DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
------------------------- )       ISCR Case No. 07-07667
SSN: ---------------- )
)
Applicant for Security Clearance )
Appearances
For Government: Jennifer I. Goldstein, Esquire, Department Counsel
For Applicant: Pro Se
August 22, 2008
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Decision
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ROSS, Wilford H., Administrative Judge:
Applicant submitted his Electronic Questionnaires for Investigations Processing
(e-QIP) on October 28, 2005.  (Government Exhibit 1.)  On January 28, 2008, the
Defense Office of Hearings and Appeals (DOHA) issued a Statement of Reasons (SOR)
detailing the security concerns under Guideline F concerning the 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 filed an Answer to the SOR on March 17, 2008, and requested a
hearing before an Administrative Judge.  Department Counsel was ready to proceed on
April 7, 2008.  The case was originally assigned to another Administrative Judge on
April 10, 2008.  I received the case assignment on April 21, 2008.  DOHA issued a
notice of hearing on April 25, 2008.  
Subparagraph 1.b. contains a typographical error which has been corrected by striking the date “December1
2007" and substituting the date “December 2000.”  This comports with the evidence.
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The hearing was convened on May 15, 2008.  The Government offered
Government Exhibits 1 through 7, which were received without objection. Applicant
called one witness, testified on his own behalf and submitted Applicant’s Exhibits A
through R, without objection. DOHA received the transcript of the hearing on June 3,
2008.  Based upon a review of the case file, pleadings, exhibits, and testimony,
eligibility for access to classified information is granted.
Findings of Fact
The Applicant is 53 and married.  He is employed by a Defense contractor and
seeks to obtain a security clearance in connection with his employment in the Defense
industry.
Guideline F, Financial Considerations
The Applicant began working in the Defense industry in October 2005.
Beginning in 1989, and continuing until 2000, the Applicant was a successful small
businessman who ran his own company.  Applicant’s Company (AC) provided services
to various clients, but he had one primary client (Client).  The AC was grossing
approximately $2 million in sales by 1998. Over the next two years (1998-2000), a
change in management at the Client brought an end to the Applicant’s relationship with
them.  Without the Client’s business, AC could not remain in business.  By 2000, the AC
had been dissolved.  Because of the nature of his business, the Applicant had to agree
to be personally responsible for many of the corporate debts.  This fact, and a complete
loss of income, forced the Applicant into bankruptcy in 2000.   (SOR subparagraph 1.b.)1
(Transcript at 47-54, 62-84; Applicant’s Exhibits H-Q.)
From 2000 through 2005, in particular between 2003 and 2005, he had several
low paying jobs as he looked for permanent employment and his income was very
erratic.  He currently makes less money than he did when he owned his business.
(Transcript at 84-87, 90.)  This time period was very difficult for the Applicant, who has a
family.  He testified, “What I am trying to say is I want to make it clear that that [inability
to pay his bills] really had nothing to do with me being unwilling or unable to live within
my means because I had no means to live within.”  (Transcript at 87.)
The Applicant began working for the Defense industry in October 2005.  He has
been able to consistently pay his current debts since beginning employment.  All of the
indebtedness dates to the period when he was unemployed or underemployed.  The
Applicant submitted a credit report showing charged off debts, which the Applicant paid
after becoming employed in 2005, and before issuance of the SOR.  The Applicant
stated, “I did the best I could during my rough years; and, then after I got past those
rough years, I went and tried to make good on what I could make good on.”  (Transcript
at 101-102; Applicant’s Exhibit G.)
Pursuant to motion by the Department Counsel, Subparagraph 1.a. was amended by striking the figure2
“$16,798" and substituting the figure “$57,000.”  This comported with the evidence introduced at the hearing.
(Transcript at 139.)
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Subparagraph 1.a.  The Applicant admits that he owes the Federal Government
$57,000.00 in back payroll taxes, interest and penalties.   The debt dates from when he2
owned his company.  The Applicant has continually been in contact with the IRS, letting
them know his employment and financial situation. (Transcript at 90-94, 125-132;
Applicant’s Exhibit A.)  In their latest communication with the Applicant, dated May 12,
2008, they state, “All of the tax accounts . . . have been placed in a non-collectible
status at this time due to your current financial situation. Being placed in this status
means that we will not take any collection action on the amount that you owe until your
financial status changes.” (Applicant’s Exhibit A at 4.)  The Applicant’s situation is
changing because his children are grown and he can downsize his house and
expenses.  He hopes to be able to begin to pay the IRS soon.  (Transcript at 135-137.)
Subparagraph 1.c.  The Applicant admits having had a State tax lien in the
amount of $2,640.00.  The taxes were paid and the lien released in December 2005.
(Transcript at 94-95; Applicant’s Exhibit B.)  
Subparagraph 1.d.  The Applicant firmly believed that he did not owe a utility
company $173.40.  After much research, he was unable to find proof of payment.  In
order to resolve the debt he paid it.  (Transcript at 100, 132-133; Applicant’s Exhibit F.)
