR Case No. 20-01176

Jun 14, 2022· Hon. Moira D. Modzelewski· appeal

Summary

A federal contractor in his mid-fifties was denied a security clearance primarily under Guideline F (Financial Considerations). The denial stemmed from 11 delinquent debts totaling approximately $108,900, which raised significant concerns about his financial responsibility.

Despite participating in a debt consolidation program and resolving some of these obligations, the applicant's appeal was ultimately denied. The adjudicator found that the debts were recent and numerous, and the circumstances surrounding their incurrence did not suggest that future recurrences were unlikely.

The applicant failed to provide persuasive evidence of his ability to manage his debts or adequately explain the delinquencies. Consequently, he did not demonstrate sufficient financial responsibility or the potential for future compliance with financial obligations, leading to the denial of his security clearance.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedDelinquent Debts
AG ¶ 19(c)raisedInability to Satisfy Debts

Mitigating

AG ¶ 20(a)rejectedThe Behavior Was Not RecentThe applicant's debts were recent and numerous.
AG ¶ 20(b)rejectedThe Applicant Has Made Efforts to Repay DebtsWhile the applicant is in a debt consolidation program, he has not rehabilitated his student loans or begun payments.

Key Rule Quoted

“A failure to meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations.”
— Directive, Encl. 2, App. A ¶ 18

Procedural Posture

SOR issuedNov 23, 2020
Answer filed—
Hearing held—Applicant requested a decision on the written record.
Decision dateJun 14, 2022Appeal affirmed.

Cite For

Denial of Security Clearance Due to Numerous Delinquent Debts Under Guideline F
Importance of Demonstrating Financial Responsibility for National Security Eligibility
Rejection of Mitigating Conditions When Debts Remain Unresolved or Numerous.

Editorial summary generated for research. Not legal advice; not a prediction. Verify against the full decision before relying on any quoted language.

Appeal at a glance· Full written decision

Affirmed

The appeal involved a denial of a security clearance based on financial considerations under Guideline F. The applicant challenged the Judge's consideration of a resolved debt and questioned the requirement of being debt-free for clearance eligibility. The Board affirmed the Judge's decision, finding no harmful error in the analysis of the applicant's financial situation.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowLeRoy F. Foreman — denied the clearance

Decided onthe written record

Guidelines belowGuideline F

What the Board reviewed

Decision arbitrary, capricious, or contrary to law — raised by the applicantRejected
Applicant argued that the Judge improperly considered a resolved debt in the decision.
Decision arbitrary, capricious, or contrary to law — raised by the applicantRejected
Applicant questioned whether debt must be resolved to obtain a security clearance.

Why the Board ruled this way

The Board found that the Judge's decision was supported by substantial evidence and that the applicant's arguments did not demonstrate harmful error. The Judge's findings regarding the applicant's financial situation were deemed reasonable and consistent with national security interests.

Standard of review applied

No de-novo re-decisionNo new evidence on appealSubstantial-evidence reviewArbitrary-and-capricious reviewProcedural compliance

Appeal Board panel

James F. Duffy — Chair
James E. Moody
Moira Modzelewski

Descriptive structured reading of this decided, public Appeal Board decision — what the case says, not a prediction or advice.

Full decision

The complete, official text — footnotes and signatures included — is in the original PDF.

Decision text, by section

DEFENSE OFFICE OF HEARINGS AND APPEALS

APPEAL

APPEARANCES

_______________________________________________ ) In the matter of: )

)

------- )

ISCR Case No. 20-01176

)

) Applicant for Security Clearance ) _______________________________________) DEPARTMENT OF DEFENSE DEFENSE LEGAL SERVICES AGENCY DEFENSE OFFICE OF HEARINGS AND APPEALS APPEAL BOARD POST OFFICE BOX 3656 ARLINGTON, VIRGINIA 22203 (703) 696-4759 Date: June 14, 2022

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT Pro se The Department of Defense (DoD) declined to grant Applicant a security clearance. On November 23, 2020, DoD issued a statement of reasons (SOR) advising Applicant of the basis of that decision—security concerns raised under Guideline F (Financial Considerations) of DoD Directive 5220.6 (January 2, 1992, as amended) (Directive). Applicant requested a decision on the written record. On March 31, 2022, after the record closed, Defense Office of Hearings and Appeals (DOHA) Administrative Judge LeRoy F. Foreman denied Applicant’s request for a security clearance. Applicant appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30. On appeal, Applicant challenges the Judge’s consideration of a resolved debt, highlights that he is in a debt consolidation program, and submits additional evidence. Consistent with the following, we affirm.

