DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
 ------------------------------------ ) ISCR Case: 10-03856 
  ) 
 ) 
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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HOWE, Philip S., Administrative Judge: 
 
 Based upon a review of the record evidence, eligibility for access to classified 
information is denied. 
 
On January 28, 2010, Applicant submitted an Electronic Questionnaire for 
National Security Positions (SF 86). On November 22, 2010, the Defense Office of 
Hearings and Appeals (DOHA) issued Applicant a Statement of Reasons (SOR) 
detailing security concerns 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 Directive 5220.6, 
Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as 
amended (Directive); and the adjudicative guidelines effective within the Department of 
Defense for SORs issued after September 1, 2006.  
  
 Applicant answered the SOR on December 17, 2010, and requested that the 
case be decided on the written record in lieu of a hearing. On January 13, 2011, 
Department Counsel prepared a File of Relevant Material (FORM) containing nine Items 
 
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2 
 
 
and mailed Applicant a complete copy on January 19, 2011. Applicant received the 
FORM on January 28, 2010, and had 30 days from its receipt to file objections and 
submit additional information. She did not submit any additional documentation. On 
April 4, 2011, DOHA assigned the case to me. 
 
Findings of Fact 
 
 Applicant is a 27-year-old employee of a defense contractor. She is not married. 
Applicant lives with her sister. She started her current position as a configuration 
management administrator in July 2008. (Items 4 and 5) 
 
 Based on credit bureau reports from July 24, 2010, September 30, 2010, and 
January 13, 2010, the SOR alleged 6 debts totaling $33,928.00. All the debts are owed 
to banks or collectors. All the debts appear to have originated as credit card debts. 
Applicant admitted that she owed the debts alleged in the SOR, including the debt in 
Subparagraph 1.d being collected by another collector instead of the agency the SOR 
alleged. (Items 3 to 9) 
 
 Applicant claimed she was paying $200 on each debt. Her interview with a 
government investigator in February 2010 showed she was not paying her delinquent 
debts between 2008 and 2010. She did not submit any documentary evidence to prove 
she paid $1,200 monthly on these debts. She presented documents showing her 
income monthly as $4,046.08 and her expenses as $3,994.89, including the $1,200. 
Her budget shows only $800 monthly paid on debts, which is a discrepancy with her 
Answer. Applicant also did not show any payment history or list the current balances of 
each debt at the time of her answer. It cannot be determined based on the evidence if 
any of them have been paid or resolved. She did not provide any evidence to contradict 
the information contained in the CBRs. (Items 1, 3, 5-9) 
 
         Applicant told the government investigator she spent money shopping and did not 
pay her credit card debts. She also used credit cards to purchase clothing she later sold 
on e-Bay from January to June 2006. She made a slight profit each month from that 
business. She told the investigator it would take her six months to get together her 
documents and discuss repayment plans with her creditors. She has been employed for 
seven continuous years except for a six month period after a lay-off in 2005. (Item 5)  
   
Applicant did not submit any documentation that she participated in credit 
counseling or budget education. She provided no evidence concerning the quality of 
her job performance. She submitted no character references or other evidence 
tending to establish good judgment, trustworthiness, or reliability. I was unable to 
evaluate her credibility, demeanor, or character in person since she elected to have 
her case decided without a hearing. 
 
 
 
 
 
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Policies 
 
 When evaluating an applicant’s suitability for a security clearance, the 
administrative judge must consider the adjudicative guidelines. In addition to brief 
introductory explanations for each guideline, the adjudicative guidelines (AG) list 
potentially disqualifying conditions and mitigating conditions, which are to be used 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.  
 
Directive ¶ E3.1.14 requires the Government to present evidence to establish 
controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, an “applicant is 
responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or 
mitigate facts admitted by the applicant or proven by Department Counsel, and has the 
ultimate burden of persuasion as to obtaining a favorable clearance decision.” 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.”  
 
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 protect or 
safeguard classified information. Such decisions entail a certain degree of legally 
permissible extrapolation as to potential, rather than actual, risk of compromise of 
classified information. 
 
