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                           DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 08-01392 
 SSN:  )   
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Jeffrey Nagel, Esq., Department Counsel 
For Applicant: Pro Se 
 
 
December 7, 2010 
______________ 
 
Decision 
______________ 
 
 
GOLDSTEIN, Jennifer I., Administrative Judge: 
 
Applicant is a 42-year-old employee of a defense contractor. He is alleged to be 
indebted to 7 creditors in the approximate amount of $26,136. In addition, it is alleged 
that he falsified his June 24, 2009 Electronic Questionnaire for Investigations 
Processing (EQIP). Applicant has not mitigated the Financial Considerations security 
concerns because he has failed to show he acted responsibly with respect to his 
outstanding debts. He did not mitigate the Personal Conduct security concerns created 
by his intentional omission of his outstanding debts from his EQIP. Eligibility for access 
to classified information is denied.  
 
Statement of the Case 
 
On April 8, 2010, the Defense Office of Hearings and Appeals (DOHA) issued a 
Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline 
F, Financial Considerations and Guideline E, Personal Conduct. The action was taken 
under Executive Order (EO) 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 
 
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amended (Directive); and the adjudicative guidelines (AG) effective for cases after 
September 1, 2006.  
 
Applicant answered the SOR on April 21, 2010, and requested a hearing before 
an administrative judge. The case was assigned to me on June 3, 2010. DOHA issued a 
notice of hearing on June 7, 2010, scheduling the hearing for July 22, 2010. On July 22, 
2010, Applicant did not appear. However, he contacted the DOHA office and orally 
requested a continuance based upon his hospitalization the day of the hearing and 
subsequent treatment for his medical condition. He provided documentation that he was 
in the emergency room on July 22, 2010, and therefore unable to attend as scheduled. 
Applicant’s request for a new hearing date was granted, and the hearing was 
rescheduled on August 12, 2010, a date after his medical treatment concluded. His 
hearing was held on September 28, 2010, as scheduled. The Government offered 
Exhibits (GE) 1 through 11, which were admitted without objection. The Applicant 
offered Exhibits (AE) A through W, which were all admitted without objection. Applicant 
called two witnesses, and testified on his own behalf. The record was left open for 
Applicant to submit additional exhibits and on October 12, 2010, Applicant presented a 
21 page submission, marked AE X through AE CC. Department Counsel had no 
objections to AE X through CC and the exhibits were admitted. DOHA received the 
transcript of the hearing (Tr.) on October 14, 2010.  
 
Findings of Fact 
 
 Applicant admitted the SOR allegations 1.b., 1.d., 1.e., and 1.g. He denies 
allegations 1.a., 1.c., 1.h., 2.a., and 2.b. Allegation 1.f. was omitted from the SOR 
through a typographical error. After a thorough and careful review of the pleadings, 
exhibits, and testimony, I make the following findings of fact. 
 
 Applicant is a 42-year-old employee of a defense contractor. He served in the 
Army from 1988 to 1991 and from 2000 to 2004. He received an honorable discharge in 
1991, and an honorable discharge for medical reasons, after he was diagnosed with 
three bulging disks, in 2004. He was married from 2000 to 2004, and has a 21-year-old 
son from that marriage. In 2004, he divorced. He is now engaged to the mother of his 
two additional children, ages two and five. (GE 1; GE 3; AE B; Tr. 39-51.) 
 
 In April 2006, Applicant applied for a security clearance for the first time. He did 
not have a clearance while in the Army. On his April 2006 EQIP, he did not list any 
debts over 180 days delinquent in the past 7 years or that he was currently over 90 
days past due on any debts when he completed section 28 of the application. In June 
2009, he was again asked to complete an EQIP. As alleged in SOR allegation 2.a., he 
indicated “yes”, he had debts over 180 days delinquent in the past 7 years and that he 
was currently over 90 days past due on some debts in answer to section 26. However, 
he only listed creditors with whom he had made payment arrangements or had satisfied 
the account on this application. He failed to disclose any accounts that he was still 
delinquent on. As alleged in SOR allegation 2.b., he also indicated he had not had any 
property repossessed in the past seven years. However, his vehicle had been 
repossessed, as noted below. Applicant claims his omissions were unintentional. He 
 
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does admit that he was “embarrassed” by the existence of his debts. In fact, when he 
discussed omitting his debts during his subject interview, he admitted in his adopted 
written report of his subject interview that he told the investigator he failed to list his 
debts because he was “embarrassed” and “did not know what to list because of his last 
experience with his security clearance processing.” As set out below, these answers 
were incorrect. (GE 1; GE 3; GE 5; GE 10; Tr. 40-44, 90-93.) 
 
