DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 09-06777 
  ) 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Gina Marine, Esquire, Department Counsel 
For Applicant: Pro se 
 
 
______________ 
 
Decision 
______________ 
 
CREAN, Thomas M., Administrative Judge: 
 
 Based on a review of the case file, pleadings, exhibits, and testimony, eligibility 
for access to classified information is granted.  
 
On May 4, 2009, Applicant submitted an Electronic Questionnaires for 
Investigations Processing (e-QIP) as a requirement for a position with a defense 
contractor. After an investigation conducted by the Office of Personnel Management 
(OPM), the Defense Office of Hearings and Appeals (DOHA) issued a Statement of 
Reasons (SOR), dated March 3, 2010, to Applicant detailing security concerns for 
financial considerations under Guideline F. DOHA acted under Executive Order 10865, 
Safeguarding Classified Information within Industry (February 20, 1960), as amended; 
Department of Defense Directive 5220.6, Defense Industrial Personnel Security 
Clearance Review Program (January 2, 1992), as amended (Directive); and the 
adjudicative guidelines (AG) effective within the Department of Defense on September 
1, 2006. Applicant acknowledged receipt of the SOR on May 3, 2010. 
 
 Applicant answered the SOR on May 17, 2010, admitting the one allegation 
under Guideline F, but denying that the allegation raised a security concern. 
Department Counsel was prepared to proceed on July 1, 2010, and the case was 
 
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assigned to me on August 11, 2010. DOHA issued a Notice of Hearing on September 2, 
2010, scheduling a hearing for September 22, 2010. I convened the hearing as 
scheduled. The Government offered four exhibits marked and admitted without 
objection as Government Exhibits (Gov. Ex.) 1 through 4. Applicant testified, and 
offered six exhibits marked and admitted without objection as Applicant Exhibits (App. 
Ex.) A through F. DOHA received the transcript of the hearing (Tr.) on October 6, 2010. 
 
Findings of Fact 
 
 Applicant admitted the factual allegation in the SOR. I included Applicant's 
admission in my findings of fact. After a thorough review of the pleadings, transcript, 
and exhibits, I make the following essential findings of fact.   
 
Applicant is 50 years old and has been employed as a lead technician for a 
defense contractor for approximately two years. He is married with two children who are 
not dependent on him for support. (Gov. Ex. 1, e-QIP, dated May 4, 2009) Credit reports 
(Gov. Ex. 3, dated May 19, 2009; Gov. Ex 4, dated April 13, 2010) show a delinquent 
debt for a line of credit for $18,582. Other debts were initially listed as delinquent on the 
credit reports, but Applicant has paid these debts in full. (Tr. 40-42) 
 
Both Applicant and his wife lost their good paying jobs in mid-to-late 2007. 
Applicant's wife was employed as a quality control inspector for a mining company, but 
the work became too hard for her. She left that job and was unemployed for only a 
month before finding employment, but at a lower salary. She also started to attend 
school at night to change careers. Her net salary with the mining company was about 
$700 a week but her present net salary is only approximately $300 weekly or $1,300 
monthly. Applicant was laid of in December 2007 and went on unemployment in 
January 2008. He received only $326 weekly in unemployment. Applicant started his 
present job in June 2008. His net monthly pay is now $2,400. Applicant and his wife's 
monthly combined total income is approximately $3,700. Their present income has been 
cut approximately in half from the income they received before losing employment in 
2007. Their monthly expenses are about $3,200 leaving approximately $300 to $500 in 
discretionary income. (Tr. 22-23) 
 
Applicant purchased land and started to build his own house on the land in 2002. 
He used a construction loan of over $115,000 to purchase the land and building 
supplies and equipment. In 2006, Applicant refinanced his mortgage. He took about 
approximately $10,000 in equity which he used to pay other bills and debts. At this time, 
his mortgage was approximately $167,000 and his monthly mortgage payments were 
approximately $1,300. The mortgage company also provided them a home equity line of 
credit card with a limit of $20,000 in early 2007. At first, Applicant and his wife did not 
use the line of credit. At the time, he and his wife were earning approximately $80,000 
yearly, and had sufficient income to meet all their financial obligations. (Tr. 25-27) 
 
When Applicant and his wife lost their good paying employment in the fall of 
2007, they started to use the line of credit for normal living expenses and the amount 
 
