KEYWORD: Financial
DIGEST: Applicant is a 33-year-old employee working for a defense contractor.  He had  alleged
debts listed in the statement of reasons (SOR) totaling approximately $25,000.  His debt problems
resulted in part from his wife's medical emergencies and periods of unemployment. He is not able
to pay his debts due to his low paying position. He has no plan in place to resolve the debt. Applicant
has not mitigated security concerns arising under financial considerations. Clearance is denied. 
CASENO: 06-20788.h1
DATE: 07/30/2007
DATE:  July 30, 2007
In re:
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SSN: ------------
Applicant for Security Clearance
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ISCR Case No. 06-20788
DECISION OF ADMINISTRATIVE JUDGE
NOREEN A. LYNCH
APPEARANCES
FOR GOVERNMENT
Daniel F. Crowley, Esq., Department Counsel
FOR APPLICANT
Pro se
SYNOPSIS
2
Applicant is a 33-year-old employee working for a defense contractor.  He had  alleged debts
listed in the statement of reasons (SOR) totaling approximately $25,000.  His debt problems resulted
in part from his wife's medical emergencies and periods of unemployment. He is not able to pay his
debts due to his low paying position. He has no plan in place to resolve the debt. Applicant has not
mitigated security concerns arising under financial considerations. Clearance is denied. 
Applicant's response to the SOR, dated May 5, 2007.1
 Government Ex. 1 (Security Clearance Application, dated October 17, 2005).2
Id. 3
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STATEMENT OF THE CASE
On October 17, 2005, Applicant applied for a security clearance and submitted a Security
Clearance Application (SF 86). On February 15, 2007, 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 May 4, 2007, and elected to have a hearing before an administrative judge. The case was
assigned to me on June 18, 2007. I scheduled a hearing for July 9, 2007. 
The hearing was convened as scheduled on July 9, 2007 to consider whether it is clearly
consistent with the national interest to grant or continue a security clearance for Applicant.
Government Exhibits (GE 1-5) were admitted into the record without objection. Applicant did not
submit any exhibits. Applicant testified in his own behalf, as reflected in the hearing transcript (Tr.)
received on July 18, 2007. At Applicant's request, I kept the record open until July 23, 2007 for
Applicant to submit additional information. He did not submit any information.
FINDINGS OF FACT
Applicant’s admissions to the allegations in subparagraphs 1.a, 1.d, 1.e, 1.f, 1.h, and 1.i in
the SOR, ¶ 1. are incorporated herein. He denied allegations in subparagraphs 1. b, 1.c, and 1.g
because he could not obtain any information about the accounts.  In addition, after a thorough and1
careful review of the evidence and exhibits, I make the following findings of fact:
Applicant is a 33-year-old who works for a defense contractor. He is married, and has one
child.  Applicant earned a high school diploma in 1991.  He submitted an application for a security2 3
clearance on October 17, 2005.
After his 1991 graduation from high school, Applicant worked as a welder and truck driver
for various companies. In 1998-1999, he had a period of unemployment for six months. He has been
Tr. 23.4
Tr. 26.5
Tr. 25.6
Tr. 27.7
GE 4 (Financial Interrogatory and attachments dated January 2007).8
Tr. 34.9
Tr. 31.10
Tr. 48.11
Tr. 41.12
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with his current position since October 2005 when he completed an application for a security
clearance.4
In 1993, Applicant had an accident on the job. He had many medical bills that were not
covered by his insurance.  In 1994, he purchased a vehicle but could not stay current on the5
payments. He acknowledged that in that time period, he was "running wild" and spending or
"blowing his money" and not being attentive to his financial situation.6
In 1996,  Applicant married. His wife has multiple sclerosis (MS) and does not work. He and
his wife lived with his mother on her property. His mother became ill in 1998, and Applicant could
not make the mortgage payments on the house. The foreclosure resulted in a debt of $21,547.7
Five debts are unpaid medical accounts. Applicant does not have any knowledge about the
accounts. He tried to call about the medical bills, but has not received any information. He also has
a judgment in the amount of $169 for propane gas.8
In 2000, Applicant' wife purchased a computer on a credit card. They could not continue to
pay on the account. This resulted in a charged off debt in the amount of $1,494.9
Applicant earns approximately $1,782  net a month.   He lives  within his means and has not10
acquired any new significant debt. He accepts responsibility for paying his debts. He has no credit
cards. However, his net monthly remainder after expenses is $15.28. He recently received a raise and
