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ISCR Case 20-03339 — CASE

ISCR Case 20-03339denied

Case Headnote

ISCR Case No. 20-03339

deniedJul 5, 2023· Hon. Roger C. Wesley· hearing

Summary

A 50-year-old defense contractor employee was denied a security clearance under Guideline F (Financial Considerations) due to unresolved financial issues. The Statement of Reasons alleged the applicant had accumulated five delinquent debts totaling over $24,000, which remained outstanding.

The denial was based on several disqualifying conditions. Specifically, the applicant had five delinquent debts exceeding $24,000 that were not resolved. Furthermore, despite acknowledging his financial mistakes, he failed to present a viable plan for resolving these debts.

The judge concluded that the applicant did not demonstrate a meaningful track record of debt reduction, and therefore, the financial concerns were not mitigated. Consequently, the security clearance was denied.

Why the Applicant Was Denied

The applicant had five delinquent debts exceeding $24,000 that remained unresolved.
He failed to provide a viable plan for debt resolution despite acknowledging his financial mistakes.
The applicant did not demonstrate a meaningful track record of debt reduction.

Conditions Referenced

Disqualifying

19(a)appliedInability to Satisfy Debts
19(b)appliedUnwillingness to Satisfy Debts Regardless of the Ability to Do So
19(c)appliedA History of Not Meeting Financial Obligations

Key Rule Quoted

“Eligibility for access to classified information may only be granted "upon a finding that it is clearly consistent with the national interest to do so."”
— Exec. Or. 10865, Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960)

Procedural Posture

SOR issuedAug 13, 2021
Answer filedMay 2, 2022
Hearing heldMay 31, 2023via Microsoft Teams
Decision dateJul 5, 2023

Cite For

Denial of Security Clearance Due to Unresolved Financial Issues Under Guideline F
Importance of Presenting a Viable Debt Resolution Plan
Lack of a Meaningful Track Record of Debt Reduction as a Basis for Denial

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 that the applicant accumulated five delinquent debts totaling over $24,000, which remain unresolved. Despite the applicant's acknowledgment of financial mistakes and intentions to address the debts, the judge concluded that the financial considerations security concerns were not mitigated, resulting in a denial of eligibility for access to classified information.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant allegedly accumulated five delinquent debts exceeding $24,000. Allegedly, these debts have not been resolved and remain outstanding. $24,000	Against Applicant	Unspecified Financial	Admitted	—	—	Claimed Acknowledgment and Remorse

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. 20-03339 ) Applicant for Security Clearance ) Appearances For Government: Aubrey De Angelis, Esq., Department Counsel For Applicant: Pro se 07/05/2023

STATEMENT OF CASE

WESLEY, ROGER C. Administrative Judge Based upon a review of the case file, pleadings, exhibits, and testimony, Applicant did not mitigate the financial consideration concerns. Eligibility for access to classified information or to hold a sensitive position is denied. Statement of the Case On August 13, 2021, the Defense Counterintelligence and Security Agency (DCSA) Consolidated Adjudications Facility (CAF) issued a Statement of Reasons (SOR) to Applicant detailing reasons why under the financial considerations guideline the DCSA could not make the preliminary affirmative determination of eligibility for granting a security clearance, and recommended referral to an administrative judge to determine whether a security clearance should be granted, continued, denied, or revoked. The action was taken under Executive Order (Exec. Or.) 10865, Safeguarding Classified Information within Industry (February 20, 1960); DoD Directive 5220.6 Defense Industrial Personnel Security Clearance Review Program, (January 2, 1992) (Directive); and Security Executive Agent Directive 4, establishing in Appendix A the National Security Adjudicative Guidelines for Determining Eligibility for Access to Classified Information or Eligibility to Hold a Sensitive Position (AGs), effective June 8, 2017.

Applicant responded to the SOR on May 2, 2022, and requested a hearing. This case was assigned to me on April 6, 2023. A hearing was scheduled for May 31, 2023, via Microsoft Teams teleconference services, and was heard on the scheduled date. At the hearing, the Government’s case consisted of six exhibits (GEs 1-6) and one hearing exhibit. (HE 1) Applicant relied on one witness (himself) and no exhibits. The transcript (Tr.) was received on June 13, 2023. Procedural Issues Before the close of the hearing, Applicant requested the record be kept open to permit Applicant to supplement the record with a written budget. For good cause shown, Applicant was granted seven calendar days to supplement the record with a written budget. Department Counsel was afforded two days to respond. Within the time permitted, applicant furnished a written budget. Applicant’s submission was admitted without objection as Applicant’s AE A. Summary of Pleadings Under Guideline F of the SOR, Applicant allegedly accumulated five delinquent debts exceeding $24,000. Allegedly, these debts have not been resolved and remain outstanding. In his response to the SOR, Applicant admitted all of the alleged SOR debts that were either charged off or in collection. He added no explanations or clarifications.

