KEYWORD: Guideline F
DIGEST: The government’s burden to produce evidence arises only in regard to controverted
facts.  The record contains a paucity of evidence that Applicant has acted responsibly with regard
to her delinquent debts, her two bankruptcies her conviction bouncing a check and her home
foreclosure.  Favorable decision reversed
CASENO: 07-13766.a1
DATE: 11/12/2008
DATE: November 12, 2008
In Re:
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Applicant for Security Clearance
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ISCR Case No. 07-13766
APPEAL BOARD DECISION
APPEARANCES
FOR GOVERNMENT
Eric H. Borgstrom, Esq., Department Counsel
FOR APPLICANT
Pro Se
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The Defense Office of Hearings and Appeals (DOHA) declined to grant Applicant a security
clearance.  On March 25, 2008, DOHA issued a statement of reasons (SOR) advising Applicant of
the basis for that decision–security concerns raised under Guideline F (Financial Considerations) of
Defense Directive 5220.6 (Jan. 2, 1992, as amended) (Directive).  Applicant requested a decision
on the written record.  On July 15, 2008, after considering the record, Administrative Judge Mary
E. Henry granted Applicant’s request for a security clearance.  Department Counsel filed a timely
appeal pursuant to Directive ¶¶  E3.1.28 and E3.1.30.
Department Counsel raised the following issues on appeal: whether the Judge erred in
concluding that the Government had not met its burden of production regarding one of Applicant’s
debts; whether the Judge erred in her application of the Guideline F mitigating conditions; and
whether the Judge’s whole-person analysis is supported by record evidence.  Finding error, we
reverse.
Whether the Record Supports the Judge’s Factual Findings
A.  Facts
The Judge made the following pertinent findings of fact: Applicant is a composition
specialist for a federal contractor.  Twice–in 1992 and again in 2000–Applicant was discharged in
Chapter 7 bankruptcy.  The record contains no evidence of reasons for these bankruptcy actions.
Applicant and her husband have experienced problems that have affected their financial
situation.  Her husband was injured in a motorcycle accident in 2001 and was unable to work for six
months.  Later, in 2006, he was diagnosed with muscular dystrophy.  He is currently receiving social
security disability benefits.  In addition to her husband’s medical problems, Applicant was laid off
from her job in 2004.  She received unemployment benefits and attended college, receiving an
associates degree in 2006.
Applicant has unpaid delinquent debts which have arisen since her second discharge in
bankruptcy.  These debts are for medical bills, home repairs, an auto repossession, and other debts
owed to banks, to a power company, etc.  Additionally, Applicant’s home was foreclosed in 2001
and in the same year she pled guilty to issuing a bad check.  Applicant has not sought credit
counseling for her financial problems.
B.  Discussion
The Appeal Board’s review of the Judge’s findings of facts is limited to determining if they
are supported by substantial evidence–“such relevant evidence as a reasonable mind might accept
as adequate to support a conclusion in light of all the contrary evidence in the same record.”
Directive  ¶ E3.1.32.1.  “This is something less than the weight of the evidence, and the possibility
of drawing two inconsistent conclusions from the evidence does not prevent an administrative
agency’s finding from being supported by substantial evidence.”  Consolo v. Federal Maritime
Comm’n, 383 U.S. 607, 620 (1966).  In evaluating the Judge’s findings, we are required to give
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deference to the Judge’s credibility determinations.  Directive ¶ E3.1.32.1. 
One of the allegations in the SOR refers to a charged-off debt to a bank in the amount of
$674.  Applicant admitted this debt in her response to the SOR.  Item 2.  Applicant also
acknowledged this debt in her response to interrogatories submitted to her by DOHA.  Item 6. 
However, the Judge  stated in her decision that, despite Applicant’s admissions, “given the lack of
evidence as to the existence of this debt, this allegation is found in Applicant’s favor.”  Decision at
3.  Department Counsel persuasively argues that this finding is erroneous.  The Government’s burden
of producing evidence arises only in regard to SOR facts that the Applicant has controverted.
Directive ¶ E3.1.14.  The Government has no such burden when an applicant admits the facts.  In
this case, Applicant has not controverted the debt in question.  It was error, therefore, for the Judge
to conclude that the Government had failed to meet a burden which the Directive does not impose
upon it.  
Whether the Record Supports the Judge’s Ultimate Conclusions
 A Judge is required to “examine the relevant data and articulate a satisfactory explanation
for” the decision, “including a ‘rational connection between the facts found and the choice made.’”
Motor Vehicle Mfrs. Ass’n of the United States v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43
(1983)(quoting Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962)).  “The
general standard is that a clearance may be granted only when ‘clearly consistent with the interests
of the national security.’” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988).  The Appeal
Board may reverse the Judge’s decision to grant, deny, or revoke a security clearance if it is arbitrary,
capricious, or contrary to law.  Directive ¶¶ E3.1.32.3 and E3.1.33.3.  
