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ISCR Case 21-02340 — CASE

ISCR Case 21-02340denied

Case Headnote

ISCR Case No. 21-02340

deniedMay 3, 2022· Hon. Matthew E. Malone· hearing

Summary

A 31-year-old federal contractor was denied a security clearance under Guideline F, Financial Considerations, due to unresolved delinquent debts totaling $31,428. The Statement of Reasons alleged the applicant owed this amount across six past-due debts, had a history of not meeting financial obligations, and had been living beyond his means. These issues raised disqualifying conditions under Adjudicative Guidelines paragraphs 19(a), 19(c), and 19(e).

The denial was based on the applicant's admission to the $31,428 in delinquent debts. Crucially, the applicant failed to provide evidence of efforts to resolve these debts or demonstrate his current financial status.

The judge concluded that the applicant's financial issues indicated poor self-control and a lack of judgment, raising significant security concerns regarding reliability and trustworthiness. Consequently, the security clearance was denied.

Why the Applicant Was Denied

The applicant admitted to owing $31,428 in delinquent debts.
The applicant did not provide evidence of efforts to resolve the debts or current financial status.
The judge concluded that the applicant's financial issues indicated poor self-control and lack of judgment.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability to Satisfy Debts
AG ¶ 19(c)raisedHistory of Not Meeting Financial Obligations
AG ¶ 19(e)raisedConsistent Spending Beyond One's Means

Key Rule Quoted

“The presence or absence of a disqualifying or mitigating condition is not determinative of a conclusion for or against an applicant.”

Procedural Posture

SOR issuedNov 15, 2021
Answer filed—Applicant requested a decision without a hearing.
Hearing held—Decision made without a hearing.
Decision dateMay 3, 2022

Cite For

Denial of Security Clearance Due to Unresolved Financial Issues Under Guideline F
Impact of Financial Irresponsibility on Reliability and Trustworthiness
Failure to Provide Mitigating Evidence in Financial Cases

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 judge found that the applicant owed $31,428 for six past-due or delinquent debts and had a history of not meeting financial obligations, which raised significant security concerns under Guideline F. The applicant's request for security clearance eligibility was ultimately denied due to these financial issues.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant owes $31,428 for six past-due or delinquent debts. $31,428	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.b	Applicant has a history of not meeting financial obligations.	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.c	Applicant has been living beyond his means.	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.d–1.f	3 sub-charges — specific text not stated in this decision (against the applicant). (low confidence)	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: ) ) ) [NAME REDACTED] ) ISCR Case No. 21-02340 ) ) Applicant for Security Clearance ) Appearances For Government: Ross Hyams, Esq., Department Counsel For Applicant: Pro se 05/03/2022

STATEMENT OF CASE

MALONE, Matthew E., Administrative Judge: Applicant failed to mitigate the security concerns raised by his financial problems. His request for continued eligibility for access to classified information is denied. Statement of the Case On February 3, 2021, Applicant submitted an Electronic Questionnaire for Investigations Processing (e-QIP) to renew his eligibility for access to classified information required as part of his employment with a federal contractor. Based on the results of the ensuing background investigation, adjudicators for the Defense Counterintelligence and Security Agency Consolidated Adjudications Facility (DCSA CAF) could not, as required by Security Executive Agent Directive (SEAD) 4, Section E.4, and by DOD Directive 5220.6, as amended (Directive), Section 4.2, make an affirmative determination that it is clearly consistent with the interests of national security for Applicant to continue to have access to classified information. On November 15, 2021, the DCSA CAF issued a Statement of Reasons (SOR) alleging facts and security concerns addressed under Guideline F (Financial

Considerations). The adjudicative guideline (AG) cited in the SOR was one of the guidelines issued by the Director of National Intelligence (DNI) on December 10, 2016, to be effective for all adjudications on or after June 8, 2017. Applicant timely responded to the SOR (Answer) and requested a decision without a hearing. On December 20, 2021, as provided for by paragraph E3.1.7 of the Directive, Department Counsel for the Defense Office of Hearings and Appeals (DOHA) issued a File of Relevant Material (FORM) that was received by Applicant on September 22, 2021. The FORM contained six exhibits (Items 1 – 6) on which the Government relies to support the SOR allegations. Applicant received the FORM on February 4, 2022, and was informed he had 30 days from receipt of the FORM to submit additional information. He did not submit anything further and the record closed on March 6, 2022. I received the case for decision on April 12, 2022.

