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DEPARTMENT OF DEFENSE
DEFENSE OFFICE OF HEARINGS AND APPEALS
         
            
In the matter of: )
)
)       ISCR Case No. 09-03941
)
)
Applicant for Security Clearance )
Appearances
For Government: Gregg A. Cervi, Esquire, Department Counsel
For Applicant: Pro se
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Decision
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LYNCH, Noreen A., Administrative Judge:
On August 11, 2010, the Defense Office of Hearings and Appeals (DOHA) issued
Applicant a Statement of Reasons (SOR) detailing the basis for its preliminary decision
to deny her security clearance application, citing security concerns under Guideline F
(Financial Considerations). DOHA acted under Executive Order 10865, Safeguarding
Classified Information within Industry (February 20, 1960), as amended; Department of
Defense (DoD) Directive 5220.6; Defense Industrial Personnel Security Clearance
Review Program (January 2, 1992), as amended (Directive); and the adjudicative
guidelines (AG) implemented by the DoD in September 2006. 
Applicant timely requested a hearing before an administrative judge. DOHA
assigned the case to me on October 18, 2010. DOHA issued a notice of hearing on
November 8, 2010. I convened the hearing as scheduled on December 8, 2010.
Government Exhibits (GE) 1 through 9, and Applicant Exhibit (AE) (A-M) were stipulated
into evidence. Applicant testified on her own behalf. DOHA received the transcript (Tr.)
on December 16, 2010. At Applicant’s request, I kept the record open for additional
documents until December 29, 2010. Applicant submitted a packet of 12 financial
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documents for the record, which were marked as AE N, and admitted into the record
without objection. Eligibility for access to classified information is granted.
Findings of Fact
In her answer to the SOR, Applicant admitted the allegations in ¶ 1.a through 1.h
with the exception of 1.c. and 1.g. At the hearing, Applicant acknowledged all the debts
alleged in the SOR. Applicant’s admissions are accepted as findings of fact. I make the
following findings.
Applicant is a 46-year-old employee of a defense contractor. She graduated from
high school in May 1982. (GE 1) She is not married and has no children. She has been
with her current employer since July 2008. 
Financial
Applicant was unemployed in 2002 due to a corporate restructure. (AE J) Before
her unemployment, she earned a good income and had no financial difficulties. (Tr. 21)
She found it difficult to find similar employment. She took various jobs to maintain her
monthly payments. However, her salary was approximately $13 an hour. (Tr. 28) She
decided to sell her home and move into a small apartment. (Tr. 29) Applicant began to
fall behind in her obligations. She immediately called her creditors to explain her
predicament. She attempted to make smaller payments, but the creditors did not work
with her. She considered a loan consolidation program, but that was not feasible.
Applicant again found herself unemployed in 2004 until January 2005. During that
time she attended driving school to enhance her employment prospects. She completed
the course and obtained a commercial driver license (CDL). Applicant worked for
approximately ten weeks after completion of the course. However, her father was
diagnosed with cancer and became ill very quickly. She moved to her parents’ home in
another state, and helped care for her father until his death in 2004. She now lives with
her mother. Applicant supports her mother and helps with rent, food, and medications.
(AE J)
From 2005 until February 2007, Applicant took a job paying $9 an hour. She left
that position for a higher paying job in March 2007. This lasted until February 2008. She
was earning about $13 an hour. In February 2008, she was again unemployed through
no fault of her own. She received unemployment from March 2008 until July 2008. She
received $598 every two weeks. She decided then to refinance her car loan; however,
Applicant could not afford the monthly car payment so she voluntarily surrendered her
car to the dealer. 
The SOR alleges eight delinquent debts, including a vehicle repossession and
collection accounts. The total amount of indebtedness is approximately $46,732.
