KEYWORD: Financial; Personal Conduct
DIGEST: Applicant is 39 years old, divorced, and has a teen-aged daughter who has a son.
Applicant works for a defense contractor.  She had financial difficulties in her early twenties after
her divorce and the loss of her job.  She resolved those problems by paying her creditors in a Chapter
13 bankruptcy.  She mitigated the current financial problems by repaying all but $1,043.  She
mitigated the personal conduct security concern.  Clearance is granted.
CASENO: 06-22473.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. 06-22473
DECISION OF ADMINISTRATIVE JUDGE
PHILIP S. HOWE
APPEARANCES
FOR GOVERNMENT
D. Michael Lyles, Esq., Department Counsel
FOR APPLICANT
Pro Se
SYNOPSIS
Applicant is 39 years old, divorced, and has a teen-aged daughter who has a son.  Applicant
works for a defense contractor.  She had financial difficulties in her early twenties after her divorce
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and the loss of her job.  She resolved those problems by paying her creditors in a Chapter 13
bankruptcy.  She mitigated the current financial problems by repaying all but $1,043.  She mitigated
the personal conduct security concern.  Clearance is granted.
Pursuant to Exec. Or. 10865, Safeguarding Classified Information within Industry (Feb. 20, 1960), as amended1
and modified, and Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review
Program  (Jan. 2, 1992), as amended and modified (Directive).
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STATEMENT OF THE CASE
The Defense Office of Hearings and Appeals (DOHA) declined to grant or continue a
security clearance for Applicant.  On January 10, 2007, DOHA issued a Statement of Reasons1
(SOR) detailing the basis for its decision–security concerns raised under Guideline F (Financial
Considerations) and Guideline E (Personal Conduct) of the revised Adjudicative Guidelines (AG)
issued on December 29, 2005, and implemented by the Department of Defense effective September
1, 2006.  Applicant answered the SOR in writing on January 31, 2007, and elected to have a hearing
before an administrative judge.  The case was assigned to me on May 2, 2007.  On June 6, 2007, I
convened a hearing to consider whether it is clearly consistent with the national interest to grant or
continue a security clearance for Applicant.  The Government and the Applicant submitted exhibits
that were admitted into evidence, except Government Exhibit 5, the 2005 security clearance
application (SCA).  It was not admitted because Applicant objected on the basis it was not signed,
and the Government did not move again for its admission at the end of the evidence (Tr. 18, 100).
The Government had no objection to Exhibits E to H submitted by Applicant within the additional
time allowed.  DOHA received the hearing transcript (Tr.) on June 27, 2007.
FINDINGS OF FACT
Applicant's admissions to the SOR allegations are incorporated here as findings of fact.  After
a complete and thorough review of the evidence in the record, and full consideration of that
evidence, I make the following additional findings of fact:
Applicant is 39 years old, divorced in 1988, and has a 19-year-old daughter who has a two-
year-old son.  Applicant lives alone after being in an 11-year relationship with a man who had three
daughters.  During that relationship, Applicant worked and gave money to her boyfriend with which
to pay the household debts.  She trusted him to pay those bills and did not keep her knowledge
current on those debts.  Her boyfriend did not work at all times during the relationship, placing the
income burden for the household on Applicant.  Applicant works for a defense contractor.  She is
regarded as very competent and trustworthy by her supervisors.  She completes all tasks in a
professional manner, including highly sensitive non-classified projects. (Tr. 13, 44, 45, 49, 60, 61,
71; Exhibits 6, A-D)
Applicant accumulated debts by 1991, when she was 22 years old, and the loss of her job
then, all of which led her to file a Chapter 13 bankruptcy.  She could not make some payments and
her parents told her instead that they would help pay her debts.  Applicant dismissed that first
bankruptcy filing on August 23, 1991, on that understanding .  Her parents did not do so, and
Applicant had to file Chapter 13 bankruptcy again on September 16, 1991.  That bankruptcy was not
completed successfully and was dismissed on February 5, 1993.  A third and final time Applicant
filed for Chapter 13 bankruptcy on October 8, 1993, and it was successfully completed.  Applicant
was discharged in this bankruptcy on April 14, 1997.  Applicant does not remember the specific
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amount of the debt included in the final bankruptcy, but recalls it may have been about $10,000. (Tr.
