DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 07-05316 
 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 May 23, 2005.  
On November 16, 2007, the Defense Office of Hearings and Appeals (DOHA) issued a 
Statement of Reasons (SOR) detailing security concerns for financial considerations 
under Guideline F 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 27, 2007. 
  
 Applicant answered the SOR in writing on December 20, 2007.  He admitted that 
the financial accounts were his accounts but denied any security concerns for the 
financial considerations allegations in the SOR with explanation.  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 
 
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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 six exhibits, marked Government exhibits (Gov. 
Ex.) 1 through 6, which were received without objection.  Applicant submitted nine 
documents, marked Applicant Exhibits (App. Ex.) A-I, which were received without 
objection.  Applicant testified on his own behalf.  The record was left open for Applicant 
to submit additional documents.  Applicant timely submitted five document, marked App. 
Ex. J-M.  The documents were admitted into the record without objection from 
Department Counsel.  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 granted 
 
Findings of Fact 
 
Applicant is 43 years old and has worked for the past three years as a machinist 
in a Navy shipyard.  He retired from active duty in the Navy as a petty officer first class 
(E-6) after over 20 years service as a machinist in 2004.  He held a security clearance 
while on active duty. (Gov. Ex. 1, Security Clearance Application, dated May 23, 2005; 
App. Ex. G, Discharge Form 214, dated June 30, 2004)  He has been married three 
times with a child he supports from his first marriage.  He has been married to his 
present wife for over nine years.  (Tr. 68-69)  Applicant and his wife have a combined 
monthly income of $6,687, with combined monthly expenses of $3,646, leaving 
combined monthly discretionary funds of over $3,200.  (Tr. 68-72; App. Ex. H, Personal 
financial statement, dated April 29, 2008; App. Ex. J, pay stubs, various dates) 
 
Credit reports and the SOR have five delinquent debts: a delinquent furniture 
account for $2,385 (SOR 1.a); a charged off account for $1,973 (SOR 1.b); an account 
placed for collection for for $13,580 (SOR 1.c); a judgment for $1,973 (SOR 1.d); and a 
delinquent account for $762 (SOR 1.e).  (Gov. Ex. 2, credit report, dated November 15, 
2005; Gov. Ex. 3, credit report, dated July 5, 2007; Gov. Ex. 5, credit report, dated 
January 10, 2008; Gov. Ex. 6, Judgment, dated December 10, 2002) 
 
Applicant did not purchase any furniture from the creditor listed in SOR allegation 
1.a.  As soon as he learned of the delinquent debt listing on his credit report, he wrote 
the creditor disputing the account. (Tr. 20-21, 41-44; Applicant Exhibit F Letter, undated)  
The account has been removed from his credit report.  (Government Exhibit 5, credit 
report, dated January 10, 2008; Applicant Exhibit A, dated March 6, 2008) 
 
The debts listed in SOR allegations 1.b and 1.d are the same debt.  SOR 
allegation 1.b is the debt to the original creditor, and SOR allegation 1.d is the account 
as a judgment.  The account was his third wife’s account which she incurred before she 
married Applicant.  When they married, the creditor listed Applicant as an authorized 
user and also responsible for the card payments.  When Applicant leaned of the 
delinquent account, he paid the judgment in full in July 2004, thus settling the account.  
(Tr. 24-28, 44-45; App. Ex. C, paid in full letter, dated December 19, 2007) 
 
 
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Applicant purchased a used car in 1996, financed by the creditor listed in SOR 
allegation 1.c.  At the time, Applicant was on active duty in the Navy stationed on a ship 
based in California.  He listed as his home address his mother’s house in California.  
After returning from a deployment, Applicant moved the car to Virginia where it was 
registered with the required and accepted insurance coverage.  Applicant paid the loan 
by allotment for at least two years.  When he returned from a deployment, he learned 
the car had been repossessed.  He was informed by the creditor that sometime during 
the loan time, they did not accept his car insurance as sufficient and used some of his 
car payment to purchase insurance, thus putting his loan in default.  He never received 
any correspondence from the creditor that his payments were being diverted to pay for 
insurance.  His mother never informed him if any correspondence was received at her 
house.  Applicant believed he had almost paid the car loan.  Since he learned the car 
had been repossessed, he told the creditor to advise him what was remaining on the 
loan after the car was sold.  Applicant was advised at the time, he still owed over 
$10,000.  The car was originally purchased for $7,000.  Applicant made over two years 
of car payments at $325 monthly so that only about $3,000 should have remained on 
the loan.  Applicant was recently advised that he owes over $21,000.  The debt in the 
SOR allegation and the credit report is listed for $13,580.  (Tr. 22-23, 47-67)  The credit 
report listing was supposed to be removed from his credit report in August 2007. (App. 
Ex. E, credit report information, dated August 29, 2006)  Applicant has disputed this 
account with the creditor and sought his Navy active duty finance records to show the 
payroll allotment for the debt.  The records have not been received. (App. Exs. J-M, 
Letters and postal receipts, dated May 20, 2008)   
 
