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                           DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
 ------------------------------ )  ISCR Case No. 10-10690 
  ) 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Pamela C. Benson, Esquire, Department Counsel 
For Applicant: Ted Pitts, Esquire 
 
 
 
______________ 
 
Decision 
______________ 
 
 
HOWE, Philip S., Administrative Judge: 
 
On May 19, 2010, Applicant submitted her Security Clearance Application (SF 
86). On April 12, 2011, the Defense Office of Hearings and Appeals (DOHA) issued 
Applicant a Statement of Reasons (SOR) detailing security concerns under Guideline F 
(Financial Considerations). 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 (AG) effective within the Department of Defense on September 
1, 2006.  
  
 Applicant acknowledged receipt of the SOR on April 25, 2011. She answered the 
SOR in writing on May 24, 2011, and requested a hearing before an administrative 
judge. DOHA received the request on May 27, 2011. Department Counsel was 
prepared to proceed on August 14, 2011. I received the case assignment on October 
24, 2011, after it was transferred from another administrative judge to whom it was 
 
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originally assigned on August 11, 2011. I added the case to several others that I was 
scheduled to hear in one state.  
 
DOHA issued a Notice of Hearing on October 27, 2011, and I convened the 
hearing as scheduled on November 15, 2011. The Government offered Exhibits 1 
through 5, which were received without objection. Applicant testified and submitted 
Exhibits A through S, without objection. DOHA received the second copy of the 
transcript of the hearing (Tr.) on January 12, 2012, after the first copy was misplaced. I 
granted Applicant’s request to keep the record open until December 1, 2011, to submit 
additional matters. On that date, she submitted Exhibits T through CC, without 
objection. Duplicate copies of certain exhibits I grouped into Exhibit DD. The record 
closed on December 1, 2011. Based upon a review of the pleadings, exhibits, and 
testimony, eligibility for access to classified information is granted. 
 
Findings of Fact 
 
 In her Answer to the SOR, Applicant admitted the factual allegations in ¶¶ 1.a, 
1.d, 1.e, and 1.k of the SOR, with explanations. She denied the factual allegations in ¶¶ 
1.b, 1.c, 1.f to 1.j of the SOR. She also provided additional information to support her 
request for eligibility for a security clearance.   
 
 Applicant is 53 years old, divorced in 1999, and has a 23-year-old daughter from 
her marriage. Her former husband died in 2006. He handled all the finances in the 
family. Applicant admits she was ignorant of money matters and mismanaged her 
income after the divorce as she tried to establish a home for herself and her young 
daughter. The divorce was a “nasty” situation, according to Applicant. Now she works 
for a defense contractor as a technical editor and speech writer. Applicant started this 
job in April 2010. She was terminated in 2009 from a newspaper where she worked 27 
years. (Tr. 19, 60, 65, 74, 78; Exhibits 1, N, O) 
 
 The SOR lists 11 delinquent debts totaling $31,911. Nine debts are resolved. 
Two debts are unknown to Applicant because her contact with the creditors does not 
show on their records that she owes them any money (Para. 1.f and 1j). These debts 
are unresolved. (Tr. 19-50; Exhibits 2-5, A to CC) 
 
 The first debt is owed to a collector for a cable television service (Para. 1.a). The 
debt is $567. Applicant paid that amount on September 19, 2011. The debt is resolved. 
(Tr. 19, 20; Exhibits 2-5, A, S, T, Z) 
 
 The second debt is a tax lien owed to her home state in the amount of $21 dating 
from 1996. Applicant does not recognize this debt (Para.1.b). She offered her 2010 
state tax return with a refund of $282 to show the $21 was paid. Applicant contends her 
refund would not have been issued if she continued to owe the $21. The debt is 
resolved. (Tr. 20, 24, 26; Exhibits 2-5, B, I, S, T, U, AA) 
 
 
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 The third debt is a $750 state tax lien dating from 1994 (Para 1.c). Applicant 
contends that this debt was also paid from her tax refunds over the past several years 
and that it is resolved. She uses her state tax return and the refund received to support 
her contention. This debt originated during her marriage. The debt is resolved with the 
copy of the tax lien release. (Tr. 24-26, 70; Exhibits 2-5, B, I, S, T, W) 
 
