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                           DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
In the matter of: ) 
 ) 
 XXXXXXXXXX, XXXXX )  ISCR Case No. 11-01467 
  ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Ray T. Blank, Esq., Department Counsel 
For Applicant: Pro se 
 
 
______________ 
 
Decision 
______________ 
 
 
TUIDER, Robert J., Administrative Judge: 
 
Applicant has mitigated security concerns under Guideline F (financial 
considerations). Clearance is granted. 
 
Statement of the Case 
 
On June 17, 2010, Applicant submitted an Electronic Questionnaire for 
Investigations Processing (e-QIP). On July 7, 2011, the Defense Office of Hearings and 
Appeals (DOHA) issued 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 for SORs 
issued after September 1, 2006.  
 
 Applicant answered the SOR on August 8, 2011, and DOHA received his answer 
on August 11, 2011. Department Counsel was prepared to proceed on September 28, 
2011. The case was assigned to me on October 14, 2011. DOHA issued a notice of 
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hearing on October 17, 2011, scheduling the hearing for November 2, 2011. The 
hearing was held as scheduled. 
 
At the hearing, the Government offered Government Exhibits (GE) 1 through 5, 
which were received into evidence without objection. Applicant testified and offered 
Applicant Exhibits (AE) A through F, which were received into evidence without 
objection.  
 
I held the record open until November 18, 2011, to afford the Applicant the 
opportunity to submit additional documents. Applicant submitted AE G through I, which 
were received into evidence without objection. DOHA received the hearing transcript 
(Tr.) on November 14, 2011. The record closed on November 18, 2011. 
 
Findings of Fact 
 
 Applicant admitted SOR ¶¶ 1c, 1e, 1i, 1k, and 1l, and denied the remaining 
allegations. His admissions are incorporated as findings of  fact. After a thorough review 
of the evidence, I make the following additional findings of fact. 
 
Background Information 
 
 Applicant is a 33-year-old network engineer, who had been employed by a 
defense contractor from May 2010 to October 2011. He is a first-time applicant for a 
security clearance and seeks a security clearance as a condition of his employment. 
Applicant’s employment contract was terminated on October 1, 2011, because he was 
unable to successfully vet for a security clearance in the time required. However, his 
employer indicated they would rehire him if he successfully vets for a security 
clearance. Applicant was unemployed at the time of his hearing. (GE 1, Tr. 11, 13, 15-
17.) 
 
 Applicant was awarded his GED in October 1997. He later attended a community 
college and earned 22 college credits. He has also taken “several” computer 
certification courses. (GE 1, Tr. 13-15.) Applicant has been married three times. His first 
marriage was from October 1996 to August 2002 (W1). His second marriage was from 
December 2005 to April 2009 (W2). Both of those marriages ended by divorce. He 
married his third and current wife in October 2009 (W3). Applicant has three minor 
children – two sons ages 14 and 10, who live with W1, and a third son age 7, who lives 
with W2. He is paying W1 $740 in monthly child support, and is paying W2 $540 in 
monthly child support. Even though Applicant is unemployed, he has not sought to 
reduce and has remained current on his child support payments with his savings and 
his wife’s income. (GE 1, Tr. 17-23, 53.) 
 
 Applicant’s current wife works full-time as an academic supervisor earning 
$32,000 annually. At the time Applicant’s contract was terminated, he was earning 
$65,000 annually. (Tr. 22-23.) 
 
 
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Financial Considerations 
 
The Government’s Exhibits included Applicant’s June 2010 e-QIP, his two sets of 
April 2010 DOHA Interrogatories; as well as his August 2010 and February 2011 credit 
reports. Applicant’s SOR alleges 13 debts totalling $50,460. The value of the debts that 
he admitted totals $13,932 and the debts he denied totals $36,528. (Tr. 9.) 
 
At the onset of the hearing, Department Counsel stated that three debts had 
been satisfied – SOR ¶¶ 1d (medical co-pay debt for $363), 1f (medical co-pay debt for 
$1,016), and 1h (telephone company collection account for $721). (Tr. 9-10, 27, 30-31, 
36, AE B – AE D.) The debts in SOR ¶¶ 1h and 1g were consolidated at the time 
Applicant paid SOR ¶ 1h. (Tr. 31-32, 57-60, GE 2, GE 3.) 
 