Applicant has experienced financial problems since 2000 or 2001. He is alleged 
to be indebted to 7 creditors in the approximate amount of $26,136. Each of these debts 
can be found on credit reports dated May 2006, July 2009, March 2010, May 2010, and 
July 2010. (GE 2; GE 4; GE6; GE 7; GE 9.) 
 
Applicant attributes his debts to a series of events that began in approximately 
2000-2001. Applicant was serving in Kosovo during this timeframe. He sent money back 
to his wife to pay their bills, but his wife was diverting the funds to other means. He did 
not have internet access or much opportunity to call his wife while deployed and he 
relied on her to satisfy their accounts. When he returned from his deployment, he 
discovered he had a number of delinquent debts. Disputes over the debts eventually led 
Applicant and his wife to file for divorce. The divorce decree assigned half of the debts 
to each party. Applicant testified that he was unable to satisfy the debts assigned to 
him, as he was unemployed for a year after leaving the Army. His EQIP shows that he 
was unemployed from October 2008 through April 2009. His debts are as follows. (GE 
1; GE 3; Tr. 62-68.) 
 
Applicant was indebted on a judgment against him in the approximate amount of 
$348, as alleged in allegation 1.a. Applicant incurred this debt when he received an 
overpayment on his unemployment benefits. His wages were garnished to satisfy this 
debt and it is now paid. Applicant produced an Acknowledgement of Satisfaction of 
Judgment as proof this debt is paid. (AE X; Tr. 72-73.) 
 
Applicant is indebted on a store credit card in the approximate amount of $3,137, 
as alleged in allegation 1.b. Applicant testified that his ex-wife incurred this debt when 
they were married and it was assigned to Applicant in their divorce. However, in his 
adopted subject interview, he indicated that this debt was solely his debt, and he used 
the card to purchase his children’s school clothing. Applicant has reached a settlement 
agreement with this creditor. He agreed to make payments of $117.65 per month until 
he has satisfied a reduced amount of $1,411.74. Applicant provided documentation 
from the creditor outlining their agreement and bank statements that show he made two 
payments, one in September 2010 and one in October 2010, under this plan. (GE 5; AE 
L; AE P; AE Y; Tr. 74-77.) 
 
Applicant was indebted to the Federal government for an overpayment he 
received when he was discharged from the Army in the approximate amount of $799, as 
stated in allegation 1.c. This debt was satisfied in February 2010 when Applicant’s 
income tax return was applied to this debt. Applicant presented a notification from the 
U.S. Department of Treasury that shows this debt was satisfied. (AE R; AE Z; Tr. 77-
79.) 
 
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Applicant is indebted to a collection agent in the approximate amount of $19,767, 
as alleged in 1.d. This debt was incurred when Applicant surrendered a vehicle for 
repossession. He purchased the vehicle in 2005 for approximately $26,000. He owned it 
for two and one-half years. He made payments on the vehicle for the first two years, but 
was unable to continue to afford the vehicle. He called the lender and surrendered it. He 
believes the vehicle was resold by the creditor for more than he owed on the vehicle at 
the time of surrender. He has joined a class action law suit against the creditor. He also 
provided documentation that he has hired a credit counseling company to negotiate with 
this creditor on his behalf. To date, there is no agreement with this creditor. Applicant 
disputes the full debt and has requested an accounting from the company, through the 
credit counseling service. (AE BB; Tr. 79-83, 105-108, 113.) 
 
Applicant is indebted to a collection agent for a phone company in the 
approximate amount of $885, as alleged in 1.e. This debt was incurred when Applicant 
acquired cell phone service for his oldest child. At hearing, Applicant claimed this debt 
had been paid. However, he was unable to provide documentation to establish 
payment. He indicated, in his post-hearing exhibits, that he has now listed this debt with 
his consumer credit counseling service, but he provided no documentation to support 
this claim. (AE T; AE Q; AE AA; Tr. 84-87.) 
 
Applicant is indebted to a collection agent for a bank in the approximate amount 
of $280, as alleged in 1.g. Applicant claims he satisfied this debt for a negotiated 
amount of $183. He provided a copy a bank statement showing $183 had been 
deducted from his bank account on April 28, 2010. However, neither the name of the 
creditor paid, nor the amount paid match the original debt as stated in Applicant’s credit 
reports. (AE BB; Tr. 87-90.) 
 
