KEYWORD: Financial; Personal Conduct; Criminal Conduct
DIGEST: Between 2001 and 2005, Applicant accrued approximately $30,000 of delinquent debt.
The delinquencies were caused by financial problems generated by her husband’s struggling business
endeavors. During the past two years, the business has experienced exponential growth, enabling
them to satisfy nearly all of the debts. Clearance is granted. 
CASENO: 06-12349.h1
DATE: 07/18/2007
DATE:  July 18, 2007
In re:
-------------------  
SSN: -----------
Applicant for Security Clearance
)
)
)
)
)
)
)
)
ISCR Case No. 06-12349
DECISION OF ADMINISTRATIVE JUDGE
MARC E. CURRY
APPEARANCES
FOR GOVERNMENT
Ray T. Blank, Jr., Department Counsel
FOR APPLICANT
Gary A. Matthews, Esq.
Arnold J. Janicker, Esq.
SYNOPSIS
Between 2001 and 2005, Applicant accrued approximately $30,000 of delinquent debt. The
delinquencies were caused by financial problems generated by her husband’s struggling business
endeavors. During the past two years, the business has experienced exponential growth, enabling
them to satisfy nearly all of the debts. Clearance is granted.
This action was taken under Executive Order 10865, dated February 20, 1960, as amended, and DoD Directive1
5220.6, dated January 2,1992, as amended and modified (Directive).
Tr. 248.2
Tr. 268; Exhibit 7, Stipulation of Expected Testimony of Office of Personnel Management Investigative Agent,3
dated May 11, 2007, at 1.
Tr. 33.4
Tr. 37, 176.5
2
STATEMENT OF THE CASE
On August 22, 2006, the Defense Office of Hearings and Appeals (DOHA) issued to
Applicant a Statement of Reasons (SOR) stating it was unable to find it clearly consistent with the
national interest to grant or continue a security clearance.  Applicant answered the SOR on October1
10, 2006, and requested a hearing. 
The case was assigned to me on February 27, 2007. On March 28, 2007, DOHA issued a
notice of hearing scheduling the case for May 15, 2007. During the hearing, I received 11 government
exhibits, 15 Applicant exhibits, and the testimony of four Applicant witnesses. At the conclusion of
the hearing, I left the record open through May 25, 2007 for Applicant to submit additional exhibits.
That day, she submitted an additional exhibit. Department Counsel did not object to its admissibility.
I then marked it as Applicant’s Exhibits P and incorporated them into the record. DOHA received the
transcript on May 24, 2007.
FINDINGS OF FACT 
Applicant is a 39-year-old married woman with five children, ages 11 through 19. She has a
high school diploma, and has worked various part-time jobs over the years. Since 1994, she has been
a homemaker. Currently, she is seeking a clearance to enable her to provide administrative support
for her husband’s consulting firm.  Over the years, she has been minimally involved in managing the2
family finances.3
Applicant’s husband is an Air Force veteran. While in the Air Force, he worked in
communications and information technology.  After leaving, he continued to work in these fields for4
defense contractors through the early 1990s. In approximately 1996, he left the defense contracting
industry and began performing information systems implementations for hospitals.  He worked on5
staff for a hospital for two years.
Exhibit 1, Security Clearance Application, dated September 23, 2004, at 2.6
Exhibit K, Reference Letter of Chief Financial Officer of a Hospital Client, dated March 12, 2007, Exhibit L,7
Client Reference Letter, dated March 14, 2007, Exhibit M, Client Reference Letter, dated March 14, 2007.
Tr. 188.8
Tr. 126-128; 165.9
Exhibit H, Release of State Income Tax Lien for Tax Year 2000, dated August 17, 2006; Exhibit I, Release10
of State Income Tax Lien for Tax Years 2002 and 2003, dated September 6, 2006.
Exhibit P, Receipt of Payment, dated May 22, 2007; Exhibit D, Release of Judgment Lien, dated August 10,11
2006.
Answer, dated October 10, 2007, at 1.12
3
In 1998, Applicant’s husband left the hospital job, and started a consulting firm.  He does the6
same type of work he did when employed with the hospital. Throughout the life of the business, he
has been very adept at recruiting clients, marketing his business, and servicing the contracts.7
Conversely, his financial management skills, for the most part, have been poor. When he first
started his business, he failed to set aside money in an income tax escrow account,  and was unable8
to pay them when due. Also, he failed to segregate his business expenses from his personal expenses,
and consequently began losing track of both. During this same period, he became financially
overextended further, purchasing two rental properties, and raising race horses.9
Applicant and her husband have had sporadic health insurance, since starting the business.
