KEYWORD: Financial
DIGEST: Applicant is a retired soldier employed by a defense contractor.  Applicant admitted six
debts established by credit reports, but denied two.  The two he denied are medical debts that should
have been paid by the military health care system.  Of the six he admitted, one is his mortgage which
is current and being paid by automatic bank payment.  Another, Applicant established has been paid
and the lien released.  Of the remaining four debts, Applicant presented no information that they are
paid or being paid.  He stated he would make arrangements to pay the debts.  Applicant has not met
his burden to establish a good faith effort to pay his debts.  Clearance is denied. 
CASENO: 06-22225.h1
DATE: 08/27/2007
DATE:  August 27, 2007
In Re:
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SSN: ------------
Applicant for Security Clearance
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ISCR Case No. 06-22225
DECISION OF ADMINISTRATIVE JUDGE
THOMAS M. CREAN
APPEARANCES
FOR GOVERNMENT
Jeff A. Nagel, Esq., Department Counsel
FOR APPLICANT
Pro Se
SYNOPSIS
Item 4.1
Items 5 and 6.2
2
Applicant is a retired soldier employed by a defense contractor.  Applicant admitted six debts
established by credit reports, but denied two.  The two he denied are medical debts that should have
been paid by the military health care system.  Of the six he admitted, one is his mortgage which is
current and being paid by automatic bank payment.  Another, Applicant established has been paid
and the lien released.  Of the remaining four debts, Applicant presented no information that they are
paid or being paid.  He stated he would make arrangements to pay the debts.  Applicant has not met
his burden to establish a good faith effort to pay his debts.  Clearance is denied.
STATEMENT OF THE CASE
On March 23, 2007, the Defense Office of Hearing and Appeals (DOHA) issued a Statement
of Reasons (SOR) detailing the basis for its decision to deny a security clearance for Applicant.  The
action was taken under Executive Order 10865, Safeguarding Classified Information within Industry
(February 20, 1990), as amended, and Department of Defense Directive 5220.6, Defense Industrial
Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive), using the
Adjudicative Guideliens promulgated by the President on December 29, 2005, and implemented by
the Department of Defense on September 1, 2006.  Applicant acknowledged receipt of the SOR on
April 19, 2007.  The SOR alleges security concerns under Guideline F (Financial Considerations),
of the Directive.
Applicant answered the SOR in writing on May 24, 2007.  He admitted six and denied two
of the allegations under Guideline F, and provided an explanation for his delinquent debts.  He
elected to have the matter decided on the written record in lieu of a hearing.
Department Counsel submitted the Government’s written case on June 15, 2007.  Applicant
received a complete file of relevant material (FORM) on June 27, 2007, and was provided the
opportunity to file objections and submit material to refute, extenuate, or mitigate the disqualifying
conditions.  His response was due July 27, 2007.  As of August 8, 2007, he had not responded.  The
case was assigned to me on August 13, 2007.
FINDINGS OF FACT
Applicant is a 39-year-old employee of a defense contractor.  He previously served 20 years
on active duty in the Army and recently retired as a sergeant first class (E-7). While on active duty,
he completed a security clearance application on November 24, 2003.   Subsequent investigation1
revealed Applicant had eight delinquent debts.   Applicant admitted six of the eight debts, with2
explanation, but did not  know about two debts.  
