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ISCR Case 23-00083 — CASE

ISCR Case 23-00083denied

Case Headnote

ISCR Case No. 23-00083

deniedJul 27, 2023· Hon. Richard A. Cefola· hearing

Summary

A 35-year-old unmarried applicant was denied a security clearance under Guideline F, Financial Considerations, due to significant unmitigated debt. The applicant admitted to past-due educational loans totaling approximately $32,042, as well as another past-due educational debt of about $2,996 owed to Creditor G. While the applicant did settle past-due debts with Creditor H, this action was deemed insufficient to resolve the overall financial concerns.

Disqualifying conditions under AG ¶ 19(a) and AG ¶ 19(c) were raised. The denial was based on the applicant's admission of substantial past-due educational loans and other debts, with the last payments on these loans having occurred over eight years prior.

Furthermore, the applicant only began to address these debts after the Statement of Reasons (SOR) was issued, which the judge determined was too late to mitigate the financial concerns effectively. Consequently, the security clearance was denied.

Why the Applicant Was Denied

The applicant admitted to significant past-due educational loans totaling approximately $32,042 and another debt of $2,996.
The applicant's last payments towards the loans were made over eight years ago, indicating a long-standing financial issue.
The applicant only initiated action to address the debts after the issuance of the SOR, which was deemed too little, too late.

Conditions Referenced

Disqualifying

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

Key Rule Quoted

“Any doubt concerning personnel being considered for national security eligibility will be resolved in favor of the national security.”

Procedural Posture

SOR issuedJan 24, 2023
Answer filedJan 29, 2023
Hearing held—Decision made on the record without a hearing.
Decision dateJul 27, 2023

Cite For

Insufficient Efforts to Mitigate Financial Concerns Under Guideline F
Long-standing Financial Issues Impacting Security Clearance Eligibility
The Importance of Timely Addressing Financial Obligations for Security Clearance Considerations

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 had significant past-due educational loans totaling approximately $32,042 and an additional past-due debt of about $2,996, both of which were ruled against the applicant. However, the applicant successfully settled debts with another creditor, which was ruled in favor of the applicant.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant admits to past-due educational loans totaling about $32,042. $32,042	Against Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	Applicant admits a past-due debt of about $2,996 to Creditor G related to another educational loan. $2,996	Against Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	Applicant settled his past-due debts to Creditor H, as affirmed by the Government in its FORM.	For Applicant	Unspecified Financial	Unknown	—	(b) conditions largely beyond the person’s control; acted responsibly	—
1.i	specific text not stated in this decision	For Applicant	Unspecified Financial	Unknown	—	—	—

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. 23-00083 ) Applicant for Security Clearance ) Appearances For Government: Mark D. Lawton, Esq., Department Counsel For Applicant: Pro se July 27, 2023

STATEMENT OF CASE

CEFOLA, Richard A., Administrative Judge: Statement of the Case Applicant submitted a security clearance application (SCA) on April 29, 2022. (Item 2.) On January 24, 2023, the Department of Defense Consolidated Adjudications Facility (DOD CAF) sent him 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 January 29, 2023 (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 9, 2023, a complete copy of the file of relevant material (FORM) was sent to Applicant, including documents identified as Items 1 through 6. He was given an opportunity to file objections and submit material to refute, extenuate, or mitigate the Government’s evidence. He received the FORM on March 15, 2023, and responded (Response) on March 29, 2023. Item 1 contains the pleadings in the case. Items 2 through 6 are admitted into evidence. Applicant’s Response is also admitted into evidence. The case was assigned to me on May 17, 2023.

FINDINGS OF FACT

Applicant, age 35, is unmarried and has no children. (Item 2 at pages 5 and 16.) Guideline F - Financial Considerations 1.a.~1.f. Applicant admits to past-due educational loans totaling about $32,042. His last payments towards these six loans was in January of 2015, more than eight years ago. (Item 5 at pages 3–5.) Only after the issuance of the SOR, did Applicant initiate action to address these very substantial debts. (See Answer and Response.) I find this to be too little too late. These allegations are found against Applicant. 1.g. Applicant admits a past-due debt of about $2,996 to Creditor G related to another educational loan. He as submitted nothing in this regard. This allegation is found against Applicant. 1.h. and 1.i. Applicant settled his past-due debts to Creditor H, as affirmed by the Government in its FORM. (FORM at page 3.) These allegations are found for 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 his 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 mitigating conditions are established. Applicant, after an eight-year hiatus, has only recently taken affirmative action to address his very substantial past-due student loans. Another past-due educational loan of nearly $3,000 has yet to be addressed. He has demonstrated only very recent efforts to resolve his delinquencies. His efforts are too little, too late. Applicant failed to meet his burden to mitigate the financial concerns set out in the SOR. For these reasons, I find SOR ¶¶ 1.a through 1.g. 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 still has significant past-due indebtedness. Accordingly, Applicant has not carried his burden of showing that it is clearly consistent with the national interest to grant him 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.g: Against Applicant Subparagraphs 1.h. and1.i: For 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