DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 09-05497 
  ) 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Nicole Noel, Esquire, Department Counsel 
For Applicant: Pro se 
 
______________ 
 
Decision 
______________ 
 
CREAN, Thomas M., Administrative Judge: 
 
Applicant submitted an Electronic Questionnaire for Investigations Processing (e-
QIP) as part of his employment with a defense contractor on September 23, 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 
October 15, 2009, to Applicant detailing security concerns for financial considerations 
under Guideline F, and personal conduct under Guideline E. 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 in the Department of 
Defense on September 1, 2006. Applicant acknowledged receipt of the SOR on October 
20, 2009. 
 
 Applicant provided answers to the SOR on both November 2 and November 6, 
2009. He admitted eight of the allegations under Guideline F and denied one. He denied 
all allegations under Guideline E. He provided an explanation for his denials, and 
requested a hearing before an administrative judge. Department Counsel was prepared 
to proceed on December 9, 2009, and the case was assigned to me on February 22, 
2010. DOHA issued a Notice of Hearing on March 10, 2010, scheduling a hearing for 
 
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April 7, 2010. I convened the hearing as scheduled. The government offered five 
exhibits, marked Government Exhibits (Gov. Ex.) 1 through 5 which were admitted 
without objection. Applicant and one witness testified on his behalf. Applicant offered 13 
exhibits marked Applicant Exhibits (App. Ex.) A through M, which were admitted without 
objection. DOHA received the transcript of the hearing (Tr.) on April 15, 2010. I kept the 
record open for Applicant to submit additional documents. Applicant timely filed three 
additional documents, marked App. Ex. N through P, which were received without 
objection. (See, Gov. Ex. 6, Memorandum, dated April 20, 2010). Based on a review of 
the case file, pleadings, exhibits, and testimony, eligibility for access to classified 
information is granted.  
 
Findings of Fact 
 
 Applicant admitted eight of the nine factual allegations in the SOR under 
Guideline F with explanation. He also denied the four factual allegations under 
Guidelines E. I included Applicant's admissions and explanation 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 62 years old, and has worked as a senior analyst, military strategist, 
and history teacher at a military war college and policy office for over two years. 
Applicant served five years on active duty in the Navy as a corpsman, during which he 
served two tours in Vietnam, and was awarded a Bronze Star, Meritorious Service 
Medal, and a Purple Heart. After his Navy tour of active duty, he entered college 
receiving a Bachelor's degree in history in 1978. He also received a Master's degree in 
history in 1995. He has since authored and published five books on military history. 
After receiving his degree, he served on active duty in the Marine Corps for 19 years 
retiring in October 1962 as a Major. He held a security clearance while on active duty. 
Applicant then served with the Marines as a civilian on the west coast until 1997. His 
position was reorganized, and Applicant and his family moved to the east coast and he 
became a teacher and tactical officer at a state-run military college. After eight years, 
Applicant thought he could easily change positions and find employment, so he left the 
college. He was unemployed for over eight months. He took a position with a defense 
contractor working as a military doctrine writer at a military organization, and became a 
geographical bachelor in 2006. He left that position after about a year because his 
administrative paperwork, including a security clearance, was not completed. He 
worked in the private sector for approximately another year until that company went out 
of business. In September 2008, he was rehired by the same defense contractor he 
previously worked for as a military doctrine writer. (Tr. 17-21; Gov. Ex. 1, E-QIP, dated 
September 17, 2008; App. Ex. A, DD 214, dated October 30, 1992; App. Ex. B, Bronze 
Star Citation with Combat Distinguishing Device, dated April 1970; App. Ex. C, 
Commander's letter for award of Bronze Star, dated April 29, 1997; App. Ex. D, Purple 
Heart Citation, dated September 2, 1970; App. Ex. E, Meritorious Service Medal 
Citation, dated October 1992; App. Ex. F, App. Ex. G, App. Ex. H, Retirement Citations, 
dated October 1992) 
 
 
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Applicant has been married for over 16 years and has two children, ages 14 and 
16. His present monthly salary and retired pay is $5,600, and his wife also has a 
monthly salary of about $800 for a combined monthly income of $6,400. Applicant and 
his wife have monthly expenses of $5,490 leaving about $900 in monthly disposable or 
discretionary funds. (Tr. 26-28; Gov. Ex. 5, Personal Financial Statement, dated April 7, 
2010). 
 
