KEYWORD: Financial
DIGEST: Applicant has  mitigated security concerns over his financial problems by his continuing
and ongoing efforts to resolve the debts that resulted from his efforts to fund his children’s college
education through credit cards.  He has borrowed from his 401 (k) and used the proceeds from the
sale of his house to resolve the majority of his debts; he has developed no new debts.  Significantly,
he has demonstrated his outstanding performance and character on the job where he is seen as a
person of excellence and integrity.  Overall, he has taken several steps to reform his conduct and
stated an intent to resolve all his debts; so he  demonstrated sufficient positive changes in behavior
to mitigate financial concerns.  Clearance is granted.
CASENO: 06-15364.h1
DATE: 09/06/2007   
DATE:  September 6, 2007
In Re:
-----------------------
SSN: -----------
Applicant for Security Clearance
)
)
)
)
)
)
)
)
ISCR Case No. 06-15364
DECISION OF ADMINISTRATIVE JUDGE
KATHRYN MOEN BRAEMAN
APPEARANCES
FOR GOVERNMENT
John Bayard Glendon, Esquire, Department Counsel
FOR APPLICANT
Pro Se
       This procedure is required by Executive Order 10865, as amended, and Department of Defense Directive1
5220.6, dated January 2, 1992 (Directive), as amended by Change 4, April 20, 1999.   
       Applicant did receive a copy of the DoD Directive 5220.6 which was sent with his Statement of Reasons2
(SOR).
2
SYNOPSIS
Applicant has  mitigated security concerns over his financial problems by his continuing and
ongoing efforts to resolve the debts that resulted from his efforts to fund his children’s college
education through credit cards.  He has borrowed from his 401 (k) and used the proceeds from the
sale of his house to resolve the majority of his debts; he has developed no new debts.  Significantly,
he has demonstrated his outstanding performance and character on the job where he is seen as a
person of excellence and integrity.  Overall, he has taken several steps to reform his conduct and
stated an intent to resolve all his debts; so he  demonstrated sufficient positive changes in behavior
to mitigate financial concerns.  Clearance is granted.
STATEMENT OF THE CASE
The Defense Office of Hearings and Appeals (DOHA) issued a Statement of Reasons (SOR)
to the Applicant on November 17, 2006.  The SOR detailed reasons why the Government could not
make the preliminary positive finding that it is clearly consistent with the national interest to grant
or continue a security clearance for the Applicant.   The SOR alleged specific concerns over1
Financial Considerations (Guideline F) in paragraph 1 based on the revised Adjudicative Guidelines2
issued on December 29, 2005, and implemented by the Department of Defense, to be effective
September 1, 2006.  Applicant responded to these SOR allegations in a notarized Answer dated
December 11, 2007.  He requested a hearing. 
Department Counsel on March 16, 2007, indicated the case was ready to proceed.  The matter
was assigned to me on March 19, 2007. Subsequently, a mutually convenient date for hearing was
agreed to; and a Notice of Hearing, issued on March 30, 2007, set the matter for May 17, 2007, at
a location near where Applicant works and lives.
 
At the hearing the Government offered seven exhibits  (Exhibit 1-7), which were admitted
into evidence. Applicant testified, and called two witnesses.  Applicant offered three documents
(Exhibits A - C), which were admitted into evidence without objection.  I granted Applicant two
weeks to submit additional evidence to which the Government consented, and Department Counsel
had one week to review it.  (TR 53; 69-70)  Applicant submitted his evidence on May 30, 2007.
(Exhibit D) Department counsel responded on June 5, 2007, that he had no objection; however,
he noted that several of the documented payments of debts did not relate to SOR allegations.  The
document was admitted into evidence and the record closed on June 5, 2007.  The transcript (TR)
was received on June 6, 2007.
