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ISCR Case 22-01956 — CASE

ISCR Case 22-01956denied

Case Headnote

ISCR Case No. 22-01956

deniedSep 7, 2023· Hon. LeRoy F. Foreman· hearing

Summary

A 50-year-old material handler, employed by a defense contractor, was denied a security clearance due to significant financial concerns under Guideline F. The applicant admitted to 19 delinquent consumer debts, totaling approximately $20,000. These debts were attributed to his wife's inability to work following an accident.

However, the applicant failed to provide any evidence of efforts to resolve these debts or of seeking financial counseling. The administrative judge noted that the financial issues were numerous and recent, with no indication of responsible behavior to address them.

Consequently, the judge concluded that the applicant did not mitigate the security concerns raised by his financial history. As a result, eligibility for access to classified information was denied.

Why the Applicant Was Denied

The applicant admitted to 19 delinquent consumer debts totaling about $20,000.
He provided no evidence of efforts to resolve the debts or of financial counseling.
The judge found that the applicant's financial issues were numerous and recent, with no indication of responsible behavior.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(a)rejectedBehavior Happened so Long Ago or InfrequentlyThe debts were numerous and recent.
AG ¶ 20(b)rejectedConditions Beyond the Person's ControlWhile the wife's injury was beyond his control, he did not demonstrate responsible behavior regarding the debts.
AG ¶ 20(c)rejectedReceiving Financial CounselingNo evidence of financial counseling was provided.
AG ¶ 20(d)rejectedGood-faith Effort to Repay DebtsNo evidence of good-faith efforts to resolve debts was submitted.

Key Rule Quoted

“Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the adjudicative guidelines.”
— Exec. Or. 10865 § 2.

Procedural Posture

SOR issuedJan 20, 2023
Answer filedFeb 6, 2023Applicant admitted all allegations.
Hearing held—Decision made on the written record.
Decision dateSep 7, 2023

Cite For

Denial of Security Clearance Due to Financial Irresponsibility Under Guideline F
Lack of Evidence for Mitigating Financial Conditions
Importance of Demonstrating Responsible Behavior in Financial Matters for 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 judge found that the applicant has 19 delinquent consumer debts totaling about $20,000, which he admitted. The judge ruled against the applicant, determining that the financial concerns were not mitigated despite the applicant's claims regarding his wife's injury and intentions to seek debt consolidation.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	19 delinquent consumer debts totaling about $20,000. $20,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Other
1.b–1.s	18 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

\\EA c; ... o _.~ .t::~!~ o ______________ ______________ DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) [Redacted] ) ISCR Case No. 22-01956 ) Applicant for Security Clearance ) Appearances For Government: Tara R. Karoian, Esq., Department Counsel For Applicant: Pro se 09/07/2023

STATEMENT OF CASE

FOREMAN, LeRoy F., Administrative Judge: This case involves security concerns raised under Guideline F (Financial Considerations). Eligibility for access to classified information is denied. Statement of the Case Applicant submitted a security clearance application (SCA) on October 25, 2021. On January 20, 2023, the Defense Counterintelligence and Security Agency Consolidated Adjudication Services (CAS) sent him a Statement of Reasons (SOR) alleging security concerns under Guideline F. The CAS acted under Executive Order (Exec. Or.) 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) promulgated in Security Executive Agent Directive 4, National Security Adjudicative Guidelines (December 10, 2016). Applicant answered the SOR on February 6, 2023, admitted all the allegations, and requested a decision on the written record without a hearing. Department Counsel submitted the Government’s written case on April 17, 2023. On April 20, 2023, a complete

copy of the file of relevant material (FORM) was sent to Applicant, who was given an opportunity to file objections and submit material to refute, extenuate, or mitigate the Government’s evidence. He received the FORM on May 8, 2023, and did not respond. The case was assigned to me on August 15, 2023. Evidentiary Issue The FORM included a summary of a personal subject interview (PSI) conducted on February 26, 2022. The summary was not authenticated as required by Directive ¶ E3.1.20. Department Counsel informed Applicant that he was entitled to comment on the accuracy of the summary; make any corrections, additions, deletions, or updates; or object to consideration of the PSI summary on the ground that it was not authenticated. I conclude that he waived any objections to the PSI summary by failing to respond to the FORM. “Although pro se applicants are not expected to act like lawyers, they are expected to take timely and reasonable steps to protect their rights under the Directive.” ISCR Case No. 12-10810 at 2 (App. Bd. Jul. 12, 2016).

