This action was taken under Executive Order 10865, DoD Directive 5220.6, dated January 2, 1992,1
as amended (Directive), and adjudicative guidelines which became effective within the Department of Defense
for SORs issued after September 1, 2006.
                                                                                                                                                
                                                                                              
In the matter of: )
)
)       ISCR Case No. 11-00893
)
Applicant for Security Clearance )
Appearances
For Government: Gina Marine, Esq., Department Counsel
For Applicant: Pro se
                                                              
______________
Decision
______________
LAZZARO, Henry, Administrative Judge
Applicant has delinquent credit card debt, owed in the combined amount of $48,961,
on which he only recently made relatively nominal payments. His past history does not
warrant a finding that he will continue to make an effort to resolve those debts. Applicant
did not deliberately fail to disclose his delinquent debts in the security clearance application
he submitted in May 2010. Clearance is denied. 
On August 1, 2011, the Defense Office of Hearings and Appeals (DOHA) issued a
Statement of Reasons (SOR) to Applicant stating it was unable to find it is clearly
consistent with the national interest to grant or continue a security clearance for Applicant.1
The SOR alleges security concerns under Guideline F (financial considerations) and
Guideline E (personal conduct). Applicant submitted a response to the SOR that was
received by DOHA on August 16, 2011. He admitted all SOR allegations except that
alleged in subparagraph 2.a, and he requested a hearing.
DEPARTMENT OF DEFENSE
DEFENSE OFFICE OF HEARINGS AND APPEALS
 AE 1 establishes that SOR subparagraphs 1.a and 1.e are duplicate entries for the same account.2
2
The case was assigned to me on November 3, 2011. A notice of hearing was issued
on November 9, 2011, scheduling the hearing for December 6, 2011. The hearing was
conducted as scheduled. The government submitted six documents that were marked as
Government Exhibits (GE) 1-6 and admitted into the record without objection. Applicant
testified, called one witness to testify on his behalf, and submitted 15 documents that were
marked as Applicant Exhibits (AE) 1-15 and admitted into the record without objection. The
transcript was received on December 21, 2011.     
Findings of Fact
Applicant’s admissions to the SOR allegations are incorporated herein. In addition,
after a thorough review of the pleadings, testimony and exhibits, I make the following
findings of fact:
Applicant is a 51-year-old man who has been employed as a watch operator by a
defense contractor since October 2003. He has been employed part time by a second
defense contractor as a security guard since March 2009. Applicant served on active duty
in the Navy from January 1982 until September 2003. He retired honorably as a petty
officer first class. Applicant held a security clearance during most of his time in the Navy,
including having access to sensitive compartmented information (SCI). There is no
indication any adverse action was ever previously taken to revoke or downgrade his
security clearance or SCI access. 
Applicant has been married since December 1991. He has two children, ages 19
and 14, who both reside with Applicant and his wife. Applicant’s wife is currently employed
part time and earns about $710 a month. At the time of the hearing, she was in the process
of training for a full-time job at which she will earn about $10 an hour. She plans on
continuing to work the part-time job when she begins full-time employment.
Applicant submitted numerous character reference letters from people who know
him through work, church, and other social settings. Those letters establish that Applicant
has earned a reputation for being responsible, honest, reliable, trustworthy, loyal and
hardworking. He is considered by his employer to be a valued employee. 
Applicant’s credit reports disclose four delinquent credit card accounts that have
been charged off as bad debts or submitted for collection, owed in the combined amount
of $29,686.  A settlement agreement submitted on behalf of another credit card company2
discloses Applicant has entered into an agreement to repay a delinquent debt that was
owed to that company in the amount of $31,169.99, for the negotiated settlement price of
$19,675. Under the terms of that agreement, Applicant is to make $150 monthly payments
with the balance owed to accrue annual interest at the rate of 24% in the event he defaults
on any payment.   
Applicant submitted proof he has made two $50 payments toward the $13,581 debt
alleged in SOR subparagraph 1.b. He submitted proof he has made two $125 payments
3
toward the $8,781 alleged in subparagraph 1.d. He submitted proof he has made one $150
payment on the $3,716 debt alleged in subparagraph 1.e, and one $150 payment toward
the $19,675 debt alleged in subparagraph 1.f. 