Applicant attributes his financial problems to: (1) his two previous divorces, 
especially his divorce from W2; (2) his current wife (W3) being unemployed for “eight to 
ten” months in 2010; and (3) him being unemployed since October 2011. The majority 
of the debts alleged in the SOR arose during his marriage to W2. (Tr. 24-27, GE 2.) 
 
The following is a summary of Applicant’s remaining SOR debts and their status: 
 
SOR ¶ 1a is telephone company collection account for $356. This account was 
paid in full on June 24, 2011. Applicant asserts that the debt in SOR ¶ 1b (charged-off 
account for $300) is a duplicate of the debt in SOR ¶ 1a. He filed an on-line dispute to 
remove the duplicate debt in SOR ¶ 1b with the various credit bureaus at the time he 
paid this debt in full in June 2011. (Tr. 28-30, GE 2, GE 3.) 
 
The debt in SOR ¶ 1c is a medical co-pay for $500. The debt was originally $664; 
however, Applicant paid $164 in May 2010 towards that account. This debt is 
unresolved. (Tr. 32-35, 60, GE 2, GE 3, GE 4.) The debt in SOR ¶ 1e is a charged-off 
credit card debt for $519 that W2 incurred while she was married to the Applicant.  This 
debt is not resolved. (Tr. 35-36, 60-61.) 
 
The debt in SOR ¶ 1i is a charged-off credit card debt for $599. This debt was 
incurred by W2 while she was married to Applicant. Applicant contacted the creditor 
(credit union) in 2010 to make payment arrangements and was informed that the 
account was closed and no further action was required on his part. This debt is not 
resolved. (Tr. 36-37, 61-63, GE 2, GE 3.) 
 
The debt in SOR ¶ 1j was incurred following a vehicle repossession. The creditor 
claims Applicant owes a balance of $33,247. In 2007, W3 purchased a truck and 
Applicant co-signed the loan. In 2010, W3 lost her job and was unable to continue 
making payments. W3 immediately contacted the lender and was informed that since 
she was already one month late on her truck payment that she did not have the option 
of a “voluntarily” repossession. In April 2010, she received a letter from her lender 
advising that her truck was sold at auction for $16,550 and that amount was subtracted 
from the original purchase price of $33,000. At the time the truck was “repossessed,” 
she owed a loan balance of $16,696. W3 has contested the $33,000 amount claiming 
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that the lender did not give her credit for her years of timely payments. W3 contacted 
the lender and has filed disputes with the credit bureaus. Results are pending. 
Furthermore, W3 has contacted the lender and made good-faith attempts to set up an 
affordable payment plan. This debt is not resolved. (Tr. 37-42, 63-64, GE 2, GE 3, AE 
E.) 
 
The debt in SOR ¶ 1k is a charged-off account for $1,830. This debt originated 
when W2 purchased a vacuum cleaner in Applicant’s name. W2 has the vacuum 
cleaner and Applicant has the debt. Applicant attempted to settle with this creditor; 
however, the amount the creditor required was more than Applicant is able to pay. 
Applicant is continuing his efforts to settle this account. This debt is not resolved. (Tr. 
42-47, GE 2, GE 3. 
 
The debt in SOR ¶ 1l is a judgment for $10,484 against Applicant. After divorcing 
W2, Applicant purchased a motorcycle from Party A and shortly thereafter recognized 
making such a purchase was not prudent. With Party A’s permission, he sold the 
motorcycle to Party B. Before transfer of title occurred or before Applicant or Party B 
paid Party A, the motorcycle was stolen from Party B. Party A wished to be paid for his 
motorcycle and successfully sued Applicant for the value of the motorcycle in 2005. 
Applicant intends to repay Party A; however, at the present time he does not have the 
funds to do so while he has been attempting to settle his other debts. Applicant was 
unaware of this judgment until it was brought to his attention during his security 
clearance background investigation.  This debt is not resolved. (Tr. 47-51, 54-57, GE 2, 
GE 3.) 
 
The debt in SOR ¶ 1m is a collection account for $413 and is not resolved. (Tr. 
50-51, GE 2, GE 3.) 
 
In conclusion, Applicant has paid or resolved 6 of the 13 debts alleged, has made 
a partial payment on one of the debts, and is contesting the amount of his largest debt, 
the truck repossession. He has also contacted several creditors and attempted to 
negotiate a settlement. Applicant leads a modest lifestyle and lives within his means. He 
and his current wife live in his mother’s house and pay her rent. As noted, Applicant 
remains current on his child support payments and views this obligation “to make sure 
[his] kids are taken care of” as a priority. (Tr. 66-68.) Applicant testified that he and his 
wife have adopted the “Ramsey strategy” of paying down their small debts first and 
working up to the larger ones. (Tr. 70-71.) 
 
