KEYWORD: Financial; Personal Conduct
DIGEST: Applicant is a 41-year-old security officer employed by a federal contractor.  He has a
history of unpaid debt.  Even though he has made some effort at debt resolution, over $40,000 of
delinquent debt remains unpaid.  He gave false answers on a security clearance questionnaire.  He
failed to mitigate the security concerns about financial considerations and personal conduct.
Clearance is denied.
CASENO: 06-18683.h1
DATE: 06/27/2007
DATE:  June 27, 2007
In re:
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SSN:  -----------
Applicant for Security Clearance
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ISCR Case No. 06-18683
DECISION OF ADMINISTRATIVE JUDGE
CHRISTOPHER GRAHAM
APPEARANCES
FOR GOVERNMENT
Daniel F.  Crowley, Esq., Department Counsel
FOR APPLICANT
Pro Se
SYNOPSIS
2
Applicant is a 41-year-old security officer employed by a federal contractor.  He has a history
of unpaid debt.  Even though he has made some effort at debt resolution, over $40,000 of delinquent
debt remains unpaid.  He gave false answers on a security clearance questionnaire.  He failed to
mitigate the security concerns about financial considerations and personal conduct.  Clearance is
denied.
Government Exhibit 1, Standard Form (SF) 86, Security Clearance Application, dated July 8, 2004.1
Tr. at 18, 27.2
Id. at 18-19.3
Id. at 21.4
Id. at 24-25.5
3
STATEMENT OF THE CASE
On July 8, 2004, Applicant submitted a Security Clearance Application (SF 86).   The Defense Office of Hearings and1
Appeals (DOHA) declined to grant or continue a security clearance for Applicant.  As required by
Executive Order 10865, Safeguarding Classified Information Within Industry, dated February 20, 1960, as amended and
modified, and Department of Defense Directive 5220.6 ¶ E3.1.2 Defense Industrial Personnel Security
Clearance Review Program (Directive), dated January 2, 1992, as amended, modified, and revised, DOHA issued a
Statement of Reasons (SOR) on November 27, 2006, detailing the basis for its decision – security
concerns raised under Guideline F (Financial Considerations) and Guideline E (Personal Conduct)
of the Directive.  The President issued revised adjudicative guidelines (AG) on December 30, 2005.
DoD implemented them effective September 1, 2006.  Pending official amendment/reissue of DoD
Directive 5220.6, the AG are to be used in all cases when the SOR is issued on or after September
1, 2006.  Because the SOR was issued after September 1, 2006, DOHA policy requires that this case
proceed under the new guidelines. 
Applicant answered the SOR in writing on January 11, 2007, and elected to have a hearing
before an administrative judge.  The case was assigned to me on February 1, 2007, and a Notice of
Hearing was dated on February 16, 2007.  I convened a hearing on March 1, 2007, to consider
whether it is clearly consistent with the national interest to grant or continue Applicant's security
clearance.  The government offered ten exhibits, marked as exhibits 1-10.  Applicant offered four
exhibits, marked as exhibits A-D.  I kept the record open until March 20, 2007, and without
objection, extended it to March 30, 2007, to allow Applicant the time to file additional documents.
He filed no documents.  DOHA received the transcript (Tr.) on March 12, 2007.
  
FINDINGS OF FACT
Applicant admitted the allegations contained in SOR subparagraphs 1.a., 1.b., 1.c., 1.e., 1.i.,
1.k., and 1.n.  He denied all other allegations in the SOR.  The admissions are incorporated herein
as findings of fact.  After a complete and thorough review of the evidence in the record, and upon
due consideration of same, I make the following additional findings of fact: 
Applicant is a 41-year-old security officer employed by a federal contractor.   He was2
divorced in 2001, and has four children   He is a high school graduate   He served in the United3 4
States Army Reserve from 1984 to 2004.  He served in Kosova, and left active duty with the rank
of sergeant  (E-4).   Because of his mother’s illness leading to her death in 2004, he did not complete5
20 years credible service to be eligible for military retirement.  He has been in touch with his unit
Id. at 22-23.6
Id. at 26.7
Tr. at 28-30.8
4
and was told if he reenlists for an additional four years, he will then be eligible for his army
retirement.   He has held a security clearance since 1984.6 7
Financial Considerations
The SOR detailed Applicant’s financial history:
SOR ¶ Year Debt Amount Current Status
1.a. 2002 Chapter 13 bankruptcy 5/22/02 Dismissed 7/23/02 
1.b. 2004 Chapter 13 bankruptcy 7/23/04 Dismissed 8/11/04
1.c. 2004 Chapter 13 bankruptcy 9/22/04 Dismissed 9/24/04
1.d. 2000 Collection account $673 Paid
1.e. 2000 Judgment $6,990 Paid