29-34, 94, 95; Exhibits 1, 2)
Applicant has two incidents of writing checks without sufficient funds in her account to pay
these checks.  The first incident was in January 1991.  She pled no contest to the two charges, and
received a sentence of 20 days in jail (suspended), and a fine of $216, $100 of which was suspended.
The second incident occurred on March 29, 1997.  Again, she pled no contest to the charge, and was
fined $500.  Those fines were paid. (Tr. 70, 71; Exhibits 3-5)
Applicant failed to file and pay her city income taxes in 1993, 1996 to 1998, 2000 to 2005.
She assumed her employer withheld the income tax from her pay checks.  She did not verify that
assumption.  She did not file her city tax returns for some years, in particular 2003.  She claimed the
filing requirement “slipped her mind.”  Since April 3, 2007, she has an installment payment
agreement with her residence city to pay $250 monthly to retire the $5,239.39 tax debt. (Tr. 67-71;
Exhibits F, G)
Applicant has no credit cards.  She has her income, now about $3,000 monthly, directly
deposited into a savings account.  She pays her bills electronically by means of a computer or with
a money order.  She does not have a checking account because she remembers the problems she had
in 1991 and 1995 with the insufficiently funded checks.  She tries to save about $400 monthly.  Her
net income monthly after expenses is about $950.  She has a budget in place for her income and
expenses.  Her grandson has a genetic ailment, and Applicant gives her daughter about $100 for
medications to cover expenses not paid by insurance.  She gives her daughter another $150 monthly
to cover her expenses, because her daughter works part-time in a low-paying job.  Applicant had a
hip replacement in 2006, causing her to miss some  work time.  Her insurance pays 80% of the cost,
and Applicant has medical expenses to pay for the remaining 20% of the bills. Applicant wants to
buy a house and is trying to resolve her debts to clear her credit record.  Applicant intends to repay
her debts one by one.  Applicant has a high school degree and a few college credits. (Tr. 37-40, 44,
50, 55, 62-64, 81, 90; Exhibit H)
Applicant has 13 delinquent debts listed in the SOR.  Two delinquent debts are listed twice.
Of these debts, Applicant has paid two in full, and has installment payment agreements for five
debts.  The remaining four debts are disputed and total $1,043.  Specifically, the delinquent debts
are as follows:
Subparagraphs 1.j ($2,075 judgment) and 1.o ($1,179 judgment) are for the same
apartment rental debt.  The difference in amounts is not explained in any exhibit.  Both debts resulted
from judgments on the same day of June 2003.  This debt is being paid at $100 monthly.  Applicant
is saving her money to settle the debt for $700.  She has saved nearly that entire amount to be able
to pay the settlement. (Tr. 43, 72; Exhibits 9, 10, Answer)
Subparagraphs 1.k ($25 for a returned check) and 1.l ($108 for a returned check) were
paid in October and November 2006, respectively. (Tr. 54, 76; Exhibits 9, 10, Answer)
Subparagraph 1.m ($1,674 for utility bills) is being paid regularly, and now has an
amount due of $208. (Tr. 76, 77; Exhibits 9, E, Answer)
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Subparagraph 1.n ($201 for a mail order business) is a debt Applicant denies as valid.
She claims her former boyfriend ordered something from this company, but she did not.  The name
used to order the item consisted of her nickname and the boyfriend’s last name.  It remains unpaid.
(Tr. 35, 36, 78; Exhibit 9)
Subparagraphs 1.p and 1.q are each for $213 for a hospital bill.  Applicant had
insurance with the company for whom she worked.  She attempted to have the insurance company
pay the bill, but it is unresolved at present.  She asked her former employer to check the status of the
payment. (Tr. 37-40, 83; Exhibits 9, 10)
Subparagraph 1.r (satellite television service bill for $391) is a debt not yet repaid.
(Tr. 85; Exhibits 9, 10)
Subparagraph 1.s is for a cell phone service provider.  Applicant denies she owes his
bill because she never had service with that company.  She uses a pre-paid cell phone.  This debt
remains unpaid, and Applicant disputes its validity. (Tr. 40, 85; Exhibits 9, 10, Answer)
Subparagraph 1.t is a medical debt for $62.  She is paying the collection agency $50
monthly to repay this bill and several others that agency is collecting.  The total debt is about $300.