This rendered it difficult for them to distinguish between medical bills that were solely their
responsibility and those that their insurance provider covered. Also, they experienced financial
hardship when the business was not making any money. Consequently, their bills grew delinquent.
By July 2006, Applicant had accrued approximately $30,400 of delinquent debt.
Approximately $28,590 consisted of state income tax liens filed against her and her husband’s
property in 2002 for tax year 2000 (subparagraph 1.a), 2004 for tax year 2002 (subparagraph 1.d), and
2005 for tax year 2003 (subparagraph 1.h). By September 2006, they had satisfied them in their
entirety, and the liens were released.10
Approximately $1,800 consists of medical bills (subparagraphs 1.c, 1.e, 1.f, and 1.g). Neither
Applicant nor her family have experienced any chronic or severely disabling injuries. Many of her
children, however, have frequently injured themselves while participating in athletics. 
She satisfied subparagraphs 1.e and 1.g.  Subparagraphs 1.c and 1.f, collectively totaling11
approximately $1,300, are owed to the same collection agency. She was unaware of them at the time
she received the SOR, and is currently in the process of tracking down the original creditors so that
she can satisfy them.12
Tr. 250.13
Tr. 251.14
Tr. 223.15
Tr. 226, 229 –Testimony of Banker.16
Tr. 237.17
Tr. 235.18
Tr. 277.19
See Husband’s SF 86, Exhibit 1 of Industrial Security Clearance Review of Applicant’s Husband (ISCR Case20
No. 06-18535).
Tr. 277.21
4
The remaining delinquency, subparagraph 1.b, originates from a $91 bounced check that
Applicant wrote to a department store. She paid it.  She attempted to obtain a confirmation of13
payment before the hearing, but was unsuccessful because the creditor is no longer in business.14
Applicant’s ability to pay these delinquencies in a short period of time, after they had lingered
for years, resulted from a drastic improvement in her husband’s business in January 2006, after he
was awarded several contracts. According to their personal banker, who testified at the hearing, the
business’ reserves, since that time, have been growing “very steadily and very quickly.”  Currently,15
they own several other businesses in addition to the consulting business. The combined gross revenue
of the companies, and the gross value of their real estate holdings exceed two million dollars.16
Since 2004, Applicant’s husband has been delegating the financial management of the
business to an accountant. Although he had worked with the same accountant since 1999, the work
was limited to filing tax returns.  Since 2004, the accountant has been handling the “payroll17
processing, fil[ing ]the required tax deposits, . . . preparing annual general ledger[s]. . . and handl[ing]
the checkbook[s] for the corporation.”  Applicant’s husband will consult his accountant before18
making any future investments.
Applicant answered “No” in response to Question 36 (Your Financial Record - Tax Lien   In
the last 7 years, have you had a lien placed against your property for failing to pay taxes or other
debts?), Question 38 (Your Financial Delinquencies - 180 Days - In the last 7 years, have you been
over 180 days delinquent on any debt?), and Question 39 (Your Financial Delinquencies - 90 days -
Are you currently over 90 days past due on any debt(s)) of the security clearance application (SF 86).
Two liens were outstanding when she executed the SF 86. Also, the debts listed in subparagraph 1.b
and 1.c were more than 180 days delinquent when she completed it.
Applicant was aware of the state tax liens, but thought they were against property owned
solely by her husband.  Her husband disclosed the liens on his SF 86, completed on the same day she19
completed hers.  She was unaware of the other delinquencies when she completed the SF 86.20 21
POLICIES
See generally, Directive, Sec. 2.3, Sec. 2.5.3, Sec. 3.2, and Sec. 4.2.22
5
Enclosure 2 of the Directive sets forth adjudicative guidelines which must be considered in
the evaluation of security suitability. In addition to brief introductory explanations for each guideline,
the adjudicative guidelines are divided into those that may be considered in deciding whether to deny
or revoke an individual’s eligibility for access to classified information (disqualifying conditions) and
those that may be considered in deciding whether to grant an individual’s eligibility for access to
classified information (mitigating conditions).
Because the entire process is a scrutiny of a number of variables known as the “whole person
concept,” all available, reliable information about the person, past and present, favorable and
unfavorable, should be considered in making a meaningful decision. 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.
The following adjudicative guidelines are raised:
Guideline F - Financial Considerations: An individual who is financially overextended
is at risk of having to engage in illegal acts to generate funds. 
Guideline E - Personal Conduct: Conduct involving questionable judgment, lack of
candor, dishonesty, or unwillingness to comply with rules and regulations could
indicate that the person may not properly safeguard classified information.
Guideline J - Criminal Conduct: A history or pattern of criminal activity creates doubt about
a person’s judgment, reliability and trustworthiness. 
