1
                                                             
                           
                        DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
----------------------- )       ISCR Case No. 09-01765
SSN: ----------- )
)
Applicant for Security Clearance )
Appearances
For Government: Eric Borgstrom, Esq., Department Counsel
For Applicant: Kristen E. Ittig, Esq.
                                                                            
______________
Decision
______________
MARSHALL, Jr., Arthur E., Administrative Judge:
On September 4, 2009, the Defense Office of Hearings and Appeals (DOHA)
issued a Statement of Reasons (SOR) enumerating security concerns arising under
Guideline F (Financial Considerations) and Guideline E (Personal Conduct). 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 response to the SOR notarized on October 9, 2009, Applicant admitted six
of the 20 Guideline F allegations and admitted the facts underlying the three allegations
set forth under Guideline E. Applicant also requested a hearing. DOHA assigned the
case to me on December 1, 2009. The parties agreed to a hearing date of January 20,
2010,  and a notice to that effect was issued on December 16, 2009. That hearing was
postponed because Applicant was out of the country at the time. It was rescheduled for
February 10, 2010, but that hearing was postponed and rescheduled for February 22,
 Tr. 11.      1
 Id.      2
 Tr. 12. This representation was later confirmed.      3
 Ex. 22 (Letter, dated Jun. 7, 2010)      4
2
2010, due to inclement weather.  The hearing was convened as rescheduled and1
Applicant waived his right to a 15-day notice for the hearing.  2
Department Counsel introduced 17 documents, which were accepted into the
record without objection as exhibits (Exs.) 1-17. He noted that the debts referenced in
SOR allegations ¶¶ 1.a, 1.d, 1.p, and 1,q had been either settled or satisfied, and that
the debts noted in ¶ 1.f and ¶ 1.j are duplicative.  Applicant gave testimony, introduced3
one character witness, and offered six documents, admitted into the record without
objection as Ex. A-F. Eleven documents were also offered by Applicant and admitted as
hearing exhibits (HE) A-K. 
Applicant was given until March 10, 2010, to supplement the record with any
additional documents. The transcript (Tr.) of the proceeding was received on March 2,
2010. On March 24, 2010, Department Counsel forwarded 10 additional documents
received from Applicant between March 4, 2010, and March 11, 2010. They were
admitted collectively without objection as Ex. G (1-10). The record was then closed. On
April 16, 2010, Applicant directly emailed to me and Department Counsel materials
updating his debt status. On April 20, 2010, Department Counsel objected to the
submission as untimely. In order to preserve a complete record of Applicant’s debt
status, the record was reopened and the document was accepted as Ex. H. The record
was then closed. 
On May 10, 2010, Applicant again directly submitted a document. Against
Department Counsel’s objection, I admitted the document as Ex. I with the request
Applicant expeditiously submit a demonstrative exhibit reflecting the updates to the
record. On May 28, 2010, Applicant submitted the requested demonstrative exhibit,
including copies of previously admitted documents in an effort to provide a more
complete representation of Applicant’s current debt status. On June 10, 2010, I
received a June 7, 2010, objection to Applicant’s submission from Department Counsel
urging that the submission was untimely.  Inasmuch as the latest submission was4
helpful in incorporating the various post-hearing submissions into the record, it was
accepted as Ex. J. Upon admission, the record was closed on June 10, 2010. Based on
a thorough review of the testimony, submissions, and exhibits, I find Applicant failed to
meet his burden regarding the security concerns raised. Security clearance denied.
Findings of Fact
Applicant is a 49-year-old program manager for a defense contractor. He has
worked for that employer for the past decade. Applicant has earned a high school
diploma, an associate’s degree In aeronautics, and a specialized professional license.
 Tr. 112.      5
 Tr. 28.      6
 Tr. 112.      7
 Tr. 113.      8
 Tr. 53.      9
 Tr. 113-114.      10
 Tr. 108, referencing Applicant’s reduced income and temporary elimination of his wife’s income during      11
his convalescence. 
 Tr. 33.      12
3
He served in the United States (U.S.) military for nine years. Applicant is married and
has four children. Because he works abroad almost 80% of the time, maintaining
contact with his family is difficult.
