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                            DEPARTMENT OF DEFENSE
             DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
---------, -------- ------- )       ISCR Case No. 08-10798
SSN: ------ ---- -------- )
)
Applicant for Security Clearance )
Appearances
For Government: Melvin A. Howry, Esquire, Department Counsel
For Applicant: Pro Se
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Decision
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WHITE, David M., Administrative Judge:
Applicant owes more than $27,600 in seven delinquent debts, including more
than $13,000 on his first mortgage loan. He began addressing some of the smaller
debts right before and after his hearing, but has not yet established a track record of
financial responsibility or solvency. He did not deliberately falsify his security clearance
application. Based upon a thorough review of the case file, pleadings, exhibits, and
testimony, eligibility for access to classified information is denied. 
Applicant submitted his security clearance application on April 7, 2008. On May
12, 2009, the Defense Office of Hearings and Appeals (DOHA) issued a Statement of
Reasons (SOR) to Applicant detailing security concerns under Guidelines F and E. 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 (DoD) for SORs issued after September 1, 2006. Applicant
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acknowledged receipt of the SOR on May 21, 2009. He answered the SOR in writing
(AR) on May 28, 2009, and requested a hearing before an administrative judge.
Department Counsel was prepared to proceed on June 19, 2009, and DOHA assigned
the case to me on the same day.
DOHA issued a Notice of Hearing on June 23, 2009, and I convened the hearing
as scheduled on July 7, 2009. Department Counsel offered Government Exhibits (GE) 1
through 8, which were admitted without objection. Applicant testified on his own behalf,
and offered Applicant’s Exhibits (AE) A through H, which were also admitted without
objection. I granted Applicant’s request to leave the record open until July 21, 2009, for
submission of additional evidence. On that date, Department Counsel forwarded 18
additional documents that were submitted by Applicant with no objection to their
admissibility. This evidence was marked AE I, and admitted. DOHA received the
transcript of the hearing (Tr.) on July 15, 2009.
Findings of Fact
Applicant is a 50-year-old employee of a federal contractor, where he has worked
for a year and a half as a recruiter. In his answer to the SOR, he admitted the truth of
the allegations in SOR ¶¶ 1.a through 1.f, with explanations, and denied the allegations
in SOR ¶¶ 1.g through 1.i, and 2.a. Applicant’s admissions are incorporated into the
following findings of fact.
Applicant is married with three children, ages 24, 16, and 4. He held a security
clearance for most of his 25-year enlisted career in the Army, which ended in 2002. He
retired as a first sergeant (E-8), and earned five Meritorious Service Medals, three Army
Commendation Medals, three Army Achievement Medals, and eight Army Good
Conduct Medals during his career. (GE 1 at 15, 18-19; AE I doc 4; Tr. at 57-58.)
Until recent marital problems arose, his wife handled the family finances and was
responsible for paying their bills. He earned more than $100,000 per year with a
different defense contractor until about September 2007, when that company lost its
contract. Since then, his income (exclusive of retirement pay) has been around $45,000
per year. His wife formerly earned about $35,000 per year, but left her job and currently
receives $1,200 per month in unemployment compensation. (Tr. at 40, 44, 58-60, 63,
67-72.) 
The delinquent government credit card account described in SOR ¶ 1.a has a
$6,500 limit, and the balance has been consistently between $6,500 and $7,000 since
at least April 2008. The account was reported to be as much as five months past due
during late 2007, was briefly brought current in early 2008, but has been continuously
delinquent since February 2008. Applicant is being garnished $345 per month from his
retirement pay for this debt. His July 2009 account statement showed a balance of
$6,405, with the past-due amount of $1,077. (GE 2 through 7; AE I docs 8 and 9; Tr. at
45-48.)
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The debts alleged in SOR ¶¶ 1.b and 1.c are the first and second mortgages on
Applicant’s home. His wife failed to make a number of payments toward these loans
without Applicant’s knowledge. In April 2008, the loans were two months and four
months delinquent respectively. By April 2009, the first mortgage was seven months
past due, in the amount of $11,868, and the second mortgage was four months ($2,252)
past due. Applicant made some payments toward these debts between February and
July 2009. An $810 payment on June 1 brought the second mortgage current except for
the June and July 2009 payments. He made another $600 payment on July 1, 2009, so
that loan was only one month delinquent at that point. However, his first mortgage fell
further behind to be eight months delinquent in the amount of $13,620. He made a
$1,900 payment on July 1, 2009, to prevent it from falling further behind. Applicant is
attempting to renegotiate the terms of his first mortgage because he cannot otherwise
afford to bring it into a current status. (GE 2; GE 6; GE 7; AE H; AE I docs 15, 16, 17;
AR at 1; Tr. at 40-44, 48-51.)
