KEYWORD: Financial
DIGEST: Applicant has settled three of her overdue debts, and she is now in the process of
attempting to resolve her two other past due debts. Applicant is current on all of her recent debts, and
she has demonstrated a stable and mature outlook about her finances.  Mitigation has been shown.
Clearance is granted.
CASENO: 06-17874.h1
DATE: 05/30/2007
DATE: May 30, 2007
In Re:
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SSN: ------------------
Applicant for Security Clearance
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ISCR Case No. 06-17874
DECISION OF ADMINISTRATIVE JUDGE
MARTIN H. MOGUL
APPEARANCES
FOR GOVERNMENT
Candace Le’i, Esq., Department Counsel
FOR APPLICANT
Pro Se
SYNOPSIS
Applicant has settled three of her overdue debts, and she is now in the process of attempting
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to resolve her two other past due debts. Applicant is current on all of her recent debts, and she has
demonstrated a stable and mature outlook about her finances.  Mitigation has been shown. Clearance
is granted.
STATEMENT OF THE CASE
On December  26, 2006 the Defense Office of Hearings and Appeals (DOHA), pursuant to
Executive Order 10865 and Department of Defense Directive 5220.6 (Directive), dated January 2,
1992, issued a Statement of Reasons (SOR) to Applicant which detailed reasons why DOHA could
not make the preliminary affirmative finding under the Directive that it is clearly consistent with the
national interest to grant or continue a security clearance for Applicant and recommended referral
to an Administrative Judge to determine whether clearance should be denied or revoked.
In a signed and notarized statement, dated January 31, 2007, Applicant responded in writing
to the SOR allegations (RSOR), and she requested a clearance decision based on a hearing record.
The case was initially assigned to another Administrative Judge on February 27, 2007, but
it was reassigned to this Administrative Judge on March 20, 2007. A Notice of Hearing was issued
to the parties on March 19, 2007, and the hearing was held on April 12, 2007. 
At the hearing, Department Counsel offered six documentary exhibits (Exhibits 1-6) and no
witnesses were called. Applicant appeared without counsel, offered nine documentary exhibits
(Exhibits A through I) and offered her own testimony. The record was held open until April 19,
2007,  for Applicant, and Applicant 26, 2007,  for Department Counsel to offer post hearing exhibits.
Applicant offered a cover letter, outlines of DOHA decisions, and other  documents regarding Statute
of Limitations, which have been identified as Exhibit J. Department Counsel submitted copies of
three DOHA Appeal Board decisions, and the laws from several states regarding Statute of
Limitations, which are marked as Exhibit 7. All documentary evidence was entered into evidence
without objection. The transcript (Tr) was received on April 23, 2007. 
FINDINGS OF FACT
In the SOR, the Government alleges that a security risk may exist under Adjudicative
Guideline F (Financial Considerations) of the Directive. The SOR contained five allegations, 1.a.
through 1.e., under Guideline F. Applicant admitted all of the SOR allegations. The admitted
allegations are incorporated herein as Findings of Fact.
After a complete and thorough review of the evidence in the record, including Applicant's
Answer to the SOR, the admitted documents, and the live testimony and upon due consideration of
that evidence, I make the following additional Findings of Fact: 
Applicant is 37 years old. She is not married and has no children. Applicant is employed by
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a defense contractor, and she seeks to retain a DoD security clearance in connection with her
employment in the defense sector. 
Paragraph 1 (Guideline F - Financial Considerations)
The SOR lists five overdue debts of Applicant, 1.a. through 1.e., under Adjudicative
Guideline F.  They will be discussed in the order that they were listed in the SOR: 
1.a. This debt is  listed in the SOR to Creditor 1 in the amount of $10,267.79. At the hearing,
Applicant testified that she had initially intended to pay of this debt, which is still due in the amount
stated above.  However, she was informed that it was no longer enforceable since it was now barred
by the statute of limitations, and therefore she did not plan to pay off this debt. In her post hearing
letter, Applicant indicated that she has now changed her mind and plans to pay off the debts that she
believes are barred by the statute of limitations (Exhibit J). She stated,  
I have since made the very personal decision to continue debt repayment for my two
remaining debts despite the fact that the Statute of Limitations has expired. I realize
that regardless of how much time has past, I knowingly and willfully incurred those
debts and it is my responsibility still to them (morally if not legally). I have made an
appointment to discuss my repayment options with a Credit Counseling organization.
. . . Given my disposable income currently, I do not foresee a problem with a clearing
up the old debt in a relatively short time.
1.b.  This debt is listed in the SOR to Creditor 2 in the amount of $6,805. This is the second
debt referred to in Applicant’s letter, which she now plans to pay despite her belief that it is not
legally collectible. 
1.c.  This debt is listed in the SOR to Creditor 3 in the amount of $1,313. Applicant testified
that she had resolved this debt in full with a payment of $640 on March 5, 2007. Exhibit D
establishes that this debt has been settled. 
 
1.d.  This debt is listed in the SOR to Creditor 4 in the amount of $807. Applicant testified
that she had resolved this debt in full with a payment of $685.67 on April 10, 2007. Exhibit E
establishes that this debt has been settled.  
1.e.  This debt is listed in the SOR to Creditor 5 in the amount of $3,938.08. Applicant
testified that she had resolved this debt in full with a payment of $2,200 on April 11, 2007. Exhibit
F establishes that this debt has been settled. 
 
The issue of unenforceable collection of debts barred because of the Statute of Limitations,
was raised at the hearing, and the record was held open to allow both Applicant and Department
Counsel an opportunity to submit evidence regarding this issue. However, since Applicant now
indicates that she intends to resolve these two debts, I find that issue now moot in this case. 
