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                              DEPARTMENT OF DEFENSE
               DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 10-03942
)
)
Applicant for Security Clearance )
Appearances
For Government: Fahryn E. Hoffman, Esquire, Department Counsel
For Applicant: Pro se
______________
Decision
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WHITE, David M., Administrative Judge:
Applicant has taken no action to resolve about $17,000 in delinquent debts owed
to 20 creditors alleged in the Statement of Reasons, and about $23,000 in other
delinquencies. Some of the debt arose from long-term medical conditions, however he
failed to demonstrate either a plan to resolve his obligations or the resources to do so.
Based upon a review of the pleadings, exhibits, and testimony, eligibility for access to
classified information is denied. 
Applicant submitted a security clearance application (SF 86) on January 27,
2010. On October 20, 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 for Determining Eligibility for Access to Classified Information
effective within the Department of Defense on September 1, 2006. 
GE 1; Tr. 27-30, 34-36.1
AR.2
GE 2; GE 3.3
AR; GE1; GE 2; GE 3; Tr. 18-19, 29-30, 34-38, 74.4
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Applicant answered the SOR in writing (AR) on November 21, 2010, and
requested a hearing before an administrative judge. Department Counsel was prepared
to proceed on December 3, 2010, and the case was assigned to me on December 14,
2010. DOHA issued a Notice of Hearing on December 21, 2010, and I convened the
hearing as scheduled on January 28, 2011. The Government offered exhibits (GE) 1
through 5, which were admitted without objection. Applicant offered no documentary
evidence during the hearing, and testified on his own behalf. I granted Applicant’s
request to leave the record open until February 14, 2011, for submission of additional
evidence. DOHA received the transcript of the hearing (Tr.) on February 7, 2011. On
February 13, 2011, Applicant submitted two documents that were marked exhibits (AE)
A and B, admitted without objection, and the record was closed as scheduled. 
Findings of Fact
Applicant is a 55-year-old employee of a defense contractor, where he has
worked since April 2009. He has no military service, and this is his first application for a
security clearance. He is a high school graduate. He is divorced, and has had custody
of his 23-year-old special-needs daughter since she was 7.  In his response to the SOR,1
Applicant admitted all of the factual allegations in SOR ¶¶ 1.a through 1.t.  Applicant’s2
admissions, including his statements in response to DOHA interrogatories,  are3
incorporated in the following findings.
Approximately 25 years ago, Applicant badly injured both legs in a skiing
accident. He has since had both knees replaced, and will need to have at least one of
the artificial knees replaced again in the near future. He has suffered several other
injuries in the meantime. As a result, he has undergone more than 55 major surgeries
involving hospitalization and recovery periods of various lengths. He has held a variety
of jobs over this period, with varying degrees of health insurance coverage. In addition,
he has raised his daughter without any child support from his former wife. She suffers
from psychological and physical disabilities that have resulted in additional medical
debt. His only reported period of unemployment since May 1995 occurred from
November 2008 to January 2009, when he was between jobs. He worked as an
electronics systems field technician throughout this period.4
Applicant admitted owing all 20 of the delinquent debts listed in the SOR, ranging
from $75 to $3,494, and totaling $16,696. On February 23, 2010, he was interviewed by
an investigator from the Office of Personnel Management (OPM) concerning his
financial delinquencies. He said that he was using his monthly income to meet current
living expenses, and was trying to devise a plan to pay off his debt. He acknowledged
AR; GE 3 at 3.5
GE 1 at 44-46; GE 2 at 4; Tr. 40-41, 55-57, 74-75.6
GE 2 at 3; AR; AE A; Tr. 39-50, 72-73.7
Tr. 65-68.8
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never having attended financial counseling or used a debt consolidation service. He
said he was not unwilling to pay his debts, but was unable to do so because he had
insufficient money and lived paycheck to paycheck.5
In addition to the delinquent debts listed on the SOR, which are confirmed by the
credit bureau reports in evidence and Applicant’s admissions, he owes about $17,000 in
medical debt to a local hospital. This debt arose from an uninsured hospital stay shortly
before he started his current job in April 2009. He had suffered some chest pains, and
was admitted for a couple days of testing. He has not made any payments toward this
debt. He also owes about $6,000 in delinquent federal income taxes, with associated
