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ISCR Case 20-03126 — CASE

ISCR Case 20-03126denied

Case Headnote

ISCR Case No. 20-03126

deniedJan 7, 2022· Hon. Richard A. Cefola· hearing

Summary

A 28-year-old unemployed male, offered a position with a defense contractor, was denied a security clearance due to financial considerations under Guideline F. The applicant faced allegations concerning several past-due debts, including approximately $1,587 owed to Creditor A and about $231 to Creditor I, both of which he denied. Additionally, he initially denied medical debts of about $165 to Creditor F and about $1,379 to Creditor G, though these appeared on his October 2019 credit report.

The judge determined that the applicant had significant past-due debts totaling approximately $20,900. Disqualifying conditions included a history of not meeting financial obligations, an inability or unwillingness to satisfy debts, and a history of financial problems.

Despite the application of several mitigating conditions, the clearance was denied because the applicant's financial problems were ongoing, he had a history of delinquencies, and he failed to demonstrate that future financial issues were unlikely.

Why the Applicant Was Denied

The applicant has significant past-due debts totaling about $20,900.
The applicant's financial problems are ongoing and he has a history of delinquencies.
The applicant did not demonstrate that future financial problems are 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)rejectedBehavior Happened so Long Ago, Was Infrequent, or Occurred Under Circumstances Unlikely to Recur
AG ¶ 20(b)rejectedConditions Resulting in Financial Problems Were Largely Beyond the Person's Control
AG ¶ 20(c)rejectedReceived Financial Counseling From a Legitimate Source
AG ¶ 20(d)rejectedInitiated and Is Adhering to a Good-faith Effort to Repay Overdue Creditors
AG ¶ 20(e)rejectedReasonable Basis to Dispute the Legitimacy of the Past-due Debt

Key Rule Quoted

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

Procedural Posture

SOR issuedMar 17, 2021
Answer filedJun 1, 2021
Hearing heldOct 18, 2021rescheduled from September 16, 2021
Decision dateJan 7, 2022

Cite For

Ongoing Financial Issues Under Guideline F
Failure to Demonstrate Mitigation Efforts
Significant Past-due Debts 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 several financial concerns under Guideline F, with some debts being admitted and others denied. Ultimately, the judge ruled against the applicant on most allegations, concluding that the financial issues were not mitigated sufficiently to grant security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant denies that he has a past-due debt to Creditor A in the amount of about $1,587. $1,587	For Applicant	Unspecified Financial	Denied	—	—	—
1.f	Applicant initially denied that he has a past-due medical debt to Creditor F in the amount of about $165; however, it does appear on Applicant's October 2019 credit report. $165	For Applicant	Medical Debt	Denied	—	—	—
1.g	Applicant initially denied that he has a past-due medical debt to Creditor G in the amount of about $1,379; however, it does appear on Applicant's October 2019 credit report. $1,379	Against Applicant	Medical Debt	Denied	—	—	—
1.i	Applicant denies that he has a past-due debt to Creditor I in the amount of about $231. $231	For Applicant	Unspecified Financial	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. 20-03126 ) ) Applicant for Security Clearance ) Appearances For Government: Tara Karoian, Esq., Department Counsel For Applicant: Pro se January 7, 2022

STATEMENT OF CASE

CEFOLA, Richard A., Administrative Judge: Statement of the Case On March 17, 2021, 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 June 1, 2021, and requested a hearing before an administrative judge. (Answer.) The case was assigned to me on July 26, 2021. The Defense Office of Hearings and Appeals (DOHA) initially issued a notice of hearing on August 24, 2021, scheduling the hearing for September 16, 2021; but pursuant to Applicant’s request, it was rescheduled for October 18, 2021. 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. Applicant offered seven documents, which I marked Applicant’s Exhibits (AppXs) A through G, and

admitted into evidence. The record was left open until November 29, 2021, for receipt of additional documentation. Applicant offered Post-Hearing Exhibits (PHXs) A and C~I, which were admitted into evidence. (Applicant averred that PHX B was “still in transit,” but it was never received by the undersigned.) DOHA received the transcript of the hearing (TR) on October 27, 2021.

