KEYWORD: Financial
DIGEST: Applicant is 60 years old and has worked for a federal contractor as a business manager
since 2005. He owes more than $169,000 in delinquent tax debts from 2001. He failed to provide
substantive mitigating information as to why he failed to deal with his tax problems in a timely
manner. He failed to provide a plan on how he will repay the debts. Applicant failed to mitigate the
trustworthiness concerns. Eligibility is denied.
CASENO: 06-25545.h1
DATE: 05/31/2007
DATE:  May 31, 2007
In re:
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SSN: ------------
Applicant for Public Trust Position
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ADP Case No. 06-25545
DECISION OF ADMINISTRATIVE JUDGE
CAROL G. RICCIARDELLO
APPEARANCES
FOR GOVERNMENT
Candace L. Le'i, Esq., Department Counsel
FOR APPLICANT
Pro Se
SYNOPSIS
Applicant is 60 years old and has worked for a federal contractor as a business manager since
2005. He owes more than $169,000 in delinquent tax debts from 2001. He failed to provide
substantive mitigating information as to why he failed to deal with his tax problems in a timely
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manner. He failed to provide a plan on how he will repay the debts. Applicant failed to mitigate the
trustworthiness concerns. Eligibility is denied.
See Memorandum from the Under secretary of Defense for Intelligence, Dated August 30, 2006, subject:1
Implementation of the Adjudicative Guidelines for Determining Eligibility for Access to Classified Information
(December 29, 2005). 
Conduct not alleged in the SOR may be considered: “(a) to assess an applicant’s credibility; (b) to evaluate an2
applicant’s evidence of extenuation, mitigation, or changed circumstances; (c) to consider whether an applicant has
demonstrated successful rehabilitation; (d) to decide whether a particular provision of the Adjudicative Guidelines is
applicable; or (e) to provide evidence for whole person analysis under Directive Section 6.3.” ISCR Case No. 03-20327
at 4 (App. Bd. Oct. 26, 2006) (citations omitted). Additionally, the Appeal Board has determined that even though crucial
security concerns are not alleged in the SOR, the Judge may consider those security concerns when they are relevant and
factually related to a disqualifying condition that was alleged in the SOR. ISCR 05-01820 at 3 n.4 (App. Bd. Dec. 14,
2006) (citing ISCR Case No. 01-18860 at 8 (App. Bd. Mar. 17, 2003) and ISCR Case No. 02-00305 at 4 (App. Bd. Feb.
12, 2003)).
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STATEMENT OF THE CASE
The Defense Office of Hearings and Appeals (DOHA) declined to grant or continue an ADP
I/II/III position for Applicant. As required by the Department of Defense Regulation 5200.2-R (Jan.
1987), as amended (Regulation) and Department of Defense Directive 5220.6 ¶ E3.1.2 (Jan. 2,
1992), as amended (Directive), DOHA issued a Statement of Reasons (SOR) on February 1, 2007,
detailing the basis for its decision–concerns raised under Guideline F (Financial Considerations) of
the revised Adjudicative Guidelines issued on December 29, 2005, and implemented by the
Department of Defense effective September 1, 2006.  In a sworn statement dated February 16, 2007,1
Applicant responded to the SOR allegations. Applicant elected to have his case decided on the
written record. Department Counsel submitted the government’s file of relevant material (FORM)
on March 23, 2007. The FORM was mailed to Applicant on March 28, 2007, and received on April
10, 2007. Applicant was afforded an opportunity to file objections and submit material in refutation,
extenuation, or mitigation. Applicant provided additional information and it was received on April
25, 2007. Department Counsel had no objections. The case was assigned to me on May 23, 2007.
FINDINGS OF FACT
Applicant is 60 years old and has been employed by a federal contractor as a business
manager since 2005. He is a college graduate with a master’s in business administration. Applicant
was unemployed from January 2005 to July 2005. He is divorced and has two children. 
