DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 08-01291 
  ) 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Richard Stevens, Esquire, Department Counsel 
For Applicant: Pro Se 
 
 
 
______________ 
 
Decision 
______________ 
 
CREAN, Thomas M., Administrative Judge: 
 
Applicant submitted a Questionnaire for Sensitive Position (SF 86) on August 15, 
2007.  On October 8, 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.  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 July 28, 2008. 
 
 Applicant answered the SOR in writing on October 28, 2008.  He admitted one of 
the debts but noted he was unaware of the debt, and denied six of the allegations under 
Guideline F.  He provided proof of payment of two of the debts.  He requested a hearing 
before an administrative judge.  Department Counsel was prepared to proceed on 
November 14, 2008, and the case was assigned to me on November 19, 2008.  DOHA 
issued a notice of hearing on January 13, 2009, for a hearing on February 4, 2009.  I 
 
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convened the hearing as scheduled.  The government offered four exhibits, marked 
Government Exhibits (Gov. Ex.) 1 through 4, which were received without objection.  
Applicant submitted six documents, marked Applicant Exhibits (App. Ex.) A-F, which 
were received and admitted without objection.  Applicant testified on his behalf.  The 
record was left open for Applicant to submit additional documents.  Applicant timely 
submitted five additional documents marked App. Ex. G-K.  The government did not 
object to the admission of the documents (See Gov. Ex. 5, Department Counsel Letter, 
dated February 19, 2009), and the documents are admitted.  DOHA received the 
transcript of the hearing (Tr.) on February 19, 2009.  Based upon a review of the case 
file, pleadings, exhibits, and testimony, eligibility for access to classified information is 
granted. 
 
Findings of Fact 
 
Applicant is 29 years old and has been a property book logistics specialist for a 
defense contractor for over two years.  He is married with three children.  He served on 
active duty in the Army for approximately five years.  His discharge was under Other 
Than Honorable Conditions in lieu of court-martial.  The Army Board for Correction of 
Military Records upgraded his discharge to General under Honorable Conditions (App. 
Ex. H, DD 214).  He did not hold a security clearance while on active duty.  After he left 
the Army, Applicant enrolled in college and earned his Bachelor's degree in 3 and a half 
years.  Applicant's wife handles the family finances.  She especially managed the 
finances while Applicant was in Iraq for his employer in 2007 to 2008 (Tr. 32-37; Gov. 
Ex. 1, SF-86, dated August 6, 2007).  When Applicant served in Iraq for his defense 
contractor employer, he earned a significant salary (See Gov. Ex. 2, Answers to 
Interrogatories at 72).  Applicant completed this form while assigned in Iraq).  Since 
Applicant's return to the United States, his salary has been reduced.  His net monthly 
pay is now $2,072.  He receives $593 per month in Veteran's Administration disability.  
His wife's net monthly pay is $2,800 for a combined family income of approximately 
$5,500.  Their monthly recurring expenses are $3,200, leaving a discretionary or 
disposable funds monthly remainder of $2,200 to $2,300 (Tr. 38-41). 
 
A credit report (Gov. Ex. 4, Credit Report, dated April 2, 2008) shows Applicant 
had the following delinquent debts; an account in collection for student loans of $1,440 
(SOR 1.a); a charged off account for $520 (SOR 1.b); a charged off credit card account 
for $765 (SOR 1.c); a credit card account charged-off for $6,016 (SOR 1.d); a charged 
off department store account for $1,416 (SOR 1.e); a collection account on a credit card 
for a bank for $943 (SOR 1.f); and a charged off bank loan for $14,135 (SOR 1.g).    
 
Delinquent debt SOR 1.a is a student loan in collection for $1,440, from a college 
Applicant attended.  Applicant completed his Bachelor's degree and started classes 
towards a Masters of Business Administration degree.  After starting the fall semester, 
he took a position in Iraq for his employer and had to drop the course.  He was not 
aware that he had incurred an expense for not completing the course.  After learning of 
the debt, Applicant entered a payment plan with the collection agency for the university 
and has been paying $100 per month on the debt.  The balance on the debt is now less 
 
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than $1,000 (Tr. 13-16, 20-21; Appellant Exhibits A and B, Bank Statements, dated 
December 23, 2008, and November 20, 2008).   
 
Delinquent debt SOR 1.b is an account in collection for a retail store for $520.  
Applicant had a payment plan with a credit organization and was informed by them that 
this account had been paid in full.  However, he had not been able to verify the payment 
or receive a letter that the account was paid.  After the hearing as requested, Applicant 
contacted the retail store and requested payment information on the account.  He was 
informed the account had been paid and was closed.  He was informed twice that 
documents verifying this information would be sent to him.  Applicant had not received 
the documents from the store at the deadline imposed for him to forward documents (Tr. 
20-22; App. Ex. G, Letter, undated). 
 
Delinquent debt SOR 1.c is an account in collection for a credit card for $765.  
Applicant's wife paid this debt by electronic transfer, but he does not have a receipt for 
the payment (Tr. 18-19).  After the hearing, Applicant called the credit card company 
and was informed the account had been sold to a law firm (App. Ex. G, Letter, undated).  
The law firm was placed in receivership and is no longer in business.  The credit card 
company cancelled all debts to them that were being collected by the law firm.  Because 
of the action of the law firm, Applicant cannot verify payment (App. Ex. K, Article, 
November 26, 2008).  However, the receivership has verified that all accounts being 
collected by the law firm have been forgiven by the credit card company (App. Ex. E, 
Letter, dated October 15, 2008).    
 
