ISCR Case No. 26-00038

______________ ______________ DEFENSE LEGAL SERVICES AGENCY DEFENSE OFFICE OF HEARINGS AND APPEALS _____________________________________

In the matter of: )

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) ISCR Case No. 26-00038

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Applicant for Security Clearance ) _____________________________________ ) Appearances For Government: Cynthia Ruckno, Esq., Department Counsel For Applicant: Pro se 09/24/2026 Decision CEFOLA, Richard A., 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 Applicant submitted a Questionnaire for National Security Positions on August 5, 2025 (Questionnaire). On February 10, 2026, the Defense Counterintelligence and Security Agency (DCSA) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline F (Financial Considerations). The action was taken under Executive Order 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) effective within DoD after June 8, 2017.

On February 17, 2026, Applicant responded to the SOR in writing (Answer) and requested that this case be decided on the written record in lieu of a hearing. In his Answer, Applicant admitted to all the debts alleged in the SOR and included a written statement in mitigation. He also included receipts I marked as Applicant Exhibits (AE) N through P. On July 6, 2026, Department Counsel submitted the Government’s written case in a File of Relevant Material (FORM). A complete copy of the FORM, consisting of Government’s Exhibits (GE) 1 to 7 and the Government’s arguments in support of the SOR, was received by Applicant on July 16, 2026. Applicant timely responded to the FORM on August 11, 2026, with additional statements in mitigation (Response), as well as additional exhibits that he marked as AE A through M (Applicant’s combined exhibit list is marked as Hearing Exhibit (HE) I). The case was assigned to me on September 15, 2026. All exhibits were admitted without objection, with the exception of the summary of Appellant’s Enhanced Subject Interview (GE 7). Applicant’s objection to admission of this document was sustained and the interview summary was not considered. Findings of Fact Applicant is 34 years old and married his wife in 2015. They have five children living at home, including his 15-year-old stepson. Applicant also has an 11-year-old child residing in State A and a 13-year-old child residing in State B. He earned a bachelor’s degree in 2014. Applicant is employed by a defense contractor in telecommunications and applied for a security clearance in connection with this employment. Applicant receives an hourly wage of $55.81, plus occasional overtime, with year­ to-date gross earnings of $73,353 as of Jun 21, 2026 (approximately $146,706 annually). He is paid biweekly with deductions that include $325.92 and $223.24 for the two separate child support payments and $64.83 to pay toward a 401(k) loan. Applicant’s employer received a report from the DoD Continuous Vetting Program (CVP) in April 2024 with an alert that Applicant had six delinquent debts totaling $46,917. They received a second CVP report in April 2025 listing eight delinquent debts totaling $47,395. (Answer; Response; AE I; GE 3 at 5, 9, 14, 27; GE 5; GE 6) SOR Paragraph 1 (Guideline F: Financial Considerations) The Government alleged Applicant is ineligible for a security clearance because he has delinquent consumer debts totaling over $47,000. The following facts pertain: 1.a. Credit Union Debt ONE – Charge Off ($26,930): Applicant took out this auto loan on a 2017 Honda Pilot that was ultimately impounded by law enforcement “due to issues related to an insurance lapse and administrative flags.” Applicant struggled to retrieve the vehicle from the towing company, which was ultimately sold for salvage. Applicant contends the sale was wrongful and at some point was looking into taking action against the towing company. Now Applicant acknowledges the account but has made no payments to date. It is, however, an obligation he i s “actively addressing through [his] current debt-resolution efforts.” (Answer; Response; GE 3 at 44; GE 4 at 2) 2