FINDINGS OF FACT
3
After a complete and thorough review of the evidence in the record, and upon due
consideration of that evidence, I make the following Findings of Fact:
Applicant, 61 years old, has worked for a defense contractor from September 1977 to
present as a maintenance supervisor. He completed an Electronic Questionnaire for Investigations
Processing (e-QIP) (SF 86) to obtain a security clearance in August  2005.  He previously was
granted a Secret clearance. He received a certificate from a vocational technical education school
in December 1972.  (Exhibit 1)  Applicant has served in the military from 1962 to 1966.  (Exhibit
1) Applicant stated he has had a clearance since 1977. (Exhibit 3)
Applicant married in 1979.  He has four children born ages 19, 21, 26 and 27.  (Exhibit 1;
TR 36, 50-51) He and his wife were divorced in May 2006. (TR 45) She has remarried, so he has
no future financial obligations to her.  They have no children under 18.  (TR 46)
Finances
Applicant’s financial problems began when he had two children in college, and he started
financing their college expenses and his family expenses with credit cards.  The interest became
so onerous that he could not keep up even with the interest in 2003. He then got a loan on his
401(k) to address his financial issues.  (TR 38, 40; 61-62)  He currently has only one child
financially dependent on him. (TR 36) He later explained that this child is now living
independently.  (TR 51)
Applicant explained on his e-QIP that he had several large credit card debts he was unable
to pay and defaulted. He reported owing $11,199.54 for one credit card, $10,000 for a second
credit card, and $3,645 on a third debt. He reported a residential lien of $5,000 placed in July 2003.
He had cleared three debts by August 2005 and reported he had four more to pay. His wages were
garnished $1,000 for back taxes in July 2001.  He is still making payments on his federal taxes in
2007.  (Exhibit 1; TR 65-67) At the time of his divorce, he considered filing for bankruptcy but
chose not to do so. (TR 69)  The current status of these debts is as follows:
SOR ¶ TYPE OF DEBT (date) AMOUNT CURRENT STATUS
1.a. Credit Card acquired in
1985 and charged off.
(2000)
$12,248.00 Applicant stated he paid it
off in a settlement in August 
2003 by taking a $40,000
loan on his 401 (k). 
(Answer; Exhibits 3, 4, 6;
Exhibits C, TR 41; 46-49)
1.b. Credit Card charged
off. (2001)
$11,199.00 Applicant stated he and his
wife split the debt; he paid it
in September 2006 with
proceeds from the sale of the
house.  (Answer; Exhibits 3,
4, 6; Exhibits C, TR 42; 49-
52)
4
1.c. Collection for a
financial group. (2004)
$ 10,546.00 Initially, Applicant stated he
paid it of in a settlement in
August  2003.  (Answer;
Exhibits 3, 4, 6; Exhibits C,
TR 41; 54-55-56) He then
documented a settlement
payment of $7,250 in
October 2006. (Exhibit D)
1.d. Collection for account
sold to another
collection agency.
(2001)
$  3,698.00 Unpaid. He testified that a
settlement offer is pending. 
He hopes to begin payments
in summer 2007.  (Answer;
TR 42)  
1.e. Collection for charged
off account.  (2001)
$3,645.00 Unpaid. He planned to use
the proceeds of his house to
settle this account.  In May
2007 he was not sure who
owned this account as it had
been sold to a different
collection company.
(Answer; Exhibit 3; TR 44;
59-61; 68)  
1.f. Collection for charged
off account.  (2001)
$ 6,119.00 Paid.  The bank obtained a
judgment and sold the debt
to a collection agency who
placed a lien on the home;
the lien was paid when they
sold the house in September
2006.  (Answer; Exhibit 3;
Exhibit C;  TR 44-45; 62-
63)  
Applicant reported on a Personal Financial Statement in April 2006 that his monthly net
income of $3,800 was expended on $1,350 in expenses and $1,673 in debt.  He had assets of
$110,000 for his home and a 401(k) account worth $135,000.  However, he had borrowed against
it to make some debt payments.  In order to repay the loan on his 401(k) he makes a $700-800
monthly payment.  (Exhibit 2; TR 58-59)  In September 2006 he stated that his “debt situation has
stabilized.”  All of the debts stemmed from 2000 to 2004 period; he has not incurred any other
non-payment of debts since that period.  (Exhibit 3) His May 2007 budget reflected monthly
income of $3,130, expenses of $2,867.22 (including $600 per month average costs for his
daughter’s university tuition and $775 for her other living expenses) with $263 remainder.
