DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 06-13607 
  ) 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government:  Fahryn Hoffman, Department Counsel 
For Applicant: Pro Se 
 
 
 
______________ 
 
Decision 
______________ 
 
 
HEINY, Claude R., Administrative Judge: 
 
Applicant owed debts totaling approximately $17,000. Applicant has paid a 
$9,000 tax lien, which is more than half of the amount owed. He has established a 
repayment plan with an additional creditor and is attempting to establish repayment 
plans with the two remaining creditors. Applicant has rebutted or mitigated the 
government’s security concerns under financial considerations. Clearance is granted. 
 
Statement of Case 
 
 Applicant contests the Defense Department’s intent to deny or revoke his 
eligibility for an industrial security clearance. Acting under the relevant Executive Order 
and DoD Directive,1 the Defense Office of Hearings and Appeals (DOHA) issued to 
 
 
 
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1 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) approved by the President on December 29, 2005, and effective within the Department of 
Defense for SORs issued after September 1, 2006. 
 
 
 
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Applicant a Statement of Reasons (SOR) on January 24, 2008, detailing security 
concerns under Guideline F, financial considerations. 
 
 On February 26, 2008, Applicant answered the SOR, and requested a hearing. 
On March 17, 2008, I was assigned the case. On June 6, 2008, DOHA issued a notice 
of hearing scheduling the hearing held on June 26, 2008. The government offered 
Exhibits (Ex.) 1 through 5, which were admitted into evidence. Applicant testified on his 
own behalf and submitted Exhibits A through D, which were admitted into evidence. The 
record was kept open to allow Applicant to submit additional matters. On July 10, 2008, 
additional documents were received. There being no objection, the material was 
admitted into evidence as Ex. E. On July 7, 2008, the transcript (Tr.) was received.  
 
Findings of Fact 
 
 In his Answer to the SOR, Applicant denied the factual allegations in ¶¶ 1.b, 1.d, 
1.e, and 1.i of the SOR. He admitted the factual allegations in ¶¶ 1.c, 1.f, 1.g, and 1.h of 
the SOR. Applicant neither admitted nor denied the allegations in SOR ¶ 1.a, simply 
stating “Unknown.”  
 
 Applicant is a 59-year-old master truck driver who trains other truck drivers and 
has worked for a defense contractor since February 2008. He is seeking to obtain a 
security clearance. In 1989, Applicant retired from the U.S. Army as a Chief Warrant 
Officer 3 after 23 years of service. (Tr. 30, 33)  
 
 In April 1994, Applicant was divorced. His ex-wife receives approximately $1,100 
of Applicant’s military retirement. (Tr. 31, Ex. E) There were no minor children of the 
marriage. In August 1994, he married his current wife. Applicant and his wife are 
enrolled in TRICARE for Life. His wife receives social security and her medical 
expenses are covered in part by Medicare. Applicant’s and his wife’s monthly medical 
expenses not covered by Medicare or TRICARE for Life average $475.  
 
From 1995 until June 2004, Applicant worked as a mechanic and bus driver. 
From June 2004 until May 2006, he was a lead quality control inspector. From June 
2006 to October 2006, Applicant was unemployed. (Tr. 73, Ex 1) Applicant was able to 
meet daily living expenses with his unemployment pay and military retirement pay, but 
had difficulty making his minimum payments on his credit cards. (Tr. 78) He asked the 
credit card companies for assistance and they responded by raising the interest rates 
on his cards. (Tr. 54)  
 
Applicant is paid $15.00 an hour. His current gross salary for two weeks is 
$1,505. (Tr. 60, Ex. E) Applicant owes a farm and home with a fair market value of 
$50,000 on which is owed approximately $43,000. (Ex. 1) His mortgage is 
approximately $200 per month. (Tr. 62) He has no car payments on his 1996 pickup 
truck or his wife’s 2001 pickup. (Tr. 63, 67-68) In September 2007, Applicant completed 
a personal financial statement listing his net monthly remainder income at 
approximately $1,000. (Ex. 2)  
 
 
 
