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DEPARTMENT OF DEFENSE 
DEFENSE OFFICE OF HEARINGS AND APPEALS 
 
           
             
 
 
In the matter of: ) 
 ) 
  ) ISCR Case No. 09-04409 
  ) 
 ) 
Applicant for Security Clearance ) 
 
 
 
 
For Government: Stephanie C. Hess, Esquire, Department Counsel 
For Applicant: Pro se 
 
 
 
 
______________ 
 
Decision 
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DAM, Shari, Administrative Judge: 
 
 Based upon a review of the record evidence as a whole, eligibility for access to 
classified information is granted. 
 
On March 27, 2009, Applicant submitted a Questionnaire for National Security 
Positions (SF 86). On September 17, 2009, the Defense Office of Hearings and Appeals 
(DOHA) issued Applicant a Statement of Reasons (SOR) 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 Adjudicative Guidelines (AG) effective within the Department of Defense for SORs 
issued after September 1, 2006.  
 
 Applicant answered the SOR in writing on September 29, 2009, and requested a 
hearing before an administrative judge. On January 22, 2010, DOHA assigned the case 
 
 
 
 
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to me. On February 3, 2010, DOHA issued a Notice of Hearing, setting the case for 
February 23, 2010. The case was heard as scheduled. Department Counsel offered 
Government Exhibits (GE) 1 through 4 into evidence without objection. Applicant 
testified and called one witness. He offered Applicant Exhibits (AE) A through D into 
evidence without objection. DOHA received the hearing transcript on March 3, 2010. 
The record remained open until March 12, 2010, to give Applicant an opportunity to 
submit information. He timely submitted four additional documents that I marked as AE 
E through H and admitted into the record without objection from Department Counsel.                          
 
Findings of Fact 
 
 In his Answer to the SOR, Applicant admitted all allegations contained in ¶ 1, 
except those contained in ¶¶ 1.e, 1.l, and 1.o. His admissions are incorporated into the 
findings below. He provided extensive explanations for each debt and some 
documentation pertinent to specific debts. 
 
 Applicant is 33 years old and married. He and his wife have three children, ages 
7, 4 and 3. At the time of the hearing, his wife was pregnant with their fourth child. He 
has two children, ages 13 and 11, from a previous marriage for whom he pays child 
support. He earned a bachelor’s degree in mechanical engineering technology in May 
2003. He completed a master’s degree in information technology management in May 
2009 through an on-line program. In February 2007, he began a position as an engineer 
with a defense contractor.  
 
 In his Answer, Applicant explained in detail the history of his financial difficulties 
and delinquent debts, which began in January 2002 and continue to the present. From 
January 2002 to July 2003, he and his wife were college students with limited income 
and medical coverage when their first child was born. In August 2003, they moved to 
another state and lived with their families to save money. In December 2003, they 
rented an apartment that became too expensive for them. In July 2004, his wife quit her 
position and they moved to another state to live with her mother. For the next three 
months, neither he nor his wife found employment, further exacerbating their financial 
situation. They subsequently received food stamps and public aid. In September 2004, 
his wife found a job and in October 2004, he found work installing cable systems. His 
wife gave birth to their second child during this time frame and stopped working.  
 
 In August 2005, Applicant was involved in a serious car accident and was placed 
on disability. In November 2005, his wife was offered a position in another state and 
they decided to relocate. In February 2006, his wife resigned from her position because 
of family issues. A few months later, she found a part-time position. In May 2006, they 
relocated again to live with her mother. He remained unemployed until June 2007, when 
he obtained a position with his current employer, which was located approximately 360 
miles away from his home. His wife found a part-time position while he commuted on 
weekends between his job and the family’s residence. Their third child was born during 
this time. In April 2008, he was laid off and received unemployment benefits for a few 
months until he found an internship with a city department. In December 2008, his 
 
 
 
 
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previous employer offered him another position. He acknowledged that his delinquent 
debts accumulate over this period of time, as a result of a lack of stable employment 
and his need to maintain two residences while working away from home for almost two 
years. (Answer.)   
 
