KEYWORD: Financial
DIGEST: Applicant has a history of financial problems. Although he had some circumstances
beyond his control and has made some effort to repay his debts, he did not present sufficient
evidence to mitigate the financial considerations security concern. Eligibility for a security clearance
is denied. 
CASENO: 06-24458.h1
DATE: 09/06/2007
DATE:  September 6, 2007
In re:
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SSN: -----------
Applicant for Security Clearance
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ISCR Case No. 06-24458
DECISION OF ADMINISTRATIVE JUDGE
MICHAEL H. LEONARD
APPEARANCES
FOR GOVERNMENT
John Bayard Glendon, Esq., Department Counsel
FOR APPLICANT
Pro Se
SYNOPSIS
 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
Applicant has a history of financial problems. Although he had some circumstances beyond
his control and has made some effort to repay his debts, he did not present sufficient evidence to
mitigate the financial considerations security concern. Eligibility for a security clearance is denied.
STATEMENT OF THE CASE
Applicant contests the Defense Department’s intent to deny or revoke his 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 April
2, 2007. The SOR—which is equivalent to an administrative complaint—details the factual basis for
the action and alleges a security concern under Guideline F for financial considerations based on
delinquent indebtedness. 
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.
On May 22, 2007, Applicant replied to the SOR and requested a hearing. The hearing took
place as scheduled on August 9, 2007, and the transcript was received on August 23, 2007.
The record was kept open until August 23  to allow Applicant to submit additionalrd
documentary evidence. Applicant made a timely submission consisting of a one-page letter, which
was forwarded to me by department counsel who voiced no objections. The letter is marked and
admitted as Exhibit G.
FINDINGS OF FACT
The SOR alleges 16 delinquent debts for about $22,500 in total. Applicant admitted all
indebtedness (except for SOR subparagraph 1.l) in his reply to the SOR. He indicated that he was
3
uncertain if subparagraph 1.l was his debt, and that he had paid the debts in subparagraphs 1.h, 1.i,
and 1.k. In addition to his admissions and explanations, the following facts are established. 
Applicant is a 45-year-old outside machinist working for a contractor that provides services
to the U.S. Navy. His job involves working on submarines. His supervisor describes Applicant as
an exceptional employee (Exhibit A). He has held a security clearance for many years as a sailor and
a civilian employee. He is seeking to retain a security clearance for his current employment. 
From 1980 to 2001, Applicant served on active duty in the Navy as a torpedoman. He retired
in June 2001 as a petty officer first class (paygrade E-6). His military retirement pay is about $1,200
per month after deductions. 
Applicant has been married twice. He first married in 1984 and divorced in 1993. He married
his current wife in 1993. Applicant and his current wife separated and lived apart from about May
2003 to sometime in early 2006, approximately three years (R. 62–63). During this time, Applicant
was trying to support two households and pay child support to his ex-wife. 
He has four children, ages 23, 22, 19, and 14. The oldest is a stepdaughter. His 14-year-old
son is the only child living in his household. Applicant is no longer paying chid support to his ex-
wife for the other two children. He made the last child-support payment in July 2007 when his son
reached the age of 19 (R. 63–64).  
Applicant has a history of financial problems. For example, a credit report from November
2005 reflects 30 accounts in the trade section of the report of which 8 accounts were listed in a
collection or past-due status (Exhibit 5). The collections section of the report lists eight accounts.
Applicant provided documentary proof of his efforts to pay or resolve the debts in the SOR.
His efforts are summarized in the following table.
Debt Description Current Status
SOR ¶¶ 1.a–1.d, medical accounts for $189,
$38, $50, and $166.
Unpaid.
SOR ¶ 1.e, telephone account for $707. Unpaid.
SOR ¶ 1.f, real estate account (apartment
rent) for $609.
Unpaid.
SOR ¶ 1.g, hospital account for $50. Unpaid. 
SOR ¶ 1.h, hospital account for $191. Unpaid. 
SOR ¶ 1.I, collection account for $545. Paid in Oct. 2006 (Exhibit G).
SOR ¶ 1.j, collection account for $6,788. Repayment agreement–to pay $100 monthly
soon.
SOR ¶ 1.k, electric account for $50. Paid in Apr. 2007.
 Department of Navy v. Egan, 484 U.S. 518, 528 (1988) (“it should be obvious that no one has a ‘right’ to a3
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.”).
4
SOR ¶ 1.l, charged-off credit card account in
collection for $4,948.
Unpaid; perhaps a duplicate account.
SOR ¶ 1.m, charged-off credit card account in
collection for $2,674
Repayment agreement–three payments made
so far. Current balance of $2,128.15 (Exhibit
D).
SOR ¶ 1.n, charged-off account in collection
for $3,341
Repayment agreement accepted Jul. 2007
(Exhibit E). 
SOR ¶ 1.o, charged-off account in collection
for $1,437
Unpaid; perhaps a duplicate account.
SOR ¶ 1.p, charged-off account in collection
for $775
Repayment agreement–current balance
$2,031.32 (Exhibits C and F).
To sum up, Applicant paid two debts for $595 in total, he has repayment agreements for four debts,
and the other ten are unpaid and with little or no action taken. To the extent he is disputing any of
the debts as duplicates, he did not provide documentary proof to substantiate the basis of his claims.
