1
                                                             
                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 08-09704
SSN: )
)
Applicant for Security Clearance )
Appearances
For Government: James F. Duffy, Esquire, Department Counsel
For Applicant: Pro Se
______________
Decision
______________
HENRY, Mary E., Administrative Judge:
Based upon a review of the case file, pleadings, exhibits, and testimony, I
conclude that Applicant’s eligibility for access to classified information is denied.
Applicant submitted her Electronic Questionnaire for Investigations Processing
(e-QIP) on May 23, 2008. The Defense Office of Hearings and Appeals (DOHA) issued
Applicant a Statement of Reasons (SOR) detailing security concerns under Guideline F
on May 29, 2009. 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 4, 2009. She answered the
SOR in writing on June 20, 2009, and requested a hearing before an administrative
Applicant and Department Counsel marked the additional submissions as 1 through 10. I have marked these1
documents to be consistent with Applicant exhibits admitted at the hearing. Number 1 has been remarked as
AE D. Numbers 2 through 10 are remarked as AE H through AE P. I marked the November 17, 2009 credit
report as AE Q. 
W hen  SOR allegations are denied, the government bears the burden of producing evidence sufficient to2
prove them. Directive, ¶ E3.1.14. “That burden has two components. First, the government must establish by
substantial evidence that the facts and events alleged in the SOR indeed took place. Second, the government
must establish a nexus between the existence of the established facts and events and a legitimate security
concern.” See ISCR Case No. 07-18525 at 4 (App. Bd. Feb. 18, 2009), (concurring and dissenting, in part)
(citations omitted).
Response to the SOR.3
GE 1; Tr. 19-21. 4
Tr. 19-21.5
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judge. DOHA received the request on June 22, 2009. Department Counsel was
prepared to proceed on August 31, 2009, and I received the case assignment on
September 3, 2009. DOHA issued a notice of hearing on September 25, 2009, and I
convened the hearing as scheduled on October 20, 2009. The government offered six
exhibits (GE) 1 through 6, which admitted into evidence without objection. Applicant and
one witness testified. Applicant submitted seven exhibits (AE) A through G. Except for
AE D, her exhibits were admitted into evidence without objection. DOHA received the
transcript of the hearing (Tr.) on October 29, 2009. I held the record open until
November 19, 2009, for Applicant to submit additional matters and to obtain copies of
AE D. Applicant timely submitted 10 additional documents and copies of AE D.  AE D1
and AE H through AE Q are admitted without objection. The record closed on
November 19, 2009.
Findings of Fact
In her Answer to the SOR, Applicant admitted the factual allegations in ¶¶ 1.b,
1.c, 1.bb, and 1.cc of the SOR, with explanations. She denied the remaining factual
allegations in the SOR.  She also argued that many of the debts listed in the SOR are2
barred from collection under the statute of limitations in the state where she lives
(hereinafter State).   3
Applicant, who is 54 years old, works as a technical order librarian for a
Department of Defense contractor. Applicant retired from the United States Air Force in
January 1997 after 20 years of service. She began working as a contractor in April
1997. She held a security clearance while on active duty, without incident. She has held
a security clearance as a contractor since 1997, without incident.4
Applicant married her first husband in 1983 and they divorced in 1992. She has
two adult children from her marriage, who are 29 and 26 years old. Her daughter and
son live independently from her. She married her present husband in 2001.5
Id. at 14.6
AE C; Tr. at 14-16, 29.7
Tr. 17.8
AE B; AE C.9
3
Applicant’s financial problems began around 2000 with the pregnancy of her then
15-year-old daughter. For many years thereafter, Applicant supported her daughter and
grandchildren, who are now 9, 5 and 4. Her daughter no longer lives with her and
Applicant is not providing financial support for her daughter and grandchildren.
Applicant’s son is married and does not live with Applicant.6
When the events of September 11, 2001 occurred, Applicant’s husband worked
for a United States airline company. Because all airlines were grounded for a period of
time in September 2001, his company laid-off or reduced the pay of its employees.
Applicant’s husband continued to work at a salary one-third less than his pay before
September 11, 2001. Her husband retired from the airline in 2007. He does not receive
retirement income from the airline company, but can fly, without charge, anywhere the
airline flies. He now works 25 to 30 hours a week in maintenance work, earning $12 an
hour. He is also retired from the United States Air Force and receives retirement
income.  7
At the time Applicant and her husband married, he had significant debt and
financial problems. After September 11, 2001 and his significant loss of pay, he
contacted a debt counseling service. With the assistance of this service, Applicant’s
husband resolved his earlier debt issues. They concentrated their efforts on resolving
his debt problems to the detriment of her finances. As a result, Applicant failed to pay all
of her monthly expenses.8
Applicant’s monthly income from her job and military retirement totals $3,635.
