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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
------------------------ )       ISCR Case No. 07-07693
SSN: ---------------- )
)
Applicant for Security Clearance )
Appearances
For Government: Alison O’Connell, Esquire, Department Counsel
For Applicant: Pro Se
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Decision
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MATCHINSKI, Elizabeth M., Administrative Judge:
Applicant submitted his security clearance application (SF 86) on October 13,
2006. On October 22, 2007, the Defense Office of Hearings and Appeals (DOHA)
issued a Statement of Reasons (SOR) to Applicant detailing the security concerns
under Guideline F. The action was taken under 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 effective
within the Department of Defense for SORs issued after September 1, 2006. 
 
Applicant acknowledged receipt of the SOR on November 2, 2007. He answered
the SOR in writing on November 16, 2007, and indicated he did not want a hearing. On
December 7, 2007, the government notified Applicant of its request for a hearing before
an administrative judge pursuant to ¶ E3.1.7 of the Directive. Department Counsel was
prepared to proceed on January 4, 2008. On January 10, 2008, I scheduled a hearing
for February 14, 2008.
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I convened the hearing as scheduled. Before the introduction of any evidence,
the government withdrew SOR allegations ¶¶ 1.d and 1.g (duplicate listing of ¶¶ 1.b and
1.c, respectively). The government then moved to amend SOR ¶ 1.f to allege that
Applicant was indebted to the listed creditor as the result of a district court judgment
entered in May 2001 in the approximate amount of $5,761 until that judgment was
satisfied in July 2005. The motions were granted without any objections from Applicant.
Four government exhibits (Ex. 1-4) and two Applicant exhibits (Ex. A-B) were received
into evidence without objection and Applicant testified, as reflected in a hearing
transcript (Tr.) received by DOHA on February 27, 2008. Based upon a review of the
case file, pleadings, exhibits, and testimony, eligibility for access to classified
information is denied.
Findings of Fact
In the SOR as amended at hearing, DOHA alleged under Guideline F, financial
considerations, that Applicant owes delinquent debt of about $53,569 (SOR ¶¶ 1.a, 1.b,
1.c, 1.e, 1.h, and 1.i), and that a judgment of $5,761 had been awarded against him in
May 2001 that he paid off in July 2005 (SOR ¶ 1.f, as amended). In his response to the
SOR, Applicant admitted the debts with the exception of the $627 in ¶ 1.i. After
consideration of the evidence of record, I make the following findings of fact.
Applicant is a 48-year-old line operator who has worked for a defense contractor
most recently since December 2003. He makes fiber optic cable and runs a crew of six
(Tr. 36). He had previously worked for the company from February 1988 to September
2002 when he was laid off (Ex. 1, Tr. 35-39). He held a security clearance until
November 2007 when it was withdrawn pending final adjudication of his clearance. He
seeks a security clearance for access to secure areas of the facility (Tr. 37-38).
On graduating from high school, Applicant enlisted in the United States Air Force
(Tr. 35). He served on active duty from November 1979 to September 1987, and then
went to work for his present employer (Ex. 1). He held a security clearance while in the
military (Tr. 38).
Applicant sent his mother $20,000 from his savings when she needed knee
surgery following a fall at her home that he recollects happened in 1999 or 2000 (Tr. 28,
42-44). She lacked health insurance to cover the cost (Tr. 28, 44), even though she was
employed as a janitor in a retirement home (Tr. 43). Applicant was behind in some of his
personal credit card obligations when he gave his mother the $20,000 (Tr. 45). When
she needed another surgery about a year or so later, he sent her another $5,000 (Tr.
44, 46). He borrowed the money from a friend and repaid it in a lump sum in about early
2006 (Tr. 46).
Some of Applicant’s consumer credit accounts began to fall delinquent in about
2000, even though he was employed full time. In about December 2000, a credit card
lender filed for a judgment to collect a $4,813 charge-off balance. In May 2001, the
lender obtained a $5,761 default judgment against Applicant (SOR ¶ 1.f). Applicant was
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permitted to make monthly payments of $100 on the debt at his request (Ex. 2, Tr. 55-
56).
As of January 2001, Applicant owed a charged off balance of $12,919 on a credit
card account that was $2,345 past due (SOR ¶ 1.c). As of October 2002, the debt had
risen to $14,866 and was in collection (Ex. 4). Another credit card lender reported a
$4,096 charged off balance as of January 2001 (SOR ¶ 1.e). In June 2002, it was
placed for collection with its current assignee (Ex. 4).
