ISCR Case No. 26-00773

______________ ______________ DEFENSE LEGAL SERVICES AGENCY DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 26-00773 ) Applicant for Security Clearance ) Appearances For Government: Tovah Minster, Esq., Department Counsel For Applicant: Pro se 09/29/2026 Decision HYAMS, Ross D., Administrative Judge: Applicant failed to mitigate the financial considerations security concerns. Eligibility for access to classified information is denied. Statement of the Case On November 6, 2025, Applicant submitted a security clearance application (SCA). On May 20, 2026, the Defense Counterintelligence and Security Agency (DCSA) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline F (financial considerations). Applicant answered the SOR on June 10, 2026, and requested a hearing before an administrative judge. The case was assigned to me on August 6, 2026. The hearing was convened on September 10, 2026. Department Counsel submitted Government Exhibits (GE) 1-5, which were admitted in evidence without objection. Applicant submitted Applicant Exhibits (AE) A-H, which were admitted without objection. After the hearing ended, I kept the record open for two weeks to allow him to submit additional documentation. He timely submitted AE I-P, which were admitted without objection. Findings of Fact The SOR alleges about $48,000 of delinquent consumer debt (¶¶ 1.a-1.f). In his Answer, Applicant admitted SOR allegations ¶¶ 1.a, 1.c-1.f, and denied SOR allegation

¶ 1.b, with explanation. Based on my review of the pleadings, evidence submitted, and testimony, I make the following findings of fact. Applicant is 44 years old. He married in 2019 and has two minor children, and three adult stepchildren. He graduated high school in 2000 and earned an associate degree in 2012. He has worked for a government contractor doing information technology (IT) support since August 2023. (Tr. 17-23; GE 1) Applicant became voluntarily unemployed in January of 2022. He was working for his current employer, a government contractor, as a supervisor on a government IT contract but started feeling burnt-out. He decided to take six months off to “career explore”, learn about real estate investment, and perhaps make a career change. He was asked why he did not use his weekends to learn about new careers and real estate investments and remain employed, and he stated his job was demanding and he needed weekends to rest and recover. Applicant’s wife was periodically employed during this time. His plan was to live off his savings during this period until his income restarted. He used credit cards to help make his savings last longer, which is how he accumulated large amounts of credit card debt. In the summer of 2022, Applicant’s wife became pregnant and he said she had a difficult time. He chose not to return to work, but to stay home with her while she was pregnant. He used his savings and credit card to pay their household expenses, but by mid-2023 his savings were running out, and he could no longer keep up with his finances. He sought work with his former employer in April of 2023, but they were under a hiring freeze. He was unable to find other employment. In August of 2023, he was able to find a position with his former employer, but by that time, he had completely exhausted his savings, ran up over $40,000 of credit card debt, and was “penny pinching” to pay any of his bills. When Applicant returned to work, he was no longer a supervisor and was making $20,000 less annually than he previously had earned. Despite being reemployed, he was unable to make payments on his debts. His credit report submissions reflect that the accounts became delinquent in September 2023. In 2024 and 2025, he started doing “gig work” to earn extra money to pay their basic expenses. His wife remained out of work during this time too. (AE L-P) In early 2026, Applicant started flex work for a large retailer, to assist with his expenses. He provided documentation showing he has added over $2,000 monthly to his income. He reported a new employer is taking over the contract at his job, and he expects a pay raise of about $20,000, putting him back to what he was earning in January 2022. He expects this income will provide him with the flexibility he needs to resolve delinquent debt. (Tr. 23-44; AE F-H) Applicant provided a budget showing he has a $566 monthly remainder. When he gets his salary increase, he expects to have a $1,949 monthly remainder. He and his wife 2

