DATE:  December 21, 2007
In re:
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SSN: -----------
Applicant for Security Clearance
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ISCR Case No. 07-08069
DECISION OF ADMINISTRATIVE JUDGE
DAVID M. WHITE
APPEARANCES
FOR GOVERNMENT
Candace Le’i, Esq., Department Counsel
FOR APPLICANT
Pro Se
SYNOPSIS
Applicant is a 48-year-old employee of a defense contractor. He still owes a significant
number and amount of delinquent debts that he accrued since closing his business and accepting his
current job in late 2003. He has a $600 monthly deficit of income to recurring expenses, and no plan
to bring the situation under control. He did not deliberately falsify his security clearance application,
but security concerns raised by financial considerations were not mitigated. Clearance is denied.
STATEMENT OF THE CASE
Adjudicative Guidelines for Determining Eligibility for Access to Classified Information (August 2006) as1
implemented by Under Secretary of Defense Memorandum of Aug. 30, 2006 for use in adjudication of all cases in which
an SOR had not been issued by Sept 1, 2006. Copies of the applicable AG were provided to Applicant with the SOR.
2
Applicant applied for a security clearance on November 15, 2006, in conjunction with his
employment by a defense contractor as a safety coordinator. On September 24, 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), and Guideline E (Personal
Conduct) of the revised Adjudicative Guidelines (AG),  why DOHA could not make the preliminary1
affirmative finding under the Directive that it is clearly consistent with the national interest to grant
a security clearance for Applicant, and recommended referral to an administrative judge to determine
whether a clearance should be granted, continued, denied, or revoked.
Applicant responded to the SOR allegations in a notarized letter, dated October 15, 2007,
admitting the truth of some of the allegations and denying others, and elected to have a hearing
before an administrative judge. The case was then assigned to me on November 1, 2007. A Notice
of Hearing was issued on November 7, 2007, and the hearing was held as scheduled on December
3, 2007. During the hearing, the Government offered nine exhibits that were marked as Government
Exhibits (GE) 1 through 9, and admitted without objection. Applicant testified, and offered one
exhibit that was admitted without objection and marked Applicant Exhibit (AE) A. The record was
kept open until December 10 to permit submission of additional evidence. Applicant submitted one
additional exhibit, to which Department Counsel had no objection, that was admitted as AE B.
DOHA received the hearing transcript (Tr.) on December 12, 2007.
FINDINGS OF FACT
Applicant formally admitted the truth of the factual allegations set forth in SOR ¶¶ 1.b
through 1.f, 1.h, and 1.j through 1.s, pertaining to financial considerations under AG F. Those
admissions are incorporated herein as findings of fact. He denied the remaining allegations under
AG F, and the allegation under AG E in ¶ 2, in his response to the SOR. After a complete and
thorough review of all the evidence in the record, I make the following findings of fact:
Applicant is a 48-year-old employee of a defense contractor seeking to obtain a security
clearance. He previously held a clearance while serving in the Navy from 1979 to 1994. He is
married, with three children, ages four, two and three months. His wife does not work outside the
home. He took a voluntary early retirement from the Navy, and, after deductions including a $188
allotment toward one of his debts, he receives $535 per month in combined retirement pay and VA
compensation each month. He has worked in his present job since December 2003, and earns
approximately $1,000 every two weeks. He owns his home, with monthly mortgage payments of
$1,000. 
From 2000 until November 2003, Applicant and his wife operated a business delivering
appliances for a major retail store. During that period, Applicant earned $3,500 to $4,000 every two
3
weeks. Their current financial troubles began when they closed the business and he started working
at his current job with substantially reduced income. He closed the business because of increased fuel
costs and having to fire his assistant over drug use. Since that time, Applicant has incurred increasing
amounts of delinquent debt. His monthly expenses exceed income by more than $600, without any
allowance for repayment of delinquent debts. He is two months behind on his mortgage payments,
and plans to apply for an assistance grant from the local housing authority to help with the arrearage.
He has consulted an attorney about filing for bankruptcy, but cannot afford to do that until he
receives his federal income tax refund next year. (Tr. at 27-37). 
Applicant and his wife previously filed a Chapter 13 bankruptcy petition in 1991, involving
about $19,000 in debts. This bankruptcy proceeding was discharged in 1995. These circumstances
arose while he was still on active duty in the Navy, were fully resolved at the time, and bear little
relevance to Applicant’s current financial situation. Applicant did have a civil judgment entered
against him, as alleged in SOR ¶ 1.q, but that was paid back in 2004 and no longer appears on his
credit reports.
