DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 09-04022 
  ) 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Gina Marine, Esquire, Department Counsel 
For Applicant: Pro se 
 
 
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Decision 
______________ 
 
CREAN, Thomas M., Administrative Judge: 
 
On November 20, 2008, Applicant submitted a Questionnaire for Investigations 
Processing (e-QIP) as a requirement for a position 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 
January 25, 2010, 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 within the Department of Defense on September 1, 2006. Applicant 
acknowledged receipt of the SOR on February 3, 2010. 
 
 Applicant answered the SOR on February 11, 2010, admitting two and denying 
seven of the allegations under Guideline F. Department Counsel was prepared to 
proceed on May 20, 2010, and the case was assigned to me on May 28, 2010. DOHA 
issued a Notice of Hearing on June 4, 2010, scheduling a hearing for June 16, 2010. I 
convened the hearing as scheduled. The Government offered four exhibits, marked 
Government Exhibits (Gov. Ex.) 1 through 4, which were admitted without objection. 
 
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Applicant testified on his behalf, and offered seven exhibits, marked Applicant Exhibits 
(App. Ex.) A through G, which were admitted without objection. DOHA received the 
transcript of the hearing (Tr.) on June 25, 2010. Based on a review of the case file, 
pleadings, exhibits, and testimony, eligibility for access to classified information is 
granted.  
 
Procedural Issues 
 
 Applicant is stationed overseas with his employer. He was returning to the United 
States for a short visit and the hearing was scheduled while he was in the United 
States. He received the Notice of Hearing on or about June 4, 2010. Applicant is entitled 
to receive notice of his hearing at least 15 days in advance of the hearing. (Directive 
E3.1.8.) Applicant waived the 15 day notice requirement. (Tr. 5-6) 
 
Findings of Fact 
 
 Applicant admitted two of the nine factual allegations in the SOR. I included 
Applicant's admissions in my findings of fact. Applicant denied six allegations since the 
alleged debts had been settled, paid, or resolved. The remaining debt was for a 
dishonored check that had been resolved. After a thorough review of the pleadings, 
transcript, and exhibits, I make the following essential findings of fact.   
 
Applicant is 30 years old and has been employed by a defense contractor as an 
aircraft mechanic and technician working on military aircraft in the Middle East since 
October 2007. He is a high school graduate. Applicant served eight years on active duty 
in the Air Force and was honorably discharged in May 2007. He left the Air Force as it 
downsized its military force. He held a security clearance while on active duty. Applicant 
was first married in June 2003 and divorced in August 2003. He has no financial 
obligations from this marriage. He remarried in October 2007, and he has one child and 
one step child. (Tr. 41-44; Gov. Ex. 1, e-QIP, dated November 20, 2008) 
 
 Applicant's monthly pay while serving on active duty was $3,000. After he left 
active duty in May 2007, he did not immediately find work. Then, he worked at low-
paying jobs, earning about half of his active duty salary, or approximately $1,600 
monthly. During this time, Applicant was unable to keep current with his debts and some 
became delinquent. He was finally hired by his present defense contractor employer in 
October 2007. Applicant's monthly pay with the defense contractor is approximately 
$5,800, with monthly expenses of $4,900, leaving $800 in monthly discretionary funds. 
Since being advised of his debts by security investigators in May 2009, Applicant's 
payment plan has been to accumulate funds, and when he has sufficient funds, settle 
and pay each account in turn. Also during this time, Applicant was working overseas 
and having difficulty contacting and paying creditors. (Tr. 31-33, 38-39, 44-51). 
 
Credit reports (Gov. Ex. 3, dated November 3, 2009; Gov. Ex. 4, dated 
December 23, 2008) and answers to interrogatories (Gov. Ex. 2, dated August 25, 
2009) show the following delinquent debts for Applicant: a collection account for 
 
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apartment rent for $1,564 (SOR 1.a); a credit card account in collection for $3,007 (SOR 
1.b); a credit card account in collection for $4,431 (SOR 1.c); a charged-off loan for 
$5,290 (SOR 1.d); a car repossession debt for $7,086 (SOR 1.e); a debt to the Defense 
Finance and Accounting Service for $1,859 (SOR 1.f); a collection account for $1,582 
(SOR 1.g); a collection account for a loan for $2,500 (SOR 1.h); and a conviction for 
theft by dishonored check of less than $500 (SOR 1.i). The total delinquent debt is 
$27,319. 
 
The delinquent debt at SOR 1.a is for an apartment Applicant leased before he 
left active duty. Applicant believed that the lease was terminated with no rent due since 
he was vacating the apartment pursuant to military orders. Applicant did not know of the 
debt until he was interviewed by security investigators. The debt has been paid in full. 
(Tr. 16; 29-31; App. Ex. A, Check, dated June 2, 2010) 
 
The delinquent debt at SOR 1.b results from charges on a credit card Applicant 
used before and after he left active duty. When his pay was cut after leaving active duty, 
he could not make the required payments. He settled the debt for $1,319.70, and it has 
been paid. (Tr. 17 and 31; App. Ex. B, Bank Statement, dated June 3, 2010)  
 