Post-hearing, Applicant submitted evidence of having sought financial 
counseling. He provided a comprehensive plan, which included a financial summary, an 
action plan that included counselor comments, an analysis with objectives, 
recommendations, setting goals, priority spending plan, and how to take charge of his 
debt. His plan broke down his income and expenses, his financial future, and how to 
protect his credit. Applicant’s financial counselor prepared two separates budgets – one 
reflecting his being unemployed and the second reflecting his being employed. His 
budget contains a strategy to repay his creditors. Additionally, Applicant’s financial 
counselor referred him to an attorney to resolve the judgment in SOR ¶ 1l. (AE G – I.) 
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Character Evidence 
 
Applicant submitted his most recent employee evaluation covering May 2010 to 
May 2011. His evaluation reflects: (1) that he is an above average performer; (2) that he 
is a valued employee; (3) that he is making a contribution to the defense industry; and 
(4) that he has excellent potential for future service. (AE F.) 
 
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 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, the applicant is 
responsible for presenting “witnesses and other evidence to rebut, explain, extenuate, 
or mitigate facts admitted by applicant or proven by Department Counsel. . . .” The 
applicant has the ultimate burden of persuasion in seeking 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 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. 
  
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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 
 
AG ¶ 18 articulates the security concern relating to financial problems: 
 
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 provides two financial considerations disqualifying conditions that could 
raise a security concern and may be disqualifying in this case, “(a) inability or 
unwillingness to satisfy debts,” and “(c) a history of not meeting financial obligations.” 
Applicant’s history of delinquent debt is established by his admissions and the evidence 
presented. The Government established the disqualifying conditions in AG ¶¶ 19(a) and 
19(c).   
 
  Five financial considerations mitigating conditions under AG ¶¶ 20 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; 
 
(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 
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documented proof to substantiate the basis of the dispute or provides 
evidence of actions to resolve the issue. 
 
Applicant’s conduct does not warrant full application of AG ¶ 20(a) because there 
is more than one delinquent debt and his financial problems are not isolated. His debt is 
a “continuing course of conduct” under the Appeal Board’s jurisprudence. See ISCR 
Case No. 07-11814 at 3 (App. Bd. Aug. 29, 2008) (citing ISCR Case No. 01-03695 
(App. Bd. Oct. 16, 2002)). Nevertheless, he receives partial credit under AG ¶ 20(a) 
because the debt occurred under circumstances that are unlikely to recur and does not 
cast doubt on his current reliability, trustworthiness, or good judgment. 
 
Applicant merits full credit under AG ¶ 20(b) because his two divorces and wife’s 
unemployment as well as his recent unemployment were circumstances beyond his 
control and he acted responsibly under the circumstances. Even though he did not have 
the funds to remain current on all of his debts, he remained in contact with the majority 
of his creditors during this timeframe and has taken reasonable steps to resolve his 
debts.1
 
  
Additionally, Applicant receives credit under AG ¶ 20(c). Although he sought 
financial counseling post-hearing, it is clear from the comprehensive plan he submitted 
that he is on a clear path to resolve his financial situation. His financial plan has factored 
in two scenarios – one where he is employed and the other where he is unemployed. 
He has, however, produced evidence that reflects he is living within his means and is 
doing everything within his ability to regain financial responsibility.  Furthermore, there is 
sufficient information to establish partial if not full mitigation under AG ¶ 20(d).2
                                                          
1“Even if Applicant’s financial difficulties initially arose, in whole or in part, due to circumstances 
outside his [or her] control, the Judge could still consider whether Applicant has since acted in a 
reasonable manner when dealing with those financial difficulties.” ISCR Case No. 05-11366 at 4 n.9 (App. 
Bd. Jan. 12, 2007) (citing ISCR Case No. 99-0462 at 4 (App. Bd. May 25, 2000); ISCR Case No. 99-0012 
at 4 (App. Bd. Dec. 1, 1999); ISCR Case No. 03-13096 at 4 (App. Bd. Nov. 29, 2005)). A component is 
whether he maintained contact with his creditors and attempted to negotiate partial payments to keep his 
debts current. 
 
