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                           DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
In the matter of: ) 
 ) 
 XXXXXXXXXX, XXXXX )  ADP Case No. 09-05090 
  ) 
Applicant for Public Trust Position ) 
 
 
Appearances 
 
For Government: Braden M. Murphy, Esq., Department Counsel 
For Applicant: Pro se 
 
 
 
______________ 
 
Decision 
______________ 
 
 
TUIDER, Robert J., Administrative Judge: 
 
Applicant failed to mitigate Guideline F (financial considerations) security 
concerns. Eligibility for access to sensitive information is denied. 
 
Statement of the Case 
 
Applicant submitted a Public Trust Position Application (SF-85P) on December 5, 
2008.1
 
 On June 24, 2010, the Defense Office of Hearings and Appeals (DOHA) issued 
a Statement of Reasons (SOR) detailing a security concern under Guidelines F 
(financial considerations). The action was taken under Executive Order 10865, 
Safeguarding Classified Information Within Industry, dated February 20, 1960, as 
amended; Department of Defense Directive 5220.6, Defense Industrial Personnel 
Security Clearance Review Program, dated January 2, 1992, as amended (Directive); 
and the adjudicative guidelines (AG), effective within the Department of Defense for 
SORs issued after September 1, 2006. 
 
 
                                                          
1 Applicant had previously submitted a Security Clearance Application (SF-86) on September 23, 2005. 
(GE 1.) 
2 
 
 
 Applicant received the SOR on July 13, 2010. He answered the SOR in writing 
on August 2, 2010, and requested a hearing before an administrative judge. Department 
Counsel was prepared to proceed on August 31, 2010, and I was assigned the case on 
September 10, 2010.  
 
DOHA issued a notice of hearing on September 20, 2010, scheduling the case 
for October 13, 2010. On September 23, 2010, DOHA issued an amended notice of 
hearing rescheduling the case for October 12, 2010. The hearing was held as 
scheduled. The Government offered Government Exhibits (GE) 1 through 9, which were 
received without objection. Applicant offered Applicant Exhibits (AE) A through C, which 
were received without objection, and he testified on his own behalf. DOHA received the 
hearing transcript (Tr.) on October 20, 2010.  
 
Findings of Fact 
 
 Applicant admitted all of the SOR allegations. His admissions are incorporated as 
findings of fact. After a thorough review of the evidence, I make the following additional 
findings of fact. 
 
Background Information 
 
 Applicant is a 44-year-old warehouse worker, who has been employed by a 
defense contractor since January 2009. He seeks access to sensitive information in 
conjunction with a public trust position, which is a condition of his continued 
employment. (GE 1, GE 2, Tr. 19-24.) 
 
 Applicant graduated from high school in June 1984. He was awarded an 
associate’s degree in computer administration in December 1998. He received a 
electrician’s certificate from his employer in February 2005. Applicant married in 
September 1998. He and his wife separated in February 2008 and have a divorce 
pending. Applicant has an adult daughter from a previous relationship. He also has 
three minor children born during his marriage. Applicant’s estranged wife has custody of 
their children and he is paying her $1,495 in monthly child support. His wife is employed 
in a management position at a U.S. Government facility. (GE 1, GE 2, Tr. 28-33, 38-39, 
41.)  
 
Financial Considerations 
 
 Applicant’s employment history preceding his current job has been plagued with 
lay-offs and underemployment. He was unemployed from November 2008 to January 
2009. For the majority of 2008, he had a series of short-term low paying jobs. From 
March 2007 to January 2008, he was unemployed. Until his current job, his last stable 
job paying a living wage was from February 2005 to March 2007 as an electrician 
working at a U.S. Government facility. (GE 2, Tr. 35-37, 39-42, 44-45.)   
 
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 Applicant’s SOR alleges nine separate debts totaling $418,012. The two largest 
debts are his mortgage with a past-due amount of $32,121 on a balance of $330,346 
and a second mortgage with a past-due amount of $$9,967 on a balance of $87,666. 
(SOR ¶¶ 1a – 1i, Tr. 11.) Applicant’s financial problems began after his lay-off as an 
electrician in March 2007. As of his hearing date, none of the debts alleged have been 
paid. (Tr. 43.) Simply put, after Applicant was laid off in March 2007, he did not have the 
funds to pay his debts and fell into a financial tailspin from which he has not recovered 
to this day. At the time of his lay-off in March 2007, he was being paid $28.95 an hour 
and was working full-time. (Tr. 43-44.)  
 
 Applicant claims that he attempted to contact “numerous creditors” to establish 
payment arrangements. He considered making mortgage payments his top priority and 
to that end contacted his mortgage lenders. In August 2010, he was able to obtain 
modifications on his first and second mortgages. Under the approved modifications, his 
monthly payments on his first and second mortgages will be $1,926.10 and $829.47, 
respectively, effective October 1, 2010. Applicant did not submit proof of payment on 
either of these accounts. He is uncertain how he will be able to make these combined 
mortgage payments on his income. Applicant’s wife and three children currently live in 
the home. (AE A, AE B, Tr. 45-46.) 
 
