CASE · Clearance Adjudication Search EngineCASE

Loading case…

ISCR Case 21-02173 — CASE

ISCR Case 21-02173denied

Case Headnote

ISCR Case No. 21-02173

deniedJul 11, 2022· Hon. Philip J. Katauskas· hearing

Summary

A 26-year-old male applicant with prior military service was denied a security clearance under Guideline F, Financial Considerations. The denial stemmed from a single delinquent account totaling $15,182. This issue raised concerns under Disqualifying Conditions AG ¶ 19(a) and AG ¶ 19(c).

The applicant admitted to the delinquent loan of $15,182 as alleged in the Statement of Reasons. However, he failed to provide any evidence demonstrating efforts to resolve or mitigate this financial concern.

Consequently, the judge concluded that the applicant's financial irresponsibility raised significant questions regarding his reliability and trustworthiness. This lack of demonstrated mitigation efforts led to the denial of his security clearance, as he was deemed not suitable for access to classified information.

Why the Applicant Was Denied

The applicant admitted to having a delinquent loan of $15,182.
He did not provide evidence of efforts to mitigate the financial concern.
The judge found that the applicant's financial irresponsibility raised questions about his reliability and trustworthiness.

Conditions Referenced

Disqualifying

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

Key Rule Quoted

“the clearly consistent standard indicates that security determinations should err, if they must, on the side of denials.”
— Department of the Navy v. Egan, 484 U.S. 518, 531 (1988)

Procedural Posture

SOR issuedNov 26, 2021
Answer filedDec 5, 2021
Hearing held—Decision made on written record.
Decision dateJul 11, 2022

Cite For

Denial of Security Clearance Due to Financial Irresponsibility Under Guideline F
Lack of Evidence to Mitigate Financial Concerns
Importance of Demonstrating Reliability and Trustworthiness for Security Clearance Eligibility

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 has one delinquent account totaling $15,182, which is a loan for an automobile that was voluntarily repossessed. The judge found the financial concerns under Guideline F to be unresolved, ruling against the applicant due to the recent and ongoing nature of the debt and a lack of good-faith efforts to address it.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant has one delinquent account for $15,182. $15,182	Against Applicant	Auto Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Financial Counseling

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

ft~ ~~= "t. O • ~ !C~'Yil o ~ ______________ ______________ DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS \\E In the matter of: ) ) -------------------------- ) ISCR Case No. 21-02173 ) Applicant for Security Clearance ) Appearances For Government: Benjamin R. Dorsey, Esq., Department Counsel For Applicant: Pro se 07/11/2022

STATEMENT OF CASE

KATAUSKAS, Philip J., Administrative Judge: Applicant has not provided evidence sufficient to mitigate the national security concern arising from his one delinquent loan. Applicant’s eligibility for access to classified information is denied. Statement of the Case Applicant submitted his security clearance application (SCA) on January 28, 2021. The Department of Defense Consolidated Adjudications Facility (DOD CAF) issued Applicant a Statement of Reasons (SOR) on November 26, 2021, detailing security concerns under Guideline F, financial considerations. The DOD 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 Security Executive Agent Directive 4, National Security Adjudicative Guidelines, effective within the DOD as of June 8, 2017. Applicant submitted an answer (Answer) to the SOR on December 5, 2021, and elected a decision on the written record by an administrative judge of the Defense Office of Hearings and Appeals (DOHA). Department Counsel submitted the Government’s file

of relevant material (FORM) on December 21, 2021, including documents identified as Items 1 through 5. Applicant received the FORM on January 27, 2022. He was afforded 30 days after receiving the FORM to file objections and submit material in refutation, extenuation, or mitigation. Applicant did not respond to the FORM. The SOR and the Answer (Items 1 and 2) are the pleadings in the case. Items 3 through 5 are admitted without objection. The case was assigned to me on April 27, 2022.