1.b. Personal Loan – Charge Off ($12,743): Applicant took out a $14,500 personal loan in July 2021 at 23% annual interest “to address emergency expenses related to vehicle impound fees, administrative costs, and transportation needs for my family.” By October 2023, Applicant appeared to have paid the loan down to $10,967, but then ceased making payments. The lender filed suit in January 2024 s eeking $12,743, including interest and costs, but as of July 2025 did not appear to have ever effectively served process on Applicant, and no judgment was entered. Applicant acknowledged the debt in his Answer and averred he was working toward resolving it. He has not made any recent payments toward this debt, but in his Response s uggests he is “continuing to evaluate the appropriate method for resolving this obligation.” (Answer; Response; AE G; AE H; GE 4 at 3) 1.c. Credit Union Debt TWO – Charge Off ($4,897): Applicant took out this credit card in June 2021 “during the same period of financial hardship previously described.” The account was charged off by April 2024. Applicant acknowledges this account and has included it within his “current organized debt-resolution efforts.” (Answer; Response; GE 4 at 3; GE 5; GE 6) 1.d. Credit Union Debt THREE – Charge Off ($1,800): Applicant took out this credit card in October 2015, and it was charged off by April 2024. Applicant acknowledges this account and has included it within his “current organized debt-resolution efforts.” (Answer; Response; GE 4 at 3; GE 5; GE 6) 1.e. Credit Card – Collection ($544): Applicant took out this credit card in December 2022 for unspecified expenses, and it was sent to collection by April 2024. On or about March 23, 2026, Applicant paid the debt in full. (Answer; Response; AE F; AE N; GE 4 at 4; GE 5; GE 6) 1.f. Personal Loan – Charge Off ($392): Applicant took out this loan in January 2021 for unspecified expenses, and it was sent to collection by April 2025. On March 17, 2026, Applicant paid the debt in full. (Answer; Response; AE F; AE O; GE 4 at 4; GE 5; GE 6) 1.g. Personal Loan – Charge Off ($86): Applicant took out this loan in September 2021 for unspecified expenses, and it was sent to collection by April 2025. Applicant avers that the debt is paid in full, but the evidence provided is unclear. (Answer; Response; AE F; AE P; GE 4 at 4; GE 5; GE 6) Whole Person Evidence The comments and explanations Applicant included in his Answer, Response, and Questionnaire were reviewed in their entirety. In his submissions, Applicant noted being the sole provider for seven children across three households and averred that his financial difficulties stemmed from “a prolonged period of financial hardship caused by a combination of substantial family responsibilities, temporary unemployment, transportation issues, and unexpected financial burdens.” He suggested that now his 3

“financial situation has improved and stabilized,” and he is “actively taking steps to resolve [his] outstanding debts by continuing to work with a financial advisor.” To that end, he engaged with financial counseling on July 23, 2026, and a financial fitness coach on August 5, 2026. He also enrolled $35,232 of debt with a debt management service on or about July 20, 2026, to which he plans to make biweekly deposits of $226.31. Additionally, he completed an online course on the basics of debt management on July 25, 2026. Four strong character statements were provided by friends, colleagues, and his pastor. (Answer; Response; AE A; AE B; AE C; AE D; AE E; AE F) Policies When evaluating an applicant’s suitability for national security eligibility, the administrative judge must consider the adjudicative guidelines. In addition to brief introductory explanations for each guideline, the AG list potentially disqualifying conditions and mitigating conditions, which are to be used in evaluating an applicant’s national security eligibility. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, these guidelines are applied in conjunction with the factors listed in AG ¶ 2 describing the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. The entire process is a conscientious scrutiny of applicable guidelines in the context 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, “Any doubt concerning personnel being considered for national security eligibility will be resolved in favor of the national security.” In reaching this decision, I have drawn only those conclusions that are reasonable, logical, and based on the evidence contained in the record. I have not drawn inferences based on mere speculation or conjecture. Directive ¶ E3.1.14, requires the Government to 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, and has the ultimate burden of persuasion as to obtaining a favorable clearance decision.” A person who seeks access to classified 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 national security eligibility. Decisions include, by necessity, consideration of the possible risk the applicant may deliberately or inadvertently fail to protect or safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation as to potential, rather than actual, risk of compromise of classified or sensitive information. Finally, as emphasized in Section 7 of Executive Order 10865, “Any determination under 4

this order adverse to an applicant shall be a determination in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See also Executive Order 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive information.) Analysis SOR Paragraph 1 (Guideline F: Financial Considerations) The security concerns relating to the guideline for financial considerations are set out in AG ¶ 18, which reads in pertinent part: 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 facts of this case establish the following disqualifying conditions set forth in AG ¶ 19 to all of the allegations under Guideline F: (a) inability to satisfy debts; and (c) a history of not meeting financial obligations. The burden therefore shifts to Applicant to mitigate security concerns under Guideline F. The guideline includes the following conditions in AG ¶ 20 that can mitigate security concerns arising from Applicant’s financial history: (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; and (d) the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts. 5