FINDINGS OF FACT

The SOR alleges 19 delinquent consumer debts totaling about $20,000. In Applicant’s answer to the SOR, he admitted all the allegations. His admissions are incorporated in my findings of fact. The debts are reflected in credit reports from December 2021, October 2022, and June 2023, and court records reflecting judgments against him entered in July 2019 and September 2020. (FORM Items 4-9) Applicant is a 50-year-old material handler senior specialist employed by a defense contractor since August 2013. (FORM Item 11 at 4) He married in June 2010. He has four children, ages 24, 23, 11, and 8, and a 29-year-old stepdaughter. He told a security investigator that he pays child support to an ex-girlfriend. He did not identify which children were born during the previous relationship, but his SCA reflects that three of his four children were born before he married. (FORM Item 11 at 5) His SCA reflects that he has never held a security clearance. (FORM Item 3 at 32) Applicant attributed the debts alleged in the SOR to his wife being unable to work after being injured in a car accident. He did not submit any evidence of efforts to resolve the debts alleged in the SOR. He told a security investigator that he intends to work with a debt-consolidation company, but that he has not yet found a company that fits his needs. (FORM Item 11 at 5, 11) He previously received a Chapter 7 bankruptcy discharge in December 1999. (FORM Item 10) The bankruptcy discharge is not alleged in the SOR, and I have considered it only for the limited purposes of deciding which adjudicative guidelines are applicable and in my whole person analysis See ISCR Case No. 03-20327 at 4 (App. Bd. Oct. 26, 2006).

POLICIES

“[N]o one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). 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. The President has authorized the Secretary of Defense or his designee to grant applicants eligibility for access to classified information “only upon a finding that it is clearly consistent with the national interest to do so.” Exec. Or. 10865 § 2. 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, an administrative judge applies these guidelines 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 and reliable information about the person, past and present, favorable and unfavorable. 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 that 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 made “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” Exec. Or. 10865 § 7. Thus, a decision to deny a security clearance is merely an indication the applicant has not met the strict guidelines the President and the Secretary of Defense have established for issuing a clearance. 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. 15-01253 at 3 (App. Bd. Apr. 20, 2016). 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 burden of proving a mitigating condition,

and the burden of disproving it never shifts to the Government. See ISCR Case No. 02- 31154 at 5 (App. Bd. Sep. 22, 2005). An applicant “has the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue his security clearance.” ISCR Case No. 01- 20700 at 3 (App. Bd. Dec. 19, 2002). “[S]ecurity clearance determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531.

ANALYSIS

Guideline F, Financial Considerations The security concern under this guideline 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. . . . An individual who is financially overextended is at greater risk of having to engage in illegal or otherwise questionable acts to generate funds. . . . This concern is broader than the possibility that a person might knowingly compromise classified information to raise money. It encompasses concerns about a person’s self-control, judgment, and other qualities essential to protecting classified information. A person 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). Applicant’s admissions and the evidence in the FORM establish two disqualifying conditions under this guideline: AG ¶ 19(a) (“inability to satisfy debts”) and AG ¶ 19(c) (“a history of not meeting financial obligations”). The following mitigating conditions are potentially relevant: AG ¶ 20(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; AG ¶ 20(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;

AG ¶ 20(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

AG ¶ 20(d): the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts. None of the above mitigating conditions are established. Applicant’s delinquent debts are numerous, recent, and there is no evidence that they were incurred under circumstances making recurrence unlikely. The injury of Applicant’s wife in an accident and the resulting loss of employment were conditions largely beyond his control, but he submitted no evidence of responsible behavior regarding the debts. He submitted no evidence of financial counseling, no evidence reflecting “clear indications” that his financial problems are under control, and no evidence of good-faith efforts to resolve his delinquent debts.

WHOLE PERSON CONCEPT

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. In applying the whole- person concept, an 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. An 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. I have incorporated my comments under Guideline F in my whole-person analysis and applied the adjudicative factors in AG ¶ 2(d). Because Applicant requested a determination on the record without a hearing, I had no opportunity to evaluate his credibility and sincerity based on demeanor. See ISCR Case No. 01-12350 at 3-4 (App. Bd. Jul. 23, 2003). After weighing the disqualifying and mitigating conditions under Guideline F and evaluating all the evidence in the context of the whole person, I conclude Applicant has not mitigated the security concerns raised by his delinquent debts.

FORMAL FINDINGS

I make the following formal findings on the allegations in the SOR: Paragraph 1, Guideline F (Financial Considerations): AGAINST APPLICANT Subparagraphs 1.a-1.s: Against Applicant

CONCLUSION

I conclude that it is not clearly consistent with the national security interests of the United States to grant Applicant eligibility for access to classified information. Clearance is denied. LeRoy F. Foreman Administrative Judge