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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 06-26041
SSN: )
)
Applicant for Security Clearance )
Appearances
    
For Government: Candace L. Le’i, Esquire, Department Counsel
For Applicant: Kevin R. Hancock, Esquire
                            
______________
Decision
______________
HENRY, Mary E., Administrative Judge:
Based upon a review of the case file, pleadings, exhibits, and testimony,  I
conclude that Applicant’s eligibility for access to classified information must be granted.
Applicant submitted his Security Clearance Application (SF 86), on March 21,
2006. On January 4, 2008, the Defense Office of Hearings and Appeals (DOHA) issued
a Statement of Reasons (SOR) detailing the security concerns under Guidelines F, E
and J 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 January 22, 2008. He answered
the SOR in writing through counsel on February 1, 2008, and requested a hearing
GE 1 (Applicant’s security clearance application, dated March 21, 2006) at 1, 7, 20-22; GE 2 (Interrogatories1
and answers) at 5; Tr. 34-35.
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before an administrative judge. DOHA received the request on the same day.
Department Counsel was prepared to proceed on February 20, 2008, and I received the
case assignment on February 27, 2008. DOHA issued a notice of hearing on March 24,
2008, and I convened the hearing as scheduled on April 30, 2008. The government
offered eight exhibits (GE) 1 through 8, which were received and admitted into evidence
without objection. Applicant testified on his own behalf. He submitted three exhibits (AE)
A through C, which were received and admitted into evidence without objection. DOHA
received the transcript of the hearing (Tr.) on May 9, 2008. I granted the government’s
request to keep the record open to submit additional matters. I also requested additional
evidence from Applicant. On May 2, 2008, the government submitted one additional
exhibit which has been received and admitted as GE 9, without objection. On  May 13,
2008, Applicant submitted two additional exhibits, which have been received and
admitted as AE D and AE E, without objection. The record closed on May 15, 2008.
Procedural and Evidentiary Rulings
Motion to Amend SOR
Department Counsel moved to amend the SOR by adding the following language
to ¶ 1.b: “As of April 5, 2006, this debt had not been paid.” and adding a new allegation
as ¶ 1.f, alleging “You are indebted to {debtor} on an account that has been charged off
in the amount of $924 since about June 2000. As of April 5, 2006, this debt had not
been paid.” Applicant denied the allegation, but did not object to the motion, which I
granted. The SOR is amended as requested. (Tr. at 11.)
Findings of Fact
In his Answer to the SOR, dated February 1, 2008, Applicant admitted the factual
allegation in ¶ 2.a of the SOR, with explanation. He denied the factual allegations in ¶¶
1.a through 1.f, and 3.a of the SOR.
Applicant is a 51-year-old corporate security manager for a Department of
Defense contractor. He enlisted in the United States Army in 1981 and retired on
permanent disability in 2000 as a sergeant first class (pay grade E-7). While in the
Army, he held a top secret -  Sensitive Compartmented Information (SCI) clearance,
without any violations or allegations of violation of the rules and procedures for his
clearance level.1
Applicant married his first wife in October 1990. Their daughter is 16 years old.
They divorced in November 1999, and his daughter lives with her mother. He pays
GE 1, supra note 1, at 11-20.2
GE 3 (Second set of Interrogatories and Answers) at 3; GE 8 (State Criminal Records) at 1; AE C (May 24,3
2004 Order) at 1; Tr. 53-61.
GE 3, supra note 3, at 3-5; Tr. 36-39. 4
GE 3, supra note 3, attachments; GE 4 (Experian credit report); GE 5 (Equifax credit report); GE 6 (Equifax5
Credit report); AE B (April 2008 credit report).