Applicant’s credit reports confirm her debts. (GE 6-9) When Applicant received the SOR,
other accounts were listed. She has since paid those accounts. (AE L) Over the past two
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years, Applicant estimates that she has paid almost $5,000 on her delinquent debts. She
used her savings and income. (Tr. 26) In July 2008, her brother died and she had to
assume the responsibility for his funeral expenses. She borrowed money from a friend of
her mother to pay for the funeral. She paid back the loan.
Applicant contacted a credit counseling agency to obtain counseling and to
resolve her delinquent debts. In 2009, she paid them for three months ($1,039).
However, they did not make any payments toward her accounts or verify the accounts on
her credit report. (Tr. 11) In addition Applicant contacted a law firm to verify accounts that
she had of which she had no knowledge. They officially disputed several accounts. (AE
B) She researched the other debts and proceeded on her own to address them.
Applicant has already paid the debts alleged in SOR 1.d and 1.h. She has a
repayment plan for the debt alleged in SOR 1.f. Since July 2009, Applicant has paid $50
monthly. (AE F) The alleged debt in SOR 1.e for the repossessed auto is in a repayment
plan. (AE O) Applicant owed a deficiency amount of approximately $8,000. She settled
the debt for $3,532. She is making monthly payments of $100 for which she submitted
receipts showing number of payments.
Applicant successfully disputed the alleged debt in SOR 1.a and it has been
removed from her credit report. (AE I) Before the dispute was resolved in her favor, she
made three months of payments. (AE A) The debt alleged in SOR 1.b has also been
successfully disputed, and the account removed from the credit report. (AE B) Applicant
had also made payments on the account until the favorable resolution. A final debt in
SOR 1.c has been resolved in Applicant’s favor. (AE C)
The debt alleged in SOR 1.g for a medical account in the amount of $301 is still
not fully resolved. Applicant denied the debt and did not recognize it. She had medical
services but had insurance and had not been contacted concerning any medical
account. She submitted a letter after the hearing revealing that the account has been
closed. (AE O)    
Applicant’s net monthly income is $2,280. After expenses, she has approximately
$600 net remainder. Applicant completed financial counseling and received a certificate
of completion in November 2010. (AE M) She has a budget and is saving some money
each month to pay more on her repayment plans. Applicant plans to allocate her tax
refund to her repayment plans. She has not incurred any new debt. She does not have
any credit cards. She continues to financially help her mother.
Applicant submitted seven character statements. (AE K) Her lead manager
describes her as a person who handles responsibility and is a dedicated and loyal
member of the team. Her work is no less than perfect. Her colleagues and friends
describe Applicant as intelligent, capable, dedicated, and personable. She is
recommended as an enthusiastic and trustworthy person.
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Policies
“[N]o one has a ‘right’ to a security clearance.”  Department of the Navy v. Egan,
484 U.S. 518, 528 (1988).  As Commander in Chief, the President has “the authority to . .
control access to information bearing on national security and to determine whether an
individual is sufficiently trustworthy to occupy a position . . . that will give that person
access to such information.”  Id. at 527.  The President has authorized the Secretary of
Defense or his designee to grant applicants 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 and modified.  
Eligibility for a security clearance is predicated upon an applicant meeting the
criteria contained in the adjudicative guidelines (AG).  These guidelines 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 overarching 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.
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
possible risk an applicant may deliberately or inadvertently fail to protect classified
information. Such decisions entail a certain degree of legally permissible extrapolation as
to 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 an applicant concerned.”  See Exec. Or.
10865 § 7. Thus, a decision to deny a security clearance is not necessarily a
determination of the loyalty of an applicant. It is merely an indication an applicant 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 an applicant that may disqualify an 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 therein 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
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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 security clearance.”
ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002). “[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
The security concern for Financial Considerations is set out in AG ¶ 18:
Failure or an 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.” It also states that “an individual who is
financially overextended is at risk of having to engage in illegal acts to
generate funds.
