Authorized by DoD Directive 5220.6 (Directive), Section E3.1.2.2.1
 Required by Executive Order 10865, as amended, and by DoD Directive 5220.6 (Directive), as amended.2
1
                                                             
                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
----------------------------- )
SSN: --------------------- )       ISCR Case No. 08-11706
)
)
Applicant for Security Clearance )
Appearances
For Government: D. Michael Lyles, Esquire, Department Counsel
For Applicant: Pro se
______________
Decision
______________
MALONE, Matthew E., Administrative Judge:
Based upon a review of the pleadings, exhibits, and transcript, Applicant’s
request for a security clearance is denied.
On July 5, 2008, Applicant submitted a Questionnaire for Sensitive Positions (SF
86) to renew a security clearance required for his job with a defense contractor. After
the ensuing background investigation was completed, adjudicators for the Defense
Office of Hearings and Appeals (DOHA) issued to Applicant a set of interrogatories  to1
clarify or augment information in his background. After reviewing the results of the
background investigation and Applicant’s responses to the interrogatories, DOHA
adjudicators were unable to make a preliminary affirmative finding  that it is clearly2
consistent with the national interest to continue Applicant’s access to classified
 The adjudicative guidelines were implemented by the Department of Defense on September 1, 2006.3
Pending official revision of the Directive, they take precedence over the guidelines listed in Enclosure 2 to the
Directive.
2
information. On February 4, 2010, DOHA issued to Applicant a Statement of Reasons
(SOR) alleging facts which raise security concerns addressed in the adjudicative
guidelines (AG)  for personal conduct (Guideline E), financial considerations (Guideline3
F), and criminal conduct (Guideline J). 
Applicant timely answered the SOR, and requested a hearing. The case was
assigned to me on June 21, 2010. Pursuant to a Notice of Hearing issued on June 24,
2010, I convened a hearing in this matter on July 15, 2010. The parties appeared as
scheduled. The Government presented 11 exhibits (Gx. 1 - 11), which were admitted
without objection. Applicant testified and proffered six exhibits, which were admitted
without objection as Applicant’s Exhibits (Ax.) A - F. Additionally, I left the record open
after the hearing to give Applicant time to submit additional relevant information. DOHA
received the transcript of hearing (Tr.) on July 29, 2010. The record closed the same
day when I received Applicant’s post-hearing submission, which I admitted without
objection as Ax. G.
Findings of Fact
Under Guideline J, the Government alleged that in September 2000, Applicant
was charged and convicted of uttering a fraudulent check (SOR 1.a); that in January
2004, his driver’s license was suspended for failure to show proof of auto insurance
(SOR 1.b); that in March 2004, the January 2004 suspension of his driver’s license was
extended because he was driving on that suspended license (SOR 1.c); that in April
2004, he was charged and convicted of the felony offense of breach of trust with
fraudulent intent over $1,000 but less than $5,000, for which he was sentenced to five
years (suspended) in jail, placed on three years probation, and ordered to pay
restitution (SOR 1.d); that in April 2006, his probation was extended for two years for
failing to pay restitution, fines, and costs as ordered by the court when he was convicted
as alleged in SOR 1.d (SOR 1.e); that in August 2006 he was charged with driving on a
suspended license (SOR 1.f); and that in November 2007, his probation from April 2004
was again extended for failure to pay restitution, fines, and costs as ordered by the
court in April 2006 (SOR 1.g). In response, Applicant admitted SOR 1.a, 1.b, 1.c, and
1.e, and he denied SOR 1.d, 1.f, and 1.g.
Under Guideline E, the Government alleged that Applicant deliberately made a
false statement to a Government investigator during his October 13, 2008, subject
interview. Specifically, the Government alleged that the Applicant attempted to minimize
the criminality of his conduct that led to his arrest in April 2004 as alleged in SOR 1.d
(SOR 2.a). In response, Applicant admitted this allegation.
