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ISCR Case ISCR Case No. 25-00197 · CASE

ISCR Case ISCR Case No. 25-00197denied

Case Headnote

ISCR Case No. ISCR Case No. 25-00197

deniedApr 30, 2026· Hon. Eric H. Borgstrom· hearing

Synopsis

The applicant, a 52-year-old former U.S. Coast Guard member, faced security concerns under Guideline F due to multiple delinquent debts, including a repossessed vehicle and credit card accounts. Despite a significant income and a willingness to pay, the applicant's failure to address these debts in a timely manner led to the denial of his security clearance.

Why the Applicant Was Denied

The applicant did not demonstrate a good-faith effort to resolve his delinquent debts in a timely manner.
The applicant's recent actions to settle debts were insufficient to mitigate years of inaction regarding financial obligations.
The applicant's financial issues raised concerns about his reliability and trustworthiness.

Conditions Referenced

Disqualifying

AG ¶ 19(a)appliedInability to Satisfy Debts
AG ¶ 19(b)appliedUnwillingness to Satisfy Debts Regardless of the Ability to Do So
AG ¶ 19(c)appliedHistory of Not Meeting Financial Obligations

Mitigating

AG ¶ 20(a)rejectedBehavior Happened Long Ago or Unlikely to RecurThe applicant's recent financial delinquencies do not support this condition.
AG ¶ 20(b)rejectedConditions Largely Beyond the Person's ControlWhile some circumstances were beyond the applicant's control, he had the means to address his debts.
AG ¶ 20(c)rejectedReceived Financial CounselingThe applicant completed a credit education course but did not demonstrate ongoing efforts to resolve debts.
AG ¶ 20(d)rejectedGood-faith Effort to Repay DebtsThe timing of the applicant's debt-resolution efforts undermined the good faith of his actions.

Key Rule Quoted

“The protection of the national security is the paramount consideration.”

Procedural Posture

SOR issuedMar 18, 2025
Answer filedJun 4, 2025
Hearing heldJan 29, 2026via video teleconference
Decision dateApr 30, 2026

Cite For

Denial of Security Clearance Due to Financial Irresponsibility Under Guideline F
Importance of Timely Debt Resolution in Security Clearance Cases
Consideration of the Whole-person Concept in Evaluating Financial Conduct

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 against the applicant on all financial allegations under Guideline F, citing a history of delinquent debts including a repossessed vehicle, two credit card debts, and a Chapter 7 bankruptcy filing. Despite the applicant's recent efforts to settle some debts, the judge concluded that these actions did not mitigate the ongoing financial concerns, leading to a denial of security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant incurred this vehicle loan in about December 2017, and he voluntarily repossessed the vehicle in about October 2021. The vehicle was sold at auction, and he admitted that he owed a deficiency balance in the approximate amount of $25,314. $25,314	Against Applicant	Auto Loan Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.b	SOR ¶ 1.b. is a credit-card account that was opened in September 2015, and Applicant admitted that this account became delinquent in about August 2021. The account was charged off in the approximate amount of $8,550. $8,550	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.c	SOR ¶ 1.c. is a credit-card account that was opened in December 2015, and Applicant admitted that this account became delinquent in about August 2021. The account was charged off in the approximate amount of $2,910. $2,910	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.d	In April 2015, Applicant filed a voluntary petition for Chapter 7 bankruptcy, listing approximately $125,000 in debt. The dischargeable debts were discharged in August 2015.	For Applicant	Bankruptcy Filing	Admitted	—	(a) behavior happened long ago / infrequent / unlikely to recur	—

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

DECISION

AR DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 25-00197 ) Applicant for Security Clearance ) Appearances For Gove

STATEMENT OF CASE

nment: Brittany C. White, Esq., Department Counsel For Applicant: Daniel Meyer, Esq. 04/30/2026 Decision BORGSTROM, Eric H., Administrative Judge: Applicant did not mitigate the financial considerations security concerns arising from his delinquent debts. Eligibility for access to classified information is denied. Statement of the Case On March 18, 2025, the Defense Counterintelligence and Security Agency (DCSA) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline F (financial considerations). The DCSA 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 on June 8, 2017. In Applicant’s June 4, 2025 response to the SOR (Answer), he admitted all four delinquent accounts. He attached five documents, which I later admitted into evidence at the hearing. He requested a hearing before a Defense Office of Hearings and Appeals (DOHA) administrative judge. (Answer) On July 7, 2025, the Government was ready to proceed to a hearing. The case was delayed when all administrative judges were furloughed from October 1 through