Before 2004, Applicant had no serious financial difficulties. In 2004, he
purchased a new home. Shortly thereafter, he was injured and underwent extensive
back surgery in late 2004.  During nearly five months of recuperation, he exhausted his5
vacation time. He then relied on short term, then long term disability.  His disability6
payments paid him at approximately 60% of his usual salary, based on an annual
income of about $90,000. His wife, a registered nurse, took an unpaid leave of absence
from her $50,000 a year job to care for Applicant during the first few months of his
recovery. During this period, their household income dropped from about $140,000 to
approximately $54,000.  When Applicant returned to work in February 2005, he7
resumed his $90,000 per year position.  After about 12 to 18 months, he resumed his8
extensive travel schedule. He currently earns approximately $130,000 a year.  When9
Applicant’s wife returned to work in 2005, she returned on a part-time basis, earning
about $30,000 or $35,000 per year until 2009, when she only earned about $1,000.10
During his recuperation and transition back to full-time employment, Applicant
had serious difficulty paying his family’s expenses. Five months with a considerable cut
in income produced a financial “domino effect” on his finances.  His household income11
was also substantially reduced by his wife’s return to work on a part-time basis. He
relied on his savings to supplement his income. Then, in middle or late 2005, he joined
a credit counseling service. The service provided little help. Some creditors would not
work with the service, and service fees were high. After about three months, he
abandoned the credit counseling service. He then consulted attorneys who advised him
to declare bankruptcy, but he chose to honor his creditors directly.  Ultimately, in 2006,12
he began working with his creditors directly. He first started paying off tax liens, then
started working with those creditors that were willing to work with him immediately. He
then moved on to other creditors in an effort to work out repayment plans. He is now
working with his employer to satisfy his debts. He hopes to have all of his debts paid off
 Tr. 34.       13
 Tr. 115-116.      14
 Ex. G (1) (Counsel’s email, dated Mar. 10, 2010) and Ex G (2) (Declaration, dated Mar. 8, 2010).      15
 Ex. G (2), supra, note 15.      16
 Id.      17
 Id.      18
 Id.      19
 Id.      20
 Id.      21
 Id.; see also Tr. 12–124.      22
4
in 18 to 24 months.  Devoted to his work, Applicant is willing to continue working13
overseas at higher wages 75% to 80% of the time in order to expedite the resolution of
financial difficulties.   14
After the hearing, some of the debts at issue in the SOR were paid or settled by
Applicant’s employer, which has “agreed to immediately repay all of [Applicant’s] past
due debts.”   In his March 8, 2010, post-hearing declaration, the founder and Chief15
Operating Executive (CEO) of Applicant’s company, demonstrated his full trust and faith
in Applicant. Apprised of Applicant’s financial distress after the hearing, he surmises
that Applicant is capable of resolving his own financial difficulties. ”  The CEO operates16
his business like a family. He noted that had he been aware of Applicant’s financial
woes, the company would have assisted Applicant earlier to help him address his debt.
He has arranged to have the entity’s finance manager “settle each of [Applicant’s]
debts” directly with each creditor.  Applicant will then be subject to a no-interest loan17
“advance against such future bonuses and pay raises, along with biweekly payroll
deductions.”  18
At the time of the March 2010 declaration, the company believed that the
delinquent debt subject to this arrangement would be approximately $27,000 or
$49,800 if a debt to the Internal Revenue Service “is rolled in.”  The March 201019
declaration states that coordination of payments on Applicant’s debts would be made
within three weeks or as quickly as possible depending on cooperation by Applicant’s
creditors.  A no-interest loan advance repayment would then commence. Under that20
plan, “[p]ayroll deductions will be remitted each month over the next 24 months, and up
to 75 percent of any bonuses (Annual Appraisal, Team Award, and/or Individual
Incentive Award) accumulated during the next two (2) years” will similarly be applied to
the loan balance through automatic payroll deduction.  The employer has offered such21
aid to others in the past. The CEO believes Applicant is loyal, committed, and deserving
of this aid.  22
 Based on the evidence submitted on May 28, 2010, and discussed below, it appears that approximately      23
$18,300 has thus far directly been paid by Applicant’s employer to pay or settle his debts. As noted, there is
no indication whether it has or will absorb into the advance loan those debts paid or settled by Applicant by
telephonic payment, check, or money order. Similarly, there is no evidence whether the IRS debt referenced
in the declaration, but not at issue in the SOR, has been paid by either Applicant or his employer.  
 Ex. G (2), supra, note 15.      24
 As noted above. See also Tr. 12. The Government also indicated that the debt at SOR allegation ¶ 1.u      25
was settled or satisfied, but there is no allegation ¶ 1.u.
