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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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------------------------ )     ISCR Case No. 07-08306
SSN: ---------------- )
)
Applicant for Security Clearance )
Appearances
For Government: Nichole L. Noel, Esquire, Department Counsel
For Applicant: Pro Se
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Decision
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MATCHINSKI, Elizabeth M., Administrative Judge:
As of November 2007, Applicant owed about $5,130 in medical debt and about
$10,783 in other unsecured debt incurred over the previous six years when his wages
were insufficient to cover his obligations. The debts were discharged in a Chapter 7
bankruptcy in February 2008 and there is no evidence of any new past due debt.
Clearance is granted.
Statement of the Case
Applicant submitted an Electronic Questionnaire for Investigations Processing (e-
QIP) on August 1, 2006. On November 29, 2007, the Defense Office of Hearings and
Appeals (DOHA) issued a Statement of Reasons (SOR) to Applicant detailing the
security concerns under Guideline F that provided the basis for its preliminary decision
to deny him a security clearance and refer the matter to an administrative judge. The
action was taken under Executive Order 10865, Safeguarding Classified Information
within Industry (February 20, 1960), as amended; Department of Defense Directive
5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2,
Department Counsel indicated in the FORM that the 16 debts totaled approximately $20,780. The1
debts alleged add up to $20,863.
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1992), as amended (Directive); and the adjudicative guidelines (AG) promulgated by the
President on December 29, 2005, and effective within the Department of Defense as of
September 1, 2006. 
 
Applicant answered the SOR on December 17, 2007, and requested a decision
without a hearing. On May 13, 2008, the government submitted a File of Relevant
Material (FORM) consisting of eight exhibits (Items 1-8). On May 14, 2008, DOHA
forwarded a copy of the FORM to Applicant through his employer of record at the time.
Applicant was instructed to respond within 30 days of receipt. Applicant did not file a
response, but there is no indication that he received the FORM. On June 10, 2009,
DOHA re-mailed the FORM to Applicant through his present employer without any input
from Department Counsel or any effort to update the financial information. Applicant
received the FORM on June 17, 2009. No response to the FORM was received by the
July 17, 2009, due date. On September 3, 2009, the case was assigned to me to
consider whether it is clearly consistent with the national interest to grant or continue a
security clearance for Applicant.
Given the dated nature of the financial information before me for review and
evidence indicating that the debts in the SOR may well have been discharged in
bankruptcy, I reopened the record on October 8, 2009, for further submissions by both
parties. On October 22, 2009, Applicant timely submitted two documents, which were
marked and admitted without objections as exhibits A and B. On October 27, 2009,
Department Counsel submitted bankruptcy records that were added to the May 13,
2008, FORM as Items 9 and 10. Based upon a review of the government’s FORM,
including Applicant’s Answer to the SOR allegations (Item 2), eligibility for access to
classified information is granted.
Findings of Fact
DOHA alleged under Guideline F, financial considerations, that Applicant owed
16 delinquent debts totaling $20,863 (SOR 1.a through 1.p)  as of November 2007 (Item1
1). On December 17, 2007, Applicant admitted the debts, but offered in mitigation that
they would be discharged in a “no asset” Chapter 7 bankruptcy (Item 2). After
considering the evidence of record, I make the following findings of fact.
Applicant is a 45-year-old employee of a defense contractor. Applicant applied
for his security clearance while he was working for a previous employer as a telecom
technician (Item 4). His employer has changed at least twice since he initially applied for
a security clearance. It is unclear whether his duty station has remained the same,
although he has maintained the same residence since April 1990. His current employer
is requesting that he be granted a security clearance.
Available information indicates that the debt in SOR 1.k is an updated balance of the debt in SOR2
1.p and does not represent a separate delinquency. Applicant listed only one account with the original lender
on his bankruptcy petition, which was being collected by the assignee in 1.k (Item 10). Applicant’s credit report
(Item 8) also indicates that the assignee in SOR 1.k was collecting for the lender in SOR 1.p. The collection
agency was reporting a delinquent balance of $7,112 as of September 2007. The original lender was reporting
a zero balance on its account, presumably because the debt had been transferred.
DOHA alleged the high credit on the account rather than the past due balance (Item 8).3
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Applicant held a succession of blue-collar positions (electrician helper, production
worker, forklift operator, CNC operator, telecom technician) from at least January 1996.
