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ISCR Case 21-01821 — CASE

ISCR Case 21-01821denied

Case Headnote

ISCR Case No. 21-01821

deniedAug 4, 2022· Hon. Richard A. Cefola· hearing

Summary

A 36-year-old defense contractor employee was denied a security clearance under Guideline F (Financial Considerations) due to approximately $57,000 in past-due debts. These financial difficulties were attributed to a divorce. The Statement of Reasons detailed ten specific past-due debts, including a second mortgage of about $28,019 to Creditor A, and other debts ranging from about $530 to Creditor J to about $6,373 to Creditor B. Additionally, the applicant admitted to six past-due debts totaling about $2,167 to Creditor G and two past-due debts totaling about $1,160 to Creditor I.

The applicant also admitted to a past-due debt of about $766 to Creditor S, which he stated had been paid. However, he denied a past-due debt of about $1,809 to Creditor T.

The administrative judge determined that the applicant failed to demonstrate sufficient mitigation of these financial issues. The applicant's plan to allow the debts to fall off his credit report was deemed an inadequate resolution. Consequently, the judge concluded that granting a security clearance was not consistent with national interest, leading to the denial.

Why the Applicant Was Denied

The applicant admitted to multiple past-due debts totaling approximately $57,000.
The applicant failed to provide evidence of efforts to mitigate his financial issues.
The applicant's plan to let debts fall off his credit report was deemed insufficient.

Conditions Referenced

Disqualifying

AG ¶ 19raisedFinancial Considerations

Procedural Posture

SOR issuedSep 10, 2021
Answer filed—
Hearing heldMay 4, 2022
Decision dateAug 4, 2022

Cite For

Failure to Demonstrate Mitigation of Financial Issues Under Guideline F
Significant Past-due Debts as a Basis for Security Clearance Denial
Insufficient Evidence of Financial Responsibility Affecting National Interest

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: denied

The judge found multiple past-due debts against the applicant under Guideline F, totaling significant amounts. The applicant's claims of financial difficulties due to personal circumstances were not sufficient to mitigate the security concerns raised by these debts, leading to a denial of the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant admits that he has a past-due debt to Creditor A, as the result of a second mortgage, in the amount of about $28,019. $28,019	Against Applicant	Mortgage or Home Loan Debt	Admitted	—	—	—
1.b	Applicant admits that he has a past-due debt to Creditor B in the amount of about $6,373. $6,373	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.c	Applicant admits that he has a past-due debt to Creditor C in the amount of about $6,151. $6,151	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.d	Applicant admits that he has a past-due debt to Creditor D in the amount of about $5,670. $5,670	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.e	Applicant admits that he has a past-due debt to Creditor E in the amount of about $3,466. $3,466	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.f	Applicant admits that he has a past-due debt to Creditor F in the amount of about $1,835. $1,835	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.g	Applicant admits that he has six past-due debts to Creditor G in the amount totaling about $2,167. $2,167	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.h	Applicant admits that he has a past-due debt to Creditor H in the amount of about $1,416. $1,416	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.i	Applicant admits that he has two past-due debts to Creditor I in the amount totaling about $1,160. $1,160	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.j	Applicant admits that he has a past-due debt to Creditor J in the amount of about $530. $530	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.k	Applicant admits that he had a past-due debt to Creditor S in the amount of about $766, but avers it has been paid. $766	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.t	Applicant denies that he had a past-due debt to Creditor T in the amount of about $1,809. $1,809	For Applicant	Unspecified Financial	Denied	—	—	—

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. 21-01821 ) ) Applicant for Security Clearance ) Appearances For Government: Andrew Henderson, Esq., Department Counsel For Applicant: Pro se August 4, 2022

STATEMENT OF CASE

CEFOLA, Richard A., Administrative Judge: Statement of the Case On September 10, 2021, in accordance with DoD Directive 5220.6, as amended (Directive), the Department of Defense issued Applicant a Statement of Reasons (SOR) alleging facts that raise security concerns under Guideline F. The SOR further informed Applicant that, based on information available to the government, DoD adjudicators could not make the preliminary affirmative finding it is clearly consistent with the national interest to grant or continue Applicant’s security clearance. Applicant answered the SOR soon thereafter, and requested a hearing before an administrative judge. (Answer.) The case was assigned to me on January 4, 2022. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on March 21, 2022, scheduling the hearing for May 4, 2022. The hearing was convened as scheduled. The Government offered Exhibits (GXs) 1 through 9, which were admitted into evidence. Applicant testified on his own behalf. Applicant offered no documents for admission into evidence. The record was left open until June 3, 2022, for receipt of

additional documentation. Applicant offered nothing. DOHA received the transcript of the hearing (TR) on May 13, 2022.

