DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 09-08365 
  ) 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Braden M. Murphy, Esquire, Department Counsel 
For Applicant: Pro se 
 
 
 
__________ 
 
Decision 
__________ 
 
 
RIVERA, Juan J., Administrative Judge: 
 
Applicant owes 12 delinquent debts, totaling near $44,000, all of which are 
unresolved. She established circumstances beyond her control that contributed to her 
financial problems. Notwithstanding, she presented no documentary evidence to show 
financial responsibility in the acquisition of the debts, good-faith efforts in the resolution 
of the debts, or a current track record of financial responsibility. There are no clear 
indications that her financial problems are being resolved or are under control. 
Clearance denied. 
 
Statement of the Case 
 
Applicant submitted a security clearance application on July 20, 2009. After 
reviewing the results of the ensuing background investigation, adjudicators for the 
Defense Office of Hearings and Appeals (DOHA) were unable to make a preliminary 
 
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affirmative finding1 that it is clearly consistent with the national interest to grant 
Applicant’s request for a security clearance.  
 
On March 22, 2010, DOHA issued Applicant a Statement of Reasons (SOR) 
which specified the basis for its decision - security concerns raised under Guideline F 
(Financial Considerations) and Guideline E (Personal Conduct) of the adjudicative 
guidelines (AG).2  
 
Applicant answered the SOR on April 20 and May 20, 2010. She elected to have 
her case decided on the written record in lieu of a hearing. A complete copy of the file of 
relevant material (FORM), dated July 1, 2010, was provided to her by transmittal letter 
dated July 7, 2010. Applicant received her copy of the FORM on July 15, 2010. 
Applicant was given 30 days from the date she received the FORM to submit any 
objections, and information in mitigation or extenuation. She did not respond, and the 
case was assigned to me on September 21, 2010, to determine whether a clearance 
should be granted or denied.  
 
Procedural Issue 
 
 In the FORM, the Government moved to amend the SOR by deleting Paragraph 
2, the Guideline E allegations, because it was inadvertently included in the SOR due to 
a clerical error. Applicant did not object, and I granted the motion as requested. (FORM, 
at pp. 3-5).  
 
Findings of Fact 
 
Applicant admitted SOR allegations 1.b through 1.i, and 1.k. She denied the total 
amount alleged as owed in ¶¶ 1.c, 1.d, and 1.i. She denied SOR allegations 1.a, 1.j, and 
1.l. Her admissions are incorporated as findings of fact. After a thorough review of the 
evidence of record, I make the following additional findings of fact. 
 
Applicant is a 56-year-old receptionist employed full-time by a placement agency 
(a defense contractor) since March 2009. She married her first spouse in June 1972, 
and divorced him in July 1988. She married her second spouse in January 1997, and 
they were divorced in November 2007. She has three children, ages 37, 34, and 20. 
From August 2001 until December 2003, she attended a technical college and received 
an associate’s degree. She financed her education through student loans that are 
currently in deferment.  
 
 
1 Required by Executive Order 10865, Safeguarding Classified Information Within Industry, dated 
February 20, 1960, as amended; and Department of Defense (DOD) Directive 5220.6, Defense Industrial 
Personnel Security Clearance Review Program (Directive), dated January 2, 1992, as revised. 
 
2 Adjudication of this case is controlled by the AGs, implemented by the DOD on September 1, 
2006. 
 
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According to her July 2009 security clearance application, Applicant was 
unemployed from August 2001 until December 2004; employed, but sometimes 
underemployed, from December 2004 until December 2007; unemployed from 
December 2007 until June 2008; employed part-time from June 2008 until August 2008; 
and unemployed again from August 2008 until March 2009. She started working for her 
current employer in March 2009. This is her first time applying for a security clearance. 
 
In her security clearance application, Applicant disclosed that she was 90 days 
delinquent on some debts, that she had defaulted on a loan, and that her home was 
pending either a short sale or foreclosure. Applicant bought the home in August 2006 
with her ex-husband. She explained that although he cosigned the loan, he never lived 
in the home and the home was her sole responsibility. She defaulted on her mortgage in 
December 2008. She stated she had been in contact with the mortgage company and 
initially negotiated a reduction on her mortgage payments. She then tried to modify her 
mortgage, and later to sell the home on a short sale, without success. 
 
In October 2009, Applicant was questioned by a background investigator about 
her delinquent loans and her overall financial situation. During the interview, she 
explained that her financial problems were the result of her periods of unemployment 
and underemployment, her then husband losing his job in early 2007, and their divorce 
in November 2007. Apparently, she and her then husband were separated before or 
around August 2006, since she lived alone in the home she purchased. She did not 
explain how his period of unemployment adversely affected her financial situation.  
 
Applicant received around $1,200 per month in unemployment benefits from 
about December 2007 until September 2008. She claimed that before her 
unemployment benefits ran out, she was current on all her debts. She had to stop 
making payment on her debts when her unemployment benefits ended. Because she 
could not find employment in her state, she was forced to move to another state to look 
for a job.  
 
