DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 09-02938 
  ) 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Alison O’Connell, Esquire, Department Counsel 
For Applicant: Pro se 
 
 
 
__________ 
 
Decision 
__________ 
 
 
RIVERA, Juan J., Administrative Judge: 
 
Applicant lacks a track record of financial responsibility. Moreover, she 
deliberately falsified her security clearance application. Eligibility for access to classified 
information is denied. 
 
Statement of the Case 
 
On November 18, 2008, Applicant submitted a security clearance application. On 
September 24, 2009, the Defense Office of Hearings and Appeals (DOHA) issued a 
Statement of Reasons (SOR) to her, pursuant to Executive Order 10865, Safeguarding 
Classified Information Within Industry, dated February 20, 1960, as amended; 
Department of Defense (DOD) Directive 5220.6, Defense Industrial Personnel Security 
Clearance Review Program (Directive), dated January 2, 1992, as revised; and the 
adjudicative guidelines (AG) effective within the DOD on September 1, 2006.  
 
The SOR alleges security concerns under Guideline F (Financial Considerations) 
and Guideline E (Personal Conduct). The SOR detailed reasons why DOHA could not 
make the preliminary affirmative finding under the Directive that it is clearly consistent 
 
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with the national interest to grant or continue a security clearance for her, and 
recommended referral to an administrative judge to determine whether a clearance 
should be granted or denied. 
 
On October 29, 2009, Applicant responded to the SOR allegations and requested 
a hearing before an administrative judge. The case was assigned to me on February 2, 
2010. DOHA issued a notice of hearing on February 19, 2010. The hearing was 
convened as scheduled on March 10, 2010. The Government offered Government 
Exhibits (GE) 1 through 15, which were admitted and made part of the record. Applicant 
testified, presented one witness, and submitted Applicant Exhibits (AE) 1 through 7, 
which were admitted without objection. DOHA received the transcript of the hearing (Tr.) 
on March 16, 2010.  
 
Findings of Fact 
 
Applicant admitted the six allegations in SOR ¶ 1. She provided some comments 
and explanations about the two allegations in SOR ¶ 2, but failed to admit or deny them. 
I consider both allegations denied. Her admissions are incorporated as findings of fact. 
After a thorough review of the evidence of record, and having considered Applicant’s 
demeanor and testimony, I make the following additional findings of fact. 
 
Applicant is a 38-year-old senior administrative assistant employed by a defense 
contractor. She has completed two semesters of college and has approximately 600 
hours of hands-on training in computer information systems. Pursuant to her 
employment, she has had access to classified information at the top secret level since 
September 2004. There is no evidence that Applicant has compromised or caused 
others to compromise classified information. 
 
Applicant married her husband in 1991, and they were divorced in 1995. She has 
sole custody of her 16-year-old son. Despite a child support court order, through the 
years Applicant’s ex-husband has provided little or no support for her son. Applicant’s 
son testified about the financial hardships that he and his mother have suffered as a 
result of his father’s failure to provide support. Applicant is a devoted mother. 
 
Applicant filed for Chapter 7 bankruptcy protection in 1999, and she was 
discharged of all of her dischargeable debts in February 2002. She was forced to file for 
bankruptcy protection because she had limited earnings, she was receiving little or no 
support from her ex-husband, and she was the sole provider for her and her son.  
 
In 2003, Applicant submitted a security clearance application. During the 
background investigation, she was confronted by Defense Investigative Service special 
agents about her then financial problems. In her March and August 2003 statements 
(GEs 11, 12), Applicant attributed her financial problems to being a divorced, working 
mother; lack of consistent child support over the last nine years; her limited earnings; 
and her substantial day-to-day living expenses, which included child care. She 
explained the reasons behind a repossessed car and the remaining deficiency balance. 
 
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She also provided information about her participation in financial counseling, a debt 
payment and consolidation program she entered into, and her plans to establish control 
of her finances, pay her delinquent debts, and avoid future financial problems. Based on 
her promises to resolve her financial problems, Applicant was granted a top secret 
clearance. 
 
In November 2008, Applicant submitted another security clearance application 
for her periodic review. In her clearance application, Applicant answered “No” to 
financial questions asking whether in the last seven years she had liens filed against her 
for failing to pay taxes or other debts, she had unpaid judgments, she had been more 
than 180 days delinquent on any debt, or if she was currently more than 90 days 
delinquent on any debt (Sections 27 and 28 of her application). She disclosed that her 
wages had been garnished to satisfy one judgment (not alleged in the SOR) resulting 
from a delinquent credit card she used to pay for her son’s expenses. 
 
