KEYWORD: Financial; Personal Conduct
DIGEST: Applicant incurred seven delinquent debts totaling about $17,786, all of which were
charged off or referred to collection agencies between July 2000 and May 2003.  She took no action
to resolve her debts until action on her application for a security clearance was imminent.  She
falsely answered “no” to two questions on her security clearance application about delinquent debts.
Security concerns based on financial considerations and personal conduct are not mitigated.
Clearance is denied.
CASENO: 06-25602.h1
DATE: 09/27/2007
DATE:  September 27, 2007
In re:
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SSN: -----------
Applicant for Security Clearance
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ISCR Case No. 06-25602
DECISION OF ADMINISTRATIVE JUDGE
LEROY F. FOREMAN
APPEARANCES
FOR GOVERNMENT
Jennifer I. Goldstein, Esq., Department Counsel
FOR APPLICANT
Phillip Carter, Esq.
SYNOPSIS
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Applicant incurred seven delinquent debts totaling about $17,786, all of which were charged
off or referred to collection agencies between July 2000 and May 2003.  She took no action to
resolve her debts until action on her application for a security clearance was imminent.  She falsely
answered “no” to two questions on her security clearance application about delinquent debts.
Security concerns based on financial considerations and personal conduct are not mitigated.
Clearance is denied.
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STATEMENT OF THE CASE
On March 20, 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 alleges security
concerns under Guidelines F (Financial Considerations) and E (Personal Conduct).
Applicant answered the SOR in writing on April 17, 2007, denied the allegations, and
requested a hearing.  The case was assigned to an administrative judge on June 12, 2007, and
reassigned to me on July 25, 2007, based on workload.  The case was heard as scheduled on August
23, 2007.  I kept the record open until September 4, 2007, to enable Applicant to submit additional
evidence.  I received her evidence on September 4, 2007, and it was admitted without objection from
Department Counsel.  DOHA received the transcript (Tr.) on September 5, 2007.
FINDINGS OF FACT
Applicant’s admissions at the hearing are incorporated into my findings of fact.  I make the
following findings:
Applicant is a 31-year-old technical services specialist for a defense contractor.  She
graduated from college in December 1998, with a bachelor’s degree in psychology.  She worked full-
time for most of her college days, but there is no evidence in the record about her income during that
period.  After college, she worked for ten different employers in three states before she was hired for
her current job.  Several were entry-level temporary jobs.  She was unemployed for a about three
months in 2001 and about three months in 2004. She has worked for her current employer since
November 2005 (Tr. 25-31; Government Exhibit (GX) 1 at 14-27).  She has never held a security
clearance.
Applicant’s supervisors describe her as intelligent, honest, hard-working, trustworthy, and
financially responsible in her personal life.  She is responsible for handling materials worth between
$2 million and $3 million.  Her supervisors are aware of her past financial problems but believe she
now manages her money very carefully (AX J, M).  She was rated as “exceeding expectations” on
her last performance appraisal, and she received a 4 percent pay raise.  She has received recognition
for her performance on three recent projects (Tr. 33).
One of her earlier supervisors described her as energetic, ambitious, and hard-working.  He
commented that she, like many recent college graduates, “made money and she spent it.”  He stated
that she has since matured.  He stated he has no reason to question her honesty or integrity (AX L).
Before working for her current employer, Applicant incurred seven the delinquent debts
alleged in the SOR, totaling  about $17,786.  Two debts were charged off or placed for collection
in July 2000, two in September 2000, one in August 2001, one in June 2002, and one in May 2003.
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Applicant’s current employer has actively supported her efforts to resolve her debts and
obtain a clearance.  Her employer referred her to a credit counseling agency (Tr. 36) and paid all her
expenses to attend the hearing (Tr. 52).  Her husband attended the hearing at his own expense (Tr.
52-53).
Applicant enrolled in a debt management plan in June 2007.  She pays $290 per month for
distribution to the four creditors alleged in SOR ¶¶ 1.c, 1.d, 1.e, and 1.f (AX H).  She makes
payments directly to the creditors alleged in SOR ¶¶1.b and 1.g (AX E, G, N).  Her consolidated
payment plan is designed to pay off all delinquent debts within about 24 months (Tr. 36).  Her
separate payment plan for the debt in SOR ¶ 1.g is designed to run for about 30 months (Tr. 75).
The evidence concerning the debts alleged in the SOR is summarized in the table below.
