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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)         ISCR Case No. 08-05339
SSN: )
)
Applicant for Security Clearance )
Appearances
For Government: Richard Stevens, Esquire, Department Counsel
For Applicant: Pro se
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Decision
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MASON, Paul J., Administrative Judge:
Based on a review of the case file, pleadings, testimony, and exhibits received at
the hearing and following the hearing, Applicant’s eligibility for access to classified
information is denied.  
Statement of the Case
Applicant submitted his Security Clearance Application (SCA) on June 18, 2007.
He was interviewed by the Department of Defense in February 2008. He supplied
answers to interrogatories concerning his financial indebtedness on July 17, 2008. The
Defense Office of Hearings and Appeals (DOHA) issued a Statement of Reasons (SOR)
on January 23, 2009 detailing security concerns under financial considerations
(Guideline F). The action was taken pursuant to 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 made
 In his SCA, Applicant answered “No” to all financial questions in modules 27 and 28. Though these1
responses cannot be considered in the government’s case-in-chief, the incorrect information has a negative
effect on Applicant’s overall credibility.
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effective within the Department of Defense for SORs issued on or after September 1,
2006.
Applicant provided his answer to the SOR on March 3, 2009. DOHA issued a
notice of hearing on April 6, 2009 for a hearing on April 23, 2009. The hearing was
cancelled on April 18, 2009. The case was reassigned to me for administrative reasons.
A notice of hearing was issued on June 3, 2009 for a hearing on June 23, 2009. At the
hearing, six exhibits (GE I through 6) were admitted in evidence without objection to
support the government's case. Applicant provided testimony until I determined the case
should be continued because he was inadequately prepared to represent himself. On
July 8, 2009, a notice of hearing was issued for a continuation of the June 23 hearing to
July 28, 2009. Applicant and his wife testified. Applicant offered two exhibits (AE A and
AE B) that were admitted in evidence without objection. In the time period allowed to
submit post-hearing exhibits, Applicant submitted AE C through AE J. The post-hearing
exhibits contain a character statement of Applicant, three citations or awards,
documentary proof of payment of $1,000 to settle the debt identified in SOR 1.c., and a
brochure from a financial counseling service in the state. DOHA received the transcript
on August 11, 2009. References to the hearing transcript on June 23, 2009, shall be
cited as Tr. I, followed by the page number. References to the hearing transcript on July
28, 2009 shall be cited as Tr. II, followed by the page number. 
Rulings on Procedure
The hearing on June 23, 2009 was suspended after it became apparent
Applicant was having difficulty presenting his case. I concluded he was not adequately
prepared (Tr. I 21, 28-40). Applicant testified his wife always handled the finances and
wrote the checks to pay bills (Tr. I 36-37). Before postponing the hearing, I explained
that when he returned to complete the hearing, he should be much more aware of the
status of each debt, and, because of her primary role in handling the finances, that he
should bring his wife to supplement his testimony (Tr. I 50-55).
Findings of Fact
The SOR lists six delinquent debts. The accounts represent credit cards, and an
auto loan account. The state tax lien was filed in April 1998. In his answer to the SOR,
Applicant admitted the debts identified in SOR 1.a., 1.b., 1.c., 1.e., and 1.f. He denied
the auto loan account listed in SOR 1.d. because he completed payment on the loan on
February 18, 2009 (AE B at 4).
Applicant is 69 years old. He married his second wife in February 2000. He has
two grown children, and two grown stepchildren (GE 1, SCA).  He has been employed1
as a security guard since April 2001 (GE 1). His wife has been employed 32 years with
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the state division of employment services (Tr. II 7). He seeks a Secret security
clearance. 
The six delinquent debts in the SOR total $21,738. Five of the six debts became
delinquent in 2005. The sixth delinquent account is a state tax lien (SOR 1.f.) totaling
$10,584. The lien was filed against Applicant in April 1998 for not paying taxes that
were still due when he closed his business. Applicant operated a business of
creating/developing animated characters for television (Tr. I 31). In developing these
characters, he used his own equipment, including studios, stages and cameras (Tr. I
31). He recalled selling all the items and paying off all his debts before he closed the
business in 1994 (Tr. II 32). The first time he found out about the tax lien was in
February 2008 when he was interviewed by a government investigator (Tr. I 32). He did
not contact the state to obtain information about the lien because he believed the lien
information was incorrect (Tr. I 33; Tr. II 37). Applicant recalled when he closed his
business in 1994, he did not file a final tax return (Tr. II 37). Applicant’s wife testified that
he scheduled an appointment with a tax agent for August 7, 2009 (Tr. II 14) to resolve
the lien. Applicant indicated in a post-hearing submission he met with the tax
representative on August 7, 2009, and agreed to pay him $500 to resolve the tax lien
(AE C).