It is well-established that a security clearance adjudication is not a proceeding aimed at collecting an applicant’s debts. Rather, it is a proceeding aimed at evaluating an applicant’s judgment, reliability, and trustworthiness. ISCR Case No. 22-02281 at 3 (App. Bd. Feb. 13, 2024). This is because failure to meet financial obligations may indicate unwillingness to abide by rules and regulations, thereby raising questions about an applicant’s ability to protect classified information. ISCR Case No. 17-04110 at 3 (App. Bd. Sep. 26, 2019). In this case, Applicant avers to having encountered significant financial strain supporting seven children across three households while simultaneously dealing with additional unexpected challenges. To that end, AG ¶ 20(b) is partially satisfied in that at least some of the conditions resulting in his financial problems were largely beyond his control. And there is certainly evidence that AG ¶ 20(d) may be partially satisfied by his very recent efforts to engage with financial counselling and debt management services. The issue precluding overall mitigation, however, lies with the timing of Applicant’s actions. The Appeal Board has clearly explained that “[t]he timing of debt payments is relevant in evaluating an applicant’s case for mitigation, as an applicant who resolves financial problems after being placed on notice that [their] security clearance is in jeopardy may lack the judgment and self-discipline to follow rules and regulations over time or when there is no immediate threat to [their] own interests.” ISCR Case No. 23-02082 at 5 (App. Bd. Jun. 23, 2026). In this case, Applicant’s company was notified of his significant debt issues in 2024 and again in 2025, but Applicant did not begin addressing these issues in earnest until he received the July 6, 2026 FORM. Applicant did address his smaller debts in March 2026, but again only after issuance of the SOR. Waiting to pay legitimate debts until forced to do so by the security clearance process does not constitute good-faith debt resolution. See ISCR Case No. 10-05909 at 3 (App. Bd. Sep. 27, 2012). As a result, there is insufficient evidence for a determination that Applicant’s financial problems have been resolved or will be resolved within a reasonable period. I have considered Applicant’s general discussion of the personal difficulties he encountered and his plans to improve his financial management in the months ahead. There does appear to be some promise that Applicant will be able to begin to get his financial situation under control in the future. But given Applicant’s eleventh-hour approach to the problem, none of the AG ¶ 20 mitigating conditions, whether reviewed separately or jointly, are sufficiently applicable to mitigate the security concerns presented by Applicant’s unpaid debts. Consequently, I am unable to find that he acted reasonably or responsibly under the circumstances or that he made a good faith effort to deal with his debts. Applicant’s financial issues are ongoing and continue to cast doubt on his current reliability, trustworthiness, and good judgment. SOR ¶ 1 is found against Applicant. 6

Whole-Person Concept Under the whole-person concept, the administrative judge must evaluate an applicant’s eligibility for national security eligibility by considering the totality of the applicant’s conduct and all relevant circumstances. The 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. Under AG ¶ 2(c), the ultimate determination of whether to grant national security eligibility for a security clearance must be an overall commonsense judgment based upon careful consideration of the guidelines and the whole-person concept. I considered the above whole-person factors and the potentially disqualifying and mitigating conditions in light of all pertinent facts and circumstances surrounding this case. I have also given the appropriate weight to Applicant’s Answer, Response, and exhibits. Because Applicant requested a determination on the written record without a hearing, I had no opportunity to question him or evaluate his credibility based on demeanor. Overall, the Guideline F issues leave me with questions and doubts as to Applicant’s suitability for national security eligibility and a security clearance. Formal Findings Formal findings for or against Applicant on the allegations set forth in the SOR, as required by ¶ E3.1.25 of Enclosure 3 of the Directive, are: Paragraph 1, Guideline F: AGAINST APPLICANT Subparagraphs 1.a through 1.g: Against Applicant

Conclusion In light of all of the circumstances presented by the record in this case, I conclude that it is not clearly consistent with the interests of national security to grant Applicant’s eligibility for a security clearance. Eligibility for access to classified information is denied. RICHARD A. CEFOLA Administrative Judge 7