Conditions pertaining to these adjudicative guidelines that could raise a security concern and may be
disqualifying, as well as those which could mitigate security concerns, are set forth and discussed in
the conclusions below.
Since the protection of national security is the paramount consideration, the final decision in
each case must be reached by applying the standard that the issuance of the clearance is “clearly
consistent with the national interest.”   In reaching this decision, I have drawn only those conclusions22
that are based on the evidence contained in the record.
The Government is responsible for presenting evidence to establish facts in the SOR that have
been controverted. The applicant is responsible for presenting evidence to rebut, explain, extenuate,
or mitigate facts admitted by the applicant or proven by the Government, and has the ultimate burden
of persuasion as to obtaining a favorable security decision.
CONCLUSIONS
6
Financial Considerations
Applicant is a homemaker whose husband handled the majority of their finances. Because the
majority of the debts are in both of their names, however, Financial Considerations Disqualifying
Condition (FC DC) E2.A6.1.2.1 (A history of not meeting financial obligations) and FC DC
E2.A6.1.2.3 (Inability or unwillingness to satisfy debts), applies to her also.
Applicant’s financial problems were neither recent nor isolated. Financial Considerations
Mitigating Conditions (FC MC) E2.A6.1.3.1 (The behavior was not recent), and FC MC E2.A6.1.3.2
(It was an isolated incident) do not apply.
Applicant neither earned any income in the late 1990s nor helped with the management of her
husband’s business which he started at that time. Her financial well-being, however, was totally
dependent on the success of the company. FC MC E2.A6.1.3.3 (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) applies.
Applicant’s husband retained an accountant to manage the finances of his business. This has
enabled him to focus more on business development. The business has grown tremendously, enabling
him to satisfy all of the delinquencies that he and his wife could identify, in their entirety. Although
FC MC E2.A6.1.3.4 (The person has received or is receiving counseling for the problem and there
are clear indications that the problem is being resolved or is under control) does not apply because
neither received counseling, FC MC E2.A6.1.3.6 (The individual initiated a good-faith effort to repay
overdue creditors or otherwise resolve debts), applies because of their repayment efforts over the past
18 months.
Applicant’s remaining delinquent debt is minimal in comparison to the debt which she has
satisfied. Given the family’s improved financial circumstances, and the track record of reform
demonstrated by satisfying the overwhelming majority of the delinquencies, I am confident that
Applicant will pay the remainder, as promised at the hearing.  She has mitigated the financial
considerations security concern.
Personal Conduct
Applicant’s responses to Questions 36, 38, and 39 of her 2004 SF 86 raise the issue of whether
Personal Conduct Disqualifying Condition E2.A5.1.2.2 (The deliberate omission, concealment, or
falsification of relevant facts from any personnel security questionnaire, personal history statement,
or similar form used to conduct investigations, determine employment qualifications, award benefits
or status, determine security clearance eligibility or trustworthiness, or award fiduciary
responsibilities) applies.
Applicant’s husband submitted his SF 86 on the same day as wife. He disclosed the tax liens,
that she omitted. Under these circumstances, I conclude her explanation for omitting them was
credible, and she possessed no intent to conceal them..
7
As a homemaker, Applicant is focused on raising her children. Her husband manages the
finances. Consequently, her testimony that she was unaware of the other SOR delinquencies at the
time she completed the SF 86 was also credible.
Applicant did not falsify her SF 86. PC DC E2.A5.1.2.2 is inapplicable, and there are no
personal conduct security concerns.
Criminal Conduct
For the reasons set forth above, Applicant’s responses to Questions 36, 38 and 39 do not
constitute falsifications under 18 U.S.C. § 1001.
Whole Person Concept
Applicant has satisfied the majority of her delinquencies. As a homemaker who earned no
income, her financial problems were caused by her husband’s past business misfortunes. After
struggling for several years, the business is stable and prosperous. Her husband has retained an
accountant to ensure that the business’ finances remain organized. These factors render the potential
for coercion nonexistent at present, and the potential for recurrence minimal. Evaluating these facts
in the context of the whole person concept, I conclude Applicant has mitigated the security concern.
Clearance is granted.
FORMAL FINDINGS
Paragraph 1 – Guideline F: FOR APPLICANT
Subparagraph 1.a - 1.h: For Applicant
Paragraph 2 - Guideline E: FOR APPLICANT
Subparagraph 2.a: For Applicant
Subparagraph 2.b: For Applicant
Subparagraph 2.c: For Applicant
Paragraph 3 - Guideline J: FOR APPLICANT
Subparagraph 3.a: For Applicant
DECISION
In light of all the circumstances presented by the record in this case, it is clearly consistent
with the national interest to grant or continue a security clearance for Applicant. Clearance is granted.
Marc E. Curry
Administrative Judge