He was married to his first wife from May 1986 to January 1999, and has a 13-year-old
son, who lives with him (Ex. 4).
Applicant’s income was insufficient to meet his and his son’s expenses from
2001 to 2006 (Ex. A). Medical debts totaling $209 from 2001 (SOR 1.h-1.j), $180 from
2002 (SOR 1.a and 1.g), $671 from 2003 (SOR 1.e and 1.f), $2,940 from 2004 (SOR
1.c and 1.d), and $341 from 2005 (SOR 1.b) were charged off and in collection as of
May 2006 (Item 8). Debts of $258 for radiology services incurred before September
2006 (SOR 1.n) and of $531 for emergency room physicians’ services (SOR 1.o) also
went unpaid and were referred for collection (Item 10). Applicant lacked medical
insurance at the time and could not afford to make payments on the debts, which
continued to mount due to collection fees (Ex. A).
He fell behind on some consumer credit accounts as well. A credit card with a
credit limit of $250 was charged off in the amount of $742 in June 2004 (SOR 1.m).
That same month, he opened a credit card account with the lender in SOR 1.p. A
delinquent balance of $4,995 was referred for collection to the assignee in SOR 1.k in
June 2005.  As of September 2007, the balance had risen to $7,112. An unsecured2
debt of $2,929 was charged off in March 2004 (SOR 1.l).3
Applicant contacted his creditors to arrange repayment plans, but the total of the
requested monthly payments exceeded his income (Ex. A). He had earned income from
employment of $20,473 in 2005 and $25,019.02 in 2006 (Item 10).  Applicant applied
unsuccessfully for a debt consolidation loan of $10,000 from three different lenders, and
family members were unable or willing to lend him the funds needed to address his
debts (Ex. A).
 
One year into his job as a telecom technician with a defense contractor,
Applicant executed an e-QIP on August 1, 2006. He indicated that he had been
employed by a succession of commercial companies from January 1996 to July 2005,
when he started with the defense contractor that was sponsoring his current application
for a security clearance. He responded affirmatively to the financial delinquency
inquiries concerning whether he had been over 180 days delinquent on any debts in the
last 7 years, and whether he was currently over 90 days delinquent on any debts. He
listed one debt, a delinquent credit card debt of $3,500 incurred in June 2004 (SOR 1.k
and 1.p duplicate debt).
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On August 3, 2007, DOHA asked Applicant to verify payments of his medical
debts and of the consumer credit accounts in SOR 1.l and 1.m, and to complete a
personal financial statement. In response Applicant submitted an undated Personal
Financial Statement on which he estimated that his monthly expenses exceeded his
income by about $70. In lieu of listing his debts, he indicated, “Bankrupt Chapter 7.”
(Item 5).
On August 29, 2007, the law firm retained to handle a Chapter 7 bankruptcy filing
for Applicant notified DOHA of an anticipated filing date within the next 60 days (Item 6).
In conjunction with his bankruptcy filing, Applicant completed in-person credit
counseling on September 10, 2007. On October 24, 2007, Applicant filed an individual
bankruptcy petition under Chapter 7, listing assets of $5,235 and liabilities of $23,150,
including $20,055 in unsecured debt and $1,814 owed his bankruptcy lawyer. Applicant
listed as unsecured debt the delinquent accounts alleged in the SOR and three other
consumer credit card debts that had been current before he elected to pursue
bankruptcy in August 2007 (Items 8, 10). Applicant remarried in 2007, and he listed joint
income of $4,088.60 and expenses of $4,083 per month. His spouse, who was not a co-
debtor in the bankruptcy, had $15,287.81 in employment income from January to mid-
October 2007. Applicant had earned $25,430.63 over that time frame. Applicant elected
to retain his motor vehicle (a 1995 minivan with 175,777 miles) on which he was making
$200 monthly payments. The balance remaining on his car loan was $1,281 as of
October 2007 (Item 10). Applicant was granted a “no asset” Chapter 7 bankruptcy
discharge on February 25, 2008 (Items 7, 9), releasing him of any liability for the
dischargeable debts listed on his bankruptcy petition, which includes the debts in the
SOR.
