1
                                                             
                           DEPARTMENT OF DEFENSE   
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
 ------------------------- )     ISCR Case No. 08-07301
SSN: ----------------- )
)
Applicant for Security Clearance )
Appearances
For Government: Eric H. Borgstrom, Esquire, Department Counsel
For Applicant: Pro se
______________
Decision
______________
MATCHINSKI, Elizabeth M., Administrative Judge:
Applicant owes about $72,000 in delinquent debt from 2006 that she has yet to
resolve. While some of the debt was incurred for a now closed mortgage business,
Applicant has a track record of late payments on living expenses that raises concerns
for her ability to manage her finances and to repay the delinquent debt in the
foreseeable future. Clearance is denied.
Statement of the Case
Applicant submitted an Electronic Questionnaire for Investigations Processing (e-
QIP) on April 2, 2008. On February 3, 2009, the Defense Office of Hearings and
Appeals (DOHA) issued to Applicant a statement of reasons (SOR) detailing the
security concerns under Guideline F that provided the basis for its decision to deny her
a security clearance and refer the matter to an administrative judge. 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
2
amended (Directive); and the revised adjudicative guidelines (AG) effective within the
Department of Defense as of September 1, 2006.
On February 20, 2009, Applicant answered the SOR and requested a hearing.
The case was assigned to me on April 2, 2009, to conduct a hearing and to determine
whether it is clearly consistent with the national interest to grant or continue a security
clearance for Applicant. On April 16, 2009, I scheduled a hearing for May 8, 2009.
I convened the hearing as scheduled. Five government exhibits (Ex. 1-5) were
admitted without any objections. A chart concerning the debts, marked as a hearing
exhibit, was submitted as a supplement to the government’s oral closing argument.
Applicant testified on her behalf, as reflected in a hearing transcript (Tr.) received on
May 14, 2009. Applicant also offered three exhibits (Ex. A-C), to which the government
had no objections. Exhibits A and B were admitted. Admission of Exhibit C was
contingent on Applicant providing a copy on or before May 15, 2009, as she wanted to
retain the original document.
On May 13, 2008, Applicant submitted a copy of Exhibit C by facsimile, and it
was entered into the record. In her forwarding correspondence, she described recent
settlement offers (Ex. D), and moved for the admission of a character reference letter
received after the hearing (Ex. E). Department Counsel filed no objections by the May
22, 2009, due date for a response, and the documents were admitted.
Findings of Fact
DOHA alleged under Guideline F, financial considerations, that Applicant owes
delinquent debt totaling $72,027 (SOR ¶¶ 1.a through 1.f). Applicant admitted the debt,
although she averred she had made payments to the creditor in SOR ¶ 1.a, was
negotiating settlements with the creditors in SOR ¶¶ 1.b through 1.e, and had received
a final settlement offer from the creditor in SOR ¶ 1.f. She indicated that she should
have that debt paid off within the next two months. Applicant explained that her
delinquent  debt was due to factors outside of her and her spouse’s control: a serious
car accident involving their children in February 2006, and a business failure in August
2006 followed by unemployment and underemployment. Applicant cited improvements
in their financial situation and her intent to resolve the debts without resorting to
bankruptcy.
After considering the pleadings, transcript, and exhibits admitted into the record, I
make the following findings of fact.
Applicant is a 40-year-old married mother of three children, sons age 7 and 11
and a daughter born in September 2008. She has been employed by a defense
contractor as a senior administrative assistant since March 2008, and seeks her first
security clearance (Ex. 1).
In August 2004, Applicant and her spouse opened a video and web business out
of their home (Ex. 1). Around that same time, Applicant’s spouse got involved in a multi-
Applicant believes these partners responded to an advertisement placed by the corporate1
headquarters (Tr. 91).
Applicant estimated that three-quarters of the debt balances in SOR ¶¶ 1.b, 1.c, and 1.e were for2
business expenses (Tr. 87). She testified that she had opened the account in SOR ¶ 1.b in her name, but later
added her spouse as an authorized user (Tr. 105).
