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                        DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
------------------- )       ISCR Case No. 08-00994
SSN: ----------- )
)
Applicant for Security Clearance )
Appearances
For Government: D. Michael Lyles, Esq., Department Counsel
For Applicant: Pro se
                                                                            
______________
Decision
______________
MARSHALL, Jr., Arthur E., Administrative Judge:
Applicant completed Electronic Questionnaires for Investigations Processing (e-
QIP) which were certified on November 7, 2007. On July 29, 2008, the Defense Office
of Hearings and Appeals (DOHA) issued a Statement of Reasons (SOR) stating
security concerns under Guideline F (Financial Considerations) and Guideline E
(Personal 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. 
In a response notarized on August 22, 2008, Applicant constructively admitted
three of nine allegations regarding finances and denied all allegations raised with
regard to personal conduct. DOHA received Applicant’s request to have the matter
heard before an Administrative Judge on October 2, 2008. I was assigned the case that
 Tr. 43.1
 Tr. 40.2
 Compare Ex. 1 (Security Clearance Application) at 8; Tr. 42.3
 Tr. 44.4
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same day. Applicant and Department Counsel agreed to a hearing date of October 23,
2008. A Notice of Hearing to that effect was issued on October 6, 2008. 
The hearing was timely convened. As a preliminary matter an Amendment to the
SOR was received, signed by Department Counsel and Applicant. By that amendment,
the Government revised allegations 1.f., 1.g., 1.h., 2.a., 2.b., and 2.c.. Applicant denied
the amended allegations. Allegations 1.i., 2.d., and 2.e. were deleted. During the
hearing, Department Counsel introduced six documents which were admitted into the
record as exhibits (Exs.) 1-6 without objection. Applicant introduced six documents
which were admitted into the record as Exs. A-F without objection. Applicant testified on
his own behalf; no witnesses appeared. The transcript (Tr.) was received on October
31, 2008, and the record was closed on November 6, 2008. Based upon a review of the
case file, exhibits, and testimony, security clearance is granted.
Findings of Fact
Applicant is a 50-year-old technical consultant, performing networking and
telephonic installation for a government contractor. He has a high school diploma and
attended two years of post-secondary technical school for electronics. He is married
and has three minor daughters.
In the mid-1990s, Applicant sold the family home for a smaller house they
intended to refurbish. During the renovations, they planned on living in a mobile home
situated on the same lot.  Expenses on the home remodeling far exceeded what they1
had expected. Meanwhile, Applicant’s elderly mother-in-law’s health was in decline and
needed assistance. She came to live with the family for a year before her condition
necessitated a hospital stay and professional nursing care. A year after her arrival, she
passed away. Applicant’s wife developed a crippling hand disorder that precluded her
from working as a waitress, which started her on a protracted period of unemployment.2
Then the family was informed that they could have only one dwelling per lot. Applicant
had to buy a new lot on which to move the mobile home. As a result of this conflux of
problems, bills continued to arrive and become delinquent. Applicant sought Chapter 7
bankruptcy protection in September 1997.
In 2004, Applicant and his wife bought a new home.  Shortly thereafter,3
Applicant’s sister-in-law needed major medical treatment. She and her son moved in
with Applicant’s family shortly after they moved into the house.  A person with4
considerable disabilities, the sister-in-law relied upon her son for transportation as she
received essential medical treatments in a nearby hospital. Applicant and his wife
 Tr. 42.5
 Id.6
 Id.7
 Tr. 53.8
 Ex. 1 (Security Clearance Application), at 25-26.9
 The original SOR incorrectly cites to these questions as being Sections 38 and 39. The amended SOR10
incorrectly refers to Section 28b as Section 29.
 Id. at 26.11
 SOR allegations 1.c. and 1.a., respectively. Included in the Chapter 13 filing (SOR allegation 1.a.) was a12
$700 obligation to a furniture company, noted in the SOR under allegation 1.d. See Tr. 35.
 Ex. A (W ife’s bankruptcy discharge, dated May 15, 2001); Tr.24-26.13
 Excluding the debt noted in SOR allegation 1.d. and conceded by the Government as being included in the14
Chapter 13 bankruptcy filing.
 SOR allegation 1.e.15
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helped care and provide for her during her stay. They stayed with Applicant and his
family for about six months. She died shortly after leaving Applicant’s home. Meanwhile,
Applicant was faced with a mortgage for which he should never have qualified.  He5
almost immediately began having difficulty making the house payments. He also had a
van requiring large monthly payments.  “And we just had more bills than we could pay6
and stay in the house.”  Applicant became unable to meet his obligations. He filed for7
Chapter 13 bankruptcy protection in 2005, on which regular payments have been made.