Applicant’s background investigation addressed her financial situation, and it 
revealed Applicant filed for Chapter 7 bankruptcy protection in November 1999, and 
was discharged of all dischargeable debts in February 2000. It also revealed the five 
delinquent debts alleged in the SOR. The unpaid judgment alleged in SOR ¶ 1.b 
($2,199) originated from a pay-day loan in 2006-2007. Applicant’s payment checks 
bounced numerous times and she was subject to penalties and overcharges. In 2007, 
the creditor filed suit against her to collect the debt and she was served with the court 
documents. She elected not to appear in court and a judgment was approved against 
her. In July 2009, she contacted the creditor and established a payment plan. Applicant 
failed to honor the payment plan because she did not have money to spare. (Tr. 131) As 
of her hearing date, this debt was unresolved. Applicant promised to include this debt in 
a debt consolidation and payment plan she intends to establish in the near future. She 
claimed that previously she was not making enough money to pay the debt and her day-
to-day living expenses. She averred she is now in a better financial position to pay the 
debt through the debt payment program.  
 
The delinquent debt alleged in SOR ¶ 1.c ($655) originated from telephone 
services Applicant received and failed to pay in 2003. In her July 2009 response to 
DOHA interrogatories, she claimed she settled the debt for $327, and implied she would 
mail the creditor the check not later than August 2009. At her hearing, she again 
promised to pay the debt as soon as she receives an anticipated child support check. 
She presented no evidence to show she resolved this debt. 
 
SOR ¶ 1.d ($5,600) alleges a delinquent deficiency balance resulting from the 
sale of Applicant’s repossessed car in 2003. In both of her 2003 statements to a 
background investigator (GE 11 and 12), Applicant promised to resolve this debt. She 
claimed in 2003, she was offered a settlement, but she did not have the financial means 
to take the offer. In 2003, she stated she was planning on including the debt in her then 
debt consolidation program. As of the hearing date, she had not resolved this debt. 
 
 
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In 2003, Applicant took a $5,000 personal loan “to catch up with other expenses.” 
She failed to repay the loan and the creditor obtained a judgment against her in 2004 
(SOR ¶ 1.e ($3,842)). She claimed she was offered a $4,000 settlement, but she could 
not take the offer because she did not have the funds. She is planning on including the 
debt in her anticipated debt consolidation program.   
 
In 2002, Applicant failed to pay her rent. In 2004, the creditor obtained a 
judgment against her to recover for her past due rent (SOR ¶ 1.f ($1,506)). Applicant 
claimed she paid the judgment by wage garnishment in 2006. Applicant’s documentary 
evidence is not sufficient to show the wage garnishments were applied to this debt, or 
that the debt has been resolved. 
 
At her hearing, Applicant admitted that during the last two to three years she has 
been regularly late paying her rent, and receives consistent eviction notices from the 
landlord. As of her hearing date, she was two months late on her rent payment. (Tr. 
140) She claimed her two unemployment periods caused her to be late on her rent 
payments. 
 
Applicant was employed from 2000 to 2004, with a yearly salary of approximately 
$38,000. She was forced to resign from that job under penalty of being fired. She 
received six-months of full salary as severance pay. From November 2004 to 
September 2005, she was employed with a yearly salary of $55,000. She received two 
pay checks for approximately five months. From September 2005 to August 2006, she 
was employed with a yearly salary of $60,000. And, from June 2006 to January 2007, 
she was making $67,000. Applicant was unemployed for two months. 
 
Applicant started a new job in February 2007 with a yearly salary of $74,000. She 
was fired from this job in February 2008 and was unemployed for two months. She 
failed to disclose in her November 2008 application that she was fired from this job. 
Instead, she stated in her application that she resigned from the job. When asked why 
she failed to disclose she was fired from the job, she stated she did not know why. 
Applicant found employment in March 2008, and worked for this employer until 
September 2008 with a yearly salary of $74,000. She started working for her current 
employer in September 2008 with a yearly salary of $90,000. She has been making 
approximately $94,000 a year thereafter. Applicant claimed she has performed well for 
government contractors and is a good employee.  
 
In 2003, Applicant contracted the services of a debt consolidation company to 
assist her in the resolution of her then delinquent debts. She also claimed she received 
some financial counseling. She made one payment of $200 to the debt consolidation 
company. There is no documentary evidence that she or the debt consolidation 
company made any payments to her SOR creditors. She presented no documentary 
evidence to show she made any other payments into her debt consolidation plan. She 
presented no documentary evidence of any additional financial counseling since 2003. 
 
 
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Applicant purchased a new car in 2007. She needed a reliable car for her work-
related travel. In 2009, she was behind on her car payments and was about to have it 
repossessed. She paid $1,685 in May-June 2009, to bring the car loan to current status 
and to forestall the repossession. The creditor reduced her monthly car payments so 
that she could afford the payments.  
 
