DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 09-08237 
            ) 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Gregg A. Cervi, Esquire, Department Counsel 
For Applicant: Pro se 
 
 
______________ 
 
Decision 
______________ 
 
 
CREAN, Thomas M., Administrative Judge: 
 
Based on a review of the case file and pleadings, Applicant failed to provide 
adequate information to mitigate security concerns under Guideline F. Eligibility for 
access to classified information is denied. 
 
On August 21, 2009, Applicant submitted an Electronic Questionnairesa for 
Investigation Processing (e-QIP) to obtain a security clearance for his employment with 
a defense contractor. (Item 5) On July 26, 2010, the Defense Office of Hearings and 
Appeals (DOHA) issued a Statement of Reasons (SOR) to Applicant detailing security 
concerns for financial considerations under Guideline F. (Item 1) 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 Security Clearance Review Program (January 2, 1992), as 
amended (Directive); and the adjudicative guidelines (AG) effective in the Department of 
Defense on September 1, 2006.  
 
 Applicant answered the SOR on August 9, 2010. He admitted seven of the nine 
allegations noting that he was paying or negotiating settlement of these debts. For the 
 
1 
 
 
 
2 
 
 
two debts he denied, he noted that he was either paying the debt or it had been 
resolved. The total delinquent debt alleged in the SOR is $46,749. Applicant elected to 
have the matter decided on the written record. (Item 4) Department Counsel submitted 
the Government’s written case on September 2, 2010. Applicant received a complete 
file of relevant material (FORM) on November 24, 2010, and was provided the 
opportunity to file objections, and submit material to refute, extenuate, or mitigate the 
disqualifying conditions. He did not provide any additional information in response to the 
FORM. The case was assigned to me on January 14, 2011.  
 
Findings of Fact 
 
 I thoroughly reviewed the case file and the pleadings. I make the following 
findings of fact. 
 
Applicant is 38 years old, and has worked for a defense contractor as a systems 
administrator since August 2009. He is not married, has no children, and has never 
served in the military. This is his first application for a security clearance. He has a 
bachelor's degree but continues to take courses at the same university that awarded 
him his degree. (Item 5) In response to interrogatories, Applicant listed his net monthly 
income as $3,600, with net monthly expenses of $2,937, leaving a monthly remainder in 
discretionary funds of $663. (Item 6 at 4) On his security clearance application, 
Applicant lists a period of unemployment from January to August 2009, and self-
employment from August 2004 until November 2005.  
 
Credit reports (Item 7, credit report, dated April 23, 2010; Item 8, credit report, 
dated December 28, 2009; and Item 9, credit report, dated September 1, 2009) show 
delinquent debts of approximately $46,749. These delinquent accounts include 
charged-off credit card debts (SOR 1.a to 1.f, and 1.i), and two loans for purchase of 
items (1.g, and 1.h). 
 
Applicant attributes his financial problems to an inability to pay his delinquent 
debts and not an unwillingness to resolve financial issues. He stated he accumulated a 
great deal of debt when he started his own business in 2004. The business failed due to 
the economy and a natural disaster. He further noted he has worked hard to pay his 
debts, entered a debt management program, paid the loan on his car, and is paying his 
student loans on schedule. (Item 4 at 2) 
 
In an April 2010 response to interrogatories, Applicant acknowledged all of the 
delinquent debts. He provided copies of March 2009 letters he sent to one of the credit 
card companies on two of the debts, and one of the loan companies offering a payment 
plan. (SOR 1.a and 1.b, and 1.h) He has not received a reply from the companies nor 
did he present any information on any follow-up contact attempts. Regarding the other 
seven delinquent debts, Applicant noted that the debts are being paid under a debt 
management program with a debt solution company starting in April 2010. He presented 
his repayment schedule showing that he is to make $679 monthly payments to the debt 
solution company which will in turn assist in paying his delinquent debts. Applicant did 
 
3 
 
 
not present any documentation that he made payments to the debt solution company or 
that the debt solution company paid any of his delinquent debts.  
 
In his response to the SOR, Applicant denied the debt at SOR 1.a stating that he 
settled the debt and is making payments. He did not present any documentation to 
support his assertion. In his denial of the debt at SOR 1.e, he notes the debt was 
resolved but presented no documentation to establish how or when it was resolved. 
(Item 4)  
 
Applicant has failed to present documentation showing he has taken or intends to 
take any action to implement his plan to resolve or pay his delinquent debts. He 
presented no documentation on debt payments. He did present documents showing an 
agreement with a debt solution company, but he did not present any documentation to 
verify payments to the debt solution company. He has substantial discretionary funds on 
a monthly basis but provided no information on how those funds are utilized or will be 
utilized to resolve his delinquent debts.  
 
Policy 
 
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 must be considered 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 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 applicant or proven by Department Counsel. . . .” The 
Applicant has the ultimate burden of persuasion for obtaining a favorable security 
decision.  
 
4 
 
 
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 safeguard 
classified information. Such decisions entail a certain degree of legally permissible 
extrapolation of potential, rather than actual, risk of compromise of classified 
information. 
 
Analysis 
 
Financial Considerations 
 
 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, 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) Similarly, an individual who is financially irresponsible may also be 
irresponsible, unconcerned, or careless in their obligations to protect classified 
information. Behaving responsibly or irresponsibly in one aspect of life provides an 
indication of how a person may behave in other aspects of life.  
 
