ISCR Case No. 25-00832

______________ ______________ DEFENSE LEGAL SERVICES AGENCY DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 25-00832 ) Applicant for Security Clearance ) Appearances For Government: William Miller, Esq., Department Counsel For Applicant: Pro se 09/28/2026 Decision GARCIA, Candace Le’i, Administrative Judge: Applicant did not mitigate the security concerns under Guideline F (Financial Considerations). Eligibility for access to classified information is denied. Statement of the Case On August 19, 2025, the Department of Defense (DOD) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline F (financial considerations). The action was taken under Executive Order (Exec. Or.) 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 by DOD on June 8, 2017. Applicant submitted a response to the SOR on August 21, 2025 (Answer) and requested a hearing before an administrative judge. The case was assigned to me on January 7, 2026. The Defense Office of Hearings and Appeals (DOHA) issued a notice on January 12, 2026, scheduling the matter for a video teleconference hearing on February 3, 2026. I convened the hearing as scheduled. At the hearing, I admitted in evidence without objection Government Exhibits (GE) 1-6. Applicant testified, called one witness, and did not submit documentation. At

Applicant’s request, I kept the record open until February 17, 2026, to enable her to submit documentation. She timely submitted documentation that I marked collectively as Applicant Exhibit (AE) A and admitted in evidence without objection. DOHA received the hearing transcript (Tr.) on February 17, 2026. Findings of Fact In her Answer, Applicant admitted all the SOR allegations. She is 59 years old, and unmarried. She graduated from high school in 1985. She previously owned a home from August 1998 to November 2014, and then another home from November 2014 to August 2021. She has owned her current home since October 2021. (GE 1-2; AE A; Tr. 5, 8, 39, 47-48, 68-69) Applicant has worked for various defense contracting companies since approximately 2008. From August 2021 to December 2022, she held only part-time employment as an administrative assistant, except for when she was briefly employed full time as an executive administrative assistant from October 2022 to November 2022. She was fired from her full-time position because her manager was not satisfied with her work. She subsequently obtained another part-time position, as a hotel operator, until December 2022. Since then, she has worked full time as an identification services operator for her current employer, a defense contractor. She has also worked as a part- time operator for a different hotel since May 2023. She began another part-time job, as a restaurant hostess on the weekends, in November 2025. She was granted a clearance in approximately 2008. (GE 1-2; Tr. 5-9, 40-43) The SOR alleges Applicant filed Chapter 7 bankruptcy in October 2018, which was discharged in January 2019. (SOR ¶ 1.k) It also alleges she has 10 delinquent consumer debts, totaling $58,047, consisting of a $13,335 charged-off loan (SOR ¶ 1.a); a $12,766 charged-off loan (SOR ¶ 1.b); two debt buyer accounts in collection for $12,763 and $336, respectively (SOR ¶¶ 1.c, 1.j); charged-off credit cards in the approximate amounts of $7,394, $4,675, $3,690, $1,325, and $810, respectively (SOR ¶¶ 1.d-1.g, 1.i); and a $953 charged-off charge account (SOR ¶ 1.h). In addition to her admissions in her Answer, Applicant disclosed her chapter 7 bankruptcy on her May 2023 security clearance application (SCA) and during her February 2024 and July 2024 background interviews. Her bankruptcy and delinquent debts are also established by her disclosures in her October 2024 response to interrogatories, bankruptcy records, and credit bureau reports (CBRs) from October 2024, June 2025, and January 2026. All her delinquent debts are reported on her most recent CBR from 2026. (GE 1-6) Applicant attributed her bankruptcy in 2018 to overwhelming debt that she lacked the ability to pay. After her bankruptcy discharge, she incurred delinquent debts when she was fired in November 2022 and suffered a loss of income. Her roommates also moved out, which led to her having to pay her monthly mortgage on her own, causing more financial stress. She testified, “I just charged things, I had medical bills, I had dental bills, 2

and I charged stuff to use the money from the charge card to pay for stuff that I needed. Yes, I did shop, yes, I did take trip[s].” (Tr. 68) During her February 2024 background interview, she characterized her financial situation as still working through financial issues and working two jobs to catch up on her finances. She indicated she was looking for a second job that pays more, and she intended to pay her debts. In her October 2024 response to interrogatories, she stated she took a significant pay cut after she lost her job and had to find another. She also stated her part-time job reduced her hours. (GE 2-3; Tr. 67-68) At her hearing, Applicant stated she also cared for her father between 19

