DEPARTMENT OF DEFENSE 
  DEFENSE OFFICE OF HEARINGS AND APPEALS 
  
  
 
 
In the matter of: ) 
 ) 
   )  ISCR Case No. 08-11690 
   ) 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Melvin A. Howry, Esq., Department Counsel 
For Applicant: Pro Se 
 
 
 
 
______________ 
 
Decision 
______________ 
 
 
HEINY, Claude R., Administrative Judge: 
 
Applicant has 27 accounts placed for collection or other delinquent accounts, 
which total in excess of $27,000. Applicant asserted, but failed to document, that some 
of the debts were included in his bankruptcy and that he was making payments on 
others. Applicant has failed to rebut or mitigate the government’s security concerns 
under financial considerations. Clearance is denied. 
 
Statement of the Case 
 
 Applicant contests the Defense Department’s intent to deny or revoke his 
eligibility for an industrial security clearance. Acting under the relevant Executive Order 
and DoD Directive,1 the Defense Office of Hearings and Appeals (DOHA) issued a 
 
1 
 
 
 
                                                          
1 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. 
 
2 
 
 
 
Statement of Reasons (SOR) on July 30, 2009, detailing security concerns under 
financial considerations. 
  
 On September 18, 2009, Applicant answered the SOR and elected to have the 
matter decided without a hearing. Department Counsel submitted the government's 
case in a File of Relevant Material (FORM), dated December 8, 2009. The FORM 
contained 10 attachments. On December 18, 2009, Applicant received a copy of the 
FORM, along with notice of his opportunity to file objections and submit material to 
refute, extenuate, or mitigate the potentially disqualifying conditions. Responses to the 
FORM are due 30 days after receipt of the FORM. Applicant’s response was due on 
January 18, 2010. As of February 18, 2010, no response had been received. On 
February 19, 2010, I was assigned the case.  
 
Findings of Fact 
 
 In Applicant’s Answer to the SOR, he denied the factual allegations in SOR ¶ 1.b, 
1.e, 1.k, and 1.l. He asserts he is currently making payments on the remaining debts. 
Applicant’s admissions to the SOR allegations are incorporated herein. After a thorough 
review of the record, pleadings, and exhibits, I make the following findings of fact: 
 
 Applicant is a 35-year-old field service engineer who has worked for a defense 
contractor since June 2008, and is seeking to obtain a security clearance.  
 
 In March 2009, when Applicant responded to written interrogatories, he included 
a personal financial worksheet. (Ex. 8) It showed monthly gross income of $4,923, net 
income of $3,520, monthly expenses of $3,209, and monthly payment on debts of $250, 
which left a net monthly remainder (income less expenses) of $305. (Ex. 8)  
 
 When Applicant answered the written interrogatories, he was unfamiliar with 
three of the medical bills. (Ex. 8) His wife contacted his previous medical insurance and 
requested a list of all medical bills paid and unpaid. He believes there are numerous 
bills that should have been paid and were not. When the insurance company responds, 
he will review the medical bills to see what remains unpaid. (Ex. 8) 
 
 Applicant asserts, but provides no documentation, that he established an 
automatic payment of $50 monthly on his student loan (SOR ¶ 1.p, $3,217). (Ex. 8) 
Applicant owes his credit union for two repossessed vehicles (SOR ¶ 1.t, $3,955 and 
SOR ¶ 1.u, $10,952). In March 2009, he asserted he previously worked for the credit 
union and the credit union suggested he work part-time to repay the debts. Applicant 
was going to check with his current employer to determine if there was any conflict of 
interest preventing him from being so employed. There is no evidence of Applicant’s 
employer’s response or if Applicant actually began working for the credit union.  
 
 Applicant asserts, but again failed to document, that he contacted all of his 
creditors, except for three, and was able to consolidate all the debts into four accounts. 
He provided no further information about the accounts and failed to provide any 
information that payment had been made on the accounts.  
 
3 
 
 
 
 Applicant included in his March 2009 written response, portions of a February 
2009 on-line credit report. (Ex. 8) The credit report indicates a number of Applicant’s 
debts were included in or discharged in a bankruptcy. No bankruptcy schedules or other 
bankruptcy forms were part of the record.  
 
 In March 2009, Applicant asserted he was going to use his anticipated tax refund 
to pay some of his debts. (Ex. 8) There is nothing in the record indicating the size of the 
refund or showing that any of the refund was used to pay his debts.  
 
 The evidence includes four credit bureau reports (CBR) dated: July 23, 2008 
(Ex.5), December 10, 2008 (Ex. 6), June 24, 2009 (Ex. 7), and December 7, 2009 (Ex. 
9). Applicant was unemployed from March 2004 through June 2004 and January 2008 
through June 2008. (Ex. 2) No further information on Applicant’s periods of 
unemployment was provided.  
 
