DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 10-03688 
  ) 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: William T. O'Neil, Esquire, Department Counsel 
For Applicant: Pro se 
 
 
______________ 
 
Decision 
______________ 
 
 
CREAN, Thomas M., Administrative Judge: 
 
 Based on a review of the case file, pleadings, exhibits, and testimony, eligibility 
for access to classified information is granted.  
 
On February 5, 2010, Applicant submitted a Questionnaire for Investigations 
Processing (e-QIP) as a requirement 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 a Statement of Reasons (SOR), dated 
November 22, 2010, to Applicant detailing security concerns for financial considerations 
under 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) effective within the Department of Defense on September 1, 2006. Applicant 
acknowledged receipt of the SOR on December 2, 2010. 
 
 Applicant answered the SOR on December 20, 2010, admitting 16 and denying 8 
allegations. Department Counsel was prepared to proceed on January 24, 2011, and 
 
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the case was assigned to me on February 23, 2011. DOHA issued a Notice of Hearing 
on March 18, 2011, scheduling a hearing for April 5, 2011. I convened the hearing as 
scheduled. The Government offered six exhibits, which I marked and admitted without 
objection as Government Exhibits (Gov. Ex.) 1 through 6. Applicant testified, and did not 
offer any exhibits. The record was held open for Applicant to submit documents. 
Applicant timely submitted 11 documents marked and admitted as Applicant Exhibit 
(App. Ex.) A through K. Department Counsel had no objection to the admission of the 
additional documents. (Gov. Ex. 7, Memorandum, dated April 29, 2011; and Gov. Ex. 8, 
Memorandum dated May 5, 2011). DOHA received the transcript of the hearing (Tr.) on 
April 22, 2011. 
 
Procedural Issues 
 
 Applicant did not receive the Notice of Hearing until March 22, 2010. He 
discussed the hearing date with Department Counsel prior to the mailing of the Notice of 
Hearing on March 18, 2011. Applicant is entitled to 15 days advanced notice of a 
hearing. (Directive E3.1.8.). Applicant was ready to proceed at the hearing on April 5, 
2011, and he had sufficient time to prepare. He waived the 15 day notice requirement. 
(Tr. 4-7) 
 
Findings of Fact 
 
 In his response to the SOR, Applicant denied some allegations and admitted 
others. At the hearing, Applicant admitted all of factual allegations because he now had 
sufficient information to identify the debts as his debts. After a thorough review of the 
pleadings, transcript, and exhibits, I make the following essential findings of fact.   
 
Applicant is a 38-year-old aviation mechanic for a defense contractor. He has a 
general education diploma from high school. He served as a combat engineer in the 
United States Army from February 1994 until April 1998. He held a security clearance 
while on this tour. He served in the Army Reserve as an aviation mechanic from 
October 1998 until June 2004. During this time, he was activated and served in Iraq 
from January 2003 until discharged with an honorable discharge in June 2004.  
 
Applicant's first child was born before he was married. He is required to pay 
monthly child support of $168 for this child, which is garnished from his pay. He has 
been married three times. He first married in November 1996 and divorced in December 
1997. His second marriage was from April 1999 until he divorced in March 2003. He 
married again in June 2006 and divorced in March 2008. He has two children from 
these marriages. One child lives with him and the other with a former wife. He does not 
pay child support for the child living with his former wife, but does provide her support 
when he can. While he is presently single, he is engaged and he and his fiancé live 
together and pool resources. Applicant's net monthly pay is $2,700 and his fiancé's net 
pay is $1,400 for a monthly income total of $4,100. His monthly recurring expenses are 
approximately $3,950, leaving $150 monthly in discretionary funds. (Tr. 23-30, 44-52, 
61-67; Gov. Ex. 1, e-QIP, dated February 5, 2010) 
 
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Credit reports (Gov. Ex. 4, dated August 30, 2010; Gov. Ex. 5, dated February 
19, 2010; and Gov. Ex. 6, dated August 2, 2008), and Applicant's response to 
Interrogatories (Gov. Ex. 2 and 3, dated July 13, 2010) show medical debts for $870 
(SOR 1.a), $683 (SOR 1.b), $493 (SOR 1.c), $75 (SOR 1.d), $570 (SOR 1.e), $468 
(SOR 1.g), $418 (SOR 1.h), and $577 (SOR 1.u); a communication debt in collection for 
$878 (SOR 1.f); cell phone accounts in collection for $110 (SOR 1.i), $805 (SOR 1.l), 
$481 (SOR 1.n), and $345 (SOR 1.p); a rent account in collection for $1,361 (SOR 1.j); 
a credit card account in collection for $1,270 (SOR 1.k); a credit union account in 
collection for $270 (SOR 1.m); a jewelry store account in collection for $175 (SOR 1.o); 
a credit account in collection for $1,872 (SOR 1.q); a car repossession charged-off for 
$9,345 (SOR 1.r); a television satellite receiver account in collection for $872 (SOR 1.s); 
a debt for a newspaper for $69 (SOR 1.t); a credit card account in collection for $1,864 
(SOR 1.v); a mortgage in foreclosure for $110,592 (SOR 1.w); and a debt for child 
support arrears for $21,211 (SOR 1.x). The total amount of debt listed is approximately 
$150,000, with $110,000 being from the mortgage and $20,000 from the child support 
arrears.  
 