In addition to the delinquent debts in the SOR, Applicant is indebted to the IRS for tax years
2004 and 2005. Also, he believes he will owe money for tax year 2006 as he just recently filed his
return. He estimates an $8,000 balance for 2004–2005 and a $3,000 balance for 2006. He has a
repayment agreement with the IRS. He recently increased the IRS monthly payment from $200 to
$265. He believes the tax debt was caused by insufficient withholding from his retirement pay. 
Applicant has not been unemployed since his retirement from the Navy in 2001. Including
his retirement pay, he estimates earning a gross annual income of $64,000 in 2006. He has not had
any financial, credit, and tax counseling. 
Applicant started falling behind in 2003 when he and his current wife separated (R. 58–59).
Also, from September 2003 to April 2004, Applicant had a job where he earned less money. Along
with this period of underemployment,  he  “just let it go” (R. 64). He was not smart about how he
handled the situation and it got away from him when he did not act. He anticipates having an extra
$400 to make debt payments when he pays off a car loan in September 2007 (R. 27). His credit union
denied his request for a debt-consolidation loan (R. 27–28). 
GENERAL PRINCIPLES OF LAW AND POLICIES
No one has a right to a security clearance.  As noted by the Supreme Court in Department3
of Navy v. Egan, “the clearly consistent standard indicates that security clearance determinations
 Egan, 484 U.S. at 531.4
 Directive, ¶ 3.2. 5
 Directive, ¶ 3.2. 6
 ISCR Case No. 02-18663 (App. Bd. Mar. 23, 2004).7
 Directive, Enclosure 3, ¶ E3.1.14.8
 Directive, Enclosure 3, ¶ E3.1.15.9
 Directive, Enclosure 3, ¶ E3.1.15.10
 Egan, 484 U.S. at 531. 11
 ISCR Case No. 01-20700 (App. Bd. Dec. 19, 2002) (citations omitted).12
 Executive Order 10865, § 7.13
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should err, if they must, on the side of denials.”  A favorable decision establishes eligibility of an4
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 security5
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 whether6
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 facts7
alleged in the SOR that have been controverted.  An applicant is responsible for presenting evidence8
to refute, explain, extenuate, or mitigate facts that have been admitted or proven.  In addition, an9
applicant has the ultimate burden of persuasion to obtain a favorable clearance decision.  In Egan,10
the Supreme Court said that the burden of proof is less than the preponderance of the evidence.  The11
agency appellate authority has followed the Court’s reasoning, and a judge’s findings of fact are
reviewed under the substantial-evidence standard.12
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 strict13
guidelines the President has established for granting eligibility for a security clearance.
CONCLUSIONS
 Revised Guidelines at 13–14 (setting forth the disqualifying and mitigating conditions). 14
 Revised Guidelines at 13. 15
 DC 1 is “inability or unwillingness to satisfy debts.” 16
 DC 3 is “a history of not meeting financial obligations.” 17
 MC 2 is “the conditions that resulted in the financial problems were largely beyond the person’s control (e.g.,18
loss of employment, a business downturn, unexpected medical emergency, or a death, divorce or separation), and the
individual acted responsibly under the circumstances.” 
 MC 4 is “the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.”19
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Under Guideline F for financial considerations,  a security concern typically exists due to14
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 is15
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.
His history of financial problems is a security concern because it indicates inability or unwillingness
to satisfy debts  and a history of not meeting financial obligations  within the meaning of Guideline16 17
F. The record evidence is more than sufficient to establish these two disqualifying conditions. 
Applicant receives some credit in mitigation. The most pertinent mitigating conditions are
the second MC  and the fourth MC  of Guideline F. The second does not apply, while the fourth18 19
applies in part. 
Applicant experienced financial problems beginning in 2003 to date. During this time, he was
separated from his second wife and making child-support payments from his first marriage. Also,
he was underemployed during part of this period. Together, these circumstances no doubt put
increased pressure on Applicant’s obligations to his family and to his creditors. MC 2 does not apply,
however, because Applicant did not act responsibly when he just let things go, a decision that had
the predictable consequence of making a bad situation worse.
But Applicant does receive some credit in mitigation under MC 4, because he has made a
good-faith effort to repay several of the debts. The credit is limited, however, because his efforts
have been uneven (see table). What is missing here is a realistic, comprehensive plan that addresses
all the Applicant’s indebtedness. 
In addition, most of the repayment agreements are recent developments, and it is too soon
to tell if Applicant will honor the agreements by making the scheduled payments. Aggravating the
situation is Applicant’s tax debt to the IRS. He owes more than $10,000 for three tax years, a
circumstance that may limit his ability to repay the other debts. Also, it indicates that Applicant’s
financial problems are far from over and likely to continue or recur.     
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To conclude, Applicant did not present sufficient evidence to explain, extenuate, or mitigate
the financial considerations security concern. Although he did present some favorable evidence, it
is insufficient to outweigh his history of financial problems. Applicant did not meet his 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: For Applicant
Subparagraphs a–p: For Applicant
DECISION
In light of all the circumstances, it is not clearly consistent with the national interest to grant
or continue a security clearance for Applicant. Eligibility for a security clearance is denied. 
Michael H. Leonard
Administrative Judge