KEYWORD: Financial
DIGEST: Applicant has delinquent debts in excess of $23,000. Applicant was questioned about his
finances in December 2004.  Although he has been employed in his current job for three and a half
year, there has been no payment on any of the debts listed in the Statement of Reasons. The record
evidence is insufficient to mitigate or extenuate the negative security implications stemming from
Applicant’s delinquent accounts. Clearance is denied.
CASENO: 06-00384.h1
DATE: 08/22/2007
DATE: August 22, 2007
In re:
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SSN: -----------
Applicant for Security Clearance
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ISCR Case No. 06-00384
DECISION OF ADMINISTRATIVE JUDGE
CLAUDE R. HEINY
APPEARANCES
FOR GOVERNMENT
James F. Duffy, Esq., Department Counsel
FOR APPLICANT
Pro Se
SYNOPSIS
Applicant has delinquent debts in excess of $23,000. Applicant was questioned about his
finances in December 2004.  Although he has been employed in his current job for three and a half
year, there has been no payment on any of the debts listed in the Statement of Reasons. The record
Required by Executive Order 10865, as amended, and Department of Defense Directive 5220.6 (Directive),1
dated January 2, 1992, as amended.
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evidence is insufficient to mitigate or extenuate the negative security implications stemming from
Applicant’s delinquent accounts. Clearance is denied.
STATEMENT OF THE CASE
On October 25, 2006, the Defense Office of Hearings and Appeals (DOHA) issued a
Statement of Reasons (SOR) to Applicant stating it could not make the preliminary affirmative
finding  it is clearly consistent with the national interest to grant or continue a security clearance for1
Applicant. The SOR set forth reasons why a security clearance could not be granted or continued
due to financial considerations security concerns.
On November 29, 2006, Applicant answered the SOR and did not request a hearing. On May
30, 2007, a File of Relevant Material (FORM) was prepared and sent to Applicant.  On July 2, 2007,
Applicant responded to the FORM. Department Counsel did not object to the material.  Applicant’s
response was admitted into the record. On July 26, 2007, I was assigned the case. 
FINDINGS OF FACT
The SOR alleges security concerns for financial considerations. Applicant denies four of the
debts and admits the remaining six debts. The admissions are incorporated herein as findings of fact.
After a thorough review of the record, I make the following findings of fact.
Applicant is a 41-year-old force protection officer who has been employed since January
2004 and is seeking to obtain a security clearance. Applicant served 10 years on active duty with the
U.S. Navy and served 10 years with the U.S. Naval Reserves and U.S. Air Force Reserves.  He was
honorably discharged from each. At age 60, Applicant will be entitled to retirement pay. Applicant
is married with six children. 
Applicant’s credit problems arose in mid-2002 to 2003. Applicant had a job at a bank earning
$45,000 annually.  He had been employed for seven years before his job was down sized. The family
income was reduced from $70,000 to $29,000, when the household had to rely solely on his wife’s
income.  At that time, he surrendered the SUV and payments to his creditors became irregular.  In
November 2006, Applicant in his answer (Item 4) to the SOR states his financial problems were
contributed to by his wife’s pregnancy and illness. However, Applicant’s December 2004 (Item 6)
sworn statement failed to mention his wife’s difficult pregnancy or illness. 
In December 2004, Applicant was asked about his finances and he provided a sworn
statement in which he acknowledged a telephone bill ($149, SOR 1.a), two credit card debts ($1,666
and $4,939, SOR 1.d and 1.e) and a mail order debt ($471, SOR 1.f). Applicant stated he did not
intend to pay the finance company related to his truck loan ($12,927, SOR 1.b) because they failed
to work with him to allow him to keep the truck. In November 2004, Applicant completed a personal
financial statement (Item 7) in which he listed the two credit card debts, a Master Card debt, a
student loan, and the mail order creditor.  The monthly payments would have totaled $325, which
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if made, would have left him with a net remainder of a negative $268.86. There is no documentation
that payments were ever made on these accounts. 
In March 2005, Applicant completed another personal financial statement (Item 9) which
did not reflect debt repayment except for his student loan ($25) and vehicle loan.  His monthly net
remainder was $37.14. 
In 2005, Applicant turned over the management of his financial affairs to his wife. Applicant
asserts his spouse is negotiating with certain creditors about some of the delinquent debt.  Applicant
failed to document any of the negotiations.  Applicant asserts that since he turned over the running
of their financial affairs to his wife, their bills have been current. 
As of July 2007, Applicant and his spouse have net monthly income of $5,800, net monthly
expenses of $2,500, and $2,200 in monthly debt repayment, resulting in a net monthly remainder
of $1,000. Applicant’s home is valued at $247,000 on which he has mortgages of $243,000,
resulting in equity of $4,000.  Applicant has $51,000 in other assets including savings, stocks, and
bonds and $21,000 in other debt, which results in equity of $21,000.
