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                            DEPARTMENT OF DEFENSE
             DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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------------, ------- ------- )       ISCR Case No. 09-03774
SSN: ------ ---- -------- )
)
Applicant for Security Clearance )
Appearances
For Government: Jeff A. Nagel, Esquire, Department Counsel
For Applicant: Pro Se
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Decision
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WHITE, David M., Administrative Judge:
Applicant has resolved all but one of the delinquent debts that accrued five years
ago during a former relationship. He makes regular payments toward this last debt, and
has established a track record of financial responsibility and solvency. Based upon a
thorough review of the case file, pleadings, exhibits, and testimony, eligibility for access
to classified information is granted. 
Applicant submitted his security clearance application on January 9, 2009. On
July 22, 2009, the Defense Office of Hearings and Appeals (DOHA) issued a Statement
of Reasons (SOR) to Applicant detailing security concerns under Guideline F (Financial
Considerations). 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 (DoD) for SORs issued after September 1, 2006.
Applicant acknowledged receipt of the SOR on July 28, 2009. He answered the SOR in
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writing on August 11, 2009, and requested a hearing before an administrative judge.
Department Counsel was prepared to proceed on September 11, 2009, and DOHA
assigned the case to me on September 21, 2009.
DOHA issued a Notice of Hearing on October 1, 2009, and I convened the
hearing as scheduled on October 28, 2009. Department Counsel offered Government
Exhibits (GE) 1 through 6, which were admitted without objection. Applicant testified on
his own behalf, and offered Applicant Exhibits (AE) A through G, which were also
admitted without objection. I granted Applicant’s request to leave the record open until
November 12, 2009, for submission of additional evidence. DOHA received the
transcript of the hearing (Tr.) on November 4, 2009. On November 10, 2009, Applicant
submitted his budget statement, performance evaluation, record of Navy awards,
multiple citations for exceptional performance, and conditional settlement offer for his
larger remaining debt, which were marked AE H through L and admitted without
objection. I reopened the record on February 2, 2010, to accept proof from Applicant
that he had resolved that debt by paying the collection agency the offered settlement
amount (AE M). Department Counsel did not object to this additional evidence.
Findings of Fact
Applicant is a 33-year-old security specialist directly employed by a defense
contractor for almost two years. He performed similar work for the same company under
contract for the preceding two years. In his answer to the SOR, Applicant admitted the
truth of both allegations set forth therein. Those admissions are incorporated into the
following findings of fact.
Applicant has never been married. He has one child from a previous relationship,
and recently began living with his current girlfriend. He has six years active duty and two
years active reserve military service, and held a security clearance since he enlisted in
1996. He earned a Good Conduct Medal and Navy Unit Commendation, and was
honorably discharged. (GE 1; AE J; Tr. at 40, 56.) 
While Applicant lived with his child’s mother, from 2002 to 2005, she was
financially irresponsible and regularly spent more than they earned. Applicant worked a
lot, and had little to do with budgeting or household finances. He did realize in general
terms that they were spending irresponsibly, however. As a result, when the relationship
ended he had accrued substantial delinquent debt. He negotiated and paid settlements
with five or six of his former creditors between 2006 and early 2008 to resolve those
accounts. The two delinquent accounts alleged in the SOR remained unresolved at the
time of his hearing, however. (AE G; Tr. at 34-36, 39-40, 46-47, 70.)
The $5,922 debt alleged in SOR ¶ 1.a is a medical bill for a surgical procedure
Applicant underwent in 2005. He thought he had medical insurance that would cover
most of the cost. Unknown to him, however, his policy had been cancelled a month or
two earlier because there were insufficient funds in his bank account to cover the
scheduled automatic premium payments. His child’s mother had spent the money on
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other things without informing him of the resulting cancellation of his medical insurance.
When he learned of the bill, he made a few payments, totaling $150, but then moved
after breaking up with his child’s mother, and forgot to make subsequent payments. The
company did not send him further bills, and he was unaware of this debt until advised of
it during his security interview. The record credit reports indicate the original debt was
$5,922, but the present balance was $5,772. Applicant paid this creditor $125 on
September 25, 2009, and $75 on October 22, 2009, so the current balance is now
$5,572. Applicant intends to continue paying this creditor until the debt is resolved. (GE
2 at 3, GE 3 at 1; GE 4 at 1; GE 5 at 1; AE D; Tr. at 36, 58-59, 63-65.)