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owed on the line of credit rose to approximately $18,000. Their line of credit payments 
were approximately $300 monthly so they had a combined payment to the mortgage 
company of approximately $1,600. They were unable to meet their mortgage and line of 
credit payments. Applicant was able to sell the house and part of the land it was on to 
his father-in-law on a short sale for approximately $45,000 less than the mortgage. This 
relieved Applicant of the mortgage. His father-in-law rents the house back to Applicant, 
and he is current with his rent. Applicant had other debts that were delinquent, such as 
medical and credit cad debts, but they have been paid in full. He also pays 
approximately $400 monthly for the portion of the land he initially purchased that was 
separated from the house at the short sale. (Tr. 28-30, 33-35) 
 
The creditor with the line of credit sold the debt to a collection agency. Applicant 
was willing to make payments on the line of credit. He contacted the collection agency 
but they would not negotiate a payment plan. They wanted a lump sum payment of the 
debt, or at best payments of $3,000 to $4,000 monthly until the debt was paid in full. 
Applicant does not have enough income to meet the demands of the collection agency. 
His last conversation with the collection agency was a few months ago. Applicant is 
current with all his bills, and local, state, and federal taxes. Only his line of credit is 
delinquent. (Tr. 30-45) 
 
Applicant presented letters of recommendation from local officials, his work 
supervisors, and customers. A local official noted that Applicant worked on a project for 
the county and showed excellent technical knowledge. His interpersonal skills fostered 
good working relationships with the county and Applicant's company. He was always a 
good team player and facilitator. (App. Ex. A, Letter, dated September 10, 2010) A local 
official noted he has known and worked with Applicant for over 20 years and Applicant 
is a person of high integrity and character. (App. Ex. B, Letter, undated) A fellow 
employee notes that he has known Applicant for over two years. Applicant has a high 
degree of integrity, responsibility, dependability, and trustworthiness. (App. Ex. C, 
Letter, dated September 10, 2010) A vice president for Applicant's employer notes that 
he has known Applicant for over two years. Applicant has met the company's high 
standard for work performance. He has excellent technical knowledge and a 
professional attitude. He is a valued team member. (App. Ex. D, Letter, dated 
September 15, 2010) A program manager for Applicant's company stated that Applicant 
was recommended to them by a supplier. They conducted a background review of 
Applicant and found nothing to doubt his credibility or suitability for their company. 
Applicant is considered a trusted and valued employee. (App. Ex. E, Letter, dated 
September 9, 2010) Another fellow worker notes that Applicant exhibits leadership, 
integrity, and commitment to excellence in dealing with the customers. Applicant is the 
visible representative of the company and is a trusted employee. (App. Ex. F, Letter, 
dated September 10, 2010)  
 
Policies 
 
When evaluating an applicant’s suitability for a security clearance, the 
administrative judge must consider the adjudicative guidelines (AG). In addition to brief 
 
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introductory explanations for each guideline, the adjudicative guidelines list potentially 
disqualifying conditions and mitigating conditions, which must be considered in 
evaluating an applicant’s eligibility for access to classified information. 
 
These guidelines are not inflexible rules of law. Instead, recognizing the 
complexities of human behavior, these guidelines are applied in conjunction with the 
factors listed in the adjudicative process. The administrative judge’s overarching 
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 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 
Government reposes a high degree of trust and confidence in individuals to whom it 
grants access to classified information. Decisions include, by necessity, consideration of 
the possible risk the applicant may deliberately or inadvertently fail to safeguard 
classified information. Such decisions entail a certain degree of legally permissible 
extrapolation of potential, rather than actual, risk of compromise of classified 
information. 
 
Analysis 
 
Financial Considerations: 
 
 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. 
(AG ¶ 18) Similarly, an individual who is financially irresponsible may also be 
irresponsible, unconcerned, or careless in his or her obligations to protect classified 
 
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information. Behaving responsibly or irresponsibly in one aspect of life provides an 
indication of how a person may behave in other aspects of life.  
 
 A person’s relationship with his creditors is a private matter until evidence is 
uncovered demonstrating an inability or unwillingness to repay debts under agreed 
terms. Absent evidence of strong extenuating or mitigating circumstances, an applicant 
with a history of serious or recurring financial difficulties is in a situation of risk 
inconsistent with the holding of a security clearance. An applicant is not required to be 
debt free, but is required to manage his finances in such a way as to meet his financial 
obligations. Applicant's delinquent line of credit account, as reported in credit reports 
and admitted by Applicant is a security concern raising Financial Considerations 
Disqualifying Conditions (FC DC) AG ¶ 19(a) (inability or unwillingness to satisfy debts) 
and FC DC AG ¶ 19(c) (a history of not meeting financial obligations). Applicant incurred 
delinquent debts after he and his wife lost well paying jobs. His finances show an 
inability and not an unwillingness to satisfy debt. 
 
