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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 11-03429
)
Applicant for Security Clearance )
Appearances
For Government: Gregg A. Cervi, Esquire, Department Counsel
For Applicant: Pro se  
______________
Decision
______________
HENRY, Mary E., Administrative Judge:
Based upon a review of the pleadings, exhibits, and testimony, Applicant’s
eligibility for access to classified information is denied.
Statement of the Case
Applicant signed an Electronic Questionnaire for Investigations Processing (e-
QIP) version of a security clearance application (SF-86) on June 10, 2010. The Defense
Office of Hearings and Appeals (DOHA) issued Applicant a Statement of Reasons
(SOR) on July 28, 2011, detailing security concerns under Guideline F, Financial
Considerations, that provided the basis for its preliminary decision to deny him a
security clearance. The action was taken 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
For Determining Eligibility for Access to Classified Information (AG) implemented on
September 1, 2006. 
GE 1; AE A; Tr. 20.1
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Applicant received the SOR on August 11, 2011. He answered the SOR on
August 23, 2011. Applicant requested a hearing before an administrative judge. DOHA
received the request, and Department Counsel was prepared to proceed on October 26,
2011. I received the case assignment on November 1, 2011. DOHA issued a notice of
hearing on November 17, 2011, and I convened the hearing as scheduled on December
7, 2011. The Government offered exhibits marked as GE 1 through GE 7, which were
received and admitted into evidence without objection. Applicant testified. He submitted
exhibits marked as AE A through AE C, which were received and admitted into
evidence without objection. DOHA received the hearing transcript (Tr.) on December
15, 2011. I held the record open until January 6, 2012, for Applicant to submit additional
matters. Applicant timely submitted AE D through AE F, which were received and
admitted without objection. The record closed on January 6, 2012.
Procedural Rulings
Notice
Applicant received the hearing notice at or near the required 15 days under ¶
E3.1.8 of the Directive. After a discussion of his notice rights, Applicant agreed to
proceed with the hearing and affirmatively waived and notice defect. (Tr. 8) 
Findings of Fact
In his Answer to the SOR, Applicant admitted the factual allegations in the SOR.
His admissions are incorporated herein as findings of fact. After a complete and
thorough review of the evidence of record, I make the following additional findings of
fact.  
Applicant, who is 26 years old, works as a military trainer for a Department of
Defense contractor. He began his current employment in April 2010, after working as a
systems engineer for another Department of Defense contractor for two years. His
manager states that Applicant’s work ethic, behavior and interaction with military
customers and other contract instructors is above reproach. His manager describes
Applicant as a model employee and an expert in his field. Applicant’s manager does not
believe Applicant’s financial problems make him vulnerable to bribery for any
information he may have.1
Applicant graduated from high school in 2003. He enlisted in the United States
Army in February 2004. After training, he served two years overseas, where he
achieved the rank of staff sergeant (E-5). The Army honorably discharged him in
February 2008. During his military service, he received a good conduct medal, two
GE 4; Tr. 20.2
Tr. 40-47.3
GE 2; GE 5- GE 7; AE F; Tr. 20, 25-27, 39-41.4
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Army achievement awards, a national defense service medal, a Korean service medal,
and several ribbons. Applicant is engaged to marry.2
When he returned from overseas, the Army stationed Applicant at a base where
all base housing was being used for returning soldiers from Iraq or Afghanistan. As a
result, the Army required him to live off base. He rented an apartment and purchased a
used vehicle for $20,000. He also incurred other debts. While in the Army, he paid his
major expenses, but slowly started to fall behind in some bills. When he left the Army,
Applicant enrolled in college, using the G.I. bill. His $1,200 a month income under the
G.I. bill did not pay all his living expenses and school costs. He obtained a part-time
waiter job to help with his expenses, but this income was not sufficient. If he worked
more, he could not keep up with his school work. If he decreasead his school schedule,
his income under the G.I. bill declined. By the summer of 2008, he could not pay his
bills.  3
In August 2008, Applicant moved to his parents’ home in another city because he
could no longer pay his bills, including his truck payment. Over the next few months, his
parents paid two credit cards, a utility bill, and a phone bill, for a total of $4,800. They
also brought one credit card current at a cost of $113. After bringing his truck payment
current in 2008, his parents made numerous calls to the creditor for his truck with the
goal of paying his debt. After talking with a friend, who is the president of a credit union,
they offered the creditor $13,000, based on the amount of remaining debt and blue book
value of the truck. Their friend considered this a reasonable and fair offer. The creditor
refused their offer and demanded an additional $500, which they did not have. The
creditor also told them they could return the truck if they would not pay the amount
demanded. Based on the information given to them by the creditor, they returned the
truck to the creditor the next day. Applicant and his mother do not indicate that the
creditor told them there would be a balance remaining on his debt after they returned
the truck. At the end of 2008, Applicant and his parents believed that they had resolved
his debt issues based on the bills he received. His credit reports reflect several paid
delinquent bills. He did not obtain a copy of his credit report at this time. In 2009, the
creditor for his truck called him and asked for $7,000 to settle his debt. He did not have
the money, and he did not ask his parents for the money.4
