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                              DEPARTMENT OF DEFENSE
               DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
--------, -------- -------- )       ISCR Case No. 09-03732
SSN: ------ ---- -------- )
)
Applicant for Security Clearance )
Appearances
For Government: Fahryn E. Hoffman, Esquire, Department Counsel
For Applicant: Pro se
______________
Decision
______________
WHITE, David M., Administrative Judge:
Applicant incurred numerous delinquent debts during the ten years preceding his
current employment, largely during downturns in the private-sector construction
business. Many of his debts arose from medical treatment of his intermittent back
problems. Both he and his recently-married wife now have good incomes from secure
jobs, and they have resolved all but two of his former delinquencies. He has both the
means and every intention to resolve these remaining debts, and remain solvent in the
future. He is a responsible and trustworthy individual, and met his burden to mitigate
security concerns arising from his financial situation. Based upon a review of the case
file, pleadings, exhibits, and testimony, eligibility for access to classified information is
granted. 
Applicant submitted a security clearance application (SF 86) on February 6,
2009. On October 23, 2009, the Defense Office of Hearings and Appeals (DOHA)
issued a Statement of Reasons (SOR) to Applicant, detailing security concerns under
Guideline F (Financial Considerations). The action was taken under Executive Order
10865, Safeguarding Classified Information within Industry (February 20, 1960), as
amended; Department of Defense Directive 5220.6, Defense Industrial Personnel
Tr. 89-90, 94-95, 100-101, 112-113; GE 1.1
AR.2
GE 3; GE 4.3
Tr. 37, 56-58.4
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Security Clearance Review Program (January 2, 1992), as amended (Directive); and the
Adjudicative Guidelines for Determining Eligibility for Access to Classified Information
that went into effect within the Department of Defense on September 1, 2006. 
Applicant answered the SOR in writing (AR) on November 19, 2009, and
requested a hearing before an administrative judge. Department Counsel was prepared
to proceed on February 11, 2010, and the case was assigned to me on May 13, 2010.
DOHA issued a Notice of Hearing on July 9, 2010, and I convened the hearing as
scheduled on August 19, 2010. The Government offered exhibits (GE) 1 through 7,
which were admitted without objection. Applicant offered exhibits (AE) A through D,
which were admitted without objection, and testified on his own behalf. His wife also
testified. I granted Applicant’s request to leave the record open until September 13,
2010, for submission of additional evidence. DOHA received the transcript of the
hearing (Tr.) on August 27, 2010. Applicant timely submitted AE E through K, which
were also admitted without objection, and the record was closed as scheduled. 
Findings of Fact
Applicant is a 40-year-old employee of a defense contractor, where he has
worked since November 2008. He served on active duty in the Army from 1988 to 1992,
and was honorably discharged in paygrade E-4. He recently married his second wife,
and has one child for whom he pays child support to his former wife, with whom he
shares custody. His wife has two children in their late teens, one of whom lives with
them.  In his response to the SOR, Applicant admitted all but two of the factual1
allegations in SOR ¶ 1.a through 1.n, with some explanations. He denied SOR ¶¶ 1.g
and 1.j.  Applicant’s admissions, including his statements in response to DOHA2
interrogatories,  are incorporated in the following findings.3
Applicant held various construction jobs during the ten years before obtaining his
current employment. His earnings fluctuated with the economic and building cycles, and
he was not good at managing his money. He suffers from a spinal condition that often
required him to obtain medical services for which he did not have insurance. Many of
the SOR-listed debts resulted from these medical issues. The remaining debts involved
consumer credit he obtained for normal living expenses, but could not afford to repay.
