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ISCR Case 20-01045 — CASE

ISCR Case 20-01045denied

Case Headnote

ISCR Case No. 20-01045

deniedJun 3, 2021· Hon. Philip J. Katauskas· hearing

Summary

A defense contractor and single parent was denied a security clearance under Guideline F (Financial Considerations) due to significant delinquent debts. The Statement of Reasons cited student loan delinquencies totaling over $32,000 and three delinquent medical accounts amounting to $4,488. These issues raised disqualifying conditions under Adjudicative Guidelines Paragraphs 19(a) and 19(c).

While the applicant offered plausible explanations for her medical debts, the judge determined there was insufficient evidence to mitigate the overall financial concerns. Specifically, the applicant failed to demonstrate responsible actions to resolve her substantial student loan debts.

Consequently, despite the application of mitigating conditions under Adjudicative Guidelines Paragraphs 20(b) and 20(d), the lack of sufficient evidence to address the financial security risks led to the denial of her security clearance.

Why the Applicant Was Denied

The applicant did not provide sufficient evidence to mitigate financial security concerns arising from delinquent debts.
The applicant failed to demonstrate responsible actions to resolve her student loan debts.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(b)rejectedConditions Largely Beyond the Person's ControlThe applicant did not show that she acted responsibly to resolve her student loan debts.
AG ¶ 20(d)rejectedGood-faith Effort to Repay Overdue CreditorsThe applicant did not provide evidence of a good-faith effort to resolve her debts.

Key Rule Quoted

“The clearly consistent standard indicates that security determinations should err, if they must, on the side of denials.”
— Department of the Navy v. Egan, 484 U.S. 518, 531 (1988)

Procedural Posture

SOR issuedJul 10, 2020
Answer filedundated
Hearing held—Decision made on written record.
Decision dateJun 3, 2021

Cite For

Insufficient Evidence to Mitigate Financial Concerns Under Guideline F
Plausible Explanations for Medical Debts
The Importance of Demonstrating Responsible Financial Behavior for 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: Decision on RecordDecided: denied

The judge found that the applicant had significant student loan delinquencies totaling over $32,000, which raised security concerns. However, the applicant's three delinquent medical accounts totaling $4,488 were found to be incurred under circumstances largely beyond her control, leading to a favorable ruling on that debt.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant has student loan delinquencies totaling just over $32,000. $32,000	Against Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.l	Applicant has three delinquent medical accounts totaling $4,488. $4,488	For Applicant	Medical Debt	Denied	—	—	—

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. 20-01045 ) Applicant for Security Clearance ) Appearances For Government: Moira Modzelewski, Esq., Department Counsel For Applicant: Pro se 06/03/2021

STATEMENT OF CASE

KATAUSKAS, Philip J., Administrative Judge: Applicant did not provide sufficient evidence to mitigate the financial security concerns arising from her delinquent debts. Applicant’s eligibility for access to classified information is denied. Statement of the Case Applicant submitted a security clearance application (SCA) on Septembe10, 2018. The Department of Defense Consolidated Adjudications Facility (DOD CAF) issued Applicant a Statement of Reasons (SOR) on July 10, 2020, detailing security concerns under Guideline F, Financial Considerations. The DOD CAF acted under Executive Order (Exec. Or.) 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and Security Executive Agent Directive 4, National Security Adjudicative Guidelines, effective within the DOD as of June 8, 2017. Applicant answered (undated) the SOR and elected a decision on the written record by an administrative judge of the Defense Office of Hearings and Appeals (DOHA).

On November 4, 2020, Department Counsel submitted the Government’s file of relevant material (FORM), including documents identified as Items 1 through 7. Applicant received the FORM on November 6, 2020. She was afforded 30 days after receiving the FORM to file objections and submit material in refutation, extenuation, or mitigation. Applicant did not respond to the FORM. The SOR and the answer (Items 1 and 2) are the pleadings in the case. Items 3 through 7 are admitted without objection. The case was assigned to me on April 12, 2021.

