They can when they reveal poor decision making. If this guy is so stupid that he's willing to stick his dick in anyone, including a Chinese spy, what does that say about his ability to make rational decisions elsewhere in his life? He's clearly not making decisions that benefit him personally in the long term so can he even make good long term decisions at his job?

There's a reason why government background checks looks at financial records. Someone that has trouble paying their bills due to a gambling habit might be easy to turn by the enemy with some cash. Or someone that regularly cheats on their wife might be willing to do some favors for a pretty girl if she lets him sleep with her.