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                           DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
In the matter of: ) 
 ) 
 XXXXXXXXXX, XXXXX )  ISCR Case No. 09-01116 
 SSN: XXX-XX-XXXX ) 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Jennifer I. Goldstein, Esq., Department Counsel 
For Applicant: Pro se 
 
 
 
______________ 
 
Decision 
______________ 
 
 
TUIDER, Robert J., Administrative Judge: 
 
Applicant has mitigated security concerns pertaining to Guideline F (financial 
considerations). Clearance is granted. 
 
Statement of the Case 
 
On October 13, 2008, Applicant submitted an Electronic Questionnaire for 
Investigations Processing (e-QIP). On September 17, 2009, the Defense Office of 
Hearings and Appeals (DOHA) issued a Statement of Reasons (SOR) detailing 
security concerns under Guideline F (financial considerations) for Applicant. 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 for SORs after September 1, 2006.  
 
 Applicant answered the SOR on October 2, 2009, and DOHA received his 
answer on October 5, 2009. Department Counsel was prepared to proceed on 
 
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December 14, 2009. The case was assigned to me on January 6, 2010. DOHA issued 
a notice of hearing on January 7, 2010, scheduling the hearing for January 26, 2010. 
The hearing was held as scheduled. 
 
The Government offered Government Exhibits (GE) 1 through 8, which were 
received without objection. The Applicant offered Applicant Exhibits (AE) A through F, 
which were received without objection, and he testified on his own behalf.  
 
I held the record open until February 9, 2010, to afford the Applicant the 
opportunity to submit additional documents on his behalf. Applicant timely submitted 
AE G through I, which were received without objection. DOHA received the hearing 
transcript (Tr.) on February 3, 2010. The record closed on February 9, 2010. 
 
Findings of Fact 
 
Applicant admitted all of the SOR allegations with explanations. His answers 
with explanations are incorporated herein as findings of fact. After a thorough review 
of the evidence, I make the following additional findings of fact. 
 
Background Information 
 
Applicant is a 61-year-old electronics technician, who has worked for his 
defense contractor employer since August 2008. He seeks a security clearance, which 
is a requirement for his continued employment. (GE 1, Tr. 17.)  
 
Applicant graduated from high school in June 1966. He attended community 
college from January 1985 to December 1986, and was awarded an Associate in 
Science degree. He subsequently was awarded a Bachelor of Science degree, date 
uncertain. (GE 1, Tr. 21-23.)  
 
Applicant served a 20-year career in the U.S. Navy, from December 1972 to 
December 1992, and was honorably discharged as an Electrician’s Technician Chief 
Petty Officer (pay grade E-7). However, for the majority of his Navy career, he was in 
the Aviation Fire Control Technician rating and underwent a forced conversion shortly 
before he retired when the Navy eliminated that rating. Applicant spent 13 of his 20 
years in the Navy at sea and went on numerous deployments. He successfully held a 
security clearance during his Navy career. (GE 1, Tr. 18-21, 27-28.) 
 
Applicant was previously married three times, and has been married to his  
current and fourth spouse since October 1996. He has an adopted son from his first 
marriage whose whereabouts are unknown. Applicant has three sons from his current 
marriage, ages 20, 13, and 11. His two youngest sons live at home, and his oldest son 
is serving in the U.S. Marine Corps. (GE 1, 25-27.)  
 
 
 
 
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Financial Considerations 
 
Applicant’s background investigation addressed his financial situation and 
included the review of his October 2008 e-QIP, his April and May 2009 responses to 
DOHA Interrogatories; as well as his November 2008, February 2009, June 2009, 
November 2009, and January 2010 credit reports. Applicant’s SOR identified eight 
separate debts totaling $39,218. (GE 1 – 8, Tr. 12.) (SOR ¶¶ 1.a. – 1.h.) 
 
