KEYWORD: Financial
DIGEST: Applicant is a 27-year-old employee working for a defense contractor.  He had fourteen
alleged debts listed in the statement of reasons (SOR) totaling approximately $24,000. He now has
three outstanding debts totaling $10,000, and started a debt repayment plan. His debt problems
resulted from his wife's medical emergencies and periods of unemployment. For the last two years
he has shown his financial responsibility by not generating any new delinquent debt. Applicant has
mitigated security concerns arising under financial considerations. Clearance is granted. 
CASNO: 06-19060.h1
DATE: 06/30/2007
DATE: June 30, 2007
In re:
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SSN: -----------
Applicant for Security Clearance
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ISCR Case No. 06-19060
DECISION OF ADMINISTRATIVE JUDGE
NOREEN A. LYNCH
APPEARANCES
FOR GOVERNMENT
John B. Glendon, Esq., Department Counsel
FOR APPLICANT
Pro se
SYNOPSIS
2
Applicant is a 27-year-old employee working for a defense contractor.  He had fourteen
alleged debts listed in the statement of reasons (SOR) totaling approximately $24,000. He now has
three outstanding debts totaling $10,000, and started a debt repayment plan. His debt problems
resulted from his wife's medical emergencies and periods of unemployment. For the last two years
he has shown his financial responsibility by not generating any new delinquent debt. Applicant has
mitigated security concerns arising under financial considerations. Clearance is granted. 
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STATEMENT OF THE CASE
On December 21, 2005, Applicant applied for a security clearance and submitted a Security
Clearance Application (SF 86). On November 9, 2006, the Defense Office of Hearings and Appeals
(DOHA) issued a Statement of Reasons (SOR) to him, pursuant to Executive Order 10865,
Safeguarding Classified Information Within Industry, February 20, 1960, as amended and modified,
and Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance
Review Program (Directive), dated January 2, 1992, as amended and modified. The SOR detailed
reasons why, 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, DOHA could not make the preliminary affirmative finding under the Directive that it is
clearly consistent with the national interest to continue a security clearance for Applicant. The
revised guidelines were provided to Applicant when the SOR was issued. Applicant answered the
SOR on January 16, 2007, and elected to have a hearing before an administrative judge. The case
was assigned to me on May 28, 2007. I scheduled a hearing for June 12, 2007. 
The hearing was convened as scheduled on June 12, 2007 to consider whether it is clearly
consistent with the national interest to grant or continue a security clearance for Applicant. Three
Government exhibits (Ex. 1-4) were admitted into the record without objection.  Applicant's three
exhibits (Ex. A-C) were admitted into the record without objection. Applicant testified in his own
behalf, as reflected in the hearing transcript (Tr.) received on June 21, 2007. At Applicant's request,
I kept the record open until June 26, 2007 for Applicant to submit additional information. He timely
sent bank statements and a debt management plan which are marked AE D and E for the record and
admitted without objection.
FINDINGS OF FACT
Applicant’s admissions to the allegations in subparagraphs 1.e, 1.f, 1.g, 1.h, 1.k, 1.l, 1.m, in
the SOR, ¶ 1. are incorporated herein. He denied allegations in subparagraphs 1.a, 1. b, 1.c, 1.d, 1.i,
Applicant's response to the SOR, dated January 16, 2007.1
 Government Ex. 1 (Security Clearance Application, dated December 21, 2005).2
Id. 3
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1.j, and 1.n because he paid the debts.  In addition, after a thorough and careful review of the1
evidence and exhibits, I make the following findings of fact:
Applicant is a 27-year-old who works for a defense contractor. He is married, and has five
children.  Applicant earned a high school diploma in 1997 and attends college courses.  He2 3
submitted an application for a security clearance on December 21, 2005.
After graduation from high school, Applicant started employment with a defense contractor.
