DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 07-12190 
  ) 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government:  Fahryn Hoffman, Esquire, Department Counsel 
For Applicant: Pro Se 
 
 
 
______________ 
 
Decision 
______________ 
 
 
HEINY, Claude R., Administrative Judge: 
 
Applicant owes approximately $9,000 on seven debts.  Applicant has failed to 
rebut or mitigated the government’s security concerns under financial considerations. 
Clearance is denied. 
 
Statement of Case 
 
 Applicant contests the Defense Department’s intent to deny or revoke her 
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 
Applicant a Statement of Reasons (SOR) on March 10, 2008, detailing security 
concerns under Guideline F, financial considerations. 
 
 
 
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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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 On April 7, 2008, Applicant answered the SOR, and requested a hearing before 
an administrative judge. On May 5, 2008, I was assigned the case. On June 6, 2008, 
DOHA issued a notice of hearing scheduling the hearing held on June 25, 2008. The 
government offered Exhibits (Ex.) 1 through 5, which were admitted into evidence. 
Applicant testified on her own behalf. The record was kept open to allow Applicant to 
submit additional matters. On July 10, 2008, documents were received. Department 
Counsel did not object to the material and it was admitted into evidence as Ex. A. On 
July 3, 2008, the transcript (Tr.) was received.  
 
Findings of Fact 
 
 In her Answer to the SOR, Applicant admits, with explanation, the factual 
allegations in the SOR.  
 
 Applicant is a 40-year-old administrator who has worked for a defense contractor 
since July 1996, and is seeking to maintain a security clearance.  In 1988, she began 
working for the company, but was laid off in 1993 and recalled in 1996. (Tr. 56) 
Applicant states she takes her position in security seriously and says during her 16 and 
one half years of employment she has never done anything to jeopardize the facility. 
(Ex. A)  
 
Her supervisor stated Applicant is very trustworthy, an excellent worker. (Tr. 24, 
39) Her supervisor knew work he gave her would get done. (Tr. 25) He also knew 
Applicant was experiencing financial problems because a garnishment was served on 
Applicant. (Tr. 27) Her supervisor indicated he had long, serious talks with Applicant 
about her financial situation. (Tr. 27, 29) Every week or every other week, her 
supervisor told Applicant of the need to take care of her bills or she would not get a 
clearance. (Tr. 30) Applicant would response she was taking care of business. (Tr. 31) 
Another co-worker counseled Applicant regarding the importance of maintaining good 
financial records and satisfying her debts. (Tr. 39) He stressed to her how important it 
was to the government for her to properly maintain her finances. (Tr. 39, 44)  
 
 Applicant was divorced in November 1993, after a six-year marriage. (Tr. 53, Ex. 
1)  A second marriage ended in April 2002. (Tr. 53) She has a 19-year-old son. She has 
recently begun taking university classes. (Tr. 55) Class attendance prevents her from 
obtaining a part-time job. (Tr. 117)  
 
Applicant failed to pay her divorce attorney and, in December 2002, a $747 
judgment (SOR ¶ 1.a) was entered against her. (Tr. 59) In December 2007, a 
garnishment started and the judgment was paid in March 2008. (Tr. 59) She paid $215 
twice a month for three months paying $1,300 on the debt. (Tr. 60)  
 
On September 16, 1999, Applicant filed for Chapter 13, wage earner’s plan, 
bankruptcy protection. (Ex. 3) She made $252 payments every two weeks over the five 
and one half year of the plan’s existence. She paid approximately $36,000 over the 
 
 
 
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course of the plan. On February 1, 2005, her debts were discharged. (Tr. 97, Ex. 3)  In 
May 1999, Applicant had purchased a 1999 Chevrolet pickup ($19,000) and could not 
afford the payments. (Tr. 87, Ex. 3, Schedule D) The bankruptcy was a way to keep the 
truck. 
 