Applicant denied owing the debts alleged in SOR ¶¶ 1.a, and 1.i, because he contacted both
creditors and neither had a record of his account. He submitted a formal dispute to the credit bureaus
with respect to each. He also claimed that he repaid the debt alleged in SOR ¶ 1.g, which his credit
report shows as a charge-off with a zero balance due. He is making monthly payments of $188 by
allotment from his retirement check toward the debt alleged in SOR ¶ 1.h, which is not
delinquent.(AE B.) He admitted the remaining delinquent debt alleged in the SOR and reflected on
his credit bureau reports (GEs 5, 6, 7 and 8). These debts total $19,714. He is current on his property
taxes, after making a late payment in April 2007 from his federal income tax refund. (GE 2 at 5, 8;
Tr. at 43, 56-59.) 
When Applicant filled out his security clearance application, he left the yes and no blocks
blank in response to question 28a, concerning 180-day delinquent debt. Instead, he wrote
“UNCERTAIN” next to the blocks. (See AE A at 9.) He turned the application in to his company’s
security manager, who input the data into an electronic questionnaire. Applicant was asked to sign
the signature page of the electronic version without checking the contents. The security manager
entered a “No” answer on the electronic form without Applicant’s knowledge. (See GE 1 at 31.)
POLICIES            
Enclosure 2 of the Directive sets forth adjudicative guidelines (AG) which must be
considered in the evaluation of security suitability. In addition to brief introductory explanations for
each guideline, the AG are divided into disqualifying conditions (DC) that may raise security
concerns, and mitigating conditions (MC) that may reduce or negate security concerns. Applicable
DCs and MCs must be considered in deciding whether to grant, continue, deny or revoke an
individual's eligibility for access to classified information. Conditions that could raise a security
concern and may be disqualifying, as well as those which would mitigate security concerns, under
Guideline F and E, are set forth and discussed in the conclusions section below.
An administrative judge need not view the adjudicative guidelines as inflexible, ironclad
rules of law. Instead, acknowledging the complexities of human behavior, these guidelines are
intended to be applied in conjunction with the factors set forth in the Adjudicative Process provision
A G  ¶ 2.2
AG ¶¶ 2(b), 2(c).3
“Substantial evidence [is] such relevant evidence as a reasonable mind might accept as adequate to support a4
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
Directive ¶ E3.1.14.5
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of the Directive,  to assist the administrative judge in reaching fair and impartial, common sense2
decisions.
The entire decision-making process is a conscientious scrutiny of a number of variables
known as the “whole person concept.” All available, reliable information about the person, past and
present, favorable and unfavorable, should be considered in making a meaningful decision. The
Adjudicative Process factors which an administrative judge should consider, in addition to the
applicable guidelines, are: (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) 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.
Protection of the national security is the paramount consideration, so the final decision in
each case must be arrived at by applying the standard that issuance of a clearance must be clearly
consistent with the interests of national security. Any doubt as to whether access to classified
information is clearly consistent with national security must be resolved in favor of the national
security.  In reaching this decision, I have drawn only those conclusions that are reasonable, logical3
and based on the evidence contained in the record. Likewise, I have avoided drawing inferences
grounded on mere speculation or conjecture.
In the decision-making process, facts must be established by “substantial evidence.”  The4
burden of producing evidence initially falls on the government to establish a case which
demonstrates, in accordance with the Directive, it is not clearly consistent with the national interest
to grant or continue an applicant's access to classified information. “Department Counsel is
responsible for presenting witnesses and other evidence to establish facts alleged in the SOR that
have been controverted.”  “The applicant is responsible for presenting witnesses and other evidence5
to rebut, explain, extenuate, or mitigate facts admitted by the applicant or proven by Department
Counsel, and [Applicant] has the ultimate burden of persuasion as to obtaining a favorable clearance
Directive ¶ E3.1.15.6
ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 2005); ?The Administrative Judge [considers] the record7
evidence as a whole, both favorable and 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). 
AG ¶ 18.8
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decision.”  Once it has met its initial burden of production, the burden of persuasion (including any6
burden to disprove a mitigating condition) never shifts to the government.  7
A person applying for access to classified information seeks to enter 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
that 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. 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,” so the decision to deny an individual a
security clearance is not necessarily a determination as to the loyalty of the applicant. 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.
CONCLUSIONS
As set forth in the Directive, every personnel security determination must be a fair and
impartial overall common sense decision based on all available evidence, both favorable and
unfavorable. The decision must be arrived at by applying the standard that the grant or continuance
of a security clearance or access to classified information is clearly consistent with the interests of
national security.  
Guideline F: Financial Considerations
Financial considerations raise security concerns when a person has significant
delinquent 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 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.”8
I have considered all of the Financial Considerations Disqualifying Conditions (FC DC), and
find that FC DC 19(a) (“inability or unwillingness to satisfy debts”) and FC DC 19(c) (“a history of
not meeting financial obligations”) apply to Applicant’s situation and raise security concerns. He
admittedly owes almost $20,000 in SOR-alleged delinquent debts, which he has neither the means
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nor intention to repay. His monthly income is $600 less than his recurring expenses, making his
financial situation continually worse. No other FC DC applies. 
