Although page one of the SF-86 indicates Applicant signed the form on December 23, 2004, the handwritten1
signatures on the actual SF-86 and attached releases are dated December 1, 2004.
1
                                                             
                           
                        DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
---------------------- )       ISCR Case No. 06-11901
SSN: ----------- )
)
Applicant for Security Clearance )
Appearances
For Government: Ray T. Blank, Jr., Esq., Department Counsel
For Applicant: Pro se
                                                                            
______________
Decision
______________
MARSHALL, Jr., Arthur E., Administrative Judge:
Applicant completed a Standard Form 86 (SF-86) security clearance application,
dated December 1, 2004.  On March 6, 2008, the Defense Office of Hearings and1
Appeals (DOHA) issued a Statement of Reasons (SOR) stating security concerns under
Guideline F (Financial Considerations), Guideline E (Personal Conduct), and Guideline
J (Criminal Conduct). 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 for SORs issued after September 1, 2006. 
 Ex. 1 (SF-86, dated Dec. 23, 2004, at 3).2
2
In a response notarized on June 4, 2008, Applicant admitted twelve of fourteen
allegations regarding finances, one of six allegations concerning personal conduct, two
of four allegations raised under the guideline for criminal conduct, and requested a
hearing before a DOHA administrative judge. DOHA initially assigned the case to
another administrative judge on July 11, 2008, but the case was transferred to me on
August 18, 2008, for caseload considerations. Applicant and Department Counsel
agreed on a September 17, 2008, hearing date and a notice to that effect was issued
on August 25, 2008. That notice was amended on August 27, 2008, to correct an error
in the hearing venue address.
 
The hearing took place as scheduled. Department Counsel moved to amend
SOR allegations 3b and 3c by correcting a date. With no objection, the motion was
granted. Department Counsel submitted eight exhibits (Ex.), accepted into the record as
Exs. 1-7 and Demonstrative Exhibit (DE) 1. Applicant testified on his own behalf. No
witnesses were called and no exhibits were offered into evidence. Applicant was given
until September 26, 2008, to submit any additional materials. On October 3, 2008,
Department Counsel forwarded one document, timely submitted by Applicant on
September 22, 2008. Without objection, it was accepted into evidence as exhibit (Ex.)
A. The transcript (Tr.) was received on October 7, 2008, and the record was closed.
Based upon a review of the case file, exhibits, and testimony, security clearance is
denied.
Findings of Fact
Applicant is a 42-year-old heavy equipment mechanic working for a government
contractor. He has worked for the same employer for four years. Applicant has a high
school diploma and has completed some college-level courses. Divorced, Applicant is
the father of two adult children. 
From 1984 through 1997, Applicant served in the U.S. Navy. While in the
service, in 1994, he visited his estranged first wife to fix one of their children’s bicycles.
When his wife’s boyfriend appeared, an altercation ensued. He was charged with
carrying a concealed weapon, misdemeanor simple assault, and misdemeanor second
degree trespass. Although a trial date was set, the case ultimately was dismissed. 
After Applicant was honorably discharged in 1997, he was given custody of his
children. His first wife, from whom he was divorced in January 1995,  was ordered to2
pay him $365 a month for child support. About 18 months later, the court ordered that
the parents share custody jointly. Up to this point, Applicant was in good standing with
his creditors. While Applicant retained physical custody of the children during the school
year, child support payments were discontinued. Applicant’s finances became strained
as he struggled to raise the children on his single salary. Then, in August 2002, he
experienced a seven month period of unemployment. Although unemployed, he went
 Tr. 41-42.3
 Tr. 49.4
 Tr. 59.5
 Tr. 48.6
 Tr. 60.7
 Tr. 56-60.8
3
through with his marriage to his second wife in April 2002. Finances were tight,
however, and he almost lost his home. Some of his accounts became delinquent.
While unemployed, Applicant received unemployment compensation.
Compensation was granted and received based on his certification of unemployment.
