KEYWORD: Guideline F
DIGEST: The Judge erred in categorizing Applicant’s poor financial choices as circumstances
outside his control.  Favorable decision reversed. 
CASENO: 09-01015.a1
DATE: 07/16/2010
DATE: July 16, 2010
In Re:
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Applicant for Security Clearance
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ISCR Case No. 09-01015
APPEAL BOARD DECISION
APPEARANCES
FOR GOVERNMENT
D. Michael Lyles, Esq., Department Counsel
FOR APPLICANT
Pro Se
The Defense Office of Hearings and Appeals (DOHA) declined to grant Applicant a security
clearance.  On June 4, 2009, DOHA issued a statement of reasons (SOR) advising Applicant of the
basis for that decision–security concerns raised under Guideline F (Financial Considerations) of
“I would bring the money home and she would go pay all the bills.  And mainly some of the bills are from1
phone companies, which is cell phones.  It was easy for her to just, okay, they cut this phone off.  Let me go get another
one.”  Tr. at 28.  
The hearing began on September 15, 2009.  Tr. at 3.  2
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Department of Defense Directive 5220.6 (Jan. 2, 1992, as amended) (Directive).  Applicant
requested a hearing.  On March 19, 2010, after the hearing, Administrative Judge Paul J. Mason
granted Applicant’s request for a security clearance.  Department Counsel appealed pursuant to
Directive ¶¶  E3.1.28 and E3.1.30.
Department Counsel raised the following issues on appeal: whether certain of the Judge’s
findings of fact were based upon substantial record evidence; whether the Judge erred in his
application of the pertinent mitigating conditions; and whether the Judge’s whole-person analysis
was erroneous.  Finding error, we reverse.
Facts
The Judge made the following pertinent findings of fact: Applicant is a former U.S. Marine
who, while on active duty, served as a drill instructor and as a guard for nuclear weapons.  Divorced,
he pays child support on behalf of his two daughters.  He is engaged to be married.
Applicant’s financial problems began during his first marriage, during which his former wife
handled their finances.   The problems were exacerbated when Applicant’s wife decided that she did1
not want to live in a mobile home.  In 2006, the couple moved out of the mobile home and into a
rented house, surrendering the home to the dealer.  The dealer treated this transaction as a
repossession, selling the home at an auction.  This resulted in a $33,173 deficiency.
Applicant stopped paying the other SOR debts due to lack of funds.  Additionally, he moved
several times during the divorce and did not keep his creditors apprised of his address.  Although it
was not listed in the SOR, Applicant also had a debt to the IRS which had been satisfied through a
wage garnishment.  
On September 9, 2009, Applicant applied for a $7,000 loan from his 401(k) plan.   He2
intended to use the money to pay off six of the seven SOR debts.  After the hearing, but before the
close of the record, Applicant completed necessary paperwork for the loan.  He also provided an
uncorroborated statement that four of the debts had been paid off.  
Applicant enjoys an excellent reputation for the high quality of his work performance, as well
as for his reliability.
Discussion
Factual Sufficiency
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Department Counsel argues that the Judge erred in a finding of fact.  Specifically, he argues
that a particular statement, contained in the Analysis portion of the decision, is in error.  The Judge
stated, “I conclude that Applicant received his loan as planned.”  Decision at 6.  Department Counsel
argues that the evidence merely demonstrates that Applicant had applied for a loan, not that he had
actually received the money.  
The Appeal Board’s review of the Judge’s findings of fact is limited to determining if they
are supported by substantial evidence–“such relevant evidence as a reasonable mind might accept
as adequate to support a conclusion in light of all the contrary evidence in the same record.”
Directive  ¶ E3.1.32.1.  “This is something less than the weight of the evidence, and the possibility
of drawing two inconsistent conclusions from the evidence does not prevent an administrative
agency’s finding from being supported by substantial evidence.”  Consolo v. Federal Maritime
Comm’n, 383 U.S. 607, 620 (1966).  In evaluating the Judge’s findings, we defer to the Judge’s
credibility determinations.  Directive ¶ E3.1.32.1.
