1
                                                             
                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
-------------------------------- )       ISCR Case No. 10-04667
)
Applicant for Security Clearance )
Appearances
For Government: J. Theodore Hammer, Esquire, Department Counsel
For Applicant: Pro se
______________
Decision
______________
CURRY, Marc E., Administrative Judge:
Applicant has struggled with her finances for nearly 20 years, incurring
approximately $16,000 of delinquent debt. These problems were caused primarily by
business misfortune and chronic health problems. By the hearing date, Applicant had
satisfied nearly all of her debts and had implemented a plan to satisfy the remainder.
Applicant has mitigated the financial considerations security concern. Clearance is
granted.
Statement of the Case
On November 17, 2010, the Defense Office of Hearings and Appeals (DOHA)
issued a Statement of Reasons (SOR) to Applicant 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 (AG) implemented by the Department of Defense on December
1, 2006.
2
Applicant answered the SOR on December 7, 2010, admitting all of the
allegations except SOR subparagraphs 1.c, 1.d, 1.n, and 1.o. She requested a hearing,
and the case was assigned to me on January 12, 2011. On February 2, 2011, a notice
of hearing was issued scheduling the case for February 25, 2011. The hearing was
conducted as scheduled. I received nine government exhibits, marked Government
Exhibits (GE) 1 through 9, and  fourteen Applicant exhibits, marked Applicant’s Exhibits
(AE) A through N. Also, I considered Applicant’s testimony. At the close of the hearing, I
left the record open at Applicant’s request to allow her to submit additional documents.
Within the time allotted, she submitted seven more exhibits received as AE O through
V. DOHA received the transcript (Tr.) on March 7, 2011.
Findings of Fact
Applicant is a 52-year-old woman with two adult children. She and her husband
separated in 2005, and legally divorced in 2010. They had been married for 32 years.
(Tr. 26)
Applicant has a high school education. (Tr. 38) She has worked as an
administrative assistant for various companies for most of her career. For the past three
years, she has worked in this capacity for a defense contractor. (Tr. 39)
Applicant’s financial problems began in the mid-1990s when her husband’s
business, a cleaning company, began struggling, and he stopped paying the payroll
taxes. (Tr. 40, 50) Applicant was jointly responsible for paying these taxes because she
and her husband jointly filed their tax returns. (Tr. 50) In July 1996, the United States
Internal Revenue Service (IRS) filed a tax lien against Applicant’s property in the
approximate amount of $5,914 for tax year 1994.
 As Applicant’s husband’s business continued to struggle through the late 1990s,
they became solely dependent on Applicant’s salary. (Tr. 42) In approximately 2000, the
business failed. Although he obtained another job, it was low paying and menial. (Tr.
42) In November 2001, Applicant and her husband filed for Chapter 13 bankruptcy
protection. (GE 5) Under the plan, they were to pay $720 per month for five years to
their creditors through the bankruptcy trustee. (Id. at 2) On July 31, 2002, the court
dismissed the bankruptcy plan after failure to confirm the plan. (Id.)
Shortly after the court dismissed the Chapter 13 bankruptcy plan, Applicant’s
home was foreclosed. She and her husband then moved to a rental property. The rent
on the home where they moved was nearly $200 higher than their mortgage. According
to Applicant, this was “all  [they] could find.” (Tr. 43)
In approximately 2003, Applicant’s financial situation improved slightly after her
husband obtained a higher-paying job and inherited a modest amount of money after
his mother’s death.  Applicant and her husband then arranged a payment plan with the
IRS to satisfy the tax lien. By then, the delinquency had increased to $16,900 and
included tax years 1995 through 1998 and 2002. (GE 7 at 17) Under the plan, they paid
3
$400 per month. (Tr. 55) After they separated permanently in 2005, they continued to
make the payments, splitting them in half. (Tr. 55) 
It is unclear from the record whether Applicant and her husband paid the IRS
consistently under the plan. The fact the IRS obtained another tax lien in 2006 suggests
that they did not make consistent payments. Nevertheless, they had satisfied the tax
delinquency entirely by December 2009. (AE B)  
At or about 2002, Applicant, a lifelong diabetic, began experiencing severe heart
problems. Over the next seven years, she had three heart attacks, and received two
stents. (Tr. 45-46) Her medical costs mounted, further straining her finances.
On or about June 2004, Applicant filed for Chapter 7 bankruptcy protection.
(Answer) The court granted the motion and discharged approximately $14,000 of debt.
(GE 7 at 5)
Applicant continued to struggle with managing her finances after the Chapter 7
bankruptcy. Her ability to make ends meet was disrupted by the separation from her
husband in 2005 and her continuing serious medical problems.
By November 2010, Applicant had accrued approximately $22,500 of additional
debt, including $20,000 of debt unlisted on the SOR, $1,000 owed to a credit card
company (SOR subparagraph 1.l), $800 in medical bills (SOR subparagraphs 1.e-1.k,
1.n-1.o), a delinquent phone account for $224 (1.m), and two miscellaneous accounts
totalling approximately $500 (SOR subparagraphs 1.p and 1.q) The $20,000 of unlisted
debt consists primarily of the balance on her father’s credit card that he allowed her to
use to purchase a car. (Tr. 118) No evidence exists that it is, or ever was delinquent. 
In November 2010, Applicant satisfied SOR subparagraphs 1.n and 1.o, totalling
$60. (AE K)  In December 2010, Applicant’s ex-husband died leaving her a $25,000 life
insurance policy. Applicant used $10,000 of the money to pay for her husband’s funeral
expenses. She then applied the remainder to her debts. By March 2011, Applicant had
satisfied the debts alleged in SOR subparagraphs 1.l through 1.m, 1.p, and 1.q in their
entirety.  (AE G, M; Tr. 70-72)
In February 2011, Applicant contacted her father’s credit card company to
arrange a settlement of her outstanding debt. Under the terms of the settlement
agreement, she paid $6,000 on February 7, 2011. (AE G at 2) Currently, she owes
approximately $11,900. (Tr. 87)
In February 2011, Applicant contacted the collection agent for the hospital which
treated her over the years to settle her delinquent accounts. The collection agent then
provided her with a statement of outstanding accounts that revealed she was delinquent
on several accounts in addition to those alleged in the SOR, and that the revised
balance was approximately $2,200. That month, she made a $382 payment. (AE G at 2)
This did not cover any of the medical bills listed in the SOR. With the help of a credit
4
counseling company, Applicant developed a payment plan to satisfy the medical bills.
(AE E) She is also satisfying the debt she accrued on her father’s credit card through
the payment plan. (Id.)
Applicant maintains a budget. She has approximately $350 of monthly after-
expense income, and $2,400 in a savings account. (Tr. 117)    
    
