DATE:  November 28, 2007
In re:
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SSN: -----------
Applicant for Security Clearance
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ISCR Case No. 07-08355
DECISION OF ADMINISTRATIVE JUDGE
LEROY F. FOREMAN
APPEARANCES
FOR GOVERNMENT
Ray T. Blank, Jr., Esq., Department Counsel
FOR APPLICANT
William C. Johnson, Jr., Esq.
SYNOPSIS
After Applicant was laid off from his job in August 2001, he decided to attend a community
college for about four months, during which he was unemployed.  After college, he worked at several
low-paying jobs and used his credit cards for living expenses, accumulating eight delinquent debts
totaling about $16,846.  Since beginning his current job in February 2005, he has resolved three
smaller debts, but the remaining debts totaling more than $14,000 remain unresolved.  Recently, he
borrowed about $28,000 to buy a new car, and he spent a $1,500 bonus on a high-definition
television.  Security concerns based on financial considerations are not mitigated.  Clearance is
denied.
STATEMENT OF THE CASE
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On August 9, 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 Guideline F (Financial Considerations).
Applicant answered the SOR through counsel on August 30, 2007, admitted one allegation
with an explanation and denied all others, and requested a hearing.  The case was assigned to me on
October 10, 2007, and heard on October 30, 2007, as scheduled.  I kept the record open until
November 16, 2007, to enable Applicant to submit additional documentary evidence.  DOHA
received the transcript (Tr.) on November 9, 2007.  
Applicant submitted additional evidence by facsimile transmission on November 16, 2007,
and it has been admitted as Applicant’s Exhibits (AX) C and D.  The facsimile cover sheet, cover
letter, and certificate of service are attached to the record as Hearing Exhibit (HX) I.  Department
Counsel’s response is attached as HX II.  The record was closed on November 16, 2007. 
FINDINGS OF FACT
Applicant’s admissions in his answer to the SOR and at the hearing are incorporated into my
findings of fact.  I make the following findings:
Applicant is a 38-year-old network security engineer for a defense contractor.  He served on
active duty in the U.S. Army from December 1987 to March 1992, and in the Army National Guard
from March 1992 to December 1995.  He has never held a security clearance.
Applicant worked at various jobs after his release from active duty.  In August 2001, he was
laid off from a job with a defense contractor.  He received about $2,000 in severance pay, and he
decided to use the money to attend a community college (Tr. 30).  He was not employed while in
college.  He graduated in December 2001 (Tr. 31).  
After college, Applicant worked at several low-paying part-time jobs, and he used his credit
cards to pay living expenses (Tr. 31, 33-34).  He was taking care of his mother, who was in poor
health, during this time (Tr. 21).  Between July 2001 and April 2004, seven credit card accounts,
with balances totaling about $16,846 were charged off as bad debts or placed for collection.  He
started receiving telephone calls and letters regarding his delinquent debts, but he ignored them
because he did not have the funds to pay them (Tr. 32-33).  
Applicant’s pay was garnished twice between February and September 2002 for delinquent
state taxes in amounts of $83 and $681.  He testified he requested that the taxes be collected by
garnishment (Tr. 58).  The delinquent taxes have been paid in full (Tr. 26; AX C).  
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Applicant began his current job in February 2005, and he currently earns about $61,500 per
year.  He is unmarried and has no children (Tr. 52).  His current take-home pay is about $1,400 every
two weeks (Tr. 48).  He has a student loan of about $6,625, on which payments are deferred (GX
4 at 2).  
Applicant testified the two credit card accounts alleged in SOR ¶¶ 1.e and 1.f were
compromised and have been paid off in full (Tr. 26, 42).  He produced evidence of 40 payments of
$30 between December 28, 2005, and July 27, 2007 (AX B; AX D).  
Applicant also testified the debt alleged in SOR ¶ 1.h was paid in full, but he had no
documentary evidence of payment (Tr. 26-27).  Regarding this debt, he testified, “if I’m not
mistaken, I paid it off with cash or whatever, but if this is something that is on another credit report,
then obviously I’m mistaken.” (Tr. 46.)  His credit report dated September 28, 2007, reported the
debt as unpaid (GX 4 at 1).
Applicant received an offer of settlement from the creditor alleged in SOR ¶ 1.g, but he had
not accepted the offer or made any payments on the debt as of the date of the hearing (AX A; Tr. 44).
He testified he has asked his attorney to negotiate settlements of the debts alleged in SOR ¶¶ 1.a, 1.b,
and 1.c, but no agreements had been reached as of the time of the hearing, and no payments had been
made (Tr. 26, 43, 59).
The evidence concerning the debts alleged in the SOR is summarized in the table below.
