DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
 
In the matter of ) 
 ) 
   )  ISCR Case No. 10-02343  
 ) 
Applicant for Security Clearance ) 
 
 
 
 
Appearances 
 
For Government: David Hayes, Esquire, Department Counsel 
 
For Applicant: Pro se 
 
 
 
______________ 
 
Decision 
______________ 
 
O’BRIEN, Rita C., Administrative Judge: 
 
Based on a review of the pleadings, exhibits, and testimony, I conclude 
that Applicant has not mitigated the security concerns raised under the guideline 
for financial considerations. Accordingly, his request for a security clearance is 
denied. 
  
Statement of the Case 
 
On September 17, 2009, Applicant submitted an Electronic Questionnaire 
for Investigations Processing (e-QIP) to request a security clearance required for 
his employment with a defense contractor. 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 affirmative 
 
 
1  
 
 
2  
                                                     
finding1 that it is clearly consistent with the national interest to grant Applicant’s 
request.  
 
 On October 18, 2010, DOHA issued to Applicant a Statement of Reasons 
(SOR) that specified the basis for its decision: security concerns addressed in the 
Directive under Guideline F (Financial Considerations) of the Adjudicative 
Guidelines (AG).2 In an undated Answer to the SOR, Applicant admitted all the 
allegations under Guideline F except subparagraphs 1.c., 1.g. though 1.i., 1.l., 
1.m., 1.t., and 1.y. He also requested a hearing before an administrative judge.  
 
Department Counsel was prepared to proceed on January 10, 2011, and 
the case was assigned to me on January 13, 2011. DOHA issued a Notice of 
Hearing on January 31, 2011, and I convened the hearing as scheduled on 
February 24, 2011. The Government offered seven exhibits, marked as 
Government Exhibits (GE) 1 through 7. Applicant testified, and offered two 
exhibits, admitted as Applicant’s Exhibits (AE) A and B. DOHA received the 
transcript on March 3, 2011. 
 
Findings of Fact 
 
Applicant’s admissions in response to the SOR are incorporated as 
findings of fact. After a thorough review of the pleadings, Applicant’s response to 
the SOR, and the evidence presented by both parties, I make the following 
additional findings of fact. 
 
 Applicant, who is 49 years old, graduated high school and served one 
month in the U.S. Navy before receiving a medical discharge in 1979. He earned 
some college credits in 1984. He married in 1996, and has four children. One is 
an adult, living independently. Applicant supports his wife and the three children 
living at home, who are 9, 13, and 16 years of age. (GE 1; Tr. 26-29)  
 
 Applicant has worked for a defense contractor since July 2008. He is 
currently an administrative assistant. From 2003 to 2005, he was a project 
control analyst with another employer, dealing with the financing and budgeting 
of special projects. His security clearance application shows continuous 
employment from 2001 to the present. However, he testified that he had short 
periods of days or weeks when he was unemployed, during which time he 
received unemployment benefits. He was also out of work for three months 
following a car accident in June 2007.3 He has worked for temporary agencies at 
1  Required by Executive Order 10865, as amended, and by DoD Directive 5220.6 (Directive), as 
amended. 
 
2 Adjudication of this case is controlled by the Adjudicative Guidelines (AG) implemented by the 
Department of Defense on September 1, 2006. 
  
3 None of the medical debts in the SOR relate to this accident. Applicant testified that the bills 
resulting from the accident were paid by Medicare or Medicaid. (Tr. 42) 
 
 
3  
times, and most of his positions were as an administrative assistant. (GE 1; Tr. 
30-32, 36-37, 41-43) 
 
 In 1979, Applicant received a medical discharge from the Navy after he 
had an asthma attack during basic training. He continues to have asthma, as well 
as severe headaches, which have resulted in his accruing numerous medical 
debts. Four of the medical debts are small, ranging from $26 to $57. (Tr. 37-39) 
 
 Applicant stated in his December 2009 security interview that he received 
lower pay in the administrative assistant positions, and his debts became 
delinquent. Over the years, he received notices from collection agencies. He 
used to throw the notices away, but since summer 2009, he kept the notices and 
planned to pay the accounts. Of the 27 debts the security investigator raised at 
the interview, Applicant did not recognize 25 debts. He told the investigator that 
he planned to begin paying his debts. (GE 3)  
 
 Applicant admitted that his delinquencies result from his “neglect, 
irresponsibility, and procrastination.” In his July 2010 Interrogatory response, he 
stated that he did not recognize some of the debts, would pay some between 
August and December 2010, and would work with a debt-repair service on 
others. As of the date of the hearing, he had not followed up on his statements 
that he would pay several debts by the end of 2010. In his Answer to the SOR, 
Applicant stated that he had satisfied several debts or was working with the 
creditor. He admitted at the hearing that he had not taken those steps at that 
point in time. (GE 2; Tr. 49, 109)  
 
