KEYWORD: Financial
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: 06-25755.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. 06-25755
DECISION OF ADMINISTRATIVE JUDGE
MICHAEL J. BRESLIN
APPEARANCES
FOR GOVERNMENT
Julie R. Edmunds, Esq. Department Counsel
FOR APPLICANT
Pro Se
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SYNOPSIS
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.
STATEMENT OF THE CASE
On March 23, 2005, Applicant submitted an SF 86, Security Clearance Applaiction.  The
Defense Office of Hearings and Appeals (DOHA) declined to grant or continue a security clearance
for Applicant under Executive Order 10865, Safeguarding Classified Information Within Industry
(Feb. 20, 1960), as amended; Department of Defense Directive 5220.6, Defense Industrial Personnel
Security Clearance Review Program (Jan. 2, 1992) (the “Directive”), as amended; and the new
adjudicative guidelines (AG) promulgated by the President on December 29, 2005, and implemented
by the Department of Defense on September 1, 2006.  On February 28, 2007, DOHA issued a
Statement of Reasons (SOR) detailing the basis for its decision: security concerns raised under the
Directive, Guideline F, Financial Considerations.  
Applicant answered the SOR in writing on March 26, 2007.  He elected to have the matter
decided without a hearing.
Department Counsel submitted the government’s case in a File of Relevant Material (FORM)
dated June 7, 2007.  On June 14, 2007, Department Counsel mailed a complete copy of the FORM
to Applicant, along with notice of his opportunity to file objections and submit material to refute,
extenuate, or mitigate the potentially disqualifying conditions.  On June 20, 2007, Applicant received
the FORM.  He did not submit any additional materials within the specified 30-day period.  The case
was assigned to me on August 15, 2007. 
FINDINGS OF FACT
Applicant admitted the allegations in the SOR.  (Item 3.)  Those admissions are incorporated
herein as findings of fact.  After a complete and thorough review of the evidence in the record, I
make the following additional findings of fact.
Applicant is 55 years old.  (Item 4 at 1.)  He is an outside machinist for a defense contractor.
(Id. at 2.)  
Applicant enlisted in the U.S. Navy Reserves in October 1970, and rose through the ranks
to Petty Officer Second Class.  (Id. at 4.)  He separated from the Navy Reserves in October 1976.
(Id.)
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He married in 1974.  (Id. at 3-4.)  Between April 1974 and December 1980, he worked as a
preservation servicer for a military installation.  (Id. at 3.)  
In December 1980, Applicant re-enlisted in the U.S. Navy, and entered active duty.  (Id. at
4.)  He was later promoted to Petty Officer First Class.  He retired from the Navy in February 1996.
(Id.)
Applicant was unemployed between about February and April 1996.  (Id. at 2.)  He then
began working as an outside machinist for a federal contractor and served in that position until May
1997.  (Id.)  He was unemployed from May until July 1997.  Applicant worked for another defense
contractor for about one month, and was unemployed again from about August to December 1997.
(Id.)  Since 1997, Applicant has worked as an outside machinist for three federal contractors without
a significant period of unemployment.  
In November 2002, Applicant and his wife filed jointly for bankruptcy protection under
Chapter 7 of the Bankruptcy Code.  (Item 4 at 6; Item 5 at 1.)  The record does not include a copy
of the bankruptcy documents.  The action was later dismissed.  (Item 3.)  
In March 2005, Applicant submitted an SF 86, Security Clearance Application.  (Item 4.)
In response to questions on the form, he reported the petition for bankruptcy and several financial
delinquencies.  (Id.)  Investigators obtained a credit bureau report, dated February 2007, that listed
four seriously delinquent accounts.  (Item 5.)  These include a delinquent credit card account in the
amount of $1,196.00 (SOR, ¶ 1.b), a charged off debt to a creditor in the amount of $4,079.00 (SOR,
¶ 1.c), a delinquent debt to a collection agency for $988.00 (SOR, ¶ 1.d), and an overdue loan for an
automobile in the amount of $11,413.00 (SOR, ¶ 1.e).  (Item 5.)  Applicant admitted these debts.
(Item 3.) 
In December 2006, security investigators requested that he respond to interrogatories.  (Item
6.)  Applicant provided a personal financial statement showing his normal, monthly living expenses.
He indicated he was then unable to make arrangements to pay any of his delinquent debts.  (Id.)  
