DEPARTMENT OF DEFENSE 
  DEFENSE OFFICE OF HEARINGS AND APPEALS 
  
  
 
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 09-00055 
  ) 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Daniel Crowley, Esq., Department Counsel 
For Applicant: Pro Se 
 
 
 
 
______________ 
 
Decision 
______________ 
 
 
HEINY, Claude R., Administrative Judge: 
 
Applicant had an unpaid judgment and ten accounts that were charged off or 
placed for collection, which totaled approximately $15,000. Applicant has rebutted or 
mitigated the government’s security concerns under financial considerations. Clearance 
is granted. 
 
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 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 on 
September 1, 2006. 
 
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Statement of Reasons (SOR) on June 22, 2009, detailing security concerns under 
financial consideration. 
  
 On July 10, 2009, Applicant answered the SOR, and requested a hearing. On 
August 5, 2009, I was assigned the case. On August 17, 2009, DOHA issued a notice of 
hearing scheduling the hearing, which was held on September 22, 2009.  
 
 The government offered Exhibits (Ex.) 1 through 7, which were admitted into 
evidence. Applicant testified on his own behalf and submitted Ex. A through K, which 
were admitted into evidence. On September 30, 2009, the transcript (Tr.) was received. 
 
Findings of Fact 
 
 In Applicant’s Answer to the SOR, he admitted all the factual allegations, with 
explanations. Applicant’s admissions to the SOR allegations are incorporated herein. 
After a thorough review of the record, pleadings, exhibits, and testimony, I make the 
following additional findings of fact: 
 
 Applicant is a 43-year-old information technology (IT) technician who has worked 
for various defense contractors over the past few years. He is currently unemployed and 
seeking to obtain a security clearance. If a clearance is obtained, a DoD contractor 
intends to hire him. Applicant received a U.S. Army certificate of appreciation for his 
“auspicious service” as a DoD contractor in Iraq during Operation Iraqi Freedom. 
(Answer to SOR) In 2003, Applicant was out of the state and returned briefly in 2004. 
(Tr. 39)  
 
 In 1996, when Applicant moved to a new state, he turned in his old vehicle 
license plates to his new state’s Department of Transportation (DOT) when he received 
that state’s license plates. In 1999, his old state finally received the plates from his new 
state’s DOT. Applicant does not know why it took this long. However, because the 
plates were not immediately returned to his prior state, that state is demanding a $100 
restoration fee. (Tr. 49) 
 
 From 1999 through 2006, Applicant experienced periods of unemployment. From 
December 1997 through October 1999, Applicant was employed, and from October 
1999 to September 2002, he was again employed, this time with an annual salary of 
$55,000. (Tr. 57) This job was terminated when the company decided to move the 
operation to another state. (Tr. 40) Applicant was out of work, living on unemployment 
compensation, for a year before obtaining a job in Iraq in August 2003. (Tr. 51) That job 
lasted ten months. (Tr. 58) At the time, Applicant was married and his wife was working. 
During the marriage, his wife handled their finances and was responsible for sending 
payments on their debts. (Tr. 71) While out of the country, Applicant assumed his wife 
was paying their joint debts in a timely manner, which was an error. (Tr. 16) 
 
In 2004 or 2005, Applicant obtained another overseas job, this time working in 
Kuwait. (Tr. 41, 51, 58) The job lasted four months and was followed by a four-month 
 
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job in Iraq. (Tr. 59) Applicant returned to the United States for about eight months 
before obtaining his next job in September 2006. (Tr. 42, 59) In April 2006, Applicant 
and his wife of 18 years divorced. (Ex. 1, p. 5, Tr. 42) For eight months in 2006, 
Applicant was unemployed. From September 2006 until September 2007, Applicant was 
employed in Iraq. (Tr. 52)  
 
 In 2007, he obtained a job lasting seven months in the United States. (Tr. 43) In 
March 2008, Applicant completed training and was DoD certified in an area of IT. (Tr. 
42) In February 2008, he accepted a temporary out-of-state job. (Tr. 60) In May 2008, 
the job terminated and he was unemployed until August or September 2008, when he 
obtained a job, which lasted until May 2009. (Tr. 53) When that job terminated, 
Applicant went on government assistance until a month before the hearing. He was on 
food stamps for the last three months before they ran out, and he needs to reapply. (Tr. 
57) A month prior the hearing, he obtained a part-time job as a disk jockey (DJ), which 
pays $100 a night when he works. (Tr. 44, 55) Applicant has a DoD contractor waiting to 
hire him if he obtains a security clearance. (Tr. 72)  
 
