KEYWORD: Financial; Personal Conduct
DIGEST: Applicant has a history of failing to meet his financial obligations dating back to 2001. As
of the date of his hearing, he had four accounts, owing approximately $5,000 that have been
delinquent for many years. His financial problems were, to a limited extent, the result of
circumstances beyond his control. Notwithstanding, Applicant’s evidence is insufficient to show he
has a track record of financial responsibility. More importantly, he deliberately falsified his security
clearance application. Clearance is denied. 
CASENO: 06-07554.h1
DATE: 04/30/2007
DATE: April 30, 2007
In re:
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SSN: -----------
Applicant for Security Clearance
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ISCR Case No. 06-07554
DECISION OF ADMINISTRATIVE JUDGE
JUAN J. RIVERA
APPEARANCES
FOR GOVERNMENT
Daniel Crowley, Esq., Department Counsel
FOR APPLICANT
Pro Se
SYNOPSIS
2
Applicant has a history of failing to meet his financial obligations dating back to 2001. As
of the date of his hearing, he had four accounts, owing approximately $5,000 that have been
delinquent for many years. His financial problems were, to a limited extent, the result of
circumstances beyond his control. Notwithstanding, Applicant’s evidence is insufficient to show he
has a track record of financial responsibility. More importantly, he deliberately falsified his security
clearance application. Clearance is denied. 
  GE 1 (Electronic Questionnaires for Investigations Processing (e-QIP), dated September 21, 2005.1
  See Executive Order 10865, Safeguarding Classified Information Within Industry (Feb. 20, 1960, as amended,2
and Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (Jan.
2, 1992) (Directive), as amended.
  GE 2 (Credit bureau report (CBR), dated October 2005, and GE 6 (CBR, dated March 2007).3
3
STATEMENT OF THE CASE
On September 21, 2005, Applicant submitted a security clearance application.  On June 12,1
2006, the Defense Office of Hearings and Appeals (DOHA) issued Applicant a Statement of Reasons
(SOR) alleging facts that raise security concerns under Guideline F (Financial Considerations) and
Guideline E (Personal Conduct). The SOR informed Applicant that, based on information available
to the Government, DOHA adjudicators could not make a preliminary affirmative finding that it is
clearly consistent with the national interest to grant him access to classified information and
recommended that his case be submitted to an administrative judge for a security determination.  On2
June 29, 2006, Applicant answered the SOR (Answer) and requested a hearing.
The case was assigned to me on February 27, 2007. On March 29, 2007, I convened a hearing
at which the government presented one witness and six exhibits, marked GE 1-6, to support the
SOR. Applicant testified on his own behalf, and presented six exhibits, marked AE 1-6, which were
admitted without objection. DOHA received the transcript (Tr.) on April 11, 2007.
FINDINGS OF FACT
Applicant denied all SOR allegations with explanations. His explanations are incorporated
herein as findings of fact. After a thorough review of the pleadings, Applicant’s testimony, and the
evidence, I make the following additional findings of fact:
Applicant is a 40-year-old information technology technician. He attended college and
received a bachelor’s degree in electrical engineering. (Tr. 5) He has no military service. Applicant
has never been married and disclosed no children. He has worked for his current employer, a defense
contractor, since June 2004, and requires access to classified information to retain his job.
In his September 2005 security clearance application, Applicant answered “No” to
questions 28a and 28b, and failed to list any debts over 180 days delinquent he had during the last
seven years, or any current debts over 90 days delinquent (respectively). The subsequent background
investigation revealed he had four outstanding delinquent accounts which have been alleged in SOR
¶¶1.a - 1.d. 
At his hearing, Applicant admitted he acquired the alleged debts and that they are
outstanding. Applicant testified he is not legally responsible for the alleged debts and does not intend
to pay off the debts. SOR ¶1.a concerns a $4,329 debt currently in collection by a collection agency
for a credit card account Applicant opened around June 2001. After Applicant became delinquent,
the credit card company charged off the debt and sold it to the collection agency around June 2002.3
Applicant testified the credit card was sent to him by mail, unsolicited, and that he has no obligation
  AE 5.4
  GE 2.5
  GE 3 (Personal Subject Interview, dated November 22, 2005).6
4
to pay the debt because he did not sign a contract with the credit card company. He claimed he asked
the credit card company twice to take the card back and they told him to keep it. He used the card
when he was unemployed to pay for day to day living expenses. He averred he only charged
approximately $1,500. (Tr. 40, 66) Applicant claimed he made some payments on the account, but
he was unemployed/underemployed, and his lack of earnings prevented him from making any more
payments. In 2002, the credit card company went out of business. He has refused to recognize the
collection agency as the credit holder of the debt. He refused to make payments to the collection
agency, because his contract was with the credit card company. He presented evidence showing the
credit card company went out of business in 2002.  4
SOR ¶1.b concerns a $360 suit (approximately value) Applicant purchased on credit in
October 2002. He made some payments, but ultimately defaulted on the account. He claimed he
attempted to contact the seller several times to make payments, but was not able to pay/contact the
seller who had gone out of business (bankrupt). The seller charged off $174 in October 2003, and
the account was sold to a collection agency. Applicant has refused to pay the collection agency
because his business was with the seller, not with the collection agency.
