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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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)         ISCR Case No. 09-07054
 )
)
Applicant for Security Clearance )
Appearances
For Government: Jeff A. Nagel, Esquire, Department Counsel
For Applicant: Pro se
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Decision
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MASON, Paul J., Administrative Judge:
Applicant’s documented track record of payments to several unlisted creditors over
18 months is part of his debt plan to resolve all listed accounts in the Statement of
Reasons. When the unlisted creditors are satisfied, he will be able to devote his efforts to
the listed creditors who will be more inclined to negotiate repayments with him. Eligibility
for access to classified information is granted.
Statement of the Case
Applicant completed and certified his Electronic Questionnaire for Investigations
Processing (e-Qip)(GE 1) on December 1, 2008. He was interviewed by an investigator
from the Office of Personnel Management (OPM) on June 11, 2009. A summary of this
interview appears in Applicant’s interrogatory answers dated November 16, 2009. His
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correction to the interview summary was that he had received financial counseling in the
form of credit card debt counseling. With the above modification, Applicant agreed with the
investigator’s summary could be used at a hearing to determine his security suitability.
On March 19, 2010, DOHA issued a Statement of Reasons (SOR) detailing security
concerns under financial considerations (Guideline F). 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) implemented by the Department of Defense on September 1,
2006. 
Applicant submitted his answer to the SOR on April 2, 2010. DOHA issued a Notice
of Hearing on June 21, 2010, for a hearing on July 14, 2010. The hearing was held as
scheduled. At the hearing, five exhibits (GE 1 through 5) were admitted in evidence in
support of the Government’s case. Applicant and one witness testified. Applicant’s nine
exhibits (AE A through AE I) were admitted without objection. In the time allowed to submit
post-hearing exhibits Applicant supplied seven exhibits (AE J through AE P). Department
counsel interposed no objection to the exhibits. Applicant’s exhibits AE A through AE P are
now in the record. DOHA received the transcript (Tr.) on July 21, 2010. The record closed
on July 23, 2010. 
Findings of Fact
The SOR contains five allegations under Guideline F (financial considerations). The
five delinquent accounts total about $40,000. Four of five of the accounts represent credit
cards. There is no information in the record that describes the fifth account (¶ 1.d).
Applicant admitted ¶¶ 1.a, 1.b, 1.c, and 1.e. He denied ¶ 1.d because he did not recognize
the name of the creditor. The account appears in GE 4. The last activity taken on the
account before it became delinquent was February 2010. (Id.)
GE 3 is a credit report dated May 2008. The report identifies one account in
collection from 2006. However, that account is not listed in the SOR or the more recent
credit report in GE 4 that is dated March 2010. The delinquent accounts listed in the SOR
also appear in GE 4. The listed accounts were transferred for collection in February 2009
and February 2010. 
Applicant is 54 years old and single. In June 1980, he graduated from an area
university with bachelors degrees in management science and systems science. Since
1986, he has also been the chairman and chief executive officer (CEO) of a research
corporation, whose business purpose is the design of security technologies that help the
contract entity control their personal information anytime and anywhere. Over 25 research
 The handwritten page number is located in the lower right corner of the page.1
 The page number is located in the upper right hand corner of the page.2
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capabilities of the corporation are listed in the corporate statement. (GE 2 at 266)1
Applicant is an inventor through his research corporation. He has patents pending in 18
foreign countries, and he has ventures with foreign patent law firms that assist in forwarding
his intellectual property in foreign markets. (GE 1 at 22)  From March 2008 to May 2008,2
Applicant was the application architect leader for another defense contractor before being
terminated through a reduction-in-force. In November 2008, he was hired as a principal
engineer by a defense contractor in November 2008, but he is currently unemployed
because he does not have a security clearance. In 1983 and 1992, Applicant had his
background investigated for access suitability. (GE 1 at 330-331) He has held a security
clearance in the past. (Tr. 44)
As an inventor and CEO of his research corporation, a small business, Applicant has
had to use a large amount of credit to apply for patents and secure patent-related products.
