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                        DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
----------------- )       ISCR Case No. 10-03757
)
Applicant for Security Clearance )
Appearances
For Government: Eric Borgstrom, Esquire, Department Counsel
For Applicant: Pro se
                                                                            
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Decision
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MARSHALL, Jr., Arthur E., Administrative Judge:
On September 1, 2010, the Defense Office of Hearings and Appeals (DOHA)
issued a Statement of Reasons (SOR) enumerating security concerns arising under
Guideline F (Financial Considerations). DOHA took action under Executive Order
10865, Safeguarding Classified Information within Industry (February 20, 1960), as
amended; Department of Defense (DOD) Directive 5220.6, Defense Industrial
Personnel Security Clearance Review Program (January 2, 1992), as amended
(Directive); and the adjudicative guidelines (AG) effective within the DOD on September
1, 2006. 
In an October 12, 2010, response, Applicant admitted 14 of 15 allegations raised
under Guideline F. He also requested a hearing before a DOHA administrative judge.
DOHA assigned the case to me on December 6, 2010. The parties proposed a hearing
date of February 14, 2011. A notice setting that date for the hearing was issued on
January 18, 2011. An amended notice was issued on January 27, 2011, correcting a
clerical error in the original notice. I convened the hearing as scheduled. 
Applicant gave testimony and offered five documents, which were accepted into
the record without objection as exhibits (Exs.) A-E. He initially was given until March 14,
2011, to submit any additional documents. The Government introduced nine
 Tr. 17-19, 28-29, 40. Intermittent consulting contracts led to interim periods during which Applicant derived      1
no income. His longest period of time without income was about six months. Tr. 29-30.
 Tr. 37.      2
 Tr. 42-44.      3
 There is much confusion about this alleged debt, which does not appear on the credit reports introduced      4
into evidence and the basis for which is evidence of a 2002 judgment, of which Applicant denies any
knowledge. Ex. A/Ex. 6 (Civil Action - Complaint, dated Mar. 21, 2002). This is the basis for the Government’s
allegation and Applicant’s belief that any such debt would have been included in his 2004 bankruptcy. See,
e.g.,Tr. 53-64, 68-70. In noting that the burden in these cases is on the Applicant, not the Government,
Department Counsel conceded that the debt, if valid, “clearly should have been included in the bankruptcy,
because it seems to have been present at the time.” Tr. 70-72, 74.  Consequently, Department Counsel was
willing to work with the Applicant to provide him more than the usual amount of time to research the issue.
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documents, which were accepted into the record without objection as Exs. 1-9, as well
as a Hearing Exhibit, noted as HE 1. The transcript (Tr.) of the proceeding was received
on February 23, 2011. Applicant timely submitted a letter and two files of materials that
were accepted without objection as Exs. F-H on March 25, 2011. On April 7, 2011,
Department Counsel submitted a compilation of Applicant’s materials and a reference
to a court case cited by Applicant. These were accepted without objection as Exs. I-J.
The record was then closed. On June 28, 2011, I reopened the record to include an
email exchange between Applicant and Department Counsel regarding the status of
one account at issue (SOR allegation ¶ 1.n). It was accepted without objection as HE 2
and the record was again closed. Based on a review of the testimony, submissions, and
exhibits, I find Applicant failed to meet his burden of mitigating security concerns related
to financial considerations. Clearance is denied.
Findings of Fact
Applicant is a 60-year-old applicant for an information technology (IT)
consultancy position. He has a bachelor’s degree. Applicant is currently single and the
father of two adult children. 
