DATE:  November 29, 2007
In re:
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SSN: -----------
Applicant for Security Clearance
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ISCR Case No. 06-26701
DECISION OF ADMINISTRATIVE JUDGE
SHARI DAM
APPEARANCES
FOR GOVERNMENT
Caroline H. Jeffreys, Esq., Department Counsel
FOR APPLICANT
Pro Se
SYNOPSIS
Applicant is a 56-year-old senior project manager, who has worked for a federal contractor
for the past 30 years. Applicant began accumulating debt in 1991. He resolved some of it through
bankruptcies he filed in 1994 and 2000. He recently paid the debts listed in the Statement of
Reasons, demonstrating a good-faith effort to repay his creditors. He mitigated the security concerns
raised by financial considerations. Clearance is granted.
STATEMENT OF THE CASE
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Applicant applied for a security clearance on January 10, 2005, in conjunction with his
employement with a defense contractor. On May 29, 2007, the Defense Office of Hearings and
Appeals (DOHA) issued a Statement of Reasons (SOR) to Applicant, pursuant to Executive Order
10865, Safeguarding Classified Information Within Industry, dated February 20, 1960, as amended
and Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance
Review Program (Directive), dated January 2, 1992, as amended. The SOR detailed reasons under
Guideline F (Financial Considerations) of the Adjudicative Guidelines (AG) issued on December
29, 2005, and implemented by the Department of Defense effective September 1, 2006, as to why
DOHA could not make a prelilminary affirmative finding under the Directive that it is clearly
consistent with national interest to grant a security clearance for Applicant. DOHA recommended
referral to an administrative judged to determine whether a clearance should be granted, continued,
denied or revoked. 
Applicant responded to the SOR in writing on or about June 29, 2007, and elected to have
a hearing before an administrative judge. The case was initially assigned to another administrative
judge on August 22, 2007, and reassigned to me on October 5, 2007. DOHA issued a Notice of
Hearing on October 10, 2007, setting the case for hearing on October 25, 2007. At the hearing,
Department Counsel introduced Government Exhibits (GX) 1 through 8 into evidence without
objections. Applicant testified in his case, called one witness, and introduced Applicant Exhibits
(AX) A through F into evidence without objections. The record was left open until November 5,
2007, to give Applicant additional time to submit documents. DOHA received the hearing transcript
(Tr.) on November 2, 2007. On that same day, Department Counsel received additional documents
from Applicant, which I marked as AX G . She had no objection to the documents and they were
admitted into the record.
FINDINGS OF FACT
Applicant admitted the truth of the factual allegations set forth in the SOR pertaining to
financial considerations under Guideline F (subparagraphs 1.a through 1.g). Those admissions are
incorporated herein as findings of fact. After a complete and thorough review of the evidence in the
record, I make the following additional findings of fact:
Applicant is a 56-year-old senior project manager for a federal contractor. In 1971, he
enlisted in the U.S. Air Force. He left military service in 1977, as a staff sergeant (E-5), and began
working with his current employer. He has held a security clearance for approximately 40 years and
works with classified information. He has two associate degrees  and a bachelor’s degree in business.
In January 2005, he completed a security clearance application (SF-86), in order to renew his Secret
clearance.
In December 1991, Applicant divorced his wife and obtained custody of his four children,
two of whom live on their own. His twin sons, ages 24, reside with him. Both of them have special
needs and have required additional care growing up. One of the sons started working about a year
ago; the other son began a position within the last four months. His former wife provided limited
monetary or emotional support for the children over the years. (Tr. 10; 26).
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Paragraph 1 of the SOR alleges security concerns under the financial guidelines. Applicant
admitted that he filed bankruptcy twice. In February 1994, he petitioned for Chapter 13 bankruptcy,
having accumulated approximately $22,000 in liabilities. After completing the repayment plan, the
debts were discharged in August 1996. (GX 5). Those debts arose subsequent to his divorce and after
assuming custody of his children and additional expenses. (Tr. 27-28).
