KEYWORD: Financial
DIGEST: Applicant was discharged through a 1999 Chapter 7 bankruptcy petition of debts left over
from a failed business. Since then, she has accrued about $11,000 in delinquent debt through 15
unpaid accounts and an unpaid tax bill. She has insufficient resources to pay or resolve her debts,
has taken no action to do so. Nor has she demonstrated financial management skills that would
prevent similar problems in the future. Accordingly, she has failed to mitigate the trustworthiness
concerns about her finances. Eligibility for an ADP I/II/III position is denied.
CASENO: 06-12107.h1
DATE: 05/21/2007
DATE:  May 21, 2007
In re:
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SSN: -----------
Applicant for ADP I/II/III Position
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ADP Case No. 06-12107
DECISION OF ADMINISTRATIVE JUDGE
MATTHEW E. MALONE
APPEARANCES
FOR GOVERNMENT
Jennifer Goldstein, Esq., Department Counsel
FOR APPLICANT
Pro Se
SYNOPSIS
2
Applicant was discharged through a 1999 Chapter 7 bankruptcy petition of debts left over
from a failed business. Since then, she has accrued about $11,000 in delinquent debt through 15
unpaid accounts and an unpaid tax bill. She has insufficient resources to pay or resolve her debts,
has taken no action to do so. Nor has she demonstrated financial management skills that would
prevent similar problems in the future. Accordingly, she has failed to mitigate the trustworthiness
concerns about her finances. Eligibility for an ADP I/II/III position is denied.
 Required by Executive Order 10865, as amended, and by DoD Directive 5220.6 (Directive), as amended.1
 Gx. 1.2
3
STATEMENT OF THE CASE
On December 20, 2004, Applicant submitted a Public Trust Position Application (SF 85P).
After reviewing the results of the ensuing background investigation, Defense Office of Hearings and
Appeals (DOHA) adjudicators were unable to make a preliminary affirmative finding  that it is1
clearly consistent with the national interest to grant Applicant a position of trust. On August 31,
2006, DOHA issued to Applicant a Statement of Reasons (SOR) alleging facts that raise
trustworthiness concerns addressed in the Directive under Guideline F (financial considerations).
Applicant timely responded to the SOR, and requested a hearing. The case was assigned to
me on November 16, 2006, and I convened a hearing on January 11, 2007, at which the parties
appeared as scheduled. The government offered 12 exhibits, all of which were admitted without
objection (Gx. 1 - 12). Applicant testified and introduced one exhibit (Ax. A), which was admitted
without objection. DOHA received the transcript (Tr.) on January 22, 2007.
FINDINGS OF FACT
The government alleged in SOR ¶ 1 that Applicant was discharged of her debts through a
Chapter 7 bankruptcy petition in October 1999 (SOR ¶ 1.a); she owes $8,051 for 15 unpaid debts
consisting of delinquent credit cards, an unpaid medical bill, unpaid telephone accounts, and a
bounced check, between August 2000 and July 2006 (SOR  ¶¶ 1.b - 1.m, 1.o - 1.q); and she owes
$2,600 to the Internal Revenue Service (IRS) for an unpaid tax bill from May 2005 (SOR ¶ 1.n).
Applicant admitted all of the allegations except for SOR ¶¶ 1.e, 1.f, 1.j, and 1.n. As to ¶ 1.n, she
asserts that she has entered into a repayment plan with the IRS. I interpret this to be an admission
of the alleged debt. 
Applicant’s admissions are incorporated herein as facts. After a thorough review of the
transcript and exhibits, I make the following findings of additional relevant fact:
Applicant is 51 years old and has worked since August 2004, first through a temporary
agency and later as a permanent hire, for a health care and medical insurance company contracted
to manage medical insurance claims and information for TRICARE, the Department of Defense
(DoD) medical insurance system for military personnel and their families. She was unemployed from
December 2002 until December 2003, but received disability benefits until October 2003. Applicant
worked as a customer service representative through all of 2002, but was on disability between July
2001 and January 2002. Between August 1999 and July 2001, she was gainfully employed except
for the four-month period between November 2000 and March 2001, when she suffered an on-the-
job injury and could not work.  2
 Gx. 2.3
 Tr., 52 - 53.4
 Tr., 47, 76.5
 Gx. 1.6
 Gx. 4; Tr., 45 - 47.7
 Gx. 7, Gx. 8.8
 Gx. 4, 5, 9, 10, 11.9
 Tr., 65 - 66.10
 Gx. 3.11
4
After being injured in a car accident, she was again out of work and on disability from March
2006 until early June 2006, but did not return to full-time work until early July 2006.  Applicant was3
also on medical leave from September 2006 and January 2, 2007.  4
Applicant has been married twice. She has two grown children from her first marriage, which
began in 1973 and ended in divorce in 1989. She re-married in 1991, but she and her husband
separated in 1997. Their divorce was not finalized until June 2004.5
From November 1988 until August 1999, Applicant ran her own child daycare business from
her home.  Many of the children she cared for were either disabled or infants, sometimes prematurely6
born with drugs in their systems. In the last year of her business, Applicant could not keep up with
all of the state regulatory and licensing requirements. The stress of trying to care for special needs