FINDINGS OF FACT

Applicant is a 50-year-old employee of a defense contractor who seeks a security clearance. Admitted facts are adopted and incorporated by reference. Additional findings of fact follow. Background Applicant married in October 1993 and has three children (ages 13, 17, and 27) from this marriage. (GEs 1-2; Tr. 17-18, 32). Applicant has a high school diploma, and he attended trade school classes between June and August 2017. (GEs 1-2; Tr. 16) Applicant reported no military service. (GEs 1-2) Since April 2017, Applicant has worked for his current employer as a radio frequency technician. (GE 1; Tr. 17) In his work, he conducts testing on shielded government facilities and has not received any “negative remarks” from his employer. (Tr. 15) Between March 2013 and April 2017 he was employed as a landscape maintenance supervisor. He worked in Mexico between April 2008 and March 2013 as the owner of a small landscaping business. (GEs 1-2) Applicant has never held a security clearance. (GE 1)

Applicant’s finances Between 2013 and 2014, Applicant accumulated five delinquent accounts. (GEs 3-6) He attributed his debt delinquencies to income shortfalls during his years of self- employment. (GE 2; Tr. 18) Despite his past promises made to an investigator from he Office of Personnel Management (OPM) in December 2019 to contact his identified creditors holding his five delinquent accounts, he failed to do so. (GE 2; Tr. 20-26) Altogether, Applicant’s delinquent accounts exceed $24,000 and remain unresolved and outstanding. Applicant acknowledged his financial mistakes and hopes to begin addressing his debt delinquencies with his improved employment situation. (Tr. 20) He did not provide any developed, well-organized payment plan or written budget for addressing his debts. Applicant currently nets $3,400 a month from his work. (Tr. 29-30) He has no consistent monthly remainder in which to access discretionary funds to address his debts. (Tr. 29-30) He has a 401(k) retirement account with an approximate $2,600 balance in the account. (Tr. 30)

POLICIES

By virtue of the jurisprudential principles recognized by the U.S. Supreme Court in Department of the Navy v. Egan, 484 U.S. 518, 528 (1988), “no one has a ‘right’ to a security clearance.” As Commander in Chief, “the President has the authority to control access to information bearing on national security and to determine whether an individual is sufficiently trustworthy to have access to such information.” Id. at 527. Eligibility for access to classified information may only be granted “upon a finding that it is clearly consistent with the national interest to do so.” Exec. Or. 10865, Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960), as amended. Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the adjudicative guidelines. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, these guidelines are applied in conjunction with an evaluation of the whole person. An administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. An administrative judge must consider all available, reliable information about the person, past and present, favorable and unfavorable. The AGs list guidelines to be considered by judges in the decision-making process covering DOHA cases. These guidelines take into account factors that could create a potential conflict of interest for the individual applicant, as well as considerations that could affect the individual’s reliability, trustworthiness, and ability to protect classified information. These guidelines include conditions that could raise a security concern and may be disqualifying (disqualifying conditions), if any, and all of the conditions that could mitigate security concerns, if any. These guidelines must be considered before deciding whether or not a security clearance should be granted, continued, or denied. Although, the guidelines do not require judges to place exclusive

reliance on the enumerated disqualifying and mitigating conditions in the guidelines in arriving at a decision. In addition to the relevant AGs, judges must take into account the pertinent considerations for assessing extenuation and mitigation set forth in ¶ 2(a) of the AGs, which are intended to assist the judges in reaching a fair and impartial, commonsense decision based on a careful consideration of the pertinent guidelines within the context of the whole person. The adjudicative process is designed to examine a sufficient period of an applicant’s life to enable predictive judgments to be made about whether the applicant is an acceptable security risk. When evaluating an applicant’s conduct, the relevant guidelines are to be considered together with the following ¶ 2(d) factors: (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 of the conduct; (8) the potential for pressure, coercion, exploitation, or duress; and (9) the likelihood of continuation or recurrence. Viewing the issues raised and evidence as a whole, the following individual guidelines are pertinent herein: Financial Considerations The Concern: Failure or inability 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 or 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 acts or otherwise questionable acts to generate funds. . . . AG ¶ 18. Burdens of Proof The Government reposes a high degree of trust and confidence in persons with access to classified information. This relationship transcends normal duty hours and endures throughout off-duty hours. 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 about potential, rather than actual, risk of compromise of classified information. Clearance decisions must be “in

terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See Exec. Or. 10865 § 7. See also Exec. Or. 12968 (Aug. 2, 1995), § 3.1. Initially, the Government must establish, by substantial evidence, conditions in the personal or professional history of the applicant that may disqualify the applicant from being eligible for access to classified information. The Government has the burden of establishing controverted facts alleged in the SOR. See Egan, 484 U.S. at 531. “Substantial evidence” is “more than a scintilla but less than a preponderance.” See v. Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994). The guidelines presume a nexus or rational connection between proven conduct under any of the criteria listed therein and an applicant’s security suitability. See ISCR Case No. 95-0611 at 2 (App. Bd. May 2, 1996).

Once the Government establishes a disqualifying condition by substantial evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the facts. Directive ¶ E3.1.15. An applicant “has the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue his [or her] security clearance.” ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002). The burden of disproving a mitigating condition never shifts to the Government. See ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 2005). “[S]ecurity clearance determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531; see AG ¶ 2(b).

ANALYSIS

Security concerns are raised over Applicant’s reported accumulation of five delinquent debts exceeding $24,000 in the aggregate. These collective debt delinquencies warrant the application of three of the disqualifying conditions (DC) of the financial considerations guidelines: DC ¶¶ 19(a), “inability to satisfy debts”; 19(b), “unwillingness to satisfy debts regardless of the ability to do so”; and 19(c), “a history of not meeting financial obligations.” Each of these DCs apply to Applicant’s situation. Applicant’s admitted delinquent debts with explanations require no independent proof to substantiate them. See Directive 5220.6 at E3.1.1.14; McCormick on Evidence § 262 (6th ed. 2006). His admitted delinquent debts are fully documented and create judgment issues as well over the management of his finances. See ISCR Case No. 03- 01059 (App. Bd. Sept. 24, 2004). Although he qualified his admissions with explanations, his admissions can be weighed along with other evidence developed during the hearing.

Financial stability in a person cleared to protect classified information is required precisely to inspire trust and confidence in the holder of a security clearance that entitles the person to access classified information. While the principal concern of a security clearance holder’s demonstrated difficulties is vulnerability to coercion and influence, judgment and trust concerns are implicit in cases involving delinquent debts. Historically, the timing of addressing and resolving debt delinquencies is critical to an assessment of an applicant’s trustworthiness, reliability, and good judgment in

__________________________ following rules and guidelines necessary for those seeking access to classified information or to holding a sensitive position. See ISCR Case No. 14-06808 at 3 (App. Bd. Nov. 23. 2016); ISCR Case No. 14-01894 at 5 (App. Bd. Aug. 18, 2015). Applicant’s cited explanations for his debt delinquencies are insufficient to warrant the application of any of the potentially available mitigating conditions. Currently, he has no financial plan in place to aid him in mitigating the Government’s financial concerns. In evaluating Guideline F cases, the Appeal Board has stressed the importance of a “meaningful track record” that includes evidence of actual debt reduction through the voluntary payment of accrued debts. See ISCR Case No. 19-02593 at 4-5 (App. Bd. Oct. 18, 2021); ISCR Case No. 19-01599 at 3 (App. Bd. Jan. 20, 2020). Based on the evidence presented, Applicant is not able to demonstrate a sufficient tangible track record of actual debt reduction to satisfy Appeal Board guidance. Whole-person assessment Whole-person assessment of Applicant’s clearance eligibility requires consideration of whether his finances are fully compatible with minimum standards for holding a clearance. Taking into account Applicant’s credited defense contributions and his explanations as to why he has not been able to address his delinquent debts to date, insufficient evidence has been presented to enable him to maintain sufficient control of his finances to meet minimum standards for holding a security clearance. I have carefully applied the law, as set forth in Department of Navy v. Egan, 484 U.S. 518 (1988), Exec. Or. 10865, the Directive, and the AGs, to the facts and circumstances in the context of the whole person. I conclude financial considerations security concerns are not mitigated. Eligibility for access to classified information is denied.

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: Guideline F (FINANCIAL CONSIDERATIONS): AGAINST APPLICANT Subparagraphs 1.a-1.e: 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 interest to grant Applicant eligibility for a security clearance. Eligibility for access to classified information is denied. Roger C. Wesley Administrative Judge