DATE:  December 28, 2007
In re:
---------------------
SSN: -----------
Applicant for Security Clearance
)
)
)
)
)
)
)
)
ISCR Case No. 07-00313
DECISION OF ADMINISTRATIVE JUDGE
NOREEN A. LYNCH
APPEARANCES
FOR GOVERNMENT
D. Michael Lyles, Esq., Department Counsel
FOR APPLICANT
Pro Se
SYNOPSIS
Applicant is a 55-year-old employee of a defense contractor. Applicant’s financial problems
resulted due to his dairy farm loss. He incurred eight delinquent debts and a tax lien in 1995.
Applicant has demonstrated he is financially responsible by resolving the debts. He received
information that the tax lien has expired and is no longer collectible. Applicant has mitigated the
financial considerations concern. He did not knowingly falsify his security clearance application.
Thus, he has mitigated the security concerns under personal conduct. Clearance is granted.
Pursuant to Exec. Or. 10865, Safeguarding Classified Information within Industry (Feb. 20, 1960), as amended1
and modified, and Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review
Program  (Jan. 2, 1992), as amended (Directive).
Initially, when Applicant responded, he stated he did not believe a hearing would help him. 2
Applicant works out of the country. This was the first date that Applicant was in the U.S. and available for a3
hearing. Also, initially Applicant requested a review on the record.
Applicant’s answer to the SOR, dated May 16, 2007.4
GE 1 (Security Clearance Application, dated June 1, 2004).5
2
STATEMENT OF THE CASE
The Defense Office of Hearings and Appeals (DOHA) declined to grant or continue a
security clearance for Applicant. On April 20, 2007, DOHA issued a Statement of Reasons  (SOR)1
detailing the basis for its decision–security concerns raised under Guideline F (Financial
Considerations), and Guideline E (Personal Conduct) of the revised Adjudicative Guidelines (AG)
issued on December 29, 2005, and implemented by the Department of Defense for SORs issued after
September 1, 2006. The revised guidelines were provided to Applicant when the SOR was issued.
Applicant answered the SOR on June 8, 2007, and elected to have a hearing before an administrative
judge.  The case was assigned to me on October 10, 2007.  I scheduled a hearing for December 7,2 3
2007.
The hearing was convened as scheduled on December 7, 2007, to consider whether it is
clearly consistent with the national interest to grant or continue a security clearance for Applicant.
Government exhibits (GE 1-6) were admitted. Applicant’s exhibits (AE A-D) were admitted into
the record without objection. Testimony was taken from Applicant. The record was held open until
December 14, 2007 for Applicant to submit additional material. Applicant did submit a packet of
information that was marked AE E. The transcript (Tr.) was received on December 14, 2007. 
FINDINGS OF FACT
As to the factual allegations under Guidelines F and E, Applicant admitted that he was
responsible for the nine debts listed on the SOR, but also explained he paid all the debts except the
tax lien, which he believed had expired, and he did not owe.  His admissions are incorporated herein4
as findings of fact. 
Applicant is a 55-year-old employee of a defense contractor who  graduated from high school
in 1970.  Applicant married his first wife in 1970. As a result of that marriage they had two children
who are now adults. He divorced his wife in 1973. Applicant has worked overseas since 2004 and
has been with his current employer since 2007.5
Applicant earned his living as a dairy farmer for more than 20 years. He supported his family
and paid his debts. However, he sold the family farm in 1983 due to financial problems but leased
it back from the new owner. In 1991, Applicant sold the dairy herd. In 1993-1994 the owner sold the
Tr. 61.6
Tr. 28.7
Tr. 51.8
Tr. 52.9
Tr. 25.10
GE 2 (Notice of Federal Tax Lien, dated March 10, 1995).11
GE 3 (Credit Report dated August 8, 2004)).12
AE (Traveler’s checks dated September 2007).13
3
farm. Since Applicant spent his entire life doing business as a dairy owner, he did not have other
transferrable work skills. He took jobs with low wages and offshore work in another state after the
farm was sold.  He did not make a substantial income.6
After Applicant’s former spouse died in 1993, Applicant started living with a lady friend.
