KEYWORD: Guideline f
DIGEST: There is record evidence which identifies with sufficient specificity for a reasonable
applicant to respond.  The timing of Applicant’s actions is relevant to the application of
mitigating condition 20 (d).  Favorable decision remanded.
CASENO: 08-06058.a1
DATE: 09/21/2009
DATE: September 21, 2009
In Re:
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Applicant for Security Clearance
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ISCR Case No. 08-06058
APPEAL BOARD DECISION
APPEARANCES
FOR GOVERNMENT
Fahryn Hoffman, Esq.,  Department Counsel
FOR APPLICANT
Pro Se
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The Defense Office of Hearings and Appeals (DOHA) declined to grant Applicant a security
clearance.  On December 5, 2008, DOHA issued a statement of reasons (SOR) advising Applicant
of the basis for that decision–security concerns raised under Guideline F (Financial Considerations)
and Guideline E (Personal Conduct) of Department of Defense Directive 5220.6 (Jan. 2, 1992, as
amended) (Directive).  Applicant requested a hearing.  On May 29, 2009, after the hearing,
Administrative Judge Mary E. Henry granted Applicant’s request for a security clearance.
Department Counsel filed a timely appeal pursuant to Directive ¶¶  E3.1.28 and E3.1.30.
Department Counsel raised the following issues on appeal: whether the Judge erred in her
analysis of the evidence produced in reference to two of the allegations and whether the Judge’s
application of the Guideline F mitigating conditions is erroneous.  Finding error, we remand the case
to the Administrative Judge for further proceedings consistent with this decision.
Whether the Record Supports the Judge’s Factual Findings
A.  Facts
The Administrative Judge made the following pertinent findings of fact:
Applicant is a 52 year old employee of a contractor.  Applicant graduated from high school
and attended a technical school. He worked a second full-time job from 2000 until 2004, when his
employer laid him off and his income decreased from $108,000 a year to approximately $60,000 a
year. He has not worked a second job since 2004, but he is now seeking part-time employment. 
Applicant married in 1989. He and his wife separated in 2001. For several years after his
separation, Applicant continued to pay the car insurance and car payment on his wife’s car. He
stopped making these payments in 2004. He has a 25 year-old son, who lives independently and has
chronic illness. He regularly provides his son with money to pay for medicine.  
For several years prior to his father’s death in 1994, Applicant regularly traveled about 150
miles away to help care for his father. He helped his father pay for medications and helped other
family members with expenses. He used his credit cards to pay for these expenses. By 1998, his debt
overwhelmed him. He enrolled in a credit management program. From 1998 through 2005, he paid
the program approximately $550 a month. Through this program, he resolved many of his
outstanding debts.
 In 2003, the Internal Revenue Service (IRS) filed a tax lien against him personally. The IRS
collected the moneys due through garnishment on his wages. From May 2003 until approximately
November 2004, Applicant paid the IRS $1,166 twice a month for a total payment of more than
$44,000.
The SOR lists numerous debts, which are listed at least once on each credit report and
sometimes more than once because the debt is under other creditors’ names.  The Judge said that
after reviewing the credit reports and the SOR, she compiled a list of the total debts owed, excluding
Department Counsel’s brief contains the following language “With the exception of the specific factual findings1
challenged on appeal, the Government adopts the Administrative Judge’s findings of fact for the purposes of this appeal
and, in further support of its appeal arguments specifically relies on the following evidence[.]” The brief does not clearly
delineate those instances where it is relying on a finding of fact made by the Judge and those instances where it is relying
on portions of the record that were not the source of a specific finding of fact on the part of the Judge.  Also, when
challenging the Judge’s findings of fact, the brief is reasonably specific in one instance, but vague in another.
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any duplicate entries. The Judge found that Applicant has one undisputed unpaid debt of $4,810 and
five other disputed debts cumulatively worth about $9,000.
In 2004, after he lost his second job, Applicant fell behind on his rent and other expenses
because of the IRS garnishment.  At this time, he paid his wife’s car payment and insurance as well
as his own. His former landlord obtained a judgment for unpaid rent in 2005 and  he has not paid this
debt.  He contacted the creditor sometime ago, but has not resolved the debt because the creditor
demanded full payment and refused to accept a monthly payment.   Two debts listed in the SOR ¶¶
1.c and 1.i are unknown to Applicant as he does not recognize the listed creditors. Applicant’s
credible denial of knowledge of these two debts is sufficient to refute the allegations of delinquent
debts. The pertinent credit report did not have sufficient information for Applicant to locate the
account. Appellant denied owing a debt to the cable company listed in SOR allegation 1.n.  In the
past, he received cable service from another cable company and two satellite companies. Although
he acknowledged at the hearing that he returned a cable box for his girlfriend who had service with
this cable company, he strongly denies any service in his name. Subsequent to the hearing, he filed
an identity theft claim on this debt.  Applicant credibly denied owing the unpaid cell phone listed
in allegation 1.j. He has had a cell phone with three other cell phone companies, but not this
company. Several years ago, he asked this creditor to provide him with evidence that he owed them
money. At that point, the creditor sent him a bill. Applicant currently earns $5,915 in gross income
each month and $4,214 a month in net income. His monthly expenses total approximately $4,000
and include rent, utilities, a car payment, gasoline, credit cards, food, and a time share. He uses his
remaining income to help his son with medicine and occasionally other family members.