In February 2007, when she completed her Electronic Questionnaires for 
Investigations Processing (e-QIP) she listed a paid $3,045 judgment from October 
2003, and unpaid $1,800 judgment from January 2007, a paid $400 to $500 judgment 
from October 2005, and a paid judgment from October 2004 for which she did not know 
the amount. (Ex. 1, pages 26-28)  She also stated on the form that her credit was 
terrible. (Tr. 103, Ex. 1) Applicant says her financial problems arose from making bad 
judgments. (Tr. 116)  
 
In February 2008, Applicant contacted the collection agency regarding a $645 
credit card debt (SOR ¶ 1.b) and a $500 telephone bill (SOR ¶ 1.e). Applicant paid $150 
on the debt and the collection agency offered to settle the matter for half of the current 
balance. (Tr. 62, 63) The same creditor is listed in SOR ¶ 1.b ($645) and SOR ¶ 1.e 
($518).  Applicant had only one credit card with the creditor. (Tr. 72)  
 
Applicant owed another credit card company $644 (SOR ¶ 1.c). Applicant has 
attempted to contact this creditor. (Tr. 57) Applicant owed a bank $180 due to a 
checking account overdraft. (Tr. 76) The debt is with a collection agency, which offered 
to settle the matter for half the balance.  Applicant never responded to the offer. (Tr. 74)  
 
Applicant and her ex-husband had a number of vehicles repossessed. Even after 
the divorce, Applicant helped her ex-husband purchase vehicles on which she was 
solely liable. (Tr. 102) In August 2002, following her divorce, she purchased a 1993 
Ford car that was repossessed, a judgment entered, which has been paid. (Tr. 91, 126)  
In November 2003, a $15,000 pickup was purchased for her ex-husband. (Tr. 92) The 
truck was repossessed and Applicant owes the creditor $6,354 (SOR ¶ 1.i). The creditor 
has offered to settle this debt for $4,200, which they wanted as a lump-sum payment. 
(Tr. 81) Applicant was unable to make a lump-sum payment. Applicant has $2,443 in 
her company’s 401 (k) retirement plan and when the balance in the plan is sufficient, 
she will make a lump-sum payment to this creditor. (Ex. A) 
 
In May 2005, another pickup was purchased. (Tr. 92, 126) The vehicle was 
repossessed leaving a balance after repossession of $1,759 (SOR ¶ 1.d). In November 
2007, the debt was satisfied by garnishment having paid $4,500 on the obligation. In 
March 2006, garnishment of $252 every two weeks started. (Tr. 69) In April 2008, 
Applicant purchased a 2005 Pontiac with monthly payments of $420.  
 
Applicant owes an insurance company $344 (SOR ¶ 1.h) on her ex-husband 
motor cycle insurance. (Tr. 77)  Applicant continued to pay her ex-husband’s insurance 
for four years after the divorce. (Tr. 77)  
 
 
 
 
 
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In October 2007, Applicant completed a personal financial statement listing her 
gross salary for two weeks as $1,607 and her net remainder income at approximately 
$300. (Ex. 1, Ex. 2, Ex. A) Her rent is less than $500 per month. (Tr. 109) 
 
A summary of her debts and their current status follows: 
 
 
 
 
Creditor 
 
Amount  
 
Current Status 
a December 2002 default 
judgment by her divorce 
attorney.  
$747 Paid by garnishment started in 
December 2007. (See Answer to SOR) 
b Collection agency for a 
credit card debt. Same 
debt as f. 
$645 Applicant has made a $150 payment in 
January 2008 and the collection agency 
offered to settle the matter for half of the 
balance.  
c Credit card debt. 
 
$644 Not paid.  Applicant tried to contact the 
creditor.  
d Automobile 
repossession. 
 
$1,759 
Paid and satisfied in November 2007. 
Garnishment started in March 2006 
whereby she paid $252 every two 
weeks. (See Answer to SOR) 
e Telephone bill.  $500 Applicant has made a $150 payment. 
Collection agency listed in b. has the 
debt and offered to settle for half the 
balance.  
f Same creditor as b.  $518 Applicant has made a $150 payment 
and the collection agency offered to 
settle the matter for half of the balance. 
g Checking account over 
draft charges.  
 
180 Creditor offered to settle for half the 
balance. (Ex. 2) Applicant never 
accepted the offer.  
h Ex-husband’s motorcycle 
insurance.  
$344 Applicant will contact creditor. 
i Pickup truck 
repossession. 
$6,354 Unpaid. Creditor has offered to settle for 
$4,200. Applicant intends to pay the debt 
when her retirement fund is large 
enough. 
 Total debt listed in SOR $11,691  
 
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 
 
 
 
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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 
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 
 
 
 
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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 her 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 her finances so as to meet her 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 owes approximately $9,000 on seven debts. Disqualifying 
conditions AG ¶ 19(a) “inability or unwillingness to satisfy debts” and AG ¶ 19(c) “a 
history of not meeting financial obligations,” apply.  
 
