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ISCR Case 21-00409 — CASE

ISCR Case 21-00409denied

Case Headnote

ISCR Case No. 21-00409

deniedFeb 21, 2023· Hon. Richard A. Cefola· hearing

Summary

A 36-year-old unmarried applicant was denied a security clearance under Guideline F (Financial Considerations) due to over $112,000 in past-due debts. The Statement of Reasons detailed several specific outstanding obligations. These included approximately $85,586 in past-due student loan debts owed to the U.S. Department of Education, about $13,342 owed to Creditor E, and roughly $3,178 owed to Creditor L.

Additionally, the applicant admitted to owing about $7,026 in past-due student loan debts to State M and approximately $6,125 across two past-due debts to Creditor R. These financial issues raised disqualifying conditions under Adjudicative Guidelines Paragraphs 19(a), 19(b), and 19(c).

The denial was based on the applicant's admission to these significant past-due debts and her failure to take any action to address her financial issues, even during periods of underemployment or unemployment. The administrative judge concluded that the applicant did not meet her burden to mitigate the security concerns, leading to the denial of her security clearance application.

Why the Applicant Was Denied

The applicant admitted to significant past-due debts totaling over $112,000.
The applicant failed to take any action to address her financial issues despite periods of underemployment or unemployment.
The judge found that the applicant did not meet her burden to mitigate the security concerns related to her financial situation.

Conditions Referenced

Disqualifying

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

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.”

Procedural Posture

SOR issuedDec 17, 2021
Answer filed—Applicant requested a decision on the written record without a hearing.
Hearing held—No hearing was held.
Decision dateFeb 21, 2023

Cite For

Significant Financial Issues Under Guideline F
Failure to Address Debts as a Security Concern
Importance of Financial Responsibility in 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 significant past-due student loan debts and other debts totaling over $100,000. The judge ruled against the applicant on all allegations under Guideline F, concluding that the financial issues raised security concerns that were not mitigated.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant admits to owing $85,586 in past-due student loan debts to the U.S. Department of Education. $85,586	Against Applicant	Student Loan Debt	Admitted	—	—	—
1.e	Applicant admits to owing past-due debts to Creditor E in the amount of about $13,342. $13,342	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.l	Applicant admits to owing a past-due debt to Creditor L in the amount of about $3,178. $3,178	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.m	Applicant admits to owing about $7,026 in past-due student loan debts to State M. $7,026	Against Applicant	Student Loan Debt	Admitted	—	—	—
1.r	Applicant admits to owing two past-due debts to Creditor R in the amount of about $6,125. $6,125	Against Applicant	Unspecified Financial	Admitted	—	—	—

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: 21-00409

) Applicant for Security Clearance ) Appearances For Government: David F. Hayes, Esquire, Department Counsel For Applicant: Pro se February 21, 2023

STATEMENT OF CASE

CEFOLA, Richard A., Administrative Judge: Statement of Case On December 3, 2021, Applicant submitted a security clearance application (SF 86). On December 17, 2021, the Department of Defense Consolidated Adjudications Facility (DoD CAF) issued Applicant a Statement of Reasons (SOR), detailing security concerns under Guideline F, Financial Considerations. (Item 1.) The action was taken 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 National Security Adjudicative Guidelines for Determining Eligibility for Access to Classified Information or Eligibility to Hold a Sensitive Position (AG), effective June 8, 2017. Applicant answered the SOR soon thereafter. (item 1.) She admitted all of the SOR allegations, and requested that her case be decided by an administrative judge on the written record without a hearing. (Item 1.) On August 4, 2022, Department Counsel submitted the Government’s written case. A complete copy of the File of Relevant

Material (FORM), containing six Items, was mailed to Applicant on August 5, 2022, and received by her on September 16, 2022. The FORM notified Applicant that she had an opportunity to file objections and submit material in refutation, extenuation, or mitigation within 30 days of her receipt of the FORM. Applicant did not respond to the FORM. DOHA assigned the case to me on December 1, 2022. Items 1 through 6 are admitted into evidence.