Applicant stated that she attempted to consolidate her debts, but she was told 
she was not making enough money to participate in a consolidation program. She has 
received no financial counseling. She also stated that she had a budget, but failed to 
present documentary evidence to show she had established and was following a 
budget. The only person who knows about her financial problems is a close friend. 
During her October 2009 interview, Applicant indicated her intention to file for Chapter 7 
bankruptcy protection in the near future. At the time, she did not have the money to pay 
the attorney fees. She provided no documentary evidence to show that she contacted 
an attorney or that she filed bankruptcy. 
 
In January 2010, DOHA requested Applicant to answer a set of financial 
interrogatories asking about the status of nine delinquent debts, most of which are 
alleged in the SOR. In her response (Item 11), she failed to address any of the nine 
delinquent debts. She stated that she did not have the ability to pay her delinquent 
debts, and that she intended to file bankruptcy as soon as she had the money to pay for 
 
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the legal fees. She also indicated that she had no current information on any of her 
debts because she had to leave her home over a year ago.  
 
In her answer to the statement of reasons, Applicant indicated she currently 
makes $9.25 an hour, however, she does not work 40 hours a week consistently, and 
sometimes she only works 32 hours a week. She also stated that she provides financial 
support for her 20-year-old son. Applicant presented no additional information 
concerning her current monthly income, living expenses, or the debts she pays on a 
monthly basis. She failed to present any documentary evidence of any debt payments, 
contacts or negotiations with creditors, debt disputes, or of any efforts to otherwise 
resolve her delinquent SOR debts since she acquired them.  
 
The SOR alleges 12 delinquent debts, totaling near $44,000, all of which are her 
delinquent debts as established by her admissions and her credit reports. Applicant 
denied SOR ¶¶1.a, 1.j, and 1.l, and stated these were not her accounts. However, she 
failed to present any evidence of efforts to ascertain the validity of the debts or to 
dispute them. Based on the credit reports, I find the 12 alleged SOR delinquent debts 
are Applicant’s unresolved delinquent accounts. Additionally, Applicant’s prior state of 
residence obtained a $4,135 civil judgment against her in October 2009, to recover for 
unauthorized unemployment compensation benefits.  
 
Policies 
 
 The President of the United States has the authority to control access to 
information bearing on national security and to determine whether an individual is 
sufficiently trustworthy to have access to such information. Department of the Navy v. 
Egan, 484 U.S. 518, 527 (1988). The President has authorized the Secretary of 
Defense to grant eligibility for access to classified information “only upon a finding that it 
is clearly consistent with the national interest to do so.” Exec. Or. 10865, Safeguarding 
Classified Information within Industry § 2 (Feb. 20, 1960), as amended. The U.S. 
Supreme Court has recognized the substantial discretion of the Executive Branch in 
regulating access to information pertaining to national security, emphasizing that “no 
one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 U.S. 
518, 528 (1988). 
 
Eligibility for a security clearance is predicated upon the applicant meeting the 
criteria contained in the adjudicative guidelines. These AGs are not inflexible rules of 
law. Instead, recognizing the complexities of human behavior, these guidelines are 
applied in conjunction with an evaluation of the whole person. An administrative judge’s 
adjudicative goal is a fair, impartial, and commonsense decision. An administrative 
judge must consider all available, reliable information about the person, past and 
present, favorable and unfavorable to reach his decision.  
 
The Government reposes a high degree of trust and confidence in persons with 
access to classified information. This relationship transcends normal duty hours and 
endures throughout off-duty hours. Decisions include, by necessity, consideration of the 
 
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possible risk that 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. Clearance decisions must be “in terms of the national interest and shall in 
no sense be a determination as to the loyalty of the applicant concerned.”  See Exec. 
Or. 10865 § 7. See also Executive Order 12968 (Aug. 2, 1995), Section 3. Thus, a 
clearance decision is merely an indication that the Applicant has or has not met the 
strict guidelines the President and the Secretary of Defense have established for issuing 
a clearance. 
 
Initially, the Government must establish, by substantial evidence, conditions in 
the personal or professional history of the applicant that may disqualify the applicant 
from being eligible for access to classified information. The Government has the burden 
of establishing controverted facts alleged in the SOR. See Egan, 484 U.S. at 531.  
“Substantial evidence” is “more than a scintilla but less than a preponderance.” See v. 
Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994). The guidelines 
presume a nexus or rational connection between proven conduct under any of the 
criteria listed and an applicant’s security suitability. See ISCR Case No. 95-0611 at 2 
(App. Bd. May 2, 1996).      
 
