DATE:   October 25, 2007
In re:
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SSN: -----------
Applicant for Security Clearance
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ISCR Case No. 07-02305
DECISION OF ADMINISTRATIVE JUDGE
MICHAEL H. LEONARD
APPEARANCES
FOR GOVERNMENT
Stephanie C. Hess, Esq., Department Counsel
FOR APPLICANT
Pro Se
SYNOPSIS
Applicant has a history of unresolved financial problems, which are ongoing. She has done
little to demonstrate that she will resolve the financial problems in a satisfactory manner. Clearance
is denied.
STATEMENT OF THE CASE
 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
This is a security clearance 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 Defense Office of Hearings and Appeals (DOHA) issued a statement of reasons1
(SOR) to Applicant on July 11, 2007. The SOR is equivalent to an administrative complaint and it
details the factual basis for the action. The issues in this case fall under Guideline F for financial
considerations. 
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 July 18, 2007, Applicant replied to the SOR and requested a hearing. The hearing took
place as scheduled on October 2, 2007, and the transcript was received on October 11, 2007.
FINDINGS OF FACT
Under Guideline F, the SOR alleges 25 delinquent debts for about $31,000 in total. Applicant
admits indebtedness of about $27,000. Also alleged is a series of Chapter 13 bankruptcy cases, the
most recent of which was dismissed in 2005, which she does not dispute. And the SOR alleges a
2004–2005 event when Applicant pleaded no contest to a charge of deposit-account fraud, which she
does not dispute. In addition to her admissions, the following facts are established. 
Applicant is a 37-year-old records management coordinator. She has worked for her current
employer since September 2005. She is seeking to obtain a security clearance for the first time
(Exhibits 1 and 2). 
Applicant has never married. She has three children, ages 17, 12, and 3. The 17-year-old
child receives child support in the amount of $74 every two weeks. The other two children do not
receive child support from their fathers. In addition to the children, Applicant’s fiancee lives with
Applicant. Her fiancee is currently seeking employment. 
Applicant has a history of unresolved financial problems. The history is established by an
October 2005 credit report and a February 2007 credit report (Exhibits 7 and 8), which form the basis
for the debts in the SOR. Applicant has been unable to repay any of the creditors in the SOR or
 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.”).
 Egan, 484 U.S. at 531.4
 Directive, ¶ 3.2. 5
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otherwise resolve her indebtedness. She believes that she will be able to take some action in about
two years after paying off her current car loan. 
In March 2006, she met with a consumer credit counseling service (Exhibit 6). They
estimated her indebtedness at $11,470 for 13 creditors with a payout forecast of $351 per month.
Applicant did not pursue the repayment plan as she was unable to afford the monthly payment. 
In addition to her indebtedness, Applicant has a history of bankruptcy court proceedings
(Exhibits 3, 4, and 5). It started with a Chapter 13 petition in 1992. It appears this petition was
modified a couple of times until it was finalized in 1995. Applicant then made the required
installment payments (amount unknown). The case was closed, and the court issued a discharge
order in 1999. 
The next bankruptcy proceeding began in 2004 when Applicant filed a Chapter 13 petition
in an effort to prevent foreclosure on her home. She had been laid off from her job in 2004 and was
trying to save her house. The 2004 Chapter 13 petition and a subsequent 2005 Chapter 13 petition
both ended in dismissal when Applicant did not have sufficient funds to pursue the cases.
Applicant’s house was foreclosed in 2005. 
In 2004, Applicant was charged with the offense of deposit-account fraud. She pleaded no
contest and was fined. She did not pay the fine in a timely fashion resulting in her arrest in 2005. She
served about two days in jail and paid the fine.
Concerning her overall financial situation, Applicant’s gross income in 2006 was about
$30,000. She is the sole financial provider in her household. She had about $100 in a checking
account the day of the hearing. Since starting her current job, Applicant has been participating in the
company 401(k) retirement plan at the 1% level. Otherwise, she has no financial assets.
 Applicant did not provide any documentary information about the debts in the SOR.
Likewise, other than her own testimony, she did not present any witnesses, on paper or in person,
in support of her application for a security clearance. 
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
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
 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
 Revised Guidelines at 13–14 (setting forth the disqualifying and mitigating conditions). 14
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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
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
 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
 DC 4 is “deceptive or illegal financial practices such as embezzlement, employee theft, check fraud, income18
tax evasion, expense account fraud, filing deceptive loan statements, and other intentional breaches of trust.”
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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.
Her history of financial problems is a security concern because it indicates inability to satisfy debts16
and a history of not meeting financial obligations  within the meaning of Guideline F. The record17
evidence is more than sufficient to establish these two disqualifying conditions. In addition, her no
contest plea to deposit-account fraud falls with the meaning of a deceptive or illegal financial
practice under the guideline.   18
All of the mitigating conditions under Guideline F have been considered and none apply in
her favor. Although unemployed in 2004, her financial problems are longstanding and cannot be
traced solely to that event. Applicant presented little in the way of favorable information, and her
good intentions and future plans are not sufficient evidence to overcome the security concern raised
by the government’s evidence. Indeed, what is missing here is: (1) a realistic approach for resolving
her delinquent debts; (2) documented actions taken in furtherance of that approach; and (3) a
measurable improvement to her situation. At this point, it is likely that her history of financial
problems will continue. 
To conclude, Applicant did not present sufficient evidence to explain, extenuate, or mitigate
the financial considerations security concern. 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–ee: Against Applicant
DECISION
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In light of all the circumstances, it is not clearly consistent with the national interest to grant
or continue eligibility for security clearance for Applicant. Clearance is denied. 
Michael H. Leonard
Administrative Judge