 I considered Financial Considerations Mitigating Condition (FC MC) AG ¶ 20(a) 
(the behavior happened so long ago, was so infrequent, or occurred under such 
circumstances that it is unlikely to recur and does not cast doubt on the individual’s 
current reliability, trustworthiness, or good judgment) and FC MC AG ¶ 20(b) (the 
conditions that resulted in the financial problems 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). These mitigating conditions apply. Applicant's line of credit 
debt became delinquent when Applicant and his wife lost good paying jobs. When they 
did find employment, their combined income was half of their previous income. 
Applicant was unable to meet all his financial obligations because of the loss of 
employment and income. Since he and his wife are now gainfully employed although at 
a lesser salary, the unemployment circumstances are unlikely to recur. Applicant acted 
responsibly under the circumstances. He and his wife sought employment and were not 
without work and income for a long period. They accepted employment even though 
their salaries were not at their earlier income level. Applicant sold his house at a short 
sale relieving him of his mortgage obligations. He paid all his other debts, and did not 
incur additional delinquent debts. He attempted to negotiate payment of the line of credit 
debt, but the collection agency would not negotiate, wanting only large lump sum 
payments.  
 
I considered FC MC AG ¶ 20(d) (the individual has initiated a good-faith effort to 
repay the overdue creditors or otherwise resolve debts). For FC MC AG ¶ 20(d) to 
apply, there must be an “ability” to repay the debts, the “desire” to repay, and “evidence” 
of a good-faith effort to repay. A systematic method of handling debts is needed. 
Applicant must establish a "meaningful track record" of debt payment. A "meaningful 
track record" of debt payment can be established by evidence of actual debt payments 
or reduction of debt through payment of debts. An applicant is not required to establish 
that he paid every debt listed. All that is required is that Applicant demonstrates an 
established plan to resolve his financial problems and show he has taken significant 
 
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actions to implement that plan. Applicant's financial problems were caused by 
conditions beyond his control when he and his wife lost employment. When Applicant 
and his wife did gain good paying employment, they paid all but one of their debts. 
Applicant attempted to negotiate a settlement with the collection agency but the 
collection agency is unwilling to reasonably settle the debt. Applicant's actions in paying 
and resolving his delinquent debts caused by unemployment provides significant and 
credible information to establish a meaningful track record of debt payment and a good-
faith effort to resolve debt. His actions show he acted reasonably and responsibly under 
the circumstances. His finances do not reflect adversely on his trustworthiness, honesty, 
and good judgment. 
 
Whole-Person Analysis  
 
 Under the whole-person concept, the administrative judge must evaluate an 
applicant’s security eligibility by considering the totality of the applicant’s conduct and all 
relevant circumstances. An 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 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 considered that Applicant is a good 
employee who is highly regarded by his supervisors and customers. I considered that 
Applicant's financial problems arose from the loss of good paying employment by both 
he and his wife. These financial conditions were beyond his control, and he resolved all 
but one delinquent financial obligation. Applicant presented sufficient information to 
show he took reasonable and responsible action to resolve his financial issues. 
Applicant's management of his finances indicates he will be concerned, responsible, 
and careful regarding classified information. Overall, the record evidence leaves me 
without questions and doubts about Applicant’s eligibility and suitability for a security 
clearance. For all these reasons, I conclude Applicant mitigated security concerns 
arising from financial considerations and should be granted access to classified 
information.  
 
 
 
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Formal Findings 
 
 Formal findings on the allegation set forth in the SOR, as required by section 
E3.1.25 of Enclosure 3 of the Directive, are: 
 
 Paragraph 1, Guideline F:   FOR APPLICANT 
 
  Subparagraphs 1.a:   For Applicant 
 
Conclusion 
 
 In light of all of the circumstances presented by the record in this case, it is 
clearly consistent with the national interest to grant Applicant eligibility for a security 
clearance. Eligibility for access to classified information is granted. 
 
 
 
_________________ 
THOMAS M. CREAN 
Administrative Judge