SOR ¶1.c concerns a $443 collection for a wireless phone service account. Applicant opened
the account sometime in 2004.  He entered into a dispute with the company concerning repairs to5
his cell phone, and the length of his service contract. The company refused to acknowledge that he
only had a one year service contract, and he refused to pay the debt. AE 6 (an invoice from the same
wireless provider, dated March 22, 2007), shows Applicant has a current account with the provider
and is making regular payments. 
SOR ¶1.d concerns a $112 collection for another wireless account. Applicant testified the
$112 was for roaming charges he refused to pay. When he entered into the wireless service contract,
he was told he would not be billed for roaming charges. After a month’s use, he received a statement
collecting roaming charges and he refused to pay them. He claimed he paid other valid charges in
the account, but disputed the roaming charges with the provider. He presented no evidence, other
than his testimony, to substantiate his claims. 
On November 22, 2005, Applicant was interviewed by a government-contracted investigator
as part of his background investigation. He was confronted with the four debts alleged in the SOR,
and asked about his intentions with respect to the four delinquent debs. He stated he had no intention
to pay off the debts.  6
At his hearing, Applicant testified he is not legally responsible for the alleged debts and does
not intend to pay off the debts. Concerning SOR ¶¶ 1.a and 1b, he explained that the original
creditors are out of business and he has no contract with the collection agencies. He is disputing the
debts alleged in SOR ¶¶ 1.c and 1d, and as such, he stated he is not going to pay them. Additionally,
he averred that all four debts are more than seven years old. As such, he believes the debts are not
legally enforceable under the state’s statute of limitations, and should have been dropped off from
  Tr. 72-75, 83.  See AE 2, AE 3, and AE 4 for an explanation of Applicant’s financial theory.7
  Directive ¶ 6.3. Each clearance decision must be a fair and impartial common sense determination based upon8
consideration of all the relevant and material information and the pertinent criteria and adjudication policy in enclosure
2.
  Directive ¶ E2.2.1. “. . . The adjudicative process is the careful weighing of a number of variables known as9
the whole person concept. Available, reliable information about the person, past and present, favorable and unfavorable,
should be considered in reaching a determination. . . .” The whole person concept includes the consideration of the nature
and seriousness of the conduct and surrounding circumstances; the frequency and recency of the conduct; the age of the
applicant; the motivation of the applicant, and the extent to which the conduct was negligent, willful, voluntary, or
undertaken with knowledge of the consequences involved; the absence or presence of rehabilitation; and the probability
that the circumstances or conduct will continue or recur in the future. 
5
his CBRs. Applicant further claimed that he resolved (discharged) the alleged debts by filing a UCC
Financing Statement in July 12, 2006. At his hearing, Applicant presented a convoluted financial
theory (UCC/Redemption Process), under which Applicant claimed he has able to discharge his
debts by filing a UCC Financial Statement and offering his personal credit to offset the debts.7
Applicant testified, and the evidence shows, that he is current in all of his other financial
obligations. Since taking his current job in June 2004, Applicant has had a monthly remainder of
approximately $1,000 after paying his debts and living expenses. He claimed that his financial
problems were the result of periods of unemployment. The evidence shows he was unemployed from
1993 to 1995, from January to July 2000, and from April to May 2004. While unemployed, he did
not have enough income to support himself and to pay for his delinquent debts. From 1998 to the
present he has worked as a mathematics teacher, program coordinator, sales representative, substitute
teacher, and IT technician. 
