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ISCR Case 21-01425 — CASE

ISCR Case 21-01425denied

Case Headnote

ISCR Case No. 21-01425

deniedNov 15, 2022· Hon. Gregg A. Cervi· hearing

Summary

A 52-year-old audio-visual technician was denied a security clearance under Guideline F (Financial Considerations) due to significant unresolved debts. The applicant was indebted on a consumer account in collection and two charged-off consumer accounts totaling $23,054, in addition to four medical debts in collections totaling $401. The applicant acknowledged a $366 delinquent credit card account and the four medical debts.

Disqualifying conditions were raised under Adjudicative Guidelines Paragraphs 19(a) and 19(c). The applicant admitted to most of the alleged debts but failed to provide evidence of financial responsibility or mitigation efforts. Claims of credit counseling and duplicate debts were not substantiated.

Ultimately, the clearance was denied because the applicant had substantial unresolved debts and did not demonstrate efforts to resolve these financial issues or provide evidence of financial responsibility.

Why the Applicant Was Denied

The applicant has significant unresolved debts totaling $23,054 and additional medical debts.
The applicant did not provide evidence of efforts to resolve his financial issues or demonstrate financial responsibility.
The applicant's claims of credit counseling and duplicate debts were not substantiated with evidence.

Conditions Referenced

Disqualifying

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

Key Rule Quoted

“Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the adjudicative guidelines.”
— Exec. Or. 10865 § 2.

Procedural Posture

SOR issuedDec 22, 2021
Answer filed—Undated response from applicant.
Hearing held—Decision made on the written record.
Decision dateNov 15, 2022

Cite For

Denial Based on Significant Unresolved Financial Obligations Under Guideline F
Lack of Evidence for Financial Responsibility and Mitigation Efforts
Insufficient Substantiation of Claims Regarding Debts and Credit Counseling

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 had significant financial issues, including a total of $23,054 in consumer debts and $401 in medical debts. Despite the applicant's admissions and claims of mitigating circumstances, the judge ruled against the applicant on all financial allegations, leading to a denial of the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant is indebted on a consumer account in collection and two charged-off consumer accounts totaling $23,054; and four medical debts in collections totaling $401. $23,054	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Applicant acknowledged the collection account in SOR 1.b for $366 as a delinquent credit-card account. $366	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	Applicant has four medical debts in collections totaling $401. $401	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d–1.f	3 sub-charges — specific text not stated in this decision (against the applicant). (low confidence)	Against Applicant			—	—	—
1.g	Applicant claimed that SOR 1.g is a duplicate of SOR 1.a. $12,043	Against Applicant	Unspecified Financial	Admitted	—	—	—

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. 21-01425 ) Applicant for Security Clearance ) Appearances For Government: Andrew H. Henderson, Esq., Department Counsel For Applicant: Pro se 11/15/2022

STATEMENT OF CASE

CERVI, Gregg A., Administrative Judge: This case involves security concerns raised under Guideline F (Financial Considerations). Eligibility for access to classified information is denied. Statement of the Case Applicant submitted a security clearance application (SCA) on July 2, 2020. On December 22, 2021, the Defense Counterintelligence and Security Agency Consolidated Adjudications Facility (DCSA CAF) sent him a Statement of Reasons (SOR) alleging security concerns under Guideline F. The DCSA CAF acted under Executive Order (Exec. Or.) 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) promulgated in Security Executive Agent Directive (SEAD) 4, National Security Adjudicative Guidelines (December 10, 2016). Applicant answered the SOR in an undated response. His request for a decision on the written record without a hearing was confirmed by email dated April 18, 2022. Department Counsel submitted the Government’s written case on April 18, 2022. On April

20, 2022, a complete copy of the file of relevant material (FORM) was sent to Applicant, who was given an opportunity to file objections and submit material to refute, extenuate, or mitigate the Government’s evidence. He received the FORM on May 4, 2022. He did not submit any material in response to the FORM, nor did he object to the Government’s exhibits. The case was assigned to me on August 4, 2022. Government Exhibits (GE) 2- 5 are admitted into evidence without objection. The FORM marked the SOR and Applicant’s Answer to the SOR as GE 1; however, they are already part of the record.

FINDINGS OF FACT

Applicant is a 52-year-old audio-visual technician, employed by a defense contractor since 2009. He earned an associate’s degree in 2007. He married in 1999 and has two children. He reported possessing no prior security clearance eligibility. The SOR alleges under Guideline F that Applicant is indebted on a consumer account in collection and two charged-off consumer accounts totaling $23,054 (SOR ¶¶ 1.a, 1.b, and 1.g); and four medical debts in collections totaling $401 (SOR ¶¶ 1.c-1.f). Applicant admitted all of the delinquent accounts; except he claimed that SOR ¶ 1.gis a duplicate of SOR ¶ 1.a. (Ans.) The record evidence is sufficient to support the SOR allegations. During his August 2020 personal subject interview (PSI) with a Government investigator, Applicant discussed the SOR debts. He said the collection account listed as SOR ¶ 1.a for $10,645 is a defaulted loan for his spouse’s car, and the account listed in SOR ¶ 1.gfor $12,043 may be the same account. Of note, the credit bureau reports in the record show each account with different account numbers and amounts due. Applicant also acknowledged the collection account in SOR ¶ 1.bfor $366 as a delinquent credit-card account, and said he would pay it off. With regard to his medical debts, he said he would investigate the accounts and pay them if his insurance does not cover them, or dispute them if the insurance company is responsible. Applicant said he would review his credit report and begin payments on the smallest accounts first. No information was provided showing efforts to investigate, pay, dispute, or otherwise resolve the SOR debts, or on his current financial status. He said in his PSI that he was unaware of the extent of his delinquency history and that it was important for him to clean up his credit. Although he admitted the delinquent accounts were his, he said he was a victim of fraud in the past, and completed credit counseling several years ago. He said he and his spouse allowed their medical bills, secured credit cards, and vehicle payments to overwhelm them.