(Tr. 86; Exhibits 9, 10, Answer)
Subparagraph 1.u is for $130 owed on a tanning salon membership.  This debt is
unpaid. (Tr. 87; Exhibit 9)
Subparagraph 1.v is for a judgment from 2004 in the amount of $795.92.  Applicant
denies the validity of this debt.  It is not listed on the credit reports submitted as exhibits.  Applicant
has not paid this debt and disputes its validity. (Tr. 42; Exhibits 9, 10)
Applicant completed a Public Trust Position Application (PTPA) on October 8, 2003.  She
did not list her disorderly conduct charge of January 2003.  She misread Question 16 because she
thought the fine cutoff amount was $150, which was the amount of her fine.  She thought the date
of her offense was 10 years ago, beyond the seven year limit of the question.  She had no explanation
of why she thought that January 2003, charge was 10 years before October 2003.  Next, Question
20 on the same PTPA asked Applicant if she had delinquent debts older than 180 days.  She
answered “no” because she asked her boyfriend, who paid the bills with the money she gave him,
if any debts were that old.  He told her none were delinquent.  She did not keep track of the debts
and relied on him to do so.  She claims she was not aware of the delinquencies until the Government
investigator talked to her in 2006. (Tr. 13, 46-49, 90-92; Exhibits 3, 6, Answer)
Applicant admitted she completed a security clearance application (SCA) on March 9, 2005.
This document was marked as Exhibit 5 for identification, but was not admitted into evidence.
Applicant testified about the SCA at the hearing.  Applicant answered Question 26 on this SCA
about offenses for which she was arrested for, charged with, or convicted of in the past seven years,
except traffic offenses with fines less than $150, with a “no.”  She again failed to list the 2003
disorderly conduct arrest and conviction.  She gave the same explanation for failing to list it in 2005
as she did in 2003.  Applicant denied deliberately failing to list her 180 day delinquent debts in
answer to Question 38, or her current 90 day delinquent accounts in answer to Question 39, giving
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as her reason her past reliance on her boyfriend who paid the household bills with the money she
gave him. (Tr. 13, 46-49, 90-93; Exhibits 3, 6, Answer)
POLICIES
“[N]o one has a ‘right’ to a security clearance.”  Department of the Navy v. Egan, 484 U.S.
518, 528 (1988).  As Commander in Chief, 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.”  Id. at
527.  The President has authorized the Secretary of Defense or his designee to grant applicants
eligibility for access to classified information “only upon a finding that it is clearly consistent the
national interest to do so.”  Exec. Or. 10865, Safeguarding Classified Information with Industry
§ 2 (Feb. 20, 1960).  Eligibility for a security clearance is predicated upon the applicant meeting the
security guidelines contained in the Directive.  An applicant “has the ultimate burden of
demonstrating that it is clearly consistent with the national interest to grant or continue his security
clearance.” ISCR Case No. 01-20700 at 3.
The adjudication process is based on the whole person concept.  All available, reliable
information about the person, past and present, is to be taken into account in reaching a decision as
to whether a person is an acceptable security risk.  Enclosure 2 of the Directive sets forth personnel
security guidelines, as well as the disqualifying conditions (DC) and mitigating conditions (MC)
under each guideline that must be carefully considered in making the overall common sense
determination required.  
In evaluating the security worthiness of an applicant, the administrative judge must also
assess the adjudicative process factors listed in ¶ 6.3 of the Directive.  Those assessments include:
(1) the nature, extent, and seriousness of the conduct; (2) the circumstances surrounding the conduct,
and the extent of knowledgeable participation; (3) how recent and frequent the behavior was; (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 pertinent 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 (See Directive, Section E2.2.1. of Enclosure 2). Because each security
case presents its own unique facts and circumstances, it should not be assumed that the factors
exhaust the realm of human experience or that the factors apply equally in every case.  Moreover,
although adverse information concerning a single condition may not be sufficient for an unfavorable
determination, the individual may be disqualified if available information reflects a recent or
recurring pattern of questionable judgment, irresponsibility, or other behavior specified in the
Guidelines.
The decision to deny an individual a security clearance is not necessarily a determination as
to the loyalty of the applicant.  See Exec. Or. 10865 § 7.  It is merely 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 establish, by substantial evidence, conditions in the personal
or professional history of the applicant that disqualify, or may disqualify, the applicant from being
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eligible for access to classified information.  The Directive presumes a nexus or rational connection
between proven conduct under any of the disqualifying conditions listed in the guidelines and an
applicant’s security suitability.  See ISCR Case No. 95-0611 at 2 (App. Bd. May 2, 1996).  All that
is required is proof of facts and circumstances that 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.  ISCR Case No.