94 and through his passing during the COVID-19 pandemic. She stated, “My father was incarcerated, in and out of jail all my life, and I would send him money, and he would come and live with me sometimes.” (Tr. 69) She withdrew $4,000 from her 401(k)- retirement savings plan to pay for his funeral. She then paid the taxes on her 401(k)- retirement savings plan withdrawal. She helps her elderly mother, to include providing her with financial assistance at times. (Tr. 39-40, 69-71) She acknowledged, “I haven’t been good with my finances That is true.” (Tr. 37) She stated she got a second part-time job to try to help her resolve her debts. She stated: But I’m working. I got a full-time job, two part-time jobs, trying to make ends meet. It’s only me. I have more debt than I have money, but I’m doing the best that I can to resolve this issue and keep it -- once I’m out of it, I don’t plan on going back. I know I don’t have a good history with my finances, but I’m too old to keep going through this. And I’m just doing the best that I can, working, trying to pay -- trying to pay my debts off. . . So I’m -- I'm just doing the best I can. I -- I don’t -- I don’t know how -- how else to say it. I -- I -- I admit it. I’m everything that’s been said. When I did my interview is true. I’m -- I’m just working. I’m trying to find another job. I’m trying to get the income that I need to cover my bills because I don’t want to work three jobs for the rest of my life. But I’m doing what I have to do to take care of my financial matters. (Tr. 37-38) Chapter 7 Bankruptcy Applicant’s chapter 7 bankruptcy--filed in 2018 and discharged in 2019-- included her mortgage, car loan, and credit cards that she used to purchase household items and items for personal needs. She stated in her SCA that all her debts were discharged in her bankruptcy, except for her mortgage and car note. During her background interview, she indicated in her background interview that her $20,976 balance on her auto loan became zero when she surrendered her car to the dealership. Bankruptcy records show she claimed approximately $331,112 in liabilities, which included the property she owned from 2014 to 2021 and whose estimated value she listed in her bankruptcy petition as $242,710. Her bankruptcy petition listed $13,800 in priority unsecured claims and $92,318 in nonpriority unsecured claims. She sold this home in 2021, and she used the money to pay her debts. She received financial counseling in September 2018 as part of this bankruptcy. (SOR ¶ 1.k; GE 1-3; Tr. 59-61, 63-64) 3

Delinquent Consumer Debts In her October 2024 response to interrogatories, Applicant noted her delinquent SOR debts remained unpaid. She provided details of a debt resolution plan she entered with a debt consolidation company (DCC) in April 2024 to resolve the debts in SOR ¶¶ 1.a-1.b, 1.d-1.g, and 1.i, which total approximately $46,174. She was waiting to receive letters from the creditors for the remaining SOR debts so she could attempt to settle and pay them. Her agreement with the DCC provides that she is to make bi-weekly payments into the program of $302, for 55 months. The estimated debt program resolution amount was reflected as $23,087. As of October 2024, she made recurring deposits from her checking account into the program of $302 twice monthly, from April 2024 to October 2024. At the hearing, she stated she was current on her payments into her plan with the DCC. She also stated the DCC provided her with financial counseling. In h er post-hearing documentation, she stated she has continued to make monthly payments of $614 into the DCC plan, and that such payments represent a signification portion of her available income, but she remained committed to resolving her debts. (GE 3; AE A; Tr. 16, 48, 50- 51, 56-57, 64, 72-73) She testified, “I have three more y ears to -- to be in this program to pay all my -- my debt so I can be free of debt again.” (Tr. 16) SOR ¶ 1.a: a $13,335 charged-off loan. Applicant obtained the loan in March 2023 to try to pay her expenses. April 2024 documentation from the creditor to Applicant reflects an agreement to settle this debt for $8,085, payable with monthly payments of $50 from May 2024 to August 2024, followed by monthly payments of $394 from November 2024 to April 2026. This debt is included in Applicant’s debt consolidation plan with the DCC, but there is no documentation in the record to demonstrate any payments have been made, either by Applicant or by the DCC on Applicant’s behalf, in accordance with the settlement terms. This debt remains unresolved. (Answer; GE 3-6; Tr. 15, 48-51) SOR ¶ 1.b: a $12,766 charged-off loan. Applicant testified that this debt is for a dental bill. This debt is included in Applicant’s debt consolidation plan with the DCC, but there is no documentation in the record to demonstrate that the DCC has settled or made any payments to this debt on Applicant’s behalf. This debt remains unresolved. (GE 3-6; Tr. 51-52, 59) SOR ¶ 1.c: a debt buyer account in collection for $12,763. Applicant used this account to pay for dental services in 2023. At the hearing, she could not recall this debt. In her post-hearing documentation, she stated this debt was included in the DCC plan, and the DCC would initiate settlement negotiations with the creditor when she had accrued sufficient funds to do so. The DCC plan that she provided with her October 2024 response to interrogatories, however, does not reflect the inclusion of this debt. She provided documentation reflecting the creditor offered to settle the debt in February 2026 for $12,073. This debt is not resolved. (GE 3, 5-6; AE A; Tr. 52-54, 59, 74-77) SOR ¶ 1.d: a charged-off credit card in the approximate amount of $7,394. This debt is included in Applicant’s debt consolidation plan with the DCC, but there is no documentation in the record to demonstrate that the DCC has settled or made any 4