Applicant married in 2000. He provided for his wife and her two children from a
previous union. Within two years, the marriage soured and the couple separated. After
maintaining two households, the couple ultimately divorced in October 2004. In the
interim, in about August 2004, Applicant filed for Chapter 7 bankruptcy protection, an
action he took in response to the mounting debts incurred related to his separation,
pending divorce, his wife’s overuse of credit cards, some medical bills, and his erratic
consulting assignments.  At the time, he listed assets in the amount of approximately1
$895 and liabilities of about $64,000.  Included in his liabilities was an entry for2
approximately $5,000 in gambling losses. Applicant denies that such losses were his,
noting that he rarely buys lottery tickets. He posits that such debts might have been
attributable to his ex-wife and notes that he did not thoroughly review the bankruptcy
petition before signing the necessary papers for its filing.  That petition was discharged3
in December 2004. This discharge included all of Applicant’s debts, except for one
(SOR allegation ¶ 1.n).  At the time, Applicant had no knowledge of that debt and it was4
 Tr. 20. That debt is the largest debt at issue ($12,386), far outweighing the other debts at issue that      5
cumulatively amount to about $8,100. 
 Tr. 53-57. Applicant testified that the entity would not issue him a letter indicating that it had no record of      6
the balance alleged. He believes this debt entry is confused with another company with which he formerly had
an account.
 Ex. A (Related paperwork).      7
 Tr. 19.      8
 Ex. F (Legal Services letter, dated Mar. 8, 2011).      9
 Id.      10
 Id. As of the date of late June 2011, there was no evidence of final resolution. See HE 2.      11
 Id.      12
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apparently overlooked by his bankruptcy attorney.  That entity no longer reflects this5
debt on its ledgers, but there is no evidence that the debt has been cancelled or that
the credit report entry was either withdrawn or disputed.  The issue is currently in6
arbitration.7
From about 2001 until June 2009, when he was interviewing for a full-time
position at a company in a neighboring state, Applicant’s provided consulting services
for at least one entity, but projects were irregular.  The inconsistency of his income8
adversely affected his finances. He recently accepted a lucrative full-time position that
is contingent on his acquiring a security clearance. 
Since discovering the existence of the debt noted at  ¶ 1.n, Applicant has been
trying to get it subsumed into his earlier bankruptcy petition or resolved through
arbitration, as noted above. His original attorney will only file the necessary paperwork
for a fee and is not currently available for the work. He consulted the bankruptcy
trustee, who referred him to a friend who might help Applicant at a lower fee. In the
interim, Applicant consulted a legal services group that, while unable to provide the
required legal service, advised him to ask for a Praecipe to Discontinue with the county
because of the age of the initial petition.  Following this advice, Applicant requested the9
praecipe. The firm noted: “Assuming that there is an agreement, the record will then be
closed. Assuming that there is no agreement, [Applicant should] add [the debt] to his
previously discharged bankruptcy” through a petition with the local bankruptcy court.”10
The legal services group notes that Applicant “has filed the necessary petition
and is waiting to hear from the court. Our best guess is that this whole process may
take one month from the date of the petition.”  It also advised him to seek recourse11
against the original bankruptcy attorney for negligence “in missing the record in the
courthouse, consequently failing to include it in the bankruptcy.”  Applicant has been12
pursuing the issue about this debt through the county civil court. He also wrote a letter
to the bankruptcy court asking that bankruptcy case be reopened for inclusion of this
 HE 2 (Email, dated Mar. 28, 2011); Ex. I (Letter to bankruptcy court, dated Mar. 7, 2011). There is no      13
evidence of further effort on this request.
 Tr. 25-27.      14
 Ex. C (Agreement, dated Feb. 11, 2011).      15
 Tr. 27. Payments were to start on March 3, 2011.      16
 HE 1 (Debt chart).      17
 Tr. 47-50.      18
 Tr. 46.      19
 Tr. 37.      20
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debt.  There is no evidence of formal filing with the bankruptcy court. The issue13
remains unresolved in both the county civil and bankruptcy courts.
With the exception of the large debt noted at ¶ 1.n for $12,386, the remaining
debts at issue in the SOR amount to about $8,000 and range from $110 to $2,099, with
the majority of those debts under $600 (ie., $108, $110, $331, $331, $499, $536,
$599). In February 2011, Applicant compiled a debt repayment plan that includes all the
debts at issue, except the debt noted at ¶ 1.n, discussed above, and the debts noted at
¶ 1.i ($2,099), which Applicant believed was a duplicate of another debt in the SOR,
and provision for the two debts noted at ¶ 1.f and ¶ 1.l, which Applicant believes are
duplicates, although there is no evidence establishing that the two noted debts with the
same balances of $331 are the same account.  Applicant, however, testified that these14
debts can be readily added to the plan. 
