KEYWORD: Financial
DIGEST: Applicant fell behind on his debt payments after his income was dramatically reduced in
early 2003.  Although he began working for his current employer in December 2003 and making
good money, he did nothing to resolve his delinquent debts until December 2006.  He started making
monthly installment payments on three of the eight delinquent debts alleged in the SOR, but he has
taken no action regarding five debts.  Security concerns based on financial considerations are not
mitigated.  Clearance is denied.
CASENO: 06-23037.h1
DATE: 08/31/2007
DATE:  August 31, 2007
In re:
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SSN:  ------------
Applicant for Security Clearance
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ISCR Case No. 06-23037
DECISION OF ADMINISTRATIVE JUDGE
LEROY F. FOREMAN
APPEARANCES
FOR GOVERNMENT
Emilio Jaksetic, Esq., Department Counsel
FOR APPLICANT
Pro Se
SYNOPSIS
2
Applicant fell behind on his debt payments after his income was dramatically reduced in early
2003.  Although he began working for his current employer in December 2003 and making good
money, he did nothing to resolve his delinquent debts until December 2006.  He started making
monthly installment payments on three of the eight delinquent debts alleged in the SOR, but he has
taken no action regarding five debts.  Security concerns based on financial considerations are not
mitigated.  Clearance is denied.
3
STATEMENT OF THE CASE
On March 23, 2007, the Defense Office of Hearings and Appeals (DOHA) issued a Statement
of Reasons (SOR) detailing the basis for its preliminary decision to deny Applicant a security
clearance.  This action was taken under Executive Order 10865, Safeguarding Classified Information
within Industry (Feb. 20, 1960), as amended and modified; Department of Defense Directive 5220.6,
Defense Industrial Personnel Security Clearance Review Program (Jan. 2, 1992), as amended and
modified (Directive); and the revised adjudicative guidelines (AG) approved by the President on
December 29, 2005, and implemented effective September 1, 2006.  The SOR alleged security
concerns raised under Guideline F (Financial Considerations). 
Applicant answered the SOR in writing on April 15, 2007, and elected to have the case
decided on the written record in lieu of a hearing.  Department Counsel submitted the Government’s
written case on May 24, 2007. A complete copy of the file of relevant material (FORM) was
provided to Applicant, who was afforded an opportunity to file objections and submit material to
refute, extenuate, or mitigate the disqualifying conditions. Applicant received the FORM on June
8, 2007, but he did not respond.  The case was assigned to me on August 15, 2007.
FINDINGS OF FACT
Applicant's admissions in his answer to the SOR are incorporated into my findings of fact.
I make the following findings:
Applicant is a 47-year-old measurement calibration technician employed by a defense
contractor since December 2003 (Item 4 at 3).  He previously served on active duty in the U.S. Air
Force for 20 years, retiring in July 2001 as a technical sergeant (E-6).  He held a security clearance
for all of his Air Force career, and he received a top secret SCI clearance in September 1997.
Applicant was married in March 2001. He has a 14-year-old stepdaughter, a 7-year-old
daughter, and a 5-year-old son.  He and his wife separated during the summer of 2006, and he pays
his wife child support of $800 per month (Answer to SOR at 2).
When Applicant retired from the Air Force, he was scheduled for an interview with a defense
contractor in the U.S.  He also had a backup plan to seek employment with an airline.  Both plans
were derailed by the terrorist attacks of September 11, 2001.  The defense contractor put plans for
deploying a new radar system on hold, and the airlines stopped hiring.
Applicant was unemployed from July 2001 until September 2001, when he found
employment as a field engineer for a crane repair company.  He left this job in May 2002 because
his employer began requiring almost continuous travel (Answer to SOR at 1).  He then worked as
an automotive technician for a luxury car dealer from May 2002 until August 2003, initially at a pay
rate comparable to his crane repair job.  Because of downturns in the economy and reduced demand
for luxury cars, however, his pay as an automotive technician was reduced by about one-third, and
he began falling behind on his debt payments.
4
In early 2003, Applicant’s wife and family moved to the United Kingdom, her native home.
