1
                                                             
                           
                        DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
----------------------------- )       ISCR Case No. 09-05184
SSN: ----------- )
)
Applicant for Security Clearance )
Appearances
For Government: John B. Glendon, Esq., Department Counsel
For Applicant: Alan V. Edmunds, Esq.
                                                                            
______________
Decision
______________
MARSHALL, Jr., Arthur E., Administrative Judge:
The Defense Office of Hearings and Appeals (DOHA) issued a Statement of
Reasons (SOR) on December 16, 2009. The SOR enumerated security concerns
arising under Guideline F (Financial Considerations). 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).
In a January 25, 2010, response, Applicant admitted the nine allegations set
forth under Guideline F, provided explanations regarding each account at issue, and
requested a hearing before an administrative judge. DOHA assigned the case to me on
March 12, 2010. The parties proposed a hearing date of June 15, 2010. A notice setting
that date for the hearing was issued on April 30, 2010. I convened the hearing as
scheduled. Department Counsel offered five documents, which were admitted as
exhibits (Exs.) 1-5 without objection. Applicant testified and presented 19 documents,
which were accepted into evidence without objection as Exs. A-S. One additional
document was submitted by Applicant on June 22, 2010. It was forwarded to me by
Department Counsel on June 23, 2010, with no objection. The document was accepted
 Tr. 9-10.      1
 Tr. 29-30.      2
 Tr. 61-62. As discussed below, no payments have yet been made on the settlement for allegation 1.c.      3
Applicant did, however, present evidence that made the Government “comfortable” that payments will
commence in September 2010.. 
2
as Ex. T. The transcript (Tr.) of the proceeding was received on June 24, 2010. The
record was then closed. Based on a review of the testimony, submissions, and exhibits,
I find Applicant met his burden in mitigating security concerns. Clearance granted.
Findings of Fact
Applicant is a 32-year-old training lead working the area of logistics support for a
defense contractor. He has worked for the same employer for two years. He is married
and has four children. Applicant joined the United States Army after high school.
Between 1997 and 2008, he had an impressive military career, served in hostile
actions, and maintained a security clearance without incident.  He was injured during1
his 11 years of military service. Applicant attended college, but has not completed a
degree program.
In late 2007, Applicant was in the military as an E-7 earning about $50,000 a
year. His wife was earning approximately $65,000 a year. In September 2007,
Applicant’s wife abruptly lost her job during a company restructuring plan. The
interruption in their combined flow of income forced his family to live solely on
Applicant’s income. As a result, some bills went unpaid or were paid late.  Applicant2
quickly acquired about $34,000 in delinquent debt. 
Meanwhile, Applicant’s wife looked for a new job. She received unemployment
benefits for about six months, until she temporarily left her family to seek employment in
another part of the country. She found work in the real estate industry, but did not earn
sufficient income to help their financial situation. Applicant made the decision to leave
the military in order to accept a higher paying position that would also let him rejoin his
family. They were reunited in the summer of 2008, when Applicant accepted his current
position. 
The following year, Applicant’s wife began to look for work outside of the
sluggish real estate market. By October 2009, it looked likely she would be hired as an
insurance company representative. With Applicant’s new salary of about $99,000 a
year and his wife’s prospective salary of approximately $65,000, the couple began
addressing their delinquent debts in October 2009. Applicant’s wife assumed her
current position in November 2009. Applicant received the SOR on December 16,
2009, at which point the he was already addressing his household’s debts.
All but one of the debts at issue in the SOR have been substantially addressed:3
 Ex. H (Letter, dated Nov. 3, 2009).      4
 Ex. I (Letter, dated Oct. 30, 2009, and account detail, dated Nov. 2, 2009).      5
 Tr. 40-41. Applicant purchased furniture with a five year warranty. W ithin months, it needed repair. The      6
company would not honor its warranty because it was going bankrupt. Applicant actively pursued repair of the
furniture from 2004 until 2006, when payments became due. After that time, he disputed the balance and the
balance remained unpaid.
 Tr. 18-19.      7
 Tr. 38-39, 61-62. As referenced in note 3, supra, the Government is “comfortable that the Applicant will      8
as of September have started making payments” on this account. 
