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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
           )       ISCR Case No. 08-10045
SSN: )
)
Applicant for Security Clearance )
Appearances
For Government: Julie Mendez, Esquire, Department Counsel
For Applicant: Ronald S. Rossi, Esquire
                            
______________
Decision
______________
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 must be granted.
Applicant submitted his Electronic Questionnaires for Investigations Processing
(e-QIP) on June 2, 2008. On February 11, 2009, the Defense Office of Hearings and
Appeals (DOHA) issued Applicant a Statement of Reasons (SOR) detailing security
concerns 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 March 30, 2009. He answered
the SOR in writing through counsel on March 31, 2009, and requested a hearing before
GE 1; Tr. 28-30.1
GE 1; Tr. 31-34, 37.2
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an administrative judge. DOHA received the request on April 1, 2009. Department
Counsel was prepared to proceed on April 24, 2009, and I received the case
assignment on April 27, 2009. DOHA issued a notice of hearing on May 8, 2009, and I
convened the hearing as scheduled on June 9, 2009. The government offered five
exhibits (GE) 1 through 5, which were received and admitted into evidence without
objection. Applicant testified on his own behalf. He submitted seven exhibits (AE) A
through G, which were received and admitted into evidence without objection. DOHA
received the transcript of the hearing (Tr.) on June 16, 2009. I held the record open until
June 23, 2009, for Applicant to submit additional matters. On June 16, 2009, he
submitted five exhibits, AE H through AE L, without objection. The record closed on
June 16, 2009.
Procedural and Evidentiary Rulings
Motion to Amend SOR
Department Counsel advised that the debt amount in allegation ¶ 1.d of the SOR
was incorrect. Department Counsel indicated that the debt amount should be $631, not
$1,631 and asked that the SOR be corrected. Applicant’s counsel did not object.
Allegation ¶ 1.d of the SOR is corrected to reflect a debt of $631.
Findings of Fact
In his Answer to the SOR, Applicant admitted the factual allegations in ¶¶ 1.b, 1.d
and 1.e of the SOR, with explanations. He denied the remaining factual allegations of
the SOR. He also provided additional information to support his request for eligibility for
a security clearance.  
Applicant, who is 51 years old, works for a Department of Defense contractor as
an electronics technician. He has worked for this company for many years. Applicant
graduated from high school, then completed a four-year apprenticeship in navigational
systems.  The federal government granted him a security clearance in 1970 or 1971. He
has held a security clearance continuously since this time without any violations of the
rules and regulations for handling classified information. Applicant is not married and
has no children.1
Applicant worked for his company or its predecessor for 18 years in the East. In
2002, he accepted a work transfer offered by his company and moved west. In 2004,
the government contract held by his company came up for bid. To retain his
employment through the contract bidding process, his company transferred him to the
Midwest. His company lost the contract bid and Applicant remained in the Midwest for
nearly three years.2
Tr. 30-36.3
Id. at 37.4
GE 2 (Credit report, dated October 7, 2008); GE 3 (Credit report, dated June 12, 2008); AE E (Credit report,5
dated June 8, 2009); AE F (Credit report, dated March 29, 2009).
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Applicant did not have financial problems until he moved to the Midwest at his
own expense and took a $30,000 pay cut. He exhausted his savings paying bills, and
he curtailed his expenses, including cancelling his cable TV service and internet access
at home. While living in the Midwest, family emergencies required him to fly East
several times. As a result, he incurred additional expenses beyond his budget. He met
with a financial counseling service and retained the company when he still lived in the
Midwest. He later discovered that this company was not paying his usual bills, such as
his car payment, as he had expected. He discontinued this company’s services and
worked on his own to resolve his debt issues.  3
In June 2007, Applicant transferred to the East and received a substantial
increase in salary. Once he settled into his new job and home, Applicant contacted his
creditors and started paying his debts.4
After reviewing the credit reports dated June 12, 2008, October 7, 2008, March
29, 2009, June 8, 2009, and the SOR, I have compiled a list of the total debts owed,
excluding any duplicate entries. I find that Applicant’s actual debts are as follows:5
SOR ¶ TYPE OF DEBT AMOUNT STATUS EVIDENCE
1.a Utility bill $     205.00 Paid AE F, page 37
1.b Credit card $  3,311.00 Paying $200 month,
Balance $1,310
AE D; Tr. 37
1.c Loan account $14,711.00 Disputes balance;
Paying $200 month
AE G; AE H; AE
I; AE K; Tr. 46-50
1.d Credit card $     631.00 Unpaid; Creditor
has no record of
debt
Tr. 50-51
1.e Credit account $  1,325.00 Paid AE E; AE G; AE
H; AE I; Tr. 51-52
1.f Collection
account
$     986.00 Settled for $600;
Paid $400; Balance
to be paid in June
2009
AE I; Tr. 54-56 
GE 4 (Response to interrogatories with attachments); AE A; Tr. 93.6
Tr. 50-51, 70, 73-75.7
Tr. 67-69.8
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1.g Collection
account
$  1,720.00 Paying $100 month,
Balance $1,120
AE I; Tr. 58-60
1.h Collection
account 
$     779.00 Settled and Paid AE J; Tr. 60-61
1.i Collection
account
$     100.00 Paid Tr. 61-62
1.j Store Account $     601.00 Paid GE 4; AE C; Tr.
62-63
Applicant currently earns $69,500 a year. His gross monthly income totals $5,795
and his net monthly income totals $3,837. His usual monthly expenses include rent,
food, utilities, automobile expenses, car payment, and insurance, for a total of $1,848.
He uses his remaining income to repay his old debts. He pays three creditors a total of
$500 each month, and he also pays smaller loans. His landlord verified he timely pays
his rent.  6
Applicant acknowledged the debts in allegations 1.c and 1.d. He borrowed up to
$3,000 from the creditor identified in 1.d when he lived in the West and Midwest, not the
amount listed in his credit reports. He filed a dispute with the credit reporting company,
challenging the balance of this debt. Concerning the credit card debt in 1.c, Applicant
contacted the creditor, who has no record of an account in his name. The creditor
advised the account had been sold, but could not provide any information about who
currently owns the account. As no other information exists on this account, Applicant
cannot resolve this debt.   7
In February 2009, Applicant suffered a stroke, received hospital treatment and
underwent physical therapy. During his illness, Applicant paid all his bills, including his
debt repayment. He has also paid all his medical bills. Applicant developed a plan for
financial recovery and followed it.8
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.
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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.
 
