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                           DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
  ) ISCR Case No.  08-06765 
  ) 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: James F. Duffy, Esq., Department Counsel 
For Applicant: Pro Se 
  
 
 
 
______________ 
 
Decision 
______________ 
 
 
DAM, Shari, Administrative Judge: 
 
 Based upon a review of the case file, pleadings, exhibits, and testimony, eligibility 
for access to classified information is granted. 
 
On February 25, 2008, Applicant submitted an Electronic Questionnaires for 
Investigations Processing (e-QIP). On December 12, 2008, the Defense Office of 
Hearings and Appeals (DOHA) issued Applicant a Statement of Reasons (SOR), 
detailing security concerns under Guideline F (Financial Considerations). 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.  
  
 
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 On January 20, 2009, Applicant answered the SOR in writing and elected to have 
the case decided on the written record in lieu of a hearing. On February 5, 2009, 
Department Counsel prepared a File of Relevant Material (FORM) containing eight 
Items, and mailed Applicant a complete copy on February 10, 2009. Applicant received 
the FORM on February 17, 2009, and had 30 days from its receipt to file objections and 
submit additional information. On March 11, 2009, Applicant submitted a letter with 
additional information. Department Counsel had no objections to the submissions, 
which I marked as Applicant Exhibits (AE) A and B and admitted into the record. On 
March 19, 2009, DOHA assigned the case to me.  
 
 Findings of Fact 
 
 In his Answer to the SOR, Applicant admitted all factual allegations contained in 
the SOR ¶¶ 1.a through 1.cc.  In AE A, Applicant revised his previous Answer, admitting 
all allegations, except ¶¶ 1. r, 1.t, 1.y, 1.aa, 1.bb, and 1.cc. He claimed they no longer 
appear on credit bureau reports (CBR), dated March 4, 2009, and March 7, 2009. He 
did not provide those documents. He also denied the allegation contained in SOR ¶ 1.v 
pertaining to a state tax lien, asserting that it was paid.  
 
 Applicant is 52-years old and married. In February 2008, he began his 
employment with a federal contractor as a drafter.1 Prior to this position, he worked as 
an associate designer for a private company from August 2006 to January 2008. 
Immediately preceding that time frame, he was on social security disability from June 
2003 to August 2006, due to medical conditions. In late 1999, he suffered a heart attack 
and later lost a kidney. He was subsequently placed on dialysis and experienced many 
complications. In early 2001, he underwent a triple bypass surgery after being evaluated 
for a transplant. As a result of his health issues and mounting debts, in June 2001, he 
filed a Chapter 13 Bankruptcy. In April 2004, he received a transplant. He and his wife 
attempted to manage their debt through the bankruptcy proceeding, but in June 2004 he 
converted the Chapter 13 into a Chapter 7 bankruptcy. In the process, he surrendered 
his home, but retained two cars. In October 2004, the court discharged delinquent 
debts, the amount of which is not clearly articulated in the record. He worked for a 
private company as an insulator from May 1995 until June 2003, when his request for 
disability became effective. While on disability, his wife earned about $17,000 annually, 
but has not worked since 2007.  (Item 5; AE A)  
 
 From September 2005 to August 2006, Applicant attended vocational training in 
order to accommodate his physical infirmities, terminate his disability status, and 
improve his financial situation. (AE A; Item 5 at 10) As a result of that training, he 
obtained his current position. (AE A) 
 
 Based on credit bureau reports (CBR) dated March 8, 2008, and November 13, 
2008, the SOR alleged twenty-eight delinquent debts, totaling $6,598. Twenty-two of 
those debts are owed to medical creditors and total $3,942. On March 10, 2009, 
                                                          
1Applicant obtained a Secret security clearance sometime in 1980, which he needed to work at a 
naval shipyard for a federal contractor. (Item 5 at 32)  
 
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Applicant entered into an agreement with a company to help resolve nineteen of the 
twenty-eight outstanding debts, which total $4,579. Applicant asserted that the 
remaining eight debts (totaling $1,419) have been removed from his recent CBR, but 
does not indicate why. Seven of those eight debts are medical debts and are included in 
the twenty-two debts noted previously. (AE A and B) Applicant paid the $688 state tax 
lien, listed under SOR ¶ 1.v. (Item 6 at 5; Item 8; AE A) 
     
 According to the budget he submitted in August 2008, Applicant’s net monthly 
income was $2,063 and his expenses were about $2,260, indicating a $197 monthly 
deficit.  Since May 2007, he has managed to pay off four tax liens. (Item 7) 
 
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 commonsense decision. According to AG ¶ 2(a), 
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. According to Directive ¶ E3.1.15, “The applicant 
is responsible for presenting witnesses and other evidence to rebut, explain, extenuate, 
or mitigate facts admitted by the 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 
 
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the possible risk that an 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 adverse to an 
applicant 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 Executive Order 
12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive 
information). 
 