In her RSOR and at the PA, Applicant indicated that she had near perfect credit history until
2000. At that time her job location was reassigned without her request, and she was forced to move
to a locality  with a higher price of living. She was then relocated a second time to an even more
expensive place to work and live. Her financial situation became more tenuous, and she consulted a
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credit counseling service, but they were unable to help her resolve her financial problems. She did
contact all of her creditors in 2002 to attempt to resolve her debts, but she could not reach a
manageable arrangement with the creditors.  
She conceded that she was so overwhelmed by her financial difficulties and at a loss for a
solution, that she simply did nothing. Applicant also lost her job through downsizing, and was
unemployed from June through August 2005, when she began her current employment. 
Currently, Applicant does not have any other overdue accounts beside those already discussed
above. She conceded that credit card debt was part of what led to her fiscal problems, and she does
not have any credit cards now, nor does she plan to apply for any in the future. 
Applicant submitted into evidence a Personal Financial Statement (Exhibit C) that was
prepared on January 17, 2006, which shows a monthly net reminder of $1,946. Applicant  will be able
to use this to resolve her last two overdue debts. 
Finally, Applicant introduced three letters of recommendation from individuals who know
Applicant in her professional setting. They strongly recommended her for a position of trust and
described her in extremely positive terms (Exhibit I). 
POLICIES
Enclosure 2 of the Directive sets forth adjudicative guidelines that must be carefully
considered in evaluating an individual's security eligibility and making the overall common sense
determination required. The Administrative Judge must take into account the conditions raising or
mitigating security concerns in each area applicable to the facts and circumstances presented.
Although the presence or absence of a particular condition for or against clearance is not
determinative, the specific adjudicative guidelines should be followed whenever a case can be
measured against this policy guidance, as the guidelines reflect consideration of those factors of
seriousness, recency, motivation, etc. 
The adjudication process is based on the whole person concept. All available, reliable
information about the person, past and present, is to be taken into account in reaching a decision as
to whether a person is an acceptable security risk.
Each adjudicative decision must also include an assessment of: (1) the nature, extent, and
seriousness of the conduct; (2) the circumstances surrounding the conduct, and the extent of
knowledgeable participation; (3) how recent and frequent the behavior was; (4) the individual's age
and maturity at the time of the conduct; (5) the voluntariness of participation; (6) the presence or
absence of rehabilitation and other pertinent behavioral changes; (7) the motivation for the conduct;
(8) the potential for pressure, coercion, exploitation, or duress; and (9) the likelihood of continuation
or recurrence (See Directive, Section E2.2.1. of Enclosure 2). 
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BURDEN OF PROOF
              Initially, the Government must prove controverted facts alleged in the Statement of Reasons.
If the Government meets that burden, the burden of persuasion then shifts to Applicant to establish
his security suitability through evidence of refutation, extenuation or mitigation sufficient to
demonstrate that, despite the existence of disqualifying conduct, it is nevertheless clearly consistent
with the national interest to grant or continue the security clearance. Assessment of Applicant's fitness
for access to classified information requires evaluation of the whole person, and consideration of such
factors as the recency and frequency of the disqualifying conduct, the likelihood of recurrence, and
evidence of rehabilitation.
A person who seeks access to classified information enters into a fiduciary relationship with
the U.S. Government that is predicated upon trust and confidence. Where facts proven by the
Government raise doubts about Applicant's judgment, reliability, or trustworthiness, Applicant has
a heavy burden of persuasion to demonstrate that he or she is nonetheless security worthy. As noted
by the United States Supreme Court in Department of the Navy v. Egan, 484 U.S. 518, 531 (1988),
"the clearly consistent standard indicates that security-clearance determinations should err, if they
must, on the side of denials."
CONCLUSIONS
Having considered the evidence of record in light of the appropriate legal precepts and factors,
I conclude the following with respect to Guideline F: 
The Government has established that Applicant has had a history of financial difficulties and
overdue debts. However, Applicant had the difficult problems of having to relocate two times and
each time to more expensive areas, combined with a period of unemployment that contributed to her
financial difficulties. The evidence shows that Applicant has resolved three of her debts, and she now
avers that she intends to resolve the other two overdue debts. Finally, all of Applicant’s other bills
are current and she now exhibits responsible financial behavior. 
Regarding the Disqualifying Conditions (DC) under Guideline F, I conclude both DC (a)., and
DC (c) apply, because of Applicant’s history of not meeting financial obligations and her previous
inability to satisfy her debts. However, I find that Mitigating Condition (MC) (a)  applies because the
behavior that resulted in Applicant’s overdue debts occurred under such circumstances that it is
unlikely to recur and does not cast doubt on Applicant’s current reliability trustworthiness or good
judgement. MC (b) also applies because Applicant went through problems, including loss of
employment and being required to relocate to more expensive places to live on two occasions, both
of which were beyond her control. MC (c) is applicable because Applicant has received counseling
to better manage her finances. Finally, MC (d) applies because Applicant has initiated a good-faith
effort to resolve her overdue debts.  I, therefore, hold Guideline F for Applicant.
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FORMAL FINDINGS
Formal Findings as required by Section E3.1.25 of Enclosure 3 of the  Directive are hereby
rendered as follows:
Paragraph 1, Financial Considerations,  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
DECISION
In light of all the circumstances and facts presented by the record in this case, it is clearly
consistent with the national interest to grant or continue a security clearance for Applicant.
Martin H. Mogul
Administrative Judge