5
Before the record closed in June 2010, no final agreement reflecting a total sum
certain or specifically enumerating which of Applicant’s debts the entity has paid or is
willing to pay on Applicant’s behalf was submitted.  Similarly, no submission was23
offered noting whether any of the debts at issue are excluded from this agreement. No
evidence was presented reflecting what actual or projected net monthly income
Applicant would receive after deductions toward this loan are taken, nor was a family
budget introduced showing how Applicant would live on his revised income after payroll
deductions for the loan. The payments thus far paid by the business on Applicant’s
behalf are noted below as having been paid by a business check. The company is an
established entity. Its mailed checks are presumed to be valid evidence of payment to
the payee. There is no indication whether payments made directly by Applicant before
March 8, 2010, are subject to reimbursement by the company for incorporation into the
loan, or whether Applicant’s post-March 8, 2010, payments might be reimbursed for
incorporation into the loan. The employer’s declaration provides that Applicant will work
with a financial management consultant for “advice and assistance.”24
The debts referenced in SOR allegations ¶¶ 1.a, 1.d, 1.p, and 1,q have been
either settled or satisfied, and the debts noted in ¶ 1.f and ¶ 1.j are duplicate entries
reflecting the same debt noted as ¶ 1.a.  Substantial evidence was offered establishing25
these facts. The debts remaining at issue in the SOR are ¶¶:
1.b – August 2008 Judgment for $763. Settled. Applicant settled the judgment balance
of $1,015.32 for $812.26 on or about April 8, 2010. A business check for that amount
was mailed to the collection entity on April 10, 2010. No receipt of payment was
presented. Lacking objection by the Government, official postal service mailing of that
check, as represented, provides adequate evidence that this debt is resolved. See Ex.
J, Tab B.
1.c – June 2007 Judgment for $12,615. Settled. Applicant negotiated a settlement for
this debt, now with a balance of $16,050.18, by which payment of $11,500 before April
30, 2010, would satisfy this debt. He provided evidence that a business check was
mailed for $11,500 on April 13, 2010, providing adequate evidence that this debt has
been resolved. Barring objection by the Government, I find this debt is addressed. See
Ex. J, Tab C.
1.e – October 2007 Judgment for $563. Paid. This judgment was filed in county court in
October 2007. Applicant provided a copy of a law firm’s letter referencing A/C No 14231
 Ex. J, Tab G (Correspondence). See also Ex. G (7) (Email, dated Sep. 14, 2009), noting that as of      26
September 2009, Applicant was “actively repaying on a repay plan.”
 See also Tr. 134.      27
 Ex. K (Letter, dated Jun. 7, 2010).      28
 Ex. J, Tab N (Income Execution and related paperwork).      29
6
and the name of the same creditor as noted in the judgment which was written in
October 2006, before the judgment was entered. He also provided a copy of a recent
business check in the amount of $794.52 to that law firm and proof of mailing. The
check does not indicate the name of the underlying creditor or an account number, but
the payment effort is linked to the debt by its being made payable to the law firm shown
as representing the creditor. There is no evidence Applicant’s employer was willing to
pay for any debts not at issue. Therefore, in light of this evidence, there is adequate
evidence this debt is paid. See Ex. J, Tab E.
1.g – Mortgage Past Due approximately $11,000. Status unclear. Applicant provided
evidence that in August and September 2009, he was working with this creditor
regarding a repayment plan.  His efforts were sufficient to divert steps toward26
foreclosure. Under the plan referenced, payment on the debt was to have continued
through May 2010. Applicant provided no evidence that payments on this plan have
been made or that the balance has been reduced since the 2009 exchange of
correspondence. See Ex. J, Tab G. Applicant did, however, submit a pre-printed
mortgage stub designated “Paymt. No. 4," with an “ON [illegible] PAYMENT DUE” of
$2,655.58 due on “APR. 1, 2010,” and a “LATE PAYMENT” balance due date for
payment after “APR. 16, 2010" of $2,726.30.  See Ex. G (6). No evidence of an April
2010 payment, any post-September 2009 payments, or an updated balance was
offered to show this debt’s current status and balance.27
1.h – Debt for $73 and 1.i for $119. Insufficient evidence. Applicant provided evidence
that his electronic payment for $80 was processed by this creditor on April 13, 2010.
