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DEPARTMENT OF DEFENSE 
DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
 --------------------- )  ISCR Case No. 09-00473 
 SSN: ----------- ) 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Eric Borgstrom, Esq., Department Counsel 
For Applicant: David P. Price, Esq. 
 
 
______________ 
 
Decision 
______________ 
 
 
FOREMAN, LeRoy F., Administrative Judge: 
 
This case involves security concerns raised under Guideline F (Financial 
Considerations). Eligibility for access to classified information is granted. 
 
Statement of the Case 
 
Applicant submitted a security clearance application on August 21, 2008. On 
December 10, 2009, the Defense Office of Hearings and Appeals (DOHA) sent him a 
Statement of Reasons (SOR) detailing the basis for its preliminary decision to deny his 
application, citing security concerns under Guideline F. DOHA acted 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) implemented by the Department of Defense on September 
1, 2006.  
 
 Applicant received the SOR on December 15, 2009; answered it in an undated 
document; and requested a hearing before an administrative judge. DOHA received the 
 
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request on January 4, 2010. Department Counsel was ready to proceed on January 31, 
2020, and the case was assigned to me on February 5, 2010. DOHA issued a notice of 
hearing on March 5, 2010, scheduling the hearing for March 30, 2010. I convened the 
hearing as scheduled. Government Exhibits (GX) 1 through 14 were admitted in 
evidence without objection. Applicant testified, presented the testimony of one witness, 
and submitted Applicant’s Exhibits (AX) A through G, which were admitted without 
objection. Department Counsel and Applicant both submitted demonstrative exhibits 
summarizing the evidence, which are attached to the record as Hearing Exhibits (HX) I 
and II. DOHA received the transcript (Tr.) on April 5, 2010.  
 
I kept the record open until April 19, 2010, to enable Applicant to submit 
additional documentary evidence. He timely submitted AX H through X. On April 28, 
2010, he submitted AX Y. Department Counsel did not object to AX H through X or the 
untimely submission of AX Y, and they were admitted. Department Counsel’s comments 
regarding AX H through X are attached to the record as HX III. The record closed on 
April 28, 2010.  
 
Findings of Fact 
 
 In his answer to the SOR, Applicant admitted the allegations in SOR ¶¶ 1.a-1.c, 
1.e-1.h, and 1.j-1.n. His admissions in his answer and at the hearing are incorporated in 
my findings of fact.  
 
 Applicant is a 58-year-old engineer employed by a defense contractor. He has 
worked for his current employer since August 1996. He received a bachelor’s degree in 
business management in June 2004, and he expects to receive a master’s degree in 
engineering management in the spring of 2011. (AX B; AX G-17; Tr. 54.)  
 
Applicant married in August 1973 and divorced in February 1989. He remarried 
in March 1990 and separated in December 2005. Since November 2006, he has been 
cohabiting and in a committed relationship with a woman who was a family friend before 
she divorced her husband and Applicant separated from his wife. (AX C-21; Tr. 29-31.)  
 
 Applicant served on active duty in the U.S. Air Force from August 1970 to May 
1974. (AX F-1.) He was discharged from the Air Force and enlisted in the Army National 
Guard in January 1975. (AX F-2; AX F-3.) He served in the Army National Guard from 
September 1975 to June 1982. (AX F-5.) He has held a clearance since October 1981. 
(GX 3, Item 31.)  
 
 Applicant lost his job shortly after his divorce in 1989. He then had custody of the 
three children from his first marriage. On the advice of his lawyer, he filed for Chapter 7 
bankruptcy and received a discharge in March 1992. (GX 7; Tr. 66, 106.)  
 
Applicant’s second wife, who had a business background, managed the family 
finances until they separated in December 2005. Between 2002 and 2004, Applicant 
discovered his wife had opened at least six credit card accounts without his knowledge 
 
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and was “floating” the account balances, using one credit card account to pay the 
balance on another. (Tr. 69.) After they separated, he found that their financial records 
were in disarray. He asked a friend with experience as a bookkeeper (now his 
cohabitant) to assist him in early 2006, but she could not reconcile the accounts. 
Applicant opened a new bank account because of his inability to reconcile the marital 
account. (Tr. 31-34; 71-74.) Applicant was aware of two auto loans that were in arrears 
and some delinquent medical bills. (Tr. 35, 72.)  
 