Applicant testified initially that her spouse handled the family’s finances, including between 2006 and3
July 2008 (Tr. 66). She later clarified that she took over the finances from 2004 until mid-2007 when she felt
overwhelmed (Tr. 103). The debts at issue became delinquent during that time. 
3
level marketing mortgage lending company that was based in a distant state. As branch
manager/owner, he opened a suburban branch, at which he maintained his primary
office and controlled the day-to-day operations. He opened a second branch in an urban
locale that was managed by four partners, each of whom had put up a share of the
funds to operate the business (Tr. 89-90).  Applicant’s spouse put up at least $10,000,1
largely on Applicant’s personal credit, to establish the two branches (Tr. 97, 99).
Applicant had been unemployed for a year. She went to work as an executive assistant
for her spouse in the suburban branch, although she also helped out at the urban
branch (Ex. 1). Her spouse continued to retain his position in sales at a local radio
station while getting established in the mortgage business. He had no previous
experience in the industry (Tr. 92).
Applicant’s spouse took cash advances against her account in SOR ¶ 1.b, and
he charged some expenses for the mortgage business using her personal credit (Tr. 87,
99).  Her spouse opened utility accounts (e.g., telephone) in his own name for the2
mortgage business (Tr. 29). Applicant or her spouse or both also traveled on personal
credit to Las Vegas and to Texas to do corporate events for their home-based
media/video business (Tr. 87). Her spouse did not open a business credit card account.
According to Applicant, their business partners were supposed to reimburse them
monthly for expenses but failed to keep up with their obligations (Tr. 88, 96-97).
In February 2006, Applicant’s two sons were involved in a serious car accident
with their nanny, who died as a result of her injuries. The children suffered primarily
emotional trauma. Applicant began to work from home and reduced her hours to about
20 a week as she cared for them and took them to mental health counseling (Tr. 30, 48-
50, 52-53). The costs were covered by their insurance for the most part, although there
is one outstanding bill that the insurer is refusing to pay (Tr. 51). Applicant and her
spouse had to retain legal counsel to obtain coverage for some of the costs associated
with the accident and the attorney’s final bill has not yet been paid (Tr. 52).
Applicant handled the family’s finances from 2004 to mid-2007 (Tr. 103).  She3
stopped paying on some of their financial obligations, including on some credit card
accounts that were solely in her name. The lender in SOR ¶ 1.b charged off a
delinquent balance of $37,644 due to nonpayment after May 2006 (Exs. 4, 5). As of July
2006, Applicant’s credit card account in SOR ¶ 1.e was closed because she was 150
days past due. As of March 2008, the account was in collection with a balance owed of
$14,903 (Ex. 5). She made no payments on their joint Discover card account after July
Applicant testified that the partners barred her spouse from access to the urban branch and contacted4
the police (“They took our personal belongings, our wedding photos, you know, anything that we had
personally in the office. The police came and said my husband could not take a single thing out of the office,
it got really nasty and my husband feared for our lives, so we had to keep a baseball bat at our door because
it got so bad.” Tr. 90). She testified threats were made against their family and she wanted to file a complaint
with the police, but that her spouse did not want to aggravate the situation (Tr. 100).
4
2006. As of September 2008, the outstanding balance of that debt had reached $3,789
(SOR ¶ 1.a) (Exs. 4, 5).
In August/September 2006, the state terminated the rights of the national
mortgage lender to operate within its boundaries. All branch offices, including those
owned by Applicant’s spouse, had to cease operations until further notice (Tr. 28). Over
the next few months, Applicant and her spouse hoped that the business license of the
out-of-state mortgage company would be reinstated and they would be allowed to
resume operations (Tr. 55). Checks from her spouse’s partners began to be returned for
insufficient funds (Tr. 92-93). Applicant’s spouse continued to pay the overhead costs of
the suburban and urban branches, largely with personal savings until December 2006,
when he decided to close the business (Ex. 2). He closed the suburban office, but his
partners at the urban branch resisted and became affiliated with another mortgage
lender (Tr. 28-29, 90-91).  Applicant was left with substantial debt on her personal credit4
card accounts, some of which was incurred for the mortgage business. Until September
2007, Applicant’s spouse received some residual income from the national mortgage
lender on mortgage loans closed outside the state (Tr. 28, 48, 56), but even with their
video and web business, they were unable to cover all their financial obligations (Tr.