B.  Discussion
The Appeal Board’s review of the Judge’s findings of facts is limited to determining if they
are supported by substantial evidence–“such relevant evidence as a reasonable mind might accept
as adequate to support a conclusion in light of all the contrary evidence in the same record.”
Directive  ¶ E3.1.32.1.  “This is something less than the weight of the evidence, and the possibility
of drawing two inconsistent conclusions from the evidence does not prevent an administrative
agency’s finding from being supported by substantial evidence.”  Consolo v. Federal Maritime
Comm’n, 383 U.S. 607, 620 (1966).  In evaluating the Judge’s findings, we are required to give
deference to the Judge’s credibility determinations.  Directive ¶ E3.1.32.1. 
To the extent that Department Counsel’s brief challenges the Judge’s findings of fact, such
challenges will be included in the discussion below.  1
The Board has previously noted in response to prior briefs with similar language that we have no authority to
make de novo findings of fact.  A party relying on a portion of the record assists themselves and the Board by indicating
whether the portion relied upon is the basis of a finding of fact made by the Judge, or is a portion of the record not
addressed by the Judge’s findings.  Similarly, a party challenging the Judge’s findings assists themselves and the Board
by stating with some precision which of the Judge’s findings are being challenged.  Further clarification (of such
challenges) is obtained when the party states whether the Judge’s finding of fact error is an error of commission (e.g.,
a finding that the light was red when the record indicates that it was green; a finding that Applicant had two DWI
convictions when the record indicates he had three) or an error of omission (a piece of record evidence important to the
resolution of the case is not incorporated into a finding of fact or is otherwise not commented upon by the Judge).  See
e.g., ISCR Case No. 03-1176 at 3 (App. Bd. Apr. 11, 2005); ISCR Case No. 03-15485 at fn. 1 (App. Bd. Jun. 2, 2005).
[T]he conditions that resulted in the financial problem were largely beyond the person’s control (e.g., loss of2
employment, a business downturn, unexpected medical emergency, or a death, divorce or separation) and the individual
acted reasonably under the circumstances.
[T]he individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.3
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Whether the Record Supports the Judge’s Ultimate Conclusions
The Judge reached the following conclusions:
(1) The government failed to establish a prima facie case as to the debts identified in SOR
allegations 1.c and 1.i because it has not provided evidence which identifies the creditor for these
debts. 
(2) Concerning the debt identified in SOR allegation 1.j, without evidence that Applicant
signed a contract to retain the services of the company in question, the mere mailing of a bill is not
enough to show a contractual obligation which would give rise to the debt as a bill can be created
simply and easily.  SOR allegation 1.j is found in favor of Applicant.
(3) Regarding mitigation, Adjudicative Guideline 20 (b),  applies since Applicant’s initial2
financial problems arose when his father became ill and he accumulated numerous credit card debts
associated with his father’s care.  Applicant also separated from his wife. As part of an informal
separation agreement he continued to make her car payment and paid for her car insurance until he
lost his second job.  
(4) Adjudicative Guideline 20 (d)  applies as Applicant has resolved many of the delinquent3
debts listed in the SOR, either by payment or settlement.  Although an outstanding judgment is not
paid, Applicant attempted to pay the debt through monthly payments, but the creditor refused.  He
did not ignore the debt.  His finances are sound and he acts responsibly in regard to his finances.  
[T]he individual has a reasonable basis to dispute the legitimacy of he past-due debt which is the cause of the4
problem and provides documented proof to substantiate the basis of the dispute or provides evidence of actions to resolve
the issue.
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(5) Adjudicative Guideline 20 (e)  has some applicability as Applicant disputed the debt4
listed in SOR allegation 1.e as he believes this debt has been paid through an earlier payment plan.
The credit reporting agency has not responded to his notice of dispute nor resolved the conflict in
information about this debt.
(6) Under the whole person concept, Applicant has taken affirmative action to pay or resolve
most of the delinquent debts raising security concerns.  Even though he has had financial problems,
he has demonstrated a meaningful track record of debt repayment.  For four years, he managed his
expenses, including a substantial monthly payment to the IRS.  While some debts remain unpaid,
they are insufficient to raise security concerns, particularly since he has resolved the majority of his
debts.