 After his separation, Applicant was ordered to pay spousal support of $2,711 per 
month, which is collected directly from his pay. (GX 6 at 9.) From 2006 to 2008, his 
spouse refused to sell the marital home, and the market value of the home declined 
during that period. (AX C-19.) When the home was eventually sold in May 2009, the 
proceeds were held in escrow. (GX 6 at 18; Tr. 40.) In December 2009, Applicant 
received $20,000 from the sale of the marital home, which he used to resolve as many 
delinquent debts as possible. (Tr. 40. 75-77.) He recently received his income tax 
refund of $8,597, which he has used to resolve the debt for apartment rent alleged in 
SOR ¶¶ 1.d and 1.h. (Tr. 86.) 
 
The table below summarizes the evidence concerning the delinquent debts 
alleged in the SOR. 
 
SOR Debt Amount Answer 
to SOR 
Status Evidence 
1.a Medical $25 Admit Paid GX 14 at 1; Tr. 11 
1.b Medical $354 Admit Paid GX 14 at 1; Tr. 11 
1.c Medical $110 Admit Paid AX A-2 at 1 
1.d Collection $1,347 Deny Paid; same as 1.h AX P thru V; Tr. 80
1.e Cell phone $362 Admit Paid AX A-2 at 1 
1.f Collection $80 Admit Paid AX Y 
1.g Cable $87 Admit Paid GX 14 at 2; Tr. 11 
1.h Apartment 
rent 
$1,347 Admit Paid GX 11; AX A-4;  
AX P thru V 
1.i Auto 
repossession 
$18,745 Deny Amount disputed AX J; AX C-19; 
Tr. 83 
1.j Auto 
repossession 
$3,017 Admit Paid GX 14 at 2; Tr. 11 
1.k Credit card $296 Admit Paid GX 14 at 2; Tr. 11 
1.l Computer $2,629 Admit Settled AX H, K, & L;  
Tr. 84 
1.m Telephone $93 Admit Paid AX A-2 at 1;  
AX A-5 
1.n Cell phone $144 Admit Paid AX M 
 
 Applicant has disputed the amount of auto repossession deficiency alleged in 
SOR ¶ 1.i, on the ground that the amount claimed is the full amount that was due before 
 
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the vehicle was repossessed and sold. He has filed a complaint with the state attorney 
general’s office. (AX J.) 
 
 In response to DOHA interrogatories, Applicant submitted a personal financial 
statement in July 2009. It reflects gross monthly income of about $10,808, net monthly 
income after deductions (including a deduction of $2,713 for spousal support) of $3,102, 
monthly expenses of $2,501, and a net remainder of $601. (GX 6 at 4.) His cohabitant’s 
income is limited to monthly Social Security payments and disability payments from the 
state. The record does not reflect the amounts of those payments. 
 
 At the hearing, Applicant testified he expected that his divorce would be final 
within about a month. When it is final, his spousal support payments will be reduced by 
at least $450 per month. (AX C-19 at 3; Tr. 68.)  
 
 Applicant and his cohabitant share all household expenses and jointly manage 
the household budget. Before he received his share of the proceeds from the sale of the 
marital home, he borrowed money from his cohabitant to pay his share of the household 
expenses, but he has since repaid her. His cohabitant testified he has not incurred any 
delinquent accounts since they began cohabiting (Tr. 41-43.)  
 
Applicant’s credit report dated March 30, 2010 reflected a medical collection 
account for $895. (GX 14 at 1.) Applicant could not explain this collection account at the 
hearing. (Tr. 88.) However, after the hearing, he submitted evidence that he had 
disputed the credit report entry, and it had been removed from his credit report. (AX X.) 
 
 Applicant is a talented, well-trained, creative, experienced engineer who has 
received numerous awards for leadership and engineering excellence. (AX C-1 through 
C-12; AX D; AX E; AX G-1 through G-16.) He is highly respected among supervisors, 
project managers, and peers. Numerous colleagues and supervisors submitted 
testimonials to Applicant’s candor, honesty, diligence, and reliability. All held current 
security clearances and were aware of his pending divorce and his financial situation. 
(AX C-13 through C-18.) 
 