Delinquent debt SOR 1.d is for a charged off debt to a bank for $6,016.  
Applicant's wife paid this account in full and Applicant, as an authorized user on the 
account, no longer has responsibility for the account and debt (Tr. 18, App. Ex. D, 
Letter, dated October 20, 2008; App. Ex. J, Check, dated April 25, 2008).  
 
Delinquent debt SOR 1.e is an account for a department store.  Applicant claims 
his wife paid the account but there is no documentation to show payment.  Applicant 
contacted the department store and was informed that the account was sold and 
charged off for so long there is no reason to try to pay the account (Tr.  21-22). 
 
Delinquent debt SOR 1.f is a bank loan in collection for $943.  Applicant paid this 
account in full (Tr. 19; App. Ex. F, Letter, dated October 22, 2008).  
 
Delinquent debt SOR 1.g is a bank loan for a car charged off for $14,135.  
Applicant settled this account for $7,000 and paid the account (Tr. 17; App. Ex. C, 
Letter, dated January 22, 2009). 
 
Since leaving active duty with the Army, Applicant has had three children, 
graduated from college, purchased a house, is employed, and meets his financial 
obligations.  His company rates his performance as above average to outstanding.  
Applicant and his wife used the extra money he made while stationed in Iraq and his tax 
refund to pay their debts in early 2008.  He has over $4,500 in cash in his house to use 
 
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for contingencies (Tr. 34-36, 43-47; App. Ex. I, Evaluation, dated February 2, 2009).  
Applicant and his wife do have student loans to pay but they are current on these loans 
(Tr. 29-30). 
 
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 
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. 
 
 
 
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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.  The delinquent debts on the credit report are a security concern raising 
Financial Consideration Disqualifying Conditions (FC DC) ¶ 19(a) "inability or 
unwillingness to satisfy debts", and FC DC ¶ 19(c) "a history of not meeting financial 
obligations".   
 
 Applicant raised mitigating circumstances for his debts by his testimony.  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" and find it has some application.  
Six of the seven debts listed in the SOR have been paid or resolved.  Four of the debts 
were paid at least a year ago and are not current debts.  Two of the debts were paid or 
forgiven within the last six months.  The remaining debt is being paid under a payment 
plan.  He used extra money earned in Iraq and his tax refund to pay his debts.  
Applicant took measures to resolve his debts and his financial problems should not 
recur.  His present financial situation does not cast doubt on his 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 did not list any 
conditions that were beyond his control that caused his financial problems.  However, 
he did act responsibly towards his debts under the circumstances by using the extra 
funds earned for serving in a combat zone and his tax return to pay most of his past due 
obligations.   
 
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 I considered FC MC ¶ 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 
under control" does not fully applies.  There are some indications Applicant received 
financial counseling since he indicated he employed a credit service company to help 
him pay his debts.  He did not provide additional information concerning any counseling 
the company provided him.  However, his financial problems are being resolved and are 
under control meeting this prong of the mitigating condition.   
 
 FC MC ¶ 20(d) "the individual has initiated a good-faith effort to repay the 
overdue creditors or otherwise resolve debts" partially applies.  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 has the ability to pay the debts, has shown a strong desire to pay 
them, and has shown a good-faith effort to pay them.  Applicant paid or resolved six of 
the seven delinquent debts listed in the SOR.  While he did not have complete 
documentation of payment of all of the debts, he made a concerted effort to obtain the 
documents, but could not because of the lack of records or response from the collection 
agencies.  His statement that debts have been paid where no documentation could 
verify the payment is credible.  The one remaining debt is being paid under a payment 
plan and Applicant provided documentation of payment under the plan.  Applicant has 
not incurred additional delinquent debts and is paying his student loans as agreed.  
Applicant acted responsibly towards his debts, and established his good-faith efforts to 
resolve his debts.  He mitigated security concerns for his financial situation. 
 
 “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) the 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.  
 
I considered the potentially disqualifying and mitigating conditions in light of all 
the facts and circumstances surrounding this case.  I considered Applicant's five years 
 
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of active duty in the Army and the upgrade of his discharge to General under Honorable 
Conditions.  Applicant lives within his means and meets his present personal financial 
obligations including his student loans.  He paid or resolved his past due obligations 
except for one debt that is being paid under a payment plan.  His actions do not indicate 
poor self control, lack of judgment or unwillingness to abide by rules and regulations.  
He is not financially overextended, and his finances do not create a security concern.  
Overall, on balance the record evidence leaves me with no questions or doubts as to 
Applicant’s eligibility and suitability for a security clearance.  For all these reasons, I 
conclude Applicant has mitigated the security concerns arising from financial 
considerations.  
 
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 
 
  Subparagraphs 1.a - 1.g:  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.  Eligibility for access to classified information is granted. 
 
 
 
_________________ 
THOMAS M. CREAN 
Administrative Judge