 A Judge is required to “examine the relevant data and articulate a satisfactory explanation
for” the decision, “including a ‘rational connection between the facts found and the choice made.’”
Motor Vehicle Mfrs. Ass’n of the United States v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43
(1983)(quoting Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962)).  “The
general standard is that a clearance may be granted only when ‘clearly consistent with the interests
of the national security.’” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988).  The Appeal
Board may reverse the Judge’s decision to grant, deny, or revoke a security clearance if it is arbitrary,
capricious, or contrary to law.  Directive ¶¶ E3.1.32.3 and E3.1.33.3.  
Once a concern arises regarding an Applicant’s security clearance eligibility, there is a strong
presumption against the grant or maintenance of a security clearance.  See Dorfmont v. Brown, 913
F. 2d 1399, 1401 (9  Cir. 1990), cert. denied, 499 U.S. 905 (1991).  After the Government presentsth
evidence raising security concerns, the burden shifts to the applicant to rebut or mitigate those
concerns.  See Directive ¶ E3.1.15.  “The application of disqualifying and mitigating conditions and
whole person factors does not turn simply on a finding that one or more of them apply to the
particular facts of a case.  Rather, their application requires the exercise of sound discretion in light
of the record evidence as a whole.”  See, e.g., ISCR Case No. 05-03635 at 3 (App. Bd. Dec. 20,
2006).
In deciding whether the Judge's rulings or conclusions are arbitrary or capricious, the Board
will review the Judge's decision to determine whether:  it does not examine relevant evidence; it fails
to articulate a satisfactory explanation for its conclusions, including a rational connection between
the facts found and the choice made; it does not consider relevant factors; it reflects a clear error of
judgment; it fails to consider an important aspect of the case; it offers an explanation for the decision
that runs contrary to the record evidence; or it is so implausible that it cannot be ascribed to a mere
difference of opinion.  In deciding whether the Judge's rulings or conclusions are contrary to law,
the Board will consider whether they are contrary to provisions of Executive Order 10865, the
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Directive, or other applicable federal law.  See ISCR Case No. 03-22861 at 2-3 (App. Bd. Jun. 2,
2006).
Department Counsel asserts that the Judge’s determination that the Government had not
established a prima facie case as to allegations 1.c and 1.i was arbitrary and capricious because it was
contrary to the record evidence and contrary to precedent established by the Board.  Department
Counsel notes that the Judge found that the debts alleged at these two SOR paragraphs remained
unproven because “they were unknown to Applicant as he does not recognize the listed debts.”
Department Counsel alleges that the Judge’s requirement that the Government provide greater detail
than was set forth on its credit reports improperly increased the Government’s burden of proof
regarding the two debts.  In the case of the two debts, neither the Judge nor the parties at the hearing
seemed to know who the creditors were.  However, there is evidence in the record which identifies
both creditors with sufficient specificity that a reasonable applicant ought to able to respond to the
allegation of delinquent indebtedness (See Credit Report dated August 12, 2008 in Government
Exhibit two with page numbers “25 of 29" and “26 of 29" at the tops of the pages and page numbers
142 and 143 at the bottom of the pages).  It is of course, well-settled that adverse information from
a  credit report can normally meet the substantial evidence standard and the government’s obligations
under E3.1.14 for pertinent allegations.  See, e.g.,  ISCR Case No. 03-20327 at 3 (App Bd. Oct. 26,
2006).  In fact, the credit reports were detailed enough to establish the government’s case regarding
the two allegations.
Department Counsel asserts that the Judge committed error by applying Adjudicative
Guideline  20 (d) in mitigation and by stating that “Applicant had resolved many of the delinquent
debts listed in the SOR, either by payment or settlement.”  Specifically, Department Counsel alleges
that the Judge erroneously applied the mitigating condition with regard to debts alleged at SOR
allegations 1.a, 1.b, 1.c, 1.f, 1.g, 1.i and 1.n.  Evaluation of this claim of error is hampered somewhat
by the fact that, when discussing the applicability of this mitigating condition, the Judge specifically
mentioned only the debts at 1.a and 1.b.  After a review of the record the Board concludes that,
although the evidence regarding Applicant’s diligence in dealing with the debt is mixed, the Judge’s
application of the mitigating condition to the debt alleged at 1.a was not error.  However, the Judge’s
analysis of the IRS garnishment of Applicant’s wages in allegation 1.b is not sustainable.  The Judge
gives Applicant credit under the mitigating condition for initiation of payment of a debt.  On its face,
satisfaction of a debt through the involuntary establishment of a creditor’s garnishment is not the
same as, or similar to, a good-faith initiation of repayment by the debtor.  Regarding debts 1.c and
1.i, since the Judge based her analysis on a finding that the Government had not initially established
its case with regard to these debts, a further analysis under Adjudicative Guideline 20 (d) would not
follow logically.  However, on remand, given the Board’s preceding ruling on these two allegations,
analysis under the mitigating condition may well be necessary.
