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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. 10-05497
)
)
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Applicant for Security Clearance )
Appearances
For Government: Caroline H. Jeffreys, Esquire, Department Counsel
For Applicant: Greg D. McCormack, Esquire
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Decision
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MALONE, Matthew E., Administrative Judge:
Applicant accrued numerous unpaid debts and did not file his tax returns for tax
years 2004 through 2006. His tax returns have been filed and he is current on all
subsequent tax filings. Most of Applicant’s debts have been either resolved or
successfully disputed because they were not his responsibility. He also resolved a tax
debt in excess of $27,000 and established that his current finances are sound.
Applicant’s request for a security clearance is granted.
Statement of the Case
On or about June 12, 2009, Applicant submitted a security clearance application
(SF-86) to obtain or renew a security clearance required for his job with a defense
contractor. After reviewing the results of the ensuing background investigation,
adjudicators for the Defense Office of Hearings and Appeals (DOHA) issued to
 Authorized by DoD Directive 5220.6 (Directive), Section E3.1.2.2.1
 Required by Executive Order 10865, as amended, and by DoD Directive 5220.6 (Directive), as amended.2
 The adjudicative guidelines were implemented by the Department of Defense on September 1, 2006. These3
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.
 Tr. 27 - 28.4
 Ax. A contains 11 sub-parts, further identified as Ax. A1, Ax. A2, etc..5
 Ax. C and D were admitted over Department Counsel’s objections. (Tr. 29 - 32)6
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Applicant interrogatories  to clarify or augment information obtained by investigators.1
After reviewing the results of the background investigation and Applicant’s responses to
the interrogatories, DOHA adjudicators were unable to make a preliminary affirmative
finding  that it is clearly consistent with the national interest to grant Applicant’s request2
for access to classified information. On November 24, 2010, DOHA issued to Applicant
a Statement of Reasons (SOR) alleging facts which raise security concerns addressed
in the adjudicative guideline (AG)  for finances (Guideline F).3
Applicant timely answered the SOR and requested a hearing. The case was
assigned to an administrative judge on April 7, 2011, but was transferred to me on June
21, 2011. Pursuant to a Notice of Hearing issued on August 15, 2011, I convened a
hearing in this matter on September 20, 2011. DOHA received a transcript (Tr.) of the
hearing on September 28, 2011. The parties appeared as scheduled. Department
Counsel presented Government Exhibits (Gx.) 1 - 13. All were admitted except for Gx.
12, which was excluded in response to an objection by Applicant.  Applicant testified4
and presented five exhibits, identified as Applicant’s Exhibits (Ax.) A  - E, were admitted5
at the hearing.  I left the record open to receive additional relevant information from the6
Applicant, whose timely post-hearing submission I have admitted over objection by
Department Counsel as Ax. F.
Findings of Fact
Through the SOR, the Government alleged under Guideline F that Applicant did
not file as required his federal income tax returns for tax years 2004 through 2006 (SOR
1.a - 1.c). The Government further alleged that Applicant accrued approximately 17
delinquent debts totaling $38,614 (SOR 1.d - 1.t). Of those debts, Applicant allegedly
owed a single debt of $27,762 (SOR 1.o) to the Internal Revenue Service (IRS).
In response to the SOR, Applicant admitted the SOR 1.n and 1.r allegations, and
denied the rest. In support of his denials, Applicant averred that he had filed his past-
due tax returns. He further claimed that the debts alleged at SOR 1.d, 1.I, and 1.j belong
to his son, whose name is nearly identical to Applicant’s; that the debts alleged at SOR
1.e, 1.g, 1.k, 1.l, 1.m, 1.n, 1.o, and 1.r have been paid or otherwise resolved. Finally, as
to the remaining debts, Applicant claimed that his financial advisor was either trying to
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verify that the debts were properly attributed to Applicant or that his advisor had
successfully disputed the debts. Applicant’s admissions are incorporated in my findings
of fact. Having reviewed the response to the SOR, the transcript, and exhibits, I make
the following additional findings of fact.
