DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: 
 ) 
           ) 
  )  ISCR Case No. 10-00976 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Gina Marine, Esquire, Department Counsel 
For Applicant: Pro Se 
 
 
______________ 
 
Decision 
______________ 
 
 
CREAN, Thomas M., Administrative Judge: 
 
 Based on a review of the pleadings, exhibits, and testimony, eligibility for access 
to classified information is denied.  
 
Statement of the Case 
 
On October 21, 2009, Applicant submitted an Electronic Questionnaire for 
Investigations Processing (e-QIP) for a security clearance required for a position with a 
defense contractor. After an investigation conducted by the Office of Personnel 
Management (OPM), the Defense Office of Hearings and Appeals (DOHA) issued an 
interrogatory to Applicant to clarify or augment potentially disqualifying information in his 
background. After reviewing the results of the background investigation and Applicant's 
responses to the interrogatory, DOHA could not make the preliminary affirmative finding 
required to issue a security clearance. DOHA issued a Statement of Reasons (SOR), 
dated September 21, 2010, to Applicant detailing security concerns for financial 
considerations under Guideline F. These actions were taken under Executive Order 
10865, Safeguarding Classified Information within Industry (February 20, 1960), as 
amended; Department of Defense Directive 5220.6, Defense Industrial Personnel 
 
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Security Clearance Review Program (January 2, 1992), as amended (Directive); and 
the adjudicative guidelines (AG) effective within the Department of Defense on 
September 1, 2006. Applicant acknowledged receipt of the SOR on October 1, 2010. 
 
 Applicant answered the SOR on October 12, 2010. He admitted three and denied 
five of the factual allegations. He also denied there was a security concern based on his 
finances. He requested a hearing on the matter. Department Counsel was prepared to 
proceed on December 13, 2010, and the case was assigned to me on December 20, 
2010. DOHA issued a Notice of Hearing on December 28, 2010, scheduling a hearing 
for January 25, 2010. I convened the hearing as scheduled. The Government offered 
five exhibits that I marked and admitted without objection as Government Exhibits (Gov. 
Ex.) 1 through 5. Applicant testified on his behalf. Applicant offered three exhibits that I 
marked and admitted without objection as Applicant Exhibit (App. Ex.) A through C. I left 
the record open for Applicant to submit additional documents. Applicant did not 
submitted additional documents. DOHA received the transcript of the hearing (Tr.) on 
February 2, 2011. 
 
Findings of Fact 
 
 After a thorough review of the pleadings, transcript, and exhibits, I make the 
following essential findings of fact.   
 
Applicant is 35 years old and a high school graduate. He has been employed as 
a receiving inspector with a defense contractor since September 2009. He served eight 
years in the active Army and the Army Reserves receiving an honorable discharge in 
December 2007. He was married in September 2004. He has four children, two at home 
and two that he supports. His wife has been continuously employed in the health field 
for over 15 years. He and his wife have a monthly combined family income of $3,600, 
with combined monthly expenses of $3,350, leaving monthly discretionary funds of 
$250. (Tr. 73-77; Gov. Ex. 1, e-QIP, dated October 21, 2009) Applicant has not received 
any financial counseling except as required by a 2007 bankruptcy. (Tr. 38-39) 
 
Credit reports (Gov. Ex. 3, dated November 13, 2009; Gov. Ex. 4, dated April 18, 
2010; and Gov. Ex. 5, dated July 9, 2010) show Applicant and his wife filed a Chapter 7 
bankruptcy in September 2007 and the debts were discharged in January 2008. (SOR 
1.a) Also listed are the following delinquent debts; a credit card debt in collection for 
$805 (SOR 1.b); a cable bill in collection for $917 (SOR 1.c); a credit card debt in 
collection for $514 (SOR 1.d); a telephone debt charged off for $585 (SOR 1.e); child 
support payments in collection for $14,447 (SOR 1.f); and two debts to the Internal 
Revenue Service (IRS) for past-due taxes of $401 for tax year 2007 (SOR 1.g), and 
$1,211 for tax year 2003 (SOR 1.h). Applicant admitted three of the debts (SOR 1.b, 
1.e, and 1.f) noting that the debts were being paid or he was unable to pay the debt 
because of being laid-off. He denied SOR 1.a because the amount of the bankruptcy 
was wrong. He denied SOR 1.c because the amount of the debt was not correct. He 
denied SOR 1.d because he had no knowledge of the debt. He denied the tax debt at 
SOR 1.g since he believed it had been paid. He denied the tax debt at SOR 1.h as 
 