The approximately $14,000 debt alleged in SOR ¶ 1.b is a collection account for
what originated as a $6,408 credit card debt. Applicant’s February 14, 2009, credit
report showed a $13,424 balance, and by his October 25, 2009, credit report the
balance due rose to $14,918. Sometime in 2006 or 2007, Applicant contacted the
collection agency to attempt to negotiate a settlement on this debt. The creditor refused
to accept a reduced amount that he could afford to pay, so he did not pay them
anything. Instead, in October 2007, he entered into an agreement with a company to
represent him in negotiating a settlement. He paid this company the agreed fees totaling
$1,680 over 17 months, but did not thereafter save sufficient funds to finance any of the
settlements the company was tentatively able to negotiate on his behalf before his
hearing. In “trying to make some sort of good-faith payment,” that some people told him
would probably be in his best interest, Applicant made one $25 payment to this creditor
on October 22, 2009. On November 11, 2009, Applicant received a conditional
settlement offer from the collection agency to resolve this debt for a payment of $6,350
by November 18, 2009. He subsequently paid the agency $6,400, and received a letter,
dated December 30, 2009, stating that the account is considered paid in full, and no
further funds are due on this matter. (GE 2 at 9; GE 5 at 3; AE A; AE E; AE L; AE M; Tr.
at 32-33, 50-51, 70-71.)
Applicant provides regular financial support to his mother, whose home he co-
owns. She receives a medical retirement pension, and her sister now lives with and
helps her. From October 2007 through September 2009, he sent his mother $16,950.
(AE B; Tr. at 29-30, 39, 54-56.)
Applicant’s child care expenses have recently been reduced because his
girlfriend, who does not have a job, watches his child. She is seeking employment, and
he recently obtained a second job working part time in a video rental store. He has $392
in a savings account that he plans to add to and use for delinquent debt repayment. He
also has about $12,500 in a company retirement savings plan, half of which he could
borrow if he chose to. Applicant’s description of his plan to resolve remaining delinquent
debt was, “I plan on actively making payments in the future to satisfy that. If I can start
working more hours, and my girlfriend gets a job, I think this – – I would be able to
satisfy this debt in a reasonable amount of time.” His financial statement shows $3,621
in monthly income and $3,199 in monthly expenses, leaving a $422 surplus for savings
and payments on his delinquent medical debt. (AE C; AE F; AE H; Tr. at 34, 40, 54, 69-
70.)  
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Applicant’s most recent performance evaluation, and numerous citations for
exceptional performance, reflect his outstanding dedication and execution of wide-
ranging and responsible security duties. He is also pursuing off-duty education, and has
one more year of classes to complete his bachelor’s degree in Criminal Justice
Administration. (AE I; AE K; Tr. at 9, 53-54.) 
Policies
When evaluating an applicant’s suitability for a security clearance, the
administrative judge must consider and apply 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 to
be 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 AG ¶ 2, describing the adjudicative process. The administrative judge’s
overarching adjudicative goal is a fair, impartial, and commonsense decision. According
to AG ¶¶ 2(a) and (c), the entire process is a conscientious scrutiny of applicable
guidelines in the context 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 the 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 in 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, “[t]he applicant is
responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or
mitigate facts admitted by the applicant or proven by Department Counsel, and has the
ultimate burden of persuasion as to obtaining a favorable clearance decision.” Section 7
of Executive Order 10865 provides, “[a]ny determination under this order adverse to an
applicant shall be a determination in terms of the national interest and shall in no sense
be a determination as to the loyalty of the applicant concerned.” 
A person applying for access to classified information seeks to enter 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 that the applicant may deliberately or inadvertently fail to protect or
safeguard classified information. Such decisions entail a certain degree of legally
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permissible extrapolation as to potential, rather than actual, risk of compromise of
classified information.
Analysis
Guideline F, Financial Considerations
AG ¶ 18 expresses the security concern pertaining to financial considerations:
Failure or inability to live within one's means, satisfy debts, and meet
financial obligations may indicate poor self-control, lack of judgment, or
unwillingness to abide by rules and regulations, all of which can raise
questions about an individual's reliability, trustworthiness and ability to
protect classified information. An individual who is financially over-
extended is at risk of having to engage in illegal acts to generate funds.
Compulsive gambling is a concern as it may lead to financial crimes
including espionage. Affluence that cannot be explained by known sources
of income is also a security concern. It may indicate proceeds from
financially profitable criminal acts.
AG ¶ 19 describes conditions that could raise a security concern and may be
disqualifying. Department Counsel requested analysis of the applicability of three of
these potentially disqualifying conditions: 
(a) inability or unwillingness to satisfy debts;
(b) indebtedness caused by frivolous or irresponsible spending and the
absence of any evidence of willingness or intent to pay the debt or
establish a realistic plan to pay the debt; and 
(c) a history of not meeting financial obligations. 