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regular monthly child support. He married his present wife in November 2000. They
have a four-year-old daughter.2
            In 2003, Applicant and his wife argued after a long day when they were both
tired and stressed. His wife threatened to call the police and he told her “fine”. She
called 911 then hung up without speaking to the operator. Thirty minutes later the police
arrived at their house. Under the state’s no tolerance law for domestic violence, the
police advised that one of them would be arrested and taken to jail. Applicant
volunteered. The police arrested him and he spent 24 hours in jail. At subsequent court
proceedings two weeks later, the prosecutor asked the court to dismiss the charges,
which the court did. Applicant requested his attorney to seek expungement of his
criminal record. His criminal attorney filed a petition to seal his arrest and criminal
record. The court granted the motion and ordered that his records be sealed on May 24,
2004. Thereafter, because of a concern about the impact of his arrest in the future,
Applicant asked his criminal attorney what information, if any, he must reveal about his
arrest if asked. His criminal attorney advised that since his record had been expunged
(sealed), his arrest did not exist. The expungement meant that his arrest never
happened.3
Applicant currently earns approximately $75,000 a year. His wife works as a real
estate broker and earns between $90,000 and $180,000 a year. At his security
investigation interview in August 2006, he listed his gross monthly income at $4,000 and
his net monthly income at $3,350 plus $1,700 a month in military retirement. His
monthly expenses, including mortgage, utilities, food, car payment, and child support,
total approximately $5,000. He and his wife keep their finances separate, so the full
extent of household income and expenses is not known. In August 2006, a security
clearance investigator interviewed Applicant. Until one hour before this interview,
Applicant did not know he had unpaid debts.   4
The record contains six credit reports with conflicting information. The
government submitted three credit reports prepared by two of the credit reporting
agencies, dated April 5, 2006 (Equifax), December 14, 2006 (Experian), and June 29,
2007 (Equifax).  In his response to the second set of interrogatories, Applicant provided5
two credit reports, one from Equifax, dated September 26, 2007 and one from Experian,
dated September 27, 2007. Applicant submitted a credit report from all three credit
reporting agencies, dated April 10, 2008. Applicant’s credit report submissions reflect a
very good credit history and do not contain the debts listed in the SOR. The April 5,
Id.6
GE, 3, attachments; GE 4; GE 5; GE 6; AE E (Letter, dated May 6, 2008); Tr. 39-40.7
Applicant might have received a response if he had put his dispute in writing.8
GE 3 attachments; GE 4 at 2, 7; GE 5 at 1; GE 6 at 1; AE B at 4. 9
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2006 Experian credit report shows all the debts listed in the SOR and the December 14,
2006 Equifax credit report lists many of the debts in the SOR, but not all. The June 29,
2007 Experian credit report lists only the debt identified in ¶ 1.c of the SOR. Except for
the April 2008 credit report, all the credit reports contain a credit history for Applicant for
at least 10 years. The June 2007 and September 2007 Experian credit report
information conflicts with the information contained in the April 2006 Experian credit
report. Likewise, the September 2006 Equifax credit report information conflicts  with the
December 2006 Equifax credit report information. The reason for the conflicting
information is not clear or explained.6
 
Based on this evidence of record and Applicant’s testimony, I make the following
finding of facts. The debt contained in allegation ¶ 1.a belongs to Applicant. He states
that he paid the debt, but has not provided proof of his debt. The letter from a creditor,
dated May 6, 2008, does not provide information indicating the account number, the
amount owed and paid, and the original creditor; thus, it is insufficient to show payment
fo this debt. The debt alleged in allegation ¶ 1.b is listed in the April 5, 2006 credit report
only. Two other accounts with this creditor are paid and timely.7
After a careful review of the credit reports, I find that the allegations ¶ 1. c and ¶
1.e are the same debt. Originally, the debt belonged to a bank. It totaled $3,674 and
became delinquent in June 2000. Based on the amount of the debt,  in April 2001, the
original bank sold the debt to another bank (P.F.), which assigned a new account
number to the debt. Based on this account number, bank P.F. sold the account to bank
3, which sold the account to the current debt holder in November 2006. A letter from the
current creditor (identified in allegation ¶ 1.e) contains the account number of the
original creditor, but refers back to the third bank purchaser. The debt now totals
$6,982, without an explanation for the basis for the new balance. Applicant credibly
testified that he verbally requested specific information about this account, including the
original creditor and the nature of the charges.  The current creditor failed to provide this8
information in its letter of September 6, 2007; rather, it requested payment in full. This
creditor has not filed an action in court to obtain a judgment and collect its debt. From
this failure, I infer that the creditor knows that the claim is barred by the statute of
limitations and lacks supporting documentation for its claim. At least one credit reporting
agency shows this debt as paid. Likewise, the other creditors have not sought recovery
of the alleged debts through legal process.9
The debt listed in allegation ¶ 1.d is not sufficiently identified for Applicant to
determine the original creditor, the actual amount of the debt, and the basis for the debt.