We have examined the challenged statement in light of the record evidence.  This evidence
shows that Applicant applied for the loan a few days before the hearing in his case.  The insurance
company processing the request advised Applicant that he needed to provide further information,
either a signed concurrence by his wife or a certification that he was no longer married.  After the
hearing, Applicant submitted a document he had sent to the insurance company certifying that he was
no longer married to his former wife.  There is nothing in the evidence to suggest that the approval
of the loan was uncertain or that Applicant’s 401(k) was insufficient to serve as collateral.  Rather,
the evidence suggests that approval would be forthcoming once Applicant submitted all the required
documentation.  Given the totality of the facts and circumstances surrounding the loan application,
the Judge’s inference that Applicant had been paid at some point after the hearing is sustainable.  
Judge’s Favorable Conclusions as to Mitigation
A Judge is required to “examine the relevant data and articulate a satisfactory explanation
for” the decision, “including a ‘rational connection between the facts found and the choice made.’”
Motor Vehicle Mfrs. Ass’n of the United States v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43
(1983)(quoting Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962)).  “The
general standard is that a clearance may be granted only when ‘clearly consistent with the interests
of the national security.’” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988).  The Appeal
Board may reverse the Judge’s decision to grant, deny, or revoke a security clearance if it is arbitrary,
capricious, or contrary to law.  Directive ¶¶ E3.1.32.3 and E3.1.33.3.
Once a concern arises regarding an Applicant’s security clearance eligibility, there is a strong
presumption against the grant or maintenance of a security clearance.  See Dorfmont v. Brown, 913
F. 2d 1399, 1401 (9  Cir. 1990), cert. denied, 499 U.S. 905 (1991).  After the Government presentsth
evidence raising security concerns, the burden shifts to the applicant to rebut or mitigate those
concerns.  See Directive ¶ E3.1.15.  “The application of disqualifying and mitigating conditions and
whole person factors does not turn simply on a finding that one or more of them apply to the
particular facts of a case.  Rather, their application requires the exercise of sound discretion in light
“[T]he conditions that resulted in the financial problem were largely beyond the person’s control . . . and the3
individual acted responsibly under the circumstances[.]”  
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of the record evidence as a whole.”  See, e.g., ISCR Case No. 05-03635 at 3 (App. Bd. Dec. 20,
2006).
In deciding whether the Judge's rulings or conclusions are arbitrary or capricious, the Board
will review the Judge's decision to determine whether:  it does not examine relevant evidence; it fails
to articulate a satisfactory explanation for its conclusions, including a rational connection between
the facts found and the choice made; it does not consider relevant factors; it reflects a clear error of
judgment; it fails to consider an important aspect of the case; it offers an explanation for the decision
that runs contrary to the record evidence; or it is so implausible that it cannot be ascribed to a mere
difference of opinion.  In deciding whether the Judge's rulings or conclusions are contrary to law,
the Board will consider whether they are contrary to provisions of Executive Order 10865, the
Directive, or other applicable federal law.  See ISCR Case No. 03-22861 at 2-3 (App. Bd. Jun. 2,
2006).
Department Counsel argues that the Judge erred in extending favorable application to three
Guideline F mitigating conditions.  He contends that the record evidence does not support the
Judge’s treatment of them. 
The first mitigating condition that the Judge addressed is found at Directive, Enclosure 2 ¶
20(b).   The Judge extended partial application to this provision.  However, Department Counsel3
cites to record evidence that Applicant’s financial problems were aggravated by his decision to leave
his mobile home and move into a rented house due to his wife’s preferences.  Arguing that this was
a voluntary decision by Applicant, Department Counsel contends that this decision by Applicant
does not justify a conclusion that Applicant’s problems arose from matters outside his control.  “[H]e
chose to take on a new financial responsibility (rent) and abandoned his existing obligation.  While
being a loyal husband trying to hold together a failing marriage is an admirable personal quality, this
is not a carte blanche invitation to make irresponsible financial decisions.”  DC Brief at 11.  
We note other record evidence which supports the point advanced by Department Counsel.
For example, Applicant testified, and the Judge found, that he had neglected to keep his creditors
informed of his whereabouts.  It is not surprising that, as a consequence, he would have problems
with his creditors.  This is a contributing factor which Applicant could have avoided through the
exercise of ordinary prudence.  We also note Applicant’s testimony that, when he gave back his
mobile home, he did not understand the legal implications of repossession.  Again, this illustrates
a failure to exercise ordinary care in the management of his personal affairs rather than a cause over
which Applicant had no control.  Accordingly, we conclude that the record as a whole does not
support a conclusion that Applicant’s problems were caused by circumstances outside his control,
i.e., his marital difficulties.  Rather, the evidence most reasonably supports a conclusion that
Applicant’s problems originated through his own actions or neglect.