Applicant joined them in July 2003, and began working in a low-paying job in an Air Force club.
At this point he had stopped making payments on his debts (Answer to SOR at 2).  In December
2003, he began working for his current employer.  He started work at $11.30 per hour but  is now
earning $18.55 per hour (Item 7 at 8).  At some time after starting this job, Applicant, his spouse,
and their three children moved from a two-bedroom home into a three-bedroom home.  The record
does not reflect how much this move increased his housing costs. 
In December 2006, Applicant began working with a debt counseling agency.  He made
monthly payments in December through April 2007 on three of the debts alleged in the SOR.
Because he did not respond to the FORM, the record does not reflect whether he has continued to
make payments after April.  In January 2007, he executed a personal financial statement in response
to DOHA interrogatories, which reflected monthly net income of $4,311, expenses of $2,356, and
debt payments of $775 (Item 7 at 4).
Applicant admitted the allegations in SOR ¶¶ 1.a and 1.b, and denied the allegations in SOR
¶¶ 1.c-1.h. The evidence concerning his delinquent debts is summarized in the table below.
SOR Debt Amount Status Record
1.a Telephone $667 Paying $30 
per month
Item 3 (Answer to SOR) at
7-8; Item 8 at 1 (Credit
report dated 3-7-07)
1.b Utilities $482 Unpaid Item 8 at 1
1.c Credit card $8,126 Unpaid Item 8 at 1
1.d Collection account $2,309 Unpaid Item 3 at 7-8; Item 8 at 2
1.e Collection account $4,095 Paying $105 
per month
Item 3 at 7-8; Item 8 at 2
1.f Collection account $14,317 Paying $300 
per month
Item 3 at 7-8; Item 8 at 2
1.g Credit card $2,448 Unpaid Item 5 (Credit report dated
6-25-04) at 3
1.h Charge account $2,343 Unpaid Item 5 at 5 
5
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 with
the national interest to do so.”  Exec. Or. 10865, Safeguarding Classified Information within
Industry § 2 (Feb. 20, 1960), as amended and modified.  Eligibility for a security clearance is
predicated upon the applicant meeting the criteria contained in the adjudicative guidelines.  Each
clearance decision must be a fair, impartial, and commonsense decision based on the relevant and
material facts and circumstances, the whole person concept, the disqualifying conditions and
mitigating conditions under each specific guideline, and the factors listed in AG ¶¶ 2(a)(1)-(9).
A person granted access to classified information enters into a special relationship with the
government.  The government must be able to have a high degree of trust and confidence in persons
with access to classified information.  However, 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 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 which disqualify, or may disqualify, the applicant from being
eligible for access to classified information.  See Egan, 484 U.S. at 531.  “Substantial evidence” is
“more than a scintilla but less than a preponderance.”  See v. Washington Metro. Area Transit Auth.,
36 F.3d 375, 380 (4th Cir. 1994).  The guidelines presume a nexus or rational connection between
proven conduct under any of the criteria listed therein and an applicant’s security suitability.  See
ISCR Case No. 95-0611 at 2 (App. Bd. May 2, 1996).  
Once the government establishes a disqualifying condition 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 it is clearly consistent with
the national interest to grant or continue his security clearance.”  ISCR Case No. 01-20700 at 3 (App.
Bd. Dec. 19, 2002).  “[S]ecurity clearance determinations should err, if they must, on the side of
denials.”  Egan, 484 U.S. at 531; see AG ¶ 2(b). 
CONCLUSIONS
Guideline F (Financial Considerations)
The concern under this guideline is as follows: “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.”  AG
¶18.
6
The disqualifying condition in AG ¶ 19(a) is raised where there is an “inability or
unwillingness to satisfy debts.”  AG ¶ 19(c) is raised when there is “a history of not meeting financial
obligations.”  Applicant’s financial history raises both of these conditions.
Since the government produced substantial evidence to raise the disqualifying conditions in
AG ¶¶ 19(a) and(c), the burden shifted to Applicant to produce evidence to rebut, explain, extenuate,
or mitigate the facts.  Directive ¶ E3.1.15.  An applicant has the burden of proving a mitigating
condition, and the burden of disproving it is never shifted to the government.  See ISCR Case No.
