ISCR Case No. 24-02360

curity Clearance ) ) ) ) ) ISCR Case No. 24-02360 Appearances For Government: Lauren A. S

ure, Esq., Department Counsel For Applicant: Pro se 07/23/2026 Decision HARVEY, Mark, Administrative Judge: Guidel

ne F (financial considerations) security concerns are not mitigated. Eligibility for access to classified information is denied. Statement of the Case On February 28, 2024, Applicant completed a security clearance application (SCA). (Government Exhibit (GE) 1) On September 17, 2025, the Defense Counterintelligence and Security Agency (DCSA) issued a statement of reasons (SOR) to Applicant under Executive Order (Exec. Or.) 10865, Safeguarding Classified Information within Industry (February 20, 1960); Department of Defense (DoD) Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (Directive) (January 2, 1992), as amended; and Security Executive Agent Directive 4, establishing in Appendix A, the National Security Adjudicative Guidelines for Determining Eligibility for Access to Classified Information or Eligibility to Hold a Sensitive Position (AGs), effective June 8, 2017. (Hearing Exhibit (HE) 1) The SOR detailed reasons why DCSA did not find under the Directive that it is clearly consistent with the interests of national security to grant or continue a security clearance for Applicant and stated his case would be submitted to an Administrative

Judge for a determination whether to grant, deny, or

evoke his security clearance. Specifically, the SOR set forth security concerns arising under Guideline F. (HE 1) On September 25, 2025, Applicant responded to the SOR and requested a hearing. (HE 2) On March 5, 2026, Department Counsel was ready to proceed. On March 19, 2026, the case was assigned to me. On May 6, 2026, DOHA issued a notice scheduling the hearing for May 12, 2026. (HE 3) The hearing was held as scheduled, using the Microsoft Teams video teleconference system. During the hearing, Department Counsel offered six exhibits; Applicant did not offer any exhibits; there were no objections; and all proffered exhibits were admitted into evidence. (Tr. 9, 16-19, GE 1-GE 6) On May 12, 2026, DOHA received a copy of the transcript. The record closed on July 15, 2026. (Tr. 78-79) He did not provide any exhibits after his hearing. Some details were excluded to protect Applicant’s right to privacy. Specific information is available in the cited exhibits and transcript. Findings of Fact In Applicant’s SOR response, he admitted the allegations in SOR ¶¶ 1.a through 1.m, 1.o through 1.q, and 1.s through 1.u. (HE 2) He denied SOR ¶¶ 1.n, 1.r, and 1.v. He also provided mitigating information. Applicant is a 39-year-old operating engineer who performs facility maintenance, and he has been working for a government contractor for 30 months. (Tr. 6, 8) In 2006, he graduated from high school. (Tr. 7) He has not attended college or served in the military. (Tr. 7) In 2006, he married, and in 2016, he was divorced. (Tr. 7, 38) His three children are ages 15, 17, and 18. (Tr. 7) Financial Considerations Applicant lives with his grandmother in a residence owned by his uncle, and he takes care of her because she has dementia. (Tr. 27, 29) He provides some financial assistance to support his grandmother. (Tr. 29) Applicant was unemployed for about six weeks at the end of 2023 because he caught COVID. (Tr. 33) His gross salary is from about $52,000 to about $61,000. (Tr. 35- 36) He s aves about $500 monthly. (Tr. 37) He intends to obtain financial counseling and eventually resolve his SOR debts. (Tr. 67) He would have filed for bankruptcy; however, he was worried about the negative impact on his security clearance. (Tr. 67) He has about $3,000 in his savings account, and he is considering whether to use some of his savings to pay or start payments to address some of his delinquent SOR debts. (Tr. 68) 2

When he was divorced in 2016, Applicant took responsibility for all of the marital debt; his spouse did not work outside their home; and he was making $12 an hour. (Tr. 40) The SOR lists 15 non-tax delinquent debts totaling $48,901. Three credit bureau reports (CBRs) from 2024 to 2026 support the existence of the delinquent debts listed in the SOR. (Tr. 41-42; GE 4-6; HE 2) He has not made any payments to address any of the SOR debts, except for the child support debt. More information about the status of the SOR debts and financial issues is as follows: SOR ¶ 1.a alleges, and Applicant admits that he failed to timely file, as required, Federal income tax (FIT) returns for tax years (TYs) 2018 through 2023. He filed his FIT returns for TYs 2018 through 2023, except for TY 2021, around April 24, 2025. SOR ¶ 1.a alleges that as of the date of this SOR his FIT for TY 2021 remained unfiled. Applicant’s August 25, 2025 IRS tax transcripts for TYs 2018 through 2023, except for TY 2021, indicate he filed those FIT returns on April 24, 2025. (Tr. 47-48; GE 2) For TY 2021, the IRS tax transcript states, “no tax return filed.” (GE 2) Applicant said he believed all of his FIT returns were filed. (Tr. 46-47) He said the completed returns were available, and he was asked to provide them after his hearing. (Tr. 47) SOR ¶¶ 1.b through 1.f allege, and Applicant admits he is indebted to the Federal Government for delinquent FIT in the amounts: TY 2018 ($1,839); TY 2019 ($2,214); TY 2022 ($5,771); TY 2023 ($4,165); and T Y 2024 ($152), respectively. Applicant agreed that the IRS said he owed these amounts; however, he said he did not understand how or why he owed those amounts. (Tr. 49-50) He said the IRS told him he owed “30- something thousand dollars”; however, Applicant believed that was more than he actually owed. (Tr. 47)