children eventually proved too much, especially after her second husband left in 1997.  She7
abandoned the business, her house, and most of her financial obligations related thereto, and filed
for a Chapter 7 bankruptcy petition in June 1999, declaring $157,626 in debts against $132,840 in
assets. In October 1999, Applicant was discharged of her debts (SOR ¶ 1.a).8
Between 1999 and 2006, Applicant incurred a variety of unpaid debts.  She is delinquent on9
five credit card accounts (SOR ¶¶ 1.b, 1.d, 1.f, 1.g, and 1.h), five cell phone or telephone accounts
(SOR ¶¶ 1.c, 1.j, 1.k, 1.m, and 1.o), a medical account (SOR ¶ 1.i), a bounced check (SOR ¶1.e), and
two other commercial accounts (SOR ¶¶ 1.p and 1.q). Applicant also owes the IRS $2,600 for unpaid
taxes (SOR ¶ 1.n), but testified that she entered into a repayment plan in July 2005. She had to
suspend payment in March 2006, when she was out of work for medical reasons.10
In 2006, Applicant sought debt repayment help from a credit counseling service, but the
monthly payment they recommended was at least $200 more than she could afford. When a
government investigator interviewed Applicant during her background investigation in May 2005,
Applicant submitted a personal financial statement (PFS) that showed she had a positive net monthly
cash flow, excluding payments to any of the debts listed in the SOR, of $142.11
 Ax. A.12
 Directive, Enclosure 2.13
 A memorandum from Carol A. Haave, Deputy Under Secretary of Defense for Counterintelligence and14
Security to DOHA Director, Adjudication of Trustworthiness Cases (Nov. 19, 2004), directed that adjudication of
trustworthiness cases for ADP I, II, and III positions be resolved using the provisions of the Directive rather than, as
originally drafted, DoD Regulation 5200.2-R, DoD Personnel Security Program , as amended (Regulation). Positions
designated as ADP I or ADP II are classified as sensitive positions in section AP10.2.1 of the Regulation. ADP III
positions are nonsensitive positions. (Regulation, AP102.3.1) By virtue of the aforementioned memorandum, however,
even though they are nonsensitive positions, ADP III cases are treated in the same way and adjudicated under the same
guidelines and procedures as ADP I and II cases.
 The November 19, 2004, memorandum did not specify whether the guidelines contained in the Directive or15
the Regulation should be used in ADP cases. Appendix 8 of the Regulation sets forth essentially the same adjudicative
policy, as well as the disqualifying conditions and mitigating conditions associated with each guideline, as is contained
in Enclosure 2 of the Directive. DoD contractor personnel, such as this Applicant, are afforded the adjudication
procedures contained in the Directive. Because it appears Applicant was given along with the SOR the adjudicative
materials from the Directive, I have referred to the factors contained in the Directive rather than the Regulation in
reaching this decision.
 Directive, 6.3.16
 “The adjudicative process is the careful weighing of a number of variables known as the whole person17
concept. Available, reliable information about the person, past and present, favorable and unfavorable, should be
considered in reaching a determination. In evaluating the relevance of an individual's conduct, the adjudicator should
consider the following factors:
 E2.2.1.1. The nature, extent, and seriousness of the conduct;
 E2.2.1.2. The circumstances surrounding the conduct, to include knowledgeable participation;
 E2.2.1.3. The frequency and recency of the conduct;
 E2.2.1.4. The individual's age and maturity at the time of the conduct;
 E2.2.1.5. The voluntariness of participation;
 E2.2.1.6. The presence or absence of rehabilitation and other pertinent behavioral changes;
 E2.2.1.7. The motivation for the conduct;
 E2.2.1.8. The potential for pressure, coercion, exploitation, or duress; and
 E2.2.1.9. The likelihood of continuation or recurrence;”
5
Applicant enjoys her work. Between May 2005 and January 2006, she received numerous
positive comments from customers about her helpfulness and expertise in handling their concerns
and requests.12
POLICIES AND BURDEN OF PROOF
The Directive sets forth adjudicative guidelines  to be considered in evaluating an13
applicant’s suitability for access to sensitive information.  Each trustworthiness determination must14
reflect consideration of both disqualifying conditions and mitigating conditions  under each15
adjudicative issue applicable to the facts and circumstances of each case. Each determination must
also reflect a fair and impartial common sense consideration of all available relevant and material
information,  and it must reflect the adjudication process outlined in the Directive at Section16
E2.2.1.  The presence or absence of a disqualifying or mitigating condition is not determinative of17
a conclusion for or against an applicant. However, specific applicable guidelines should be followed
 Regulation, C6.1.1.1. 18
 Department of the Navy v. Egan, 484 U.S. 518, at 528, 531(1988).19
 See Egan; Directive, E2.2.2.20
 Directive, E2.A6.1.1.21
 Directive, E2.A6.1.2.1. A history of not meeting financial obligations;22
 Directive, E2.A6.1.2.3. Inability or unwillingness to satisfy debts;23
6
whenever a case can be measured against them as they represent policy guidance governing the grant
or denial of access to sensitive information.