See Ex. J, Tab H. He represented that the payment was for the $73 debt. The account
number for the account balance paid does not correspond with the account numbers
shown on the credit reports for these accounts, although notice is taken that medical
account numbers on credit reports do not always reflect the underlying entity’s actual
account number.
1.k – 1.m – Debts for approximately $11,129. Settled. These three accounts were
settled by payment of $4,100, remitted on a business check and mailed on April 12,
2010. Department Counsel stressed that “it is critical to note that these debts were
settled for a fraction of the total amount owed.”  See Ex. J, Tab K.28
1.n – Charged-off Account for approximately $6,060. Insufficient evidence. A judgment
in the amount of $9,282.97 was ultimately entered against Applicant in 2006 for this
debt.  The creditor is named in the county’s judgment order. It is the same creditor29
 See Exs. 5-13 (credit reports from Nov. 5, 2009, Aug. 5, 2009, and Nov. 4, 2009, six filings of judgments      30
and liens, and county court record). Applicant testified that he has had only one account with this creditor. Tr.
91. Ex. 5 (Credit report, dated Nov. 4, 2008), however, reflects two account entries with this creditor. Although
they share the same date of account opening, they reflect different dates of last activity and account numbers.
 Tr. 143-144. Compare Tr. 132-134, 137.      31
 Tr. 130.      32
 Tr. 98.       33
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noted in the SOR for this debt. Payment is shown on this judgment in the amount of
$8,388.77, in July 2008 to the county sheriff. There is no evidence that a second,
separate judgment by this creditor was obtained by this creditor against Applicant.30
However, there is no link showing the $8,388.77 payment was made toward or satisfied
this $9,282.97 judgment. See Ex. J, Tab N. No documentation shows why there is a
discrepancy in the amount of payment.
1.o – Charged-off Account for approximately $7,095. Settled. This account was settled
for an undisclosed amount in 2005. See Ex. J, Tab O.
1.r – Collection Account for approximately $74. Paid. Applicant showed evidence of a
United States Postal Service money order in the amount of $74.50 payable to this
creditor. See Ex. J, Tab R.
1.s – Collection Account for approximately $541. Insufficient evidence. Applicant
provided evidence of a settlement offer to resolve this matter on payment of $162.95.
The offer has “$320.06. Check by phone. 4/7/2010" handwritten on it, but there is no
evidence of payment, receipt, or transaction, such as a bank statement or on-line
statement indicating the payment was successfully made.  See Ex. J, Tab S.
1.t – Collection Account for approximately $1,114. Settled. Applicant provided evidence
of a February 2010 offer to settle this balance for a 70% savings by payment of $334.44
in the form of a business check mailed on April 10, 2010. See Ex. J, Tab T. 
Applicant, in citing to relevant Appeal Board case law, argued that “the question
is not that the Applicant has paid off all of the indebtedness before the security
clearance arises, only they they’ve established a reasonable plan to resolve the debts,
and that they’ve taken significant actions to implement the plan.”  Department Counsel31
urges, among other arguments, particular consideration of not just the establishment of
a reasonable plan, but the timing of payments in respect to an applicant’s payment
history.  32
In addition to Applicant’s finances, his execution of a security clearance
application on or about September 5, 2008 is at issue. Before completing that
application, he did not check his credit report.  At the time, he knew only that he had33
 Tr. 98-99, .      34
 Tr. 99-100, 115-116.      35
 Regarding the judgments, Applicant was apparently unaware that some of what he thought were debts      36
were, in fact, judgments. See, e.g., Tr. 100. Applicant never appeared in court for any of the proceedings
leading to his adverse judgments. Tr. 104. He was often overseas and usually only received collection calls
or information regarding those calls. Id.
 Ex. 1 (Security clearance application, dated Sep. 5, 2008) at 28-29 of 31.      37
 Tr. 97-98.      38
 Tr. 100.      39
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“some debts.”  He was in a rush to complete the application, basing his answers on a34
previous application.  On that application, in response to Section 27c, he denied35
having any property liens for taxes or debts, despite the ultimately resolved obligation
noted in SOR allegation ¶ 1.d. In response to Section 27d, he denied having had any
adverse judgments in the preceding seven years that had yet to be paid, although
unpaid judgments were then existent.  In response to Section 28, he admitted being36
“currently over 90 days delinquent on any debt[s])” and denied being “over 180 days
delinquent on any debt[s]).”  When instructed to supply account information if he37
answered “yes” to either question regarding delinquent debts, he noted only the debt
listed in the SOR as ¶ 1.j. He did not consider any debts upon which he had made
payments or was working with the creditor as delinquent.  Applicant described his38
omissions as a “mistake.”39
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. 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
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.
