KEYWORD: Financial
DIGEST: Applicant is a 36-year-old material coordinator who has worked for a federal contractor
since September 2004. She had $50,000 in delinquent debts discharged in bankruptcy in 2002. She
continued to experience financial problems and acquired additional delinquent debts. She was
unemployed for nine months in 2004. Since then she took minimal action regarding her delinquent
debts until her security clearance became an issue. Applicant’s past and present financial history
raise security concerns. She failed to mitigate Guideline F, financial considerations security
concerns. Clearance is denied.  
CASENO: 06-19435.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. 06-19435
DECISION OF ADMINISTRATIVE JUDGE
CAROL G. RICCIARDELLO
APPEARANCES
FOR GOVERNMENT
Richard A. Stevens, Esq., Department Counsel
FOR APPLICANT
Pro Se
Item 5 at 5.1
2
SYNOPSIS
Applicant is a 36-year-old material coordinator who has worked for a federal contractor since
September 2004. She had $50,000 in delinquent debts discharged in bankruptcy in 2002. She
continued to experience financial problems and acquired additional delinquent debts. She was
unemployed for nine months in 2004. Since then she took minimal action regarding her delinquent
debts until her security clearance became an issue. Applicant’s past and present financial history
raise security concerns. She failed to mitigate Guideline F, financial considerations security
concerns. Clearance is denied. 
STATEMENT OF CASE
The Defense Office of Hearings and Appeals (DOHA) declined to grant or continue a
security clearance for Applicant. As required by Department of Defense Directive 5220.6 ¶ E3.1.2
(Jan. 2, 1992), as amended, DOHA issued a Statement of Reasons (SOR) on January 4, 2007,
detailing the basis for its decision–security concerns raised under Guideline F (financial
considerations) of the revised Adjudicative Guidelines (AG) issued on December 29, 2005 and
implemented by the Department of Defense effective September 1, 2006.
In a sworn statement dated January 26, 2007, Applicant responded to the SOR allegations
admitting all of them. Applicant elected to have her case decided on the written record. Department
Counsel submitted the government’s file of relevant material (FORM) on July 11, 2007. The FORM
was mailed to Applicant on July 16, 2007, and received on July 20, 2007. Applicant was afforded
an opportunity to file objections and submit material in refutation, extenuation, or mitigation.
Applicant responded on July 23, 2007 with additional material. Department Counsel had no
objections and the documents were included in the record. The case was assigned to me on August
15, 2007. 
FINDINGS OF FACT
Applicant is a 36-year-old material coordinator who has worked for a federal contractor since
September 2004. Prior to then she was unemployed since February 2004. She is single and has no
children. Applicant filed for bankruptcy in 2001 as alleged in SOR ¶ 1.a. Her only explanation was
that she got in over her head and had been living with someone who left and was paying half of all
of the bills.  In April 2002 she had $50,000 in debt discharged in bankruptcy. No accounting or1
explanation was provided as to what type of debts she had accumulated that were discharged nor
what actions she had taken prior to the discharge. 
The debt listed in SOR ¶ 1.b is for an automobile that was repossessed for nonpayment in
about January 2004. The amount owed is $1,743.63. No information was provided as to the status
of this debt. 
Item 4 at 4.2
Id. at 7.3
Response dated July 23, 2007. 4
Item 6 at 5. 5
3
The debt listed in SOR ¶ 1.c is for the amount of $356 went into collection in January 2004.
No information was provided as to the status of this debt.
The debt listed in SOR 1.d is presumably for telephone services in the approximate amount
of $2,977. The account was placed in collection in March 2004 and no information was provided as
to the status of this debt. 
The debt listed in SOR 1.e is to a credit union in the approximate amount of $7,233 for the
balance owed on a automobile that was repossessed for nonpayment in March 2004. She negotiated
a repayment plan with the collection firm. The balance on the debt has increased to $8,203.20. She
agreed to pay $170.90 per month for 48 months.  She provided proof that she made monthly2
payments in October, 2006, November 2006 and December 2006.  No further documentation was3
provided that she has continued to make monthly payments.