POLICIES

“[N]o one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). As Commander in Chief, the President has the authority to “control access to information bearing on national security and to determine whether an individual is sufficiently trustworthy to have access to such information.” Id. at 527. The

President has authorized the Secretary of Defense or his designee to grant applicants eligibility for access to classified information “only upon a finding that it is clearly consistent with the national interest to do so.” Exec. Or. 10865 § 2. Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the adjudicative guidelines. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, an administrative judge applies these guidelines in conjunction with an evaluation of the whole person. An administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. An administrative judge must consider all available and reliable information about the person, past and present, favorable and unfavorable. The Government reposes a high degree of trust and confidence in persons with access to classified information. This relationship transcends normal duty hours and endures throughout off-duty hours. Decisions include, by necessity, consideration of the possible risk that the applicant may deliberately or inadvertently fail to safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation about potential, rather than actual, risk of compromise of classified information. Clearance decisions must be made “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” Exec. Or. 10865 § 7. Thus, a decision to deny a security clearance is merely an indication the applicant has not met the strict guidelines the President and the Secretary of Defense have established for issuing a clearance. Initially, the Government must establish, by substantial evidence, conditions in the personal or professional history of the applicant that may disqualify the applicant from being eligible for access to classified information. The Government has the burden of establishing controverted facts alleged in the SOR. See Egan, 484 U.S. at 531. “Substantial evidence” is “more than a scintilla but less than a preponderance.” See v. Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994). The guidelines presume a nexus or rational connection between proven conduct under any of the criteria listed therein and an applicant’s security suitability. See ISCR Case No. 15-01253 at 3 (App. Bd. Apr. 20, 2016). Once the Government establishes a disqualifying condition by substantial evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the facts. Directive ¶ E3.1.15. An applicant has the burden of proving a mitigating condition, and the burden of disproving it never shifts to the Government. See ISCR Case No. 02- 31154 at 5 (App. Bd. Sep. 22, 2005). An applicant “has the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue his security clearance.” ISCR Case No. 01- 20700 at 3 (App. Bd. Dec. 19, 2002). “[S]ecurity clearance determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531.

ANALYSIS

Guideline F, Financial Considerations The security concern under this guideline 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. . . . The relevant disqualifying conditions under AG ¶ 19 include: (a) inability to satisfy debts; and (c) a history of not meeting financial obligations. Applicant is indebted on a consumer account in collection and two charged-off consumer accounts, totaling $23,054, and four medical debts in collection, totaling $401. These accounts are unresolved. The documentary evidence in the record and Applicant’s admissions are sufficient to establish the disqualifying conditions in AG ¶¶ 19(a) and (c). The following mitigating conditions under AG ¶ 20 are potentially relevant: (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 (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 the above mitigating conditions are established. Applicant has a history of not meeting his financial obligations, and he has not shown efforts to address his debts despite a long history of full employment. The guideline encompasses concerns about a person’s self-control, judgment, and other qualities essential to protecting classified information. A person who is financially irresponsible may also be irresponsible, unconcerned, or negligent in handling and safeguarding classified information. See ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012). There is insufficient evidence to determine that Applicant’s financial problems will be resolved within a reasonable period and that he can obtain and maintain a measure of financial responsibility. He claimed to have received credit counseling, but did not provide supporting evidence. He claimed that two SOR allegations were duplicates, but did not provide documentary evidence to support his contention. He presented no documentary evidence of a significant life circumstance that contributed to his financial problems, and regardless, there is no evidence that he acted in good faith under the circumstances. His financial issues continue to cast doubt on his current reliability, trustworthiness, and good judgment. No mitigation credit is applicable.

WHOLE PERSON CONCEPT

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. In applying the whole- person concept, an 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. An 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. I have incorporated my comments under Guideline F in my whole-person analysis and applied the adjudicative factors in AG ¶ 2(d). I have considered Applicant’s employment history and the type of debts owed, including medical debts and a claimed duplicate account. Because he requested a determination on the record without a hearing, I had no opportunity to evaluate his credibility and sincerity based on demeanor or to question him about the circumstances that led to his debts or any action he may

_________________________ have taken to address them. See ISCR Case No. 01-12350 at 3-4 (App. Bd. Jul. 23, 2003). I have carefully applied the law, as set forth in Egan, Exec. Or. 10865, the Directive, the AGs, and the Appeal Board’s jurisprudence to the facts and circumstances in the context of the whole person, including exceptions available under Appendix C of SEAD 4. I conclude Applicant has not mitigated the security concerns raised by his financial delinquencies.

FORMAL FINDINGS

I make the following formal findings on the allegations in the SOR: Paragraph 1, Guideline F (Financial Considerations): AGAINST APPLICANT Subparagraphs 1.a-1.g: Against Applicant

CONCLUSION

I conclude that it is not clearly consistent with the national interest to grant Applicant’s eligibility for access to classified information. Clearance is denied. Gregg A. Cervi Administrative Judge