currently have no savings. He has considered exploring debt consolidation to resolve the debts but asserted he needs more income before he can make payments. (Tr. 44-49; AE I-K) Under Guideline F, the allegations are as follows: SOR ¶ 1.a alleges Applicant is indebted on a credit card account charged off for $28,522. He used this credit card to help pay for expenses when he was not working. He reached his credit limit, and he was unable to make payments. This debt became delinquent in September 2023. He hopes to make a payment arrangement with them in the future when his finances have stabilized, but no arrangements have been made and this debt remains unresolved. (Tr. 23-44; GE 4, 5; AE E, P) SOR ¶ 1.b alleges Applicant is indebted to a cellular phone company on an account placed for collection for $577. He reported his phone was destroyed in the washing machine. He claimed he called them to turn off his cellular service but he was charged for several more months. He unsuccessfully tried to dispute the debt with the credit reporting company. He stated he may pay this debt if it still creates a problem for him. This debt remains unresolved. (Tr. 23-44; GE 4, 5) SOR ¶ 1.c alleges Applicant is indebted on a credit card account charged off for $8,054. He used this credit card to help pay for expenses when he was not working. He reached his credit limit, and he was unable to make payments. This debt became delinquent in September 2023. He hopes to make a payment arrangement with them in the future when his finances have stabilized, but no arrangements have been made and this debt remains unresolved. (Tr. 23-44; GE 4, 5; AE B, O) SOR ¶ 1.d alleges Applicant is indebted on a credit card account charged off for $7,612. He used this credit card to help pay for expenses when he was not working. This debt became delinquent in September 2023. He claimed that he has been making $70 monthly payments the whole time, which are auto deducted from his account, even after it was charged off. The documentation he provided substantiated this, and the current balance is $5,652. His account became delinquent and charged off because his payments were under the minimum amount due. (Tr. 23-44; GE 4, 5; AE D, M) SOR ¶ 1.e alleges Applicant is indebted on a credit card account charged off for $2,694. He used this credit card to help pay for expenses when he was not working. He reached his credit limit, and he was unable to make payments. This debt became delinquent in September 2023. Recently, the creditor started a collection action against him in court. He made a payment arrangement with them in June of 2026 so that they would not seek a judgement against him. He provided documentation showing that he has agreed to pay $96 monthly, which was to start in July 2026. He did not try to resolve this debt until the action was brought against him. (Tr. 23-44; GE 4, 5; AE A, C, N) SOR ¶ 1.f alleges Applicant is indebted on a consumer account charged off for $367. This debt was for a line of credit with an electronics manufacturer. He has not contacted the creditor, and this debt remains unresolved. (Tr. 23-44; GE 4, 5) 3

Policies This case is adjudicated under Executive Order (EO) 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), which became effective on June 8, 2017. When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines. In addition to brief introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which are to be used in evaluating an applicant’s eligibility for access to classified information. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, administrative judges apply the guidelines in conjunction with the factors listed in the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶ 2(c), the entire process is a conscientious scrutiny 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 that “[a]ny doubt concerning personnel being considered for national security eligibility will be resolved in favor of the national security.” Under Directive ¶ E3.1.14, the Government must 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.” The applicant has the ultimate burden of persuasion to obtain a favorable security 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 access to classified information. 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 of potential, rather than actual, risk of compromise of classified information. Section 7 of EO 10865 provides that adverse decisions shall be “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive information). 4

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. This concern is broader than the possibility that an individual might knowingly compromise classified information in order to raise money. It encompasses concerns about an individual’s self-control, judgment, and other qualities essential to protecting classified information. An individual who is financially irresponsible may also be irresponsible, unconcerned, or negligent in handling and safeguarding classified information. ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012). The guideline notes conditions that could raise security concerns under AG ¶ 19. The following are applicable in this case: (a) inability to satisfy debts; and (c) history of not meeting financial obligations. Conditions that could mitigate 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 5

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; and (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. AG ¶ 20 (d) applies to SOR ¶ 1.d, and it is resolved in Applicant’s favor. None of the other mitigating conditions apply. Applicant’s financial problems are primarily due to voluntary unemployment, which is not a circumstance beyond his control. His underemployment when he re-entered the job market and his wife’s difficulties with her pregnancy were circumstances beyond his control. However, he did not provide sufficient evidence that he acted responsibly under the circumstances. After six months of “career exploring” he decided to stay home with his pregnant wife. He only sought work once their finances were in serious distress. He did not provide sufficient evidence that he sought to make arrangements with his creditors when he could no longer pay them. Applicant’s failure to pay delinquent debt is recent, not isolated, and ongoing. It cannot be found unlikely to recur. He did not provide sufficient evidence to find the problem is under control, he is adhering to a good faith effort to resolve debt, or he has a reasonable basis to dispute the legitimacy of the debts. He did not provide sufficient evidence to find that he is currently financially stable. All of this continues to cast doubt on his current reliability, trustworthiness, and judgment. While Applicant engaged in “gig work” for a time to earn extra money, he only earnestly started working a second job in January 2026 to supplement his income. His income is set to increase with his new employer, but he has not provided a sufficient track record of debt resolution or financial stability that supports finding for him on the financial security concerns at this time. Whole-Person Concept Under the whole-person concept, the 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. 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; 6

________________________ (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 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 potentially disqualifying and mitigating conditions in light of all the facts and circumstances surrounding this case. I considered his service to the government working for a government contractor. I have incorporated my comments under Guideline F in my whole- person analysis. Overall, the record evidence leaves me with questions and doubts about Applicant’s eligibility for a security clearance. I conclude that Applicant has not mitigated the financial considerations security concerns. This decision should not be construed as a determination that Applicant cannot or will not attain the state of reform necessary for eligibility for access to classified information in the future. 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.c: Against Applicant Subparagraph 1.d: For Applicant Subparagraphs 1.e-1.f: Against Applicant Conclusion It is not clearly consistent with the national interest to grant Applicant a security clearance. Eligibility for access to classified information is denied. Ross D. Hyams Administrative Judge 7