KEYWORD: Financial; Personal Conduct
DIGEST: Applicant is 35 years old and works for a federal contractor. Since 2001, he accumulated
a significant amount of debt that he has not paid or resolved. When he completed his security
clearance application in December 2004, he did not disclose an automobile repossession and two
unpaid judgments. He mitigated the security concerns raised by his personal conduct, but did not
mitigate those raised by financial considerations. Clearance is denied. 
CASENO: 06-00635.h1
DATE: 08/29/2007
DATE:  August 29, 2007
In re:
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SSN: ------------
Applicant for Security Clearance
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ISCR Case No. 06-00635
DECISION OF ADMINISTRATIVE JUDGE
SHARI DAM
APPEARANCES
FOR GOVERNMENT
James F. Duffy, Esq., Department Counsel
FOR APPLICANT
Pro Se
SYNOPSIS
       Applicant is 35 years old and works for a federal contractor. Since 2001, he accumulated a
FOR OFFICIAL USE ONLY
When unredacted this document contains information
EXEMPT FROM MANDATORY DISCLOSURE under the FOIA
Exemption 6 applies
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significant amount of debt that he has not paid or resolved. When he completed his security
clearance application in December 2004, he did not disclose an automobile repossession and two
unpaid judgments. He mitigated the security concerns raised by his personal conduct, but did not
mitigate those raised by financial considerations. Clearance is denied.
STATEMENT OF THE CASE
On December 30, 2004, Applicant submitted a security clearance application (SCA). On
August 30, 2006, the Defense Office of Hearings and Appeals (DOHA) issued a Statement of
Reasons (SOR) to Applicant, under Executive Order 10865, Safeguarding Classified Information
Within Industry, as amended, and Department of Defense Directive 5220.6, Defense Industrial
Security Clearance Review Program (Directive), dated January 2, 1992, as amended. The SOR
detailed reasons under Guidelines F (Financial Considerations) and E (Personal Conduct) why
DOHA could not make a preliminary affirmative finding under the Directive that it is clearly
consistent with the national interest to grant a security clearance to Applicant.  DOHA recommended
the case be referred to an administrative judge to determine whether a clearance should be granted.
On October 18, 2006, Applicant filed his Answer and elected to have the case decided on the
written record in lieu of a hearing. On April 25, 2007, Department Counsel prepared a File of
Relevant Material (FORM), containing twelve Items, and mailed Applicant a complete copy on April
27, 2007. Applicant had 30 days from receipt of the FORM to file objections and submit material
in refutation, extenuation, or mitigation. Applicant received the FORM on May 21, 2007, and timely
submitted additional information without an objection from Department Counsel. I marked the
documents as Applicant Exhibit (AX) A. The case was assigned to me on July 16, 2007. 
FINDINGS OF FACT
Based on the entire record, including Applicant’s admissions in his Answer to the SOR, I
make the following findings of fact:
Applicant is a 35 year- old security technician who works for a federal contractor. He began
his current position in November 2001. Prior to this job, he worked in private industry for seven
years. (Id. at 2). In December 2004, he completed a SCA. (Item 5).
In response to specific questions on the SCA, Applicant disclosed adverse information. He
noted a citation for a firearm’s offense in response to Question 22. He included two wage
garnishments in response to Question 34. He listed a student loan that was more than 180 days
delinquent under Question 38 and a car loan that was more than 90 days delinquent under Question
39. He did not disclose a November 2004 vehicular repossession under Question 35, or two unpaid
judgments as requested in Question 37. (Item 5).
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During a meeting with a government investigator in June 2005 regarding his finances and
his answers to the financial questions in the SCA, Applicant acknowledged various debts. He was
not able to pay his debts because he was supporting his father and paying his mortgage through a
bankruptcy proceeding. (Item 6 at 1 & 7). He denied having knowledge of any judgment entered
against him. (Id. at 1). He believed his debts totaled approximately $9,000-10,000 in June 2005. (Id.
at 6). He also submitted a budget indicating a total net monthly income of $2,400 and expenses of
$1,000, leaving approximately $860 for other expenses. The only delinquent debt listed on the
budget was a garnishment for his student loan. (Item 7). Credit reports confirm his financial
problems began in 2001. (Items 9 & 10). 