The current status of the SOR-listed debts is described in the following paragraphs.4
Applicant still owes the judgment debt alleged, in the amount of $9,389, in SOR ¶
1.a. He checked the court records before his hearing, and reported that the amount due
AE C at 11; AE D1; Tr. 63-65.5
GE 2 at 3, 6; GE 3 at 5, 6; GE 5 at 1, 3; GE 6 at 1, 3.6
AE E through AE H; Tr. 63, 84-88.7
AE C at 11; AE D2; Tr. 56-63.8
GE 2 at 8; GE 5 at 2; GE 6; AE D3; Tr. 83-84.9
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has risen to more than $12,000 due to the interest that continues to accrue.  The SOR5
misidentified the judgment creditor for this debt as being the same one that obtained the
judgment described in SOR ¶ 1.b. All of Applicant’s record credit bureau reports (CBRs)
identify the creditor as the same one to whom he was alleged to owe $13,092, on a later
date, in SOR ¶ 1.l. According to Applicant’s explanation to the Office of Personnel
Management (OPM) investigator during his interview on March 20, 2009, he originally
obtained a $5,000 consumer loan from Beneficial Finance (which is also known as, and
owned by HSBC). All of the record CBRs indicate that Beneficial/HSBC sold this debt to
the creditor alleged in SOR ¶¶ 1.a and 1.l in November 2007. This company obtained
the SOR ¶ 1.a judgment in September 2008. They have continued to report it on
Applicant’s CBRs as a collection account, with ever-increasing interest and/or fees.
Applicant indicated no knowledge of any separate debt to this creditor during his OPM
interview, and surmised that it was a duplicate collection action. He and his wife have
not yet contacted this creditor, since they have been resolving many of his other
delinquencies first. Although he admitted owing both debts, I conclude that he was
confused by the misidentification of the judgment creditor in the SOR, and that the debts
alleged in SOR ¶¶ 1.a and 1.l represent the same debt that has grown to about $13,000
due to interest after the 2008 judgment.  6
Applicant also still owes the $1,139 judgment debt alleged in SOR ¶ 1.b. This
represents a judgment obtained by the collection agency for the two medical debts that
were owed by Applicant as alleged in SOR ¶¶ 1.h and 1.i.  7
The four medical debts, alleged in SOR ¶¶ 1.c, 1,d, 1.e, and 1.f, are all in
collection with a different company. Applicant and his wife entered into an agreement
with this creditor to repay all four of them, starting in December 2009, at a rate of $200
per month. All payments since then have been paid as agreed. With imputed interest,
the total of all payments over 32 months will be $6,478 to resolve these debts.   8
Applicant denied owing the $86 debt alleged in SOR ¶ 1.g, and successfully
disputed it with the credit bureau who removed it from his CBR effective December 1,
2009. That alleged debt appeared on his February 2009 and August 2009 CBRs, but
does not appear on his February 2010 CBR.  9
Applicant’s remaining delinquent debts alleged in SOR ¶¶ 1.j, 1.k, 1.m, and 1.n,
and originally totaling $13,662, have been paid in full under his changed circumstances
AE D4; AE D5; AE D6; AE D7; Tr. 69-73, 76-81.10
AE C at 11; AE D8; Tr. 66-69; 73-76; 81-83.11
AR; AE B; AE C at 8-10; Tr. 40-54, 113-116.12
Tr. 37, 50-53, 105, 109-111.13
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described below.  In addition, he reported and documented full payment of eight other10
debts that did not appear in the SOR. Six of those debts, totaling about $2,300, were for
medical bills involving more recent treatment. One involved a $300 legal bill for an
attorney who Applicant consulted for advice on debt resolution after receiving his SOR.
The last one involved an Internal Revenue Service collection of a $2,100 tax
delinquency that was incurred when Applicant erroneously claimed head-of-household
status for 2007, due to his misunderstanding of child-support issues.  11
Applicant and his current wife have known each other for about six years. They
dated for about a year before becoming engaged in October 2009. They married in
January 2010. Applicant’s wife is an accountant and office manager, who has held her
present job for about 14 years. She earns over $50,000 per year, and Applicant now
earns about $60,000 per year as a electrician for a base operations support contractor.
