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ISCR Case 20-00595 — CASE

ISCR Case 20-00595denied

Case Headnote

ISCR Case No. 20-00595

deniedMay 3, 2022· Hon. Richard A. Cefola· hearing

Summary

A 38-year-old unmarried applicant with one adult child was denied national security eligibility under Guideline F, Financial Considerations, due to multiple past-due debts. The Statement of Reasons detailed several financial allegations, including a $1,353 past-due debt to Creditor A, and a $1,584 past-due debt to Creditor J, both appearing on a September 2019 credit report.

The applicant admitted to a $38,549 student loan debt to Creditor B, a $250 debt to Creditor C, a $414 debt to Creditor D, and four student loan debts totaling approximately $21,409 to Creditor F. However, the applicant denied an additional $22,830 student loan debt to Creditor B and student loan debts totaling about $12,047 to Creditor K, both of which appeared as delinquent on a November 2021 credit report.

The denial was based on the applicant's significant past-due indebtedness and failure to demonstrate mitigation. The administrative judge concluded that the applicant did not provide evidence of addressing these debts, engaging in financial counseling, or making a good-faith effort to repay overdue creditors, thus failing to meet the burden of proof to mitigate security concerns.

Why the Applicant Was Denied

The applicant has significant past-due indebtedness, which raises security concerns under Guideline F.
The applicant failed to show that she has addressed or is addressing any of her past-due indebtedness.
The applicant did not provide evidence of financial counseling or a good-faith effort to repay overdue creditors.

Conditions Referenced

Disqualifying

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

Key Rule Quoted

“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.”
— AG ¶ 18

Procedural Posture

SOR issuedOct 20, 2021
Answer filedOct 27, 2021Applicant requested a decision on the written record.
Hearing held—Decision made based on written record.
Decision dateMay 3, 2022

Cite For

Failure to Mitigate Financial Considerations Under Guideline F
Significant Past-due Indebtedness as a Disqualifying Factor
Lack of Evidence for Mitigating Conditions in Financial Cases

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 significant past-due indebtedness against the applicant, leading to a denial of her security clearance. The applicant admitted to several debts, including substantial student loan obligations, but denied others, which were confirmed as delinquent on her credit reports.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant denies that she has a past-due debt to creditor A in the amount of $1,353. However, this debt appears as delinquent on Applicant’s September 2019 credit report. $1,353	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.b	Applicant admits that she has one past-due, $38,549 student loan debt to Creditor B, but denies an additional $22,830 student loan debt to Creditor B. However, this second debt does appear as delinquent on Applicant’s November 2021 credit report. $38,549	Against Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.c	Applicant admits a $250 past-due debt to Creditor C. $250	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.d	Applicant admits a $414 past-due debt to Creditor D. $414	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.f	Applicant admits to four past-due, student loan debts to Creditor F totaling about $21,409. $21,409	Against Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.j	Applicant denies that she has a past-debt to creditor J in the amount of $1,584. However, this debt appears as delinquent on Applicant’s September 2019 credit report. $1,584	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.k	Applicant denies that she has past-due, student loan debts to Creditor K in an amount totaling about $12,047. However, these delinquent student loan debts do appear on Applicant’s November 2021 credit report. $12,047	Against Applicant	Student Loan Debt	Denied	(a) inability to satisfy debts (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

~ 0 .~;;o-1~'i:""'' t, ~ t ______________ ______________ DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: )

)

) ISCR Case: 20-00595

) Applicant for Security Clearance )

Appearances For Government: Eric C Price, Esquire, Department Counsel For Applicant: Pro se May 3, 2022

STATEMENT OF CASE

CEFOLA, Richard A., Administrative Judge: Statement of Case On September 6, 2019, Applicant submitted a security clearance application (SF 86). On October 20, 2021, the Department of Defense Consolidated Adjudications Facility (DoD CAF) issued Applicant a Statement of Reasons (SOR), detailing security concerns under Guideline F, Financial Considerations. (Item 1.) The action was taken 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 National Security Adjudicative Guidelines for Determining Eligibility for Access to Classified Information or Eligibility to Hold a Sensitive Position (AG), effective June 8, 2017. Applicant answered the SOR on October 27, 2021. She denied all of the SOR allegations concerning her delinquent debts; except for subparagraphs 1.b.~1.d. and 1.f.~1.i., and requested that her case be decided by an administrative judge on the written record without a hearing. (Item 2.) On November 30, 2021, Department Counsel

submitted the Government’s written case. A complete copy of the File of Relevant Material (FORM), containing six Items, was mailed to Applicant on December 2, 2021, and received by her on December 8, 2021. The FORM notified Applicant that she had an opportunity to file objections and submit material in refutation, extenuation, or mitigation within 30 days of her receipt of the FORM. Applicant did not respond to the FORM. Items 1 through 6 are admitted into evidence.