FINDINGS OF FACT

Applicant admitted SOR ¶¶ 1.a. through 1.k. She denied SOR ¶¶ 1.l.through 1.n. Her admissions are incorporated in the findings of fact. After a thorough and careful review of the pleadings and exhibits submitted, I make the following findings of fact. Applicant is separated from her spouse and has a son eight years old who lives with Applicant. She attended college from 2010 to 2014 but was not awarded a degree. Since September 2018, Applicant has worked for a defense contractor. Item 3. Applicant has student loan delinquencies totaling just over $32,000. She was on a monthly payment plan of $489. Separation from her husband in March 2017 made her a single-income parent. Applicant could not keep up with those payments. She has applied to reduce her monthly payment to $175. Applicant has not, however, provided any documents showing that this has been accomplished. Applicant has three delinquent medical accounts totaling $$4,488. She thought those were for herself or her son but could not recall any details. Item 4. All debts alleged in the SOR are supported by the record. Items 5 through 7. Applicant provided no documents concerning her current financial situation, such as her assets, or monthly income and expenses.

POLICIES

It is well established that no one has a right to a security clearance. As the Supreme Court held, “the clearly consistent standard indicates that security determinations should err, if they must, on the side of denials.” Department of the Navy v. Egan, 484 U.S. 518, 531 (1988). The adjudicative 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 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 access to classified information 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. Likewise, I have avoided drawing inferences grounded on mere speculation or conjecture. Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, an “applicant is responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by applicant or proven by Department Counsel, and has the ultimate burden of persuasion as to obtaining a favorable security decision.” A person who seeks access to classified information enters 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 that an applicant may deliberately or inadvertently fail to 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.

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. . . . This concern is broader than the possibility that an individual might knowingly compromise classified information in order to raise money. It encompasses concerns about an individual’s self-control, judgment, and other qualities essential to protecting classified information. An individual who is financially irresponsible may also be irresponsible, unconcerned, or negligent in handling and safeguarding classified information. ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012). The guideline notes several conditions that could raise security concerns under AG ¶ 19. The following are potentially applicable in this case:

(a) inability to satisfy debts; and (c) a history of not meeting financial obligations. The SOR debts are established by the credit reports in the record. AG ¶¶ 19(a) and 19(c) apply. The guideline also includes conditions that could mitigate security concerns arising from financial difficulties. The following mitigating conditions under AG ¶ 20 are potentially applicable: (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, or a death, divorce or separation, clear victimization by predatory lending practices, or identity theft), and the individual acted responsibly under the circumstances; and (d) the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts. The SOR debts were incurred when Applicant was unable keep up with her student loan payments due to her separation in March 2017 and loss of her spouse’s income. I cannot find that the debts were incurred so long ago. AG ¶ 20(a) does not apply. The debts were caused by her separation from her spouse. They, therefore, occurred due to circumstances largely beyond her control. Applicant has not, however, shown that she has acted responsibly to resolve her student loan debts. AG ¶ 20(b) and (d) do not apply. I find against Applicant on SOR ¶¶ 1.a. through 1.k. Applicant has provided plausible explanations for the medical debts. Medical debts are often incurred under circumstances largely beyond an applicant’s control. In addition, the magnitude of Applicant’s medical debts does not, in itself, raise security concerns. I find in favor of Applicant on SOR ¶¶ 1.l.through 1.n. Under AG ¶ 2(a), 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 the facts and circumstances surrounding this case. I have also considered the whole-person concept. Applicant leaves me with questions and doubts as to her eligibility and suitability for a security clearance. For these reasons, I conclude Applicant did not mitigate the security concerns arising under Guideline F, financial considerations.

FORMAL FINDINGS

Formal findings for or against Applicant on the allegations set forth in the SOR, as required by section E3.1.25 of Enclosure 3 of the Directive, are: Paragraph 1, Guideline F: AGAINST APPLICANT Against Applicant

_____________________________ Subparagraphs 1.a, through 1.k: Subparagraphs 1.lthrough1.n. For Applicant

CONCLUSION

In light of all of the circumstances presented, it is not clearly consistent with the interests of national security to grant Applicant eligibility for access to classified information. Eligibility for access to classified information is denied. Philip J. Katauskas Administrative Judge