The debt alleged in SOR ¶ 1.d was a $195 medical bill that became delinquent in
March 2005, and was placed for collection in December 2007. Applicant settled this
debt with the creditor on July 2, 2009, by making a payment of $222.75. However, the
payment of this check brought his checking account to a negative $1,195 balance.
Additionally, Applicant’s account statement reflects six ATM cash withdrawals between
July 3 and July 6, 2009. These withdrawals, four of which were at a local casino, totaled
$980 and incurred an additional $133 in overdraft and transaction fees. (AE F; AE G;
AE I doc 6; Tr. at 38-39, 51-52.)
The SOR ¶ 1.e debt is another medical bill that became delinquent in May 2006,
which Applicant attributes to services received by his adult daughter. He finally
acknowledged that he should pay it, however. He agreed with the collection agency to
settle the debt for $293.37 on June 30, 2009, but did not make that payment. (AR at 1;
GE 7 at 2; AE E; AE I doc 7; Tr. at 52-53.)
 The $1,617 debt alleged in SOR ¶ 1.f was for dental services Applicant received
after being told it would be covered by his insurance. It was not covered, and the debt
became delinquent in March 2007. In his response to the SOR, he said he had made
arrangements to take care of the debt, without further elaboration. During the hearing,
he said he was disputing the debt, and had a court date to resolve the dispute on July 9,
2009. His post-hearing evidence submission included a July 10, 2009, letter from the
collection agency referencing a judgment number and setting forth a total judgment debt
of $1,886.29. The letter detailed an agreed payment plan requiring Applicant to pay
$170 per month for 12 months beginning August 1, 2009. (GE 7 at 1; AR at 1; AE I doc
5; Tr. at 53-54.)
The $2,433 debt alleged in SOR ¶ 1.g involves a charged off credit card account.
In his response to the SOR, Applicant said he had never had an account with this
creditor, and was disputing the listing with the three credit bureaus. Page 1 of AE A
reflects a response from one credit bureau that his dispute of a debt to this creditor with
an unknown account number could not be located. Page 2 of AE A and AE D (as well
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as GE 2 at 16 and GE 3 at 2) reflect that Applicant resolved a different delinquent
account with this creditor by payments through a financial counseling program. That
account had been opened in 1998 and was paid and closed in October 2002. The SOR
¶ 1.g account was opened in November 2003, and became delinquent in August 2007.
(GE 2 at 20, GE 3 at 2.) Applicant provided no evidence of any action to address or
resolve this newer charged-off account. 
Applicant successfully challenged the debt alleged in SOR ¶ 1.h, and it has been
removed from his credit reports. (GE 7; AE I docs 11, 12, 13; Tr. at 54.) Although his
SOR response claimed the ¶ 1.i debt, in the amount of $2,413, was a case of identity
fraud, he admitted during the hearing that it was a legitimate obligation incurred by his
wife in his name. He disputed it with the credit bureaus at the same time as the disputes
discussed above, but the debt was confirmed to have been delinquent since December
2004. He has made some informal arrangements with his wife and mother-in-law
concerning repayment of this debt, but has not made any contact with the creditor to
resolve it. (GE 7 at 3; AE C; Tr. at 41, 55.)
One week after his hearing, Applicant joined a credit counseling service. They
prepared a budget for him reflecting regular monthly income of $7,063 and expenses of
$6,815, leaving a surplus of $248. He agreed to pay the service $240 per month into a
debt management plan (DMP) starting July 20, 2009, and to make 25 monthly
payments ending in August 2011. The DMP only includes payments toward the
delinquent debts alleged in SOR ¶¶ 1.e, 1.f, and 1.i, and makes no provision for
repayment of his mortgage delinquencies, the ¶ 1.g credit card debt, or more than the
garnishment toward the ¶ 1.a debt. (AE I doc 18.)
Applicant testified, and his wife corroborated, that he was unaware of their
delinquent debts when he answered “no” to questions 28a and 28b on his security
clearance application. He did not learn about these debts until January 2009, when she
temporarily left him. (AR at 2; AE H; Tr. at 36-38, 40-44, 58.) He served as a recruiter
for many years, and is fully aware of the obligation to truthfully disclose financial matters
on the application. In that regard, he added an “additional comment” on the final page of
his application that said, “I have been late on bills before several times in my life.” (GE 1
at 31.) Applicant’s demeanor while denying the alleged falsification of financial
information was sincere and forthright. 