1.f. 2000 Collection account $189 Paid
1.g. 2001 Collection account $254 Paid
1.h. 2001 Homeowners association $672 Paid
1.i. 2002 Judgment $1,340 Paid
1.j. 2003 Collection account $61 Paid
1.k. 2004 Repossession $14,964 Unpaid
1.l 2004 Judgment $2,045 Paid
1.m 2004 Judgment $1,705 Paid
1.n 2005 Charged off account $24,478 Unpaid
1.o 2006 Collection account $239 Paid
1.p. 2006 Charged off account $410 Unpaid
Applicant’s total indebtedness alleged in the SOR was $54,283.  He filed his first chapter 13
bankruptcy petition in May 2002.  The court dismissed his case in July 2002, because he had been
deployed to Kosova, and under the Soldiers and Sailors Relief Act, he could defer payments during
his deployment.  When he returned in 2004, and upon his release from active duty, the mortgagor
attempted to foreclose on his house.   He filed two Chapter 13 petitions in July and September 2004,8
in an effort to stall the foreclosure, as he had the house listed for sale.  In September 2004, he sold
Id. at 30.9
Id. at 79-81.10
Applicant’s Exhibit D (Credit Report, dated September 26, 2006) at 1-9.11
Government Exhibit 10 (Credit Report, dated March 1, 2007) at 1-2.12
Id.13
Id. at 51-52.14
Government Exhibit 1, supra, note 1, at 8.15
Id. at 47-49.16
5
the house.   The closing agent used the sale proceeds to pay some of his debts.   Applicant was asked9
to provide the government with a copy of the closing agreement, which he said was in storage.  He
did not do so.  10
In comparing the credit report of September 26, 2006,  and the credit report dated March 1,11
2007,  remaining unpaid are those debts listed in SOR subparagraphs 1.i., 1.k., 1.n., and 1.p.  The12
first involves a state tax deficiency, the second concerns a repossession for which he owes
approximately $15,000, the third is a note in default which he co-signed, with a balance due of about
$24,500, and the fourth is $365, to replace a bad check he gave an to an automobile dealer.13
Applicant stated he had made arrangements to pay the two large debts, a debt consolidation plan, to
pay $621 per month.  He was asked to provide the government a copy of the agreement but did not
do so.14
Personal Conduct
When Applicant executed his questionnaire for national security positions (Standard Form
86), on July 8, 2004, he answered “No” to the following question: “Question 33.  Your Financial
Record - Bankruptcy In the last 7 years, have you filed a petition under any chapter of the
bankruptcy code (to include Chapter 13)?”  He also answered “No” on the same SF 86, when he
answered the following question: “37.  Your Financial Record - Unpaid Judgments  In the last
7 years, have you had any judgments against you that have not been paid?  On that same SF 86, he
answered “No” in response to “Question 38.  Your Financial Delinquencies - 180 days  In the last
7 years, have you been over 180 days delinquent on any debt(s)?”   He failed to list information15
about his delinquent debts and bankruptcy filings as detailed in SOR subparagraph 1, and as
discussed in the previous section.
Applicant thought he had answered the questions correctly.  He believed that because he
availed himself of the benefits of the Soldiers and Sailors Relief Act, he didn’t know that he should
list these debts on the SF 86.  He asked no questions about the form or about the questions on it.  He
stated that he didn’t recall what he answered.  “I didn’t mean to put “no” on there when I answered
them, and I told him that.  If I put no, that was a mistake on my part.”16
Guidelines ¶ 2(c).17
Guidelines ¶ 2(b).18
“Substantial evidence [is] such relevant evidence as a reasonable mind might  accept as adequate to support a
19
conclusion in light of all the contrary evidence in the record.”  ISCR Case No. 04-11463 at 2 (App. Bd. Aug. 4, 2006)
(citing Directive ¶ E3.1.32.1).  “This is something less than the weight of the evidence, and the possibility of drawing
two inconsistent conclusions from the evidence does not prevent [a Judge’s] finding from being supported by substantial
evidence.”  Consolo v. Federal Maritime Comm’n, 383 U.S. 607, 620 (1966).  “Substantial evidence” is “more than a
scintilla but less than a preponderance.”  See v. Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4  Cir. 1994).th
6
POLICIES
In an evaluation of an applicant’s security suitability, an administrative judge must consider
the “Adjudicative Guidelines for Determining Eligibility For Access to Classified Information”
(Guidelines).  In addition to brief introductory explanations for each Guidelines, the Guidelines are
divided into Disqualifying Conditions and Mitigating Conditions, which are used to determine an
applicant’s eligibility for access to classified information.
