DATE:  November 19, 2007
In Re:
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SSN: -----------
Applicant for Security Clearance
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ISCR Case No. 07-02695
DECISION OF ADMINISTRATIVE JUDGE
THOMAS M. CREAN
APPEARANCES
FOR GOVERNMENT
Robert E. Coacher, Esq., Department Counsel
FOR APPLICANT
Pro Se
SYNOPSIS
Applicant is a painter for a defense contractor.  His debts were discharged by Chapter 7
bankruptcy in 1991, and again in 2001.  He now has a debt of $47,000 from the repossession of his
second house that he has not paid or made any attempts to resolve.  He has not provided information
to mitigate security concerns raised by his irresponsible actions concerning his finances.  Clearance
is denied.
STATEMENT OF THE CASE
On July 18, 2007, the Defense Office of Hearing and Appeals (DOHA) issued a Statement
Item 4.1
Items 3, 4, and 6.2
2
of Reasons (SOR) detailing the basis for its decision to deny a security clearance for Applicant.  The
action was taken under Executive Order 10865, Safeguarding Classified Information within Industry
(February 20, 1990), as amended, and Department of Defense Directive 5220.6, Defense Industrial
Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive), using the
Adjudicative Guidelines promulgated by the President on December 29, 2005, and implemented by
the Department of Defense on September 1, 2006.  Applicant acknowledged receipt of the SOR on
July 25, 2007.  The SOR alleges security concerns under Guideline F (Financial Considerations), of
the Directive.
Applicant answered the SOR in writing on July 30, 2007.  He admitted the factual allegations
in the SOR but denied the security concern raised under Guideline F.  He provided an explanation
for his financial problems.  He elected to have the matter decided on the written record in lieu of a
hearing.
Department Counsel submitted the Government’s written case on August 23, 2007.
Applicant received a complete file of relevant material (FORM) on September 5, 2007, and was
provided the opportunity to file objections and submit material to refute, extenuate, or mitigate the
disqualifying conditions.  His response was due October 5, 2007.  As of November 1, 2007, he had
not responded.  The case was assigned to me on November 2, 2007.
FINDINGS OF FACT
I thoroughly and carefully reviewed the case file and the pleadings.  I make the following
findings of fact.
Applicant is 46 years old and a painter for a defense contractor.  He was married for over 19
years before his first wife died of cancer.  There were two children from this marriage.  He married
again six years ago and has two step-children.  He served in the Army for ten years and held a
security clearance during that time.  He also held a security clearance while working for other
defense contractors.  He submitted a security clearance application for his present position with the
defense contractor on October 26, 2005.1
Applicant and his first wife filed a Chapter 7 bankruptcy in June 1991.  His first wife was
diagnosed with terminal cancer.  They had expensive medical bills and his wife used their credit
cards to buy an exceptional number of non-medical items.  The bankruptcy was filed because they
were not able to pay the medical or credit card bills.  Their debts were discharged in October 1991.
His first wife passed away in March 1996.2
Applicant filed a second Chapter 7 bankruptcy in February 2002, and his debts were
discharged in May 2002.  Applicant had been employed for over 18 years at the same defense
contractor firm and was making a good salary.  His company was purchased by another company and
he was laid off.  He secured other employment but at a salary about half of his prior salary.  He could
Items 3 and 7.3
Item 5.4
Items 6 and 8.5
Department of the Navy v. Egan, 484 U.S. 518 (1988).6
Directive ¶ E2.2.1.7
AG ¶ 2(a).8
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not keep up with his debts because of the reduced salary.3
Applicant had two house, the first was paid and there is no mortgage on that house.
