KEYWORD: Financial
DIGEST: Applicant has a history of financial problems consisting of delinquent consumer debts and
a real estate foreclosure. He has not presented sufficient information to explain, extenuate, or
mitigate the financial considerations security concern. Clearance is denied. 
CASENO: 06-13898.h1
DATE: 05/22/2007
DATE:  May 22, 2007
In re:
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SSN: -----------
Applicant for Security Clearance
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ISCR Case No. 06-13898
DECISION OF ADMINISTRATIVE JUDGE
MICHAEL H. LEONARD
APPEARANCES
FOR GOVERNMENT
James F. Duffy, Esq., Department Counsel
FOR APPLICANT
Joseph L. Johnson, Esq.
SYNOPSIS
 Executive Order 10865, dated February 20, 1960, as amended, and DoD Directive 5220.6, dated January 2,1
1992, as amended (Directive).
 See Memorandum from the Under Secretary of Defense for Intelligence, dated August 30, 2006, Subject:2
Implementation of Adjudicative Guidelines for Determining Eligibility for Access to Classified Information (December
29, 2005). 
2
Applicant has a history of financial problems consisting of delinquent consumer debts and
a real estate foreclosure. He has not presented sufficient information to explain, extenuate, or
mitigate the financial considerations security concern. Clearance is denied. 
STATEMENT OF THE CASE
Applicant contests the Defense Department’s intent to deny or revoke his eligibility for a
security clearance. Acting under the relevant Executive Order and DoD Directive,  the Defense1
Office of Hearings and Appeals (DOHA) issued a statement of reasons (SOR) to Applicant on
November 21, 2006. The SOR—which is equivalent to an administrative complaint—details the
factual basis for the action and alleges security concerns under Guideline F for financial
considerations. Applicant, through counsel, timely replied to the SOR and requested a hearing. 
In addition to the Directive, this case is brought under the revised Adjudicative Guidelines
for Determining Eligibility for Access to Classified Information approved by the President on
December 29, 2005. The revised guidelines were then modified by the Defense Department, effective
September 1, 2006. They supersede or replace the guidelines published in Enclosure 2 to the
Directive and Appendix 8 to DoD Regulation 5200.2-R, and they apply to all adjudications and other
determinations where an SOR has been issued on September 1, 2006, or thereafter.  Both the2
Directive and the Regulation are pending formal amendment. The revised guidelines apply to this
case because the SOR is dated November 21, 2006. At the hearing, Applicant acknowledged that
they would apply to his case (R. 129–130). 
The case was assigned to me January 24, 2007. A notice of hearing was issued scheduling
the hearing for March 5, 2007. The hearing took place as scheduled. DOHA received the hearing
transcript March 14, 2007.
RULINGS ON PROCEDURE
The government moved to amend the SOR by adding three additional allegations of
indebtedness to the Guideline F allegation (Appellate Exhibit I). Without objections, the motion was
granted and subparagraphs 1.f, 1.g, and 1.h were added (R. 11–13).  
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FINDINGS OF FACT
Applicant’s response to the SOR allegations was mixed. His admissions and explanations
are incorporated herein. I make the following findings of fact set forth below in numbered
paragraphs. 
1. Applicant is a 52-year-old driver for a trucking company engaged in hauling munitions and
other loads for the government. He has been married and divorced four times. He is part of a two-
person driving team who operates a company-owned truck. The other driver is a woman he has had
a romantic relationship with for the last five years. He has worked for his current employer since
February 2002, and held an interim security clearance until the SOR was issued in November 2006.
Since the loss of his interim security clearance, Applicant has continued to work hauling non-
restricted government freight.
2. Applicant has a history of financial problems. As part of the background investigation, a
credit report was obtained in January 2005 (Exhibit 2). The public record section of the report
revealed a state tax lien for $1,591 filed in June 1997 and paid in August 1998. The trade section of
the report revealed nine accounts of which only three accounts did not have a negative account
history. The collections section of the report revealed an unpaid collection account. An additional
credit report was obtained in November 2006, and this report further revealed or confirmed
Applicant’s unfavorable financial history. The specific accounts alleged in the SOR, as amended,
are discussed below.
3. SOR subparagraph 1.a concerns a collection account for $78. Applicant disputes this debt
because he had previously paid this account in full. He presented documentary proof from the
collection agency that the account was turned over to their office in error (Exhibit A).
4. SOR subparagraph 1.b concerns a collection account for $157. It stemmed from a medical
bill for services incurred without health insurance. Applicant resolved this account by payment in
full in December 2006 (Exhibit B).
5. SOR subparagraph 1.c concerns a past-due collection account for $3,481. It originated as a
credit card account during Applicant’s fourth marriage. Applicant says the account was allocated to
him during the divorce proceedings. He has made $100 monthly payments for the last three months.
Applicant did not present any documentary evidence on this debt.
6. SOR subparagraph 1.d concerns a collection account for $224. The account originated as an
account for TV services, and it was placed for collection when it became delinquent. Applicant
resolved this account by payment in full in December 2006 (Exhibit C).