These Guidelines are not inflexible ironclad rules of law.  Instead, recognizing the
complexities of human behavior, an administrative judge should apply these Guidelines in
conjunction with the factors listed in the adjudicative process.  Guidelines ¶ 2.  An administrative
judge’s over-arching adjudicative goal is a fair, impartial and common sense decision.  Because the
entire process is a conscientious scrutiny of a number of variables known as the “whole person
concept,” an administrative judge should consider all available, reliable information about the
person, past and present, favorable and unfavorable, in making a decision.17
Specifically, an administrative judge should consider the nine adjudicative process factors
listed at Guidelines ¶ 2(a): “(1) the nature, extent, and seriousness of the conduct; (2) the
circumstances surrounding the conduct, to include knowledgeable participation; (3) the frequency
and recency of the conduct; (4) the individual’s age and maturity at the time of the conduct; (5)
extent to which participation is voluntary; (6) the presence or absence of rehabilitation and other
permanent 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.”
Since the protection of the national security is the paramount consideration, the final decision
in each case is arrived at by applying the standard that “[a]ny doubt concerning personnel being
considered for access to classified information will be resolved in favor of national security.”   In18
reaching this decision, I have drawn only those conclusions that are reasonable, logical and based
on the evidence contained in the record.  Likewise, I have avoided drawing inferences grounded on
mere speculation or conjecture.
In the decision-making process, facts must be established by “substantial evidence.”   The19
Government initially has the burden of producing evidence to establish a case which demonstrates,
in accordance with the Directive, that it is not clearly consistent with the national interest to grant
or continue an applicant’s access to classified information.  Once the Government has produced
substantial evidence of a disqualifying condition, the burden shifts to Applicant to produce evidence
and prove a mitigating condition.  Directive ¶ E3.1.15 provides, “The applicant is responsible for
See ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 2005).  The Administrative Judge [considers] the record evidence20  
as a whole, both favorable and unfavorable, evaluate[s] Applicant’s past and current circumstances in light of pertinent
provisions of the Directive, and decide[s] whether Applicant ha[s] met his burden of persuasion under Directive ¶
E3.1.15.”  ISCR Case No. 04-10340 at 2 (App. Bd. July 6, 2006). 
Executive Order 10865, § 7. 21
7
presenting witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by
applicant or proven by Department Counsel, and [applicant] has the ultimate burden of persuasion
as to obtaining a favorable clearance decision.”  The burden of disproving a mitigating condition
never shifts to the Government.20
A person who seeks access to classified information enters into a fiduciary relationship with
the government predicated upon trust and confidence.  It is a relationship that transcends normal duty
hours and endures throughout off-duty hours as well.  It is because of this special relationship the
government must be able to repose a high degree of trust and confidence in those individuals to
whom it grants access to classified information.  Decisions under this Directive and the Guidelines
include, by necessity, consideration of the possible risk that an applicant may deliberately or
inadvertently fail to protect or safeguard classified information. Such decisions entail a certain
degree of legally permissible extrapolation as to potential, rather than actual, risk of compromise of
classified information.
 
The scope of an administrative judge’s decision is limited.  Nothing in this decision should
be construed to suggest that I have based this decision, in whole or in part, on any express or implied
determination as to Applicant’s allegiance, loyalty, or patriotism.  21
CONCLUSIONS
Guideline F—Financial Considerations
Guidelines ¶ 18. The Concern. 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. 
Guidelines ¶ 19. Conditions that could raise a security concern and may be disqualifying
include:
(a) inability or unwillingness to satisfy debts; and
(c) a history of not meeting financial obligations.
Applicant has a history of delinquent debts since at least 1999.  He adequately explained that
the Chapter 13 bankruptcy petitions were used to stop the foreclosure of his home until he could get
it sold.  He has made progress on either paying debts or getting the credit reporting agencies to
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remove other debts that were not his.  However, he still owes about $40,000.  He did not provide a
copy of his consolidation agreement to substantiate his efforts to pay down these debts.
Guidelines ¶20. Conditions that could mitigate security concerns include:
(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;
(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;
(c) 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; and
(d) the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve
debts.
Applicant’s debts are continuing.  While he was deployed, payments he made to his wife to
pay bills were instead used by her to build her own home.  They divorced after he returned from that
deployment.  While the divorce itself did not create any unusual financial problem for him, the
deployment did because his wife did not pay his bills. There is no evidence that he sought
counseling.  He did initiate a good-faith effort to pay his bills, as evidenced by the bankruptcy
petition, and payment of some debts from his house sale.  What is troubling is the $40,000 still
unpaid.  His lack of documentation showing any effort to arrange terms with creditors, after telling
the government he would provide it, and after being given nearly a month after the hearing to do so,
is problematic.  It casts doubt about the veracity of his testimony.  I conclude Guideline F against
Applicant.
