DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 09-01456 
  ) 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Caroline H. Jeffreys, Esquire, Department Counsel 
For Applicant: Pro Se 
 
 
 
______________ 
 
Decision 
______________ 
 
CREAN, Thomas M., Administrative Judge: 
 
Applicant submitted an Electronic Questionnaires for Investigations Processing 
(e-QIP) on September 15, 2008, as part of her employment with a defense contractor. 
On June 3, 2009, the Defense Office of Hearings and Appeals (DOHA) issued a 
Statement of Reasons (SOR) for Applicant detailing security concerns for financial 
considerations 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 June 8, 2009. 
 
 Applicant answered the SOR in writing on June 14, 2009. She admitted six and 
denied two of the allegations under Guideline F with explanation, and requested a 
hearing before an administrative judge. Department Counsel was prepared to proceed 
on July 10, 2009, and the case was assigned to me on July 20, 2009. DOHA issued a 
Notice of Hearing on July 30, 2009, for a hearing on August 19, 2009. Applicant signed 
 
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for the Notice of Hearing on August 3, 2009. I convened the hearing as scheduled. The 
government offered seven exhibits, marked Government Exhibits (Gov. Ex.) 1 through 
7, which were received without objection. Applicant and one witness testified on her 
behalf and offered nine exhibits, marked Applicant Exhibits (App. Ex.) A - I which were 
received without objection. DOHA received the transcript of the hearing (Tr.) on August 
25, 2009. Based on a review of the case file, pleadings, exhibits, and testimony, 
eligibility for access to classified information is granted. 
 
Findings of Fact 
 
 After a thorough review of the pleadings, transcript, and exhibits, I make the 
following essential findings of fact.   
 
Applicant is 47 years old and has been an office manager for a defense 
contractor for one year. She is a high school graduate who is taking college level 
courses. She is married with three grown children. This is her first request for a security 
clearance (Tr. 22). Applicant and her husband's monthly income is approximately 
$3,600. Applicant's husband is also reimbursed for some of his expenses by his 
employer. Their monthly expenses are approximately $3,400, leaving $200 monthly in 
discretionary funds (Tr. 35-37; Gov. Ex. 4, Answer to Interrogatories, Personal Financial 
Statement at 6).  
 
Credit reports list the following financial issues for Appellant; a Chapter 13 
bankruptcy filed in December 2004, and dismissed in February 2005 (SOR 1.a); a 
Chapter 7 bankruptcy filed in March 2005, with debts discharged in June 2005 (SOR 
1.b); a cell phone account in collection for $519 (SOR 1.c); a charged off credit union 
account for $722 (SOR 1.d); a credit card in collection for $708 (SOR 1.e); another 
credit card account in collection for $1,094 (SOR 1.f); a charged off account for $395 
(SOR 1.g); and a remaining debt owed on a vehicle repossession for $17,580 (SOR 1.h; 
Gov. Ex. 2, Credit report, dated March 18, 2009; Gov. Ex. 4, Credit report, dated 
October 21, 2008). 
 
Applicant's daughter was living with Applicant and her husband in 2004. The 
daughter had medical problems and was pregnant requiring support from Applicant and 
her husband. Applicant and her husband were unable to pay their debts so they 
consulted a lawyer who suggested filing the bankruptcy. Applicant and her husband 
filed a Chapter 13 bankruptcy in December 2004 (SOR 1.a). The bankruptcy showed 
liabilities of over $150,000 most of which was for $137,000 owed on Applicant's house 
and three vehicles, two cars and a camper (Tr. 22-25; Gov. Ex. 8, Bankruptcy Schedule 
D, filed December 11, 2004). The wage earner plan payments were too high for them to 
pay so they requested the bankruptcy be dismissed. It was dismissed in February 2005. 
Applicant and her husband submitted a Chapter 7 bankruptcy in March 2005, listing the 
same debts as listed in the Chapter 13 bankruptcy (Gov. Ex. 7, Schedule D, filed March 
8, 2005). All debts were discharged by the bankruptcy in June 2005, to include the 
loans for their house and the two cars which were returned (SOR 1.b). Applicant and 
her husband were starting with a clean slate of debts except for the camper which they 
 
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kept at the request of the creditor. They made payments on the camper until May 2008, 
when they were no longer able to make payments because their daughter's child their 
grandchild, was now living with them. The camper was returned to the creditor in May 
2008 (Tr. 25-26).  
 
