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ISCR Case 21-01443 — CASE

ISCR Case 21-01443denied

Case Headnote

ISCR Case No. 21-01443

deniedOct 25, 2021· Hon. Edward W. Loughran· hearing

Summary

A 50-year-old male applicant with a bachelor's degree was denied a security clearance under Guideline F (Financial Considerations) due to unresolved financial issues. The Statement of Reasons detailed a history of financial problems, including 23 delinquent debts totaling approximately $57,000. The applicant attributed these difficulties to a 2019 layoff following an industry downturn.

While the applicant was paying current bills and improving his credit score, he stated he did not intend to pay his delinquent debts. This decision was based on advice from a financial counselor, who suggested the debts would fall off his credit report faster if left unpaid. The judge found that the applicant's initial inability to pay his debts had evolved into an unwillingness to satisfy them.

The denial was based on the applicant's financial irresponsibility, his unwillingness to resolve the debts despite attributing them to a layoff, and his failure to demonstrate a good-faith effort to address his ongoing and recent financial problems. These factors raised significant concerns about his reliability and judgment, leading to the denial of his eligibility for access to classified information.

Why the Applicant Was Denied

The applicant had 23 delinquent debts totaling approximately $57,000, indicating financial irresponsibility.
He attributed his financial issues to a layoff but showed an unwillingness to pay his debts, raising concerns about his judgment.
The applicant did not demonstrate a good-faith effort to resolve his financial problems, which were ongoing and recent.

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)raisedHistory of Not Meeting Financial Obligations

Procedural Posture

SOR issuedJul 15, 2021
Answer filedJul 16, 2021Requested decision based on written record.
Hearing held—Decision based on written record.
Decision dateOct 25, 2021

Cite For

Denial of Security Clearance Due to Unresolved Financial Issues Under Guideline F
Unwillingness to Pay Debts as a Significant Concern for Reliability and Judgment
Lack of Good-faith Effort to Resolve Financial Obligations as a Basis for Denial.

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 $57,000. The applicant's claims of financial counseling and current bill payments were not sufficient to mitigate the security concerns, 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 totaling about $57,000. $57,000	Against Applicant	Unspecified Financial	Unknown	—	—	—
1.b	Applicant attributed his financial difficulties to a 2019 layoff after a downturn in the industry in which he worked.	Against Applicant	Unspecified Financial	Unknown	—	—	—
1.c	He is paying his current bills and increasing his credit score, but he does not intend to pay his delinquent debts.	Against Applicant	Unspecified Financial	Unknown	—	—	—
1.d	A financial counselor advised him not to pay the debts because the debts would fall off of his credit report faster if he did not pay them.	Against Applicant	Unspecified Financial	Unknown	—	—	Claimed Other
1.e	Applicant has a history of financial problems, including multiple delinquent debts.	Against Applicant	Unspecified Financial	Unknown	—	—	—
1.f	He was unable to pay his debts for a period, but that changed to an unwillingness to satisfy his debts.	Against Applicant	Unspecified Financial	Unknown	—	—	—
1.g–1.w	17 sub-charges — specific text not stated in this decision (against the applicant).	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. 21-01443 ) Applicant for Security Clearance ) Appearances For Government: Benjamin R. Dorsey, Esq., Department Counsel For Applicant: Pro se 10/25/2021

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 July 15, 2021, the Department of Defense (DOD) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline F, financial considerations. Applicant responded to the SOR on July 16, 2021, and requested a decision based on the written record in lieu of a hearing. The Government’s written case was submitted on July 29, 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 August 12, 2021. As of September 14, 2021, he had not responded. The case was assigned to me on October 6, 2021. The Government’s exhibits included in the FORM are admitted in evidence.

FINDINGS OF FACT

Applicant is 50 years old. He is applying for a security clearance for the first time. He has a bachelor’s degree that was awarded in 2011. He also has several professional certifications. The most recent information available indicates that he is married for the third time with a three-year-old child. (Items 3, 4) The SOR alleges 23 delinquent debts totaling about $57,000. The debts are established through Applicant’s admissions and a January 2021 credit report. (Items 2 5) Applicant attributed his financial difficulties to a 2019 layoff after a downturn in the industry in which he worked. He stated that his employment has stabilized since 2019, as has his finances. He is paying his current bills and increasing his credit score, but he does not intend to pay his delinquent debts. A financial counselor advised him not to pay the debts because the debts would fall off of his credit report faster if he did not pay them. (Items 2-4)

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; (b) unwillingness to satisfy debts regardless of the ability to do so; and (c) a history of not meeting financial obligations.

Applicant has a history of financial problems, including multiple delinquent debts. He was unable to pay his debts for a period, but that changed to an unwillingness to satisfy his 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 2019 layoff after a downturn in the industry in which he worked. That qualifies as a condition that was largely beyond his control. He stated that his employment has stabilized since 2019, as has his finances. He is paying his current bills and increasing his credit score. He is following a financial counselor’s advice not to pay the delinquent debts, because the debts will fall off of his credit report faster if he does not pay them. 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. None of the mitigating conditions are applicable.

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 Subparagraphs 1.a-1.w: 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