Applicant is 60 years old and is employed by a company doing business with the
State Department in a position that requires a security clearance. Since 2006, Applicant
has worked exclusively on overseas projects. Except for three brief periods in 2006,
2007 and 2008, Applicant has not resided in the United States. Except for a brief visit in
August 2010, from July 2008 until he returned to appear for this hearing, Applicant has
worked abroad and lived in quarters supplied as part of his employment contracts. (Gx.
1; Gx. 2; Tr. 55 - 56)
Applicant previously was investigated for a security clearance in 1994. The
record does not show that he was actually granted a security clearance; however,
Applicant testified that he previously worked for his brother’s company doing work
similar to that for which he currently needs a security clearance. (Gx. 9; Tr. 56 - 57)
Applicant has been married and divorced twice. His first marriage began in
January 1969 and ended in May 1978. He and his first wife had two children together.
Applicant married his second wife in November 1982. They were divorced in September
2007. In addition to her two children from before the marriage, they had four children
together. All of Applicant’s children are now adults. (Gx. 1; Tr. 50) His second ex-wife
and two of his sons live in the house Applicant and his ex-wife bought in 1992. Applicant
has not lived there since 2006, but pays the mortgage, insurance, and taxes on the
house. His ex-wife pays the insurance, utilities and all other expenses connected with
the house. Applicant still owes about $126,000 on the mortgage for the house, which he
estimates is worth about $170,000. (Tr. 54, 90 - 92)
In the mid-1980s, Applicant worked selling and installing garage doors. Between
1984 and 1986, he and another person had their own garage door business. The
business failed in about 1987, when, according to Applicant, his partner stole about
$30,000 from the business bank account. Available information does not corroborate
Applicant’s claim that he was a victim in the business failure; however, the record does
show that there was a falling out with his partner and that significant amounts of
company funds were lost, possibly through his partner’s malfeasance. As a result of that
business failure, Applicant became delinquent on numerous business and personal
debts. In 1987, he was discharged of 31 debts totaling in excess of $64,000 (Gx. 10;
Gx. 13 - 15; Tr. 61 - 62)
After his small business failed, Applicant returned to installing garage doors as
an employee of other companies. In 1990, he suffered a severe neck injury on the job
and was unable to work for most of the next two years. He supported himself through
workmen’s compensation, unemployment benefits and limited sales work. In about
1992, his brother hired him in a sales position, which he held until he and his second
wife started their own garage door business in 1996. (Gx. 1; Gx. 2; Tr. 58 - 59, 62 - 64,
94 - 95)
 See Department of the Navy v. Egan, 484 U.S. 518 (1988).7
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Applicant and his wife stayed in business until about 2006. Applicant worked in
the field selling garage doors and overseeing their installation. His ex-wife was their
business manager who was responsible for paying their business expenses as well as
managing their personal finances. He averred that the business then failed due to the
cumulative effects of business downturns after the September 11, 2001, attacks and the
deterioration of their marriage. Between 2003 and 2006, Applicant and his wife did not
file their federal tax returns as required. Applicant blamed his wife for not filing because
she generally handled their finances. However, he also acknowledged that he should
have been more attentive to his financial responsibilities. Applicant has since filed all of
his past-due tax returns and satisfied a debt for unpaid taxes totaling $32,073.77, with
interest and penalties. (Gx. 2; Ax. A3; Ax. A4; Ax. D; Ax. F; Tr. 76 - 82)
Credit reports obtained during Applicant’s background investigation attributed to
him additional debts totaling about $10,852. Applicant averred that some of those debts
actually belonged to his son. Only the son’s middle name is different, but the middle
initial is the same. This issue was also present during Applicant’s previous background
investigation. (Gx. 14) In about January 2011, Applicant asked a financial advisor,
whom he had used for his most recent business venture, to help him verify the debts in
his credit history and to negotiate account settlements with his creditors. The advisor
determined that the debts at SOR 1.d, 1.f, 1.h - 1.j, 1.q and 1.s, totaling $2,779, are
actually the responsibility of Applicant’s son. They likely stem from his son’s own
business problems. (Gx. 2; Ax. A2; Ax. E; Tr. 71 - 72)
Applicant has paid or resolved, through successful dispute with credit reporting
services, all of the remaining $8,073 of unpaid debt alleged at SOR 1.e, 1.g, 1.k - 1.n,
1.p, 1.r, and 1.t. (Ax. A2; Ax. A5 - 9) Applicant began paying off debts on his own during
a one-year work assignment abroad. (Tr. 57, 64 - 65) His current finances appear to be
sound. He has a significant positive cash flow each month, and he carries little personal
debt aside from his mortgage obligations for the house in which his ex-wife still lives.
