ISCR Case No. 26-00036

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

)

In the matter of: )

) ISCR Case No. 26-00036

)

) Applicant for Security Clearance ) ___________________________________ ) Appearances For Government: Mark D. Lawton, Esq., Department Counsel For Applicant: Pro se 09/10/2026 Decision FOREMAN, LeRoy F., Administrative Judge: Applicant mitigated the security concerns under Guideline F (Financial Considerations). Eligibility for access to classified information is granted. Statement of the Case Applicant submitted a security clearance application (SCA) on June 4, 2025. On February 12, 2026, the Defense Counterintelligence and Security Agency (DCSA) sent him a Statement of Reasons (SOR) alleging security concerns under Guideline F. Applicant answered the SOR on April 23, 2026, and requested a decision on the written record in lieu of a hearing. Department Counsel submitted the Government’s written case on June 8, 2026. A complete copy of the file of relevant material (FORM) was sent to Applicant, who was given an opportunity to file objections and submit material to refute, extenuate, or mitigate the Government’s evidence. He received the FORM on June 23, 2026, and did not respond. The case was assigned to me on August 26, 2026. The Government’s FORM consists of the pleadings in the case, which include the SOR, Applicant’s answer to the SOR (Government Exhibit (GE) 1), and the documents in 1

support of the allegations in the SOR (GE 2-6). GE 2 through 6 are admitted into evidence, without objection. Findings of Fact The SOR alleges under Guideline F that Applicant has 12 delinquent consumer debts that total approximately $102,000 (SOR ¶¶ 1.a-1.l). He admits all the allegations. (GE 1) Applicant is 34 years old, married, previously divorced, and has five minor children. He earned his high school diploma in 2009 and served in the inactive reserve in the U.S. Army from 2012 to 2015, at which time he was honorably discharged. He has been employed by his current sponsor since June 2025. (GE 2) He filed for Chapter 7 bankruptcy protection in December 2018, following his divorce from his first wife. The bankruptcy was discharged in March 2019. (GE 2; GE 6) Applicant attributed the alleged debts to a sole trucking business he started in 2019 and was forced to close in 2024. He operated and managed the business during the entire duration. Over time, mechanical failures, maintenance and repair bills, and downtime due to needed truck repairs made the business unsustainable. Despite his best efforts to save the business, he ultimately decided to shut it down in 2024. There is no evidence of irresponsible spending or living outside of his means. He made the necessary payments towards the loans and credit card debt he incurred for the business until he realized his approach of making the monthly payments was unsustainable. (GE 1) In October 2024, Applicant retained a debt-resolution company (DRC) for assistance in securing settlements and paying back his creditors. He enrolled approximately $98,000 of his unsecured debts into a repayment plan set up by the DRC and agreed to a structured savings program with monthly drafts of approximately $1,272 beginning in November 2024. All 12 debts alleged in the SOR were enrolled in the debt- resolution program. (GE 1) As of June 2025, the date he submitted his SCA, he was making payments towards his debt resolution program. (GE 2 at 50) After issuance of the SOR, he realized that the actual impact the DRC had on preserving his credit and resolving his debts was not as he expected. This prompted him to terminate the DRC agreement and personally reach out to his creditors for resolution. (GE 1; GE 2 at 50-54) Along with his answer, Applicant provided documentation verifying that he has addressed all the debts in his SOR through either payment in full, written settlement, or an agreed repayment arrangement as follows: SOR ¶ 1.a: A delinquent debt to Creditor A for Account 1 totaling approximately $25,437. In April 2026, Applicant entered a payment agreement with C reditor A to pay $50 per month on this charged-off account until it has been paid in full. The first payment was due in May 2026. SOR ¶ 1.b: A delinquent debt to Creditor A for Account 2 totaling approximately $13,675. In April 2026, Applicant entered a payment agreement with C reditor A to 2

pay $50 per month on this charged-off account until it has been paid in full. The first payment was due in May 2026. SOR ¶ 1.d: A delinquent debt to Creditor A for Account 3 totaling approximately $11,232. In April 2026, Applicant entered a payment agreement with C reditor A to pay $50 per month on this charged-off account until it has been paid in full. The first payment was due in May 2026. SOR ¶ 1.e: A delinquent debt to Creditor A for Account 4 totaling approximately $10,903. In April 2026, Applicant entered a payment agreement with C reditor A to pay $50 per month on this charged-off account until it has been paid in full. The first payment was due in May 2026. SOR ¶ 1.f: A delinquent debt to Creditor A for Account 5 totaling approximately $7,035.00. In April 2026, Applicant entered a payment agreement with Creditor A to pay $50 per month on this charged-off account until it has been paid in full. The first payment was due in May 2026. SOR ¶ 1.c: A delinquent debt to Creditor B for Account 1 totaling approximately $12,119. Applicant settled this debt for $4,847, to be paid in monthly payments of approximately $202 beginning in May 2026 through April 2028. SOR ¶ 1.i: A delinquent debt to Creditor B for Account 2 totaling approximately $5,508. Applicant settled this debt for $2,203, to be paid in monthly payments of approximately $92 beginning in May 2026 through April 2028. SOR ¶ 1.g: A delinquent debt to Creditor C for Account 1 totaling approximately $6,801. Applicant settled this debt for $3,741, to be paid in monthly payments of approximately $75.00 beginning in May 2026 through April 2030. SOR ¶ 1.h: A delinquent debt to Creditor C for Account 2 totaling approximately $5,976. Applicant settled this debt for $3,288, to be in monthly payments of approximately $91.00 beginning in May 2026 through April 2029. SOR ¶ 1.k: A delinquent debt to Creditor C for Account 3 totaling approximately $938. Applicant settled this debt for $657, to be paid in monthly payments of approximately $55.00 beginning in May 2026 through April 2027. SOR ¶ 1.l: A delinquent debt to Creditor C for Account 4 totaling approximately $937. Applicant settled this debt for $657, to be paid in monthly payments of approximately $55.00 beginning in May 2026 through April 2027. SOR ¶ 1.j: A delinquent debt to Creditor D totaling approximately $1,446. Applicant paid this debt in August 2025. 3