SOR Debt Amount Status Evidence
1.a Library fines $238 Placed for collection 6-02;
paid 8-07
GX 3 at 1; AX I; 
Tr. 34
1.b Credit card $2,428 Charged off 7-00; payment
plan started 8-07
GX 3 at 1; AX G; 
Tr. 35
1.c Credit card $468 Charged off 9-00; payment
plan started 8-07
GX 2 at 2; AX H; 
AX N; Tr. 35-36
1.d Credit card $504 Charged off 9-00; payment
plan started 8-07
GX 2 at 2; AX H; 
AX N; Tr. 35-36
1.e Telephone
credit card
$2,917 Placed for collection 7-00;
payment plan started 8-07
GX 2 at 2; AX H; 
AX N; Tr. 37
1.f Credit card $6,527 Placed for collection 8-01;
payment plan started 8-07
GX 2 at 2; AX D; 
Tr. 39
1.g Car payments $4,704 Placed for collection 5-03;
payment plan started 7-07
GX 2 at 3; AX E; 
AX N; Tr. 40
Applicant’s credit reports reflect several delinquent debts not alleged in the SOR.  A
delinquent medical collection account for $1,628 is being paid through her debt management plan
(GX 2 at 1; AX H; Tr. 40).  Her most recent credit report reflects several collection accounts for
unpaid parking tickets issued in 2003 and 2004 (AX A at 4-11; Tr. 44-45).  She testified she is
making monthly payments on the parking tickets, but she submitted no substantiating documentation
(Tr. 45).
Applicant testified that her debts became delinquent because she was dealing with personal
issues that superseded her concern for her financial obligations.  Her Electronic Questionnaire for
Investigations Processing (e-QIP) discloses that, from August 1999 to the date of her e-QIP, she
received therapy and counseling for child sexual abuse at the hands of her biological father ( GX 1
at 34-35).  She testified she spent much of her money for counseling and medication (Tr. 71).  Her
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counseling is now partially covered by her medical insurance.  She now spends about $100 per
month for medications, about $40 per month for individual counseling, and $45 weekly for group
counseling (Tr. 87).
Applicant was married in March 2007.  Her net monthly income is about $2,200, and her
husband’s net monthly income is about $2,400.  After they pay their rent, car payment, car insurance,
student loans, utility and phone bills, they have a net monthly remainder of about $2,800 for living
expenses, debt payments, and savings (AX K).  They spend $200-$400 per month for groceries,
toiletries, and miscellaneous expenses (Tr. 85).  Applicant’s husband handles most of the family
finances (Tr. 53).  
Applicant has about $12,500 in her 401(k) retirement account (AX F; Tr. 50).  She and her
husband live frugally and rarely spend money on entertainment (Tr. 50-52).  She has not used credit
cards since 2000 (Tr. 81).
Applicant executed her e-QIP on January 20, 2006.  She answered “no” to questions 28(a)
and (b), asking if she had been more than 180 days delinquent on any debts in the last seven years
and if she was currently more than 90 days delinquent on any debt.  She did not disclose any of the
debts listed above.
In mid-2006, Applicant was interviewed by a security investigator and questioned about her
delinquent debts.  She readily admitted the debts to the investigator, and she disclosed her financial
situation to her supervisor after her interview with the investigator (Tr. 58).  She was aware her debts
raised security concerns, but she did nothing to address the debts until she received the SOR in
March 2007.  She testified she was “in denial” and not focused on her past debts (Tr. 65-66).  
Applicant denied intentionally falsifying her e-QIP. She testified she misunderstood questions
28(a) and (b) and thought they applied only to the original lenders and did not apply to debts that
were charged off or referred to collection agencies (Tr. 54-55).  She was aware of the delinquent
debts but adamantly insisted at the hearing that she did not believe they were encompassed by the
questions (Tr. 79-81).  She had examined her credit report in 2005, in contemplation of purchasing
a house,  and she was aware of her old delinquent debts (Tr. 96).  At the time she executed the e-QIP,
she had no recent debts to original creditors more than 90 days past due (Tr. 55).  She knew her
credit reports would be included in her background investigation (Tr. 56).
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 Guidelines.  Each clearance
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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 SOR alleged seven delinquent debts totaling about $17,786, charged off or referred for
collection between June 2000 and May 2003.  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.