Once the Government establishes a disqualifying condition by substantial 
evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the 
facts. Directive ¶ E3.1.15. An applicant “has the ultimate burden of demonstrating that it 
is clearly consistent with the national interest to grant or continue [his or her] security 
clearance.” ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002). The burden of 
disproving a mitigating condition never shifts to the Government. See ISCR Case No. 
02-31154 at 5 (App. Bd. Sep. 22, 2005). “[S]ecurity clearance determinations should err, 
if they must, on the side of denials.” Egan, 484 U.S. at 531; see AG ¶ 2(b).   
 
Analysis 
 
Guideline F, Financial Considerations 
 
 Under Guideline F, the security concern 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. AG ¶ 18. 
 
The SOR alleges and the evidence established that Applicant owes 12 
delinquent debts, totaling near $44,000, all of which are unresolved. AG ¶ 19(a): 
“inability or unwillingness to satisfy debts” and AG ¶ 19(c): “a history of not meeting 
financial obligations,” apply. 
 
 
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 AG ¶ 20 lists six conditions that could mitigate the financial considerations 
security concerns:  
 
(a) the behavior happened so long ago, was so infrequent, or occurred 
under such circumstances that it is unlikely to recur and does not cast doubt 
on the individual’s current reliability, trustworthiness, or good judgment; 
 
(b) the conditions that resulted in the financial problem were largely beyond 
the person’s control (e.g., loss of employment, a business downturn, 
unexpected medical emergency, or a death, divorce or separation), and the 
individual acted responsibly under the circumstances; 
 
(c) the person has received or is receiving counseling for the problem and/or 
there are clear indications that the problem is being resolved or is under 
control; 
 
(d) the individual initiated a good-faith effort to repay overdue creditors or 
otherwise resolve debts;  
 
(e) the individual has a reasonable basis to dispute the legitimacy of the 
past-due debt which is the cause of the problem and provides documented 
proof to substantiate the basis of the dispute or provides evidence of actions 
to resolve the issue; and 
 
 (f) the affluence resulted from a legal source of income. 
 
 Applicant’s sparse favorable evidence fails to fully raise the applicability of any 
mitigating condition. Her financial problems are ongoing and her evidence fails to show 
they occurred under such circumstances that they are unlikely to recur and do not cast 
doubt on Applicant's current reliability, trustworthiness, or good judgment. AG ¶ 20(a) 
does not apply. 
 
 Applicant presented some evidence to establish circumstances beyond her 
control contributing to her inability to pay her debts, e.g., her periods of unemployment 
and underemployment, her then spouse’s period of unemployment, her divorce, and her 
inability to find a job. Notwithstanding, Applicant’s documentary evidence is not 
sufficient to corroborate many of her claims and show that she acted responsibly in the 
acquisition of her debts, that she made good-faith efforts to resolve her debts, or that 
she has a track record of financial responsibility. AG ¶¶ 20(b) and (d) do not apply. 
 
 AG ¶ 20(c) does not apply because there are no clear indications that her 
financial problem is being resolved or is under control. There is insufficient evidence 
about her current income, living expenses, and existing debts to make an informed 
judgment about her financial situation. She has not participated in financial counseling, 
and there is no documentary evidence she follows a budget. Considering the number of 
 
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delinquent debts, the date the debts were acquired, the aggregate value of the debts, 
and the limited evidence of efforts to resolve her legal financial obligations, Applicant’s 
information is insufficient to establish that her financial problems are unlikely to recur. 
The remaining mitigating conditions are not reasonably raised by the facts in this case. 
 
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 the 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.  
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. AG ¶ 2(c). I have incorporated in my whole-
person analysis my comments on the analysis of Guideline F. 
I considered the potentially disqualifying and mitigating conditions in light of all 
the facts and circumstances surrounding this case. Applicant receives credit for her 
work for a government contractor. She is a good mother and provides financial support 
for her son. She moved to another state seeking better employment opportunities and 
found a job. These factors show some responsibility.  
 
Notwithstanding, security concerns remain about Applicant’s current financial 
responsibility. Applicant’s documentary evidence failed to show financial responsibility in 
the acquisition of the debts, good-faith efforts to resolve her financial problems in a 
timely manner, or a current track record of financial responsibility. Her failure to address 
any of the SOR debts indicates she is probably financially overextended. The sparse 
mitigating record evidence fails to convince me of Applicant’s suitability for a security 
clearance. For all these reasons, I conclude Applicant failed to mitigate the security 
concerns arising from her 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 Section E3.1.25 of Enclosure 3 of the Directive, are:          
 
 Paragraph 1, Guideline F:    AGAINST APPLICANT 
 
 Subparagraphs 1.a - 1.l:     Against Applicant 
 
Paragraph 2, Guideline E:   Withdrawn per Government  
   motion. 
 
 Subparagraph 2.a:      Withdrawn 
 
Conclusion 
 
In light of all the circumstances presented by the record in this case, it is not 
clearly consistent with the national interest to grant eligibility for a security clearance to 
Applicant. Clearance is denied. 
 
 
 
____________________________ 
JUAN J. RIVERA 
Administrative Judge