KEYWORD: Financial; Personal Conduct
DIGEST: Applicant is a retired Navy petty officer and has been an employee of defense contractors
for about ten years.  He has a history of significant financial problems and he is currently unable to
pay his delinquent debts totaling more than $17,000.00. Applicant provided no information
demonstrating how his financial problems arose or what he has done to resolve them.  Applicant
failed to mitigate security concerns arising under the guideline for financial considerations.  He has
not met his burden of demonstrating that it is clearly consistent with the national interest to grant him
a security clearance.  Clearance is denied. 
CASENO: 06-22633.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. 06-22633
DECISION OF ADMINISTRATIVE JUDGE
CAROL G. RICCIARDELLO
APPEARANCES
FOR GOVERNMENT
Daniel F. Crowley, Esq., Department Counsel
FOR APPLICANT
Pro Se
SYNOPSIS
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Applicant is a 49-year-old security officer who has worked for a federal contractor since
2004. He retired from the military in 1995. He failed to pay his taxes in 1995, 1996, 1997 and 1998.
The Internal Revenue Service has applied his tax refunds from subsequent years to offset his debt.
He has not made any voluntary payments. He also owes more than $18,000 in back child support.
Applicant claimed he has started to make monthly payments, but failed to substantiate any payments.
Applicant intentionally failed to divulge his delinquent tax debts. He has failed to mitigate the
security concerns raised under Guideline F, financial considerations, and Guideline E, personal
conduct. Clearance is denied.
Item 2.1
Id.2
Id.3
Item 7.4
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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. 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 March 28, 2007,
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.
In a sworn statement dated April 10, 2007, Applicant responded to the SOR and admitted the
allegations under Guideline F and denied the allegation under Guideline E. Applicant elected to have
his case decided on the written record. Department Counsel submitted the government’s file of
relevant material (FORM) on May 25, 2007. The FORM was mailed to Applicant on June 4, 2007,
and received on June 7, 2007. Applicant was afforded an opportunity to file objections and submit
material in refutation, extenuation, or mitigation. Applicant did not provide additional information.
The case was assigned to me on August 15, 2007. 
FINDINGS OF FACT
Applicant’s admissions to the allegations in the SOR, are incorporated herein. In addition,
after a thorough and careful review of the pleadings, exhibits, and FORM, I make the following
findings of fact:
Applicant is 49 years old and has worked for a federal contractor as a security officer since
September 2004. He retired from the Army in 1995. Applicant admitted he failed to pay his federal
taxes for the years 1995, 1996, 1997, and 1998. He failed to provide any explanation for why he
failed to pay his taxes. He provided a letter from the Internal Revenue Service (IRS) dated May 16,
2005, indicating that a refund from his 2004 taxes was applied to his 1995 tax debt and he had a zero
balance.  It also showed the remainder of his 2004 refund was applied to his 1998 tax debt, thereby1
reducing it to $6,637.  He provided another letter from the IRS dated May 29, 2006, indicating a2
refund from his 2005 taxes was applied to his 1998 tax debt reducing it to $1,771.57.  It does not3
appear any other payments were made toward his tax debts other than the forced payment of applying
his tax refunds to his previous years tax debts. A federal tax lien remains in the amount of $9,067.
Applicant stated in his interrogatory dated December 20, 2006 that: “I will start my payment plan
in January 07.”  He provided no information to show he has made any further payments beyond the4
involuntary IRS action. 
Item 2.5
Id.6
Department of the Navy v. Egan, 484 U.S. 518, 528 (1988).7
Id. at 527.8
Exec. Or. 10865, Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960). 9
ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002).10
Id.11
Id.; Directive, Enclosure 2, ¶ E2.2.2.12
Executive Order 10865 § 7.13
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Applicant admitted he owes back child support payments. A notice from the state dated
March 31, 2007, stated he owed “at least the amount of” $18,472.71.  He provided no explanation5
for why he was in arrears. The notice from the state also advised him if he did not take action on the
arrearage he would be subject to enforcement actions. Applicant stated he set up an allotment to pay
$282 a month on this debt. He did not provide any documentation to support his claim.
