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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 08-04682
SSN: )
)
Applicant for Security Clearance )
Appearances
For Government: Kathryn MacKinnon, Esquire, Department Counsel
For Applicant: Leon A. Maryland, Esquire
______________
Decision
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HENRY, Mary E., Administrative Judge:
Based upon a review of the case file, pleadings, exhibits, and testimony,  I
conclude that Applicant’s eligibility for access to classified information is denied.
Applicant submitted his Security Clearance Application (SF 86), on September
26, 2007. On August 11, 2008, the Defense Office of Hearings and Appeals (DOHA)
issued a Statement of Reasons (SOR) detailing security concerns under Guidelines F
and E. 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 August 13, 2008. He answered
the SOR in writing on September 16, 2008, admitted all the SOR allegations and
GE 1 (Applicant’s security clearance application, dated September 26, 2007); Tr. 23, 100.1
GE 3 (Interrogatories) at 3; GE 4 (Interrogatories) at 5; Tr. 35-36, 110-111.2
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requested a hearing before an administrative judge. DOHA received the request on
September 19, 2008. Department Counsel was prepared to proceed on October 6,
2008, and I received the case assignment on January 22, 2009. DOHA issued a notice
of hearing on January 30, 2009, and I convened the hearing as scheduled on February
26, 2009. The government offered four exhibits (GE) 1 through 4, which were received
and admitted into evidence without objection. Applicant testified on his own behalf. He
submitted 18 exhibits (AE) A through R, which were received and admitted into
evidence without objection. The record closed on February 26, 2009. DOHA received
the transcript of the hearing (Tr.) on March 10, 2009.
Procedural and Evidentiary Rulings
Motion to Amend SOR
At the hearing, Applicant’s counsel proffered to stipulate to the fact “that at some
point in 2007, the debts listed in the SOR went into collection.  After much discussion,
the parties agreed to amend the SOR allegations 1.a through 1.l. by deleting the
language “placed for collection” with a date for collection, which is near the end of the
first sentence in each allegation. The language identifying the creditor and the amount
of the debt would remain as would the second sentence, which read: “As of June 18,
2008, this debt had not been paid.” I granted the change in the SOR as agreed by the
parties. (Tr. 34)
Findings of Fact
Applicant is 33 years old and single. At the time he completed his SF-86,
Applicant worked for a Department of Defense Contractor. He has been offered another
position with a different Department of Defense contractor which requires a security
clearance.1
Applicant worked with temporary agency in the fall 2006. His job ended at the
end of December 2006. In January 2007, Applicant became seriously ill with
pneumonia. He did not work the entire month of January 2007. Applicant obtained a 90-
day temporary job in February 2007. When this job ended in May 2007, he did not work
for two weeks.  2
On June 1, 2007, Applicant began working for a major United States (U.S.)
airline as a baggage handler. On June 30, 2007, he suffered a heart attack on the job.
His doctor released him to return to work in October 2007. He had no insurance at this
GE 4, supra note 2, at 3; Tr. 37-38, 111.3
GE 4, supra note 2; Tr. 102-104.4
GE 4, supra note 2, at 4-5; Tr. 100-104. 5
SOR; GE 3, supra note 2, attachments; AE G (Settlement offer); Tr. 49, 56-57, 60-65, 73, 75, 79, 83, 83-86,6
90, 105.
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time and workers compensation benefits did not pay his medical expenses. He paid his
medical bills related to his heart attack.3
On October 1, 2007, Applicant began employment with a Department of Defense
contractor. In November 2007, Applicant began a second job to help pay the expenses
he had incurred while unemployed. On December 12, 2007, he suffered a stroke. His
medical insurance provider paid his medical bills. Applicant did not return to work until
April 2008. Subsequent to his stroke, Applicant has been diagnosed with trigemenal
neuralgia.4
Applicant started a position with a contractor in April 2008. His net earnings with
this employer totaled $1,300 a month, which is $700 less than he was earning prior to
his stroke in December 2007. His most recent employer laid him off in January 2009
when the work contract ended. Prior to his most recent layoff, Applicant could pay his
monthly living expenses, but not his unpaid debts as he lacked sufficient income. He
has not purchased a car, new or used, has not taken a vacation, has not purchased any
big ticket items, or acquired new credit cards. In 2007, many of his creditors turned his
unpaid debts over to collection agencies. His parents helped pay his bills during periods
of unemployment and he received unemployment benefits during some of this time. He
has not provided documents showing his income and payment of living expenses during
his times of unemployment. The record is not clear as to how he paid his rent, food, and
other necessary living expenses and his medical bills in 2007.5
The SOR identifies 12 debts, totaling $15,750, owed by Applicant. At the hearing,
he acknowledged that he had not paid any of these debts. Applicant received settlement
offers from the creditors in SOR allegations 1.b through 1.e, 1.h through 1.j, and 1.l.