Her husband’s monthly income from his military retirement and part-time job totals
$2,238 for a total monthly household income of $5,918. They live in a trailer they own,
and they rent the lot where their trailer is located. Although Applicant has not sought
credit counseling, she and her husband have developed a detailed monthly budget,
using his knowledge from his past debt-counseling experience. Their budget detailed
the allocation of their income each month for debt payment, including some debts listed
in the SOR. Their budgeted monthly expenses total $4,624.Their budget does not
include food costs and miscellaneous expenses. I estimate these expenses at $500 a
month. Applicant has approximately $800 a month remaining after paying her bills listed
in her budget. The record evidence does not contain information which would indicate
that this money equates to payroll deductions.9
The SOR alleges that Applicant owes more than $45,000 to creditors. The
creditor in SOR allegation 1.a obtained a judgment against Applicant in 2006. The
AE D; AE H; Tr. 34-35.10
AE A; AE I; Tr. 24-27.11
GE 3; AE Q; Tr. 38-44.12
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creditor collected the judgment by garnishing Applicant’s wages. The judgment has
been paid in full. This debt is the same as the debt alleged in allegation 1.aa.10
SOR allegations 1.b, 1.c, 1.d, and 1.e concern four tax liens filed against
Applicant by the State. Applicant’s son became emancipated in 2005, and thus,
Applicant could no longer claim him as a dependent for tax purposes. Applicant and her
husband did not change their tax withholding information to reflect this change. As a
result, they owed additional taxes to the State. Prior to their marriage, Applicant’s
husband also owed taxes to the State revenue service. Applicant and her husband
began repaying the state tax debt in October 2008. By the hearing date, they had paid
$2,600 on their state tax debt, which totaled more than $6,000. The two smaller tax
liens were paid when the Internal Revenue Service forwarded their tax refund to the
State. After the hearing, they paid the remainder of their state tax debt.11
Applicant suffered from migraine headaches from 2003 until 2005. She sought
medical care at a hospital emergency room on many occasions. She provided the
hospital with her insurance information. She had then, and still has, two health
insurance policies with two separate insurance companies. Her primary insurance
company is through her job and her secondary insurance company is as a military
retiree. Her insurance carriers paid the hospital bills. She believed that medical bills
listed in SOR allegations 1.f to 1.l, 1.q to 1.z, and 1.ff to 1.kk are bills from the
emergency room physicians, who worked under a contract with the hospital. These bills
should have been paid by her insurance plans. She spoke with a representative from
her secondary carrier, who advised that the bills had not been submitted for payment.
She also believed that the physicians’ medical practice is no longer operating.
Applicant’s husband contacted the collection company. The collection company
requested payment and suggested Applicant then submit the medical bills for payment.
Applicant’s husband told the collection company to submit the bills for payment as is the
normal process. The collection company stopped its contact with them after this
conversation. The medical bills listed in the SOR total $4,487. Several debts may be
duplications of other listed debts, but the evidence is unclear on this issue. The medical
bills listed in SOR allegations 1.q to 1.y remain on Applicant’s credit report and total
$2,600. Because the other medical debts are no longer on her credit report, Applicant
believes that the debts have been paid by her insurance companies. She has not
provided documentation that these debts are paid.12
Applicant developed a payment plan with the creditor listed in SOR allegation
1.bb. She began paying $294 a month in June 2008. She has paid this amount monthly
and currently owes less than $3,000 on this judgment. She expects to pay this debt by
November 2010. Applicant also began a payment plan with the creditor in SOR
AE E; AE J; AE M; AE N; Tr. 51-53.13
SOR allegations 1.m and 1.dd are for the same car repossession debt. Allegation 1. dd reflects the current14
balance as $3,247. See AE Q (Credit Report, dated November 17, 2009). 
AE L; Tr. 45-46.15
Id.16
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allegation 1.n. She pays $260 a month on this debt and currently owes less than $1,300
on this debt. She anticipates full payment of the debt by April or May 2010. The creditor
in SOR allegation 1.ee forgave Applicant’s debt. The creditor reported the debt
forgiveness amount of $5,758 to the IRS and the state revenue service as income for
Applicant. Just prior to the hearing, Applicant received a notice of proposed tax
assessment from the State for the debt forgiveness. The State revised her income for
the tax year 2005 and requested a payment of $490 by November 15, 2009. Applicant
paid the taxes due on the debt forgiveness on November 13, 2009.13
Two large debts remain unpaid (SOR allegations 1.m, which is the same as
1.dd,  and 1.p). These debts total approximately $11,000. One debt occurred when14
Applicant’s son failed to pay his monthly car payment and the car was repossessed.