FINDINGS OF FACT

Guideline F – Financial Considerations Applicant is 38 years old. She is unmarried, with one adult child. (Item 3 at pages 7, 20 and 38.) 1.a. Applicant denies that she has a past-due debt to creditor A in the amount of $1,353. However, this debt appears as delinquent on Applicant’s September 2019 credit report. (Item 5 at page 8.)

1.b. and 1.e. Applicant admits that she has one past-due, $38,549 student loan debt to Creditor B, but denies an additional $22,830 student loan debt to Creditor B. However, this second debt does appear as delinquent on Applicant’s November 2021 credit report. (Item 6 at page 4.) 1.c. Applicant admits a $250 past-due debt to Creditor C. 1.d. Applicant admits a $414 past-due debt to Creditor D. (1.e. has been discussed, above.) 1.f.~1.i. Applicant admits to four past-due, student loan debts to Creditor F totaling about $21,409. 1.j. Applicant denies that she has a past-debt to creditor J in the amount of $1,584. However, this debt appears as delinquent on Applicant’s September 2019 credit report. (Item 5 at page 10.) 1.k.~1.r. Applicant denies that she has past-due, student loan debts to Creditor K in an amount totaling about $12.047. However, these delinquent student loan debts do appear on Applicant’s November 2021 credit report. (Item 6 at pages 10–12.)

POLICIES

When evaluating an applicant’s suitability for national security eligibility, the administrative judge must consider the adjudicative guidelines. In addition to brief introductory explanations for each guideline, the adjudicative guidelines (AG) 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, these guidelines are applied 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. The entire process is a conscientious scrutiny of applicable guidelines in the context 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. I have not drawn inferences based on mere speculation or conjecture. Directive ¶ E3.1.14, requires the Government to 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 the applicant or proven by Department Counsel, and has the ultimate burden of persuasion as to obtaining a favorable clearance decision.” A person applying for national security eligibility 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 national security eligibility. 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 or sensitive information. Finally, as emphasized in Section 7 of EO 10865, “[a]ny determination under this order adverse to an applicant shall be a determination 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 concerns relating to the guideline for financial considerations are set out in AG ¶ 18, which reads in pertinent part: 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. . . . AG ¶ 19 describes two conditions that could raise security concerns and may be disqualifying in this case: (a) inability to satisfy debts; and (c) a history of not meeting financial obligations. Applicant has significant past-due indetedness. These facts establish prima facie support for the foregoing disqualifying conditions, and shift the burden to Applicant to mitigate those concerns. The guideline includes five conditions in AG ¶ 20 that could mitigate the security concerns arising from Applicant’s alleged financial difficulties: (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; (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. None of these apply. Applicant has failed to show that she has addressed or is addressing any of her past-due indebtedness.

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. According to AG ¶ 2(c), the ultimate determination of whether to grant national security eligibility must be an overall commonsense judgment based upon careful consideration of the applicable guidelines and the whole-person concept. I considered the potentially disqualifying and mitigating conditions in light of all pertinent facts and circumstances surrounding this case. Overall, the record evidence leaves me with questions and doubts as to Applicant’s judgment, eligibility, and suitability for a security clearance. She has not met her burden to mitigate the security concerns arising under the guideline for financial considerations.

________

FORMAL FINDINGS

Formal findings for or against Applicant on the allegations set forth in the SOR, as required by ¶ E3.1.25 of Enclosure 3 of the Directive, are: Paragraph 1, Guideline F: AGAINST APPLICANT Subparagraphs 1.a through1.r: 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 and a security clearance. National security eligibility is denied. Richard A. Cefola Administrative Judge