They lived together for a number of years (1993 until 2003).  She had multiple health problems and
he paid for her medical bills and surgeries.  While he was working in another state, he sent money7
to his friend so that she could pay his bills. However, she did not do so. Thus, unknown to Applicant
he had delinquent bills.  Also, his friend would use his name and order various services such as pay-8
for-view movies. Applicant’s friend sometimes used Applicant’s money to pay her bills rather than
his.9
In the summer of 1994, Applicant received a tax notice from the IRS stating that he owed
money for tax years 1990, 1991, 1992 and 1993. He had just lost the rental use of the farm and had
no money to pay the IRS approximately $10,000. Also, he did not believe that he owed any money
to the IRS due to the low wages that he made. Applicant had a dispute about the taxes owed due to
his deductions for the dairy farm. He had documents relating to tax deductions and his income in a
shed on the remainder of his property. The documents were lost. He did not receive any offer of a
payment plan and he had no money to pay the full amount. The IRS filed a tax lien against Applicant
in 1995.10
Applicant asked a local attorney about the tax issue and was told that after seven years the
lien would expire or it would be uncollectible. Applicant was told that due to the Statute of
Limitations (SOL) the tax was no longer owed.  In 1995, the IRS issued a Federal Tax Lien in the
amount of $11,000.  They never attempted to collect the money or garnish his pay.11
After Applicant lost the lease on his farm, in addition to farming small grain, he worked as
an electrician and worked in the local area for a period of time. He received training and decided to
work overseas building embassies for the U.S. Government to increase his income.
Applicant had $2000 in delinquent debt listed on the SOR.  Applicant has paid the12
delinquent bills in allegations 1.b, through 1.i.. He did this when he was overseas by sending money
orders/traveler’s checks. He proved he paid the SOR debts with copies of the checks at the hearing.13
Tr. 42.14
Tr. 14.15
Tr. 27.16
AE B (Letter from Superintendent, dated December 4, 2007).17
Department of the Navy v. Egan, 484 U.S. 518, 528 (1988).18
Id. at 527.19
Exec. Or. 10865, Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960). 20
ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002).21
4
Applicant’s current net monthly income is $4,700. He earns more if there is overtime. He has
few expenses because his company overseas pays his housing as a benefit. He pays for his food and
incidental expenses. He is current on all his bills. He also sends money to savings, which is now in
excess of $160,000 because his work overseas pays well and he has few expenses.  14
On June 6, 2004, when Applicant completed his security clearance application, he was
working 12-14 hour days away from home. He did not have any records with him.  He answered
“no” to  Questions 27 and 28 concerning financial delinquencies and tax liens because he believed
the tax lien had expired. In addition, he believed because he was now receiving a refund from his
federal tax returns that the matter was settled. He also, at the time of the application, did not have
knowledge about the delinquent debts.  The fact that he admitted they were his debts at the hearing,15
after seeing the SOR, does not render his answers unreasonable and his testimony incredible.
Applicant has received refunds from his federal tax filings from 2002-2005. He produced his latest
refund check. He believes that the IRS would not send him refund checks if he actually owed them
money.  He paid the delinquent debts as soon as he discovered them.16
Applicant’s current employer praises his work and positive attitude. He rates him as trusted
and reliable. He endorses Applicant with respect to his professionalism, character, and reliability.