Several disqualifying conditions under this guideline could raise a security concern and may
be disqualifying in this case.  AG ¶ 19(a) is raised where there is an “inability or unwillingness to
satisfy debts.” AG ¶ 19(b) is a two-pronged condition that is raised where there is “indebtedness
caused by frivolous or irresponsible spending and the absence of any evidence of willingness or
intent to pay the debt or establish a realistic plan to pay the debt.”  AG ¶ 19(c) is raised when there
is “a history of not meeting financial obligations.”  AG ¶ 19(e) is raised when there is “consistent
spending beyond one’s means, which may be indicated by excessive indebtedness, significant
negative cash flow, high debt-to-income ratio, and/or other financial analysis.”  AG ¶¶ 19(a) and (c)
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are raised by Applicant’s financial history.  AG ¶ 19(b) is not raised, because she recently established
a realistic plan to pay her debts.  AG ¶ 19(e) is not raised, because there is no evidence in the record
about her income during the period the debts were incurred.
Applicant introduced evidence of several delinquent debts not alleged in the SOR.  Conduct
not alleged in the SOR may be considered: “(a) to assess an applicant’s credibility; (b) to evaluate
an applicant’s evidence of extenuation, mitigation, or changed circumstances; (c) to consider whether
an applicant has demonstrated successful rehabilitation; (d) to decide whether a particular provision
of the Adjudicative Guidelines is applicable; or (e) to provide evidence for whole person analysis
under Directive Section 6.3.” ISCR Case No. 03-20327 at 4 (App. Bd. Oct. 26, 2006) (citations
omitted).  I have considered this evidence for the limited purpose of evaluating Applicant’s evidence
of mitigation, determining whether she has changed her financial habits, and in my whole person
analysis.
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 never shifts 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).  Applicant’s debts are multiple and still not fully resolved.  Her
repayment plans have not been in effect long enough to establish a track record of financial
responsibility, especially in light of her long record of financial neglect.  “Only with the passage of
time will there be a track record that shows whether a person, through actions and conduct, is willing
and able to adhere to a stated intention to refrain from acting in a way that the person has acted in
the past.”  ISCR Case No. 97-0727, 1998 DOHA LEXIS 302 at *7 (App. Bd. Aug. 3, 1998).  I
conclude AG ¶ 20(a) is not 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.
From her graduation in 1999 until she found her current position in November 2005, she worked at
a series of intermittent, entry-level jobs, and she experienced at least two periods of unemployment,
the last in late 2004.  Her underemployment and unemployment were circumstances beyond her
control.  However, she found a permanent and responsible position in November 2005, but she took
no action to resolve her debts until June 2007.  
Since 1999, Applicant has been undergoing counseling and receiving medication for
unspecified problems arising from child sexual abuse.  These problems were beyond her control.
However, the record does not reflect the severity of her emotional problems and does not establish
that she was mentally or emotionally unable to act responsibly.  To the contrary, she acted
responsibly and decisively starting in June 2007, even though she continues to take medication and
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receive counseling.  She also incurred medical expenses, in an amount not reflected in the record,
for medication and counseling, but her medical expenses have been partially covered by her medical
insurance since she began her current employment.  Applicant’s periods of unemployment,
emotional distress, and medical expenses were all circumstances beyond her control.  However, I
am not satisfied she acted responsibly.  Applicant has the burden of establishing a mitigating
condition.  I conclude she has not carried her burden with respect to AG ¶ 20(b).
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 condition is established.
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 took no action
to resolve her debts until she received the SOR and finally realized she would not receive a clearance
unless she put her financial house in order.  I conclude AG ¶ 20(d) is not established.
Guideline E (Personal Conduct)
The SOR alleges Applicant intentionally falsified her security clearance application by
answering “no” to the two questions about delinquent debts.  The concern under this guideline is as
follows: “Conduct involving questionable judgment, lack of candor, dishonesty, or unwillingness
to comply with rules and regulations can raise questions about an individual’s reliability,
trustworthiness and ability to protect classified information. Of special interest is any failure to
provide truthful and candid answers during the security clearance process or any other failure to
cooperate with the security clearance process.”  AG ¶ 15.  
The relevant disqualifying condition in this case is “deliberate omission, concealment, or
falsification of relevant facts from any personnel security questionnaire, personal history statement,
or similar form used to conduct investigations, determine employment qualifications, award benefits
or status, determine security clearance eligibility or trustworthiness, or award fiduciary
responsibilities.” AG ¶ 16(a). When a falsification allegation is controverted, as in this case, the
government has the burden of proving it.  An omission, standing alone, does not prove an applicant’s
state of mind when the omission occurred.  An administrative judge must consider the record
evidence as a whole to determine whether there is direct or circumstantial evidence concerning an
applicant’s state of mind at the time of the omission.  See ISCR Case No. 03-09483 at 4 (App. Bd.