The debts listed in SOR ¶¶ 1.f and 1.g are in the amounts of $98 and $134 respectively and
were forwarded for collection in March 2005 and December 2005. Both were paid on January 31,
2007, from Applicant’s tax refund.4
Applicant’s personal financial statement (PFS) dated October 2006 shows a net monthly
salary of $1,948 and expenses as $1,737, with a remainder monthly balance of $211.  Her statement5
includes the $170.90 monthly payment for the balance owed on her repossessed car and a loan from
a credit union for $15,000, for which she pays $302 monthly. Her PFS does not show payments to
any other creditors. Applicant has not provided any additional documentation to show she is repaying
her debts or has contacted creditors to resolve them. 
Applicant stated in her answer:
In Dec. 2006 I moved into [a] cheaper home for the main reason of getting my
finances squared away. I am planning to pay my debts one at a time once I am settled
in my home. I am working on the biggest debt now. At the same time I plan to pay
the smaller ones first and work my way up. After losing my job, I lost everything and
had to move in with my dad. I am back on my feet now and will get this taken care
of.
In her response dated July 23, 2007, she did not provide additional information as to what
further actions she has taken on her delinquent debts since moving into her new home.
POLICIES
Department of the Navy v. Egan, 484 U.S. 518, 528 (1988).6
Id. at 527.7
Exec. Or. 10865, Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960). 8
ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002).9
Id.10
Id.; Directive, Enclosure 2, ¶ E2.2.2.11
Executive Order 10865 § 7.12
See Exec. Or. 10865 § 7.13
See Egan, 484 U.S. at 531.14
See v. Washington Metro. Area Transit Auth., 36 F.3rd 375, 380 (4th Cir. 1994).15
See ISCR Case No. 95-0611 at 2 (App. Bd. May 2, 1996)16
See Directive ¶ E3.1.15.17
4
“[N]o one has a ‘right’ to a security clearance.”  As Commander in Chief, the President has6
“the authority to . . . control access to information bearing on national security and to determine
whether an individual is sufficiently trustworthy to occupy a position . . . that will give that person
access to such information.”  The President has authorized the Secretary of Defense or his designee7
to grant applicants eligibility for access to classified information “only upon a finding that it is
clearly consistent with the national interest to do so.”  An applicant “has the ultimate burden of8
demonstrating that it is clearly consistent with the national interest to grant or continue his security
clearance.”  “The clearly consistent standard indicates that security clearance determinations should9
err, if they must, on the side of denials.”  Any reasonable doubt about whether an applicant should10
be allowed access to sensitive information must be resolved in favor of protecting such sensitive
information.  The decision to deny an individual a security clearance is not necessarily a11
determination as to the loyalty of an applicant.  It is merely an indication that the applicant has not12
met the strict guidelines the President and the Secretary of Defense have established for issuing a
clearance.13
Initially, the government must establish, by substantial evidence, conditions in the personal
or professional history of the applicant which disqualify, or may disqualify, the applicant from being
eligible for access to classified information.  “Substantial evidence” is “more than a scintilla but less14
than a preponderance.”  The Guidelines presume a nexus or rational connection between proven15
conduct under any of the criteria listed therein and an applicant’s security suitability.16
Once the government establishes a disqualifying condition by substantial evidence, the
burden shifts to the applicant to rebut, explain, extenuate, or mitigate the facts.  An applicant “has17
the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant
ISCR Case No. 01-207000 at 3 (App. Bd. Dec. 19, 2002)18
Egan, 484 U.S. at 531; see Guidelines ¶ 2(b).19
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or continue his security clearance.”  “[S]ecurity clearance determinations should err, if they must,18
on the side of denial.”19
Conditions that could raise a security concern and may be disqualifying, as well as those
which would mitigate security concerns, pertaining to the adjudicative guideline are set forth and
discussed in the conclusions below. 
CONCLUSIONS
I have carefully considered all facts in evidence and the legal standards discussed above. I
reach the following conclusions regarding the allegations in the SOR.
Based upon consideration of the evidence, I find the following adjudicative guideline most
pertinent to the evaluation of the facts in this case:
Financial Considerations are a security concern because 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.
Compulsive gambling is a concern as it may lead to financial crimes including espionage. Affluence
that cannot be explained by known sources of income is also a security concern. It may indicate
proceeds from financially profitable criminal acts. 