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being discharged in his 2007 bankruptcy. After testimony at the hearing, Department 
Counsel moved to amend the SOR adding allegation SOR 1.i for a tax debt of $600 due 
the IRS for tax year 2008. Applicant had no objection and I approved the amendment. 
(Tr. 78-80) This brings the total amount of indebtedness alleged to $19,480. 
 
Applicant and his wife filed a Chapter 7 bankruptcy in September 2007. Applicant 
testified that most of the debts were accrued by his wife before they married but did 
include some joint marital debts as well as individual debts from Applicant. The total 
amount of liability was $260,000 with assets of only $127,000. The largest asset was 
their house which was not forfeited as part of the bankruptcy. Applicant does not believe 
any assets were sold to have the debts discharged or satisfy any debts listed in the 
bankruptcy. (Tr. 52-54)  
 
Applicant continued to have financial problems after the bankruptcy discharge 
because he was laid off twice. (Tr. 13) At the time he filed the bankruptcy in September 
2007, he was employed but was laid off in October 2007. He was out of work and did 
not draw unemployment for three months until hired by another employer in late 
January 2008. He did work briefly during this time between jobs delivering newspapers 
and for a pharmaceutical manufacturer. He worked at the new employment from 
January 2008 until June 2009. He was making approximately $2,000 monthly until he 
was again laid off for lack of work in June 2009. He drew unemployment benefits of 
$280 weekly for this unemployment until he was hired by his present employer on 
September 28, 2009. He has been employed in his present position continuously since 
then. (Tr. 54-57) 
 
Applicant disputed the amount of the bank credit card debt at SOR 1.b. The debt 
is listed for $805, but Applicant believes the debt should be for only approximately $640. 
Applicant disputed the debt with the credit reporting agency which notified the collection 
agency that the dispute was based on identity fraud. Applicant received a letter from the 
collection agency to complete in regard to identity fraud. He did not return a completed 
form to the collection agency or notify them of the actual basis of his dispute. Applicant 
stated he made a number of automatic payments from his bank account to the original 
creditor. Applicant was provided the opportunity to submit documentation after the 
hearing to establish these payments from his bank account. He did not provide such 
documentation. (Tr. 41-43, 61-65; App. Ex. A, Letter, dated January 10, 2011) 
 
The cable television debt at SOR 1.c is for equipment provided by the cable 
company. Applicant stated he returned the equipment to the cable company and does 
not owe the debt. He has not been in contact with the cable company or the collection 
agency concerning the debt for over a year. He has not made any payments on the 
debt. He was provided the opportunity to present the receipt for the equipment after the 
hearing but he did not provide the document. (Tr. 43-45, 65-66) 
 
The debt at SOR 1.d is for a credit card debt in collection for $514. Applicant 
settled the debt for $168 with a payment plan of $21 monthly starting in November 
2010. Applicant was provided the opportunity after the hearing to provide 
 
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documentation that he has made the initial payments. He did not provide such 
documentation. (Tr. 45-46, 66-67, App. Ex. B, Letter, dated January 10, 2011) 
 
The debt at SOR 1.e is for a telephone bill. Applicant stated he made some 
payments on the debt whenever he had the funds. His last payment was allegedly for 
$140 a few months prior to the hearing. He does not know the balance on the account 
and has not been in contact with the creditor. He was provided the opportunity to 
present documentation after the hearing of payments on the debt but he did not provide 
any information. (Tr. 46-47, 67-68)  
 