FINDINGS OF FACT

Applicant admitted all of the allegations in SOR, except for ¶¶ 1.t. After a thorough and careful review of the pleadings, exhibits, and testimony, I make the following findings of fact. Applicant is a 36-year-old employee of a defense contractor. He has been employed with the defense contractor since 2019. He is divorced, and has two children, ages 11 and 14. (TR at page 14 line 6 to page 17 line 4.) He attributes much of his financial difficulties to his divorce, and plans to address these difficulties by letting his admitted past-due debts fall off his credit report after seven years of delinquency. (TR at page 35 line 16 to page 36 line 20.) Guideline F - Financial Considerations 1.a. Applicant admits that he has a past-due debt to Creditor A, as the result of a second mortgage, in the amount of about $28,019. Despite having a month to further address this concern, Applicant has submitted nothing in this regard. (TR at page 18 line 1 to page 19 line 20, and at page 20 line 20 to page 21 line 7.) 1.b. Applicant admits that he has a past-due debt to Creditor B in the amount of about $6,373. Despite having a month to further address this concern, Applicant has submitted nothing in this regard. (TR at page 19 line 21 to page 20 line 19, and at page 21 lines 8–17.) 1.c. Applicant admits that he has a past-due debt to Creditor C in the amount of about $6,151. Despite having a month to further address this concern, Applicant has submitted nothing in this regard. (TR at page 21 line 18 to page 22 line 2.) 1.d. Applicant admits that he has a past-due debt to Creditor D in the amount of about $5,670. Despite having a month to further address this concern, Applicant has submitted nothing in this regard. (TR at page 22 lines 3–16.) 1.e. Applicant admits that he has a past-due debt to Creditor E in the amount of about $3,466. Despite having a month to further address this concern, Applicant has submitted nothing in this regard. (TR at page 22 lines 17–24.) 1.f. Applicant admits that he has a past-due debt to Creditor F in the amount of about $1,835. Despite having a month to further address this concern, Applicant has submitted nothing in this regard. (TR at page 23 lines 1–12.) 1.g., 1.l., 1.m, 1.o., 1.p., and 1.q. Applicant admits that he has six past-due debts to Creditor G in the amount totaling about $2,167. Despite having a month to further

address this concern, Applicant has submitted nothing in this regard. (TR at page 23 line 13 to page 25 line 22.) 1.h. Applicant admits that he has a past-due debt to Creditor H in the amount of about $1,416. Despite having a month to further address this concern, Applicant has submitted nothing in this regard. (TR at page 25 line 23 to page 26 line 10.) 1.i. and 1.k. Applicant admits that he has two past-due debts to Creditor I in the amount totaling about $1,160. Despite having a month to further address this concern, Applicant has submitted nothing in this regard. (TR at page 26 line 11 to page 27 line 3.) 1.j. Applicant admits that he has a past-due debt to Creditor J in the amount of about $530. Despite having a month to further address this concern, Applicant has submitted nothing in this regard. (TR at page 27 lines 4–8.) 1.k., 1.l., and 1.m. These allegations have already been discussed, above. 1.n. and 1.r. Applicant admits that he has two past-due debts to Creditor N in the amount totaling about $171. Despite having a month to further address this concern, Applicant has submitted nothing in this regard. (TR at page 27 lines 10–23.) 1.o., 1.p., 1.q. and 1.r. These allegations have already been discussed, above. 1.s. Applicant admits that he had a past-due debt to Creditor S in the amount of about $766, but avers it has been paid. Despite having a month to further address this concern, Applicant has submitted nothing in this regard. (TR at page 27 line 24 to page 28 line 7.) 1.t. Applicant denies that he had a past-due debt to Creditor T in the amount of about $1,809. As this debt does not appear as past-due on the Government’s most recent May 2022 credit report, this allegation is found for Applicant. (TR at page 28 lines 8–25, and GX 7.)

POLICIES

When evaluating an applicant’s national security eligibility, the administrative judge must consider the adjudicative guidelines (AG). In addition to brief introductory explanations for each guideline, the adjudicative guidelines 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, administrative judges apply the guidelines 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. 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 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. Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Directive ¶ E3.1.15 states the “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 who applies for access to classified information 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 access to classified information. 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 information. Section 7 of Executive Order (EO) 10865 provides that adverse 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. The guideline notes several conditions that could raise security concerns under AG ¶ 19. Three are potentially applicable in this case: (a) inability to satisfy debts; (b) unwillingness to satisfy debts regardless of the ability to do so; and (c) a history of not meeting financial obligations. Applicant has significant past-due indebtedness. The evidence is sufficient to raise these disqualifying conditions. AG ¶ 20 provides conditions that could mitigate security concerns. I considered all of the mitigating conditions under AG ¶ 20 including: (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; (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. Applicant’s financial problems are ongoing. He has a long history of delinquencies. He has about $57,000 of past-due debt that he has yet to address. He has not demonstrated that future financial problems are unlikely. Mitigation under AG ¶ 20 has not been established. Financial Considerations is found against Applicant.

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. 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 facts and circumstances surrounding this case. I have incorporated my comments under Guideline F in my whole-person analysis. Overall, the record evidence leaves me with questions and doubts as to Applicant’s eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant failed to mitigate the Financial Considerations security concern.

FORMAL FINDINGS

Formal findings for or against Applicant on the allegations set forth in the SOR, as required by ¶ E3.1.25 of the Directive, are: Paragraph 1, Guideline F: AGAINST APPLICANT Subparagraphs 1.a~1.s: Against Applicant Subparagraph 1.t: For 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 for a security clearance. Eligibility for access to classified information is denied. Richard A. Cefola Administrative Judge