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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 07-11909
SSN: )
)
Applicant for Security Clearance )
Appearances
For Government: Candace L. Le’i, Esquire, Department Counsel
For Applicant: Pro Se
                             
______________
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 denied.
Applicant submitted his Security Clearance Application (SF 86), on October 19,
2006. On January 22, 2008, the Defense Office of Hearings and Appeals (DOHA)
issued a Statement of Reasons (SOR) detailing the security concerns 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 January 30, 2008. He answered
the SOR in writing on February 15, 2008, and requested a hearing before an
GE 1 (Applicant’s security clearance application, dated October 19, 2006) at 2, 7; Tr. 29, 76.1
Tr. 29-30.2
Id. at 21-23, 26-27; GE 1, supra note 1, at 4-10.3
Tr. 72, 79-82.4
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administrative judge. DOHA received the request on February 19, 2008. Department
Counsel was prepared to proceed on February 27, 2008, and I received the case
assignment on February 28, 2008. DOHA issued a notice of hearing on March 24, 2008,
and I convened the hearing as scheduled on April 29, 2008. The government offered
five exhibits (GE) 1 through 5, which were received and admitted into evidence without
objection. Applicant and one witness testified on his behalf. He submitted two exhibits
(AE) A and B, which were received and admitted into evidence without objection. DOHA
received the transcript of the hearing (Tr.) on May 9, 2008. I held the record open until
May 16, 2008, for Applicant to submit additional matters.  He did not submitted any
additional evidence. The record closed on May 16, 2008.
Findings of Fact
In his Answer to the SOR, dated February 15, 2008, Applicant admitted the
factual allegations in ¶¶ 1.a through 1.j, 2.a and part of 2.b of the SOR. He denied the
remaining factual allegation in ¶ 2.b of the SOR and that his financial problems were a
security concern and that he was dishonest or untrustworthy.
Applicant, who is 50 years old, works for a Department of defense contractor as
an engineering equipment mechanic. He began his employment with his current
employer on October 1, 2005. He submitted his security clearance application one year
later.1
Applicant is married and has two children, ages 20 and 18. His oldest child is a
college student, who works part-time. Applicant holds a bachelor degree in metallurgy.2
In 1987, Applicant began working in the aerospace industry. When his company
merged with another, the new company decided to downsize and laid him off from his
job. For the next several years, he worked sporadically, moving twice in the summer of
1995 and twice in the first six months of 1996. He started working for a gold mining
company in 1997 in a rural area of the State. The company ceased operations and laid
off its workforce, including Applicant, in November 2004. He returned to work in April
2005 and has worked steadily since.3
In 1998, Applicant’s wife sustained an on-the-job injury. She returned to work
part-time in 2002 and worked until 2004. In August 2005, she obtained a full-time job,
paying $10 an hour. Six months later, she sustained an on-the-job injury. Her employer
terminated her in February 2006. She currently works full-time, earning a base salary of
$12.78 an hour plus shift differential pay.4
GE 2 (Financial interrogatories and Applicant’s response with attachments) at 9-13; Tr. 24, 100-101.5
GE 2, supra note 1, at 17, 19; GE 3 (Credit report, dated November 21, 2006) at 4, 6; GE 4 (Credit report,6
dated September 21, 2007) at 1-2; GE 5 (Credit report, dated April 23, 2008) at 2; Tr. 41-49, 91, 110, 114-121.
GE 2, supra note 1, at 14-16, 18; GE 3, supra note 6, at 4, 6, 8; GE 4, supra note 6, at 1; GE 5, supra note7
6, at 1-2; Tr. 31-36, 39-40, 69, 83. 
Tr. 40-41, 54.8
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Applicant earns approximately $40,000 a year. He earned $68,000 a year in
2004. His net monthly income is approximately $2,200 and his wife’s net monthly
income is approximately $1,800 a month for a total household net monthly income of
$4,000. Their estimated monthly living expenses, including rent, food, utilities, car
expenses, and other household expenses, is $4,385. Applicant does not have enough
income each month to pay his household expenses based on his estimate. At the
hearing, his wife indicated they are paying their monthly expenses, but do not have any
money to pay creditors.5
Applicant and his family lived in a very rural area of the state when he worked for
the gold mining company. They purchased a home near his place of employment. He
received no severance pay when his employer laid him off in 2004, and his wife was not
working at the time. He lacked funds to pay his monthly mortgage and the second
mortgage on the house. He tried to sell the house, but, because of the rural location, he
was unable to sell the house. The mortgagor foreclosed on his house. As a result of the
foreclosure, Applicant still owes approximately $17,000 on his primary mortgage, a fact
he realized during the hearing. He also owes more than $22,000 on his second
mortgage. He has not paid these debts.6
In 2002, Applicant’s son severely injured his arm. He and his wife took their son
to the nearest walk-in emergency medical center. The emergency medical center
referred them to a hospital, which Applicant later determined was not a participant in
their health care plan. The medical insurer and the hospital argued over payment of the
bill. His employer’s human resource office told him not to pay any bills until the matter
was resolved. At the time his employer terminated him, the payment issue had not been
resolved. He acknowledges that he owes the medical bills listed in SOR ¶¶ 1.a through
1.c. He made payments on some of these medical bills for a period of time, but has not
made any payments since September 2007 because of his wife’s car accident and
injury in August 2007. Some of the medical bills remain outstanding.7
Applicant’s wife believed the debt listed in SOR ¶ 1.d had been paid, but
Applicant did not provide proof of payment. He acknowledges the debt listed in SOR ¶
1.j. He has a current and timely paid account with this creditor. He has asked the
creditor to place the outstanding amount on his current bill and he would pay a small
part of the bill each month. The creditor declined to do so. The bill remains unpaid.8
GE 2, supra note 1, attachments; AE B (Documents from credit counseling service); Tr. 61-63, 84-88, 140.9
Tr. 42, 145-147.10
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Applicant admitted owing the debts listed in SOR ¶¶ 1.g through 1.i in his
response to the SOR. He is no longer sure he owes these debts as the counseling
service he recently contacted cannot identify the debts. Applicant has spoken with two
separate credit counseling services about paying his debt. The recent counseling
services recommended that he consider filing bankruptcy. He has spoken to an attorney
about filing bankruptcy, but has not retained the services of an attorney. At the hearing,
Applicant advised that he is considering filing for bankruptcy. He is overwhelmed by his
debts.9
Applicant has a 401(k) account valued at $28,000. He has not used this money
to pay his debts because of the penalties he would incur if he accessed the money at
this time. He has a piece of land in a very rural area valued at $28,000, which he might
sell, although he does not think it would sell because of its location. His motor vehicles
are very old, of limited value, and without debt.10
When he completed his security clearance application, Applicant answered “no”
to the following questions:
Section 27: Your Financial Record b. In the last 7 years, have you had
your wages garnished or had any property repossessed for any reason?
Section 28: Your Financial Delinquencies a. In the last 7 years, have you
been over 180 days delinquent on any debt(s)? [and] b. Are you currently
over 90 days delinquent on any debt(s)?
Applicant admits that he has old, unpaid debts and his house was repossessed,
but denies any wage garnishment. When he read wage garnishment, he answered no
without reading the question further. He did not pay careful attention to the questions
and his answers. He denies deliberately falsifying his answers.
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 ¶
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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.
 
