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                           DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 09-05854 
 SSN: )   
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Melvin A. Howry, Esq., Department Counsel 
For Applicant: Pro se 
 
 
August 16, 2010 
______________ 
 
Decision 
______________ 
 
 
GOLDSTEIN, Jennifer I., Administrative Judge: 
 
Applicant has not mitigated the Financial Considerations or Personal Conduct 
security concerns. Eligibility for access to classified information is denied.  
 
Statement of the Case 
 
On March 8, 2010, the Defense Office of Hearings and Appeals (DOHA) issued a 
Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline 
F, Financial Considerations and Guideline E, Personal Conduct. The action was taken 
under Executive Order (EO) 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 for cases after 
September 1, 2006.  
 
Applicant answered the SOR on April 22, 2010, and requested a hearing before 
an administrative judge. The case was assigned to me on June 3, 2010. DOHA issued a 
notice of hearing on June 7, 2010, and the hearing was convened as scheduled on July 
 
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21, 2010. The Government offered Exhibits (GE) 1 through 17, which were admitted 
without objection. The Applicant offered Exhibits (AE) A through P, which were 
admitted, and testified on his own behalf. The record was held open for Applicant to 
submit additional information. On July 30, 2010, Applicant submitted AE Q through AE 
HH, all of which were admitted without any stated objection. On August 12, 2010, 
Applicant submitted AE II and JJ, which were admitted without objection, although they 
were received after the record closed on July 30, 2010. DOHA received the transcript of 
the hearing (Tr.) on August 5, 2010.  
 
Findings of Fact 
 
 Applicant is a 56-year-old employee of a defense contractor. He is also a 
member of the Coast Guard Auxiliary, which he joined a few months prior to the 
hearing. He has been divorced three times and is currently engaged. He has four adult 
children. He currently has no dependents. (AE A; Tr. 5, 82-83.)  
 
 Applicant has experienced numerous periods of unemployment. He began his 
career in 1978. He worked steadily until 1983 or 1984, when he was laid off. Applicant 
was unemployed until approximately 1985 or 1986. He supported himself during this 
time by teaching martial arts. He was then rehired in his profession and employed until 
1990. In 1990, he was laid off again. He found new employment in 1992 and was 
employed through 1994. From 1994 through 2001, Applicant built his own construction 
business, which failed in 2001. He became a government contractor in 2001 and 
worked through 2005, when he took a leave of absence to care for his ailing father. He 
was hired into his current position in 2007. In 2008, Applicant formed a limited liability 
company to instruct in the martial arts. Applicant was laid off of work for six months 
during 2009. He totals his loss of income in 2009, during this six month period lay-off, to 
be approximately $46,000. (GE 9; AE A; AE B; AE D; Tr. 47-49, 71-81.) 
 
Financial Considerations 
 
 Applicant suffered financial problems beginning prior to 1987 and extending 
through the present time. He discharged debt through a 1987 Chapter 7 bankruptcy. 
Currently, the SOR alleges that Applicant has $28,600 in debt, owed to eight creditors, 
in addition to the bankruptcy and failure to file his state income taxes.1 The Government 
concerns are as follows: 
 
 Allegation 1.a. alleges that Applicant filed Chapter 7 bankruptcy in January 1987. 
Applicant admits this allegation. He filed bankruptcy after being laid-off from his 
employer. It is noteworthy that Applicant’s bankruptcy filing discloses that Applicant 
owed the IRS approximately $3,605 for tax year 1983 and he owed state taxes in the 
amount of $1,792 for tax year 1984. (GE 1; AE Q.)  
 
 Allegation 1.b. alleges that Applicant is indebted on a state tax lien filed against 
him in 2004, in the approximate amount of $1,192. Applicant is indebted to the state in 
                                                          
1 The SOR alleges nine debts, however 1.g. is a duplicate of 1.d. 
 
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the approximate total amount of $11,365 for tax year 1990. Applicant hired an 
accountant in June 2010 to assist him with his state tax delinquencies. In July 2010, an 
Order to Withhold Taxes in the amount of $450.00 per pay period was sent to the 
Applicant’s employer. It is listed on Applicant’s July 30, 2010 pay statement as a state 
tax levy. (GE 5; GE 8; GE 10; GE 12; GE 14; AE E; AE R; AE AA; Tr. 84.) 
 
 Allegation 1.c. alleges that Applicant is indebted to a creditor for the approximate 
amount of $361. This debt was incurred as a result of Applicant’s care for his ailing 
father. Applicant satisfied this debt in full on June 23, 2010, as evidenced by a receipt 
from this creditor. (GE 11; AE G; AE N; AE S; Tr. 84-86.) 
 