In about August 1999, Applicant took out an unsecured loan of $5,318. It was
refinanced in July 2001 with a balance of $5,477. In about May 2002, the creditor
charged off a balance of $6,568 (SOR ¶ 1.b) (Ex. 4).
After a job layoff in July 2002, Applicant was unemployed until his employer
recalled him in December 2003 (Ex. 1). He collected unemployment compensation of
about $300 every two weeks, which went to pay for rent, telephone, and food (Tr. 57-
58). Had he been working, his earnings would have been about $500 to $600 per week
(Tr. 57-58). Struggling financially (“I was broke. I had no money at all.” Tr. 68),
Applicant stopped paying on his court judgment (SOR ¶ 1.f) in April 2003. He was
ordered to pay $2,500 immediately and then $100 monthly thereafter. Applicant cashed
in his pension of about $25,000 (Tr. 55-56), which went to paying the $2,500 (Tr. 56)
and living expenses (Tr. 67-68).
In about January 2003, Applicant opened a wireless telephone account in his
name for a 17-year-old goddaughter as a birthday present. The girl’s mother had
promised to pay the $29 monthly fee (Ex. 4, Tr. 52). The girl incurred substantial
charges and her mother didn’t pay the bills (Tr. 53-54). Applicant confronted her about
the nonpayment but she still refused to pay (Tr. 52-53). A $627 debt balance was
eventually placed for collection (SOR ¶ 1.i) (Ex. 4). In about 2002 or 2003, Applicant lent
$3,000 to a friend who did not repay him (Tr. 78-79).
On his return to work in December 2003, Applicant made no effort to pay his long
delinquent debts as he had fallen behind in other bills during his 18 months of
unemployment (Tr. 29). He stopped making his $100 monthly payments on the
judgment debt in about August 2004, and he was ordered to appear at a contempt
hearing in July 2005 (Tr. 56). Applicant paid a settlement amount in excess of $1,000 in
July 2005 to fulfill his obligation to the creditor. He used some of his pension monies to
pay the debt (Tr. 56-57).
In or before June 2004, Applicant opened a telephone services account in his
name for a girlfriend who had bad credit (“You do stupid things when you’re in love.” Tr.
54). In January 2005, the creditor placed a $211 debt balance in collection (SOR ¶ 1.a)
(Ex. 4).
On October 13, 2006, Applicant completed a Questionnaire for Sensitive
Positions (SF 86) in application for a security clearance. He responded affirmatively to
A collection agency took on the debt in June 2006 (Ex. 4). Applicant admitted the debt when he answered1
the SOR, but testified at his hearing that he did not recognize the debt and thought he had only one account
(SOR ¶ 1.f) with the original creditor (Tr. 49). This debt was not reported by Equifax in a subsequent credit
check in September 2007 (Ex. 3), but it appears on the consolidated credit report of October 2006 (Ex. 4).
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questions 28A. “LAST 7 YRS, OVER 180 DAYS DELINQUENT ON ANY DEBTS?” and
28B. “CURRENTLY OVER 90 DAYS DELINQUENT ON ANY DEBTS?” and listed an
unpaid credit card balance of $6,568.24 since January 2001 (SOR ¶ 1.b).  He also
reported under question 29 concerning any civil actions in the past seven years that he
had been under court order to repay the debt in SOR ¶ 1.f at $100 monthly (Ex. 1).
As of October 25, 2006, the credit bureaus reported Applicant owed several
delinquent balances in collection: $211 on SOR ¶ 1.a, $19,415 on SOR ¶ 1.c, $9,726 on
SOR ¶ 1.e, $16,109 (original installment account debt $6,922) on SOR ¶ 1.h,  and $6271
on SOR ¶ 1.i. The delinquent debt Applicant had reported on his SF 86 was listed as
charged off with a balance owed of $6,568 (SOR ¶ 1.b). Applicant was reportedly
paying a revolving charge with a credit union on time and it had a balance of $2,279.
(Ex. 4) In early 2007, he began contributing 10% of his pay to his pension at work (Tr.
67-68).
On July 18, 2007, DOHA asked Applicant to provide documentation of any
repayment efforts, to complete a personal financial statement, and to furnish copies of
his last two pay stubs. He responded on September 4, 2007, submitting a personal
financial statement reflecting a net remainder of $976.26 monthly after payment of
expenses and $150 toward a $1,629.55 balance on a credit card account with a credit
union (Ex. 2). Applicant’s reported income included daily overtime earnings (Tr. 64-65).