Because of his good credit history, the bank creditor in ¶¶ 1.a and 1.e provided him with
a credit line. (Exact date credit line offered not in record) Applicant explained:
Many small businesses, when we don’t have the cash,
because we have good credit - - I had very good credit so you
see I got a lot of credit cards thrown at me because of my good
credit - - I used those to pay patent bills. I used those to pay
lawyers. And so I accumulated debt on my credit cards as my
way of financing myself. And so when [the bank] pulled that
hundred thousand dollar - - or $70,000 credit line, I was using
that to pay these other debts and once I had the safety net
removed, I’m screwed and I’m - - but, I want to make clear for
the record that I do not use - - I use these credit cards to fund
[Applicant’s research corporation]. (Tr. 53-54, 57)
In early 2008, Applicant was working for another defense contractor when he was
laid off. He had a medical procedure conducted at a hospital and was told the cost would
be less that $200. Instead, he was billed close to $7,000. He contested the overcharges
and another unrelated overcharge for x-rays. (Tr. 38-39) Both creditors apologized for the
mistaken entries on Applicant’s credit report, and directed the appropriate credit agencies
to remove the inaccurate information from Applicant’s credit report. (GE 2 at 156, 164) 
Even after Applicant officially advised the bank creditor (¶ 1.a and ¶ 1.e) that the
medical bills in his credit report were inaccurate (GE 2 at 173; AE O), the bank refused to
reinstate his credit line. Applicant noted the “business line of credit was a safety net that
 See unsigned forbearance agreement requiring Applicant to turn over patent rights to the bank. 3
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was established in case of loss of revenue/employment, other financial hardship or needed
funds to help cover business expenses such as my firm’s legal expenses.” (GE 2 at 5)
Applicant explained:
[the bank], after 20 plus years of my good standing relationship
egregiously cut off my business line of credit refusing to
acknowledge documented facts in my favor, plus letters from
health care authorities removing these derogatory medical
collection items. Additionally, [the bank] refuses to
acknowledge independent, expert financial and legal
evaluations of my firm’s intellectual property which has been
patiently built over 10 years. (Id.) 
Though Applicant has received unemployment compensation since 2009, he has
continued to pay those creditors who were willing to negotiate repayment agreements with
him. After trying unsuccessfully to negotiate or settle with the listed creditors. (Tr. 50, 52,
54, 57)  Applicant’s plan is to continue to focus on the resolution of the past due debts he3
is paying, then devote his attention to the listed creditors. He has made regular payments
to a credit card company from January 2009 to June 2010. (GE 2 at 273; AE A) He has
made regular payments to a second credit card company from March 2009 through June
2010. (AE B) Since October 2009, he has made as many payments to other creditors as
his unemployment compensation budget allowed. (GE 2 at 281-282) He has furnished
payments to a credit union (Id. at 276) and a city bank (Id. at 283) In 2009, he was able to
make eight payments to the utility company (Id. at 285), 11 payments to the government
military exchange (Id. at 286), and 12 payments to two telecommunications services. (Id.
at 287-288) He has continued to pay most of the above creditors through July 2010. (AE
C)
Applicant is current on his day-to-day and month-to-month expenses. He has rented
an apartment in the local area since 2000. (GE 1; Case file, hearing notice) He is current
on his rent and utility bills. His car is paid and he is current on car insurance. (Tr. 46-47)
Applicant’s financial statement also lists his rent, utilities, and car insurance. (GE 2 at 279-
283)
Character Evidence
Applicant has written articles on programs his research corporation offers. One
article is information asset management. (AE H) A second article explains the objectives
health record management capabilities. (AE I)
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On July 23, 2010, a director and a senior solutions expert of a competitor  company
believe that Applicant’s information applications has critical importance to the protection of
the national security. (AE J)
On July 23, 2010, a senior staff engineer, who wrote a recommendation for
Applicant, indicated that he has known Applicant for 10 years in a professional and a social
capacity. He believes Applicant’s technology would provide an advancement to existing
encryption technologies. (AE P) 
Policies
When evaluating an applicant's suitability for a security clearance, the administrative
judge must consider the AG. Each guideline lists potentially disqualifying conditions and
mitigating conditions, which are required to be used to the extent they apply in evaluating
an applicant's eligibility for access to classified information.
The administrative judge's ultimate goal is to reach a fair and impartial decision that
is based on common sense. The decision should also include a careful, thorough
evaluation of a number of variables known as the "whole-person concept" that brings
together all available, reliable information about the person, past and present, favorable
and unfavorable, in making a decision. 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
about the potential, rather than actual, risk of compromise of classified information.
Under Directive ¶ E3.l.14., the Government must present evidence to establish
controverted facts alleged in the SOR. Under Directive ¶ E3.l.l5., 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.
