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ISCR Case 19-00183 — CASE

ISCR Case 19-00183denied

Case Headnote

ISCR Case No. 19-00183

deniedOct 16, 2019· Hon. Richard A. Cefola· hearing

Summary

A 33-year-old defense contractor was denied a security clearance due to financial considerations under Guideline F. The applicant faced multiple allegations of past-due debts, admitting to most, while the government withdrew two.

Specific debts included approximately $7,118 to Creditor A, about $24,428 and $2,296 to Creditor D for car loans and another debt, respectively, and about $1,245 to Creditor G. Other outstanding debts included approximately $501 to Creditor H, about $1,245 to Creditor I, about $1,946 to Creditor L, approximately $3,303 to Creditor M, about $1,271 to Creditor O, about $1,043 to Creditor P, and about $159 to Creditor Q. The applicant provided documentation showing a $315 debt to Creditor B was paid in full, and averred a $140 debt to Creditor C was paid. A settlement agreement was also reached with Creditor F to pay $521.

The judge found the applicant's ongoing financial issues significant, noting over $40,000 in past-due debts. The denial was based on the applicant's failure to demonstrate financial responsibility, provide evidence of efforts to resolve the issues, or show that the problems were unlikely to recur.

Why the Applicant Was Denied

The applicant has significant past-due debts totaling over $40,000, indicating a lack of financial responsibility.
The applicant failed to provide evidence of efforts to resolve his financial issues or demonstrate that they are unlikely to recur.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability to Satisfy Debts
AG ¶ 19(b)raisedUnwillingness to Satisfy Debts Regardless of the Ability to Do So
AG ¶ 19(c)raisedHistory of Not Meeting Financial Obligations

Key Rule Quoted

“Failure to live within one's means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual's reliability, trustworthiness, and ability to protect classified or sensitive information.”

Procedural Posture

SOR issuedFeb 8, 2019
Answer filedMay 10, 2019
Hearing heldAug 13, 2019
Decision dateOct 16, 2019

Cite For

Significant Past-due Debts Under Guideline F
Failure to Demonstrate Financial Responsibility
Ongoing Financial Issues as a Security Concern

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

Standardized Decision Profile

SEAD-4 Guideline F · descriptive summary of a decided case

Posture: HearingDecided: denied

The judge found multiple past-due debts against the applicant, including significant amounts owed to various creditors. While one debt was found to be paid in full, the overall financial situation led to a decision against the applicant regarding their security clearance eligibility.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant has a past-due debt to Creditor A in the amount of about $7,118. $7,118	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.b	Applicant has submitted documentation showing that he has 'paid in full' the $315 alleged past-due debt to Creditor B. $315	For Applicant	Unspecified Financial	Admitted	—	—	—
1.c	Applicant avers he has now paid a past-due debt to Creditor C in the amount of about $140. $140	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.d	Applicant has a past-due debt to Creditor D for car loans in the amount of about $24,428. $24,428	Against Applicant	Auto Loan Debt	Admitted	—	—	—
1.e	Applicant has a past-due debt to Creditor D in the amount of about $2,296. $2,296	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.f	Applicant has submitted documentation showing that he has a settlement agreement with Creditor F to pay $521 to settle this alleged past-due debt. $521	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.g	Applicant has a past-due debt to Creditor G in the amount of about $1,245. $1,245	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.h	Applicant has a past-due debt to Creditor H in the amount of about $501. $501	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.i	Applicant has a past-due debt to Creditor I in the amount of about $1,245. $1,245	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.j	These allegations have been withdrawn by the Government.	Withdrawn	Unspecified Financial	Unknown	—	—	—
1.l	Applicant has a past-due debt to Creditor L in the amount of about $1,946. $1,946	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.m	Applicant has past-due debts to Creditor M totaling about $3,303. $3,303	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.o	Applicant has a past-due debt to Creditor O in the amount of about $1,271. $1,271	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.p	Applicant has a past-due debt to Creditor P in the amount of about $1,043. $1,043	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.q	Applicant has a past-due debt to Creditor Q in the amount of about $159. $159	Against Applicant	Unspecified Financial	Admitted	—	—	—

Descriptive standardized rendering of a decided public case (Guideline F). The verbatim source decision is shown in full below.

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

HEARING

APPEARANCES

DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS

In the matter of: )

)

ISCR Case No. 19-00183

)

) Applicant for Security Clearance )

For Government: Tara Karoian, Esq., Department Counsel For Applicant: Pro se

October 16, 2019 ______________

STATEMENT OF CASE

______________

CEFOLA, Richard A., Administrative Judge:

Statement of the Case

On February 8, 2019, in accordance with DoD Directive 5220.6, as amended (Directive), the Department of Defense issued Applicant a Statement of Reasons (SOR) alleging facts that raise security concerns under Guideline F. The SOR further informed Applicant that, based on information available to the government, DoD adjudicators could not make the preliminary affirmative finding it is clearly consistent with the national interest to grant or continue Applicant’s national security eligibility.