Nov. 17, 2004) (explaining holding in ISCR Case No. 02-23133 at 5 (App. Bd. Jun. 9, 2004)).
Applicant is a well-educated, mature adult.  She presented herself at the hearing as very
intelligent and articulate.  Her supervisors commented favorably on her intelligence.  I find her
explanation for not disclosing her debts totally implausible.  She saw the delinquent debts on her
credit report in 2005.  She admits she was “in denial” about her debts, even after being interviewed
by a security investigator.  Her emotional distress deserves sympathy and understanding.
Nevertheless, the evidence shows she knew she had numerous delinquent debts that had been
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charged off or referred to collection agencies, but she intentionally failed to disclose them on her e-
QIP.  I conclude AG ¶ 16(a) is established.
Security concerns raised by false or misleading answers on a security clearance application
can be mitigated by showing that “the individual made prompt, good-faith efforts to correct the
omission, concealment, or falsification before being confronted with the facts.”  AG ¶ 17(a).
Applicant executed her application in January 2006, but she did not correct the omission until she
was confronted with the evidence by a security investigator six months later.  I conclude AG ¶ 17(a)
is not established.
Security concerns under this guideline also can be mitigated by showing “the offense is so
minor, or so much time has passed, or the behavior is so infrequent, or it happened under such
unique circumstances that it is unlikely to recur and does not cast doubt on the individual’s
reliability, trustworthiness, or good judgment.”  AG ¶ 17(c).  Applicant’s offense is not minor; it is
a felony under 18 U.S.C. § 1001, and it goes to the heart of the security clearance process.  It is
recent.  It is “infrequent” because there is no evidence of other falsifications.  It occurred during a
routine security clearance application in connection with employment by a defense contract, which
is not a unique circumstance.  The falsification casts doubt on Applicant’s reliability and
trustworthiness.  The absence of other incidents of falsification offers some mitigation, but the
remaining elements of AG ¶ 17(c) are not established.
Security concerns can be mitigated by evidence that “the individual has acknowledged the
behavior and obtained counseling to change the behavior or taken other positive steps to alleviate
the stressors, circumstances, or factors that caused untrustworthy, unreliable, or other inappropriate
behavior, and such behavior is unlikely to recur.”  AG ¶ 17(d).  It is unclear to what extent, if any,
Applicant’s unfortunate childhood experiences caused her to conceal her financial problems.  For
reasons not apparent from the record, she chose not to present more detailed medical evidence.  To
the extent her emotional distress affected her financial management, she has sought medication and
counseling to address those stressors.  Her conduct is somewhat mitigated by the emotional distress
her life experiences have caused her and her positive steps to deal with it.
Lastly, security concerns under this guideline can be mitigated by showing “the individual
has taken positive steps to reduce or eliminate vulnerability to exploitation, manipulation, or duress.”
AG ¶ 17(e).  Applicant has now made full disclosure of her financial history and taken positive steps
to right her financial ship.  I conclude AG ¶ 17(e) is established.
Whole Person Analysis
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).  Some of these factors are discussed above, but some merit additional comment.
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Applicant is a mature, intelligent, well-educated adult.  She has impressed her current
supervisors, as demonstrated by the strong support she has received before and during the hearing.
She has made a good start in resolving her financial problems, but not enough time has elapsed to
demonstrate a change in financial habits.  Her previous unwillingness to face financial reality and
her lack of candor on her security clearance application raise serious concerns that can be overcome
only by a track record of financial responsibility and absolute candor.  Insufficient time has elapsed
to demonstrate such a track record.
After weighing the disqualifying and mitigating conditions under Guidelines F and E, 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 and personal conduct.  Accordingly, I
conclude she has not carried her burden of showing that it is clearly consistent with the national
interest to grant her a security clearance.
FORMAL FINDINGS
The following are my conclusions as to each allegation in the SOR:
Paragraph 1.  Guideline F (Financial Considerations): AGAINST APPLICANT
Subparagraphs 1.a-1.g: Against Applicant
Paragraph 2.  Guideline E (Personal Conduct): AGAINST APPLICANT
Subparagraphs 2.a-2.b: Against Applicant
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DECISION
In light of all of the circumstances in this case, it is not clearly consistent with the national
interest to grant Applicant a security clearance.  Clearance is denied.
LeRoy F. Foreman
Administrative Judge