KEYWORD: Financial
DIGEST: While Applicant's financial problems raised security concerns because of his long-standing
debts to several creditors, in 2006 he begin a good-faith effort to resolve debts with credit solutions.
Since then, he has been consistently make payments on several large debts.  He negotiated an
agreement with another creditor in 2007 to pay an additional large debt.  The only unresolved debts
are small, dated medical debts as his payment checks were returned as the collection agency was no
longer in business.  Overall, he demonstrated a plan to systematically resolve his other debts; he has
paid several of his debts and has a plan to resolve the remainder.  He has stable employment and
lives prudently.  He is highly regarded as trustworthy and recommended for a security clearance by
his employer.  Consequently, concerns over financial issues can be mitigated.  Clearance is granted.
CASENO: 05-14750.h1
DATE: 05/31/2007
DATE:  May 31, 2007
In Re:
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SSN: -----------
Applicant for Security Clearance
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ISCR Case No. 05-14750
DECISION OF ADMINISTRATIVE JUDGE
KATHRYN MOEN BRAEMAN
APPEARANCES
FOR GOVERNMENT
John Bayard Glendon, Esq., Department Counsel
FOR APPLICANT
Pro Se
       This procedure is required by Executive Order 10865, as amended, and Department of Defense Directive1
5220.6, dated January 2, 1992 (Directive), as amended.   
2
SYNOPSIS
While Applicant's financial problems raised security concerns because of his long-standing
debts to several creditors, in 2006 he begin a good-faith effort to resolve debts with credit solutions.
Since then, he has been consistently make payments on several large debts.  He negotiated an
agreement with another creditor in 2007 to pay an additional large debt.  The only unresolved debts
are small, dated medical debts as his payment checks were returned as the collection agency was no
longer in business.  Overall, he demonstrated a plan to systematically resolve his other debts; he has
paid several of his debts and has a plan to resolve the remainder.  He has stable employment and
lives prudently.  He is highly regarded as trustworthy and recommended for a security clearance by
his employer.  Consequently, concerns over financial issues can be mitigated.  Clearance is granted.
STATEMENT OF THE CASE
The Defense Office of Hearings and Appeals (DOHA) issued a Statement of Reasons (SOR)
to the Applicant on April 13, 2006.  The SOR detailed reasons why the Government could not make
the preliminary positive finding that it is clearly consistent with the national interest to grant or
continue a security clearance for the Applicant.   The SOR alleges specific concerns over finances1
(Guideline F).  Applicant responded to these SOR allegations in an Answer notarized on April 28,
2006, where he admitted in part and denied in part the allegations; he requested a decision without
a hearing.  A File of Relevant Material (FORM) was forwarded on June 19, 2006; in his response
of August 26, 2006, Applicant submitted documentation on his efforts to resolve his debts, but at that
point requested a hearing on his case.  The Administrative Judge assigned to the FORM forwarded
the file to the Chief Administrative Judge on October 10, 2006: the Memorandum noted Applicant’s
request for a hearing and that the Department Counsel had no objection.
Subsequently, the case was assigned to me for hearing on January 17, 2007.  On January 17,
2007,  DOHA issued a Notice of Hearing and set this case to be heard on February 7, 2007, in a city
near where Applicant works.  Department Counsel presented eight exhibits (Exhibits 1-8) which
were admitted into evidence without objection. Applicant testified and offered eight exhibits
(Exhibits A-H), which were admitted into evidence without objection.  Applicant was given ten days
to submit additional evidence before the close of business on February 17; the Government was
given three days until February 20, 2007, to review the documents and submit a response.  (TR 66-
67) On February 15, 2007, Applicant submitted Exhibit I, a two page document; Department
Counsel did not object to Exhibit I, but argued in a letter of February 26, 2007, that the Government
did not have the responsibility to call an employer to seek a letter of reference as Applicant had
requested.   Subsequently, on February 23, 2007, Applicant submitted Exhibit J which detailed his
payment arrangements with a major creditor.   On March 13, 2007, Applicant submitted five letters
of reference (Exhibit K); on March 16, 2007, Department Counsel indicated he had no objection to
the admissibility of these exhibits.  Consequently, the Applicant’s post-hearing exhibits were
admitted; and the record closed on March 16, 2007.  The transcript (TR) was received on February
15, 2007.