Delinquent debts 1 (SOR 1.a) and 2 (SOR 1.f) are medical debts to the local hospital that
have been placed for collection.  Applicant was on active duty with the Army when the debts were
See, Item 3.3
Id.4
Item 3, Attachment 2.5
Item 4, response to question 38.6
Item 3, Attachment 1.7
Item 3 at 2.8
Department of the Navy v. Egan, 484 U.S. 518 (1988).9
Directive ¶ E2.2.1.10
3
incurred in May and October 2001.  As such, Applicant and his family were covered by the military
health care system and the bills should have paid by them.  Applicant has inquired about the military
health care system paying the debts.3
Delinquent debt 3 (SOR 1.b) is a credit card debt to Capital One for $863.  Applicant thought
he had paid the debt and stated he would settle it in the next 90 days.  Delinquent debt 4 (SOR 1.c)
is for a Military Star credit card in the amount of $2,785.  Applicant stated he made payment
arrangements.  Delinquent debt 5 (SOR 1.g) is to Bank of America on a car loan.  Applicant
acknowledged the debt and stated he required time to clear the debt.  Delinquent debt 6 (SOR 1.h)
is to MBNA bank on a credit card debt.  Applicant acknowledged the debt and stated he would make
payment arrangements.4
Delinquent debt 7 (SOR 1. d) is to Bank One on a car loan.  This debt has been paid and the
lien released.   Delinquent debt 8 (SOR 1.e) is for the mortgage on Applicant’s residence.  Applicant5
stated his father was living in the house and was suppose to make the house payment.  On his return
from an overseas assignment, he learned his father had not made the payments.   The mortgage is6
current and Applicant established an automatic payment plan for the mortgage.7
Applicant explained that his financial troubles started in 2001 when he was assigned to
Germany and lost his housing allowance but still had a house payment.  The family also lost income
when his wife was injured on her job and received only workman’s compensation, which was
approximately $1,500 less per month then her normal pay.8
POLICIES
The President has “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.”   Eligibility for a security clearance is9
predicated upon the applicant meeting the security guidelines contained in the Directive.10
The Directive sets out the adjudicative guidelines for making decisions on security clearances.
Enclosure 2 of the Directive sets forth adjudicative guidelines for determining eligibility for access
AG ¶ 2(a).11
Id.12
See Exec. Or. 10865 § 7.13
Directive ¶ E3.1.14.14
ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002); see Directive ¶ E3.1.15.15
ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002). 16
ISCR Case No. 99-0597 (App. Bd. Dec 13, 2000).17
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to classified information, and it lists the disqualifying conditions and mitigating conditions for each
guideline.  The adjudicative guidelines for this case are the guidelines promulgated by the President
on December 29, 2005, and implemented by the Department of Defense on September 1, 2006.  Each
clearance decision must be fair, impartial, and a commonsense decision based on the relevant and
material facts and circumstances, and the whole person concept.11
The adjudicative process is an examination of a sufficient period of a person’s life to make
an affirmative determination that the person is eligible for a security clearance.  An administrative
judge must apply the “whole person concept,” and consider and carefully weigh the available, reliable
information about the person.  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 applicant’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 pertinent behavioral changes; (7) the motivation for the conduct; (8) the
potential for pressure, coercion, exploitation, or duress; and (9) the likelihood of continuation of
recurrence.12
A person granted access to classified information enters into a special relationship with the
government.  The government must be able to repose a high degree of trust and confidence in those
individuals to whom it grants access to classified information.  The decision to deny an individual a
security clearance is not necessarily a determination as to the loyalty of the applicant.   It is merely13
an indication that the applicant has not met the strict guidelines the President and the Secretary of
Defense have established for issuing a clearance.
Initially, the Government must present evidence to establish controverted facts in the SOR that
disqualify or may disqualify the Applicant from being eligible for access to classified information.14
Thereafter, Applicant is responsible for presenting evidence to rebut, explain, extenuate, or mitigate
facts.   An applicant “has the ultimate burden of demonstrating that it is clearly consistent with the15
national interest to grant or continue his security clearance.”   The government is under no duty to16
present evidence to disprove any Adjudicative Guideline mitigating condition, and an Administrative
Judge cannot assume or infer that any particular mitigating condition is applicable merely because the
government does not present evidence to disprove that particular mitigating condition.   “[T]he17
Directive presumes there is a nexus or rational connection between proven conduct under any of the
ISCR Case No. 95-0611 at 2 (App. Bd. May 2, 1996) (quoting DISCR Case No. 92-1106 (App. Bd. Oct. 7,18
1993))
Egan, 484 U.S. at 531; see AG ¶ 2(b).19
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criteria listed therein and an applicant’s security suitability.”   “Any doubt as to whether access to18
classified information is clearly consistent with national security will be resolved in favor of the
national security.”19
Based upon a consideration of the evidence, I find the following adjudicative guideline most
pertinent to the evaluation of the facts in this case:
Guideline F - Financial Considerations: A security concern exists because a 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.
