DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 07-04413 
 SSN: ) 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Daniel F. Crowley, Esquire, Department Counsel 
For Applicant: Pro Se 
 
 
 
______________ 
 
Decision 
______________ 
 
 
CREAN, Thomas M., Administrative Judge: 
 
Applicant submitted his Security Clearance Application (SF 86), on December 9, 
2005. On October 28, 2007, the Defense Office of Hearings and Appeals (DOHA) 
issued a Statement of Reasons (SOR) detailing security concerns for financial 
considerations and personal conduct under Guidelines F and E for Applicant. 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 29, 2007. 
  
 Applicant answered the SOR in writing on January 8, 2008.  He admitted seven 
and denied one of the financial considerations allegations with explanation.  He denied 
the allegation under Guideline E that he falsified information on his security clearance 
application.  He admitted the allegation under Guideline E that he received a General 
 
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discharge (Under Honorable Conditions) from the Navy due to a pattern of misconduct.  
He requested a hearing before an administrative judge.  Department Counsel was 
prepared to proceed on January 31, 2008.  The case was assigned to another 
administrative judge on February 1, 2008, and reassigned to me on February 13, 2008.  
DOHA issued a notice of hearing on March 19, 2008, for a hearing on April 30, 2008.  I 
convened the hearing as scheduled.  The government offered 14 exhibits, marked 
government exhibits (Gov. Ex.) 1 through 14, which were received without objection.  
Applicant testified on his own behalf.  Applicant did not submit any exhibits but the 
record was kept open for him to submit documentation.  Applicant timely submitted 
seven documents, marked App. Ex. A-G, which were admitted to the record without 
objection from Department Counsel. (Gov. Ex. 15, Letter, dated May 27, 2008)  DOHA 
received the transcript of the hearing (Tr.) on May 9, 2008.  Based upon a review of the 
case file, pleadings, exhibits, and testimony, eligibility for access to classified 
information is denied. 
 
Procedural Issues 
 
Department Counsel requested that I take administrative notice of MILPERSMAN 
1910-140, admitted as Court Exhibit I, which governs separation of Navy members for a 
pattern of misconduct.  I have taken administrative notice of the Navy regulation, which 
notes that two non-judicial punishments administered during a current enlistment are 
considered a pattern of misconduct. 
 
Findings of Fact 
 
Applicant is 36 years old and has worked as a technician for a defense contractor 
for over a year.  He left the Navy in 2006 after serving on active duty as an operations 
specialist and master at arms for over 16 years.  He was administratively separated with 
a general discharge under honorable conditions for a pattern of misconduct.  Applicant 
is a high school graduate and has taken some college level courses.  He married 
another active duty Navy sailor, who is now a senior chief (E-8), in 1990.  They have 
three children.  They separated about two years ago and are in the process of divorcing.  
One of the children lives with Applicant and the other two with his wife.  Applicant held a 
security clearance while on active duty. (Tr. 21-22; Gov. Ex. 1, security clearance 
application, dated December 9, 2005)   
 
Applicant and his wife had financial and marital problems.  When they separated, 
he moved board a ship and sent her all of his pay except $400 per month.  He believed 
his wife was taking care of the family finances.  Applicant deployed with his ship, and on 
return learned that his wife had not been making mortgage payments.  Applicant was 
advised to file a Chapter 13 bankruptcy and bring their mortgage payments current.  
Applicant and his wife consulted an attorney and they filed a Chapter 13 bankruptcy on 
January 4, 1999, as alleged in SOR 1.a.  There was a paperwork problem created by 
their attorney so the petition was dismissed and resubmitted on March 24, 1999.  After 
making a few monthly payments and bringing their mortgage current, on the advice of 
their bankruptcy attorney, Applicant and his wife converted the Chapter 13 to a Chapter 
 
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7 bankruptcy on June 23, 2003.  Their debts were discharged in Chapter 7 bankruptcy 
on October 23, 2003.  (SOR allegation 1.b; Tr. 23-26, 52-53; Gov. Ex. 3, bankruptcy 
documents, dated March 2, 1999; Gov. Ex. 4, bankruptcy documents, dated October 
23, 2003) 
 
Additional delinquent debts accumulated after Applicant’s debts were discharged 
in bankruptcy.  The SOR lists six delinquent debts totaling $18,715.  These debts 
include a charged off account to Capital One for $1,174 (1.c); a charged off account for 
Washington Mutual/Providian for $2,232 (1.d); another charged off Capital One account 
for $1,074 (1.e); a judgment from Freedom Acceptance for $3,594 (1.f); a collection 
account to the Department of Defense for $10,192 (1.g); and a collection account to 
Zenith Acquisition for a credit card account of $450 (1.h). (See, Gov. Ex. 5, credit report, 
dated December 28, 2005; Gov. Ex. 7, credit report, dated May 7, 2007; Gov. Ex. 9, 
credit report, dated July 24, 2007; Gov. Ex. 11, credit report, dated October 11, 2007; 
and Gov. Ex. 12, credit report, dated April 23, 2008)  Applicant admitted all of the debts 
with explanation except the Zenith Acquisition debt in allegation 1.h, which he had no 
knowledge.   
 