 The fourth debt is a tax lien for $24,632 owed to the Internal Revenue Service 
(IRS) (Para. 1.d). Applicant has an installment payment agreement with the IRS starting 
in December 2011 to pay $750 monthly to resolve the debt. The amount to be paid is 
$12,000. This debt is being resolved. (Tr. 20, 21; Exhibits 2-5, C, S, T, V, BB) 
 
 The fifth debt is a judgment owed to a former landlord of Applicant (Para. 1.e). 
The amount is $2,375. Applicant paid the creditor $1,500 to settle the debt on August 
31, 2011. Applicant paid an additional $300 requested by the creditor on September 15, 
2011. The creditor signed the letter agreement accepting the settlement on September 
29, 2011. This debt is resolved. (Tr. 21; Exhibits 2-5, D, S, T, Y) 
 
 Applicant owed a collector $72 for the sixth debt in the SOR (Para. 1.f). She does 
not remember or recognize the debt. It is not resolved. Applicant has not been able to 
find out anything about the debt from the creditor. (Tr. 21, 70; Exhibits 2-5, T) 
  
 The seventh debt is owed to a collector on a cell telephone account in the 
amount of $94 (Para. 1.g). The debt was paid in a settlement for $47.04 on September 
19, 2011. This debt is resolved. (Tr. 20, 21; Exhibits 2-5, E, S, T) 
 
 The eighth debt is owed to a collector in the amount of $773 for a medical debt 
(Para. 1.h). Applicant recognizes the debt as part of the cost of her daughter’s wisdom 
teeth extraction. Applicant paid $600 to resolve this account. She paid it on September 
19, 2011. (Tr. 46; Exhibits 2-5, G, S) 
 
 The ninth debt is owed to a collector on behalf of a bank in the amount of $757 
(Para. 1.i). The account is closed and the client of the collector was told of this action. 
Applicant obtained the letter dated September 22, 2011, from the collector informing her 
of this status. The letter states a zero balance exists on its records for this debt. The 
debt is resolved. The debt dates from 2005. (Tr. 46-48; Exhibits 2-5, G, S) 
     
 The tenth debt shows Applicant owing $191 to a creditor for a medical service 
(Para. 1.j). Applicant’s Answer stated she did not know anything about this account. The 
collector for this account informed Applicant it does not have this collection account on 
its records. It is unclear if this debt is valid, but there is no written proof it was resolved. 
She submitted a copy of an on-line dispute statement from one credit reporting agency 
showing no negative accounts on that company’s files for Applicant. She contends this 
dispute document shows this debt also is resolved. (Tr. 49; Exhibits 2-5, S, X; Answer) 
 
 The eleventh and final debt is a utility bill owed to the local power company in the 
amount of $1,679 (Subparagraph 1.k). The debt was settled for $839. Applicant mailed 
 
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a check to the collector on September 22, 2011. The collector stated he never received 
the check and Applicant repaid the debt using her credit card on October 5, 2011. 
Applicant’s credit card account report shows the debt was paid. The collection agency 
also submitted a statement showing the debt is paid in full. This debt is resolved. (Tr. 
50-52; Exhibits 2-5, H, S, CC) 
 
 Applicant submitted a monthly financial plan, two award nomination forms from 
her employer showing financial incentives given her for her quality work in October 
2011, a congratulatory letter from the commander of the government agency to which 
she is assigned by her employer, two other complimentary email messages regarding 
her work product, her 2010 income tax return, and her current pay stubs from her 
employer. Applicant has not had any financial counseling. All of her income tax forms 
are filed and her tax payments are current. Applicant does not use credit cards at the 
present time and does not have a debit card. She pays cash for any purchases. (Tr. 76, 
86; Exhibits I to R) 
 
Policies 
 
 When evaluating an applicant’s suitability for a security clearance, the 
administrative judge must consider the adjudicative guidelines (AG). In addition to brief 
introductory explanations for each guideline, the adjudicative guidelines list potentially 
disqualifying conditions and mitigating conditions, which are useful 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 (AG ¶ 2(a)). 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. Likewise, I have avoided drawing inferences 
grounded on mere speculation or conjecture. 
 