Under Guideline F, the Government alleged that Applicant accrued
approximately $22,724 of delinquent debt for 16 accounts (SOR 3.a - 3.p). The
Government also cross-alleged as disqualifying financial information the allegations in
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SOR 1.a, 1.e, and 1.g (SOR 3.q) In response, Applicant denied SOR 3.a - 3.o, but
admitted SOR 3.p. His answers to SOR 1.a, 1.e, and 1.g serve by reference as his
answer to SOR 3.q. In addition to Applicant’s admissions, and having reviewed
Applicant’s response to the SOR, the transcript, and exhibits, I make the following
findings of relevant fact.
Applicant is 32 years old and has been employed since June 2008 by a defense
contractor in a position that requires a security clearance. He also is in the U.S. Army
National Guard, where he holds the rank of staff sergeant (paygrade E-6). In 2003, he
was recalled to active duty and deployed to Iraq for 12 months. He again deployed to
Iraq from May 2009 until May 2010. Applicant also served in the U.S. Navy from June
1996 until June 1999, then affiliated in a reserve status with the Army National Guard in
February 2000. Applicant first obtained a security clearance while in the Navy, and he
still holds a clearance through his Army National Guard affiliation. (Gx. 1)
Applicant and his wife have been married since March 2008, and they have three
children (ages 13, 8, and 3). Applicant also has a 13-year-old child by another woman to
whom he pays $250 each month in child support. (Gx. 1; Tr. 82 - 83)
After he left the Navy in 1999, Applicant began to have financial problems
because he was either unemployed or under-employed. In August 2001, he was hired
by a franchise of a nationally-known auto parts chain. He eventually became the store
manager. However, in 2004 he converted approximately $1,463.26 of store refunds into
cash, which he then used for his own purposes. In April 2004, Applicant pleaded guilty
to a felony charge of breach of trust with fraudulent intent over $1,000 but less than
$5,000. Applicant was sentenced to five years in jail, which was suspended. He was
placed on three years probation, and ordered to perform 100 hours of community
service. He was also ordered to pay back the money he stole plus fines and court costs.
(Gx.1; Gx. 3; Gx. 4) Applicant testified that he did this because, as a store manager, he
worked nearly 70 hours each week yet was paid only $9 hourly. He felt underpaid and
decided to take what he felt was due him. Applicant acknowledged this did not justify
what he did. (Tr. 69 - 70)
Applicant was twice charged with violating the terms of his probation. Specifically,
he was delinquent in making the required restitution payments ordered by the court.
Applicant was not convicted of the actual charges; rather, the terms by which he was to
pay were revised by the court and he was put on a new payment plan. He otherwise
complied with the terms of his probation, from which he was released in March 2008,
one year later than originally intended. (Ax. F)
Applicant disclosed his felony conviction on his September 2008 SF 86.
However, in October 2008, when he was interviewed by a Government investigator,
Applicant stated that he was charged with theft because an engine was missing from
the store’s inventory. Applicant went on to explain that, because he was the store
manager he was told he would have to pay for it. He told the Government agent that,
rather than pay for the engine, he quit his job. Applicant characterized the resolution of
this event as a civil action (See Gx. 2: “The case was found in favor of the company and
[Applicant] had to pay for the missing property.”) in which the company prevailed. He
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also stated that he paid for the missing property and that “no further action was taken.”
(Id.) According to police and court records, Applicant was charged through a grand jury
indictment with the felony specified in SOR 1.d. He pleaded guilty and received the
sentence specified in SOR 1.d. Applicant has admitted that he intentionally falsified his
statements about this allegation during his subject interview, but did not otherwise
address his conduct in response to the SOR or at his hearing.
The financial problems Applicant experienced after he left the Navy were
exacerbated by the loss of his job at the auto parts store. According to available credit
reports, he amassed approximately $22,724 of delinquent debt for 16 unpaid accounts.
