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ISCR Case 23-02835 — CASE

ISCR Case 23-02835denied

Case Headnote

ISCR Case No. 23-02835

deniedOct 29, 2024· Hon. Erin C. Hogan· hearing

Summary

A 57-year-old employee of a Department of Defense contractor was denied eligibility for access to classified information due to financial considerations under Guideline F. The applicant faced concerns regarding nine delinquent accounts, which collectively totaled approximately $39,909. These included several accounts placed for collection, with individual balances ranging from $358 to $13,121, as well as a charged-off department store credit card account of $4,259.

The Statement of Reasons detailed these nine delinquent accounts, raising disqualifying conditions under Adjudicative Guidelines Paragraphs 19(a) and 19(c). While mitigating conditions under Paragraphs 20(b) and 20(d) were considered, they were ultimately not sufficient to overcome the security concerns.

The denial was based on the applicant's admission to the allegations and the failure to demonstrate any efforts to resolve the debts. The applicant did not provide evidence of attending financial counseling or making good-faith efforts to address the ongoing financial problems, leading to the final decision to deny the security clearance.

Why the Applicant Was Denied

The applicant admitted to having nine delinquent accounts totaling approximately $39,909.
The applicant did not provide evidence of efforts to resolve her debts or attend financial counseling.
The applicant's financial problems were ongoing and not mitigated by any good-faith efforts.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(b)rejectedConditions Largely Beyond the Person's ControlThe applicant's unemployment was a personal choice and not beyond her control.
AG ¶ 20(d)rejectedGood-faith Effort to Repay DebtsThe applicant failed to show any attempts to resolve her delinquent debts.

Key Rule Quoted

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

Procedural Posture

SOR issuedJan 16, 2024
Answer filedMar 20, 2024Requested decision based on written record.
Hearing held—Decision made without a hearing.
Decision dateOct 29, 2024

Cite For

Denial Based on Ongoing Financial Issues Under Guideline F
Failure to Demonstrate Good-faith Efforts to Resolve Debts
Impact of Personal Choices on Financial Responsibility

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 nine delinquent accounts totaling approximately $39,909. The applicant admitted to all allegations, but the judge ruled against her, citing ongoing financial problems and a lack of good-faith efforts to resolve her debts.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant has nine delinquent accounts totaling approximately $39,909. $39,909	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	$13,121 delinquent account placed for collection. $13,121	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	$8,742 delinquent account placed for collection. $8,742	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	$5,016 delinquent account placed for collection. $5,016	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	$4,784 delinquent account placed for collection. $4,784	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	$4,259 charged off department store credit card account. $4,259	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	$1,328 delinquent credit card account placed for collection. $1,328	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	$1,176 delinquent account placed for collection. $1,176	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i	$1,125 delinquent account placed for collection. $1,125	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.j	$358 delinquent account placed for collection. $358	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: ) ) [Name Redacted] ) ISCR Case No. 23-02835 ) Applicant for Security Clearance ) Appearances For Government: Tovah Minster, Esq., Department Counsel For Applicant: Pro Se 10/29/2024

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 22, 2023. On January 16, 2024, the Defense Counterintelligence and Security Agency Consolidated Adjudication Services (DCSA CAS) sent her 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 March 20, 2024, and requested a decision based on the written record in lieu of a hearing. On April 1, 2024, 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 4. She was given an opportunity

to submit a documentary response setting forth objections, rebuttal, extenuation, mitigation, or explanation to the Government’s evidence. She received the FORM on May 20, 2024. She was given 30 days to submit a Response to the FORM. She did not submit a response. The case was forwarded to the DOHA Hearing Office on July 23, 2024, and assigned to me on September 3, 2024. Evidentiary Matters Items 1 and 2 contain the pleadings in the case and is part of the record. Items 3 and 4 are admitted into evidence.

FINDINGS OF FACT

Applicant, age 57, is an employee of a DOD contractor since September 2021. This is her first time seeking a security clearance. Prior to this job, Applicant was unemployed from April 2017 to until September 2021. She was a homemaker during this period of unemployment. She has never served in the U.S. military. She earned her General Equivalency Degree (GED) in 1986. She is married and has four adult children and two adult stepchildren. (Item 3) After submitting her SCA in June 2023, a subsequent background investigation revealed the Applicant had nine delinquent accounts, an approximate total of $39,909. The SOR debts include: a $13,121 delinquent account placed for collection (SOR ¶ 1.a: Item 4 at 2); a $8,742 delinquent account placed for collection (SOR ¶ 1.b: Item 4 at 2); a $5,016 delinquent account placed for collection (SOR ¶ 1.c: Item 4 at 3); and a $4,784 delinquent account placed for collection. (SOR ¶ 1.d: Item 4 at 3). Additional delinquent debts include: a delinquent department store credit card account that was charged off in the amount of $4,259 (SOR ¶ 1.e: Item 4 at 3); a $1,328 delinquent credit card account placed for collection (SOR ¶ 1.f: Item 4 at 3); a $1,176 delinquent account placed for collection (SOR ¶ 1.g: Item 4 at 3); a $1,125 delinquent account that was placed for collection (SOR ¶ 1.h: Item 4 at 4) and a $358 delinquent account that was placed for collection. (SOR ¶ 1.i: Item 4 at 4) In her response to the SOR, Applicant admits all the SOR allegations. She did not provide any updates on her attempt to settle or resolve these debts. (Item 2, Response to SOR) Applicant did not submit a Response to the FORM. She did not provide an update on progress of the delinquent accounts alleged in the SOR.

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.i. The total approximate balance of the delinquent debt is over $39,000. 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. Applicant had periods of unemployment. However, it was her decision to not work for a few years. I cannot conclude it was a circumstance

beyond her control. The mitigating condition is also given less weight because I cannot conclude she acted responsibly under the circumstances since she failed to show any attempt to resolve her delinquent debts. None of the other mitigating conditions apply because Applicant’s financial problems are ongoing. She failed to initiate a good-faith effort to resolve her debts. She has not attended financial counseling. Overall, she failed to meet her burden of proof to 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 employment with a DOD contractor since September 2021. However, she failed to show that she made any attempts to resolve her 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 Applicant has not mitigated the security concerns raised under financial considerations.

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.i: 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