GE 3, Creditor letter, dated May 6, 2008 and attachments; GE 4, GE 5, GE 6; AE B; Tr.  84-86.10
GE 1, supra note 1, at 24; Tr. 56-62, 111-116.11
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Finally, the debt identified in allegation ¶ 1.f is listed in the April 5, 2006 as sold to
another creditor. This debt is not listed in any later credit reports. I infer that since the
debt was sold to another creditor, it was mistakenly listed in Applicant’s credit report.
Applicant denies knowledge of all the debts except the first debt. He admits having a
credit card with the bank listed in allegation ¶ 1.c, but states he paid the account and
closed the account. Applicant acknowledged these debts could have been established
in his first marriage, but he has no knowledge or recollection that the accounts were
acquired in his first marriage. He credibly testified that he verbally requested information
from the creditors about the nature of the debts owed to determine if the debts are his.10
When Applicant completed his security clearance application, he answered “no”
to question f in Section 23: Your Police Record. He answered “no” based on the advise
given to him by his criminal attorney in 2004.11
The record contains two possible social security numbers for Applicant. In the
SF-86, he lists his social security number and his military service/ certificate number.
The third digit of his military number is different than the third digit of his social security
number. Otherwise both numbers are the same and are listed on his credit reports. I
find that these numbers belong to Applicant.
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
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
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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.
 
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. 
In the instant case, Applicant has denied owing the debts listed in the SOR. The
government bears the burden of proving by substantial evidence that Applicant owes
the debts listed. The record contains six credit reports, which provide conflicting
information about his past debts and credit history. All of the reports, except the most
recent, contain a lengthy credit history for Applicant. The 2007 and 2008 credit reports
reflect an excellent credit history for the last 10 years or more. Given the existence of a
10-year credit history in the reports prepared by Experian and Equifax, the absence of
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some of the debts listed in the SOR can not be explained as dropped from the report
due to age. The inconsistency in the information provided by Experian and Equifax in
the 2006 and 2007 credit reports is not explained. In light of his lack of knowledge about
these debts and the lack of substantive information in these credit reports about the
source and type of debts, the reports are not sufficient to establish that Applicant owes
the debts alleged in SOR ¶¶ 1.b, 1.d and 1.f. Thus, the government has not met it
burden of proof as to these allegations. 
The guideline notes several conditions that could raise security concerns. Under
AG & 19(a), an Ainability or unwillingness to satisfy debts@ is potentially disqualifying.
Similarly under AG & 19(c), Aa history of not meeting financial obligations@ may raise
security concerns. Applicant acknowledged the debt in SOR allegation ¶ 1.a and the
evidence indicates that the debt in SOR allegation 1.c belongs to Applicant. The
evidence is sufficient to raise these potentially disqualifying conditions, requiring a closer
examination.
The guideline also includes examples of conditions that could mitigate security
concerns arising from financial difficulties. Under AG ¶ 20(a), the disqualifying condition
may be mitigated where Athe 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.@ Applicant=s two
debts occurred in 2000, shortly after his divorce from his first wife. Applicant has not
incurred any delinquent debt since this time. With his present income level and payment
history, there is little likelihood that he will have debt problems in the future. This
mitigating condition has some applicability. 