The delinquent debt at SOR 1.c, also listed as a debt with the original creditor at 
SOR 1.h, is for a credit card Applicant and his wife used to meet living expenses after 
Applicant left active duty. Applicant has been paying this debt at $200 monthly since 
starting work with the defense contractor in October 2007. The present balance of the 
debt is $2,800. His payments are current. (Tr. 17 and 32; App. Ex. C, Letter, dated 
December 9, 2009) 
 
The delinquent debt at SOR 1.d is for a loan Applicant and his wife used to 
purchase items when their child was born in 2005. Applicant had two loans with the 
same creditor. Both loans have been paid in full. (Tr. 18, 33-34; App. Ex. D, Paid in Full 
Letter, dated November 9, 2009; App. Ex. E, Paid in Full Letter, dated November 25, 
2009)  
 
The delinquent debt at SOR 1.e is for a car repossession. Applicant settled this 
account, and it has been paid. His present credit report shows the account at "0" 
balance. (Tr. 18 and 35; App. Ex. G, Credit Report, dated June 8, 2010, at 4)  
 
The delinquent debt at SOR 1.f is for a debt owed the Defense Finance and 
Accounting Service for uncharged leave while on active duty. Applicant paid this debt in 
full. (Tr. 18 and 35; App. Ex. F. Paid in Full notice, dated May 5, 2010) 
 
The delinquent debt at SOR 1.g is for a telephone debt. Applicant paid the debt 
to the telephone company as the original creditor. He disputed the debt with the 
telephone company when he learned about it from security investigators. The original 
creditor notified the collection agency that the debt had been paid. The debt has been 
removed from Applicant's credit report. (Tr. 18-21, 35-36; App. Ex. G, Credit Report, 
dated June 8, 2010) 
 
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The financial issue at SOR 1.i is for a 2003 conviction for a dishonored check. 
Applicant believes the check was for an overdraft of his checking account for a check he 
issued to a local supermarket. Applicant believed when he wrote the check that he had 
sufficient funds in his account. However, there was a delay on the direct deposit of his 
pay to his bank account. His attorney noted that his conviction for theft by check was 
improper since Applicant was not notified of a hearing and did not appear. (Tr. 20, 37-
38; See, Applicant's response to SOR, Attorney's Letter, dated January 21, 2008)  
 
Applicant has not received financial counseling. Applicant has worked overseas 
away from home and family for over three years to accumulate funds to pay his debts. 
He and his wife have a family budget to manage their finances. They have checking and 
saving accounts with positive balances. He is current with is mortgage and vehicle loan 
payments, as well as his federal, state, and local taxes. (Tr. 39-41)  
 
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 
on the evidence contained in the record.  
 
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 
 
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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 his or her 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, as reported in credit reports are a security concern 
raising Financial Considerations 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 after he involuntarily left active 
duty in May 2007 because the Air Force was downsizing its military force.  He was 
unable to immediately find employment at a salary comparable to his military salary. He 
incurred delinquent debt because he did not have sufficient income to meet his financial 
obligations. His finances show an inability and not an unwillingness to satisfy debt. 
 
 I considered Financial Considerations Mitigating Condition (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 
 
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debts were incurred because he left active duty involuntarily when the Air Force 
downsized and was not immediately able to find suitable employment. When he did find 
employment five months later, he started repaying his delinquent debts. All but one of 
his debts has been paid. Applicant's loss of good employment was beyond his control 
and he acted reasonably and responsibly under the circumstances by paying almost all 
of his debt.  
 
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 method of handling debts is needed. 
Applicant must establish a "meaningful track record" of debt payment. A "meaningful 
track record" of debt payment can be established by evidence of actual debt payments 
or reduction of debt through payment of debts. An applicant is not required to establish 
that he paid each and every debt listed. All that is required is that Applicant 
demonstrates an established plan to resolve his financial problems and show he has 
taken significant actions to implement that plan. Applicant's financial problems were 
caused by conditions beyond his control. Applicant settled and paid six of his eight 
delinquent debts. He established that one of the delinquent debts is a duplicate of a 
debt paid to the original creditor that is listed as alleged by the collection agency. He is 
making current monthly payments on the eighth debt, and the amount of the debt has 
reduced significantly. Applicant also established that he should not have been convicted 
for a dishonored check since he paid the check and he was not present for the court 
hearing pertaining to the debt. Applicant's actions in paying and resolving his delinquent 
debts provide significant and credible information to establish a meaningful track record 
of debt payment and a good-faith effort to repay his creditors or resolve debt. His 
actions show he acted reasonably and responsibly under the circumstances. His 
finances no longer reflect adversely on his trustworthiness, honesty, and good 
judgment. 
 
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 
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 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 
eight years on active duty in the Air Force, received an honorable discharge, and 
successfully held a security clearance. 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 took reasonable and 
responsible action to resolve his financial issues. His financial issues where caused by 
conditions beyond his control. He is resolving his financial issues and has all but one 
resolved. The remaining delinquent debt is being paid and is current. Applicant's current 
finances do not show any financial problems. 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, 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 should be granted access to classified information.  
 
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.i:  For Applicant 
 
Conclusion 
 
 In light of all of the circumstances presented by the record in this case, it is 
clearly consistent with the national interest to grant Applicant eligibility for a security 
clearance. Eligibility for access to classified information is granted. 
 
 
 
_________________ 
THOMAS M. CREAN 
Administrative Judge