After the bankruptcy discharge in June 2005, Applicant and her husband had to 
purchase new cars and find a place to live. Applicant had worked for over 12 years 
making $12 per hour. She could no longer meet the physical requirements of the job 
and her doctor advised her to change occupations. Applicant became a receptionist but 
was only paid $8 an hour for that job. She also had periods of unemployment due to 
sickness and injury (Tr. 26-27). Applicant continued to make some payments on her 
debts from March 2006 until 2009 as best she could.  She did not make full payments 
but did make some payments on most of the debt (Tr.33-34).  
 
The delinquent debt at SOR 1.c is for a cell phone. Applicant and her husband 
had service from the company at one time. They switched service providers and paid all 
of the bill. When notified of the debt a number of years ago, she disputed it with the 
provider. It has been removed from her latest credit report as reported by the credit 
agency (Tr. 29-30, 45-46; Gov. Ex. 6, Fax information from Applicant at 6, Experian 
report, dated June 11, 2009). 
 
The credit union credit card debt at SOR 1.d was opened by Applicant's daughter 
without Applicant's knowledge. Applicant was listed as a co-signer on the card.  She did 
not know about the card and never used it. The credit union acknowledged that 
Applicant does not owe the debt (Tr. 27-29, 46; Gov. Ex. 6, Fax Information from 
Applicant at 10, Letter, dated June 13, 2009). 
 
The delinquent debts listed at SOR 1.e and 1. f are for credit cards Applicant and 
her husband took out after the bankruptcy discharge in 2005. The cards were mainly 
used in support of their Shriner activities for disabled children. They usually travel in 
support of Shriner activities about twice a year. Applicant has been making payments 
on these debts (Tr. 30-31, 46-48; Gov. Ex. 6, Fax Information from Applicant, at 11, 
Check, dated June 20, 2009; App. Ex. C, Bank debit, dated June 28, 2009; App. Ex. D, 
Bank debit, dated July 26, 2009; App. Ex. E, check, dated June 20, 2009). 
 
The delinquent debt at SOR 1.g is for a loan Applicant's husband took out in both 
of their names. Applicant believed the debt was paid. After learning the debt was still 
outstanding, she has been paying on the debt. The remaining balance on this account is 
approximately $320 (Tr. 31, 48-49; App. Ex. F, Check, dated June 16, 2009; App. Ex. 
G, Check, dated July 20, 2009). 
 
The repossession debt at SOR 1.h is for the camper. The creditor requested 
Applicant and her husband keep the camper after the bankruptcy and continue to make 
payments of about $498 monthly. When Applicant had to take a lower paying position, 
they continued to make payments for less than the required amount until it was 
returned. They voluntarily returned the camper to the creditor in May 2008, since they 
 
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could not afford to make the payments. When the creditor notified Applicant of the debt 
after the camper was sold, Applicant agreed to make payments of $75 per month on the 
account. She has been making monthly payments since March 2009 (Tr. 31-33, 49-50; 
App. Ex. H, Check, dated June 22, 2009; App. Ex. I, Check, dated July 21, 2009). 
 
Applicant's immediate supervisor testified that shortly after Applicant started 
working for the defense contractor, her potential for higher level positions was 
recognized by the company leaders. After a few months, Applicant was moved to the 
office manager position at corporate headquarters. She is recognized as a trustworthy 
employee who keeps information confidential. Her duties include managing the 
corporate credit card accounts and arranging employee travel. She is responsible for 
purchasing supplies and overseeing the payroll. She has been recommended to be the 
facilities security officer requiring her to have a security clearance. Applicant is 
considered by the company leaders to be trustworthy, reliable, and has an excellent 
ability to handle classified information (Tr. 51-54). 
 