Applicant sought financial counseling but learned his debt load was such that 
debt consolidation would not assist him.  He is now current with his mortgage and car 
payments.  He and his wife are attempting to sell the home they own together.  He 
hopes to pay his remaining debts with his share of the equity in the house, which is 
calculated at a total of $97,000.  Since separating from his wife, one of their children 
lives with Applicant and the other two with his wife.  Applicant’s monthly income from 
salary and Veteran’s Administration disability is $4,212.  His monthly expenses are 
approximately $2,075 with a discretionary fund remainder of $2,137. (Tr. 41-50) 
 
The first Capital One account, SOR allegation 1.c, is for a credit card account 
charged off for $1,173, and was included in the Chapter 7 bankruptcy discharge. (Tr. 
26-28)  The second Capital One account, SOR allegation 1.e, is also for a credit card 
account and is listed as charged off and also the subject of a judgment for $910.39. 
(Gov. Ex. 14, Judgment, dated September 14, 2007)  Applicant has discussed the 
judgment with the creditor and is attempting to reach a settlement.  (Tr. 28-29, 53-55; 
App. Ex. A, Letter, dated May 9, 2008) 
 
The Washington Mutual/Providian account, SOR allegation 1.d, is for a credit 
card and is charged off for $2,232.  Applicant has written the creditor to settle the 
account but has not heard from them.  (Tr. 31-32) 
 
The Freedom Acceptance account, SOR allegation 1.f, was for computer and 
stereo equipment.  Applicant has been making payments on the account and it is 
current with a balance of about $1,737. (Tr. 29-31, 55-57; App. Ex. D, Account 
statement, dated May 20, 2008; Gov. Ex. 13, Judgment, dated February 27, 2007)  
 
The debt to the Department of Defense for $10,192, SOR allegation 1.g, was for 
the balance of a re-enlistment bonus received by Applicant which he is required to 
 
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repay because he did not complete the terms of the re-enlistment.  Applicant received 
$30,000 for a three year re-enlistment.  He only served two years of the enlistment 
before being released from active duty.  He is required to repay the portion of the re-
enlistment bonus for the time not served.  Applicant has contacted the collection agency 
for the creditor and is attempting to reach a payment agreement.  (Tr. 32-35, 57-58; 
App. Ex. B, Letter, date May 9, 2008) 
 
The Zenith Acquisition account, SOR allegation 1.h, was for a credit card.  
Applicant at first did have knowledge of the debt.  After further inquiry, he acknowledged 
the debt and is making arrangement to make payments. Applicant has renewed his 
efforts to pay this account and requested an agreement to make payments.  (Tr. 35-36, 
58-59; App. Ex. E, Account notice, dated august 18, 2006; App. Ex. G, e-mail, dated 
May 23, 2008; App. Ex. E, account statement, dated August 18, 2006) 
 
Applicant responded “NO” to question 26 on his security clearance application 
which asked in the last seven years had he ever been arrested, charged with, or 
convicted of any offense(s).  Records show that in November 2004, while on active 
duty, Applicant was arrested and charged by civilian authorities with assault and battery. 
(Government Exhibit 6, Federal Bureau of Investigation report, dated December 29, 
2005)  Applicant was in an altercation with another person at a party.  Police were 
called but Applicant departed the party before they arrived.  He later learned that 
charges were filed.  He was required to go to court but all charges were dismissed.  
Applicant did not list the offense on his security clearance application because he 
believed he was not required to do so since the charges were dismissed.  When 
questioned about the offense by security investigators, he told them about the charge 
and explained he did not think it was required to be reported on the security clearance 
application since it was dismissed. (Tr. 50-52, 62-63)  
 
Applicant was administratively separated with a General Discharge under 
Honorable Conditions from the Navy after over 16 years of active duty.  He had 
received two non-judicial punishments during his most recent enlistment. (See, Court 
Exhibit I)  Applicant received a traffic ticket and was required to go to court.  He thought 
his absence from his duty station was approved by his chief through his leading petty 
officer.  His absence was not approved and he received non-judicial punishment.  
Applicant believes his wife’s fellow chief petty officers were working to cause him 
problems at his wife’s request.  Applicant was having marital problems and he wanted 
to be discharged from the Navy and received a second non-judicial punishment. (Tr. 20-
21)  Applicant is attempting to have the discharge upgraded to Honorable Discharge. 
(Tr. 60-61; App. Ex. F, Application for review of discharge, undated) 
 
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 
 
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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 
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. 
 