 Applicant asserted that he was making payment on a number of debts. (Ex. 3) 
He also asserted some of his debts were discharged in bankruptcy. (Ex. 8) Applicant’s 
four CBRs submitted by the government do not list any of the SOR accounts placed for 
collection as having been in bankruptcy. A summary of Applicant’s accounts placed for 
collection and other unpaid obligations and their current status follows:  
 
 
 Creditor Amount Current Status 
a Chapter 7 bankruptcy filed 
August 26, 2005. 
 
$ Debts of $79,351 were discharged. 
Applicant asserts the majority of his 
debt was medical. 
b Collection firm collection for a 
cable bill.  
$132 
 
Denied the debt as having been paid 
November 2007. (Ex. 3)  
Applicant asserted this debt was 
discharged in his bankruptcy. (Ex. 8)  
c Collection firm collecting for 
medical services 8319. 
 
$461 
 
Applicant asserts he is currently 
making payments on this debt. (Ex. 3) 
Applicant asserted this debt was 
discharged in his bankruptcy. (Ex. 8)  
d Collection firm collecting for 
medical services 8599.  
Applicant’s CBRs do not list 
this account as having been in 
bankruptcy.  
$899 Applicant asserts he is currently 
making payments on this debt. (Ex. 3) 
Applicant asserted this debt was 
discharged in his bankruptcy. (Ex. 8)  
e Collection firm collecting for 
medical services 4286.  
Applicant’s CBRs do not list 
this account as having been in 
bankruptcy. 
$66 Applicant asserts he is currently 
making payments on this debt. (Ex. 3) 
Applicant asserted this debt was 
discharged in his bankruptcy. (Ex. 8)  
 
4 
 
 
 
 Creditor Amount Current Status 
f Collection firm collecting for 
medical services 0497.  
Applicant’s CBRs do not list 
this account as having been in 
bankruptcy.  
$445 Applicant asserts he is currently 
making payments on this debt. (Ex. 3) 
Applicant asserted this debt has been 
consolidated and included in a payoff 
schedule. (Ex. 8)  
g Collection firm collecting for 
medical services 4659.  
Applicant’s CBRs do not list 
this account as having been in 
bankruptcy.  
$161 Applicant asserts he is currently 
making payments on this debt. (Ex. 3) 
Applicant asserted this debt has been 
consolidated and included in a payoff 
schedule. (Ex. 8)  
h Collection firm collecting for 
medical services 9077.  
Applicant’s CBRs do not list 
this account as having been in 
bankruptcy.  
$221 Applicant asserts he is currently 
making payments on this debt. (Ex. 3) 
Applicant asserted this debt has been 
consolidated and included in a payoff 
schedule. (Ex. 8)  
i Collection firm collecting on an 
unpaid electrical utility debt.  
$352 Applicant asserts he is currently 
making payments on this debt. (Ex. 3) 
Applicant asserted this debt was 
discharged in his bankruptcy. (Ex. 8)  
j Collection firm collecting for an 
unpaid sewer bill.  
 
$126 Applicant asserts he is currently 
making payments on this debt. (Ex. 3) 
Applicant asserted this debt was 
discharged in his bankruptcy. (Ex. 8)  
k Collection firm collecting for an 
unpaid cable bill.  
$49 Applicant asserts he is currently 
making payments on this debt. (Ex. 3) 
Applicant asserted this debt was 
discharged in his bankruptcy. (Ex. 8)  
l Collection firm collecting for an 
unpaid library bill.  
$40 
 
Denied. Applicant asserts this was 
paid March 2009. (Ex. 3)  
Applicant asserted this debt was 
discharged in his bankruptcy. (Ex. 8)  
m Collection firm collecting for an 
doctors’ bill. 
 
$2,986 
 
Applicant asserts he is currently 
making payments on this debt. (Ex. 3) 
Applicant asserted these debts have 
been consolidated and included in a 
payoff schedule. (Ex. 8)  
 
 
 
 
5 
 
 
 
 Creditor Amount Current Status 
n Unpaid medical services 
collection account 6187. 
 
$616 Applicant asserts he is currently 
making payments on this debt. (Ex. 3) 
Applicant asserted these debts have 
been consolidated and included in a 
payoff schedule. (Ex. 8)  
o Unpaid medical services 
collection account 9155. 
$393 
 
Applicant asserts he is currently 
making payments on this debt. (Ex. 3) 
p Student loan placed for 
collection. 
$3,217 
 
Applicant asserts he has a $50 
monthly automatic allotment paying 
the debt. (Ex. 8)  
q Unpaid medical services 
account collecting 4704. 
 