He stayed with the company until August 2002 when he was laid off. He found new employment and
remained with that company until January 2003. After two months of unemployment, he found
employment with another contractor. Unfortunately that job only lasted a few months. Applicant then
Tr. 41.4
Tr. 26.5
5
attempted to join the United States Air Force. However, the military advised him he had too many
children.  He completed an application for a security clearance on December 21, 2005.4
When Applicant married in October 2000, his financial problems had already started. He was
evicted from an apartment in July 2000 due to a neighbor's complaint. As a result of the unpaid rent,
a judgment in the amount of $925 was entered against him.  Shortly thereafter, his car was5
repossessed, but he did not understand the consequences. He believed the dealer would hold the car
Tr. 64.6
Tr. 70.7
Tr. 44.8
Tr. 40.9
Applicant's receipt in file, dated 2002.10
AE D (Bank Statements).11
AE B (Letter dated June 11, 2007).12
AE D (Debt Management Plan dated June 2007).13
Tr.106.14
AE C (Applicant's credit report, dated June 11, 2007).15
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for him until he could pay.  His wife had a child in January 2000 from a prior relationship and6
another child was born in 2001. In order to save money, Applicant moved them into his
grandmother's house.  He attempted to assume the mortgage after his grandmother died, but7
unfortunately that property was foreclosed in August 2001.  His wife had another child the next year
and her relatives lived with them. Applicant attempted to support his wife's relatives.
In October 2002, Applicant and his wife broke the lease on their apartment and a debt of
$3000 was the result. At the same time, his wife had medical problems due to several miscarriages.
Applicant took some time from work to attend to his wife. Due to more unemployment, Applicant's
debt continued to plague him.  In March 2003, he was again evicted from another property due to8
his unemployment. He worked at low paying jobs, but in 2004, he and his wife were again evicted
from a home, and a judgment in the amount of $2,901 was the result.  At that time he and his wife
had five children.  They were living pay check to pay check. He incurred bills for utilities, credit card9
debt and other living expenses that he could not pay.
Applicant attempted to supplement his limited income with overtime and jobs on the road
during these years. Through a wage garnishment, he paid a judgment in 2002.  He paid some debts10
in 2006-2007 due to extra income from being overseas six months. Three of those months he spent
in Iraq. With his extra income, he paid most of the debts in the SOR.  He sought financial11
counseling from his brother who has expertise in the banking industry. He was advised to contact
creditors and collection agencies, and disputed the debt in 1.h. However, he was also advised to
improve his credit score by paying debts rather than consolidating them.  Applicant's remaining12
debts from the SOR are allegations 1. k, 1. l, and 1. m. These debts total approximately $10,000.13
Applicant earns approximately $4,000 net a month.  Today, Applicant lives more within his14
means and has not acquired any significant debt other than his home mortgage and car loan. His
credit bureau reports confirm his paid accounts.  He is current on his mortgage and his car loan. His15
credit rating is improving. He is financially more stable. After his monthly expenses, he has
AE B supra, at note 12.16
AE D supra, at note 13.17
 Letter from manager in file, dated June 2007.18
 ISCR Case No. 96-0277 at 2 (App. Bd. Jul 11, 1997).19
 ISCR Case No. 97-0016 at 3 (App. Bd. Dec 31, 1997); Directive, Enclosure 3, ¶ E3.1.14.20
 Department of the Navy v. Egan, 484 U.S. 518, 531 (1988).21
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approximately $1,300 net monthly remainder.  His only delinquent debts are the three accounts16
noted above. He accepts responsibility for paying those debts. He accepted another overseas
assignment that will generate sufficient income to allow him to make monthly payments. He signed
an agreement in June 2007 with a debt management company to allow direct payments on the
remaining accounts in the SOR. Applicant is receiving debt management counseling in accordance
with this agreement. He has a structured payment plan.17
Applicant is highly recommended by his employer. He is rated as a highly motivated,
dependable, dedicated individual  who strives to make improvements for himself as well as his peers.
His three years of employment are unblemished. He has excellent potential and opportunity for
advancement in the defense industry.  18
POLICIES
The revised Adjudicative Guidelines (AG) set forth set forth both disqualifying conditions and
mitigating conditions applicable to each specific guideline. Additionally, each security clearance
decision 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: (1) the nature, extent and seriousness of the conduct and surrounding
circumstances; (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) the 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. 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.
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 government19
has the burden of proving controverted facts.  The burden of proof is something less than a20
preponderance of evidence.  Once the government has met its burden, the burden shifts to an21
applicant to present evidence of refutation, extenuation, or mitigation to overcome the case against
 ISCR Case No. 94-1075 at 3-4 (App. Bd. Aug 10, 1995); Directive, Enclosure 3, ¶ E3.1.15.22
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan 27, 1995); Directive, Enclosure 3, ¶ E3.1.15.23
 Egan, 484 U.S. 518, at 531.24
 Id.25
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him.  Additionally, an applicant has the ultimate burden of persuasion to obtain a favorable clearance22
decision.23
No one has a right to a security clearance  and “the clearly consistent standard indicates that24
security clearance determinations should err, if they must, on the side of denials.”  Any reasonable25
doubt about whether an applicant should be allowed access to sensitive information must be resolved
 Id.; Directive, Enclosure 2, ¶ E2.2.2.26
 Executive Order 10865 § 7.27
 AG ¶ 18.28
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in favor of protecting such sensitive information.  The decision to deny an individual a security26
clearance is not necessarily a determination as to the loyalty of an applicant.  It is merely an27
indication that the applicant has not met the strict guidelines the President and the Secretary of
Defense have established for issuing a security clearance.
