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ISCR Case 21-02394 — CASE

ISCR Case 21-02394denied

Case Headnote

ISCR Case No. 21-02394

deniedSep 20, 2022· Hon. Carol G. Ricciardello· hearing

Summary

A 41-year-old male applicant was denied a security clearance under Guideline F (Financial Considerations) due to 11 delinquent debts totaling approximately $49,234, which began accumulating around 2018. The Statement of Reasons specifically alleged his inability to pay these debts.

The applicant attributed his financial difficulties to underemployment and child support obligations. However, he failed to provide evidence of responsible financial management or any efforts to resolve his outstanding debts.

Despite the consideration of several mitigating conditions, the judge ultimately found that the applicant's financial problems raised significant doubts about his current reliability and trustworthiness, leading to the denial of his security clearance.

Why the Applicant Was Denied

The applicant admitted to having 11 delinquent debts totaling approximately $49,234.
He failed to provide evidence of responsible financial management or efforts to resolve his debts.
The judge found that the applicant's financial problems cast doubt on his current reliability and trustworthiness.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(b)rejectedConditions Largely Beyond the Person's ControlThe applicant's failure to pay debts was not solely due to underemployment, as child support obligations were within his control.
AG ¶ 20(a)rejectedBehavior Unlikely to RecurThe applicant's financial issues were recent and ongoing.
AG ¶ 20(c)rejectedReceiving Financial CounselingThere was no evidence of financial counseling or efforts to resolve debts.
AG ¶ 20(d)rejectedGood-faith Effort to Repay CreditorsThe applicant did not demonstrate a good-faith effort to resolve his debts.

Key Rule Quoted

“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.”
— AG ¶ 18

Procedural Posture

SOR issuedDec 31, 2021
Answer filedMar 14, 2022Applicant elected to have the case decided on the written record.
Hearing held—Decision made based on written record.
Decision dateSep 20, 2022

Cite For

Failure to Mitigate Financial Concerns Under Guideline F
Insufficient Evidence of Responsible Financial Management
Impact of Child Support Obligations on Financial Stability

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 11 delinquent debts totaling approximately $49,234, which he has not paid. The judge found that the applicant's financial problems are not under control and ruled against him on all allegations under Guideline F.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant has 11 delinquent debts totaling approximately $49,234 that began accumulating in about 2018, and which he is unable to pay. $49,234	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.b–1.k	10 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. 21-02394 ) Applicant for Security Clearance ) Appearances For Government: Dan O’Reilley, Esq., Department Counsel For Applicant: Pro se 09/20/2022

STATEMENT OF CASE

RICCIARDELLO, Carol G., Administrative Judge: Applicant failed to mitigate the security concerns under Guideline F, financial considerations. Eligibility for access to classified information is denied. Statement of the Case On December 31, 2021, the Defense Counterintelligence and Security Agency issued to Applicant a Statement of Reasons (SOR) detailing security concerns under Guideline F, financial considerations. The action was taken under Executive Order (EO) 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; Department of Defense (DOD) Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG) effective within the DOD on June 8, 2017. Applicant answered the SOR on March 14, 2022, and elected to have his case decided on the written record in lieu of a hearing. Department Counsel submitted the Government’s file of relevant material (FORM), and Applicant received it on June 9, 2022. He was afforded an opportunity to file objections and submit material in refutation,

extenuation, or mitigation within 30 days of receipt of the FORM. The Government’s evidence is identified as Items 2 through 6 (Item 1 is the SOR). Applicant did not provide a response to the FORM, object to the Government’s evidence, or submit documents. The Government’s evidence is admitted. The case was assigned to me on September 13, 2022.

FINDINGS OF FACT

Applicant admitted all of the SOR allegations. After a thorough and careful review of the pleadings and exhibits submitted, I make the following findings of fact. Applicant is 41 years old. He married in 2006 and divorced in 2015. He has two children with his ex-wife. He also has two children with a former girlfriend. He currently cohabits with his new girlfriend. His children’s ages are 16, 10, 8, and 7. He pays $600 a month for the two older children and $880 a month for the younger children. (Item 3) Applicant served on active duty in the military from 2000 to 2014 and received an honorable discharge. He chose to leave the service and accept a year of severance pay when the military was reducing its ranks during a drawdown. After his discharge, he was unemployed for about eight months. He decided to use his military educational benefits and go back to school for a period. He then held several jobs for short periods of time. He has worked for his current employer, a federal contractor, since October 2020. (Item 3) The SOR alleges 11 delinquent debts totaling approximately $49,234, which are charged-off or in collection status. They are corroborated by Applicant’s admissions in his answer to the SOR, disclosure in his security clearance application (SCA), statements made to the government investigator, and credit reports from July 2021 and December 2020. Many of the debts became delinquent in 2018. (Items 2, 3, 4, 5, 6,) Applicant attributes his financial problems to being underemployed. He states that because he changed careers, he has had to start at the bottom of the pay scale, and he does not earn enough to pay his bills and his child support. He also stated that he moved in 2015 to an area with a higher cost of living. He is living paycheck to paycheck. His current annual salary is approximately $70,000, but he was previously earning only about $49,000. He stated in his SCA that he got behind in paying some of his bills because of his child support payments, but intended to get back on track. (Items 3, 4) During Applicant’s January 2021 background interview with a government investigator, he stated that he cannot pay all of his creditors at the same time. He said he was working on paying some of his small debts. He did not provide evidence of payments he may have made to these creditors. He said that although he would like to pay the larger debts, he is unable to do so with the amount of his salary and his child support obligations. He plans to settle his delinquent accounts eventually. He provided no other evidence or documents to corroborate resolution of his delinquent debts. (Item 4)

POLICIES

When evaluating an applicant’s suitability for 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 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(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.” 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. Directive ¶ E3.1.15 states 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. Section 7 of EO 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 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. 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. See ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012). AG ¶ 19 provides conditions that could raise security concerns. The following are potentially applicable: (a) inability to satisfy debts; and (c) a history of not meeting financial obligations. Applicant has 11 delinquent debts totaling approximately $49,234 that began accumulating in about 2018, and which he is unable to pay. There is sufficient evidence to support the application of the above disqualifying conditions. The guideline 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;

(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. Applicant has been unable to pay his delinquent debts. He attributes his financial problems to being underemployed and having to pay his child support. He has not paid any of the accounts. He said he plans to eventually pay the debts, but did not provide a timeline on when that might occur. His underemployment is beyond his control. Paying child support is not. For the full application of AG ¶ 20(b), Applicant must have acted responsibly under the circumstances. He has not paid any of his delinquent debts and did not offer evidence of how he intends to do so in the future. AG ¶ 20(b) has minimal application. Applicant has not made a good-faith effort to resolve his debts. There is no evidence that he has participated in financial counseling and there are not clear indications his financial problems are under control. His debts are recent and there is insufficient evidence to conclude that future problems are unlikely to recur. His behavior casts doubt on his current reliability, good judgment and trustworthiness. AG ¶ 20(a) through AG ¶ 20(d) do not apply.

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. Insufficient evidence was provided, and Applicant failed to meet his burden of persuasion. 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 security concerns raised 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 Subparagraphs 1.a-1.k: 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 security to grant Applicant eligibility for a security clearance. Eligibility for access to classified information is denied. Carol G. Ricciardello Administrative Judge