Applicant’s wife testified that no plan for repayment had been established for the
delinquent debt in SOR 1.b. (Tr. II 11-12). On July 27, 2008, she contacted the
collection agency identified in SOR 1.c., and arranged a settlement of the credit card
debt for $1,000 (Tr. II 12). The settlement transaction occurred on July 31, 2009 (AE G).
Regarding SOR 1.e., Applicant’s wife is still trying to negotiate a settlement plan their
earnings can reasonably accommodate (Tr. II 14).
One of the two remaining delinquent accounts listed in the SOR is a judgment
(SOR 1.a.) that was entered against Applicant in November 2007 for $1,616. The last
SOR debt that has not been addressed is Applicant’s auto loan (SOR 1.d.). Applicant’s
wife added these two accounts to the PFS she prepared for Applicant in July 2008. (GE
2;Tr. II. 17). The PFS is being addressed because it shows additional, unlisted
delinquent credit accounts that Applicant is servicing that are not listed in the SOR. The
PFS shows that in July 2008 Applicant and his wife earned $4,159 month, minus
monthly expenses of $1,422, and monthly debt payments of $2,447, leaving a net
monthly remainder of $289 a month (Id.). In the monthly debt payment module of the
PFS, Applicant’s wife identified ten credit or installment accounts and payments they
are making on each account (Id.). After the first account (Applicant’s mortgage), the
next six accounts ($20,574) in the debt module (excluding the fifth account which is
SOR 1.a.) are delinquent (GE 2). The first account (Applicant’s mortgage) listed in the
debt module is current (Tr. II 19-21). 
The second account (not listed in the SOR) in Applicant’s PFS debt module was
originally his late mother-in-law’s credit card she used to pay her expenses before she
died in 2004 (GE 2 at 4, 5; Tr. II 21-23). After her death, Applicant and his wife agreed
to assume liability for the account, and have been paying $313 a month since August
 Attached to GE 2 are 16 documents followed by a credit bureau report dated July 17, 2008. Each of the 162
documents are numbered chronologically (in handwriting) in the upper right hand corner. 
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2005 (Tr. II 21) under the creditor’s special repayment program that was applied to the
account prohibiting Applicant and his wife from using the card (for credit purchases)
until further notice (GE 2 at 5).  2
The third account (not listed in the SOR) in Applicant’s PFS debt module is a
credit card used by Applicant and his wife (GE 2 at 7; Tr. II 21). This card is covered by
the same repayment program (applied in July 2005) that requires a $298 monthly
payment, and prevents Applicant and his wife from using the credit card (GE 2 at 7).
Applicant’s wife testified that the balances of the second and the third credit card
accounts have each been reduced to about $3,000 (Tr. II 23). Applicant testified the
second and third credit card accounts originally carried balances of $14,500 and
$15,000 because they were using the cards to pay off other credit cards (Tr. I 46). 
The fourth account (not listed in the SOR) in Applicant’s PFS debt module is a
credit card (GE 2). Applicant was trying to settle the delinquent account with three
payments of $457 (Id. at 8). GE 5 shows the account was settled in 2008 (GE 5).
The fifth account (SOR 1.a.) in Applicant’s PFS debt module is a credit card
account that was opened in December 2003 and became delinquent after August 2005
(GE 6). A judgment was entered on the account in November 2007 (GE 5). Applicant’s
wife had been paying $100 a month on the judgment from an unknown time in 2007
until July 2008, when she stopped paying on the judgment because the mortgage (first
account in debt module) started falling behind (Tr. II 27). Also, she had medical
problems (Tr. II 10-11). She provided no additional information about her medical
problems. In July 2009, she resumed payments to the SOR 1.a. creditor. She made two
payments of $200 each on July 16, and July 22, 2009 (Tr. II 10-11; AE F). 
The sixth account in Applicant’s PFS is not listed in the SOR, but is another
credit card account transferred for collection to the same law firm listed in SOR 1.a. (GE
2 at 10).
The seventh account in Applicant’s PFS debt module is also not listed in the SOR
(GE 2). The credit union account was transferred to a collection agency who advised
Applicant they had received his $200 payment on June 23, 2008 (GE 2 at 11). Applicant
wrote in the column of the exhibit that the account was debited $200 every month until
the debt was paid in full; however, there is no date on the document indicating when the
debt was paid-in-full (Id.). There is no independent documentation from the collection
agency verifying the debt was paid. 
The eighth, ninth and tenth debts appear on the second page of Applicant’s PFS
debt module. These three accounts are current or paid off. The eighth account listed in
the PFS, an installment loan (SOR 1.d.), has been satisfied with a final payment made
in February 2009 (AE B at 4). The ninth account is an installment loan taken out in
 Applicant’s annual income is computed by multiplying his monthly income of $4,159 (GE 2, PFS) by 123
months. 
