1 Authorized by DoD Directive 5220.6 (Directive), Section E3.1.2.2.
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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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)
[NAME REDACTED] )       ISCR Case No. 10-01575
)
)
Applicant for Security Clearance )
Appearances
For Government: John Glendon, Esquire, Department Counsel
For Applicant: Richard Morris, Esquire
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Decision
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MALONE, Matthew E., Administrative Judge:
Applicant has experienced significant financial problems and delinquencies since
at least 1997. Those problems worsened in 2007 due, in part, to circumstances beyond
his control. However, he did not establish that he acted responsibly or that his finances
have improved so that he will not incur more delinquencies in the future. Based on a
review of the pleadings, exhibits, and transcript, Applicant’s request for a security
clearance is denied.
Statement of the Case
After reviewing the results of the Applicant’s background investigation,
adjudicators for the Defense Office of Hearings and Appeals (DOHA) issued to
Applicant interrogatories1 to clarify or augment information obtained in his background
investigation. Based on all available information, including Applicant’s responses to the
2 Required by Executive Order 10865, as amended, and by DoD Directive 5220.6 (Directive), as amended.
3 The adjudicative guidelines were implemented by the Department of Defense on September 1, 2006. These
guidelines were published in the Federal Register and codified through 32 C.F.R. § 154, Appendix H (2006).
Pending official revision of the Directive, they take precedence over the guidelines listed in Enclosure 2 to the
Directive.
4 In his Answer, Applicant omitted his response to SOR 1.i. At the hearing, he entered an admission to that
allegation. (Tr. 9 - 10)
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interrogatories, DOHA adjudicators could not make a preliminary affirmative finding2 that
it is clearly consistent with the national interest to grant or continue Applicant’s access
to classified information. On August 25, 2010, DOHA issued to Applicant a Statement of
Reasons (SOR) alleging facts which, if proven, raise security concerns addressed in the
adjudicative guidelines (AG)3 for financial considerations (Guideline F).
Applicant timely answered the SOR and requested a hearing. The case was
assigned to an administrative judge on December 6, 2010, and a hearing was set for
January 18, 2011. However, on January 12, 2011, the administrative judge granted
Applicant’s request for a continuance. The case was transferred to me on February 3,
2011. Pursuant to a Notice of Hearing issued on February 16, 2011, I convened a
hearing in this matter on March 30, 2011. The parties appeared as scheduled. DOHA
received a transcript (Tr.) of the hearing on April 7, 2011. The Government presented
nine exhibits that were admitted without objection as Government Exhibits (Gx.) 1 - 9.
Applicant testified and submitted two exhibits that were admitted without objection as
Applicant Exhibits (Ax.) A and B. Additionally, I left the record open after the hearing so
that Applicant could submit additional relevant information. (Tr. 102) Applicant’s timely
post-hearing submission has been admitted into the record without objection as Ax. C.
Findings of Fact
Under Guideline F, the Government alleged that Applicant owed $80,966 for 29
delinquent debts (SOR 1.a - 1.cc). Applicant admitted, with explanation, all of the SOR
allegations.4 Applicant’s admissions are incorporated in my findings of fact. Having also
reviewed the transcript and exhibits, I make the following additional findings of relevant
fact.
Applicant is 31 years old and works as a senior welder for a defense contractor in
support of Navy maintenance and repair programs. He has worked for his employer
since June 2001. For three months in 2004, he also worked as a welder for a private
shipyard. Applicant served in the U. S. Navy from January 1990 until he was honorably
discharged in June 2001 as a Boiler Technician Second Class (BT2; E-5). He has held
a security clearance since he enlisted in the Navy. He held that clearance without
incident until his employer reported a garnishment against Applicant’s wages in 2009 for
the debt alleged at SOR 1.a. (Tr. 12 - 13)
Applicant and his wife have been married since December 1991. They have two
children, ages 17 and 15. Applicant also has a third child, age 25, from before the
3
marriage. Applicant’s wife has a chronic medical condition that has prevented her from
working since about 2007. (Gx. 3; Gx. 4; Tr. 36) Applicant enjoys a solid reputation at
work. He is very good at his job and works long hours of overtime whenever he can.
Applicant also works a second job delivering pizza to earn extra money. (Ax. A; Tr. 64)
On September 13, 2005, Applicant submitted a security clearance application
(SF 86). He responded “yes” to SF 86 questions 34 (wage garnishment), 35
(repossessions), 37 (unpaid judgments), 38 (debts greater than 180 days past-due in
the past 7 years), and 39 (debts currently more than 90 days past-due), and disclosed
nine delinquent debts totaling $12,751. (Gx. 1) A credit report obtained on September
26, 2005, showed that Applicant had incurred debts of $6,738 for four civil judgments,
but that he had paid three of them, leaving a single unpaid judgment of $676. The report
also showed that Applicant owed $2,403 for six collection accounts, $24,619 for seven
delinquent or past-due debts, and that he was at least 30 days past-due on his
mortgage. (Gx. 8)
Applicant was interviewed about his debts by a Government investigator on June
28, 2006. He stated at that time that he was working to repay his debts and intended to
resolve his financial problems. It appears that his security clearance was renewed
based on the ensuing background investigation. (Gx. 4)
On December 16, 2009, Applicant was interviewed by a Government
investigator, who reviewed with Applicant a credit report obtained on October 7, 2009.