Analysis
Financial Considerations 
The security concern for financial considerations is set forth 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
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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.
There are two disqualifying conditions under AG ¶ 19 that may apply.
AG ¶ 19(a) (inability or unwillingness to satisfy debts); and 
AG ¶ 19(c) (a history of not meeting financial obligations). 
Applicant owes more than $40,000 to five creditors. The credit reports show this
debt was transferred to a collection status between February 2009 and February 2010.
Applicant is unable, no unwilling, to repay the debts. AG ¶ 20(a) applies. The conversion
of five debts in the one-year period shows a history of not meeting financial obligations
within AG ¶ 20(c). 
Four conditions under AG ¶ 20 could potentially mitigate Applicant’s delinquent
indebtedness: 
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); 
AG ¶ 20(b) (the conditions that resulted in the financial problem were largely
beyond the person’s control, and the person acted responsibly under the
circumstances); 
AG ¶ 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); and
AG ¶ 20(d) (the individual initiated a good-faith effort to repay overdue
creditors or otherwise resolve debts).
The fact that Applicant had developed a large credit line with the bank over the years
suggests that the bank considered Applicant a very worthy credit risk. Applicant’s May 2008
credit report (listing only one debt in collection) tends to support that rating. While the
bank’s removal of Applicant’s credit line in 2008 was not illegal, inappropriate, or unethical,
the bank would not rescind their removal decision even after receiving correct information
showing the entries in Applicant’s credit report were wrong. Suddenly, Applicant was left
without a “safety net” resource to pay the creditors. Though AG ¶ 20(a) is not applicable
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because of the recency of the financial problems, Applicant receives substantial mitigation
under AG ¶ 20(b) for “conditions that resulted in the financial problem were largely beyond
the person’s control.”
Applicant’s regular payments to keep his month-to-month expenses current while
regularly paying several unlisted creditors since early 2009 based on his unemployment
compensation budget demonstrates that he has sound financial practices in place. Both AG
¶¶ 20(c) and 20(d) apply even though Applicant has yet to reduce the listed debt. 
Whole-Person Concept 
In evaluating Applicant’s security clearance worthiness, I have examined the
evidence under the disqualifying and mitigating conditions. I have also weighed the
circumstances within the context of nine variables known as the whole-person concept. In
evaluating the relevance of an individual's conduct, the administrative judge should
consider the following factors:
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 the participation was 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.
Applicant is 54 years old and has been involved in information technology for a
significant period of time. The depth of his involvement in the field is substantiated by the
services his corporation can supply and the technical articles he has written about his field
of expertise. He has several patents, patents pending, or licenses, all over the world. 
Based on his good credit history, he developed a credit line with the creditor
identified in ¶¶ 1.a and 1.c. Sometime in 2008, the bank learned about some negative
information on Applicant’s credit report. Even after the bank discovered the information on
the report was incorrect, they would not reinstate the credit line. 
As his documents verify, Applicant has received unemployment compensation since
2009. With a reduced income, Applicant has been able to maintain payments with several
creditors while keeping current on his rent, utilities, and car insurance. Since he could not
successfully negotiate reasonable payments with the listed creditors, his plan is to resolve
the debts he is currently working on, and then work out a plan with the listed creditors.
Based on Applicant’s documented action in regularly paying the unlisted creditors, I am
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confident his plan will work. The DOHA Appeal Board has held that there is no mechanical
method for an applicant to develop a meaningful track record. The Board noted that: 
The judge can reasonably consider the entirety of an
applicant’s financial situation and actions in evaluating
applicant’s plan for the reduction of his outstanding
indebtedness. There is no requirement that a plan provide for
payments on all outstanding debts simultaneously. A
reasonable plan (and concomitant conduct) may provide for the
payment of such debts one at a time. Likewise, there is no
requirement that the first debts actually paid in furtherance of
a reasonable debt plan be the ones listed in the SOR. ISCR
Case No. 07-06482 at 3 (App. Bd. May 21, 2008)
Having weighed and balanced the entire record, in the context of the whole person,
Applicant has mitigated the adverse evidence under the financial considerations guideline.
Formal Findings
Paragraph 1 (Guideline F): FOR APPLICANT
Subparagraph 1.a through 1.e: For Applicant
Conclusion
In light of all the circumstances presented by the record in this case, it is clearly
consistent with the national interest to grant Applicant access to classified information.
Eligibility for access to classified information is granted.
Paul J. Mason
Administrative Judge