DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
 ------------------------- )  ISCR Case No. 08-03071 
 SSN: ----------------- ) 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Pamela C. Benson, Esquire, Department Counsel 
For Applicant: Pro Se 
 
 
 
______________ 
 
Decision 
______________ 
 
 
HOWE, Philip S., Administrative Judge: 
 
On July 13, 2007, Applicant submitted his Security Clearance Application (SF 
86). On May 13, 2008, the Defense Office of Hearings and Appeals (DOHA) issued 
Applicant a Statement of Reasons (SOR) detailing the security concerns under 
Guideline F. 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 acknowledged receipt of the SOR on May 19, 2008. He answered the 
SOR in writing on May 22, 2008, and requested a hearing before an administrative 
judge. I received the case assignment on August 27, 2008. DOHA issued a Notice of 
Hearing on October 20, 2008, and I convened the hearing as scheduled on November 
6, 2008. The Government offered Exhibits 1 through 6, which were received without 
objection. Applicant testified and submitted no exhibits. DOHA received the transcript of 
 
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the hearing (Tr.) on November 17, 2008. Based upon a review of the case file, 
pleadings, exhibits, and testimony, eligibility for access to classified information is 
denied. 
 
Findings of Fact 
 
 In his Answer to the SOR, dated May 22, 2008, Applicant admitted the factual 
allegations in ¶¶ 1.a, to 1.e, and 1.g of the SOR, with explanations. He denied the 
factual allegations in ¶¶ 1.f, 1.h, and 1.i of the SOR. He also provided additional 
information to support his request for eligibility for a security clearance.   
 
 Applicant is 44 years old, married, and has three children.  He works currently for 
a defense contractor in graphic design and computer support.  He has worked for that 
employer for three years, since late 2005 or early 2006.  He sought a job which had 
benefits and a regular income. Previously, he operated a wedding photography 
business out of his home. That business started to dwindle because of competition and 
digital photography. His income from that business at the end of it was about $30,000 
annually.  His bankruptcy filing shows his adjusted gross income in fiscal year 2006 was 
$91,655, and in fiscal year 2007 his adjusted gross income was $27,500.  He also 
worked a second job at a photo lab to support his family. He had the home-based 
photography business from 1984 until 2006. He works a second job now as a 
commercial photographer for a professional photography company.  For that company 
he might work 18 weddings or similar functions this year, earning about $1,000 for each 
photo shoot.  His income from the defense contractor is $42,000 annually.  Applicant 
has not had a security clearance previously. (Tr. 17-27, 88-91, 98; Exhibits 1 and 3; 
Answer) 
 
 Applicant closed his photography business in 2006 because he was working at 
least 80 hours per week, and his income was not growing.  In July 2006, his wife was 
diagnosed with mucosal melanoma in her nose. It was removed, and then in September 
2007 she had a spot removed on her face.  Her condition seemed fine after both these 
occurrences.  In February 2008, his wife was diagnosed with cancer in her lung, spleen, 
liver, and sternum.  During part of this treatment period, he had to drive her 90 miles 
one way to another city for the chemotherapy.  Later, his wife was able to have her 
treatments in her home town.  She underwent chemotherapy until June 2008, when she 
was hospitalized for three one-week long hospital admissions with different treatments.  
She also had been going to the emergency room frequently.  In August 2008, she was 
in an extreme condition.  Her chemotherapy regime was changed, and she has 
improved dramatically.  At the time he closed his business, Applicant also realized he 
had to undertake greater family responsibilities because of his wife’s medical situation. 
(Tr. 23-25, 81-91, 98; Exhibits 1 and 3) 
 
 Applicant has eight delinquent debts listed in the SOR totaling $247,151.  That 
amount includes the mortgage balance on his foreclosed house which should have 
been paid through the foreclosure sale.  Of those eight debts, none have been proven 
to be paid except the last listed debt in Paragraph 1.h.  Applicant filed a Chapter 13 
 
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bankruptcy action on July 26, 2007, to resolve his financial delinquencies.  It was 
dismissed on October 4, 2007, because Applicant did not file an amended payment 
plan.  There was an error in a tax return filed as part of the bankruptcy, and while 
Applicant was getting it corrected, his father-in-law died.  Applicant’s spouse is the 
executor of the estate.   His attorney advised him to let the bankruptcy petition be 
dismissed until the bequests from the estate were determined, and Applicant’s wife’s 
inheritance calculated.  She eventually received $13,000 from her father’s estate.  
Applicant and his wife spent $7,000 on a tax bill, utility bill payments, and several car 
repairs, and retain $6,000 in an emergency fund.  She is also to get one-seventh of the 
value of her father’s home when they are able to sell it.  He values it at about $95,000. 
Applicant was advised by two bankruptcy attorneys to hold off filing the Chapter 13 
petition again until his creditors contact him again, especially with the medical 
deductible payments being on-going with his wife’s cancer condition.  Applicant would 
rather file bankruptcy soon and eliminate the financial uncertainly in his life, but feels he 
has no choice because of his wife’s cancer treatments and their costs.  He did 
participate in financial counseling when he filed the bankruptcy in 2007.   He also will 
prepare a budget for his home expenses. (Tr. 29-34, 53-55, 99-101; Exhibits 1, 3) 
 