CONCLUSIONS
I have carefully considered all the facts in evidence and the legal standards. Based upon
consideration of the evidence, I find Guideline F of the revised AG most pertinent to the evaluation
of the facts in this case. That guideline reads in pertinent part:
Guideline F - Financial Considerations. 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.28
In this matter, the government provided substantial evidence that Applicant accrued fourteen
delinquent debts since 2000. He still owes approximately $10,000 in debt.  Consequently, Financial
Considerations Disqualifying Condition (FC DC), AG ¶ 19(a), (inability or unwillingness to satisfy
debts) and FC DC, ¶ 19(c), (a history of not meeting financial obligations) apply. 
With the government’s case established, the burden shifts to Applicant to present evidence
of refutation, extenuation, or mitigation to overcome the case against him. Applicant suffered with
unemployment on a number of occasions. His wife had some difficulty with her pregnancies and
therefore she had some medical problems. Applicant was the sole support for his wife and five
children. His unemployment caused him to get behind in his bills some time ago. He attempted to
save by moving into his grandmother's house. Therefore, FC MC, AG ¶ 20(b), (the conditions that
resulted in the behavior 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) applies. 
Applicant received financial counseling and paid a judgment through  a wage garnishment.
He  contacted his creditors and paid what he could. He paid many of his debts in January 2007 when
he had extra money from his work overseas. He is now situated to pay the remaining three debts. FC
MC, AG ¶ 20(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 FC MC, AG ¶ 20(d) (the
individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts) apply.
The issue before me is not whether Applicant is still legally liable for any or all of his
outstanding debts, but whether he has presented sufficient evidence of extenuation, mitigation or
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changed circumstances to warrant a favorable security clearance decision. His remaining unpaid debt
does not constitute a security risk.  He has a professional position with a good income and stands
ready to proceed with his repayment plan.
Whole Person 
I have considered both the record and Applicant in light of the “whole person” concept. He
is an earnest, young man who is supporting a wife and five children. He assumed many
responsibilities at any early age. He worked diligently in his field in the defense contractor industry
but suffered periods of unemployment. He persevered to support his family through the times of
medical emergencies and periods of unemployment. He attempted to join the military to stabilize his
situation. His testimony at the hearing was candid and straightforward. At the hearing he
acknowledged the financial delinquencies would be considered a negative. He is open, honest and has
not hidden the situation. His financial circumstances have improved. The potential for pressure,
coercion, exploitation, or duress is low. He is current on his financial obligations, and has a very
positive employment history since 2004. Changes resulting from counseling and greater awareness
of financial responsibilities will result in a continuously improving trend of financial circumstances.
In sum, the likelihood of new debt problems is low. Applicant's financial case shows his
willingness to utilize his repayment plan to resolve his delinquent debts. However, three SOR debts
remain unpaid and not resolved. After weighing the disqualifying and mitigating conditions, and all
the facts and circumstances, in the context of the whole person, I conclude he has mitigated the
security concerns pertaining to financial considerations. Clearance is granted.
FORMAL FINDINGS
Formal Findings for or against Applicant on the allegations set forth in the SOR, as required
by Section E3.1.25 of Enclosure 3 of the Directive, are:
Paragraph 1. Guideline F (Financial Considerations):       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
Subparagraph 1.f. For Applicant
Subparagraph 1.g. For Applicant
Subparagraph 1.h. For Applicant
Subparagraph 1.i. For Applicant
Subparagraph 1.j. For Applicant
Subparagraph 1.k. For Applicant
Subparagraph 1.l. For Applicant
Subparagraph 1.m. For Applicant
Subparagraph 1.n. For Applicant
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DECISION
In light of all of the circumstances in this case, it is clearly consistent with the national interest
to grant a security clearance for Applicant. Clearance is granted.
                                               
Noreen A. Lynch.
Administrative Judge