KEYWORD: Guideline F
DIGEST: Judge’s statements that Applicant’s financial problems arose from circumstances
outside his control and that Applicant had done all he could to resolve them were not consistent
with the Judge’s ultimate adverse decision.  Best result is to remand for a new decision that
addresses the mitigating conditions and whole-person factors as they apply to each of the SOR
allegations.  Adverse decision remanded.
CASE NO: 10-04405.a1
DATE: 09/19/2011
DATE: September 19, 2011
In Re:
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Applicant for Security Clearance
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ISCR Case No. 10-04405
APPEAL BOARD DECISION
APPEARANCES
FOR GOVERNMENT
Stephanie Hess, Esq., Department Counsel
FOR APPLICANT
Darin Groteboer, Esq.
The Defense Office of Hearings and Appeals (DOHA) declined to grant Applicant a security
clearance.  On September 28, 2010, DOHA issued a statement of reasons (SOR) advising Applicant
of the basis for that decision–security concerns raised under Guideline F (Financial Considerations)
of Department of Defense Directive 5220.6 (Jan. 2, 1992, as amended) (Directive).  Applicant
requested a hearing.  On June 29, 2011, after the hearing, Administrative Judge Henry Lazzaro
denied Applicant’s request for a security clearance.  Applicant appealed pursuant to Directive ¶¶
E3.1.28 and E3.1.30.
Applicant raised the following issues on appeal: whether the Judge’s application of the
pertinent mitigating conditions and of the whole-person factors was erroneous.  Consistent with the
following, we remand the case to the Judge.
Facts
The Judge made the following pertinent findings of fact: Applicant is seeking a security
clearance in connection with his employment by a Defense contractor.  He previously worked for
this same contractor form 1999 until 2007.  He has held a top secret clearance without incident.
Applicant served as an enlisted member of the Army from 1971 until 1974.  He obtained a
commission in 1982, after having completed a bachelor’s degree.  He served as an Army officer
from 1982 until his retirement in 1999, in the rank of major.  While on active duty, he obtained a
master’s degree.  Applicant is currently married to his second wife.  His wife was forced to stop
working in 2008 for medical reasons.  She receives monthly disability pay.
In 2004, Applicant began purchasing rental properties as a source of income.  He has
acquired a total of 11 properties.  His total amounts owed on the properties exceed their value by
about $500,000.  He also owes more on his personal residence than it’s worth.  However, he is
current on the mortgages.
In 2007, Applicant left the employ of the Defense contractor and started up a business
devoted to disaster recovery.  His business engages in repair and restoration after hurricanes, fires,
floods, etc.  He has also expanded his business to include other profitable services, such as duct
cleaning.  He financed the startup costs by means of a bank loan.  He defaulted on at least one
payment, and he has entered into a forbearance agreement, whereby he will repay the loan at a
specified amount  for a period of 180 months.  As of the date of hearing, he has made his payments
under the forbearance agreement in a timely fashion.
In addition, Applicant has two accounts owed to banks.  These accounts have been charged
off.  Applicant has contacted the creditors to work out repayment plans, but he has been unable to
afford any of the options that the creditors have presented to him.
Applicant’s financial problems were affected by his wife’s loss of employment and by the
recession.  His disaster recovery business has also been affected by rising fuel prices.  Because he
must charge for his services in accord with insurance company fee schedules, he is unable to
increase the price for his services to meet his increased fuel costs.  Additionally, his brother-in-law
suffered a terminal illness without health insurance.  Applicant and other relatives provided him with
financial support, medical care, and funeral expenses.
Discussion
Once a concern arises regarding an Applicant’s security clearance eligibility, there is a strong
presumption against the grant or maintenance of a security clearance.  See Dorfmont v. Brown, 913
F. 2d 1399, 1401 (9th Cir. 1990), cert. denied, 499 U.S. 905 (1991).  After the Government presents
evidence raising security concerns, the burden shifts to the applicant to rebut or mitigate those
1Directive, Enclosure 2 ¶ 20(b): “the conditions that resulted in the financial problem were largely beyond
the person’s control . . . and the individual acted responsibly under the circumstances[.]”
