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ISCR Case 23-00554 — CASE

ISCR Case 23-00554denied

Case Headnote

ISCR Case No. 23-00554

deniedNov 1, 2023· Hon. Erin C. Hogan· hearing

Summary

A 29-year-old employee of a Department of Defense contractor was denied a security clearance due to financial considerations under Guideline F. The applicant faced allegations concerning multiple delinquent debts, totaling approximately $32,392. These included two charged-off automobile loans for $14,661 and $12,354, respectively, along with two other charged-off accounts for $1,826 and $1,722. Additional debts comprised a $1,228 cellphone account placed for collection, a $295 charged-off credit card account, a $170 delinquent cellphone account, and a $136 account also placed for collection.

The decision cited disqualifying conditions related to a history of not meeting financial obligations and an inability or unwillingness to satisfy debts. While mitigating conditions were considered, the applicant admitted to some debts but failed to provide any evidence of efforts to resolve them.

Ultimately, the security clearance was denied because the applicant did not demonstrate attempts to pay or resolve any of the delinquent debts, indicating ongoing financial problems and a lack of good-faith effort to address his obligations.

Why the Applicant Was Denied

The applicant did not provide evidence indicating attempts to pay or resolve any of the delinquent debts.
The applicant's financial problems are ongoing, and he failed to initiate a good-faith effort to resolve his debts.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(b)appliedConditions Largely Beyond the Person's ControlThe applicant encountered several periods of unemployment which were circumstances beyond his control, but he did not act responsibly under the circumstances.

Key Rule Quoted

“Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the AG.”

Procedural Posture

SOR issuedMar 13, 2023
Answer filedApr 17, 2023Requested a decision based on the written record.
Hearing held—Decision made based on written record.
Decision dateNov 1, 2023

Cite For

Failure to Demonstrate Good-faith Efforts to Resolve Financial Obligations Under Guideline F
Ongoing Financial Problems as a Basis for Security Clearance Denial
Consideration of the Whole-person Concept in Security Clearance Determinations

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 multiple financial concerns under Guideline F, including several charged-off debts and accounts in collection. Despite the applicant's claims of mitigating circumstances, the judge ruled against the applicant on all allegations, concluding that the financial issues raised security concerns that were not sufficiently addressed.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	$14,661 charged-off automobile loan $14,661	Against Applicant	Auto Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	$12,354 charged-off account owed to a credit union for another automobile loan $12,354	Against Applicant	Auto Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	$1,826 charged-off account $1,826	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Other
1.d	$1,722 charged-off account $1,722	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Other
1.e	$1,228 cellphone account that was placed for collection $1,228	Against Applicant	Utility or Phone Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	$295 charged-off credit card account $295	Against Applicant	Credit Card Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Other
1.g	$170 delinquent cellphone account placed for collection $170	Against Applicant	Utility or Phone Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Other
1.h	$136 account placed for collection $136	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Other

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: ) ) [Name Redacted] ) ISCR Case No. 23-00554 ) Applicant for Security Clearance ) Appearances For Government: Jeff A. Nagel, Esq., Department Counsel For Applicant: Pro Se 11/01/2023

STATEMENT OF CASE

HOGAN, Erin C., 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 June 2, 2022. On March 13, 2023, the Defense Counterintelligence and Security Agency Consolidated Adjudication Services (DCSA CAS) sent him a Statement of Reasons (SOR) alleging security concerns under Guideline F. The CAS acted under Executive Order (EO) 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; Department of Defense (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 April 17, 2023, and requested a decision based on the written record in lieu of a hearing. On May 9, 2023, the Government sent Applicant a complete copy of its written case, a file of relevant material (FORM), including pleadings and evidentiary documents identified as Items 1 through 6. He was given an opportunity to submit a documentary response setting forth objections, rebuttal, extenuation,

mitigation, or explanation to the Government’s evidence. He received the FORM on June 10, 2023. He was given 30 days to submit a Response to the FORM. He did not submit a response. The case was forwarded to the DOHA Hearing Office on July 25, 2023, and assigned to me on September 27, 2023. Evidentiary Matters Item 1 contains the pleadings in the case and are part of the record. Items 2 through 6 are admitted into evidence. Applicant did not respond to the FORM.