Applicant incurred delinquent debts in the amount of $46,732. She was unable to
pay her delinquent accounts for a period of time. Consequently, Financial Considerations
Disqualifying Condition (FC DC) AG ¶ 19(a) (inability or unwillingness to satisfy debts),
and FC DC AG ¶ 19(c) (a history of not meeting financial obligations) apply. With such
conditions raised, it is left to Applicant to overcome the case against her and mitigate
security concerns.  
Applicant had no financial difficulties until 2002 when she lost her job. She
attempted to make changes in her lifestyle so that she could maintain her expenses. She
again experienced unemployment in 2004 and underemployment in 2007. She again
strategized to reduce her expenses by selling her home and moving into a small
apartment in an attempt to pay her bills. She was not earning enough money to pay her
rent and car payments. She eventually surrendered her car. She also moved home so
that she could help her ill father. She has a steady job and has addressed all her
delinquent accounts. She has no new debt.  Consequently, Financial Considerations
Mitigating Condition (FCMC) 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)
applies.
Financial Considerations Mitigating Condition (FC MC) AG ¶ 20(b) (the conditions
that resulted in the behavior 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) applies. As
noted above, Applicant experienced unemployment and underemployment on several
occasions. These circumstances were out of her control and adversely impacted her
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finances. She also paid for her brother’s funeral when he suddenly died in 2008. She
paid accounts that are not listed on the SOR. She took actions to reduce her expenses
and pay accounts that she could. She even voluntarily surrendered her car. She has
acted responsibly under the circumstances. Applicant went back to school in 2004 so
that she could have enhanced employment opportunities to pay her bills.
FC MC AG ¶ 20(d) (the individual initiated a good-faith effort to repay overdue
creditors or otherwise resolve debts) applies to her delinquent debts. She has paid or is
in a repayment plan for her debts. She completed counseling and has followed a plan to
resolve her delinquent debt.  FC MC AG ¶ 20(c) (the person has received or is receiving
counseling for the problem and there are clear indications that the problem is being
resolved or is under control) applies. FC MC AG ¶ 20(e) also applies as Applicant
successfully disputed and documented her effort to dispute certain debts.
Whole-Person Concept
Under the whole-person concept, an administrative judge must evaluate an
applicant’s eligibility for a security clearance by considering the totality of the applicant’s
conduct and all the 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 eligibility for a
security clearance must be an overall commonsense judgment based upon careful
consideration of the guidelines and the whole-person concept. Some of the factors in AG
¶ 2(a) were addressed above, but some warrant additional comment.
Applicant is a single person who has shown incredible resolve against adversity.
She was gainfully employed and financially solvent until 2002 when she lost her job. She
took steps to reduce her expenses so that she could pay her accounts that were
becoming unmanageable. Applicant suffered more unemployment. She went back to
school to enhance employment opportunities. She again acted responsibly and tried
everything to keep afloat. She cared for her ill father and when he died, she remained to
care for her mother. She paid for her brother’s funeral expenses.
Applicant sought counseling and even paid money to a credit counseling agency
that really did not help her. She disputed debts that she did not recognize. She continued
to pay what she could on other accounts over the past years. Applicant has addressed
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all the delinquent debt that is noted on her SOR. She has no other debt. She lives
modestly. Applicant has a steady income. She saves her money. She relies on the
knowledge that she gained from her financial counseling to guide her. She is described
as a trustworthy and reliable individual. She has mitigated the security concerns under
the financial considerations guideline.
Accordingly, I conclude she has carried her burden of showing that it is clearly
consistent with the national interest to grant her eligibility for access to classified
information under the financial considerations guideline. 
Formal Findings
I make the following formal findings for or against Applicant on the allegations set
forth in the SOR, as required by Directive ¶ E3.1.25 of Enclosure 3:
Paragraph 1, Financial: FOR APPLICANT
Subparagraphs 1.a-h: 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.
_________________
Noreen A. Lynch
Administrative Judge