I have considered all of the Financial Considerations Mitigating Conditions (FC MC) that
might apply to Applicant’s inability to meet, and history of not meeting, his financial obligations.
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”) does not apply since his delinquent indebtedness
continues to date.
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”)
applies to some degree. Applicant chose to close a business that was generating three to four times
more income than his current job. His stated reason was that fuel costs rose, which would only make
sense if those fuel costs substantially reduced his ability to continue generating that income. He did
obtain his present employment shortly thereafter, but has continued incurring additional delinquent
debt with no plan to turn the situation around. Accordingly, the pressures resulting from the
delinquent indebtedness and a bad credit rating remain. 
FC MC 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”) was not established
by Applicant. He said that a VA counselor worked out a budget for him several years ago showing
the $600 monthly deficit. He did not obtain or follow financial counseling to resolve the situation,
however. 
FC MC 20(d) (“the individual initiated a good-faith effort to repay overdue creditors or
otherwise resolve debts”) also does not apply to mitigate security concerns arising from his financial
situation. He showed that he is making regular payments toward one SOR-alleged debt, and is
disputing two others. His only potential plan to address the rest is a possible bankruptcy filing
sometime next year.
Applicant disputes the legitimacy of some of his reported past-due debts, but presented no
documentation to substantiate the basis of the disputes, or actions to resolve them. Accordingly, FC
MC 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 mitigate security concerns, even with
respect to the portion of the indebtedness he disputes. No unexplained affluence concerns were
raised, so FC MC 20(f) has no bearing in this case.
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
AG ¶ 15.9
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failure to provide truthful and candid answers during the security clearance process or any other
failure to cooperate with the security clearance process.”9
The Regulation’s personal conduct guideline requires deliberate omission, concealment or
falsification of relevant facts to establish Personal Conduct Disqualifying Condition (PC DC) 16(a)
(“deliberate omission, concealment or falsification of relevant facts from any personnel security
questionnaire, personal history statement, or similar form used to conduct investigations, determine
employment qualifications, award benefits or status, determine security clearance eligibility or
trustworthiness, or award fiduciary responsibilities”). Appellant provided an accurate answer of
“UNCERTAIN” when he completed his security clearance application, but his security manager
change it to “No” on the electronic application form that was submitted to the government. Applicant
was not aware of this incorrect answer, so no security concerns arise from this allegation.
Whole Person Analysis 
I have considered the “whole person” concept in evaluating Applicant’s risk and vulnerability
in protecting our national interests. The nature, extent, and seriousness of his delinquent
indebtedness is not under control, and is getting worse as time passes. Applicant is a mature,
educated adult who chose to close a business and accept his current employment, and offered no
reason he should not be considered accountable for his voluntary actions. He produced no evidence
of rehabilitation or other permanent behavioral changes. The evidence shows that continuation and
worsening of these problems is highly probable into the foreseeable future. Accordingly, I find that
Applicant has not mitigated the security concerns raised by the financial considerations set forth in
the SOR. It is not clearly in the interest of national security to grant him access to classified material.
FORMAL FINDINGS           
            Formal Findings For or Against Applicant on the allegations set forth in the SOR, as required
by Paragraph 25 of Enclosure 3 of the Directive are:
Paragraph 1, GUIDELINE F: AGAINST APPLICANT
Subparagraph 1.a: For Applicant
Subparagraph 1.b: Against Applicant
Subparagraph 1.c: Against Applicant
Subparagraph 1.d: Against Applicant
Subparagraph 1.e: Against Applicant
Subparagraph 1.f: Against Applicant
Subparagraph 1.g: For Applicant
Subparagraph 1.h: For Applicant
Subparagraph 1.i: For Applicant
Subparagraph 1.j: Against Applicant
Subparagraph 1.k: Against Applicant
Subparagraph 1.l: Against Applicant
Subparagraph 1.m: Against Applicant
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Subparagraph 1.n: Against Applicant
Subparagraph 1.o: Against Applicant
Subparagraph 1.p: For Applicant
Subparagraph 1.q: For Applicant
Subparagraph 1.r: For Applicant
Subparagraph 1.s: For Applicant
Paragraph 2, GUIDELINE E: FOR APPLICANT
Subparagraph 2.a: For Applicant
DECISION            
In light of all the circumstances presented by the record in this case, it is not clearly consistent
with the national interest to grant or continue a security clearance for Applicant. Clearance is denied.
David M. White             
Administrative Judge