1
                                                             
                           
                        DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 08-11950
)
)
Applicant for Security Clearance )
Appearances
For Government: David F. Hayes, Esq., Department Counsel
For Applicant: Pro se
                                                                            
______________
Decision
______________
LYNCH, Noreen A., Administrative Judge:
On October 20, 2010, the Defense Office of Hearings and Appeals (DOHA)
issued a Statement of Reasons (SOR) listing security concerns arising 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 (DoD) Directive 5220.6, Defense Industrial Personnel Security
Clearance Review Program (January 2, 1992), as amended (Directive); and the
adjudicative guidelines (AG) implemented in September 2006. 
Applicant timely answered the SOR, admitted the debts alleged in the SOR,  and
requested a hearing. DOHA assigned the case to me on December 14, 2010. A Notice
of Hearing was issued on December 23, 2010, and the case was heard on February 8,
2011. Department Counsel offered eight exhibits, which were admitted without objection
as Government Exhibits (GE) 1-8. Applicant testified and submitted exhibits AE A
through AE J at the hearing, which were admitted. I kept the record open at Applicant’s
request, and he submitted AE K and L, which were admitted without objection. DOHA
received the hearing transcript (Tr.) on February 16, 2011. Based on a review of the
2
pleadings, testimony, and exhibits, I find Applicant failed to meet his burden regarding
the security concerns raised. Security clearance is denied.
Findings of Fact
Applicant is a single 27-year-old employee of a defense contractor. He
graduated from high school in 2002. He attended one semester of college. Applicant
has one child, who is seven years old, from a previous relationship. He has worked for
his current employer since August 2008. (Tr. 19) He believes he has an interim security
clearance. (Tr. 26)
Financial
Applicant bought a car in 2002. He had just graduated from high school. He
obtained a loan from a credit union for approximately $5,600. He bought a 1992 vehicle
but after just three weeks, his car was totaled in an accident. This was not his fault. He
recalls that he received $3,300 for the car from insurance. He did not use the money to
pay for the car loan. (Tr. 55) He did not arrange a payment plan. (SOR 1.c) (GE 3)
In January 2004, Applicant had his tax returns prepared by a Rapid Refund
group who worked out of a liquor store. He paid them a fee of $200 and they prepared
his tax returns. He was given a sum of approximately $5,000 or $6,000 based on an
expected tax refund. However, he learned a few months later that an error was made
and that he owed the money to the tax group. He had spent the money buying
furnishings for his apartment. (Tr. 35) Thus, he did not have the money to return to the
tax group. He recalls that the group took an amount each year from him from his tax
refunds. He believes he also paid on the account, but could not provide any
documentation. (SOR 1.b) However, a recent credit report shows a balance of $2,811.
(GE 6)
In 2005, Applicant purchased another vehicle for $10,000. However, he returned
the car a few days later because a “cigarette tray” was missing. (Tr. 64) He had not
made a down payment. The dealership gave him a different truck that he thought was a
loaner until he would get his original car back. He kept the truck for 30 days and he
learned he was then responsible for the truck. (Tr 67) He did not want this particular
type of truck so he returned the truck to the dealership. Applicant did not make any
payments on the vehicle. He now owes $13,550. (SOR 1.d) He recalls a year ago he
was offered a settlement of $8,000 but could not afford it. 
Applicant was employed during these years. After high school, he worked as a
tire technician until 2005. He then started work as a security officer. (Tr. 22) He was
unemployed from September 2006 until March 2007. (Tr. 22) He took available
temporary work while he was unemployed. He knew he had delinquent debts but did
not address them. In fact, he acknowledged that instead of paying some of his
delinquent debt, he took out a loan for a vacation in the amount of $1,000. (Tr. 73 )
(SOR 1.e.) He believes that the loan was in 2002 or 2003. He also admits that he just
stopped paying on the loan despite the fact that he was working. (Tr. 76)
3
The SOR lists six delinquent accounts totaling $20,000. The debts include auto
loans, an overdraft, and a medical bill. The credit reports confirm these debts. (GE 4-8)
Applicant notes that he paid some small debts that are not listed in the SOR. (AE A and
GE 2) The total amount paid for the accounts is approximately $200.
Applicant contacted a credit consolidation company in 2006 to help him with his
delinquent bills from the tax refund error and other bills. He paid them an initial fee of
$400, but they did not help him. They advised him to stop paying any debts. (Tr. 35).
Despite his frequent phone calls, he has not heard from them. Applicant recalls that he
tried other consolidation companies but decided to just start paying his small debts. (Tr.
47)
Applicant submitted documentation showing that certain accounts were paid in
January 2011. At the hearing, he did not know whether a medical bill for $385 belonged
to him. (SOR 1.a) After the hearing, he investigated the matter and paid the entire sum.
Applicant submitted a receipt for SOR allegation 1.a. ($385). (AE K) Applicant also
submitted a receipt for $500 showing that parking tickets from 2008 or 2009 have been
paid recently. (AE I) The debt alleged in SOR 1.f is due to a bank overdraft. Applicant
acknowledged that this account has been delinquent for several years. He provided
receipts for payment of the overdraft of $281.
Applicant claims he has payment plans for the debts in SOR ¶ 1.b, 1.c, 1.d., and
1.e. He sends $25 a month. He started the repayment plans in January 2011. He did
not submit any structured payment plans. He testified that he will make larger payments
as he can. (Tr. 63)
Applicant’s monthly net income is $3,300. After expenses he has approximately
$900 in net remainder. He started a second job, but the hours vary. Since 2005,
Applicant pays $460 a month for child support. The money is automatically deducted
from his pay. Applicant has a 2007 car with a monthly car payment of $500. He has no
new debt and has no credit cards. His financial statement showed that he was not
paying anything on his delinquent debts in 2009.
At the hearing, Applicant was sincere in his testimony that he has every intention
of paying his delinquent debts. He realized he made some mistakes when he was
younger. He also admitted that he was irresponsible. He was candid and forthright in
his testimony. He spoke to his father about his financial situation. He is now engaged
and told his fiancee that he is addressing his credit issues. He has taken a second job
to help pay his debts. He has learned the importance of his credit issues. He has no
new debts. However, he admitted that recently he paid for his fiancee’s books (about
$400). He is also planning a wedding with a budget of $5,000. He noted that he took a
vacation last summer. 
Applicant acknowledged that he used poor judgment with regard to his finances
when he was younger. However, he did not begin addressing the debts alleged on the
SOR until recently. He recently began a payment plan for three debts alleged in the
 See also ISCR Case No. 94-1075 at 3-4 (App. Bd. Aug. 10, 1995).      1
 Department of the Navy v. Egan, 484 U.S. 518, 531 (1988).      2
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      3
4
SOR. He now monitors his credit reports and keeps track of his bills. He is taking his
financial issues seriously due to his livelihood. (Tr. 50)
Applicant submitted a letter of recommendation from his employer. (AE J)
Applicant is described as a professional with sound ethics. Applicant provides critical
security for the agency. He is dedicated and trustworthy. 
Policies
When evaluating an applicant’s suitability for a security clearance, an
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. These guidelines are not inflexible
rules of law. Instead, recognizing the complexities of human behavior, they are applied
in conjunction with the factors listed in the adjudicative process. An administrative
judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision.
Under AG ¶ 2(c), this process is a conscientious scrutiny of a number of variables
known as the “whole-person concept.” An 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. Likewise, I have avoided drawing inferences
grounded on mere speculation or conjecture.
The Government must present evidence to establish controverted facts alleged
in the SOR. An 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 burden of proof is something less than a1
preponderance of evidence.  The ultimate burden of persuasion is on the applicant.  2 3
A person seeking access to classified information enters into a fiduciary
relationship with the Government based on 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 classified information. Such
 See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive      4
information), and EO 10865 § 7.
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      5
 Id.      6
5
decisions entail a certain degree of legally permissible extrapolation of potential, rather
than actual, risk of compromise of classified information.
 
