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ISCR Case 21-02231 — CASE

ISCR Case 21-02231denied

Case Headnote

ISCR Case No. 21-02231

deniedApr 6, 2022· Hon. Benjamin R. Dorsey· hearing

Summary

A 45-year-old defense contractor employee was denied a security clearance under Guideline F, Financial Considerations, due to significant unresolved financial issues. The Statement of Reasons detailed 13 delinquent debts, totaling approximately $81,000. These debts included an unpaid mortgage, a professional services debt, multiple credit cards, a telecommunications debt, medical debts, and a utility debt.

The applicant acknowledged the existence of these debts but failed to provide any evidence of efforts to mitigate them. Despite claiming intentions to resolve or negotiate the outstanding amounts, no documentation or proof of action was presented to the judge.

Consequently, the judge determined that the applicant's financial issues, specifically the unmitigated delinquent debts, raised concerns about his reliability and good judgment. This lack of demonstrated effort to address the financial obligations led to the denial of the security clearance.

Why the Applicant Was Denied

The applicant had 13 delinquent debts totaling approximately $81,000, which he acknowledged but did not mitigate.
The applicant failed to provide evidence of efforts to resolve or negotiate his debts, despite claiming intentions to do so.
The judge found that the applicant's financial issues cast doubt on his reliability and good judgment.

Conditions Referenced

Disqualifying

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

Procedural Posture

SOR issuedOct 18, 2021
Answer filed—Applicant requested a decision based on the written record.
Hearing held—Decision made based on written record.
Decision dateApr 6, 2022

Cite For

Failure to Mitigate Financial Issues Under Guideline F
Importance of Providing Evidence of Debt Resolution Efforts
Impact of Unresolved Financial Obligations on 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 13 delinquent debts totaling approximately $81,000, including various types of debts such as an unpaid mortgage, credit cards, and medical debts. The judge found all allegations against the applicant, concluding that the financial considerations security concerns were not mitigated, resulting in a denial of the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant owes 13 delinquent debts totaling about $81,000, including an unpaid mortgage, a debt for professional services, credit cards, a telecommunications debt, medical debts, and a utility debt. $81,000	Against Applicant	Unspecified Financial	Admitted	—	—	Claimed Other
1.b–1.m	12 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. 21-02231 ) Applicant for Security Clearance ) Appearances For Government: Jeff Kent, Esq., Department Counsel For Applicant: Pro se 04/06/2022

STATEMENT OF CASE

Dorsey, Benjamin R., Administrative Judge: Applicant did not mitigate the financial considerations security concerns. Eligibility for access to classified information is denied. Statement of the Case On October 18, 2021, the Department of Defense (DOD) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline F, financial considerations. Applicant responded to the SOR and requested a decision based on the written record in lieu of a hearing. The Government’s written case was submitted on December 16, 2021. A complete copy of the file of relevant material (FORM) was provided to Applicant, who was advised that he had 30 days from his date of receipt to file objections and submit material to refute, extenuate, or mitigate the security concerns. Applicant received the FORM on January 3, 2022. As of February 24, 2022, he had not responded. The case was assigned to me on March 22, 2022. The Government exhibits included in the FORM are admitted into evidence without objection. Applicant did not provide any documents with his response to the SOR.

