DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 09-05792 
  ) 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Nichole Noel, Esquire, Department Counsel 
For Applicant: Pro se 
 
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Decision 
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CREAN, Thomas M., Administrative Judge: 
 
On June 10, 2009, Applicant submitted an Electronic Questionnaire for 
Investigations Processing (e-QIP) as part of his employment with a defense contractor. 
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 December 11, 2009, to Applicant detailing security concerns for financial 
considerations under Guideline F. 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 January 2, 2010. 
 
 Applicant answered the SOR on January 2, 2010, admitting all but one of the ten 
allegations under Guideline F. He provided a detailed explanation for his response, and 
requested a hearing before an administrative judge. Department Counsel was prepared 
to proceed on March 10, 2010, and the case was assigned to me on March 22, 2010. 
Applicant was stationed in Iraq working for a defense contractor. He returned to the 
United States for some training, and became available for a hearing. DOHA issued a 
Notice of Hearing on April 29, 2010, scheduling a hearing for May 3, 2010. I convened 
 
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the hearing as scheduled. The government offered three exhibits, marked Government 
Exhibits (Gov. Ex.) 1 through 3, which were admitted without objection. Applicant 
testified on his own behalf and introduced three exhibits marked Applicant Exhibits 
(App. Ex.) A through C, which were admitted without objection. DOHA received the 
transcript of the hearing (Tr.) on May 18, 2010. I kept the record open for Applicant to 
submit additional documents. Applicant timely filed three additional documents marked 
App. Ex. D through F, which were received without objection (Gov. Ex. 4, Memorandum, 
dated May 24, 2010). Based on a review of the case file, pleadings, exhibits, and 
testimony, eligibility for access to classified information is granted.  
 
Procedural Issues 
 
 Applicant received the Notice of Hearing on April 29, 2010. Applicant is entitled to 
15 days advance notice of the hearing (Directive ¶ E3.1.8). Applicant discussed with 
myself and Department Counsel the hearing date of May 3, 2010. At the hearing, 
Applicant waived the 15 days notice requirement (Tr. 9-13). 
 
Findings of Fact 
 
 Applicant denied SOR 1.j, but admitted with explanation SOR allegations 1.a - 
1.i. I included Applicant's 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 46 years old, and has worked as a welder for a defense contractor 
for about a year. He graduated from the equivalent of high school in his native country 
and received professional training in the United States as a welder. He came to the 
United States in 1994, and became a United States citizen in 2002. He is married with 
four children, ages 18, 12, 10, and seven months. All of his children live at home. His 
wife is at home with the children, and is not employed outside the home. She worked 
outside the home until their youngest child was born in September 2009. (Tr. 31-35) 
Applicant's monthly net salary is $9,677.51, with monthly expenses of $6,566. He has a 
monthly remainder for discretionary spending of approximately $3,000. Applicant no 
longer uses credit cards but relies solely on his debit card. (Tr. 57-61; Gov. Ex. 2, 
Answers to Interrogatories, Personal Financial Statement, at 52) 
 
Applicant was steadily employed until mid-2008 when his employer finished a 
contract and did not have another job for Applicant. Up until that time, his debts were 
paid as agreed and his credit was good. Applicant was only able to find temporary jobs 
until he went to work for a defense contractor in June 2009. He was unable to keep up 
with his bills and mortgage payments and had to use credit cards to continue providing 
for his family. His pay in the temporary jobs was adequate but the jobs did not last long. 
(Tr. 14-22)  
 
A credit report (Gov. Ex. 3, Credit report, dated June 20, 2009) shows the 
following delinquent debts for Applicant: a charged-off debt to Bank of America for 
$3,905 (SOR 1.a); a Chase Home Mortgage foreclosure on a balance of $122,932, that 
 
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was past due for $8,658 (SOR 1.b); a charged-off credit card debt of $966 (SOR 1.c); 
another charged-off credit card account for $1,500 (SOR 1.d); a charged-off loan of 
$7,195 (SOR 1.e); a department store charged-off account for $1,567 (SOR 1.f); an 
electronics store account charged-off for $2,793 (SOR 1.g); an auto repair debt 
charged-off for $782 (SOR 1.h); and a telephone debt in collection for $2,803 (SOR 1.i). 
The balance owed on these accounts is $30,167 (Tr. 13). Also listed is a Chapter 7 
bankruptcy filed on May 28, 2009, and dismissed in August 2009 (SOR 1.j) 
 