After the creditor sold the car, Applicant and her son owe $3,247 on this debt. Although
she co-signed the car loan, Applicant believes this debt belongs to her son, who has not
made arrangements to pay the debt. The remaining credit card debt is hers. Applicant’s
father-in-law died in March 2009. Her husband anticipates receiving an inheritance from
his father and indicates the money will be used to resolve these two accounts.  15
SOR allegations 1.n and 1.o involve the same cell phone account, which
belonged to Applicant’s daughter. Applicant believes she paid this account in full in
2003, but she has not requested the creditor or the credit reporting agency to
investigate her belief, nor has she provided proof of her payment.  16
Policies
When evaluating an applicant’s suitability for a security clearance, the
administrative judge must consider the revised adjudicative guidelines (AG). In addition
to brief introductory explanations for each guideline, the adjudicative guidelines list
potentially disqualifying conditions and mitigating conditions, which are 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 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,
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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, an applicant is
responsible for presenting “witnesses and other evidence to rebut, explain, extenuate,
or mitigate facts admitted by applicant or proven by Department Counsel. . . .” An
applicant has the ultimate burden of persuasion to obtain 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
an 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 relating to the guideline for Financial Considerations 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. 
The guideline notes several conditions that could raise security concerns. Under
AG & 19(a), an Ainability or unwillingness to satisfy debts@ is potentially disqualifying.
See ISCR Case No. 04-07360 (App.Bd. Sept. 26, 2006)17
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Similarly under AG & 19(c), Aa history of not meeting financial obligations@ may raise
security concerns. Applicant accumulated significant delinquent debt and was unable to
pay her obligations for a period of time. The evidence is sufficient to raise these
potentially disqualifying conditions.
The guideline also includes examples of conditions that could mitigate security
concerns arising from financial difficulties. Under AG ¶ 20(a), mitigation may occur when
Athe 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.@ Applicant=s financial worries did
not arise under such unusual circumstances that these worries are unlikely to recur.
Rather, the circumstances causing her financial problems could recur. Her financial
problems are recurring and ongoing. This mitigating condition does not apply. 
Under AG & 20(b), disqualifying conditions may be mitigated when Athe
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.@ Applicant’s financial problems began in 2000 and 2001 with
her daughter’s pregnancy and her husband’s significant loss of income. To their credit,
she and her husband worked to resolve his debt problems after his income declined.
This decision negatively impacted her finances, which continue to be problematic. Since
2008, Applicant and her husband have worked to gain control over their finances. This
mitigating condition has some applicability in this case. 
Evidence that Athe 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@
is potentially mitigating under AG & 20(c). While Applicant has not sought credit
counseling, she and her husband are using the knowledge that he learned from his past
experience with debt counseling to gain control over their finances. They developed
repayment plans in 2008 for their state tax debt, one judgment, and one credit account,
and have complied with their payment plans. In addition, one debt was paid through
garnishment and one debt has been resolved through loan forgiveness.  This mitigating17
condition applies to allegations 1.a-1.e, 1.aa-1.cc, and 1.ee.
Similarly, AG & 20(d) can apply where the evidence shows “the individual
initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.”
Applicant developed debt payment plans following tax liens, judgments, or threat of
court action, not on her own initiative. While she has paid or is paying these debts, her
decision to pay the debts under these circumstances does not constitute good faith.
This mitigating condition is not applicable.
AG ¶¶ 20(e) and 20(f) are not raised in this case. Applicant has not filed formal
challenges with the credit reporting companies or the creditors for her unresolved debts.
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While her husband has indicated that he will use his inheritance to resolve to the two
large debts, he has not received his inheritance nor can he estimate at this time how
much money he will receive. Future intent to pay debts is not sufficient evidence to
support mitigation. 
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 an 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 guidelines and the whole person concept. The decision to grant or
deny a security clearance requires a careful weighing of all relevant factors, both
favorable and unfavorable. In so doing, an administrative judge must review all the
evidence of record, not a single item in isolation, to determine if a security concern is
established and then whether it is mitigated. A determination of an applicant’s eligibility
for a security clearance should not be made as punishment for specific past conduct,
but on a reasonable and careful evaluation of all the evidence of record to decide if a
nexus exists between established facts and a legitimate security concern. 
In reaching my conclusion, I considered the potentially disqualifying and
mitigating conditions in light of all the facts and circumstances surrounding this case.
Applicant’s finances became unmanageable when her husband’s income declined by
one-third. He sought financial counseling, which helped resolve his debts. They focused
their financial resources on his debts to the detriment of her debts. In the last decade,
Applicant’s daughter received significant financial assistance from Applicant to help
raise her three children. This additional financial cost associated with raising her
grandchildren diverted income away from debt repayment.
