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DEPARTMENT OF DEFENSE 
DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
 [Redacted] )  ISCR Case No. 10-09700 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Caroline H. Jeffreys, Esq., Department Counsel 
For Applicant: Pro se 
 
 
______________ 
 
Decision 
______________ 
 
 
FOREMAN, LeRoy F., Administrative Judge: 
 
This case involves security concerns raised under Guideline F (Financial 
Considerations). Eligibility for access to classified information is denied. 
 
Statement of the Case 
 
Applicant submitted a security clearance application on June 6, 2010. On July 5, 
2011, the Defense Office of Hearings and Appeals (DOHA) sent her a Statement of 
Reasons (SOR) detailing the basis for its preliminary decision to deny her application, 
citing security concerns under Guideline F. DOHA acted 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) implemented by the Department of Defense on September 
1, 2006.  
 
 Applicant received the SOR on July 12, 2011; answered it on July 22, 2011; and 
requested a hearing before an administrative judge. Department Counsel was ready to 
proceed on August 23, 2011, and the case was assigned to me on August 26, 2011. 
 
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DOHA issued a notice of hearing on September 27, 2011, scheduling it for October 20, 
2011. I convened the hearing as scheduled. Government Exhibits (GX) 1 through 4 
were admitted in evidence without objection. Applicant testified but called no witnesses 
and presented no documentary evidence. I kept the record open until November 5, 
2011, to enable her to submit documentary evidence. DOHA received the transcript 
(Tr.) on October 28, 2011. 
 
At Applicant’s request, I extended the deadline for submitting documentary 
evidence until December 9, 2011. She timely submitted AX A, consisting of 13 pages of 
medical records, which were admitted without objection. Department Counsel’s 
comments regarding AX A are attached to the record as Hearing Exhibit I.  
 
Findings of Fact 
 
 The SOR alleges 23 debts totaling about $23,067. Two are duplicates, reducing 
the total to $22,880. In her answer to the SOR, Applicant wrote “I agree” after every 
alleged debt listed in the SOR. However, during an interview with a security investigator 
in July 2010, she disputed all the medical debts listed on her credit reports, asserting 
that they were covered by Medicaid. (GX 2 at 6.) For the purposes of this decision, I 
have treated all the medical debts as disputed and all the non-medical debts as 
admitted.  
 
 Applicant is a 38-year-old electrical designer employed by a defense contractor. 
She has worked for her current employer since January 2009. She was a temporary 
federal employee from January to May 2000 and then worked at various non-
governmental jobs from May 2001 to June 2003. She was a stay-at-home mother and a 
student from July 2003 until she began her current employment. (Tr. 29-30.) She has 
never held a security clearance. 
 
 Applicant attended a technical school from May 2004 to February 2007, receiving 
an associate’s degree in computer networking, and from February 2007 to October 
2008, receiving a second associate’s degree in architectural drafting and design 
technology. Her June 2011 credit report reflects $43,918 in student loans, which are 
deferred and not alleged in the SOR. (GX 3 at 2-3.) 
 
 Applicant was seriously injured in December 1992, when she was a pedestrian 
and hit by a car. She suffered a fractured skull and severe head trauma. Her medical 
records reflect that her cognitive ability was reduced as a result of her injuries. A 
neuropsychologist found “demonstrated compromise in encoding and retrieving 
information.” She suffered “mild compromise of auditory attention and more moderate to 
marked compromise of immediate recall of spoken information.” The neuropsychologist 
strongly recommended that she be transferred to a rehabilitation program “for intensive 
evaluation to more precisely define the extent of her current learning and memory 
difficulties and better determine the extent of any disorder of executive functioning.” (AX 
A at 12-13.) Applicant testified that she was hospitalized for ten days and in 
rehabilitation for two weeks.  
 
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 Applicant testified that her memory is improving but she still has difficulties. She 
copes by writing things down, both at home and at work. (Tr. 28, 57.) She also testified 
that she was tested for reading comprehension in 1998 and found to have the reading 
comprehension of a seventh grade student. She did not provide any documentary 
evidence of this testing. (Tr. 61.) 
 