When he returned to work in about February 2003, funds continued to be deposited into
his bank account for the weeks ending March 8, 2003, March 13, 2003, March 22,
2003, and April 26, 2003. Applicant was initially unaware of these deposits.  Once they3
were discovered, he kept the funds because he feared he might lose his house.  4
Applicant’s new job paid less than his prior employer. Meanwhile, his new wife,
who had two children of her own, was unemployed. Providing for six family members
was nearly impossible and more accounts went unpaid. He filed for bankruptcy
protection in May 2004. A month later, he was arrested and charged with knowingly
making a false statement and representation and failing to disclose a material fact to
the unemployment commission for the four weeks of unemployment compensation paid
out after he returned to work. At a July 2004 hearing, Applicant advised the tribunal he
had filed for bankruptcy. It was his understanding that if he pled guilty, the matter would
be dropped.  He was sentenced to 60 days in jail, placed on probation for a year, and5
ordered to pay court costs. Applicant testified that garnishment was put into place to
repay the approximately $2,000 in overpayments noted in SOR allegation ¶ 1n, but he
failed to provide evidence showing garnishment had paid off or reduced this debt. 
In December 2004, Applicant completed an SF-86 and answered “no” to
questions as to whether he had any delinquent debts. Although he gave full answers
regarding his bankruptcy petition and liens, he failed to indicate his delinquent debts.
This was due to oversight caused by his rush to complete the form and his failure to
understand the question.  He similarly failed to disclose the convictions related to the6
unemployment compensation overpayments and related misrepresentations. He
believed the charges had been “dropped.”  Applicant does not completely understand7
either the process of recoupment or his conviction.8
In 2005, Applicant reconsidered his bankruptcy filing. While he thought it would
“look better” to pay off his debt himself, he also had property taxes that could be
 Tr. 24.9
 Tr. 67.10
 Tr. 31 regarding ¶ 1.g for $320.11
 SOR ¶ 1k states a balance of $2,513 remained as of February 5, 2008, on account ending – 0473. See Ex.12
3, Interrogatories, at 4. Applicant had two to four accounts with this same creditor. There is some evidence
that one or two entries may be duplicates. Tr. 50-56. One account was taken over by another creditor, as
shown on Ex. A. Ex. A shows a history of regular payments not inconsistent with those prior payments shown
in Ex. 3, with a current balance of $954. In the absence of the original February 5, 2008, credit report, and in
light of the ultimate disposition in this case, I find regular payments were paid on the account noted in the SOR
(account ending – 0473). 
 Tr. 29-30.13
 Tr. 28-29, 67.14
4
included if he re-filed.  A consumer credit counseling service advised him to pay off9
what he could and he moved to dismiss the bankruptcy action. He was told they could
not help him because he had insufficient funds to start making significant payments. He
intends to return to counseling when he has more bills paid or under control.10
Meanwhile, his wife left with her children the following year and they divorced in 2006.
Applicant has struggled to keep up with child and household expenses. His lack
of financial savvy has made the attempt more difficult. He stated, albeit without
documentary proof, that he has satisfied four delinquent accounts not noted in the
SOR. He denied the medical account noted as SOR allegation ¶ 1g is his, arguing that,
as former military personnel, all of his medical care is provided and paid through the
Veteran’s Administration.  There is no evidence that he has formally disputed the11
inclusion of this account on his credit report with the credit reporting bureaus. He made
substantial progress, however, paying down one account at issue in the SOR,  SOR12
allegation ¶ 1k. That debt was reduced from $2,513 to $954 through regular payments.
He admits the remaining nine accounts noted in the SOR, amounting to an additional
sum in the approximate amount of $7,000, remain outstanding.  Consequently, that13
balance, along with the balance owed on SOR allegation ¶ 1k, is currently around
$8,000. This sum does not include any balance owed toward the $2,000 in workers
compensation debt he alleged he is currently satisfying through garnishment. 
Much of Applicant’s money over the past years has been expended on his two
children. Without child support, the burden was onerous. They are both finished with
college now, and he intends to devote the money formerly spent on them to his
delinquent debts.14
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
 See also ISCR Case No. 94-1075 at 3-4 (App. Bd. Aug. 10, 1995).15
 Department of the Navy v. Egan, 484 U.S. 518, 531 (1988).16
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).17
 Id.18
5
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. Under AG ¶ 2(c), this 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.