Policies
When evaluating an applicant’s suitability for a security clearance, the
administrative judge must consider the revised adjudicative guidelines (AG). In addition
to introductory explanations for each guideline, the adjudicative guidelines list potentially
disqualifying conditions and mitigating conditions.
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. 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.” 
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.
Analysis
Guideline F, Financial Considerations
Under this guideline, “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 (AG
¶ 18). 
Applicant has been struggling with her finances for nearly 20 years. During this
time, she had, among other things, accrued approximately $16,900 of delinquent federal
income taxes, and filed for bankruptcy protection twice. AG ¶¶ 19(a), “inability or
5
unwillingness to satisfy debts,” and 19(c), “a history of not meeting financial obligations,”
apply.
The following 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
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; and
(d) the individual initiated a good-faith effort to repay overdue creditors or
otherwise resolve debts.
Applicant’s financial problems were not caused by irresponsible spending.
Instead, they were caused by a failing business and then compounded by medical
expenses related to three successive heart attacks.
By December 2009, Applicant had satisfied her outstanding federal income tax
delinquency, her most significant SOR debt. In December 2010, her ex-husband died,
leaving her $25,000 through a life insurance policy. Since then, Applicant has satisfied
approximately $9,000 of her debt. Currently, the only SOR debts that remain
outstanding are several medical bills totalling approximately $800. With the help of a
creditor counselor, she is satisfying these bills, along with some unlisted delinquencies
through a debt repayment plan. All of the mitigating conditions set forth above apply.
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 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
6
for the conduct; (8) the potential for pressure, coercion, exploitation, or
duress; and (9) the likelihood of continuation or recurrence.   
The income tax-related nature of much of Applicant’s delinquencies compounded
the seriousness of her financial problems. Moreover, she accrued additional debt after a
bankruptcy discharge. Applicant’s income tax delinquencies were caused by hardship
resulting from her then-husband’s failing business, and the recurrence of her financial
problems stemmed from severe medical problems. These mitigating circumstances
combined with the steps taken to satisfy her debts outweigh the nature and serious of
her delinquent debt accrual, and render the likelihood of recurrence minimal. Upon
evaluating this case in the context of the whole-person, I conclude Applicant has
mitigated the financial considerations security concern.
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: FOR APPLICANT
Subparagraphs 1.a - 1.q: For Applicant
Conclusion
In light of all of the circumstances presented by the record in this case, it is
clearly consistent with the national interest to grant Applicant eligibility for a security
clearance. Eligibility for access to classified information is granted.
                                             
MARC E. CURRY
Administrative Judge