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ISCR 21-01709: Guideline F security clearance hearing, denied (2022) · CASE

ISCR Case 21-01709denied

Case headnote

ISCR Case No. 21-01709

deniedJan 31, 2022· Hon. LeRoy F. Foreman· hearing

Summary

A 34-year-old federal contractor was denied a security clearance under Guideline F (Financial Considerations) due to over $45,000 in delinquent debts. The Statement of Reasons detailed 20 delinquent debts, including 11 consumer debts, 6 student loans, a child support arrearage, a home foreclosure, and a vehicle repossession. These issues indicated a failure to live within his means and satisfy debts, raising concerns about poor self-control and judgment.

The applicant admitted to all allegations regarding the delinquent debts. However, he did not provide evidence of financial counseling or demonstrate efforts to resolve these significant financial issues.

Ultimately, the security clearance was denied because the applicant's financial problems were numerous and recent, and he failed to show responsible actions to mitigate them. While certain mitigating conditions were considered, they were not sufficient to overcome the disqualifying conditions presented by the extensive and unaddressed financial delinquencies.

Why the applicant was denied

The applicant admitted to all allegations of delinquent debts totaling over $45,000.
The applicant did not provide evidence of financial counseling or efforts to resolve his debts.
The applicant's financial issues were numerous and recent, indicating a lack of responsible action.

Conditions referenced

Disqualifying

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

Mitigating

AG ¶ 20(a)rejectedBehavior Happened Long Ago or InfrequentlyThe applicant's debts were numerous and recent.
AG ¶ 20(b)rejectedConditions Largely Beyond the Person's ControlWhile some circumstances were beyond the applicant's control, he did not act responsibly.
AG ¶ 20(d)rejectedGood-faith Effort to Repay DebtsThe applicant did not demonstrate any efforts to resolve his debts.

Key rule quoted

“Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the adjudicative guidelines.”

Procedural posture

SOR issuedAug 10, 2021
Answer filedAug 16, 2021
Hearing held—Requested a decision on the written record without a hearing.
Decision dateJan 31, 2022

Cite for

Denial of Security Clearance Due to Financial Irresponsibility Under Guideline F
Failure to Demonstrate Good-faith Efforts to Resolve Debts
Importance of Timely Responses to Formal Objections in Security Clearance Cases.

Editorial summary generated for research. Not legal advice; not a prediction. Verify against the full decision before relying on any quoted language.

From the decision

Facts this decision states, each with the exact sentence it comes from. Descriptive of the record, not an assessment.

Age at decision: 34: “Applicant is a 34-year-old employee of a federal contractor.”
Delinquent debt cited: $45,000: “The SOR alleges 20 delinquent debts totaling more than $45,000.”

Standardized Decision Profile

SEAD-4 Guideline F · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The applicant has 20 delinquent debts totaling over $45,000, including consumer debts, student loans, a child-support arrearage, a home foreclosure, and a vehicle repossession. The judge found these financial issues indicative of an inability to satisfy debts and a history of not meeting financial obligations, leading to a denial of the security clearance.

The sub-allegation breakdown is part of the Professional plan. See what it includes.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation

Descriptive standardized rendering of a decided public case. 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: ) ) [Redacted] ) ISCR Case No. 21-01709 ) Applicant for Security Clearance ) Appearances For Government: Rhett Petcher, Esq., Department Counsel For Applicant: Pro se 01/31/2022

STATEMENT OF CASE

FOREMAN, LeRoy F., 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 29, 2020. On August 10, 2021, the Defense Counterintelligence and Security Agency Consolidated Adjudications Facility (CAF) sent him a Statement of Reasons (SOR) alleging security concerns under Guideline F. The 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), and the adjudicative guidelines (AG) promulgated in Security Executive Agent Directive 4, National Security Adjudicative Guidelines (December 10, 2016). Applicant answered the SOR on August 16, 2021, and requested a decision on the written record without a hearing. Department Counsel submitted the Government’s written case on August 30, 2021. On August 31, 2021, 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 September 10, 2021, and did not respond. The case was assigned to me on December 2, 2021. Evidentiary Issue The FORM consisted of five exhibits. Government Exhibit (GX) 3 is a summary of a personal subject interview (PSI) conducted on September 20, 2020. The PSI summary was not authenticated as required by Directive ¶ E3.1.20. Department Counsel informed Applicant that he was entitled to comment on the accuracy of the PSI summary; make any corrections, additions, deletions or updates; or object to consideration of the PSI summary on the ground that it was not authenticated. Applicant did not respond to the FORM. I conclude that he waived any objections to the PSI summary by failing to respond to the FORM. “Although pro se applicants are not expected to act like lawyers, they are expected to take timely and reasonable steps to protect their rights under the Directive.” ISCR Case No. 12-10810 at 2 (App. Bd. Jul. 12, 2016).