The debt at SOR 1.f is for child support Applicant was required to pay under a 
court order. In November 2010, Applicant appeared before a juvenile court referee 
concerning his failure to make child support payments. The referee found that Applicant 
willfully neglected to make 35 separate payments. The arrears accumulated to 
approximately $19,273.86. Applicant was ordered to make child support payments of 
$400 starting on December 1, 2010. Applicant testified he notified his employer of the 
need to have the payments taken from his pay and sent to the court. As of the hearing, 
his employer had not started taking funds from his pay, and Applicant has not been in 
contact with the employer to determine the status of the support payments. (Tr. 47-48, 
67-68; App. Ex. C, Report for Non-payment of Child Support, dated November 10, 
2010) 
 
Applicant filed his federal tax returns for tax years 2003, 2007, 2008, and 2009. 
He admitted that he owed $401 in federal taxes for tax year 2007, approximately $610 
for tax year 2008, and $1,211 for tax year 2003. Applicant believes the tax debt for 2007 
was paid from the economic stimulus funds of $600 provided to all tax payers in 2008. 
He believes the 2003 tax debt was included in the 2007 bankruptcy and discharged. He 
contacted the IRS to establish a payment plan when he learned of a tax debt for tax 
year 2009. He was advised that no payment plan was possible because of the taxes 
owed for tax year 2007. He has not been in contact with the IRS to resolve these tax 
debts since sometime in mid 2010. He has not set aside funds to pay any tax debts. He 
has not provided any information concerning any payments to the IRS on taxes due. 
(Tr. 47-52, 70-73) 
 
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 list potentially 
disqualifying conditions and mitigating conditions, which must be considered 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 ¶ 
 
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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.  
 
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 in seeking a favorable security decision.  
 
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 that the applicant may deliberately or inadvertently fail to safeguard 
classified information. Such decisions entail a certain degree of legally permissible 
extrapolation about potential, rather than actual, risk of compromise of classified 
information. 
 
Analysis 
 
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 overextended is at risk of having to engage in illegal acts to generate funds. 
(AG ¶ 18) Similarly, an individual who is financially irresponsible may also be 
irresponsible, unconcerned, or careless in his or her obligations to protect classified 
information. Behaving responsibly or irresponsibly in one aspect of life provides an 
indication of how a person may behave in other aspects of life.  
 
 A person’s relationship with his creditors is a private matter until evidence is 
uncovered demonstrating an inability or unwillingness to repay debts under agreed 
terms. Absent evidence of strong extenuating or mitigating circumstances, an applicant 
with a history of serious or recurring financial difficulties is in a situation of risk 
inconsistent with the holding of a security clearance. An applicant is not required to be 
 
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debt free, but he is required to manage his finances in such a way as to meet his 
financial obligations. The delinquent debts established by credit reports or admitted by 
Applicant raise Financial Considerations Disqualifying Conditions (FC DC) AG ¶ 19(a) 
(inability or unwillingness to satisfy debts); and FC DC AG ¶ 19(c) (a history of not 
meeting financial obligations). Applicant continued to incur delinquent debt after a 
discharge in bankruptcy because of two layoffs from different employers. He also failed 
to stay current with his child support payments through willful neglect. He has not 
inquired about the status of his debts from creditors in over a year. The delinquent debts 
indicate a history of both an inability and an unwillingness to satisfy debt. 
 
 I considered Financial Considerations Mitigating Condition (FC MC) 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) and FC MC AG ¶ 20(b) (the 
conditions that resulted in the financial problems 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). These mitigating conditions do not apply. Applicant incurred 
the delinquent debt after his debts were discharged in bankruptcy in 2007. He did not 
take consistent, reasonable, responsible, and concerted action thereafter to continue to 
pay or resolve his debts. While Applicant was laid off twice for brief periods, he received 
some unemployment and his wife was employed. He has not established a nexus 
between the layoffs and his failure to inquire about the status of his debts or make 
payments. He was ordered to pay child support after a finding of willful neglect to pay 
the support. He has not ensured that his employer is taking the required child support 
payments from his pay and sending it to the proper authorities. He stated he made 
payments on some debts but when offered the opportunity to provide documentation to 
substantiate the payments, he neglected to do so. While he filed his tax returns, he did 
not pay the taxes due and has not inquired of the IRS concerning payment of taxes. His 
failure to act reasonably and responsibly concerning his finances indicates that his 
financial problems are likely to recur and will continue to be a security concern.  
 