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March 2004 for $5,118. The loan is current (GE 2 at 13). The tenth account listed in
Applicant’s PFS is a credit union account belonging to Applicant’s wife. It is current (GE
2 at 14). 
Included in GE 2 are two collection statements (GE 2 at 15, 16). Although neither
account is listed in the SOR, both collection statements confirm two separate,
delinquent credit accounts that remain Applicant’s responsibility. (See also GE 5 and
GE 6). 
The record does not provide much detail as to why Applicant and his wife have
carried so much delinquent debt in their PFS. Both said that they occasionally used their
credit cards (credit accounts listed in the SOR and credit accounts not listed in SOR, but
included in Applicant’s PFS) to pay off their other creditors (Tr. II 22-24, 39-40). When
asked whether medical issues caused their financial difficulties, Applicant described a
dislocated shoulder (Tr. II 35) and his eye problems in June 2008 requiring surgery, but
then indicated that his insurance covered 80% of the cost of the eye surgery (Tr. II 40-
44). 
The total amount of debt in the SOR is $21,738. The total amount of unlisted
indebtedness in the debt module of Applicant’s PFS is $20,534. The total amount
delinquent debt is more than $41,000. Even after subtracting the delinquent debts that
Applicant settled over the last year, the delinquent debt is still at least $25,000.
Applicant’s yearly income is approximately $49,908  (GE 2). 3
Although Applicant did not specifically indicate at the June 23 or July 28 hearings
whether he had financial counseling, I find that he has never had financial counseling. I
make this finding because: (1) Applicant was not prepared to represent himself at the
hearing on June 23, 2009 (Tr. I 21, 28-40), (2) his wife makes all the financial decisions
(Tr. I 36-37), and (3) he testified regarding the importance of receiving financial
counseling (Tr. II 45, 46).
Character Evidence
Applicant’s site supervisor, who has known Applicant professionally since
January 2008, wrote a character endorsement praising Applicant’s trustworthiness and
dedication to his job assignments (AE E). AE H is a brochure published by a consumer
credit counseling organization that Applicant plans to contact (Tr. 46; AE H). On August
7, 2009, Applicant consulted with a tax agent concerning the state tax lien identified in
SOR 1.f. (AE C).
Applicant received an honorable discharge from the United States Army in
October 1966 (AE I). AE J contains an undated certificate awarded Applicant for
exceptional performance in coverage of aircraft posts. In November 2004 and the first
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quarter of 2007, Applicant was favorably recognized for an outstanding job performance
(Id.)  
Policies
When evaluating an applicant's suitability for a security clearance, the
administrative judge must consider the revised adjudicative guidelines (AG). Each
guideline lists potentially disqualifying conditions and mitigating conditions, which are
useful in evaluating an applicant's eligibility for access to classified information. These
guidelines are flexible rules of law that must take into consideration the complexities of
human behavior. 
The administrative judge's ultimate adjudicative goal is to reach a fair and
impartial decision that is based on common sense. The decision should also include a
careful, thorough evaluation of a number of variables known as the "whole person
concept." Finally, 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.
Reasonable 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 sensible, logical and based on the evidence
contained in the record. Likewise, I have avoided drawing inferences grounded on mere
speculation or conjecture.
A person who seeks access to classified information enters into a fiduciary
relationship with the government predicated upon trust and confidence. This relationship
is not restricted to normal duty hours. Rather, the relationship is an around-the-clock
responsibility between an applicant and the federal government. 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 the potential, rather than actual, risk of compromise of classified information.
Under Directive ¶ E3.l.14., the government must present evidence to establish
controverted facts alleged in the SOR. Under Directive ¶ E3.l.l5., 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.
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Analysis
Financial Considerations (FC)
Paragraph 18 of the Adjudicative Guidelines (AG) sets forth the security concern
related 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
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. 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.
The financial guideline lists three disqualifying conditions that may be applicable
to this case:
AG ¶ 19(a) (inability or unwillingness to satisfy debts); and
AG ¶ 19(c) (a history of failing to meet financial obligations); and
AG ¶ 19(e) (consistent spending beyond one’s means, which may be indicated
by excessive indebtedness, significant negative cash flow, high debt-to-income ration,
and/or other financial analysis).
The SOR lists six delinquent debts that total $21,738. Applicant is unable to pay
these debts. AG ¶ 19(a) applies. Most of the listed debts became delinquent in 2005.
The state tax lien identified in SOR 1.f. was filed 11 years ago in April 1998. AG ¶ 19(c)
applies because Applicant has a history of not meeting his financial obligations.  