  Applicant owes $386 as the last payment on a leased vehicle he turned in at the 
end of the lease term in March 2007.  That time period was when Applicant had the 
most financial constraints on him.  This debt has not been paid, though Applicant would 
pay it if he had the money to do so.  This debt was included in his 2007 bankruptcy 
filing. (Tr. 34, 35; Exhibits 1-6) 
 
 Applicant owes $17,292 to a credit card company for debts incurred as part of 
operating his photography business.  He used the card to live on in 2006 as his 
business declined.  This debt is included in his 2007 bankruptcy filing. It has not been 
paid.  The business was not a corporation, and the debt is a personal obligation of 
Applicant’s. (Tr. 35, 36; Exhibits 1-6) 
 
 Applicant owes four debts to a credit union with which he formerly did business. 
The first debt is for $38,503 on an equity line of credit on his former home, $1,826 on an 
auto loan, and $212 on an overdraft protection account, and $4,756 for business 
equipment for his former photography business.  None of these debts have been paid.  
All were included in his bankruptcy petition filing.  The overdraft protection account 
amount was listed in the SOR as $4,756, but the Government amended the amount to 
the correct amount of $212, and Applicant had no objection to the amendment, so I 
granted it.  (Tr. 36-42, 79; Exhibits 1-6) 
 
 Applicant owes $179,850 on the mortgage due on his home which was 
foreclosed in 2007.  Applicant has not received any correspondence from the bank on 
this debt.  To his knowledge, the bank bought the house for $191,000 at the auction.   
That sale price would be sufficient to satisfy his mortgage and part of the $38,503 line of 
credit he had tied to the home value.   This debt was included in the 2007 bankruptcy 
filing. (Tr. 42-44; Exhibits 1-6) 
 
 
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 The last debt listed in the SOR was for $82 owed to a collector.  Applicant denied 
that debt, and the credit report of October 27, 2008, shows the balance on this debt as 
zero.  It has been paid. (Tr. 44, 45; Exhibits 1-5) 
 
 Applicant also owes debts not listed in the SOR.  He owes federal and state 
income taxes for 2006.  He filed the tax returns, but did not have the money to pay the 
taxes with the return after he changed his accounting system from accrual to cash 
basis.  He has installment payment agreements with both tax collection agencies.  He 
pays the federal tax at the rate of $150 monthly.  The original amount owed was about 
$9,500, and now is about $7,000.  He pays the state tax agency $75 monthly on a debt 
of $1,200. (Tr. 45-49, 64, 93) 
 
 Applicant owes about $5,000 in medical debts.  He recently repaid $300 in co-
payment bills.  He tries to pay the smaller bills.  The larger hospital bills of $1,500 to one 
hospital, for example, he cannot repay now. (Tr. 28, 29; Exhibits 2-5) 
 
 Applicant owes $308 to a telephone company.  He has not paid that bill, and has 
not had contact with the creditor for over a year. (Tr. 49; Exhibits 2-5) 
 
 Applicant’s payments on his minivan are current.  He paid $162 to a children’s 
hospital on a medical debt.  A medical debt to a cancer doctor for $1,108 was paid by 
insurance.  Other medical bills listed in his bankruptcy petition were paid.  The $6,146 
owed to a dentist from 2003 has not been paid because Applicant disputes that amount, 
and the quality of the work. (Tr. 49-53, 62; Exhibits 2-5) 
 
 Applicant has not incurred any new long-term debt since February 2007.  He has 
paid debts which he could pay since then, and has managed to survive financially.  His 
financial statement provided as part of his interrogatory answers in March 2008, is 
substantially correct currently. (Tr. 54-64; Exhibits 2-5) 
 
 Applicant has no credit cards presently.  He owns two cars, one he is purchasing 
and the other is a 1991 Ford Tempo he inherited from his wife’s father.  His oldest child 
started college at a state university in September 2008.  The son is studying visual 
communications.  Applicant finances that education through loans, a scholarship, and a 
grant.  Applicant paid $1,680 for the fall semester.  Applicant uses the money from his 
second job to pay that tuition. (Tr. 73-76) 
 
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. 
 