3
FINDINGS OF FACT
After a complete and thorough review of the evidence in the record, and upon due
consideration of that evidence, I make the following findings of fact:
Applicant, 47 years old, has been employed by successor defense contractors in State #1 as
a locksmith since July 2006 on a military base; he worked for another contractor from October 2000
to July 2006.  The contract is rebid every five years.  He completed a Security Clearance Application
(SF 86) on February 2001. Previously, he worked as a locksmith for other companies from 1994 to
2000 and from 1984 to 1994.  (Exhibit 1; TR 26; 27-34)
Applicant has not served in the military.  Applicant  has one child from an earlier relationship
who is 30.  He  married in June 1984 and also has three stepchildren, ages 25-28, who live
independently. (Exhibit 1; TR 26; 27-31; 34-35)
Finances
Investigation disclosed several adverse credit issues in credit reports.  (Exhibits 2, 3, 4, 5, 6)
 In May 2002 he was interviewed by a Defense Security Service Special Agent about his financial
difficulties.  He explained that the majority of debts were due to medical expenses that were not
covered by insurance.  He stated he would make arrangements to pay these debts, but he was also
paying other debts.  (Exhibit 7)  Until he was shown his credit report in that interview he was
unaware of the extent of his delinquencies.  (TR 30-34)  At one point Applicant’s son lived with
them and used his father’s information to take out some loans in the 1999 to 2001 period which
Applicant took responsibility for paying.  This son is now incarcerated.  (TR 29) At the hearing
Applicant provided documentation of other bills he has paid.  (Exhibits F, G, H)
SOR 1.a.., 1.c. Applicant admitted a debt to Creditor #1, for a credit card for $412 which
was opened in 1998 and  was charged off in May 1999. The card was referred
to Creditor #3, a collection agency, with a current debt of $839.  To address
his credit issues he made arrangements with Credit Solutions to consolidate
his debts; he is paying them a monthly payment of $115 to resolve this debt
and other debts over a five or six year period.  He began making payments in
June 2006.   (Answer; Exhibit D; TR 35-38) [The Government conceded that
SOR 1.a. and 1.c. are the same debt.  (TR 63)]
SOR 1.b. Applicant denied a debt to Creditor #2, for $195 for a delinquent debt which
was charged off in August 1999.   (Answer; Exhibits 5, 6; Exhibit A; TR 38-
39)
SOR 1.d. Applicant denied a debt to Creditor #4, for a credit card for $184; he has no
record of this debt.  (Answer; Exhibits 5, 6; Exhibit A; TR 39-40)
SOR 1.e. Applicant admitted a debt to Creditor #5, for $175 for a medical debt to a
hospital.  He mailed them a check and the check got “kicked back.” and not
4
delivered to the collection agency; he called the number to get a better
address but there was no answer.  The hospital had no record as it had been
sent to collection. (Answer; Exhibit H; TR 40-45)
SOR 1.f. Applicant admitted a debt to Creditor #6, a collection agency for a credit card
for $2,832 from 2001. He made arrangements with Credit Solutions to
consolidate his debts: he is paying them a monthly payment of $115 to
resolve this debt and other debts over a five or six year period.  He began
making payments in June 2006.    (Answer; Exhibits 2, 3, 4, 5; Exhibit D; TR
45)
SOR 1.g. Applicant admitted his debt to a department store, Creditor #7, for $2,296,
charged off as a bad debt in 2001.  He made arrangements with Credit
Solutions to consolidate his debts; he is paying them a monthly payment of
$115 to resolve this debt and other debts over a five or six year period.  He
began making payments in June 2006.   (Answer; Exhibits 2, 3, 4, 5; Exhibit
D; TR 45-46)
SOR 1.h. Applicant admitted a debt to Creditor #8, for $168 for a medical debt to a
doctor.  He mailed them a check and the check got “kicked back.” and not
delivered to the collection agency; he called the number to get a better
address but there was no answer.  The doctor had no record as it had been
sent to collection. (Answer; Exhibit H; TR 40-45)
SOR 1.i., 1.j. Applicant admitted a debt to Creditor #9, for $195 and Creditor #9 for $108,
for medical debts to a hospital.  He mailed them a check and the check got
“kicked back.” and not delivered to the collection agency; he called the
number to get a better address but there was no answer.  The hospital had no
record of the debt as it had been sent to collection. (Answer; Exhibit H; TR
47-48)
SOR 1.k. . Applicant admitted a debt to Creditor #10, for $25 for a medical debt placed
for collection in 2002, but later stated he could not identify this creditor.