 Ex. J (Evidence of payment, dated Dec. 22, 2009); Tr. 19.      9
 Ex. K (Payment receipt, dated Jan. 15, 2010).      10
 Ex. T (Letter, dated Mar. 26, 2010).      11
 Tr. 31.      12
3
1.a. Collection account ($515) – Paid. Applicant provided evidence that the account for
this credit service was paid in full on or before November 3, 2009.4
1.b. Collection account ($122) – Paid. Applicant provided evidence that the account for
this credit service was paid on or about November 2, 2009.5
1.c. Collection account ($8,604) – Payment plan negotiated. Applicant has worked out a
settlement amount and payment plan on this disputed furniture company account
balance, although repayment has yet to commence.  So as not to overextend himself6
financially, progress toward the pending balance was temporarily halted due to the
finances required for Applicant’s hiring of legal representation for this action.7
Otherwise, he is prepared to start repayment on the negotiated balance of $5,500 in
September 2010, after he completes the repayment plan noted in 1.g, below.8
1.d. Medical collection account ($22) – Paid. Applicant provided evidence that the
balance owed on this hospital emergency room account for a co-payment was paid
between November 2, 2009, and November 6, 2009.  9
1.e. Collection account ($541) – Paid. Applicant provided evidence that the balance for
this utility account was paid on or about January 15, 2010.10
1.f. Charge-off account ($2,786) – Paid. Applicant provided evidence that the balance
for this account was paid on or before March 26, 2010.11
1.g. Charge-off account ($20,543) – In repayment. Applicant negotiated a settlement on
this auto loan debt in December 2009, the actual balance of which was $15,742.
Payments on the loan were missed when Applicant’s wife lost her job in 2007.  The12
 Ex. M (Letter, dated Dec. 22, 2009).      13
 Tr. 20-21, 27, 51-53; Exs. M and P (Payments). At the time of the hearing, Applicant owed a balance of      14
approximately $1,950 on the voluntarily repossessed vehicle. 
 Ex. N (Letter, dated Jan. 18, 2010).      15
 Ex. O (Letter, dated Dec. 28, 2009, and evidence of payments between Oct. 30, 2009, and Nov. 2, 2009).      16
 Ex. A-E (References).      17
 Tr. 57.      18
 Ex. F (Certificate of Counseling, dated Jun. 1, 2010); Ex. G (Family budget).      19
 Tr. 59-60.      20
4
settlement Applicant negotiated featured a pay-off balance of $7,800.  Repayment13
commenced in January 2010, when payments of $975 every 60 days were
commenced. Payments have been made through automatic deduction from Applicant’s
salary. Upon deposit of the final payment of $975 on August 15, 2010, the entire
balance will be satisfied.  14
1.h. Telecommunication collection ($365) – Paid. Applicant provided evidence this
balance was satisfied on or before January 18, 2010.15
1.i. Collection account ($274) – Paid. Applicant provided evidence that this debt was
paid in full between October 30, 2009, and November 2, 2009.16
In his free time, Applicant is very involved with youth sports as a coach. At work,
in the military, and among associates, Applicant has a solid reputation for honesty,
integrity, patriotism, diligence, and superior judgment.  At home, Applicant and his wife17
use a budget that Applicant recently devised. It has thus far proved to be a workable
budget, under which they have a net monthly remainder of about $3,200 a month.18
They are current on all their utility bills. Applicant has received financial counseling.19
He has a savings account. He maintains no credit card accounts. Other than the
balances owed on the two accounts noted in SOR allegations 1.c and 1.g, Applicant
has no outstanding debts and is current on his taxes.20
Policies
When evaluating an applicant’s suitability for a security clearance, an
administrative judge must consider the AG. In addition to brief introductory explanations
for each guideline, the AG list potentially disqualifying conditions and mitigating
conditions. 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. Under AG ¶ 2(c), this
 See also ISCR Case No. 94-1075 at 3-4 (App. Bd. Aug. 10, 1995).      21
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      22
 Id.      23
 Id.      24
5
process is a conscientious scrutiny of a number of variables known as the “whole-
person concept.” The administrative judge must consider all 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.
The government must present evidence to establish controverted facts alleged in
the SOR. An 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 burden of proof is something less than a21
preponderance of evidence. The ultimate burden of persuasion is on the applicant.  22
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 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). “The clearly consistent standard
indicates that security clearance determinations should err, if they must, on the side of
denials.”  Any reasonable doubt about whether an applicant should be allowed access23
to sensitive information must be resolved in favor of protecting such sensitive
information.24
Based upon consideration of the evidence, Guideline F (Financial
Considerations) is pertinent to this case. Conditions pertaining to this AG that could
raise a security concern and may be disqualifying, as well as those which would
mitigate such concerns, are set forth and discussed below.
