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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)         ISCR Case No. 07-03059
SSN: )
)
Applicant for Security Clearance )
Appearances
For Government: John B. Glendon, Esquire, Department Counsel
For Applicant: Alan V. Edmunds, Esquire 
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Decision
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MASON, Paul J., Administrative Judge:
Applicant submitted her Security Clearance Application (SCA), on April 30, 2005.
On June 27, 2007, the Defense Office of Hearings and Appeals (DOHA) issued a
Statement of Reasons (SOR) detailing security concerns under financial considerations
(Guideline F). The action was taken pursuant to Executive Order 10865, Safeguarding
Classified Information within Industry (February 20, 1960), as amended; Department of
Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review
Program (January 2, 1992), as amended (Directive), and the revised adjudicative
guidelines (AG) promulgated by the President on December 29, 2005, and made
effective within the Department of Defense for SORs issued on or after September 1,
2006. 
 
Applicant provided her answer to the SOR on August 23, 2007. DOHA issued a
notice of hearing on October 24, 2007 for a hearing that was originally scheduled for
November 13, 2007. At the beginning of the hearing, I granted Applicant’s motion for
continuance for medical reasons. On December 4, 2007, the case was rescheduled for
hearing on December 20, 2007. At the hearing, five exhibits (AE 1 through 5) were
placed in the record to support the government’s case. Forty-four exhibits (AE A through
 AE PP (budgetary information) and AE QQ (correspondence relating to debt in 1.c. of the SOR were received1
in the time period allowed for post-hearing submissions. 
 In Applicant’s SCA, she listed almost all debts under question 38 (debts over 180 days delinquent in the last2
7 years).
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AE QQ)  were received in the record in support of Applicant’s case. Applicant called one1
witness and then testified on her own behalf. DOHA received the transcript of the
hearing on January 7, 2008. Based upon a review of the case file, pleadings, exhibits,
and testimony, eligibility for access to classified information is granted.
Findings of Fact
There are seven allegations under the financial considerations guideline.
Applicant admitted all the alleged delinquent debts, but noted the overdue debts
identified in subparagraph 1.c. and 1.f. were the same. As of the date of the SOR (June
27, 2007) Applicant owes six creditors $49,066.00. 
Applicant is 48 years old. She is divorced and has one son. She became an
independent contractor after she was laid off in August 2000. As an independent
contractor, she contracts her software training services to private entities or state and
federal agencies. Her employment requires living in a customer’s location during the life
of a contract. When the contract ends, she moves to the next project that could be in a
different location. Sometimes however, Applicant may have a few months of
unemployment before beginning her next period of employment. 
Due to a stagnant national economy in August 2000, and before Applicant
became an independent contractor, her employer, a dot. com company, suddenly laid
her off after promising her an extension of her contract. She moved to another location
in the state, believing her chances for employment would improve. Upon arriving at the
new location, Applicant was incapacitated for a few months after being diagnosed with
asthma, so she did not look for work. When she started investigating opportunities, she
found no work because (1) there was little work to be found in her field, and (2) she had
no experience in negotiating the terms of her services as an independent contractor.
Between August 2000 and May 2001, she paid all her credit cards with her savings.
When she stopped paying her credit cards in May 2001, the listed debts fell delinquent
as late fees and interest quickly climbed to levels she could not pay. 
Applicant’s security clearance questionnaire (SCA) (GE 1),  dated April 30, 2005,2
reflects that after she resumed employment in November 2001, she worked on
contracts for four employers, and then was unemployed from June to December 2003.
She knows she should have paid off the debt after she resumed work, “but [I] was very
busy trying to make up for the time I had been unemployed by just working as much as I
could.” (Tr. 69)
 Applicant adopted the ROI with minor changes.3
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Applicant is sure she will not fall into the same situation as she did in 2000. She
testified, “Because I have established savings (Tr. 71; AE MM), I’ve established a
retirement account. I am working consistently and I am paying my - - my credit card bills
in full every month so there is no debt.” (Tr. 70) 
On May 26, 2007, Applicant provided answers to interrogatories. Attached to her
answers is a report of interview (ROI) (October 13, 2006) conducted by an investigator
from the Office of Personnel Management (OPM) and Applicant.  Applicant quoted her3
earnings at about $94,000.00 a year, with a monthly remainder of more than $4,600.00
a month for savings. 
Applicant’s answers to interrogatories also contain an attached statement from
her regarding the interview, Applicant’s budget, and a list of her creditors. 