his monthly net remainder will increase. He and his wife are now living in her grandmother's house
and do not pay rent.  He has a car loan and he is struggling to make the last payments. 11
On June 23, 2007, Applicant's mother died suddenly. He is in the process of paying funeral
expenses. He is the beneficiary of her life insurance policy. If there is any money left after paying
funeral expenses, he will pay some of the smaller debts.  12
POLICIES
 ISCR Case No. 96-0277 at 2 (App. Bd. Jul 11, 1997).13
 ISCR Case No. 97-0016 at 3 (App. Bd. Dec 31, 1997); Directive, Enclosure 3, ¶ E3.1.14.14
 Department of the Navy v. Egan, 484 U.S. 518, 531 (1988).15
 ISCR Case No. 94-1075 at 3-4 (App. Bd. Aug 10, 1995); Directive, Enclosure 3, ¶ E3.1.15.16
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan 27, 1995); Directive, Enclosure 3, ¶ E3.1.15.17
 Egan, 484 U.S. 518, at 531.18
 Id.19
 Id.; Directive, Enclosure 2, ¶ E2.2.2.20
 Executive Order 10865 § 7.21
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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 government13
has the burden of proving controverted facts.  The burden of proof is something less than a14
preponderance of evidence.  Once the government has met its burden, the burden shifts to an15
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 clearance16
decision.17
No one has a right to a security clearance  and “the clearly consistent standard indicates that18
security clearance determinations should err, if they must, on the side of denials.”  Any reasonable19
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 security20
clearance is not necessarily a determination as to the loyalty of an applicant.  It is merely an21
indication that the applicant has not met the strict guidelines the President and the Secretary of
Defense have established for issuing a security clearance.
 AG ¶ 18.22
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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.22
In this matter, the government provided substantial evidence that Applicant accrued eight
delinquent debts since 2000. He still owes approximately $25,000 in debt.  Consequently, Financial
Considerations Disqualifying Condition (FC DC), AG ¶ 19(a), (inability or unwillingness to satisfy
debts) and FC DC, AG ¶ 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.  His wife has muscular dystrophy and therefore she had some medical problems.
Applicant is the sole support for his wife and his son. His unemployment caused him to get behind
in his bills some time ago. He attempted to save money by moving into his mother's house. However,
he acknowledged that he was wild in his youth and did not spend money wisely. He admits he did not
act responsibly to pay his debts. 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 in part. 
Applicant has not received any financial counseling. He has no plan in place to pay his 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) do
not apply. 
The issue 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 changed circumstances
to warrant a favorable security clearance decision. Applicant acknowledged his debts at the hearing
and his present inability to pay them. Despite his good intentions and his hope that if he receives
money from his mother's life insurance policy, he still owes $25,000 in delinquent debt and has no
financial plan or real ability to pay the debt. He has not contacted creditors in a consistent manner in
an attempt to resolve the matter. 
Whole Person 
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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 with medical problems. His mother died very
recently and he has accumulated debt from when he was young. He was very candid at the hearing
and would like to pay his debts, but to date has been unable to establish a sound financial track record.
In sum, the likelihood of new debt problems is high. Applicant demonstrated his willingness
to use any inheritance money to pay some of his smaller debts, but a promise to pay in the future is
not sufficient to mitigate his financial condition. 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 not mitigated the security concerns pertaining to
financial considerations. Clearance is denied.
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):       AGAINST APPLICANT
Subparagraph 1.a.       Against Applicant
Subparagraph 1.b.      Against Applicant
Subparagraph 1.c.       Against Applicant
Subparagraph 1.d. Against Applicant
Subparagraph 1.e. Against Applicant
Subparagraph 1.f. Against Applicant
Subparagraph 1.g. Against Applicant
Subparagraph 1.h. Against Applicant
Subparagraph 1.i. Against Applicant
DECISION
In light of all of the circumstances in this case, it is not clearly consistent with the national
interest to grant a security clearance for Applicant. Clearance is denied.
Noreen A. Lynch.
Administrative Judge