FINDINGS OF FACT

After a thorough and careful review of the pleadings and exhibits submitted, I make the following findings of fact: Applicant is 26 years old, never married and has two sons, ages two and four. He is a high school graduate and has taken some college courses. Applicant served on active duty in the U.S. Army from May 2014 until August 2017, when he was honorably discharged. Applicant also served in the Army National Guard from August 2019 until his honorable discharge in February 2020. Applicant has been unemployed since July 2020. He is sponsored for employment by a defense contractor pending eligibility for a security clearance. (Item 3.) The SOR alleged one delinquent account for $15,182. (Item 1.) Applicant admitted that allegation and produced no documents. (Item 2.) The delinquent account is a loan for an automobile Applicant bought in 2017. Not long after the purchase, he realized that he could not make the monthly payments. Applicant returned the vehicle to the dealership, but they charged him $9,000 for the voluntary repossession. He attempted to work out a payment plan with the collection agency but was unsuccessful. (Item 4.) That loan account has been charged off and is the only delinquent account on Applicant’s financial record. All other accounts are in “Pays As Agreed” status. Applicant has considered financial counseling but has not done so yet. (Items 4 and 5.) Applicant did not respond to the FORM, so there is no more recent information available about the status of the debt, his ability or efforts to pay it, or his current financial status. Law and Policies It is well established that no one has a right to a security clearance. As the Supreme Court held, “the clearly consistent standard indicates that security determinations should err, if they must, on the side of denials.” Department of the Navy v. Egan, 484 U.S. 518, 531 (1988). The adjudicative 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 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. 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. 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 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.

ANALYSIS

Guideline F, Financial Considerations The security concern relating to Guideline F 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. . . .

This concern is broader than the possibility that an individual might knowingly compromise classified information in order to raise money. It encompasses concerns about an individual’s self-control, judgment, and other qualities essential to protecting classified information. An individual who is financially irresponsible may also be irresponsible, unconcerned, or negligent in handling and safeguarding classified information. ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012).

Guideline F notes conditions that could raise security concerns under AG ¶ 19. The following conditions are applicable in this case: (a) inability to satisfy debts; and (c) a history of not meeting financial obligations. The SOR debt is established by Applicant’s admission and the Government’s credit report. AG ¶¶ 19(a) and 19(c) apply. Guideline F 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; and (d) the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts.

This case involved a single delinquent debt, a past-due loan for a repossessed auto. No other debts are evident. The singular nature of the debt suggests that it is isolated. AG ¶ 20(a), therefore, has some application. The debt, however, is also recent and ongoing. Therefore, I cannot find that AG ¶ 20(a) fully applies. In addition, Applicant has not established that he has undertaken any good-faith efforts to address his debt, by repaying the creditor, or otherwise resolving the debt. AG ¶ 20(d), therefore, does not apply. I have also considered the other mitigating conditions under AG ¶ 20. No other mitigating conditions apply. Under AG ¶ 2(a), 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. AG ¶¶ 2(a) and (d)(1)-(9) (explaining the “whole-person” concept and factors). In my analysis above, I considered the potentially disqualifying and mitigating conditions and the whole-person concept in light of all the facts and circumstances surrounding this case. As part of my whole-person analysis, it is worth noting that the SOR debt is the only blemish on Applicant’s financial record. His other accounts are current. Applicant’s effort to consummate a payment plan with the collection agency was unsuccessful. On this record, Applicant may very well benefit from financial counseling, but there is no evidence that he has yet done so.

AGAINST APPLICANT

Subparagraphs 1.a.:

CONCLUSION

_____________________________ Applicant leaves me with questions about his eligibility and suitability for a security clearance. Therefore, I conclude that Applicant has not provided sufficient evidence to mitigate 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: Against Applicant In light of all of the circumstances presented, it is not clearly consistent with the interests of national security to grant Applicant eligibility for access to classified information. Eligibility for access to classified information is denied. Philip J. Katauskas Administrative Judge