Section 7 of Executive Order 10865 provides that 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.”  “The clearly consistent standard indicates that security clearance4
determinations should err, if they must, on the side of denials.”  Any reasonable doubt5
about whether an applicant should be allowed access to sensitive information must be
resolved in favor of protecting such information.  The decision to deny an individual a6
security clearance does not necessarily reflect badly on an applicant’s character. It is
merely an indication that the applicant has not met the strict guidelines the President
and the Secretary of Defense established for issuing a clearance.
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 currently has delinquent debts that have existed for at least five years.
He has known about the accounts since 2004. 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 him and mitigate
security concerns.  
Applicant has unresolved debt for several accounts. He agrees that his debts
have languished over time. He has no new delinquent debt. However, he just started
making the payments last month for the four accounts that are in repayment. He has a
$500 a month car note. He is planning a wedding with a budget of $5,000.
Consequently, Financial Considerations Mitigating Condition (FCMC) AG ¶ 20(a) (the
6
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) does not apply.
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)
does not apply. Applicant has worked since high school. He was working when he
became delinquent with his auto debts. He was unemployed for a brief period, but there
does not seem to be a nexus for the delinquent debts. He took out a loan to take a
vacation in 2003 or 2004. However, there is no evidence that he acted responsibly
under the circumstances for several years. He allowed the delinquent debts to remain
unpaid for several years. He noted that he also took another vacation last summer. 
FC MC AG ¶ 20(d), (the individual initiated a good-faith effort to repay overdue
creditors or otherwise resolve debts) does not apply in full. Applicant has made
attempts to obtain help with his delinquent accounts. He paid small accounts in 2009
and 2010. He is now beginning some repayment plans. However, at this time failure to
provide information about financial counseling obviates the applicability of 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). He has a net
remainder but has not made his delinquent debts a priority. He may be on the right
track, but he has not met his burden 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 an applicant’s
conduct and all the 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. As noted above, the
ultimate burden of persuasion is on the applicant seeking a security clearance. 
7
I considered the potentially disqualifying and mitigating conditions in light of all
the facts and circumstances surrounding this case, as well as the whole-person factors.
Applicant is 27 years old. When he was young, he did not manage his finances very
well. He allowed his delinquent debts to languish for years. He does have good
intentions. He is a father who cares for his son through child support. He is on the right
track, but at this time he has not met his burden in this case. 
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: For Applicant
Subparagraph 1.b: Against Applicant
Subparagraph 1.c: Against Applicant
Subparagraph 1.d: Against Applicant
Subparagraph 1.e: Against Applicant
Subparagraph 1.f: For 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 a security clearance.
Clearance is denied.
                                                     
NOREEN A. LYNCH.
Administrative Judge