 In December 2002, Applicant purchased a computer for $1,200. Applicant quit 
making monthly payments on the computer when he was unemployed and later forgot 
about the debt. (Ex. 5) In 2003 or 2004, he began working with a credit counseling 
service that negotiated with his creditors and established a repayment plan. In 2004, 
Applicant was unemployed for six or seven months. (Ex. 5) He was unable to make his 
$1,283 house payment for four months. In 2005, the house was sold and all obligations 
related to the house were paid. 
 
 In February 2009, Applicant retained a credit service to assist him with his debts. 
(Ex. 6, p. I-19, Tr. 36) The credit service contacted his creditors asking that they verify 
their accounts with Applicant. The credit service informed Applicant of his consumer 
credit rights. Establishing credit, paying the smaller debts first, seeking to have the 
interest rate lowered, and paying the creditors charging the highest interest rate first, 
were also discussed. (Tr. 37)  
 
 In September 2009, Applicant contacted a debt resolution company to establish a 
debt management program. (Ex. J) The program required Applicant to make $138 
monthly payments, which included a $15 monthly service fee. (Ex. J) The plan would 
address the $1,646 credit card debt (SOR ¶ 1.d) and the $3,972 credit card debt (SOR 
¶ 1.i). (Ex. K) Once the creditors verify the debts listed in SOR ¶ 1.a ($244), SOR ¶ 1.e 
($389), and SOR ¶ 1.j ($200), Applicant intends to include these accounts in his debt 
management plan. (Tr. 39) 
 
Applicant and his ex-wife have two children. (Tr. 41) His oldest son, now 24 
years old, is in the Navy, and was shot while serving in Iraq in January 2008. (Tr. 54) 
His son has recovered. His other son is a senior in high school preparing to go to 
college. (Tr. 54) His ex-wife is currently not working. Applicant’s monthly budget lists 
$1,200 monthly child support payments, which he is not paying. (Ex. 6, p. I-16, Tr. 56) 
 
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Currently, he pays her $25 per month and owes her the remainder, which he intends to 
pay when his finances permit it. (Tr. 57)  
 
 A summary of Applicant’s judgment, accounts charged off, accounts placed for 
collection, and other unpaid obligations and their current status follows: 
 
SOR Creditor Amount Current Status 
a Telephone service 
account in collection. 
$244 Applicant is disputing this debt. (Tr. 17) He 
believed he paid his last telephone bill. (Tr. 
62) He has asked the creditor for a detailed 
billing summary. Once verified, Applicant 
intends to include this in his debt 
management plan. (Tr. 39) 
b Credit card company 
judgement. Applicant 
and his now ex-wife 
each had a credit card.  
$5,815 
 
This is his ex-wife’s debt. (Tr. 45) Applicant 
disputed this debt and creditor agreed to 
remove it from his CBR because Applicant 
was only an authorized user on the card. 
(Ex. B, Tr. 26, 34)  
c Account placed for 
collection. 
$404 
 
Unpaid. Debt incurred for a urinalysis. If 
Applicant was hired the company would 
pay this debt. If not hired, Applicant would 
be responsible for paying it. Applicant was 
not hired. (Ex. C, Tr. 39) 
d Credit card account was 
charged off as a bad 
debt. 
$1,585 Included in Applicant’s debt management 
plan. (Ex. J)  
e Television service 
account placed for 
collection. (Ex. 6, Ex. E)  
$389 Applicant is disputing this debt. (Tr. 17) 
Equipment was returned and the bill paid. 
He has asked the creditor for a detailed 
billing summary. Once verified, Applicant 
intends to include this in his debt 
management plan. (Tr. 39) 
f Alarm monitoring 
company account 
placed for collection. 
(Ex. F) 
$126 Applicant provided no documentation that 
this debt has been added to his debt 
management plan. (Tr. 39)  
g Cable account placed 
for collection. 
$185 Paid. Ex. G 
h Cable account placed 
for collection. 
$185 This was not Applicant’s account. (Ex. G)  
i Credit card account 
placed for collection. 
$3,972 In August 2004, a consumer counseling 
service made a $58 payment. (Ex. I) The 
debt is included in Applicant’s current debt 
 
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management plan. (Ex. J)  
j Division of Motor 
Vechicles tax lien. 
 
