ISCR Case No. 24-01982

______________ ______________ DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: )

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ISCR Case No. 24-01982

) Applicant for Security Clearance ) Appearances For Government: Rhett E. Petcher, Esq., Department Counsel For Applicant: Pro Se 06/18/2025

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 September 26, 2023. On December 27, 2024, the Defense Counterintelligence and Security Agency (DCSA) 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 timely answered the SOR on January 6, 2025, and requested a decision based on the written record in lieu of a hearing. On February 5, 2025, 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 5. 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 February 17, 2025. 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 April 8, 2025, and assigned to me on June 5, 2025. Evidentiary Matters Item 1 contain the pleadings in the case and are part of the record. Items 2 through 5 are admitted into evidence.

Applicant, age 27, is an employee of a DOD contractor who is seeking a security clearance for the first time. He has been employed with the DOD contractor since October 2023. He is a naturalized U.S. citizen. He is single and has no children. (Item 2, Item 3 at 3) The original SOR alleged Applicant had four delinquent debts including: a $30,866 charged-off car loan (SOR ¶ 1.a: Item 3 at 1, Item 4 at 3, Item 5 at 1); a $453 debt owed to an insurance company that was placed for collection (SOR ¶ 1.b: Item 3 at 1, Item 4 at 3, Item 5 at 2) a $75 delinquent account owed to an insurance company that was placed for collection (SOR ¶ 1.c: Item 5 at 2), and a $135 account owed to an insurance company that was placed for collection. (SOR ¶ 1.d: Item 3 at 1-2; Item 4 at 4) In his response to the SOR, Applicant admits to all of the allegations in the SOR. His largest debt in the amount of $30,866 was a car loan that he cosigned for his cousin. He did not understand that he would be responsible for the loan if his cousin stopped paying on the loan. In his response to the SOR, he indicated that the bank repossessed the car. He hopes to pay off the $453 collection account alleged in SOR ¶ 1.b when he receives his income tax refund. He indicates that he planned to pay off the debts alleged in SOR ¶ 1.c ($75) and ¶ 1.d ($135) in the near future. (Item 1) He did not a submit a Response to the Form. All debts alleged in the SOR remain unresolved.

“[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))

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.d. The total approximate balance of the delinquent debt is $31,529. The largest debt is the car loan Applicant cosigned for his cousin in the amount of $30,866. The three remaining delinquent debts total $663. All three debts were owed to insurance companies. 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 per

son'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. None of the mitigating conditions apply. All of the delinquent debts remain outstanding. Applicant was unaware that as a cosigner he is responsible for the car loan payments should his cousin default. He should have read the loan paperwork before he signed as a cosigner. The car has been repossessed and there will likely be a deficiency judgment. He will be responsible for the deficiency judgment if his cousin does not make the payments. Applicant did not provide information about circumstances beyond his control which affected his ability to pay the alleged debts. Aside from the car loan, he should have been able to pay off the three remaining debts due to their low balances. While Applicant claimed he would pay the debts alleged in SOR ¶¶ 1.b – 1.d in the near future, he provided no proof that payments were made. An expressed intention to resolve one’s accounts in the future does not demonstrate a good-faith basis to resolve one’s debts. Overall, Applicant failed to meet his burden of proof to mitigate the concerns raised under Financial Considerations.

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 that Applicant’s cousin took advantage of him when he asked him to cosign a car loan for him. It is a difficult lesson to learn that as a cosigner you are responsible for the car loan should the other party not make payments. While he indicated he would soon pay the delinquent accounts with the lower balances alleged in SOR ¶¶ 1.b – 1.d, he did not submit proof of payment. 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 Applicant has not mitigated the security concerns raised under financial considerations.

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.d: Against Applicant

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