Applicant has settled, paid, or otherwise resolved the eight debts alleged. A 
brief summary of each debt follows. The debts alleged in SOR ¶¶ 1.a. and 1.b. are 
past-due credit card accounts (same credit card company) in the amounts of $17,577 
and $3,657, respectively. The creditor has combined these accounts and Applicant 
has been making $100 monthly payments by direct debit to the creditor since 
September 2009. The accounts are current and Applicant plans to settle these 
accounts as soon as he is able to sell off equipment from his failed business, 
discussed infra. (AE A, Tr. 40-44.)  
 
The debt alleged in SOR ¶ 1.c. is a past-due credit card account in the amount 
of $893. Applicant settled this account for $475, which he paid in July 2009. (AE B, Tr. 
44-46.)  
 
The debt alleged in SOR ¶ 1.d. is a past-due credit card account in the amount 
of $1,661. Applicant had been making monthly payments on this account for 
approximately one year before the hearing. Post-hearing, he settled the remaining 
balance owed on this account for $601, which he paid in February 2010. (AE I, Tr. 46-
48.)  
 
The debt alleged in SOR ¶ 1.e. is a past-due credit card account in the amount 
of $7,773. Applicant settled this account with the creditor for approximately $3,000. In 
December, the creditor issued the Applicant a Form 1099C, Cancellation of Debt, for 
$4,602.36. Applicant reported this amount when he filed his income tax return. (AE C, 
Tr. 49-51.) 
 
The debt alleged in SOR ¶ 1.f. is for a past-due credit card in the amount of 
$1,219. Applicant settled this account for $605.93, which he paid in May 2009. (AE D, 
Tr. 53-54.)  
 
The debt alleged in SOR ¶ 1.g. is for a past-due medical bill in the amount of 
$170, which Applicant paid in full in September 2009. (AE E, Tr. 54-55.) 
 
The debt alleged in SOR ¶ 1.h. is for a past-due credit card in the amount of 
$6,268. Applicant has been making monthly payments by allotment in the amount of 
$203.81 since mid-2009. The account is current. (AE F, Tr. 55-59.) 
 
Post-hearing, Applicant submitted documentation that he paid off two past-due 
medical bills that were not alleged in the SOR. (AE G, AE H, Tr. 59-60.) 
 
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Applicant attributes his financial problems to the fact that his small business 
failed in 2008 as a result of the recent economic downturn. From 1996 to 2008, 
Applicant owned an ice cream distributorship and a mobile vending business in the 
off-road areas in his county of residence. (GE 2, Tr. 30-32.) When the economy failed, 
the off-road vehicle community significantly reduced its off-road vehicle use. With little 
or no income, Applicant resorted to using his credit cards to make ends meet. He 
reached a point where his business was doing so poorly and he was so deep in debt 
that he was forced to close his business in the latter part of 2008. He is actively 
looking for buyers to purchase his business assets. (GE 3, Tr. 33-37.) Applicant 
estimates that his business assets are worth $50,000 to $60,000; however, “[he 
would] be willing to take [$20,000] for [them] if [he] could get that.” (Tr. 64.) 
 
In conclusion, Applicant has paid, settled, made good-faith efforts to repay 
overdue creditors, or resolved all debts alleged. Applicant remains current on the rest 
of his monthly bills. His budget further demonstrates that he maintains a modest 
lifestyle and is living within his means.   
 
Character Evidence 
 
After Applicant retired from the Navy, he became very active and involved in his 
community. He served as a city councilman for seven years, and during those seven 
years served as mayor for two terms. He served on his city planning commission, 
served as a board member of his state league of cities for a one-year term, and is 
currently the president of the board of directors of his county school district, serving a 
second four-year term. (GE 2, Tr. 62-64.) 
 