2Directive, Enclosure 2 ¶ 20)d): “the individual initiated a good-faith effort to repay overdue creditors or
otherwise resolve debts[.]”  
3Directive, Enclosure 2 ¶ 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[.]”  
concerns.  See Directive ¶ E3.1.15.  In rendering a final decision, an “agency must examine the
relevant data and articulate a satisfactory explanation for” the decision, “including a ‘rational
connection between the facts found and the choice made.’” Motor Vehicle Mfrs. Ass’n of the United
States v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)(quoting Burlington Truck Lines,
Inc. v. United States, 371 U.S. 156, 168 (1962)).  The standard applicable in security clearance
decisions “is that a clearance may be granted only when ‘clearly consistent with the interests of the
national security.’” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988).  “Any doubt
concerning personnel being considered for access to classified information will be resolved in favor
of the national security.”  Directive, Enclosure 2 ¶ 2(b). 
In deciding whether the Judge's rulings or conclusions are erroneous, the Board will review
the Judge's decision to determine whether: it does not examine relevant evidence; it fails to articulate
a satisfactory explanation for its conclusions, including a rational connection between the facts
found and the choice made; it does not consider relevant factors; it reflects a clear error of judgment;
it fails to consider an important aspect of the case; it offers an explanation for the decision that runs
contrary to the record evidence; or it is so implausible that it cannot be ascribed to a mere difference
of opinion.  See ISCR Case No. 03-22861 at 2-3 (App. Bd. Jun. 2, 2006).
In analyzing the record, the Judge concluded that Applicant’s circumstances raised  Financial
Considerations Disqualifying Condition 19(a): “inability or unwillingness to satisfy debts[.]”
Accordingly, he proceeded to consider whether Applicant had met his burden of persuasion as to
mitigation.
The Judge stated that Applicant’s financial problems resulted from several things–his wife’s
loss of employment, his brother-in-law’s illness, and the national recession.  As the Judge
acknowledged, these were circumstances that were outside Applicant’s control.  The Judge went on
to state that Applicant “has done all within his means to resolve his financial problems, including
entering into a forbearance agreement with his largest creditor on which he has made all  required
payments, and applying income from his business to stay current on his mortgages.”  Decision at
6.  The Judge concluded that Financial Consideration Mitigating Conditions (FCMC) 20(b)1 and
20(d)2 apply.  In the whole-person analysis, the Judge stated that, “[d]espite his best efforts,
Applicant remains in a precarious financial position that is unlikely to improve in the foreseeable
future.”  Decision at 7.  
Applicant contends that the Judge failed properly to apply the mitigating conditions and the
whole-person factors.  For one thing, Applicant contends that the Judge failed to apply FCMC
20(a).3  We are not persuaded by this argument, in light of evidence that Applicant’s debts, and the
conduct from which the debts arose, are ongoing.   However, Applicant also contends that the Judge
erred in his treatment of FCMC 20(d).  We find this argument persuasive, in view of the statement
in the Judge’s decision in which he appears to extend favorable application to this condition.  In light
of this, and in light of other statements in the Decision in which the Judge opines that Applicant’s
financial problems arose from circumstances beyond his control and that Applicant has done all that
he can to resolve them, the Judge’s overall adverse conclusion is problematic.  He has not articulated
a satisfactory explanation for his decision.  See, e.g., ISCR Case No. 08-06567 (App. Bd. Oct. 29,
2009).   
We conclude that the best result is to remand the case to the Judge for a new decision in
which he addresses more specifically how the Guideline F mitigating conditions and whole-person
factors apply to each of the three allegations in the SOR.  
Order
The Judge’s adverse security clearance decision is REMANDED.  
Signed: Michael Y. Ra’anan          
Michael Y. Ra’anan
Administrative Judge
Chairperson, Appeal Board
Signed: William S. Fields             
William S. Fields
Administrative Judge
Member, Appeal Board
Signed: James E. Moody            
James E. Moody
Administrative Judge
Member, Appeal Board