 
 
 
 
 
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Analysis 
 
Guideline F, Financial Considerations 
 
The security 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 classified information. An individual who is financially 
overextended is at risk of having to engage in illegal acts to generate 
funds.  
 
AG ¶ 19 notes two disqualifying conditions that could potentially raise security 
concerns in this case: 
 
(a)  inability or unwillingness to satisfy debts; and 
 
(c) a history of not meeting financial obligations. 
 
Based on three CBRs and her admissions, Applicant has been unable or 
unwilling to satisfy her delinquent debts that began accruing in 2006 and remain unpaid 
at the present. The evidence is sufficient to raise these two potentially disqualifying 
conditions. 
 
After the Government produced substantial evidence of those two 
disqualifications, the burden shifted to Applicant to produce evidence and prove a 
mitigating condition. AG ¶ 20 set forth conditions that could mitigate financial security 
concerns: 
(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; 
(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; 
 
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(d) the individual initiated a good-faith effort to repay overdue creditors or 
otherwise resolve debts; 
(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; and 
(f) the affluence resulted from a legal source of income. 
Applicant admitted she charged purchases on her credit cards over a number of 
years since 2006, but never repaid the debts. She just ignored the debts. During that 
time Applicant was employed but for a short period of months. She had the income with 
which to resolve these debts, but took no action to do so.  
 
Because Applicant’s financial delinquencies have been ongoing since 2006, 
remain unresolved, and are not isolated, there is insufficient evidence to support a 
finding that the indebtedness is unlikely to recur or continue. Hence, AG ¶ 20(a) does 
not apply.  
 
She did not present credible evidence that the accumulation of the debt was due 
to conditions beyond her control or that she attempted to responsibly manage that debt 
once as it accrued, as required under AG ¶ 20(b). 
 
Applicant established no mitigation under AG & 20(c) or AG & 20(d). She did not 
submit evidence that she received credit counseling or that she paid or resolved any 
debt, which would indicate that the situation is coming under control. Nor, did she 
present evidence that she made a good-faith effort to pay or resolve any of the six 
debts. She claims she is paying $200 monthly on six debts, but her budget lists only 
four debts with a repayment amount attributed to them. But Applicant did not submit any 
proof she paid the creditors based on her alleged plan. Applicant did not provide 
documentation verifying that she formally disputed or investigated any debt which 
evidence is necessary to trigger the application of AG & 20(d). There is no evidence to 
support the application of AG & 20(f). 
 
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). They include the following:  
 
(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 
 
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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.    
     
I considered the potentially disqualifying and mitigating conditions in light of all 
the facts and circumstances surrounding this case. Applicant is a mature individual, who 
has worked for a federal contractor since July 2008. In January 2010, she learned of the 
Government’s concerns relating to her financial delinquencies. In November 2010, the 
Government filed the FORM. For almost a year, she has been on notice that her 
delinquent debts were creating security concerns and potentially affecting her 
employment.  Despite that knowledge, she did not provide proof that she had taken any 
steps to address the delinquent debts, other than making an unsupported assertion in 
her Answer. Applicant failed to demonstrate financial rehabilitation, which is required to 
assure the Government that the recurrence or continuance of these unaddressed 
obligations is unlikely. The record contains insufficient evidence about her character, 
trustworthiness, or responsibility to mitigate these concerns or make their continuation 
less likely. 
 
Overall, the record evidence creates substantial doubt as to Applicant’s present 
eligibility and suitability for a security clearance. For all these reasons, I conclude 
Applicant did not mitigate the security concerns arising from her financial 
considerations. 
 
Formal Findings 
 
 Formal findings for or against Applicant on the allegations set forth in the SOR, 
as required by ¶ E3.1.25 of Enclosure 3 of the Directive, are: 
 
 Paragraph 1, Guideline F:    AGAINST APPLICANT 
 
 Subparagraphs 1.a through 1.f:             Against Applicant 
 
 
 
 
 
 
 
 
 
 
 
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Conclusion 
 
 In light of all of the circumstances presented by the record in this case, it is 
clearly not consistent with the national interest to grant Applicant eligibility for a security 
clearance. Eligibility for access to classified information is denied. 
 
 
                                                     
_________________ 
PHILIP S. HOWE 
Administrative Judge