(Answer; TR 48-49)
SOR 1.l. Applicant denied a debt to Creditor #11 as he has paid his debt to that
creditor for $3,055 for a loan which was confirmed by his credit report. 
However, the government asserted the debt was still reflected as owing on a
November 2005 credit bureau report.  (Answer; Exhibit 6; Exhibits A, B; TR
49, 65)
SOR 1.m. Applicant admitted a debt to Creditor #11 for a debt of $2,735, but believed
he had paid that debt.  (Answer; Exhibit 6; Exhibits A, B; TR 49, 65) After
the hearing he completed payment arrangements with Creditor #11 to make
a $200 payment ever month beginning on February 28, 2007, to resolve this
debt.  (Exhibit J)
5
SOR 1.n. While Applicant admitted a medical debt to Creditor #12 for $163 placed for
collection in 2003, he later claimed he had never used this doctor.  Applicant
stated  he sent a check to a collection agency that was returned ; he could not
find the correct address for the collection agency.   (Answer; Exhibit H; TR
52-53)
SOR 1.o., 1.p. Applicant has paid a $70 debt and a $139 debt to a medical facility in August
2006.  (Answer, Exhibit H; TR 53)
In 2007 Applicant reported he was making $19.60 per hour and works a 40-hour week.  (TR
26-27) Applicant reported he earns approximately $2,000 net per month and his wife’s net is $900
per month working for a school district .  (TR 34, 54-55;  Exhibits 7, 8)  His monthly expenses
include rent $250, groceries $300, utilities $400, and car expenses $336; his medical expenses are
about $175, and miscellaneous $100.  He has paid off all his car loans and has the debt payment plan
of  $115.  He has a 1994 and 1998 auto and a 1980 truck.  He also has a retirement savings plan.  He
has no personal credit cards.  Beyond his arrangements with Credit Solutions, he has had no
additional credit counseling. He has approximately $1,000 remainder every month, so he is living
prudently and within his means, so he is able to resolve his debts.  (Exhibits A,  D,  E; TR 58-61)
References
Applicant’s program manger verified that he had worked for the company since July 2006
as a locksmith.  The union representative reviewed Applicant’s file and stated that he has never had
any disciplinary action at the base.  He has been a member of the union since July 2004 and is in
good standing.  The director of human resources reported to the union that Applicant has been “an
exemplary employee” during his tenure;  she considers him “an important member of the team.”  The
human resources administrator in a June 2006 letter stated that he has been “a valued asset” and that
his “integrity and work ethics are exceptional.”  She recommended him for a security clearance.
Another employee stated that during the seven years he had know Applicant, he has proven a reliable
and dedicated employee with a skill level that is admirable.  Applicant is viewed as dependable and
trustworthy.  (Exhibit K)
POLICIES
Enclosure 2 of the Directive sets forth adjudicative guidelines to consider in evaluating an
individual’s security eligibility.  The mere presence or absence of any given adjudication policy
condition is not decisive.  Based on a consideration of the evidence as a whole in evaluating this
case, I weighed relevant Adjudication Guidelines as set forth below:
Guideline F - Financial Considerations 
The Concern:  An individual who is financially overextended is at risk of having to engage in
illegal acts to generate funds.  Unexplained affluence is often linked to proceeds from
financially profitable criminal acts.