Policies 
 
 “[N]o one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 
484 U.S. 518, 528 (1988). As Commander in Chief, the President has the authority to 
“control access to information bearing on national security and to determine whether an 
individual is sufficiently trustworthy to have access to such information.” Id. at 527. The 
President has authorized the Secretary of Defense or his designee to grant applicants 
eligibility for access to classified information “only upon a finding that it is clearly 
consistent with the national interest to do so.” Exec. Or. 10865, Safeguarding Classified 
Information within Industry § 2 (Feb. 20, 1960), as amended and modified.   
 
Eligibility for a security clearance is predicated upon the applicant meeting the 
criteria contained in the AG. These guidelines are not inflexible rules of law. Instead, 
 
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recognizing the complexities of human behavior, these guidelines are applied in 
conjunction with an evaluation of the whole person. An administrative judge’s 
overarching adjudicative goal is a fair, impartial, and commonsense decision. An 
administrative judge must consider all available, reliable information about the person, 
past and present, favorable and unfavorable. 
 
 The Government reposes a high degree of trust and confidence in persons with 
access to classified information. This relationship transcends normal duty hours and 
endures throughout off-duty hours. 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. 
 
Clearance decisions must be made “in terms of the national interest and shall in 
no sense be a determination as to the loyalty of the applicant concerned.”  See Exec. 
Or. 10865 § 7. Thus, a decision to deny a security clearance is not necessarily a 
determination as to the loyalty of the applicant.  It is merely an indication the applicant 
has not met the strict guidelines the President and the Secretary of Defense have 
established for issuing a clearance. 
 
 Initially, the Government must establish, by substantial evidence, conditions in 
the personal or professional history of the applicant that may disqualify the applicant 
from being eligible for access to classified information. The Government has the burden 
of establishing controverted facts alleged in the SOR. See Egan, 484 U.S. at 531.  
“Substantial evidence” is “more than a scintilla but less than a preponderance.”  See v. 
Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994). The guidelines 
presume a nexus or rational connection between proven conduct under any of the 
criteria listed therein and an applicant’s security suitability. See ISCR Case No. 92-1106 
at 3, 1993 WL 545051 at *3 (App. Bd. Oct. 7, 1993).   
 
 Once the Government establishes a disqualifying condition by substantial 
evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the 
facts. Directive ¶ E3.1.15. An applicant “has the ultimate burden of demonstrating that it 
is clearly consistent with the national interest to grant or continue his security 
clearance.” ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002). “[S]ecurity 
clearance determinations should err, if they must, on the side of denials.” Egan, 484 
U.S. at 531; see AG ¶ 2(b).  
 
Analysis 
 
Guideline F, Financial Considerations 
 
The SOR alleges 14 delinquent debts. Two of those debts (SOR ¶¶ 1.d and 1.h) 
are duplicates. All but one have been resolved. One debt arising from an automobile 
repossession (SOR ¶ 1.i) is disputed.  
 
 
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The concern under this guideline is set out in AG ¶ 18 as follows:  
 
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. 
 
Several disqualifying conditions under this guideline are relevant. AG ¶ 19(a) is 
raised by an “inability or unwillingness to satisfy debts.” AG ¶ 19(c) is raised by “a 
history of not meeting financial obligations.” AG ¶ 19(e) is raised by “consistent 
spending beyond one=s means, which may be indicated by excessive indebtedness, 
significant negative cash flow, high debt-to-income ratio, and/or other financial analysis.” 
All three disqualifying conditions are raised by the evidence, shifting the burden to 
Applicant to rebut, explain, extenuate, or mitigate the facts. Directive ¶ E3.1.15. An 
applicant has the burden of proving a mitigating condition, and the burden of disproving 
it never shifts to the government. See ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 
2005).   
 
 Security concerns based on financial problems can be mitigated by showing that 
“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.” AG ¶ 20(a). Applicant’s delinquent 
debts were recent and numerous. They occurred because he did not pay attention to 
the family finances and his wife was financially irresponsible. Applicant has learned his 
lesson about neglecting his financial responsibilities, and he and his irresponsible wife 
have parted ways, making another financial disaster unlikely to recur. He acted 
responsibly after the marital breakup, enlisting the help of his cohabitant to use her 
bookkeeping experience to evaluate his financial situation, minimizing his living 
expenses, borrowing money from his cohabitant to pay current expenses, and resolving 
his delinquent debts when the proceeds from the sale of the marital home finally 
became available. I conclude AG ¶ 20(a) is established.  
 