FINDINGS OF FACT

Applicant denied all the SOR allegations. After a thorough and careful review of the pleadings, exhibits, and testimony, I make the following findings of fact. Applicant is 28 years old. He has a job offer from a defense contractor, but is currently unemployed. He is not married, but has one child. (TR at page 19 line 14 to page 25 line 1.) Guideline F - Financial Considerations 1.a. Applicant denies that he has a past-due debt to Creditor A in the amount of about $1,587. (TR at page 25 line 18 to page 26 line 12.) He has submitted correspondence from Creditor A confirming that Applicant does not owe this debt. (AppX B.) 1.b. Applicant denies that he has a past-due debt to Creditor B in the amount of about $963. (TR at page 27 line 2 to page 29 line 19.) He has submitted correspondence from a credit reporting agency averring that this “Disputed item [has been] deleted” as being past due. (AppX C.) 1.c. Applicant denies that he has a past-due college debt to Creditor C in the amount of about $11,720; however, it does appear on Applicant’s October 2019 credit report. (GX 3 at page 4.) He avers that Creditor C made false promises as to post- college employment. (TR at page 29 line 24 to page 35 line 5.) Applicant has submitted correspondence from a “Debt Collector” that it “is not currently handing” this account (PHX A); but that does not “rule out” the fact that another debt collector may be, and that this large past-due debt is still outstanding.

1.d. Applicant denies that he has a past-due debt to Creditor D in the amount of about $3,114; however, it does appear on Applicant’s October 2019 credit report (GX 3 at page 5). (TR at page 33 lines 6–14, and at page 35 lines 8–24.) He has submitted nothing further in this regard.

1.e. Applicant denies that he has a past-due medical debt to Creditor E in the amount of about $3,114; however, it does appear on Applicant’s October 2019 credit report (GX 3 at page 5). (TR at page 36 line 1 to page 40 line 12.) He has submitted nothing further in this regard.

1.f. Applicant initially denied that he has a past-due medical debt to Creditor F in the amount of about $165; however, it does appear on Applicant’s October 2019 credit

report (GX 3 at page 5). (TR at page 36 line 1 to page 40 line 12.) He has now set up a payment plan to address this past-due debt. (PHX C.) 1.g. Applicant initially denied that he has a past-due medical debt to Creditor G in the amount of about $1,379; however, it does appear on Applicant’s October 2019 credit report (GX 3 at page 5). (TR at page 36 line 1 to page 40 line 12.) He has now submitted documentation verifying this past-due debt is his, but nothing more. (AppX G, and PHX D.) 1.h. Applicant denies that he has a past-due medical debt to Creditor H in the amount of about $4,128; however, it does appear on Applicant’s October 2019 credit report (GX 3 at page 5). (TR at page 36 line 1 to page 40 line 12.) He has submitted nothing further in this regard.

1.i. Applicant denies that he has a past-due debt to Creditor I in the amount of about $231. (TR at page 40 lines 13–20.) He has submitted documentation showing that this balance is now “$0.00.” (AppX E.) 1.j. Applicant denies that he has a past-due motor vehicle debt to Creditor J in the amount of about $13,667. (TR at page 40 line 25 to page 42 line 13, and at page 44 lines 6–12.) He has submitted documentation showing that this balance is now “$0.” (AppX E.)

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 (c) a history of not meeting financial obligations. Applicant had 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. Applicant’s financial problems are ongoing. He has a history of delinquencies, and still owes past-due debts totaling about $20,900. 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. Overall, the record evidence leaves me with questions and doubts as to Applicant’s eligibility and suitability for a security clearance. 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. and 1.b: For Applicant Subparagraphs 1.c~1.e: Against Applicant Subparagraph 1.f: For Applicant Subparagraphs 1.g. and 1.h: Against Applicant Subparagraphs 1.i. and 1.j: 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