(Tr. at 18.) From 2002 to 2005, Applicant accumulated the two SOR-listed delinquent
debts that total about $20,000, as well as five or six other delinquencies that he
resolved between 2006 and 2008. He entered into an agreement with a credit
settlement service to attempt resolution of the larger of these debts, and paid that
company $1,680 to represent him. Shortly after his hearing, he received a settlement
offer that he could afford to pay, and did so to fully resolve that debt. Applicant has
begun regular payments toward the remaining medical debt that are well within his
budgetary ability to continue. Accordingly, he has eliminated the formerly applicable
security concerns under AG ¶ 19(a). He is not under continuing financial duress, so he
is no longer at risk of having to engage in illegal acts to generate funds. The evidence
established a history of not meeting some financial obligations while in a prior
relationship from 2002 to 2005, raising potential security concerns under AG ¶ 19(c).
AG ¶ 19(b) was not established in this case. Although Applicant admits irresponsible
spending over the period from 2002 to 2005 that resulted in multiple delinquent debts,
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his resolution of several of these debts between 2006 and early 2008, and his recent
efforts regarding the remaining two, provide strong evidence of his willingness and
intent to pay his debt. 
AG ¶ 20 provides conditions that could mitigate security concerns arising from
the foregoing financial considerations. The potentially applicable mitigating conditions
are:
(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; and
(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.
Mitigation under AG ¶ 20(a) was established in part. Applicant’s delinquencies
arose from five to seven years ago, during a relationship he broke off. He resolved most
of them between 2006 and 2008, but two substantial debts continued at the time of
Applicant’s hearing. He since resolved the larger one, and only one debt of about
$5,500 remains. Most of the underlying irresponsible spending was done by the mother
of his child, with whom he no longer lives. However, he admitted his own irresponsible
participation and at least tacit consent to her conduct, so mitigation under AG ¶ 20(b)
was not established. Applicant provided no evidence of financial counseling, but hired a
company to negotiate a reduced settlement of one debt, which led to its successful
resolution in late 2009. During the two months immediately preceding his hearing, he
also paid $200 toward the $5,772 debt alleged in SOR ¶ 1.a. These are substantial
steps in the right direction, creating meaningful mitigation under AG ¶¶ 20(c) and (d).
Moreover, Applicant demonstrated his present solvency and ability to avoid additional
delinquencies in the future. Applicant did not dispute any of his delinquencies under AG
¶ 20(e), and in fact admitted that they are valid debts. 
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As the Appeal Board ruled concerning the successful mitigation of security
concerns arising from financial considerations, “[a]n applicant is not required to show
that [he] has completely paid off [his] indebtedness, only that [he] has established a
reasonable plan to resolve [his] debts and has ‘taken significant actions to implement
that plan.’” ISCR Case No. 06-12930 at 2 (App. Bd. Mar. 17, 2008) (quoting ISCR Case
No. 04-09684 at 2-3 (App. Bd. Jul. 6, 2006)). This applicant has established and
substantially implemented an effective plan to resolve the debts that would formerly
have given rise to security concerns.
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 applicable guidelines and the whole-person concept.  
I considered the potentially disqualifying and mitigating conditions in light of all
the pertinent facts and circumstances surrounding this case. Applicant’s conduct of
security concern was incurring two delinquent debts, which totaled about $20,000. He
fully resolved the larger debt, and is making regular payments toward the remaining
$5,500 debt. His delinquencies arose between 2002 and 2005, during a relationship
with a financially irresponsible woman that has ended. Since 2006, he has incurred no
new delinquencies, and resolved the vast bulk of his prior debt. His actions have greatly
mitigated the formerly applicable security concerns, and he has established a good-faith
track record of financial responsibility. The record demonstrates his ongoing ability to
address the remaining delinquent debt, and his excellent performance of responsible
security duties at work while continuing to pursue advanced education. Applicant’s
actions have eliminated any continuing potential for pressure, coercion, or duress. He
demonstrated that his financial problems are unlikely to continue or worsen. Applicant
presented sufficient evidence to fully mitigate security concerns arising from his history
of failing to meet financial obligations, and his former inability to pay some delinquent
debts. The record generates significant confidence as to his present eligibility and
suitability for a security clearance.
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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
Subparagraph 1.a: For Applicant
Subparagraph 1.b: For Applicant
Conclusion
In light of all of the circumstances presented by the record in this case, it is
clearly consistent with the interests of national security to grant Applicant eligibility for a
security clearance. Eligibility for access to classified information is granted.
                                  
DAVID M. WHITE
Administrative Judge