That report showed that Applicant had five unsatisfied judgments totaling $16,339, and
that he owed $2,135 for six collection accounts. The report also showed that Applicant
owed $2,990 for three delinquent accounts. (Gx. 7) In the interview, Applicant stated
that 25% of his pay was being garnished to satisfy the debt at SOR 1.a, which arose
when he had to finance funeral services for his father-in-law in 2007. Applicant stated
that, as a result, he has been unable to keep up with his mortgage, while still paying
other debts. However, a review of his monthly finances during the interview showed
Applicant had about $1,200 remaining each month after expenses, which included less
than $200 in debt payments. (Gx. 4)
Complicating Applicant’s finances in 2007 was his wife’s arrest and conviction on
federal credit card fraud charges. Applicant had to pay legal fees for his wife’s defense.
After she was convicted and sentenced to five months in jail, some of Applicant’s
income, which is their sole means of support because of his wife’s illness, was diverted
to making court-ordered restitution. She still owes about $11,000. (Tr. 46 - 49) Applicant
also had to pay legal fees when his wife was sued by her mother around the time she
was charged with fraud. Applicant and his wife were advised to settle the suit in light of
her pending criminal charges. The resulting civil judgment requires Applicant’s wife to
pay $26,500. Although Applicant listed this debt as his in an attachment to his response
to DOHA interrogatories (Gx. 3), none of the credit reports obtained by the Government
attributes this debt (alleged at SOR 1.n) to Applicant. However, he has taken
responsibility for this debt, as well as for his wife’s restitution obligation, because he
loves his wife. (Tr. 68 - 69)
5 See Department of the Navy v. Egan, 484 U.S. 518 (1988).
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Also in 2007, Applicant’s taxes were audited by the Internal Revenue Service
(IRS). It was determined that he owed approximately $16,000, including interest and
penalties, for disallowed deductions of work-related expenses from a prior tax year.
Applicant averred that this debt was satisfied. There is no documentation in the record
to verify this debt. (Gx. 3; Tr. 34, 63 - 64)
Applicant paid most of his wife’s legal fees by refinancing the mortgage on his
house. However, because of his poor financial record, he had to pay a 13.5% interest
rate. After his pay was garnished for the debt at SOR 1.a, he was unable to keep up
with the mortgage payments, and the house was lost to foreclosure in March 2010. (Tr.
43 - 47)
For most of their marriage, Applicant’s wife has managed their finances. While
Applicant was in the Navy, he was assigned to three different ships, deployed at least
three times for six months or more, and was at sea for other extended periods until
1996. For that reason, they found it easier for her to pay the bills and manage their
money. From 1996 until 2000, however, Applicant was assigned to shore duty posts, yet
his wife still managed their finances. Between 1993 and 2008, Applicant and his wife
incurred at least 14 delinquent debts that have been enforced through civil judgments.
Eight of those debts were incurred before 2006, when Applicant averred that his
financial problems started. (Gx. 9) Since leaving the Navy, Applicant continued to let his
wife manage their money because he sometimes worked two jobs, worked seven days
a week for the overtime pay, or was temporarily assigned to locations away from home.
Since responding to the SOR, Applicant is more involved with the management of the
household finances. (Tr. 89 - 91, 61, 65 - 66)
To try and resolve their financial problems, Applicant’s wife testified that they
received personal financial management counseling from the Consumer Credit
Counseling Service (CCCS) in their area. (Tr. 63 - 65) Both Applicant and his wife
stated that they have learned and implemented better money management practices.
However, they did not provide any documentation of their CCCS counseling or their
current finances. 
Applicant stated in his 2009 subject interview that he and his wife intended to file
for Chapter 13 bankruptcy protection. In 2010, they also consulted a bankruptcy
attorney; however, that person died. On April 1, 2011, Applicant and his wife retained
another bankruptcy attorney and had begun the process of filing a petition. (Tr. 69, 76 -
77, 95 - 96; Ax. C) Applicant and his wife had previously filed a Chapter 13 petition in
1997. (Tr. 95)
Policies
A security clearance decision is intended to resolve whether it is clearly
consistent with the national interest5 for an applicant to either receive or continue to
have access to classified information. Each decision must be a fair, impartial, and
6 Directive. 6.3.
7 See Egan, 484 U.S. at 528, 531.
8 See Egan; Adjudicative Guidelines, ¶ 2(b).
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commonsense determination based on examination of all available relevant and
material information,6 and consideration of the pertinent criteria and adjudication policies
in the adjudicative guidelines. Decisions must also reflect consideration of the factors
listed in ¶ 2(a) of the new guidelines. Commonly referred to as the “whole-person”
concept, those factors are:
(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 presence or absence of a disqualifying or mitigating condition is not, by itself,
conclusive. However, specific applicable guidelines should be followed whenever a case
can be measured against them as they represent policy guidance governing the grant or
denial of access to classified information.