FINDINGS OF FACT

Under Guideline F, the SOR alleged that Applicant owes $31,428 for six past-due or delinquent debts (SOR 1.a – 1.f). In response to the SOR, Applicant admitted all of the Guideline F allegations. (FORM, Items 1 and 3) In addition to the facts established by Applicant’s admissions, I make the following findings of fact. Applicant is 31 years old and is sponsored for a security clearance by his employer, a federal contractor. In his most recent e-QIP, he disclosed that he owed $35,171 for six delinquent or past-due debts. A credit report obtained by government investigators in March 2021 documented those and other delinquencies about which Applicant was interviewed by a government investigator on June 3, 2021. During the interview, Applicant attributed his financial problems to his employer’s decision to stop allowing overtime, on which Applicant relied to make an extra $5 hourly. When he was able to earn that extra income, he could make at least the minimum payments on the commercial credit accounts listed in the SOR. He did not otherwise explain why or how he incurred numerous credit accounts with high balances. Based on my review of all of the available information, I conclude that Applicant was living beyond his means when his access to overtime pay ended. (FORM, Items 4 – 6) In response to the SOR, Applicant asserted that he had resolved one account and was paying off another debt that was not one of those alleged in the SOR. (FORM, Item 3) He has not provided any information in response to the SOR or the FORM that would support that claim. Applicant also did not provide any information about his current finances or about any efforts to resolve the debts documented by the Government’s information.

POLICIES

Each security clearance decision must be a fair, impartial, and commonsense determination based on examination of all available relevant and material information,

and consideration of the pertinent criteria and adjudication policy in the adjudicative guidelines (AG). (See Directive, 6.3) Decisions must also reflect consideration of the factors listed in AG ¶ 2(d). Commonly referred to as the “whole-person” concept, those factors are: (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. The presence or absence of a disqualifying or mitigating condition is not determinative of a conclusion for or against an applicant. However, specific applicable guidelines should be followed whenever a case can be measured against them as they represent policy guidance governing the grant or denial of access to classified information. A security clearance decision is intended only to resolve whether it is clearly consistent with the national interest for an applicant to either receive or continue to have access to classified information. (Department of the Navy v. Egan, 484 U.S. 518 (1988)) The Government bears the initial burden of producing admissible information on which it based the preliminary decision to deny or revoke a security clearance for an applicant. Additionally, the Government must be able to prove controverted facts alleged in the SOR. If the Government meets its burden, it then falls to the applicant to refute, extenuate or mitigate the Government’s case. Because no one has a “right” to a security clearance, an applicant bears a heavy burden of persuasion. (See Egan, 484 U.S. at 528, 531) A person who has access to classified information enters into a fiduciary relationship with the Government based on trust and confidence. Thus, the Government has a compelling interest in ensuring each applicant possesses the requisite judgment, reliability and trustworthiness of one who will protect the national interests as his or her own. The “clearly consistent with the national interest” standard compels resolution of any reasonable doubt about an applicant’s suitability for access in favor of the Government. (See Egan; AG ¶ 2(b))

ANALYSIS

Financial Considerations Available information shows that Applicant owes more than $31,000 for six delinquent debts that he has not yet addressed or resolved. His debts became delinquent because he was living beyond his means. This information reasonably raises the security concerns articulated, in relevant part, at 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. More specifically, the Government’s information requires application of the following AG ¶ 19 disqualifying conditions: (a) inability to satisfy debts; and (c) a history of not meeting financial obligations; and (e) consistent spending beyond one's means or frivolous or irresponsible spending, which may be indicated by excessive indebtedness, significant negative cash flow, a history of late payments or of non-payment, or other negative financial indicators. I also have considered the following pertinent AG ¶ 20 mitigating conditions: (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. The Government’s information presented a prima facie case for disqualification. Accordingly, it was incumbent on Applicant to present sufficient reliable information on which application of available mitigating conditions could be based. He did not do so. The record does not support any of the cited mitigating conditions. Applicant did not meet his

burden of persuasion to overcome the Government’s case for disqualification from access to classified information. In addition to my evaluation of the facts and application of the appropriate adjudicative factors under Guideline F, I have reviewed the record before me in the context of the whole-person factors listed in AG ¶ 2(d). The record evidence as a whole presents unresolved doubts about Applicant’s suitability for access to classified information. His ongoing financial problems leave him at risk of engaging in unacceptable conduct to resolve his debts. Further, his apparent lack of action in addressing his financial problems reflects adversely on his judgment and reliability. Because protection of the national interest is the principal focus in these adjudications, any remaining doubts must be resolved against allowing access to sensitive information.

FORMAL FINDINGS

Formal findings 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 Subparagraph 1.a – 1.f: Against Applicant

CONCLUSION

In light of all available information, it is not clearly consistent with the interests of national security for Applicant to have access to classified information. Applicant’s request for security clearance eligibility is denied. MATTHEW E. MALONE Administrative Judge