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ISCR Case 20-03143 — CASE

ISCR Case 20-03143denied

Case Headnote

ISCR Case No. 20-03143

deniedJun 17, 2021· Hon. Richard A. Cefola· hearing

Summary

This case involves an applicant who was denied a security clearance under Guideline F (Financial Considerations) due to multiple outstanding financial obligations. The applicant, representing himself, admitted to several debts, including approximately $3,886 in back child support owed to State A, and an estimated $7,000 owed to the IRS for tax years 2018 and 2019. Additionally, the applicant was indebted to Creditor L for about $495. While his mortgage loan with Creditor D had been modified and was current, these other debts remained.

The administrative judge identified disqualifying conditions related to the applicant's financial difficulties. Although mitigating conditions were considered, the judge ultimately determined that the applicant's financial problems, which he attributed to a loss of employment, did not sufficiently mitigate the security concerns raised by these outstanding debts.

Consequently, the judge concluded that the applicant's financial difficulties did not establish sufficient mitigation, leading to the denial of the security clearance.

Why the Applicant Was Denied

The applicant admitted to multiple financial obligations, including debts to the IRS and child support.
The judge concluded that the applicant's financial difficulties did not establish sufficient mitigation of security concerns.

Conditions Referenced

Disqualifying

AG ¶ 18(a)raisedInability or Unwillingness to Satisfy Debts
AG ¶ 18(c)raisedA History of Not Meeting Financial Obligations

Mitigating

AG ¶ 20(a)rejectedThe Behavior Was Not RecentThe judge found that the applicant's financial issues were ongoing and not resolved.
AG ¶ 20(b)rejectedThe Conditions That Resulted in the Financial Problems Were TemporaryThe judge determined that the applicant's financial difficulties were not adequately addressed.

Procedural Posture

SOR issuedDec 18, 2020
Answer filednullUndated and unsigned.
Hearing heldMay 3, 2021
Decision dateJun 17, 2021

Cite For

Financial Obligations as a Basis for Security Concerns Under Guideline F
Insufficient Mitigation of Financial Difficulties Due to Ongoing Issues
The Impact of Employment Loss on Financial Stability and 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 multiple financial concerns under Guideline F, including debts for child support, tax obligations, and other unspecified debts. The applicant's financial issues were deemed ongoing and not sufficiently mitigated, leading to a decision against the applicant.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant is indebted to State A for back child support, in the amount of about $3,886. $3,886	For Applicant	Child Support Debt	Admitted	—	—	—
1.b	Applicant is indebted to the Internal Revenue Service (IRS), by his own estimation, in the amount of about $7,000 for tax years 2018 and 2019. $7,000	Against Applicant	Tax Unpaid	Admitted	(b) unwillingness to satisfy debts regardless of ability	—	—
1.d	Applicant has had his mortgage loan with Creditor D modified; and as such, is current with his mortgage.	For Applicant	Mortgage or Home Loan Debt	Admitted	—	—	—
1.l	Applicant is indebted to Creditor L in the amount of about $495. $495	Against Applicant	Unspecified Financial	Admitted	(b) unwillingness to satisfy debts regardless of ability	—	—

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. 20-03143 ) ) Applicant for Security Clearance ) Appearances For Government: Aubrey De Angelis, Esq., Department Counsel For Applicant: Pro se June 17, 2021

STATEMENT OF CASE

CEFOLA, Richard A., Administrative Judge: Statement of the Case On December 18, 2020, in accordance with DoD Directive 5220.6, as amended (Directive), the Department of Defense (DoD) 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 submitted an undated and unsigned Answer. (Answer.) The case was assigned to me on March 24, 2021. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on March 25, 2021, scheduling the hearing for May 3, 2021. The hearing was convened as scheduled. The Government offered Exhibits (GXs) 1 through 4, which were admitted into evidence. Applicant testified on his own behalf and called one witness. Applicant presented three documents, which I marked Applicant’s Exhibits (AppXs) A through C. The record was left open until June 4, 2021,

for receipt of additional documentation. Applicant submitted nothing further. DOHA received the transcript of the hearing (TR) on May 10, 2021.

FINDINGS OF FACT

Applicant admitted to 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 32-year-old employee of a defense contractor. (GX 1 at page 7.) He has been employed with the defense contractor since January of 2020. (TR at page 14 lines 19–24.). He does not have a security clearance. (TR at page 14 line 14 to page 18 line 19.) He is single, and has two children. (TR at page 14 lines 14–18.) Applicant attributes his current financial difficulties to a loss of employment. (TR at page 14 line 14 to page 18 line 19.) Guideline F - Financial Considerations 1.a. Applicant is indebted to State A for back child support, in the amount of about $3,886, as evidenced by documentation from State A. (TR at page 20 line 13 to page 21 line 8, and AppX A.) He is making monthly payments of $86 towards this debt, which is in arrears. (Id.) 1.b. Applicant is indebted to the Internal Revenue Service (IRS), by his own estimation, in the amount of about $7,000 for tax years 2018 and 2019. Furthermore, Applicant has yet to file his income tax returns for tax year 2019. (TR at page 21 line 9 to page 24 line 4.) Despite having a month to do so, Applicant has submitted nothing further in this regard. (TR at page 33 line 22 to page 34 line 6.) 1.c. Applicant is indebted to Creditor C in the amount of about $474. (TR at page 24 lines 5–21.) Despite having a month to do so, Applicant has submitted nothing further in this regard. (TR at page 34 line 6 to page 35 line 9.) 1.d. Applicant has had his mortgage loan with Creditor D modified; and as such, is current with his mortgage. (TR at page 24 line 22 to page 26 line 7.) This is evidenced by documentation from Creditor D. (AppX C at pages 4–5.) 1.e.~1.k. Applicant is addressing his past-due debts to seven creditors, in the amount of about $10,522, through a debt-consolidation service. (TR at page 26 line 8 to page 28 line 18.) This is evidenced by documentation from said debt consolidation service. (AppX B.) 1.l. Applicant is indebted to Creditor L in the amount of about $495. (TR at page 28 line 19 to page 29 line 15.) Despite having a month to do so, Applicant has submitted nothing further in this regard.

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; (c) a history of not meeting financial obligations; and (f) failure to file or fraudulently filing annual Federal, state, or local income tax returns or failure to pay annual Federal, state, or local income tax as required. Applicant has significant past-due indebtedness and delinquent taxes. 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 (g) the individual has made arrangements with the appropriate tax authority to file or pay the amount owed and is in compliance with those arrangements. Although Applicant can attribute his current financial difficulties to a loss of employment, his financial problems are ongoing. He has tax delinquencies, and at least two past-due debts he has yet to address. He 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

Subparagraph 1.a:

For Applicant

Subparagraphs 1.b. and 1.c:

Against Applicant

Subparagraphs 1.d. through 1.k: For Applicant

Subparagraph 1.l:

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