An unsigned copy of the repayment agreement shows that the contemplated
monthly payments of the plan as it was presented at hearing were for approximately
$157 a month.  As of the time the record closed, however, there was no evidence that15
Applicant had started making regular payments on the plan.  None of the debts at16
issue in the SOR have been otherwise paid or addressed, although their various dates
of delinquency range from 2002 to 2009.  He had been aware of most of the17
delinquent accounts.  Applicant specifically confirmed that between 2008 and the18
compilation of this payment plan that he had made no progress on the debts at issue,
nor had he contacted any of the creditors.19
Since at least November 2010, Applicant has been unemployed and had
become increasingly frustrated at not being able to find a well-paying position in his
rural region. He is looking forward to relocating to another state to accept his recent job
offer. The position for which Applicant is seeking a security clearance is quite lucrative.
As opposed to past annual incomes in the $30,000 range, this pending position starts at
about $105,000 a year. At present, however, he remains unemployed, although he is
willing to take interim employment if an opportunity arises.  He is living off of20
unemployment compensation payments of about $650 a month, which covers his rent.
He is currently acquiring negative balances to cover his cable and
 Tr. 32-35, 57.       21
 Tr. 33.      22
 Tr. 45-46.      23
 Tr. 33.      24
 Tr. 31.      25
 Ex. B (References).      26
 Id.      27
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Internet/telecommunications (about $200 a month), transportation-related costs (about
$200 a month), and insurance (about $100 a month), and food.  Applicant owns his21
car, which he bought used, and has no car payments. He is current on his utilities. He
does not maintain a savings or checking account.  He uses cash or a pre-paid debit22
card for his transactions. He does not spend money needlessly. He lives a simple life
and rarely spends money on entertainment, although he took a two week tour in Europe
in 2005 on a promotion that cost less than $5,000.  Lack of financial resources and23
savings have prohibited him from addressing some of his smaller debts.  He has been24
working with a credit counselor to best allocate his limited income.  25
As an employee, Applicant is a valued worker. His references speak of him in the
highest terms.  He is known as a hard working man who is dedicated, professional,26
discrete, and diligent.  He takes great pride in working within the defense industry.27
Policies
When evaluating an applicant’s suitability for a security clearance, an
administrative judge must consider the AG. In addition to brief introductory explanations
for each guideline, the AG 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. The administrative judge’s overarching
adjudicative goal is a fair, impartial, and commonsense decision. Under AG ¶ 2(c), this
process is a conscientious scrutiny of a number of variables known as the “whole-
person concept.” The administrative judge must consider all 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.
The Government must present evidence to establish controverted facts alleged
in the SOR. An applicant is responsible for presenting “witnesses and other evidence to
 See also ISCR Case No. 94-1075 at 3-4 (App. Bd. Aug. 10, 1995).      28
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      29
 Id.      30
 Id.      31
 AG ¶ 18.      32
 Id.      33
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rebut, explain, extenuate, or mitigate facts admitted by applicant or proven by
Department Counsel. . . .”  The burden of proof is something less than a28
preponderance of evidence. The ultimate burden of persuasion is on the applicant.  29
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 those 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
about potential, rather than actual, risk of compromise of classified information.
Section 7 of Executive Order 10865 provides that decisions shall be “in terms of
the national interest and shall in no sense be a determination as to the loyalty of the
applicant concerned.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites
for access to classified or sensitive information). “The clearly consistent standard
indicates that security clearance determinations should err, if they must, on the side of
denials.”  Any reasonable doubt about whether an applicant should be allowed access30
to sensitive information must be resolved in favor of protecting such sensitive
information.31
Based upon consideration of the evidence, Guideline F (Financial
Considerations) is  the most pertinent to this case. Conditions pertaining to this AG that
could raise a security concern and may be disqualifying, as well as those which would
mitigate such concerns, are set forth and discussed below.
