DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 08-01417 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Eric H. Borgstrom, Esquire, Department Counsel 
For Applicant: Pro Se 
 
 
______________ 
 
Decision 
______________ 
 
CREAN, Thomas M., Administrative Judge: 
 
Applicant submitted his Electronic Questionnaire for Investigations Processing 
(e-QIP), on January 18, 2006 (Item 3).  On July 9, 2008, the Defense Office of Hearings 
and Appeals (DOHA) issued a Statement of Reasons (SOR) for Applicant detailing 
security concerns for financial considerations under Guideline F (Item 1).  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 answered the SOR in writing on July 30, 2008, admitting all of the 
allegations.  He elected to have the matter decided on the written record in lieu of a 
hearing.  Department Counsel submitted the Government’s written case on August 30, 
2008.  Applicant received a complete file of relevant material (FORM) on September 17, 
2008, and was provided the opportunity to file objections, and submit material to refute, 
extenuate, or mitigate the disqualifying conditions.  Applicant did not respond to the 
FORM or provide additional material.  The case was assigned to me on November 19, 
 
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2008.  Based on a review of the case file and pleadings, eligibility for access to 
classified information is denied. 
 
Findings of Fact 
 
Applicant is 46 years old and has been a senior janitor maintenance employee of 
a defense contractor since December 2005.  Prior to his employment with the defense 
contractor, he was employed for over 18 years as a warehouse manager.  After leaving 
employment as a warehouse manager, he was unemployed for a month and worked as 
a farm hand for a month before starting with the defense contractor.  He is married with 
two teenager children.  He also served on active duty with the Air Force for four years 
(Item 3, e-QIP).   
 
When employed as a warehouse manager, Applicant stated his salary was about 
$70,000 per year.  He left where he was employed as the warehouse manager to move 
to a new area which he and his wife believed was the best place for his family.  He had 
a tentative job offer that was not guaranteed.  He placed his house for sale and 
purchased another house in the new location before his old house sold.  His former 
residence did not sell and he could not afford to make payments on both houses.  The 
old house has been foreclosed (See Item 4, Credit Report, dated January 28, 2008 at 
2).  The tentative job offer did not materialize and he eventually found employment with 
the defense contractor at half the salary that he had received as a warehouse manager.  
In response to interrogatories, Applicant stated that he and his wife now take home 
about $3,900 per month with monthly expenses of $3,589, leaving discretionary or 
disposable funds of approximately $311 per month (Item 8, Interrogatories, at 6).   
 
Applicant filed for Chapter 7 bankruptcy in 1997 and his debts of about $25,000 
were discharged in March 1998.  Applicant stated he lost track of his bills and he got 
over his head in debt.  He used credit cards for Christmas presents and every day 
expenses.  He paid only the minimum on his credit cards and became financially 
delinquent because of high interest rates on the credit cards.  This financial 
irresponsibility caused him and his wife to file for bankruptcy (SOR 1.a; Item 8, Interview 
statement, dated November 28, 2006, at 2, and interview statement, dated June 19, 
2007 at 5-6).   
 
The SOR lists four delinquent debts that became delinquent after the bankruptcy 
discharge totaling approximately $49,267.  Applicant admits these debts.  The debts 
include a line of credit loan from HFC for $32,529, charged off in December 2005 (SOR 
1.b); a loan from Washington Mutual for $13,137, charged off in May 2006 (SOR 1.c); a 
line of credit account with Equity One, charged off in August 2006 for $3,373 (SOR 1.d), 
and a debt of $228 placed for collection in August 2007 (SOR 1.e; See Item 4, Credit 
Report, dated January 28, 2008; Item 5, Credit Report, dated January 23, 2007; and 
Item 6, Credit Report, dated January 26, 2006).  Applicant admits he has taken no 
action to make any payments on these debts (Item 7, Answer to Interrogatories, dated 
March 19, 2008).   
 
 
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In response to interrogatories, Applicant stated that after the bankruptcy 
discharge he managed his finances without incurring delinquent debt until September 
2005 when he and his family moved, he could not sell is old house, and had a new 
house mortgage to pay.  When Applicant moved, the real estate market was good and 
Applicant believed he could sell his old house.  He purchased a new house in the area 
he moved to at a price less than the asking price on his old house.  The housing market 
downturned and he was not able to sell the former residence and it has been foreclosed 
for the amount of the old mortgage.  He is current with the mortgage on the new house 
since it is where he and his family are living.  Applicant notes that he incurred a $45,000 
reduction in yearly salary affecting his ability to pay his delinquent debts.  He has been 
advised by his lawyer to focus on keeping his present mortgage current since the old 
debts can be discharged in bankruptcy later.  Appellant is making every effort to repay 
his debts and to avoid a second bankruptcy.  However, he is starting over with his 
finances due to the problem of selling his old residence and the reduction in his income.  
He stated his financial situation is slowly recovering (item 7, Interrogatories, dated 
March 19, 2008, at 1 and 2 
 
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 
 
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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. 
 
Analysis 
 
Financial Consideration: 
 
 Under financial considerations, 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. (AG ¶ 18)  Similarly, an individual who is financially 
irresponsible may also be irresponsible, unconcerned, or careless in their obligations to 
protect 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.  
 