 Applicant completed a personal financial statement (PFS) in July 2010. He 
testified that he rushed through it and did not fill it out properly. His current net 
monthly income is $2,800. His wife earns $1,200 per month gross as a school 
aide, but only when she can work full-time hours. His monthly expenses are 
approximately $2,000 per month. Counting only Applicant's income, he has $800 
net remainder each month. He does not have a savings account, and does not 
contribute to a retirement plan. He has opened a credit card account since July 
2010, which is past due. Applicant is current on his past income tax obligations, 
but he owes $2,000 in federal and state income taxes for his most recent filing. 
His tax preparer enrolled him in a payment plan. As of the hearing date, 
Applicant had not been notified as to the payments he will be required to make. 
(GE 3; Tr. 103-112) 
 
 Applicant submitted a list showing contacts with his creditors over the six 
weeks since he received the Government’s hearing exhibits in January 2011. 
The list indicates how he planned to handle each SOR debt. Subsequently, he 
contacted a credit-repair agency, and was advised not to contact or pay any 
creditors, as the company would handle debt repayment. He submitted an email 
from the company dated February 22, 2011. It notes that the plan requires him to 
pay $155 per month starting March 15, 2011. It discusses two medical bills 
 
 
4  
                                                     
(allegations 1.b. and 1.f.) that Applicant must pay on his own because they are 
too small to include in the plan. However, it does not contain specific information 
such as the names of the creditors to be included in the plan, or the amount that 
will be disbursed to each creditor. The record contains no evidence of payments 
by Applicant. (AE A, B; Tr. 20-25) 
 
 The following 25 SOR debts accrued between 2003 and 2009, with 17 of 
the 25 debts becoming delinquent in 2009. They total almost $10,000. The 
delinquencies appear in Applicant's credit reports of November 2009 and August 
2010. (GE 4, 5, 6, 7)  
 
• Medical debts, $2,498 (allegations 1.a., b., d., e., f., j., l., q., y.).  
 
• City government parking tickets, $205 (allegations 1.u., v.)  
 
• Utilities, $1,394 (allegations 1.c., 1.h.)  
 
$        Credit cards, $2,709 (allegations 1.g., 1.i., 1.o.)  
 
$   Payday loans, $553 (allegations 1.k. and 1.p.)  
 
$  Insurance, $234 (allegation 1.r.)  
 
$   Hotel, $100 (allegation 1.n.)  
 
$  Bank card overdrafts, $1,981 (allegations 1.s., 1.t., 1.w., 1.x.)  
 
$  Miscellaneous, $269 (allegation 1.m.)  
 
Policies 
 
 Each security clearance decision must be a fair, impartial, and 
commonsense determination based on examination of all available relevant and 
material information, and consideration of the pertinent criteria and adjudication 
policy in the AG.4 Decisions must also reflect consideration of the factors listed in 
¶ 2(a) of the Guidelines, commonly referred to as the “whole-person” concept. 
 
 The presence or absence of a disqualifying or mitigating condition does 
not determine a conclusion for or against an applicant. However, specific 
applicable guidelines are followed when a case can be measured against them 
as they represent policy guidance governing the grant or denial of access to 
classified information. In this case, the pleadings and the information presented 
by the parties require consideration of the security concerns and adjudicative 
factors addressed under Guideline F (Financial Considerations) at AG ¶ 18. 
4 Directive 6.3 
 
 
 
5  
                                                     
 A security clearance decision is intended only to resolve whether it is 
clearly consistent with the national interest5 for an applicant to either receive or 
continue to have access to classified information. The Government bears the 
initial burden of producing admissible information on which it based the 
preliminary decision to deny or revoke a security clearance for an applicant. 
Additionally, the Government must be able to prove controverted facts alleged in 
the SOR. If the Government meets its burden, it then falls to the Applicant to 
refute, extenuate, or mitigate the Government’s case.  
 
 Because no one has a “right” to a security clearance, an applicant bears a 
heavy burden of persuasion.6 A person who has access to classified information 
enters into a fiduciary relationship with the Government based on trust and 
confidence. Therefore, the Government has a compelling interest in ensuring 
each applicant possesses the judgment, reliability and trustworthiness to protect 
the national interests as his or her own. The “clearly consistent with the national 
interest” standard compels resolution of any reasonable doubt about an 
applicant’s suitability for access in favor of the Government.7 
 
Analysis 
 
Guideline F, Financial Considerations 
 
 AG ¶ 18 expresses the overall security concern about 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, all of 
which can raise questions about an individual's reliability, 
trustworthiness and ability to protect classified information. An 
individual who is financially over-extended is at risk of having to 
engage in illegal acts to generate funds. Compulsive gambling is a 
concern as it may lead to financial crimes including espionage. 
Affluence that cannot be explained by known sources of income is 
also a security concern. It may indicate proceeds from financially 
profitable criminal acts. 
 
 The evidence supports application of disqualifying conditions AG ¶19 (a) 
(inability or unwillingness to satisfy debts) and AG ¶19 (c) (a history of not 
meeting financial obligations). The SOR alleges $9,900 in delinquent debt. 
5 See Department of the Navy v. Egan, 484 U.S. 518 (1988). 
 