Subparagraph 1.e.  The Applicant denied currently owing a cable company
$26.70.  He presented a statement from the collection agency showing that the payment
had been made in December 2005, soon after the Applicant was employed in the
Defense industry.  (Transcript at 99-100; Applicant’s Exhibit E.)
Subparagraph 1.f.  The Applicant was in a long term dispute with this hospital
and his insurance company over the amount he owed for medical care after an
accident.  He had paid a substantial amount of this medical debt, and believed that the
rest would be handled by his insurance company.  In order to resolve this debt he paid
it.  (Transcript at 97-99, 133; Applicant’s Exhibit D.)
Subparagraph 1.g.  The Applicant submitted a copy of the Personal Financial
Statement that he submits to the IRS in connection with his tax liability.  This is based
on the Applicant’s actual expenses over a three month period.  This exhibit shows a
monthly net remainder of $218.00, not over $1,000 a month.  (Transcript at 96-
97;Applicant’s Exhibit C.) 
The Applicant submitted that his current financial situation is stable.  He is able to
pay his current debts and is in communication with the IRS about his unpaid tax
liabilities.  His financial difficulties were over a limited time, and he has paid the rest of
his debts.  
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Mitigation
A co-worker of the Applicant, who was an employee in the Applicant’s company
and is a friend, testified on the Applicant’s behalf.  He describes the Applicant as,
“extremely trustworthy, responsible, above reproach.”  (Transcript at 55.)
The Applicant submitted letters from supervisors and other people he works with.
These people have the “highest confidence and trust” in him.  His immediate supervisor
states that, “honesty, truth and integrity are sound descriptions of his character.”
(Applicant’s Exhibit A.) 
Policies
Security clearance decisions are not made in a vacuum.  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.  In addition, the Administrative Judge may also rely on his own
common sense, as well as his knowledge of the law, human nature, and the ways of the
world, in making a reasoned 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. 
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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. Security clearance decisions include, by
necessity, consideration of the possible risk that 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.
 
Finally, as emphasized by President Eisenhower in Section 7 of Executive Order
10865, “Any determination under this order . . . shall be a determination 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. 
The guideline notes several conditions that could raise security concerns. Under
AG &19(c), Aa history of not meeting financial obligations@ may raise security concerns.
There is evidence in the record that the Applicant has a $58,000.00 tax lien for taxes
related to his failed business.  He also owed several other, smaller, bills.  The evidence
is sufficient to raise this potentially disqualifying condition, 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.@ In addition, AG
¶ 20(b) states that it may be mitigating if “the conditions that resulted in the financial
problems were largely beyond the person’s control (e.g., . . . a business downturn . . .),
and the individual acted responsibly under the circumstances.”
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 The majority of the Applicant’s past due indebtedness was incurred between
2000 and 2005 when the Applicant’s company failed and he had five years of sporadic
employment and fluctuating income.  As described at length above, once the Applicant
was employed in the Defense industry, he began working to pay his past due
indebtedness.  Specifically, in addition to the debts in the SOR, he paid several
creditors not mentioned in the SOR even though his debts had been charged off.  Since
being employed in the Defense industry, he has been able to pay all of his current
debts.  I find the behavior occurred under such unusual circumstances that it is unlikely
to recur, it also occurred because of a business downturn, and it does not raise
concerns about his current reliability, trustworthiness, or good judgment. The evidence
raises this potentially mitigating condition.  
AG ¶20(c) applies if “there are clear indications that the problem is being
resolved or is under control.”  Evidence that Athe individual initiated a good-faith effort to
repay overdue creditors or otherwise resolve debts@ is also mitigating under ¶20(d).  
The Applicant has successfully paid off all of the debts in the SOR but one.  He
has not ignored his Federal tax liability, rather the record shows that he has maintained
close and continuing contact with the IRS.  The records submitted by the Applicant
show the IRS understands his financial situation and intends no collection efforts at the
current time.  The Applicant expresses a credible intent to resolve the Federal tax
liability at the earliest time he can.  I conclude these potentially mitigating conditions
apply.
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) 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.
I considered the potentially disqualifying and mitigating conditions in light of all
the facts and circumstances surrounding this case.  The record shows that the Applicant
had a successful career and business before his current problems began.  He is
respected in his current job.  
The Applicant, by his own admission, had debt problems between 2000 and
2005.  The reasons are described at length above.  Rather than avoid his debts, once
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he obtained steady and well-paying employment in the Defense industry, he began
working to pay his debts.  I have considered the large amount of his tax debt and find
that it can be mitigated in that he has been in contact with the IRS, which obviously
believes that the Applicant is doing the best he can.  He has behaved reasonably and
appropriately in trying to resolve his debts, thereby AG ¶ 2(a)(6) applies.  Under the
particular circumstances of this case, I find that there is little to no potential for pressure,
coercion, exploitation, or duress (AG ¶2(a)(8)), and that the likelihood of recurrence is
close to nil (AG ¶2(a)(9)). 
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 THE APPLICANT
Subparagraphs 1.a through 1.g.: For the 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.
                                              
_________________
WILFORD H. ROSS
Administrative Judge