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ISCR Case 20-03085 — CASE

ISCR Case 20-03085granted

Case Headnote

ISCR Case No. 20-03085

grantedApr 27, 2022· Hon. Carol G. Ricciardello· hearing

Summary

A 40-year-old college graduate was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The Statement of Reasons cited seven delinquent debts, totaling approximately $33,848, which began accumulating in 2018. These debts arose from the applicant using credit cards and a loan to supplement income, leading to payment difficulties and defaults.

However, the administrative judge found that the applicant had successfully mitigated these concerns. All delinquent debts were resolved through consistent payments and a loan. The financial difficulties were largely attributed to circumstances beyond the applicant's control, specifically job loss and medical issues.

After gaining employment, the applicant established a reliable financial track record and demonstrated responsible financial behavior. The judge concluded that the financial difficulties were unlikely to recur and did not cast doubt on the applicant's current reliability, trustworthiness, or good judgment, leading to the clearance being granted.

Why the Applicant Prevailed

The applicant resolved all delinquent debts totaling approximately $33,848 through consistent payments and a loan.
His financial difficulties were largely attributed to circumstances beyond his control, such as job loss and medical issues.
He established a reliable financial track record and demonstrated responsible financial behavior after gaining employment.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(b)appliedConditions Beyond ControlThe applicant's financial problems were largely due to job loss and medical issues.
AG ¶ 20(d)appliedGood-faith Effort to Repay DebtsThe applicant made consistent payments and resolved all debts.

Key Rule Quoted

“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.”

Procedural Posture

SOR issuedJan 4, 2021
Answer filed—Applicant requested a hearing.
Hearing heldApr 14, 2022Hearing was convened as scheduled.
Decision dateApr 27, 2022

Cite For

Mitigation of Financial Concerns Under Guideline F
Demonstrating a Reliable Financial Track Record
Consideration of Circumstances Beyond an Applicant's Control in Financial Matters

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: granted

The applicant had seven delinquent debts totaling approximately $33,848, which began accumulating in 2018. The judge found that the applicant mitigated the financial concerns by obtaining a new job, making consistent payments, and resolving four of the debts. Ultimately, the judge ruled in favor of the applicant on all allegations under Guideline F.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant had seven delinquent debts totaling approximately $33,848 that began accumulating in 2018. $33,848	For Applicant	Credit Card Debt	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly	Documented Debt Paid in Full
1.b	Applicant used credit cards and a loan to supplement his income, but had difficulty maintaining the payments and subsequently defaulted on some of them.	For Applicant	Credit Card Debt	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly	Documented Debt Paid in Full
1.c	specific text not stated in this decision	For Applicant	Unspecified Financial	Unknown	—	—	—
1.d	Applicant's financial difficulties are unlikely to recur and do not cast doubt on his current reliability, trustworthiness or good judgment. (low confidence)	For Applicant	Unspecified Financial	Unknown	—	—	—
1.e–1.g	3 sub-charges — specific text not stated in this decision (for the applicant). (low confidence)	For 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. 20-03085 ) Applicant for Security Clearance ) Appearances For Government: Rhett Petcher, Esq., Department Counsel For Applicant: Pro se 04/27/2022

STATEMENT OF CASE

RICCIARDELLO, Carol G., Administrative Judge: Applicant mitigated the security concerns under Guideline F, financial considerations. Eligibility for access to classified information is granted. Statement of the Case On January 4, 2021, the Defense Counterintelligence and Security Agency issued to Applicant a Statement of Reasons (SOR) detailing security concerns under Guideline F, financial considerations. The action was taken under Executive Order (EO) 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; Department of Defense (DOD) Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG) effective on June 8, 2017. In an undated answer to the SOR, Applicant requested a hearing before an administrative judge. The case was assigned to me on February 18, 2022. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on March 17, 2022, scheduling the hearing for April 14, 2022. I convened the hearing as scheduled. The

Government offered exhibits (GE) 1 through 4. Applicant offered Applicant Exhibit (AE) A. There were no objections and all exhibits were admitted into evidence. Applicant testified on his own behalf. DOHA received the hearing transcript on April 25, 2022.