The Government bears the initial burden of producing admissible information on
which it based the preliminary decision to deny or revoke a security clearance for an
applicant. Additionally, the Government must be able to prove controverted facts
alleged in the SOR. If the Government meets its burden, it then falls to the applicant to
refute, extenuate, or mitigate the Government’s case. Because no one has a “right” to a
security clearance, an applicant bears a heavy burden of persuasion.7 A person who
has access to classified information enters into a fiduciary relationship with the
Government based on trust and confidence. Thus, the Government has a compelling
interest in ensuring each applicant possesses the requisite judgment, reliability, and
trustworthiness of one who will protect the national interests as his or her own. The
“clearly consistent with the national interest” standard compels resolution of any
reasonable doubt about an applicant’s suitability for access in favor of the Government.8
Analysis
Financial Considerations
The security concern about Applicant’s finances, as stated in AG ¶ 18, is that:
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
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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.
The Government’s information, as well as Applicant’s SF 86 disclosures, and his
admissions, and testimony support the SOR allegations that Applicant owed more than
$80,000 for 26 delinquent or past-due debts. The record also established that Applicant
has experienced severe financial trouble since about 1997, when he filed a bankruptcy
petition. He is currently in the process of filing another bankruptcy petition, and his
financial history is characterized by a series of delinquent debts being enforced through
civil judgments. Available information requires application of the disqualifying conditions
listed at AG ¶ 19(a) (inability or unwillingness to satisfy debts), and AG ¶ 19(c) (a history
of not meeting financial obligations).
By contrast, the record shows that in 2007, Applicant experienced unforeseen
challenges to his finances that either added to his debt or hindered his ability to repay
previous debts. His wife’s debt from a lawsuit by her mother, the expenses of his father-
in-law’s funeral, an IRS audit, his wife’s criminal conviction, and his wife’s inability to
work due to illness all require consideration of the mitigating condition at AG ¶ 20(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). To benefit the Applicant, he must show that he acted responsibly under
the circumstances. Although he and his wife claimed they used CCCS and paid some of
their debts, they did not document their claims. Additionally, Applicant is in the process
of seeking bankruptcy protection from his creditors. Although this is a legitimate action,
and might be the most prudent option for Applicant, he has used bankruptcy in the past,
yet continued to amass significant debts and delinquencies thereafter. This mitigating
condition does not apply. 
The mitigating condition at 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)
does not apply because of Applicant’s extensive history of financial problems even
before the events of 2007. Since 1997, he and his wife have been unable or unwilling to
manage their finances to be able to better respond to financial challenges and to exert
some control over their affairs. Also, his wife’s restitution obligations and the judgment
obtained against her by her mother will continue to impede their financial well-being.
The mitigating conditions at 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) are not applicable because there is
no documentation of Applicant’s CCCS counseling or record of their claimed debt
payments. It may be that Applicant will successfully resolve his debts through
bankruptcy. But given his prior bankruptcy and extensive history of delinquencies,
Applicant must establish a reliable track record of financial health before he can
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overcome the adverse inferences from his poor financial history. Because this record
does not contain such a track record, he has not mitigated the security concerns raised.
Whole-Person Concept
I have evaluated the facts presented and have applied the appropriate
adjudicative factors under Guidelines F. I have also reviewed the record before me in
the context of the whole-person factors listed in AG ¶ 2(a). Applicant is 31 years old,
and has a good work record and reputation at his company. He is a responsible father
and husband who served his country honorably in the Navy. He has accepted onerous
financial responsibilities, some of which are not of his own making. Nonetheless, the
adverse information about his finances, despite the sometimes unusual circumstances
surrounding them, presents an unacceptable risk to the Government’s interest in
protecting sensitive and classified information. Were the events of 2007 the only cause
of his financial difficulties, there might be less cause for concern. However, Applicant
was already having financial problems for most of the preceding decade. He has not
shown that those problems will not continue or recur in the future. A fair and
commonsense assessment of all of the available information shows that reasonable
doubts remain about Applicant’s finances. Those doubts, in turn, reflect poorly on his
ability or willingness to protect the national interest as his own, and must be resolved
against continuing Applicant’s access to classified information. 
Formal Findings
Formal findings 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 1.a - 1.cc: Against Applicant
Conclusion
In light of all of the foregoing, it is not clearly consistent with the national interest
for Applicant to have access to classified information. Request for security clearance is
denied.
                                         
MATTHEW E. MALONE
Administrative Judge