In July 2000, Applicant filed a Chapter 7 bankruptcy petition. In September 2000, the court
discharged approximately $244,500 in debts, including $144,000 of an unpaid mortgage on his
residence. At the time, he began having problems with one of his twins, requiring him to move his
residence. As he was unable to manage his bills, while paying off his former wife, he relinquished
all equity in his home and the bank ultimately foreclosed on it. (Tr. 29-31). He attributed part of the
debt to indiscriminate spending during that time period. (Tr. 60). He subsequently reaffirmed several
debts and repaid them. (Response 23-27).
From November 2005 until April 2006, Applicant paid $15,000 of his son’s court imposed
restitution, after learning that his son was not making the payments. He did so, in order to prevent
his son from going to prison. (Response at 29). That expenditure placed an additional strain on
Applicant’s finances. (Tr. 36-38) That son, along with his other son, recently began contributing
small amounts of money to the family’s monthly budget. (Tr. 48-49).
The SOR listed five delinquent debts, all of which are paid. Applicant paid the $874 credit
card debt, noted in ¶ 1.c, in June 2007. (Response at 9-10). He paid the $452 debt, noted in ¶ 1.d, in
June 2007. (Response at 11-13). At the end of June, 2007, he paid the charge card debt of $1,979
listed in ¶ 1.e. (Response at 14-17). He completed his payment plan to the creditor listed in ¶ 1.f for
$2,897 in September 2007. In June 2007, he paid the $147 credit card debt, listed in ¶ 1.g. (Response
at 20-21). According to Applicant, some of his financial problems began in approximately 1991 with
his first bankruptcy and continued until recently. (GX 6, 7 & 8).
Applicant presented evidence that he also resolved debts not listed in the SOR. He paid off
a credit card debt of $492 in October 2007. He recently completed his payments to the IRS on a
$1,740 tax liability for 2005 taxes, which he miscalculated on his tax return. (AX D; Tr. 56). In
January 2006, he completed payments to his father on a $15,000 car loan he had since May 2002,
and recently repaid him $2,200 for another short term loan. (AX A & D).
After meeting with a credit counselor in January 2007, Applicant prepared a Personal
Financial Statement in February 2007. According to that Statement, he earns $8,577 a month, with
a net monthly income of $5,999. His monthly expenses are a $3,136, leaving him about $2,860 for
other items. Since that time, he paid several debts, including those listed in the SOR. He has six
remaining financial obligations, totaling $1,000 a month, which includes five credit cards and an
automobile loan. (GX 2 at 73, 102-103). He anticipates paying off the credit cards by January 2008,
leaving a $600 monthly car loan outstanding. He uses his credit cards more carefully than he did in
the past and does not intend to maintain high balances. (Tr. 44). 
Several times during the hearing, Applicant acknowledged that he mismanaged his finances
over the years and used his charge cards excessively. He candidly admitted that he should have
exercised more responsible financial judgment. He recognizes that at this time in his life he needs
to concentrate on saving money for retirement. (Tr. 67). He is committed to establishing financial
stability. (Tr. 47; 67).
 “Substantial evidence [is] such relevant evidence as a reasonable mind might  accept as adequate to1
support a conclusion in light of all the contrary evidence in the record.”  ISCR Case No. 04-11463 at 2 (App.
Bd. Aug. 4, 2006) (citing Directive ¶ E3.1.32.1).  “This is something less than the weight of the evidence, and
the possibility of drawing two inconsistent conclusions from the evidence does not prevent [a Judge’s] finding
from being supported by substantial evidence.” Consolo v. Federal Maritime Comm’n, 383 U.S. 607, 620
(1966).  “Substantial evidence” is “more than a scintilla but less than a preponderance.” See v. Washington
Metro. Area Transit Auth., 36 F.3d 375, 380 (4  Cir. 1994).th
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On June 11, 2007, Applicant’s employer selected him to participate in its Reward
Management Achievement Plan for 2007 that may provide him with a $4,000 to $5,000 bonus in
March 2008, if he reaches specified goals. Applicant anticipates that he will meet those performance
goals, and intends to deposit the bonus income into his savings account. (AX G).