6 See Egan, 484 U.S. at 528, 531. 
 
7 See Egan; Adjudicative Guidelines, ¶ 2(b). 
 
 
6  
Applicant's oldest debt became delinquent in 2003. Applicant's history 
demonstrates a failure to meet his financial obligations. 
 
 Under AG ¶ 20, the following potentially mitigating factors are relevant: 
 
(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;  
 
(d) the individual initiated a good-faith effort to repay overdue 
creditors or otherwise resolve debts; and 
 
(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; 
 
 Although Applicant's debts have been accruing for years, they are not in 
the distant past, as almost $10,000 remains unpaid. Applicant's inattention to his 
numerous debts, even during the security clearance process when he was on 
notice that they were a concern, indicates that delinquencies may continue in the 
future. His failure to make consistent attempts to resolve his debts over the years 
raises questions about his reliability and judgment. AG ¶ 20(a) does not apply.  
 
 AG ¶ 20(b) focuses on situations where conditions beyond an applicant’s 
control affect his ability to meet his financial obligations. Applicant has had some 
health issues. However, his medical debts are relatively small, four being under 
$100. He did suffer injuries from an unexpected car accident in 2007. Although 
the resulting medical bills did not cause his financial problems, he was out of 
work for three months. Applicant’s intermittent unemployment was also beyond 
his control, but it was only for short periods, and he received unemployment 
compensation. For full application of this mitigating condition, an applicant must 
act reasonably in response to unforeseen circumstances. Applicant has not done 
so. He has failed to take concrete steps to pay his debts, most of which became 
delinquent in 2009, when he had been working steadily for the previous two 
years. Applicant receives only partial mitigation under AG ¶ 20(b).  
 
 AG ¶ 20(d) requires a good-faith effort to resolve debts. Applicant accrued 
25 debts between 2003 and 2009 and has done little to resolve them. He testified 
 
 
7  
that he made contact with several creditors, but he did not make any payments. 
Despite being aware that his finances placed his security clearance application in 
jeopardy, he failed to take steps to pay even small debts of less than $100. 
Although he initiated a plan with a credit-repair service, it was not finalized until 
after the hearing. No details of the plan were provided, and it is too recent for him 
to be able to show that he will make payments or adhere to the plan. An 
applicant must demonstrate a track record of efforts to resolve debts, and 
Applicant's efforts are too recent to have established such a record. He denied 
several debts in his Answer, but provided no evidence that he informed the credit 
reporting agencies or took any other steps to either resolve or document his 
disputes. AG ¶ 20(d) and 20(e) cannot be applied. 
 
Whole-Person Concept 
 
 Under the whole-person concept, an administrative judge must evaluate 
an applicant’s security eligibility by considering the totality of the applicant’s 
conduct and all the relevant circumstances. I have evaluated the facts presented 
and have applied the appropriate adjudicative factors under the cited guideline. I 
have also reviewed the record before me in the context of the whole-person 
factors listed in 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. 
 
 AG ¶ 2(c) requires that the ultimate determination of whether to grant a 
security clearance must be an overall commonsense judgment based on careful 
consideration of the guidelines and the whole-person concept. Under the 
appropriate guideline, I considered the potentially disqualifying and mitigating 
conditions in light of all the facts and circumstances surrounding this case. 
 
 Applicant was candid during the hearing, admitting that he has been 
negligent about his debts. The record supports his assessment. Although a 
mature adult of 49 years, he has not demonstrated reliability in handling his 
financial obligations. His lack of diligence about his obligations for the past 
several years is a serious concern. He was on notice that debts were an issue for 
his security clearance since he completed his application in September 2009. He 
was reminded of his debts at his security interview, and again when he 
responded to Interrogatories. At each juncture, he stated he would take action on 
his debts. Yet he did not act in the year and a half before the hearing, even to 
 
 
8  
pay small debts of $25 to $50. He did not set up a payment plan until two days 
before his hearing. Although Applicant recently took a promising step toward 
resolving his debts, it does not outweigh his inaction over the past several years. 
His conduct does not demonstrate reliability or good judgment.  
 
A fair and commonsense assessment of the available information shows 
that Applicant has not satisfied the doubts raised about his suitability for a 
security clearance. For these reasons, I conclude Applicant has not mitigated the 
security concerns arising from the cited adjudicative guideline. 
 
Formal Findings 
 
 Formal findings on the allegations set forth in the SOR, as required by 
section E3.1.25 of Enclosure 3 of the Directive, are as follows: 
 
Paragraph 1, Guideline F:   AGAINST Applicant 
 
 Subparagraphs 1.a. – 1.y.   Against Applicant  
  
Conclusion 
 
 In light of all of the foregoing, it is not clearly consistent with the national 
interest to allow Applicant access to classified information. Applicant’s request for 
a security clearance is denied. 
 
 
 
 
_  
RITA C. O’BRIEN 
Administrative Judge