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.”  Department of the Navy v. Egan, 484 U.S.
518, 527 (1988).  In Executive Order 10865, Safeguarding Classified Information Within Industry
(Feb. 20, 1960), the President set out guidelines and procedures for safeguarding classified
information within the executive branch. 
To be eligible for a security clearance, an applicant must meet the security guidelines
contained in the Directive.  Enclosure 2 of the Directive sets forth personnel security guidelines, as
well as the disqualifying conditions and mitigating conditions under each guideline.  Conditions that
could raise a security concern and may be disqualifying, as well as those which could mitigate
security concerns pertaining to this adjudicative guideline, are set forth and discussed in the
conclusions below.
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“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.)  An
administrative judge must apply the “whole person concept,” and consider and carefully weigh the
available, reliable information about the person.  (Id.)  An administrative judge should consider the
following factors: (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 individual’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 or recurrence.  (Id.) 
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.  (Directive, ¶ E3.1.14.)  Thereafter, the applicant is responsible for presenting evidence
to rebut, explain, extenuate, or mitigate the facts.  (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).  “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.)
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 a determination as to the loyalty of the applicant.  (Exec. Ord. 10865, §
7.)  It is merely an indication that the applicant has not met the strict guidelines the President has
established for issuing a clearance.
CONCLUSIONS
I considered carefully all the facts in evidence and the legal standards discussed above.  I
reach the following conclusions regarding the allegations in the SOR.
Financial Considerations
The security concern relating to the guideline for Financial Considerations is set out in ¶ 18
of the new adjudicative guidelines.  
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. 
The guideline notes several conditions that could raise security concerns.  Under ¶ 19(a), an
“inability or unwillingness to satisfy debts” is potentially disqualifying.  Similarly, under  ¶ 19(c),
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“a history of nor meeting financial obligations” may raise security concerns.  As noted above,
Applicant had significant financial problems for several years and he is currently unable to pay or
resolve some substantial delinquent debts.  I find the available evidence raises these potentially
disqualifying conditions. 
The guideline also includes several conditions that could mitigate security concerns raised
under this guideline.  Paragraph 20(a) may apply where “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.”  The behavior in question
is the non-payment of delinquent debts.  The financial obligations in question remain unresolved;
therefore, I find the behavior is recent.  It also appears there were several unpaid debts that
accumulated over a period of time; thus, I cannot find this was an infrequent event.  Finally,
Applicant provided no information about the origin of these debts, or any actions he has taken to
resolve them, therefore he has failed to demonstrate they are unlikely to recur.
Under ¶ 20(b), it may be mitigating where “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.”  The available information indicates Applicant experienced
several periods of unemployment in 1997.  It is not clear, however, whether this caused or
contributed to his financial problems; he was steadily employed for about four years before he filed
for bankruptcy, and has been employed continuously since then.  Applicant offered no statement or
other information shedding any light on his personal circumstances, therefore I am unable to find that
this potentially mitigating condition applies.
Evidence 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” is potentially mitigating
under ¶ 20(c).  Similarly, ¶ 20(d) applies where the evidence shows “the individual initiated a good-
faith effort to repay overdue creditors or otherwise resolve debts.”  There is no information Applicant
received any counseling.  Furthermore, he indicated he is unable make any payments on his
delinquent debts.  The evidence does not raise this potentially mitigating condition.
Whole Person Concept
I considered carefully all the potentially disqualifying and mitigating conditions in this case
in light of the “whole person” concept, keeping in mind that any doubt as to whether access to
classified information is clearly consistent with national security must be resolved in favor of
national security.  I considered the nature, extent, and seriousness of the conduct.  The available
evidence shows Applicant has a history of significant financial problems and he is currently unable
to pay his delinquent debts.  Unfortunately, Applicant provided no information demonstrating how
his financial problems arose, or what he has done to resolve them.  For this reason, I cannot assess
the extent of his rehabilitation or another pertinent behavioral change, or determine the likelihood
of continuation or recurrence.  Considering all the evidence, I conclude Applicant has not met his
burden of demonstrating that it is clearly consistent with the national interest to grant him a security
clearance. 
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FORMAL FINDINGS
My conclusions as to each allegation in the SOR are:
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
DECISION
In light of all of 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.
Michael J. Breslin
Administrative Judge