KEYWORD: Financial; Personal Conduct
DIGEST: Applicant has a history of unresolved financial problems. It is too soon to tell if she will
resolve the financial problems in a satisfactory manner. Clearance is denied. 
CASENO: 06-20776.h1
DATE: 09/26/2007
DATE:  September 26, 2007
In re:
---------------
SSN: -----------
Applicant for Security Clearance
)
)
)
)
)
)
)
)
ISCR Case No. 06-20776
DECISION OF ADMINISTRATIVE JUDGE
MICHAEL H. LEONARD
APPEARANCES
FOR GOVERNMENT
Eric H. Borgstrom, Esq. , Department Counsel
FOR APPLICANT
Pro Se
SYNOPSIS
Applicant has a history of unresolved financial problems. It is too soon to tell if she will
resolve the financial problems in a satisfactory manner. Clearance is denied. 
 Executive Order 10865, dated February 20, 1960, as amended, and DoD Directive 5220.6, dated January 2,1
1992, as amended (Directive).
 See Memorandum from the Under Secretary of Defense for Intelligence, dated August 30, 2006, Subject:2
Implementation of Adjudicative Guidelines for Determining Eligibility for Access to Classified Information (December
29, 2005). 
2
STATEMENT OF THE CASE
Applicant contests the Defense Department’s intent to deny or revoke her eligibility for a
security clearance. Acting under the relevant Executive Order and DoD Directive,  the Defense1
Office of Hearings and Appeals (DOHA) issued a statement of reasons (SOR) to Applicant on
February 15, 2007. The SOR is equivalent to an administrative complaint and it details the factual
basis for the action. In general, the issues in this case fall under Guideline F for financial
considerations based on delinquent debts and Guideline E for personal conduct based on falsification
of a security-clearance application.  
In addition to the Directive, this case is brought under the revised Adjudicative Guidelines
for Determining Eligibility for Access to Classified Information (Revised Guidelines) approved by
the President on December 29, 2005. The Revised Guidelines were then modified by the Defense
Department, effective September 1, 2006. They supersede or replace the guidelines published in
Enclosure 2 to the Directive. They apply to all adjudications and other determinations where an SOR
has been issued on September 1, 2006, or thereafter.  The Directive is pending revision or2
amendment. The Revised Guidelines apply here because the SOR is dated after the effective date.
Applicant replied to the SOR in writing on March 21, 2007. She elected to have her case
decided on the written record in lieu of a hearing.
On May 30, 2007, the government submitted its written case consisting of all relevant and
material information that could be adduced at a hearing. This so-called file of relevant material
(FORM) was mailed to Applicant and it was received by her on June 11, 2007. Applicant replied to
the FORM on August 14, 2007, and she submitted materials for consideration. The case was
assigned to me on September 14, 2007.   
RULINGS ON PROCEDURE
In its FORM, the government included an FBI Identification Record concerning Applicant
(Exhibit 6). It reports that Applicant was arrested or charged (or both) with two counts of issuing bad
checks in 1978. The disposition of these misdemeanors is not reported. This matter is not alleged
in the SOR. And in its brief, government counsel did not explain why a 29-year-old bad check  case
 See Directive, Enclosure 3, ¶ E3.1.20. 3
 Id. 4
3
(with an unknown disposition) is relevant and material to the debts in the SOR, to Applicant’s ability
to repay, or to Applicant’s current overall financial situation. Accordingly, the FBI report has not
been considered.
Also in its FORM, the government included a personal subject interview of Applicant that
was part of a report of investigation (ROI) prepared by the U.S. Office of Personnel Management
(Exhibit 7). The ROI indicates that the Applicant’s subject interview was unsworn. The general rule
is that a background ROI may not be received and considered by an administrative judge.  The3
exception to the general rule is “[a]n ROI may be received with an authenticating witness provided
it is otherwise admissible under the Federal Rules of Evidence.”  Here, the ROI is not accompanied4
by an authenticating witness (for example, perhaps by affidavit or adopted by Applicant).
Accordingly, the ROI has not been considered.    
FINDINGS OF FACT
Under Guideline F, the SOR alleges seven delinquent debts ranging from $21 to $10,793 for
a total of about $23,637. Under Guideline E, the SOR alleges Applicant gave deliberately false
answers to two questions about her financial delinquencies when completing a security-clearance
application in November 2005. She admits the indebtedness and denies the falsification allegations.
In addition, the following facts are established. 