When Applicant retired from the Marine Corps in 1992, he and his wife were both 
employed and their yearly income was between $160,000 and $170,000, including 
Applicant's retirement pay. Their standard of living was based on this level of yearly 
income. In 1996/1997, Applicant's wife's job was eliminated through re-organization. 
Shortly thereafter, Applicant's job was eliminated in a re-organization, and Applicant and 
his wife were no longer employed. They started to incur financial problems and 
delinquent debt in 1997 when they were unemployed. Applicant was hired as a teacher 
and tactical officer at an east coast state-run military college for substantially less 
salary. After moving across country, which cost Applicant over $35,000 of his own 
funds, he worked for eight years at the college. His salary level, including his military 
retirement pay, was approximately $60,000. They changed their lifestyle and adjusted to 
the lower income and have not incurred any additional delinquent debts. The drain on 
their finances from the move, from periods of subsequent unemployment, and from 
lower salary, added to their financial problems. Since Applicant has taken the position 
with the defense contractor as a senior military analyst and teacher, their finances have 
improved, and they continue to live within their income and means. Appellant's wife 
manages all of the family finances, including payment of bills. (Tr. 29-32; 61-65) 
 
Applicant received the offer for a military analyst position with the defense 
contractor in 2006. He accepted the offer and was asked to complete a Security 
Clearance Application (SCA) as part of his employment. When completing that form, 
Applicant answered "no" to the financial questions. At the time, he knew that he and his 
wife had some financial problems but he thought they were under control. Since his wife 
handled the finances, he was not completely familiar with the circumstances of their 
finances. He did not know what bills were outstanding, for how long, and in what 
amount. He knew they had tried to pay bills on time and never missed a mortgage 
payment. They never refinanced and had not taken out any loans recently. They did not 
have a tax lien since he knew the tax lien was filed in error by the state. His request for 
a security clearance was not granted for financial considerations. He appealed and the 
appeal was still pending after more than a year. Applicant decided to accept another job 
and the security clearance process was terminated. (Tr. 30-39; Gov. Ex. 2, e-QIP, dated 
June 21, 2006)  
 
When Applicant accepted his new position in 2008 with the same defense 
contractor, he was required to submit another security clearance application. He was 
provided the security clearance application he filed in 2006, and asked to update it. 
Applicant was in one location and his family was in another location. He made some 
changes concerning his employment status and jobs. He again answered "no" to 
financial questions. He noted in the section concerning previous investigations for 
 
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security clearance that his security clearance application in 2006 had been questioned 
concerning financial matters but the application was withdrawn before the process was 
completed. On the day he completed the application, he became sick and spent the 
next two weeks recovering form acute pancreatitis. He did not have any financial 
information with him when he completed the application. He did not believe he was in 
serious financial trouble even though he knew he had some delinquent debts. He had 
not missed any mortgage or car payments. He had debts but not more than 90 or 180 
days past due. He did not know of any judgments or liens against him. He believed he 
was current on his taxes. He and his wife had an agreement with the state to pay state 
taxes and they were being paid. Since his wife managed the finances, he was not fully 
aware of the details of their finances and debt payments. He responded to the financial 
questions as best he could. (Tr. 39-59) 
 
Credit reports ( Gov. Ex. 3, Credit report, dated September 21, 2009; and Gov. 
Ex. 4, Credit report, dated August 9, 2006) show the following delinquent debts for 
Applicant: a judgment in favor of a merchant for $1,303 (SOR 1.a); a state tax lien for 
$3,104 (SOR 1.b); a state tax lien for a different state for $1,449 (SOR 1.c); a medical 
debt for $350 (SOR 1.d); a charged off bank credit card for $6,937 (SOR 1.e); a 
gasoline company credit card charged off for $94 (SOR 1.f); a department store credit 
card in collection for $14,475 (SOR 1.g); a credit card charged off for $12,020 (SOR 
1.h); another credit card charged off for $20,252 (SOR 1.i); and a credit union account 
in collection for $1,996 (SOR 1.j). The balance owed on these accounts is 
approximately $62,000. The majority of the unpaid debt, about $53,700, is from four 
credit accounts incurred on the west coast prior to 1997. (Tr. 63-64) 
 
The delinquent debt at SOR 1.a is a judgment from a company which performed 
cleaning service at Appellant's home after a water problem. Appellant's wife thought the 
bill had been paid by their insurance company. The first she knew of the debt and 
judgment was when the judgment notice was placed on their front door. Appellant's wife 
paid the judgment the next day. She does not believe she even informed Appellant of 
the judgment. (Tr. 65, Response to SOR, Enclosure 1, Satisfaction, dated May 4, 2006)  
 
The delinquent debt at SOR 1.b is for a property tax lien placed against Applicant 
by his former state of residence. Applicant and his family had moved from the property 
subject to the tax lien prior to incurring the tax. The state released the lien since it was 
recorded in error. (Tr. 66, Response to SOR, Enclosure 3, Release of Lien, dated July 
17, 2007) 
 
The delinquent debt at SOR 1.c is for an income tax lien from Applicant's state of 
residence. The lien has been paid and released. (Tr. 66-67; Response to SOR, 
Enclosures 2, Release, dated June 5, 2008) 
 
The delinquent debt at SOR 1.d is for a medical debt. The bill has been paid in 
full. (Tr. 68; Response to SOR, Enclosure 4, Letter, dated October 6, 2007). 
 