Trustworthiness determinations are intended solely to resolve whether it is clearly consistent
with the interests of national security  for an applicant to receive or continue to have access to18
sensitive  information. The government bears the initial burden of producing admissible information
on which it based the preliminary decision against the applicant. Additionally, the government must
be able to prove controverted facts alleged in the SOR. If the government meets its burden, the
burden then shifts to the applicant to refute, extenuate or mitigate the government’s case. As with
security clearances, no one has a “right” to such access.  Thus, an applicant bears a heavy burden19
of persuasion. Access to sensitive information is a fiduciary relationship with the government based
on trust and confidence. The government, therefore, has a compelling interest in ensuring each
applicant possesses the requisite judgement, reliability and trustworthiness of one who will protect
sensitive information pertaining to the national interests as his or her own. Resolution of any
reasonable doubt about an applicant’s suitability for a public trust position should be resolved in
favor of the government.20
CONCLUSIONS
Financial Considerations. Under Guideline F, an applicant who is financially overextended
through delinquent debt and poor personal financial management may be at risk of engaging in
illegal acts to generate funds to resolve her fiscal difficulties.  In 1999, Applicant received relief21
through Chapter 7 bankruptcy from debts that went unpaid when she abandoned her business. Since
then, she has incurred at least 16 other delinquent debts, some as recent as 2006. Aside from entering
into a repayment agreement with the IRS to repay the debt listed in SOR ¶ 1.n, she has not acted to
pay or otherwise resolve her obligations. Nor has Applicant shown she is fully informed about the
full extent of her indebtedness or is able to manage her finances so as to avoid additional unpaid
debts in the future. These facts warrant consideration of Guideline F disqualifying condition (DC)
1  and DC 3.  22 23
By contrast, available information shows over the past seven years Applicant has experienced
several medical problems and other unforeseen events that could have caused her delinquent debts,
but certainly have hindered her ability to stay employed and repay some of them. Accordingly,
 Directive, E2.A6.1.3.3. The conditions that resulted in the behavior were largely beyond the person's control24
(e.g., loss of employment, a business downturn, unexpected medical emergency, or a death, divorce or separation).
 See note 17, supra.25
 Directive, E2.2.3. 26
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Guideline F mitigating condition 3  must be considered. However, this is the only mitigating24
condition that applies. Applicant’s financial problems are recent, they are not isolated, and Applicant
has not made a good-faith effort to repay or otherwise resolve her debts. Although she contacted a
credit counseling service, she did not follow through with their recommendations or pursue any other
organized approach to her debts. The conditions still exist that have resulted in her poor financial
condition.
Any benefit Applicant receives from MC 3 is attenuated by the fact her debts have arisen
even when she was working. Based on all of the available information, it appears she is in debt
primarily because she does not manage her money in a prudent manner. The Directive allows for a
balancing of Applicant’s poor financial health against the circumstances that have prevented her
from resolving her debts. Nonetheless, even if the applicant is without fault in accruing the debt,
circumstances may still present an unacceptable risk to the government. On the facts presented here,
it is probable Applicant would have neglected her finances even if she had not been ill, injured, or
unemployed. I conclude Applicant has failed to mitigate the security concerns under Guideline F
presented by available information about her finances.
Whole Person. I have also considered the adjudicative process factors collectively referred
to as the “whole person” concept.  A fair and commonsense assessment  of Applicant’s financial25 26
problems, taken in the context of all of the information before me shows that reasonable doubts
persist about her ability to protect sensitive by exercising the requisite good judgment and discretion
expected of one in whom the government entrusts its interests. Absent substantial information to
mitigate these doubts, which Applicant failed to provide, I cannot conclude she has otherwise
overcome the government’s case.
FORMAL FINDINGS
Formal findings regarding each SOR allegation are as follows:
Paragraph 1, Guideline F (Financial): AGAINST THE APPLICANT
Subparagraph 1.a: Against the Applicant
Subparagraph 1.b: Against the Applicant
Subparagraph 1.c: Against the Applicant
Subparagraph 1.d: Against the Applicant
Subparagraph 1.e: Against the Applicant
Subparagraph 1.f: Against the Applicant
Subparagraph 1.g: Against the Applicant
Subparagraph 1.h: Against the Applicant
Subparagraph 1.i: Against the Applicant
Subparagraph 1.j: Against the Applicant
8
Subparagraph 1.k: Against the Applicant
Subparagraph 1.l: Against the Applicant
Subparagraph 1.m: Against the Applicant
Subparagraph 1.n: Against the Applicant
Subparagraph 1.o: Against the Applicant
Subparagraph 1.p: Against the Applicant
Subparagraph 1.q: Against the Applicant
DECISION
In light of all of the circumstances presented by the record in this case, it is not clearly
consistent with the interests of national security to grant Applicant a position of public trust.
Matthew E. Malone
Administrative Judge