Analysis 
 
Guideline F, Financial Considerations 
 
The security concerns relating to the guideline for Financial Considerations are 
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, two of them are potentially disqualifying: 
 
(a) an inability or unwillingness to satisfy debts; and 
 
(c) a history of not meeting financial obligations. 
 
Based on two CBRs and his admissions, Applicant has been unable or unwilling 
to satisfy debts that began accruing subsequent to the discharge of other debts through 
bankruptcy in October 2004. The evidence is sufficient to raise these two disqualifying 
conditions.  
 
After the Government raised potential disqualifications, the burden shifted to 
Applicant to rebut and prove mitigation of the resulting security concerns. The guideline 
includes six examples of conditions that could mitigate security concerns arising from 
financial difficulties under AG ¶ 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 
 
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cast doubt on the individual=s current reliability, trustworthiness, or good 
judgment;  
 
 (b) the 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;  
 
(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;  
 
(d) the individual initiated a good-faith effort to repay overdue 
creditors or otherwise resolve debts;   
 
(e) 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; and 
 
(f) the affluence resulted from a legal source of income.   
 
Applicant’s financial delinquencies are ongoing and have been so, both prior to 
and subsequent to a discharge of debt through the bankruptcy court in October 2004. 
Hence, AG ¶ 2 (a) cannot apply. Applicant’s financial difficulties are attributable to a 
three-year period of time in which he was on disability, his wife earned a small salary, 
and he incurred large medical bills that constitute the bulk of the delinquent debts. 
Those conditions were beyond his control. However, there is no evidence in the record 
indicating that he responsibly attempted to manage his finances during those difficult 
periods, which is necessary for full application of this mitigating condition. Thus, AG & 
20(b) has limited application. Applicant did not present any evidence that he received 
credit counseling. Recently, he hired a firm to begin resolving 19 of the 28 delinquent 
debts, which actions warrants some mitigation under AG & 20(c). Applicant has paid the 
outstanding $688 tax lien, such that AG & 20(d) applies to that debt. There is no 
evidence indicating that he disputed any of the debts, which is required for the 
application of AG & 20(e). The record does not support the application of AG & 20(f).  
  
 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). They include the following:  
 
(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.  
 
According to 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. Applicant is 52-years old and 
recently began working for a federal contractor. Prior to this position, he worked for a 
private company for about eight years before becoming disabled due to kidney failure. 
As a consequence of his serious medical condition, he was on disability for three years, 
while his wife earned a minimal salary. Those circumstances clearly contributed to his 
bankruptcy and later financial problems. Initially, he attempted to manage his debts 
through a Chapter 13, but within three years converted it into a Chapter 7 when he 
could no longer maintain the payments. I also considered the Government’s concerns 
over Applicant’s outstanding delinquent debt that now totals about $6,000 and accrued 
since his October 2004 bankruptcy discharge. While I appreciate the significance of that 
concern, I recognize that Applicant sought to improve his financial situation by attending 
vocational school for a year between 2005 and 2006 while on disability. Given his initial 
attempt to pay his debts through a Chapter 13 and the subsequent completion of 
vocational training, I find that he previously demonstrated a determination to responsibly 
manage his financial delinquencies. Although he entered into an agreement to resolve 
his debts very recently, there is no other derogatory information in the record that leads 
me to conclude that he will not follow through with the resolution of his debts (most of 
which are medical) and jeopardize his employment.   
 
  Overall, the record evidence leaves me without 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 financial issues.  
 
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 through 1.cc:  For Applicant 
  
 
 
 
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Conclusion 
 
 In light of all of the circumstances presented by the record in this case, it is 
clearly consistent with the interests of national security to grant Applicant eligibility for a 
security clearance.  Eligibility for access to classified information is granted. 
                                              
   
 
_________________ 
SHARI DAM 
Administrative Judge