7. SOR subparagraph 1.e concerns a collection account for $7,903. It appears the account
originated as an auto loan with payment terms of $388 monthly (Exhibit 2 at 2). It became a bad debt
and was placed for collection with the creditor alleged in the SOR (Exhibit 3 at 2). Applicant has
been unable to find any information on this account and did not present any documentary evidence
on this debt.
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8. SOR subparagraph 1.f concerns a real estate mortgage for $60,000 that went into foreclosure
in about November 2000. Applicant explained that the debt stemmed from the home where he and
his fourth wife lived. He says the house was sold and there was not a deficiency balance (R. 49–51).
His assertion is verified by the most recent credit report that shows a zero balance (Exhibit 3 at 2).
9. SOR subparagraph 1.g concerns a charged-off account for $2,531. Applicant believes this
debt is the same as that alleged in subparagraph 1.c. The 2005 credit report shows this was a credit
card account that became a bad debt and was placed for collection (Exhibit 2 at 2). The account was
sold or transferred, and it shows a zero balance on the account with a high credit of $2,531. The debt
appears again on the credit report as a collection account 120 days or more past due with a balance
of $3,481 and a high credit of $2,531 (Exhibit 2 at 3). Applicant did not present any documentary
evidence on this debt. Reading the two entries in the credit report together and given the high credit
amounts match, I find the debt in subparagraphs 1.c and 1.g are the same, and Applicant owes
approximately $3,481 on this debt.
10. SOR subparagraph 1.h concerns a collection account for $11,358. Applicant thought this debt
was the same as that alleged in subparagraph 1.e, but he did not present any documentary evidence
on this debt. Under cross-examination, he acknowledged that it was possible this debt stemmed from
a car loan that he cosigned for a girlfriend several years ago (R. 69–73). Moreover, the two credit
reports establish two different accounts. The 2005 credit report shows this debt originated as a car
loan with $309 monthly payments (Exhibit 2 at 3). It became a bad debt and was placed for
collection by transfer or sale to another creditor. The report reflects a zero balance and a high credit
of $11,358. The 2006 credit report shows another creditor holding the account with a zero balance
and a high credit of $11,358 (Exhibit 3 at 2). The debt was also transferred or sold. At bottom, both
credit reports establish that Applicant was delinquent on this account in the past and that it is a
different debt than that alleged in subparagraph 1.e. 
11. In addition to the debts in the SOR, Applicant is making monthly payments to a creditor for
a $9,000 medical bill he incurred when he was hospitalized for several days without health
insurance. He has made monthly payments on this account for the last two years or so, and, as far
as he knows, the account is in good standing.
12. Applicant concedes that he is not a good money manager. His girlfriend/co-driver handles
all the money matters, bill paying, etc., via a joint account. Because they are on the road for weeks
at a time, they do not own or rent a residence. Instead, they live with his girlfriend’s parents and
assist with living expenses. Applicant does not have a personal credit card. Applicant attributes his
financial problems to his last divorce in about 2000 after a brief one-year marriage and the medical
expenses he incurred without health insurance in about 2004.  
13. Applicant has not been arrested, charged, or convicted or any crimes. Likewise, he has not
had a speeding ticket for five years.
POLICIES
The Directive sets forth adjudicative guidelines to consider when evaluating a person’s
security clearance eligibility, including disqualifying conditions (DC) and mitigating conditions
 Directive, Enclosure 2, ¶ E2.2.1 (setting forth nine factors to consider under the whole-person concept).3
 Executive Order 10865, § 7.4
 ISCR Case No. 96-0277 (App. Bd. Jul. 11, 1997).5
 ISCR Case No. 02-18663 (App. Bd. Mar. 23, 2004).6
 Directive, Enclosure 3, ¶ E3.1.14.7
 Directive, Enclosure 3, ¶ E3.1.15.8
 Directive, Enclosure 3, ¶ E3.1.15.9
 Department of Navy v. Egan, 484 U.S. 518, 528 (1988) (“it should be obvious that no one has a ‘right’ to a10
security clearance”); Duane v. Department of Defense, 275 F.3d 988, 994 (10  Cir. 2002) (“It is likewise plain that thereth
is no ‘right’ to a security clearance, so that full-scale due process standards do not apply to cases such as Duane’s.”).
 Egan, 484 U.S. at 531.11
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(MC) for each guideline. In addition, each clearance decision must be a fair and impartial
commonsense decision based upon consideration of all the relevant and material information, the
pertinent criteria and adjudication factors, and the whole-person concept.  A person granted access3
to classified information enters into a special relationship with the government. The government
must be able to have a high degree of trust and confidence in those persons to whom it grants access
to classified information. The decision to deny a person a security clearance is not a determination
of an applicant’s loyalty.  Instead, it is a determination that the applicant has not met the strict4
guidelines the President has established for granting eligibility for a security clearance.