Applicant attributes his financial problems to the purchase and subsequent 
foreclosure on a house, a divorce, the expense of a move for employment reasons to a 
high cost new location, the loss of employment and income because he needed to care 
for his mother, and the expenses of having his son live with him. (Tr. 17) Applicant was 
unemployed in the last ten years for a total of approximately a year. The longest period 
of unemployment was from July 2008 until March 2009. His mother became sick and he 
needed to be at home to care for her. While he cared for her he was unable to find a job 
where his mother lived. (Tr. 24-25, 43-44)  
 
When Applicant returned from his tour in Iraq and was discharged from the Army 
Reserve, he started working for a defense contractor at a military base. He rented a 
house near the base in May 2004. In April 2005 at the end of the lease, he was in the 
process of having a house built. It would not be ready until July 2005 and he received 
verbal permission from the property manager to continue renting on a monthly basis. 
When he made his final payment in July 2005, the manager informed him he did not 
provide the appropriate timely notice that he was leaving and he owed more rent. 
Applicant is disputing the debt at SOR 1.j because he believes the appropriate notice 
was provided. He did not present information that he filed a dispute. However, he 
intends to pay the debt in the future since it would be more costly for him to contest the 
debt than pay it. (Tr. 37-40) 
 
Applicant started to work for defense contractors in 2000 shortly after leaving 
active duty. He continued to work for defense contractors while he was a drilling 
member of the Army Reserve. Most of his work was as an aviation mechanic but he 
took whatever job was available. After his honorable discharge in 2004, Applicant 
continued to work as an aviation mechanic for a defense contractor on a military base. 
He purchased a house in June 2005 near the base using a Veteran's Administration 
(VA) guaranteed loan. In November 2005, Applicant's job was uncertain because the 
contract was changing, so he accepted a new position with a defense contractor in a 
 
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high cost area of another state which required an expensive move for him. He tried to 
sell the house or in the alternative to rent it. He hired a property manager, but they did 
not work to either sell or rent the house. He was unable to either sell or rent the house 
because of the downturn in the housing market. Applicant could not afford to pay the 
mortgage and rent at his new location. The house was foreclosed. (SOR 1.w) Prior to 
the hearing, his last contact with the creditor or the VA was in May 2006. Applicant has 
not received information concerning any debt from either the lender of the Veteran's 
Administration. After the hearing, he contacted the lender and the Veteran's 
Administration and neither has any information concerning a debt he owes to them. He 
learned that the house had been sold and the lender has a new owner listed for the 
property. Since the loan was a VA guaranteed loan, there is no debt owed. (Tr. 15-16, 
22-24, 30-36 App. Ex A, Letter, dated April 26, 2011) 
 
Applicant's 13-year-old son, who has asthma, came to live with him in April 2010. 
This increased his household expenses about $250 monthly. These expenses used his 
limited discretionary funds. His fiancé just recently found full-time employment and is 
able to assist with paying their debts. (Tr. 17-19, 28-30) He is not required to provide 
support to a child living with his former wife, but he does provide some support when 
requested. (Tr. 28-30) Applicant is under court order to pay child support for his oldest 
child. He was unable to make the support payments because of unemployment and lack 
of funds in maintaining his own household. The child support arrears are in now in 
excess of $20,000. (SOR 1.x) His pay has been garnished for over two years to pay the 
child support. The garnishment was initially for $400 monthly but has been reduced to 
$168 monthly. His pay is still being garnished. Even though Applicant's pay has been 
garnished for a few years, he is now aware of the actual balance owed. He is no longer 
required to provide child support and his debt is just for the arrears. (Tr. 26-28)  
 
Applicant initially denied the medical debts because he had not seen his credit 
report and could not identify the debts. After receiving a credit report and researching 
the debts, Applicant now believes the medical debts are his responsibility. He believes 
most of them are for treatment of his son's asthma. (Tr. 20-21) 
 