00-0277, 2001 DOHA LEXIS 335 at **6-8 (App. Bd. 2001).  Once the Government has established
a prima facie case by substantial evidence, the burden shifts to the applicant to rebut, explain,
extenuate, or mitigate the facts.  See Directive ¶ E3.1.15.  An applicant “has the ultimate burden of
demonstrating that is clearly consistent with the national interest to grant or continue his security
clearance. ISCR Case No. 01-20700 at 3 (App. Bd. 2002).  “Any doubt as to whether access to
classified information is clearly consistent with national security will be resolved in favor of the
national security.” Directive ¶ E2.2.2.  “[S]ecurity clearance determinations should err, if they must,
on the side of denials.”  Egan, 484 U.S. at 531.  See Exec. Or. 12968 § 3.1(b).
Based upon a consideration of the evidence as a whole, I find the following adjudicative
guidelines most pertinent to an evaluation of the facts of this case:
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 could 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 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.
Guideline E: Personal Conduct: The Concern: Conduct involving questionable judgment,
lack of candor, dishonesty, or unwillingness to comply with rules and regulations can raise questions
about an individual’s reliability, trustworthiness and ability to protect classified information.  Of
special interest is any failure to provide truthful and candid answers during the security clearance
process or any other failure to cooperate with the security clearance process.
CONCLUSIONS
Financial Considerations:  Applicant had financial difficulties from the time of her
marriage 18 years ago until 2006.  She incurred debts that she could not repay, due to a low income
resulting from her high school education, a divorce, and lack of financial sophistication.  She filed
Chapter 13 bankruptcy three times between 1991 and 1993, unable to pay and complete the first two
filings.  Finally, she successfully completed the 1993 filing in 1997.  She failed to pay her city
income taxes for a number of years, because she thought the tax was deducted from her pay by her
employer, and at the same time she failed to file the tax returns with the city because the requirement
“slipped her mind.”  The disqualifying conditions applicable are Financial Considerations
Disqualifying Condition ¶19.a. (inability or unwillingness to satisfy debts), ¶19.c. (a history of not
meeting financial obligations), and ¶19.g (failure to file annual local income tax returns).
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Applicant’s successful Chapter 13 bankruptcy in 1997 shows she tried to repay her creditors,
not just eradicate her debts.  That pattern of attempting to repay her debts is shown again in her
current efforts to repay the current delinquent debts.
Applicant showed at the hearing she is making efforts to repay her debts to clear her financial
record in preparation to buying a house.  She has installment payment agreements with several
creditors, and has repaid two.  The SOR contains four allegations that should be only two because
of duplications on the credit reports.  Only three debts remain unpaid at present (Subparagraphs 1.r,
1.s, and 1.u), totaling $842.  She disputes Subparagraphs 1.s and 1.n as not being her debts.  A
delinquent debt total of $842, plus the disputed debt contained in Subparagraph 1.n for $201 equals
only $1,043, not a significant amount.  
Applicant’s explanation why her local income taxes were not paid for several years has two
reasonable bases.  First, the time periods coincide with the 11 years she spent living with her former
boyfriend who was not paying bills as she expected.  Second, her expectation that her employers
would withhold income taxes from her paychecks.  This second expectation is a reasonable one,
compounded by her obvious lack of financial sophistication and higher education.  She made a
mistake about the tax process, and relied on her assumptions based on state and federal income taxes
being withheld.  She trusted her live-in boyfriend more than she should have.
The Financial Considerations Mitigating Conditions applicable are ¶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), ¶20.d (the individual initiated a good-faith
effort to repay overdue creditors or otherwise resolve debts), and ¶20.e (the individual has a
reasonable basis to dispute 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).  Applicant demonstrated an awareness and dedication to control her finances and repay
her debts, pre-dating the SOR.  Applicant expressed her intention to repay her debts one by one, and
has submitted proof  that she is doing so.  It is likely that she will continue paying off her unpaid
debts based on her performance to date.  