FINDINGS OF FACT

Applicant is a 45-year-old employee of a defense contractor for whom he has worked since December 2016. He earned a bachelor’s degree in 2002. He has been married since 2006. He has no children. Applicant was granted a clearance in 2004 (Items 3, 6) The SOR alleges Applicant owes 13 delinquent debts totaling about $81,000 (SOR ¶¶ 1.a-1.m). The debts include, among other things, an unpaid mortgage, a debt for professional services, credit cards, a telecommunications debt, medical debts, and a utility debt. Applicant admitted the debts in the SOR, with no further comment. I find that the SOR allegations are established through credit reports and Applicant’s admissions. (Items 1-6) Applicant attributed his financial problems to paying a residential mortgage payment and a residential lease payment simultaneously without the requisite funds to do so. He was responsible for both because, despite a realtor’s advice to the contrary, he was unable to sell his home in State A after moving to State B in 2012. He also asserted that a bankruptcy attorney advised him to stop making payments on his credit card debts. Applicant alleged that he later consulted with another bankruptcy attorney who suggested that he try to pay off his debts beginning with the smallest amounts. He was unemployed from about September 2016 until December 2016 (Items 3, 6) Despite averring that he would either repay or dispute the SOR debts, Applicant has presented no evidence that he has contacted creditors, made payments, disputed any debts, offered or negotiated payment agreements, or taken any significant actions to resolve his debts. All 13 SOR debts are unresolved. Applicant did not respond to the FORM, so more recent information about his finances is not available. (Items 1-6)

POLICIES

This case is adjudicated under Executive Order (EO) 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), which became effective within DOD on June 8, 2017. 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 to be 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, 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(c), 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.” Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, 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.” The applicant 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 the applicant may deliberately or inadvertently fail to safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation of potential, rather than actual, risk of compromise of classified information. Section 7 of 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 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.

The guideline notes several conditions that could raise security concerns under AG ¶ 19. The following are potentially applicable in this case: (a) inability to satisfy debts; and (c) a history of not meeting financial obligations. Applicant has a history of financial delinquencies, that includes a mortgage, a debt for professional services, credit cards, a telecommunications debt, medical debts, and a utility debt. The evidence is sufficient to raise the above disqualifying conditions and shifts the burden to Applicant to provide evidence in mitigation. Conditions that could mitigate the financial considerations security concerns are provided under AG ¶ 20. The following 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; (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. Applicant attributed his financial problems to having insufficient funds to pay a residential mortgage and a residential lease simultaneously. Applicant averred that his need to pay both was necessitated because he had moved from State A to State B and could not sell the home he owned in State A. He asserted that a realtor told him that he would be able to sell the home in State A. However, the record contains insufficient evidence to show why this decision was beyond his control. Based upon the timing of a change in his employment, his move may have been necessary to change jobs. However, Applicant does not provide evidence of that assumption, nor does he provide

evidence that moving prior to selling his home was anything other than a voluntary choice. Applicant’s unemployment was beyond his control. Applicant’s cessation of payments on his credit card debts in anticipation of a bankruptcy that he did not file was within his control. Applicant provided no documentary evidence of payments or favorable resolution of the SOR debts. Applicant stated that he intends to pay some of the SOR debts. However, intentions to pay debts in the future are not a substitute for a track record of debt repayment or other responsible approaches. See ISCR Case No. 11-14570 at 3 (App. Bd. Oct. 23, 2013). Applicant provided no documents in his response to the SOR or in response to the FORM. It is reasonable to expect Applicant to present documentation about the resolution of specific debts. See, e.g., ISCR Case No. 15- 03363 at 2 (App. Bd. Oct. 16, 2016). While Applicant claimed to have consulted two bankruptcy attorneys to help him resolve his financial issues, he has not provided evidence of any progress. Therefore, I am unaware of financial counseling or of efforts to resolve financial issues. Applicant alleged that he would dispute at least one of the SOR debts. However, he provided no documentary evidence to substantiate the basis of his dispute. Applicant moved from to State A to State B ten years ago. He has worked for his current employer for over five years. Most of his SOR debts have been delinquent for several years. There is insufficient evidence for a determination that Applicant’s financial problems will be resolved within a reasonable period. I am unable to find that he acted responsibly under the circumstances or that he made a good-faith effort to pay his debts. His financial issues are ongoing. They continue to cast doubt on his current reliability, trustworthiness, and good judgment. Financial considerations security concerns are not mitigated.

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 the 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 about Applicant’s eligibility and suitability for a security clearance. I conclude Applicant did not mitigate 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.m:

Against Applicant

CONCLUSION

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. Benjamin R. Dorsey Administrative Judge