 I considered FC MC 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). This mitigating condition does not apply. Appellant 
received the required financial counseling when he filed his bankruptcy petition in 2007. 
He has not provided any information concerning any other counseling. There is no clear 
indication that the financial problems are being resolved or under control 
 
 I considered FC MC AG ¶ 20(d) (the individual has initiated a good-faith effort to 
repay the overdue creditors or otherwise resolve debts). For FC MC AG ¶ 20(d) to 
apply, there must be an “ability” to repay the debts, the “desire” to repay, and “evidence” 
of a good-faith effort to repay. A systematic method of handling debts is needed. 
Applicant must establish a "meaningful track record" of debt payment. Good-faith 
means acting in a way that shows reasonableness, prudence, honesty, and adherence 
to duty or obligation. A "meaningful track record" of debt payment is evidence of actual 
 
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debt reduction through payment of debts. A promise to pay debts in the future is not 
evidence of a good-faith intention to resolve debts. All that is required is a plan to 
resolve financial problems coupled with significant action to implement that plan. An 
applicant is not required to establish that he paid each and every debt listed.  
 
 Applicant has not provided sufficient information to establish that he paid any of 
his delinquent debts. Since bankruptcy is a legal and permissible means of resolving 
debt, the debts discharged in the 2007 bankruptcy are not a security issue. However, 
after his debts were discharged, he continued to accrue debt and did not establish a 
plan to resolve the debts. In fact, Applicant has not verified any payments on his debts 
or even that he has a plan to resolve the debts. His lack of reasonable and responsible 
action to resolve debt shows a lack of good-faith effort to pay creditors or resolve debt. 
His delinquent debts and his failure to provide information concerning his efforts to 
resolve them reflect adversely on his trustworthiness, honesty, and good judgment. 
 
Whole-Person Analysis  
 
 Under the whole-person concept, the administrative judge must evaluate an 
applicant’s security eligibility by considering the totality of the applicant’s conduct and all 
relevant circumstances. An 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. 
 
Under AG ¶ 2(c), the ultimate determination of whether to grant 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. I considered Applicant's service in 
the Army and Army Reserves. Applicant's financial problems started after discharge of 
debts by bankruptcy and he was laid off briefly from two different positions. He did 
collect some unemployment and his wife was continuously employed. He did not 
establish a connection between the layoffs and his inability to pay or resolve the debts. 
He indicated some debts were being paid or disputed. He was provided an opportunity 
to present documentation of his efforts which he indicated was available. He failed to 
provide the information. Applicant's failure to act to resolve and pay debts shows he will 
not be reasonable and responsible in safeguarding classified information. The lack of 
 
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proper management of his finances indicates he will not be concerned, responsible, and 
careful regarding classified information. Overall, the record evidence at this time leaves 
me with questions and doubts as to Applicant’s eligibility and suitability for a security 
clearance. I conclude that Applicant has not mitigated security concerns arising from his 
finances, and he should not be granted access to classified information.  
 
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:   AGAINT APPLICANT 
 
  Subparagraph 1.a:   For Applicant 
 
  Subparagraphs 1.b - 1.i:  Against Applicant 
 
Conclusion 
 
 In light of all of the circumstances presented by the record in this case, it is not 
clearly consistent with the national interest to grant Applicant eligibility for a security 
clearance. Eligibility for access to classified information is denied. 
 
 
 
_________________ 
THOMAS M. CREAN 
Administrative Judge