 Applicant married in May 1998 and separated in May 2005. She has four 
children, ages 15, 13, 8, and 3. She receives child support of $228 per month for her 
oldest child, $50 per month for her youngest, and is the sole support of the other two. 
(GX 2 at 10; Tr. 31-32.) She testified that her injuries caused her to make bad decisions. 
She married “an unreliable man,” and then became involved with “another man of 
negative character.” (Tr. 24.)  
 
 Applicant and her four children moved from another state at her own expense 
when she was hired by her current employer, not realizing that the cost of living at her 
new job location was considerably higher than at her former residence. Her delinquent 
debts arose because of her increased living expenses and her lack of expertise in 
budgeting. She has since cut her living costs, but she still has no extra money to repay 
her delinquent debts. She is looking for other sources of income to supplement her 
salary. (Tr. 25-26.)  (Tr. 25.)  
 
Applicant testified that before moving to her current job location, she received 
public assistance, and her medical expenses and those of her children were covered by 
Medicaid. (GX 2 at 6-7.) She now has medical insurance through her current employer. 
(Tr. 36; GX 2 at 11.) 
 
 The evidence concerning the delinquent debts alleged in the SOR is summarized 
below. 
 
 SOR ¶ 1.a (judgment--$2,324). Applicant’s employer provided her with housing 
for one month after she was hired. She then rented a house for $1,195 per month. The 
house had oil heat, costing $400-500 per month. In the fall of 2009, Applicant traveled 
to her previous place of residence for her brother’s wedding, and during her return trip 
she hit a deer, seriously damaging her car and stranding her for three days. These 
unexpected expenses made her unable to pay her rent. To avoid being evicted, she put 
her property in storage, and she and her children moved into an extended-stay hotel. In 
January 2010, her former landlord obtained a $2,324 judgment against her for early 
termination of the lease. The judgment is unsatisfied. (GX 3 at 1; Tr. 40-42.)  
 
 SOR ¶ 1.b (modeling classes--$545). Applicant enrolled her daughter in 
modeling classes during the summer of 2009, with some financial assistance from her 
mother-in-law. She withdrew her daughter from the classes in June 2009 because they 
were too expensive, but she still owed a balance on the contract, which she could not 
afford to pay. The debt is unresolved. (GX 3 at 1; Tr.43.) 
 
 
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 SOR ¶¶ 1.c-1.d (medical bills--$173 and $304). During a security interview in 
July 2010, Applicant disputed all the delinquent medical bills listed on her credit report, 
on the ground that she and her children were covered by Medicaid at her previous 
residence. However, these two medical bills were incurred after she moved and started 
her current job, and they are unresolved. (GX 2 at 6; GX 3 at 1; Tr. 43-44.) 
 
SOR ¶ 1.e (medical bill--$72). This medical bill was incurred in December 2007, 
while Applicant lived at her previous residence, where she testified that she was 
covered by Medicaid. She has not disputed it with the credit reporting agencies. It is 
unresolved. (GX 2 at 6; GX 3 at 1; Tr. 43-44.) 
 
 SOR ¶ 1.f (catalog purchase--$115). Applicant made catalog purchases that 
she could not afford. The debt was charged off in May 2005, and it is unresolved. (GX 3 
at 1; Tr. 45.) 
 
 SOR ¶¶ 1.g and 1.h (bad checks--$260 and 525). Applicant wrote these checks 
to a department store in December 2007 to buy Christmas gifts for her children, but she 
had insufficient funds in her account to cover them. She offered to resolve the debts 
with monthly $20 payments, but her offer was refused. The debts are unresolved. (GX 2 
at 6; GX 3 at 2; Tr. 45-47.) 
 
 SOR ¶ 1.i (credit card--$1,186). This debt is a delinquent credit card account 
that was referred for collection in June 2007. It is unresolved. (GX 3 at 2; Tr. 28.) 
 