 
 
$509 
 
Applicant asserted these debts have 
been consolidated and included in a 
payoff schedule. (Ex. 8)  
In his March 2009 response to the 
interrogatories, Applicant said he 
could not find any contact information 
about this debt. (Ex. 8) 
 r Unpaid medical services 
collection account 5270. 
 
 
 
$95 
 
Applicant asserted these debts have 
been consolidated and included in a 
payoff schedule. (Ex. 8)  
In his March 2009 response to the 
interrogatories, Applicant said he 
could not find any contact information 
about this debt. (Ex. 8) 
s Unpaid medical services 
collection account 7267. 
$138 
 
Applicant asserted these debts have 
been consolidated and included in a 
payoff schedule. (Ex. 8)  
t Credit union collection account 
for automobile repossession. 
$3,955 Applicant was negotiating a consulting 
services contract in exchange for this 
debt. (Ex. 8) 
u Credit union collection account 
for automobile repossession. 
$10,952 Applicant was negotiating a consulting 
services contract in exchange for this 
debt. (Ex. 8) 
v Unpaid medical services 
collection account 5750. 
$802 Applicant asserts he is currently 
making payments on this debt. (Ex. 3) 
w Collection firm collecting for 
returned check. 
$38 Applicant asserts he is currently 
making payments on this debt. (Ex. 3) 
 
 
 
6 
 
 
 
x Collection firm collecting for a 
gas utility bill.  
$265 Applicant asserts he is currently 
making payments on this debt. (Ex. 3) 
y Unpaid medical services 
collection account 5086. 
$228 Applicant asserts he is currently 
making payments on this debt. (Ex. 3) 
z Unpaid medical services 
collection account 2529. 
$127 
 
Applicant asserts he is currently 
making payments on this debt. (Ex. 3) 
a
a 
Collection firm collecting for 
unpaid telephone bill.  
$185 
 
Applicant asserts he is currently 
making payments on this debt. (Ex. 3) 
b
b 
Collection firm collecting for 
unpaid medical account. The 
SOR alleges a debt of $728, 
however, Applicant’s July 2008 
CBR (Ex. 5) lists the debt at 
$127.  
 This debt is a duplication of SOR ¶ 1.z 
for it has the same account number 
2529.  
Applicant asserts he is currently 
making payments on this debt. (Ex. 3) 
I find for Applicant as to this 
duplication.  
c
c 
Collection firm collecting for 
unpaid medical account.  
$386 Applicant asserts he is currently 
making payments on this debt. (Ex. 3) 
 Total debt listed in SOR $27,844  
 
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. 
 
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. 
 
 
7 
 
 
 
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 for 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 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 
 
 Revised Adjudicative Guideline (AG) ¶ 18 articulates the security concerns 
relating to financial problems: 
 
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. 
 
Additionally, an individual who is financially irresponsible may also be 
irresponsible, unconcerned, negligent, or careless in properly handling and 
safeguarding 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 as agreed. Absent 
substantial evidence of extenuating or mitigating circumstances, an applicant with a 
history of serious or recurring financial difficulties is in a position of risk that is 
inconsistent with holding a security clearance. An applicant is not required to be debt 
free, but is required to manage his finances so as to meet his financial obligations. 
 
8 
 
 
 
                                                          
 The record evidence supports a conclusion Applicant has a history of financial 
problems. In January 2006, Applicant had $79,351 of debt discharged in bankruptcy. 
The SOR lists 282 accounts placed for collection or other past due indebtedness, which 
totaled approximately $28,000. Disqualifying Conditions AG ¶ 19(a), “inability or 
unwillingness to satisfy debts” and AG ¶ 19(c), “a history of not meeting financial 
obligations,” apply.  
 
 Five financial considerations mitigating conditions under AG ¶¶ 20(a) – (e) are 
potentially applicable: 
 
(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; 
 
(b) the conditions that resulted in the financial problem were largely 
beyond the person's control (e.g., loss of employment, a business 
downturn, unexpected medical emergency, or a death, divorce or 
separation), and the individual acted responsibly under the circumstances; 
 
(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; 
 
(d) the individual initiated a good-faith effort to repay overdue creditors or 
otherwise resolve debts; or 
 
(e) the individual has a reasonable basis to dispute the legitimacy of the 
past-due debt which is the cause of the problem and provides 
documented proof to substantiate the basis of the dispute or provides 
evidence of actions to resolve the issue. 
 
