DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 08-08599 
  ) 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Ray T. Blank, Jr., Esquire, Department Counsel 
For Applicant: Lachaun Peake, Personal Representative 
 
 
 
______________ 
 
Decision 
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CREAN, Thomas M., Administrative Judge: 
 
Applicant submitted an Electronic Questionnaires for Investigations Processing 
(e-QIP) as part of his employment with a defense contractor on April 23, 2008. After an 
investigation conducted by the Office of Personnel Management (OPM), the Defense 
Office of Hearings and Appeals (DOHA) issued a Statement of Reasons (SOR), dated 
June 22, 2009, to 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 27, 2009. 
 
 Applicant answered the SOR in writing on July 15, 2009, admitting the 19 
allegations under Guideline F with a detailed explanation and exhibits. He requested a 
hearing before an administrative judge. Department Counsel was prepared to proceed 
on October 1, 2009, and the case was assigned to me on October 7, 2009. DOHA 
 
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issued a Notice of Hearing on October 7, 2009, scheduling a hearing for October 22, 
2009. I convened the hearing as scheduled. The government offered eight exhibits, 
marked Government Exhibits (Gov. Ex.) 1 through 8, which were admitted without 
objection. Applicant and one witness testified on his behalf. While Applicant did not offer 
any exhibits, he referred during the hearing to exhibits that were included with his 
response to the SOR. DOHA received the transcript of the hearing (Tr.) on November 6, 
2009. I kept the record open for Applicant to file documents. Applicant timely filed three 
documents marked Applicant exhibits A through C, which were received without 
objection. Based on a review of the case file, pleadings, exhibits, and testimony, 
eligibility for access to classified information is granted.  
 
Procedural Issues 
 
 Applicant received the Notice of Hearing on October 14, 2009. Applicant is 
entitled to 15 days advance notice of the hearing (Directive E3.1.8). Applicant discussed 
with Department Counsel the hearing date of October 20, 2009, before the Notice of 
Hearing was issued on October 7, 2009. Since Applicant discussed the hearing date 
with Department counsel before the Notice of Hearing was issued, actual notice was 
given more than 15 days before the hearing. However, Applicant signed for the Notice 
of Hearing only eight days prior to the hearing. At the hearing, Applicant waived the 15 
days notice requirement (Tr. 4-10). 
 
Findings of Fact 
 
 Applicant admitted all of the factual allegations in the SOR. I included Applicant's 
admission in my findings of fact. After a thorough review of the pleadings, transcript, 
and exhibits, I make the following essential findings of fact.   
 
Applicant is 31 years old and has worked as a materials handler for a defense 
contractor for approximately two years. He received a bachelor's degree in December 
2002. He is married with three children. Applicant's monthly pay is approximately 
$2,800. His wife is employed and contributes $1,400 monthly to the family income for a 
total monthly income of $4,200. Their monthly expenses are approximately $3,800, 
leaving $400 in monthly discretionary funds (Tr. 72-75; Gov. Ex. 1, e-QIP, dated April 
23, 2008). 
 
Credit reports (Gov. Ex. 5, Credit report, dated May 2, 2008; Gov. Ex. 6, Credit 
report, dated September 11, 2008; Gov. Ex. 7, Credit report, dated January 12, 2009; 
and Gov. Ex. 8, Credit report, dated April 21, 2009) show the following delinquent debts 
for Applicant: a medical debt for $447 (SOR 1.a); another medical debt for $47 (SOR 
1.b); a debt in collection for $88 (SOR 1.c); a medical debt for $4,825 (SOR 1.d); a 
credit card debt for $391 (SOR 1.e); a debt for telephone service for $657 (SOR 1.f); a 
debt for furniture for $3,013 (SOR 1.g); a debt for $6,328 (SOR 1.h); a debt in collection 
for telephone service for $116 (SOR 1.i); a debt in collection for a credit card for $575 
(SOR 1.j); a student loan account for $36,694 (SOR 1.k); another student loan account 
for $3,406 (SOR 1.l); a medical account in collection for $28 (SOR 1.m); another 
 
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medical account in collection for $278 (SOR 1.n); a loan account in collection for $350 
(SOR 1.o); a medical account in collection for $270 (SOR 1.p); and an account on a 
credit card in collection for $175 (SOR 1.q). There are also reports of Applicant uttering 
two fraudulent checks (SOR 1.r, and SOR 1.s; Gov. Ex. 4, Criminal justice report). 
 