Applicant is indebted to a collection agent for a phone company in the 
approximate amount of $920, as alleged in 1.h. Applicant disputes this debt and claims 
it is a duplicate of the debt in SOR allegation 1.e. However, he offered no 
documentation to establish his claim. Applicant’s credit reports show Applicant had two 
different account numbers with this creditor, opened at different times. (Tr. 89-90.) 
 
In August 2007, Applicant attended a course on personal financial management 
offered through his employer. It was an eight hour class and Applicant presented 
documentation that he successfully completed the training. Applicant has also been 
working with the consumer credit counseling service, since March 2010, to manage his 
debt. (AE CC; AE W; Tr. 96-97.)  
 
Applicant is well respected by his supervisors, colleagues, fiancée, and friends. 
Each speaks highly of Applicant’s dedication and trustworthiness. He has completed a 
number of training courses through his present employer and is dedicated to his job. He 
also has been awarded a number of certificates from his employer and medals by the 
Army, including the Achievement Medal, the National Defense Service Medal, the Army 
Service Ribbon, the Antarctic Deployment Ribbon, and the Kosovo Service Medal. (AE 
C;AE D; AE E; AE F; AE G; AE H; AE I; AE P; AE BB; Tr. 45-52.) 
 
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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 and mitigating conditions, 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, administrative judges apply the guidelines 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 the 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 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 EO 10865 provides that adverse 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).   
 
 
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Analysis 
 
Guideline F, Financial Considerations 
 
The security concern for Financial Considerations is set out in AG ¶ 18, as 
follows:       
 
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 guideline notes several conditions that could raise security concern under 
AG ¶ 19. Two are potentially applicable in this case:   
 
(a) inability or unwillingness to satisfy debts; and 
 
(c) a history of not meeting financial obligations. 
 
 Since 2001, Applicant has not been financially solvent. He admits that he did not 
attempt to satisfy his debts until approximately 2008. In addition, he has a number of 
debts that remain unsatisfied. The Government established the disqualifying conditions 
in AG ¶ 19(a) and 19(c). Further inquiry about the applicability of mitigating conditions is 
required.  
 
 Five Financial Considerations Mitigating Conditions under AG ¶ 20 are potentially 
applicable:  
 
(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; and 
 
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(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. 
 
 Applicant has not acted responsibly, or in a timely manner, to attempt to resolve 
his delinquent debt. Of Applicant’s seven debts listed in the SOR, Applicant is making 
payments on one debt as alleged in 1.b. Two debts, 1.a., and 1.c., have been paid 
involuntarily, through garnishment. He is disputing 1.d. He was unable to present proof 
that he has satisfied or otherwise resolved 1.e., 1.g., and 1.h. His debt is current and 
on-going. Applicant’s conduct does not warrant application of AG ¶ 20(a).  
 
 Applicant’s debts may have been due, in part, to his ex-wife’s mismanagement of 
money and their subsequent divorce, but he has had ample time to resolve his debts 
since then. Further, while he suffered two periods of unemployment, the first in 2004-
2005 and the second in 2008 through April 2009, he failed to demonstrate responsible 
behavior toward his debts during his periods of employment. He has been employed 
with his present employer since April 2009 and has made little progress on his debts 
listed on the SOR. AG ¶ 20(b) is only partially mitigating. 
 
 Applicant presented evidence that in August 2007 he attended a financial 
management class. What effect, if any, this class had on Applicant’s finances is unclear, 
as he did not focus on repaying any of his debts until 2008. He indicated he has been 
working with a consumer credit counseling service, since March 2010, however, his 
financial problems are not fully resolved or under control, despite having satisfied SOR 
allegations 1.a and 1.c., and successfully making two payments in the debt in 1.b. AG ¶ 
20(c) does not apply.  
 
 Applicant has made a good faith effort to satisfy the creditors in SOR allegation 
1.b. The same cannot be said for the debts in 1.a. and 1.c. On its face, satisfaction of a 
debt through the involuntary establishment of a creditor’s garnishment is not the same 
as, or similar to, a good-faith initiation of repayment by the debtor.1 Further, as 
previously noted, Applicant failed to provide documentation that 1.e., 1.g., and 1.h. have 
been resolved. AG ¶ 20(d) only applies in part. 
 
 Applicant disputes the legitimacy of his debt on his repossessed vehicle. He has 
enlisted the help of a consumer credit counseling service to dispute this debt. He has 
presented no evidence to substantiate a dispute with any of his other unsatisfied 
creditors. AG ¶ 20(e) is mitigating only with respect to allegation 1.d. 
 
