ISCR Case No. 26-00326

______________ ______________ DEFENSE LEGAL SERVICES AGENCY DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 26-00326 ) Applicant for Security Clearance ) Appearances For Government: Sakeena Farhath, Esq., Department Counsel For Applicant: Pro se 09/29/2026 Decision DRISKILL, A. M., 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 September 8, 2025. On March 23, 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 May 27, 2026, and requested a hearing before an administrative judge. Department Counsel was ready to proceed on July 28, 2026. The case was assigned to me on August 4, 2026. On August 11, 2026, the Defense Office of Hearings and Appeals (DOHA) notified Applicant that the hearing was scheduled to be conducted on September 14, 2026. I convened the hearing as scheduled. Government Exhibits (GE) 1 through 9 were admitted in evidence after Applicant withdrew his objections1 to GEs 3 and 4. Applicant 1 Applicant objected to GEs 3 and 4 because he was concerned that their descriptions on the Government’s exhibit list (Hearing Exhibit (HE) I) were misleading and could be read as pertaining to two different bankruptcies, when he in fact only had one. We confirmed that the exhibits themselves displayed the same bankruptcy case number, removing any possible confusion. Applicant withdrew his objections and had no further objections.

testified but did not present the testimony of any other witnesses. He submitted Applicant’s Exhibits (AE) A through S, which were admitted without objection. The record closed on September 14, 2026. DOHA received the transcript on September 21, 2026. Findings of Fact The SOR alleges Applicant filed for Chapter 13 bankruptcy in 2024, which was dismissed in 2025 (SOR ¶ 1.a); he failed to file Federal income tax returns for tax years (TY) 2022 and 2024 (SOR ¶ 1.b); he is indebted to the Federal government for those two tax years in the amount of about $9,694 (SOR ¶ 1.c); he failed to file State A income tax returns for TY 2022 and 2024 (SOR ¶ 1.d); and he has four delinquent consumer debts, totaling $8,308. He admitted all the allegations. His admissions are incorporated into the findings of fact. Additional findings follow. Applicant is 48 years old. He earned an associate degree in 2014. He married in 2000, divorced in 2025, and has one adult child. He has worked for his current employer since 2021. (GE 1, 2; Tr. 19-20) Applicant’s financial troubles initially began in 2019. At that time, he and his then- wife were living with and taking care of his disabled father and mother. Even before that time, they had been financially assisting his parents. Applicant was in a car accident in April 2019 and had to retain an attorney in case a lawsuit resulted in damages beyond what his insurance would pay (insurance later covered all costs). His father was hospitalized in June 2019 due to complications from diabetes and heart issues. Anticipating that the family home would need to be modified in order for his father to be able to move on his own, Applicant and his wife decided to buy the home from his parents and take out additional money to remodel the home. They closed on the home in summer 2019. (GE 1, 2; Answer; Tr. 21-22) They began the remodeling process immediately after closing, but five days after the remodeling began, Applicant’s father died. Because his parents had little savings, Applicant ended up having to use some of the money intended for the remodel to pay for the funeral. Shortly after that, his mother started acting strangely and moved out of the house within six months of her husband’s death. In June 2020, Applicant’s wife became epileptic and had seizures every one to two months for the next three years. She could not drive and was out of work. During that time, Applicant continued trying to remodel the home and was hospitalized for a bad infection and diagnosed with diabetes. (Tr. 22-25) In 2023, Applicant received a phone call from a man his mother had moved in with. The man was concerned with her behavior and wanted Applicant to pick her up and take her to the doctor. Applicant’s mother moved in with him and his wife in November 2023, suspecting dementia, and received a dementia diagnosis by the end of the year. Applicant explained that, with all this as background, he forgot about filing his TY 2022 income tax returns. He had requested an extension, but with everything else going on, he forgot to actually file the returns. (GE 1, 2; Answer; Tr. 24-26) 2

In March 2024, Applicant and his wife decided to separate. She let him keep the home. With only one income, Applicant was financially stretched paying for the mortgage and caring for his mother on his own. In June 2024, Applicant had a heart attack. He was in intensive care for three days and was on short-term disability for two months, which reduced his income while he recovered. It was at that time he decided to look into Chapter 13 bankruptcy. (GE 1, 2; Answer; AE F, G; Tr. 26-27) Applicant filed for Chapter 13 bankruptcy in July 2024. Applicant testified that he “didn’t have the greatest of lawyers” and he started incurring fees from the bankruptcy process sooner than he had anticipated. He made one or two $1,000 payments but he did not have the money to keep paying and he decided to have the bankruptcy dismissed in April 2025. His failure to file his TY 2022 tax returns also precluded proceeding with the bankruptcy. (GE 1-4; AE B; Tr. 28, 32, 35) Although he originally did not want to, Applicant ultimately decided to sell the home he was living in and use the equity in the home to pay off his debts, get himself back on track, and have some cushion for his mother’s expenses. He was delayed in selling the home due to a dispute with his neighbor over a fence. He sold the home in January 2026 and received about $120,000 in net proceeds. In order for him to go back to work, he had to put his mother in an assisted living facility. Her own income does not fully cover the expenses, so he typically has to pay about $1,000 a month to cover everything. She has been in the facility for about two years. He is going through the process of requesting Medicaid coverage for her assisted living costs, but he has been told that will take many years. He explained that he no longer intends to file for bankruptcy because the sale of his home has allowed him to pay off his debts and he is currently learning how to better manage his money. (Answer; AE M-P, R; Tr. 28-34, 49, 61, 69-71) Applicant mailed all outstanding Federal and State A returns in March 2026 to the IRS and the state tax authority. At the time, he calculated owing $9,694 in total Federal taxes. He had tremendous difficulty getting updates on his return statuses, so he re-sent the returns in May 2026. He submitted a September 7, 2026 tax account transcript for TY 2022 showing “tax return secured” on June 30, 2026 and a zero balance, and an IRS Tax Compliance Report showing the return was received 989 days after the due date. (AE C) He explained that he understood this to mean the IRS had received his return but had not processed it yet. He is currently awaiting the processing of the return so he can pay the balance owed. His ex-wife has agreed to pay half of the balance, and he has set aside $5,000 to pay his share. He stated that, if she does not have the money to pay her share, he intends to take responsibility for it and arrange for her to pay him back at a later date. (GE 2, 6; AE C; Answer; Tr. 24-25, 36-39, 46-47) Applicant provided a September 7, 2026 tax account transcript for TY 2024 showing the return was received on May 26, 2026 and has a zero balance. Applicant testified that TY 2024 is “all taken care of” because his TY 2025 refund covered the roughly $6,000 owed for TY 2024. He was due refunds for TY 2022 and 2024 from State 3