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 section below.
CONCLUSIONS
I carefully considered all of the facts in evidence and the legal standards discussed above.  I
reach the following conclusions regarding the allegations in the SOR.
Applicant’s delinquent debts from credit reports and admitted by Applicant brings the matter
within Financial Considerations Disqualifying Conditions (FC DC) ¶ 19(a) (Inability or unwillingness
to satisfy debts), and FC DC ¶ 19(c) (A history of not meeting financial obligations).  Since Applicant
admits six of the eight debts, I conclude the above disqualifying conditions have been established.
Appellant’s answer to the SOR raises Financial Consideration Mitigating Conditions (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 judgement), 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), and FC MC 20(d) (The individual initiated a good-faith effort to repay
overdue creditors or otherwise resolve debts).  Applicant was not responsible for two of the debts
(SOR 1. a and f) since the debts arose from medical treatment covered by the military health care
system.  He presented sufficient information that one of the debts (SOR 1.d) was paid in full and the
lien released.   Applicant presented sufficient information that his mortgage debt (SOR 1.e) is current
and paid by automatic bank payment.  He also presented sufficient information to establish that the
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debt was accumulated when his father did not pay the mortgage as agreed.  
The four remaining debts, (SOR, 1.b, 1.c, 1.g, and 1.h), were incurred after 2001 and still are
unresolved.  There is more than one debt so the accumulation of delinquent debts was frequent.  While
his circumstances changed when he was on an overseas assignment and his wife received only
workman’s compensation payments, there is no indication that these circumstances affected his ability
to resolve and pay the four remaining debts.  The family did receive some level of income from the
workman’s compensation that would permit some payments on these four debts.  The debts are not
large or the accumulated amount substantial.  Applicant presented no information to indicate that under
similar circumstances, he would not again incur delinquent debts.  Additionally, Applicant did not
explain why the delinquent debts were accumulated so there is no indication the debts resulted from
conditions beyond his control
Applicant stated he would make inquiries and pay these four debts in the future, but presented
no proof of any inquiries or attempts to make payments.  Behaving responsibly or irresponsibly in one
aspect of life provides an indication of how a person may behave in other aspects of life.  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 situation of risk inconsistent with the holding of a security clearance.  An applicant is not required
to be debt free, but is required to manage his finances in such a way as to meet his financial
obligations. An intention to pay debts in the future is not sufficient to establish a good-faith effort to
pay the debts.  Applicant admitted the four debts and took no action to pay or resolve them
I carefully considered all of the circumstances in light of the “whole person” concept.  I
conclude Applicant is not eligible for access to classified information.  Applicant has shown an
irresponsible attitude toward his debts.  He presented insufficient information to explain the debts or
mitigate the disqualifying conditions.  He has failed to carry his burden to refute, extenuate, or mitigate
four debts.  I conclude Applicant has not mitigated the security concerns for financial considerations.
FORMAL FINDINGS
Formal findings for or against Applicant on the allegations in the SOR, as required by Section
E3.1.25 of Enclosure 3 of the Directive, are:
Paragraph 1, Guideline F: AGAINST APPLICANT
Subparagraph 1.a.: For Applicant
Subparagraph 1.b.: Against Applicant
Subparagraph 1.c.: Against Applicant
Subparagraph 1.d.: For Applicant
Subparagraph 1.e.: For Applicant
Subparagraph 1.f.: For Applicant
Subparagraph 1.g.: Against Applicant
Subparagraph 1.h.: Against Applicant
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DECISION
In light of all of the circumstances presented by the record in this case, it is not clearly
consistent with the national security to grant or continue access to classified information for Applicant.
Clearance is denied.
Thomas M. Crean
Administrative Judge