Applicant admitted the delinquent debts alleged in SOR 1.a. and 1.b. The debt in SOR 1.a
is a state tax lien in the approximate amount of $69,541 for tax year 2001. The tax lien was filed in
February 2004. Applicant has a second state tax lien in the amount of approximately $39,905, which
was filed in November 2006. This tax lien was not alleged in the SOR and will not be considered
for disqualifying purposes.  However, it will be considered when accessing Applicant’s ability to
repay his debts and when analyzing the “whole person.”  The debt in SOR 1.b. is a debt to the2
Internal Revenue Service in the approximate amount of $100,000 for tax year 2001. Applicant does
not dispute the debts in SOR 1.a and 1.b. 
Applicant’s sworn statement attributes these debts to the following factors: (1) a business he
owned and was trying to keep solvent so he used funds from his personal accounts; (2) his wife’s
Answer.3
GE 4.4
Answer.5
Response to Form.6
Answer.7
See FN 2.8
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increased spending in 1998 for three years; (3) the stock market and margin calls, which created
taxable events; (4) he had “nearly” no income until he obtained his present job in August 2006.3
Applicant did not provide any amplifying information as to the causes of his financial
difficulties. He listed in his trustworthiness application that he started work for his present employer
in July 2005.  He lists he was unemployed for a period in 2005, but also lists he was employed from4
December 2003 to December 2004, as a vice president of operations for a company, and was
employed as the owner of his own business from 1998 to 2003. However he also states he closed the
business in 2001.  Without amplification, his information is conflicting.  5
Applicant stated he contacted his state tax office and the IRS several times since 2002, but
did not elaborate as when he did this and what transpired, if anything. He stated he recently contacted
them both, but claimed they did not reply. He spoke with an accountant the day before he provided
his answer to the SOR. He stated he presented an offer to compromise, but did not state whether the
offer was to the state or the IRS. He stated he had presented an offer to compromise to the IRS 18
months ago and it was rejected for procedural reasons. He failed to explain what he did in response
to that rejection. In his answer to the FORM, he stated both his state and federal tax liens were still
outstanding, but he is current on his personal and his business taxes for 2003-2006. He stated this
was a prerequisite for filing an offer to compromise. He further stated: “I still have a couple of non-
monetary prerequisites to satisfy before I can file a [state] or federal [offer to compromise] for 2001
and 2002.”  He did not explain what those prerequisites were and when and if he was going to satisfy6
them. Applicant did not provide any documentation as to his efforts to resolve these tax debts. He
also did not provide any information to show what caused his financial problems and what actions
he took to minimize or mitigate the problems. He did not provide any information as to why it has
taken more than six years for him to take more than nominal action on his tax debts. 
Applicant denied the debt in SOR 1.c, however he did admit that he is indebted to the
creditor’s affiliate and was making payments.  In his answer to the FORM he stated he has now7
satisfied the debt, but failed to provide any documentation to support the payment. 
In addition to the second state tax lien not alleged Applicant states in his answer to the
FORM that he has two credit card debts totaling $20,000. He paid off one and owes $10,000 on the
remaining credit card.  This debt will only be considered for purposes of analyzing Applicant’s8
ability to repay his delinquent debts and in a whole person analysis. 
Regulation ¶ C8.2.1.9
Regulation ¶ C2.1.2.10
Regulation ¶¶ C3.1.2.1.1.7 and C3.1.2.1.2.3.11
Regulation ¶ C3.1.2.2.12
Regulation ¶C6.1.1.1.13
Regulation ¶ C8.2.1.14
Revised Adjudicative Guidelines 2(a).15
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POLICIES
The revised adjudicative guidelines are used to make ADP trustworthiness determinations.
Department of Defense contractor personnel are afforded the right to the procedures contained in the
Directive before any final unfavorable access determination may be made.9
An individual may not be assigned to perform sensitive duties unless a competent security
authority determines it is clearly consistent with the interests of national security to do so.  Positions10
designated as ADP I or ADP II are classified as sensitive positions.  ADP III positions are11
“nonsensitive positions.”  However, DOHA has been directed to apply the due process provisions12
of the Directive for all trustworthiness determinations under ADP I, II, and including ADP III
positions by a memorandum from the Deputy Undersecretary of Defense (Counterintelligence and
Security) dated November 19, 2004. Thus, even though ADP III positions are nonsensitive, they are
treated in the same way and adjudicated under the same guidelines and procedures as ADP I and II
cases. 