At her hearing, Applicant testified she intends to retain the services of a debt 
consolidation company in the near future to help her resolve her debts. She contacted 
the debt consolidation company a few days before her hearing, used their services to 
prepare a budget, and needs to provide them with additional information. She has yet to 
sign a contract for their services. Applicant’s budget shows she currently has a negative 
$193 monthly net remainder without considering any possible fees and payments she 
would have to make on her future debt repayment plan. Applicant stated she intends to 
stop entertaining, reduce eating outside her home, entertainment, and hair and nail 
expenses. Applicant expressed remorse for her financial problems and promised to do 
better. 
 
Applicant took a vacation to Las Vegas in 2005 and went on a Caribbean cruise 
in 2006. She owes the Internal Revenue Service approximately $6,000 in past due 
taxes, and she owes state taxes of $1,200. She claimed she established agreements to 
start paying on both debts in March 2010. She presented no documentary evidence to 
support her claims. 
 
In her answer to the SOR and at her hearing, Applicant denied she falsified her 
clearance application. She claimed she was “ill prepared” because she did not have a 
current credit report, she completed the clearance application in haste, and she did not 
have accurate information because she had disputed many of her delinquent debts. 
Applicant presented no documentary evidence to show she disputed any debts. 
Considering the evidence as a whole, Applicant deliberately falsified her November 
2008 security clearance application as alleged in the SOR.  
 
Policies 
 
 When evaluating an applicant’s suitability for a security clearance, the 
administrative judge must consider the adjudicative guidelines. They provide 
explanations for each guideline and 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 goal is to achieve a 
fair, impartial, and commonsense decision. 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. AG ¶ 2(c). 
 
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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 the decision-making process, the Government has the initial burden of 
establishing controverted facts alleged in the SOR by “substantial evidence.”1 Once the 
Government has produced substantial evidence of a disqualifying condition, the burden 
shifts to applicant to produce evidence “to rebut, explain, extenuate, or mitigate facts 
admitted by applicant or proven by department counsel, and [applicant] has the ultimate 
burden of persuasion as to obtaining a favorable clearance decision.” Directive ¶ 
E3.1.15. The burden of disproving a mitigating condition never shifts to the 
Government.2 
 
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 of 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 Executive Order 12968 (Aug. 2, 1995), Section 3. 
 
Analysis 
 
Guideline F, Financial Considerations 
 
 Under Guideline F, the security concern is that 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. 
 
 
1 See Directive ¶ E3.1.14. “Substantial evidence [is] such relevant evidence as a reasonable mind might 
accept as adequate to support a conclusion in light of all the contrary evidence in the record.” ISCR Case 
No. 04-11463 at 2 (App. Bd. Aug. 4, 2006) (citing Directive ¶ E3.1.32.1). “Substantial evidence” is “more 
than a scintilla but less than a preponderance.” See v. Washington Metro. Area Transit Auth., 36 F.3d 
375, 380 (4 th Cir. 1994). 
 
2 See ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 2005). 
 
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Applicant has a history of financial problems dating back to 1999, when she filed 
for bankruptcy protection. She has been unable or unwilling to resolve the delinquent 
debts alleged in the SOR since 2003. She presented little documentary evidence of 
good-faith efforts to pay, settle, or resolve her delinquent debts. AG ¶ 19(a): “inability or 
unwillingness to satisfy debts” and AG ¶ 19(c): “a history of not meeting financial 
obligations” apply.  
 
 AG ¶ 20 lists six conditions that could mitigate the financial considerations 
security concerns:  
 
(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;  
 
(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; and 
 
 (f) the affluence resulted from a legal source of income. 
 
 Applicant established some circumstances beyond her control, which contributed 
to her inability to pay her debts, i.e., she is a single mother with little or no financial 
support, and her four-month period of unemployment. I find AG ¶ 20(b) partially applies, 
but does not fully mitigate the financial concerns. Applicant’s evidence is not sufficient to 
show she acted responsibly under the circumstances. The evidence shows Applicant 
was unemployed for a relatively brief period. Notwithstanding, she has more than 
doubled her income from 2004 ($38,000) to 2010 ($94,000). She has been consistently 
employed and earning at least $74,000 a year since February 2007. Despite her 
earnings, Applicant presented little documentary evidence of paid debts or of any efforts 
to resolve her debts. 
 
 In light of her negative monthly net remainder, and her failure to pay 
relatively small debts, I find she is financially overextended. She is not in control of her 
 
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financial situation, and her financial problems are likely to continue. Considering the 
record as a whole, I find she does not understand the importance of having and 
maintaining financial responsibility. Her behavior shows lack of candor and reliability, 
and an unwillingness to pay her debts. None of the mitigating circumstances apply. 
 