Analysis
Guideline F - Financial Considerations 
Under Guideline F, “failure or an 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.”  It32
also states that “an individual who is financially overextended is at risk of having to
engage in illegal acts to generate funds.”  Aside from his 2004 bankruptcy, Applicant33
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has 13 alleged delinquent debts amounting to about $20,500. Even if the $12,386
alleged debt were to be proven as erroneous or remedied through retroactive inclusion
in his 2004 bankruptcy, approximately $8,100 in debt that went delinquent between
2002 and 2009 remains unpaid and virtually unaddressed. Such facts are sufficient to
raise Financial Considerations Disqualifying Condition (FC DC) AG ¶ 19(a) (inability or
unwillingness to satisfy debts) and FC DC AG ¶ 19(c) (a history of not meeting financial
obligations). With such conditions raised, it is left to Applicant to overcome the case
against him and mitigate security concerns. 
The debts at issue are multiple in number. Although some may have been
acquired during times of recent financial distress, they range in dates of delinquency
from 2002 through 2009. While Applicant provided evidence of progress exploring one
debt, which appears to have been overlooked during his 2004 bankruptcy, 12 other
debts amounting to over $8,000 were ignored until after the September 2010 SOR was
issued. It was not until February 2011 that he first sought to formalize a debt repayment
plan. There is no evidence that this plan was implemented, that he has made any
headway on this proposed plan, or, given his currently negative monthly remainder, that
he has the financial resources to do so. There is insufficient evidence to raise 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). 
With regard to Applicant’s 2004 bankruptcy, there is evidence indicating that
much of that debt was attributable to his separation, divorce, the unbridled spending of
his ex-wife, and medical bills. Overwhelmed by liability of approximately $64,000 and
with only negligible assets, he declared bankruptcy. Since that time, he has had periods
when erratic project assignments adversely impacted his income. This includes his
current period of unemployment, which appears to date back to November 2010. To the
extent these factors helped create the debts at issue in his bankruptcy and some of the
debts acquired between 2002 and 2009, FC MC AG ¶ 20(b) (the conditions that
resulted in the behavior 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) applies.
Although Applicant is receiving credit counseling with regard to his current
finances, the majority of the debts at issue, and the contemplation of a debt
consolidation repayment plan, Applicant still maintains a negative monthly remainder.
Moreover, he has yet to establish a meaningful record of regular payment on his
proposed repayment plan. However, his approach to the debt at ¶ 1.n with the guidance
of a legal services entity warrants at least partial application of FC MC AG ¶ 20(c) (the
person has received or is receiving counseling for the problem and there are clear
indications that the problem is being resolved or is under control) to that debt. 
Of the delinquent debts acquired between 2002 and 2009, Applicant has only
made contact with the creditor in ¶ 1.n. He has known about most of the other 12 debts.
However, he has never contacted any of those creditors, made any payments or
alternative arrangements on those accounts, or made any effort to satisfy even the
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smallest debts of $108 or $110 – debts with balances lower than his non-essential
monthly cable and Internet service. He drafted a repayment plan, but failed to show a
meaningful track record of payment on it despite reasonable monthly terms ($157). This
amount could also be easily met by foregoing cable and Internet until he is again fully
employed. Meanwhile, to the extent his sole income at present is unemployment
compensation it may be assumed his current negative monthly remainder is adding to
his debt. While some progress has been made toward exploring the situation regarding
the debt at ¶ 1.n, such facts undermine broad application of FC MC AG ¶ 20(d), (the
individual initiated a good-faith effort to repay overdue creditors or otherwise resolve
debts) to Applicant’s overall financial situation. 