The Government must present evidence to establish controverted facts alleged
in the SOR. An 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 burden of proof is something less than a15
preponderance of evidence.  The ultimate burden of persuasion is on the applicant.  16 17
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). “The clearly consistent standard
indicates that security clearance determinations should err, if they must, on the side of
denials.”  Any reasonable doubt about whether an applicant should be allowed access18
 Id.19
 Executive Order 10865 § 7.20
 Revised Adjudicative Guideline (AG) ¶ 18.21
 Neither the filing for nor the voluntary dismissal of a single bankruptcy action is, by itself, sufficient to raise22
security concerns to the extent that both are legal and valid options for addressing debt. 
6
to sensitive information must be resolved in favor of protecting such sensitive
information.  The decision to deny an individual a security clearance is not necessarily19
a determination as to the loyalty of an applicant.  It is merely an indication that the20
applicant has not met the strict guidelines the President and the Secretary of Defense
have established for issuing a clearance.
Based upon consideration of the evidence, I find Guideline F (Financial
Considerations), Guideline E (Personal Conduct), and Guideline (Criminal Conduct) to
be the most pertinent to the case. Conditions pertaining to these adjudicative guidelines
that could raise a security concern and may be disqualifying, as well as those which
would mitigate such concerns, are set forth and discussed below.
Analysis
GUIDELINE F – Financial Considerations
Under Guideline F, failure or an 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 Regulation sets out several potentially disqualifying conditions21
under this guideline.  
Between 1998 and 2004, Applicant acquired a number of debts which ultimately
became delinquent. They currently amount to about $8,000 to $10,000. Of the accounts
at issue, represented in the SOR as allegations ¶¶ AG 1(a)-1(k) and ¶ 1(n), the
evidence only reflects payment on the account noted at SOR allegation ¶ 1(k).
Consequently, Financial Considerations Disqualifying Condition (FC DC) AG ¶ 19(c) (“a
history of not meeting financial obligations”) and FC DC AG ¶ 19(a) (“inability or
unwillingness to satisfy debts”) apply.  With such conditions raised, the burden shifts to22
Appellant to overcome the case against her and mitigate security concerns. 
In 1997, Applicant was given custody of his two children and his ex-wife provided
child support. That support was curtailed by 1999, although Applicant substantially
retained physical custody of the children. He also experienced periods of
unemployment in 2002 and 2003. In 2005, he moved to dismiss his bankruptcy petition,
a strategy that could have helped resolve his debts. He decided to tackle his delinquent
debts alone, without the help and guidance of a finance professional. Lacking such
7
guidance, his delinquent debts remain largely unaddressed. Therefore, Financial
Considerations Mitigating Condition (FC MC) AG ¶ 20(b) (“the conditions that resulted
in the behavior 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”) cannot apply.
While Applicant showed that he has substantially paid a little over a third of one
of the debts at issue, he presented no documentary evidence demonstrating his efforts
toward any of the many other debts at issue. Consequently, FC MC AG ¶ 20(d), (“the
individual initiated a good-faith effort to repay overdue creditors or otherwise resolve
debts”) cannot apply. 
Applicant did not complete financial counseling. He did not present an
established plan or articulate a new approach for addressing his many remaining
delinquent debts. Further, there is no indication that continuing with his current method
for addressing his debts without professional guidance or oversight will result in any
significant results in the near future. Therefore, FC MC AG ¶ 20)(c) (“the 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”) does not apply. None of the
other mitigating conditions apply. 
Guideline J – Criminal Conduct
With respect to Guideline J (Criminal Conduct), the Government has established
its case. Under 18 U.S.C. ¶ 1001, it is a crime to knowingly and willfully make any
materially false, fictitious, or fraudulent statement or representation in any matter within
the jurisdiction of the executive, legislative, or judicial branch of the United States.
Applicant admits he failed to note his arrest and conviction for knowingly making false
statements, and failing to disclose material facts to the unemployment compensation
commission. Such conduct and admissions are sufficient to raise security concerns,
invoke Criminal Conduct Disqualifying Conditions (CC DC) AG ¶ 31(a) (“a single serious
crime or multiple lesser offenses”), and CC DC AG ¶31(c) (“allegation or admission of
criminal conduct, regardless of whether the person was formally charged, formally
prosecuted, or convicted”), and initiate inquiry.