56).
Applicant stopped making payments on her credit card debt in SOR ¶ 1.c by
February 2007. As of October 2007, she owed a collection balance of $12,305 (SOR ¶
1.c) (Exs. 4, 5). A gasoline credit card account on which Applicant owed $2,000 was
closed by the credit grantor (SOR ¶ 1.d) for nonpayment since December 2006 (Exs. 4,
5). Applicant and her spouse also began to fall behind in late 2006 on a joint auto loan
of $24,548 that they had taken out in May 2004 for a Nissan Pathfinder. As of March
2008, the loan was 60 days past due for the third time (not alleged in SOR) (Ex. 5). In
about August 2007, they began to fall behind on their mortgage. As of late 2007, their
mortgage loan was 60 days past due but they brought it current by February 2008 (Ex.
5). On January 4, 2008, Applicant was given the option of settling a delinquent gasoline
credit card debt of $615.66 (SOR 1.f) for a lump sum payment of $61.57 or five
payments of $24.63 (Ex. 3). She did nothing about the debt until March 2009.
Following the closure of his mortgage office, Applicant’s spouse worked for his
brother’s employer in the mortgage industry from December 2006 to September 2007
(Ex. 2), when he returned to his previous job at the radio station because he was not
bringing enough income into the home to sustain their family (Tr. 30, 57). In mid-2007,
Applicant turned over handling of the family’s finances to her spouse because she was
overwhelmed (Tr. 104), even though she was unemployed. She had not found an
administrative position that would allow her to be at home after school (Tr. 57). In July
2007, Applicant and her spouse traveled to the Bahamas (Ex. 1), but it was paid for by
5
her father-in-law’s travel agency in return for some videotaping work (Tr. 82-83). By
September 2007, Applicant realized that she had to bring in income, and she went to
work for her brother-in-law’s employer at reduced hours, albeit reluctantly since she was
not a talented salesperson (Ex. 3, Tr. 59). She worked  on commission and closed only
one mortgage over the few months she was there (Ex. 3, Tr. 59).
In March 2008, Applicant began working for her current employer (Ex. 1, Tr. 31).
She and her spouse established a new budget and a plan to save $100 per pay period.
She also set up a 401(k) at work for her retirement (Ex. 2). That same month, the
creditor in SOR ¶ 1.a obtained a $4,362.75 judgment against her, and placed a lien
against their home. In late March 2008, their 2004 model-year vehicle was repossessed
after they fell behind in their payments.
On April 2, 2008, Applicant completed an e-QIP for a security clearance. She
disclosed the judgment and lien awarded the creditor in SOR ¶ 1.a and the very recent
repossession of their vehicle, although she explained that she and her spouse were in
the process of gathering the funds needed to redeem the car by April 10, 2008. In
response to the financial delinquency inquiries, Applicant listed the judgment and car
repossession debts and some credit card debts ($12,305 on SOR ¶ 1.c, $2,000 on SOR
1.d, $37,644 on SOR ¶ 1.b, and $13,794 on SOR ¶ 1.e). As for being a party to any
public civil court actions in the last seven years, Applicant listed the judgment lien, but
also that they were still awaiting a settlement for their sons’ injuries in the February
2006 car accident (Ex. 1). On April 7, 2008, Applicant’s spouse paid $1,885.16 to
redeem their 2004 Nissan Pathfinder from repossession (Ex. 2).
Over the January to May 2008 time frame, Applicant and her spouse incurred
medical costs of about $2,413.72 not covered by insurance (Ex. A). Applicant disputed
their responsibility for most of the debt (Ex. 2).
Applicant and her spouse got behind on their mortgage in April and May 2008.
The mortgage lender offered them a means to bring their loan current by signing a
promissory note for the $5,992.49 past due. On May 28, 2008, Applicant her spouse
agreed to resume regular payments of their mortgage immediately, and starting in
December 2008, to make regular installment payments of $48.49 per month on the
promissory note in addition to their mortgage payments. Two days later, the mortgage
lender issued a notice of intention to foreclose on their mortgage. They avoided
foreclosure by making their subsequent monthly payments of $2,059.44 on time (Ex. 3).