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
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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 following a significant
decrease in income. He was unable to pay some 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.@ This mitigating
condition is not applicable. 
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 accepted a job
transfer in 2002 and a second job transfer in 2004. He moved in 2004 to preserve his
employment. The move, however, cost him $30,000 in income loss and resulted in debt
accumulation. Applicant eventually obtained a better paying job. Once he settled in his
new location, he contacted his creditors and began repaying his debts. He acted
responsibly under the circumstances. This mitigating condition applies. 
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 retained a counseling service several years ago, but
discontinued the service when he learned this company was not paying his bills
properly. This decision shows sound judgment on his part. Once his financial
circumstances improved, he contacted his creditors and began the long process of
paying his delinquent debts. He has resolved many of his delinquent debts, either by
payment or settlement. He pays the remaining debts through monthly payment plans.
He is now financially sound. I conclude these mitigating conditions apply.
Finally, an applicant may mitigate 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 disputed the
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debt listed in SOR allegation ¶ 1.c as he believed the balance on this account is
incorrect. He acknowledged owing money to this creditor; but, he believed the balance
was excessive. His decision to dispute this debt is reasonable based on his knowledge
of the actual amount of money borrowed from the creditor. The credit reporting agency
has not responded to his notice of dispute nor resolved the conflict in information about
this debt. This mitigating condition has some applicability to this one debt.
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 relevant circumstances. The administrative judge should consider the
nine adjudicative process factors listed at AG ¶ 2(a):
(1) the nature, extent, and seriousness of the conduct; (2) the
circumstances surrounding the conduct, to include knowledgeable
participation; (3) the frequency and recency of the conduct; (4) the
individual’s age and maturity at the time of the conduct; (5) 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.       
I considered the potentially disqualifying and mitigating conditions in light of all
the facts and circumstances surrounding this case. Applicant incurred delinquent debts
when he accepted a much lower paying job in order to continue working. He initially
believed this position would be temporary, but it lasted three years and significantly
impacted his ability to pay his monthly expenses. He decided to find better paying
employment, which he obtained in 2007. His new job again required him to move a
significant distance. Once he settled in his new job and new location, he initiated
contacts with his creditors about repayment of his debts. He developed a plan to resolve
his debts and has followed his plan.
Over the last five years, Applicant has exercised good judgment in the
management of his financial resources, especially during difficult circumstances. He
discontinued his internet access and cable television when his bills became
unmanageable. He looked for ways to pay his debts on his reduced income, including
retaining a debt counseling service. When this service failed to properly manage his
finances, he stopped it and assumed full responsibility for his debt repayment. He is a
responsible individual who found himself in circumstances beyond his control. He
developed a track record for resolving his old debt. Most significantly, he has taken
affirmative action to pay or resolve most of the delinquent debts raising security
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concerns. (See AG & 2(a)(6).) His debts cannot be a source of improper pressure or
duress. Of importance in this case is the fact that he has held a security clearance for
nearly 40 years without incident. Of course, the issue is not simply whether all his debts
are paid----it is whether his financial circumstances raise concerns about his fitness to
hold a security clearance. While some debts remain unpaid, the debts are insufficient to
raise security concerns. (See AG & 2(a)(1).)  
Overall, the record evidence leaves me without 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 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
Subparagraph 1.a: For Applicant
Subparagraph 1.b: For Applicant
Subparagraph 1.c: For Applicant
Subparagraph 1.d: For Applicant
Subparagraph 1.e: For Applicant
Subparagraph 1.f: For Applicant
Subparagraph 1.g: For Applicant
Subparagraph 1.h: For Applicant
Subparagraph 1.i: For Applicant
Subparagraph 1.j: For Applicant
Conclusion
In light of all of the circumstances presented by the record in this case, it is
clearly consistent with the national interest to grant Applicant eligibility for a security
clearance.  Eligibility for access to classified information is granted.
                                                              
MARY E. HENRY
Administrative Judge