SOR Debt Amount Status Evidence
1.a Credit Card $2,546 Unpaid GX 4 at 1; Tr. 26, 43, 59
1.b Credit Card $2,259 Unpaid GX 4 at 1; Tr. 26, 43, 59
1.c Credit Card $2,392 Unpaid GX 4 at 2; Tr. 26, 43, 59
1.d State Taxes $764 Paid by garnishment AX C; Tr. 26
1.e Credit Card $1,114 Settled AX B; AX D; Tr. 39-40
1.f Credit Card $966 Settled AX B; AX D; Tr. 39-40
1.g Credit Card $2,270 Unpaid GX 4 at 2; Tr. 26, 43, 59
1.h Credit Card $5,299 Claimed to be paid, but
no documentation
GX 4 at 1; 
Tr. 26-27, 44, 46
In 2005, Applicant  borrowed about $28,000 to buy a car (Tr. 48).  His monthly car payments
are about $601, and his insurance is $328 per month.  His monthly rent, including utility payments,
is $750.  He pays about $100-$130 per month for cable, internet, and telephone service, and about
$125 for cell phone service (Tr. 51).  He has medical insurance, but he pays a co-payment for his
medications for high blood pressure, diabetes, and high cholesterol (Tr. 52).  He has about $870 per
month for living expenses, food, and gasoline (Tr. 54-55).  He recently received a $1,500 bonus, and
he used it to purchase a high-definition television set (Tr. 53).
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Applicant has never sought credit counseling services (Tr. 47).  He testified he did not realize
his financial record would affect his ability to obtain a clearance.  When he realized the importance
of his financial record, he began making payments on the two debts in SOR ¶¶ 1.e and 1.f, and he
asked his attorney to begin negotiating with his other creditors (Tr. 25-26).
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
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)
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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(g) is raised
by “failure to file annual Federal, state, or local income tax returns as required or the fraudulent filing
of the same.”  
Applicant’s financial history raises AG ¶¶ 19(a), (c), and (e).  AG ¶ 19(b) is not raised,
because his purchases of an expensive new car and a high-definition television set instead of paying
off his delinquent debts, although frivolous and irresponsible, did not cause the debts alleged in the
SOR.  AG ¶ 19(g) is not raised because his delinquent taxes were the result of inability to pay rather
than failure to file or fraud.
Since the government produced substantial evidence to raise the disqualifying conditions in
AG ¶¶ 19(a), (c) and (e), 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).  
Several mitigating conditions are relevant to this case.  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).  This condition is
not established because Applicant’s debts are numerous and not yet resolved.  His irresponsible
assumption of additional debt for an expensive car and use of his bonus to buy a high-definition
television set reflect bad financial judgment and lack of financial discipline. 
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.
Applicant’s loss of employment in 2001 was a circumstance beyond his control, and his
desire to attend college education was understandable.  It was not reasonable, however, for him to
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become a full-time student with no means of financial support.  It also was not reasonable for him
to ignore the telephone calls and letters from creditors instead of attempting to reach an
accommodation.  I conclude AG ¶ 20(b) is not established.
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).  Applicant has never sought financial counseling.
He recently retained an attorney, but there are no “clear indications” that his financial problems are
being resolved.  I conclude AG ¶ 20(c) is not 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).
Applicant requested that the delinquent taxes be collected by garnishment, and there is no indication
of tax liens on his credit reports.  He settled and paid off the debts in SOR ¶¶ 1.e and 1.f in
installments.  I conclude that a “good faith effort” is established for these three debts.  On the other
hand, he was vague and uncertain regarding the debt in SOR ¶ 1.h, and he could produce no
documentation to corroborate his assertion that the debt had been paid in full. His most recent credit
report contradicts his testimony.  Finally, he admitted that no settlement agreements have been
reached and no payments made on the remaining debts.  I conclude AG ¶ 29(d) is established only
for the debts alleged in SOR ¶¶ 1.d, 1.e, and 1.f.
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).  
Applicant is a mature, well-educated adult.  His unresolved debts are significant but not
insurmountable in light of his current income.  At the hearing, he appeared to lack clear
comprehension of his financial situation, and he is depending on his lawyer to resolve it.  Although
he resolved the debts in SOR ¶ 1.e and 1.f after beginning his current job, he did so only after
learning that his debts could prevent him from obtaining a clearance.  He has never received any kind
of credit counseling, and appears financially naive and undisciplined, as demonstrated by his recent
high-dollar discretionary purchases in spite of his ongoing financial problems.  His financial record
keeping is spotty.  Although he has resolved some debts and obtained the assistance of a lawyer to
resolve the remaining debts, he has not yet established a track record of financial responsibility.
After weighing the disqualifying and mitigating conditions under Guideline F, 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.  Accordingly, I conclude he has not carried his
burden of showing that it is clearly consistent with the national interest to grant him a security
clearance.
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FORMAL FINDINGS
The following are my conclusions as to each allegation in the SOR:
Paragraph 1. Guideline F (Financial): AGAINST APPLICANT
Subparagraph 1.a: Against Applicant
Subparagraph 1.b: Against Applicant
Subparagraph 1.c: Against Applicant
Subparagraph 1.d: For Applicant
Subparagraph 1.e: For Applicant
Subparagraph 1.f: For Applicant
Subparagraph 1.g: Against Applicant
Subparagraph 1.h: Against Applicant
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