 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 
terms.  Absent evidence of strong extenuating or mitigating circumstances, an Applicant 
with a history of serious or recurring financial difficulties is in a situation of risk 
inconsistent with the holding of a security clearance.  An Applicant is not required to be 
debt free, but is required to manage his finances in such a way as to meet his financial 
obligations.  Applicant’s four delinquent debts are a security concern raising Financial 
Consideration Disqualifying Conditions (FC DC) ¶ 19(a) "inability or unwillingness to 
satisfy debts"; FC DC ¶ 19(b) "indebtedness caused by frivolous or irresponsible 
spending and the absence of any evidence of willingness or intent to pay the debt or 
establish a realistic plan to pay the debt"; and FC DC ¶ 19(c) "a history of not meeting 
financial obligations".  Applicant accumulated delinquent debts because he made no 
effort to pay his financial obligations.  The debt was accumulated after his previous 
debts had been discharged by bankruptcy.  While the debts were on lines of credit and 
loans, the funds he received appear to be used for normal consumer items which 
indicate Applicant may be spending beyond his means.  He incurred a mortgage on a 
new home before his old home was sold indicating irresponsible spending.  When his 
financial resources changed because of a move to a new location, it does not appear 
that Applicant changed his spending priorities or life style. 
 
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 I considered Financial Considerations Mitigating Conditions (FC MC) ¶ 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".  Applicant took no action to pay 
the four delinquent debts so the debts are current.  The debts are from various sources, 
lines of credit, loans, and credit cards, so they are not infrequent.  The debts may have 
been incurred because Applicant voluntarily moved from one area to another, had a 
lower paying job, and could not sell his former residence, but these are not unusual 
circumstances since Applicant acted voluntarily.  Since the debts are current and not 
paid, they cast doubt on Applicant’s current reliability, trustworthiness, or good 
judgment.  
 
 I considered FC MC ¶ 20(b) "the conditions that resulted in the financial problems 
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".  Applicant claims he was 
unemployed for a month after he moved, and took a pay cut when he had new 
employment.  He presented no information on how or why these events impacted his 
ability to make some payments on his debts.  In fact, Applicant and his wife have been 
and are gainfully employed and they have a monthly positive cash flow.  There has 
been no attempt to pay past due obligations indicating that he is not trying to resolve his 
indebtedness.  He did not establish that he acted responsibly under the circumstances.  
Applicant made a voluntary decision to move his family.  This was not a condition 
beyond his control.  He then purchased a new house before he sold his old one creating 
a severe financial hardship.  His actions were within his control.  He has not acted 
responsibly in managing his finances. 
 
 I considered FC MC ¶ 20(d) "the individual has initiated a good-faith effort to 
repay the overdue creditors or otherwise resolve debts".  For FC MC ¶ 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 debts is needed.  
Applicant presented no information to show he has a plan to pay the debts or any action 
that he has taken to pay his debts.  Applicant has sufficient income to make some 
payments on his delinquent debts but has not attempted to do so.  His and his wife have 
a combined income of about $48,000 a year, with a net remainder each month of over 
$311 that could be used for debt reduction.  Applicant's debts were discharged in 
bankruptcy in 1998 and he started accumulating delinquent debts again in 2005.  
Bankruptcy is a legal and permissible means of resolving indebtedness.  However, the 
circumstances of the bankruptcy action can be examined to determine any security 
significance.  The filing of the bankruptcy action in itself does not create a security 
concern.  Applicant admitted he incurred financial problems because he was 
irresponsible towards his finances necessitating the bankruptcy filing.  Applicant 
accumulated delinquent debt after the bankruptcy discharge indicating a continual 
irresponsible and indifferent attitude towards his finances.  There is no indication 
Applicant acted responsibly towards his debts or that the situation is under control.  In 
fact, the opposite seems to be true, his finances are not under control and he has not 
 
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acted responsibly.  Applicant has not presented sufficient information to indicate a good 
faith effort to pay creditors or resolve debts.  He has not presented sufficient information 
to mitigate security concerns for financial considerations. 
 
“Whole Person” Analysis  
 
 Under the whole person concept, the Administrative Judge must evaluate an 
applicant’s security eligibility by considering the totality of the applicant’s conduct and all 
the circumstances. An 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 a security clearance 
must be an overall common sense judgment based upon careful consideration of the 
guidelines and the whole person concept.  
 
 Applicant has not taken action to resolve his past due debts.  His indifferent 
attitude and lack of actions shows he is not trustworthy, responsible, or exercises good 
judgment.  Applicant has been irresponsible towards his delinquent debts and financial 
obligations.  This is an indication that he might be irresponsible towards the protection 
and handling of classified information.  I conclude Applicant has not mitigated the 
security concerns arising from his finances.  Clearance is denied. 
 
Formal Findings 
 
 Paragraph 1, Guideline F:   AGAINST APPLICANT 
 
  Subparagraph 1.a:   For Applicant 
  Subparagraph 1.b-1.e:  Against Applicant 
 
 
 
 
 
 
 
 
 
 
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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. 
 
 
 
_________________ 
THOMAS M. CREAN 
Administrative Judge