Applicant submitted letters from three coworkers attesting to his trustworthiness,
competence, and communication skills. They each described him as a valuable asset to
the military and highly recommended that he be granted a security clearance. (AE I at 1
through 3.) He is well educated, mature, and performs his job with excellence.
Policies
When evaluating an applicant’s suitability for a security clearance, the
administrative judge must consider and apply the revised adjudicative guidelines (AG).
In addition to brief introductory explanations for each guideline, the adjudicative
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guidelines list potentially disqualifying conditions and mitigating conditions, which are to
be used 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 AG ¶ 2, describing the adjudicative process. The administrative judge’s
overarching adjudicative goal is a fair, impartial and commonsense decision. According
to AG ¶¶ 2(a) and (c), the entire process is a conscientious scrutiny of applicable
guidelines in the context 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 the 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 in 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, “[t]he applicant is
responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or
mitigate facts admitted by the applicant or proven by Department Counsel, and has the
ultimate burden of persuasion as to obtaining a favorable clearance decision.” Section 7
of Executive Order 10865 provides, “[a]ny determination under this order adverse to an
applicant shall be a determination in terms of the national interest and shall in no sense
be a determination as to the loyalty of the applicant concerned.” 
A person applying for access to classified information seeks to enter 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
Guideline F, Financial Considerations
AG ¶ 18 expresses the security concern pertaining to 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
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unwillingness to abide by rules and regulations, all of which can raise
questions about an individual's reliability, trustworthiness and ability to
protect classified information. An individual who is financially over-
extended is at risk of having to engage in illegal acts to generate funds.
Compulsive gambling is a concern as it may lead to financial crimes
including espionage. Affluence that cannot be explained by known sources
of income is also a security concern. It may indicate proceeds from
financially profitable criminal acts.
AG ¶ 19 describes conditions that could raise a security concern and may be
disqualifying. Department Counsel asserted the applicability of two of these potentially
disqualifying conditions: “(a) inability or unwillingness to satisfy debts;” and “(c) a history
of not meeting financial obligations.” (Tr. at 19.) Over the past five years, Applicant has
accumulated multiple delinquent debts that totaled approximately $27,600 at the time of
his hearing. He successfully disputed one relatively minor SOR-listed debt, and paid a
second one, albeit by overdrawing his checking account. However, his financial inability
or unwillingness to pay seven substantial remaining delinquencies supports ongoing
security concerns under AG ¶ 19(a). He is under continuing financial duress, so remains
at risk of having to engage in illegal acts to generate funds. The evidence further
established a five-year history of not meeting some significant financial obligations,
raising security concerns under AG ¶ 19(c). This history potentially indicates poor self-
control, lack of judgment, and unwillingness to abide by rules and regulations, thereby
raising questions about his reliability, trustworthiness, and ability to protect classified
information.
AG ¶ 20 provides conditions that could mitigate security concerns arising from
financial considerations. The potentially applicable mitigating conditions are:
(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;
(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;
(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;
(d) the individual initiated a good-faith effort to repay overdue creditors or
otherwise resolve debts; and
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(e) the individual has a reasonable basis to dispute the legitimacy of the
past-due debt which is the cause of the problem and provides
documented proof to substantiate the basis of the dispute or provides
evidence of actions to resolve the issue.
AG ¶¶ 20(a) and (b) were not established because Applicant’s delinquencies
resulted from continuing to spend more than he was earning after a job change resulted
in reduced family income. Substantial delinquencies continue to date, with no
demonstrated means available to resolve them. The fact that he was unaware of the
specifics of some delinquencies directly caused by his wife’s failure to pay some bills
neither restores confidence in his good judgment nor establishes that he acted
responsibly under the circumstances. His payment of the $195 debt alleged in SOR ¶
1.d was made by overdrawing his checking account. Applicant received some financial
counseling a week after his hearing, but the resulting debt management plan addresses
less than half of his delinquent debt and no actual payment under the plan was proven.
While these are steps in the right direction, meaningful mitigation is not yet established
under AG ¶¶ 20(c) or (d). 
Finally, Applicant successfully disputed the debt alleged in SOR ¶ 1.h. However,
the evidence he provided concerning SOR ¶ 1.g involved an earlier debt to the same
creditor and did not substantiate a legitimate basis for dispute. He was also in the
process of disputing the legitimacy of the debt alleged in SOR ¶ 1.f on his hearing date,
but AE I doc 5 showed that this dispute resulted in a judgment against him. AG ¶ 20(e)
thus provides mitigation of only the $424 debt alleged in SOR ¶ 1.h. 
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.