In November 2007, Applicant completed a security clearance application. He did
so without first consulting a recent credit report.  He believed all of his delinquent debts8
had been included in his bankruptcy. On the application, at Section 27, he fully detailed
both the 1997 and 2005 bankruptcy filings. In doing so, he constructively gave notice
that he had considerably delinquent debts within the past seven years of his
application.  However, in answering the following sections, Sections 28a and 28b,  he9 10
answered “No” to questions as to whether he had been over 180 days delinquent on
any debts in the prior seven years or was currently delinquent on any debts over 90
days.  He further testified that he believed his answers to be true.11
In sum, Applicant filed bankruptcy twice, Chapter 7 in 1997, and Chapter 13 in
2005.  Applicant’s credit bureau report shows a third bankruptcy, from 2001, but it is an12
erroneous entry for a bankruptcy filed by his wife.  The Government alleges that13
despite the bankruptcies, Applicant owes a cumulative delinquent debt of $1,943 : $7414
to a credit union, an amount which was charged off,  $100 to a creditor, which was15
 SOR allegation 1.f. (as amended).16
 SOR allegation 1.g. (as amended).17
 SOR allegation 1.h. (as amended).18
 Tr. 33.19
 Tr. 39. Appellant was given 14 days following the hearing to submit to Department Counsel any evidence20
of payment or inclusion in the bankruptcy, but no further documents were timely received. 
 Tr. 46.21
 Tr. 48.22
 Tr. 55-56.23
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turned over for collection,  $50 to a creditor, which was turned over for collection,  and16 17
$1,719 on an account since placed for collection as a bad debt.18
Applicant denied the debts alleged. As proof, Applicant introduced Exhibit B,
Notice of Claims Filed in the Chapter 13 bankruptcy, which shows that the obligations
for $100 (SOR allegation 1.f., as revised) and $50 (SOR allegation 1.g., as revised)
were included in that filing. He also introduced Exhibit C, an October 22, 2008, credit
report, indicating that the account noted at SOR allegation 1.h, as revised, is now at a
zero balance by virtue of the Chapter 13 bankruptcy.  The account balance of $74,19
which apparently failed to be included in the bankruptcy, remains unpaid.20
Late in 2007, Applicant’s wife was in a car accident which damaged her foot and
caused deep thrombosis. Immediate surgery was required. As a result, she has been
unable to return to work. Aside from that impact on the family coffers, Applicant has no
large debt. His wife is currently awaiting qualification for unemployment assistance
based on her disability. While she waits out that protracted process, she is
contemplating finding some form of work she can perform. If his wife can return to work
or when she is finally eligible for Social Security disability payments, the family will be
doing much better financially.  They have no car payments and Applicant nets21
approximately $3,250 per month in take-home pay.  With three girls in public school,22
ranging in age between 10 and 17, little is left at the end of the month after all living
expenses and extras are paid. Applicant currently has three credit cards. None of the
balances ever exceed $500. Two are currently 30 days past due for amounts between
$230 and $222.  On the other hand, Applicant is generally keeping up with his debts23
and living within his income. The family lives simply, but comfortably.
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
 See also ISCR Case No. 94-1075 at 3-4 (App. Bd. Aug. 10, 1995).24
 Department of the Navy v. Egan, 484 U.S. 518, 531 (1988).25
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).26
 Id.27
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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 a24
preponderance of evidence.  The ultimate burden of persuasion is on the applicant.  25 26
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 access27
to sensitive information must be resolved in favor of protecting such sensitive
 Id.28
 Executive Order 10865 § 7.29
 Revised Adjudicative Guideline (AG) ¶ 18.30
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information.   The decision to deny an individual a security clearance is not necessarily28
a determination as to the loyalty of an applicant.  It is merely an indication that the29
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) to be the most pertinent to the case. Conditions pertaining to this
adjudicative guideline 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
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 conditions30
under this guideline.  
In 1997 and in 2005, Applicant’s expenses exceeded his income, debts became
delinquent, and he was forced to resort to bankruptcy protection. Today, one minor debt
for $74 appears to remain delinquent and unpaid. 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 to Appellant to overcome
the case against him and mitigate security concerns. 
Applicant bought a modest house in the 1990s he wished to remodel. Expenses
toward that project exceeded his expectations, and a mobile home on the property had
to be moved and a new lot purchased for its placement. While both situations arose
unexpectedly, neither was necessarily unforeseeable had more diligence been
exercised. What was unforeseeable and beyond Applicant’s control, however, was his
wife’s inability to work due to a crippling hand injury and his mother-in-law’s need of
end-term care. Similarly, with regard to the facts leading to the 2005 bankruptcy,
Applicant realizes the mortgage he undertook was more than he could afford, especially
when he had an expensive vehicle note. To the extent he and his wife provided end-
care assistance to his sister-in-law, however, those expenses were unforeseeable.