FINDINGS OF FACT

Applicant, age 29, is an employee of a DOD contractor who is seeking to maintain his security clearance. He has worked for the same employer in an overseas location since July 2022. He served on active duty in United States Army from May 2014 to August 2017. He separated with an honorable discharge. He has a high school diploma and some college credits. He married in 2016 and has three step-daughters. (Item 2) The SOR alleged eight delinquent debts, with a combined approximate total of $32,392, to include: a $14, 661 charged-off automobile loan (SOR ¶ 1.a: Item 4 at 2; Item 5 at 2; Item 6 at 4); a $12,354 charged-off account owed to a credit union for another automobile loan (SOR ¶ 1.b: Item 4 at 3; Item 5 at 2; Item 6 at 4); a $1,826 charged-off account (SOR ¶ 1.c: Item 3 at 4; Item 5 at 2); a $1,722 charged-off account (SOR ¶ 1.d: Item 4 at 3; Item 5 at 2); a $1,228 cellphone account that was placed for collection (SOR ¶ 1.e: Item 5 at 3; Item 6 at 4); a $295 charged-off credit card account (SOR ¶ 1.f: Item 4 at 5; Item 5 at 3; Item 6 at 5); a delinquent cellphone account in the amount of $170 placed for collection (SOR ¶ 1.g: Item 5 at 3); and a $136 account placed for collection (SOR ¶ 1.h: Item 4 at 4) In his response to the SOR, Applicant admitted the allegations in SOR ¶¶ 1.a, 1.b, and 1.e. He denied the allegations in SOR ¶¶ 1.c, 1.d, 1.f – 1.h. With regard to SOR ¶¶ 1.cand 1.d, he claimed the company has permanently closed. He claimed he cancelled the credit card alleged in SOR ¶ 1.fand no longer uses it. He denied the $1,228 cellphone debt alleged in SOR ¶ 1.gbecause he transferred to another provider. He is not sure where the debt came from. Finally, he denied the debt alleged in SOR ¶ 1.hbecause he did not recognize the debt. Applicant did not provide evidence indicating that he is attempting to pay or resolve any of the delinquent debts alleged in the SOR. In his response to the SOR, he indicated he really needs a security clearance so he can keep his job. He briefly stopped paying his debts because he arranged to put his wife and children into a house before he went overseas for his job and focused on his essential expenses. He claimed the debts owed to the creditor in SOR ¶¶ 1.cand 1.dwere paid. He did not provide proof that the debts were resolved. He is currently looking into debt consolidation. He hopes to pay everything off all at once. (Response to SOR).

Applicant had several periods of unemployment within the past five years. His recent period of unemployment was from October 2021 and July 2022. After separating from active duty, he was unemployed from August 2017 to October 2018.

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.” (Egan 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.” (EO 10865 § 2) Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the AG. 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.” (EO 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. (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. 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. (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; AG ¶ 2(b))

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. (ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012). AG ¶ 19 notes several disqualifying conditions that could raise security concerns. The disqualifying conditions that are relevant to Applicant’s case include: (a) inability to satisfy debts; and (c) a history of not meeting financial obligations. AG ¶ 19(a) and AG ¶ 19(c) apply to Applicant’s delinquent debts alleged in SOR ¶¶ 1.a – 1.h. The total approximate balance of the delinquent debt is $32,392. AG ¶ 20 describes conditions that could mitigate security concerns. The following are potentially applicable in this case:

(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 in 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. AG ¶ 20(b) applies, in part, because Applicant encountered several periods of unemployment which were circumstances beyond his control. However, the mitigating condition is given less weight because I cannot conclude he acted responsibly under the circumstances because he made no attempts to resolve any of the delinquent debts. None of the other mitigating conditions apply because Applicant’s financial problems are ongoing. He failed to initiate a good-faith effort to resolve his debts. Applicant bears the burden of production and persuasion in mitigation. He did not mitigate the concerns raised under Financial Considerations.

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 commonsense judgment based upon careful consideration of the adjudicative 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). I considered Applicant’s honorable active- duty service in the United States Army. I considered that periods of unemployment adversely affected his finances. However, he failed to show that he made any attempts to resolve his delinquent accounts. 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 he has not mitigated the security concerns raised under financial considerations. Accordingly, he has not carried his burden of showing that it is clearly consistent with the interests of national security to grant him eligibility for access to classified information.

FORMAL FINDINGS

Formal findings 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

I conclude that it is not clearly consistent with the interests of national security to grant Applicant eligibility for access to classified information. Clearance is denied. Erin C. Hogan Administrative Judge