 SOR ¶ 1.j (student loan--$1,093). Applicant attended classes funded by a grant, 
but it was converted into a loan because of her low grades. It is unresolved. (GX 3 at 2; 
Tr. 49.) 
 
 SOR ¶ 1.k (bank overdraft--$736). Applicant testified that this overdraft was the 
result of a bank error, but it was never resolved. (GX 4 at 4; Tr. 50.) 
 
 SOR ¶¶ 1.l, 1.m, 1.p (medical bills--$350, $304, and $173). Applicant’s credit 
reports reflect that these three medical bills were incurred after she moved to her 
current residence. They are unresolved. (GX 2 at 6; GX 4 at 8-9.) 
 
 SOR ¶ 1.n (medical bill--$72). This bill is a duplicate of the debt alleged in SOR 
¶ 1.e. (Tr. 16.) 
 
 SOR ¶¶ 1.o, 1.q, and 1.r (medical bills--$11,560, $333, and $275). These 
medical bills were incurred while Applicant lived at her previous residence, where she 
claimed that she was covered by Medicaid. She has not disputed them with the credit 
reporting agencies. They are unresolved. (GX 2 at 6; GX 4 at 9-11.) 
 
 SOR ¶ 1.s (catalog purchase--$115). This debt is a duplicate of the debt 
alleged in SOR ¶ 1.f. (Tr. 52.) 
 
 
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 SOR ¶ 1.t (charge account--$259). This debt arose from a bad check uttered to 
a department store. It was referred for collection in December 2007, and it is 
unresolved. (GX 4 at 8; Tr. 52.) 
 
 SOR ¶ 1.u (telephone bill-$672). This is an unpaid telephone bill from 
Applicant’s previous residence. It does not appear on her credit reports, but she 
disclosed it on her security clearance application and admitted it in her response to the 
SOR and at the hearing. (GX 1 at 51; Tr. 53.) 
 
 SOR ¶¶ 1.v and 1.w (catalog purchases--$936 and $685). These catalog 
purchases do not appear on Applicant’s credit reports, but she disclosed them on her 
security clearance application and admitted them in her answer to the SOR and at the 
hearing. (GX 1 at 52; Tr. 52-53.) 
 
 Applicant submitted a personal financial statement on March 2011 at DOHA’s 
request. She reported net monthly income of about $2,065 (including $228 in child 
support), expenses of $2,532, and a monthly shortfall of about $468. (GX 2 at 10.) As of 
the date of the hearing, she was receiving an additional $50 per month in child support, 
and her day care expenses had been reduced from $560 to about $360, but her 
expenses still exceed her income. (Tr. 31-32, 38.) She has never sought or received 
financial counseling. (Tr. 58.) 
 
 Applicant contributes to a retirement account in her current job. She estimated 
that she has about $10,000 in her retirement account. (Tr. 40.) She has taken two 
$1,000 loans from her retirement account, which she is repaying at the rate of about 
$64 per month. (Tr. 55.) 
 
Policies 
 
 “[N]o one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 
484 U.S. 518, 528 (1988). As Commander in Chief, the President has the authority to 
“control access to information bearing on national security and to determine whether an 
individual is sufficiently trustworthy to have access to such information.” Id. at 527. The 
President has authorized the Secretary of Defense or his designee to grant applicants 
eligibility for access to classified information “only upon a finding that it is clearly 
consistent with the national interest to do so.” Exec. Or. 10865, Safeguarding Classified 
Information within Industry § 2 (Feb. 20, 1960), as amended.   
 
Eligibility for a security clearance is predicated upon the applicant meeting the 
criteria contained in the AG. These guidelines are not inflexible rules of law. Instead, 
recognizing the complexities of human behavior, an administrative judge applies these 
guidelines in conjunction with an evaluation of the whole person. An administrative 
judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. An 
administrative judge must consider all available, reliable information about the person, 
past and present, favorable and unfavorable. 
 
 
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 The Government reposes a high degree of trust and confidence in persons with 
access to classified information. This relationship transcends normal duty hours and 
endures throughout off-duty hours. 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. 
 