He recommends him for a security clearance.17
POLICIES
“[N]o one has a ‘right’ to a security clearance.”  As Commander in Chief, the President has18
“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.”  The President authorized the Secretary of Defense or his designee to19
grant applicants eligibility for access to classified information “only upon a finding that it is clearly
consistent with the national interest to do so.”  An applicant has the ultimate burden of20
demonstrating that it is clearly consistent with the national interest to grant or continue his or her
security clearance. The clearly consistent standard indicates that security clearance determinations
should err, if they must, on the side of denials.  Any reasonable doubt about whether an applicant21
should be allowed access to sensitive information must be resolved in favor of protecting such
Id.; Directive, ¶ E2.2.2.22
Exec. Or. 10865 § 7.23
AG ¶ 18.24
5
sensitive information.  The decision to deny an individual a security clearance is not necessarily a22
determination as to the loyalty of an applicant.  It is merely an indication that the applicant has not
met the strict guidelines the President and the Secretary of Defense have established for issuing a
clearance.  23
The revised Adjudicative Guidelines (AG) set forth potentially disqualifying conditions (DC)
and mitigating conditions (MC) under each guideline. Additionally, each security clearance decision
must be a fair and impartial commonsense decision based on the relevant and material facts and
circumstances, the whole-person concept, along with the adjudicative process factors listed in the
Directive and AG ¶ 2(a).
CONCLUSIONS
I have carefully considered all the facts in evidence and the legal standards discussed above.
I reach the following conclusions regarding the allegations in the SOR.
Guideline F: Financial Considerations
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.  24
Applicant’s history of delinquent debts establishes Financial Considerations Disqualifying
Condition (FC DC) 19(a) (inability or unwillingness to satisfy debts) and FC DC 19(c)(a history of
not meeting financial obligations). His admissions and credit reports confirm the delinquent debts.
Applicant did not believe he had to file income tax for the years 1990-1993 due to his low
wages and the sale of the farm. However, there is substantial evidence of FC DC 20(g) (failure to
file annual Federal, state, or local income tax returns as required or the fraudulent filing of same).
I have considered all the Financial Considerations Mitigating Conditions (FC MC), and
especially considered 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 judgment), 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), FC MC 20(c) (the
person received or is receiving counseling for the problem and/or there are clear indications that
The Appeal Board has previously explained what constitutes a “good faith” effort to repay overdue creditors25
or otherwise resolve debts:
In order to qualify for application of Financial Considerations Mitigating Condition 6, an applicant
must present evidence showing either a good-faith effort to repay overdue creditors or some other
good-faith action aimed at resolving the applicant’s debts. The Directive does not define the term
‘good-faith.’ However, the Board has indicated that 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.’ Accordingly, an applicant must do more than merely show that he or she relied on a
legally available option (such as bankruptcy) in order to claim the benefit of Financial Considerations
Mitigating Condition 6. 
(internal citation and footnote omitted) ISCR Case No. 02-30304 at 3 (App. Bd. Apr. 20, 2004) (quoting ISCR Case No.
99-9020 at 5-6 (App. Bd. June 4, 2001)).
26
A levy must be made or proceeding in court begun to collect a federal tax lien within 10
years after a tax assessment is made. See 26 U.S.C. § 6502; United States v. Galletti, 541 U.S. 114,
119 (2004). The running of the statute of limitations is tolled during a bankruptcy proceeding, see 
United States v. Doe, 438 F. Supp. 2d 796 (S.D. Ohio 2006), by agreements (made before Dec. 20,
2000), see United States v. Ryals, 480 F.3d 1101,    1106 (11  Cir. 2007),         or while an offer inth
compromise (made on or after Dec. 31, 1999) is pending. Id.  There was no evidence of    record     
about levies, judicial collections, agreements, offers in compromise, or bankruptcy. I infer that collec-
tibility of the federal tax lien is currently barred by the 10-year statute of limitations.
AG ¶ 15.27
6
the problem is being resolved or is under control), and FC MC 20(d) (the individual initiated a
good-faith effort to repay overdue creditors or otherwise resolve debts).