However, his son lived in the house.  The second house is a mobile home that he lived in which had
a mortgage.  When Applicant was laid off, this house was repossessed by the mortgage company
when he was unable to pay the mortgage because of his decreased salary.  There is a remainder debt
of over $47,000, from the repossession that Applicant has not paid or made any arrangements with
the mortgage company to pay.  Applicant now lives in the original house.4
Applicant’s monthly income is $1,900, with monthly expenses of $1,260, leaving a remainder
of $690 monthly .  He has $4,200 in savings, and owns a car, motorcycle, and boat.  He lists his
assets as $89,000.  There are no other delinquent accounts listed on his credit report.5
POLICIES
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.”   Eligibility for a security clearance is6
predicated upon the applicant meeting the security guidelines contained in the Directive.7
Adjudicative guidelines for determining eligibility for access to classified information, and
the disqualifying conditions and mitigating conditions for each guideline are set forth in the AG
promulgated by the President on December 29, 2005, and implemented by the Department of Defense
on September 1, 2006.  Each clearance decision must be fair, impartial, and a commonsense decision
based on the relevant and material facts and circumstances, and the whole person concept.8
The adjudicative process is an examination of a sufficient period of a person’s life to make
an affirmative determination that the person is eligible for a security clearance.  An administrative
judge must apply the “whole person concept,” and consider and carefully weigh the available, reliable
information about the person.  An administrative judge should consider: (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 pertinent behavioral changes; (7) the motivation for the conduct; (8) the
potential for pressure, coercion, exploitation, or duress; and (9) the likelihood of continuation of
Id.9
See Exec. Or. 10865 § 7.10
Directive ¶ E3.1.14.11
ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002); see Directive ¶ E3.1.15.12
ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002). 13
ISCR Case No. 99-0597 (App. Bd. Dec 13, 2000).14
ISCR Case No. 95-0611 at 2 (App. Bd. May 2, 1996) (quoting DISCR Case No. 92-1106 (App. Bd. Oct. 7,15
1993))
Egan, 484 U.S. at 531; see AG ¶ 2(b).16
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recurrence.9
A person granted access to classified information enters into a special relationship with the
government.  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.  The decision to deny an individual a
security clearance is not necessarily a determination as to the loyalty of the applicant.   It is merely10
an indication that 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 present evidence to establish controverted facts in the SOR that
disqualify or may disqualify the Applicant from being eligible for access to classified information.11
Thereafter, Applicant is responsible for presenting evidence to rebut, explain, extenuate, or mitigate
facts.   An applicant “has the ultimate burden of demonstrating that it is clearly consistent with the12
national interest to grant or continue his security clearance.”   The government is under no duty to13
present evidence to disprove any adjudicative guideline mitigating condition, and an Administrative
Judge cannot assume or infer that any particular mitigating condition is applicable merely because the
government does not present evidence to disprove that particular mitigating condition.   “[T]he14
Directive presumes there is a nexus or rational connection between proven conduct under any of the
criteria listed therein and an applicant’s security suitability.”   “Any doubt as to whether access to15
classified information is clearly consistent with national security will be resolved in favor of the
national security.”16
Conditions that could raise a security concern and may be disqualifying, as well as those which
would mitigate security concerns, pertaining to the adjudicative guideline are set forth and discussed
in the conclusions section below.
CONCLUSIONS
I carefully considered all of the facts in evidence and the legal standards discussed above.  I
reach the following conclusions regarding the allegations in the SOR.
AG ¶ 18.17
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A security concern exists because a 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.   17
The cause of debts and action taken or not taken to pay debts are a better indicator of a person’s
reliability or trustworthiness and judgment than the amount of debt.  An individual who is financially
irresponsible may also be irresponsible, unconcerned, or careless in their obligation to protect
classified information.  Behaving responsibly or irresponsibly in one aspect of life provides an
indication of how a person may behave in other aspects of life.  Irresponsibility towards financial
obligations may be indicated by failure to take reasonable measures to pay or reduce debts.  A person’s
relationship with his creditors is a private matter until evidence is uncovered demonstrating an inability
or unwillingness to repay debts under agreed upon terms.  Absent evidence of strong extenuating or
mitigating circumstances, an applicant with a history of serious or recurring financial difficulties is in
a situation of risk inconsistent with the holding of a security clearance.  An applicant is not required
to be debt free, but is required to manage his finances in such a way as to meet his financial
obligations.  