t is unclear how he could owe “30-something thousand dollars,” to the IRS when these five accounts total $14,141. He may owe FIT from previous tax years; however, this possibility is speculative at this time. He did not provide correspondence from the IRS showing the amounts the IRS was seeking from him. SOR ¶ 1.g alleges, and Applicant admits he failed to file, as required, state income tax (SIT) returns for TYs 2018 through 2023. He said all SIT returns are filed. (Tr. 50-51) He heard from the state that he might owe some SIT; however, he was unclear about how much he might owe. (Tr. 51) He did not provide correspondence from the SIT authority showing the amounts the SIT authority was seeking from him. SOR ¶ 1.h alleges, and Applicant admits he has a charged-off debt for $29,252. He said he had a vehicle which was voluntarily repossessed. He replaced the repossessed vehicle with a less-expensive vehicle to reduce his monthly vehicle payments by $300 from the amount needed for the monthly payment when he owned the repossessed vehicle. (Tr. 24-27, 53-54) He has not made any payments to address this 3

debt. (Tr. 53-54) He is current on his payments for the new vehicle. (GE 6) He said after he pays off all of his child support responsibilities, he intends to address this debt. (Tr. 53-54) SOR ¶ 1.i alleges, and Applicant admits he has a charged-off debt for $6,621. He said the debt resulted from a vehicle loan. (Tr. 54-57) The vehicle had serious mechanical problems, and he no longer has the vehicle. (Tr. 55) SOR ¶ 1.j alleges, and Applicant admits that he has a child support debt placed for collection for about $3,419. His current monthly child support payment is $800. (Tr. 32, 41) At his hearing, he said he has paid down his outstanding child support arrearage from about $3,419 to $1,369. (Tr. 30; GE 6) He has not missed any payments for the last two years. (Tr. 57) He pays the amount the state requires him to pay. (Tr. 30-32) The payments are taken out of his paycheck. (Tr. 57) His May 11, 2026 CBR lists the debt in SOR ¶ 1.j with a balance of $1,369. (GE 6 at 3-4) SOR ¶¶ 1.k, 1.l, 1.m, 1.o, 1.p, and 1.u allege, and Applicant admits he has six medical accounts, which were placed for collection for about $1,751, $1,636, $1,458, $658, $658, and $663 respectively. He said he had several medical issues and went to the emergency room for treatments. (Tr. 58, 65) He acknowledged that he had an obligation to pay these debts even if they were dropped from his credit report. (Tr. 59) His May 11, 2026 CBR lists the debts in

SOR ¶ 1.k, 1.m, 1.o, and 1.p (GE 6 at 3-4); however, it does not list the SOR medical debts in 1.l and 1.u. (GE 6) SOR ¶ 1.n alleges, and Applicant owed a telecommunications debt for $1,324. He denied he owed the debt because he returned the equipment. (Tr. 44-45; HE 2) He said he disputed the debt several times. (Tr. 60) His May 11, 2026 CBR does not list this debt. (GE 6) SOR ¶ 1.q alleges, and Applicant admits he has a charged-off debt for about $497. He said he overdrew his bank account. (Tr. 61) SOR ¶ 1.r alleges Applicant has a telecommunications debt for $300. He denied responsibility for the debt. He said his former girlfriend told him that she returned the telecommunications equipment, and he believed her. (Tr. 44, 61-63; HE 2) His May 11, 2026 CBR does not list this debt. (GE 6) SOR ¶ 1.s alleges, and Applicant admitted the debt in his SOR response for an account placed for collection for about $183. (HE 2) At his hearing, he said he did not recognize the debt, and he disputed his responsibility for it. (Tr. 64) His May 11, 2026 CBR lists the debt in SOR ¶ 1.s. (GE 6 at 4) SOR ¶ 1.t alleges, and Applicant admitted the debt in his SOR response for an account placed for collection for $149. At his hearing, he said the creditor increased the 4