Applicant’s daughter and grandchildren do not live with her anymore, and
Applicant no longer provides financial support to her daughter. In the last 18 months or
more, Applicant and her husband have successfully worked to gain control over their
finances and to repay her old debt. They have a budget and a plan for allocation of their
monthly income towards bill payment. They are improving their financial situation. The
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SOR alleged more than $45,000 in unpaid debt. Applicant’s credible evidence reflects
that she has resolved or is resolving over $29,000 of this debt or more than 60% of the
debts alleged in the SOR.
Applicant’s unpaid debts can be placed in three categories: car repossession
($3,247 1.dd), commercial credit accounts ($8,454 1.n-1.p), and medical bills ($5,000
1.f to 1.l, 1.q to 1.z, 1.ff-1.kk).The intent of Applicant’s husband to use his inheritance to
resolve the car repossession and commercial credit accounts is admirable. However,
under Appeal Board law, a promises of a future intent to pay is not evidence of payment
and rehabilitation of debt. See ISCR No. 08-05379 (App. Bd. Nov. 24, 2009). Applicant
believes she paid the two cell phone debts in 2003, but has not provided documents
which reflect payment, nor has she challenged the validity of these two small debts with
the credit reporting companies.  At this time, these debts remain unresolved.
Applicant’s unpaid medical bills present a unique problem. At the time she
incurred these bills, she presented the hospital with information about her insurance
coverage, primary and secondary. Her insurance companies paid the hospital bills for
her treatments between 2003 and 2005. For reasons unknown to Applicant, the
emergency room physicians’ office failed to submit its bills for payment. While Applicant
may be absolutely correct that the bills would be paid by her insurance carriers, she had
an obligation when she became aware that the bills were not being paid to contact the
emergency room physicians’ office and determine why. The record contains no
evidence that Applicant made this contact. At this point, the credit collection company is
refusing to submit the bills to Applicant’s insurance carriers for payment. One likely
reason for this refusal is that the credit collection company lacks information, such as
dates of service, services rendered, or insurance codes, which would result in payment
from the insurance carriers. I am not sure Applicant has information on dates of services
and the types of services rendered. If she doesn’t, she may not be able to pursue these
claims with her insurance carriers. Ultimately, Applicant is responsible for any medical
bills not covered by insurance. Applicant argues that her medical bills have been paid by
her insurance carriers, as shown by the deletion of many of her medical bills from her
credit report. The SOR lists medical bills totaling approximately $5,000. From a careful
review of the credit reports of record, there is a clear likelihood that some of the medical
debts listed in the SOR are duplicates because the debts have been sold from one
credit collection company to another without a correction of her credit report. The most
recent credit report shows that Applicant’s unpaid medical bills total $2,612 and reflect
the deletion of many medical debts from the report. The reason for the deletion of these
debts is not known. Applicant has not provided information from the credit reporting
company for this change in her credit report. Even assuming that many of the debts
have been removed as duplicates, Applicant still owes $2,612 in medical bills.
Applicant argues that the statute of limitations applies to her debts. Under state
law, a creditor must take court action within a specified period of time to collect the
debts owed to it. If the creditor does not pursue its rights within this specified period of
time, any legal action to collect the debt is barred from collection under state law. The
Appeal Board has held that elimination of debts by the statute of limitations is not
10
evidence of a good-faith resolution of debt. The Appeal Board has held that for
purposes of security clearance eligibility, old, time-barred debts are current and
ongoing. See ISCR Case No. 07-11814 (App. Bd., Aug. 29, 2008).  
Applicant has made good progress on her debt resolution. She still has a fair
amount of debt to resolve. Thus, I cannot favorably conclude that she should have a
security clearance. Under the Directive, a sponsored Applicant can apply for her
security clearance one year from the date of this decision. If she can show that she has
paid or established payment plan for her remaining debts, she would be a good
candidate for being granted a security clearance, assuming no other issues of a security
concern arise. 
  
Overall, the record evidence leaves me with questions or doubts as to Applicant’s
eligibility and suitability for a security clearance. For all these reasons, I conclude
Applicant has not mitigated the security concerns arising from her finances under
Guideline F.
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-1.e: For Applicant
Subparagraph 1.f-1.l: Against Applicant
Subparagraph 1.m: For Applicant
Subparagraph 1.n-1.z Against Applicant
Subparagraph 1.aa-1.cc: For Applicant
Subparagraph 1.dd: Against Applicant
Subparagraph 1.ee: For Applicant
Subparagraph 1.ff-1.kk: Against Applicant:
Conclusion
In light of all of the circumstances presented by the record in this case, it is not
clearly consistent with the national interest to grant Applicant eligibility for a security
clearance.  Eligibility for access to classified information is denied.
                                                              
MARY E. HENRY
Administrative Judge