On May 19, 2008, the agency holding the debt in SOR ¶ 1.e offered to settle the
$15,674.96 balance on receipt of a lump sum payment of $7,053.73. On June 16, 2008,
Applicant sent letters to the creditors in SOR ¶¶ 1.a through 1.d. She offered to pay
10% of the outstanding balances of SOR ¶¶ 1.a, 1.c, and 1.d (¶¶ 1.a and 1.d at $25 per
month and ¶ 1.c at $50 per month). Applicant offered to pay $1,200 at $50 per month to
settle the $37,644 debt balance of SOR ¶ 1.b. Her payments would be contingent on
the creditors waiving interest and removing any negative information from her and her
spouse’s credit records. Applicant asked both the original creditor of SOR ¶ 1.c  and the
agency collecting the debt to cease contacting her at work about the debt because she
In her letter to the creditor, Applicant increased her offer to $2,461. However, in her settlement offer5
to the collection agency, she reiterated her previous settlement offer of 10% or $1,230.50 (Ex. 3).
Applicant testified they got stuck with paying the copier lease of $5,000 (“It jumped from, I thought6
it was $3,500 and it ended up being $5,000.") (Tr. 86). She told DOHA in August 2008 that they were under
a plan to make $500 payments per month until the $3,500 balance was paid off (Ex. 3).
6
had been reprimanded by her employer because of their calls. Applicant’s creditors had
not responded to her offers by July 18, 2008, so she sent second letters offering to
settle SOR ¶ 1.a for $1,308.82 (up from $436.28), ¶ 1.b for $3,764.40 (up from $1,200),
and ¶ 1.c for $2,461 (up from $1,230.50 ). Also, on July 18, 2008, Applicant offered to5
settle the debt in SOR ¶ 1.e for 10% of the original balance of $13,794 at $50 per
month. Over the next few weeks, she sent followup letters to the creditors in SOR ¶ 1.d
and 1.e, offering again to resolve the debts at 10% of the original balances. On August
7, 2008, a new assignee of the debt in SOR ¶ 1.c requested payment of the $12,305.24
full balance from Applicant (Ex. 3).
In the summer of 2008, Applicant’s spouse paid $1,500 toward a $3,500 copier
debt for his former business,  and they paid for summer camp for their two sons (Ex. 3).6
In July 2008, Applicant incurred late charges on three department store revolving
charge accounts for failure to make a payment the previous month (Ex. 3). On July 29,
2008, the court ordered Applicant and her spouse to pay $25 per month on the
judgment owed the creditor in SOR ¶ 1.a, pending a hearing on the matter scheduled
for December 1, 2008 (Ex. 2). Applicant, who gave birth to their third child (a daughter)
in late September 2008 (Tr. 73), did not make any payments on the debt until December
2008, because she was out of work for six weeks on unpaid maternity leave (Tr. 71).
She paid for a short-term disability benefit but found out she was ineligible to collect as
she had not been with her employer for a year (Tr. 71). 
DOHA sent financial interrogatories to Applicant on July 19, 2008, requesting that
she document any payments on the debts in SOR ¶¶ 1.a–1.e. On August 14, 2008,
Applicant forwarded copies of her current monthly bills (utilities, school tuition, summer
camp, mortgage), medical bills, and her efforts to reach settlements on her delinquent
credit card debt. She provided evidence of her and her spouse’s employment income, of
joint  savings and checking balances totaling $2,205, and of the value ($1,764.74) of her
401(k). She estimated a net monthly remainder of $1,014.52, including a monthly
payment of $25 on SOR ¶ 1.a but excluding any payments on the debts in SOR ¶¶
1.b–1.e. Applicant indicated that she and her spouse had taken specific actions to get
back on track financially. She had acquired stable employment and they had restarted
their home-based web and video business for extra income. They had redeemed their
Nissan vehicle from repossession and had averted foreclosure of their mortgage. Her
spouse was paying on the copy machine debt from their failed mortgage business. They
had brought current some bills, and were working to bring current their heating oil,
cellular phone, and outstanding medical debts. She added that they planned to put up
their home for sale, and would use any equity to pay off their debts. Applicant
volunteered that her spouse had been in a car accident with their 2001 Honda on
August 6, 2008, and they were waiting to see whether the car could be repaired or
would have to be replaced (Ex. 3). The vehicle was subsequently determined to be
Applicant testified on May 8, 2009, that the creditor owed the $37,644 offered to settle for 30% of the7
balance (Tr. 67). On May 13, 2009, she indicated that she had just received an offer to settle the debt for 10%
of the balance (Ex. D). She presented no documentation from the creditor corroborating the offers.