 AG ¶ 18.      25
6
Analysis
Under Guideline F, “failure or an inability to live within one’s means, satisfy
debts, and meet financial obligations may indicate poor self-control, lack of judgment, or
an 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.”  The guideline sets out several potentially disqualifying conditions. Here,25
Applicant acquired nine delinquent debts, amounting to about $34,000, after his wife
lost her job in 2007. Although the majority of that debt has been repaid, approximately
$1,900 remains owed on an automobile loan and although a second debt has been
settled for $5,500, actual payment on that balance has yet to commence.
Consequently, Financial Considerations Disqualifying Condition (FC DC) AG ¶ 19(a)
(inability or unwillingness to satisfy debts) and FC DC AG ¶ 9(c) (a history of not
meeting financial obligations) apply. With such conditions raised, the burden shifts to
Applicant to overcome the case against him and mitigate security concerns. 
Applicant and his wife support their family on their joint income. In 2007, when
Applicant’s wife earned considerably more than he earned in the Army, she abruptly
lost her job due to a company restructuring. As a consequence, their income was
drastically reduced. She actively sought a new job, eventually relocating to generate
income. Her new field, however, was in real estate. Given the sluggish real estate
market, her income was low. Applicant left his military career in order to better provide
for his family financially and his wife found work in the insurance industry. Through
these efforts, Applicant has doubled his income, his wife has found a new position
paying her at her former salary, and Applicant has paid, addressed, or otherwise
negotiated with all of his creditors. Indeed, several of the debts at issue were paid or
about to be paid before he received the SOR. Given these facts, 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), FC MC AG ¶ 20(b) (the conditions that resulted in the behavior 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), and FC MC ¶ 20(d) (the individual initiated
a good-faith effort to repay overdue creditors or otherwise resolve debts) apply. In
addition to the progress Applicant has made on the debts at issue, he has received
beneficial financial counseling. Therefore FC MC ¶ 20(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) applies. 
To date, Applicant has paid seven of the nine debts noted in the SOR. The
eighth and largest debt has been renegotiated, is in repayment, and has been
substantially repaid. The only other debt at issue, for $8,604, will be settled on payment
of a negotiated sum of $5,500. With the hiring of an attorney for this process, however,
7
Applicant wisely chose to defer payment on this debt to avoid becoming financially
overextended. He is prepared to proceed on payments toward that debt in September
2010, after he completes repayment on his largest debt. The Government stated it is
“comfortable” with this commonsense plan, and so am I. Given Applicant’s progress on
the debts at issue and evidence that he was already addressing those debts before he
received the SOR, I find that Applicant provided sufficient evidence to mitigate financial
considerations security concerns.
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 an applicant’s
conduct and all relevant circumstances. An administrative judge should consider the
nine adjudicative process factors listed at AG ¶ 2(a). 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, as well as the “whole-person”
factors. Many facts speak in favor of Applicant. He is a mature and credible man who
has honorably served this country with distinction. Applicant has built a reputation for
honesty, integrity, diligence, and sound judgment. When their household income was
drastically reduced in 2007, both Applicant and his wife made significant personal
sacrifices to support their family and try to recapture their financial stability. She
temporarily left her home and her family in search of work; he sought an honorable
discharge from the Army to maximize his earning potential through private sector
employment. Their efforts were rewarded. Today, they have a joint income of
approximately $164,000 and the vast majority of their debt has been repaid. 
Applicant began paying off his delinquent debts before he received the SOR.
Seven of the nine debts at issue have been paid. Applicant is in repayment on a debt
initially reflected as having a balance of approximately $20,543. At the time of the
hearing, less than $2,000 had yet to be paid, and it seemed clear that the balance
would be satisfied by September 2010.  Moreover, despite his genuine dispute with a
furniture company over a debt listed in the SOR for $8,604, Applicant negotiated a pay-
off balance on that debt for $5,500. Payment on that plan is set to commence in
September 2010, when Applicant finalizes his payments on the $20,543 debt. There is
every indication that Applicant will continue to honor these debts until they are
completely satisfied, and he has shown that he has both the character and the
resources to do so. In light of Applicant’s demonstrated efforts regarding the delinquent
debts at issue, from both before and after the issuance of the December 16, 2010,
SOR, I find that he has mitigated financial considerations security concerns. Clearance
granted.
8
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
Subparagraph 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 national interest to grant Applicant a security clearance.
Clearance granted.
ARTHUR E. MARSHALL, JR.
Administrative Judge