Applicant claims the debt alleged in SOR subparagraph 1.c has been satisfied. In
support of that claim, he submitted a document from the creditor stating the account had
been closed. However, that document contains a different account number from the
account that is listed in Applicant’s credit reports as having been charged off as a bad debt.
Further, the document does not indicate the account has been satisfied, but rather states
that if there is a balance owed on the account he is to continue making payments on the
account until it is paid in full.
Applicant initially attributed his financial problems to his wife losing her employment
in 2009. However, she had only held that job for between nine and twelve months, and
Applicant’s accounts began falling into a delinquent status before she ever obtained that
employment. Prior to that employment, Applicant’s wife had not worked during their
marriage. 
Applicant also attributes the start of his financial problems to a miscalculation he
made in his 2006 income tax returns that resulted in him entering into a repayment
agreement with the Internal Revenue Service (IRS) in 2009. Under the repayment
agreement Applicant had to make $175 monthly payments to repay the $2,900
underpayment of his 2006 income tax. Once again, Applicant’s credit reports disclose his
financial problems began as far back as 2007, predating by at least two years the
repayment plan he entered into with the IRS.       
Applicant testified he obtained financial counseling from someone through his
church in November 2011, and that he is to continue to seek that person’s assistance in
resolving his financial problems. Applicant intends to continue making the payments to his
delinquent creditors in the same amount as he has thus far made. Additionally, as soon as
he repays a loan he obtained from his 401(k) account to pay for automobile repairs,
Applicant plans on obtaining a loan of about $11-13,000 to apply to his delinquent debts.
Under either scenario, Applicant will not be able to satisfy his delinquent creditors for at
least several years. 
Applicant only listed one collection account in the security clearance application he
submitted in May 2010. He credibly testified that he was under time constraints to submit
the application, lacked the required information to submit additional entries, and continued
receiving error messages when he tried to make entries without inputting all the required
information. Further corroborating Applicant’s assertions that he did not deliberately fail to
disclose information about his delinquent accounts is the notation by the investigator who
interviewed him in June 2010 that Applicant volunteered information about delinquent
accounts before he was confronted with known information about those accounts. 
POLICIES
The Directive sets forth adjudicative guidelines to consider when evaluating a
person’s eligibility to hold a security clearance. Chief among them are the disqualifying
 ISCR Case No. 96-0277 (July 11, 1997) at p. 2.3
 ISCR Case No. 97-0016 (December 31, 1997) at p. 3; Directive, Enclosure 3, Item E3.1.14. 4
 Department of the Navy v. Egan 484 U.S. 518, 531 (1988).5
 ISCR Case No. 01-20700 (December 19, 2002) at p. 3 (citations omitted).6
 ISCR Case No. 98-0761 (December 27, 1999) at p. 2.7
 ISCR Case No. 94-1075 (August 10, 1995) at pp. 3-4; Directive, Enclosure 3, Item E3.1.15.8
 ISCR Case No. 93-1390 (January 27, 1995) at pp. 7-8; Directive, Enclosure 3, Item E3.1.15.9
 Egan, 484 U.S. at 528, 531.10
 Id. at 531.11
 Egan, Executive Order 10865, and the Directive.12
4
conditions and mitigating conditions for each applicable guideline. Each clearance decision
must be a fair and impartial decision based upon the relevant and material facts and
circumstances, the whole person concept, and the factors listed in ¶ 6.3.1 through ¶ 6.3.6
of the Directive. Although the presence or absence of a particular condition or factor for or
against clearance is not outcome determinative, the adjudicative guidelines should be
followed whenever a case can be measured against this policy guidance. Considering the
evidence as a whole, Guideline F (financial considerations) and Guideline E (personal
conduct), with their disqualifying and mitigating conditions, are most relevant in this case.