 Allegations 1.d. and 1.g. allege that Applicant is indebted on a judgment against 
him for the approximate amount of $5,018 to a surety company. Applicant provided a 
letter from the creditor that established these are the same debt, although the creditor’s 
name appears to be different on the credit report entries. Applicant contracted this 
company to provide bonds for his construction company. In Applicant’s July 2003 
signed statement to the Defense Security Service, he indicated he intended to negotiate 
a settlement with this surety company. He failed to follow up with this creditor, as this 
debt continued to appear on his credit reports dated May 2008. Applicant claims in his 
July 30, 2010, submission that “I was not aware of this debt prior to the beginning of my 
security clearance investigation process.” He indicated he is now investigating the debt 
and has the funds to pay the debt, should it be determined he owes the debt. (GE 3; GE 
4; GE 6; GE 10; GE 11; GE 12; AE W; AE II; Tr. 86, 89.) 
 
 Allegation 1.e. alleges that Applicant is indebted on a medical account for the 
approximate amount of $280. Applicant satisfied this debt in full in September 2005, as 
evidenced by a letter from this creditor. (GE 10; GE 11; AE H; AE X; tr. 87.) 
 
 Allegation 1.f. alleges that Applicant is indebted on a utility bill for the 
approximate amount of $194. Applicant satisfied this debt in full in March 2010, as 
evidenced by a letter from this creditor. (GE 10; GE 11; GE 12; AE J; Tr. 88-89.) 
 
 Allegation 1.h. alleges that Applicant is indebted on a medical account for the 
approximate amount of $55. Applicant satisfied this debt in full in April 2010, as 
evidenced by a letter from this creditor. (GE 10; GE 11; AE I; Tr. 88.) 
 
 Allegation 1.i. alleges that Applicant is indebted on a collections account for the 
approximate amount of $7,500. This debt is for a second surety company that posted a 
bond for Applicant’s construction business. Applicant was clearly aware of this debt 
when he wrote his July 2003 signed statement to the Defense Security Service, 
however, to date, he has taken little action to satisfy this account. (GE 6; GE 10; GE 11; 
AE Y; AE JJ; Tr. 89-90.) 
 
 Allegation 1.j. alleges that Applicant is indebted on a Federal tax debt for the 
approximate amount of $14,000. The total amount alleged, $14,000, comes from 
Applicant’s July 2003 signed statement to the Defense Security Service in which he 
indicated “I believe that the amount I owe is in the neighborhood of $14,000 . . .” when 
 
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discussing his debt to the IRS. He further indicated that his accountant was in the 
process of reaching a settlement with the IRS at that time. A statement from the IRS 
dated August 2003 indicated Applicant owed $26,480 for tax year 1989 and $16,708 for 
tax year 1990. Together, the Credit Reports from November 2001 and May 2008 shows 
that a Federal tax lien of $18,556 against the Applicant was paid and released on 
November 2003. Applicant now indicates that “I apparently, and mistakenly confused 
owing monies to the IRS with monies I may have owed to the [state].” Applicant and his 
accountant visited the IRS on July 27, 2010, to investigate this debt. Applicant avers 
that the IRS informed him he did not owe any monies, and provided him documentation 
that shows he would have been due a refund for tax year 2000, the only year he had not 
filed for, had he actually filed his tax return. Applicant provided proof that he has since 
filed his 2000 individual income tax return. Documentation from the IRS supports 
Applicant’s contention that he would have received a $1,000 refund, had he filed in a 
timely manner. (GE 2; GE 5; GE 7; GE 10; AE M; AE Z; Tr. 90-92.) 
 
 Allegations 1.k. through 1.n allege that Applicant failed to file his state income tax 
returns for 1998, 1999, 2000, and 2001. Documentation from the state indicates that as 
of August 2003, Applicant had failed to file state personal income tax returns for tax 
years 1990, 1992, 1998, 1999, 2000, and 2001. Applicant has indicated his intent to file 
tax returns for the listed years, but has failed to provide proof of any actions to file these 
state returns. (GE 8; AE AA; Tr. 92-96, 114-119.) 
 
 Applicant attended three financial counseling sessions offered through his 
church.  (Tr. 124-271.) 
 