 Applicant and his wife purchased their home in March 2003. At that time, they 
only had a primary mortgage with a fixed interest rate; however, they refinanced in June 
2004 and acquired a second mortgage with adjustable interest rates. Over time their 
mortgage payments increased from a $1,300 monthly payment to a $2,600 monthly 
payment. Ultimately, Applicant and his wife refinanced three times before they received 
a loan modification in August 2010. (Tr. 46-53.) Applicant fell behind on his mortgage 
payments after he was laid off in March 2007 and refinanced to lower his mortgage 
payments. (Tr. 53-55.)  
 
 Applicant and his wife retained a bankruptcy attorney in July 2010. They are in 
the process of paying down his $2,100 retainer fee. Until such time as that fee is paid, 
he will not file their Chapter 7 bankruptcy petition.  (AE C, Tr. 66-68.) Applicant has not 
participated in any credit counseling. (Tr. 72.) Applicant’s net monthly remainder after 
his child support is deducted is $1,400. (Tr. 76.) He currently lives with his sister and 
pays her about $900 per month for essentially room and board. After Applicants pays all 
of his other expenses, he has more money “going out than coming in” or “really nothing 
[at] all” left over. (Tr. 76-81, 96.)  Applicant’s sister is disabled and he receives $680 
from the state as her caregiver. His sister also receives state welfare to support her 
child. (Tr. 92-95.) 
 
 When queried about his state and federal income taxes, Applicant stated he 
owed $1,100 to the Internal Revenue Service for tax year 2008. As of his hearing date, 
he not filed his 2009 state and federal income tax returns. He testified that he had an 
appointment with an income tax preparer in the near future to resolve his income tax 
problems. (Tr. 83-90.) Applicant is unable to pay any of his SOR creditors because he 
has nothing left over after he pays his monthly bills. (Tr. 97.) He anticipates the debts 
alleged in the SOR will be discharged when he receives a Chapter 7 bankruptcy 
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discharge. Applicant hopes that by filing bankruptcy his wife and children will be able to 
remain in their home. (Tr. 98-100.) 
 
Character Evidence 
 
Applicant did not submit any character evidence. 
 
Policies 
 
Positions designated as ADP I and ADP II are classified as “sensitive positions.”  
(See Regulation ¶¶ C3.1.2.1.1.7 and C3.1.2.1.2.3.)  “The standard that must be met for 
. . . assignment to sensitive duties is that, based on all available information, the 
person’s loyalty, reliability, and trustworthiness are such that . . . assigning the person to 
sensitive duties is clearly consistent with the interests of national security.” (See 
Regulation ¶ C6.1.1.1.) The Deputy Under Secretary of Defense (Counterintelligence 
and Security) Memorandum, dated November 19, 2004, indicates trustworthiness 
adjudications will apply to cases forwarded to DOHA by the Defense Security Service 
and Office of Personnel Management.  Department of Defense contractor personnel are 
afforded the right to the procedures contained in the Directive before any final 
unfavorable access determination may be made. (See Regulation ¶ C8.2.1.)   
 
When evaluating an applicant’s suitability for a public trust position, the 
administrative judge must consider the disqualifying and mitigating conditions in the AG. 
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 
[sensitive] 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. 
 
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 as to obtaining a favorable 
trustworthiness decision.  
 
A person who seeks access to sensitive information enters into a fiduciary 
relationship with the Government predicated upon trust and confidence. This 
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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 sensitive information. Decisions include, by necessity, consideration of 
the possible risk the applicant may deliberately or inadvertently fail to protect or 
safeguard sensitive information. Such decisions entail a certain degree of legally 
permissible extrapolation as to potential, rather than actual, risk of compromise of 
sensitive information. 
  
Section 7 of Executive Order (EO) 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.” See also EO 12968, Section 3.1(b) (listing multiple 
prerequisites for access to classified or sensitive information).   
 
Analysis 
 
Guideline F, Financial Considerations 
 
The trustworthiness concern relating to the guideline for financial considerations 
is set out in AG & 18:   
 
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 [sensitive] 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 trustworthiness concerns.  
Under AG & 19(a), an Ainability or unwillingness to satisfy debts@ is potentially 
disqualifying. Similarly, under AG & 19(c), Aa history of not meeting financial obligations@ 
may raise security concerns. Applicant accumulated nine debts totaling $418,121 that 
he is unable to pay. His indebtedness has been ongoing since at least 2007. The 
evidence is sufficient to raise these potentially disqualifying conditions, requiring a 
closer examination. 
 
  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 
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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 
 
(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’s conduct does not warrant application of AG ¶ 20(a) because there is 
more than one delinquent debt and his financial problems are not isolated. Therefore, 
his cumulative debt is “a continuing course of conduct” under the Appeal Board’s 
jurisprudence. See ISCR Case No. 07-11814 at 3 (App. Bd. Aug. 29, 2008) (citing ISCR 
Case No. 01-03695 (App. Bd. Oct. 16, 2002)).  
 