                                                          
1 ISCR Case No. 08-06058 (App. Bd. Sept. 21, 2009). 
 
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Guideline E, Personal Conduct  
 
The security concern for the Personal Conduct guideline is set out in AG ¶ 15: 
 
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. 
 
 AG ¶ 16 describes conditions that could raise a security concern and may be 
disqualifying. The following disqualifying conditions are potentially applicable: 
 
(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; and 
 
(c) credible adverse information in several adjudicative issue areas that is 
not sufficient for an adverse determination under any other single 
guideline, but which, when considered as a whole, supports a whole-
person assessment of questionable judgment, untrustworthiness, 
unreliability, lack of candor, unwillingness to comply with rules and 
regulations, or other characteristics indicating that the person may not 
properly safeguard protected information. 
 
 Applicant failed to list his delinquent debts on his 2009 EQIP in Sections 26(b) 
and 26(m). He clearly knew he had debts that had not been resolved since his last 
security interview and were over 180 days delinquent in the past 7 years and that he 
was currently over 90 days past due on some debts. Additionally, he knew he had a 
vehicle repossessed. Yet, he chose not to include the debts on the EQIP because he 
was embarrassed of them. This behavior indicates questionable judgment and 
untrustworthiness. 
  
AG ¶ 17 provides conditions that could mitigate security concerns. The following 
are potentially applicable:  
 
(a) the individual made prompt, good-faith efforts to correct the omission, 
concealment, or falsification before being confronted with the facts; 
 
(b) the refusal or failure to cooperate, omission, or concealment was 
caused or significantly contributed to by improper or inadequate advice of 
authorized personnel or legal counsel advising or instructing the individual 
specifically concerning the security clearance process. Upon being made 
 
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aware of the requirement to cooperate or provide the information, the 
individual cooperated fully and truthfully; 
 
(c) the offense is so minor, or so much time has passed, or the behavior is 
so infrequent, or it happened under such unique circumstances that it is 
unlikely to recur and does not cast doubt on the individual’s reliability, 
trustworthiness, or good judgment; 
 
(d) the individual has acknowledged the behavior and obtained counseling 
to change the behavior or taken other positive steps to alleviate the 
stressors, circumstances, or factors that caused untrustworthy, unreliable, 
or other inappropriate behavior, and such behavior is unlikely to recur; and  
 
(e) the individual has taken positive steps to reduce or eliminate 
vulnerability to exploitation, manipulation, or duress. 
 
 After considering the mitigating conditions outlined above in AG ¶ 17, it is 
apparent that none of them apply. Applicant did not make prompt or good-faith efforts to 
correct his falsification or concealment. He provided no information that indicates he 
was ill-advised in completing his SF 86. Falsifying information is a serious offense and 
Applicant has done nothing to show that similar lapses in judgment are unlikely to recur. 
Further, he fails to take responsibility for his actions. He has not provided information in 
this record to show that he has met his burden of proof for his personal conduct. 
 
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 
the facts and circumstances surrounding this case. I have incorporated my comments 
 
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under Guidelines F and E in my whole-person analysis. Some of the factors in AG ¶ 
2(a) were addressed under those guidelines, but some warrant additional comment.  
 
Applicant is well respected by his supervisors, friends, colleagues, and fiancée. 
He has honorably served in the U.S. Army. Those who know him best report that he has 
a high degree of honor and trustworthiness. His standards are reflected in the 
certificates he received during his employment with the government contractor and in 
the Army. However, he has not acted in a trustworthy manner when it comes to 
addressing his financial delinquencies or in completing his EQIP.  
 
Overall, the record evidence leaves me with questions and doubts as to 
Applicant’s eligibility and suitability for a security clearance. For all these reasons, I 
conclude Applicant has failed to mitigate the Financial Considerations and Personal 
Conduct security concerns.  
 
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.:   Against Applicant 
Subparagraph 1.b:   For Applicant 
  Subparagraph 1.c.:   Against Applicant 
  Subparagraph 1.d.:   For Applicant 
  Subparagraph 1.e.:   Against Applicant 
  Subparagraph 1.g.:   Against Applicant 
  Subparagraph 1.h.:   Against Applicant 
 
Paragraph 2, Guideline E:   AGAINST APPLICANT 
 
  Subparagraph 2.a.:   Against Applicant 
Subparagraph 2.b:   Against Applicant 
 
Conclusion 
 
 In light of all of the circumstances presented by the record in this case, it is not 
clearly consistent with the national interest to grant Applicant eligibility for a security 
clearance. Eligibility for access to classified information is denied. 
 
 
 
________________________ 
Jennifer I. Goldstein 
Administrative Judge