 
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In February 2005, a judgment (SOR ¶1.a, $1,873) was filed against Applicant for 
two credit card debts. In September 2007, Applicant first learned of the judgment when 
he received written interrogatories. (Ex. 2) Applicant contacted the creditor and is 
waiting for a reply. Following the hearing, he was going to review this judgment at the 
county courthouse. (Tr. 76) 
 
A medical group lists a $54 debt (SOR ¶1.c) owed by Applicant. Applicant’s credit 
report shows two medical debts (SOR ¶1.d, $36; SOR ¶1.e, $122) not further identified. 
In February 2008, Applicant sent the credit reporting agency a letter asking for more 
information about the debts. (Ex. B) Applicant’s medical insurance is TRICARE, which 
has told him not to immediately pay any medical bills when they are received for it takes 
TRICARE 45 days or longer to make payment and to notify individuals the amount it is 
paying on the debt. (Tr. 46) For his wife’s medical bills, any amount not paid by 
TRICARE is paid by Medicare. Applicant has received refunds for overpayment of his 
medical bills. (Ex. E)  
 
In 2004, Applicant received a federal tax lien (SOR ¶1.b, $9,111, Ex. A) for tax 
year 2001. The lien has been paid by the IRS garnishing his wages and interception of 
his tax refunds, which was applied to the amount owed. (Tr.38, 39) The lien has been 
paid and Applicant received a $1,472 refund. (Ex. A) 
 
Applicant admits owing a $2,218 credit card company judgment (SOR ¶1.f). In 
February 2008, Applicant sent the company a letter asking to establish a repayment 
plan. Applicant owes a credit card company $1,817 (SOR ¶1.h). The company has 
made a settlement offer and Applicant has accepted the offer agreeing to pay $50 per 
month. (Ex. E). The debts in SOR ¶1. a and SOR ¶1.g are the same debt. (Ex. E) 
Applicant paid his past due telephone bill (SOR ¶1.i, $116). and maintains service with 
the same company. (Tr. 52, Ex. C)  
 
 Applicant owes three debts totaling approximately $6,000. A summary of those 
debts follows: 
 
 
 
 
Creditor 
 
Amount  
 
Current Status 
a Credit cards judgment 
filed February 2005.   
$1,873 This is the same debt as SOR ¶1.g. (Ex. 
E) Applicant was going to review the 
judgment at the courthouse. (Tr. 76) 
b IRS federal tax lien filed 
September 2005. 
$9,111 Released October 17, 2007. (Ex. A) 
c Medical group debt.  $54 Paid. Applicant has medical insurance.  
d Medical account. 
 
$36 Paid. Applicant has medical insurance. 
(Ex. B) 
e Medical account. $122 Paid. Applicant has medical insurance. 
(Ex. B) 
f Credit card debt. 
 
$2,218 Applicant sent letter requesting a 
repayment plan. 
 
 
 
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g Credit card debt.  $1,884 This is the same debt as SOR ¶1.a. (Ex. 
E) 
h Credit card debt.  $1,817 Creditor has accepted repayment offer 
and Applicant is making payment. (Ex. E) 
i Telephone bill.  $116 Paid. Zero balance. (Ex. C) 
 Total debt listed in SOR. $17,231  
 
 
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 
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 
 
 
 
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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  
Under Guideline F for financial considerations, a security concern typically exists 
due to significant unpaid debts. 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.2 
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 
upon terms. Absent evidence of strong extenuating or mitigating circumstances, an 
applicant with a history of serious or recurring financial difficulties is in a position of risk 
that is inconsistent with the holding of a security clearance. An applicant is not required 
to be debt free, but is required to manage his finances so as to meet his financial 
obligations. 
 
 Financial considerations become a security concern when a person has 
significant delinquent debts. An individual who is financially overextended is at risk of 
having to engage in illegal or unethical acts to generate funds to meet financial 
obligations. Additionally, an individual who is financially irresponsible may also be 
irresponsible, unconcerned, negligent, or careless in properly safeguarding and 
handling 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.  
 
 The record evidence supports a conclusion Applicant has a history of financial 
problems. Applicant owed approximately $17,000 on nine debts, some of which were 
duplicate debts. Disqualifying conditions AG ¶ 19(a) “inability or unwillingness to satisfy 
debts” and AG ¶ 19(c) “a history of not meeting financial obligations,” apply.  
 