Applicant testified he did not intend to falsify his security clearance application. He believed
that, because he was not legally obligated to pay the debts, he was not required to disclose them. He
considers himself to be reliable, trustworthy, and with good judgment. In support of his assertions,
he submitted 33 character reference letters from supervisors, co-workers, and friends. Applicant is
characterized as a hard-working person, with exceptional on-duty performance, excellent technical
knowledge, and outstanding work ethics. In general, his references attest to Applicant’s honesty,
trustworthiness, good judgment, and dependability. There is no evidence Applicant has mishandled,
or caused the compromise of classified information while employed by a defense contractor.
POLICIES
The Directive sets forth adjudicative guidelines which must be considered in evaluating an
Applicant’s eligibility for access to classified information. Foremost are the disqualifying and
mitigating conditions under each adjudicative guideline applicable to the facts and circumstances
of the case. However, the guidelines are not viewed as inflexible ironclad rules of law. The presence
or absence of a disqualifying or mitigating condition is not determinative of a conclusion for or
against an Applicant. Each decision must also reflect a fair and impartial common sense
consideration of the factors listed in Section 6.3 of the Directive,  and the whole person concept.8 9
Having considered the record evidence as a whole, I conclude Guideline F (Financial
  See Department of the Navy v. Egan, 484 U.S. 518, 531 (1988).10
  ISCR Case No. 98-0761 at 2 (App. Bd. Dec. 27, 1999)(Substantial evidence is more than a scintilla, but less11
than a preponderance of the evidence.); ISCR Case No. 02-12199 at 3 (App. Bd. Apr. 3, 2006)(Substantial evidence is
such relevant evidence as a reasonable mind might accept as adequate to support a conclusion in light of all the contrary
evidence in the record.); Directive ¶ E3.1.32.1.
  Egan, 484 U.S. 518, at 528, 531.12
  See, id.; Directive ¶ E2.2.2.13
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Considerations) and Guideline E (Personal Conduct) are the applicable relevant adjudicative
guidelines.
BURDEN OF PROOF
The purpose of a security clearance decision is to determine whether it is clearly consistent
with the national interest to grant or continue an applicant’s eligibility for access to classified
information.  A person who has access to classified information enters into a fiduciary relationship10
with the government based on trust and confidence. The government, therefore, has a compelling
interest to ensure each applicant possesses the requisite judgement, reliability and trustworthiness
of one who will protect the national interests as his or her own. 
The government has the initial burden of proving controverted facts alleged in the SOR. To
meet its burden, the government must establish by substantial evidence  a prima facie case that it11
is not clearly consistent with the national interest for the applicant to have access to classified
information. The responsibility then shifts to the applicant to refute, extenuate or mitigate the
government’s case. Because no one has a right to a security clearance, the applicant carries a heavy
burden of persuasion.  The “clearly consistent with the national interest” standard compels12
resolution of any reasonable doubt about an applicant’s suitability for access to classified information
in favor of protecting national security.13
7
CONCLUSIONS
Applicant has a history of failing to meet his financial obligations dating back to around
2001. He accumulated approximately $5,000 in four debts resulting from periods of unemployment
and the use of his credit to pay for day to day living expenses. As of the day of the hearing, he still
had the same four delinquent/charged off debts, owing approximately $5,000. Financial
Considerations Disqualifying Condition (FC DC) 1: A history of not meeting financial obligations;
and FC DC 3: Inability or unwillingness to satisfy debts, apply in this case. 
Appellant established mitigating factors that I have considered as circumstances beyond his
control contributing to his inability to pay his debts -- i.e., his three periods of unemployment.
Financial Considerations Mitigating Condition (FC MC) 3: The conditions that resulted in the
behavior were largely beyond the person’s control (e.g., loss of employment, a business downturn,
unexpected medical emergency, or a death, divorce or separation), applies, but only to a limited
extent. The evidence also shows that since 2001, Applicant ignored his delinquent debts and took
little or no action to pay or resolve his debts. Since June 2004, he has had means to pay but refused
to do so. Accordingly, his indebtedness, since at least when he was hired for his current job, has not
been beyond his control at all.
I specifically considered FC MC 6: The individual initiated a good-faith effort to repay
overdue creditors or otherwise resolve debts, and conclude it does not apply. Applicant’s
uncorroborated claims of contacts with creditors to make/attempt payments and to dispute his
financial obligations are not sufficient to trigger the applicability of this mitigating condition. 