Prior to the hearing, Applicant filed his tax return for 2010 and expects a refund 
of approximately $4,600. He will use these funds to pay some of his debts. For the 
remaining debts, he will attempt to negotiate settlements and pay approximately $75 
monthly on the debts until paid. If his financial situation improves, he will pay more 
towards his debts. His goal is to improve his credit rating to enable him to purchase a 
house. (Tr. 20-21) He also believes after research that the other debts are his valid 
debts. (Tr. 36-37) He talked to financial counselors but did not use their services 
because of the costs. (Tr. 40-41)  
 
Applicant received his tax refund after the hearing. He contacted all of his 
creditors. He requested payment information from the creditors for medical debts at 
SOR 1.a and 1.b, but they have not returned his call. He paid in full the $493 medical 
debt at SOR 1.c (App. Ex. A, Letter, dated April 26, 2011; App. Ex. B, Money 
Transactions, dated April 26, 2011) He paid in full the $75 medical debt at SOR 1.d. and 
 
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the $577 medical debt at 1.u. (App. Ex. A, Letter, dated April 26, 2011; App. Ex. C, 
Money Transactions, dated April 22, 2011; App. Ex. H, Receipt, dated April 26, 2011; 
App. Ex. K, Receipt, dated April 27, 2011) He paid in full the medical debt at SOR 1.e 
(App. Ex. A, Letter, dated April 26, 2011; App. Ex. B, Money Transactions, dated April 
26, 2011)  
 
Applicant contacted the collection agency holding the debts at SOR 1. f, 1.g, 1.h, 
and 1.i. He paid the debts at SOR 1.g, 1.h, and 1.i in full. He plans to pay in full the debt 
at SOR 1.f when the collection agency can provide him with appropriate payment 
information. (App. Ex. A, Letter, dated April 26, 2011; App. Ex. C, Transactions, dated 
April 22, 2011; App. Ex. C, Receipt, dated April 19, 2011)  
 
Applicant also paid in full the cell phone debts at SOR 1.l, 1.n, and 1.p. (App. Ex. 
A, Letter, dated April 26, 2011; App. Ex. F, Letter, dated April 22, 2011; App. Ex. G, 
Letter, dated April17, 2011) He paid in full the loan account at SOR 1.m. He also paid in 
full the debts listed at SOR 1.o, 1.q, and 1.t. (App. Ex. A, Letter, dated April 26, 2011; 
App. Ex. C, Transactions, dated April 22, 2011; App. Ex. E, Receipt, dated April 18, 
2011) These debt payments total approximately $5,600. He agreed to a settlement plan 
for the debt at SOR 1.k but has not yet made any payments. (App. Ex. A, Letter, dated 
April 26, 2011) 
 
Applicant has attempted, but has not been successful, in contacting the creditors 
to establish payment plans for the debts at SOR 1.r, 1.s, and 1.v. His intent is to 
continue attempts to contact creditors, reach settlement agreements and payment 
plans, and pay all of the debs, (App. Ex. A, Letter, dated April 26, 2011) Applicant 
admits that a car was repossessed in 2004 and he has a debt of approximately $9,345. 
(Tr. 41-42) He has attempted to contact the creditor to arrange a payment plan. The 
creditor has not returned his calls. He is trying to contact them by mail to establish a 
payment plan. (App. Ex. A, Letter, dated April 26, 2011) 
 
Applicant is highly regarded by his employer. His program manager writes that 
Applicant has worked for him for over 15 months. Applicant has proven he is an 
extremely dedicated, trustworthy, and motivated employee. His work is exemplary and 
the customers have recognized the excellence of his work. (App. Ex. I, Letter, dated 
April 25, 2011) Applicant's immediate supervisor notes that Applicant is dedicated to his 
work and is willing to go the extra mile to provide a good work product for the 
government. Applicant's work ethic leads his supervisor to believe that Applicant will be 
successful in managing his finances and following his financial recovery plan. Applicant 
has shown he is honest and trustworthy. (App. Ex. J, Letter, dated April 25, 2011)  
 
Policies 
 
When evaluating an applicant’s suitability for a security clearance, the 
administrative judge must consider the revised adjudicative guidelines (AG). In addition 
to brief introductory explanations for each guideline, the adjudicative guidelines list 
 
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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 ¶ 
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 to obtain 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 the applicant may deliberately or inadvertently fail to 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. 
 
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 
 
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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 
debt free, but is required to manage his finances in such a way as to meet his financial 
obligations. Credit reports show and Applicant admitted at the hearing that he had over 
$150,000 in delinquent debts, including a mortgage foreclosure of $110,000, and child 
support arrears of over $20,000. The credit reports and Applicant's admissions at 
hearing are sufficient to raise a security concern and consideration of 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). 
This is a circumstance of an inability and not an unwillingness to satisfy debt. 
 