Applicant is a 57-year-old technician. She has worked for her current employer since
November 1996. According to her general manager/facility security officer, Applicant is a reliable
and stable employee. She is punctual and produces high-quality work. 
Applicant has been married twice. She was first married in 1967 and then divorced in 1982.
She married her current husband in 1989. All her children are adults.
Applicant has a history of financial problems. It is established by the three credit reports in
the FORM (Exhibits 8, 9, and 10) as well as her admissions. The status of her indebtedness alleged
in the SOR is summarized in the following table.
Debt Description Current Status
SOR ¶ 1.a–medical account in collection for
$21; delinquent since June 2004.
Paid in March 2007. 
SOR ¶ 1.b–medical account in collection for
$107; delinquent since April 2004.
Paid in March 2007.
SOR ¶ 1.c–charged-off account for $131.   Paid in March 2007.    
 Department of Navy v. Egan, 484 U.S. 518, 528 (1988) (“it should be obvious that no one has a ‘right’ to a5
security clearance”); Duane v. Department of Defense, 275 F.3d 988, 994 (10  Cir. 2002) (“It is likewise plain that thereth
is no ‘right’ to a security clearance, so that full-scale due process standards do not apply to cases such as Duane’s.”).
 Egan, 484 U.S. at 531.6
 Directive, ¶ 3.2. 7
 Directive, ¶ 3.2. 8
 ISCR Case No. 02-18663 (App. Bd. Mar. 23, 2004).9
4
SOR ¶ 1.d–charged-off credit card account
for $10,793; delinquent since June 2005. 
In collection. Making payments since January
2007; as of July 2007, balance of $9,246.98.
SOR ¶ 1.e–charged-off account for $2,215;
charged-off in about July 2005. 
Applicant cosigned loan for son who did not
make payments. Voluntary repossession of
truck. Settled for $1,750 in January 2007.  
SOR ¶ 1.f–past-due account for $1,984. In temporary hardship relief. Made $178
payments in January, February, March, April,
May, June, and July 2007.  
SOR ¶ 1.g–charged-off account for $8,386;
charged-off in about July 2003. 
In collection since at least 2004. Resolved for
$2,917 in 2006 or 2007.  
In about November 2005, Applicant signed a security-clearance application (Exhibit 3). In
doing so, she certified that her answers were true, complete, and correct to the best of her knowledge
and belief and made in good faith. Also, she understood that a knowing and willful false statement
on the application could be punished by a fine or imprisonment or both. In response to Questions 38
and 39 about her financial record, she answered in the negative. She did not disclose any financial
delinquencies called for by the questions. 
GENERAL PRINCIPLES OF LAW AND POLICIES
No one has a right to a security clearance.  As noted by the Supreme Court in Department5
of Navy v. Egan, “the clearly consistent standard indicates that security clearance determinations
should err, if they must, on the side of denials.”  A favorable decision establishes eligibility of an6
applicant to be granted a security clearance for access to confidential, secret, or top-secret
information.  An unfavorable decision: (1) denies any application; (2)  revokes any existing security7
clearance; and (3) prevents access to classified information at any level and retention of any existing
security clearance.  Under Egan, Executive Order 10865, and the Directive, any doubt about whether8
an applicant should be allowed access to classified information will be resolved in favor of
protecting national security.
There is no presumption in favor of granting, renewing, or continuing eligibility for access
to classified information.  The government has the burden of presenting evidence to establish facts9
 Directive, Enclosure 3, ¶ E3.1.14.10
 Directive, Enclosure 3, ¶ E3.1.15.11
 Directive, Enclosure 3, ¶ E3.1.15.12
 Egan, 484 U.S. at 531. 13
 ISCR Case No. 01-20700 (App. Bd. Dec. 19, 2002) (citations omitted).14
 Executive Order 10865, § 7.15
 Revised Guidelines at 13–14 (setting forth the disqualifying and mitigating conditions). 16
 Revised Guidelines at 13. 17
5
alleged in the SOR that have been controverted.  An applicant is responsible for presenting evidence10
to refute, explain, extenuate, or mitigate facts that have been admitted or proven.  In addition, an11
applicant has the ultimate burden of persuasion to obtain a favorable clearance decision.  In Egan,12
the Supreme Court said that the burden of proof is less than the preponderance of the evidence.  The13
agency appellate authority has followed the Court’s reasoning, and a judge’s findings of fact are
reviewed under the substantial-evidence standard.14
The Revised Guidelines set forth adjudicative guidelines to consider when evaluating a
person’s security clearance eligibility, including disqualifying conditions (DC) and mitigating
conditions (MC) for each guideline. In addition, each clearance decision must be a fair and impartial
commonsense decision based upon consideration of all the relevant and material information, the
pertinent criteria and adjudication factors, and the whole-person concept. 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 those persons to whom it grants access
to classified information. The decision to deny a person a security clearance is not a determination
of an applicant’s loyalty.  Instead, it is a determination that the applicant has not met the strict15
guidelines the President has established for granting eligibility for a security clearance.