He provided no indication of any efforts to resolve his delinquent debts (Ex. 2).
In September or October 2007, Applicant lent $5,000 to a teenage goddaughter
at her request so that she could buy a car. He borrowed the $5,000 from a friend who
wants it repaid in a lump sum within two years (Tr. 48-49, 70-72, 75-82). The
goddaughter has been repaying Applicant at $100 per month (Tr. 80-81), but as of mid-
February 2008, Applicant has not repaid the $5,000 he borrowed (Tr. 48). The girl’s
mother is taking care of Applicant’s cellular phone charges for him “to get the payment
down” in return for the favor (Tr. 74-75).
Equifax Information Services reported on September 27, 2007, that Applicant
owed collection debts of $7,481 (SOR ¶ 1.b) and $211 (SOR ¶ 1.a) and $1,395 on a
credit card account that was current (Ex. 3). Applicant obtained a copy of his credit
report and he began contacting his creditors in October 2007. On October 17, 2007, the
collection agency servicing the debt in SOR ¶ 1.b offered to settle the $7,593.17
balance on receipt of a lump sum payment of $4,555.90 by November 16, 2007 (Ex. B).
On October 22, 2007, Applicant paid another collection agency $627.43 to satisfy the
debt in SOR ¶ 1.i (Ex. A). In December 2007, the assignee attempting to collect the
$19,415 debt in SOR ¶ 1.c offered to settle for about $7,000 (Tr. 60).
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As of mid-February 2008, Applicant was still working on saving the money to
settle the debt in SOR ¶ 1.b (Tr. 31). Due to a 3.1% increase in his pay (Tr. 77),
Applicant had accumulated $4,400 in his checking account. He had set $3,000 of it
aside for the debt in SOR ¶ 1.b and the rest was intended for bills (Tr. 69).
Applicant plans to repay his debts as quickly as he can (tr. 34). As of February
2008, he was working eight to 12 hours of overtime per week. Over the past three
years, his overtime hours have averaged out to two days per week (Tr. 39-40).
Applicant estimates about $176 remaining each month due to less overtime than in
September 2007 (Tr. 65-67). Applicant will provide financial assistance to this family
members (primarily his mother) in the future if necessary. He might put $100 in his
mother’s purse when he goes to see her but does not send her any money on a regular
basis (Tr. 47). Over the years he has been “burned” at least once a year by friends who
have not repaid funds borrowed from him. He does not intend to lend money to friends
in the future (Tr. 78-79). Applicant has not opened any new credit card accounts in the
past few years (Ex. 3, Ex. 4, Tr. 73).
Policies
When evaluating an Applicant’s suitability for a security clearance, the
administrative jdge 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 not inflexible rules of law. Instead, recognizing the
complexities of human behavior, these guidelines are applied in conjunction with the
factors listed in the adjudicative process. The administrative judge’s over-arching
adjudicative goal is a fair, impartial and common sense decision. According to AG ¶
2(c), the entire process is a conscientious scrutiny 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 ¶ 2(b)
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
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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
transcends normal duty hours and endures throughout off-duty hours. 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.
 
Section 7 of Executive Order 10865 provides that decisions shall be “in terms of
the national interest and shall in no sense be a determination as to the loyalty of the
applicant concerned.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites
for access to classified or sensitive information).  
Analysis
Guideline F, Financial Considerations
The security concern relating to the guideline for financial considerations is set
out in AG & 18:
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. 
Applicant has a history of financial delinquency since about 2000. While a debt
that went to court judgment (SOR ¶ 1.i) was eventually satisfied with pension monies,
about $52,000 in delinquent debt was still outstanding when he applied for his clearance
in October 2006. As his indebtedness continued to mount (e.g., the debt balance of
SOR ¶ 1.b alone went from $6,568 to $7,481 by September 2007), he borrowed $5,000
from a friend that he has not repaid. Significant security concerns are raised by “inability
or unwillingness to satisfy debts” (AG ¶ 19(a)) and by “a history of not meeting financial
obligations” (AG ¶ 19(c)).
Applicant attributes his financial problems to him giving his mother $25,000 “like
between 2000—1999 to 2001, 2002" when she needed two surgeries and had no
insurance coverage, and to him being unemployed for 18 months after a job layoff.