 A person’s relationship with his creditors is a private matter until evidence is 
uncovered demonstrating an inability or unwillingness to repay debts under agreed 
terms. Absent evidence of strong extenuating or mitigating circumstances, an applicant 
with a history of serious or recurring financial difficulties is in a situation of risk 
inconsistent with the holding of a security clearance. An applicant is not required to be 
debt free, but is required to manage his finances in such a way as to meet his financial 
obligations. Applicant’s delinquent debts listed in credit reports and admitted by 
Applicant raise Financial Considerations Disqualifying Conditions (FC DC) AG ¶ 19(a) 
(inability or unwillingness to satisfy debts), and FC DC AG ¶ 19(c) (a history of not 
meeting financial obligations). The number and nature of the debts, nine debts from 
credit cards and loans, establish a history and unwillingness to pay debts.  
 
 The Government produced substantial evidence to establish the disqualifying 
conditions as required in AG ¶¶ 19(a) and 19(c). The burden shifts to Applicant to 
produce evidence to rebut, explain, extenuate, or mitigate the security concerns under 
financial considerations. An applicant has the burden to refute an established allegation 
or prove a mitigating condition, and the burden to prove or disprove it never shifts to the 
Government. 
 
 I considered Financial Considerations Mitigating Condition (FC MC) 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 
 
5 
 
 
current reliability, trustworthiness, or good judgment); and FC MC ¶ 20(b) (the 
conditions that resulted in the financial problems were largely beyond the person’s 
control (e.g., loss of employment, a business downturn, unexpected medical 
emergency, or a death, divorce, or separations) and the individual acted responsibly 
under the circumstances). These mitigating conditions do not apply. Applicant incurred 
delinquent debt after completing college, being self-employed, and a short period of 
unemployment. Even though he experienced an eight-month period of unemployment, 
there is no indication that his debts were incurred under such circumstances that the 
debts will not recur. In fact, it appears the debts were incurred by Applicant in the 
normal course of living. Applicant contacted some of his creditors and indicated an 
agreement with a debt solution company to pay his debts. He has discretionary funds 
each month to pay delinquent debts but has not indicated that he is making payments, 
thereby acting responsibly to use these funds to resolve his past financial obligations. 
Applicant presented no information, evidence, or documentation to verify his assertions 
of debt settlement or payment. Without information from Applicant, it cannot be 
determined his financial problems are being resolved. With evidence of delinquent debt 
and no documentation to support reasonable management of his finances, it is obvious 
that his financial problems are not under control.  
 
 I considered FC MC ¶ 20(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). Applicant presented information to indicate an agreement with a debt 
solution company. I assume that since he entered an agreement with the company, 
there was some debt counseling provided Applicant. Even if he received counseling, 
there is no indication his financial problems are being resolved or under control.  
 
 I considered FC MC ¶ 20(d) (the individual has initiated a good-faith effort to 
repay the overdue creditors or otherwise resolve debts). For FC MC ¶ 20(d) to apply, 
there must be an “ability” to repay the debts, the “desire” to repay, and “evidence” of a 
good-faith effort to repay. A systematic, concrete method of handling debts is needed. 
Good-faith means acting in a way that shows reasonableness, prudence, honesty, and 
adherence to duty or obligation. A promise to pay debts in the future is not evidence of a 
good-faith intention to resolve debts. Applicant has to show a "meaningful track record" 
of debt payment, including evidence of actual debt reduction through payment of debts. 
All that is required is a plan to resolve financial problems coupled with significant action 
to implement that plan. Applicant failed to establish such a meaningful track record. 
 
 Applicant stated he has an agreed plan with a debt solution company to pay his 
debts. However, he has not presented adequate evidence to show he implemented this 
agreement. He has sufficient income to meet his financial obligations and has years of 
steady employment. Applicant's lack of documented action to pay his debts is 
significant. Based on the acknowledged delinquent debts, Applicant has not acted 
responsibly towards his debts and finances. Applicant has not presented sufficient 
information to mitigate security concerns for financial considerations.  
 
 
 
6 
 
 
Whole-Person Concept 
 
 Under the whole-person concept, an administrative judge must evaluate an 
applicant’s eligibility for access to classified information by considering the totality of the 
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 access to 
classified information 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. Applicant has not established a 
meaningful track record of paying his delinquent debts. He has not provided sufficient 
credible documentary information to show he acted reasonably and responsibly to 
address his delinquent debts and resolve his financial problems, or even that he has a 
credible plan to resolve and pay his delinquent debts. Applicant has not demonstrated 
responsible management of his finances or a consistent record of actions to resolve 
financial issues. The lack of responsible management of financial obligations indicates 
he may not be concerned or responsible in regard to classified information. Overall, the 
record evidence leaves me with questions and doubts about Applicant’s judgment, 
reliability, and trustworthiness. He has not established his suitability for access to 
classified information. For all these reasons, I conclude Applicant has not mitigated the 
security concerns arising from his financial situation. Eligibility for access to classified 
information is denied. 
 
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.i:  Against Applicant  
  
 
 
 
7 
 
 
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 access to 
classified information. Eligibility for access to classified information is denied. 
 
 
 
_________________ 
THOMAS M. CREAN 
Administrative Judge