Applicant presented two letters of recommendation. A friend wrote that she has 
known Applicant for over 20 years and considers her to be trustworthy and reliable 
(App. Ex. A, Letter, undated). The leader of Applicant's Shriner chapter wrote that he 
has known Applicant for over ten years. Applicant is involved in a number of Shriner 
fund raisings and charitable activities. She is organized, efficient, competent, and has 
excellent rapport with others. She is very dependable and trustworthy. She has been 
trusted with large sums of money and personal information. He would trust her to 
manage any type of information (App. Ex. B, Letter, dated August 18, 2009). 
 
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 
 
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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. 
 
Analysis 
 
Financial Considerations: 
 
 Under financial considerations, 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 (AG ¶ 18). Similarly, an individual who is financially 
irresponsible may also be irresponsible, unconcerned, or careless in their obligations to 
protect classified information. Behaving responsibly or irresponsibly in one aspect of life 
provides an indication of how a person may behave in other aspects of life.  
 
 A person’s relationship with her creditors is a private matter until evidence is 
uncovered demonstrating an inability or unwillingness to repay debts under agreed 
terms. Absent evidence of strong extenuating or mitigating circumstances, an applicant 
with a history of serious or recurring financial difficulties is in a situation of risk 
inconsistent with the holding of a security clearance. An applicant is not required to be 
debt free, but is required to manage her finances in such a way as to meet her financial 
obligations. Applicant's delinquent debts as listed on credit reports and admitted by 
Applicant are a security concern raising Financial Considerations Disqualifying 
Conditions (FC DC) AG ¶ 19(a) (inability or unwillingness to satisfy debts), and FC DC 
AG ¶ 19(c) (a history of not meeting financial obligations).   
 
 A bankruptcy discharge itself is not a security concern since bankruptcy is a legal 
and permissible means of resolving debts. Applicant and her husband filed a Chapter 
 
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13 bankruptcy that was dismissed and a Chapter 7 bankruptcy that discharged her 
debts. The bankruptcy discharge released Applicant of the burden of paying most of the 
debts that arose from the expenses of caring for her daughter and grandchild. A creditor 
requested Applicant to keep one debt on a camper. Additional debts arose after the 
bankruptcy discharge, and they should be examined to determine financial responsibility 
and the impact on security worthiness. The debts she accumulated after the bankruptcy 
do create a financial consideration security concern and raise the disqualifying 
conditions.  
 
 Applicant disputed two of the debts listed in the SOR (SOR 1.c, and 1.d). I 
considered FC MC ¶ 20(e) (the individual has a reasonable basis to dispute the 
legitimacy of the past-due debt which is the cause of the problem and provided 
documented proof to substantiate the basis of the dispute or provides evidence of 
actions to resolve he issue). One of the debts was removed from her credit report by the 
credit reporting agency. The creditor on the other debt acknowledged that Applicant 
does not owe this debt. Based on the information provided by Applicant, I conclude 
these debts are not delinquent debts attributable to Applicant. SOR 1.c and 1.d, are 
found for Applicant.  
 
 There are four delinquent debts remaining for consideration. Two debts are for 
credit cards used by Applicant and her husband for expenses in their charitable 
activities with the Shriners. One debt is for a loan taken out by Applicant's husband. The 
fourth debt is for the camper remaining from the bankruptcy discharge. 
 