On his security clearance application (SCA) Applicant responded “no” to question 27c which
asked in the last 7 years if he had a lien placed against his property for failing to pay taxes or other
debts. Applicant’s explanation for failing to divulge that he owed taxes for several tax years was that
because he did not own property he did not think he had to list his tax debts.  The wording of the6
question specifically asks if there is a lien against his property. If he did not have property it is
reasonable that he answered “no” even though he had delinquent taxes. I find he did not intentionally
falsify his answer to this question as alleged. 
POLICIES
“[N]o one has a ‘right’ to a security clearance.”  As Commander in Chief, the President has7
“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 designee8
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 of9
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 should10
err, if they must, on the side of denials.”  Any reasonable doubt about whether an applicant should11
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 a12
determination as to the loyalty of an applicant.  It is merely an indication that the applicant has not13
See Exec. Or. 10865 § 7.14
See Egan, 484 U.S. at 531.15
See v. Washington Metro. Area Transit Auth., 36 F.3rd 375, 380 (4th Cir. 1994).16
See ISCR Case No. 95-0611 at 2 (App. Bd. May 2, 1996)17
See Directive ¶ E3.1.15.18
ISCR Case No. 01-207000 at 3 (App. Bd. Dec. 19, 2002)19
Egan, 484 U.S. at 531; see Guidelines ¶ 2(b).20
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met the strict guidelines the President and the Secretary of Defense have established for issuing a
clearance.14
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 less15
than a preponderance.”  The Guidelines presume a nexus or rational connection between proven16
conduct under any of the criteria listed therein and an applicant’s security suitability.17
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 “has18
the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant
or continue his security clearance.”  “[S]ecurity clearance determinations should err, if they must,19
on the side of denial.”20
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 is set forth and
discussed in the conclusions below. 
CONCLUSIONS
I have carefully considered all the 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 guidelines most
pertinent to the evaluation of the facts in this case:
Financial Considerations
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
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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 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 failed to pay his taxes for several years and is in arrears
on his child support. 
I have considered all 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 unpaid and he failed to provide any information or tangible evidence that his actions are
not likely to recur. His provided no proof that he has made any voluntary payments on either his tax
debts or child support debt. Rather the IRS applied overpayments to his delinquent tax debts and the
enforcement division of the state’s child support agency notified him that action would be taken if
he failed to make payments. He stated he started an allotment to pay his child support, but provided
no proof that he has actually made a payment. In addition, he provided no explanation as to why he
failed to pay his taxes or his child support in the first place and why his taxes have been delinquent
for so many years. Although the balance on his delinquent taxes has been reduced, it has not been
through a good faith effort. I find none of the mitigating conditions apply. 
Personal Conduct
Guideline E-Personal Conduct is a concern because conduct involving questionable
judgment, lack of candor, dishonest, 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.
I considered the applicability of Personal Conduct Disqualifying Condition (PC DC) 16(a)
(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, award benefits or status, determine security clearance eligibility or
trustworthiness, or award fiduciary responsibilities). I previously found Applicant did not
deliberately falsify information when he responded “no” to Question 27c which asked if he had a lien
placed on his property for failing to pay taxes or other debts. Although he had failed to pay his taxes,
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he did not have any property and therefore he answered the question correctly. The question did not
ask him if he had unpaid taxes. I find no disqualifying conditions 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
guideline, 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
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 the evidence provided and also considered 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 all the evidence in the
context of the whole person, I conclude Applicant has not mitigated the security concerns based on
financial considerations. Because I found Applicant did not intentionally falsify his SCA, I conclude
he has mitigated the security concerns under Guideline E, personal conduct. 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.
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. Guideline F: AGAINST APPLICANT
Subparagraph 1.a: Against Applicant
Subparagraph 1.b: Against Applicant
Paragraph 2. Guideline E: FOR APPLICANT
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Subparagraph 2.a: For Applicant
DECISION
In light of all of the circumstances 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