In 2006, Applicant opened four new credit card accounts. (Item 12) Applicant’s credit
reports dated July 2004 (Item 10), March 2006 (Item 11), and March 2007 (Item 12) list ten past due
or delinquent accounts totaling approximately $25,600.  Half of the delinquent debt (approximately
$13,000) is the result of a repossessed SUV/truck.  A summary of the debts follows:
SOR 1 Creditor Amount Current Status
a Telephone bill. $149 Applicant admits and alleges his spouse is
negotiating with creditor.  No documentation
was provided. 
b Repossessed SUV/truck. $12,927 Applicant admits the truck was repossessed,
but refuses to pay because creditor failed to
work with him so he could keep the truck.
(Item 6, 11)
c Department store debt. $2,164 Applicant denies the debt. No
documentation was provided. (Item 11)
d Credit card debt. Same
debt as k. 
$1,666 Applicant admits and states creditor has lost
the records.  No documentation was
provided. 
e Credit card debt. $4,939 Applicant admits and states creditor has lost
the records.  No documentation was
provided. 
f Mail order seller debt. $471 Applicant admits and alleges his spouse is
negotiating with creditor.  No documentation
was provided. 
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g Collection for bank debt. $737 Applicant admits and alleges his spouse is
negotiating with creditor.  No documentation
was provided. 
h Debt. $437 Applicant admits, but disputes the amount
owed. (Item 11)
i Collection agency. $2,026 A duplication of SOR 1.d. (Item 11)
j Utility bill. $439 Applicant admits and alleges his spouse is
negotiating with creditor.  No documentation
was provided. Applicant alleges the debt
record was lost. (Item 12)
Total debt listed in SDI $25,689
POLICIES
The Directive sets forth adjudicative guidelines to be considered when evaluating a person’s
eligibility to hold a security clearance. Disqualifying Conditions (DC) and Mitigating Conditions
(MC) are set forth for each applicable guideline. Additionally, each decision must be a fair and
impartial commonsense decision based upon the relevant and material facts and circumstances, the
whole person concept, and the factors listed in Section 6.3 of the Directive. The adjudicative
guidelines are to be applied by administrative judges on a case-by-case basis with an eye toward
making determinations that are clearly consistent with the interests of national security. The
presence or absence of a particular condition or factor for or against clearance is not determinative
of a conclusion for or against an applicant.  However, the adjudicative guidelines should be followed
whenever a case can be measured against this policy guidance. Considering the evidence as a whole,
I conclude the relevant guideline to be applied here is Guideline F, financial considerations.
BURDEN OF PROOF
The sole purpose of a security clearance decision is to decide if it is clearly consistent with
the national interest to grant or continue a security clearance for an applicant. Initially, the
Government must establish, by substantial evidence, that conditions exist in the personal or
professional history of the applicant which disqualify, or may disqualify, an applicant from being
eligible for access to classified information. The burden of proof in a security clearance case is
something less than a preponderance of evidence, although the government is required to present
substantial evidence to meet its burden of proof.  Substantial evidence is more than a scintilla, but
less than a preponderance of the evidence. All that is required is proof of facts and circumstances
which indicate an applicant is at risk for mishandling classified information, or that an applicant
does not demonstrate the high degree of judgment, reliability, or trustworthiness required of persons
handling classified information.  Additionally, the government must prove controverted facts alleged
in the SOR.  Once the government has met its burden, the burden shifts to an applicant to present
 ISCR Case No. 93-1390 (Aff.. Bd. January 27, 1995) at pp. 7-8; Directive, Enclosure 3, Item E3.1.152
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evidence to refute, extenuate or mitigate the government's case.  Additionally, an applicant has the
ultimate burden of persuasion to obtain a favorable clearance decision.2
As noted by the United States Supreme Court in Department of Navy v. Egan, 484 U.S. 518,
528 (1988), “no one has a ‘right’ to a security clearance.” A person who has access to classified
information enters into a fiduciary relationship with the government based on trust and confidence.
The government, therefore, has a compelling interest in ensuring each applicant possesses the
requisite judgment, reliability and trustworthiness of one who will protect the national interests. The
“clearly consistent with the national interest” standard compels resolution of any reasonable doubt
about an applicant’s suitability for access to classified information in favor of protecting national
security.  Security clearance determinations should err, if they must, on the side of denials. 
CONCLUSIONS
The Government has satisfied its initial burden of proof under Guideline F, financial
considerations. A person’s relationship with his creditors is a private matter until evidence is
uncovered demonstrating an inability or unwillingness to repay debts under agreed upon terms.