BURDEN OF PROOF
The only purpose of a security-clearance decision is to decide if it is clearly consistent with
the national interest to grant or continue a security clearance for an applicant.  There is no5
presumption in favor of granting or continuing access to classified information.  The government6
has the burden of presenting evidence to establish facts alleged in the SOR that have been
controverted.  An applicant is responsible for presenting evidence to refute, explain, extenuate, or7
mitigate facts that have been admitted or proven.  In addition, an applicant has the ultimate burden8
of persuasion to obtain a favorable clearance decision.9
No one has a right to a security clearance.  As noted by the Supreme Court in Department10
of Navy v. Egan, “the clearly consistent standard indicates that security clearance determinations
should err, if they must, on the side of denials.”  Under Egan, Executive Order 10865, and the11
Directive, any doubt about whether an applicant should be allowed access to classified information
will be resolved in favor of protecting national security.
CONCLUSIONS
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Under Guideline F, a concern typically exists due to significant unpaid debts. Failure or
inability 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
information. An individual who is financially overextended is at risk of having to engage in illegal
or unethical acts to generate funds to meet financial obligations. Similarly, an individual who is
financially irresponsible may also be irresponsible, unconcerned, negligent, or careless in properly
handling and safeguarding classified information.   
Here, based on the record evidence as a whole, a security concern is raised by significant
unpaid debts. Applicant has a well-established history of financial problems (Exhibits 2 and 3). His
derogatory financial history is a security concern because it indicates an inability or unwillingness
to satisfy debts and a history of not meeting financial obligations within the meaning of the
guideline.
I reviewed the MC under the guideline and conclude he receives some credit in mitigation.
Each MC is briefly summarized and discussed below.
The first MC—the behavior happened so long ago, was so infrequent, or occurred under such
circumstances that it is unlikely to recur—does not apply. His financial problems are ongoing, and
his financial problems involve multiple delinquent debts. Given his longstanding financial problems
that continue to date, it is too soon to say that his financial problems are unlikely to recur. 
The second MC—the conditions that resulted in the behavior were largely beyond the
person’s control—applies somewhat. Applicant experienced understandable financial problems
stemming from his last divorce in about 2000. Likewise, his uninsured medical expenses in about
2004 no doubt had a negative effect on his overall financial situation and he has acted reasonably
by making monthly payments on this debt. The credit is limited, however, given that his divorce was
several years ago and he is still in the process of cleaning up his financial  house. 
The third MC—the person has received or is receiving counseling for the problem and/or
there are clear indications that the problem is being resolved or is under control—does not apply. 
There is no evidence to support application of this MC. 
The fourth MC—the individual initiated a good-faith effort to repay overdue creditors or
otherwise resolve debts—applies somewhat. Applicant has resolved three collection accounts by
payment in full (subparagraphs 1.a, 1.b, and 1.d). He is making monthly payments on another bad
debt (subparagraph 1.c). And he is making monthly payments on a sizeable medical bill not alleged
in the SOR. Taken together, these circumstances are sufficient to qualify for initiating a good-faith
effort within the meaning of the guideline. The credit is limited because of the other debts where he
has taken little, if any, action to resolve. 
The fifth MC—the individual has a reasonable basis to dispute the legitimacy of the past-due
debt—is not applicable here. 
The sixth MC—the affluence resulted from a legal source—is not applicable here.
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I have also considered this case in light of the whole-person concept. Applicant is 52 years
old and sufficiently mature to make thoughtful, prudent decisions about his finances, but the record
evidence shows otherwise. Although he has made some progress in resolving his bad debts, there
is still much work to do. He owes about $3,481 stemming from a credit card account and he just
started making monthly payments on it (subparagraphs 1.c and 1.g). He owes nearly $8,000 on a
collection account stemming from an auto loan (subparagraph 1.e). Also, the current status of the
auto loan that went in collection for about $11,358 is unknown (subparagraph 1.h). 
Of concern here is the lack of documentary evidence (account statements, receipts,
correspondence verifying the status of accounts, etc.) from Applicant. Other than the three small
debts he paid in full for less than $500 in total (Exhibits A, B, and C), he did not present
documentary evidence about his other debts or his overall financial situation. Indeed, what’s missing
here is: (1) a comprehensive, realistic approach or plan for resolving his indebtedness; (2)
documented actions taken in furtherance of that approach; and (3) a measurable improvement to his
situation. In my view, Applicant does not have a firm grasp on his finances and it is likely his
financial problems will continue. These circumstances militate against a favorable decision for
Applicant.  
After weighing the favorable and unfavorable evidence, I conclude that Applicant has not
presented sufficient information to explain, extenuate, or mitigate the financial considerations
security concern. Likewise, he has not met his ultimate burden of persuasion to obtain a favorable
clearance decision. 
FORMAL FINDINGS
Here are my conclusions for each allegation in the SOR:
SOR ¶ 1–Guideline F: Against Applicant
Subparagraphs a–h: Against Applicant
DECISION
In light of all the facts and circumstances, it is not clearly consistent with the national interest
to grant or continue a security clearance for Applicant. Clearance is denied.  
Michael H. Leonard
Administrative Judge