 
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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, and 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 
 
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 
 
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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(a), an Ainability or unwillingness to satisfy debts@ is potentially disqualifying.  
Similarly under AG & 19(c), Aa history of not meeting financial obligations@ may raise 
security concerns. Applicant accumulated some delinquent debt and was unable to pay 
some obligations for the last two years. He lived in his former home without paying the 
mortgage.  The foreclosure process started, and the debt continues to show on his 
latest credit report.  He has not pursued the Chapter 13 bankruptcy, and only paid an 
$82 debt listed in the SOR.  He did pay other small debts, but has not made any effort in 
the past year to resolve the bulk of his delinquent debts.  He has delinquent taxes. The 
evidence is sufficient to raise these potentially disqualifying conditions, 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.@ Applicant=s 
financial worries arose between about 2006. He accumulated delinquent debt due to his 
wife=s medical issues and his declining income from his business. The evidence does 
not raise this potentially mitigating condition.  
 
Under AG & 20(b), it may be mitigating where Athe 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.@ As noted above, some of 
the financial problems arose from his wife=s medical problems, including the medical 
bills not covered by insurance. His wife was first diagnosed with a form of cancer in July 
2006, after he was employed by the defense contractor.  He acted responsibly in 
closing his business which consumed large amounts of his time, more than 80 per 
week, and in finding a position with a regular income and benefits which were needed 
when his wife was diagnosed with cancer. Applicant also had to assume additional 
familial responsibilities when his wife’s cancer spread in her body.  He also acted 
responsibly when he explored Chapter 13 bankruptcy, and carefully prioritized his bills. 
He allowed his residence to be foreclosed, reducing his housing costs.  But his business 
was declining before his wife was diagnosed, so it was not a pre-existing condition 
under his employer’s medical insurance to prevent coverage.  I find this potentially 
mitigating condition is a factor for consideration in this case.  
 
Evidence that Athe 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@ 
 
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is potentially mitigating under AG & 20(c). Similarly, AG & 20(d) applies where the 
evidence shows Athe individual initiated a good-faith effort to repay overdue creditors or 
otherwise resolve debts.@ Applicant received counseling as part of his 2007 bankruptcy 
filing, and filed a Chapter 13 bankruptcy in July 2007.  He dismissed it on advice of his 
attorneys when his wife was about to inherit money which might have allowed him to 
repay his debts.  He has not refilled the bankruptcy petition, but would like to do so to rid 
himself of the burden of these unresolved delinquent debts.  While he is not financially 
sound now because of his wife’s cancer treatments, he does have a plan to resolve his 
debts, and has paid some smaller debts while not incurring any other delinquent debt in 
almost two years.  But he has not started a plan to repay his overdue creditors or 
resolve his delinquent debts without bankruptcy.  I conclude these two potentially 
mitigating conditions do not apply. 
 
The connection between Applicant’s inability to repay his delinquent debts, and 
his wife’s cancer treatments, is not shown persuasively by Applicant.  His financial 
situation was declining before she was diagnosed in July 2006, and she was not shown 
to be in serious condition until February 2008, long after Applicant was employed with 
the defense contractor and had closed his photography business.  His delinquent debts, 
including the failure to pay his mortgage debt, and his various car purchases or leases, 
predate his wife’s medical problems.   
 
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.  On the Applicant’s side of the issue, 
Applicant is a husband and parent faced with very great health and financial difficulties.  
He has a cancer-stricken wife for whom he must care, including driving her 180 miles 
round-trip for treatments for a period of time until he could get the same treatments in 
his hometown area.  He saw his photography business declining, and sought regular 
employment three years ago.   
 
 
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On the financial side of the issue, it is clear his financial difficulties resulted from 
a declining business income, and his repeated use of his credit card to finance his 
business and to live on when his business declined.  $17,292 is owed on his credit card, 
and another $38,503 on an equity line of credit.  That totals about $57,000 in debt 
incurred when he should have taken action earlier to decrease his losses.  That action 
is not a responsible one, in addition to not paying his mortgage.  Applicant is a mature 
adult with business experience who should have known what would occur if he 
continued as he had been doing in his business.  It is unclear when these debts will be 
discharged in bankruptcy, or paid outside of bankruptcy.  Therefore, the situation is 
continuing.  He voluntarily incurred the debt. 
  
Overall, the record evidence leaves me with questions or doubts as to Applicant’s 
eligibility and suitability for a security clearance. For all these reasons, I conclude 
Applicant did not mitigate the security concerns arising from his financial considerations.  
I also conclude the “whole person” concept against Applicant. 
 
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 to 1.i:   Against Applicant 
   
Conclusion 
 
 In light of all of the circumstances presented by the record in this case, it is not 
clearly consistent with national security to grant Applicant eligibility for a security 
clearance.  Eligibility for access to classified information is denied. 
 
 
                                                     
_________________ 
PHILIP S. HOWE 
Administrative Judge