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ISCR Case 19-02366 — CASE

ISCR Case 19-02366denied

Case Headnote

ISCR Case No. 19-02366

deniedMay 21, 2020· Hon. Richard A. Cefola· hearing

Summary

A 49-year-old defense contractor employee was denied a security clearance under Guideline F (Financial Considerations) due to significant past-due debts totaling approximately $30,686. These debts were attributed to periods of unemployment.

The Statement of Reasons detailed several specific past-due debts, including approximately $2,183 to Creditor A, $2,986 to Creditor B, $1,660 to Creditor C, and $1,985 in medical debts to Creditor D. Additionally, the applicant admitted to $10,621 in credit card debts to Creditor J, $5,406 to Creditor N, $2,609 to Creditor O, $471 to Creditor P, and $2,761 to Creditor Q.

Despite acknowledging her financial difficulties and being granted additional time to address her obligations, the applicant failed to take action on her debts. The denial was based on her inability to demonstrate that future financial problems were unlikely.

Why the Applicant Was Denied

The applicant admitted to multiple past-due debts totaling approximately $30,686.
The applicant failed to take action to address her debts despite being given additional time to do so.
The applicant did not demonstrate that future financial problems were unlikely.

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)raisedA History of Not Meeting Financial Obligations

Mitigating

AG ¶ 20(a)rejectedThe Behavior Happened so Long Ago, Was so Infrequent, or Occurred Under Such Circumstances That It Is Unlikely to RecurThe applicant has a long history of delinquencies.
AG ¶ 20(b)rejectedConditions That Resulted in the Financial Problem Were Largely Beyond the Person's ControlAlthough the applicant attributed her financial difficulties to unemployment, the problems are ongoing.

Key Rule Quoted

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

Procedural Posture

SOR issuedAug 23, 2019
Answer filedSep 10, 2019
Hearing heldJan 6, 2020
Decision dateMay 21, 2020

Cite For

Financial Considerations Under Guideline F
Impact of Ongoing Financial Issues on Security Clearance Eligibility
Failure to Mitigate Significant Past-due Debts

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 financial concerns under Guideline F, including various past-due debts totaling over $30,000. The applicant admitted to these debts but failed to take any action to address them, leading to a decision against the applicant.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant admits to a past-due debt to Creditor A in the amount of about $2,183. $2,183	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.b	Applicant admits to a past-due debt to Creditor B in the amount of about $2,986. $2,986	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.c	Applicant admits to a past-due debt to Creditor C in the amount of about $1,660. $1,660	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.d	Applicant admits to past-due medical debts to Creditor D in the amount totaling about $1,985. $1,985	Against Applicant	Medical Debt	Admitted	—	—	—
1.j	Applicant admits to past-due credit card debts to Creditor J in the amount totaling about $10,621. $10,621	Against Applicant	Credit Card Debt	Admitted	—	—	—
1.n	Applicant admits to a past-due debt to Creditor N in the amount of about $5,406. $5,406	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.o	Applicant admits to a past-due debt to Creditor O in the amount of about $2,609. $2,609	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.p	Applicant admits to a past-due debt to Creditor P in the amount of about $471. $471	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.q	Applicant admits to a past-due debt to Creditor Q in the amount of about $2,761. $2,761	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. 19-02366

)

) Applicant for Security Clearance )

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

May 21, 2020 ______________

STATEMENT OF CASE

______________

CEFOLA, Richard A., Administrative Judge:

Statement of the Case

On August 23, 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 September 10, 2019, and requested a hearing before an administrative judge. (Answer.) That Answer included Applicant’s Exhibits (AppXs) A through L, which were admitted into evidence. The case was assigned to me on November 25, 2019. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on November 26, 2019, scheduling the hearing for January 6, 2020. The hearing was convened as scheduled. The Government offered Exhibits (GXs) 1 through 4, which were admitted into evidence. Applicant testified on her own behalf. The record was left open until February 6, 2020, for receipt of additional documentation.

Applicant has submitted nothing further. DOHA received the transcript of the hearing (TR) on January 14, 2020.

FINDINGS OF FACT

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

Applicant is a 49-year-old employee of a defense contractor. (GX 1 at pages 7 and 12.) She has been employed with the defense contractor since July of 2019. (TR at page 12 line 14 to page 15 line 18.) She is married to her second husband, and has seven children and stepchildren. (TR at page 19 line 6 to page 20 line 6.) Her current husband is unemployed. She also attributes their current financial difficulties to her additional periods of unemployment and underemployment. (TR at page 12 line 14 to page 15 line 18.)

Guideline F - Financial Considerations

1.a. Applicant admits to a past-due debt to Creditor A in the amount of about $2,183. (TR at page 20 line 12 to page 26 line 18.) Despite having been given an additional month to do so, Applicant has done nothing to address this debt. (TR at page 26 line 23 to page 27 line 12.) This allegation is found against Applicant.

1.b. Applicant admits to a past-due debt to Creditor B in the amount of about $2,986. (TR at page 20 line 12 to page 26 line 18.) Despite having been given an additional month to do so, Applicant has done nothing to address this debt. (TR at page 27 line 13 to page 28 line 4.) This allegation is found against Applicant.

1.c. Applicant admits to a past-due debt to Creditor C in the amount of about $1,660. (TR at page 20 line 12 to page 26 line 18.) Despite having been given an additional month to do so, Applicant has done nothing to address this debt. (TR at page 28 lines 5–10.) This allegation is found against Applicant.

1.d.~1.i. Applicant admits to past-due medical debts to Creditor D in the amount totaling about $1,985. (TR at page 15 line 20 to page 18 line 24.) Despite having been given an additional month to do so, Applicant has done nothing to address these debts. These allegations are found against Applicant.

1.j.~1.m. Applicant admits to past-due credit card debts to Creditor J in the amount totaling about $10,621. (TR at page 21 lines 4–23.) Despite having been given an additional month to do so, Applicant has done nothing to address these debts. (TR at page 28 lines 13–21.) These allegations are found against Applicant.

1.n. Applicant admits to a past-due debt to Creditor N in the amount of about $5,406. (TR at page 20 line 12 to page 26 line 18.) Despite having been given an additional month to do so, Applicant has done nothing to address this debt. (TR at page 28 line 23 to page 29 line 5.) This allegation is found against Applicant.

1.o. Applicant admits to a past-due debt to Creditor O in the amount of about $2,609. (TR at page 20 line 12 to page 26 line 18.) Despite having been given an additional month to do so, Applicant has done nothing to address this debt. (TR at page 29 lines 6–14.) This allegation is found against Applicant.

1.p. Applicant admits to a past-due debt to Creditor P in the amount of about $471. (TR at page 20 line 12 to page 26 line 18.) Despite having been given an additional month to do so, Applicant has done nothing to address this debt. (TR at page 29 lines 15–20.) This allegation is found against Applicant.

1.q. Applicant admits to a past-due debt to Creditor Q in the amount of about $2,761. (TR at page 20 line 12 to page 26 line 18.) Despite having been given an additional month to do so, Applicant has done nothing to address this debt. 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 very significant past-due indebtedness totaling about $30,686. 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; and

(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.

Although Applicant can attribute her financial difficulties to periods of unemployment and underemployment, these financial problems are ongoing. She has a long history of delinquencies. Applicant has not demonstrated that future financial problems are unlikely. Mitigation under AG ¶ 20 has not been established. Financial Considerations is found against Applicant.

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 or 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

Subparagraphs 1.a~1.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