 
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The delinquent debt at SOR 1.f is for a gas credit card. The debt is paid in full. 
(Tr. 74-76; App. Ex. M, Letter, dated January 29, 2009) 
 
The delinquent debt at SOR 1.j is for a credit union loan. The debt has been paid 
in full. (Tr. 76-78; Response to SOR, Enclosure 5, Letter, dated October 28, 2009) 
 
The delinquent debts at SOR 1.e, 1.g, 1.h, and 1.i, are for credit cards and loans 
Applicant and his wife used when they were first unemployed in 1997, and had to move 
to the east coast for employment. The amount of the debt listed in the SOR is not the 
amount Applicant and his wife used. The SOR amounts include extensive penalties and 
interest accruals. The debts have not been paid. However, Applicant and his wife 
contacted all of the creditors and have received settlement offers from them. (App. Ex. I, 
Letter, dated January 26, 2009; App. Ex. J, Letter, dated January 23, 2009; App. Ex. K, 
Letter, dated January 27, 2009; App. Ex. L, Letter, dated January 30, 2009; App. Ex. P, 
letter, dated April 9, 2010) Applicant and his wife tried a few years ago to refinance their 
home and take the equity from the house to pay the settlement offers. However, the 
arrangements were not completed before the housing downturn and the tightening of 
credit stopped the transaction. Applicant and his wife recently were contacted by their 
mortgage company and they have again made arrangements to receive equity from 
their home to pay these four debts. (App. Ex. N, Letter, dated April 114, 2010; App. Ex. 
O, Truth in Lending Statement, dated April 12, 2010) Upon completion of the 
arrangements and payment of the equity in the house, Applicant and his wife will pay 
the settlement offers. (Tr. 68-71)  
 
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 
 
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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 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.  
 
 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. Applicant's delinquent debts 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 debts when he and his wife lost their lucrative 
employment, had to use credit to pay their debts, and incurred additional moving 
expenses when they moved across country for new jobs.  
 
 
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 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). The mitigating conditions apply. Applicant and his wife had 
good jobs receiving excellent pay. When the companies reorganized, both lost their 
employment and used credit cards and loans to assist in paying their debts. They had to 
move across country to find new work incurring unreimbursed moving expenses. 
Applicant's salary at this new position was only about 40% of what he had been 
receiving. They changed their life style and have not incurred additional debt. The loss 
of a job and income is unlikely to recur since Applicant has been successfully employed 
by a defense contractor. The debt occurred through circumstances beyond Applicant's 
control since it resulted from the job reorganization. Applicant acted responsibly under 
the circumstances. He has been continuously employed since moving. He paid or is 
paying almost all of his debts, and is not incurring additional delinquent debt. One debt 
was a state property tax lien that Applicant contested, and it was released as filed in 
error. He paid five of the debts and has a plan to pay the remaining four debts. He acted 
responsibly under the circumstances by paying most of his past due debts and staying 
current with his present financial obligations. Since his debts have been or are being 
paid, his finances do not cast doubt on his current reliability, trustworthiness, or good 
judgment.  
 
I considered FC MC AG ¶ 20(d) (the individual has initiated a good-faith effort to 
repay the overdue creditors or otherwise resolve debts). For FC MC AG ¶ 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, concrete method of handling debts is 
needed. Applicant has sufficient discretionary funds to pay his delinquent debts. He 
presented sufficient information to show that five of the ten delinquent debts have been 
paid in full. One debt was released since it was filed in error. He has a plan to pay the 
remaining four debts and is executing that plan. Applicant's action in contacting his 
creditors and arranging to make payments on the debts demonstrates a good-faith effort 
to repay his creditors. 
 