interest and fees, on which he recently entered a repayment agreement with the Internal
Revenue Service (IRS). Under the agreement, he pays $150 per month, beginning in
December 2010.  6
On September 20, 2010, Applicant responded to financial interrogatories from
DOHA. He said that he was scheduled to meet with legal counsel to discuss filing for
bankruptcy on September 23, 2010. He attended that meeting, at which the attorney
explained his options, but Applicant took no further action. He also spoke with another
attorney by telephone concerning bankruptcy options. In his November 21, 2010,
response to the SOR he said that he was working on filing bankruptcy to clear his
financial record. About a month before the hearing, he sent his financial information to
his father, who is a financial consultant. About two weeks later, they discussed whether
bankruptcy would be his best option, but reached no conclusions. Applicant said he was
waiting to hear from his father before deciding how to proceed, and had done nothing
during the weeks leading up to his hearing. Except for his IRS debt, and despite having
received several settlement offers from creditors, he said he had not made payments
toward his debts because his father advised him not to show favoritism toward any
creditors until they decided what to do about the bankruptcy situation. Another concern
was Applicant’s inability to afford the legal fees necessary to file bankruptcy. Applicant
said he wanted to submit a statement from his father after the hearing concerning the
situation, but did not do so. His post-hearing submission, dated February 12, 2010,
merely stated that he needed to wait until April 1 to qualify for Chapter 7 status.    7
Applicant has no formal budget, and still has not obtained financial counseling.
He still lives paycheck to paycheck, with no money left at the end of the month for
savings. He characterized his recent financial management as “just kind of trying to put
out fires as they come up.” 8
AE B. 9
Tr. 80-81.10
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Applicant offered a letter from the owner of his company, which describes him as
an honest and hard-working employee, who has been open about the state of his
finances, and has a sincere desire to serve others and do the right thing. The owner
further stated that Applicant follows all safety and personnel standards, and conducts
himself with integrity, respect, and honesty.  His demeanor during the hearing was9
pleasant, open, sincere, and straightforward.10
Policies
When evaluating an applicant’s suitability for a security clearance, the
administrative judge must consider the adjudicative guidelines (AG). In addition to brief
introductory explanations for each guideline, the adjudicative guidelines list potentially
disqualifying conditions (DCs) and mitigating conditions (MCs), 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 AG ¶ 2 describing the adjudicative process. The administrative judge’s
overarching adjudicative goal is a fair, impartial, and commonsense decision. According
to AG ¶¶ 2(a) and 2(c), the entire process is a conscientious scrutiny of applicable
guidelines in the context 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 the 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. Likewise, I have avoided drawing inferences
grounded on mere speculation or conjecture.
Under Directive ¶ E3.1.14, the Government must present evidence to establish
controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, “[t]he 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: “[a]ny determination under this order adverse to an
applicant shall be a determination in terms of the national interest and shall in no sense
be a determination as to the loyalty of the applicant concerned.”
A person applying for access to classified information seeks to enter into a
fiduciary relationship with the Government predicated upon trust and confidence. This
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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.
Analysis
Guideline F, Financial Considerations
The security concerns relating to the guideline for financial considerations are 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. 
The evidence raised security concerns under two Guideline F DCs, as set forth in
AG ¶ 19(a) “inability or unwillingness to satisfy debts”; and ¶ 19(c) “a history of not
meeting financial obligations.” Applicant’s history of financial problems dates back more
than 25 years, and was exacerbated over the past 16 years by having the sole support
responsibilities for his special-needs daughter. He has worked steadily in his field,
except for one brief period of unemployment, but his obligations exceed his income to
the point that he owes 20 different creditors almost $17,000 in delinquent debt as
alleged in the SOR. He does not have the resources to repay these debts, especially
while facing another $17,000 in recent medical debt and $6,000 in delinquent IRS debt.