 See also ISCR Case No. 94-1075 at 3-4 (App. Bd. Aug. 10, 1995).      40
 Department of the Navy v. Egan, 484 U.S. 518, 531 (1988).      41
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      42
 Id.      43
 Id.      44
9
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 a40
preponderance of evidence.  The ultimate burden of persuasion is on the applicant.  41 42
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 an 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). “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 access43
to sensitive information must be resolved in favor of protecting such sensitive
information.44
Based upon consideration of the evidence, Guideline F (Financial
Considerations) is the most pertinent to this case. Conditions pertaining to this
adjudicative guideline 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.
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
 AG ¶ 18, which also notes, “An individual who is financially overextended is at risk of having to engage      45
in illegal acts to generate funds.”
 Regarding the debts cited at SOR allegations ¶¶ 1.b, 1.c, 1.e, and 1.k.      46
10
information.”  The guideline sets out several potentially disqualifying conditions. Here,45
Applicant admitted several of the numerous delinquent debts enumerated in the SOR,
entries derived from his credit reports. Many date back to late 2004 through 2006, an
acknowledged period of financial difficulty. 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. 
The SOR lists 20 delinquent debts (¶¶ 1.a-1.t) amounting to nearly $74,000. In
his response to the SOR, Applicant admitted to six of the 20 SOR allegations,
representing approximately $14,560 in delinquent debt, and, with explanations, denied
the remaining debts alleged. At the hearing, Applicant attributed his acquisition of
delinquent debt mainly to a period between late 2004 and 2006, when he was seriously
injured, underwent surgery, and had a protracted convalescence. For about five
months, he generated a significantly reduced income and his wife took unpaid leave to
aid him. During that time, their household income was reduced from about $140,000 to
approximately $54,000. Since that time, Applicant’s health has improved, he has
returned to work, and he now spends approximately about 75% of his work effort
abroad in order to earn a higher income to help him address his financial situation. In
2006, he utilized a credit counseling service to address his debts, but the venture was
unproductive. Lawyers advised him to declare bankruptcy, an option he declined to
pursue. He then decided to address his debts on his own, one at a time. At the
February 2010 hearing, Applicant’s employer surmised the extent of Applicant’s debt
and chose to intercede, continuing an apparent corporate tradition of treating the entity
as a family. The CEO graciously offered to pay or settle Applicant’s remaining debts
and pursue recoupment for the sum expended on Applicant’s behalf through a payroll
deduction repayment plan. In March 2010, the employer outlined the terms of this
arrangement. The most recent evidence shows that the employer has thus far obligated
over $17,000  on an overall assessment of Applicant’s debt that ranges from $27,00046
to $49,800, depending on whether a federal tax debt not at issue in the SOR is
incorporated.
Applicant presented evidence that most of the numerous debts at issue have
been settled or paid. Conversely, several debts remain unsatisfied or lack clear
evidence of either their satisfaction or their current status. This includes the delinquent
debts cited in SOR allegations ¶¶ 1.g, 1.h, 1.i, 1.n, and 1.s, involving a total sum in
excess of $18,000. Moreover, Applicant offered his employer’s assurance that it would
lend Applicant the necessary sums to satisfy his debts. While the employer’s
expression of confidence in Applicant is clear and the CEO’s benevolence is striking,
the gesture arrives late in the process. In addition, the payment/repayment plan’s
relatively specific terms fail to identify exactly which delinquent debts of those at issue
11
here are, have been, or will be satisfied directly by the business. Furthermore, lacking a
specific total sum of the debt transferred from delinquent creditors to employer,
assessment cannot be made with regard to whether the loan can be repaid in the time
allotted; whether the undefined payroll deductions will leave Applicant with sufficient
funds to maintain his current lifestyle, obligations, and needs; or whether Applicant will
continue to derive an income sufficient to honor his repayment obligations if a security
clearance is not maintained. Given these considerations, and the fact the record lacks
evidence that all of the debts at issue have been adequately addressed, 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) does not apply. 