In the attached statement (GE 2), Applicant acknowledged the October 13, 2006,
interview was substantially accurate, though she pointed out some changes. She
explained in the attached statement she had not been able to resolve any of the debts
because of her temporary work assignment since November 2006 that was not
supposed to end until July 2007. Applicant requested more time to launch her plan to
address the creditors. She stated, “It is still my intent to make arrangements to settle
with my [creditors] but it may take time to find the current owners of the debts, negotiate
a settlement, and make payment arrangements.” (GE 2, statement
supplementing/correcting the October 2006 interview) Behind her attached statement is
a budget showing yearly income, monthly taxes, and assets. She supplemented her
budget in GE 2 with a budget for November and December 2007. (AE PP)
As Applicant indicated in her May 2007 answers to interrogatories, and her
August 2007 answer to the SOR, she intends to repay her debts. Combined with the
employment issues, the delay in repaying her debts was partially due to an inability to
find the owners of the accounts. 
In May or June 2007, Applicant’s cousin, a paralegal for about 20 years, agreed
to assist Applicant locate the account owners and resolve the delinquent accounts.
Though she had no experience, Applicant’s cousin was positive she could locate the
owners of the overdue accounts and negotiate settlements. Applicant also hired a public
accountant to assist in the negotiations with the creditors while advising her in the
business aspects of her extant consulting venture. 
Locating the actual owners was difficult as most of the accounts had been sold
several times. The cousin located and communicated with four of the six listed creditors.
During her investigation, she discovered that the accounts described in subparagraphs
1.c. and 1.f. were the same account. All listed debts became delinquent at various times
in 2001, when Applicant was unemployed. 
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 The account ($3,351.00) with creditor 1.a. was paid in full on September 26,
2007. (AE H, AE I) Though the debt was charged off by the original creditor, it had not
been sold to a collection agency. The creditor accepted the written off amount in full
satisfaction of the debt. (Tr. 99) 
 The account ($8,843.00) belonging to creditor 1.c. was settled on September
21, 2007 for $3,700.00. (GE KK) In a letter by the collection agency to Applicant on
September 7, 2007 (GE QQ) laying out terms of the settlement, the collection agency
identifies creditor 1.f. as the original creditor of the account. 
 The account ($3,631.50) belonging to creditor 1.e. was settled for $1,800.00
on September 21, 2007. (AE G, AE LL) 
 The oil company credit union account (1.g.) totaling $11,307.49, was settled
for $2,929.00 on October 23, 2007. (AE M, Q, R)
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 Applicant tried several times through letters to establish contact with the
creditor in 1.b. and the collection agency in 1.d. (AE T, V, W, and NN) In her letters, she
indicated that she obtained the creditor’s name from her credit bureau report. She
requested that she be contacted in writing by the creditor about resolving the delinquent
debt. As of the date of hearing, she had received no response from either the creditor in
1.b. or the collection agency in 1.d. 
Applicant’s cousin knows that Applicant’s current financial problems eventuated
from unemployment in 2000 and 2001. To avoid having those same problems, Applicant
has been regularly saving large amounts of money, and paying her bills in advance. The
cousin has seen Applicant’s monthly budget. 
Applicant is sticking to her budget. She has reestablished her credit as evidenced
by her credit cards that she pays every month in full to avoid carrying balances. (Tr. 86)
Applicant’s ongoing plan is to satisfy the remaining creditors even though the debts may
no longer be legally enforceable. (Tr. 88)
On November 12, 2007, Applicant attended a live one-hour, financial counseling
course, and received a certificate of completion. (AE AA) The instructor did not believe
additional counseling was necessary. (Tr. 126)
Applicant is viewed at work and in non-work situations as honest and trustworthy.
Her social friend of two years thinks she is a caring individual. Applicant’s education
loan that she opened in June 1997 shows a regular payment history from December
2003 to the present. 
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Policies
When evaluating an applicant’s suitability for a security clearance, the
Administrative Judge must consider the revised adjudicative guidelines (AG). In addition
to brief introductory explanations for each guideline, the adjudicative guidelines list
potentially disqualifying conditions and mitigating conditions, which are useful in
evaluating an Applicant’s eligibility for access to classified information.
These guidelines are flexible rules of law. Recognizing the complexities of human
behavior, these guidelines are applied in conjunction with the factors listed in the
adjudicative process. The Administrative Judge’s ultimate adjudicative goal is a fair,
impartial and common sense decision. According to the AG, the entire process is a
careful, thorough evaluation of a number of variables known as the “whole person
concept.” The Administrative Judge must consider all available, reliable information
about the person, past and present, favorable and unfavorable, in making a decision.
The protection of the national security is the paramount consideration. AG ¶ 2b.
requires that “[a]ny doubt concerning personnel being considered for access to
classified information will be resolved in favor of national security.” 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.
Under Directive ¶ E3.1.14, the Government must present evidence to establish
controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, 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. . . .” The
Applicant has the ultimate burden of persuasion as to obtaining a favorable security
decision. 