Under AG & 20(b), it may be mitigating where Athe 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.@ As noted above,
Applicant’s financial problems arose shortly after his divorce in 1999 and may be
related to unknown accounts from his previous marriage. He has requested information
to determine if these debts are his. He has acted reasonably in requesting information
about debts unknown to him. I find this potentially mitigating condition has some
applicability in this case. 
Evidence that Athe 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@
is potentially mitigating under AG & 20(c). Similarly, AG & 20(d) applies where the
evidence shows Athe individual initiated a good-faith effort to repay overdue creditors or
otherwise resolve debts.@ Applicant has not received counseling nor has he resolved
these two delinquent debts. Applicant has sought information to determine if these
debts are his, but the creditors have refused to provide him with information. The credit
reports indicate Applicant’s finances are under control. I conclude that these potentially
mitigating conditions apply partially.
The debts not established as Applicant’s are also barred by the state’s statute of limitation.12
A  State Court of Appeals, in another jurisdiction, succinctly explained the societal and judicial value of13
application of the statute of limitations:
Statutes of limitations embody important public policy considerations in that they stimulate
activity, punish negligence and promote repose by giving security and stability to human
affairs. The cornerstone policy consideration underlying statutes of lim itations is the laudable
goal of law to promote and achieve finality in litigation. Significantly, statutes of limitations
provide potential defendants with certainty that after a set period of time, they will not be
ha[led] into court to defend time-barred claims. Moreover, limitations periods discourage
plaintiffs from sitting on their rights.  Statutes of limitations are, indeed, fundamental to our
judicial system.
Carolina Marine Handling, Inc. v. Lasch, 609 S.E.2d 548, 552 (Ct. App. 2005) (internal quotation marks and
citations omitted).
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Finally, AG ¶ 20(e) “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 the issue” has partial applicability. Applicant credibly testified to
telephone contacts to the creditors, as shown by the September 2007 letters from one
creditor. That creditor has refused to provide him with detailed information about the old
debt it wants him to pay. Except for the creditor listed in allegation ¶ 1.a of the SOR, the
remaining creditors have not responded to his verbal requests for information on the
debt.
He also receives some credit in the whole person analysis, infra, for the
application of the state’s 6-year statute of limitations, which applies to the debts listed in
SOR allegations 1.a and 1.c.  Under tate law, the creditors are time barred from12
collecting these debts See State Code. Ann. §13-80-103.5.  Elimination of these13
delinquent debts through the statute of limitations has ended his potential vulnerability
to improper financial inducements related to these debts as he no longer has any legal
responsibility for these debts. The fact that these debts are very old and not collectible
under state law may not negate his past conduct in not paying these outstanding debts,
a factor I must consider.  
Guideline E, Personal Conduct
AG ¶ 15 expresses the security concern pertaining to personal conduct::
Conduct involving questionable judgment, lack of candor, dishonesty, 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.
See ISCR Case No. 03-09483 at 4 (App. Bd. Nov.17, 2004)(explaining holding in ISCR Case No. 02-2313314
at 5 (App. Bd. Jun. 9, 2004)).
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AG ¶ 16(a) describes conditions that could raise a security concern and may be
disqualifying:
(a) deliberate omission, concealment, or falsification of relevant facts from
any personnel security questionnaire, personal history statement, or
similar form used to conduct investigations, determine employment
qualifications, award benefits or status, determine security clearance
eligibility or trustworthiness, or award fiduciary responsibilities;
The government established that Applicant omitted material facts from his SF-86
when he answered “no” to Question f in Section 23 about his past criminal record. This
information is material to the evaluation of Applicant’s trustworthiness to hold a security
clearance and to his honesty. For this guideline to apply, Applicant’s omission must be
deliberate. He denies, however, that he deliberately falsified his answer to these
questions. When a falsification allegation is controverted, the government has the
burden of proving it. Proof of an omission, standing alone, does not establish or prove
an applicant’s intent or state of mind when the omission occurred. An administrative
judge must consider the record evidence as a whole to determine whether there is
direct or circumstantial evidence concerning an applicant’s intent or state of mind at the
time the omission occurred.  For DC ¶ 16 (a) to apply, the government must establish14
that Applicant’s omission, concealment or falsification in his answer was deliberate.