Whole-Person Concept
Under the whole-person concept, an administrative judge must evaluate an
applicant’s eligibility for a security clearance by considering the totality of an applicant’s
conduct and all the circumstances. An administrative judge should consider the nine
adjudicative process factors listed at AG ¶ 2 (a). Under AG ¶ 2(c), the ultimate
determination of whether to grant a security clearance must be an overall
commonsense judgment based on careful consideration of the guidelines and the
whole-person concept. In addition, what constitutes reasonable behavior in such cases,
as contemplated by FC MC ¶ 20(b), depends on the specific facts in a given case. 
I considered the potentially disqualifying and mitigating conditions in light of all
the facts and circumstances surrounding this case, as well as the “whole-person”
factors. Applicant is a highly credible and candid 60-year-old IT professional. He is
college educated and has helped raise two adult children. Living in a primarily rural
region of the country that has faced hard economic times and a shortage of well-paying
jobs, he has shown flexibility by being available to relocate in search of stable
employment. Following a costly divorce, he declared bankruptcy in 2004 out of financial
necessity. Since that time, he has continued in his chosen profession despite the fact
full-time, salaried work was, at times, hard to find or maintain. Within the past year, he
was offered a lucrative position based on the conditions that he relocate and
successfully obtain a security clearance.  
Applicant’s necessity for a security clearance now appears immediate due to his
offer of a lucrative position requiring a security clearance. The standards by which a
security clearance may be awarded, however, go well beyond sheer necessity. To his
credit, and as the Government concedes, his largest alleged debt, if valid, should have
been included in his 2004 bankruptcy petition. On that issue, he has demonstrated
clear effort in instituting the two paths recommended by legal counsel to address the
status of that debt. Thus far, he has actively pursued recourse through the county civil
court, and he has showed that he has taken the first step in exploring the issue with the
bankruptcy court. While there is insufficient evidence to suggest how or if this issue
ultimately will be resolved, Applicant’s preliminary efforts toward this debt are notable.
Remaining are the dozen other debts at issue, which have been virtually ignored
for years. While amounting to little over $8,000, they were acquired between 2002 and
2009, during times of solid employment as well as times when intermittent projects
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adversely affected his income. While deferring action on such debts could be
understandable when income was tight, there is no evidence that he paid any of the
delinquent debts, discussed payments or deferred payments with his creditors, formally
disputed the debts, or even contacted any of those creditors during the times he was
regularly earning a steady income. To the extent that several of those debts are in the
$100 to $500 range, such effort would not have been overly burdensome. This is
particularly true when he was able to pay for a two week European tour in 2005. Even
now, while he relies on unemployment compensation as income, he enjoys cable and
Internet service while his creditors remain uninformed and his debts remain
unaddressed.  
Applicant has no cash reserves or notable assets, and his monthly expenses
have exceeded his income since at least November 2010. Although he has sought the
aid of a financial counselor and developed a reasonable debt repayment plan (where
monthly payments would be less than his Internet/cable costs, for example), there is no
evidence that the plan was effectuated and that he is making even the most nominal of
regular payments on that plan. Such efforts could have helped demonstrate his
commitment to honor his delinquent debts through a realistic plan. Instead, while he
may have formulated a schedule to address these debts at some unspecified time in
the future, there is no evidence that he has initiated his proposed repayment plan and
that he currently has the financial resources to maintain it. In short, as a result of his
deferral of responsibility on these debts, there is no indication that he presently has the
ability to make any progress on these debts, even if the courts eventually absolve him
of liability on the alleged debt noted in SOR allegation ¶ 1.n.
Based on Applicant’s evidence and argument, financial considerations security
concerns remain unmitigated. As noted, any reasonable doubt about whether an
applicant should be allowed access to sensitive information must be resolved in favor of
protecting such sensitive information. Clearance is denied.
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: AGAINST APPLICANT
Subparagraph 1.a: For Applicant
Subparagraphs 1.b-1m: Against Applicant
Subparagraph 1.n: 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 national interest to grant Applicant a security clearance.
Clearance granted.
ARTHUR E. MARSHALL, JR.
Administrative Judge