The bank credit card debt listed in SOR allegation 1.e also belonged to his third 
wife before they married.  The latest credit reports show the account is current and 
being paid as agreed.  (Tr. 29-29, 45-47; Gov. Ex. 5, credit report, date January 10. 
2008; App. Ex. A, credit report, dated March 6, 2008) 
 
Applicant’s latest credit report shows his debts are mostly current or paid in full. 
(Tr. 30-31)  The car loan debt in SOR allegation 1.c is still listed.  There is a collection 
account listed for a cell phone.  However, Applicant presented documentation that that 
account was paid in full.  (App. Ex. D, Letter, dated April 19, 2008)  There is a collection 
account listed for $53.  However, Applicant presented documentation that the account 
was paid in full. (App. Ex. B, Letter, dated March 28, 2008) 
 
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 not inflexible rules of law. Instead, recognizing the 
complexities of human behavior, these guidelines are applied in conjunction with the 
 
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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 
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 
 
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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 listed in credit reports 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),  Since two of the debts are the same, the SOR allegations are for four 
delinquent debts. 
 
 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) applies.  The debts happened years ago when 
applicant was on active duty or were his wife’s before they married.  He has either paid 
the debts or disputed them.  Since the debts have either been paid or disputed, they do 
not 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 
financial issues.  Two of the debts were the same debt.  This debt and another debt 
were incurred by his wife before they married.  When he learned of the debts, he paid 
them.  The other two delinquent debts have been disputed by Applicant.  The debts 
either arose by the actions of his wife or are in dispute so they were largely beyond 
Applicant’s control.  The remaining debt was caused by the creditor’s questionable 
action that was unknown to Applicant.  Since he paid two debts and disputed two 
others, he acted reasonably under the circumstances.  
 
FC MC ¶ 20(d) (the individual has initiated a good-faith effort to repay the 
overdue creditors or otherwise resolve debts) applies.  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.  
Applicant has the ability to pay the debts, has shown a strong desire to pay them, and 
has shown a good effort to pay them.  Applicant paid two of the debts in full and 
disputed the other two.  His present credit report and other documents show his 
accounts are paid in full, except for the car loan he disputes.  Applicant acted 
responsibly towards his debts and they are under control.  Applicant established his 
good-faith efforts to resolve his debts, and mitigated security concerns for his financial 
situation 
 
 FC MC ¶ 20(d) (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 he 
issues) applies.  Applicant disputed two of the debts.  He did not have any knowledge of 
 
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one debt and has a legitimate dispute on another debt.  For the furniture debt that he 
has no knowledge of, Applicant wrote the creditor and the debt was removed from his 
credit report.  On the car loan, Applicant had legitimate concerns about the debt 
because the creditor did not credit his full payments to his account.  He provided 
sufficient information of his action with the creditor to resolve the issue.  Applicant has 
presented sufficient information to mitigate security concerns for financial 
considerations. 
 
 “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 
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 
20 years honorable active duty in the Navy during which he successfully held a security 
clearance.  I considered that he took responsibility for the debts and paid two of the four 
of concern and disputed the other two.  I considered that Applicant’s other financial 
obligations are paid as agreed.  He manages his finances in a manner that does not 
create a security concern.  Overall, on balance the record evidence leaves me with no 
questions or doubts as to Applicant’s eligibility and suitability for a security clearance.  
For all these reasons, I conclude Applicant has mitigated the security concerns arising 
from financial considerations.  
 
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:   FOR APPLICANT 
 
  Subparagraph 1.a:    For Applicant 
  Subparagraph 1.b:    For Applicant 
  Subparagraph 1.c:    For Applicant 
  Subparagraph 1.d:    For Applicant 
 
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  Subparagraph 1.e:    For Applicant 
 
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. 
 
 
 
_________________ 
THOMAS M. CREAN 
Administrative Judge