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ISCR Case 20-03809 — CASE

ISCR Case 20-03809denied

Case Headnote

ISCR Case No. 20-03809

deniedNov 3, 2021· Hon. Edward W. Loughran· hearing

Summary

A 39-year-old male applicant, seeking a security clearance for the first time, was denied access to classified information under Guideline F (Financial Considerations). The denial stemmed from unresolved financial issues, specifically 13 delinquent debts totaling approximately $52,000.

The Statement of Reasons highlighted a history of financial problems, including multiple delinquent debts. While one $130 debt was paid in full, the majority remained outstanding. The applicant attributed his financial difficulties to a layoff, divorce, and caring for his mother.

However, the applicant failed to provide sufficient evidence of financial responsibility or a consistent track record of debt repayment. His stated intentions to pay debts in the future were not accepted as a substitute for actual repayment, leading to the final decision to deny his security clearance.

Why the Applicant Was Denied

The applicant has unresolved financial issues, including multiple delinquent debts totaling approximately $52,000.
The applicant did not provide sufficient evidence of financial responsibility or a track record of debt repayment.
The applicant's intentions to pay debts in the future were not considered a substitute for actual repayment.

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 ControlWhile the applicant attributed his financial difficulties to circumstances beyond his control, he did not demonstrate responsible actions to mitigate the issues.
AG ¶ 20(d)rejectedGood-faith Effort to Repay Overdue CreditorsThe applicant's intentions to pay debts were not substantiated by a track record of repayment.

Key Rule Quoted

“Any doubt concerning personnel being considered for national security eligibility will be resolved in favor of the national security.”

Procedural Posture

SOR issuedJan 19, 2021
Answer filed—Applicant submitted an undated response.
Hearing held—Applicant requested a decision based on the written record.
Decision dateNov 3, 2021

Cite For

Denial of Security Clearance Due to Unresolved Financial Issues Under Guideline F
Insufficient Evidence of Financial Responsibility Leading to Denial
Importance of a Track Record of Debt Repayment in Security Clearance Evaluations

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 has a history of financial problems, including multiple delinquent debts totaling about $52,000. While the applicant successfully paid off a $130 debt, the overall financial concerns were not mitigated, leading to a decision against the applicant.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant has a history of financial problems, including multiple delinquent debts. $52,000	Against Applicant	Unspecified Financial	Unknown	—	—	—
1.b	Applicant paid in full the $130 debt alleged in SOR 1.b. $130	For Applicant	Unspecified Financial	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly	Credited Debt Paid in Full
1.c	Applicant has multiple delinquent debts totaling about $52,000. $52,000	Against Applicant	Unspecified Financial	Unknown	—	—	—
1.d–1.m	10 sub-charges — specific text not stated in this decision (against the applicant). (low confidence)	Against Applicant			—	—	—

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. 20-03809 ) Applicant for Security Clearance ) Appearances For Government: Jeff Kent, Esq., Department Counsel For Applicant: Pro se 11/03/2021

STATEMENT OF CASE

LOUGHRAN, Edward W., Administrative Judge: Applicant did not mitigate the financial considerations security concerns. Eligibility for access to classified information is denied. Statement of the Case On January 19, 2021, the Department of Defense (DOD) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline F, financial considerations. Applicant submitted an undated response to the SOR and requested a decision based on the written record in lieu of a hearing.1 The Government’s written case was submitted on June 3, 2021. A complete copy of the file of relevant material (FORM) was provided to Applicant, who was afforded an opportunity to file objections and submit material to refute, extenuate, or mitigate the security concerns. Applicant received the FORM on July 15, 2021. As of September 14, 1 Applicant wrote in his SOR response: “I do not feel it necessary to have a hearing before an Administrative Judge, but will be available if required.” Applicant confirmed on October 20, 2021, that he did not want a hearing.

2021, he had not responded. The case was assigned to me on October 6, 2021. The Government exhibits included in the FORM are admitted in evidence.

FINDINGS OF FACT

Applicant is 39 years old. He is applying for a security clearance for the first time. He married in 2008 and divorced in 2017. He has a nine-year-old child. (Item 3) The SOR alleges 13 delinquent debts totaling about $52,000. The debts are established through Applicant’s admissions and a January 21, 2021 credit report. (Items 2-5) Applicant attributed his financial difficulties to a layoff, his divorce, and his mother’s cancer. He was laid off in August 2016 and rehired in December 2017. During that period, he worked as an Uber driver from August 2016 to February 2017, and for another company from February 2017 until he left to care for his mother in May 2017. (Items 2, 3) Applicant stated in his response to the SOR that since he returned to work in December 2017, he has been working to pay his debts. His first priority was to pay his back child support. A July 2020 credit report lists a child support account with a state government. The account was opened in December 2016. It was reported as “current account – was 30 days past due,” with a $0 balance. Applicant stated that he is now able to focus on his other debts. He stated, without corroborating documentation, that he paid in full the $130 debt alleged in SOR ¶ 1.b, apparently after he received the SOR. Since he did not respond to the FORM, additional information about his finances was not provided. (Items 2, 5)

POLICIES

This case is adjudicated under Executive Order (EO) 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 the adjudicative guidelines (AG), which became effective on June 8, 2017. When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines. 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 eligibility for access to classified information. 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 the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶ 2(c), 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.” Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, 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.” The applicant has the ultimate burden of persuasion to obtain 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 the applicant may deliberately or inadvertently fail to safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation of potential, rather than actual, risk of compromise of classified information. Section 7 of 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 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.

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. Applicant has a history of financial problems, including multiple delinquent debts. The evidence is sufficient to raise the above disqualifying conditions. Conditions that could mitigate the financial considerations security concerns are provided under AG ¶ 20. The following 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, 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. Applicant attributed his financial difficulties to a layoff, his divorce, and his mother’s cancer. Those events qualify as conditions that were largely beyond his control. He stated that since he returned to work in December 2017, he has been working to pay his debts. His first priority was to pay his back child support. That account is current, but information about how much he had to pay to bring it current is lacking. I am crediting him with paying the $130 debt alleged in SOR ¶ 1.b, and that debt is mitigated, but that is $130 out of $52,000 in delinquent debts. He stated that he intends to pay his other debts. However, intentions to pay debts in the future are not a substitute for a track record of debt repayment or other responsible approaches. See ISCR Case No. 11-14570 at 3 (App. Bd. Oct. 23, 2013). There is insufficient evidence for a determination that Applicant’s financial problems will be resolved within a reasonable period. I am unable to find that he acted responsibly under the circumstances or that he made a good-faith effort to pay his debts. His financial issues are recent and ongoing. They continue to cast doubt on his

current reliability, trustworthiness, and good judgment. I find that financial considerations security concerns remain despite the presence of some mitigation.

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 the 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 about Applicant’s eligibility and suitability for a security clearance. I conclude Applicant did not 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 section E3.1.25 of Enclosure 3 of the Directive, are: Paragraph 1, Guideline F: Against Applicant Subparagraph 1.a: Against Applicant Subparagraph 1.b: For Applicant Subparagraphs 1.c-1.m: Against Applicant

________________________

CONCLUSION

It is not clearly consistent with the national interest to grant Applicant eligibility for a security clearance. Eligibility for access to classified information is denied. Edward W. Loughran Administrative Judge