Analysis 
 
Financial Consideration: 
 
 Under 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. (AG ¶ 18)  Similarly, an individual who is financially 
irresponsible may also be irresponsible, unconcerned, or careless in their obligations to 
 
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protect classified information. Behaving responsibly or irresponsibly in one aspect of life 
provides an indication of how a person may behave in other aspects of life.  
 
 A person’s relationship with his creditors is a private matter until evidence is 
uncovered demonstrating an inability or unwillingness to repay debts under agreed 
terms.  Absent evidence of strong extenuating or mitigating circumstances, an applicant 
with a history of serious or recurring financial difficulties is in a situation of risk 
inconsistent with the holding of a security clearance.  An applicant is not required to be 
debt free, but is required to manage his finances in such a way as to meet his financial 
obligations.  Applicant’s delinquent debts are a security concern raising Financial 
Consideration Disqualifying Conditions (FC DC) ¶19(a) (inability or unwillingness to 
satisfy debts), and FC DC ¶ 19(c) (a history of not meeting financial obligations),  
Applicant accumulated delinquent debts because of an inability to pay his financial 
obligations.  The bankruptcy discharges are not a security concern since bankruptcy is 
a legal and permissible means of resolving debts.  His debts at the time were resolved 
through the process.  However, the facts causing the bankruptcy and the financial 
actions taken after bankruptcy discharge should be examined to determine financial 
responsibility and the impact on security worthiness.   
 
 Financial Considerations Mitigating Conditions (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.  Some of the delinquent debts have 
only recently been addressed by Applicant.  These debts are still not paid so they are 
current debts.  There are a number of delinquent debts from various sources such as 
credit cards and a pay advance.  Since they are current debts that have not been paid, 
they cast doubt on Applicant’s current reliability, trustworthiness, or good judgment.  
 
 FC MC ¶ 20(b) (the conditions that resulted in the financial problems 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) has some application to Applicant’s 
situation.  Applicant had financial problems after he and his wife had marital problems, 
and she did not pay their bills as required.  Applicant initially failed to take responsible 
action on the delinquent debts, even though he is now trying to act responsibly towards 
the debts.  Of the six debts listed in credit reports, one was discharged in the 
bankruptcy, and one is being paid and the account is current.  He recently contacted the 
other creditors.  He has not heard from one creditor.  He has been trying to make 
arrangements with the three other creditors, including the creditor for the largest debt.  
He has not yet made any arrangements and has not started to make any payments on 
these debts.  He has not established responsible action towards his debts under the 
circumstances, so the mitigating condition does not apply. 
 
 FC MC ¶ 20(a) (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) does not apply.  Applicant attempted to seek financial counseling, but 
 
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determined that it would not be assistance to him.  This mitigating condition does not 
apply since he has not received any formal financial counseling.  
 
 FC MC ¶ 20(d) (the individual has initiated a good-faith effort to repay the 
overdue creditors or otherwise resolve debts) does not application for Applicant.  For FC 
MC ¶ 20(d) to apply, there must be an “ability” to repay the debts, the “desire” to repay, 
and “evidence” of a good-faith effort to repay.  A systematic, concrete method of 
handling debts is needed.  The debts arose because of the marital problems with his 
wife, his discharge from the Navy, and his wife’s failure to pay all of their debts while he 
was deployed.  Applicant initially failed to make payment arrangements on all of his 
debts because some he was not aware of and the others he simply neglected.  
Applicant’s action on most of the debts has been to contact creditors to seek 
arrangements to pay the debts.  Applicant presented no information to show he has a 
plan to pay the debts or any action taken to make payments.  He has not been able to 
complete arrangements with creditors for payment plans.  An applicant is not required to 
be debt free, but is required to act responsibly in regard to his finances.  A promise to 
make arrangements or make future payments is not sufficient to indicate a good-faith 
effort to pay debts or an indication of acting responsibly towards the debts.  Applicant 
has not presented sufficient information to mitigate security concerns for financial 
considerations. 
 
Personal Conduct 
 
 A security concern is raised because conduct involving questionable judgment, 
untrustworthiness, unreliability, 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. (AG ¶ 15)  Personal conduct is always a security concern 
because it asks the central question does the person’s past conduct justify confidence 
the person can be entrusted to properly safeguard classified information.  The security 
clearance process depends on the individual providing correct and accurate information.  
If a person conceals or provides false information, the security clearance process 
cannot function properly to ensure that granting access to classified information is in the 
best interest of the United States Government.  Applicant’s incomplete answer to a 
question concerning an arrest for assault and battery charge on his security clearance 
application raises security concerns under Personal Conduct Disqualifying Condition 
(PC DC) ¶ 16(a) (the deliberate omission concealment, or falsification of relevant and 
material facts from any personnel security questionnaire, personal history, or similar 
form used to conduct investigations determine security eligibility or trustworthiness).   
 