The following will normally result in an unfavorable clearance action or
administrative termination of further processing for clearance eligibility:
(a) refusal, or failure without reasonable cause, to undergo or
cooperate with security processing, including but not limited to
meeting with a security investigator for subject interview,
completing security forms or releases, and cooperation with
medical or psychological evaluation; 
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(b) refusal to provide full, frank and truthful answers to lawful
questions of investigators, security officials, or other official
representatives in connection with a personnel security or
trustworthiness determination.
AG ¶ 16 describes conditions that could raise a security concern and may be
disqualifying. The potentially disqualifying condition alleged in this case is:
(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.
Applicant denied that he deliberately or knowingly omitted, concealed or falsified
relevant financial information on his security clearance information when he incorrectly
answered “no” to questions 28a and 28b. He proved by a preponderance of the
evidence that he did not know about these debts at the time, and further established his
good-faith effort to be forthcoming by adding a comment that he had encountered
financial delinquencies in the past. The record does not support application of AG ¶
16(a), nor does it raise any personal conduct security concerns independent of those
that overlap duplicate reliability and trustworthiness issues arising under Guideline F. 
Whole-Person Concept
Under the whole-person concept, the administrative judge must evaluate an
applicant’s eligibility for a security clearance by considering the totality of the applicant’s
conduct and all relevant circumstances. The administrative judge should consider the
nine adjudicative process factors listed at AG ¶ 2(a): 
(1) the nature, extent, and seriousness of the conduct; (2) the
circumstances surrounding the conduct, to include knowledgeable
participation; (3) the frequency and recency of the conduct; (4) the
individual’s age and maturity at the time of the conduct; (5) the extent to
which participation is voluntary; (6) the presence or absence of
rehabilitation and other permanent behavioral changes; (7) the motivation
for the conduct; (8) the potential for pressure, coercion, exploitation, or
duress; and (9) the likelihood of continuation or recurrence. 
Under AG ¶ 2(c), the ultimate determination of whether to grant eligibility for a security
clearance must be an overall commonsense judgment based upon careful consideration
of the applicable guidelines and the whole-person concept.  
I considered the potentially disqualifying and mitigating conditions in light of all
the pertinent facts and circumstances surrounding this case. Applicant’s conduct of
security concern was incurring eight delinquent debts which totaled $27,942 when the
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SOR was issued. By the time of his hearing, one $195 debt had been paid by
overdrawing his checking account, and the remaining seven delinquent debts still
totaled more than $27,600. While he was unaware of the delinquent debts when he
completed his security clearance application in April 2008, he became aware of the
problems in January 2009 but did nothing to address or resolve any of them until he
received the SOR. His actions since that time have begun to address the resulting
security concerns, but he has not yet established a good-faith track record of financial
responsibility or permanent behavioral changes. Moreover, the record demonstrates his
ongoing inability to address the majority of his delinquent debt, including the first
mortgage on his home that is now eight months and more than $13,000 delinquent. The
resulting threat to his family home exacerbates the potential for pressure, coercion, and
duress over that normally arising from unsecured consumer debts of an equivalent
amount. Applicant exhibited an incomplete understanding of his financial situation and
failed to demonstrate that his financial problems are unlikely to continue or worsen.
Applicant has a long record of excellent and honorable service to the national
defense, and is highly regarded by those with whom he serves. On balance, however,
he presented insufficient evidence to mitigate security concerns arising from his history
of failing to meet financial obligations, and his inability or unwillingness to pay his
substantial delinquent debts. The record generates significant doubt as to his present
eligibility and suitability for a security clearance. Applicant rebutted personal conduct
security concerns, but did not mitigate security concerns related to his financial
considerations. 
Formal Findings
Formal findings for or against Applicant on the allegations set forth in the SOR,
as required by section E3.1.25 of Enclosure 3 of the Directive, are:
Paragraph 1, Guideline F: AGAINST APPLICANT
Subparagraph 1.a: Against Applicant
Subparagraph 1.b: Against Applicant
Subparagraph 1.c: Against Applicant
Subparagraph 1.d: For Applicant
Subparagraph 1.e: Against Applicant
Subparagraph 1.f: Against Applicant
Subparagraph 1.g: Against Applicant
Subparagraph 1.h: For Applicant
Subparagraph 1.i: Against Applicant
Paragraph 2, Guideline E: FOR APPLICANT
Subparagraph 2.a: For Applicant
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Conclusion
In light of all of the circumstances presented by the record in this case, it is not
clearly consistent with the interests of national security to grant Applicant eligibility for a
security clearance. Eligibility for access to classified information is denied.
                                  
DAVID M. WHITE
Administrative Judge