Applicant’s supervisor of seven years testified. He enlisted in the U. S. Navy in 1959 and
after four years attended the Naval academy for a couple years. He has held a Top Secret security
clearance for more than 25 years and works with classified information. He has great confidence in
Applicant’s abilities and finds him to be very competent and reliable. He indicated that Applicant
is responsible for overseeing a $20 million dollar budget, used to support the U.S. military forces.
He does not consider Applicant to be a security risk. (Tr. 73-76).
POLICIES
In an evaluation of an applicant’s security suitability, an administrative judge must consider
the “Adjudicative Guidelines for Determining Eligibility For Access to Classified Information”
(Guidelines). In addition to brief introductory explanations for each guideline, the adjudicative
Guidelines are divided into Disqualifying Conditions (DC) and Mitigating Conditions (MC), which
are used to determine an applicant’s eligibility for access to classified information.
These Guidelines are not inflexible ironclad rules of law. Instead, recognizing the
complexities of human behavior, an administrative judge should apply these Guidelines in
conjunction with the factors listed in the adjudicative process. Guideline ¶ 2. An administrative
judge’s over-arching adjudicative goal is a fair, impartial and common sense decision. Because the
entire process is a conscientious scrutiny of a number of variables known as the “whole person
concept,” an administrative judge should consider all available, reliable information about the
person, past and present, favorable and unfavorable, in making a decision. Guideline ¶ 2(c).
Specifically, an administrative judge should consider the nine adjudicative process
factors listed at Guideline ¶ 2(a): “(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 individual’s age and maturity at the time of the conduct; (5)
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.”
In the decision-making process, facts must be established by “substantial evidence.”  The1
Government initially has the burden of producing evidence to establish a case which demonstrates,
in accordance with the Directive, that it is not clearly consistent with the national interest to grant
or continue an applicant’s access to classified information. Once the Government has produced
substantial evidence of a disqualifying condition, the burden shifts to Applicant to produce
The Administrative Judge [considers] the record evidence as a whole, both favorable and2“
unfavorable, evaluate[s] Applicant’s past and current circumstances in light of pertinent provisions of the
Directive, and decide[s] whether Applicant ha[s] met his burden of persuasion under Directive ¶ E3.1.15.”
ISCR Case No. 04-10340 at 2 (App. Bd. July 6, 2006). 
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evidence and prove mitigation. Directive ¶ E3.1.15 provides, “The applicant is responsible for
presenting witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted
by applicant or proven by Department Counsel, and [Applicant] has the ultimate burden of
persuasion as to obtaining a favorable clearance decision.” The burden of disproving a mitigating
condition never shifts to the Government. See ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22,
2005). 2
A person who seeks access to classified information enters into a fiduciary relationship with
the government predicated upon trust and confidence. It is a relationship that transcends normal
duty hours and endures throughout off-duty hours as well. It is because of this special relationship
the government must be able to repose a high degree of trust and confidence in those individuals
to whom it grants access to classified information. Decisions under this Directive include, by
necessity, consideration of the possible risk an applicant may deliberately or inadvertently fail to
protect or safeguard classified information. Such decisions entail a certain degree of legally
permissible extrapolation as to potential, rather than actual, risk of compromise of classified
information.
Since the protection of the national security is the paramount consideration, the final
decision in each case is arrived at by applying the standard that “[a]ny doubt concerning personnel
being considered for access to classified information will be resolved in favor of national security.”
Guideline ¶ 2(b). In reaching this decision, I have drawn only those conclusions that are reasonable,
logical and based on the evidence contained in the record. Likewise, I have avoided drawing
inferences grounded on mere speculation or conjecture.
The scope of an administrative judge’s decision is limited. Nothing in this Decision should
be construed to suggest that I have based this decision, in whole or in part, on any express or
implied determination as to Applicant’s allegiance, loyalty, or patriotism. Section 7 of Executive
Order 10865 specifically provides that any adverse industrial security clearance decision shall be
“in terms of the national interest and shall in no sense be a determination as to the loyalty of the
applicant concerned.” 