Applicant failed to disclose on his SF-86 form that he had been arrested and
convicted over the unemployment compensation overpayments. He testified that It was
his understanding that if he pled guilty, the matter would be dropped. Consequently, it
was not at the forefront of his thoughts when he completed the SF-86. 
Overall, Applicant’s testimony was highly credible. His depiction of the legal
proceedings regarding the overpayments shows how little he understands those
proceedings and the significance of his plea. He believes the matter was “dropped.”
Therefore, it was not in his thoughts when he completed the SF-86. While this raises
questions regarding his judgment, such questions are better considered under the
“whole person” analysis below in light of evidence indicating his failure to note these
incidents was neither a knowing or willing attempt to defraud or mislead.
8
Guideline E – 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.
Under this guideline, examination is made of an Applicant’s reliability,
trustworthiness, and ability to protect classified information based on his past personal
conduct and actions. 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. Applicant denied having any financial delinquencies on his
December 2004 SF-86. He also denied having been convicted of any offense in the
seven years preceding his execution of that application. Consequently, Personal
Conduct (PC) Disqualifying Condition (DC), ¶ 16(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”) applies.
Applicant credibly testified that he was in a hurry to complete his SF-86 and that
he may not have understood the questions at issue. He did, however, provide complete
information about his liens and his then-pending bankruptcy petition. The information
about the bankruptcy was more than sufficient to give notice that he had delinquent
accounts and money issues. Moreover, there is no evidence he deliberately omitted,
concealed, or falsified relevant facts regarding the fact he had delinquent debts. As for
not listing his convictions for the unemployment compensation, Applicant’s testimony
and demeanor make it more than plausible that he did not and does not completely
comprehend either the process or the plea he entered. Again, there is no indication of
deliberate omission, concealment, or falsification. 
Lacking a disqualifying condition, I find that Guideline E does not apply. These
facts and his explanations, however, do raise questions of judgment. Such questions
are thoroughly considered under the “whole person” analysis, below.
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
9
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 public trust position 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, as well as the “whole person”
factors. Applicant is a forthright and mature man who is devoted to his children. He has
made great sacrifices to raise and educate them. Lacking a background in finance and
failing to adhere to a coherent approach for tackling his delinquent debts, however, he
relied on a haphazard approach to address the debts at issue. He also put off to the
future much needed financial counseling. As a result, almost all the debts at issue in the
SOR remain unaddressed. Moreover, he failed to provide documentary evidence of
those efforts he testified he has made. As a consequence of these factors, Applicant
failed to mitigate security concerns regarding his finances. In failing to provide
documentation reflecting his efforts to date, he failed to mitigate financial considerations
security concerns.  
Further, while the guidelines for personal conduct and criminal conduct are an ill
fit for consideration of Applicant’s judgment and reliability, those qualities are inherent
to the analysis of the “whole person.” Despite his best intentions and efforts to raise and
educate his children without financial help from their mother, his actions and inactions
demonstrate questionable judgment. Substituting his own repayment scheme for his
bankruptcy petition only served to protract repayment of his debts. Failing to complete
financial counseling resulted in a haphazard approach to rectifying his financial
situation. Not documenting his efforts to resolve his finances undermined his burden to
mitigate security concerns. While seeking aid from a financial expert might help reverse
his course, demonstrate solid judgment, and help mitigate financial considerations
security concerns, at present, genuine security concerns remain. Therefore, I conclude
it is not clearly consistent with the national security to grant Applicant a security
clearance. Clearance is denied.
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
10
Subparagraph 1.I Against Applicant
Subparagraph 1.j: Against Applicant
Subparagraph 1.k: For Applicant
Subparagraph 1.l: For Applicant
Subparagraph 1.m: For Applicant
Subparagraph 1.n: Against Applicant
Paragraph 2, Guideline J: FOR APPLICANT
Subparagraph 1.a: For Applicant
Subparagraph 1.b: For Applicant
Subparagraph 1.c: For Applicant
Subparagraph 1.d: For Applicant
Paragraph 1, Guideline E: FOR APPLICANT
Subparagraph 1.a: For Applicant
Subparagraph 1.b: For Applicant
Subparagraph 1.c: For Applicant
Subparagraph 1.d: 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 security to grant Applicant eligibility for a security
clearance. Clearance is denied.
ARTHUR E. MARSHALL, JR.
Administrative Judge