 Based on credit bureau reports dated April 2009 and August 2009, the SOR 
alleged that Applicant accumulated 29 delinquent debts totaling over $38,000, of which 
he admitted to owing about $23,000. A summary of status of the debts is listed below: 
   
(1) Applicant is making monthly payments of $80 on the $6,046 judgment alleged 
in ¶ 1.a. The debt is owed to the same credit card company listed in ¶ 1.j for 
expenses he incurred during the above stated time frame. He started making 
payments in July 2009. The balance is $5,996, as interest continues to accrue 
on the debt. (AE H; Tr. at 36.) 
 
(2) Applicant paid the $66 debt alleged in ¶ 1.h. (AE A.)  
 
(3) Applicant paid the $21 debt alleged in ¶ 1.cc. (AE A.) 
 
(4) Applicant is not responsible for the $15,717 debt alleged in ¶ 1.o. The credit 
card charges were fraudulently placed on the account by his brother, who 
gained access to Applicant’s personal information and opened the account. 
The matter is being resolved through the credit card company’s fraud division. 
His brother accepted responsibility for the debt. (AE D; Answer.) 
 
(5)  Ten of the alleged delinquent debts are unpaid medical bills totaling $4,205. 
Applicant admitted owing the debts and will pay them as money becomes 
available. They arose during periods that he and his wife did not have medical 
insurance or sufficient monies to make the payments. (SOR ¶¶ 1.c, 1.k, 1.r, 
1.s, 1.t, 1.v, 1.w, 1.y, 1.aa, and 1.bb.)   
 
(6) In August 2009, Applicant disputed the $432 debt listed in ¶ 1.e. The 
telephone company validated the debt, but he continues to dispute it, claiming 
he never had a telephone with the creditor. (Tr. 41.) 
 
(7) Applicant admitted owing the debts alleged in ¶¶ 1.b, 1.d, 1.f, 1.g, 1.i, 1.m, 
1.n, 1.p, 1.q, 1.u, 1.x, and 1.z, which total $13,058. The larger debts are owed 
to credit card companies for expenses he charged while he was unemployed. 
He wrote letters to these creditors in August 2009, requesting verification 
and/or authorization to begin making minimal monthly payments on some of 
them. He heard from one credit card company that wanted a large settlement 
payment, which he cannot afford. (AE B.) To-date they remain unpaid or 
unresolved because he does not have sufficient income. 
 
 In August 2009, Applicant began attending a 13-week financial counseling 
course offered through his church. He completed the course in December. (Answer; Tr.  
 
 
 
 
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at 43.) He submitted a copy of his budget. His net monthly income is approximately 
$3,427. His expenses are $2,800 and include a $926 child support payment of which 
$100 is for arrears. After making the $80 payment on the outstanding judgment alleged 
in ¶ 1.a, he has about $500 remaining for other expenditures. (AE G.) At the end of 
March 2009, his wife started a federal position with an annual salary of $47,448. (AE F.) 
In May 2010, he will begin making $350 monthly payments on his outstanding student 
loans.1 He no longer uses credit cards. (Tr. at 56.) 
 
 Applicant’s co-worker testified on his behalf. The co-worker, a liaison engineer, 
has known Applicant since spring of 2007.  He considers Applicant to be a good worker 
and representative for the company. Over the course of working with Applicant, he has 
never observed Applicant engaging in behavior that would lead him to believe that 
Applicant poses a security risk. (Tr. at 24-29.) 
 
 Applicant testified candidly about his financial situation. He accepted his 
responsibility to pay the delinquent debts, which total approximately $23,000, and 
expressed a willingness to do so when money becomes available. His wife, who 
attended the hearing, is clearly aware of the situation and his financial obligations to 
address his delinquent debts.  
  
Policies 
 
 When evaluating an applicant’s suitability for a security clearance, the 
administrative judge must consider the AG. In addition to brief introductory explanations 
for each guideline, the AG list potentially disqualifying and mitigating conditions, which 
are useful 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. 
 
                                            
1 Applicant’s outstanding student loans total $93,631. His wife’s loans total $23,630.   
 
 
 
 
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According to Directive ¶ E3.1.14, the Government must present evidence to 
establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, an 
“applicant is responsible for presenting witnesses and other evidence to rebut, explain, 
extenuate, or mitigate facts admitted by applicant or proven by Department Counsel and 
has the ultimate burden of persuasion as to obtaining a favorable clearance decision.” 
 