Guideline E—Personal Conduct
Guidelines ¶ 15. The Concern. Conduct involving questionable judgment, lack of candor,
dishonesty, or unwillingness to comply with rules and regulations can raise questions about an
individual's reliability, trustworthiness and ability to protect classified information. Of special
interest is any failure to provide truthful and candid answers during the security clearance process
or any other failure to cooperate with the security clearance process.
Guidelines ¶16. Conditions that could raise a security concern and may be disqualifying
include:
(a) deliberate omission, concealment, or falsification of relevant facts from any personnel
security questionnaire, personal history statement, or similar form used to conduct investigations,
See ISCR Case No. 03-09483 at 4 (App. Bd. Nov. 17, 2004) (explaining holding in ISCR Case No. 02-23133 at 5 (App.22
Bd. Jun 9, 2004).
Directive ¶ E.2.2.1.23
Id.24
Id.25
9
determine employment qualifications, award benefits or status, determine security clearance
eligibility or trustworthiness, or award fiduciary responsibilities;
Guidelines ¶ 17. Conditions that could mitigate security concerns include:
(a) the individual made prompt, good-faith efforts to correct the omission, concealment, or
falsification before being confronted with the facts;
(b) the refusal or failure to cooperate, omission, or concealment was caused or significantly
contributed to by improper or inadequate advice of authorized personnel or legal counsel advising
or instructing the individual specifically concerning the security clearance process. Upon being made
aware of the requirement to cooperate or provide the information, the individual cooperated fully and
truthfully.
Applicant denies that he deliberately falsified his answers to the questions on his SF 86,
arguing that because he availed himself of the benefits of the Soldiers and Sailors Relief Act, he
didn’t know that he should list these debts on the SF 86.  When a falsification allegation is
controverted, the government has the burden of proving it.  Proof of an omission, standing alone,
does not establish or prove an applicant’s intent or state of mind when the omission occurred.  An
administrative judge must consider the record evidence as a whole to determine whether there is
direct or circumstantial evidence concerning the applicant’s intent or state of mind at the time the
omission occurred.   The government must establish that Applicant’s omission, concealment, or22
falsification in his answers was deliberate.  Applicant thought he had answered the questions
correctly, yet he asked no questions about the form or about the questions on it.  He stated that he
didn’t recall what he answered.  Applicant has held a security clearance for over 20 years, he has
nearly 20 years service in the Army Reserve, and he has a history of bad debt.  I do not believe his
explanations.  I conclude Guideline E against Applicant.
Whole Person Analysis
“The adjudicative process is an examination of a sufficient period of a person’s life to make
an affirmative determination that the person is eligible for a security clearance.”   “Available,23
reliable information about the person, past and present, favorable and unfavorable, should be
considered in reaching a determination.”   In evaluating Applicant’s case, in addition to the24
disqualifying and mitigating conditions, I also considered the “whole person” concept in evaluating
Applicant’s risk and vulnerability in protecting our national interests.   I considered his age (48),25
his education, his employment, his military service, and what might motivate him to be less than
truthful.  Applicant supplied false answers on a security clearance application.  This is problematic
10
because candor with the government about a person’s negatives is the crux of a trustworthiness
determination.  If a person discloses their personal adverse information, then he or she is more likely
to be trustworthy with confidential or classified information.  The totality of the record  raises
reasonable and persistent doubts about Applicant’s ability to protect classified information and to
exercise the requisite good judgment and discretion expected of one in whom the government
entrusts its interests and secrets.  I conclude it is not clearly consistent with the national interest to
grant or continue Applicant’s security clearance.
FORMAL FINDINGS
Formal findings For or Against Applicant on the allegations set forth in the SOR, as required
by E3.1.25 of Enclosure 3 of the Directive, are:
Paragraph 1. Guideline F: AGAINST 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: Against Applicant
Subparagraph 1.j: For Applicant
Subparagraph 1.k: Against Applicant
Subparagraph 1.l: For Applicant
Subparagraph 1.m: For Applicant
Subparagraph 1.n: Against Applicant
Subparagraph 1.o: For Applicant
Subparagraph 1.p: Against Applicant
Paragraph 2. Guideline E: AGAINST APPLICANT
Subparagraph 2.a: Against Applicant
Subparagraph 2.b: Against Applicant
Subparagraph 2.c: Against Applicant
DECISION
In light of all of the circumstances in this case, it is not clearly consistent with the national
interest to grant or continue a security clearance for Applicant.  Clearance is denied.
11
Christopher Graham
Administrative Judge