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ISCR Case 19-01869 — CASE

ISCR Case 19-01869denied

Case Headnote

ISCR Case No. 19-01869

deniedDec 9, 2019· Hon. Richard A. Cefola· hearing

Summary

A 35-year-old defense contractor and former U.S. Navy member was denied a security clearance under Guideline F (Financial Considerations) due to significant unresolved debts. The Statement of Reasons detailed seven specific allegations of indebtedness. These included approximately $10,101 owed to a landlord, about $10,026 for a business loan, and roughly $7,970 for an auto loan.

Further debts included approximately $5,508 and $2,892 owed to a credit union, about $4,794 to a bank, and around $215 to a cable company. While the applicant addressed some debts through consolidation, over $20,000 in past-due indebtedness remained unresolved.

The denial was based on the applicant's significant unresolved past-due indebtedness and a long history of delinquencies. The applicant failed to demonstrate that future financial problems were unlikely, leading to the denial of the security clearance.

Why the Applicant Was Denied

The applicant has significant past-due indebtedness totaling over $20,000 that remains unresolved.
The applicant has a long history of delinquencies and did not demonstrate that future financial problems are unlikely.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability to Satisfy Debts
AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations

Mitigating

AG ¶ 20(a)rejectedBehavior Happened Long Ago or InfrequentlyThe applicant's financial problems are ongoing.
AG ¶ 20(b)rejectedConditions Largely Beyond the Person's ControlThe applicant's financial issues are not solely due to uncontrollable circumstances.
AG ¶ 20(c)rejectedReceiving Financial CounselingThe applicant did not provide evidence of effective financial counseling.
AG ¶ 20(d)rejectedGood-faith Effort to Repay DebtsThe applicant has not addressed all overdue debts.

Key Rule Quoted

“The protection of the national security is the paramount consideration.”

Procedural Posture

SOR issuedJun 26, 2019
Answer filedJul 23, 2019
Hearing heldSep 11, 2019convened as scheduled
Decision dateDec 9, 2019

Cite For

Failure to Mitigate Financial Difficulties Under Guideline F
Significant Past-due Indebtedness as a Disqualifying Factor
Ongoing Financial Issues Impacting Security Clearance Eligibility

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 several financial concerns against the applicant, including a business loan and an auto loan. However, debts related to a landlord and a credit union were found for the applicant due to ongoing debt consolidation efforts.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant is indebted to Creditor A, a landlord, in the amount of about $10,101. $10,101	For Applicant	Unspecified Financial	Admitted	—	—	—
1.b	Applicant is indebted to Creditor B, for a business loan, in the amount of about $10,026. $10,026	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.c	Applicant is indebted to Creditor C, for an auto loan, in the amount of about $7,970. $7,970	Against Applicant	Auto Loan Debt	Admitted	—	—	—
1.d	Applicant is indebted to Creditor D, a credit union, in the amount of about $5,508. $5,508	For Applicant	Unspecified Financial	Admitted	—	—	—
1.e	Applicant is indebted to Creditor E, a bank, in the amount of about $4,794. $4,794	For Applicant	Unspecified Financial	Admitted	—	—	—
1.f	Applicant is also indebted to Creditor D, the same credit union as noted in 1.d., above, in the amount of about $2,892. $2,892	For Applicant	Unspecified Financial	Admitted	—	—	—
1.g	Applicant is indebted to Creditor G, a cable company, in the amount of about $215. $215	For Applicant	Utility or Phone Debt	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. 19-01869

)

) Applicant for Security Clearance )

For Government: Aubrey De Angelis, Esq., Department Counsel For Applicant: Pro se

December 9, 2019

STATEMENT OF CASE

CEFOLA, Richard A., Administrative Judge: Statement of the Case On June 26, 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 security clearance. Applicant answered the SOR on July 23, 2019 (Answer), and requested a hearing before an administrative judge. The case was assigned to me on September 5, 2019. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on September 5, 2019, scheduling the hearing for September 11, 2019. The hearing was convened as scheduled. The Government offered Exhibits (GXs) 1 through 5, which were admitted into evidence. Applicant testified on his own behalf. The record was left open until September 25, 2019, for receipt of additional documentation.

Applicant presented six documents, which I marked Applicant’s Exhibits (AppXs) A and B. DOHA received the transcript of the hearing (TR) on October 24, 2019.

FINDINGS OF FACT

Applicant admitted to the allegations in SOR with explanations. After a thorough and careful review of the pleadings, exhibits, and testimony, I make the following findings of fact.

Applicant is a 35-year-old employee of a defense contractor. (GX 1 at page 7.) He has only recently been employed by a defense contractor. (GX 1 at page 13, and TR at page 6 lines 4–9.) He served in the U.S. Navy “from 2003 through 2011.” (TR at page 13 lines 12–14.). He is married, and has two children. (TR at page 17 lines 7–9.) He attributes his current financial difficulties to a failed business. (TR at page 13 line 17 to page 15 line 13.)

Guideline F - Financial Considerations

1.a. Applicant is indebted to Creditor A, a landlord, in the amount of about $10,101. He is addressing this debt through a debt consolidation service; and as such, this allegation is found for Applicant. (TR at page 18 line 17 to page 22 line 11, and Answer at pages vand vi.)

1.b. Applicant is indebted to Creditor B, for a business loan, in the amount of about $10,026. (TR at page 23 line 11 to page 25 line 12.) He has offered nothing further in this regard; and as such, this allegation is found against Applicant.

1.c. Applicant is indebted to Creditor C, for an auto loan, in the amount of about $7,970. (TR at page 25 lines 13–23.) He has offered nothing further in this regard; and as such, this allegation is also found against Applicant.

1.d. Applicant is indebted to Creditor D, a credit union, in the amount of about $5,508. He is addressing this debt through a debt consolidation service; and as such, this allegation is also found for Applicant. (TR at page 25 line 24 to page 26 line 17, and Answer at page v.)

1.e. Applicant is indebted to Creditor E, a bank, in the amount of about $4,794. He is addressing this debt through a debt consolidation service; and as such, this allegation is also found for Applicant. (TR at page 26 line 18 to page 27 line 8, and Answer at page v.)

1.f. Applicant is also indebted to Creditor D, the same credit union as noted in 1.d., above, in the amount of about $2,892. He is addressing this debt through a debt consolidation service; and as such, this allegation is also found for Applicant. (TR at page 27 line 9 to page 28 line 2, and Answer at page v.)

1.g. 1.e. Applicant is indebted to Creditor G, a cable company, in the amount of about $215. He has paid this debt as evidenced by correspondence from this creditor; and as such, this allegation is found for Applicant. (TR at page 28 lines 4–13, and AppX A at page 3.)

Applicant is well respected both by a former military member, and by a work colleague. (AppX B.)

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. Two are potentially applicable in this case:

(a) inability to satisfy debts; 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; and

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

Although Applicant has addressed much of his past-due indebtedness, his financial problems are ongoing as he has yet to address two past-due debts totaling over $20,000. He has a long history of delinquencies. Applicant has not demonstrated that future financial problems are unlikely. Mitigation under AG ¶ 20 has not been established.

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. Some of the factors in AG ¶ 2(d) were addressed under those guidelines, but some warrant additional comment. Applicant is respected by those who know him. He performs well at his job.

However, 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:

For Applicant

Subparagraphs 1.b. and 1.c.: Against Applicant

Subparagraphs 1.d. through 1.g.: For 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