FINDINGS OF FACT

Applicant admitted all of the allegations in the SOR. His admissions are incorporated into the findings of fact. After a thorough and careful review of the pleadings, testimony, and exhibits submitted, I make the following findings of fact. Applicant is 40 years old. He is a college graduate. He was married from 2004 to 2014 and has three children from the marriage, ages 16, 13 and 11 years old. He

remarried in 2017 and divorced in 2018. He has been employed by his present employer

since April 2019. (Tr. 13-16) The SOR alleges seven delinquent debts for credit cards and a personal loan totaling approximately $33,848. In 2018, Applicant was laid off from his job with a defense contractor. He was earning about $70,000. As he looked for another job, he worked with his father in

construction and sales, but his income had been drastically reduced. During this period,

he and his wife did not have health insurance and both experienced medical issues. He

was also paying an attorney as his ex-wife wanted to change the amount of his child

support payments. Applicant used credit cards and a loan to supplement his income, but

had difficulty maintaining the payments and subsequently defaulted on some of them. (Tr. 14-18, 26)

Applicant got a new job in April 2019, earning a salary of $113,000. Shortly after he began work he contacted a debt relief (DR) company to help him resolve his delinquent

debts. He made monthly payments of approximately $400 to a dedicated account to be

used to settle his debts. This amount later increased to $523. He consistently made the

payments and four of the debts on the SOR were resolved. DR suggested it would make

financial sense for Applicant to get a loan and use the proceeds to pay the remaining two

debts and then just have the loan payment due. Applicant obtained a loan through DR for

$7,565 that had the same monthly payment he had been making to the dedicated

account, $523. Applicant then paid the remaining two debts on the SOR. He now makes

timely loan payments. All of the debts alleged in the SOR are resolved. (Tr. 18-24; AE A)

Applicant testified that he has not participated in financial counseling, but has learned from this experience. He is more aware of his finances and monitors his accounts

regularly through a credit reporting service. His expenses are paid on time, and he does

not have any new delinquent debts. He is current on his child support payments and

timely files his tax returns and pays his taxes. He does not live paycheck to paycheck.

Applicant takes pride in holding a security clearance. He has diligently worked to resolve his delinquent debts. (Tr. 24-32)

POLICIES

When evaluating an applicant’s national security eligibility, the administrative judge must consider the AG. In addition to brief introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which are 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, these guidelines are applied 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.” In reaching this decision, I have drawn only those conclusions that are reasonable, logical, and based on the evidence contained in the record. Likewise, I have avoided drawing inferences grounded on mere speculation or conjecture. Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Directive ¶ E3.1.15 states an “applicant is responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by applicant or proven by Department Counsel, and has the ultimate burden of persuasion as to obtaining 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 that an applicant may deliberately or inadvertently fail to 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 EO 10865 provides that 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. AG ¶ 19 provides conditions that could raise security concerns. The following are potentially applicable: (a) inability to satisfy debts; and (c) a history of not meeting financial obligations. Applicant had seven delinquent debts totaling approximately $33,848 that began accumulating in 2018. There is sufficient evidence to support the application of the above disqualifying conditions. The guideline also includes conditions that could mitigate security concerns arising from financial difficulties. The following mitigating conditions under AG ¶ 20 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 delinquent debts to being laid off from his job in 2018 and then being underemployed. When he began his new job in April 2019, he contacted DR to help him resolve his debts. He made consistent payments into a dedicated account used to settle his debts. He then took a loan to repay the remaining two debts and continues to make consistent payments on the loan. Applicant’s financial difficulties are unlikely to recur and do not cast doubt on his current reliability, trustworthiness or good judgment. His unemployment and underemployment were beyond his control. Once he was gainfully employed, he began resolving his debts. He acted responsibly under the circumstances. He has repaid the debts he owed. Although, he has not participated in financial counseling, he has learned lessons and there are clear indications that his financial issues are resolved. All of the above mitigating conditions apply.

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 the 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. Applicant met his burden of persuasion. He has established a reliable financial track record. The record evidence leaves me with no questions or doubts as to Applicant’s eligibility and suitability for a security clearance. For these reasons, I conclude Applicant mitigated the security concerns arising under Guideline F, financial considerations.

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: FOR APPLICANT Subparagraphs 1.a-1.g: For Applicant

CONCLUSION

In light of all of the circumstances presented by the record in this case, it is clearly consistent with the national security to grant Applicant’s eligibility for a security clearance. Eligibility for access to classified information is granted. Carol G. Ricciardello Administrative Judge