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                           DEPARTMENT OF DEFENSE   
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
 ------------------------ )     ISCR Case No. 08-07308
SSN: ---------------- )
)
Applicant for Security Clearance )
Appearances
For Government: Eric H. Borgstrom, Esquire, Department Counsel
For Applicant: Pro se
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Decision
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MATCHINSKI, Elizabeth M., Administrative Judge:
Applicant stopped paying on a credit card debt in 2006 when finances became
tight because of unexpected legal and counseling costs for his younger son. He is
saving funds and plans to resolve the $6,378 balance as soon as he can determine who
is presently entitled to collect it. Another creditor is not holding him legally responsible
for his spouse’s $5,326 delinquent credit card balance, although the funds to repay it
will come out of their household income. These unresolved debts are not likely to cause
Applicant to engage in illegal activity. Clearance is granted.
Statement of the Case
Applicant submitted an Electronic Questionnaire for Investigations Processing (e-
QIP) on February 6, 2008. On February 12, 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 preliminary decision
to deny him 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
Applicant indicated on his e-QIP that he worked with the defense contractor until May 1996 (Ex.1).1
He subsequently indicated in September 2008 (Ex. 2) and at his hearing (Tr. 97) that he was laid off in 1997.
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5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2,
1992), as amended (Directive); and the revised adjudicative guidelines (AG) effective
within the Department of Defense as of September 1, 2006.
On February 23, 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 May 4, 2009, I scheduled a hearing for May 27, 2009.
I convened the hearing as scheduled. Five government exhibits (Ex. 1-5) and
four Applicant exhibits (Ex. A-D) were admitted without any objections. Applicant, his
spouse, and his brother-in-law also testified, as reflected in a transcript (Tr.) received on
June 8, 2009.
Findings of Fact
DOHA alleged under Guideline F, financial considerations, that Applicant owed
two delinquent consumer credit card debts of $5,326 (SOR ¶ 1.a) and $6,147 (SOR ¶
1.b) as of December 2008, and a $75 debt in collection as of February 2008 (SOR ¶
1.c). When he answered the SOR, Applicant accepted responsibility for the three debts
and indicated that the $75 debt had been paid in 2008. He fell behind because of costs
associated with his younger son, who had legal problems related to substance abuse.
Applicant expressed his intent to satisfy the debts with his income tax refund. After
considering the pleadings, transcript, and exhibits, I make the following findings of fact.
Applicant is a 48-year-old sheet metal mechanic, who has worked for a defense
contractor most recently since February 2008 (Tr. 30). He had previously worked for the
company from January 1980 until he was laid off in 1996 or 1997 (Ex. 1, Tr. 31, 96-97),1
and he held a secret-level security clearance for most of that employment (Ex. 1). 
Applicant and his spouse married in August 1981, and sons were born to them in
March 1984 and August 1987 (Ex. 1, Tr. 26, 32-33, 82). In about December 1987,
Applicant and his spouse bought their current residence, taking out a mortgage of
$68,000 (Ex. 4). The home was built in the mid-to-late 1940s (Tr. 70), and they have
refinanced their mortgage several times over the years to pay bills and for home
improvements (siding, windows, remodeling) (Ex. 4, Tr. 69).
Applicant was active in his parish and community while his boys were young. A
scout himself during his youth, Applicant attained the rank of Eagle Scout and continued
on as an adult leader, holding various positions at the troop, council, and district level
over the years. His received several awards for his dedication to scouting (Ex. C, Tr. 59-
62).
Applicant apparently authorized a collection agency to withdraw $100 per week from his checking2
account to repay the debt until the account was emptied at which time he closed the account (Tr. 39).
Applicant estimated about $1,000 was paid toward the debt. His February 2008 credit report shows that the
account was 60 days past due in September 2003, and 30 days past due in March 2004 and November 2005,
with last activity in June 2006. The payments could well have been made between November 2005 and June
2006. As of February 2008, the account was in collection with a past due balance of $5,845 (Ex. 4). 
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After he was laid off by the defense contractor in 1996/97, Applicant worked as
building superintendent for his parish until December 2000 (Ex. 1). In January 2001,
Applicant started working as a motor coach operator for a bus company (Ex. 1). The job
took him away from home for two to three weeks at a time (Tr. 50-51). His mother-in-law
moved into their household when she could no longer manage on her own due to
Alzheimer’s disease (Tr. 65). Applicant’s spouse was employed by their parish school at
$7.50 per hour (Tr. 164) from about 2001 until 2004 when she decided to care for her
mother full time (Tr. 65-66). In 2005,  her mother went into a nursing home because she
needed 24-hour care (Tr. 66). The nursing home costs were covered, but Applicant and
his spouse paid for personal care items for her mother (Tr. 67).