Personal Conduct:  Applicant did not disclose certain information as alleged in the SOR
on her 2003 PTPA.  She did not disclose the same information on her 2005 SCA, as alleged in the
SOR.  She explained both failures occurred because she misread the question on the $150 traffic
offenses, and did not believe it applied to  her situation.  As to the questions related to delinquent
debts, she relied on her former live-in boyfriend’s statements and did not personally review her
financial matters. 
Personal Conduct Disqualifying Condition (DC) which applies is ¶16.(a) involving deliberate
omission, concealment, or falsification of relevant facts from any personnel security questionnaire,
personal history statement, or similar form used to conduct investigations, determine employment
qualifications, or determine trustworthiness.  If the failure to disclose is deliberate, then this DC
applies.  
However, Applicant’s explanations of why she did not disclose the same information on two
Government forms is reasonable, credible, and persuasive.  She misread the first question on the fine
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minimums for disclosure.  She did not read the question carefully enough to understand it applied
to minor traffic fines.  She also miscalculated the disclosure period for her disorderly conduct charge,
which she repeated at the hearing, showing a deficit of math skills primarily.  Her offense was minor
and that behavior was infrequent in her life.  Regarding the debts, she relied on what her live-in
boyfriend told her about their debts.  She trusted, but did not verify.  She did not learn of her
delinquent debts until the Government investigator told her what they were in 2006.  The same errors
being made on two forms completed two years apart shows the same mind-set and detrimental
reliance on her boyfriend and her math abilities.  
Whole Person Analysis
“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.” AG ¶ 2(a). “Each
security clearance decision must be a fair and impartial common sense determination based upon
consideration of all the relevant and material information and the pertinent criteria and adjudication
policy.” Directive ¶ 6.3. “Available, reliable information about the person, past and present,
favorable and unfavorable, should be considered in reaching a determination.” AG ¶ 2(a). In
evaluating Applicant’s case, I have considered the adjudicative process factors listed in the AG ¶
2(a).
Applicant’s testimony is credible and persuasive on her medical and family ailments and debt
obligations.  She married and was divorced at an early age.  She has a minimally employed single
daughter whose son has a chronic medical condition.  She is also credible and persuasive in her
testimony about her efforts to repay her debts.  She admitted she previously spent money on
shopping for items, but has stopped doing so.  She reduced her discretionary spending.  Her unpaid
debts total approximately $1,043 and not the $7,000 listed in the SOR..  She is saving money and
working to repay her debts, and is resolved to control her spending in the future.  She does not have
any credit cards and no checking account, reducing the opportunities for overspending.  Her
bankruptcies resulted from her divorce and job loss in 1991.  She learned from her earlier problems
and mistakes.  She rehabilitated herself by identifying the problems and correcting them.  Her debt
repayment actions are recent, but debt accumulation is not recent in the past two years.  Applicant
is trying to live responsibly.  Her mistakes on her PTPA and SCA resulted from misunderstanding
and detrimental reliance.  She had no deceptive motivation for her conduct.  Based on the evidence
Applicant presented, there is little likelihood of recurrence.  
Furthermore, without Exhibit 5, and with her denials of Subparagraphs 2.d and 2.e, the
findings on those allegations must be for Applicant.  Applicant objected to Exhibit 5 and its
admission, and it was never admitted into evidence.  The Government’s stated (Tr. 100, 101) that
it did not put the document into evidence and were not pursuing those allegations, although the
Government mistakenly referred to Exhibit 6 instead of Exhibit 5.  I assume Exhibit 5 was the
correct reference and the two allegations Applicant denied.
Therefore, considering all of the evidence, I conclude the financial considerations security
concern for Applicant.  I also conclude the personal conduct security concern for Applicant.  Finally,
I conclude the “whole person concept” for Applicant based on her continued efforts to repay her
debts and not avoid them, her evaluations from her supervisors, and the totality of her explanations
and the evidence introduced.
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FORMAL FINDINGS
The following are my conclusions as to each allegation in the SOR:
Paragraph 1.  Guideline F: FOR APPLICANT
Subparagraphs 1.a to 1.v: For Applicant
Paragraph 2.  Guideline E: FOR APPLICANT
Subparagraphs 2.a to 2.e: For Applicant
DECISION
In light of all of the circumstances presented by the record in this case, it is clearly consistent
with the national interest to grant or continue a security clearance for Applicant.  Clearance is
granted.
Philip S. Howe
Administrative Judge