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ISCR Case 22-01989 — CASE

ISCR Case 22-01989denied

Case Headnote

ISCR Case No. 22-01989

deniedSep 1, 2023· Hon. Richard A. Cefola· hearing

Summary

A 48-year-old defense contractor employee was denied a security clearance under Guideline F, Financial Considerations, due to significant past-due debts totaling approximately $39,561. The applicant admitted to several specific debts, including about $10,699 owed to Creditor A and approximately $2,396 owed to Creditor F. For the latter, the applicant stated "Unable to Locate" despite having additional time to provide further information.

While the applicant did resolve a past-due debt of about $2,082 to Creditor G for less than the full balance, this was insufficient to mitigate the overall financial concerns. Disqualifying conditions under Guideline F were raised, specifically AG ¶ 19(a), AG ¶ 19(b), and AG ¶ 19(c).

Although mitigating conditions AG ¶ 20(a), AG ¶ 20(b), and AG ¶ 20(d) were considered, the applicant failed to provide sufficient evidence of efforts to resolve the remaining financial issues. The ongoing nature of the financial problems and a demonstrated lack of responsible debt management ultimately led to the denial of the security clearance.

Why the Applicant Was Denied

The applicant admitted to significant past-due debts totaling approximately $39,561.
The applicant failed to provide sufficient evidence of efforts to mitigate financial issues.
The applicant's financial problems were ongoing and demonstrated a lack of responsible management of debts.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability to Satisfy Debts
AG ¶ 19(b)raisedUnwillingness to Satisfy Debts Regardless of the Ability to Do So
AG ¶ 19(c)raisedHistory of Not Meeting Financial Obligations

Mitigating

AG ¶ 20(a)rejectedBehavior Happened Long Ago or InfrequentlyThe applicant's financial problems are ongoing.
AG ¶ 20(b)rejectedConditions Beyond the Person's ControlThe applicant did not demonstrate that the financial issues were beyond his control.
AG ¶ 20(d)rejectedGood-faith Effort to Repay DebtsThe applicant did not show a consistent effort to resolve debts.

Key Rule Quoted

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

Procedural Posture

SOR issuedNov 14, 2022
Answer filedNov 24, 2022
Hearing heldApr 12, 2023Record left open until July 12, 2023 for additional documentation.
Decision dateSep 1, 2023

Cite For

Denial of Security Clearance Due to Unresolved Financial Obligations
Failure to Demonstrate Sufficient Mitigation Efforts Under Guideline F
Impact of Ongoing Financial Difficulties on National Security 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: HearingDecided: denied

The judge found multiple financial concerns under Guideline F, with some debts admitted by the applicant. While debts to Creditor C, D, G, and H were either satisfied or settled, the debts to Creditor A, B, and F remained unresolved, leading to a decision against the applicant.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant admits that he has a past-due debt to Creditor A in the amount of about $10,699. $10,699	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts	—	—
1.f	Applicant admits that he has a past-due debt to Creditor F in the amount of about $2,396. Despite having an extra three months to do so, he has submitted little further regarding it, only averring 'Unable to Locate.' $2,396	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts	—	—
1.g	Applicant admits that he had a past-due debt to Creditor G in the amount of about $2,082. This debt has been resolved for less than the full balance, as evidenced by documentation. $2,082	For 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. 22-01989 ) ) Applicant for Security Clearance ) Appearances For Government: Jeff Nagel, Esq., Department Counsel For Applicant: Pro se September 1, 2023

STATEMENT OF CASE

CEFOLA, Richard A., Administrative Judge: Statement of the Case On November 14, 2022, in accordance with DoD Directive 5220.6, as amended (Directive), the Department of Defense issued Applicant a Statement of Reasons (SOR) alleging facts that raise security concerns under Guideline F. The SOR further informed Applicant that, based on information available to the government, DoD adjudicators could not make the preliminary affirmative finding it is clearly consistent with the national interest to grant or continue Applicant’s security clearance. Applicant answered the SOR on November 24, 2022, and requested a hearing before an administrative judge. (Answer.) The case was assigned to me on March 20, 2023. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on March 22, 2023, scheduling the hearing for April 12, 2023. The hearing was convened as scheduled. The Government offered Exhibits (GXs) 1 through 4, which were admitted into evidence. Applicant testified on his own behalf. Applicant offered two documents, which I marked Applicant’s Exhibits (AppXs) A and B. The record was left open for three months until July 12, 2023, for receipt of additional documentation. On

July 12, 2023, Applicant offered six documents that I marked as Post-Hearing Exhibits (PHXs) A~F and admitted into evidence. DOHA received the transcript of the hearing (TR) on April 21, 2023.