In about 2003, Applicant’s younger son began to get involved with the wrong
crowd. He quit scouting and began to smoke marijuana and to drink alcohol (Tr. 59).  In
May 2005, Applicant’s son was arrested twice by the local police for offenses related to
underage drinking and disorderly conduct (Ex. B).  Applicant paid a $2,500 retainer fee
for legal representation for his son (Tr. 41), and he covered the costs of court-ordered
fines, counseling, and urinalysis testing for his son over the next two years. Applicant’s
son was discharged from various counseling programs and he was required to submit to
urinalysis testing as frequently as three times weekly at one point for his failure to
remain abstinent (Tr. 45). Applicant estimates that he paid $2,000 to $3,000 for his
son’s alcohol/drug screening and therapy (Tr. 47-48).
In October 2005, Applicant lost his job with the bus company due to a corporate
acquisition and closure of his division (Tr. 101). Applicant was unemployed until January
2006, when he went to work for a relative who had a video service company (Ex. 1, Tr.
32, 52) at $20 an hour and no benefits (Tr. 103).  Applicant put in long hours for little
pay (Tr. 52).
Applicant’s spouse handled the family’s finances (Tr. 34), with mixed results. A
delinquent credit card account of Applicant’s (not alleged in the SOR) was settled for
less than the full amount in 2004 (Exs. 3, 4). They had a history of occasionally falling
behind 30 to 90 days in their mortgage payments (Ex. 4). Their financial situation
became tight in the fall of 2005 due to their son’s legal costs. In November 2005,
Applicant and his spouse were 30 days late on their $117,000 mortgage. They took out
an adjustable rate mortgage loan of $147,000 (Ex. 4) to cover their expenses, but
continued to have difficulties meeting all their obligations. Applicant was 30 days past
due on a retail credit card account as of November 2005 and no payments were made
after June 2006 on a balance of $4,513 (SOR ¶ 1.b). As of February 2008, the account
was in collection with a $5,845 past due balance.  Applicant’s spouse opened a credit2
card account with Applicant as an authorized user in February 2006. The credit grantor
closed the account due to nonpayment in October 2006, and by February 2008, the
Applicant mistakenly indicated that the debt in SOR ¶ 1.b was held by an electronics retailer rather3
than with the creditor he named on his e-QIP. There is no listing on Applicant’s credit reports that would
indicate he held an account with the electronics retailer.
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past due balance was $5,326 (SOR ¶ 1.a). In May 2006, a medical provider placed a
$75 balance for collection (SOR ¶ 1.c) (Ex. 4). Applicant was sickened with pneumonia
on the job and the insurer paid the debt in 2008 (Tr. 35-36).
In about October 2006, Applicant’s spouse began working for a home
improvement retailer full time as a sales specialist (Tr. 147). From February to June
2007, Applicant held a second job with the home improvement company to supplement
his income (Ex. 1, Tr. 31, 52). In August 2007, Applicant submitted an application to
return to work for the defense contractor at a different facility. He did not apply for a
specific position at that time (Tr. 98-99).
In about December 2007, Applicant left the employment of the video company
after he confronted his relative about income and unreimbursed mileage on his vehicle
for the job. An inquiry about the status of his job application with the defense contractor
led to him being rehired at top rate (hourly wage $24.87, Tr. 100) with all his benefits
restored (Tr. 98-99). He completed an e-QIP on January 10, 2008 (signed on February
6, 2008), on which he disclosed in response to the financial delinquency inquiries that
he was $3,700 in arrears on his mortgage, and owed about $5,000 on the retail credit
card debt in SOR ¶ 1.b. He indicated that his mortgage would be brought current with
his income from his job or with his income tax refund, and that he was working to pay off
his other debt (Ex. 1).
In April 2008, Applicant was interviewed by a government investigator about the
debts in the SOR. He admitted he had not made any payments on the two credit card
delinquencies, and expressed an intent to resolve them by the end of the year (Ex. 5).