In August 2006, the Government filed a SOR. Paragraph 1 of the SOR alleged that
Applicant’s fifteen delinquent debts totaled $12,358. In his Answer, Applicant admitted owing all
of the debts. He asserted that he entered into a debt management agreement to pay six debts (¶¶ 1.a,
1.b, 1.f, 1.g, 1.i, and 1.k), and that he was making monthly payments on them. (Item 4; AX A at 3).
He located another debt management company to handle the debts noted in ¶¶ 1.c, 1.d, 1e, and 1.m.
(AX A at 3). He submitted proof of payment for ¶¶ 1.h and 1.l, which was the same debt. (AX A at
4). The debts alleged in ¶¶ 1.j, 1.n, 1.o, have been paid, albeit through garnishments. (Item 12).
In his response to the FORM, Applicant stated that he did not answer Question 35 correctly
“because [he] honestly overlooked item 35, resulting in the repossession not be [sic] listed on the
clearance application.” (Item 4 at 3). He failed to include two judgments under Question 37 because
he was unaware of them when he completed the SCA. (Item 6). Applicant reiterated in his response
that after he started taking care of his elderly father in 2002, including his finances, he began
experiencing his additional financial difficulties. (AX A at 4).
POLICIES
Enclosure 2 of the Directive, Adjudicative Guidelines for Determining Eligibility for Access
to Classified Information, sets forth criteria, which must be evaluated when determining security
clearance eligibility. Within those adjudicative guidelines are factors to consider in denying or
revoking an individual’s request for access to classified information (Disqualifying Conditions), and
factors to consider in granting an individual’s request for access to classified information (Mitigating
Conditions). By recognizing that individual circumstances of each case are different, the guidelines
provide substantive standards to assist an administrative judge in weighing the evidence in order to
reach a fair, impartial and common sense decision.
The adjudicative process requires thorough consideration and review of all available, reliable
information about the applicant, past and present, favorable and unfavorable, to arrive at a balanced
decision. Section E2.2. of Enclosure 2 of the Directive describes the essence of scrutinizing all
appropriate variables in a case as the “whole person concept.” In evaluating the disqualifying and
mitigating conduct an administrative judge should consider: (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) the voluntariness of participation; (6) the presence or absence of
rehabilitation and other 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.
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Granting an applicant’s clearance for access to classified information is based on a high
degree of trust and confidence in the individual. Accordingly, decisions under the Directive must
include consideration of not only the actual risk of disclosure of classified information, but also
consideration of any possible risk an applicant may deliberately or inadvertently compromise
classified information. Any doubt about whether an applicant should be allowed access to classified
information must be resolved in favor of protecting classified information. Directive ¶ E2.2.2. The
decision to deny an individual a security clearance is not necessarily a judgment about an applicant’s
loyalty. Exec. Or. 10865, § 7. Instead, it is a determination that an applicant has not met the strict
guidelines established by the Department of Defense for issuing a clearance.
Initially, the Government must establish, by substantial evidence, conditions in the personal
or professional history of the applicant that disqualify, or may disqualify, the applicant from being
eligible for access to classified information. Departments of the Navy v. Egan, 484 U.S. 518, 531
(1988). The Directive presumes a rational connection between past proven conduct under any
disqualifying conditions and an applicant's present security suitability. ISCR Case No. 95-0611 at
2 (App. Bd. May 2, 1996). 
Once the Government establishes a disqualifying condition by substantial evidence, the
corresponding burden of rebuttal shifts to the applicant to present evidence in refutation, extenuation,
or mitigation sufficient to overcome the position of the government. ISCR Case No. 01-20700 at 3
(App. Bd. Dec. 19, 2002); Directive ¶ E3.1.15. An applicant “has the ultimate burden of
demonstrating that it is clearly consistent with the national interest to grant or continue his
clearance.” Id.
CONCLUSIONS
Upon consideration of all facts in evidence and after application of the appropriate
adjudicative factors and pertinent legal standards, I conclude the following with respect to the
allegations set forth in the SOR:
Guideline F: Financial Considerations
Guideline F articulates the Government’s concern regarding financial problems. “A security
concern may exist when an individual who is financially overextended is at risk of having to engage
in illegal acts to generate funds.”  Failure to live within one’s means 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. See ISCR Case No. 98-0810 at 4 (App. Bd. June 8, 2000).
Based on the evidence, 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), apply to this case. Since 2001, Applicant has a history of being
unable to meet his financial obligations as evidenced by his admissions and credit reports.