Three creditors made offers when Applicant was unemployed, the most recent on
February 5, 2009. Four creditors made offers less than 60 days after he returned to
work in April 2008. Applicant accepted none of the settlement offers. I infer that his
refusal to accept the settlement offers was because he lacked funds to pay the amount
of money requested and he decided not to pay old debt with credit cards.6
In his answers to interrogatories in June 2008, he indicated he would pay many
of his debts within 90 days. Instead, in October 2008, Applicant mailed letters to the
creditors identified in SOR allegations 1.a through 1.c and 1.h through 1.k. Referencing
the Fair Credit Reporting Act and the Fair Debt Collection Act, Applicant notified each
creditor that he was disputing the creditors debt claim and was requesting validation,
not verification, of the debt. Specifically, he requested information on the name of the
AE H through AE M; Tr. 48.7
SOR; GE 2; GE 3; GE 4, supra note 2, at 4; AE O; Tr. 45-46, 56-57, 79-82.  8
GE 1, supra note 1, at 33.9
GE 1, supra note 1, at 27-29; GE 3, supra note 2, at 5; Tr. 107-108.10
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original creditor, documents showing his debts, agreements to pay and calculation of
the amount of debt. He did not deny the debt or refuse to pay. He received no response
from these creditors nor has he established that the creditors received these letters. He
has not developed a plan to pay these debts or his other old debts once he returns to
work.7
Finally, Applicant denies that he owes the debts alleged in SOR allegations 1.a,
1.f and 1.g. He did not recognize these debts. He wrote to the creditor in 1.a, but has
not received a response. Without a response, Applicant cannot identify this debt. The
$180 medical bill is not recognized by Applicant as a medical debt he owes. His medical
bill are paid. These SOR allegations are generic allegations that have not been plead
with specificity and thus, fail to give Applicant notice as to whom he owes these debts.
The government has not established a prima facie case as to the debt identified in SOR
allegations 1.a and 1.g. He provided a receipt, which he believes shows he paid this
debt. I find that his receipt is valid verification that he paid the debt in allegation 1.f,
which is found in favor of Applicant.8
 On September 26, 2007, Applicant completed his security clearance application.
He answered “no” to the following questions in his e-QIP:9
Section 28: Your Financial Delinquencies
a. In the last 7 years, have you been over 180 days
delinquent on any debts?
b. Are you currently over 90 days delinquent on any debts?
Applicant denies that he intentionally falsified his answers to these questions. He
admits that he was aware of his bills when he completed his security clearance
application. He offered no clear explanation for his answer, except to say that in haste,
he just provided the wrong information. Applicant did provide information on his E-QIP
about an arrest in 2004 and a job termination under unfavorable circumstances in 2007,
indicating he was willing to provide derogatory information with potentially adverse
security implications.10
Applicant provided three letters of recommendation from two friends and a former
co-worker. All three recommend him for a clearance, stating that he is trustworthy,
AE C; AE D; AE E.11
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patriotic, and a person of integrity. All hold clearances and believe that Applicant would
protect the nation’s secrets.  11
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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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
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 delinquent debt when he was unemployed
and ill. He has been unable to pay his obligations for a period of time. 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 in 2007 and 2008. His unpaid debts are recent and frequent.
This mitigating condition does not apply.
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.@ Applicant’s financial
problems arose from his medical problems, which led to eight months of unemployment
between January 2007 and April 2008. He returned to work in April 2008, earning $700
a month less in income than he earned at the time he suffered a stroke. Clearly, these
factors are beyond his control. Before determining the applicability of this mitigating
condition, I must determine if Applicant acted reasonably under the circumstances. For
a period of 15 months, Applicant worked less than 50% of the time. He could not pay his
bills, He relied upon family and unemployment to pay his basic bills, such as rent,
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utilities, food and his car payment. Payment of all his debts by his family was not an
option. He had no choice but to forgo many of his debt payments. When he returned to
work, he earned enough money to pay his basic bills. He did not incur new, unpaid
debts. He, however, did not pay his old debts nor did he accept any the offers to settle
his debts as he lacked the money to do so. He did not settle these debts by acquiring
new debt. Under these circumstances, Applicant acted reasonably. Using new debt to
pay old debt or failing to pay current expenses as a means to pay old debt is not
reasonable. This mitigating condition applies. However, financial considerations are not
fully mitigated because Applicant has not made sufficient progress or provided a viable
plan for delinquent debt resolution. See whole person concept, infra.
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@
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 has not received counseling nor has he resolved
any of his delinquent debts. His letters to seven creditors are not sufficient evidence to
fully establish a good faith effort to resolve his debts. He has not developed a plan to
repay his debts when he returns to work. I conclude these two potentially mitigating
conditions do not apply.
Finally, an Applicant may mitigated security concerns under AG ¶ 20 (e) if “the
individual has a reasonable basis to dispute the legitimacy of the past-due debt which is
the cause of the problem and provides documented proof to substantiate the basis of
the dispute or provides evidence of actions to resolve the issue.” Applicant notified
seven creditors that he disputed their claim he owed a debt and requested validation of
the debt. He did not refuse to pay the debt. Nonetheless, the creditors failed to respond
to his request for validation of their debt. He does not deny owing some of these debts,
but disputes the actual amount owed. He, however, has not taken sufficient action to
resolve these debts. This mitigating condition has partial applicability.