Applicant’s mother-in-law died in late June 2008 (Ex. 2). Applicant and his
spouse paid about $3,500 of the funeral expenses (Tr. 64). In August 2008, a law firm
attempted to collect the balance of SOR ¶ 1.b from Applicant (Ex. A), but he and his
spouse were in arrears $3,759.75 on their mortgage at the time and he could not afford
to pay the credit card debt. In September 2008, Applicant and his spouse accepted an
offer from their lender to modify their mortgage loan to a 7% fixed rate loan with a new
principal balance of $148,054.50. This loan modification brought their account current
and lowered their monthly mortgage payment of principal and interest from $1,156.80 to
$1,016.24 (Ex. 2). Accounting for escrow payments, their monthly mortgage is about
$1,400 (Tr. 148). As of late September 2008, Applicant estimated he had $1,183.38 in
discretionary funds each month after monthly expense and debt payments (Ex. 2, Tr.
156). Payments were not being made on the debts in SOR ¶¶ 1.a and 1.b (Ex. 3).3
With the help of his brother-in-law, Applicant began contacting the creditors in
SOR ¶¶ 1.a and 1.b in January 2009 (Tr. 135), initially to verify the debts. In April 2009,
the creditor in SOR ¶ 1.a notified Applicant that he was only an authorized user and was
not responsible for the debt (Ex. A). Applicant’s spouse was the listed account holder
A privacy notice included in the April 23, 2009, correspondence from the servicer of the debt4
(company X) indicates that X and Y are two of 15 companies under the umbrella of a parent company (Ex.
A).
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(Tr. 117, 136). As of May 2009, Applicant’s brother-in-law was still in negotiations with
the creditor about a possible settlement (Tr. 137).
In February 2009, a collection agent for the servicer (company X) of the debt in
SOR ¶ 1.b offered to settle the $6,237.08 balance on receipt of $3,118.54 within 45
days. In March 2009, Applicant received his income tax refund of about $6,000 for tax
year 2008 (Tr. 68-69, 107, 160). He deposited the funds in a savings account because
he could not determine to whom to send the money (Tr. 68, 108), and his spouse paid
their mortgage out of those funds (Tr. 160). On March 25, 2009, Applicant sent letters to
the collection agency and the listed holder of the account (company Y) requesting
verification of the debt. In response to a telephone inquiry from Applicant’s brother-in-
law (Tr. 125), the collection agency offered to settle the balance on receipt of $3,157.82,
payable in a lump sum of $1,007 followed by six consecutive monthly payments of
$358.47. Applicant did not settle the debt because he was not sure whether payment to
the collection agency on behalf of company X would resolve the debt owed to company
Y. On April 23, 2009, Applicant was informed by company X that the debt (balance
$6,377.93) and had been recalled by company Y (Ex. A, Tr. 118).  As of late May 2009,4
company Y had not responded to telephone calls or to a registered letter sent by
Applicant about the debt in March 2009 (Ex. A). The original credit card lender had
written off the debt and rebuffed Applicant’s attempt at repayment (Tr. 122). Applicant
remains able and willing to settle the debt in SOR ¶ 1.b once he receives confirmation
from a creditor that payment will legally satisfy the debt (Tr. 132). His plan is to resolve
the debt in SOR ¶ 1.b before his spouse’s debt in SOR ¶ 1.a, in the hope that it would
resolve the issue impeding his security clearance (Tr. 139-40). He is expecting overtime
to be available at work in June/July 2009, which would give him additional income to
resolve the debts (Tr. 57).
Applicant and his spouse have been current on their mortgage since the loan
was modified (Tr. 148). They are still working on a family budget (Tr. 154). They
recently bundled their cable television and Internet services to reduce their monthly bill
(Tr. 150). Applicant’s spouse has a monthly car payment of $239 (Tr. 150) and a cellular
phone bill of $120 per month (Tr. 152). Their present income is sufficient to meet their
monthly expenses (Tr. 162), although his spouse, who pays the bills, was unable to
provide specific figures (Tr. 162). Applicant, with the help of a friend, remodeled their
kitchen in the last couple of years (Tr. 167). Applicant has not taken a vacation in the
last ten years (Tr. 70). Applicant has no active credit card accounts (Tr. 58). 
As of May 2009, Applicant’s brother-in-law was living with Applicant and his
spouse and contributing to the household finances (Tr. 133, 153). Applicant’s younger
son is still at home but he does not contribute financially (Tr. 33, 53). He is working in a
restaurant about 30 hours a week (Tr. 55). Applicant paid more than $2,000 in tuition
and books for his son for one semester at a local community college (Tr. 155).
Applicant’s older son is a health services technician in the Coast Guard. He was
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awarded an achievement medal for superior performance of duty in October 2007. In
August 2008, this son was commended by his state’s senate for his distinguished
service on that date in October 2007 (Ex. D).  
