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ISCR Case 22-01522 — CASE

ISCR Case 22-01522denied

Case Headnote

ISCR Case No. 22-01522

deniedAug 22, 2023· Hon. Benjamin R. Dorsey· hearing

Summary

This case involves a 42-year-old government contractor whose security clearance was denied under Guideline F, Financial Considerations. The denial stemmed from eight delinquent debts, primarily credit cards and a personal loan, totaling approximately $40,000. The applicant admitted to these allegations, which included a failure to contact lenders, establish payment plans, or provide evidence of resolving the debts.

The Statement of Reasons highlighted that the applicant's financial delinquencies were ongoing and recent. He acknowledged overspending on alcohol and disaster preparedness but did not demonstrate efforts toward financial counseling or a change in financial behavior. Disqualifying conditions under Guideline F, specifically AG ¶ 19(a) and AG ¶ 19(c), were raised due to the significant, unresolved debts and lack of mitigation efforts.

Ultimately, the administrative judge concluded that the applicant failed to mitigate the financial security concerns. Despite admitting to the debts, he did not provide evidence of financial responsibility or any concrete steps to resolve his outstanding obligations. Consequently, eligibility for access to classified information was denied.

Why the Applicant Was Denied

The applicant admitted to having eight delinquent debts totaling approximately $40,000.
He failed to provide evidence of any efforts to contact creditors or set up payment plans for his debts.
The applicant acknowledged financial irresponsibility and overspending without demonstrating a change in behavior or financial management.

Conditions Referenced

Disqualifying

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

Key Rule Quoted

“The protection of the national security is the paramount consideration.”

Procedural Posture

SOR issuedAug 19, 2022
Answer filedAug 26, 2022Requested decision based on written record.
Hearing held—Decision made without a hearing.
Decision dateAug 22, 2023

Cite For

Failure to Demonstrate Financial Responsibility Under Guideline F
Impact of Unresolved Debts on Security Clearance Eligibility
Importance of Mitigating Conditions in Financial Considerations 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 has eight delinquent debts totaling approximately $40,000, which consist of credit cards and a personal loan. The applicant failed to demonstrate financial responsibility or efforts to resolve these debts, leading to a decision against the applicant on all allegations under Guideline F.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant has eight delinquent debts totaling approximately $40,000. $40,000	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.b	Delinquent debts consist of credit cards and a personal loan.	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.c	Applicant failed to provide evidence of contacting lenders or setting up payment plans.	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.d	Applicant acknowledged overspending on alcohol and disaster prepping.	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.e	Applicant has not shown evidence of financial responsibility or resolution of debts.	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.f	Applicant's debts remain unresolved and he has not undergone financial counseling.	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.g	Applicant's financial delinquencies are ongoing and recent.	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.h	Applicant has not provided evidence of resolving or addressing his debts.	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 No. 22-01522 ) Applicant for Security Clearance ) Appearances For Government: Tara R. Karoian, Esq., Department Counsel For Applicant: Pro se 08/22/2023

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 August 19, 2022, 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 on August 26, 2022, and requested a decision based on the written record in lieu of a hearing. The Government submitted its written case on October 20, 2022. 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 November 2, 2022, and he did not respond within the deadline. The case was assigned to me on July 24, 2023. The Government exhibits included in the FORM, marked as Items 1-8, are admitted in evidence without objection.

FINDINGS OF FACT

Applicant is a 42-year-old employee of a government contractor for whom he has worked since October 2013. He has attended a community college and an online college but has not earned a degree or certificate. He has never married and has no children. He served with the Marine Corps from 2002 until 2010, when he earned an honorable discharge. (Items 5, 8) In the SOR, the Government alleged Applicant’s eight delinquent debts totaling approximately $40,000 (SOR ¶¶ 1.a through 1.h). These delinquencies consist of credit cards (SOR ¶¶ 1.a through 1.g) and a personal loan (SOR ¶ 1.h). He admitted the SOR allegations. His admissions are adopted as findings of fact. The SOR allegations are established through his admissions and the Government’s credit reports. The SOR debts became delinquent between June 2018 and July 2020. He failed to provide any evidence that he contacted the lenders, set up any payment plans for his SOR debts, or paid any of the accounts. He does not answer phone calls from unknown numbers and does not open mail that he believes has been auto generated, so he does not know if his creditors have attempted to contact him. The SOR debts remain unresolved. (Items 2-4, 6-8) Applicant became delinquent on the SOR debts because he used credit to pay for disaster prepping and made no effort to pay the money back. He also acknowledged that he overspent on alcohol at bars. He admitted that he was irresponsible with his finances. Despite having made no effort to repay the creditors listed in the SOR, he claimed that he is now more responsible with his finances. He claimed that he no longer uses credit. He estimated that he has about $300 in surplus funds at the end of each month, however, he reported having no money in his savings account. He claimed that in 2019, he resolved a credit card that was not listed in the SOR. The available evidence does not corroborate this resolution. He provided no evidence that he has undergone financial counseling. He did not respond to the FORM, so more recent information about his finances is not available. (Items 3, 7)

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 number of delinquent debts, many of which are several years old. The above disqualifying conditions are raised. 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; and (d) the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts. Applicant’s financial delinquencies are ongoing and therefore recent. He has not provided evidence that he has resolved or is resolving his SOR debts. He has not established a track record of financial responsibility. AG ¶ 20(a) does not apply. Applicant’s delinquencies were caused by financial irresponsibility and overspending. These causes were not beyond his control. Even if they were, because he has not attempted to resolve his debts, he has not shown that he acted responsibly under the circumstances with respect to these debts. AG ¶ 20(b) does not apply. The lack of resolution of his SOR debts also means that AG ¶ 20(d) does not apply. He failed to provide sufficient evidence that any of the mitigating conditions 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 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. I have also considered Applicant’s military service. 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 concern.

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.h: 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