DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 08-11643 
  ) 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Caroline H. Jeffreys, Esquire, Department Counsel 
For Applicant: Donna Roth, Personal Representative 
 
 
 
______________ 
 
Decision 
______________ 
 
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 July 24, 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 
August 24, 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 August 27, 2009. 
 
 Applicant answered the SOR in writing on October 5, 2009, admitting six and 
denying one of the allegations under Guideline F. He also denied with explanation the 
 
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security concern based on his finances. Applicant requested a hearing before an 
administrative judge. Department Counsel was prepared to proceed on November 4, 
2009, and the case was assigned to me on November 17, 2009. DOHA issued a Notice 
of Hearing on November 23, 2009, scheduling a hearing for December 11 2009. I 
convened the hearing as scheduled. The government offered six exhibits, marked 
Government Exhibits (Gov. Ex.) 1 through 6, which were received without objection. 
Applicant and two witnesses testified on his behalf. Applicant offered four exhibits, 
marked Applicant Exhibits (App. Ex.) A through D, which were received without 
objection. DOHA received the transcript of the hearing (Tr.) on December 28, 2009. 
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 November 28, 2009, 14 days before 
the hearing. Applicant is entitled to 15 days advance notice of the hearing (Directive 
E3.1.8). Applicant discussed with Department Counsel the hearing date of December 
11, 2009, before the Notice of Hearing was issued on November 23, 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. At 
the hearing, Applicant waived the 15 days notice requirement (Tr. 3-4). 
 
Findings of Fact 
 
 Applicant admitted all but one of the factual allegations in the SOR. I included 
Applicant's admissions 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 48 years old and has been employed as the facilities security officer 
and procurement agent for a defense contractor for approximately seven years. He 
served 22 years on active duty with the Air Force, retiring in 2003 in the grade of master 
sergeant (E-7) with an honorable discharge. He has held a security clearance since 
1981. He received two associate's degrees while in the Air Force. Applicant married in 
1984, separated in March 2006, and divorced in March 2007. There were two children 
from the marriage (Tr. 13-14, 41-43; Gov. Ex. 1, e-QIP, dated July 24, 2008; Gov. Ex. 2, 
Answers to Interrogatories, dated May 21, 2009, DD 214 at 5). Applicant's monthly 
salary is approximately $2,200 and he receives another $1,170 monthly in military 
retired pay and disability. Child support payments of $1,094 have been taken from his 
salary before he receives his net monthly income. His former wife's share of his military 
retirement has already been deducted before he receives his military retired pay. His 
total monthly net income is approximately $3,300. His monthly expenses are 
approximately $2,300 leaving approximately $1,000 monthly in discretionary funds. 
Applicant has $1,700 in saving and another $25,000 in his 401(K) account (Tr. 33-50). 
 
Credit reports (Gov. Ex. 4, dated July 29, 2008; Gov. Ex. 5, dated June 22, 2009; 
and Gov. Ex. 6, dated November 4, 2009) show the following delinquent debts for 
 
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Applicant: a debt for a computer for $507 (SOR 1.a); two credit card debts to the same 
creditor for $4,988 (SOR 1.b) and $2,797 (SOR 1.c); a debt in collection on a credit card 
for $2,623 (SOR 1.d); a debt in collection for a bank of $22,400 (SOR 1.e); a debt in 
collection for telephone service for $1,627 (SOR 1.f); and another debt to the same 
bank listed in SOR 1.e for $7,701 (SOR 1.g). The total delinquent debt listed in the SOR 
is $42,000. The delinquent debts arose from 1998 to about 2008 (Tr. 8-9). 
 
Applicant's wife managed the family finances while Applicant was on active duty. 
She did not pay their bills when they became due. Applicant was not aware of the 
details of the family finances since he was on deployment or working. He periodically 
asked his wife about the state of their finances, and she always informed him that their 
finances were good and debts were being paid. However, Applicant learned that their 
finances were deteriorating when he received notice of late or past-due payments from 
creditors. His wife quit her well-paying job and did not immediately seek employment 
while the debts mounted. Applicant encouraged his wife to seek work, but his wife did 
not work for many months. She finally found another job but quit after a few months 
because she did not like the work. She continued to use credit cards for purchases and 
not pay the family bills. She again went without work for a few months until she started 
another job. A few months later she was fired from that job for embezzling funds from 
her employer to use to pay some of her debts. Applicant inquired into their finances and 
learned that their house was in danger of foreclosure, his cars were about to be 
repossessed because they were months behind on car payments, and credit card debts 
had not been paid. He also learned that his wife had taken money from accounts she 
was managing for his elderly father and used the funds for herself and not his father. 
Applicant and his wife attempted a debt consolidation but it did not continue after his 
wife lost employment. When Applicant separated from his wife, he realized that they 
were $52,000 in debt and his wife was continuing to incur debt in his name (Tr. 13-16; 
56-60; Gov. Ex. 2, Answers to Interrogatories, dated may 21, 2009, Report of 
Investigation, at 5-6; App. Ex. A, Affidavit, dated March 2006). 
 