The delinquent debts at SOR 1.a and 1.b are medical debts for the same 
creditor. Applicant incurred the bills when he was a college student. He was initially 
included on his father's health insurance plan, but lost coverage when he was not taking 
sufficient credit hours. He became ill and had to go to the emergency room. He 
contacted the creditor and was told to pay as much as he could whenever he could 
make a payment. He is making some payments on the debt at SOR 1.a, and the 
balance is now $229. The debt at SOR 1.b is paid in full (Tr. 35-36; Response to the 
SOR, Exhibit B, Money order, dated July 15, 2009; App. Ex. C, Payment receipt, 
undated).   
 
The delinquent debt at SOR 1.c is paid in full (Tr. 36-37; Response to SOR, 
Exhibit C, Money order, dated July 15, 2009). The delinquent debts at SOR 1.d and 1.p 
are for medical expenses Applicant incurred when he was a student and not included on 
his father's health insurance plan. Applicant has a payment plan with the creditor and 
they deduct payment of $50 each month from his bank account. Applicant is not sure of 
the balanced owed on either debt because the creditor does not provide such 
information (Tr. 26-27, 37-39; App. Ex. B, Bank statement, dated January 25, 2010).  
 
The delinquent debt at SOR 1.e was settled for $102 and paid in full (Tr. 39, 48-
53; Response to SOR, Exhibit E, Letter, dated July 6, 2009). The delinquent debt at 
SOR 1.f for telephone service has been paid (Tr. 27-28, 39; App. Ex. C, Paid letter, 
dated May 2, 2009).  
 
The delinquent debt at SOR 1.g is for furniture Applicant's wife purchased before 
they were married. After they were married, Applicant's name was added to the 
account. Applicant's wife lost her job and she continued to not work because of a 
pregnancy and having a young child at home. They were unable to make payments on 
the furniture and it was repossessed. Applicant makes small payments on this debt 
when he has funds, and the debt has been reduced (Tr. 53-55; Response to SOR, 
Exhibit G, Receipt, dated July 1, 2009).   
 
Applicant and his wife are not aware of the delinquent debt at SOR 1.h. The debt 
is being reported by only one of the three credit reporting agencies. Applicant attempted 
to contact the company but to no avail. He protested the debt to the one credit reporting 
agency and it has been removed from their credit report as not verified (Tr. 24-25; 
Response to SOR, Exhibit H, Letter, dated July 8, 2009).  
 
The delinquent debt at SOR 1.i is for telephone service and is paid in full in 
December 2008 (Tr. 28; Response to SOR, Exhibit I, Letter with receipts, dated June 
30, 2009). The delinquent debt at SOR 1.j is to a bank on a loan. Applicant makes $20 
monthly payments on the debt (Tr. 40). 
 
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The delinquent debt at SOR 1.k is for student loans. The loans are now in 
deferment and considered current (Tr. 40). The delinquent debt at SOR 1.l is also for 
student loans. The loans were consolidated with other student loans and are in 
deferment. However, Applicant has made some payments on the loans (Tr. 41-42; 
Response to SOR, Exhibit L, Money Order, dated July 15, 2009).  
 
The delinquent debt at SOR 1.m is paid in full (Tr. 42-43; Response to SOR, 
Exhibit M, Money Order, dated July 15, 2009). The delinquent debt at SOR 1.n was 
settled for $55 and paid in full (Tr. 42-43, Response to SOR, Exhibit N, Money Order, 
dated July 15. 2009). 
 
Applicant and his wife called the creditor for the delinquent debt at SOR 1.o, but 
did not receive an answer. They have sent small amounts in payment of the debt. They 
are not sure the money orders are being cashed (Tr. 43; Response to SOR, Exhibit O, 
Money Orders, dated July 15, 2009). The delinquent debt at SOR 1.q was settled and 
paid in full (Tr. 44; Response to SOR, Exhibit Q, Letter dated July 7, 2009). 
 