Security concerns under this guideline also can be mitigated by showing that “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.” AG ¶ 20(b). Both prongs, i.e., conditions beyond the person=s 
control and responsible conduct, must be established.  
 
Applicant encountered several conditions beyond his control: his spouse’s 
financial irresponsibility, the high costs of an acrimonious divorce, the refusal of his 
spouse to dispose of the marital home until the real estate market plummeted, and the 
refusal of the domestic relations court to release the proceeds from the sale of the 
 
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family home until all issues in the divorce were resolved. He acted responsibly by 
reviewing his financial records, reducing his living expenses, borrowing money from his 
cohabitant to pay some of his debts and living expenses. Once the marital assets were 
released, he repaid his cohabitant and paid as many delinquent debts as he could. I 
conclude AG ¶ 20(b) is established. 
 
 Security concerns under this guideline also can be mitigated by showing that “the 
individual initiated a good-faith effort to repay overdue creditors or otherwise resolve 
debts.” AG ¶ 20(d). Good faith means acting in a way that shows reasonableness, 
prudence, honesty, and adherence to duty or obligation. ISCR Case No. 99-0201, 1999 
WL 1442346 at *4 (App. Bd. Oct. 12, 1999). An applicant is not required, as a matter of 
law, to establish resolution of each and every debt alleged in the SOR. See ADP Case 
No. 06-18900 (App. Bd. Jun. 6, 2008). An applicant need only establish a plan to 
resolve financial problems and take significant actions to implement the plan. ISCR 
Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008). There also is no requirement that 
an applicant make payments on all delinquent debts simultaneously, nor is there a 
requirement that the debts alleged in the SOR be paid first. Id. 
 
Applicant was living on a tight budget until the marital home was sold and the 
proceeds distributed in January 2010. He has paid or resolved all his delinquent debts 
except the auto repossession in SOR ¶ 1.i, which he has disputed. I conclude AG ¶ 
20(d) is established for the debts alleged in SOR ¶¶ 1.a-1.h and 1.j-1.n. 
 
Security concerns under this guideline also can be mitigated by showing “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.” AG ¶ 20(e). Applicant 
has disputed the amount of the debt alleged in SOR ¶ 1.i because he has not received 
credit for the sale of the repossessed property. He has documented the basis for the 
dispute. I conclude AG ¶ 20(e) is established for the debt alleged in SOR ¶ 1.i. 
 
Whole-Person Concept 
 
 Under the whole-person concept, an administrative judge must evaluate an 
applicant’s eligibility for a security clearance by considering the totality of the applicant’s 
conduct and all the relevant 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.  
 
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 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. I have incorporated my 
comments under Guideline F in my whole-person analysis. Some of the factors in AG ¶ 
2(a) were addressed under that guideline, but some warrant additional comment. 
 
 Applicant is an intelligent, talented, well-educated man. He has served his 
country for many years in the armed forces and as an employee of a defense 
contractor. He has held a clearance for many years without incident. He is devoted to 
his work, to the extent that he completely entrusted his financial well-being to his 
spouse while he focused exclusively on being an engineer. He has learned, however, 
that his responsibilities extend beyond the workplace, and he now actively participates 
in the financial management of his household. He has a reputation for being candid, 
truthful, and reliable. He was candid, sincere, and credible at the hearing. 
 
 After weighing the disqualifying and mitigating conditions under Guideline F, 
evaluating all the evidence in the context of the whole person, and mindful of my 
obligation to resolve close cases in favor of national security, I conclude Applicant has 
mitigated the security concerns based on financial considerations. Accordingly, I 
conclude he has carried his burden of showing that it is clearly consistent with the 
national interest to continue his eligibility for access to classified information. 
 
Formal Findings 
 
 I make the following formal findings on the allegations in the SOR: 
 
 Paragraph 1, Guideline F (Financial Considerations):  FOR APPLICANT 
 
  Subparagraphs 1.a-1.n:     For Applicant 
 
Conclusion 
 
 In light of all of the circumstances, it is clearly consistent with the national interest 
to continue Applicant’s eligibility for a security clearance. Eligibility for access to 
classified information is granted. 
 
 
 
 
LeRoy F. Foreman 
Administrative Judge