 Applicant denied intentional falsification.  He believed he did not have to list his 
arrest for assault and battery. Since the case was dismissed, he did not consider it an 
offense.  While there is a security concern for an omission, concealment, or falsification 
of a material fact in any written document or oral statement to the government when 
applying for a security clearance, every omission, concealment, or inaccurate statement 
 
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is not a falsification.  A falsification must be deliberate and material.  It is deliberate if it 
is done knowingly and willfully.  Applicant knew of arrest but since the charge was 
dismissed he believed it was not required to be listed.  While the question on the 
security clearance application is clear, a reader not schooled in legal matters could 
reasonably believe a dismissed offense is not considered as having happened.  
Applicant belief is reasonable and shows he did not deliberately fail to provide the 
correct information with the intent to deceive.   
 
 In addition, Applicant’s discharge from the Navy for a pattern of misconduct 
raises a security concern under PC DC ¶ 16(e) (personal conduct, or concealment of 
information about one’s conduct, that creates a vulnerability to exploitation, 
manipulation, or duress, such as (1) engaging in activities which, if known, may affect 
the person’s personal, professional, or community standing, . . .).  In regard to this 
issue, I considered Personal Conduct Mitigating Conditions (PC MC) ¶ 17(c) (the 
offense is so minor, or so much time has passed, or the behavior is so infrequent, or it 
happened under such unique circumstances that it is unlikely to recur and does not cast 
doubt on the individual’s reliability, trustworthiness, or good judgment), and PC MC ¶ 
19(d) (the individual has acknowledged the behavior and obtained counseling to change 
the behavior or taken other positive steps to alleviate the stressors, circumstances, or 
factors that caused untrustworthy, unreliable, or other inappropriate behavior, and such 
behavior is unlikely to recur); and PC MC ¶ 17(e) (the individual has taken positive steps 
to reduce or eliminate vulnerability to exploitation, manipulation or duress).  Applicant’s 
discharge was precipitated by his marital problems which caused the pattern of 
misconduct.  He was willing to accept the discharge after many years of service just to 
be out of the Navy and the influence his wife had on his career through other chief petty 
officers.  His actions could indicate he acted irresponsibly towards his career thus 
indicating he would act irresponsibly towards protecting classified information.  
However, his actions were caused more by marital issues than irresponsible conduct.  
Additionally, an administrative discharge for a pattern of misconduct could be a means 
of exploitation, manipulation or duress.  Applicant’s discharge was a one time event and 
happened under the unusual circumstances of marital problems.  It is not likely to recur.  
He took responsibility and positive steps by applying to have his discharge upgraded.  
He is not under stress for the discharge and it does not affect his trustworthiness or 
reliability.  I find for Applicant as to Personal Conduct.   
 
“Whole Person” Analysis  
 
 Under the whole person concept, the Administrative Judge must evaluate an 
applicant’s security eligibility by considering the totality of the applicant’s conduct and all 
the circumstances. An 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 
 
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duress; and (9) the likelihood of continuation or recurrence.” Under AG ¶ 2(c), the 
ultimate determination of whether to grant a security clearance must be an overall 
common sense 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.  I considered Applicant’s over 16 
years of active duty in the Navy during which he successfully held a security clearance.  
He is taking positive steps to upgrade his discharge. I considered that his problems 
were precipitated by marital issues.  I considered that he has delinquent debt that he is 
just by contacting creditors to make payment arrangements.  He has not completed the 
arrangements or made any payments.  He has the financial means to repay his debts 
with his creditors, but he is only now starting the process of payment.  Applicant is now 
attempting to resolve his financial issues, and has the ability to enter a plan to pay his 
delinquent debts.  If he establishes adequate arrangements with creditors and makes 
payments according to the plans, he may in the future be able to establish responsibly 
financial behavior. 
 
On balance, the record evidence leaves me with questions or doubts as to 
Applicant’s eligibility and suitability for a security clearance.  For the reasons stated, I 
conclude Applicant has not mitigated the security concerns arising from financial 
considerations.  He has mitigated security concerns for personal conduct.  
 
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:    For Applicant 
Subparagraph 1.b:    For Applicant 
Subparagraph 1.c:    For Applicant 
Subparagraph 1.d:    Against Applicant 
Subparagraph 1.e:    Against Applicant 
Subparagraph 1.f:    For Applicant 
Subparagraph 1.g:    Against Applicant 
Subparagraph 1.h:    Against Applicant 
 
 Paragraph 2, Guideline E:   FOR APPLICANT 
 
  Subparagraph 2.a:    For Applicant 
  Subparagraph 2.b:    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 national security to grant Applicant eligibility for a security 
clearance.  Eligibility for access to classified information is denied. 
 
 
 
_________________ 
THOMAS M. CREAN 
Administrative Judge