7
totaled and they bought a used 1998 model year minivan to replace it. They owe
nothing on that vehicle (Tr. 77).
In August 2008, Applicant and her spouse were billed $6,300 in reduced tuition
for their two sons who attend a private school. They received financial aid of $3,928 for
the upcoming school year. As of July 25, 2008, Applicant and her spouse had just
finished paying their tuition and extended care obligation for the 2007-08 school year
(Ex. 3).
On December 23, 2008, Applicant paid $75 on the Discover card judgment debt
(SOR ¶ 1.a) for October through December 2008. On February 3, 2009, she paid $25
for January 2009. She paid $25 for February on the 27  of the month (Ex. B). Afterth
Applicant missed her payment for March 2009, the creditor obtained a court order to
garnish her wages. Applicant had the order rescinded, and on April 15, 2009, an
“agreement for judgment” in the amount of $4,678.70 was awarded the creditor.
Applicant is under court order to repay the debt at $25 per month beginning April 30,
2009, in return for waiver of future interest, provided her payments are made on time
(Tr. 41, 72-73). In the event of a default, interest is to accrue from March 8, 2008 (Ex.
C). On April 28, 2009, she paid the creditor $50 (Ex. B).
In mid-April 2009, Applicant’s spouse was laid off from his job at the radio station.
He has since focused on their home-based video and web design business (Tr. 60). He
was collecting unemployment compensation of $750 per week (Tr. 61, 75). On March 3,
2009, Applicant paid $61.57 to settle the debt in SOR ¶ 1.f (Ex. A, Tr. 32). On April 30,
2009, she paid $1,433.71 to pay off the car loan for the Nissan that had been redeemed
(Ex. A, Tr. 32). The money came from their income tax refunds for 2008, which totaled
about $3,900 (Tr. 68-69). On May 8, 2009, Applicant paid $1,500 of her sons’ school
tuition. The remainder of the income tax refund monies was still in their bank account
(Tr. 68-69). Applicant pays a friend from church $35 per day to care for her daughter
while she is at work (Tr. 74). Applicant is employed full-time, although she has a
modified schedule under which she works nine-hour days one week followed by three
nine-hour days and one eight-hour day the next week (Tr. 74).
As of May 2009, Applicant had not resolved those debts in SOR ¶¶ 1.a–1.e.
Apparently the creditors in SOR ¶¶ 1.b and 1.d have agreed to settle her accounts on
receipt of $3,765  and $1,000 (Tr. 32-33, 64), although there is no record documenting7
these offers. She plans to pay the $1,000 once she has the funds and then work on
repaying the creditor in SOR ¶ 1.b (Ex. D). She has not had any contact with the
creditor in SOR ¶ 1.c since July 2008 (Tr. 69). Applicant is paying on three retail store
charge accounts as of May 2009 (Tr. 80). The accounts had been delinquent in July
2008 (Ex. 3). Based on current expenses, Applicant estimates that she and her spouse
have a joint remainder of $1,000 per month even while he is collecting unemployment
compensation. She testified they are saving toward satisfying debts and catching up on
Applicant testified that she and her spouse had worked with consumer credit counseling when they8
first moved to the area and had resolved previous debt successfully (Tr. 102).