CONCLUSIONS
Under Guideline F for financial considerations,  a security concern typically exists due to16
significant unpaid debts. “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.”  Similarly, an individual who is17
financially irresponsible may also be irresponsible, unconcerned, negligent, or careless in properly
handling and safeguarding classified information.   
The record evidence supports a conclusion that Applicant has a history of financial problems.
Her  history of financial problems is a security concern because it indicates inability or unwillingness
 DC 1 is “inability or unwillingness to satisfy debts.” 18
 DC 3 is “a history of not meeting financial obligations.” 19
 MC 4 is “the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.”20
 Revised Guidelines at 10–12 (setting forth the disqualifying and mitigating conditions). 21
 Revised Guidelines at 10. 22
6
to satisfy debts  and a history of not meeting financial obligations  within the meaning of Guideline18 19
F. The record evidence is more than sufficient to establish these two disqualifying conditions. 
The most pertinent mitigating condition is the fourth MC  of Guideline F (the other MCs20
have been considered and none apply). It receives consideration because of Applicant’s efforts to
repay or resolve her debts (see table). She has made good progress: (1) she paid three of the smaller
debts in March 2007; (2) she settled or resolved two of the larger debts in 2006–2007; and (3) she
made repayment arrangements for two debts in 2007. At present, she has about $10,000 outstanding
in unresolved delinquent debt. 
The credit in mitigation, however, is lessen by two factors. First, her good-faith efforts have
largely been a recent development undertaken in 2007. Second, she still has two sizable debts to
resolve (SOR ¶¶ 1.d and 1.f), and one account is in a temporary hardship relief status. It is unknown
if Applicant will be able to make payments when the account returns to its normal status. 
In short, given her longstanding history of financial problems, it is too soon to make a
predictive judgment about her ability to resolve the balance of her delinquent debt and then live a
financially-responsible lifestyle. Accordingly, Applicant’s efforts to resolve her financial problems,
while laudable, are insufficient to mitigate the financial considerations security concern. 
Personal conduct under Guideline E  addresses “conduct involving questionable judgment,21
lack of candor, dishonesty, or unwillingness to comply with rules and regulations.”  In this regard,22
the deliberate omission, concealment, or falsification of a material fact in any written document or
oral statement to the government when applying for a security clearance or in other official matters
is a security concern. It is deliberate if it is done knowingly and willfully. An omission of relevant
and material information is not deliberate if the person genuinely forgot about it, inadvertently
overlooked it, misunderstood the question, or genuinely thought the information did not need to be
reported.
At issue here is the truthfulness of Applicant’s answers to two questions seeking information
about financial delinquencies. She should have revealed the debts specified in the SOR in response
to Questions 38 and 39 of the security-clearance application. She contends she did not intentionally
omit the information. Instead, she was unaware and did not have a credit report available to her when
she completed and signed the application. Her explanation is accepted as reasonable because it does
not appear that she had a firm grasp on her finances in 2005 when she completed the application.
Accordingly, based on the admissible evidence, her answers to the two questions were not
deliberately false and Guideline E is decided for Applicant.  
7
To conclude, Applicant did not present sufficient evidence to explain, extenuate, or mitigate
the financial considerations security concern. She has a history of unresolved financial problems and
it is too soon to tell if she will resolve the financial problems in a satisfactory manner. Applicant did
not meet her ultimate burden of persuasion to obtain a favorable clearance decision. In reaching this
conclusion, the whole-person concept was given due consideration and that analysis does not support
a favorable decision. 
FORMAL FINDINGS
SOR ¶ 1–Guideline F: Against Applicant
Subparagraphs a–g: Against Applicant
SOR ¶ 2–Guideline E: For Applicant
Subparagraphs a–b: For Applicant
DECISION
In light of all the circumstances, it is not clearly consistent with the national interest to grant
or continue eligibility for a security clearance for Applicant. Clearance is denied. 
Michael H. Leonard
Administrative Judge