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
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protect classified information. An individual who is financially overextended
is at risk of having to engage in illegal acts to generate funds. 
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 accumulated significant delinquent debt subsequent to his
job termination in 2004. He has been unable to repay his past due obligations. 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
financial worries have been ongoing for several years and are not resolved. However,
his unpaid medical bills are a result of misdirection by a medical service and a dispute
with the medical insurance carrier. It is unlikely that he will encountered a similar
problem concerning his medical bills. This potentially mitigating condition has some
applicability. 
Under AG & 20(b), mitigation can occur when 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, some of
the financial problems arose because of a dispute with his medical insurer. His major
financial difficulties occurred following the loss of his job in 2004 and his inability to sell
his house because of its rural location. In addition, his wife was not employed at the
time of his job termination. Because his debts remain unpaid, I find this potentially
mitigating condition is partially applicable. 
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). Applicant twice contacted credit counselors in
an effort to resolve his debts. For a period of time in 2007, he made payment to one
credit collector. This mitigating condition is only partially applicable because there are
not clear indications that his finances are under control.
Similarly, AG & 20(d) applies where the evidence shows Athe individual initiated a
good-faith effort to repay overdue creditors or otherwise resolve debts.@ In this case,
Applicant has made some effort to pay his outstanding medical bills. He, however, has
not made any effort to resolve his major debts, one of which he did not realize he owed
until the hearing. This mitigating condition is not applicable. The remaining mitigating
conditions in this guideline do not apply.
See ISCR Case No. 03-09483 at 4 (App. Bd. Nov.17, 2004)(explaining holding in ISCR Case No. 02-2313311
at 5 (App. Bd. Jun. 9, 2004)).
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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.
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 b in Section 27 and Questions a and b in Section
28  about his financial delinquencies. 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) to11
apply, the government must establish that Applicant’s omission, concealment or
falsification in his answer was deliberate.
At the time he completed his SF-86, Applicant knew he had financial problems
from the past. He credibly testified that he read garnishment and answered “no” without
reading the question in its entirety. Although Section 28 clearly asks for information
about past unpaid debts and he knew he had old, unpaid debts, Applicant’s
presentation at the hearing showed me that he had little understanding about the extent
of his debts current or past. His wife has a much better understanding of the family’s
finances. He did not deliberately falsify his answer to this question. The government has
not established its case under guideline E.
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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 surrounding 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. Applicant’s initial financial problems
began when he lost his job in the aerospace industry in 1994. With the income earned
at the gold mining company, he paid his bills. The loss of this job caused serious
financial problems for him, particularly since his wife was not working. He could not pay
his mortgage nor could he sell his house. As a result, the mortgagor foreclosed on this
house. Although he has worked steadily for the last three years, his income is
significantly lower than the income he earned working for the mining company. The
household income barely pays his family’s monthly expenses. He has no additional
funds to repay his old debts. He is considering filing for bankruptcy. Applicant needs
more time to improve his financial situation. Although I do not believe he can be
coerced, pressured or exploited because of his debt problems, he has not gained
control over his finances. He is overwhelmed by his financial problems, and thus, the
potential exists for his debt problems to reoccur or increase.  He has not mitigated the
government’s security concerns. (See AG & 2(a)(1).)  
Overall, the record evidence leaves me with questions or doubts as to Applicant’s
eligibility and suitability for a security clearance. For all these reasons, I conclude
Applicant has not mitigated the security concerns arising from his financial
considerations and personal conduct. 
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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: Against Applicant
Subparagraph 1.e: Against Applicant
Subparagraph 1.f: Against Applicant
Subparagraph 1.g: Against Applicant
Subparagraph 1.h: Against Applicant
Subparagraph 1.i: Against Applicant
Subparagraph 1.j: Against Applicant
Paragraph 2, Guideline E: FOR APPLICANT
Subparagraph 2.a: For Applicant
Subparagraph 2.b: For Applicant
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.
                                                              
MARY E. HENRY
Administrative Judge