As of September 18, 2009, Applicant’s hourly wage was about $21.06. His take-
home pay for 74 hours was $1,175. His gross earnings to date for 2009 were
$37,934.64 (Ex. B).
Policies
The U.S. Supreme Court has recognized that the Executive Branch has
substantial discretion in regulating access to information pertaining to national security,
emphasizing “no one has a ‘right’ to a security clearance.” Department of the Navy v.
Egan, 484 U.S. 518, 528 (1988). When evaluating an applicant’s suitability for a security
clearance, the administrative judge must consider the revised adjudicative guidelines
(AG). In addition to brief introductory explanations for each guideline, the adjudicative
guidelines list potentially disqualifying conditions and mitigating conditions, which are to
be considered 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.”
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The administrative judge must consider all available, reliable information about the
person, past and present, favorable and unfavorable, in making a decision.
The protection of the national security is the paramount consideration. AG ¶ 2(b)
requires that “[a]ny doubt concerning personnel being considered for access to
classified information will be resolved in favor of national security.” In reaching this
decision, I have drawn only those conclusions that are reasonable, logical, and based
on the evidence contained in the record. Likewise, I have avoided drawing inferences
grounded on mere speculation or conjecture. Under Directive ¶ E3.1.14, the
government must present evidence to establish controverted facts alleged in the SOR.
Under Directive ¶ E3.1.15, the applicant is responsible for presenting “witnesses and
other evidence to rebut, explain, extenuate, or mitigate facts admitted by applicant or
proven by Department Counsel. . . .” The applicant has the ultimate burden of
persuasion as to obtaining a favorable security decision.
A person who seeks access to classified information enters into a fiduciary
relationship with the government predicated upon trust and confidence. This relationship
transcends normal duty hours and endures throughout off-duty hours. The government
reposes a high degree of trust and confidence in individuals to whom it grants access to
classified information. Decisions include, by necessity, consideration of the possible risk
that the applicant may deliberately or inadvertently fail to protect or safeguard classified
information. Such decisions entail a certain degree of legally permissible extrapolation
as to potential, rather than actual, risk of compromise of classified information. Section 7
of Executive Order 10865 provides that decisions shall be “in terms of the national
interest and shall in no sense be a determination as to the loyalty of the applicant
concerned.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access
to classified or sensitive information).
Analysis
Guideline F, Financial Considerations
The security concern about finances is set out in AG ¶ 18:
Failure or inability to live within one’s means, satisfy debts, and meet
financial obligations may indicate poor self-control, lack of judgment, or
unwillingness to abide by rules and regulations, all of which can raise
questions about an individual’s reliability, trustworthiness and ability to
protect classified information. An individual who is financially overextended
is at risk of having to engage in illegal acts to generate funds.
As of November 2007, Applicant owed about $5,130 in medical debt in collection
and another $10,783 in delinquent consumer credit balances from 2004/05. AG ¶ 19(a),
“inability or unwillingness to satisfy debts,” and ¶ 19(c), “a history of not meeting
financial obligations,” are implicated.
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Concerning potential factors in mitigation, AG ¶ 20(a), “the behavior happened so
long ago, was so infrequent, or occurred under such circumstances that it is unlikely to
recur and does not cast doubt on the individual’s current reliability, trustworthiness, or
good judgment,” cannot reasonably be applied. Applicant had 15 outstanding delinquent
accounts that were incurred in or before 2005 that he had not resolved as of November
2007. Some medical debts were for as little as $33 and $50.
AG ¶ 20(b), “the conditions that resulted in the financial problem were largely
beyond the person’s control (e.g., loss of employment, a business downturn,
unexpected medical emergency, or a death, divorce or separation), and the individual
acted responsibly under the circumstances,” applies. Applicant incurred sizeable
medical costs when he did not have insurance, including an unexpected hospital bill
(SOR 1.c) and emergency room physician services (SOR 1.o). Low wage earnings were
also a contributing factor. His gross  income for 2005 was $20,473, barely enough to
support himself and his son. He earned $25,019.02 in 2006, but even with the increase,
he clearly did not have the means to address his debt in a reasonably timely manner.