$100 Applicant is disputing this debt. (Tr. 17) The 
state where he previously lived is 
demanding $100 restoration fee. (Tr. 49)  
k Computer account 
placed for collection. 
$2,387 Applicant offered to settle. Creditor stated it 
would not open a closed account and had 
sent the account to a collection firm. (Ex. 
H) That firm has offered a settlement of 
three monthly payments of $471. (Tr. 49, 
50)  
 Total debt listed in SOR $15,392  
 
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. 
 
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 
 
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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. 
 
 The record evidence supports a conclusion Applicant has a history of financial 
problems. The SOR reflects a judgment and ten past due obligations, which total 
approximately $15,500. 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 are 
potentially applicable: 
 
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(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. 
 
Applicant’s delinquent debts are “a continuing course of conduct” under the 
Appeal Board’s jurisprudence. See ISCR Case No. 07-11814 at 3 (App. Bd. Aug. 29, 
2008) (citing ISCR Case No. 01-03695 (App. Bd. Oct. 16, 2002)). Nine SOR debts 
remain unpaid or unresolved, which makes them recent and numerous. AG ¶ 20(a) 
does not apply. 
 
The DOHA Appeal Board has previously noted that an applicant is not required 
to be debt-free or to develop a plan for paying off all debts immediately or 
simultaneously. All that is required is that an applicant act responsibly given his 
circumstances and develop a reasonable plan for repayment, accompanied by 
“concomitant conduct,” that is, actions which evidence a serious intent to effectuate the 
plan. See ISCR Case No. 07-06482 at 3 (App. Bd. May 21, 2008).  
 
Due to circumstances beyond his control, specifically four periods of 
unemployment, Applicant has been unable to make progress on paying his bills. The 
Appeal Board’s discussion of AG & 20(b) in ISCR Case No. 08-06567 (App. Bd. Oct. 
29, 2009) clarifies the applicability of this mitigating condition when an Applicant is 
unable to make substantial progress on delinquent debts after circumstances outside an 
applicant’s control cause delinquent debt. The Appeal Board at 3 determined that 
administrative judge erred when he failed to explain, 
 
. . . what he believes that Applicant could or should have done under the 
circumstances that he has not already done to rectify his poor financial 
 
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condition, or why the approach taken by Applicant was not “responsible” in 
light of his limited circumstances.  
 
What constitutes sufficient responsible behavior to mitigate concerns depends on 
the facts of a given case. In the circumstances at issue here, Applicant was unemployed 
from August 2002 to August 2003, for six months in 2004, eight months in 2006, for four 
months in 2008, and for five months in 2009. Just prior to the hearing, Applicant was 
living on food stamps and government assistance. If he obtains his clearance, he has a 
job waiting for him with a DoD contractor. Additionally, in 2006 his marriage of 18 years 
ended, with the financial burden that accompanies divorce including a child support 
obligation. These unexpected events were beyond his control. AG & 20(b) applies. 
 
Applicant has acted responsibly given his limited resources. The SOR lists 11 
past due obligations totaling approximately $15,500. Applicant has paid one debt SOR 
& 1.g, $185) He has disputed two debts (SOR & 1.b, $5,815 and SOR & 1.h, $185), 
totaling $6,000. He has been told the largest of the SOR debts, the $5,815 credit card 
judgment (SOR & 1.b), will be removed from his CBR since he was only an authorized 
user on his wife’s credit card. He has arranged a debt management plan for three debts 
(SOR & 1.d, $1,585, SOR & 1.f, $126, and SOR & 1.i, $3,972), which total 
approximately $5,700. Applicant is disputing two other debts (SOR & 1.a, $244 and 
SOR & 1.e, $389), which total $600. However, there is no final resolution as to his 
disputes.  
 
Three debts (SOR & 1.c, $404, SOR & 1.j, $200, and SOR & 1.k, $2,387), which 
total approximately $3,000 remain unpaid. Applicant financial situation prevents him 
from accepting the settlement offer on SOR & 1.k, $2,387.  
 