 I considered the Financial Considerations Mitigating Conditions (FC MC) raised 
by Applicant's testimony concerning the four remaining debts. FC MC 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), and FC MC ¶ 20(b) (the 
conditions that resulted in the financial problems 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) have some application to Applicant's circumstances. All four 
debts are still being paid so they are current debts and not old or infrequent. Applicant 
incurred the debts because she cared for her daughter and then granddaughter. She 
had to take a lower paying job because she could no longer physically perform her 
previous job. Her new job lowered her hourly pay by a third. She also was out of work 
for some time because of sickness and illness. These conditions were beyond her 
control and caused financial problems. The debts pertaining to the credit cards and the 
loan happened in support of their charitable and normal circumstances so they can 
recur. The camper repossession is a carryover from the bankruptcy and this is unlikely 
to recur. Applicant is paying on these debts so they do not cast doubt on her current 
reliability, trustworthiness, or good judgment. By making arrangement to pay these 
debts, she acted responsibly under the circumstances.   
 
 
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 I considered FC MC ¶ 20(d) (the individual has initiated a good-faith effort to 
repay the overdue creditors or otherwise resolve debts). For FC MC ¶ 20(d) to apply, 
there must be an “ability” to repay the debts, the “desire” to repay, and “evidence” of a 
good-faith effort to repay. A systematic, concrete method of handling debts is needed. 
Good-faith means acting in a way that shows reasonableness, prudence, honesty, and 
adherence to duty or obligation. Evidence of past irresponsibility is not mitigated by 
payment of debt only under pressure of qualifying for a security clearance. Applicant 
has the ability and a strong desire to pay the debts. She established her good-faith 
effort to pay the four debts. She presented information to show that she has been 
paying the debts according to her agreements with the creditors. The payment plans are 
credible and reasonable under her financial circumstances. Applicant mitigated security 
concerns based on her finances. 
 
 “Whole Person” Analysis  
 
 Under the whole person concept, the Administrative Judge must evaluate an 
applicant’s security eligibility by considering the totality of the applicant’s conduct and all 
the circumstances. An 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 a security clearance 
must be an overall commonsense 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. I considered Applicant's good 
reputation at work and in the community for trustworthiness, reliability, and good 
judgment. I considered that she and her husband devote their time to the charitable 
activities of the Shriners. I considered that some of her debts are directly attributed to 
their charitable activities.  
 
Applicant must establish a "meaningful track record" of debt payment, including 
evidence of actual debt reduction through payment of debts. She is not required, as a 
matter of law, to establish that she paid off each and every debt listed in the SOR. All 
that is required is that she has a plan to resolve her financial problems and takes 
significant action to implement that plan. The entirety of her financial situation and her 
actions can reasonably be considered in evaluating the extent to which her plan to 
 
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reduce her outstanding indebtedness is credible and realistic. Available, reliable 
information about the person's behavior, past and present, favorable and unfavorable, 
should be considered in reaching a determination. There is no requirement that a plan 
provide for payments on all outstanding debts simultaneously. Rather, a reasonable 
plan and concomitant conduct may provide for the payment of such debts one at a time.   
 
Applicant established a meaningful track record of debt payment by presenting 
sufficient information to show she has payment plans in effect for the four outstanding 
debts and that her payments are current according to the plan. She has sufficient 
monthly income to meet her present obligations. Applicant demonstrated that her plan is 
credible and realistic, and she is managing her finances responsibly under the 
circumstances. The management of her present finances and her past obligations 
indicates she will be concerned, responsible, and not careless in regard to classified 
information. Applicant is not financially overextended and she is living within her means. 
Overall, the record evidence leaves me with no questions or doubts as to Applicant’s 
judgment, reliability, and trustworthiness. She established she is suitable for a security 
clearance. I conclude Appellant has mitigated the security concerns arising from her 
financial situation. 
 
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 
 
  Subparagraphs 1.a - h:  For Applicant 
 
Conclusions 
 
 In light of all of the circumstances presented by the record in this case, it is 
clearly consistent with national security to grant Applicant eligibility for a security 
clearance. Eligibility for access to classified information is granted. 
 
 
 
_________________ 
THOMAS M. CREAN 
Administrative Judge