 The largest of the debts listed in the SOR was a $9,111 tax lien (SOR ¶1.b), 
which has been paid and released. As retired military, Applicant and his spouse are 
covered by TRICARE medical insurance.  Additionally, his wife is covered by Medicare. 
His military medical insurance and Medicare coverage addresses the three medical 
debts (SOR ¶1.c, $54, 1.d, $36, and 1.e, $122). The telephone bill listed in SOR ¶1.i 
($116) has been paid. Applicant provided no documentation but maintains telephone 
2 Revised adjudicative guidelines (AG) ¶ 18. 
 
 
 
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service with the same provider. If a delinquent debt did exist his telephone service 
would routinely be interrupted.  
 
Applicant has accepted a repayment offer related to SOR ¶1.h ($1,817). 
Applicant has written the creditor in SOR ¶1.f ($2,218) to set up a repayment plan. The 
two debts listed in SOR ¶1.a ($1,873) and SOR ¶1.g ($1,884) are the same debt. 
Applicant has written the creditor and is going to the county courthouse to review the 
judgment.  
 
 Mitigating condition AG¶ 20(b) “the conditions that resulted in the financial 
problem were largely beyond the person’s control (e.g., loss of employment, a business 
downturn, unexpected medical emergency, or a death, divorce or separation), and the 
individual acted responsibly under the circumstances,” has limited applicability. 
Applicant was unemployed from June 2006 to October 2006. When he asked his credit 
card providers for assistance, they increased the interest rate on his credit cards. He is 
now addressing his debts and attempting to establish repayment plans with all of his 
creditors. 
 
 Mitigating conditions AG ¶ 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. Applicant is addressing the debt and his delinquencies are not likely to recur. 
 
  There is no evidence Applicant has sought financial counseling, but has  
demonstrated a positive change in his financial management. The problem is being 
resolved or under control. AG ¶ 20 (c) “the person has received or is receiving 
counseling for the problem and there are clear indications that the problem is being 
resolved or is under control,” applies as does AG ¶ 20 (d) “the individual initiated a 
good-faith effort to repay overdue creditors or otherwise resolve debts.”  
 
 For AG ¶ 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 his debts is needed. Applicant has paid the largest of the debts, the tax lien, 
which was more than half the total delinquency. He has accepted a repayment offer on 
another debt and is attempting to establish repayment plans on the remaining debts. He 
has the desire to pay his bills.   
 
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 
 
 
 
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individual’s age and maturity at the time of the conduct; (5) extent to which 
participation is voluntary; (6) the presence or absence of rehabilitation and 
other permanent behavioral changes; (7) the motivation for the conduct; 
(8) the potential for pressure, coercion, exploitation, or duress; and (9) the 
likelihood of continuation or recurrence. 
 
 Under AG ¶ 2(c), the ultimate determination of whether to grant eligibility for a 
security clearance must be an overall commonsense judgment based upon careful 
consideration of the guidelines and the whole person concept.  
 
Appellant has acted responsibly to resolve his debts and improve his current 
financial picture. He intends to resolve his financial problems and his resolve appears to 
be genuine. He is 59-years-old and a mature, responsible adult who acting to ensure his 
past financial difficulties will not recur. Appellant is making monthly payments on one 
debt, is attempting to establish repayment plan on the two remaining debts, which total 
approximately $4,000, and the reminder have been paid. Overall, the record evidence 
leaves me without questions or doubts as to Appellant’s eligibility and suitability for a 
security clearance.  
 
The facts and circumstances presented do not pose an unacceptable risk to the 
interests of national security. For all these reasons, I conclude Appellant mitigated the 
security concerns arising from his financial considerations concerns. Applicant met his 
ultimate burden of persuasion to obtain a favorable clearance decision. In reaching this 
conclusion, the whole-person concept was given due consideration and that analysis 
supports a favorable decision.  
 
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-1i: For Applicant 
 
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.  
 
 
_________________ 
CLAUDE R. HEINY II 
Administrative Judge