After the Government produced substantial evidence of those two FC DC, the burden shifted
to Applicant to produce evidence of mitigating condition. Five Financial Considerations Mitigating
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Conditions (FC MC) are potentially applicable. Because Applicant’s financial troubles began in
approximately 2001 and continued to the present, 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) are not applicable. Applicant claimed
he was unable to pay some of his delinquent debts because he was helping his elderly father manage
his finances and paying his mortgage. Such monetary assistance is sufficient to provide some
mitigation under FC MC E2.A6.1.3.3 (The condition that resulted in the behavior were largely
beyond the person’s control). However, there is no evidence that Applicant participated in
counseling for his financial difficulties or that the problems are resolved or under control, as required
by FC MC E2.A.6.1.3.4 (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). The record
contains proof that five debts are paid. Applicant asserted that he was managing the other debts
through consolidation payment plans. Although he submitted a letter from one company
acknowledging an agreement, he did not submit any evidence to verify his compliance with the
agreement or the balance owed on the debts covered by the agreement. Nor did he submit evidence
of the additional repayment plan he recently negotiated. Thus, he did not provide sufficient
documentary evidence to trigger full application of FC MC E2.A6.1.3.6 (The individual initiated a
good-faith effort to repay overdue creditors or otherwise resolve debts).
Guideline E: Personal Conduct
Guideline E articulates the Government’s concern under personal conduct. “A security
concern may exist when conduct involving questionable judgment, untrustworthiness, unreliability,
lack of candor, dishonesty, or unwillingness to comply with rules and regulations could indicate that
the person may not properly safeguard classified information.” 
The Government alleged in SOR ¶¶ 2. a and 2.b that Applicant falsified his SCA by failing
to disclose an automobile repossession and two unpaid judgments, which established a
disqualification under Personal Conduct Disqualifying Condition (PC DC) E2.A5.1.2.2 (The
deliberate omission, concealment, or falsification of relevant and material 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). Applicant asserted that his failure
to disclose the repossession was an oversight and that he was unaware of the unpaid judgments.
When a falsification allegation is controverted or denied, the government has the burden of
proving it. Proof of an omission, standing alone, does not establish or prove an applicant’s 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 an applicant’s state
of mind at the time the omission occurred.  See ISCR Case No. 03-09483 at 4 (App. Bd. Nov. 17,
2004) (explaining holding in ISCR Case No. 02-23133 at 5 (App. Bd. June 9, 2004).
Applicant disclosed a delinquent automobile loan in response to Question 39 on the SCA.
That disclosure, along with the other adverse information he provided under Questions 22, 34 and
38, demonstrates his intention to be truthful in completing his SCA, and corroborate his explanations
that the omission of information was negligent and not intentional. Hence, the evidence does not
establish deliberate falsification. This Guideline is found in his favor.
“Whole Person” Analysis
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In addition to the enumerated disqualifying and mitigating conditions, I considered the
general adjudicative guidelines related to the whole person concept under the Directive. Although
Applicant made some progress in resolving the SOR debts and asserted a commitment to paying the
others, he failed to provide evidence that he has addressed the remaining ten debts. He is 35 years
old, sufficiently mature to be fully responsible for his obligations. His decision to incur more debt
than he could manage over the last several years was voluntary. While I recognize the value of the
assistance he provided to his father, his decision to abandon his obligations without a repayment
plan, exhibited poor judgment. Until he establishes a budget documenting his repayment plans and
a track record of consistent financial management, which demonstrates reliability and good
judgment, I am concerned that he will continue having financial difficulties, despite assertions to the
contrary.
After weighing the disqualifying and mitigating conditions and all facts in the context of the
whole person, I conclude he has not mitigated the security concerns pertaining to financial
considerations. For the reasons stated, I conclude he is not eligible for access to classified
information at this time.
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 as follows:
Paragraph 1: Guideline F (Financial Considerations) AGAINST APPLICANT
Subparagraphs 1.a through 1.g: Against 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: Against Applicant
Subparagraph 1.n: For Applicant
Subparagraph 1.o: For Applicant
Paragraph 2: Guideline E (Personal Conduct) FOR APPLICANT
Subparagraphs 2.a and 2.b: For Applicant
DECISION
In light of all the circumstances and evidence presented in this case, it is not clearly consistent
with the national interest to grant a security clearance to Applicant. Clearance is denied.
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Shari Dam
Administrative Judge