(Exhibit A)
Reference
5
The site manager has known Applicant since October 1986 and has been his direct
supervisor during all of his time at the site.  Applicant exercises technical control over maintenance
for three site locations and supervises a staff of six engineers and technicians.  The supervisor
attested that all of his experiences with Applicant have been positive.  He is directly responsible
for initiatives that have saved the military hundreds of thousands of dollars because of his
development of techniques which have improved maintenance activities.  Under his leadership,
“his staff has reached the highest levels of productivity and professionalism.”  He is well respected
by the military community as a leading expert and has earned the trust and respect of the military
customer, peers and subordinates.  For example he was entrusted to hand-carry extremely fragile
$700,000 camera components between the vendor and the sites, including international travel.  His
“honesty, integrity and loyalty have been above reproach.” (Exhibit B)
The program manager for the program where Applicant works testified on Applicant’s
behalf.  The manager has been in the program for ten years and oversees three sites with sixty
people.  Previously he served in the military for 21 years and has a secret clearance or higher
throughout his entire 30-year career.  This manager has known him for ten years and attested to
Applicant’s important and responsible position in overseeing maintenance for a multi-million
dollar system.  “And without his expertise, we would have suffered in terms of our ability to keep
the system operational when it was needed to perform.”  He is the only contractor approved to
carry expensive replacement cameras internationally.  He serves in a “highly trusted position
involving immense responsibilities and of very important significance to our nation.”  This
manager oversees the evaluation process and reported that applicant consistently gets outstanding
evaluations which are given to only the top people in the program.  He reported Applicant is “up
there right at the top.”  He recommended him for a position of trust. (TR 19-26)
A military officer who is the detachment commander where Applicant works also testified
on Applicant’s behalf.  He does the daily quality assurance evaluations of the contractor and has
had a top secret clearance since 2000.  He has daily interactions with Applicant on site operations.
He supervises and evaluates his performance for the government and has given him an “excellent”
rating, the “highest rating possible.” He testified that Applicant has demonstrated “absolute
integrity on the issues regarding accountability.”  He recommended that Applicant’s security
clearance be continued.  (TR 28-33)
POLICIES
Enclosure 2 of the Directive sets forth adjudicative guidelines to consider in evaluating an
individual's security eligibility which  are divided into conditions that could raise a security
concern and may be disqualifying and conditions that could mitigate security concerns.  In deciding
whether to grant or continue an individual's access to classified information, the administrative
judge considers the evidence as a whole in evaluating this case and weighs relevant revised
Adjudication Guidelines: the mere presence or absence of any adjudication policy condition is not
decisive. 
 The responsibility for producing evidence initially falls on the Government to demonstrate
that it is not clearly consistent with the national interest to grant or continue Applicant's access to
classified information.  Then the Applicant presents evidence to refute, explain, extenuate, or
mitigate in order  to overcome the doubts raised by the Government, and to demonstrate
     Executive Order No. 10865 § 7.3
6
persuasively that it is clearly consistent with the national interest to grant or continue the clearance.
Under the provisions of Executive Order 10865, as amended, and the Directive, a decision to grant
or continue an applicant's security clearance may be made only after an affirmative finding that to
do so is clearly consistent with the national interest. In reaching the fair and impartial overall
common sense determination, the Administrative Judge may  draw only those inferences and
conclusions that have a reasonable and logical basis in the evidence of record.  
Section 7 of Executive Order 10865 specifically provides industrial security clearance
decisions shall be “in terms of the national interest and shall in no sense be a determination as to
the loyalty of the applicant concerned.” The decision to deny an individual a security clearance is
not necessarily a determination as to the allegiance, loyalty, and patriotism of an applicant.  It is3
merely an indication that the applicant has not met the strict guidelines the President and the
Secretary of Defense have established for issuing a security clearance.
CONCLUSIONS
Guideline F:  Financial Considerations
 ¶ 18. The Concern.  Failure or inability to live within one’s means, satisfy debts,
and meet financial obligations may indicate poor self-control, clack 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.  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.
The government provided substantial evidence of Applicant’s financial problems reflected
by his accumulating substantial credit card debts that have persisted. Consequently, Financial
Considerations Disqualifying Condition (DC), AG ¶ 19(a), (inability or unwillingness to satisfy
debts) and AG ¶ 19(c), (a history of not meeting financial obligations) apply. 