In November 2009, Applicant informed his then-fiancee about his delinquent debt. In her
words, she was “overwhelmed, disappointed.” She undertook to teach him financial
responsibility and management, and to resolve his debt problems. He sold the mobile
home in which he had been living since his divorce, and moved into her home after their
marriage. While keeping him fully involved in the process, she managed their joint
resources to substantially reduce his previously delinquent debt as described above.
Their monthly budget reflects a surplus of over $1,850 per month available for food,
clothing, entertainment, gifts, medical co-pays, and delinquent debt reduction. About
$800 per month is available for the latter purpose. According to the foregoing analysis,
only the judgment debts in SOR ¶¶ 1.a (or 1.l) and 1.b remain unresolved, since the
agreed upon $200 monthly payments toward the four medical debts alleged in SOR ¶¶
1.c through 1.f are included among the family’s budgeted expenses. Applicant and his
wife mistakenly estimated that they still owed almost $31,000 of Applicant’s original
delinquencies described above, since they included both of the debts alleged in SOR ¶¶
1.a and 1.l. I conclude that their remaining delinquent debt is no more than the $13,227
most recently reported by that collection agency (for his original $5,000 loan), plus the
$1,139 judgment in SOR ¶ 1.b (plus any interest on that debt). If they cannot negotiate
a cheaper settlement on the large debt, the total will be somewhat over $15,000. With at
least $800 per month to put toward those debts, these two debts will be repaid in about
18 months.12
Applicant has long resisted advice from others that he seek bankruptcy relief,
because he wanted to repay his debts. Both he and his wife persuasively and credibly
testified that they have every intention to continue their present efforts to resolve his
remaining debts. He has kept his work supervisors and family members fully informed of
his financial situation, and is under no present duress due to his debts.  13
AE C at 1-4.14
AE I; AE J; Tr. 107-108.15
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Applicant’s supervisor described him as “an exemplary and trustworthy
employee,” who emphasizes safety and has assumed increasing responsibilities. His
general manager formally recognized his extraordinary support and effort for the month
of January 2010. A Navy lieutenant who has become a close personal friend through
their mutual work as Boy Scout leaders vouched for Applicant’s outstanding character,
integrity, and trustworthiness. He also commended Applicant’s honesty with all
concerned about his prior financial difficulties and his intention to resolve all of his
financial obligations now that he has the means to do so.  The Boy Scout Troop14
Committee Chairman under whom Applicant performed Scoutmaster and Assistant
Scoutmaster duties praised his outstanding work and character. Applicant also made
them aware of his financial situation, and was nevertheless entrusted to manage the
Troop’s funds and budget, which he did without any problems.15
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 (DCs) and mitigating conditions (MCs), 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, these guidelines are applied in conjunction with the
factors listed in AG ¶ 2 describing the adjudicative process. The administrative judge’s
overarching adjudicative goal is a fair, impartial, and commonsense decision. According
to AG ¶¶ 2(a) and 2(c), the entire process is a conscientious scrutiny of applicable
guidelines in the context 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 the 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. Likewise, I have avoided drawing inferences
grounded on mere speculation or conjecture.
Under Directive ¶ E3.1.14, the Government must present evidence to establish
controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, “[t]he 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, and has the
ultimate burden of persuasion as to obtaining a favorable clearance decision.” Section 7
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of Executive Order 10865 provides: “[a]ny determination under this order adverse to an
applicant shall be a determination in terms of the national interest and shall in no sense
be a determination as to the loyalty of the applicant concerned.”
A person applying for access to classified information seeks to enter 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 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.
Analysis
Guideline F, Financial Considerations
The security concerns relating to the guideline for financial considerations are set
out in AG ¶ 18:      
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 evidence raised security concerns under two Guideline F DCs, as set forth in
AG ¶ 19(a) “inability or unwillingness to satisfy debts”; and ¶ 19(c) “a history of not
meeting financial obligations.” Applicant’s history of delinquent debt stretches back
about ten years, and continues, in part, at present. The burden accordingly shifts to
Applicant to rebut, explain, extenuate or mitigate these facts and the resulting security
concerns.