CONCLUSIONS
Upon consideration of all facts in evidence and application of the appropriate adjudicative
factors and legal standards, I conclude the following with respect to the allegations set forth in the
SOR:
Guideline F - Financial Considerations
Guideline ¶ 18 articulates the Government concern regarding financial problems. “The 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
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information. An individual who is financially overextended is at risk of having to engage in illegal
acts to generate funds.”
Based on Applicant’s admissions and credit bureau reports, the Government established
disqualifications under two Financial Considerations Disqualifying Conditions: “inability or
unwillingness to satisfy debts,” and “a history of not meeting financial obligations.” Applicant has
been unable to manage his debts from approximately 1991 until approximately March 2006, as
evidenced by two bankruptcies, delinquent debts, and numerous other financial obligations.
Guideline ¶ 19(a) and ¶ 19(c).
The Government raised a security concern and the burden shifted to Applicant to mitigate
or rebut the allegations. Six Financial Considerations Mitigating Conditions can mitigate security
concerns arising from financial difficulties under Guideline ¶ 20(a)-(e). After reviewing all of them,
I conclude he presented evidence to support application of three of them, but not the others.
¶ 20(a) ‘‘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” does not apply
because Applicant’s problems have been ongoing from 1991 until 2006, and does
cast doubt on his financial judgment up to 2006.
¶ 20(b) “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,” offers limited mitigation in view of Applicant’s divorce
and assumption of custody for four children, two with special needs, at the time of
his first bankruptcy. However, there is no evidence that he contacted his creditors or
sought credit counseling during the time he began accruing debts, which is the type
of evidence necessary to establish the second prong of this condition. 
¶ 20(c) “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”
applies because Applicant obtained some credit counseling prior to the issuance of
the SOR, completed the Personal Financial Statement, and subsequently paid off
many delinquent debts, indicating his financial issues are under control. 
¶ 20(d) “the individual initiated a good-faith effort to repay overdue creditors or
otherwise resolve debts” is applicable because Applicant provided evidence to
document the payment of the five delinquent debts alleged in the SOR.
¶ 20(e) “the individual has a reasonable basis to dispute the legitimacy of the past
due debt which is the cause of the problem and provides documented proof to substantiate the basis
of the dispute or provides evidence of actions to resolve the issue” does not apply in view of
Applicant’s acknowledgment of the debts. 
¶ 20(f) “the affluence resulted from a legal source of income” is not applicable.
“Whole Person”- Analysis
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I considered the totality of the evidence in view of the “whole person” concept, including
Applicant’s middle age, his military service and his marital and family history. I also considered his
30 year work history with the same employer, the fact that he has held a security clearance for more
than forty years without evidence of any problems, and his supervisor’s strong support and
commendations. I carefully observed his demeanor while testifying, and listened to his candid
disclosure about his history of financial problems and assumption of responsibility for them, along
with a committment to funding his retirement. I took into account that he met with a credit counselor
and reviewed his budget before the SOR issued, and that his two sons are now contributing to the
family budget. Assuming he continues working with that budget and retires all unnecessary debts
within the next couple months, I am confident that he has enough income to cover his obligations
and will not incur similar financial obligations in the future. Given his acute awareness of the impact
that his financial situation has on his employment, I believe he will continue to manage his financial
obligations and demonstrate good judgment. Based on those facts, I am confident that he does not
pose a security risk.
After weigh the disqualifying and mitigating conditions and all facts and circumstances in
the context of the whole person, I concluded Applicant mitigated the security concerns raised by
financial considerations. The evidence leaves me with no doubts as to his security elibibility and
suitability. Accordingly, Guideline F is found for him.
FORMAL FINDINGS
Formal Findings for or against Applicant on the allegations set forth in the SOR, as required
by Section E3.1.25 of Enclosure 3 of the Directive, are as follows:
Paragraph1: Guideline F (Financial Considerations) FOR APPLICANT
Subparagraphs 1.a.S1.g: For Applicant
DECISION
In light of all of the circumstances presented by the record in this case, it is clearly consistent
with the national interest to grant Applicant a security clearance. Clearance is granted.
Shari Dam
Administrative Judge