 The Government produced sufficient evidence to establish the disqualifying 
conditions as required in AG ¶¶ 19(a) and 19(c). The burden shifted to Applicant to 
produce evidence to rebut, explain, extenuate, or mitigate the security concerns under 
financial considerations. An applicant has the burden to refute an established allegation 
or prove a mitigating condition, and the burden to prove or disprove it never shifts to the 
Government. Applicant raised conditions that may mitigate the security concern. 
 
 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 apply. Applicant incurred the 
delinquent debt when he moved to a new location for a job, could not sell or rent his 
house, and it was foreclosed. At the new location, he incurred delinquent debt because 
of the costs. He also was unemployed from July 2008 until March 2009 while he was 
caring for his mother. He incurred additional costs when his son came to live with him. 
The debts were incurred in the past, but have not been resolved and are current. The 
circumstances causing the debts were beyond his control since they were caused by a 
housing market downturn affecting his ability to sell or rent his house, his move to find 
better employment, periods of unemployment, and medical expenses for his son. 
Applicant has taken the steps to resolve the debts. He contacted all his creditors to 
arrange payment plans. He used his tax refund to make debt payments of over $5,600. 
His mortgage foreclosure was resolved by a VA guaranteed loan. He disputed one of 
his debts. Applicant's financial history shows he has taken the necessary steps to 
resolve his debts. Applicant established that he acted responsibly under the 
circumstances to resolve his debts.   
 
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 I considered FC MC ¶ 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. Applicant consulted some 
debt counselors but never employed them because of the cost. However, the 
information presented shows his financial problems are being resolved and are under 
control.  
 
I considered FC MC AG ¶ 20(d) (the individual initiated a good-faith effort to 
repay 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. A "meaningful track record" 
of debt payment can be established by evidence of actual debt payments or reduction of 
debt through payment of debts. An applicant is not required to establish that he paid 
each and every debt listed. All that is required is that Applicant demonstrates an 
established plan to resolve his financial problems and show he has taken significant 
actions to implement that plan.  
 
Applicant does not have a mortgage debt since his house was purchased using a 
VA guaranteed loan. When the house was foreclosed because Applicant could not sell 
or rent it when he moved to a new location for a new position, the loan was covered by 
the VA. Applicant's child support arrears are being paid by garnishment. He no longer 
has a child support requirement so he is only paying the arrears. Applicant's plan was to 
use a tax refund to pay off some of his debts. He received the tax refund and presented 
adequate information to establish he paid over $5,600 on his debts resolving 14 of the 
debts. He is attempting to locate other creditors to establish payment plans and is 
waiting for contact or payment information on six debts. A debt will be paid under a 
recently agreed payment plan. Applicant's action to resolve debts show that he was 
responsible towards his finances. He provided significant and credible information to 
establish a meaningful track record of debt payment and a good-faith effort to repay his 
creditors or resolve debt through debt payment. The past delinquent debts do not reflect 
adversely on his trustworthiness, honesty, and good judgment. 
 
I considered FC MC ¶ 20(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). Applicant disputed a rent payment debt. He has a 
reasonable basis for the dispute but he does not have documentation to establish that 
he has filed a dispute.   
 
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):  
 
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(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 prior service 
in the Army. I considered that he served in Iraq, received an honorable discharge, and 
successfully held a security clearance. I also considered that he is an excellent 
employee. His supervisors consider him to be honest and trustworthy and recommend 
he be granted access to classified information.  
 
Applicant presented sufficient information to show he has taken reasonable and 
responsible action to resolve his financial issues. He paid over $5,600 of his debt using 
a recently received tax refund. He presented information that his mortgage was 
resolved using his VA guaranteed loan and his child support arrears are paid by 
garnishment. He has debts to resolve but he contacted the creditors and is awaiting 
payment and contact information. His recent financial history indicates he will pay his 
remaining debt when he has adequate information and funds. Applicant's payment of 
his debts and attempts to resolve his remaining debts indicate he will be concerned, 
responsible, and careful regarding classified information. Applicant mitigated security 
concerns based on his finances. Overall, on balance the record evidence leaves me 
without questions and doubts as to Applicant’s eligibility and suitability for a security 
clearance. For all these reasons, I conclude Applicant mitigated security concerns 
arising from financial considerations and he should 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:   FOR APPLICANT 
 
  Subparagraph 1.a-1.x:  For Applicant 
 
 
 
 
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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. 
 
 
 
_________________ 
THOMAS M. CREAN 
Administrative Judge