FINDINGS OF FACT

November 12, 2025, during a federal government shutdown due to a lapse in federal funding. I was assigned this case on December 17, 2025. On January 6, 2026, a notice was issued scheduling the hearing for January 26, 2026, by video teleconference. The hearing was rescheduled for January 29, 2026, and it convened as rescheduled. The Government proffered seven evidentiary exhibits, which I admitted as Government Exhibits (GE) 1 through 7, without objection. Applicant testified and submitted six exhibits (including the five exhibits originally attached to the Answer), which I admitted as Applicant Exhibits (AE) A through F, without objection. At Applicant’s request, I kept the record open until March 2, 2026, to provide him an opportunity to supplement the evidentiary record. DOHA received the hearing transcript (Tr.) on February 9, 2026. On March 2, 2026, Applicant provided four additional exhibits, which I admitted as AE G through J, without objection. The evidentiary record closed on March 2, 2026. Findings of Fact Applicant is 52 years old. From August 1991 to June 1998, he served on active duty in the U.S. Coast Guard (USCG), from which he received an honorable discharge. He graduated from high school in about 1991, earned a bachelor’s degree in 2004, and earned a master’s degree in 2006. He was first married from 1992 to 1998. He married his second wife in September 2000, separated in June 2013, and divorced in November 2016. He has two adult children. (GE 1, GE 2, GE 4, GE 5; Tr. 17-18, 35, 46) Since October 2015, Applicant has been employed by a series of federal contractors, holding senior roles as director and chief technology officer (CTO) with his last three employers. Since January 2022, he has been employed with his current employer as the CTO, and he holds a 10% equity interest in this $100 million company. (GE 1, GE 2, GE 4; Tr. 17-18, 28, 47) The SOR alleges financial considerations security concerns arising from a repossessed vehicle (SOR ¶ 1.a.), two delinquent credit-card accounts (SOR ¶¶ 1.b. and 1.c.), and a Chapter 7 bankruptcy filing (SOR ¶ 1.d.). Applicant admitted all four allegations in his Answer. (Answer) SOR ¶ 1.a. Applicant incurred this vehicle loan in about December 2017, and he voluntarily repossessed the vehicle in about October 2021. The vehicle was sold at auction, and he a dmitted that he ow

ed a deficiency balance i nthe approximate amount of $25,314. (Answer; GE 4-7; Tr. 39-40) During his October 28, 2024 interview with an investigator from the Office of Personnel Management (OPM), Applicant explained that he voluntarily repossessed the vehicle during the COVID pandemic so that he could provide financial assistance to some of his family members. He claimed that the account was current at the time he surrendered the vehicle. At the time of the interview, he claimed to be making arrangements to resolve this account. (GE 5; Tr. 40) 2

At the hearing, Applicant admitted this debt and the circumstances discussed during his OPM interview, supra. He provided financial support to his parents and brother during COVID, as these family members worked in the service industry and were directly impacted by shutdowns and restrictions. When questioned about the “arrangements” to which he referred during his October 2024 interview, he explained that the creditor had sent him correspondence in about 2021 regarding a court filing or judgment. The hearing or court date was later canceled without further communication from the creditor. He clarified that he had no communication with the creditor between 2021 and

POLICIES

his March 2025 letter to the creditor. He submitted a second letter to this creditor in October 2025. He claimed that he had also tried unsuccessfully to contact this creditor by phone in the last year. He testified that he has not received a response from this creditor. He expressed a willingness to pay this debt, but he had been reluctant to make telephonic contact with the creditor in the absence of a paper trail. As of the close of the record, there was no evidence of payment arrangements or payments made. (Tr. 20-22, 30, 33, 40-45, 54-58, 81; AE J) SOR ¶ 1.b. SOR ¶¶ 1.b. and 1.c. are credit-card accounts with the same creditor. The debt in SOR ¶ 1.b. is a credit-card account was opened in September 2015, and Applicant admitted that this account became delinquent in about August 2021. The account was charged off in the approximate amount of $8,550. (GE 4-6; Tr. 24) SOR ¶ 1.c. This credit-card account was opened in December 2015, and Applicant admitted that this account became delinquent in about August 2021. The account was charged off in the approximate amount of $2,910. (GE 4-6; Tr. 24-25) Applicant reported these two accounts on his May 2024 security clearance application (SCA). During his October 2024 OPM interview, Applicant explained that these two accounts (SOR ¶¶ 1.b. and 1.c.) became delinquent when he chose to financially support or assist his family members during the COVID pandemic. In his February 27, 2025 response to DOHA interrogatories, he confirmed the accuracy of the summary of the October 2024 interview, without any corrections or additions. At the hearing, Applicant testified that he had re