Personal Conduct 
 
 Applicant completed an Electronic Questionnaire for Investigations Processing 
(EQIP) on April 8, 2008. On this form, he was asked in Section 27 “c. In the last 7 years, 
have you had a lien placed against your property for failing to pay taxes or other debts?” 
and “d. In the last seven years, have you had any judgments against you that have not 
been paid?” Applicant answered both of these questions “No.” He was also asked, in 
Section 28, “a. In the last 7 years, have you been over 180 days delinquent on any 
debt(s)?” and “b. Are you currently over 90 days delinquent on any debt(s)?” Applicant 
answered each of these questions “No,” as well. (GE 9.) 
 
 In answering “No” to these questions, he omitted the state tax lien filed against 
him in 2004, addressed above in 1.b.; the judgment against him, addressed above in 
allegation 1.d; and his debts over 180 delinquent within the previous seven years, and 
currently 90 days delinquent, respectively. He denied any intention to mislead the 
Government. He contends that he was unaware of any lien or judgment. Further he 
claimed that he was “unaware of what had been on the Credit Reports” and “at that 
moment of time, I didn’t have any lates [sic].” (Tr. 97-98, 102-113.) 
 
 Considering the straight-forward nature of the EQIP questions, and Applicant’s 
blanket denials of all of the information covered in questions 27 and 28, Applicant 
cannot be credited with good-faith mistake and confusion over his negative answers to 
 
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these questions. In July 2003, Applicant was the subject of a security investigation 
conducted by the Defense Security Service. He gave two in depth signed and sworn 
financial statements in which he disclosed his financial difficulties. These statements 
included a discussion of Applicant’s past due taxes as well as monies owed to the 
creditor who received a judgment against the Applicant. Applicant should have realized 
that he would need to disclose those same issues covered in a previous investigation, 
along with any new debts, since he had not rectified his financial problems. Instead, he 
chose to omit them from his EQIP. 
 
 Applicant is well regarded by his Chief, who wrote a letter in support of Applicant. 
His Chief called him a “trustworthy employee and an asset to the department.” In 
addition, Applicant presented numerous certificates, performance evaluations, and 
thank-you letters that he has been awarded, demonstrating his professional 
achievements and good conduct through his employment. (AE GG.) 
 
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 to be 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, administrative judges apply the guidelines 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 the 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 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 EO 10865 provides that adverse 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 
 
Guideline F, Financial Considerations 
 
The security concern for Financial Considerations is set out in AG ¶ 18, as 
follows:       
 
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.  
 
The guideline notes several conditions that could raise security concern under 
AG ¶ 19. Three are potentially applicable in this case:   
 
(a) inability or unwillingness to satisfy debts;  
 
(c) a history of not meeting financial obligations; and 
 
(g) failure to file annual Federal, state, or local income tax returns as 
required or the fraudulent filing of the same. 
 
 Applicant accumulated delinquent debts and has been unable or unwilling to pay 
his obligations. His delinquencies have been on-going for several years, without 
resolution. He has a history, dating back to tax year 1983, of failing to pay his Federal 
and state taxes in a timely manner. Further, the Government established that Applicant 
failed to file his state income tax returns for tax years 1998, 1999, 2000, and 2001. The 
evidence is sufficient to raise the above disqualifying conditions. 
  
 Five Financial Considerations Mitigating Conditions under AG ¶ 20 are potentially 
applicable:  
 
 
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(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 has satisfied several of his smaller debts, but his large debts to the two 
surety companies remain unpaid. Further, Applicant was unable to establish that he is 
taking any reasonable actions on either of these two surety debts. His actions with 
respect to his state tax debt have not been shown to be voluntary, nor do they evidence 
a good faith effort to repay the debt. His debt is current and on-going. AG ¶ 20(a) is not 
applicable.  
 
Applicant’s financial difficulties were partly caused by periods of unemployment, 
three divorces, and his extended care for his father. These qualify as conditions that 
were outside his control. However, to be fully applicable, AG ¶ 20(b) also requires that 
the individual act responsibly under the circumstances. Applicant has not made a 
significant attempt to responsibly address his remaining debts. AG ¶ 20(b) is not 
applicable. 
 
 Applicant sought financial counseling from his church. However, he has failed to 
show that his financial problems are under control. He failed to provide proof that AG ¶ 
20(c) applies. 
 
 Applicant has satisfied four of his debts totaling $890 in addition to the IRS tax 
debt that was satisfied in November 2003. He recently made a single $450 payment on 
his state tax debt. However, he has not made payment arrangements with any of his 
other creditors. There is no showing he has initiated a good-faith effort to repay his 
remaining overdue creditors or otherwise resolve debts with respect to allegations 1.d 
and 1.i.  AG ¶ 20(d) is only partially mitigating. 
 