The responsibility for producing evidence initially falls on the Government to demonstrate
       Conditions that could raise a security concern and may be disqualifying include: E2.A6.1.2.1.  A2
history of not meeting financial obligations; E2.A6.1.2.2.  Deceptive or illegal financial practices such as
embezzlement, employee theft, check fraud, income tax evasion, expense account fraud, filing deceptive loan
statements, and other intentional financial breaches of trust; E2.A6.1.2.3.  Inability or unwillingness to satisfy
debts; E2.A6.1.2.4.  Unexplained affluence; E2.A6.1.2.5.  Financial problems that are linked to gambling,
drug abuse, alcoholism, or other issues of security concern.
       Conditions that could mitigate security concerns include: E2.A6.1.3.1.  The behavior was not recent;3
E2.A6.1.3.2.  It was an isolated incident;  E2.A6.1.3.3.  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);  E2.A6.1.3.4.  The person has received or is receiving
counseling for the problem and there are clear indications that the problem is being resolved or is under
control;  E2.A6.1.3.5.  The affluence resulted from a legal source; and E2.A6.1.3.6.  The individual initiated
a good-faith effort to repay overdue creditors or otherwise resolve debts.
6
that it is not clearly consistent with the national interest to grant or continue Applicant’s access to
classified information.  Then the Applicant presents evidence to refute, explain, extenuate, or
mitigate in order  to overcome the doubts raised by the Government, and to demonstrate persuasively
that it is clearly consistent with the national interest to grant or continue the clearance.  Under the
provisions of Executive Order 10865, as amended, and the Directive, a decision to grant or continue
an applicant's security clearance may be made only after an affirmative finding that to do so is clearly
consistent with the national interest. In reaching the fair and impartial overall common sense
determination, the Administrative Judge may  draw only those inferences and conclusions that have
a reasonable and logical basis in the evidence of record.
CONCLUSIONS
Financial Considerations
The Government established disqualifying conditions  that could raise a security concern and2
may be disqualifying including Applicant’s  (1) history of financial problems and his (3) inability
or unwillingness to satisfy all of his debts.  At the time of the investigation he had several
unresolved debts that stemmed for medical bills when he was not insured and other consumer debts
as well as debts created by his son for which he took responsibility. 
Although the dated delinquent debts have persisted, I conclude that under MC1, the behavior
that led to his debts was not recent as he developed no new delinquent debts.  Under MC 2, the debts
are not isolated as in the past he developed multiple delinquent debts.  To his credit, Applicant has
been making a systematic effort to resolve these debts where he has been able to reach the creditor
or identify the debt collector.  Thus, Applicant falls within several mitigating  conditions.  First, he3
has developed a plan: he provided evidence he has addressed a majority of the debts by either paying
them in full or setting up a credit plan except for several smaller, dated debts where he sent a
payment; but the collection agency was no longer in business and the checks were returned.  
His take home pay is approximately $2,000 per month and his wife’s take home pay is $900
per month, so they have disposable income of approximately $1,000 to resolve these debts as he lives
prudently and has no car payments.  While under MC. 4., Applicant has not sought formal financial
counseling for the problem, he did see assistance and advice from Credit Solutions and is resolving
several debts with them.  Now there are clear indications that the problem is being resolved or is
       See ISCR Case No. 04-06242 at 2 (App. Bd. June 28, 2006).4
7
under control as he took responsibility for resolving several debts through Credit Solutions and
negotiated directly with another creditor for payments to resolve that debt.  Under MC 6., an
individual is expected to have initiated a good-faith effort to repay overdue creditors or otherwise
resolve debts.  To mitigate Applicant does not have to have erased every debt.  Here Applicant has
demonstrated overall he is now financially responsible as he is consistently following  through on
his plan to resolve these debts. Thus, Applicant has mitigated these financial concerns as he has
provided evidence that he has a systematic plan to resolve the identifiable debts.  