Under AG ¶ 20(a), Applicant=s accounts placed for collection are both numerous 
and recent. Half of the debts, 14 in number, are related to medical accounts placed for 
collection. Applicant is checking to see why his insurance did not pay these bills. The 
record provides no evidence of the nature of the medical services provided. There is no 
explanation why he had two cars repossessed. He was unemployed for four months in 
2004 and six months in 2008. As the record has been presented, I am unable to find the 
debts were incurred under such circumstances that it is unlikely to recur or that they do 
not cast doubt on Applicant’s current reliability, trustworthiness, or good judgment. AG ¶ 
20(a) does not apply. 
 
Under AG & 20(b), Applicant experienced two recent periods of unemployment, 
in 2004 and in 2008. Additionally, half of the accounts placed for collection were for 
medical bills. However, Applicant provided no additional information about the medical 
2 Two of the debts listed are the same obligation. 
 
9 
 
 
 
condition so that I could find it was an unexpected medical emergency. AG & 20(b) has 
only limited application.  
 
AG & 20(c) does not apply. There is no showing Applicant has received financial 
counseling or that his debts are under control. Applicant asserts he is paying his student 
loan, is talking to the credit union about part-time employment with them to excuse his 
debt, and asserts he is paying his other debts. He also asserted that many of the debts 
he now states he is paying were included in his bankruptcy.  
 
In March 2009, Applicant asserted he had consolidated his debts into four 
accounts. Applicant’s most recent CBR (Ex. 9) fails to support that any of his financial 
obligations, listed in the SOR, are being paid as agreed. Approximately a year ago, he 
said he would use his tax refund to pay some of the debt. He provided nothing showing 
that he received a tax refund or how he used the refund. He failed to document, that he 
is making timely, monthly payments on the four consolidated debts, or on his student 
loan. He provided no cancelled checks, no letters from the creditors, no monthly bank 
account statements showing monthly withdrawals for the amounts in question, no 
monthly account balances from the creditors showing the balance owed is being 
reduced, or other evidence of payments being made. Applicant has provided insufficient 
proof that he is making timely payments. AG & 20(d) does not apply.  
 
Applicant said he had paid the $132 cable bill (SOR ¶ 1.b), a $66 medical bill 
(SOR ¶ 1.e), the $49 cable bill (SOR ¶ 1.j), and the $40 library bill (SOR ¶ 1.k). He 
failed to document the payments. He is not disputing any of the remaining account 
placed for collection or other past due obligations. Therefore, AG ¶ 20(e) does not 
apply. 
 
Whole Person Concept 
 
 Under the whole person concept, the administrative judge must evaluate an 
applicant’s eligibility for a security clearance by considering the totality of the 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. I considered the 
 
10 
 
 
 
potentially disqualifying and mitigating conditions in light of all the facts and 
circumstances surrounding this case.  
 
Because Applicant chose to have this matter handled administratively, I am 
unable to evaluate his demeanor, appearance, or form a positive determination as to his 
truthfulness. From the record, I am unable to find Applicant was sincere, open, and 
honest. Even if I found for him in these matters, there is no evidence of documentation 
to support that the delinquent debts have been paid or are being paid in a manner 
agreeable to the creditors.  
 
Applicant was unemployed twice in the recent past and half of his debts are for 
unpaid medical bills. These events are beyond his control. However, he has been 
employed with his current employer since June 2008, more than a year and a half. 
Almost a year ago, Applicant stated he would contact his creditors and start repaying 
his past due obligations, and would use his tax refund to make payment on his debts. 
There is no evidence he has done so.  
 
This decision should not be construed as a determination that Applicant cannot 
or will not attain the state of true reform and rehabilitation necessary to justify the award 
of a security clearance. The awarding of a security clearance is not a once in a lifetime 
occurrence, but is based on applying the factors, both disqualifying and mitigating, to 
the evidence presented. Under the Applicant=s current circumstances, a clearance is not 
recommended. Should the Applicant be afforded an opportunity to reapply for a security 
clearance in the future, having paid the delinquent obligations, established compliance 
with a repayment plan, or otherwise addressed the obligations, he may well 
demonstrate persuasive evidence of his security worthiness. However, 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 failed to 
mitigate the security concerns arising from his financial considerations.  
 
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: AGAINST APPLICANT 
 
  Subparagraph 1.a:   For Applicant  
  Subparagraph 1.b- 1.aa:  Against Applicant 
  Subparagraph 1.bb:   For Applicant  
  Subparagraph 1.cc:   Against Applicant 
 
 
 
 
 
 
 
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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.  
 
 
_______________________ 
CLAUDE R. HEINY II 
Administrative Judge