Clearly, Applicant’s medical issues and related surgery were unforeseen. A
related and unexpected, drastic drop in household income from about $140,000 a year
to approximately $54,000 a year for a five-month period is highly significant. After his
recuperation, Applicant pursued credit counseling, legal help, and self-budgeting to
address his debts, albeit with varying rates of success. Such facts give rise to 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).
As part of Applicant’s employer’s loan advance and repayment plan, Applicant
was required to meet with a financial management consultant for advice and
assistance. While there is no evidence as to the extent of this consultation or whether it
has transpired, the facts indicate that the employer is resolute in its offer overall.
Assuming Applicant met with this consultant and received or is receiving a program
tantamount to financial counseling, and in light of evidence that many of the debts at
issue have been paid, settled, or are being resolved, 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 those delinquent
obligations. In addition, given the number of debts thus far addressed and adequately
documented, FC MC ¶ 20(d) (the individual initiated a good-faith effort to repay overdue
creditors or otherwise resolve debts) applies.
It is plain that the “domino effect” of Applicant’s injury, surgery, and recuperation,
which featured a five-month long, approximately 61% reduction in household income,
adversely affected Applicant’s financial situation. Whether nearly $74,000 in alleged
delinquent debt and probable interest and fees can be attributed from that five-month
drop from $140,000 to $54,000 annual household income, however, is questionable.
Regardless, Applicant explored resolution of his dilemma with credit counseling and
lawyers before attempting to tackle the problem on his own. Since that time, undeniable
progress has been made by Applicant in addressing many of the 20 debts at issue in
the SOR. 
While progress has been made, at least $17,000 of that debt has not so much
been resolved as it has been temporarily displaced, to the extent that it was paid by
Applicant’s employer with anticipation of repayment in the next two years. In addition,
 In substance, there are two repayment plans. One is the plan executed on Applicant’s behalf by his      47
employer. The second is the plan for Applicant’s repayment of the loan created by his employer’s
expenditures. 
 AG ¶ 15.      48
 Id.      49
12
evidence regarding the current status of the nearly $18,000 at issue for SOR allegations
¶¶ 1.g, 1.h, 1.i, 1.n, and 1.s has yet to be validated.  The amount to be repaid to
Applicant’s employer, and any balances yet owed on any other accounts, are to be paid
in the future from Applicant’s net monthly salary. Applicant currently earns about
$130,000 and his wife recently earned only $1,000 in income, less than the
approximately $140,000 in household income Applicant had when he first encountered
financial difficulty. Without more evidence and information showing what debts are
being paid by the employer, how much new debt Applicant will be obligated to repay his
employer, and what Applicant’s net available income will be following loan-related
deductions, it is impossible to discern whether Applicant can  suffer and sustain a 24-
month long reduction in household income that would lead him into more delinquent
debt. This is particularly worrisome given the substantial debt acquired over a five-
month period in 2005, and his past inability to satisfy those same debts over the past
few years. 
Applicant, in citing to relevant Appeal Board case law, argued that the question is
not that the Applicant has paid off all of the indebtedness before the security clearance
arises, only that they have established a reasonable plan to resolve the debts, and that
they have taken significant actions to implement the plan. This is true. However,
whether a plan is reasonable can only be assessed when sufficient information is
established with regard to the terms and Applicant’s ability to adhere to that plan.
Without more information detailing all the obligations subsumed into the loan, the full
amount of the obligation to be repaid over 24 months, verification that other debts at
issue in the SOR and not subject to that loan are resolved, and a more thorough
depiction of Applicant’s current, post-loan budgetary needs, it is impossible to assess
whether the present debt repayment plans are workable and potentially effective.47
Absent such additional evidence, financial considerations security concerns remain
unmitigated.    
Guideline E – Personal Conduct
Security concerns arise from matters of personal conduct because “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.“  In addition, “any failure to48
provide truthful and candid answers during the security clearance process or any other
failure to cooperate with the security clearance process” is of special interest.  Here,49
personal conduct concerns were potentially raised when Applicant failed to identify his
delinquent debts and judgments on his security clearance application. If such a failure
was deliberate, such omissions would be sufficient to raise Personal Conduct
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Disqualifying Condition AG ¶ 16(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). Consequently, the burden shifts to Applicant to
mitigate the resultant security concerns.
Applicant credibly testified that he did not intentionally mislead or falsify when he
only noted one delinquency on his security clearance application. His explanation was
credible, especially since he was in a rush, based his answers on a previously
submitted application, and had not checked his credit report. Absent evidence that his
omissions were intentional or fraudulent, the disqualifying condition cited must fail.