Applicant remained in contact with the majority of his creditors and was able to 
successfully settle several debts and made a partial payment on one debt. Several 
creditors required more than Applicant was able to pay. With regard to the largest debt, 
 
2The Appeal Board has previously explained what constitutes a “good-faith” effort to repay 
overdue creditors or otherwise resolve debts: 
 
In order to qualify for application of [the “good-faith” mitigating condition], an applicant 
must present evidence showing either a good-faith effort to repay overdue creditors or 
some other good-faith action aimed at resolving the applicant’s debts. The Directive does 
not define the term ‘good-faith.’ However, the Board has indicated that the concept of 
good-faith ‘requires a showing that a person acts in a way that shows reasonableness, 
prudence, honesty, and adherence to duty or obligation.’ Accordingly, an applicant must 
do more than merely show that he or she relied on a legally available option (such as 
bankruptcy) in order to claim the benefit of [the “good-faith” mitigating condition].  
 
(internal citation and footnote omitted) ISCR Case No. 02-30304 at 3 (App. Bd. Apr. 20, 2004) (quoting 
ISCR Case No. 99-9020 at 5-6 (App. Bd. June 4, 2001)). 
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which is the truck repossession, Applicant’s wife has diligently attempted to correct the 
amount reflected on their credit report and address the balance owed. Given his 
financial situation, Applicant has done all that can reasonably be expected of him. AG ¶ 
20(e) is applicable with regard to those debts that Applicant established were duplicates 
or consolidated. 
 
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 the applicant’s 
conduct and all the 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.  
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. AG ¶ 2(c). The discussion in the Analysis section under 
Guideline F is incorporated in this whole-person section. However, further comments are 
warranted. 
Applicant’s service as a defense contractor employee and employment record 
weigh in his favor. He is a law-abiding citizen and a productive member of society. He is 
current on his day-to-day expenses, lives within his means, and his SOR debts have 
been addressed to the best of his ability given his circumstances. The Appeal Board 
has addressed a key element in the whole-person analysis in financial cases stating: 
 
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.” 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. 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.” 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 
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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. 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. ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008) 
(internal citations omitted). 
 
Of note, Applicant remains current on his day-to-day expenses and has also 
remained current on his child support obligations. He could easily have sought to 
reduce his child support payments due to a change of circumstances, i.e. him being 
unemployed. However, Applicant and his wife continue to work through this problem by 
using his savings and her current salary to ensure his children’s needs are met. 
Applicant’s financial situation is not where he would like it to be, but he has a plan in 
place and has taken significant actions to implement that plan. His past conduct 
demonstrates that he had paid his creditors when he could while attempting to balance 
his daily living expenses and the needs of his minor children. Applicant’s company fully 
supports him and recommends him for a security clearance. Due to circumstances 
beyond his control, his debts became delinquent. Despite Applicant’s recent financial 
setback, it is clear from his actions that he is on the road to a full financial recovery. 
These factors show responsibility, rehabilitation, and mitigation.  
 
Both the mitigating conditions under Guideline F and the whole-person analysis 
support a favorable decision. I specifically considered Applicant’s years of financial 
responsibility before falling into debt, his financial recovery and substantial steps he has 
taken to resolve his financial situation, his potential for future service as a defense 
contractor, the mature and responsible manner in which he dealt with his adverse 
situation, his performance evaluation, and his testimony and demeanor. After weighing 
the disqualifying and mitigating conditions, and all the facts and circumstances, in the 
context of the whole-person, I conclude he has mitigated the financial considerations 
security concerns.  
 
I take this position based on the law, as set forth in Department of Navy v. Egan, 
484 U.S. 518 (1988), my careful consideration of the whole-person factors and 
supporting evidence, my application of the pertinent factors under the adjudicative 
process, and my interpretation of my responsibilities under the adjudicative guidelines. 
Applicant has fully mitigated or overcome the government’s case. For the reasons 
stated, I conclude he is eligible for access to classified information. 
 
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 
 
Subparagraphs 1a to 1m:  For Applicant 
 
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Conclusion 
 
In light of all the circumstances presented by the record in this case, it is clearly 
consistent with the national interest to grant or continue Applicant’s eligibility for a 
security clearance. Eligibility for a security clearance is granted. 
 
 
 
____________________________ 
Robert J. Tuider 
Administrative Judge