Policies This case is adjudicated 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) 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 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.” Exec. Or. 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.” Exec. Or. 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, 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. 15-01253 at 3 (App. Bd. Apr. 20, 2016). 4

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, 484 U.S. at 531. Analysis 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. Applicant’s admissions and the evidence in the FORM establish the following disqualifying conditions under this guideline: AG ¶ 19(a): inability to satisfy debts; and AG ¶ 19(c): a history of not meeting financial obligations. The following mitigating conditions are potentially applicable: AG ¶ 20(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; AG ¶ 20(b): the conditions that resulted in the financial problem were largely beyond the p

erson’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; 5

AG ¶ 20(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 AG ¶ 20(d): the individual 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. Applicants are not held to a standard of perfection in their debt-resolution efforts, and they are not 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). The mere fact that it might take Applicant a long time to complete a payment agreement is not a reason to deny him a clearance. ISCR Case No. 19-01624 at 4 (App. Bd. Aug. 29, 2022). Mitigation is established. AG ¶ 20(a) applies because the debts were incurred to operate a business, which despite Applicant’s best efforts, was unsuccessful. As such, the behavior occurred under such circumstances that it is unlikely to recur and does not cast doubt on Applicant’s current reliability, trustworthiness, or good judgment. AG ¶ 20(b) applies because the conditions that resulted in Applicant’s financial problem were largely beyond his control and attributable to a business downturn and failure under financial pressure. The debts did not arise because of excessive or irresponsible spending or a lack of discipline or judgment. Moreover, Applicant acted responsibly under the circumstances and continued to make his monthly payments towards his debts. In October 2024, when he could no longer make the monthly payments, he retained the services of a debt-resolution company to negotiate in good faith on his behalf and resolve his debts. He relied on their plan to pay back his debt and honored his payment arrangement with them. He paid into the DRC program from November 2024 to at least June 2025. When he received the SOR in February 2026, he realized that the debt resolution company was not taking sufficient action to resolve his debts, so he personally reached out to each creditor and arranged for payments. AG ¶ 20(c) applies in part. Applicant has not received any financial counseling. However, there are clear indications that the problem is being resolved or is under control. His previous arrangement with the DRC required a monthly deposit of $1,272, which he was able to maintain for at least eight months. His current payment arrangements require a total of $820 in monthly recurring payments towards 11 debts. His ability to maintain a higher payment for nearly a year supports a finding that he is financially able to fulfill his current payment arrangements as agreed upon with his individual creditors. AG ¶ 20(d) applies in part to the debts in the SOR, except for the debt alleged in SOR ¶ 1.j, which Applicant resolved in good faith prior to the issuance of the SOR. Although he provided evidence that he has negotiated good-faith settlements that lowered 6

his outstanding debt to approximately $84,236, he has just begun making his payments in accordance with those settlements, as such AG ¶ 20(d) does not fully apply to the remaining debts. The reasons underlying an applicant’s financial problems are relevant matters for an administrative judge to consider in a Guideline F case. In conducting a mitigation analysis, it is important to determine if those underlying reasons have been fully resolved or continue to exist in assessing whether the financial problems are likely to persist or recur. ISCR Case No. 21-01347 at 3 (App. Bd. Mar. 9, 2022). The evidence presented here supports a finding that the root cause of Applicant’s financial problems has been resolved, and the remaining debts are being responsibly addressed. He has presented a clear plan of resolution, supported by documentation, and an ability to pay. 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): (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). After weighing the disqualifying and mitigating conditions under Guideline F and evaluating all the evidence in the context of the whole person, I conclude Applicant has mitigated the security concerns raised under Guideline F (Financial Considerations). Formal Findings I make the following 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: Paragraph 1, Guideline F: FOR APPLICANT Subparagraphs 1.a-1.l: For Applicant 7

Conclusion I conclude that it is clearly consistent with the national security interests of the United States to grant Applicant eligibility for access to classified information. Clearance is granted. LeRoy F. Foreman Administrative Judge 8