Once a concern arises regarding an Applicant’s security clearance eligibility, there is a strong
presumption against the grant or maintenance of a security clearance.  See Dorfmont v. Brown, 913
F. 2d 1399, 1401 (9  Cir. 1990), cert. denied, 499 U.S. 905 (1991).  After the Government presentsth
evidence raising security concerns, the burden shifts to the applicant to rebut or mitigate those
concerns.  See Directive ¶ E3.1.15.  “The application of disqualifying and mitigating conditions and
whole person factors does not turn simply on a finding that one or more of them apply to the
particular facts of a case.  Rather, their application requires the exercise of sound discretion in light
of the record evidence as a whole.”  See, e.g., ISCR Case No. 05-03635 at 3 (App. Bd. Dec. 20,
2006).
In deciding whether the Judge's rulings or conclusions are arbitrary or capricious, the Board
will review the Judge's decision to determine whether:  it does not examine relevant evidence; it fails
to articulate a satisfactory explanation for its conclusions, including a rational connection between
the facts found and the choice made; it does not consider relevant factors; it reflects a clear error of
judgment; it fails to consider an important aspect of the case; it offers an explanation for the decision
that runs contrary to the record evidence; or it is so implausible that it cannot be ascribed to a mere
difference of opinion.  In deciding whether the Judge's rulings or conclusions are contrary to law,
the Board will consider whether they are contrary to provisions of Executive Order 10865, the
Directive, or other applicable federal law.  See ISCR Case No. 03-22861 at 2-3 (App. Bd. Jun. 2,
Directive ¶ E2.19(a): “inability or unwillingness to satisfy debts;” Directive ¶ E2.19 c): “a history of not1
meeting financial obligations[.]”  
Directive ¶ E2.20(b): “the conditions that resulted in the financial problem were largely beyond the person’s2
control (e.g., loss of employment, a business downturn, unexpected medical emergency, or a death, divorce or separaton),
and the individual acted responsibly under the circumstances.”
Directive ¶ E2.20(e): “the individual has a reasonable basis to dispute the legitimacy of the past-due debt which3
is the cause of the problem and provides documented proof to substantiate the basis of the dispute or provides evidence
of actions taken to resolve the issue.” 
See ISCR Case No. 06-18900 at 5 (App. Bd. Jun. 6, 2008 ) (Applicant offered no independent witnesses and4
provided no documented proof which would substantiate her claim that her debts were not legitimate or that she had
taken reasonable steps to resolve them).  
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2006).
The Judge properly concluded that Applicant’s case raised security concerns under Guideline
F.   She went on to conclude that Applicant had met her burden of persuasion as to mitigation,1
specifically under Financial Considerations Mitigating Condition (FCMC) 20(b).   Department2
Counsel persuasively argues that this conclusion was error, in light of contrary of record evidence.
For example, Department Counsel points to record evidence that Applicant and her husband took
a vacation to Aruba in 2005.  This vacation appears to have coincided with a period of time in which
both were unemployed.  This raises serious questions about Applicant’s judgment in regard to her
debts, in that she appears to have used funds on the vacation that could better have been expended
on debt reduction.   The Board notes that Applicant chose to have the case decided upon the written
record, with the  result that her credibility could not be evaluated in the context of a hearing.  See
ISCR Case No. 08-00899 at 3 (App. Bd. Jul. 29, 2008).  Furthermore, Applicant did not reply to the
File of Relevant Material, nor did she submit a reply brief on appeal.  As a consequence, there is
nothing in the record to address questions arising out of the trip.  Indeed, the record contains a
paucity of evidence demonstrating that Applicant has acted responsibly in regard to her delinquent
debts.  In light of that, the Judge’s favorable application of FCMC 20(b) is not sustainable.  For
similar reasons the record will not sustain the Judge’s partial application of FCMC 20(e),  in that3
there is insufficient evidence to demonstrate that Applicant’s past due debts are not legitimate.
Neither is there documentary evidence of positive steps Applicant has taken to resolve any alleged
dispute.   Accordingly, the Judge’s favorable application of the mitigating conditions is erroneous.4
Likewise, the Judge’s whole-person analysis also cannot be sustained, due to lack of
evidence.  As stated above, it is an applicant’s responsibility to demonstrate that he or she should
have a security clearance.  Under the facts of this case, the security concerns implicit in Applicant’s
bankruptcies in 1992 and 2000, her conviction for bouncing a check, her home foreclosure in 2001,
and her numerous delinquent debts have not been mitigated simply by Applicant’s admissions in her
response to the SOR or her answers to interrogatories.  There is little in the record to demonstrate
that Applicant has made a reasonable effort to pay off her debts or that she has otherwise acted
responsibly in regard to them.  The Board takes special note of the Judge’s finding that there is no
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evidence in the record explaining Applicant’s two bankruptcy actions.  Taken together, and viewed
in light of her subsequent financial history, they  raise serious questions about Applicant’s judgement
and reliability.  The record as a whole does not support a conclusion that Applicant has met her
burden of persuasion under the Egan standard.  Accordingly, the Board concludes that the record will
not sustain the Judge’s favorable decision.
Order
The Judge’s favorable security clearance decision is REVERSED.
Signed: Michael Y. Ra’anan           
Michael Y. Ra’anan
Administrative Judge
Chairman, Appeal Board
Signed; William S. Fields               
William S. Fields
Administrative Judge
Member, Appeal Board
Signed: James E. Moody                 
James E. Moody
Administrative Judge
Member, Appeal Board