 Applicant has been with her company for more than 16 years. In 2002, Applicant 
was divorced and the financial problems from that marriage continue. Her attorney was 
forced to garnish her wages to obtain payment for his services in the divorce. Even after 
the divorce, Applicant continued to pay her ex-husband’s motorcycle insurance and 
purchased vehicles for his use on which she is solely liable. Since 2002, she and her 
ex-husband have had four vehicles repossessed and she has had two garnishment 
placed on her pay. One garnishment was to pay her attorney fees and a second was to 
pay for one of the repossessed vehicles. 
 
In 2005, she completed a Chapter 13, wage earner’s plan, bankruptcy and her 
debts were discharged. Two years later when she completed her security clearance she 
listed two unpaid judgments and stated her credit was terrible. Applicant knew of the 
concern over her finances. She answered interrogatories about her finances in 
November 2007. Her supervisor was aware of her financial problems due to a 
garnishment. He attempted to stress how important it was to correct any financial 
problem because such problems could result in the loss of her clearance. He frequently 
asked her the state of her finances. Applicant stated she was unaware of how important 
her finances were until the hearing.  
 
2 Revised adjudicative guidelines (AG) ¶ 18. 
 
 
 
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Other than the garnishments, Applicant contacted one credit collection agency 
and paid them $150. Another creditor offered to settle for half of what was owed, but 
Applicant failed to follow up on the offer. 
 
 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. Since her 
2002 divorce she has been gainfully employed, but has made a single $150 payment to 
her creditors. Applicant has not acted reasonably under the circumstances. Her income 
may have been limited, but she should have been able to establish a repayment plan 
with some of the creditors. 
 
 Seven of the debts remain unpaid. 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, does not apply. The debts in question went unpaid 
starting in 2002, they are numerous, and did not incurred under unusual circumstances. 
 
  There is no evidence Applicant has sought financial counseling or demonstrated 
a positive change in her financial management. It is not clear 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,” does not apply nor does AG ¶ 20 (d) “the individual 
initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.” The 
two garnishments do not count because they were initiated by the creditor and not by 
Applicant.  
 
 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 her debts is needed, which is not present here. Applicant intends to save 
money in her 401(k) plan and make a lump-sum payment to a creditor. This may or may 
not occur. There is no repayment plan other than her statement that she will pay the 
debts.  
 
 Applicant has made few efforts to resolve the delinquent indebtedness and has 
not made any real progress in addressing her debts. Given these circumstances, in light 
of the unaddressed delinquent debts, her efforts do not amount to a good-faith effort 
within the meaning of the 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): 
 
 
 
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 (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.  
 
 Applicant is 40 years old and sufficiently mature to make prudent decisions about 
her finances. She is saving in her 401(k) plan to pay a creditor. Although her intent to 
resolve her financial problems appears to be genuine, she has done little to 
demonstrate that intent. What is missing is: (1) a realistic and workable plan to address 
her financial problems, (2) documented actions taken in furtherance of the plan, and (3) 
a measurable improvement in the situation. Given the current circumstances, it is likely 
that the financial problems will continue.  
 
This decision should not be construed as a determination that Applicant cannot 
or will not attain the state of true reform and rehabilitation necessary to justify the award 
of a security clearance. The awarding of a security clearance is not a once in a life time 
occurrence, but is based on applying the factors, both disqualifying and mitigating, to 
the evidence presented. Under the Applicant=s current circumstances a clearance is not 
recommended, but should the Applicant be afforded an opportunity to reapply for a 
security clearance in the future, having paid the delinquent obligations, established 
compliance with a repayment plan, or otherwise suitably addressed the obligations, she 
may well demonstrate persuasive evidence of her security worthiness. However, a 
clearance at this time is not warranted.  
 
 To conclude, Applicant did not present sufficient evidence to explain, extenuate, 
or mitigate the financial considerations security concern. Applicant did not meet her 
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 
does not support 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:  AGAINST APPLICANT 
 
 
 
 
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  Subparagraph 1.a-1j: Against 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.  
 
 
_________________ 
CLAUDE R. HEINY II 
Administrative Judge 
 
 
 
 
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