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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 08-03658
SSN: )
)
Applicant for Security Clearance )
Appearances
For Government: Eric Borgstrom, Esquire, Department Counsel
For Applicant: Pro Se
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Decision
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HENRY, Mary E., Administrative Judge:
Based upon a review of the case file, pleadings, exhibits, and testimony, I
conclude that Applicant’s eligibility for access to classified information is denied.
Applicant submitted his Security Clearance Application (SF 86) on June 24, 2007
and resigned it on July 18, 2007. The Defense Office of Hearings and Appeals (DOHA)
issued a Statement of Reasons (SOR) detailing security concerns under Guidelines F
and E on November 7, 2008. 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. He answered the SOR in writing on
November 29, 2008, and requested a hearing before an administrative judge. DOHA
W hen  SOR allegations are controverted, the government bears the burden of producing evidence sufficient1
to prove controverted allegations. Directive, ¶ E3.1.14. That burden has two components. First, the
government must establish by substantial evidence that the facts and events alleged in the SOR indeed took
place. Second, the government must establish a nexus between the existence of the established facts and
events and a legitimate security concern. See ISCR Case No. 07-18525 (App. Bd. Feb. 18, 2009), (concurring
and dissenting, in part).
GE 1; AE F; AE G; AE H; AE I; Tr. 15-20, 67-70. 2
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received the request on December 1, 2008. Department Counsel was prepared to
proceed on March 20, 2009. DOHA assigned the case to another administrative judge
on April 16, 2009, who scheduled a hearing on May 22, 2009. Due to an unexpected
emergency, the administrative judge could not proceed with the hearing as scheduled.
DOHA reassigned the case to me on May 26, 2008. DOHA issued a notice of hearing
on June 22, 2009, and I convened the hearing as scheduled on July 10, 2009. The
government offered six exhibits (GE) 1 through 6, which were received and admitted
into evidence without objection. Applicant and one witnesses testified on his behalf. He
submitted five exhibits (AE) A through E, which were received and admitted into
evidence without objection. DOHA received the transcript of the hearing (Tr.) on July 16,
2009. I held the record open until July 31, 2009 for the admission of additional evidence.
In an Order dated July 27, 2009, I granted Applicant’s request for additional time to
submit this information. Applicant timely submitted the additional information, which has
been admitted as AE F through AE N, without objection. The record closed on August
10, 2009.
Procedural and Evidentiary Rulings
Notice
At the hearing, Applicant indicated he received the hearing notice less than 15
days before the hearing. (Tr. 9.) I advised Applicant of his right under ¶ E3.1.8 of the
Directive to 15 days notice before the hearing. Applicant affirmatively waived his right to
15 days notice. (Tr. 9-10.) 
Findings of Fact
In his Answer to the SOR, Applicant admitted the factual allegations in ¶¶ 1.a,
1.c, 1.e-1.h, and 1.j-1.l of the SOR, with explanation. He denied the factual allegations
in ¶¶ 1.b, 1.d, 1.i, 1.m, and 1.n of the SOR.  He also provided additional information to1
support his request for eligibility for a security clearance.  
Applicant, who is 39 years old, works as a security guard for a Department of
Defense contractor, a position he began in June 2007. Applicant has worked as a
security guard or corrections officer since 2001. His supervisors describe him as hard
working, with a willingness to help others. He works as a volunteer fireman in his
community and has done so for the last 18 years.  2
AE A; Tr. 50-51.3
AE A; Tr. 17-19.4
AE A; Tr. 52, 69-71.5
GE 2; AE L; Tr. 42-43.6
Tr. 44-48, 60.7
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In 2004, Applicant had significant credit card debt from the past. His father
obtained a $25,000 equity loan on his home to pay Applicant’s debt. Applicant started
payments on the equity loan immediately and has paid the monthly payment for the last
five years. Five years of payments remain.3
Applicant started working as a corrections officer in 2002. His girlfriend
developed problems during her pregnancy with his son in 2004. He missed time from
work to care for her. As a result, the corrections department fired him in December
2004. Without an income, Applicant used his credit cards to pay his living expenses and
to purchase items for his son such as diapers, formula, a crib, and clothes.4
Applicant obtained another position as a security guard, where he worked for two
months. He then moved out of state with his girlfriend and son. Shortly after the move,
his daughter was born. He obtained a job in security in the other state, where he worked
for two years, earning sufficient income to pay his usual living expenses. While living out
of state, he required hospital treatment for gout, a medical condition from which he
suffers. He received assistance from community resources to help pay his medical
expenses. He returned to his home state alone in 2007.5