FINDINGS OF FACT

Guideline F – Financial Considerations Applicant is 36 years old. She is unmarried, and has no children. (Item 2 at pages 5 and 26–27.) In her Subject interview, Applicant attributes her past-due indebtedness to periods of underemployment or unemployment. (Item 3 at pages 1 and 5.) 1.a.~1.d., 1.f.~1.i., 1.k. and 1.o. Applicant admits to owing $85,586 in past-due student loan debts to the U.S. Department of Education. She has submitted nothing further in this regard. 1.e. and 1.j. Applicant admits to owing past-due debts to Creditor E in the amount of about $13,342. She has submitted nothing further in this regard. 1.l. Applicant admits to owing a past-due debt to Creditor L in the amount of about $3,178. She has submitted nothing further in this regard. 1.m, 1.n., 1.p. and 1.q. Applicant admits to owing about $7,026 in past-due student loan debts to State M. She has submitted nothing further in this regard. 1.r.~1.u. Applicant admits to owing two past-due debts to Creditor R in the amount of about $6,125. She has submitted nothing further in this regard.

POLICIES

When evaluating an applicant’s suitability for national security eligibility, the administrative judge must consider the adjudicative guidelines. In addition to brief introductory explanations for each guideline, the adjudicative guidelines (AG) list potentially disqualifying conditions and mitigating conditions, which are to be used in evaluating an applicant’s national security eligibility. 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 AG ¶ 2 describing the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. The entire

process is a conscientious scrutiny of applicable guidelines in the context 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. I have not drawn inferences based on mere speculation or conjecture. Directive ¶ E3.1.14, requires the Government to 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 the applicant or proven by Department Counsel, and has the ultimate burden of persuasion as to obtaining a favorable clearance decision.” A person applying for national security eligibility seeks to enter 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 national security eligibility. Decisions include, by necessity, consideration of the possible risk the applicant may deliberately or inadvertently fail to protect or safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation as to potential, rather than actual, risk of compromise of classified or sensitive information. Finally, as emphasized in Section 7 of EO 10865, “[a]ny determination under this order adverse to an applicant shall be a determination 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 concerns relating to the guideline for financial considerations are set out in AG ¶ 18, which reads in pertinent part: 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. . . . AG ¶ 19 describes three conditions that could raise security concerns and may be disqualifying in this case: (a) inability to satisfy debts; (b) unwillingness to satisfy debts regardless of the ability to do so; and (c) a history of not meeting financial obligations Applicant has significant past-due indebtedness. These facts establish prima facie support for the foregoing disqualifying conditions, and shifts the burden to Applicant to mitigate those concerns. The guideline includes two conditions in AG ¶ 20 that could mitigate the security concerns arising from Applicant’s alleged financial difficulties: (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 (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. Applicant has over $112,000 in past-due debts that she has yet to address. Although she has had periods of underemployment or unemployment, she has done nothing to address her significant indebtedness. Financial Considerations is found against Applicant.

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. According to AG ¶ 2(c), the ultimate determination of whether to grant national security eligibility must be an overall commonsense judgment based upon careful consideration of the applicable guidelines and the whole-person concept. Overall, the record evidence leaves me with questions and doubts as to Applicant’s judgment, eligibility, and suitability for a security clearance. She has not met her burden to mitigate the security concerns arising under the guideline for financial considerations.

FORMAL FINDINGS

Formal findings for or against Applicant on the allegations set forth in the SOR, as required by ¶ E3.1.25 of Enclosure 3 of the Directive, are: Paragraph 1, Guideline F: AGAINST APPLICANT Subparagraphs 1.a through1.u.: 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 national security eligibility and a security clearance. National security eligibility is denied. Richard A. Cefola Administrative Judge