Applicant called four character witnesses to testify on his behalf, a grocery 
store and ice plant owner, his contract site manager, his immediate supervisor, and a 
co-worker. The first witness spoke of Applicant’s integrity and honesty and 
emphasized that Applicant was a “man of his word.” He verified the business downturn 
that Applicant experienced. The remaining three work-related witnesses described 
Applicant as “a real professional,” “honest,” “dependable,” “very good character,” “very 
smart,” and an asset to their company. All the witnesses recommended that Applicant 
be granted a security clearance. (Tr. 66-94.) 
 
Policies 
 
When evaluating an applicant’s suitability for a security clearance, the 
administrative judge must consider the adjudicative guidelines (AG). In addition to 
brief introductory explanations for each guideline, the adjudicative guidelines list 
potentially disqualifying conditions and mitigating conditions, which are used 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 
 
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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 as to obtaining 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 protect or 
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. 
  
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 EO 12968, Section 3.1(b) (listing multiple prerequisites 
for access to classified or sensitive information).   
 
Analysis 
 
  Upon consideration of all the facts in evidence, and after application of all 
appropriate legal precepts, factors, and conditions, including those described briefly 
above, I conclude that a relevant security concern exists under Guideline F (financial 
considerations). AG ¶ 18 articulates the security concern relating to financial 
problems: 
 
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 
 
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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 ¶ 19 provides two financial considerations disqualifying conditions that 
could raise a security concern and may be disqualifying in this case: “(a) inability or 
unwillingness to satisfy debts,” and “(c) a history of not meeting financial obligations.” 
Applicant’s history of delinquent debt is established by his admissions and the 
evidence presented. As indicated in SOR ¶¶ 1.a. to 1.h., he had eight delinquent 
debts totaling $39,218 that were in various states of delinquency since at least 2008. 
The Government established the disqualifying conditions in AG ¶¶ 19(a) and 19(c).   
 
  Five financial considerations mitigating conditions under AG ¶¶ 20(a)-(e) are 
potentially applicable:  
 
(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; and 
 
(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. 
 
Applicant’s conduct does not warrant full application of AG ¶ 20(a) because 
there is more than one delinquent debt and his financial problems are not isolated. It 
was not until recently that these debts were paid or resolved. Therefore, his debt is “a 
continuing course of conduct” under the Appeal Board’s jurisprudence. See ISCR 
Case No. 07-11814 at 3 (App. Bd. Aug. 29, 2008) (citing ISCR Case No. 01-03695 
(App. Bd. Oct. 16, 2002)). He receives partial credit under AG ¶ 20(a) because the 
debt “occurred under such circumstances that it is unlikely to recur and does not cast 
 
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doubt on the individual’s current reliability, trustworthiness, or good judgment.”  Under 
AG ¶ 20(b), he receives full credit because the downfall in the economy was largely 
beyond his control and he acted responsibly under the circumstances.1  
 
AG ¶ 20(c) is not applicable because Applicant did not seek financial 
counseling. He has, however, produced evidence that reflects he is living within his 
means and regained financial responsibility. Furthermore, there is sufficient 
information to establish full mitigation under AG ¶ 20(d).2 Applicant has paid, is 
paying, or has otherwise resolved his debts. AG ¶ 20(e) is not applicable because 
Applicant did not dispute the legitimacy of any of his debts.  
 
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 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, 
1“Even if Applicant’s financial difficulties initially arose, in whole or in part, due to circumstances outside 
his [or her] control, the Judge could still consider whether Applicant has since acted in a reasonable 
manner when dealing with those financial difficulties.” ISCR Case No. 05-11366 at 4 n.9 (App. Bd. Jan. 
12, 2007) (citing ISCR Case No. 99-0462 at 4 (App. Bd. May 25, 2000); ISCR Case No. 99-0012 at 4 
(App. Bd. Dec. 1, 1999); ISCR Case No. 03-13096 at 4 (App. Bd. Nov. 29, 2005)). A component is 
whether he maintained contact with his creditors and attempted to negotiate partial payments to keep 
his debts current. 
 