Applicant currently earns $820 bi-weekly in gross income, for an annual income
of $21,320. His bi-weekly net income is approximately $670 for a total net monthly
income of $1,340. He works overtime when asked. His earnings statement for May and
June 2009 reflect that he worked between 11. 5 and 19 hours of overtime each pay
period, except one pay period. This resulted in an additional net income of $301 in May
and $136 in June. Because he is paid bi-weekly, he received an additional pay check in
May 2009.6
In addition to the $281 monthly equity loan payment, Applicant’s monthly
expenses include $100 in rent to his father, with whom he lives, $40 in car insurance,
$80 for gasoline, $50 for utilities, $25 for clothes, and $160 in voluntary child support for
total ordinary monthly expenses of $736. He also pays $200 a month on one debt and
$200 on a truck repair bill. He did not mention food expenses or other costs such as a
hair cut. The transmission in his 2001 truck needs to be repaired and he estimates the
repair cost at approximately $1,500. He does not use credit cards now.7
In early 2008, the sheriff served him with court papers for the $7,161 debt listed
in allegation 1.l. Applicant contacted counsel for the creditor and developed a
AE B; Tr. 37-39.8
Response to SOR; GE 4; GE 5; GE 6; AE K; AE M; Tr. 28, 34, 39-41. 9
Tr. 28-41. 10
At the hearing, Department Counsel raised questions about whether Applicant accurately completed his11
security clearance application. The type SF-86, which is part of the record, reflected an incorrect employment
history, which Applicant pointed out. Applicant insisted that he hand wrote his answers on the SF-86 and that
he did not type his application. As requested at the hearing, Applicant provided a copy of his hand written
answers. AE N. No issue is raised from this colloquy.  Tr. 20-26, 77. 
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repayment plan. On March 7, 2008, he signed a Stipulation In Lieu of Judgment, which
set out the terms of his repayment agreement. He made the initial $740 payment and
each monthly payment since April 2008. His remaining balance owed on June 22, 2009
was $3,951. If he fails to make the required payments, the creditor can request the court
to enter judgment against Applicant for any unpaid balance.   8
When the government mailed interrogatories to Applicant, it listed two additional
credit card debts. Applicant verified that he resolved both debts in 2008. Applicant
denies any knowledge of the debts listed in allegations 1.b, and 1.i. Applicant’s credible
denial of knowledge of these two debts is sufficient to refute the allegations of these two
delinquent debts. The pertinent credit report did not have sufficient information for
Applicant to locate the account.  
Applicant also denied owing the debt listed in allegation 1.m. Upon further
discussion at the hearing, Applicant believed 1.m. was an automobile repair store
account, which he had paid. He verified that this debt is paid in full.9
Applicant does not deny owing the remaining debts, although he does dispute
the current balances on several accounts. He has not paid the remaining debts, as he
lacks funds to pay these debts in full.  10
In the interrogatories sent to Applicant in July 2008, the government identified 16
unpaid debts, totaling $38,763. Applicant fully resolved two debts and has complied with
the payment plan for a third debt. He also proved that one listed debt is paid and two
other debts are not his. Applicant has resolved five debts totaling $4,895 and through
the payment plan, has paid approximately 50% of the $7,161 debt. He still owes 10
unpaid debts valued at $26,707. 
When Applicant completed his security clearance application on June 24, 2007,
he hand wrote his answers.  He answered “no” to the following questions:11
Section 28: Your Financial Delinquencies
a.   In the last 7 years, have you been over 180 days delinquent on any debt(s)?
GE 1; Tr. 54-58.12
AE G through AE J.13
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b.   Are you currently over 90 days delinquent on any debt(s)?
Applicant acknowledges that he knew he had unpaid debts. He answered “no”
because he didn’t think people needed to know his financial situation and because his
finances were his personal business. He did not understand the need for the federal
government to know about his finances because when other organizations of the State
conducted background checks on him, the focus was criminal conduct, not his finances.
He is embarrassed about his debts. At the hearing Applicant answered no to a question
asking if he had a concern that his debts would hurt his chances of getting a security
clearance.12
Supervisors, friends and his brother wrote letters of recommendation on his
behalf. They praise his volunteer service as a fireman to the community. His brother
advises that Applicant, who lives with his father, is available to assist with any health
issues his elderly father may have. He also provides transportation and home repair for
his father and other elderly relatives. All acknowledge he has financial difficulties, which
they believe he will resolve.  13
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 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.