Of those debts, one is for $16,199 and represents a car loan he obtained while he was
in the Navy, and on which Applicant defaulted in February 2002. (Gx. 9; Gx. 10; Gx. 11)
The car was repossessed and Applicant believes it was resold, with the proceeds to be
applied to the loan obligation. However, Applicant has not verified that his actual debt is
less than that listed in the credit reports. Nor has he contacted that creditor to try and
resolve the debt. (Tr. 54 - 55) Of the remaining 10 debts totaling $6,525, Applicant
established that he has resolved six of them (SOR 3.a - 3.d, 3.g, and 3.i) totaling
approximately $2,382. (Ax. G)
Applicant also established that he and his wife bought a house in March 2010
after they resolved other (unalleged) debts to raise their credit score and qualify for a
Veterans’ Administration mortgage subsidy program. That effort began in late 2009.
Applicant and his wife were able to make progress on resolving their debts because
Applicant’s military pay when he was deployed was significantly higher than the pay
from his defense contractor job. (Ax. C; Tr. 45) Applicant also testified that he has taken
advantage of financial counseling programs offered through the Army, and that his
command made financial responsibility a training priority. (Tr. 59, 66, 77 - 78) Applicant
further testified, but did not document, that he has about $8,000 in savings, he has a
positive monthly cash flow of about $2,500, and the balance on a retirement account he
started while he was in the Navy is now about $125,000. (Tr. 63 - 65)
In addition to Applicant’s 2004 felony conviction and his subsequent probation
violations, in September 2000, Applicant was also charged with uttering a fraudulent
check in September 2000. He was found guilty through a bench trial in May 2001, and
he was fined and ordered to make restitution. In January 2004, Applicant’s driver’s
license was suspended after he was charged with not having car insurance. He was
also charged in March 2004 with driving on that suspended driver’s license. However,
Applicant explained that his license was suspended without his knowledge while he was
deployed to Iraq in 2003. (Tr. 43) Available information showed that this charge actually
stemmed from the aforementioned license suspension in January 2004, because
Applicant had not yet resolved the question of his insurance so he could get his license
back. (Gx. 6 and 7) In August 2006, Applicant was again charged with driving on a
suspended license. Applicant denied the SOR allegation (SOR 1.f) regarding this
charge, and aside from a listing of an arrest in Gx. 3 there is no other information
available about what happened.
 See Department of the Navy v. Egan, 484 U.S. 518 (1988).4
 Directive. 6.3.5
 See Egan, 484 U.S. at 528, 531.6
5
Applicant’s performance in the Army during his active duty recalls was excellent.
He received numerous awards and other forms of recognition for his work. (Ax. B) His
personal references describe Applicant as reliable and of good character. (Ax. A)
Policies
A security clearance decision is intended to resolve whether it is clearly
consistent with the national interest  for an applicant to either receive or continue to4
have access to classified information. Each decision must be a fair, impartial, and
commonsense determination based on examination of all available relevant and
material information,  and consideration of the pertinent criteria and adjudication policies5
in the adjudicative guidelines. Decisions must also reflect consideration of the factors
listed in ¶ 2(a) of the new guidelines. Commonly referred to as the “whole-person”
concept, those factors are:
(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. 
The presence or absence of a disqualifying or mitigating condition is not, by itself,
conclusive. However, specific applicable guidelines should be followed whenever a case
can be measured against them as they represent policy guidance governing the grant or
denial of access to classified information. In this case, the pleadings and the information
presented by the parties require consideration of the security concerns and adjudicative
factors addressed under AG ¶ 15 (Guideline E - Personal Conduct), AG ¶ 18 (Guideline
F - Financial Considerations), and AG ¶ 30 (Guideline J - Criminal Conduct).