(Ax. B)
Applicant continues to earn employment opportunities abroad through his
reputation for reliability and professionalism. Several supervisors and co-workers from
current and past projects recommend him for a position of trust because they have
found him to be diligent, trustworthy, and honest. They also cite the absence of any
breaches of security procedures as a basis for their recommendations. (Ax. B; Ax. C)
Policies
A security clearance decision is intended to resolve whether it is clearly
consistent with the national interest  for an applicant to either receive or continue to7
have access to classified information. Each decision must be a fair, impartial, and
commonsense determination based on examination of all available relevant and
 Directive. 6.3.8
 See Egan, 484 U.S. at 528, 531.9
 See Egan; Revised Adjudicative Guidelines, ¶ 2(b).10
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material information,  and consideration of the pertinent criteria and adjudication policies8
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. In this case, the pleadings and the information
presented by the parties require consideration of the security concerns and adjudicative
factors addressed under AG ¶ 18 (Financial Considerations).
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.  A person who9
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.10
Analysis
Financial Considerations
The Government presented information that showed Applicant has had
significant financial problems for several years. In the mid-1980s, his debts forced him
to file for Chapter 7 bankruptcy protection. More recently, he did not file his federal tax
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returns as required for 2004 through 2006, in part, because he could not afford to pay
his taxes. His most recent background investigation showed that he owed $38,614 in
delinquent debt for 17 accounts, of which $27,762 was owed to the IRS. This
information raises a security concern about Applicant’s finances addressed, in relevant
part, at AG ¶ 18 as follows:
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.
More specifically, the Government’s information requires application of the
disqualifying conditions at AG ¶ 19(a) (inability or unwillingness to satisfy debts); AG ¶
19 (c) (a history of not meeting financial obligations); and AG ¶ (g) (failure to file annual
Federal, state, or local income tax returns as required or the fraudulent filing of the
same).
In response, Applicant presented information that showed his current finances
are sound, he has no new delinquent or excessive personal debt, and he has a positive
cash flow. His financial problems in the 1980s arose through a business failure. In the
1990s he suffered lost income after he was injured at work. In about 2006, he and his
second wife, who was also his business partner, separated and divorced. Their
business failed and he incurred expenses and debts from both the marriage and his
business. Further, several debts were improperly attributed to him rather than his son,
who was experiencing financial problems of his own. Finally, Applicant showed that he
started paying his debts in 2009, that he has satisfied his tax debt, and that, with the
help of a financial advisor, he has paid or successfully disputed the remaining debts
alleged in the SOR.
All of the foregoing supports application of the mitigating conditions 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); 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); 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); AG ¶ 20(d)
(the individual initiated a good-faith effort to repay overdue creditors or otherwise
resolve debts); and AG ¶ 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). On balance, Applicant has mitigated the security concerns
about his finances.
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Whole-Person Concept
I have evaluated the facts presented and have applied the appropriate
adjudicative factors under Guideline F. I have also reviewed the record before me in the
context of the whole-person factors listed in AG ¶ 2(a). Applicant is 60 years old and
has experienced significant financial problems over the past 25 years. However, the
record shows that he has acted prudently to resolve his debts and the circumstances
from which they arose. He has acknowledged his responsibilities regarding his
previously unfiled tax returns, and he has demonstrated that he is now complying with
his obligations. Available information shows that Applicant is not likely to act in a
manner inconsistent with the national interest should he be granted a security
clearance. A fair and commonsense assessment of all available information bearing on
Applicant’s past and current circumstances shows that he has satisfactorily addressed
the doubts, raised by his finances, about his ability to protect the Government’s interests
as his own.
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: FOR APPLICANT
Subparagraphs 1.a - 1.t: For Applicant
Conclusion
In light of all of the foregoing, it is clearly consistent with the national interest to
continue Applicant’s access to classified information. Request for security clearance is
granted.
                                         
MATTHEW E. MALONE
Administrative Judge