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Under Directive ¶ E3.1.14, the government must present evidence to establish
controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, an applicant is
responsible for presenting “witnesses and other evidence to rebut, explain, extenuate,
or mitigate facts admitted by applicant or proven by Department Counsel. . . .” An
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
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 shall be “in terms of
the national interest and shall in no sense be a determination as to the loyalty of the
applicant concerned.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites
for access to classified or sensitive information).  
Analysis
Guideline F, Financial Considerations
The security concern relating to the guideline for Financial Considerations is set
out in AG & 18:      
Failure or inability to live within one=s means, satisfy debts, and meet
financial obligations may indicate poor self-control, lack of judgment, or
unwillingness to abide by rules and regulations, all of which can raise
questions about an individual=s reliability, trustworthiness and ability to
protect classified information. An individual who is financially overextended
is at risk of having to engage in illegal acts to generate funds. 
The guideline notes several conditions that could raise security concerns. Under
AG & 19(a), an Ainability or unwillingness to satisfy debts@ is potentially disqualifying.
Similarly under AG & 19(c), Aa history of not meeting financial obligations@ may raise
security concerns. Applicant accumulated significant delinquent debt and has been
unable to pay many of the 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
AG ¶¶ 20(e) and 20(f) are not applicable in this case.14
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on the individual=s current reliability, trustworthiness, or good judgment.@ Applicant=s
financial worries arose over a period of time through the accumulation of credit card
debt. The record contains insufficient evidence to show that his debt accumulation
occurred under unusual circumstances which will not occur again. This mitigating
condition does not apply
Under AG & 20(b), it may be mitigating where Athe conditions that resulted in the
financial problem were largely beyond the person=s control (e.g., loss of employment, a
business downturn, unexpected medical emergency, or a death, divorce or separation),
and the individual acted responsibly under the circumstances.@ Applicant’s financial
issues relate to his employment, including periods of unemployment and lower wages.
Since 2007, he has worked consistently and full-time. He earns just over $10 an hour,
which does not provide significant excess income to pay usual living expenses and
delinquent debt. He is current in the debts he can pay. This mitigating condition partially
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). Applicant has not received financial
counseling. Given his current level of income and his budget, financial counseling alone
would not be sufficient to mitigate security concerns. His current expenses are under
control. He is slowly working towards resolution of his outstanding debt problems. Thus,
the mitigating condition has some applicability.
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 paid
two debts and is currently paying on another debt. While he did not take the initiative to
resolve this debt, he has complied with the repayment plan he developed. For five
years, he has paid the equity loan on his father’s house, which resolved past debt. This
mitigating condition partially applies.14
Guideline E, Personal Conduct
AG ¶ 15 expresses the security concern pertaining to personal conduct:
Conduct involving questionable judgment, lack of candor, dishonesty, or
unwillingness to comply with rules and regulations can raise questions
about an individual's reliability, trustworthiness and ability to protect
classified information. Of special interest is any failure to provide truthful
and candid answers during the security clearance process or any other
failure to cooperate with the security clearance process.
AG ¶ 16(a) describes conditions that could raise a security concern and may be
disqualifying:
See ISCR Case No. 03-09483 at 4 (App. Bd. Nov.17, 2004)(explaining holding in ISCR Case No. 02-2313315
at 5 (App. Bd. Jun. 9, 2004)).
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(a) deliberate omission, concealment, or falsification of relevant facts from
any personnel security questionnaire, personal history statement, or
similar form used to conduct investigations, determine employment
qualifications, award benefits or status, determine security clearance
eligibility or trustworthiness, or award fiduciary responsibilities.