Applicant and his wife separated in March 2006. Applicant continued to pay the 
family debts as best he could while also providing support to his former wife and 
children. Since then, Applicant has paid off both his car and his wife's van, and other 
accounts, and continued to pay support for his former wife and his children. However, 
his wife continued to incur debts. Applicant pressed for their house to be sold after the 
divorce in 2007, so the profit could be used to pay debts. Applicant's wife was reluctant 
to sell the house. She delayed signing the sales documents, and Applicant had to 
continue paying the mortgage from March 2006, when he moved out, until it was sold, 
because he did not want the house foreclosed. The house was placed on the market in 
September 2007, and sold in April 2008. Applicant and his wife realized $27,515.45 
from the sale of the house (Tr. 14-16, 56-59). 
 
Applicant agreed to use his wife's divorce attorney to assist with settlement and 
payment of the marriage debts from the proceeds of the sale of the house. When the 
house was sold, the attorney used $6,437 of the proceeds to pay debts. The delinquent 
debt at SOR 1.a for the purchase of a computer was paid from the proceeds of the sale 
 
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of the house (Tr. 25-28; Gov. Ex. 3, Answers to Interrogatories, dated April 8, 2009, at 
13-14). Other debts were paid that are not listed in the SOR. Seven debts, that 
Applicant thought would be paid in full or part from the sale of the house, were not paid. 
The attorney noted that while these debts were outstanding, they would not be paid off 
because the statute of limitations had run, or the actual owner and the amount of the 
debt could not be ascertained. The delinquent debts at SOR 1.b, 1.d, 1.e, and 1.g are 
included in this list of debts not to be paid. The delinquent debts at SOR 1.c and 1.f are 
not included in the list but are included in those debts affected by the statute of 
limitations and inability to determine the creditor. Applicant's attorney tried to contact all 
of the creditors but was not successful. Even as late as December 2008, when checks 
from the proceeds of the sale of the house were being mailed to potential creditors, the 
attorney was receiving information from creditors that they no longer held the debt and 
could not accept payment. Applicant made no attempt to contact the creditors or to 
make payments on these debts. He was acting on the advice of an attorney who 
informed him if he contacted the creditors or made any payments, the timelines for 
enforcing the debts would start to run again (Tr. 16-21, 28-33, 66-67; Gov. Ex. 3, 
Answers to Interrogatories, dated April 8, 2009, at 13-14; App. Ex. B at Exhibit A, Letter, 
dated October 10, 2008). The $6,437 in debts paid by the attorney left $21,078.45 from 
the sale of the house which was split evenly between Applicant and his wife. Applicant 
used his share of the proceeds to pay other debts, pay for medical care for his fiancée's 
daughter, and repair his car. He also put $1,700 in savings (Tr. 28-32). 
 
Applicant is considered an excellent employee by his company. His immediate 
supervisor noted that he has known Applicant for several years. Applicant is a hard 
working and dedicated employee who is consistently reliable. He is one of their most 
trusted employees. He considers Applicant as ethically strong and a patriotic individual 
who is loyal to the United States. He recommends Applicant be granted access to 
classified information (Gov. Ex. 3, Answers to Interrogatories, at 21).  
Applicant's fiancée testified that she worked closely with Applicant for about five 
years when she also worked at the same company as Applicant. There never were any 
questions in the company about Applicant's integrity and ability to maintain confidential 
information (Tr. 53-56). Applicant's friend testified he has known Applicant for over five 
years. He sees Applicant socially but they do not work together. Applicant has an 
outstanding reputation for personal and professional conduct. There is no question 
concerning his integrity and ability to maintain confidential information (Tr. 71-74). 
 
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. 
 
 
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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. 
 
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 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 
the Applicant may deliberately or inadvertently fail to 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.  
 
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 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. 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 during his marriage 
when he permitted his wife to manage the family finances without his adequate 
involvement. His wife did not pay their debts, instead spending money on luxuries. 
Since his divorce, Applicant paid some of his debts but some still remain. 
 
 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. The debts were 
incurred because of his wife's misconduct and failure to use their family funds to pay 
debts when due. His financial problems are partially beyond his control because the 
delinquent debts arose through his wife's action that he was not aware of. He asked his 
wife about their finances, and she left him with the information that they were not in 
financial trouble. However, Applicant could have been more fully involved in the family 
finances, and, if he did, he would have learned earlier of their financial issues. Since 
then, Applicant has been acting responsibly under the circumstances. He separated 
from and divorced his wife, took charge of his finances, pressed to have their house 
sold to get funds to pay debts, and paid as many of the debts as his finances permitted.  
 