cost for his vehicle insurance, and he terminated the contract. (Tr. 65) He disputed his responsibility for the debt. (Tr. 65) His May 11, 2026 CBR does not list this debt. (GE 6) SOR ¶ 1.v alleges Applicant has a telecommunications debt for $332. At his hearing, he said he was not responsible for the debt because he returned the equipment. (Tr. 44-45, 66; HE 2) His May 11, 2026 CBR does not list this debt. (GE 6) The record was held open until July 15, 2026, to enable Applicant to provide evidence that he filed his FIT return for 2021, information about his SIT debt, and any other evidence he wanted to submit. (Tr. 71-72, 79) Policies The U.S. Supreme Court has recognized the substantial discretion of the Executive Branch in regulating access to information pertaining to national security emphasizing, “no 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. Id. at 527. The President has authorized the Secretary of Defense or his designee to grant an applicant eligibility for access to classified information “only upon a finding that it is clearly consistent with the national interest to do so.” Exec. Or. 10865, Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960), as amended. Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the adjudicative guidelines. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, these guidelines are applied 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, 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 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 “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See Exec. Or. 10865 § 7. Thus, nothing in an unfavorable decision should be construed to suggest that it is based on any express or implied determination about an applicant’s allegiance, loyalty, or patriotism. An unfavorable decision is merely an indication the applicant has not met the strict guidelines the President, Secretary of Defense, and Director of National Intelligence have established for issuing a clearance. 5

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. See 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. See ISCR Case No. 95-0611 at 2 (App. Bd. May 2, 1996). 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 ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue his [or her] security clearance.” ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002). The burden of disproving a mitigating condition never shifts to the Government. See ISCR Case No. 02- 31154 at 5 (App. Bd. Sept. 22, 2005). “[S]ecurity clearance determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531; see AG ¶ 2(b). Analysis Financial Considerations AG ¶ 18 articulates the security concern for financial problems: 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, 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 Appeal Board explained the scope and rationale for the financial considerations security concern in ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012) (citation omitted) as follows: This concern is broader than the possibility that an applicant might knowingly compromise classified information to raise money in satisfaction of his or her debts. Rather, it requires a Judge to examine the totality of an applicant’s financial history and circumstances. The Judge must consider pertinent evidence regarding the applicant’s self-control, judgment, and 6

other qualities essential to protecting the national secrets as well as the vulnerabilities inherent in the circumstances. The Directive presumes a nexus between proven conduct under any of the Guidelines and an applicant’s security eligibility. AG ¶ 19 includes disqualifying conditions that could raise a security concern and may be disqualifying in this case: (a)

inability to satisfy debts; (c) a history of not meeting financial obligations; and (f) failure to file or fraudulently filing annual Federal, state, or local income tax returns or failure to pay annual Federal, state, or local income tax as required. The record establishes the disqualifying conditions in AG ¶¶ 19(a), 19(c), and 19(f), requiring additional inquiry about the possible applicability of mitigating conditions. Discussion of the disqualifying conditions is contained in the mitigation section, infra. The financial considerations mitigating conditions under AG ¶ 20, which may be applicable in this case, are as follows: (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 p

oblem 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, and there are clear indications that the problem is being resolved or is under control; (d) the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts;

(e) the individual has a reasonable basis to dispute the legitimacy of the past-due debt which is the cause of the problem and provides documented proof to substantiate the basis of the dispute or provides evidence of actions to resolve the issue; and 7

(g) the individual has made arrangements with the appropriate tax authority to file or pay the amount owed and is in compliance with those arrangements. The Appeal Board in ISCR Case No. 10-04641 at 4 (App. Bd. Sept. 24, 2013) explained an applicant’s responsibility for proving the applicability of mitigating conditions is as follows: Once a concern arises regarding an applicant’s security clearance eligibility, there is a strong presumption against the grant or maintenance of a security clearance. See Dorfmont v. Brown, 913 F.2d 1399, 1401 (9th Cir. 1990), cert. denied, 499 U.S. 905 (1991). After the Government presents evidence raising security concerns, the burden shifts to the applicant to rebut or mitigate those concerns. See Directive ¶ E3.1.15. The standard applicable in security clearance decis

t, in and of itself, resolve concerns arising from the dilatory nature of an applicant’s response to his debts or other circumstances that detract from an applicant’s judgment and reliability. See also ISCR Case No. 21-00261 2-3 (App. Bd. June 6, 2022) (“the absence of unsatisfied debts from an applicant’s credit report does not extenuate or mitigat

an overall history of financial difficulties or constitute evidence of financial reform or rehabilitation”); ISCR Case No. 14-05803 at 3 (App. Bd. July 7, 2016) (citing ISCR Case No. 14-03612 at 3 (App. Bd. Aug. 25, 2015)). Th