Under AG ¶ 20(b), Applicant receives partial credit because his periods of 
unemployment and underemployment from 2007 to 2009 were largely beyond his 
control. However, to receive full credit under this mitigating condition, Applicant has to 
demonstrate that he acted responsibly under the circumstances. There is no 
documentary evidence that Applicant remained in contact with his creditors or tried to 
make minimum payments during this time.2
 
 Under these facts, I am unable to apply full 
credit under this mitigating condition. 
AG ¶ 20(c) is not applicable. Applicant has not participated in financial 
counseling and has yet to participate in the mandatory credit counseling required 
associated with Chapter 7 bankruptcy. It is clear that his financial situation is not 
resolved or under control. Likewise, there is no evidence in the record to establish full or 
partial mitigation under AG ¶ 20(d).3
                                                          
2 “Even if Applicant’s financial difficulties initially arose, in whole or in part, due to circumstances outside 
his control, the Judge could still consider whether Applicant has since acted in a reasonable manner 
when dealing with those financial difficulties.” ISCR Case No. 05-11366 at 4 n.9 (App. Bd. Jan. 12, 2007) 
(citing ISCR Case No. 99-0462 at 4 (App. Bd. May 25, 2000); ISCR Case No. 99-0012 at 4 (App. Bd. 
Dec. 1, 1999); ISCR Case No. 03-13096 at 4 (App. Bd. Nov. 29, 2005)). A component is whether he 
maintained contact with his creditors and attempted to negotiate partial payments to keep his debts 
current. 
 Given Applicant’s current situation, he is unable to 
 
3The Appeal Board has previously explained what constitutes a “good-faith” effort to repay overdue 
creditors or otherwise resolve debts: 
 
In order to qualify for application of [the “good-faith” mitigating condition], an applicant must present 
evidence showing either a good-faith effort to repay overdue creditors or some other good-faith action 
aimed at resolving the applicant’s debts. The Directive does not define the term ‘good-faith.’ However, the 
Board has indicated that the concept of good-faith ‘requires a showing that a person acts in a way that 
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pay any of his SOR creditors. He plans to file Chapter 7 bankruptcy as soon as he is 
able to pay his bankruptcy attorney’s retainer fee. Until such time as that occurs, 
Applicant’s financial situation remains status quo. AG ¶ 20(e) is not applicable because 
Applicant does not dispute the validity of the debts alleged. 
 
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.  
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. AG ¶ 2(c).  
The comments in the Analysis section of this decision are incorporated in the 
whole-person concept analysis. Applicant has had the misfortune of being laid off two 
times since 2007. From 2007 until he found his current job in January 2009, he worked 
low paying jobs. In short, he has not been able to recover financially since he was laid 
off in 2007. To make matters worse, he and his wife separated in February 2008 and 
have a divorce pending. In the interim, he is paying his estranged wife $1,495 per 
month in child support for their three children and shares living expenses with his 
disabled sister. He also has unresolved income tax problems. He plans to file Chapter 7 
bankruptcy; however, that course of action is being held in abeyance until he pays his 
bankruptcy attorney’s retainer fee. To Applicant’s credit, he is doing everything possible 
to keep his wife and three children in their family home.  
 
Based on the record evidence, I have concerns about Applicant’s current 
financial situation. After weighing the disqualifying and mitigating conditions, and all the 
facts and circumstances, in the context of the whole-person, I conclude he has not 
mitigated security concerns pertaining to financial considerations.  
                                                                                                                                                                                           
shows reasonableness, prudence, honesty, and adherence to duty or obligation.’ Accordingly, an 
applicant must do more than merely show that he or she relied on a legally available option in order to 
claim the benefit of [the “good-faith” mitigating condition].  
 
(internal citation and footnote omitted) ISCR Case No. 02-30304 at 3 (App. Bd. Apr. 20, 2004) (quoting 
ISCR Case No. 99-9020 at 5-6 (App. Bd. June 4, 2001)). 
 
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I take this position based on the law, as set forth in Department of Navy v. Egan, 
484 U.S. 518 (1988), my careful consideration of the whole-person factors and 
supporting evidence, my application of the pertinent factors under the adjudicative 
process, and my interpretation of my responsibilities under the adjudicative guidelines. 
Applicant has not fully mitigated or overcome the Government’s case. For the reasons 
stated, I conclude he is not eligible for access to a public trust position. 
 
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 1a – 1i:  Against Applicant 
   
Conclusion 
 
 In light of all of the circumstances presented by the record in this case, it is not 
clearly consistent with national security to grant Applicant eligibility for a public trust 
position. Eligibility for access to sensitive information is denied. 
 
 
                                                     
_________________ 
ROBERT J. TUIDER 
Administrative Judge