Although FC MC 20(a) does not provide a temporal or specific definition of what constitutes
“recent” conduct, Applicant’s overall conduct with creditors in resolving his debts shows he is now
reliable, trustworthy and has good judgment. He has shown sufficient unusual circumstances to
establish that his financial problems are “unlikely to recur” due to the loss of the dairy farm and his
low wages for a long period of time, under 20(a). He thought he did not owe any tax for the years
in question and then later he inquired and learned that the SOL in effect made the tax lien legally
unenforceable. Moreover, Applicant began paying his non-tax related delinquent bills as soon as he
learned of them. He reasonably expected his friend to pay his bills, as he directed her. He acted in
a responsible manner. I find that FC MC 20(b) is applicable. FC MC 20(c) is applicable for the
reasons stated above. Even though, Applicant did not receive counseling, he has resolved the
problem. He receives partial credit under FC MC 20(d) because he paid 8 of 9 debts. For the tax lien,
he did not make any effort to pay the IRS and does not receive credit for acting in good faith.  He25
has paid the majority of the debts listed in the SOR. The tax lien has expired.26
Guideline E: Personal Conduct  
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.27
7
On June 1, 2004, Applicant, in response to Question 28 a. and b. concerning financial
delinquencies (90 or 180 days overdue) answered “no.” When he responded to the questions, he
firmly believed he did not owe the tax lien. At first in 1995, he honestly believed he did not owe the
taxes. In 2004, he understood that the lien had expired. He did not intentionally falsify his security
clearance application. As to the other small debts on the SOR, he was not aware of them. Appellant
has refuted the allegations of falsification.
Under DC 16 (a), the government established that Applicant omitted a material fact from his
answers to Question 28. He denied that he deliberately or knowingly falsified an answer to his
security clearance application. When a falsification allegation is controverted, the government has
the burden of proving it. Proof of an omission, standing alone, does not establish or prove an
Applicant’s intent or 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 regarding an Applicant’s intent or state of mind at the time the omission occurred. For DC
16 (a) (deliberate omission, concealment, or falsification of relevant and material facts from a
personnel security questionnaire.....) To apply, the government must establish that Applicant’s
omission was deliberate. I find that Appellant has mitigated the allegation under MC 17 (f) ( the
information was not substantiated). Applicant did not intentionally falsify his security application.
Whole Person Analysis
The adjudicative process is an examination of a sufficient period of a person’s life to make
an affirmative determination that the person is an acceptable security risk. Available, reliable
information about the person, past and present, favorable and unfavorable, should be considered in
reaching a determination. In evaluating Applicant’s case, I have considered the adjudicative process
factors listed in the Directive and AG ¶ 2(a). I have also considered all the evidence, and every
finding of fact and conclusion discussed above. 
Applicant had a history of good credit and no financial problems until his dairy farm was
sold. Applicant paid eight of nine debts in the SOR as soon as he was made aware of the situation.
He is current on all his bills. The ninth debt is a tax lien. It is addressed in the next paragraph.
Applicant talked with an attorney and was told that the tax lien had expired and was no
longer in effect. He had no money to pay at the time. He expected that his wages would be garnished
but that did not happen. He did not fraudulently answer questions on the security clearance
application in 2004 because at the time he filled out the SF 86, he did not have any delinquent debt.
I found him reasonable, forthright and candid at the hearing.
He has the endorsement of his employer and has been working overseas since 2004. He has
a good position and is deemed reliable and trustworthy.
In sum, Applicant paid 8 of 9 delinquent debts. The ninth debt is not legally collectible and
does not currently have any security significance. Applicant is not financially overextended, and
therefore he is not at risk of having to engage in illegal acts to generate funds. See AG ¶ 18.
After weighing the disqualifying and mitigating conditions and evaluating all the evidence
in the context of the whole person, I conclude Applicant has mitigated the security concerns based
on his financial issues, and personal conduct. He is eligible for a security clearance.
8
FORMAL FINDINGS
The following are my conclusions as to each allegation in the SOR:
Paragraph 1.  Guideline F: FOR APPLICANT
Subparagraph 1.a-1.i:             For Applicant
Paragraph 2.  Guideline E: FOR APPLICANT
Subparagraph 2.a-2.b: 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 or continue a security clearance for Applicant. Clearance is
granted.
Noreen A. Lynch
Administrative Judge