The evidence clearly establishes Applicant’s inability to satisfy his debts, and his history
of not meeting financial obligations, thereby shifting the burden to him to prove
mitigation.
The guideline includes four conditions in AG ¶ 20 that could mitigate security
concerns arising from Applicant’s financial problems:
(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
ISCR Case No. 06-12930 at 2 (App. Bd. Mar. 17, 2008) (quoting ISCR Case No. 04-09684 at 2-3 (App.11
Bd. Jul. 6, 2006)). 
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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 admitted the SOR-alleged debts, and has no unexplained affluence, so the
remaining MCs are not pertinent.
Applicant has a large number, and significant total amount, of delinquent debts
that continue unresolved at present. Applicant failed to demonstrate that his current
financial situation makes this behavior unlikely to recur, or that it does not cast doubt on
his current trustworthiness and judgment. The evidence does not establish mitigation
under AG ¶ 20(a).
Mitigation under AG ¶ 20(b) was not established. Applicant has incurred
significant medical expenses over the past 25 years, but failed to show that a
substantial portion of them were unexpected. A number of his delinquencies are
medical accounts, but a large number are credit cards and other consumer debts. Nor
did Applicant’s divorce cause his financial problems, since his former wife was not
subsequently in a position to contribute financially to their daughter’s support and
maintenance. His ex-wife’s absence resulted in one fewer people depending on
Applicant for financial support. Finally, Applicant failed to demonstrate that he has acted
responsibly under the circumstances. He admitted that he has taken no action at all to
improve his financial responsibility, beyond talking to a few people about it.
Applicant has not received financial counseling. He made a very recent
arrangement with the IRS to repay $6,000 in past-due tax obligations over the next
three years, but neither made nor intends to make any payments to his SOR-listed
creditors or toward $17,000 in other medical delinquencies that did not appear on the
SOR. Thus, no mitigation was established under AG ¶¶ 20(c) or (d).
As the Appeal Board has ruled concerning the successful mitigation of security
concerns arising from financial considerations, “[a]n applicant is not required to show
that [he] has completely paid off [his] indebtedness, only that [he] has established a
reasonable plan to resolve [his] debts and has ‘taken significant actions to implement
that plan.’”  This applicant admittedly has neither a plan, nor the means or intention to11
implement one.
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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): 
(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 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
pertinent facts and circumstances surrounding this case. Applicant is a hard-working
and dedicated employee. He has suffered a large number of medical problems, and has
incurred many additional medical expenses as the sole caretaker for his special-needs
daughter. He was open and honest about his situation and intentions, as well as his lack
of any effective action toward resolution of the delinquent debts listed in the SOR. 
However, Applicant currently has about $40,000 in delinquent debts that he
accrued over many years, and he does not have the financial means to resolve them in
the foreseeable future. He has made preliminary inquiries with several people
concerning bankruptcy, but is also unable to afford or save toward paying the necessary
legal fees. He did not demonstrate any behavioral changes despite considerable notice
about the security concerns raised by his financial situation. 
Applicant is a mature and experienced individual, who is fully accountable for his
situation and knows he will continue to incur medical expenses he will be unable to pay.
The potential for pressure, coercion, exploitation, or duress remains largely
undiminished, and he did not begin to demonstrate a sufficient pattern of financial
responsibility to show that the financial concerns are unlikely to continue or recur. 
Overall, the record evidence creates substantial doubt as to Applicant’s present
eligibility and suitability for a security clearance. He failed to meet his burden to mitigate
the security concerns arising from his financial considerations.
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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.t: Against Applicant
Conclusion
In light of all of the circumstances presented by the record in this case, it is not
clearly consistent with the interests of national security to grant Applicant eligibility for a
security clearance. Eligibility for access to classified information is denied.
                                              
DAVID M. WHITE
Administrative Judge