FINDINGS OF FACT

Applicant admitted to all the allegations in the SOR, with explanations. After a thorough and careful review of the pleadings, exhibits, and testimony, I make the following findings of fact. Applicant is a 48-year-old employee of a defense contractor. He has been employed with the defense contractor since January of 2022. He is married, and has adult children. (TR at page 13 line 21 to page 18 line 23, and GX 1 at pages 5, 10, 18–19 and 23–25.) He attributes his financial difficulties to extensive periods of unemployment that are not reflected on his e-QIP. (GX 1 at pages 10–14) Guideline F - Financial Considerations 1.a. Applicant admits that he has a past-due debt to Creditor A in the amount of about $10,699. Despite having an extra three months to do so, he has submitted nothing further regarding the debt. (TR at page 19 line 24 to page 22 line 20.) 1.b. Applicant admits that he has a past-due debt to Creditor B in the amount of about $9,404. Despite having an extra three months to do so, he has submitted nothing further regarding the debt. (TR at page 23 line 17 to page 24 line 12.) 1.c. Applicant admits that he had a past-due debt to Creditor C in the amount of about $5,171. This debt has been satisfied through wage garnishments, as evidenced by documentation. (TR at page 24 lines 13–19, at page 27 line 24 to page 28 line 22, and AppX B.) 1.d. Applicant admits that he has a past-due debt to Creditor D in the amount of about $5,019. This debt has been settled for $1,505, toward which Applicant is making four payments of $376. He has made two payments with two payments remaining to be made. (TR at page 24 lines 20–22, and PHXs E and F.) 1.e. Applicant admits that he has a past-due debt to Creditor E in the amount of about $2,763. Applicant is making 12 payments of $174 toward this admitted debt. He has made one payment with 11 payments remaining to be made. (TR at page 24 line 23 to page 25 line 2, and PHXs A, D and F.) 1.f. Applicant admits that he has a past-due debt to Creditor F in the amount of about $2,396. Despite having an extra three months to do so, he has submitted little further regarding it, only averring “Unable to Locate.” (TR at page 25 lines3–5, and PHX F.) However, it does appear on an April 2023 credit report offered into evidence by Applicant, with an address and phone number. (AppX A at page 4.)

1.g. Applicant admits that he had a past-due debt to Creditor G in the amount of about $2,082. This debt “has been resolved for less than the full balance,” as evidenced by documentation. (TR at page 25 lines 6–8, PHX B at page 2, and PHX F.) 1.h. Applicant admits that he had a past-due debt to Creditor H in the amount of about $2,027. This debt has been “Settled for less than the full balance,” as evidenced by documentation. (TR at page 25 lines 9–13, PHXs B and F.)

POLICIES

When evaluating an applicant’s national security eligibility, the administrative judge must consider the adjudicative guidelines (AG). 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 national security eligibility. 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 AG ¶ 2 describing the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶ 2(a), 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.” In reaching this decision, I have drawn only those conclusions that are reasonable, logical, and based on the evidence contained in the record. Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Directive ¶ E3.1.15 states 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 applies for access to classified information 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 access to classified information. 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 information.

Section 7 of Executive Order (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 relating to the guideline 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. Affluence that cannot be explained by known sources of income is also a security concern insofar as it may result from criminal activity, including espionage. The guideline notes several conditions that could raise security concerns under AG ¶ 19. Three are potentially applicable 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 had past-due indebtedness of about $39,561. The evidence is sufficient to raise these disqualifying conditions. AG ¶ 20 provides conditions that could mitigate security concerns. I considered all of the mitigating conditions under AG ¶ 20 including: (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 problems are ongoing. He has a long history of delinquencies. Applicant has yet to address admitted past-due debts totaling about $22,499. He has not demonstrated that future financial problems are unlikely. Mitigation under AG ¶ 20 has not been established.

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 facts and circumstances surrounding this case. I have incorporated my comments under Guideline F in my whole-person analysis. Overall, the record evidence leaves me with questions and doubts as to Applicant’s eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant failed to mitigate the Financial Considerations security concerns.

________________________

FORMAL FINDINGS

Formal findings for or against Applicant on the allegations set forth in the SOR, as required by ¶ E3.1.25 of the Directive, are: Paragraph 1, Guideline F: AGAINST APPLICANT Subparagraphs 1.a. and 1.b: Against Applicant Subparagraphs 1.c.~1.e: For Applicant Subparagraph 1.f: Against Applicant Subparagraphs 1.g. and 1.h: For 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 for a security clearance. Eligibility for access to classified information is denied. Richard A. Cefola Administrative Judge