Absent evidence of strong extenuating or mitigating circumstances, an applicant with a history of
serious or recurring financial difficulties is in a position of risk that is inconsistent with the holding
of a security clearance. An applicant is not required to be debt free, but is required to manage his
finances so as to meet his financial obligations.
Financial considerations become a security concern when a person has significant delinquent
debts. An individual who is financially overextended is at risk of having to engage in illegal or
unethical acts to generate funds to meet financial obligations. Additionally, an individual who is
financially irresponsible may also be irresponsible, unconcerned, or careless in their obligations to
protect classified information.  Behaving responsibly or irresponsibly in one aspect of life provides
an indication of how a person may behave in other aspects of life. 
Applicant denies four of the ten debts. Debts SOR 1.d ($1,666) and SOR 1.i ($2,026) are the
same debt. Applicant admits owing SOR 1.d and denies SOR 1.I, the same debt. Applicant denies
the vehicle repossession debt (SOR 1.b, $12,927).  He admits the vehicle was repossessed, but
refuses to pay the balance due because the creditor failed to work with him to allow him to keep the
vehicle. Applicant admits owing six debts totaling approximately $8,400.  Disqualifying Conditions
(DC) 19 (a) inability or unwillingness to satisfy debts and 19 (c) a history of not meeting financial
obligations apply. 
None of the Mitigating Conditions (MC) apply in the Applicant’s favor. 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, does not apply because there are numerous debts and, even though the obligations
were not recently incurred, the delinquent debts remain. There is insufficient evidence to establish
the conduct is unlikely to recur.
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In July 2002, Applicant lost his $45,000 job due to downsizing.  He was asked about his
debts in December 2004 (Item 6). Applicant has been employed in his current job for three and a
half years and has yet to show payment on a single bill.  He asserts his wife is now handling the
family’s finances and all the debts are current.  However, he provides no documentation supporting
this assertion. He also asserts his financial problems were contributed to by his wife’s difficult
pregnancy and illness. Her pregnancy and illness may have had some impact on Applicant’s
finances, but he failed to document the extent of the impact. 
Sufficient time has passed since Applicant has obtained his current job to have made
payment on at least one of the debts listed in the SOR.  I find 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, does not apply. Applicant has not acted
responsibly under the circumstances.
 There is no evidence Applicant has sought financial counseling nor has he demonstrated a
change in his financial management.  There no clear indication the problem is being resolved or
under control, even though Applicant asserts all his bills are now current and his wife now handles
the family finances.  MC 20 (c) 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.
MC 20 (d) applies when the individual initiated a good-faith effort to repay overdue creditors or
otherwise resolve debts to apply to apply there must be an “ability” to repay the debts, the “desire”
to repay, and evidence of a good-faith effort to repay.  A systematic, concrete method of handling
his debts is needed, which is not present here. 
Applicant disputes the amount owed in SOR 1.g ($737).  He says he will not repay the debt
arising from the repossession of his truck because the creditor did not work with him to allow him
to keep the vehicle. However, Applicant’s assertions, that the amount owed on one debt is incorrect
and he did not like  the creditor’s conduct, are insufficient to apply MC 20 (e) the individual has a
reasonable basis to dispute the legitimacy of the past-due debt which is the cause of the problem and
provides documented proof to substantiate the basis of the dispute or provides evidence of actions
to resolve the issue.
Affluence has not been alleged, therefore MC 20 (f) the affluence resulted from a legal
source of income, does not apply. Because he has failed to document payment of his debts, I find
against Applicant on financial considerations.
In reaching my conclusions I have also considered: the nature, extent, and seriousness of the
conduct; Applicant’s age and maturity at the time of the conduct; the circumstances surrounding the
conduct; Applicant’s voluntary and knowledgeable participation; the motivation for the conduct; the
frequency and recency of the conduct; presence or absence of rehabilitation; potential for pressure,
coercion, exploitation, or duress; and the probability that the circumstance or conduct will continue
or recur in the future. After weighing the disqualifying and mitigating conditions and evaluating the
evidence in the context of the “whole person,” I conclude Applicant has not mitigated the security
concern based on financial considerations. 
FORMAL FINDINGS
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Formal Findings as required by Section 3, Paragraph 7, of Enclosure 1 of the Directive are
hereby rendered as follows:
Paragraph 1 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: For Applicant
Subparagraph 1.k: Against Applicant
DECISION
In light of all the circumstances presented by the record in this case, it is not clearly
consistent with the national interest to grant or continue a security clearance for Applicant.
Clearance is denied.
Claude R. Heiny 
Administrative Judge