The SOR allegations at 1.r and 1.s pertain to checks returned for insufficient 
funds by the bank. Applicant did not initially know of the dishonored checks. When he 
was advised of the returned checks, he redeemed them and the charges were 
dismissed (Tr. 45-46; Response to SOR, Exhibits R and S, Case Disposition, dated 
April 14, 2000). 
 
Applicant's pastor testified that she has known Applicant for a few years and 
sees him regularly. She considers him honest, reliable, and trustworthy. He is always 
willing to do whatever she asks him to do. She knows he has financial problems 
because of his youth and immaturity. But she also knows that he is trying to resolve his 
financial problems to the best of his ability (Tr. 79-82). 
 
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 must 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.” The administrative judge must consider all available, 
reliable information about the person, past and present, favorable and unfavorable, in 
making a decision. 
 
 
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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 
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: 
 
 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 his 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 his finances in such a way as to meet his financial 
obligations.  
 
 
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 The delinquent debts listed in credit reports for Applicant are a security concern 
raising Financial Consideration 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). Applicant incurred delinquent debt as a college student for medical 
expense, student loans, and living expenses. Applicant assumed his wife's delinquent 
debts when they married.    
 
 I considered Financial Considerations Mitigating Conditions (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 AG ¶ 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). These mitigating conditions partially apply. Applicant's 
financial problems started as a college student without health insurance. He required 
student loans to finance his education. His wife also brought some delinquent debts to 
the marriage. Some of the debts have been paid, but most of the debts are still 
outstanding and so are current debts. There were no unusual circumstances beyond 
Applicant's control that led to the debts. The debts were incurred in the normal course of 
financial activities. However, Applicant is paying his delinquent debts and is acting 
responsibly toward his debts.  
 
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 method of handling debts is needed. Applicant 
must establish a "meaningful track record" of debt payment. A "meaningful track record" 
of debt payment can be established by evidence of actual debt payments or reduction of 
debt through payment of debts. An applicant is not required to establish that he paid 
each and every debt listed. The entirety of an Applicant’s financial situation and his 
actions can reasonably be considered in evaluating the extent to which that Applicant’s 
plan for the reduction of his outstanding indebtedness is credible and realistic. 
Available, reliable information about the person, 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. Likewise, there is no requirement that the first debts actually paid in 
furtherance of a reasonable debt plan be the ones listed in the SOR. All that is required 
is that Applicant demonstrates he has established a plan to resolve his financial 
problems and taken significant actions to implement that plan.   
 
Applicant has paid 8 of his 17 delinquent debts. He is paying another six debts 
according to agreed plans. In addition, his largest single debt, his student loans, are 
considered current since the loans are in deferment. He disputed one debt and it has 
been removed from his credit report as not verified. Applicant's actions paying and 
 
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resolving his delinquent debts is significant and credible information to establish a 
meaning track record of debt payment, and shows that he acted reasonably under the 
circumstances.  
 
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 action 
to resolve he issue). Applicant disputed one debt that he had no knowledge of and was 
only reported by one of the credit reporting agencies. The debt was not verified and was 
removed from his credit report.  
 
Applicant has acted responsibly towards his debts and finances under the 
circumstances. Applicant presented sufficient information to mitigate security concerns 
for financial considerations by establishing that he has or is paying his delinquent debts. 
His finances do not indicate a security concern.   
 
Whole Person Concept 
 
 Under the whole person concept, an administrative judge must evaluate an 
applicant’s eligibility for access to classified information by considering the totality of the 
applicant’s conduct and all the 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 access to 
classified information 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 that Applicant has a 
reputation in the community for reliability, honesty, and trustworthiness.  
 
 Applicant established a meaningful track record of debt payment of his 
delinquent debts. He has or is paying all of his debts except for student loans, which are 
in deferment. He established that he acted reasonably and responsibly towards his 
finances indicating he will act reasonably and responsibly to protect classified 
information. The management of his finances indicates he will be concerned, 
responsible, and not careless concerning classified information. Overall, the record 
 
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evidence leaves me with no questions or doubts as to Applicant’s eligibility and 
suitability for access to classified information. For all these reasons, I conclude 
Applicant has mitigated the security concerns arising from his 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 - 1.s:  For Applicant 
  
Conclusion 
 
 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 access to 
classified information. Clearance is granted. 
 
 
 
_________________ 
THOMAS M. CREAN 
Administrative Judge