Clearance decisions must be made “in terms of the national interest and shall in 
no sense be a determination as to the loyalty of the applicant concerned.”  See Exec. 
Or. 10865 § 7. Thus, a decision to deny a security clearance is merely an indication the 
applicant has not met the strict guidelines the President and the Secretary of Defense 
have established for issuing a clearance. 
 
 Initially, the Government must establish, by substantial evidence, conditions in 
the personal or professional history of the applicant that may disqualify the applicant 
from being eligible for access to classified information. The Government has the burden 
of establishing controverted facts alleged in the SOR. See Egan, 484 U.S. at 531.  
“Substantial evidence” is “more than a scintilla but less than a preponderance.”  See v. 
Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994). The guidelines 
presume a nexus or rational connection between proven conduct under any of the 
criteria listed therein and an applicant’s security suitability. See ISCR Case No. 92-1106 
at 3, 1993 WL 545051 at *3 (App. Bd. Oct. 7, 1993).   
 
 Once the Government establishes a disqualifying condition by substantial 
evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the 
facts. Directive ¶ E3.1.15. An applicant has the burden of proving a mitigating condition, 
and the burden of disproving it never shifts to the Government. See ISCR Case No. 02-
31154 at 5 (App. Bd. Sep. 22, 2005).  
 
An applicant “has the ultimate burden of demonstrating that it is clearly consistent 
with the national interest to grant or continue his security clearance.” ISCR Case No. 
01-20700 at 3 (App. Bd. Dec. 19, 2002). “[S]ecurity clearance determinations should err, 
if they must, on the side of denials.” Egan, 484 U.S. at 531; see AG ¶ 2(b).  
 
Analysis 
 
Guideline F, Financial Considerations 
 
The concern under this guideline is 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 
 
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overextended is at risk of having to engage in illegal acts to generate 
funds. 
 
 Applicant’s financial history is established by her credit reports, her admissions in 
her security clearance application, her responses to the SOR, and her testimony at the 
hearing. The evidence establishes three disqualifying conditions under this guideline: 
AG ¶ 19(a) (“inability or unwillingness to satisfy debts”); AG ¶ 19(c) (“a history of not 
meeting financial obligations”); and AG ¶ 19(e) (“consistent spending beyond one=s 
means, which may be indicated by excessive indebtedness, significant negative cash 
flow, high debt-to-income ratio, and/or other financial analysis”). 
 
 The record reflects that the delinquent debt alleged in SOR ¶ 1.n is the same 
debt as alleged in SOR ¶ 1.e; and the delinquent debt alleged in SOR ¶ 1.s is the same 
debt as alleged in SOR ¶ 1.f. When the same conduct is alleged twice in the SOR under 
the same guideline, one of the duplicative allegations should be resolved in Applicant=s 
favor. See ISCR Case No. 03-04704 (App. Bd. Sep. 21, 2005) at 3 (same debt alleged 
twice). Thus, I have resolved SOR ¶¶ 1.n and 1.s in Applicant’s favor.  
 
 Security concerns based on financial problems can be mitigated by showing that 
“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(a). This mitigating 
condition is not established, because Applicant’s delinquent debts are numerous, 
ongoing, and did not occur under circumstances making them unlikely to recur. 
 
Security concerns under this guideline also can be mitigated by showing that “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(b). Both prongs, i.e., conditions beyond the person=s 
control and responsible conduct, must be established. If Applicant suffered a loss of 
cognitive and executive functioning as a result of her injury in December 1992, it would 
be a condition beyond her control. However, the evidence does not establish that she 
currently suffers from a loss of cognitive or executive functioning that would account for 
her financial disarray. Applicant’s unemployment appears to have been a voluntary 
choice, motivated by desire to raise her children and obtain an education. Her marital 
breakups and her car accident involving a deer were circumstances beyond her control. 
However, she has not acted responsibly. She has not investigated the validity of many 
debts alleged in the SOR, and she has taken no meaningful steps to dispute or resolve 
any of the debts alleged in the SOR. In spite of her limited income, she purchased 
Christmas gifts she could not afford, contracted for modeling lessons for her daughter, 
and incurred substantial debts through catalog purchases. I conclude that this mitigating 
condition is not established. 
 