Applicant filed a bankruptcy petition in May 2009 when he could not pay his 
debts on time and was not steadily employed. (SOR 1.j) As soon as he received steady 
employment from the defense contractor, Applicant had the bankruptcy dismissed in 
August 2009. (Tr. 35-41)  
 
Applicant's delinquent mortgage loan at SOR 1.b has been modified and his 
payments are current. (Tr. 24-25; App. Ex. A, loan documents, dated April 19, 2010) 
Appellant settled or paid some of his debts. He paid in full the $966 credit card debt at 
SOR 1.c. (Tr. 45-46; Answer to SOR, Letter dated November 2, 2009) He settled and 
paid the credit card at SOR 1.e. (Tr. 46-47; App. Ex. D, Letter, dated January 5, 2010, 
App. Ex. E, Bank Statement, dated January 20, 2010) He settled and paid the loan debt 
at SOR 1.h. (Tr. 50-51; Answer to SOR, Letter, dated January 2, 2010) Applicant also 
paid or is current on some debts not listed in the SOR. His car loan is current and he 
only has five payments left. He paid a credit card debt of $1,265. (Tr. 26-30; App. Ex. B, 
Payment Letter, dated December 21, 2009) His latest credit report shows most of his 
debts are paid as agreed. (App. Ex. C, Credit report, date May 2, 2010) 
 
Applicant contacted or attempted to contact the original creditor or the collection 
agency on four of the remaining debts. The creditors or collection agencies for the debt 
at SOR 1.a, SOR 1.d, SOR 1.e, and SOR 1.g informed Applicant that they either do not 
own the debt or do not know the identity of the current creditor. Applicant has not been 
contacted by any creditors seeking payment of these debts. Applicant is ready and able 
to settle or pay the debts if he can determine the correct creditor. (Tr. 41-46, 49-51) 
 
Applicant disputed the telephone debt at SOR 1.i with the credit reporting 
agency. After an investigation, the credit reporting agency removed the debt from his 
credit report. (Tr. 51-52; App. Ex. F, Letter, dated May 13, 2010) 
 
Policies 
 
When evaluating an applicant’s suitability for a security clearance, the 
administrative judge must consider the adjudicative guidelines. 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 
 
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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 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 
 
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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 as reported in a credit report and admitted by 
Applicant 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).   
 
 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). These mitigating conditions apply. Applicant's delinquent 
debts were incurred when he lost his steady employment, and found only work with a 
temporary agency. The jobs he received paid well but only lasted a short time. Applicant 
continued to seek employment and finally was steadily employed by the defense 
contractor. Since being steadily employed, he has contacted all of his creditors. His 
house mortgage was modified. He paid three of the SOR debts in full, and paid other 
debts in full not listed in the SOR. He is current with his car payments. He disputed one 
debt that has been removed from his credit report. He tried to pay his remaining four 
SOR debts but was unable because he could not learn the identity of the creditor. He 
filed a bankruptcy action but immediately had it dismissed when he found good steady 
employment. The unemployment and underemployment were circumstances beyond 
his control. He is now steadily employed and delinquent debts should not recur. He 
does not use credit cards but only his debit card, so he is living within his means. His 
present credit report shows he is paying his debts as agreed. He acted responsibly 
under the circumstances by paying most of his past due debts and staying current with 
his present financial obligations. His debts have been or are being paid, and he cannot 
pay others because the creditors are not known. 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 three of the nine delinquent debts have 
been paid, and his mortgage has been modified and is current. He wanted to pay four 
others but he was unable to find the creditors after diligent inquiry. Applicant's action in 
contacting his creditors and arranging to make payments on the debts demonstrates a 
good-faith effort to repay his creditors. 
 
 
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I considered FC MC AG ¶ 20(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 
documentation to substantiate the basis of the dispute or provides evidence of actions 
taken to resolve the issue). Applicant disputes a telephone debt as not his debt since he 
never had service with the telephone provider. The debt was removed by the credit 
reporting agency from his credit report.  
 
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 
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 is a hard 
worker who always sought employment. 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 presented 
sufficient information to show he is taking reasonable and responsible action to resolve 
his financial issues. He paid three of the nine delinquent debts; his mortgage payments 
have been modified and are current; he disputed one debt and it has been resolved in 
his favor; he filed bankruptcy but had it dismissed as soon as he received good steady 
 
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employment; he tried to pay or settle four of his other debts but could not learn the 
appropriate creditor; and he paid other debts not listed in the SOR. 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. Overall, 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.  
 
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 
 
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