Consequently, with regard to his wife’s injury and his in-laws’ final illnesses, Financial
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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”) applies.
Applicant provided no evidence that he has received financial counseling. He
has, however, demonstrated that all the debts noted in the amended SOR but one – a
delinquent debt for $74 – have been satisfied. It is troublesome, however, that so minor
a debt has not been satisfied in the months since he received the SOR. Also troubling
is the fact that two of his credit cards are currently over 30 days past due. Conversely,
Applicant has met his responsibilities with the bankruptcy court. He has realistically
adjusted his budget to account for his wife’s current disability and unemployment and is
contemplating options for when she either returns to work or receives disability. While it
cannot be said Applicant’s financial problems are under control, he has demonstrated
that considerable progress has been made toward resolving the problem. 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”)
applies. None of the other mitigating conditions, however, apply. 
GUIDELINE E
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. Based on the amended SOR, Department Counsel argues
that Applicant actively falsified material facts on his security clearance application when
he denied he had debts currently delinquent over 90 days. To support this claim, he
points to the debts noted at allegations 1.d. through 1.h.
Applicant denies he falsely answered any application questions. Not having first
consulted his most recent credit report, he had no idea what his credit report revealed.
However, he felt sure that any delinquent accounts had been addressed through the
2005 bankruptcy. That bankruptcy was duly described on the security clearance
application on page 28 at the end of Section 27 – inches above his denials regarding
delinquent debts in Sections 28a and b.
Applicant apparently overlooked the $74 debt when he was preparing his
bankruptcy petition, just as he missed it when he completed his application by not first
checking his credit report. Given the nominal sum at issue, Applicant’s highly credible
testimony, and his success in demonstrating that the other four accounts alleged were,
in fact, included in his bankruptcy, it is difficult to conclude Applicant deliberately
falsified facts simply to conceal one minor outstanding debt. I find no falsity or
concealment was committed. Lacking that element, a Personal Conduct Disqualifying
Condition cannot be sustained. Applicant’s evidence and explanation mitigate personal
conduct security concerns. 
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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 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 quick to accept blame for poor
business choices, yet capable of both articulating and documenting his efforts in
managing his finances. While he found himself over-extended in the 1990s due to a
variety of factors, the story behind his most recent bankruptcy is an all too familiar tale
in this recent economic climate. He was extended a mortgage which grew beyond his
means, other accounts suffered, and his personal finances became undone. He has
complied with the terms of the bankruptcy court. Applicant has made great strides to
modify and monitor his family’s expenditures. He is committed to holding his family to
their budget. 
The Government’s initial SOR was revised, with many prior allegations withdrawn
to conform with the evidence. The evidence, however, showed this Applicant has only
twice sought bankruptcy protection, not thrice. Of several alleged delinquent debts
amounting to about $2,500, he showed that all but one $74 debt was addressed in his
2005 bankruptcy petition. Applicant did well in addressing those allegations head on.
What remains is an examination of Applicant today. He has no large or unwieldy
debts, nor does he have any car note payments. He is currently budgeting within his
means and comfortably providing for his family, although little is left for extras. He is
able to meet the daily needs of both his spouse and three maturing girls on his income.
Family resources should be much improved when his wife’s disability or work situation
is resolved. While two credit cards are just over 30 days late, his use of credit is minor.
It would be easy to contemplate various future scenarios as to his future solvency or
insolvency, particularly given the current economic climate, but this process demands
that I avoid drawing inferences grounded on mere speculation or conjecture. The
simple fact is that at present, Applicant is living within his means with only a $74
delinquent debt outstanding. The meager amount of Applicant’s unresolved delinquent
debt is not large enough to be of security concern.
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Moreover, there is no indication that Applicant committed a falsity or otherwise
tried to conceal the existence of the $74 which, at the time of the hearing, remained
unresolved. Given his candid testimony and other factors previously discussed,
personal conduct security concerns are similarly mitigated. With security concerns thus
mitigated, I conclude it is clearly consistent with national security to grant Applicant a
security clearance. Clearance is granted.
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: FOR APPLICANT
Subparagraph 1.a: For Applicant
Subparagraph 1.b: For Applicant
Subparagraph 1.c: For Applicant
Subparagraph 1.d: For Applicant
Subparagraph 1.e: For Applicant
Subparagraph 1.f: For Applicant
Subparagraph 1.g: For Applicant
Subparagraph 1.h: For Applicant
Paragraph 2, Guideline E: FOR APPLICANT
Subparagraph 2.a: For Applicant
Subparagraph 2.b: For Applicant
Subparagraph 2.c: For Applicant
Conclusion
In light of all of the circumstances presented by the record in this case, it is
clearly consistent with national security to grant Applicant eligibility for a security
clearance. Clearance is granted.
ARTHUR E. MARSHALL, JR.
Administrative Judge