With the government’s case established, the burden shifted to Applicant to present evidence
of refutation, extenuation, or mitigation to overcome the case against him.  Applicant’s debts grew
out of his desire to fund his children’s college education and his poor judgment in trying to finance
those expenses through credit cards.  While he has a good  income and limited expenses, he has
struggled over several years to resolve his credit problems.  In 2003 he took out a substantial loan
from his 401(k) account to begin to resolve these debts rather than filing for bankruptcy.  In 2006
he sold his family home and used some of those proceeds to resolve several other debts.  While
he has not erased all of his debts, he has demonstrated a conscientious and consistent approach to
addressing and resolving the debts as money allows.  He still has financial limitations from
providing substantial resources to a child who remains in college.  However, in May 2007 he
reported she was financially independent.  Overall, he has demonstrated his tenacity and
       AG ¶ 20(c), (the person has received or is receiving counseling for the problem and/or there are clear4
indications that the problem is being resolved or is under control). 
       AG ¶ 20(b), (the conditions that resulted in the behavior were largely beyond the person’s control (e.g.,5
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(a) the behavior happened so long ago, was so infrequent, or occurred under such circumstances6
that it is unlikely to recur and does not cast doubt on the individual’s current reliability, trustworthiness, or
good judgment.  
7
persistence in resolving these debts. 
Consequently, Applicant has established a case in mitigation.  Applicant has demonstrated
his responsibility by paying the majority of his debts and stating  his intent to pay the remaining
debts.  He has developed a plan for how he might pay all his debts as his daughter’s college
expenses diminish.   Thus, he  meets  AG ¶ 20(d), (the individual initiated a good-faith effort to
repay overdue creditors or otherwise resolve debts).  He has a professional and responsible
position with a good income, and has limited his personal expenses in order to resolve these dated
debts.  To his credit, he has not developed any new debts. 
While Applicant provided no evidence of his seeking counseling  for these financial4
problems, he developed his own plan and made substantial steps to turn around his financial issues.
He did not try to establish that the debts were due to conditions beyond his control  even though5
he subsequently divorced.  AG ¶ 20(a)  does apply as the circumstances of his wanting to use his6
resources to fund his children’s college education has changed as all his children, but one, are now
financially independent.    
Whole Person Analysis
Having considered both the record and Applicant in light of the “whole person” concept,
I conclude he is an earnest person who has made many efforts to reform his financial practices and
has paid off the majority of his debts.  He has demonstrated amply his intent to resolve them all.
Also, he has changed his financial practices and reduced his expenses in order to resolve his debts.
He has developed a budget and understands where his money goes.  The potential for pressure,
coercion, exploitation, or duress is slight as he has a stable and impressive employment history.
Notably, three key people at his site praise him highly and have confidence in his trustworthiness
and good character.  His direct supervisor since 1986 praised his performance and commended his
ability to save hundreds of thousands of dollars with his innovative techniques to improve
maintenance activities.  He also noted Applicant’s honesty, integrity and loyalty. The program
manager who has known him for ten years attested to the importance of Applicant’s expertise and
attested to his outstanding performance ratings in a “highly trusted position.” He recommended
him for a security clearance.  The military officer at the site who does the daily quality assurance
evaluations commended his excellent performance and his integrity. He also recommended
Applicant for a security clearance.  Based on these assessments of three top officials who know
Applicant well, I conclude favorably for him based on a whole person assessment.  As he is
earnestly working to resolve his financial problems, the likelihood of new debts and related
8
problems is low. 
After weighing the disqualifying and mitigating conditions, and all the facts and
circumstances, in the context of the whole person, I conclude he has  mitigated the security
concerns pertaining to financial considerations.  I rule for  Applicant on subparagraphs 1.a. through
1.f. under SOR Paragraph 1.
FORMAL FINDINGS
After reviewing the allegations of the SOR in the context of the Adjudicative Guidelines
in Enclosure 2 and the factors set forth under the Adjudicative Process section, I make the
following formal findings:
Paragraph 1. Guideline F: FOR APPLICANT
Subparagraph 1.a through 1.f. For Applicant
DECISION
In light of all 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 the Applicant.  Clearance is
granted.
Kathryn Moen Braeman
Administrative Judge