When Applicant and his wife were asked why they had so much delinquent debt,
their main response was that occasionally they used the credit cards to pay off other
bills or credit cards. After adding the delinquent debt listed in the SOR to the unlisted
delinquent accounts listed on the first page of Applicant’s PFS, the total is more than
$41,000. Even though Applicant’s payments on some accounts and settlements on
other accounts over the last year have reduced the total delinquent amount to about
$25,000, AG ¶ 19(e) still applies because of the excessive indebtedness and high debt
($25,000)-to-income ($49,908) ratio. 
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The financial guideline identifies four mitigating conditions that may apply to the
case:
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 
AG ¶ 20(b) (the conditions that resulted in the financial problem were
largely beyond the person’s control, and the person acted responsibly
under the circumstances); and
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); and
AG ¶ 20(d) (the individual initiated a good-faith effort to repay overdue
creditors or otherwise resolve debts).
AG ¶ 20(a) does not apply because Applicant has failed to establish that the
circumstances are unlikely to recur. First, Applicant still owes four of six listed accounts.
Second, in addition to the listed delinquent debts, Applicant is servicing at least three
delinquent accounts that are identified in his PFS. Neither Applicant nor his wife could
adequately explain why they had so much delinquent debt. The age of the listed and
unlisted delinquent debt, the amount of the debt, and Applicant’s inability to explain why
there was a large amount of delinquent debt, all raise security concerns about
Applicant’s reliability, and good judgment. 
AG ¶ 20(b) has only limited application as Applicant has presented minimal
evidence that his financial problems were caused by events beyond his control.
Applicant mentioned a dislocated shoulder and eye surgery. His wife mentioned medical
problems. However, without documentation outlining the costs, assigning more weight
to the mitigator would be grounded upon speculation rather than the record. 
Applicant has received no financial counseling, and there is no indication the
indebtedness is under control. Applicant still owes four of six delinquent accounts listed
in the SOR. In addition, he owes at least three additional delinquent debts identified in
his PFS. AG ¶ 20(c) does not apply. Applicant receives some mitigation under AG ¶
20(d), but not nearly enough to meet his burden of demonstrating he warrants a security
clearance. 
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Whole Person Concept 
I have examined the evidence with the disqualifying and mitigating conditions in
my ultimate finding against Applicant under the FC guideline. I have also weighed the
circumstances within the context of nine variables known as the whole person concept.
In evaluating the relevance of an individual's conduct, the administrative judge should
consider the following factors:
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 the participation was 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.
Applicant was 67 years old in 2007 when he filled out his SCA. In February 2008,
Applicant was told by the government that a state tax lien had been filed against him.
On July 17, 2008, Applicant was asked to provide information about the state lien and
other debts listed in the SOR. In his PFS (attached to his interrogatory answers),
Applicant provided information in the debt module that showed his unlisted delinquent
debt almost equaled the delinquent debt listed in the SOR. On January 30, 2009, an
SOR was mailed to Applicant. Along with the five other delinquent accounts, the SOR
included the state tax lien filed in April 1998. In his March 2009 response to the SOR,
Applicant admitted the state tax lien. On July 28, 2009, Applicant was asked why he did
not take action on the tax lien. His reply was that he thought the lien information was a
mistake. 
The settlement of SOR 1.c. and 1.d. constitutes favorable evidence weighing in
Applicant’s favor. On the other hand, Applicant has made no progress concerning SOR
1.b., 1.e., 1.f., and only recently has resumed payments on SOR 1.a. Even though he
has been on notice since February 2008 that there are debts he should address, except
for the debt identified in SOR 1.d., he took no action to repay any of the delinquent SOR
accounts until March 2009. Applicant’s three awards and the favorable reference from
his site supervisor have been considered. The fact he has settled some unlisted
delinquent accounts also weighs in his favor. Having weighed and balanced the entire
record as a whole, given Applicant’s excessive indebtedness, the high income-to-debt
ratio, and the absence of financial counseling, I am unable to conclude his indebtedness
is being effectively managed and/or is under control. Applicant has not met his burden
under the financial considerations guideline. 
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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 (Financial Considerations, Guideline F): AGAINST APPLICANT
Subparagraph 1.a. Against Applicant
Subparagraph 1.b. Against Applicant
Subparagraph 1.c. For Applicant
Subparagraph 1.d. For Applicant 
Subparagraph 1.e. Against Applicant
Subparagraph 1.f. Against Applicant
Conclusion
In light of all of the circumstances presented by the record in this case, it is not
clearly consistent with national security to grant Applicant eligibility for a security
clearance. Eligibility for access to classified information is denied. 
                      
Paul J. Mason
Administrative Judge