Based on all of the evidence, Financial Considerations Disqualifying Condition (FC DC)
19(a) (inability or unwillingness to satisfy debts) and FC DC 19(c) (a history of not meeting financial
obligations), apply in this case. Applicant has debts that are delinquent. She had $50,000 in debts
discharged in bankruptcy in 2002. Bankruptcy is a legitimate means of resolving delinquent debts
and obtaining a fresh financial start. However, Applicant slid back into financial difficulty and many
of her debts are again in a collection status and have been since as far back as January 2004. 
I have considered all of the Financial Considerations Mitigating Conditions (FC MC), and
especially considered FC 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), FC 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), FC MC 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 20(d) (the individual initiated
a good-faith effort to repay overdue creditors or otherwise resolve debts). Applicant’s debts are
recent and some remain unpaid. She has paid two debts and has a repayment plan for a third, but
failed to specifically address and provide information on the other debts. Applicant had $50,000 in
debt discharged in bankruptcy in 2002 giving her a new financial start. She was unemployed for a
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period of approximately nine months in 2004. This event obviously set her back financially.
However, her debt in SOR ¶1.b was sent to collection in January 2004, prior to her unemployment
and after her bankruptcy, which means she was delinquent on her debt while she was employed. The
debts listed in SOR ¶¶ 1.f and 1.g were relatively small debts that have since been paid, but those
debts were sent to collection in March 2005 and December 2005, again while Applicant was
employed. She did not pay either of those debts until her security clearance became an issue. No
explanation was provided regarding why these debts were not paid timely. Based on Applicant’s
history, I find that the circumstances that her behavior is likely to recur and her actions do cast doubt
on her reliability and good judgment. I find FC MC 20(a) does not apply. 
I have considered the circumstances regarding Applicant’s unemployment and the results it
had on her financial situation. These circumstances were beyond her control. However, she provided
little explanation as to why after having her debts discharged in bankruptcy she was again in a
financial crisis prior to her unemployment. Applicant filled out her security clearance application
in June 2005 and was aware that her financial status was a concern. Some of the circumstances she
presented were beyond her control, but it has been three years since her unemployment and there is
little evidence that she addressed her finances until her security clearance became an issue. I find FC
MC 20(b) does not apply.
Applicant started a repayment plan on the debt for her repossessed automobile, but only
provided proof of three payments. She paid two other debts that were in collection status for more
than a year before being paid. She failed to take action on her other debts or provide information
regarding them. She offered no evidence she has sought financial counseling. Her efforts to resolve
her debts were many months after she was employed. The concern is that Applicant having already
been provided a clean slate after bankruptcy is again in financial difficulty and has not sought
counseling. It is too early to conclude that she will not continue on the same financial road. I find
FC MC 20(c) and (d) do not apply.
Whole Person Analysis
In all adjudications, the protection of our national security is the paramount concern. The
objective of the security-clearance process is the fair-minded, commonsense assessment of a
person’s life to make an affirmative determination that the person is eligible for a security clearance.
Indeed, the adjudicative process is a careful weighing of a number of variables in considering the
“whole person” concept. It recognizes that we should view a person by the totality of his or her acts,
omissions, motivations and other variables. Each case must be adjudged on its own merits, taking
into consideration all relevant circumstances, and applying sound judgment, mature thinking, and
careful analysis.
In addition to considering the specific disqualifying and mitigating conditions under the
Guidelines, I have also considered the adjudicative process factors listed in ¶ 2a (1)-(9) of the
Guidelines to be considered in evaluating a person’s eligibility to hold a security clearance.
Specifically these are: (1) the nature, extent and seriousness of the conduct; (2) the circumstances
and 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 was 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
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or absence of a particular condition or factor for or against clearance is not outcome determinative,
the Guidelines should be followed whenever a case can be measured against this policy guidance.
I considered all of the evidence provided and the “whole person” concept in evaluating
Applicant’s risk and vulnerability in protecting our national interests. After weighing the
disqualifying and mitigating conditions under Guideline F and evaluating  the evidence in the context
of the whole person, I conclude Applicant has not mitigated the security concerns based on financial
considerations. Therefore, I am persuaded by the totality of the evidence in this case, that it is not
clearly consistent with the national interest to grant Applicant a security clearance. Accordingly,
Guideline F is decided against Applicant.
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 Financial Considerations (Guideline F) 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. For Applicant
Subparagraph 1.f. For Applicant
Subparagraph 1.g. For 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.
Carol. G. Ricciardello
Administrative Judge