2The Appeal Board has previously explained what constitutes a “good-faith” effort to repay overdue 
creditors or otherwise resolve debts: 
 
In order to qualify for application of [the “good-faith” mitigating condition], an applicant 
must present evidence showing either a good-faith effort to repay overdue creditors or 
some other good-faith action aimed at resolving the applicant’s debts. The Directive 
does not define the term ‘good-faith.’ However, the Board has indicated that the 
concept of good-faith ‘requires a showing that a person acts in a way that shows 
reasonableness, prudence, honesty, and adherence to duty or obligation.’ Accordingly, 
an applicant must do more than merely show that he or she relied on a legally available 
option (such as bankruptcy) in order to claim the benefit of [the “good-faith” mitigating 
condition].  
 
(internal citation and footnote omitted) ISCR Case No. 02-30304 at 3 (App. Bd. Apr. 20, 2004) (quoting 
ISCR Case No. 99-9020 at 5-6 (App. Bd. June 4, 2001)). 
 
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exploitation, or duress; and (9) the likelihood of continuation or 
recurrence.  
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).  
There is evidence against mitigating Applicant’s conduct. The SOR lists eight 
debts totalling $39,218 that were at one time or another in various states of 
delinquency. For two years, he failed to keep his accounts current or negotiate lesser 
payments, showing financial irresponsibility and lack of judgment. His lack of success 
in resolving delinquent debt until recently raises sufficient security concerns to merit 
further inquiry.   
 
The mitigating evidence under the whole-person concept is more substantial. 
Applicant’s record of military service, community involvement, and good employment 
weighs in his favor. There is no evidence of any security violation during the time 
Applicant may have held a security clearance. He is a law-abiding citizen. All of his 
SOR debts are paid or resolved. His monthly expenses are current. The Appeal Board 
has addressed a key element in the whole-person analysis in financial cases, stating: 
 
In evaluating Guideline F cases, the Board has previously noted that the 
concept of “‘meaningful track record’” necessarily includes evidence of 
actual debt reduction through payment of debts.” However, an applicant 
is not required, as a matter of law, to establish that he has paid off each 
and every debt listed in the SOR. All that is required is that an applicant 
demonstrate that he has “. . . established a plan to resolve his financial 
problems and taken significant actions to implement that plan.” The 
Judge can reasonably consider the entirety of an applicant’s financial 
situation and his actions in evaluating the extent to which that applicant’s 
plan for the reduction of his outstanding indebtedness is credible and 
realistic. See Directive ¶  E2.2(a) (“Available, reliable information about 
the person, past and present, favorable and unfavorable, should be 
considered in reaching a determination.”) 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. Likewise, there is no 
requirement that the first debts actually paid in furtherance of a 
reasonable debt plan be the ones listed in the SOR. 
 
ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008) (internal citations omitted). 
Applicant is making a significant contribution to the national defense. His company 
fully supports him and recommends him for a security clearance. He made mistakes, 
and debts became delinquent. There is, however, simply no reason not to trust him. 
He has paid his debts. Furthermore, he has established a “meaningful track record” of 
debt payments. These factors show responsibility, rehabilitation, and mitigation. After 
 
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weighing the disqualifying and mitigating conditions, and all the facts and 
circumstances in the context of the whole person, I conclude he has mitigated the 
financial considerations security concerns.  
 
I take this position based on the law, as set forth in Department of Navy v. 
Egan, 484 U.S. 518 (1988), my careful consideration of the whole person factors and 
supporting evidence, my application of the pertinent factors under the adjudicative 
process, and my interpretation of my responsibilities under the adjudicative guidelines. 
Applicant has fully mitigated or overcome the Government’s case. For the reasons 
stated, I conclude he is eligible for 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. to 1.h.:  For Applicant 
 
Conclusion 
 
In light of all the circumstances presented by the record in this case, it is 
clearly consistent with the national interest to grant or continue Applicant’s eligibility 
for a security clearance. Eligibility for a security clearance is granted. 
 
 
 
____________________________ 
Robert J. Tuider 
Administrative Judge