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 commonsense 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
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).
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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.
Applicant owes a credit card debt of about $6,377.93 (SOR ¶ 1.b) on an account
that has been delinquent since 2006. Although he is not legally liable for the $5,326
credit card debt in SOR ¶ 1.a, the funds to repay the debt will be coming out of the
household income, given it is his spouse’s debt. Applicant’s financial problems appear
to be more extensive than the SOR would indicate, in that he and his spouse have had
problems over the years remaining current on their mortgage. As of September 2008,
they were in arrears $3,759.75 on their mortgage before their loan was modified. AG ¶
19(a), “inability or unwillingness to satisfy debts,” AG ¶ 19(c), “a history of not meeting
financial obligations,” apply.
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. The delinquency is attributable in significant part to the legal problems of a
rebellious teenager. However, since Applicant and his spouse have fallen behind at
times on other expenses, including their mortgage, the fact that their son has been on
good behavior for the past two years does not completely alleviate the financial
judgment concerns.
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,” is clearly implicated. His household
finances were negatively impacted by his spouse having to leave her job with the school
to care for her mother in 2004. From May 2005 to the fall of 2007, Applicant incurred
substantial costs because of his son’s substance abuse and related legal problems. In
October 2005, Applicant lost his job when the bus company closed his division. While
he went to work for a family member in January 2006 at $20 an hour, there were issues
regarding his pay and unreimbursed mileage for his vehicle used in the video business
that subsequently led him to leave that job in December 2007. He was rehired by the
defense contractor in December 2007, but he did not start working until February 2008.
Unexpected circumstances continued even after he began his present employment, in
that he and his spouse had to pay about $3,500 of her mother’s funeral expenses in late
June 2008.
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AG ¶ 20(d), “the individual initiated a good-faith effort to repay overdue creditors
or otherwise resolve debts,” applies to the extent that he has taken steps to bring his
mortgage current and to determine to whom he should pay the debt in SOR ¶ 1.b.  After
his April 2008 interview, Applicant determined that the debt in SOR ¶ 1.c had been paid.
Applicant has demonstrated that his inaction until January 2009 on the other two debts
was not due to disregard. He reported that he and his spouse had $1,183.38 remaining
at the end of the month as of September 2008, but this does not appear to be an
accurate reflection of their finances at that point. He and his spouse had recently
incurred the funeral expenses for her mother, and seen a spike in their monthly
mortgage payment due to the adjustable interest rate which led the lender to modify
their loan. Before the SOR was issued, Applicant’s brother-in-law began seeking
verification of the debts. While Applicant has yet to make a payment toward resolving
SOR ¶ 1.b, it is reasonable for him to require written confirmation beforehand that
payment to company Y, the listed current holder of the account, would satisfy the debt.
Applicant approached the original lender with an offer of repayment but the debt had
been written off and the retailer would not accept payment. As for the creditor in SOR ¶
1.a, no efforts to collect will be forthcoming against Applicant, but he intends to resolve
that debt as soon as his debt is cleared.
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,”
applies when viewing his financial situation as a whole. His spouse credibly testified that
with their joint income, they have been able to catch up on their obligations. Although
they have yet to finalize a budget, and there is some question about whether they have
a good handle on their finances, there is no evidence of extravagant expenditure or of
new delinquencies. They took some steps to reduce expenses by bundling their cable
television and Internet costs, and expressed a credible intent to resolve all outstanding
financial obligations.
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.
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
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law, to establish that he has paid off each and every debt listed in the SOR. All that is
required is that an applicant demonstrate that he has ‘ . . . established a plan to resolve
his 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).
Applicant’s financial struggles are due in part to financial naivete. By refinancing
their mortgage several times, they improved their home and paid off some debts, but
also increased their debt obligation substantially. Yet, factors outside of their control,
most notably their son’s legal problems, the costs incurred caring for his spouse’s
mother and then her funeral, and times of unemployment for Applicant and his spouse,
have significantly impacted their ability to remain current in all their obligations. As of
May 2009, Applicant had saved a portion of their joint income tax refund to pay off his
delinquent debt. Given his desire to retain the employment that he needs to support his
family, he is likely to resolve the debt in the near future. His record of dedication to his
employer and to his community shows he is not likely to engage in illegal activities to
obtain funds to resolve the delinquent debt.
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
Conclusion
In light of 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.
ELIZABETH M. MATCHINSKI
Administrative Judge