Personal Conduct 
 
 A security concern is raised because conduct involving questionable judgment, 
untrustworthiness, unreliability, or unwillingness to comply with rules and regulations 
can raise questions about an individual’s reliability, trustworthiness, and ability to protect 
classified information. Of special interest is any failure to provide truthful and candid 
answers during the security clearance process or any other failure to cooperate with the 
security clearance process. (AG ¶ 15) Personal conduct is always a security concern 
because it asks the central question does the person’s past conduct justify confidence 
the person can be entrusted to properly safeguard classified information. The security 
 
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clearance system depends on the individual providing correct and accurate information. 
If a person conceals or provides false information, the security clearance process 
cannot function properly to ensure that granting access to classified information is in the 
best interest of the United States Government. Applicant’s incorrect answers to 
questions on his security clearance application concerning his finances raise a security 
concern under Personal Conduct Disqualifying Condition (PC DC) AG ¶ 16(a) (the 
deliberate omission, concealment, or falsification of relevant and material facts from any 
personnel security questionnaire, personal history, or similar form used to conduct 
investigations, to determine security eligibility or trustworthiness). 
 
 Applicant denied intentional falsification. While there is a security concern for an 
omission, concealment, or falsification of a material fact in any written document or oral 
statement to the government when applying for a security clearance, every omission, 
concealment, or inaccurate statement is not a falsification. A falsification must be 
deliberate and material. It is deliberate if it is done knowingly and willfully with intent to 
deceive. When Applicant completed his security clearance applications in 2006 and 
2008, he did not know the full extent of his financial issues. His wife managed the family 
finances and at the time they were located in two different areas. Applicant knew of 
some financial problems but did not believe the problems were serious or to the extent 
to be included on the security clearance application. He did not know of a judgment 
because his wife did not tell him about it and she paid it immediately. He knew that a tax 
lien had been entered erroneously and another had been paid. He never had 
repossessions or filed bankruptcy. He was current with his taxes. He knew that he and 
his wife had some past due debts but they were either paid or being paid, or they had a 
plan to pay any remaining debts. Appellant honestly and reasonably believed his 
finances were under control and being paid. He also noted that his suitability for access 
to classified information had been questioned for financial reasons after he submitted 
his 2006 application. This put the government on notice that there may be some 
financial issues concerning Applicant that needed to be investigated. His answers to the 
questions were not deliberately false because of his honest and reasonable belief 
concerning his finances, coupled with his lack of knowledge and information concerning 
the family's finances and debts. Accordingly, his wrong answers were not a deliberate 
intent to deceive. I find for Applicant as to personal conduct. 
 
Whole-Person Analysis  
 
 Under the whole-person concept, the administrative judge must evaluate an 
applicant’s security eligibility by considering the totality of the applicant’s conduct and all 
the circumstances. An 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 
 
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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 a security clearance 
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 that Applicant served 
over 24 years on active duty in the Marines and Navy, and retired with an honorable 
discharge. He received an award for valor while serving on active duty. He also served 
as a civilian for many years and taught at a state-run military college. He is highly 
regarded by his employers.  
 
Applicant must establish a "meaningful track record" of debt payment, including 
evidence of actual debt reduction through payment of debts. He is not required, as a 
matter of law, to establish that he paid each and every debt listed in the SOR. All that is 
required is that he has a plan to resolve his financial problems and takes significant 
action to implement that plan. The entirety of his financial situation and his actions can 
reasonably be considered in evaluating the extent to which his actions to reduce his 
outstanding indebtedness are credible and realistic. 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.   
 
Applicant established a "meaningful track record" of debt payment, including 
evidence of actual debt reduction through payment of debts. Applicant's debts were 
created by circumstances beyond his control. He presented sufficient information to 
show he is taking reasonable and responsible action to resolve his financial issues. He 
paid five of the ten delinquent debts. He established another debt was an error. He has 
a plan to pay the remaining four debts. He has negotiated settlements with these 
creditors and is in the process of refinancing his house to withdraw the equity to pay the 
settlement offers. Applicant's management of his finances and payment of past 
obligations indicates he will be concerned, responsible, and careful regarding classified 
information. Applicant mitigated security concerns based on his finances. Applicant did 
not provide false information concerning his finances with intent to deceive on his 
security clearance application. His explanation for his responses to financial questions 
on his security clearance application mitigates security concerns under personal 
conduct. Overall, on balance the record evidence leaves me without questions and 
doubts as to Applicant’s eligibility and suitability for a security clearance. For all these 
reasons, I conclude Applicant mitigated security concerns arising from financial 
considerations and personal conduct.  
 
 
 
 
 
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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.j:  For Applicant 
 
 Paragraph 2, Guideline E;   FOR APPLICANT 
 
  Subparagraphs 2.a - 2.d:  For Applicant 
 
Conclusion 
 
 In light of all of the circumstances presented by the record in this case, it is 
clearly consistent with national interest to grant Applicant eligibility for a security 
clearance. Eligibility for access to classified information is granted. 
 
 
 
_________________ 
THOMAS M. CREAN 
Administrative Judge