The Government bears the initial burden of producing admissible information on
which it based the preliminary decision to deny or revoke a security clearance for an
applicant. Additionally, the Government must be able to prove controverted facts
alleged in the SOR. If the Government meets its burden, it then falls to the applicant to
refute, extenuate or mitigate the Government’s case. Because no one has a “right” to a
security clearance, an applicant bears a heavy burden of persuasion.  A person who6
has access to classified information enters into a fiduciary relationship with the
Government based on trust and confidence. Thus, the Government has a compelling
interest in ensuring each applicant possesses the requisite judgment, reliability, and
trustworthiness of one who will protect the national interests as his or her own. The
 See Egan; Adjudicative Guidelines, ¶ 2(b).7
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“clearly consistent with the national interest” standard compels resolution of any
reasonable doubt about an applicant’s suitability for access in favor of the Government.7
Analysis
Financial Considerations
The security concern about Applicant’s finances, as stated in AG ¶ 18, is that:
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 Government presented sufficient information to support the allegations in
SOR 3.a - 3.q; that is, that Applicant accrued about $22,724 of delinquent debt for 16
unpaid accounts. Applicant’s financial problems arose from uneven employment after
he left the Navy in 1999, but were exacerbated by the loss of his job in 2004 when he
was arrested for stealing from his employer. Applicant presented information showing
he has paid some of his debts, but he still owes more than $20,000 in delinquencies.
Further, he twice violated the terms of his probation after his 2004 arrest by failing to
pay restitution as ordered by the sentencing court, and he was convicted in 2001 of
issuing a worthless check. All of the foregoing requires application of the disqualifying
conditions listed at AG ¶ 19(a) (inability or unwillingness to satisfy debts) and AG ¶
19(c) (a history of not meeting financial obligations), and AG ¶ 19(d) (deceptive or illegal
financial practices such as embezzlement, employee theft, check fraud, income tax
evasion, expense account fraud, filing deceptive loan statements, and other intentional
financial breaches of trust).
Given the facts of this case, I have considered possible application of the
mitigating conditions at 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);
AG ¶ 20(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); AG ¶ 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); and AG ¶ 20(d) (the individual initiated a good-faith effort
to repay overdue creditors or otherwise resolve debts). However, I conclude the record
does not support application of any of these factors.
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In response to the SOR and at hearing, Applicant established that he has paid or
otherwise resolved six of the debts listed in the SOR. Applicant also established that he
started paying his debts in late 2009, in an effort to clean up his credit so he and his
wife could buy a house. Applicant established through Ax. C that he and his wife bought
a house in March 2010. But while Applicant asserted that he completed financial
counseling through the Army, that he has significant positive cash flow each month, and
that he has savings in excess of $130,000, he has not corroborated his current finances
through any documentation. Given his previous misrepresentations about relevant
information in his background, the Government is entitled to such proof before
concluding that his current finances are sound. On balance, Applicant still carries
significant delinquent debt, but he has not presented sufficient information to show how,
if at all, his debt was due to unusual or unforeseen circumstances, or why he did not act
sooner to resolve his debts despite being steadily employed since 2008. On balance, he
has not met his burden of persuasion in response to the adverse information that
supports the Government’s decision to refuse his application for a security clearance.
Criminal Conduct
The Government presented sufficient reliable information to support its
allegations that Applicant has engaged in criminal conduct on several occasions in the
past 10 years. His crimes range from minor bad check charges to a felony conviction for
theft from his employer. He also twice violated the terms of his probation after his felony
conviction. The security concern raised by the facts established by the Government’s
information is stated at AG ¶ 30 as follows:
Criminal activity creates doubt about a person's judgment, reliability and
trustworthiness. By its very nature, it calls into question a person's ability
or willingness to comply with laws, rules and regulations. 
More specifically, Applicant’s conduct requires application of the disqualifying conditions
at AG ¶ 31(a) (a single serious crime or multiple lesser offenses), AG ¶ 31(c) (allegation
or admission of criminal conduct, regardless of whether the person was formally
charged, formally prosecuted or convicted) and AG ¶31(e) (violation of parole or
probation, or failure to complete a court-mandated rehabilitation program). 
In response, Applicant has argued that he is now more mature and responsible.