“[T]he person has received or is receiving counseling for the problem and/or there are clear indications that4
the problem is being resolved or is under control[.]”  
“[T]he individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts[.]”  5
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Additionally, Department Counsel contends that Applicant failed to demonstrate that he took
responsible action in regard to his financial difficulties.  For example, he notes Applicant’s testimony
that he had taken no action to address his debts until September 2009, leaving them unpaid for three
years.  This extends even to relatively minor debts, such as an $81 medical bill.  Tr. at 40.  The Judge
himself stated that Applicant did not act responsibly under the circumstances.  Department Counsel’s
argument that Mitigating Condition 20(b) does not support a favorable decision for Applicant is
persuasive.
The Judge also extended favorable consideration to Directive, Enclosure 2 ¶ 20(c).   He cited4
to “some evidence” that Applicant was trying to gain control over his finances.  Decision at 6.
However, Department Counsel persuasively argues that the evidence is not sufficient to support a
favorable conclusion under this mitigating condition.  Applicant has demonstrated that he expected
to pay off certain debts with the proceeds from his loan.  However, even if that were to occur, his
major debt of the $33,000 deficiency resulting from repossession of his mobile home would remain
unsatisfied.  Applicant’s stated intention to hire an attorney sometime after the hearing and seek a
reduction of this debt is at best speculative.  There is no basis in the record to support a conclusion
that such a plan has a reasonable chance of success.  As such, it merely suggests a “potential for
eventual debt resolution” rather than for a track record of actual repayment.  See ISCR Case No. 01-
03695 at 4 (App. Bd. Oct. 16, 2002).  The record evidence, viewed as a whole, does not support a
favorable conclusion under Mitigating Condition 20(c).  
Finally, the Judge concluded that Applicant had established limited mitigation under
Directive, Enclosure 2 ¶ 20(d)  and that he was confident that Applicant would pay all of his5
delinquent debts.  This mitigating condition requires a showing of good-faith efforts at debt
repayment.  To receive the benefit of this mitigating condition, an applicant must show that he has
acted in a way evidencing “reasonableness, prudence, honesty, and adherence to duty or obligation.”
ISCR Case No. 06-14521 at 2 (App. Bd. Oct. 15, 2007).  Department Counsel persuasively argues
that Applicant’s having apparently obtained a $7,000 loan is not sufficient to demonstrate a good-
faith effort to pay off debts totaling over $36,000.  Even if he repays all SOR debts but the
deficiency, he is left with a delinquent debt of over $33,000, for which he has demonstrated nothing
more than a promise for future payment.  See ISCR Case No. 07-13041 at 4 (App. Bd. Sep. 19, 2008)
(Promises to pay off delinquent debts in the future are not a substitute for a track record of paying
debts in a timely manner and otherwise acting in a financially responsible manner.)  We conclude
that the circumstances of Applicant’s financial problems do not demonstrate a good-faith effort to
resolve his outstanding debts.  As Department Counsel argues, even a limited favorable application
of this mitigating condition is not supported by the record evidence.
In summary, both the record and the Judge’s decision demonstrate that (1) Applicant has
substantial delinquent debts; (2) these debts were caused in large measure by circumstances that were
See ISCR Case No. 08-06056 at 6 (App. Bd. Sep 21, 2009), in which the Board held that it was error for the6
Judge not to have considered “the fact that any efforts on the part of Applicant to resolve these debts came very late in
the process.”  
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within his control, such as his permitting his former wife to handle the family budget, the voluntary
repossession of his mobile home, his failure to keep his creditors apprised of his place of residence,
and his failure to inquire into the legal implications of his decisions; (3) he did not address his debts
for three years and only began to do so immediately before the hearing;  and (4) he provided no6
corroboration of any debt repayment by the close of the record.  In light of this, Applicant’s having
obtained approval of a loan in the amount of $7,000 is not sufficient to demonstrate mitigation, either
through the mitigating conditions or the whole-person analysis, in light of the Egan standard.
Accordingly, we conclude that the Judge’s favorable decision is not sustainable.
Order
The Judge’s favorable security clearance decision is REVERSED.
Signed: Jeffrey D. Billett           
Jeffrey D. Billett
Administrative Judge
Member, Appeal Board
Signed: Jean E. Smallin             
Jean E. Smallin
Administrative Judge
Member, Appeal Board
Signed: James E. Moody                   
James E. Moody
Administrative Judge
Member, Appeal Board