For AG ¶ 16(a) to apply, Applicant’s omission, concealment or falsification in his
answer must be deliberate. The government established that Applicant omitted a
material fact from his SF-86 when he answered “no” to Questions 28a, about debts over
180 days delinquent, and 28b, about debts currently 90 days overdue. This information
is material to the evaluation of Applicant’s trustworthiness to hold a security clearance
and to his honesty. When a falsification allegation is controverted, the government has
the burden of proving it. Proof of an omission, standing alone, does not establish or
prove an applicant’s intent or state of mind when the omission occurred. An
administrative judge must consider the record evidence as a whole to determine
whether there is direct or circumstantial evidence concerning an applicant’s intent or
state of mind at the time the omission occurred.15
When he completed his SF-86 in June 2007, Applicant denied any delinquent
debts when he knew he had many overdue debts. He did not think people needed to
know about his finances. His statement is an admission that he intentionally falsified this
answer. The government has established its case under AG ¶ 16(a)
Under AG ¶ 17, an applicant may mitigate the government’s security concerns in
the following manner in this case:
(a) the individual made prompt, good-faith efforts to correct the omission,
concealment, or falsification before being confronted with the facts;
(b) the refusal or failure to cooperate, omission, or concealment was
caused or significantly contributed to by improper or inadequate advice of
authorized personnel or legal counsel advising or instructing the individual
specifically concerning the security clearance process. Upon being made
aware of the requirement to cooperate or provide the information, the
individual cooperated fully and truthfully;
(c) the offense is so minor, or so much time has passed, or the behavior is
so infrequent, or it happened under such unique circumstances that it is
unlikely to recur and does not cast doubt on the individual's reliability,
trustworthiness, or good judgment;
(d) the individual has acknowledged the behavior and obtained counseling
to change the behavior or taken other positive steps to alleviate the
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stressors, circumstances, or factors that caused untrustworthy, unreliable,
or other inappropriate behavior, and such behavior is unlikely to recur;
(e) the individual has taken positive steps to reduce or eliminate
vulnerability to exploitation, manipulation, or duress; and
(f) the information was unsubstantiated or from a source of questionable
reliability.
After reviewing the facts of this case and the above mitigating conditions, I
conclude that Applicant has not mitigated the falsification of his answer to questions 28a
and 28b in his security clearance application. Guideline E is found against Applicant.
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 an 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 commonsense judgment based upon careful consideration
of the guidelines and the whole person concept. The decision to grant or deny a security
clearance requires a careful weighing of all relevant factors, both favorable and
unfavorable. In so doing, an administrative judge must review all the evidence of record,
not a single item in isolation, to determine if a security concern is established and then
whether it is mitigated. A determination of an applicant’s eligibility for a security
clearance should not be made as punishment for specific past conduct, but on a
reasonable and careful evaluation of all the evidence of record to decide if a nexus
exists between established facts and a legitimate security concern. 
In reaching a conclusion, I considered the potentially disqualifying and mitigating
conditions in light of all the facts and circumstances surrounding this case. Applicant
works a full-time job which does not pay a high salary. With his limited income, he pays
the loan on his father’s house and his monthly living expenses. He pays support for his
two children without a court order. He complies with the terms of his one debt
repayment plan. He recently incurred two significant repair bills for work done on his
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2001 truck, which he is paying. He acts responsibly towards his current bills and has
decided against the use of credit cards. 
In 2004, Applicant’s father agreed to a $25,000 equity loan on his house to pay
off Applicant’s accumulated credit card debt. Shortly after resolving all his credit card
debt, Applicant acquired new and significant credit card debt when he lost his job. He
has resolved about 25% of his old debts. Recognizing that his income prevents him
from paying all the debts immediately, his failure to resolve some of the smaller debts
when he had extra income raises questions about the strength of his commitment to pay
his debts at this time. When he completed his security clearance application, he falsified
his answer about delinquent debts and clearly intended to do so. This is a serious lapse
of judgment on his part, which is a primary reason his clearance is denied. At the
hearing, he explained his reasons for his conduct. He presented himself in a forthright
and honest manner, not only about his falsification, but also when explaining his reason
for not properly answering the question. His decision to send money to support two
children he does not see indicates that he is a responsible individual. In much of his
daily life, he is a reliable, dependable, hardworking, and honest person. He has learned
that in the future he must answer security-related questions honestly.
Overall, the record evidence leaves me with questions or doubts as to Applicant’s
eligibility and suitability for a security clearance at this time. For all these reasons, I
conclude Applicant has not mitigated the security concerns arising from his finances
and personal conduct.
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: For Applicant
Subparagraph 1.c: Against Applicant
Subparagraph 1.d: Against Applicant
Subparagraph 1.e: Against Applicant
Subparagraph 1.f: Against Applicant
Subparagraph 1.g: Against Applicant
Subparagraph 1.h: Against Applicant
Subparagraph 1.i: For Applicant
Subparagraph 1.j: Against Applicant
Subparagraph 1.k: Against Applicant
Subparagraph 1.l: For Applicant
Subparagraph 1.m: For Applicant
Subparagraph 1.n: Against Applicant
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Paragraph 2, Guideline E: AGAINST APPLICANT
Subparagraph 2.a: Against Applicant
Conclusion
In light of all of the circumstances presented by the record in this case, it is not
clearly consistent with the national interest to grant Applicant eligibility for a security
clearance.  Eligibility for access to classified information is denied.
                                                              
MARY E. HENRY
Administrative Judge