In 2009, Applicant began living on his own, and in 2010, he moved to another
state. He rented an apartment in City A, where he works, for $979 a month. In July
2011, he moved to a smaller apartment, which reduced his rent to $809, plus $100 for
electricity. In September 2011, he moved to City B to live with his fiancee and now
commutes to work in a car pool, about 88 miles each way. He spends approximately
$280 a month commuting, and he will continue to pay the rent on his apartment in City
GE 3; Tr. 31-38. 5
AE E; Tr. 28-29, 49-50.6
GE 5-GE 7; AE B; AE D; Tr. 23-24.7
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A until his lease expires. Since moving to City B, he discontinued his cable and internet
service in City A ($129 a month). His current expenses total $2,329 and include $809
for rent in City A, $500 for rent in City B, $220 for utilities in both cities, $120 for cell
phone, $230 for car expenses, $250 for food, and $200 for miscellaneous items such as
haircuts or car repairs. His net monthly income is approximately $2,589. His monthly
remainder after paying his bills is $250. With this money, he paid one credit card debt
not listed in the SOR and made a partial payment on another debt listed in the SOR (¶
1.c).5
Applicant met with an attorney in his parents’ hometown in September 2011 to
discuss several of his debts. The attorney advised him that the apartment complex
identified in SOR ¶ 1.e ($1,628) was required by state law to provide him an itemized bill
explaining why all or part of his security deposit was being retained within 30 days of his
vacating the apartment. The attorney also advised Applicant about his rights for specific
information to verify his debts. Applicant advised that he is working with this attorney
concerning his problems with the apartment complex, but had not provided proof that he
has retained the attorney or instituted legal action against the apartment complex. He
has asked the apartment complex for information about the basis of his debt. As of the
hearing, he had not received a response.   6
Applicant contacted the local office of a national nonprofit about debt
consolidation in early November 2011. Based on his conversation, he started collecting
and assembling information on all his bills and debts. At the hearing, he indicated that
he had information on 80% of his SOR debts. He has been unable to determine the
actual creditor for the $35 medical debt in SOR ¶ 1.f. The credit reports do not contain
any contact information for this creditor. He met with a credit counseling representative
after the hearing. There is no indication that he hired this company nor did he provide
any information showing a developed plan of action to resolve his debts. It is unclear at
this time what he will do to resolve his debts. Applicant did contact the creditor in SOR ¶
1.c ($449) and reached an agreement to pay the creditor $112.25 a month for four
months. He authorized the creditor to withdraw the payments from his checking
account. The creditor withdrew the first payment in September 2011, but has not
withdrawn the remaining payments. Applicant has not again contacted the creditor to
resolve the payment issue.7
Applicant has not resolved the debts listed in the SOR. He pays his current
monthly expenses and lives within his current monthly income.  
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Policies
When evaluating an applicant’s suitability for a security clearance, the
administrative judge must consider the adjudicative guidelines. In addition to brief
introductory explanations for each guideline, the adjudicative guidelines list potentially
disqualifying conditions and mitigating conditions, which are used in evaluating an
applicant’s eligibility for access to classified information.
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. According to AG ¶
2(c), the entire process is a conscientious scrutiny of a number of variables known as
the “whole-person concept.” The administrative judge must consider all available,
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.
Under Directive ¶ E3.1.14, the Government must present evidence to establish
controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, an applicant is
responsible for presenting “witnesses and other evidence to rebut, explain, extenuate,
or mitigate facts admitted by applicant or proven by Department Counsel. . . .” An
applicant has the ultimate burden of persuasion for obtaining a favorable security
decision.
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 individuals to whom it
grants access to classified information. Decisions include, by necessity, consideration of
the possible risk an applicant may deliberately or inadvertently fail to protect or
safeguard classified information. Such decisions entail a certain degree of legally
permissible extrapolation as to 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).  
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Analysis
Guideline F, Financial Considerations
The security concern relating to the guideline for Financial Considerations 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 overextended
is at risk of having to engage in illegal acts to generate funds. 
AG ¶ 19 describes the disqualifying conditions that could raise security concerns.
I have considered all the conditions, and the following are potentially applicable: 
(a) inability or unwillingness to satisfy debts; and
(c) a history of not meeting financial obligations. 
Appellant developed significant financial problems after his discharge from the
military in 2008 because of bills he incurred while in the military. Most of the.debts have
not been resolved. These two disqualifying conditions apply.
The Financial Considerations guideline also includes examples of conditions that
can mitigate security concerns. I have considered mitigating factors AG ¶ 20(a) through
20(f), and the following are potentially applicable:
(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;
(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;
(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; and
(d) the individual initiated a good-faith effort to repay overdue creditors or
otherwise resolve debts.