The Judge’s Findings of Fact and Analysis Applicant is in his mid-fifties. Employed by federal contractors since February 2006, he was cleared for a position of public trust in 2007 after disclosing delinquent debts. In his current security clearance application (SCA), Applicant disclosed two delinquent debts: a dental bill from 2014 and a car-repair bill in 2015. The car repair account was satisfied in 2019. The SOR alleges 11 delinquent debts totaling about $108,900. In April 2019, Applicant retained a law firm to assist him in resolving his debts. He enrolled in a 42-month program with an estimated completion date of October 2022 and monthly payments of $285. He has increased his payments to $355/month. His estimated completion date is now in 2025. Of the 11 delinquent debts alleged, five are federal student loans totaling about $91,100 that became delinquent in 2017. These student loans are not included in the law firm’s program. Since March 2020, Applicant’s student loans have been in forbearance under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). In August 2020, Applicant signed an agreement to participate in a loan rehabilitation program for these loans, paying $133/month, and has stated his intent to begin payment when the forbearance ends. Notwithstanding the forbearance, Applicant’s student loans were delinquent well before the forbearance went into effect, and he has not yet completed a loan rehabilitation program. “I am not convinced that he will make the required payments on his student loans when they are no longer in forbearance.” Decision at 3. The remaining six SOR allegations are consumer and auto loan debts that total about $17,800. Several debts are included in the law firm’s program. While in this program, Applicant has settled and paid one, settled two, and is negotiating one more. Applicant’s delinquent debts are recent, numerous, and not incurred under circumstances marking recurrence unlikely. Although Applicant has recently experienced events beyond his control, those situations occurred after the student loans and consumer debts were delinquent. Applicant did not hire the law firm to assist him in resolving his consumer debts until his security clearance was in jeopardy. He has not rehabilitated his student loans or begun payments. He has offered limited evidence about his overall income and expenses, and has not persuasively explained why so many debts became delinquent in 2017 and 2018, while he was employed.

DISCUSSION

On appeal, Applicant highlights that the Judge referenced his car repair bill of $7,000, states that debt has been resolved, and argues that the Judge should not have considered the debt in his decision. The debt in issue was not alleged in the SOR. As clear from the summary above, the Judge mentioned the debt as one disclosed by Applicant on his SCA, acknowledged that it was resolved, and did not reference it again. Our review confirms that the Judge did not consider that particular debt for any purpose. This claim of error lacks merit. Second, Applicant highlights that he is enrolled in a debt consolidation plan and questions whether applicants must be debt-free before granting a clearance: “Is it the government’s position that you can only hold a clearance if you are debt free before employment? As citizens of this

nation we all have some type of debt whether it’s in the form of a mortgage, student loan, car loan or credit cards.” Appeal Brief at 2. We concur that debt itself is typically not an issue. Instead, it is delinquent debt that raises a concern under Guideline F, as a failure to meet financial obligations “may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations[.]” Directive, Encl. 2, App. A ¶ 18. The 11 delinquent debts alleged in the SOR were a sufficient basis for the Judge to deny Applicant’s security clearance eligibility. Applicant makes no other assertion of harmful error on the part of the Judge. However, Applicant re-states information previously provided to the Judge, submits documents previously considered, and submits new evidence as well. The Appeal Board does not review cases de novo and is prohibited from considering new evidence on appeal. Directive E3.1.29. The Judge examined the relevant evidence and articulated a satisfactory explanation for his decision. The decision is sustainable on this record. “The general standard is that a clearance may be granted only when ‘clearly consistent with the interests of the national security.’” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). See also Directive, Encl. 2, App. A ¶ 2(b): “Any doubt concerning personnel being considered for national security eligibility will be resolved in favor of the national security.”

ORDER

The decision is AFFIRMED. Signed: James F. Duffy James F. Duffy Administrative Judge Chairperson, Appeal Board Signed: James E. Moody James E. Moody Administrative Judge Member, Appeal Board Signed: Moira Modzelewski Moira Modzelewski Administrative Judge Member, Appeal Board