Unforeseen medical emergency and unemployment are circumstances that implicate
AG ¶ 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
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medical emergency, or a death, divorce or separation), and the individual acted
responsibly under the circumstances”). Applicant admits he was behind in at least some
of his obligations before the situation with his mother arose, and he offered no credible
explanation for his failure to remain current when he had about $20,000 in savings. Yet,
his gift of monies to his mother was reasonable under the circumstances, and there is
no evidence that Applicant knew he was going to be laid off when he depleted his
savings account to help his mother.
After he returned to work in December 2003, Applicant satisfied the court
judgment (SOR ¶ 1.f) in July 2005 and a telephone debt (SOR ¶ 1.i) in October 2007.
Repayment of a court judgment in response to a contempt citation does not qualify for
mitigation under AG ¶ 20(d) (“the individual initiated a good-faith effort to repay overdue
creditors or otherwise resolve debts”), but his October 2007 attempts  to make payment
arrangements with his creditors and his satisfaction of the debt in ¶ 1.i predate his
receipt of the SOR. While these efforts were in good faith, they are too recent to enable
the affirmative finding that Applicant is likely to resolve his financial issues in the near
future. The debt balance is substantial in relation to his income. As of February 2008, he
reported about $176 remaining after payment of his monthly expenses. Even if he were
to manage to settle the debts for less than their full amounts, it would take several years
before he paid them off.
Applicant has also made poor financial decisions in the past few years that raise
doubts for his judgment and reliability. Knowing he had several outstanding delinquent
debts and one court judgment to satisfy, Applicant lent money to others when he could
not afford to do so.  A friend who borrowed $3,000 from Applicant in 2002 or 2003 left
town without repaying him. In about June 2004, Applicant opened a wireless telephone
account in his name (SOR ¶ 1.a) for a girlfriend who had bad credit. When she failed to
abide by her promise to pay, he “got silly and didn’t make the payments.” (Tr. 51-52)
More recently, in September 2007 he borrowed $5,000 from a friend so that his 17-year-
old goddaughter could buy herself a vehicle. Applicant testified with no rebuttal from the
government that she is repaying him at $100 per month plus her mother is covering the
cost of his cell phone in return for the favor. However, he has to repay his lender the
$5,000 in a lump sum by September 2009. There is no evidence that he is setting the
$100 aside for that purpose. He testified he has $4,400 in checking, $3,000 of which is
intended to settle the debt in SOR ¶ 1.b, and the remainder is for bills (Tr. 69). Applicant
now promises to refrain from lending money to friends in the future because he has
been “burned at least once a year” (Tr. 78), but that is not enough to overcome the
substantial financial considerations concerns that exist in this case.
Whole Person Concept
Under the whole person concept, the administrative judge must evaluate an
Applicant’s eligibility for a security clearance by considering the totality of the Applicant’s
conduct and all the circumstances. The administrative judge should consider the nine
adjudicative process factors listed at AG ¶ 2(a):
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(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) 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.
Under AG ¶ 2(c), the ultimate determination of whether to grant eligibility for a security
clearance must be an overall commonsense judgment based upon careful consideration
of the guidelines and the whole person concept. 
I considered the potentially disqualifying and mitigating conditions in light of all
the facts and circumstances surrounding this case. Applicant lost his job through no
fault of his own when he had no savings to draw on. He is entitled to a reasonable
period of time to reestablish himself financially, and there is no evidence that he is
behind in his day-to-day obligations. However, during the past four years he has
repeatedly put himself and his friends before his obligations to his creditors. Given the
extent of his unresolved debt and his track record of questionable financial decisions, I
am unable to conclude at this time that it is clearly consistent with the national interest
to grant him access.
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, Guideline F: AGAINST APPLICANT
Subparagraph 1.a: Against Applicant
Subparagraph 1.b: Against Applicant
Subparagraph 1.c: Against Applicant
Subparagraph 1.d: Withdrawn
Subparagraph 1.e: Against Applicant
Subparagraph 1.f: For Applicant
Subparagraph 1.g: Withdrawn
Subparagraph 1.h: Against Applicant
Subparagraph 1.i: For Applicant
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Conclusion
In light of all of the circumstances presented by the record in this case, it is not
clearly consistent with the national interest to grant Applicant eligibility for a security
clearance.  Eligibility for access to classified information is denied.
                                           
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ELIZABETH M. MATCHINSKI
Administrative Judge