Whether due to poor credit because of collection accounts, his low income, or a
combination of these and other factors not evident in the file, Applicant was three times
denied in his efforts to obtain a debt consolidation loan. Family members also were not
willing to lend him money or to cosign on a loan for him. Before the SOR was issued,
Applicant reluctantly filed for Chapter 7 bankruptcy. Given his limited income, it is
considered a good faith effort to resolve his debts under AG ¶ 20(d), “the individual
initiated a good-faith effort to repay overdue creditors or otherwise resolve debts,” even
though his creditors were not satisfied in his “no asset” discharge.
Since his creditors are legally barred from pursuing collection of the discharged
debts, much of Applicant’s financial pressure has been eliminated. But a discharge does
not guarantee financial solvency or the sound judgment that must be demanded of
those persons granted access to classified information. In Applicant’s favor, there is no
evidence of lavish expenditure. As of his bankruptcy, he was making timely payments
on a 1995 model-year minivan with 175,000 miles on it. His credit report of November
2007 (Item 8) shows he had been making his payments on three credit cards with a
total balance of $4,424 until he decided to file for bankruptcy and he included those
accounts on his petition. As of mid-September 2009, his gross earnings for the year
were $37,934.64, which is considerably more than he earned in 2007. There is no
evidence of any delinquency since his bankruptcy. Resolution of his delinquent debts
through a Chapter 7 discharge, when coupled with his improved income situation,
satisfies AG ¶ 20(c), “the person has received or is receiving counseling for the problem
and/or there are clear indications that the problem is being resolved or is under control.”
Whole-Person Concept
Under the whole-person concept, the administrative judge must evaluate an
applicant’s eligibility for a security clearance by considering the totality of the conduct
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and all the circumstances in light of the nine adjudicative process factors listed at AG ¶
2(a):
(1) the nature, extent, and seriousness of the conduct; (2) the
circumstances surrounding the conduct, to include knowledgeable
participation; (3) the frequency and recency of the conduct; (4) the
individual’s age and maturity at the time of the conduct; (5) the extent to
which participation is voluntary; (6) the presence or absence of
rehabilitation and other permanent behavioral changes; (7) the motivation
for the conduct; (8) the potential for pressure, coercion, exploitation, or
duress; and (9) the likelihood of continuation or recurrence.
Under AG ¶ 2(c), the ultimate determination of whether to grant eligibility for a security
clearance must be an overall common sense judgment based upon careful
consideration of the guidelines and the whole-person concept.
The DOHA Appeal Board has addressed a key element in the whole person
analysis in financial cases stating, in part, “an applicant is not required, as a matter of
law, to establish that he has paid off each and every debt listed in the SOR. All that is
required is that an applicant demonstrate that he has ‘ . . . established a plan to resolve
his financial problems and taken significant actions to implement that plan.’” ISCR Case
No. 07-06482 at 2-3 (App. Bd. May 21, 2008) (internal citations omitted). While a
bankruptcy discharge is not entitled to the same weight in mitigation as a track record of
repayment, Applicant filed reluctantly and only after he had tried to obtain loans needed
to make payments. There is no evidence that he has abused the fresh start afforded
him through the bankruptcy. The government had an opportunity to update the record in
October 2009, and did not raise any new concerns. Based on the information before
me, I conclude that it is clearly consistent with the national interest to grant Applicant a
security clearance.
Formal Findings
Formal findings for or against Applicant on the allegations set forth in the SOR,
as required by section E3.1.25 of Enclosure 3 of the Directive, are:
Paragraph 1, Guideline F: FOR APPLICANT
Subparagraph 1.a: For Applicant
Subparagraph 1.b: For Applicant
Subparagraph 1.c: For Applicant
Subparagraph 1.d: For Applicant
Subparagraph 1.e: For Applicant
Subparagraph 1.f: For Applicant
Subparagraph 1.g: For Applicant
Subparagraph 1.h: For Applicant
Subparagraph 1.i: For Applicant
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Subparagraph 1.j: For Applicant
Subparagraph 1.k: For Applicant
Subparagraph 1.l: For Applicant
Subparagraph 1.m: For Applicant
Subparagraph 1.n: For Applicant
Subparagraph 1.o: For Applicant
Subparagraph 1.p: For Applicant (Duplicate of 1.k)
Conclusion
In light of the record in this case, it is clearly consistent with the national interest
to grant Applicant eligibility for a security clearance. Eligibility for access to classified
information is granted.
ELIZABETH M. MATCHINSKI
Administrative Judge