8
their mortgage. As of May 2009, Applicant and her spouse were behind a payment or
two on their mortgage. They were seeking to refinance their adjustable rate loan into a
30-year fixed loan that would lower their monthly obligation (Tr. 62). They had about
$2,900 in savings/checking assets (Tr. 82). Asked about why they are continuing to fall
behind when they reportedly have $1,000 in discretionary funds each month, Applicant
cited the costs associated with a newborn and a need to readjust their budget to get a
handle on their expenditures (Tr. 84). In an effort to reduce their expenses, they had
eliminated Internet access at home over a year ago (Tr. 92). Since they keep their
check register in their computer, her spouse now takes his laptop to the library and
downloads their account information (Tr. 66). They also dropped their telephone land
line at home, but have two cell phone accounts (Tr. 92-93). As of July 2008, Applicant
had a calling plan costing her $100 a month. Her spouse was with a separate carrier at
a monthly charge of $80 (Ex. 3). Applicant reduced the percentage of money she was
investing in her 401(k) at work so that they would have more income for household
expenses (Tr. 94). To prevent unnecessary spending, she no longer carries her debit
card and has to clear any purchases with her spouse (Tr. 95). He is handling the
family’s finances. She trusts him to do so despite his poor choice of business partners in
the past (Tr. 101).
Applicant and her spouse hold lay leadership positions in their church. She has
been a member of the congregation since 1996. She has proven to the ministers and to
others in the church that she can keep information private and they consider her to
possess high character and personal integrity (Exs. A, B, E). Applicant and her spouse
have signed up to take a financial course offered through their church in the fall in an
effort to get out of debt as quickly as they can (Tr. 102).8
Applicant is held in high regard by her work colleagues as well. She provides
administrative support to several project finance teams where she is known for an
excellent work ethic, teamwork, and commitment to the programs (Exs. A, B).
Policies
The U.S. Supreme Court has recognized the substantial discretion of the
Executive Branch in regulating access to information pertaining to national security
emphasizing, “no one has a ‘right’ to a security clearance.” Department of the Navy v.
Egan, 484 U.S. 518, 528 (1988). 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 overarching adjudicative goal is a fair,
impartial and common sense decision. According to AG ¶ 2(c), the entire process is a
9
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
that 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 about finances 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.
Between May 2006 and February 2007, Applicant stopped paying on five of her
credit card accounts (SOR ¶¶ 1.a—1.e), and delinquent debts totaling about $70,641
were charged off or placed for collection or both. A $615.66 gasoline credit card debt, in
collection as of January 2008 (SOR ¶ 1.f) was settled for 10% of the balance ($61.57
payment) in March 2009, but the other debts have yet to be resolved. As of May 2009,
10
the aggregate balance of the unpaid accounts was about $72,000. Furthermore, in
August 2008, she provided documentation showing she owed more than $2,000 in
unpaid medical debt (not alleged in SOR). There is no proof that those debts had been
resolved or her liability successfully disputed. AG ¶ 19(a), “inability or unwillingness to
satisfy debts,” AG ¶ 19(b), “a history of not meeting financial obligations,” are
implicated.
Mitigating condition 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 cast doubt on the individual’s current reliability, trustworthiness, or good judgment,”
cannot reasonably be applied. Her financial problems are extensive and ongoing. Just
before she completed her e-QIP in April 2008, their car was repossessed for failure to
make timely payments. While she redeemed the vehicle within 30 days, they fell behind
in their mortgage payments. They avoided foreclosure by executing a promissory note
under which they are required to pay $48.49 per month for 174 months in addition to
making their regular mortgage payments. By May 2009, they were again behind in their
mortgage.
AG 20(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,” applies, but only in part. The serious car
accident in February 2006, the unexpected suspension of the national mortgage
lender’s license to operate in the state in 2006, and the denial of short-term disability
pay while Applicant was on maternity leave in the fall of 2008, negatively impacted her
ability to pay her financial obligations. However, AG ¶ 20(b) does not mitigate the poor
financial decisions that led to the incurring of substantial debt that became  delinquent in
2006. They put up $10,000 largely on her credit to open two branches within a multi-
level marketing organization in an industry in which her spouse had no previous
experience (Tr. 92). He entered into some type of partnership with four persons he did
not know but on whom he depended for the funds to run his mortgage business. He
took cash advances on her credit card in SOR ¶ 1.b to pay office overhead costs. They
used her credit for a trip to Las Vegas for their home-based video business. Nor does
AG ¶ 20(b) explain the repossession of their vehicle (albeit redeemed within 30 days) in
April 2008, the late charges in July 2008 on some of her retail credit card accounts, or
her failure to make her $25 payment on the debt in SOR ¶ 1.a in March 2009.