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 the applicant or proven by Department Counsel, and has the 
ultimate burden of persuasion as to obtaining a favorable clearance decision.”  
 
 
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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 the 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).   
 
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.  
 
The guideline at AG ¶ 19 contains nine disqualifying conditions that could raise 
security concerns.  Two conditions are applicable to the facts found in this case: 
 
(a) inability or unwillingness to satisfy debts; and   
 
(c) a history of not meeting financial obligations. 
 
Applicant accumulated $31,911 in delinquent debt from 2004 to the present time 
that was unpaid.  Applicant has 11 delinquent debts listed in the SOR.  
 
The guideline in AG ¶ 20 contains six conditions that could mitigate security 
concerns arising from financial difficulties. Four conditions may be applicable:   
 
(b) the conditions that resulted in the financial problem were largely 
beyond the person's control (e.g., loss of employment, a business 
 
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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; 
 
(d) the individual initiated a good-faith effort to repay overdue creditors or 
otherwise resolve debts; and 
 
(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. 
 
 Applicant was terminated from her long-time employment in 2009. She was 
divorced in 1997. These two events caused most of her financial difficulties. Applicant 
did not comprehend her continuing obligations to pay her debts, including her income 
taxes, in a regular manner. Now she does understand what she needs to do to resolve 
her debts and she has done it. Applicant acted as well as she could under the stressful 
circumstances of losing a job she had for over 25 years, being divorced after 11 years 
of marriage, and having to fend for herself and find new employment. She worked 
toward stabilizing her life and resolving her delinquent debts. AG ¶ 20 (b) applies. 
 
Applicant paid several debts in an orderly manner in 2011. She submitted her 
financial plan with the monthly budget she uses. There are clear indications from the 
evidence she presented that the financial problems are under control and being 
resolved. AG ¶ 20 (c) applies.  
 
Applicant paid nine debts and filed her tax returns. She only has $263 worth of 
debts unresolved, though she did submit a statement from one credit reporting agency 
that she has no negative accounts on their records. AG ¶ 20 (d) applies because of 
Applicant’s good-faith efforts to repay her delinquent debts.  
 
Finally, Applicant disputed two debts she could not identify. The credit reporting 
agency she contacted sent her an email that there were no negative accounts on her 
record. AG ¶ 20 (d) applies for her efforts to dispute those two debts. 
 
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 the circumstances. The administrative judge should consider the nine 
adjudicative process factors listed at AG ¶ 2(a):  
 
 
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(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.  
 
 AG ¶ 2(c) requires each case must be judged on its own merits.  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.        
 
I considered the potentially disqualifying and mitigating conditions in light of all 
the facts and circumstances surrounding this case. Applicant was divorced in 1999 and 
was ignorant of how to manage her income. Then she lost her job in 2009 and was 
unemployed until she found her current job in April 2010. She failed to file income tax 
returns for several years because of her lack of knowledge about such matters. Now 
she has corrected all those failings, paid her debts as listed in the SOR, and has only 
$263 of possibly unresolved debt. One credit reporting agency found she had no 
negative accounts on her credit record. Applicant no longer engages in spending 
practices that would create the same situation. There is no potential for pressure, 
coercion, exploitation, or duress by any one against Applicant. Her work product is 
considered high quality by her supervisors and other superiors at her work site. 
Applicant has substantially improved her financial behavior.   
 
Overall, the record evidence leaves me without questions or doubts as to 
Applicant’s eligibility and suitability for a security clearance. For all these reasons, I 
conclude Applicant mitigated the security concerns arising from her financial 
considerations. I conclude the “whole-person” concept for 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:   FOR APPLICANT 
 
 Subparagraph 1.a to 1.k:   For Applicant 
 
 
  
 
  
 
 
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Conclusion 
 
 In light of all of the circumstances presented by the record in this case, it is 
clearly consistent with the national interest to grant Applicant eligibility for a security 
clearance.  Eligibility for access to classified information is granted. 
 
 
                                                     
_________________ 
PHILIP S. HOWE 
Administrative Judge