A but was ineligible for the TY 2022 refund due to the passage of time. He filed his TY 2025 Federal and state tax returns on time. (GE 2, 5; AE C; Answer; Tr. 39-45) All four alleged consumer debts were initially enrolled in Applicant’s bankruptcy. SOR ¶¶ 1.e, 1.g, and 1.h are listed on the May 2025 credit bureau report (CBR) and all four accounts are listed on the January 2026 CBR. The September 2026 CBR reflects SOR ¶¶ 1.e and 1.g were “legally paid in full for less than full balance” and SOR ¶ 1.h is “paid/zero balance.” SOR ¶ 1.f is still listed with a balance of $1,831. There are no new delinquent debts reported on the CBR. (GE 2-4, 7-9) Applicant testified that the debt alleged in SOR ¶ 1.e was taken out to finish some of the home remodeling and other costs. It became delinquent when he and his wife separated in March 2024. It was originally enrolled in his bankruptcy, but he negotiated with the creditor directly at the end of 2025 and paid it once he received the proceeds from the sale of his home. (AE L; Answer; Tr. 48-51) Applicant testified that the debt alleged in SOR ¶ 1.f was settled for fifty percent of the original balance and provided proof that he paid that amount on March 13, 2026. He did not know why it was reported as unpaid on his most recent credit report, but he intended to dispute the report. Applicant testified that the debts alleged in SOR ¶¶ 1.g and 1.h were credit cards for remodeling and living expenses. He has paid both and provided supporting documentation. (GE 9; AE E, Q; Answer; Tr. 51-56, 65-66) Applicant testified that he is taking a self-paced financial literacy course online. He also has financially-savvy friends who are helping him work on a budget. He put about $50,000 of the proceeds from the sale of his home toward his debts. He spent the remainder on paying six months of rent up front at his new residence, furniture, and several small weekend vacations. He described his situation as living paycheck to paycheck, but he is not currently behind on any of his bills. (Tr. 60-63) Applicant provided several documents showing that he had paid off other delinquent accounts not alleged on the SOR. He also submitted several messages from his employer praising his work and rewarding him with bonuses or salary increases consistently since 2022. (AE D, H-K, S; Answer) 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 4

“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). 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). 5

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. The evidence establishes the following disqualifying conditions under this guideline: AG ¶ 19(a): inability to satisfy debts; AG ¶ 19(c): a history of not meeting financial obligations; and AG ¶ 19(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 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; 6

AG ¶ 20(d): the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts; and AG ¶ 20(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. Applicant’s financial issues started in 2019 and did not stop until 2025. They stemmed from costly illnesses for both himself and his family members, a death, and divorce—all conditions largely beyond his control. He acted responsibly in July 2024 when he filed for bankruptcy, but, when he was unable to afford that option, he chose to sell his home in order to resolve his financial issues. He has now filed all outstanding tax returns; paid all known taxes owed; saved money to put toward the impending TY 2022 tax bill; and paid or settled all his delinquent consumer debts. He has no new delinquent debt. He is actively working to reduce the cost of his mother’s care through Medicaid, and he is using online resources and trusted friends to help him budget and avoid future financial issues. He is successful in his career and has consistently earned bonuses and salary increases. The circumstances that led to his financial issues are unlikely to recur and do not cast doubt on his current reliability, trustworthiness, or good judgment. AG ¶¶ 20(a), 20(b), 20(d), and 20(g) are established for all allegations. 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). I found Applicant’s testimony to be sincere and honest regarding both his past financial circumstances and his financial plans for his future. After weighing the disqualifying and mitigating conditions under Guideline 7

________________________ F and evaluating all the evidence in the context of the whole person, I conclude that Applicant has mitigated the security concerns raised by his financial considerations. 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: FOR APPLICANT Subparagraphs 1.a-1.h: For Applicant Conclusion I conclude 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. A. M. Driskill Administrative Judge 8