Guideline E, Personal Conduct
AG ¶ 15 expresses the security concern pertaining to 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.
AG ¶ 16(a) describes conditions that could raise a security concern and may be
disqualifying:
See ISCR Case No. 03-09483 at 4 (App. Bd. Nov.17, 2004)(explaining holding in ISCR Case No. 02-2313312
at 5 (App. Bd. Jun. 9, 2004)).
Even if I were to find the government had established disqualifying condition AG ¶ 16(a), mitigating condition13
AG 18(f), the information was unsubstantiated or from a source of questionable reliability would apply as the
allegation of intentional falsification was unsubstantiated.
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(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.
For AG ¶ 16(a) to apply, Applicant’s omission must be deliberate. The
government established that Applicant omitted a material fact from his SF-86 when he
answered “no” to Question 28, sections a and b, about his past due debts. This
information is material to the evaluation of Applicant’s trustworthiness to hold a security
clearance and to his honesty. In his response, he denies, however, that he had an intent
to hide information about his finances. When a falsification allegation is controverted,
the government has the burden of proving the omission was deliberate. Proof of an
omission, standing alone, does not establish or prove an applicant’s intent or state of
mind when the omission occurred. An administrative judge must consider the record
evidence as a whole to determine whether there is direct or circumstantial evidence
concerning an applicant’s intent or state of mind at the time the omission occurred.  For12
DC ¶ 16 (a) to apply, the government must establish that Applicant’s omission,
concealment or falsification in his answer was deliberate.
Applicant denied intentionally leaving out information about his overdue debts.
Even though he had knowledge of past due debts, Applicant’s failure to answer “yes”
about his overdue debts in light of this knowledge is not proof that he intentionally
falsified his SF-86. The government has not established that Applicant intended to hide
his financial situation from the government. Applicant testified that he was trying to
make sure his answers were correct and that he must have unintentionally inputted the
incorrect information. His testimony reflects that he sought to provide honest and correct
information. He provided other negative information in his SF-86, which supports his
position that he did not act intentionally, but carelessly. Guideline E is found in favor of
Applicant.13
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
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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 eligibility for a security
clearance must be an overall common sense judgment based upon careful
consideration of the guidelines and the whole person concept. The decision to grant or
deny a security clearance requires a careful weighing of all relevant factors, both
favorable and unfavorable. In so doing, an administrative judge must review all the
evidence of record, not a single item in isolation, to determine if a security concern is
established and then whether it is mitigated. A determination of an applicant’s eligibility
for a security clearance should not be made as punishment for specific past conduct,
but on a reasonable and careful evaluation of all the evidence of record to decide if a
nexus exists between established facts and a legitimate security concern.     
In reaching a conclusion, I considered the potentially disqualifying and mitigating
conditions in light of all the facts and circumstances surrounding this case. Applicant’s
financial problems became serious when he started missing time from work because of
major health issues. He lost income each time his serious health problems kept him
from working. In November 2007, he took a second job to help pay his bills. Only a
month later, he suffered a stroke, causing him to again miss significant time from work.
Once his health improved, he returned to work, but at a lower salary than previously
earned. 
Applicant disputes seven of the debts listed in the SOR. He, however, has not
contacted any of the creditors listed in the SOR to work out a repayment plan once he
returns to work nor has he made sufficient efforts to verify if the debts are his or not. In
his answers to interrogatories, he said he would pay many of his debts with 90 days of
returning to work, but he did not do so. Because he is currently unemployed, he has no
ability to repay his old debts. He has not provided any concrete plan to resolve his debts
nor has he provided documented information on how he is paying his living expenses
when unemployed. Of course, the issue is not simply whether all his debts are paidBit is
whether his financial circumstances raise concerns about his fitness to hold a security
clearance. His debts remain unpaid and he is unemployed. His present circumstances
raise a security concern because he has no income. (See AG & 2(a)(1).) Based on an
overall review of the evidence of record, I am unable to conclude that Applicant has
mitigated the security concerns of the government even though he has established
some financial mitigating conditions. 
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 mitigated the security concerns arising from his personal conduct, but has not
fully mitigated the security concerns arising under financial considerations. 
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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: For Applicant
Subparagraph 1.b: Against Applicant
Subparagraph 1.c: Against Applicant
Subparagraph 1.d: Against Applicant
Subparagraph 1.e: Against Applicant
Subparagraph 1.f: For Applicant
Subparagraph 1.g: For Applicant
Subparagraph 1.h: Against Applicant
Subparagraph 1.i: Against Applicant
Subparagraph 1.j: Against Applicant
Subparagraph 1.k: Against Applicant
Subparagraph 1.l: Against Applicant
Paragraph 2, Guideline E: FOR APPLICANT
Subparagraph 2.a: For Applicant
Subparagraph 2.b: 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 interest to grant Applicant eligibility for a security
clearance.  Eligibility for access to classified information is denied.
                                                              
MARY E. HENRY
Administrative Judge