Applicant filed two bankruptcy actions and then had his second home repossessed.  He has
taken no steps to pay the $47,000 owed on the repossessed home.  His bankruptcy actions and his
failure to act on the repossession debt brings the matter within Financial Considerations Disqualifying
Conditions (FC DC) ¶ 19(a) (Inability or unwillingness to satisfy debts), and FC DC ¶ 19(c) (A history
of not meeting financial obligations).  Since Applicant admits the bankruptcies, the repossession, and
that he has taken no action to resolve this debt, I conclude the above disqualifying conditions have
been established.
Appellant’s answer to the SOR raises a number of Financial Consideration Mitigating
Conditions (FC MC).  Applicant’s first wife had expensive medical treatment for her cancer and ran
up credit debts resulting in the first bankruptcy filing.  The second bankruptcy was caused by Applicant
being laid off from a good paying job requiring him to take a lesser paying job.  These conditions raise
FC MC ¶ 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).  His wife’s
illness and spending habits as well as his loss of employment were beyond his control.  However,
Applicant present no information to show that under the circumstances he acted reasonably.  There is
no indication of what actions, if any, he took or could have taken to control his debts to live within his
means on a reduced salary.  While this mitigating condition applies, I give it only partial weight.  
Applicant has no delinquent debt other than the debt owed on the mobile home that was
repossessed.  His credit report shows he pays bills as agreed.  His monthly salary and expenses shows
he has a remainder sufficient to pay his debts.  He is not now financially overextended.  These
circumstances raises FC MC 20(d) (The individual initiated a good-faith effort to repay overdue
creditors or otherwise resolve debts).  He is paying his creditors and has resolved his debt other than
the debt owed on the home repossession, so he receives some mitigating credit for his efforts to pay
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creditors. 
Applicant still has an unresolved debt on the home repossession.  FC MC ¶ 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
judgement) is not raised since the debt is still owed and current and failure to take action on the debt
does cast doubt on his judgment, trustworthiness, and reliability.
Bankruptcy is a legal and permissible means of paying and resolving debt.  However, the
circumstances leading up to the bankruptcy action and the actions of Applicant after debts are
discharged should be examined to determine if Applicant acted reasonably and responsibly in regard
to his finances.  Applicant’s first bankruptcy was caused by medical bills from his wife’s illness and
her spending habits.  The second bankruptcy was filed after he lost lucrative employment and then
worked at a reduced salary.  The fact that he filed bankruptcy under the circumstances does not show
he was irresponsible towards his finances, and he has mitigated security concerns based on the
bankruptcies.  Thereafter, his second home was repossessed and he still has a debt to the mortgage
company of over $47,000.  He has taken no steps to resolve this debt.  He has sufficient income to
make payments on the debt.  He has sufficient assets he can use to generate funds to use to pay the
debt.  He has not presented any information on steps taken to resolve the debt or why he cannot resolve
it.  This information does show that he is irresponsible in regard to his finances.
I carefully considered all of the circumstances in light of the “whole person” concept.  I
conclude Applicant is not eligible for access to classified information.  Applicant has shown an
irresponsible attitude toward his debts.  He presented insufficient information to explain why he cannot
pay or resolve the debt.  He has failed to carry his burden to refute, extenuate, or mitigate the
disqualifying conditions.  I conclude Applicant has not mitigated the security concerns for financial
considerations.
FORMAL FINDINGS
Formal findings for or against Applicant on the allegations in the SOR, as required by Section
E3.1.25 of Enclosure 3 of the Directive, are:
Paragraph 1, Guideline F: AGAINST APPLICANT
Subparagraph 1.a.: For Applicant
Subparagraph 1.b.: For Applicant
Subparagraph 1.c.: Against Applicant
DECISION
In light of all of the circumstances presented by the record in this case, it is not clearly
consistent with the national security to grant or continue Applicant’s access to classified information.
Clearance is denied.
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Thomas M. Crean
Administrative Judge