A person who seeks access to classified information enters into a fiduciary
relationship with the Government predicated upon trust and confidence. This
relationship is not restricted to normal duty hours. Rather, the relationship is an-around-
the-clock responsibility between an applicant and the federal government. The
government reposes a high degree of trust and confidence in individuals to whom it
grants access to classified information. Decisions include, by necessity, consideration of
the possible risk the 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.
Financial Considerations (FC)
Inability to pay bills on time places the individual debtor at risk of committing
illegal acts to generate funds. 
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Analysis
Applicant’s financial indebtedness falls within the scope of FC disqualifying
condition (DC) 19.a. (inability or unwillingness to satisfy debts), and FC DC 19.c. (a
history of not meeting financial obligations). As of the date of the SOR, Applicant owed
$49,066.00 to six creditors. For approximately six years, she did nothing to address the
debts. 
Because the listed debts converted to a delinquent status within a relatively small
period of time six years ago, FC mitigating condition (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) receives some consideration. All credit reports (GE 3, 4, and 5) show
the debts became past due in 2001, without more recent evidence of delinquent
indebtedness. 
Having been informed of a contract extension in 2000, Applicant did not foresee
a sudden layoff followed by a 14-month period of unemployment from August 2000 to
November 2001. Fortunately, she exercised good judgment by continuing to pay the
credit cards until May 2001, when she exhausted her savings account.  
Applicant’s medical problems, a lack of experience in negotiating her
independent contractor services in 2000 and 2001, and a poor economy, fetches less
mitigation with the passage of time, her fairly steady employment, except for a six-
month period in 2003, and Applicant’s aggressive saving practices. With the amount of
money Applicant was saving in October 2006, she could have easily paid off or settled
two of the smaller debts listed in the SOR. The fact that it was difficult to locate the
owners of the accounts is not mitigating. As her monthly remainder indicates, Applicant
could have hired professional support much earlier to assist her locate and resolve her
financial delinquencies. 
Applicant’s completion of the financial counseling course is entitled to limited
consideration FC MC 20.c. (the person has received or is receiving counseling for the
problem and/or there are clear indications the problem is being resolved or is under
control), even though the course was completed shortly before the hearing, and lasted
only an hour. The more probative evidence is Applicant’s budget that has been in
existence since May 2007. (GE 2) Even though there are still two large debts
outstanding that must be addressed, the presence of a budget provides a concrete
indicator that Applicant is committed to regaining firm control over her finances. 
Applicant repayment of $11,700.00 to fully pay one creditor and settle three of six
creditors are entitled to substantial weight under FC MC 20.d. (the individual initiated a
good-faith effort to repay overdue creditors or otherwise resolve debts) With the help of
her cousin and her accountant, Applicant executed her plan to address her debts. Even
though receipt of the SOR played a significant part in Applicant’s success in settling with
four of six creditors, Applicant is to be commended for paying the debts from her own
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funds rather than creating new debt by taking out a loan. I find for Applicant under the
financial considerations guideline. 
Whole Person Concept (WPC)
As set forth on page 18 of Enclosure 2 of Directive 5220.6, the decision to grant
or deny a security clearance depends on a commonsense assessment of the FC
guideline, and then evaluating that guideline in the context of the general factors of the
whole person. Accumulating more than $49,000.00 in debt to six creditors since 2001
demonstrates serious financial problems. However, a 14-month period of
unemployment was a circumstance that a reasonable 41-year-old person in Applicant’s
position could not have anticipated, especially after she had been told she could expect
a contract extension. Though she should have tackled the debts much sooner than she
did, the 14-month period of unemployment made her increasingly apprehensive about
another long period of unemployment. 
Applicant has made several behavior changes in her financial practices that
persuade me to find for her under the FC guideline. First, she has never attempted to
hide or shy away from the past due debt, although she has learned that the remaining
debts may no longer be legally enforceable. Second, in May or June 2007, Applicant
devised and executed a plan that harvested the pay off or settlement of four out of six
creditors in September 2007. Third, in May 2007, she changed her financial practices by
installing a budget to aid in the management of her financial affairs. The budget is
facilitating payment of her current creditors in advance of when the actual debts are
due. Fourth, she hired an accountant to oversee her business matters. Finally, I am
confident Applicant will resolve the remaining two debts as she had with the other four.
Having considered the record as a whole, the FC guideline is resolved in Applicant’s
favor. 
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:
Paragraph 1 (Financial Considerations, Guideline F): FOR APPLICANT
Subparagraph 1.a. For Applicant
Subparagraph 1.b. For Applicant
Subparagraph 1.c. For Applicant
Subparagraph 1.d. For Applicant
Subparagraph 1.e. For Applicant
Subparagraph 1.f. For Applicant
Subparagraph 1.g. For Applicant
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Conclusion
In light of all of the circumstances presented by the record in this case, it is
clearly consistent with national security to grant Applicant eligibility for a security
clearance. Eligibility for access to classified information is granted. 
                       
Paul J. Mason
Administrative Judge