 The sole purpose of a security clearance decision is to decide if it is clearly
consistent with the national interest to grant or continue a security clearance for an
applicant.  The Government has the burden of proving controverted facts.  The burden of3 4
proof in a security clearance case is something less than a preponderance of evidence,5
although the Government is required to present substantial evidence to meet its burden
of proof.  “Substantial evidence is more than a scintilla, but less than a preponderance of6
the evidence.”  Once the Government has met its burden, the burden shifts to an applicant7
to present evidence of refutation, extenuation, or mitigation to overcome the case against
him.  Additionally, an applicant has the ultimate burden of persuasion to obtain a favorable8
clearance decision.9
No one has a right to a security clearance  and “the clearly consistent standard10
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 access11
to classified information must be resolved in favor of protecting national security.      12
5
Analysis
Guideline F, Financial Considerations
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. . . . (AG 18)
Applicant’s credit reports and the repayment agreement he entered into with a
creditor disclose that he has accumulated delinquent credit card debt, owed in the
combined amount of $48,961, that has been charged off, submitted for collection, or that
caused him to enter into a repayment agreement in lieu of the creditor filing a law suit. That
delinquent debt dates back as far as 2007, and Applicant has only very recently begun to
make any payment toward his delinquent debt. DC 19(a): inability or unwillingness to
satisfy debts; and DC 19(c): a history of not meeting financial obligations apply.
Applicant attributed his delinquent debt to his wife’s loss of employment and an error
he made in computing his 2006 income tax returns. However, his financial problems began
before either of those events could have caused an unexpected effect on his financial
status. Accordingly, Mitigating Condition (MC) 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 does not apply.  
Applicant submitted proof he has made a few relatively small payments toward all
of his delinquent debts except one. While he claims the document he submitted for the
debt alleged in SOR subparagraph 1.c establishes that debt has been fully satisfied, the
account numbers contained in his credit reports and the contents of the document itself do
not corroborate his claim. Applicant’s financial problems are ongoing and the amount of
delinquent debt he has accumulated will not be satisfied in the foreseeable future even if
he continues to make the payments he has thus far made. Further, Applicant’s failure to
do anything to resolve his delinquent debt until very recently does not warrant a finding that
he will continue to make payments such as he has recently made. 
Accordingly, the following mitigating conditions do not apply: MC 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; and MC 20(d): the individual initiated a good-faith effort
to repay overdue creditors or otherwise resolve debts. While Applicant has recently
consulted with a financial counselor through his church there is insufficient evidence from
which to conclude that his problems are currently under control. Thus, MC 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 does not apply. The
remaining mitigating conditions have no applicability to the facts of this case. 
6
Considering the length of time Applicant’s debts have remained delinquent, his
belated effort to begin to satisfy those debts, the amount of delinquent debt that remains
outstanding, his apparent lack of the financial resources to resolve his delinquent debt in
the foreseeable future, and his explanations for the debts becoming delinquent being
events that occurred after his financial problems began, I conclude Applicant has failed to
mitigate the financial considerations security concern. 
Guideline E, Personal Conduct
Conduct involving questionable judgment, lack of candor, dishonesty, or
unwillingness to comply with rules and regulations can raise questions about an individual’s
reliability, trustworthiness, and ability to protect classified information. Of special interest
is any failure to provide truthful and candid answers during the security clearance process
or any other failure to cooperate with the security clearance process. (AG 15)
Applicant failed to disclose all his delinquent debts in the security clearance
application he submitted in May 2010. His explanation for failing to list those debts is
credible. Further, his action in volunteering information about his delinquent debts when
he was questioned in June 2010 without being confronted with known information about
the debt convincing establishes that he did not deliberately fail to disclose information
about his financial affairs. No personal conduct disqualifying condition applies.
Considering all relevant and material facts and circumstances present in this case,
including Applicant’s effort in at least beginning to resolve his delinquent debts, the
character reference letters he submitted, the whole-person concept, the factors listed in
¶ 6.3.1 through ¶6.3.6 of the Directive, and the applicable disqualifying and mitigating
conditions, I find Applicant failed to mitigate the financial considerations security concern.
He has not overcome the case against him nor satisfied his ultimate burden of persuasion.
It is not clearly consistent with the national interest to grant Applicant a security clearance.
Guideline F is decided against Applicant. 
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-f: Against Applicant
Paragraph 2, Guideline E: FOR APPLICANT
Subparagraph 2.a: For Applicant
7
Conclusion               
In light of all the circumstances presented by the record in this case, it is not clearly
consistent with the national interest to grant or continue a security clearance for Applicant.
Clearance is denied.
Henry Lazzaro
Administrative Judge