“Whole Person” Analysis 
In addition to the enumerated disqualifying and mitigating conditions, I have considered the
general adjudicative guidelines related to the whole person concept under the Regulation, Appendix
8.  While Applicant’s debt problems resulted in part from voluntary decisions to purchase items and
from health care debts when he was not covered by insurance, Applicant provided evidence of
rehabilitation, positive behavior changes, and improved circumstances as indicated by self-discipline
and the complete absence of new delinquent, unpaid debt. The potential for pressure, coercion,
exploitation, or duress is low.  Applicant has no mortgage payments as he rents, and has refrained
from using any personal credit cards.  Greater awareness of financial responsibilities will result in
a continuously improving trend of financial circumstances. Moreover, he has stability in his
employment which should increase his net worth and establish a financial foundation for his future.
In sum, the likelihood of recurrent debt problems is low. He has had a clearance for a number of
years in his work for defense contractors.  At his place of employment, he is viewed as a responsible
person overall who is recommended for a security clearance by the director of human resources.  She
stated that Applicant has been “an exemplary employee” during his tenure; she considers him “an
important member of the team.”  He now has sufficient resources to resolve these delinquent debts
and has been following a plan to do so since 2006.
In ISCR Case No. 04-07360 (App. Bd. Sep. 26, 2006), the Board noted that two SOR debts
were paid through judgment and garnishment, one SOR debt was paid through settlement, and one
SOR debt was never paid.  Indeed, for one SOR debt the applicant did not even contact the creditor
about payment.  Nevertheless, the applicant showed that he reduced his overall debt by 95% and the
Board affirmed the decision to grant that applicant a clearance.  Applicant’s financial case is similar
to ISCR Case No. 04-07360.  After weighing the disqualifying and mitigating conditions, and all the
facts and circumstances, in the context of the whole person, I conclude he has mitigated the concerns
pertaining to financial considerations.  Substantial evidence supports Applicant’s eligibility and
suitability. I take this position based on the law, my “careful consideration of the whole person
factors”  and supporting evidence, as well as my application of the pertinent factors under the4
Adjudicative Process. 
Thus, after looking at the whole person, including his long history of responsible conduct,
and also considering the Adjudicative Process factors and the Adjudicative Guidelines, I rule for
Applicant under SOR Paragraph 1 as he mitigated the allegations in SOR subparagraphs 1.a. through
1.q.  
8
FORMAL FINDINGS
After reviewing the allegations of the SOR in the context of the Adjudicative
Guidelines in Enclosure 2 and the factors set forth under the Adjudicative Process section, I make
the following formal findings:
Paragraph 1. Guideline F: FOR APPLICANT
Subparagraph 1.a.: For Applicant
Subparagraph 1.b.: For Applicant
Subparagraph 1.c.: For Applicant
Subparagraph 1.d.: For Applicant
Subparagraph 1.e.: For Applicant
Subparagraph 1.f.: For Applicant
Subparagraph 1.g.: For Applicant
Subparagraph 1.h.: For Applicant
Subparagraph 1.i.: For Applicant
Subparagraph 1.j.: For Applicant
Subparagraph 1.k.: For Applicant
Subparagraph 1.l.: For Applicant
Subparagraph 1.m.: For Applicant
Subparagraph 1.n.: For Applicant
Subparagraph 1.o.: For Applicant
Subparagraph 1.p.: For Applicant
Subparagraph 1.q.: For Applicant
DECISION
In light of all the circumstances presented by the record in this case, it is clearly consistent
with the national interest to grant or continue a security clearance for the Applicant.  Clearance is
granted.
Kathryn Moen Braeman
Administrative Judge