 
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 Finally, Applicant has not contested his outstanding debts. AG ¶ 20(e) is not 
mitigating. 
 
Guideline E, Personal Conduct  
 
The security concern for the Personal Conduct guideline is set out in AG ¶ 15: 
 
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. 
 
 AG ¶ 16 describes conditions that could raise a security concern and may be 
disqualifying. The following disqualifying conditions are potentially applicable: 
 
(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 or status, determine security clearance 
eligibility or trustworthiness, or award fiduciary responsibilities; and 
 
(c) credible adverse information in several adjudicative issue areas that is 
not sufficient for an adverse determination under any other single 
guideline, but which, when considered as a whole, supports a whole-
person assessment of questionable judgment, untrustworthiness, 
unreliability, lack of candor, unwillingness to comply with rules and 
regulations, or other characteristics indicating that the person may not 
properly safeguard protected information. 
 
 Applicant failed to list debts on his 2008 EQIP in Sections 27 and 28 that he 
acknowledged in his 2003 signed statement. He clearly knew he had debts that had not 
been resolved since his last security interview. Yet, he chose not to include the debts on 
the EQIP. This behavior indicates questionable judgment and untrustworthiness. 
  
AG ¶ 17 provides conditions that could mitigate security concerns. The following 
are potentially applicable:  
 
(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 
 
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aware of the requirement to cooperate or provide the information, the 
individual cooperated fully and truthfully; 
 
(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; and  
 
(e) the individual has taken positive steps to reduce or eliminate 
vulnerability to exploitation, manipulation, or duress. 
 
 After considering the mitigating conditions outlined above in AG ¶ 17, it is 
apparent that none of them apply. Applicant did not make prompt or good-faith efforts to 
correct his falsification or concealment. He provided no information that indicates he 
was ill-advised in completing his SF 86. Falsifying information is a serious offense and 
Applicant has done nothing to show that similar lapses in judgment are unlikely to recur. 
Further, he fails to take responsibility for his actions. He has not provided information in 
this record to show that he has met his burden of proof for his personal conduct. 
 
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, exploitation, or 
duress; and (9) the likelihood of continuation or recurrence. 
 
Under AG ¶ 2(c), 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.        
 
I considered the potentially disqualifying and mitigating conditions in light of all 
the facts and circumstances surrounding this case. I have incorporated my comments 
 
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under Guidelines F and E, in my whole-person analysis. Some of the factors in AG ¶ 
2(a) were addressed under those guidelines, but some warrant additional comment.  
 
Applicant is well respected by his Chief and has numerous certificates showing 
achievements over his long career. He is currently employed and has satisfied some of 
his debts. Despite his accomplishments, he has failed to demonstrate good judgment 
when it comes to satisfying his financial delinquencies, and in his personal conduct. His 
choices, with respect to his debts and his answers on his EQIP, do not demonstrate the 
judgment, reliability, or trustworthiness needed to hold a security clearance. There are 
significant unresolved concerns about Applicant’s finances and judgment.  
 
Overall, the record evidence leaves me with questions and doubts as to 
Applicant’s eligibility and suitability for a security clearance. For all these reasons, I 
conclude Applicant has not mitigated Financial Considerations and Personal Conduct 
security concerns.  
 
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 
 
  Subparagraph 1.a.:   Against Applicant 
Subparagraph 1.b:   Against Applicant 
  Subparagraph 1.c.:   For Applicant 
  Subparagraph 1.d.:   Against Applicant 
  Subparagraph 1.e.:   For Applicant 
  Subparagraph 1.f.:   For Applicant 
  Subparagraph 1.g.:   Against Applicant 
  Subparagraph 1.h.:   For Applicant 
  Subparagraph 1.i.:   Against Applicant 
  Subparagraph 1.j.:   For Applicant 
Subparagraph 1.k.:   Against Applicant 
Subparagraph 1.l.:   Against Applicant 
Subparagraph 1.m.:   Against Applicant 
Subparagraph 1.n.:   Against Applicant 
 
Paragraph 2, Guideline E:   AGAINST APPLICANT 
 
  Subparagraph 2.a.:   Against Applicant 
Subparagraph 2.b:   Against Applicant 
  Subparagraph 2.c.:   Against Applicant 
  Subparagraph 2.d.:   Against Applicant 
 
 
 
 
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Conclusion 
 
 In light of all of the circumstances presented by the record in this case, it is not 
clearly consistent with the national interest to grant Applicant eligibility for a security 
clearance. Eligibility for access to classified information is denied. 
 
 
 
________________________ 
Jennifer I. Goldstein 
Administrative Judge