At the time he completed his SF-86, Applicant knew he had been arrested for
domestic violence following an argument with his wife in 2003. Given his long
experience in security work, he knew this information was relevant to his background
investigation. He deliberately falsified his answer to this question. The government has
established its case.
AG ¶ 17 provides conditions that could mitigate security concerns:
(b) the refusal or failure to cooperate, omission, or concealment was
caused or significantly contributed to by improper or inadequate advice of
authorized personnel or legal counsel advising or instructing the individual
specifically concerning the security clearance process. Upon being made
aware of the requirement to cooperate or provide the information, the
individual cooperated fully and truthfully.
Following his arrest in 2003 and the dismissal of the charges by the prosecutor,
Applicant asked his criminal attorney to petition the court to expunge his record. In May
2004, the court sealed his arrest and criminal record. Because he knew his arrest may
have a negative impact on future jobs, Applicant asked his criminal attorney if he had to
provide any information about his arrest since his record had been expunged. His
counsel told him he did not have to discuss the arrest because the expungement meant
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it never happened. Thus, Applicant understood that when his record had been
expunged, he had no past criminal record. Applicant thought expungement and sealed
meant the same thing. To his detriment, Applicant relied upon the incorrect advice of his
criminal attorney and did not list his 2003 arrest. He has mitigated the Guideline E
security concern.
Guideline J
In light of my finding under Guideline E, the government has not established its
case under this guideline.
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) the 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 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. Until his divorce in 1999, Applicant
had excellent credit. Shortly thereafter in 2000 and unbeknownst to him, problems
developed with his credit because several debts had not been paid. Outside of this year,
the record shows that Applicant timely paid his debts and continues to do so. 
Applicant sought information from the creditors about the debts listed in the April
2006 credit report so that he could understand what type of debts he owed, the source
of the debts, and his actual liability for the debts. The creditors have refused to provide
him with this information, most likely because the listed creditors do not have the
information requested. The same creditors have failed to use the legal process to obtain
a judgement, in part for the same reason. Applicant’s failure to pay these old debts is
not because of neglect but because of lack of knowledge about the existence of the
debts. When he learned that he had these debts in 2006, he requested additional
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information for the purpose of determining if the debts were his, a reasonable request
on his part. He cannot be faulted for the refusal of the creditors to provide him with the
information requested.
Applicant held a top secret-SCI clearance for many years without incident. There
is little likelihood that he can be pressured or coerced because of these unpaid debts.
Department Counsel’s argument that these debts may have occurred during his first
marriage is speculative, and thus, insufficient to establish that the debts are his. He
received extensive training and has a good record of commendable duty performance
during and after his military service. He is married and has one daughter living with him.
As a result, he has focused his attention on providing a stable domestic environment for
his family. Of course, the issue is not simply whether all his debts are paid B it is
whether his financial circumstances raise concerns about his fitness to hold a security
clearance. While some debts remain unresolved, they are insufficient to raise security
concerns. His finances are stable and his monthly bills are paid in a timely manner.
(See AG & 2(a)(1).)  
Overall, the record evidence leaves me without questions or doubts as to
Applicant’s eligibility and suitability for a security clearance. For all these reasons, I
conclude Applicant mitigated the security concerns arising from his 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
Subparagraph 1.e: For Applicant
Subparagraph 1.f: For Applicant
Paragraph 1, Guideline E: FOR APPLICANT
Subparagraph 2.a: For Applicant
Paragraph 1, Guideline J: FOR APPLICANT
Subparagraph 3.a: 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 the national interest to grant Applicant eligibility for a security
clearance.  Eligibility for access to classified information is granted.
                                                              
MARY E. HENRY
Administrative Judge