Applicant claimed his financial obligations are old and not legally enforceable (because of
the passing of the statute of limitations), that the debts should have been removed from his CBRs
after seven years, and that he resolved the debts by filing a UCC Financial Statement. His arguments
are not persuasive. On balance, and after careful consideration of all information, Applicant’s
evidence is not sufficient to show he has dealt responsibly with his financial obligations. Applicant
presented little or no evidence to show he paid debts, established or sought settlements/negotiations,
established payment plans, budgets, sought financial assistance/counseling before or after receipt of
the SOR. Applicant’s financial history and lack of favorable evidence preclude a finding that he has
established a track record of financial responsibility. 
Considering Applicant’s age, education, and work experience, his claim that he believed he
could resolve/discharge his financial obligations by filing a UCC Financial Statement is preposterous
and disingenuous. He solicited credit and obtained goods and services based on his promise to repay
his financial obligations. Unable to repay his financial obligations, a reasonable, responsible person
would have used legally recognized means available to all United States citizens to revolve his credit
problems, i.e., settlements, negotiations, payment plans, and filing for bankruptcy protection. Instead,
he chose to disregard his financial obligations and waited for the passing of the statute of limitations.
Notwithstanding the circumstances beyond his control, Applicant demonstrated a lack in
judgment and trustworthiness in the handling of his financial affairs. He failed to present sufficient
evidence to demonstrate good faith efforts to resolve his debts, or of the reasons that prevented him
from discharging his financial obligations. Guideline F is decided against Applicant.
  Directive, ¶ E2.A5.1.1.14
8
Under Guideline E, personal conduct is always a security concern because it asks the ultimate
question – whether a person’s past conduct instills confidence the person can be trusted to properly
safeguard classified information. An applicant's conduct is a security concern if it involves
questionable judgment, untrustworthiness, unreliability, lack of candor, dishonesty, or unwillingness
to comply with rules and regulations. Such behavior could indicate that the person may not properly
safeguard classified information.14
The government established, and Applicant admitted, that he failed to disclose the debts
alleged in SOR ¶¶ 1.a - 1.d in his response to questions 28a and 28b of his security clearance
application.
Considering the record as a whole, I am convinced Applicant deliberately failed to disclose
his delinquent debts. Numerous factors weighed in my analysis to reach that conclusion, including:
Applicant’s age, his level of education, his employment history, his demeanor and testimony, the
number and value of the debts, his long term disregard of the debts, and the submission of his
unrealistic financial theory to justify his behavior. I also considered the same reasons previously
outlined under the Guideline F discussion, incorporated herein. Personal Conduct Disqualifying
Condition (PC DC) E2.A5.1.2.2: the deliberate omission, concealment, or falsification of relevant
and material facts from any personnel security questionnaire, personal history statement, or similar
form used to conduct investigations, determine employment qualifications, award benefits or status,
determine security clearance eligibility or trustworthiness, or award fiduciary responsibilities,
applies.
I specifically considered all Guideline E Mitigating Conditions and concluded that none
apply. The evidence available in this case is not sufficient to support the applicability of any of the
mitigating conditions. Although the falsification occurred in 2005, considering the totality of the
circumstances in Applicant’s case, the passage of time alone is not sufficient to mitigate the security
concerns raised by his behavior. The falsification occurred on the same security clearance
application that is now under adjudication. Additionally, for the same reasons outlined above under
the discussion of Guidelines F, incorporated herein, I conclude Applicant’s behavior shows
questionable judgment, lack of reliability, and untrustworthiness. Guideline E is decided against
Applicant.
I have carefully weighed all evidence, and I applied the disqualifying and mitigating
conditions as listed under the applicable adjudicative guidelines. I applied the whole person
concept. I specifically considered Applicant’s maturity, his years of good performance working for
a defense contractor, and his good reputation. Considering the totality of Applicant’s circumstances,
Applicant demonstrated a lack in judgment and trustworthiness in the handling of his financial
affairs. He failed to provide credible information to justify or mitigate his unwillingness to satisfy
his delinquent debts. Moreover, Applicant failed to present sufficient evidence to mitigate the
overall judgment, honesty, and trustworthiness security concerns raised by his falsifications.
9
FORMAL FINDINGS
Formal findings regarding each SOR allegation as required by Directive Section E3.1.25 are
as follows:
Paragraph 1, Financial Considerations (Guideline F) AGAINST APPLICANT
Subparagraphs 1.a - 1.e Against Applicant
Paragraph 2, Personal Conduct (Guideline E) AGAINST APPLICANT
Subparagraphs 2.a - 2.c Against Applicant
DECISION
In light of all the circumstances presented by the record in this case, it is not clearly
consistent with the national interest to grant or continue a security clearance for Applicant.
Clearance is denied.
Juan J. Rivera
Administrative Judge