02-31154 at 5 (App. Bd. Sep. 22, 2005).  
Security concerns based on financial problems can be mitigated by showing that “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.”  AG ¶ 20(a).  This is a compound mitigating condition, with three disjunctive
prongs and one conjunctive prong.  It may be established by showing the conduct was “so long ago,”
or “so infrequent,” or “occurred under such circumstances that it is unlikely to recur.”  If any of the
three disjunctive prongs are established, the mitigating condition is not fully established unless the
conduct “does not cast doubt on the individual’s current reliability, trustworthiness, or good
judgment.”
Applicant’s financial problems began when his pay as an automotive technician was reduced,
and they were exacerbated when his family moved back to the U.K. and he followed them, working
for several months at low pay.  There is no evidence he experienced previous financial problems.
His financial problems are unlikely to recur if he continues working for his current employer.  The
circumstances causing his financial distress do not raise doubts about his reliability, trustworthiness,
or good judgment.  However, his failure to begin resolving his problems until December 2006, three
years after he started his current job, raises doubts about his prudence, sense of duty, and good
financial judgment.  I conclude this mitigating condition is not fully established.
Security concerns under this guideline also can be mitigated by showing that “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.”  AG ¶ 20(b).  Both
prongs, i.e., conditions beyond the person’s control and responsible conduct, must be established.
Applicant’s marital problems and unexpected reduction in his pay as an automotive technician were
circumstances beyond his control.  He appears to have acted responsibly when the circumstances
occurred, but he did not act responsibly once his financial situation stabilized, because he waited
three more years to begin resolving his financial problems.  I conclude this mitigating condition is
not fully established.
Security concerns under this guideline also can be mitigated by showing that “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.”  AG ¶ 20(c).  This mitigating condition also has two prongs.
If, as in this case, the person has received counseling, it must also be shown that there are clear
indications the problem is being resolved or under control.  The second prong is not established,
because there is no evidence that the debts alleged in SOR ¶¶ 1.b, 1.c, 1.d, 1.g, and 1.h are being
resolved.
7
Security concerns under this guideline also can be mitigated by showing that “the individual
initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.”  AG ¶ 20(d).  The
concept of good faith “requires a showing that a person acts in a way that shows reasonableness,
prudence, honesty, and adherence to duty or obligation.”  ISCR Case No. 99-0201, 1999 WL
1442346 at *4 (App. Bd. Oct. 12, 1999).  Evidence of past irresponsibility is not mitigated by
payment of debts only under pressure of qualifying for a security clearance.  Applicant waited three
years to begin repaying his delinquent debts, after he realized his security clearance was in jeopardy.
His debt repayment plan appears to cover only three of the eight debts alleged in the SOR.  I
conclude this mitigating condition is not established.
The Whole Person
In addition to considering the specific disqualifying and mitigating conditions under each
guideline, I have also considered: (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
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.  AG ¶¶
2(a)(1)-(9).  Several of these factors are incorporated in the above discussion of Guideline F, but
some merit additional comment.
Applicant is a mature adult.  He served honorably for 20 years in the Air Force, and he held
clearances during all of his Air Force service, apparently without incident.  His financial downturn
was unfortunate and not entirely in his control.  However, his failure to address his financial
problems for three years after returning to gainful employment raises doubts about his sense of duty,
judgment, and reliability.  He has not yet established a track record of systematic payments on his
delinquent debts.
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.  Accordingly, I conclude he has not carried his
burden of showing that it is clearly consistent with the national interest to continue his security
clearance.
8
FORMAL FINDINGS
The following are my conclusions as to each allegation in the SOR:
Paragraph 1.  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: Against Applicant
Subparagraph 1.f: Against Applicant
Subparagraph 1.g: Against Applicant
Subparagraph 1.h: Against Applicant
DECISION
In light of all of the circumstances in this case, it is not clearly consistent with the national
interest to continue Applicant’s security clearance. Clearance is denied.
LeRoy F. Foreman
Administrative Judge