“The standard that must be met for …assignment to sensitive duties is that, based on all
available information, the person’s loyalty, reliability, and trustworthiness are such that …assigning
the person to sensitive duties is clearly consistent with the interests of national security.”  The13
revised adjudicative guidelines set for potentially disqualifying conditions (DC) and mitigating
conditions (MC) under each guideline. Department of Defense contractor personnel are afforded the
adjudicative procedures contained in the Directive.14
“The adjudicative process is an examination of a sufficient period of a person’s life to make
an affirmative determination that the person is an acceptable security risk.”  Each eligibility15
determination  must be a fair and impartial commonsense decision based on the relevant and material
facts and circumstances, the whole-person concept, along with the factors listed in the Directive.
Specifically these are: the nature, extent, and seriousness of the conduct; the circumstances
surrounding the conduct, to include knowledgeable participation; the frequency and recency of the
conduct; the individual’s age and maturity at the time of the conduct; the voluntariness of
participation; the presence or absence of rehabilitation and other pertinent behavioral changes; the
motivation for the conduct; the potential for pressure, coercion, exploitation, or duress; and the
likelihood of continuation or recurrence. Although the presence or absence of a particular condition
or factor for or against clearance is not outcome determinative, the adjudicative guidelines should
be followed whenever a case can be measured against this policy guidance.
ISCR Case No. 96-0277 at 2 (App. Bd. Jul. 11, 1997).16
ISCR Case No. 97-0016 at 3 (App. Bd. Dec. 31, 1997); Directive, Enclosure 3, ¶ E3.1.14.17
Department of the Navy v. Egan, 484 U.S. 518, 531 (1988).18
ISCR Case No. 94-1075 at 3-4 (App. Bd. Aug. 10, 1995); Directive, Enclosure 3, ¶ E3.1.15.19
ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995); Directive, Enclosure 3, ¶ E3.1.15.20
Egan, 484 U.S. at 531.21
Id.22
Id.; Directive, Enclosure 2, ¶ E2.2.2.23
Executive Order 10865 § 7.24
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The sole purpose of a security clearance determination is to decide if it is clearly consistent
with the national interest to grant or continue a security clearance for an applicant.  The government16
has the burden of proving controverted facts.  The burden of proof is something less than a17
preponderance of evidence.  Once the government has met its burden, the burden shifts to an18
applicant to present evidence of refutation, extenuation, or mitigation to overcome the case against
him.  Additionally, an applicant has the ultimate burden of persuasion to obtain a favorable clearance19
decision.  These same burdens of proof apply to trustworthiness determinations for ADP positions.20
No one has a right to a security clearance  and “the clearly consistent standard indicates that21
security clearance determinations should err, if they must, on the side of denials.”  Any reasonable22
doubt about whether an applicant should be allowed access to sensitive information must be resolved
in favor of protecting such sensitive information.  The decision to deny an individual a security23
clearance is not necessarily a determination as to the loyalty of an applicant.  It is merely an24
indication that the applicant has not met the strict guidelines the President and the Secretary of
Defense have established for issuing a clearance.
Conditions that could raise a security concern and may be disqualifying, as well as those
which would mitigate security concerns, pertaining to the adjudicative guideline are set forth and
discussed in the conclusions below.
CONCLUSIONS
I have carefully considered all the facts in evidence and the legal standards discussed above.
I reach the following conclusions regarding the allegations in the SOR.
Based upon consideration of the evidence, I find the following adjudicative guidelines most
pertinent to the evaluation of the facts in this case:
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Financial Considerations are a security concern because 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 acts to generate funds. 
Based on all the evidence, Financial Considerations Disqualifying Condition (FC DC) 19(a)
(inability or unwillingness to satisfy debts) and FC DC 19(c) (a history of not meeting financial
obligations), apply in this case. Applicant has more than $169,000 in delinquent tax debts from 2001.
He did not provide any information as to why he did not address the debts sooner or how he is going
to pay them. He did not provide any information of his financial resources or specifically how he got
into deep financial trouble. 