Applicant answered the SOR on May 10, 2019, and requested a hearing before an administrative judge. (Answer.) The case was assigned to me on July 2, 2019. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on July 9, 2019, scheduling the hearing for August 13, 2019. The hearing was convened as scheduled. The Government offered Exhibits (GXs) 1 through 4, which were admitted without objection. Applicant testified on his own behalf. Applicant offered one set of documents, which I marked Applicant’s Exhibits (AppX) A, and admitted into evidence. The record was left open until September 13, 2019, for receipt of additional

documentation. Applicant offered nothing further; and as such, the record was closed on that date. DOHA received the transcript of the hearing (TR) on August 22, 2019.

FINDINGS OF FACT

Applicant admitted to all the allegations of the SOR. However, the Government withdrew ¶¶ 1.j., and 1.1.k. After a thorough and careful review of the pleadings, exhibits, and testimony, I make the following findings of fact.

Applicant is a 33-year-old employee of a defense contractor. He has been employed with the defense contractor for 15 months. (TR at page 15 line 7 to page 18 line 1.) He is married, and has two children. (Id.) He attributes his current financial difficulties to periods of unemployment and underemployment. (TR at page 25 line 13 to page 31 line 12.)

Guideline F - Financial Considerations

1.a. Applicant has a past-due debt to Creditor A in the amount of about $7,118. (TR at page 19 line 15 to page 22 line 23, and AppX A at page 6.) Despite having a month to do so, Applicant has submitted nothing further in this regard. This allegation is found against Applicant.

1.b. Applicant has submitted documentation showing that he has “paid in full” the $315 alleged past-due debt to Creditor B. (TR at page 18 lines 9–18, and Answer at page 2.) This allegation is found for Applicant.

1.c. Applicant avers he has now paid a past-due debt to Creditor C in the amount of about $140. (TR at page 22 line 24 to page 23 line 7.) Despite having a month to do so, Applicant has submitted nothing further in this regard. This allegation is found against Applicant.

1.d. Applicant has a past-due debt to Creditor D for car loans in the amount of about $24,428. (TR at page 23 line 14 to page 24 line 22.) Despite having a month to do so, Applicant has submitted nothing further in this regard. This allegation is found against Applicant.

1.e. Applicant has a past-due debt to Creditor D in the amount of about $2,296. (TR at page 32 line 23 to page 33 line 12.) Despite having a month to do so, Applicant has submitted nothing further in this regard. This allegation is found against Applicant.

1.f. Applicant has submitted documentation showing that he has a settlement agreement with Creditor F to pay $521 to settle this alleged past-due debt. (TR at page 18 line 19 to page 19 line 14, and Answer at page 6.) However, as Applicant has submitted nothing further in this regard, this allegation is found against Applicant.

1.g. Applicant has a past-due debt to Creditor G in the amount of about $1,245. (TR at page 33 lines 13–21.) Despite having a month to do so, Applicant has submitted nothing further in this regard. This allegation is found against Applicant.

1.h. Applicant has a past-due debt to Creditor H in the amount of about $501. (TR at page 33 line 22 to page 34 line 9.) Despite having a month to do so, Applicant has submitted nothing further in this regard. This allegation is found against Applicant.

1.i. Applicant has a past-due debt to Creditor I in the amount of about $1,245. (TR at page 34 lines 10–11.) Despite having a month to do so, Applicant has submitted nothing further in this regard. This allegation is found against Applicant.

1.j. and 1.k. These allegations have been withdrawn by the Government. (TR at page 34 line 15 to page 36 line 2.)

1.l. Applicant has a past-due debt to Creditor L in the amount of about $1,946. (TR at page 36 line 3 to page 37 line 23.) Despite having a month to do so, Applicant has submitted nothing further in this regard. This allegation is found against Applicant.

1.mand 1.n. Applicant has past-due debts to Creditor M totaling about $3,303. (TR at page 37 line 24 to page 40 line 20.) Despite having a month to do so, Applicant has submitted nothing further in this regard. These allegations are found against Applicant.

1.o. Applicant has a past-due debt to Creditor O in the amount of about $1,271. (TR at page 40 line 21 to page 42 line 8.) Despite having a month to do so, Applicant has submitted nothing further in this regard. This allegation is found against Applicant.

1.p. Applicant has a past-due debt to Creditor P in the amount of about $1,043. (TR at page 42 lines 9–25.) Despite having a month to do so, Applicant has submitted nothing further in this regard. This allegation is found against Applicant.

1.q. Applicant has a past-due debt to Creditor Q in the amount of about $159. (TR at page 43 lines 1–19.) Despite having a month to do so, Applicant has submitted nothing further in this regard. This allegation is found against Applicant.

POLICIES

When evaluating an applicant’s national security eligibility, the administrative judge must consider the adjudicative guidelines (AG). In addition to brief introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which are to be used in evaluating an applicant’s national security eligibility.

These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, administrative judges apply the guidelines in conjunction with the factors listed in AG ¶ 2 describing the adjudicative process. The

administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶ 2(a), the entire process is a conscientious scrutiny of a number of variables known as the whole-person concept. The administrative judge must consider all available, reliable information about the person, past and present, favorable and unfavorable, in making a decision.