ANALYSIS

ched an agreement with the creditor a few days prior to the hearing. On December 29, 2025, Applicant paid $10,929 to this creditor. Applicant submitted a checking account statement with a partial account number that could be either SOR ¶ 1.b., ¶ 1.c., or both. This amount is less than the aggregate balance of SOR ¶¶ 1.b. and 1.c., and there is no further information in the record as to whether there was an agreed-upon settlement or multiple payments scheduled. (AE H at 3; GE 4, GE 5; Tr. 24-25) SOR ¶ 1.d. In April 2015, Applicant filed a voluntary petition for Chapter 7 bankruptcy, listing approximately $125,000 in debt. The dischargeable debts were discharged in August 2015. In his October 2015 SCA, he explained that he had filed bankruptcy at the advice of his divorce attorney after his estranged wife had filed for bankruptcy. The complex and contentious divorce proceedings involved businesses, commercial properties, and a residential property, and his required attendance at out-of- 3

state court proceedings led to his termination and a period of unemployment. (Answer; GE 1-5; AE E; Tr. 26, 50-51) With his Answer, Applicant included a declaration claiming he had a 10% equity interest in his company and that his “debts are scheduled to be cleared from [his] credit report by September 2027.” He attached a certificate of completion for a two-hour credit education course. He also attached letters to his creditors, dated March and May 2025, offering settlement of his three delinquent accounts. (AE C, AE E; Tr. 32) With his Answer, Applicant also included a monthly budget listing his total income as $28,176, his total expenses as $15,522, and his net monthly remainder as $12,654. His gross annual income was approximately $225,000 when he started at his current employer in January 2022, and it is currently approximately $360,000. (AE E; Tr. 30-31, 59-62) At the hearing, Applicant testified that the contentious divorce proceedings resulted in a property settlement and a monthly child-support obligation. The divorce decree required Applicant to pay his ex-wife $10,000 in child support arrears and $5,000 in attorneys fees. (AE E; Tr. 51-52) At the hearing, Applicant testified that he no longer uses credit-card accounts and relies upon cash for his purchases, to include vehicles. He provided documentary evidence of his checking account balance (approximately $68,000). He continues to provide financial support to his parents as they navigate some health issues. (AE H; Tr. 23-25, 83) 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 list potentially disqualifying conditions and mitigating conditions, which are to be used in evaluating an applicant’s eligibility for access to classified information. 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 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.” 4

Under Directive ¶ E3.1.14, the Government must 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.” The applicant has the ultimate burden of persuasion to obtain a favorable security decision. A person who seeks access to sensitive 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 access to sensitive information. Decisions include, by necessity, consideration of the possible risk the applicant may deliberately or inadvertently fail to safeguard sensitive information. Such decisions entail a certain degree of legally permissible extrapolation of potential, rather than actual, risk of compromise of sensitive information. Section 7 of 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 for financial consid

WHOLE PERSON CONCEPT

rations 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. . . . The guideline notes several conditions that could raise security concerns under AG ¶ 19. The following 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. 5

Applicant’s admissions and the documentary evidence established that he had three delinquent accounts, totaling approximately $36,774. These accounts became delinquent in 2021. In April 2015, Applicant filed a voluntary petition for Chapter 7 bankruptcy, listing approximately $125,000 in delinquent debts. The dischargeable debts were discharged in August 2015. Given Applicant’s significant salary since January 2022 ($225,000 or more) and his checking account balance ($60,000-70,000), the record evidence indicates an unwillingness to satisfy debts in recent years. AG ¶¶ 19(a), 19(b), and 19(c) apply. Conditions that could mitigate financial considerations security concerns are provided under AG ¶ 20. 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 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; (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

FORMAL FINDINGS

and there are clear indications that the problem is being resolved or is under control; and (d) the individual has initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts. Applicant bears the burdens of production and persuasion in mitigation. An applicant is not held to a standard of perfection in his or her debt-resolution efforts or required to be debt-free. “Rather, all that is required is that an applicant act responsibly given his circumstances and develop a reasonable plan for repayment, accompanied by ‘concomitant conduct,’ that is, actions which evidence a serious intent to effectuate the plan.” ISCR Case No. 15-02903 at 3 (App. Bd. Mar. 9, 2017). See, e.g., ISCR Case No. 13-00987 at 3, n.5 (App. Bd. Aug. 14, 2014). Applicant established circumstances beyond his control that contributed to his financial problems. His complex, contentious, and costly divorce proceedings resulted in a period of unemployment. He filed a Chapter 7 bankruptcy petition at the advice of legal counsel, due to these divorce proceedings. In mid-2021, Applicant elected to surrender his vehicle and cease his payments on his credit-card accounts to provide financial support to his family members impacted by the COVID pandemic. While the pandemic may have been beyond his control, he was gainfully employed and earning mor

CONCLUSION

than 6

$225,000 annually by January 2022. Meanwhile, there is no evidence of any attempts to contact these creditors (SOR ¶¶ 1.a.-1.c.) between 2021 and March 2025. Applicant did not establish