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In assessing whether an Applicant has established mitigation under Guideline F,
the Appeal Board provided the following guidance in ISCR Case No. 07-06482 at 3
(App. Bd. May 21, 2008):
In evaluating Guideline F cases, the Board has previously noted that the
concept of “‘meaningful track record’ necessarily includes evidence of
actual debt reduction through payment of debts.” See, e.g., ISCR Case
No. 05-01920 at 5 (App. Bd. Mar. 1, 200). However, an applicant is not
required, as a matter of law, to establish that he has paid off each and
every debt listed in the SOR. See, e.g., ISCR Case No. 02-25499 at 2
(App. Bd. Jun. 5, 2006). All that is required is that an applicant
demonstrate that he has “. . . established a plan to resolve his financial
problems and taken significant actions to implement that plan.” See, e.g.,
ISCR Case No. 04-09684 at 2 (App. Bd. Jul. 6, 2006). The Judge can
reasonably consider the entirety of an applicant’s financial situation and
his actions in evaluating the extent to which that applicant’s plan for the
reduction of his outstanding indebtedness is credible and realistic. See
Directive ¶ E2.2(a) (“Available, reliable information about the person, past
and present, favorable and unfavorable, should be considered in reaching
a determination.”) There is no requirement that a plan provide for
payments on all outstanding debts simultaneously. Rather, a reasonable
plan (and concomitant conduct) may provide for the payment of such
debts one at a time. See, e.g., ISCR Case No. 06-25584 at 4 (App. Bd.
Apr. 4, 2008). Likewise, there is no requirement that the first debts actually
paid in furtherance of a reasonable debt plan be the ones listed in the
SOR.
Applicant has not shown a track record for reducing the debts listed in the SOR.
He did pay one collection debt not listed in the SOR, and the credit reports show several
additional old debts paid at some time. He has not provided a definitive plan for paying
his debts. He did contact the creditor in SOR ¶ 1.c and made arrangements to resolve
this debt. He made one payment, but did not follow up with the creditor when the
subsequent payments were not withdrawn from his checking account. He gets some
credit under AG ¶ 20(d) for contacting this one creditor. Applicant also gets credit under
AG ¶ 20(c) for seeking credit counseling in November 2011 and for meeting with a
credit counselor in December 2011. He does not get full credit because he has not
presented a plan for resolving his debt or resolved any SOR debts.
Concerning the truck debt, Applicant’s parents made a reasonable and fair offer
to pay this loan in 2008. The bank rejected their offer, demanding a small amount of
additional funds. The bank then told them they could return the truck, but did not advise
them that a significant debt would result when they returned the truck. The actions of
the bank reflect bad faith on its part and are the reason for the large debt in SOR ¶ 1.h.
Thus, Applicant is not entirely responsible for this debt because he could not control the
actions of the bank. He is only entitled to partial mitigation credit under AG ¶ 20(b)
because he has not contacted the creditor recently to resolve this debt.
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In summary, Applicant is entitled to some mitigation credit based on the actions
he has taken, but because he has not taken control of his debts, he has not mitigated
the Government’s security concerns under Guideline F. 
Whole-Person Concept
Under the whole-person concept, the administrative judge must evaluate an
applicant’s eligibility for a security clearance by considering the totality of an applicant’s
conduct and all relevant circumstances. The 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
for the conduct; (8) the potential for pressure, coercion, exploitation, or
duress; and (9) the likelihood of continuation or recurrence. 
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. The decision to grant or
deny a security clearance requires a careful weighing of all relevant factors, both
favorable and unfavorable. In so doing, an administrative judge must review all the
evidence of record, not a single item in isolation, to determine if a security concern is
established and then whether it is mitigated. A determination of an applicant’s eligibility
for a security clearance should not be made as punishment for specific past conduct,
but on a reasonable and careful evaluation of all the evidence of record to decide if a
nexus exists between established facts and a legitimate security concern. 
In reaching a conclusion, I considered the potentially disqualifying and mitigating
conditions in light of all the facts and circumstances surrounding this case. Applicant
performed his duties very well in the military, which led to quick promotions. Likewise,
his current employer praises his work skills. When his financial problems first began,
Applicant was still in the military. After he left the military and started college, he lost
control of his finances as he lacked sufficient income to pay his monthly bills. With the
assistance of his parents, several of his debts in 2008 were resolved. His parents made
a fair and reasonable offer to resolve his truck loan, which the creditor rejected. On the
advise of the creditor, they returned the truck, not realizing a significant balance would
remain on this debt.
Applicant lives within his current income and pays his current bills. He has talked
with a credit counselor and an attorney about his bills. He, however, has failed to take
definitive action on even his small debts. He is still developing a debt resolution plan,
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which should resolve his small debts within a short time. He needs to show that he has
done more on his debts.
Overall, the record evidence leaves me with questions or doubts as to Applicant’s
eligibility and suitability for a security clearance. For all these reasons, I conclude
Applicant has not mitigated the security concerns arising from his finances under
Guideline F.
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: Against Applicant
Subparagraph 1.b: Against Applicant
Subparagraph 1.c: For Applicant
Subparagraph 1.d: Against Applicant
Subparagraph 1.e: For Applicant
Subparagraph 1.f: Against Applicant
Subparagraph 1.g: Against Applicant
Subparagraph 1.h: Against Applicant
Conclusion
In light of all of the circumstances presented by the record in this case, 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.
                                                              
MARY E. HENRY
Administrative Judge