The guideline includes four conditions in AG ¶ 20 that could mitigate security
concerns arising from Applicant’s financial problems:
(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
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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; and
(d) the individual initiated a good-faith effort to repay overdue creditors or
otherwise resolve debts.
A relatively small portion of Applicant’s delinquent indebtedness is ongoing, but
arose under circumstances that have substantially changed and improved. Until
obtaining his present well-paying and secure job in November 2008, his income was
subject to the whims and variations of the construction market. His back problems
would flare up sporadically, requiring uninsured medical attention and affecting his
ability to work. He recently married a highly responsible and capable woman with
substantial income of her own from her long-held job as an accountant and office
manager. His former inability to satisfy some debts is therefor unlikely to recur and does
not cast doubt on his current reliability, trustworthiness, or good judgment. This
establishes mitigation under AG ¶ 20(a).
Partial mitigation under AG ¶ 20(b) was also established. Applicant’s
delinquencies arose during business downturns, and largely consisted of medical bills
from his intermittent back problems. After his divorce in 2002, he prioritized his child
support obligations, and never missed those payments even during bad economic
times. He declined to discharge his obligations through bankruptcy, despite
encouragement from others to do so, because he wanted to make good on his
obligations. Over the past year, and especially since marrying his current wife last
January, he has made impressive strides in that direction. 
Applicant sought counseling from an attorney, but more significantly sought the
help and guidance of his wife to address his financial problems. She is highly capable
and dedicated to resolving those issues with him, while educating him on good financial
practices and management. They are almost a year into an agreement with the
collection agency holding four medical debts under which they are repaid at the rate of
$200 per month. Their only other unresolved debts, which they intend to address next,
involve two judgment debts which they have the means to fully repay with 18 months.
Thus, additional mitigation was established under AG ¶¶ 20(c) and (d).  
As the Appeal Board has ruled concerning the successful mitigation of security
concerns arising from financial considerations, “[a]n applicant is not required to show
that [he] has completely paid off [his] indebtedness, only that [he] has established a
reasonable plan to resolve [his] debts and has ‘taken significant actions to implement
ISCR Case No. 06-12930 at 2 (App. Bd. Mar. 17, 2008) (quoting ISCR Case No. 04-09684 at 2-3 (App.16
Bd. Jul. 6, 2006)). 
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that plan.’”  This applicant, with significant help and resolve from his wife, has16
established and substantially implemented an effective plan to resolve the debts that
could formerly have given rise to security concerns. He also demonstrated his
commitment to avoiding future financial problems, and a solvent budget that will permit
him to do so.
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
pertinent facts and circumstances surrounding this case. Applicant incurred a moderate
amount of delinquent debt, primarily due to downturns in the private-sector construction
industry and intermittent medical problems. He has always intended to repay these
debts when able to do so. His recent marriage has substantially changed his financial
circumstances, and enabled him to successfully resolve his delinquencies. He has
undertaken and followed through on an aggressive but workable program to do so. He
is a mature and responsible individual, and recurrence of financial problems is quite
unlikely. His openness with all concerned about his financial situation, and proactive
efforts to achieve resolution of his debts have eliminated any ongoing potential for
pressure, coercion, exploitation, or duress. The strong testaments to his good character,
integrity, and trustworthiness by supervisors, fellow Boy Scout leaders, and his very
capable wife further evidence his reliability and responsibility. 
Overall, the record evidence creates substantial confidence as to Applicant’s
present eligibility and suitability for a security clearance. He fully met his burden to
mitigate the security concerns arising from his financial considerations.
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Formal Findings
Formal findings for or against Applicant on the allegations set forth in the SOR,
as required by ¶ E3.1.25 of Enclosure 3 of the Directive, are:
Paragraph 1, Guideline F: FOR APPLICANT
Subparagraphs 1.a through 1.n: For Applicant
Conclusion
In light of all of the circumstances presented by the record in this case, it is
clearly consistent with the interests of national security to grant Applicant eligibility for a
security clearance. Eligibility for access to classified information is granted.
                                              
DAVID M. WHITE
Administrative Judge