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ISCR Case ISCR Case No. 21-01755 — CASE

ISCR Case ISCR Case No. 21-01755denied

Case Headnote

ISCR Case No. ISCR Case No. 21-01755

deniedNov 18, 2022· Hon. Candace Le'i Garcia· hearing

Summary

A 48-year-old system engineer was denied a security clearance under Guideline F, Financial Considerations, due to six delinquent consumer debts totaling $40,752. The Statement of Reasons specifically cited these outstanding obligations as a primary concern.

The applicant acknowledged his financial difficulties and stated an intent to resolve them. However, he failed to provide any evidence of concrete steps taken to mitigate these debts, such as making payments, negotiating with creditors, or seeking financial counseling.

The judge concluded that the applicant's history of not meeting financial obligations, coupled with the lack of demonstrated effort to address these issues, raised significant doubts about his reliability and good judgment. Consequently, the security clearance was denied.

Why the Applicant Was Denied

The applicant had six delinquent debts totaling $40,752, indicating a history of not meeting financial obligations.
The applicant failed to provide evidence of efforts to resolve his debts or seek financial counseling.
The applicant's financial difficulties raised doubts about his reliability and good judgment.

Conditions Referenced

Disqualifying

AG ¶ 19(a)appliedInability to Satisfy Debts
AG ¶ 19(c)appliedHistory of Not Meeting Financial Obligations

Key Rule Quoted

“Any doubt concerning personnel being considered for access to classified information will be resolved in favor of the national security.”

Procedural Posture

SOR issuedApr 1, 2022
Answer filedMay 23, 2022
Hearing held—Decided on the written record.
Decision dateNov 18, 2022

Cite For

Denial of Security Clearance Due to Unresolved Financial Issues Under Guideline F
Importance of Providing Evidence of Efforts to Mitigate Financial Concerns
Impact of Financial Distress on Reliability and Judgment in Security Clearance Evaluations.

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 applicant had six delinquent consumer debts totaling $40,752, which he admitted. The judge found that the applicant's financial difficulties raised security concerns and ruled against him on all allegations under Guideline F.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant had six delinquent consumer debts totaling $40,752. $40,752	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Other
1.b–1.f	5 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. 21-01755 ) Applicant for Security Clearance ) Appearances For Government: Carroll J. Connelley, Esq., Department Counsel For Applicant: Pro se 11/18/2022

STATEMENT OF CASE

GARCIA, Candace Le’i, Administrative Judge: Applicant did not mitigate the financial considerations security concerns. Applicant’s eligibility for a security clearance is denied. Statement of the Case On April 1, 2022, the Department of Defense (DOD) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline F (financial considerations). The action was taken 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) implemented by DOD on June 8, 2017. Applicant responded to the SOR on May 23, 2022 (Answer), and elected to have his case decided on the written record in lieu of a hearing. The Government’s written case was submitted on August 15, 2022. A complete copy of the file of relevant material (FORM) was provided to Applicant on August 17, 2022, and he was afforded an opportunity to file objections and submit material to refute, extenuate, or mitigate the security concerns. Applicant received the FORM on August 24, 2022. He did not submit a response. The case was assigned to me on November 3, 2022. The Government’s

documents identified as Items 1 through 5 in its FORM are admitted in evidence without objection. Amendment to the SOR I hereby sua sponte amend the SOR, pursuant to ¶ E3.1.17 of the Directive, to correct the caption of this case from ISCR Case No. 21-01730 to ISCR Case No. 21- 01755.

FINDINGS OF FACT

Applicant admitted SOR ¶¶ 1.a through 1.fin his Answer. He is 48 years old. He married in 1994, divorced in 1995, remarried in 2000, and divorced in 2005. He has one child, a minor. He has owned his home since April 2009. He served in the U.S. military from May 1992 to May 1997, when he was honorably discharged. As of his December 2020 security clearance application (SCA), he worked as a system engineer for his employer, a DOD contractor, since June 1999. He has held a security clearance since approximately 2003. (Items 1, 2) The SOR alleges that Applicant had six delinquent consumer debts totaling $40,752 (SOR ¶¶ 1.a-1.h). Applicant listed his delinquent debts on his SCA, and he discussed them during his January 2021 background interview. A December 2020 credit bureau report lists all of the SOR debts, and a March 2022 credit bureau report lists SOR ¶¶ 1.a through 1.e. (Items 1, 2, 3, 4, 5) Applicant’s financial issues began in mid-2018, when he became financially overextended due to medical and private tutoring expenses for his child. After his father passed away in late 2018, he was despondent and did not handle his financial obligations. As of his SCA, he had not yet taken action to resolve his debts due to a lack of funds. He indicated during his background interview that he intended to resolve his delinquent debts; he cancelled his credit cards so that he would no longer incur credit card debt; and, he planned to cash out his 401(k) retirement account to pay his debts. In his Answer, he stated that he was “trying to find a remedy to remove these items from my record.” He further stated, “Unfortunately I do not have a time table of when this will be completed, if at all." There is no record evidence of payment toward any debts. (Items 1, 2, 3)

POLICIES

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 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(a), 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 access to classified information 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. Under Directive ¶ E3.1.14, the Government must 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 applicant or proven by Department Counsel, and 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 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 Exec. Or. 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 Exec. Or. 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive information).

ANALYSIS

Guideline F, Financial Considerations AG ¶ 18 expresses the security concern pertaining to financial considerations: 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 describes conditions that could raise a security concern and may be disqualifying. I considered ¶ 19(a), an “inability to satisfy debts,” and ¶ 19(c), “a history of not meeting financial obligations,” relevant. Applicant has a history of not paying his debts. Applicant AG ¶¶ 19(a) and 19(c) are established. I have considered all of the mitigating conditions under AG ¶ 20 and considered the following 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; and (d) the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts. Conditions beyond Applicant’s control, as previously discussed, contributed to his financial problems. For the full application of AG ¶ 20(b), he must provide evidence that he acted responsibly under the circumstances. Applicant has not provided documentation of his efforts to resolve any of his delinquent debts. There is no evidence that he received any financial counseling. I find that Applicant’s financial difficulties continue to cast doubt on his current reliability, trustworthiness, and good judgment. AG ¶¶ 20(a), 20(b), 20(c), and 20(d) are not 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 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. Overall, the record evidence leaves me with questions and doubts about Applicant’s eligibility and suitability for a security clearance. For all these reasons, I conclude that Applicant has not mitigated 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.f: 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 eligibility for a security clearance. Eligibility for access to classified information is denied. Candace Le’i Garcia Administrative Judge