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ISCR Case 22-01955 — CASE

ISCR Case 22-01955denied

Case Headnote

ISCR Case No. 22-01955

deniedJun 20, 2023· Hon. Richard A. Cefola· hearing

Summary

A 46-year-old divorced applicant with one minor child was denied a security clearance under Guideline F, Financial Considerations, due to significant past-due debts. The applicant admitted to owing approximately $23,240 to Creditor A, $15,950 to Creditor C, $2,261 to Creditor E, $1,966 to Creditor F, $1,812 to Creditor G, $872 to Creditor H, and $402 to Creditor I. These admissions raised disqualifying conditions under Adjudicative Guidelines paragraphs 19(a) and 19(c).

The administrative judge determined that the applicant's financial irresponsibility and failure to address these debts presented serious security concerns. The denial was based on the applicant's admission of multiple past-due debts totaling over $23,000.

Furthermore, the applicant failed to demonstrate a good-faith effort to resolve her financial issues and did not provide evidence of financial counseling or a concrete plan to repay her outstanding debts. Consequently, the security clearance was denied.

Why the Applicant Was Denied

The applicant admitted to multiple past-due debts totaling over $23,000.
The applicant failed to demonstrate a good-faith effort to resolve her financial issues.
The applicant did not provide evidence of financial counseling or a plan to repay her debts.

Conditions Referenced

Disqualifying

AG ¶ 19(a)appliedInability to Satisfy Debts
AG ¶ 19(c)appliedA History 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.”
— AG ¶ 18

Procedural Posture

SOR issuedNov 7, 2022
Answer filedNov 20, 2022Requested decision on the record without a hearing.
Hearing held—Decision made based on written record.
Decision dateJun 20, 2023

Cite For

Financial Irresponsibility Under Guideline F
Failure to Mitigate Financial Concerns
Impact of Financial Issues on 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 multiple past-due debts totaling approximately $63,000, which were found against her under Guideline F. The judge determined that the applicant's financial issues raised significant security concerns, leading to a denial of her security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant admits that she had past-due debts to Creditor A totaling about $23,240. $23,240	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Applicant admits that she has past-due debts to Creditor C totaling about $15,950. $15,950	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	Applicant admits that she has a past-due debt to Creditor E in the amount of about $2,261. $2,261	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	Applicant admits that she has a past-due debt to Creditor F in the amount of about $1,966. $1,966	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	Applicant admits that she has a past-due debt to Creditor G in the amount of about $1,812. $1,812	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	Applicant admits that she has a past-due debt to Creditor H in the amount of about $872. $872	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	Applicant admits that she has a past-due debt to Creditor I in the amount of about $402. $402	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—

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. 22-01955 ) Applicant for Security Clearance ) Appearances For Government: Kelly M. Folks, Esq., Department Counsel For Applicant: Pro se June 20, 2023

STATEMENT OF CASE

CEFOLA, Richard A., Administrative Judge: Statement of the Case Applicant submitted a security clearance application (SCA) on March 9, 2022. (Item 3.) On November 7, 2022, the Department of Defense Consolidated Adjudications Facility (DOD CAF) sent her a Statement of Reasons (SOR) alleging security concerns under Guideline F. (Item 1.) The DOD CAF acted 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) implemented by the DOD on June 8, 2017. Applicant answered the SOR on November 20, 2022 (Answer), and requested a decision on the record without a hearing. Department Counsel submitted the Government’s written case on March 9, 2023. On March 10, 2022, a complete copy of the file of relevant material (FORM) was sent to Applicant, including documents identified as Items 1 through 7. She was given an opportunity to file objections and submit material to refute, extenuate, or mitigate the Government’s evidence. She received the FORM on March 24, 2022, and submitted her Response that same date, and did not object to the Government’s evidence. Items 1 through 7, and Applicant’s Response are admitted into evidence. The case was assigned to me on May 24, 2023.

FINDINGS OF FACT

Applicant, age 46, is divorced and has one minor child. (Item 3 at pages 5, 20 and 23.) Guideline F - Financial Considerations 1.a., 1.b. and 1.j. Applicant admits that she had past-due debts to Creditor A totaling about $23,240. She avers that these debts were “charged off,” and submits tax documents showing that Applicant has paid taxes on the amount charged off. (Response.) However, this does not show a good-faith effort to satisfy her past-due debts. These allegations are found against Applicant. 1.c. and 1.d. Applicant admits that she has past-due debts to Creditor C totaling about $15,950. Applicant offers nothing further in this regard. These allegations are found against Applicant. 1.e. Applicant admits that she has a past-due debt to Creditor E in the amount of about $2,261, and offers nothing further in this regard. This allegation is found against Applicant. 1.f. Applicant admits that she has a past-due debt to Creditor F in the amount of about $1,966, and offers nothing further in this regard. This allegation is found against Applicant. 1.g. Applicant admits that she has a past-due debt to Creditor G in the amount of about $1,812, and offers nothing further in this regard. This allegation is found against Applicant. 1.h. Applicant admits that she has a past-due debt to Creditor H in the amount of about $872, and offers nothing further in this regard. This allegation is found against Applicant. 1.i. Applicant admits that she has a past-due debt to Creditor I in the amount of about $402, and offers nothing further in this regard. This allegation is found against Applicant.

POLICIES

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 (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, “Any 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, “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, and has the ultimate burden of persuasion as to obtaining a favorable clearance 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 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, “Any 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 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. 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. . . . 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, corroborated by her credit reports, 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 security concerns raised in the SOR may be mitigated by any of the following potentially applicable factors: 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 these are applicable. Apart from the charged-off debts of 1.a., 1.b. and 1.j., which Applicant has only partially addressed by paying taxes on the charged-off amounts, she has failed to address the remaining $23,263 of admitted past-due debts, 1.c.~1.i. Applicant failed to meet her burden to mitigate the financial concerns set out in the SOR. For these reasons, I find Financial Considerations against Applicant.

WHOLE PERSON CONCEPT

Under AG ¶ 2(c), the ultimate determination of whether the granting or continuing of national security eligibility is clearly consistent with the interests of national security must be an overall common-sense judgment based upon careful consideration of the applicable guidelines, each of which is to be evaluated in the context of the whole person. 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 I have considered the factors in AG ¶ 2(d). After weighing the disqualifying and mitigating conditions under Guideline F, and evaluating all the evidence in the context of the whole person, I conclude that Applicant has not mitigated the security concerns raised by her financial indebtedness. Accordingly, Applicant has not carried her burden of showing that it is clearly consistent with the national interest to grant her eligibility for access to classified information.

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.j: Against Applicant

CONCLUSION

I conclude that it is not clearly consistent with the national interest to grant or continue Applicant’s national security eligibility for access to classified information. Clearance is denied. Richard A. Cefola Administrative Judge