 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. The 
concept of good-faith action requires a showing that a person acts in a way that shows 
reasonableness, prudence, honesty, and adherence to duty or obligation. An applicant 
must do more than merely show that he or she relied on a legally available option (such 
as the statute of limitations) in order to claim the benefit of the “good-faith” mitigating 
condition. Applicant has the funds to pay his debts since he has money in savings and a 
401K account. Applicant paid some of his delinquent debts. The SOR lists only those 
debts that are still outstanding. The proceeds from the sale of his house paid one of 
these debts. However, he has not paid the other debts because he does not know the 
background and reasons for some of the debts, cannot clearly identify the creditor to be 
 
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paid, and has followed the advice of an attorney not to contact creditors or pay debts 
that are close to being unenforceable because of a statute of limitations.  
 
Applicant's state of residence has a three-year statute of limitation provision for 
enforcements of debts. The statute has the societal, judicial, and public policy rationale 
to stimulate activity, punish negligence, and promote stability to human affairs. It is 
intended to promote and achieve finality in litigation. The statute of limitations provides 
potential defendants with certainty that after a set period of time, they will not be taken 
to court to defend time-barred claims. The statute of limitations clearly and 
unequivocally ends an applicant’s legal responsibility to pay the creditor after the 
passage of a certain amount of time, as specified in state law. However the application 
of a state statute of limitations on debt collection does not automatically mitigate 
financial considerations concerns under AG ¶ 20(d). An Applicant may be relieved of 
legal and financial responsibility for a debt not paid because the timeline for enforcing 
the debts had run, but the debt may remain a security concern even though not 
collectible. His actions show some good-faith but his failure to pay the debts because of 
the potential lack of enforcement by the statute of limitation is not a good-faith effort.  
 
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 Applicant served 22 
yeas on active duty in the Air Force, he received an honorable discharge, and 
successfully held a security clearance for over 30 years. I considered that Applicant has 
a reputation in his company as well as the community for reliability, honesty, and 
trustworthiness.  
 
 
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 Applicant must establish a "meaningful track record" of debt payment, including 
evidence of actual debt reduction through payment of debts. The issue is not simply 
whether all of Applicant's debts are paid. It is whether his financial circumstances raise 
concerns about his fitness to hold a security clearance. Applicant's wife managed the 
family finances. She did not pay the family bills and used the funds for other purposes. 
She also was involved in fraudulent financial activities with Applicant's father's funds 
and the funds from her employer. Applicant did not know the debts were not paid even 
though he asked his wife about their finances. Applicant has some culpability in regard 
to the delinquent debts because he did not exercise sufficient interest in the finances. 
However, once he learned of the financial issues, he separated from and eventually 
divorced his wife. He entered a property agreement to use the proceeds from the sale of 
their house to pay some of their debts. He continued to pay other debts from his own 
resources. These actions establish a track record of debt payment of his delinquent 
debts. Delinquent debts remain and are listed in the SOR. He has not paid them 
because enforcement of the debts under the state statute of limitations is or will shortly 
be barred. 
 
  Applicant anticipated, most if not all, delinquent debts would be paid from the 
proceeds of the sale of their house. However, some were not and are listed of security 
concern in the SOR. The debts were not paid for a variety of reasons. The attorney 
managing the property settlement from the divorce could not identify some of the 
creditors, did not have accurate information on the amount of each debt, and the debts 
were or would shortly be barred from enforcement under the statute of limitation. 
Applicant relied on the advice and guidance of the attorney in not inquiring about the 
debts or making payments. He was relying on the debts not being collectible by the 
passage of time under the statute of limitations. Reliance on the statute of limitation to 
not pay debts is not a good-faith effort to pay debts and normally is not considered as 
acting reasonably and responsibly concerning delinquent debt. However, under these 
circumstances, Applicant demonstrated he acted reasonably and responsibly. The 
remaining unpaid delinquent debts are not the type indicating poor self-control, lack of 
judgment, or unwillingness to abide by rules and regulations. He did not cause the 
financial problems even though he should have been more active in the management of 
the family finances. He paid some of the debts from his own resources, and pressed for 
the sale of the house to generate funds to pay the delinquent debts. He is living within 
his means and continues to pay his current debts as agreed. His reliance on the statute 
of limitation is based on the advice of the attorney managing the dissolution of the 
marital property and payments of marital debts. Applicant established that he acted 
reasonably and responsibly towards his finances. His actions indicate 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 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. 
 
 
 
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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, Guideline F:   FOR APPLICANT 
 
  Subparagraphs 1.a - 1.g:  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