Security concerns under this guideline also can be mitigated by showing that “the 
person has received or is receiving counseling for the problem and/or there are clear 
 
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indications that the problem is being resolved or is under control.” AG ¶ 20(c). Applicant 
has not sought or received financial counseling. She is financially unsophisticated and 
would benefit from financial counseling. She is facing the likelihood of an additional 
$43,918 in additional delinquent debt when the deferment of her student loans 
terminates. Her financial situation is not under control. I conclude that AG ¶ 20(c) is not 
established.  
 
 Security concerns under this guideline also can be mitigated by showing that “the 
individual initiated a good-faith effort to repay overdue creditors or otherwise resolve 
debts.” AG ¶ 20(d). Good faith means acting in a way that shows reasonableness, 
prudence, honesty, and adherence to duty or obligation. ISCR Case No. 99-0201, 1999 
WL 1442346 at *4 (App. Bd. Oct. 12, 1999). An applicant is not required, as a matter of 
law, to establish resolution of every debt alleged in the SOR. An applicant need only 
establish a plan to resolve financial problems and take significant actions to implement 
the plan. There is no requirement that an applicant make payments on all delinquent 
debts simultaneously, nor is there a requirement that the debts alleged in the SOR be 
paid first. See ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008). Applicant does 
not have a good grasp of her financial situation and no concrete plan for financial 
stability. Thus, I conclude that AG ¶ 20(d) is not established. 
 
Security concerns under this guideline also can be mitigated by showing “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.” AG ¶ 20(e). Applicant 
disputed some the medical debts in her July 2010 security interview and at the hearing, 
but she presented no documentary proof that the debts were covered by Medicaid. She 
has not contacted the creditors, Medicaid authorities, or the credit reporting agencies to 
determine the validity of the debts. I conclude that this mitigating condition is not 
established. 
 
Whole-Person Concept 
 
 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. In applying the whole-
person concept, an 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. An 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 
 
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for the conduct; (8) the potential for pressure, coercion, exploitation, or 
duress; and (9) the likelihood of continuation or recurrence.  
 
 I have incorporated my comments under Guideline F in my whole-person 
analysis. Some of the factors in AG ¶ 2(a) were addressed under that guideline, but 
some warrant additional comment. 
 
 Applicant was very candid and sincere at the hearing, but she was not well 
prepared for the hearing and was vague and uncertain about many of her debts. The 
record raises the possibility that she suffered some loss of cognitive and executive 
functioning as a result of her injuries in 1992, but there is no medical evidence of 
treatment or evaluation after her release from the hospital in January 1993. She is 
functioning well enough to have obtained two associate’s degrees in February 2007 and 
October 2008, but she has not yet put her financial house in order.  
 
 After weighing the disqualifying and mitigating conditions under Guideline F, and 
evaluating all the evidence in the context of the whole person, I conclude Applicant has 
not mitigated the security concerns based on financial considerations. Accordingly, I 
conclude she has not carried her burden of showing that it is clearly consistent with the 
national interest to grant her eligibility for access to classified information. 
 
Formal Findings 
 
 I make the following formal findings on the allegations in the SOR: 
 
 Paragraph 1, Guideline F (Financial Considerations): AGAINST APPLICANT 
 
  Subparagraphs 1.a-1.m:    Against Applicant 
  Subparagraph 1.n:     For Applicant 
  Subparagraphs 1.op-1.r:    Against Applicant 
  Subparagraph1.s:     For Applicant 
  Subparagraphs 1.t-1.w:    Against Applicant 
 
Conclusion 
 
 I conclude that it is not clearly consistent with the national interest to grant 
Applicant eligibility for a security clearance. Eligibility for access to classified information 
is denied. 
 
 
 
 
LeRoy F. Foreman 
Administrative Judge