As previously stated, Applicant has three debts included in his debt management 
plan, which shows some a good-faith effort to repay overdue creditors or otherwise 
resolve debts. Applicant does not receive full mitigation under AG ¶ 20(d) because this 
arrangement was only recently made and there is no “meaningful track record” of debt 
payment. 
 
The Appeal Board has addressed a key element in the whole person analysis in 
financial cases stating: 
 
In evaluating Guideline F cases, the Board has previously noted that the 
concept of “‘meaningful track record’ necessarily includes evidence of 
actual debt reduction through payment of debts.” However, an applicant is 
not required, as a matter of law, to establish that he has paid off each and 
every debt listed in the SOR. All that is required is that an applicant 
demonstrate that he has ‘ . . . established a plan to resolve his financial 
problems and taken significant actions to implement that plan.’ The Judge 
can reasonably consider the entirety of an applicant’s financial situation 
and his actions in evaluating the extent to which that applicant’s plan for 
the reduction of his outstanding indebtedness is credible and realistic. See 
 
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Directive ¶ E2.2(a) (‘Available, reliable information about the person, past 
and present, favorable and unfavorable, should be considered in reaching 
a determination.’) There is no requirement that a plan provide for 
payments on all outstanding debts simultaneously. Rather, a reasonable 
plan (and concomitant conduct) may provide for the payment of such 
debts one at a time. Likewise, there is no requirement that the first debts 
actually paid in furtherance of a reasonable debt plan be the ones listed in 
the SOR. 
 
ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008) (internal citations 
omitted).  
 
Applicant has acted responsibly given his limited income. There is little else 
Applicant can currently do to rectify his poor financial condition. Applicant’s approach is 
responsible in light of his limited resources. Neither the remaining $3,000 of unpaid 
debt, nor his only recent enrollment in a debt management plan raises concerns about 
his current reliability, trustworthiness, or good judgment.  
 
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 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 a security 
clearance must be an overall commonsense judgment based upon careful consideration 
of the guidelines and the whole person concept.  
 
The whole person factors against granting Applicant a clearance are significant; 
however, they do not warrant revocation of his security clearance. Applicant’s failure to 
pay or resolve his just debts in accordance with contracts he signed was not prudent or 
responsible. He has a history of financial problems. However, the debts incurred were 
not the type that indicates poor self-control, lack of judgment, or unwillingness to abide 
by rules and regulations. Additionally, his financial difficulties were increased because 
he was working overseas and relied upon his then wife to pay their debts in a timely 
manner with the money he was sending her.  
 
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The rationale for granting Applicant’s clearance is more substantial. He was 
forthright and candid in his security clearance application, his responses to DOHA 
interrogatories, his responses to an OPM investigator, his SOR response, and in his 
testimony at his hearing about his financial problems. Several problems beyond his 
control adversely affected his financial status. In the past eight years, he has had four 
periods of unemployment and his 18-year marriage ended in divorce. He has arranged 
to start payment plans on three of the debts. I am confident he will keep his promise to 
pay his delinquent debts.  
 
Applicant deserves substantial credit for his service in Southwest Asia at various 
times from 2003 through 2007. He has demonstrated his loyalty, patriotism, and 
trustworthiness through his service to the DoD as a contractor. He has served in the 
combat zone of Iraq risking his life to support DoD missions in that country. His son was 
wounded in the service of his country. There is simply no reason not to trust this 
patriotic American with our nation’s secrets. 
 
Applicant is 43 years old. He has demonstrated self-discipline, responsibility and 
dedication. His financial problems were caused by his unemployment, and family 
problems, rather than by his misconduct or irresponsible spending. Applicant is an 
intelligent person, and he understands his need to be financially responsible.  
 
Overall, the record evidence leaves me without questions or doubts as to 
Applicant’s eligibility and suitability for a security clearance. For all these reasons, I 
conclude Applicant mitigated 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: FOR APPLICANT 
 
  Subparagraphs 1.a—1.k:  For Applicant 
 
Conclusion 
 
 In light of all of the circumstances presented by the record in this case, it is 
clearly consistent with the national interest to grant Applicant eligibility for a security 
clearance. Eligibility for access to classified information is granted.  
 
 
_______________________ 
CLAUDE R. HEINY II 
Administrative Judge