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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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---------------------- )       ISCR Case No. 07-11338
SSN: ----------- )
)
Applicant for Security Clearance )
Appearances
For Government: Stephanie C. Hess, Esquire, Department Counsel
For Applicant: Pro Se
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Decision
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CURRY, Marc E., Administrative Judge:
On October 28, 2007, the Defense Office of Hearings and Appeals (DOHA)
issued to Applicant a Statement of Reasons (SOR) detailing the security concern under
Guidelines 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. 
DOHA received Applicant’s answer, requesting a hearing, on November 27,
2008. I received the case assignment on December 20, 2007. DOHA issued a notice of
hearing on January 24, 2008, and I convened the hearing as scheduled on February 7,
2008. During the hearing, I received three government exhibits, three Applicant exhibits,
and the testimony of two Applicant witnesses. Applicant attempted to move a fourth
exhibit into the record. Department Counsel objected because she had not seen it
before the hearing. I identified it, reserving judgment on its admissibility until
The proposed exhibit was 43 pages long.1
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Department Counsel had an opportunity to review it after the hearing . Department1
Counsel reviewed it and withdrew her objection, whereupon I received it. I received the
transcript on February 27, 2008. Based upon a review of the case file, pleadings,
exhibits, and testimony, eligibility for access to classified information is denied.
Preliminary Ruling
SOR subparagraphs 1.h and 1.i allege delinquencies owed to “unknown”
creditors. Because these allegations are vague and overbroad, I have resolved them in
Applicant’s favor without further discussion. 
Findings of Fact
Applicant is a 47-year-old, married woman with one adult child. Both she and her
husband are professional truck drivers. He has a twelfth grade education (Tr. 34).
In 1997, Applicant and her husband started a trucking business. They financed
the purchase of two eighteen-wheelers for approximately $230,000. Typically, they
drove one together, and either leased the other or hired employees to drive it (Tr. 46,
49).
The business struggled. Applicant and her husband had trouble finding
competent employees, and they underestimated the vehicles’ maintenance costs (Tr.
46). When Applicant experienced a serious medical crisis in 2001, everything
“snowballed” (Tr. 25). Because they had no medical insurance, they incurred
tremendous out-of-pocket health care expenses and grew increasingly unable to pay
their business expenses.
In October 2000, Applicant and her husband filed for Chapter 7 bankruptcy
protection (Exhibit D). The court discharged approximately $290,000 of business and
personal debt (Exhibit D at 11). 
Although Applicant and her husband had to return one of the trucks to the
creditor as part of the bankruptcy process, they were able to continue operating the
business. They failed, however, to set aside funds in an escrow account to pay their
federal income taxes (Tr. 50). In 2002, they were unable to pay them when due (Id.).
With the help of their accountant, Applicant and her husband arranged an installment
plan and paid an average of $200 per month (Tr. 49-51, 64).
Applicant and her husband were again unable to pay their federal income taxes
in 2003 and 2004. They arranged installment plans for those years also (Tr. 50). In
2003, they “saved up and splurged” on two Caribbean vacations (Tr. 42, Exhibit 1).
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When Applicant and her husband were unable to pay their federal income taxes
in 2004, their accountant advised them that the Internal Revenue Service (IRS) did not
allow taxpayers to arrange installment plans for more than three consecutive years (Tr.
51). They then did not file their 2004 income tax return (Tr. 56).
Applicant experienced another major medical problem requiring surgery in 2005
(Tr. 70). In early 2006, Applicant and her husband filed both their 2004 and 2005
income tax returns. At that time, they had paid approximately $2,735 toward the 2002
and 2003 delinquencies through the installment plans (Exhibit E). Through their
accountant, they then began negotiating an offer and compromise (Tr. 57). 
The accountant worked on a settlement with the IRS for approximately a year
before quitting abruptly (Tr. 57). In December 2007, the IRS froze their bank account,
obtained a lien against their property for $61,838, and began garnishing Applicant’s
husband’s wages (Exhibit C, Tr. 29). Currently, Applicant’s husband has paid
approximately $970 through the garnishment (Exhibit B). Their bank account remains
frozen (Tr. 29, 33). 
Applicant also owes approximately $11,000 in delinquent medical expenses, as
alleged in SOR subparagraphs 1.b through 1.g. She denied the debt listed in SOR
subparagraph 1.d. She has not notified the creditor of her dispute.
Over the years, Applicant has intermittently made payments ranging from $10 to
$240 on her medical delinquencies (See Exhibit E at 6-13). She has not made any
payments since June 2007 (Exhibit 6 at 9). She intends to resume payments after she
and her husband satisfy their remaining income tax delinquencies.
Applicant and her husband have retained another accounting firm to help resolve
the tax delinquencies (Exhibit A). Their goal is to satisfy the tax delinquencies, then
“move on to a plan that will pay the medical [bills]” (Tr. 25).
Applicant has not sought money management counseling. Recently, he read a
self-help book by a prominent money management expert, and has been incorporating
the book’s lessons into their daily financial plan (Tr. 35). Applicant and her husband
estimate their delinquencies wil be satisfied in three years.
Applicant and her husband ended their business in 2005. Since then Applicant
has been working for the same company.
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.
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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 overarching
adjudicative goal is a fair, impartial and common sense decision. According to AG ¶
2(c), the entire process is a 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. 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. 
Analysis
Financial Considerations
Under this guideline, “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” (AG
¶ 18). Moreover, “an individual who is financially overextended is at risk of having to
engage in illegal acts to generate funds” (Id.).
Applicant’s history of financial problems, and failure to file her 2004 federal
income taxes on time triggers the application of AG ¶¶ 19(a), “inability or unwillingness
to satisfy debts,” 19(c), “a history of not meeting financial obligations,” 19(e), “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,”
and 19(g), “failure to file Federal, state, or local income tax returns as required.”
Applicant’s financial problems were originally caused by her struggling business and her
illness. When they became overwhelming, she filed for Chapter 7 bankruptcy protection
in 2000. Shortly after the court discharged her debts, however, Applicant’s financial
problems recurred. In 2003, as Applicant was increasingly losing control of her finances
again, she spent money on two Caribbean vacations. Consequently, although her
problems were originally caused by circumstances beyond her control, she did not deal
with them responsibly enough for 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 medical emergency, or a death, divorce, or separation),
and the individual acted responsibly under the circumstances,” to apply.
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I have considered the remaining mitigating conditions and conclude they do not
apply either. Applicant and her husband have outlined a debt repayment plan, and have
retained an accounting firm for assistance with their taxes. However, the plan is sketchy
at best, and the only payments they has made thus far have been through her
husband’s wage garnishment. Moreover, Applicant denied one of the delinquencies but
has taken no steps to resolve the dispute. I conclude Applicant’s finances remain a
security concern.
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): “(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.
Applicant’s struggling business and her major medical problems contributed to
her financial problems. Her limited education was also a factor. However, her financial
problems recurred after a Chapter 7 bankruptcy discharge. Although she has taken
steps to get her finances under control, it is too soon to conclude they no longer pose a
security concern in light of the remaining amount of the delinquencies and their
recurrent nature. Evaluating this case in the context of the whole person, I conclude
Applicant’s financial problems remain a security concern. Clearance is denied.
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
Subparagraphs 1.a - 1.g: Against Applicant
Subparagraphs 1.h - i.i: For Applicant
Subparagraph 1.j: Against 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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MARC E. CURRY
Administrative Judge