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ISCR 22-02481: Guideline F security clearance hearing, granted (2024) · CASE

ISCR Case 22-02481granted

Case headnote

ISCR Case No. 22-02481

grantedJan 18, 2024· Hon. Richard A. Cefola· hearing

Summary

A 31-year-old defense contractor employee's security clearance was reviewed under Guideline F (Financial Considerations) due to an alleged past-due debt of approximately $33,000. The applicant consistently maintained that this debt was fraudulent, leading to allegations under Disqualifying Conditions AG ¶ 19(a), AG ¶ 19(b), and AG ¶ 19(c).

The administrative judge found the applicant's claim of fraud credible. The applicant had taken proactive steps to address the issue, including filing a police report and retaining an attorney to dispute the debt's authenticity. These actions resulted in the debt being removed from the applicant's credit report.

Based on these mitigating factors, specifically AG ¶ 20(a), AG ¶ 20(b), and AG ¶ 20(c), and applying the whole-person concept, the administrative judge determined there were no disqualifying conditions. Consequently, the applicant's security clearance was GRANTED.

Why the applicant prevailed

The applicant credibly denied the existence of the debt, asserting it was fraudulent.
The applicant filed a police report and hired an attorney to dispute the debt's authenticity.
The debt was removed from the applicant's credit report, demonstrating proactive measures taken.

Conditions referenced

Disqualifying

AG ¶ 19(a)rejectedInability to Satisfy DebtsNone of the disqualifying conditions were established as the debt was fraudulent.
AG ¶ 19(b)rejectedUnwillingness to Satisfy Debts Regardless of the Ability to Do SoNone of the disqualifying conditions were established as the debt was fraudulent.
AG ¶ 19(c)rejectedA History of Not Meeting Financial ObligationsNone of the disqualifying conditions were established as the debt was fraudulent.

Mitigating

AG ¶ 20(a)appliedThe Behavior Was Not Recent and Was Caused by Circumstances Beyond the Applicant's ControlThe debt was a result of fraud.
AG ¶ 20(b)appliedThe Applicant Has Taken Significant Steps to Address the CircumstancesThe applicant filed a police report and hired an attorney.
AG ¶ 20(c)appliedThe Applicant Has a Good Reputation and Is Respected in the CommunityThe applicant has a distinguished history of working in the defense industry.

Key rule quoted

“The entire process is a conscientious scrutiny of a number of variables known as the whole-person concept.”

Procedural posture

SOR issuedFeb 13, 2023
Answer filedJun 9, 2023
Hearing heldOct 3, 2023Hearing convened as scheduled.
Decision dateJan 18, 2024

Cite for

Fraudulent Debt Under Guideline F
Proactive Measures in Disputing Debts
Whole-person Concept in Security Clearance Evaluations

Editorial summary generated for research. Not legal advice; not a prediction. Verify against the full decision before relying on any quoted language.

From the decision

Facts this decision states, each with the exact sentence it comes from. Descriptive of the record, not an assessment.

Age at decision: 31: “Applicant is a 31-year-old employee of a defense contractor.”
Tenure: ~6 years: “He has been employed with the defense contractor since March of 2018.”
Delinquent debt cited: $33,000: “Applicant denies that he has a past-due debt to Creditor A in the amount of about $33,000.”

Standardized Decision Profile

SEAD-4 Guideline F · descriptive summary of a decided case

Posture: HearingDecided: granted

The judge found that the applicant successfully mitigated the financial concerns related to a past-due debt of approximately $33,000 claimed by Creditor A. The applicant credibly asserted that the debt was fraudulent, supported by a police report and legal action, leading to its removal from his credit report.

The sub-allegation breakdown is part of the Professional plan. See what it includes.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation

Descriptive standardized rendering of a decided public case. 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. 22-02481 ) ) Applicant for Security Clearance ) Appearances For Government: Tara Karoian, Esq., Department Counsel For Applicant: Pro se 01/18/2024

STATEMENT OF CASE

CEFOLA, Richard A., Administrative Judge: Statement of the Case On February 13, 2023, 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 (Financial Considerations). 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 June 9, 2023, and requested a hearing before an administrative judge. (Answer.) The case was assigned to me on August 30, 2023. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on September 5, 2023, scheduling the hearing for October 3, 2023. The hearing was convened as scheduled. The Government offered Exhibits (GXs) 1 through 6, which were admitted into evidence. Applicant testified on his own behalf and called one witness. The record was left open until November 3, 2023, for receipt of additional

documentation. On October 30, 2023, Applicant offered documents, which I marked Applicant’s Exhibit (AppX) A, and admitted into evidence. DOHA received the transcript of the hearing (TR) on October 12, 2023.

FINDINGS OF FACT

Applicant denied the allegation in SOR ¶ 1.a. After a thorough and careful review of the pleadings, exhibits, and testimony, I make the following findings of fact. Applicant is a 31-year-old employee of a defense contractor. He has been employed with the defense contractor since March of 2018. Applicant is unmarried, and has no children. (GX 1 at pages 7, 14 and 20,) Guideline F - Financial Considerations 1.a. Applicant denies that he has a past-due debt to Creditor A in the amount of about $33,000. He avers, credibly, that it is a fraudulent debt. Applicant filed a police report in that regard, and hired an attorney to dispute its authenticity. As a result, it has been removed from Applicant’s most recent credit report. (TR at page 26 line 11 to page 51 line 8, GXs 4 and 5, and AppX A at pages 1–6.) This allegation is found for Applicant.

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. None of these conditions were established. Applicant’s alleged past-due debt is the result a fraud perpetrated against Applicant. Financial Considerations is found for Applicant.

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. Some of the factors in AG ¶ 2(d) were addressed under those guidelines, but some warrant additional comment. Applicant has a distinguished history of working in the defense industry (AppX A at pages 10–22), and is respected by those who know him in the workplace and in his community (TR at page 19 line 11 to page 24 line 9, and AppX A at pages 7–9). Overall, the record evidence leaves me without questions or doubts as to Applicant’s eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant mitigated 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: FOR APPLICANT Subparagraph 1.a: For Applicant

________________________

CONCLUSION

In light of all of the circumstances presented by the record in this case, it is clearly consistent with the national interest to grant Applicant national security eligibility for a security clearance. Eligibility for access to classified information is granted. Richard A. Cefola Administrative Judge