A person who seeks access to classified information enters into a fiduciary 
relationship with the Government predicated upon trust and confidence. This 
relationship transcends normal duty hours and endures throughout off-duty hours. The 
Government reposes a high degree of trust and confidence in individuals to whom it 
grants access to classified information. Decisions include, by necessity, consideration of 
the possible risk an applicant may deliberately or inadvertently fail to protect or 
safeguard classified information. Such decisions entail a certain degree of legally 
permissible extrapolation as to potential, rather than actual, risk of compromise of 
classified information. 
 
Section 7 of Executive Order 10865 provides that decisions shall be “in terms of 
the national interest and shall in no sense be a determination as to the loyalty of the 
applicant concerned.”  
  
Analysis 
 
Guideline F, Financial Considerations 
 
The security concern for financial considerations is set out in AG & 18:       
 
Failure or inability to live within one’s means, satisfy debts, and meet 
financial obligations may indicate poor self-control, lack of judgment, or 
unwillingness to abide by rules and regulations, all of which can raise 
questions about an individual’s reliability, trustworthiness and ability to 
protect classified information. An individual who is financially 
overextended is at risk of having to engage in illegal acts to generate 
funds.  
AG ¶ 19 describes two conditions that could raise a security concern and may be 
disqualifying: 
(a) inability or unwillingness to satisfy debts; and 
(c) a history of not meeting financial obligations. 
Applicant admitted that he began accruing debt in January 2002, which he has 
been unable to pay or resolve until late 2009. The evidence supports the application of 
the above disqualifications. 
 
 
 
 
 
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AG ¶ 20 provides four conditions that could mitigate security concerns arising 
under this guideline: 
(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 started accumulating debt in January 2002 while he was in college. He 
continued accumulating debts that he could not pay until 2009, as a result of 
unemployment, underemployment, lack of medical insurance, relocations for 
employment purposes, and a period of disability. Some of these circumstances were 
beyond his control. However, there is no evidence to indicate that over the course of 
those seven years, Applicant took steps to responsibly manage the accumulating 
delinquent debts. Hence, AG ¶ 20(b) has limited application. 
  
Applicant presented evidence that he obtained financial counseling, established 
a budget, and subsequently contacted all of his creditors to either verify the debts or 
work out minimal payments. Recently, his wife began a well-paying position that will 
provide additional income to the family budget and assist in the resolution of Applicant’s 
delinquent debts. The evidence indicates that his financial obligations are slowly being 
addressed. AG ¶ 20(c) has some application.  
 
Applicant paid two small debts and is making monthly payments on a large 
judgment. He also contacted other creditors and offered to resolve some of the debts 
through small monthly payments. His attitude and actions demonstrate a good-faith 
effort to resolve his debts and warrant a partial application of AG ¶ 20(d).  
 
AG ¶ 20(e) is applicable in this case. Applicant successfully disputed the largest 
debt alleged in the SOR after his brother fraudulently used his identity to open the 
account. He continues to dispute another debt because he never had an account with 
the company.  
 
 
 
 
 
 
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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). They include the following:  
 
(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 include 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. Applicant is a 33-year-old married 
man with six children. Until he obtained his current position, he and his wife experienced 
long periods of inadequate income due to multiple factors, some of which included 
immaturity. At this juncture in his life, he is becoming financially solvent and capable of 
resolving his delinquent debts, for which he repeatedly expressed responsibility. He has 
matured over the past couple years and acknowledged the importance of maintaining 
sound financial practices and good credit. He stated his willingness to continue paying 
some of the small debts alleged in the SOR, and then begin resolving the larger ones as 
money becomes available. Given his wife’s new position and the additional income, he 
should be able to slowly resolve his delinquent debts and pay current obligations. Based 
on the evidence and his testimony, it is unlikely that similar financial problems will recur, 
as he is clearly aware of the negative effect that future delinquencies will have on his 
eligibility to maintain a security clearance and retain his employment.   
 
After weighing the disqualifying and mitigating conditions, and all facts and 
circumstances in the context of the whole person, I conclude that Applicant mitigated 
the security concerns pertaining to financial considerations. Overall, the record evidence 
leaves me without questions or doubts as to Applicant’s 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 ¶ E3.1.25 of Enclosure 3 of the Directive, are: 
 
  Paragraph 1, Guideline F:    FOR APPLICANT 
 
  Subparagraphs 1.a through 1.cc:   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. 
 
 
                                                     
_________________ 
SHARI DAM 
Administrative Judge