FINDINGS OF FACT

In Applicant’s answer to the SOR, he admitted all the allegations. His admissions are incorporated in my findings of fact. Applicant is a 34-year-old employee of a federal contractor. When he submitted his SCA, he had been unemployed since November 2019. The record does not reflect when he was hired by his current employer. He served on active duty in the U.S. Army from January 2006 to April 2010 and received an honorable discharge. He received an associate’s degree in December 2017. He married in January 2007, divorced in April 2009, married in November 2009, and divorced in August 2015. He has lived with a cohabitant since June 2015. He has two children, ages 11 and 1. After Applicant was discharged from the Army, he worked for several employers from June 2010 to June 2015, when he was fired for sleeping on the job. He worked for another employer from June 2015 to December 2016, when he was fired for poor performance. He believes that he was fired because he and his supervisors disagreed about how certain tasks should be performed. He was unemployed from January 2017 to January 2018 while attending school under the GI Bill. He was employed from January to May 2018, and he voluntarily left that job because he believed he was underpaid and disrespected. He was employed from May 2018 to November 2019, when he was laid off. He was unemployed until he was hired by his current employer. (GX 2 at 17-20; GX 3 at 5-7.) The SOR alleges 20 delinquent debts totaling more than $45,000. They consist of 11 delinquent consumer debts, 6 delinquent student loans, a child-support arrearage, a home foreclosure, and a vehicle repossession. The debts are reflected in credit reports from August 2020 and May 2021. (GX 4 and 5.)

The home foreclosure alleged in SOR ¶ 1.sresulted in sale of the property and the proceeds apparently were sufficient to satisfy the debt. (GX 4 at 5.) Regarding the vehicle repossession in July 2016, alleged in SOR ¶ 1.t, Applicant stated in the PSI that the value of the vehicle at the time of repossession was about $3,000, and that the sale of the vehicle was sufficient to resolve the debt. (GX 3 at 10.) The debt apparently was satisfied because there are only two auto loans reflected in the credit reports. The payments on one auto loan are current, and the other loan was charged off for $1,002 in July 2020 (SOR ¶ 1.h), much later than the repossession admitted by Applicant. (GX 4 at 8, 10; GX 5 at 3, 6.) At the time of the September 2020 PSI, Applicant was unemployed, and he attributed all of his delinquent debts to lack of employment. He told the investigator that he intended to contact his creditors and start making payments after he found a job. (GX 3 at 10-19.) He did not dispute any of the debts. He submitted no evidence of financial counseling. He did not mention any specific attempts to resolve his debts in the PSI or his response to the SOR. He did not respond to the FORM.

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. . . . An individual who is financially overextended is at greater risk of having to engage in illegal or otherwise questionable acts to generate funds. . . . This concern is broader than the possibility that a person might knowingly compromise classified information to raise money. It 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).

Applicant’s admissions and the evidence in the FORM establish the following two disqualifying conditions under this guideline: AG ¶ 19(a) (“inability to satisfy debts”) and AG ¶ 19(c) (“a history of not meeting financial obligations”). The following mitigating conditions are potentially relevant: AG ¶ 20(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; AG ¶ 20(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; and AG ¶ 20(d): the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts. None of the above mitigating conditions are established. Applicant’s delinquent debts are numerous, recent, and were not incurred under circumstances making them unlikely to recur. His periods of unemployment and two divorces appear to have been circumstances largely beyond his control, but he has not acted responsibly. He submitted no evidence of contacts with his creditors or efforts to resolve his debts even after he began working for his current employer. Although the debts alleged in SOR ¶¶ 1.sand 1.twere resolved, satisfaction of debts by repossession or foreclosure does not constitute a “good-faith effort” to resolve them.

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 honorable military service. Because he requested a determination on the record without a hearing, I had no opportunity to evaluate his credibility and sincerity based on demeanor. See ISCR Case No. 01-12350 at 3-4 (App. Bd. Jul. 23, 2003). After weighing the disqualifying and mitigating conditions under Guideline F, and evaluating all the evidence in the context of the whole person, I conclude Applicant has not mitigated the security concerns raised by his delinquent debts.

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.t: Against Applicant

CONCLUSION

I conclude that it is not clearly consistent with the national security interests of the United States to grant Applicant eligibility for access to classified information. Clearance is denied. LeRoy F. Foreman Administrative Judge