payments to this debt on Applicant’s behalf. This debt remains unresolved. (GE 3-6; Tr. 54, 58-59) SOR ¶ 1.e: a charged-off credit card in the approximate amount of $4,675. This debt is included in Applicant’s debt consolidation plan with the DCC, but there is no documentation in the record to demonstrate that the DCC has settled or made any payments to this debt on Applicant’s behalf. This debt remains unresolved. (GE 3-6; Tr. 54-55, 58) SOR ¶ 1.f: a charged-off home improvement store credit card in the approximate amount of $3,690. This debt is included in Applicant’s debt consolidation plan with the DCC, but there is no documentation in the record to demonstrate that the DCC has settled or made any payments to this debt on Applicant’s behalf. This debt remains unresolved. (GE 3-6; Tr. 55-56, 58) SOR ¶ 1.g: a charged-off retail store credit card in the approximate amount of $1,325. This debt is included in Applicant’s debt consolidation plan with the DCC, but there is no documentation in the record to demonstrate that the DCC has settled or made any payments to this debt on Applicant’s behalf. This debt remains unresolved. (GE 3-6; Tr. 55-56, 58) SOR ¶ 1.h: a $953 charged-off charge account. Applicant testified this account was for dental work. She did not realize it was not listed on the DCC debt consolidation plan, as she believed it was, and she intended to contact the DCC to inquire about it. This debt is not resolved. (GE 3-6; Tr. 55-57, 75-77) SOR ¶ 1.i: a charged-off credit card in the approximate amount of $810. This debt is not resolved. (GE 3-6; Tr. 57-58) SOR ¶ 1.j: a debt buyer account in collection for $336. February 2026 documentation from the creditor reflects Applicant settled this debt for $184, and her balance is zero. This debt is resolved. (GE 3-6; Tr. 57-58, 76; AE A) During her July 2024 background interview, Applicant indicated she arranged a payment plan with her mortgage company, scheduled to begin in December 2024 to resolve her then-delinquent mortgage of $10,000, but she had not yet started making payments in accordance with that plan. At the hearing, she testified her mortgage was current. Her monthly mortgage was $2,052 plus $90 in homeowners’ association fees. She also testified that she initiated the loan modification process with her lender in December 2025; meanwhile, she has continued to make her monthly mortgage payment. (GE 2; Tr. 47, 59-60, 64, 71-72) April 2024 documentation reflects Applicant had a wireless services debt in collection for $422. The collection company offered to settle the debt for $250. This debt is included in Applicant’s debt consolidation plan with the DCC. (GE 3) This debt is not alleged in the SOR, and it may not be an independent basis for revoking Applicant’s 5

clearance, but I will consider it in evaluating her evidence of extenuation, mitigation, or changed circumstances, and in my whole person analysis. In October 2024, Applicant provided a personal financial statement that reflected a net monthly income of $4,036 (which included $677 from her part-time job). After her monthly expenses, which did not include her payment in the DCC plan or any of the SOR debts, she noted her monthly net remainder was $490. At the hearing, she testified her net monthly income was $3,358, after her hours were cut at her part-time job as a hotel operator. She testified her annual salary when she started working for her current full- time employer was $55,000, and she earned $59,000 annually as of the date of the hearing. She also stated she earned $8,000 annually with her part-time job as a hotel operator, and $300-$400 monthly as a restaurant hostess. She testified that she does not keep a budget, but she pays her bills through automatic deduction, and she checks her bank account weekly. She stated she paid for her car in September 2024, which provided her with a