Also, under Adjudicative Guideline 20 (d), Department Counsel complains that, regarding
the debts covered in allegations 1.f, 1.g, and 1.n, the Judge erred in applying the mitigating condition
because the debts were not addressed by Applicant until his security clearance processing had
proceeded through its entire investigation and a due process hearing, and therefore could not
constitute a “good faith effort to resolve debts.”  On this record, the timing of Applicant’s attempts
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to resolve these particular debts does not make the mitigating condition inapplicable as a matter of
law.  However, the timing of Applicant’s actions impacts upon the degree to which the mitigating
factor applies.  Department Counsel’s argument raises the issue of the Judge’s failure to consider the
fact that any efforts on the part of Applicant to resolve these debts came very late in the process.
Under these circumstances, the failure of the Judge to analyze the timing of Applicant’s actions when
considering the mitigating factor was error.
Department Counsel contends that the Judge erroneously applied Adjudicative Guideline 20
(e) in mitigation.  It should be mentioned at the outset that, despite the breadth of Department
Counsel’s argument, the Judge’s decision appears to limit the application of this mitigating condition
to a single debt (allegation 1.e).  Regarding that debt, the Judge’s analysis is problematic in that it
states only vaguely that the mitigating condition has “some” applicability and it focuses on the
reasonableness of Applicant’s belief that the debt has been resolved while at the same time
acknowledging that his belief may be erroneous.  The mitigating condition also requires documented
proof to substantiate the basis of the dispute or evidence of actions to resolve the issue, and the
Judge’s discussion of whether Applicant has satisfied these requirements is inadequate.
Department Counsel asserts that the Judge erred by applying Adjudicative Guideline 20 (b)
to this case.  Department Counsel states that the record evidence fails to establish a nexus between
conditions beyond Applicant’s control and the various, ongoing financial delinquencies alleged in
the SOR, and contends that even if there is some connection, there is little evidence that Applicant
acted reasonably under the circumstances.  After a review of the record evidence, the Board
concludes that the Judge’s application of Adjudicative Guideline 20 (b) was not inappropriate as a
matter of law.  However, Department Counsel challenges the adequacy of the Judge’s discussion of
this mitigation issue in her decision.  The record reveals that Applicant encountered serious financial
difficulties during the period of his father’s illness and death, but that over a period of years, much
of that delinquent indebtedness was resolved.  The record further indicates that a second round of
financial difficulties followed the loss of a job in 2004.  The Judge’s discussion lacks sufficient
detail in that she does not discuss individual debts and how the rise of those debts relate to either of
the two distinct periods in Applicant’s past where he lost control of his finances.  The Judge also
fails to explain the relevance of Applicant’s voluntary entry into a separation agreement with his wife
and the subsequent acceptance of her car payment and insurance obligations, given the fact that the
mitigating condition covers circumstances largely beyond the debtor’s control.
The Board remands the case to the Judge with instructions to re-open the record for the
limited purpose of obtaining from Applicant an admission or denial regarding the  two creditors
referred to in  SOR allegation 1.c and 1.i in light of the discussion above.  Department Counsel shall
be given an opportunity to respond.  The Judge shall write a new decision in which she evaluates the
additional information.  The new decision shall not give Applicant credit under Adjudicative
Guideline 20 (d) for the IRS garnishment nor for any debt which Applicant disputes, denies or
otherwise has not paid.  The new decision shall discuss the significance of the timing of each of
Applicant’s actions on his debts which were taken in the aftermath of the initiation of security
clearance due process. The Judge’s new decision shall include in any discussion of either
Adjudicative Guideline 20 (b) or Adjudicative Guideline 20 (e) a complete discussion as to how each
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prong of the Adjudicative Guideline applies for each debt under discussion in light of the Judge’s
own findings of fact and the record evidence.  The Judge’s new decision shall not contain a
discussion of her appraisal of the Board’s authority (See ISCR Case No. 07-15281 at fn. 5 (App. Bd.
Jun. 16, 2009). 
Order
The Judge’s favorable security clearance decision is REMANDED in accordance with the
decision above.
Signed: Michael Y. Ra’anan           
Michael Y. Ra’anan
Administrative Judge
Chairman, Appeal Board
Signed: Jeffrey D. Billett              
Jeffrey D. Billett
Administrative Judge
Member, Appeal Board
Signed: James E. Moody               
James E. Moody
Administrative Judge
Member, Appeal Board