Applicant and her spouse had some financial help from consumer credit
counseling when they first moved to the area. But one has to question the value of that
previous association, given it did not prevent them from risking their own financial
solvency by entering into a multi-level mortgage marketing business on little more than
credit. Moreover, in lieu of settling the debt in SOR ¶ 1.d with their income tax refund,
Applicant paid $1,500 of the refund toward their sons’ private school tuition. Although
not frivolous expenditure, one has to question whether they can reasonably afford
private school tuition when her spouse was recently laid off and they are currently
behind in their mortgage. Applicant and her spouse have taken some steps to reduce
their expenses. She no longer carries her debit card and has to inform her spouse of
11
any intended purchases. At home, they have eliminated Internet access and their land
line. They also registered for a financial class offered at their church this fall. However, it
would be premature to apply 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,” when she has made little progress toward resolving her
delinquent debt.
AG ¶20(d), “the individual initiated a good-faith effort to repay overdue creditors
or otherwise resolve debts,” applies in very limited part. Her payments on her Discover
card debt (SOR ¶ 1.a) began after a judgment had been awarded the creditor in March
2008 and a lien had been placed on their home, so it cannot be said that the payments
were completely voluntary. She missed her October and November 2008 payments
when she was on maternity leave without pay. Although she paid $75 in December
2008 to catch up, she made a late payment for January 2009 and she missed her
March 2009 payment. She argued in closing (Tr. 119) that she had been notified that
the creditor was seeking to attach her wages, and she did not want to make a double
payment. A creditor is not likely to resort to court action if timely payments are being
made. Even with respect to the settlement of the debt in SOR ¶ 1.f, the creditor offered
to settle for $61.57 back in January 2008. Applicant did not pay the settlement amount
until March 3, 2009. According to the income and expense figures she provided in
August 2008, she should have been able to settle the debt sooner. Applicant proposed
settlement offers to her creditors last summer, but her failure to make any payments on
the debts in SOR ¶¶ 1.b, 1.c, 1.d, and 1.e undermine her case for mitigation under AG ¶
20(d). She has had no contact with the creditor in SOR ¶ 1.c since July 2008.
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 conduct
and all the circumstances in light of 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 eligibility for a security
clearance must be an overall commonsense judgment based upon careful consideration
of the guidelines and the whole-person concept.
The DOHA Appeal Board has addressed a key element in the whole person
analysis in financial cases stating, in part, “an applicant is not required, as a matter of
12
law, to establish that [she] has paid off each and every debt listed in the SOR. All that is
required is that an applicant demonstrate that [she] has ‘ . . . established a plan to
resolve [her] financial problems and taken significant actions to implement that plan.’”
ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008) (internal citations omitted).
Assuming her spouse incurred about three-quarters of her delinquent debt in the
operation of his mortgage business, Applicant is still responsible for the debt incurred in
her name. She handled the family’s finances when the accounts in the SOR became
delinquent, so the debt balances were known to her. In her favor, she has been open
about her financial problems with the government, and she has had more than her
share of unfortunate circumstances that have negatively affected her finances, including
her spouse’s recent layoff. But while she presented DOHA with a plan to resolve her
financial problems in August 2008, she has not done enough under that plan to
overcome the concerns about her financial judgment. 
The incurring of late charges on retail credit card accounts in July 2008, when
she and her spouse were working full-time, raise doubts about whether she can
properly manage her finances. As of May 2009, she and her spouse were again late in
their mortgage payments despite the efforts they made to avert foreclosure in May
2008. The creditors in SOR ¶¶ 1.b, 1.d, and 1.e have offered settlements advantageous
to Applicant, and she still has not made any payments to those creditors. Based on the
facts before me, I am unable to conclude that it is clearly consistent with the national
interest to grant Applicant access to classified information at this time, notwithstanding
her good work performance for the defense contractor.
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: Against 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
Conclusion
In light of 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.
ELIZABETH M. MATCHINSKI
Administrative Judge