Personal Conduct 
 
AG ¶ 15 explains why personal conduct is a security concern stating: 
 
Conduct involving questionable judgment, lack of candor, dishonesty, 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. 
 
Applicant deliberately falsified material facts on her November 2008 security 
clearance application when she failed to disclose the debts and judgments alleged in 
the SOR. Considering the record evidence as a whole, including her education, her 
years working for government contractors, the Government’s expressed concerns 
during her 2003 background investigation, and her demeanor and testimony, her 
statement that her falsification was not deliberate is not credible. 
 
Her behavior triggers the applicability of disqualifying conditions AG ¶ 16(a): 
“deliberate omission, concealment, or falsification of relevant facts from any personnel 
security questionnaire, personal history statement, or similar form used to conduct 
investigations, determine employment qualifications, award benefits of status, determine 
security clearance eligibility or trustworthiness, or award fiduciary responsibilities;” and 
AG ¶ 16(e) “personal conduct or concealment of information about one’s conduct, that 
creates a vulnerability to exploitation, manipulation, or duress, such as (1) engaging in 
activities which, if known, may affect the person’s personal, professional, or community 
standing.”  
 
  AG ¶ 17 lists seven conditions that could mitigate the personal conduct security 
concerns:  
 
(a) the individual made prompt, good-faith efforts to correct the omission, 
concealment, or falsification before being confronted with the facts; 
 
(b) the refusal or failure to cooperate, omission, or concealment was 
caused or significantly contributed to by improper or inadequate advice of 
authorized personnel or legal counsel advising or instructing the individual 
specifically concerning the security clearance process. Upon being made 
aware of the requirement to cooperate or provide the information, the 
individual cooperated fully and truthfully; 
 
 
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(c) the offense is so minor, or so much time has passed, or the behavior is 
so infrequent, or it happened under such unique circumstances that it is 
unlikely to recur and does not cast doubt on the individual's reliability, 
trustworthiness, or good judgment; 
 
(d) the individual has acknowledged the behavior and obtained counseling 
to change the behavior or taken other positive steps to alleviate the 
stressors, circumstances, or factors that caused untrustworthy, unreliable, 
or other inappropriate behavior, and such behavior is unlikely to recur; 
 
(e) the individual has taken positive steps to reduce or eliminate 
vulnerability to exploitation, manipulation, or duress;  
 
(f) the information was unsubstantiated or from a source of questionable 
reliability; and 
 
(g) association with persons involved in criminal activity has ceased or 
occurs under circumstances that do not cast doubt upon the individual's 
reliability, trustworthiness, judgment, or willingness to comply with rules 
and regulations. 
 
After considering the above mitigating conditions, I find none apply. Applicant 
falsified her 2008 security clearance application. Her falsification is a serious offense 
(felony-level),3 is relatively recent, and casts doubt on her reliability, trustworthiness, 
and 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 relevant 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.  
 
3 See 18 U.S.C. 1001. 
 
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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. AG ¶ 2(c).  
I considered the potentially disqualifying and mitigating conditions in light of all 
the facts and circumstances surrounding this case. Applicant is a devoted mother and 
has been taking care of her son for many years with little financial assistance. She has 
worked for government contractors and has possessed a security clearance since 2004. 
There is no evidence she has ever compromised or caused others to compromise 
classified information. These factors show some responsibility, good judgment, and 
mitigation. Applicant also established some circumstances beyond her control, which 
contributed to her inability to pay her debts.  
Notwithstanding, Applicant’s evidence is not sufficient to show she acted 
responsibly under the circumstances. She presented little documentary evidence of debt 
payments, contacts with creditors, negotiations to resolve her SOR debts, or of other 
efforts to resolve her debts. She also failed to resolve any of her relatively small 
delinquent obligations even though she has been aware of the Government’s financial 
considerations concerns since 2003. Her favorable information fails to show financial 
responsibility and good judgment. Applicant does not fully understand the importance of 
having and maintaining financial responsibility. Moreover, Applicant deliberately falsified 
her 2008 security clearance application when she failed to fully disclose her financial 
problems. Her overall behavior shows lack of judgment, candor, and reliability, and an 
unwillingness to comply with the law.  
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:    AGAINST APPLICANT 
 
 Subparagraphs 1.a-1.f:     Against Applicant 
 
Paragraph 2, Guideline E:    AGAINST APPLICANT 
 
 Subparagraphs 2.a-2.b:    Against Applicant 
 
 
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Conclusion 
 
In light of all the circumstances presented by the record in this case, it is not 
clearly consistent with the national interest to grant eligibility for a security clearance for 
Applicant. Eligibility for a security clearance is denied. 
 
 
 
____________________________ 
JUAN J. RIVERA 
Administrative Judge