Thus, he avers that his criminal conduct is remote in time and circumstance, and not
likely to recur. Given the facts and circumstances of this case, I have considered the
possible application of the mitigating conditions listed at AG ¶ 32(a) (so much time has
elapsed since the criminal behavior happened, or it happened under such unusual
circumstances that it is unlikely to recur or does not cast doubt on the individual's
reliability, trustworthiness, or good judgment) and AG ¶ 32(d) (there is evidence of
successful rehabilitation; including but not limited to the passage of time without
recurrence of criminal activity, remorse or restitution, job training or higher education,
good employment record, or constructive community involvement).
Applicant’s position is that he accepts responsibility for his past actions and that
he is not likely to engage in illegal conduct. His last known criminal conduct occurred in
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2007, when he violated the terms of his probation. Thus, court oversight of his conduct
did not end until March 2008. Seven months later, when he was interviewed for his
security clearance, he lied to a Government investigator about his felony arrest,
essentially denying that he did anything wrong. At hearing, he did not address this
conduct other than to admit that his falsification was intentional. His lack of candor
undermines any claim that he is rehabilitated and has accepted responsibility for his
actions. Applicant was 26 years old and a veteran of the military when he stole from his
employer. He was 30 years old when he lied during his subject interview. These facts
weaken his claim that age and maturity will preclude future criminal conduct. The
foregoing persuades me that Applicant has not met his burden in response to the
Government’s information and that he has not mitigated the security concerns about his
criminal conduct. 
Personal Conduct
The Government presented sufficient information to support its allegation that
Applicant deliberately made false statements about his 2004 felony arrest during his
subject interview with a Government investigator. Additionally, Applicant admitted the
allegation in response to the SOR and did not provide any explanation for his conduct in
this regard. The security concern raised by this conduct is stated at AG ¶ 15 as follows:
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.
More specifically, Applicant’s conduct requires Application of the disqualifying condition
at AG ¶ 16(b) (deliberately providing false or misleading information concerning relevant
facts to an employer, investigator, security official, competent medical authority, or other
official government representative). By contrast, Applicant presented no information to
explain, refute, or mitigate his deliberate falsification to a Government investigator.
Accordingly, none of the mitigating conditions at AG ¶ 17 apply, and this guideline is
resolved against the Applicant.
Whole-Person Concept
I have evaluated the facts presented and have applied the appropriate
adjudicative factors under Guidelines E, F, and J. I have also reviewed the record
before me in the context of the whole-person factors listed in AG ¶ 2(a). Applicant is 32
years old and presumed to be a mature adult. He served in the U.S. Navy until 1999,
and he has served, by all accounts, with distinction in the U.S. Army National Guard.
His service included two deployments to Iraq and he was personally commended for his
performance on several occasions. Although Applicant’s finances continue to be of
concern relative to his suitability for a security clearance, he appears to be trying to
improve his financial standing and his personal circumstances. Unfortunately, he has
not documented those efforts sufficiently to outweigh the negative inferences raised by
 See footnote 5, supra.8
 See footnote 7, supra.9
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his recent criminal conduct and his deliberate misrepresentations about that conduct.
He has not yet established a documented track record of personal and financial
reliability that is consistent with the level of trust which the Government must be able to
place in him for continued access to classified information. A fair and commonsense
assessment  of all available information bearing on Applicant’s past and current8
circumstances shows that doubts remain about his ability or willingness to protect the
Government’s interests as his own. Because protection of the national interest is the
most important consideration in these determinations, any doubts about Applicant’s
suitability to hold a security clearance must be resolved in favor of the Government.9
Formal Findings
Formal findings 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 J: AGAINST APPLICANT
Subparagraphs 1.a - 1.g: Against Applicant
Paragraph 2, Guideline E: AGAINST APPLICANT
Subparagraph 2.a: Against Applicant
Paragraph 3, Guideline F: AGAINST APPLICANT
Subparagraphs 3.a - 3.d, 
3.g, 3.i: For Applicant
Subparagraphs 3.e - 3.f, 
3.h, 3.j - 3.q: Against Applicant
Conclusion
In light of all of the foregoing, it is not clearly consistent with the national interest
to continue Applicant’s access to classified information. Request for security clearance
is denied.
                                         
MATTHEW E. MALONE
Administrative Judge