n extra $450 monthly. She stated she has approximately $3,000 in her retirement savings account. She also stated she does not currently have any credit cards or owe any outstanding taxes, and she has timely filed her income tax returns. She traveled for pleasure to the Dominican Republic in 2017, Costa Rica and Mexico in 2019, Cozumel in 2023, New Orleans in 2024, and Dallas in 2025. (GE 2-3; Tr. 42-47, 59, 61- 67, 70-71, 73-74) Applicant’s witness, a friend of over 20 years, testified that she has had numerous conversations with Applicant about financial literacy. She stated Applicant did not have financial guidance over the course of her life, and the witness has tried to help her in that regard. She described Applicant as a good-hearted and caring person. Applicant testified that this witness gifted her $500 to open a certificate of deposit for retirement, but she intended to repay the witness. (Tr. 26-35, 61-64) Applicant also provided character statements from two individuals who attested to her reliability, trustworthiness, and judgment. One individual, her Division Chief, described Applicant as an “exemplary employee,” a “valued asset within the division,” whose “character on the job has been of high integrity within a position of trust. (AE A) The other individual stated Applicant has worked for her since 2023 and described her as one who “consistently demonstrated strong character, reliability, and professionalism.” (AE A) Policies This case is adjudicated 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. “[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.” Id. at 527. The 6

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 adjudicative guidelines. 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. See Egan 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. 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. See 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 at 531. 7

Analysis Guideline F: Financial Considerations The security concern 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 . . .. 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; and (c) a history of not meeting financial obligations. Applicant has a history of not paying her debts. AG ¶¶ 19(a) and 19(c) are established. Conditions that could mitigate the financial considerations security concerns are provided under AG ¶ 20. The following are potentially applicable: (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, and there are clear indications that the problem is being resolved or is under control; and 8

(d) the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts. Conditions beyond Applicant’s control contributed to her debts. The first prong of AG ¶ 20(b) applies. For the full application of AG ¶ 20(b), she must provide evidence that she acted responsibly under the circumstances. Applicant made efforts to begin resolving her delinquent consumer debts alleged in the SOR through her plan with the DCC before the issuance of the SOR. Since entering the DCC plan in April 2024, she has consistently made bi-weekly payments of $302 twice monthly, despite that amount accounting for a significant portion of her available income. She paid the debt in SOR ¶ 1.j in February 2026, and I find that allegation in Applicant’s favor. A security clearance adjudication is an evaluation of an individual’s judgment, reliability, and trustworthiness. It is not a debt-collection procedure. ISCR Case No. 09- 02160 (App. Bd. Jun. 21, 2010). The adjudicative guidelines do not require that an individual make payments on all delinquent debts simultaneously, pay the debts alleged in the SOR first, or establish resolution of every debt alleged in the SOR. He or she need only establish a plan to resolve financial problems and take significant actions to implement the plan. See ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008). As such, I find allegations SOR ¶¶ 1.c-1.d and 1.h i n Applicant’s favor under AG ¶ 20(b). However, considering Applicant’s 2018-chapter 7 bankruptcy, her failure to resolve her remaining SOR debts that she incurred after her bankruptcy discharge raises questions about her judgment, trustworthiness, and reliability. She acknowledged her payments into the DCC plan represent a significant portion of her available income, and she has three years remaining under that plan. While Applicant appears to have settled the debt in SOR ¶ 1.a, there is no evidence that she or the DCC on her behalf has made any payments in accordance with the settlement terms. There is no evidence that the DCC has yet settled or made any payments toward any of the remaining debts with the creditors enrolled in that plan. While she has received financial counseling, her incurrence of delinquent debts after her previous chapter 7 bankruptcy means she needs more time to get her financial issues under control. I find that that these financial issues continue to cast doubt on her reliability, trustworthiness, and judgment. AG ¶¶ 20(a), 20(b), 20(c), and 20(d) do not apply to SOR ¶¶ 1.a-1.i and 1.k. Whole-Person Concept 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. In applying the whole- person concept, an 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. An administrative judge should consider the nine adjudicative process factors listed at AG ¶ 2(d): 9

________________________ (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 applied the adjudicative factors in AG ¶ 2(d). I considered the potentially disqualifying and mitigating conditions in light of all the facts and circumstances surrounding this case. Overall, the record evidence leaves me with questions and doubts about Applicant’s eligibility and suitability for a security clearance. I conclude Applicant did not mitigate all the financial considerations security concerns. Formal Findings Formal findings for or against Applicant 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: Subparagraph 1.j: Subparagraph 1.k: Against Applicant For Applicant 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. Candace Le’i Garcia Administrative Judge 10