However, if a disqualifying condition did apply, Personal Conduct Mitigating Condition
AG ¶ 17(e) (the individual has taken positive steps to reduce or eliminate vulnerability to
exploitation, manipulation, or duress) would apply. Absent evidence of intentional falsity
or omission, personal conduct security concerns are mitigated.
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 the 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. Applicant is a mature, educated, and credible witness who served this country
through nine years of military service. He is a devoted husband and father. Applicant is
employed by an understanding and generous employer. There, he is a highly regarded
employee who works tirelessly, usually at a great distance from his family. Applicant
incurred an injury that demanded major surgery in 2004. His wife, a nurse, took leave
without pay to care for him during his recovery. He incurred significant debt during the
five months he recuperated, during which he depleted his savings and lived on
compensation that provided only 60% of his salary. After that five month period, he
returned to work at full salary, while his wife returned to work part-time. 
In 2005, Applicant sought to address his acquired debt through a credit
counseling program, but the program was ineffective. He consulted attorneys who
advised him to file for bankruptcy, but Applicant wanted to honor his debts directly. He
then proceeded to address his debts on his own, apparently without the aid of formal
financial advice. Many debts were addressed, although a substantial amount of his debt
was settled for less than he originally owed. 
When Applicant appeared at the March 2010 hearing, he provided evidence of
an unorchestrated and protracted, but somewhat effective approach to his debts. After
 Applicant’s employer’s plan is exceptionally lenient with regard to the loan’s framework of terms. W hether      50
is is reasonable, however, cannot be discerned without actual numbers, enumerated accounts, and specific
dollar sums regarding deductions to be applied toward repayment of the loan.
14
the hearing, he entered into an agreement with his employer. Under that agreement, his
company would pay Applicant’s delinquent debts. In return, Applicant is to repay any
debt incurred by his employer on his behalf. Evidence of the loan and its repayment
plan is lacking specificity. While the plan proposed reflects that the loan is interest-free,
should be repaid within two years, and designates from what sources Applicant’s
payments should be derived, it does not enumerate what debts at issue will be paid or
reimbursed by the business. The anticipated sum of the loan is projected only as being
between approximately $27,000 and 49,800, which poses an exceptionally broad
range. Without a fixed or more finite loan amount defined, the ability of Applicant to
budget his net income, as reduced through payroll deductions to pay on that loan, is
incalculable. It further confounds attempts to judge the plan as reasonable when
insufficient terms and sums are offered to assess whether Applicant can adjust to the
resultant reduction in net income and still effectively manage his other current
obligations. This is an essential consideration given the tremendous debt Applicant
previously incurred over only five months on a reduced income. Because of that
experience, such information is important in order to gauge his current ability to live
within his means while honoring this repayment through payroll deduction. In addition to
the above, questions remain as to whether purported payments on other debts were
successfully transacted and credited. 
There is no issue here regarding Applicant’s honesty, loyalty, or industriousness.
He has proven himself as a dedicated citizen and a highly valued employee. The
burden in these proceedings, however, is placed squarely on the Applicant. The
evidence provided is  deficient, both in terms of past payments and his financial ability
to adhere to the still-undefined plan proposed by his employer.  The protection of the50
national security is the paramount consideration. AG ¶ 2(b) requires that any doubt
concerning personnel being considered for access to classified information will be
resolved in favor of national security. 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 access to sensitive
information must be resolved in favor of protecting such sensitive information. In light of
these standards and the evidence submitted, I conclude Applicant failed to meet his
burden and mitigate financial considerations security concerns. Clearance is denied.
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 – 1.f For Applicant
Subparagraph 1.g – 1.i Against Applicant
15
Subparagraph 1.j  – 1.m  For Applicant
Subparagraph 1.n Against Applicant
Subparagraph 1.o – 1.r For Applicant
Subparagraph 1.s Against Applicant
Subparagraph 1.t  For Applicant
Paragraph 2, Guideline E: AGAINST APPLICANT
Subparagraph 1.a – 1.c For Applicant
Conclusion
In light of all of the circumstances presented by the record in this case, it is not
clearly consistent with national interest to grant Applicant a security clearance.
Clearance denied.
ARTHUR E. MARSHALL, JR.
Administrative Judge