The protection of the national security is the paramount consideration. AG ¶ 2(b) requires that “[a]ny doubt concerning personnel being considered for national security eligibility will be resolved in favor of the national security.” In reaching this decision, I have drawn only those conclusions that are reasonable, logical, and based on the evidence contained in the record.

Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Directive ¶ E3.1.15 states the “applicant is responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by the applicant or proven by Department Counsel, and has the ultimate burden of persuasion as to obtaining a favorable clearance decision.”

A person who applies for access to classified information seeks to enter into a fiduciary relationship with the Government predicated upon trust and confidence. This relationship transcends normal duty hours and endures throughout off-duty hours. The Government reposes a high degree of trust and confidence in individuals to whom it grants access to classified information. Decisions include, by necessity, consideration of the possible risk the applicant may deliberately or inadvertently fail to protect or safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation as to potential, rather than actual, risk of compromise of classified information.

Section 7 of Executive Order (EO) 10865 provides that adverse decisions shall be “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive information).

ANALYSIS

Guideline F - Financial Considerations

The security concern relating to the guideline for Financial Considerations is set out in AG ¶ 18:

Failure to live within one's means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual's reliability, trustworthiness, and ability to protect classified or sensitive information. Financial distress can also be caused or exacerbated by, and thus can be a possible indicator of, other issues of personnel security concern such as excessive gambling, mental

health conditions, substance misuse, or alcohol abuse or dependence. An individual who is financially overextended is at greater risk of having to engage in illegal or otherwise questionable acts to generate funds. Affluence that cannot be explained by known sources of income is also a security concern insofar as it may result from criminal activity, including espionage.

The guideline notes several conditions that could raise security concerns under AG ¶ 19. Three are potentially applicable in this case:

(a) inability to satisfy debts;

(b) unwillingness to satisfy debts regardless of the ability to do so; and

Applicant has significant past-due indebtedness. The evidence is sufficient to raise these disqualifying conditions.

AG ¶ 20 provides conditions that could mitigate security concerns. I considered all of the mitigating conditions under AG ¶ 20 including:

(a) the behavior happened so long ago, was so infrequent, or occurred under such circumstances that it is unlikely to recur and does not cast doubt on the individual's current reliability, trustworthiness, or good judgment;

(b) the conditions that resulted in the financial problem were largely beyond the person's control (e.g., loss of employment, a business downturn, unexpected medical emergency, a death, divorce or separation, clear victimization by predatory lending practices, or identity theft), and the individual acted responsibly under the circumstances;

(c) the individual has received or is receiving financial counseling for the problem from a legitimate and credible source, such as a non-profit credit counseling service, and there are clear indications that the problem is being resolved or is under control;

(d) the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts; and

(e) the individual has a reasonable basis to dispute the legitimacy of the past-due debt which is the cause of the problem and provides documented proof to substantiate the basis of the dispute or provides evidence of actions to resolve the issue.

None of these apply. Applicant’s financial problems are ongoing. He has a long history of delinquencies. He has not demonstrated that future financial problems are unlikely. Mitigation under AG ¶ 20 has not been established. Financial Considerations is found against Applcant.

WHOLE PERSON CONCEPT

Under the whole-person concept, the administrative judge must evaluate an applicant’s eligibility for a security clearance by considering the totality of the applicant’s conduct and all relevant circumstances. The administrative judge should consider the nine adjudicative process factors listed at AG ¶ 2(d):

(1) the nature, extent, and seriousness of the conduct; (2) the circumstances surrounding the conduct, to include knowledgeable participation; (3) the frequency and recency of the conduct; (4) the individual’s age and maturity at the time of the conduct; (5) the extent to which participation is voluntary; (6) the presence or absence of rehabilitation and other permanent behavioral changes; (7) the motivation for the conduct; (8) the potential for pressure, coercion, exploitation, or duress; and (9) the likelihood of continuation or recurrence.

Under AG ¶ 2(c), the ultimate determination of whether to grant eligibility for a security clearance must be an overall commonsense judgment based upon careful consideration of the guidelines and the whole-person concept.

I considered the potentially disqualifying and mitigating conditions in light of all facts and circumstances surrounding this case. I have incorporated my comments under Guideline F in my whole-person analysis. Overall, the record evidence leaves me with questions and doubts as to Applicant’s eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant failed to mitigate the Financial Considerations security concerns.

FORMAL FINDINGS

Formal findings for or against Applicant on the allegations set forth in the SOR, as required by ¶ E3.1.25 of the Directive, are:

Paragraph 1, Guideline F:

AGAINST APPLICANT

Subparagraph 1.a:

Against Applicant

Subparagraph 1.b:

For Applicant

Subparagraphs 1.c~i:

Against Applicant

Subparagraphs 1.j. and 1.k:

Withdrawn

Subparagraphs 1.l~q:

Against Applicant

CONCLUSION

In light of all of the circumstances presented by the record in this case, it is not clearly consistent with the national interest to grant Applicant national security eligibility for a security clearance. Eligibility for access to classified information is denied.

________________________ Richard A. Cefola Administrative Judge