I have considered all the Financial Considerations Mitigating Conditions (FC MC), and
especially considered FC MC 20(a) (the behavior happened so long ago, was so infrequent, or
occurred under such circumstances that it is unlikely to recur and does not cast doubt on the
individual’s current reliability, trustworthiness, or good judgment), FC MC 20(b) (the conditions that
resulted in the financial problem were largely beyond the person’s control (e.g., loss of employment,
a business downturn, unexpected medical emergency, or a death, divorce or separation), and the
individual acted responsibly under the circumstances), and FC MC.20(d) (the individual initiated a
good-faith effort to repay overdue creditors or otherwise resolve debts). Applicant’s delinquent debts
are recent and remain unpaid. Applicant failed to provide any mitigating evidence as to how he was
going to pay the debts and assurances that it is unlikely to recur. The tax debts are years old and no
substantive proof was provided to show what Applicant has done in the past or how he intends on
resolving the debts. Therefore, FC MC 20(a) does not apply. 
Applicant alludes to problems he encountered that may have been beyond his control, but
failed to elaborate or provide any substantiating documentation. He alludes to the stock market and
margin calls as being a problem, but failed to provide how his finances were affected. Both of these
financial endeavors are fraught with risk and those involved with them take on the risks with the hope
of financial reward, but also the risk of serious financial loss. Although the result of what happens
in the stock market and margin calls are beyond an investor’s control, the willingness to take the risk
is totally within their control. I do not find that condition is beyond a person’s control. Applicant also
alluded to being unemployed and underemployed, but again failed to elaborate. Applicant has had a
significant number of years to address his financial problems and failed to offer any substantiation
for his failure to address them. The debt he claimed he paid, he failed to provide documentation that
it is satisfied. He apparently has remaining prerequisites to abide by in order to make an offer to
compromise, but again he did not elaborate as to what they were. He simply failed to provide
substantive mitigating evidence. I find FC MC 20(b) and (d) do not apply.
Whole Person Analysis
In all adjudications, the protection of our national security is the paramount concern. The
objective of the security-clearance process is the fair-minded, commonsense assessment of a person’s
life to make an affirmative determination that the person is eligible for a security clearance. Indeed,
the adjudicative process is a careful weighing of a number of variables in considering the “whole
person” concept. It recognizes that we should view a person by the totality of their acts, omissions,
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motivations and other variables. Each case must be adjudged on its own merits, taking into
consideration all relevant circumstances, and applying sound judgment, mature thinking, and careful
analysis.
In addition to considering the specific disqualifying and mitigating conditions under each
guideline, I have also considered the adjudicative process factors listed in ¶ 2a (1)-(9) of the Directive
to be considered in evaluating a person’s eligibility to hold a security clearance. Specifically these are:
(1) the nature and seriousness of the conduct and surrounding circumstances; (2) the frequency and
recency of the conduct; (3) the age of the applicant; (4) the motivation of the applicant, and the extent
to which the conduct was negligent, willful, voluntary, or undertaken with knowledge of the
consequences; (5) the absence or presence of rehabilitation; and (6) the probability that the
circumstances or conduct will continue or recur in the future. Although the presence or absence of
a particular condition or factor for or against clearance is not outcome determinative, the Guidelines
should be followed whenever a case can be measured against this policy guidance.
I considered the whole person in evaluating the case. Applicant has more than $169,000 in
delinquent tax debts as listed in the SOR. He has an additional $39,000 in tax debts and $10,000 in
credit card debts he owes. These additional debts affect his ability to pay those listed in the SOR. He
has not provided documentation on his efforts to repay, an explanation as to specifically how he got
into financial problems, or a plan for how he will repay his delinquent debts. After weighing the
disqualifying and mitigating conditions under Guideline F and evaluating all the evidence in the
context of the whole person, I conclude Applicant has failed to meet his burden and mitigate the
security concerns based on financial considerations. 
FORMAL FINDINGS
The following are my conclusions as to each allegation in the SOR:
Paragraph 1. Guideline F: AGAINST APPLICANT
Subparagraph 1.a: Against Applicant
Subparagraph 1.b: Against Applicant
Subparagraph 1.c: Against Applicant
DECISION
In light of all of the circumstances in this case, it is not clearly consistent with the interests
of national security to grant or continue Applicant’s eligibility for a public trust position. Eligibility
is denied.
Carol G. Ricciardello
Administrative Judge