Consisting of the transcript (Tr.), Government’s exhibits (GE) 1-5, and Applicant’s exhibits (AE) A-I. AE H and1
I were timely received post-hearing.
DOHA acted under Executive Order 10865, Safeguarding Classified Information Within Industry (February2
20, 1960), as amended; Department of Defense (DoD) Directive 5220.6, Defense Industrial Personnel Security
Clearance Review Program  (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG)
effective within the DoD on 1 September 2006. 
1
            
            
            
            
     
                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 11–02253
)
Applicant for Security Clearance )
Appearances
For Government: Philip J. Katauskas, Esquire, Department Counsel
For Applicant: Pro se
______________
Decision
______________
METZ, John Grattan, Jr., Administrative Judge:
Based on the record in this case,  Applicant’s clearance is denied.1
On 27 July 2011, the Defense Office of Hearings and Appeals (DOHA) sent
Applicant a Statement of Reasons (SOR) detailing security concerns under Guideline F,
Financial Considerations.  Applicant timely answered the SOR, requesting a hearing.2
DOHA assigned the case to me 6 October 2011, and I convened a hearing 1 November
2011. DOHA received the transcript 10 November 2011.
Because of her financial situation, Applicant’s rent is Government-subsidized. However, even in unsubsidized3
rentals, landlords may act quickly to reduce any unpaid rent to judgment, but are not equally swift to report
those judgments as paid.
2
Findings of Fact
Applicant admitted all the SOR allegations except SOR 1.b-1.e and 1.ll.  She is
the 50-year-old founder, president, and chief executive officer of an information
technology (IT) company seeking government contract work—for which she needs a
clearance. She last had an industrial clearance in 2003, when she worked for a defense
contractor.
Applicant is the never-married mother of an 18-year-old son, whose father lives
outside the U.S. and provides essentially no financial support for his son. She has been
unemployed since December 2003. She received $2,000 per month in disability
insurance payments from March 2004 through September 2011 (AE A, B). In
September 2011, she received a $28,000 lump-sum payment from the Social Security
Administration (SSA) for back disability payments. In May 2001, Applicant won her
disability case at SSA, and was rated 100% disabled effective July 2006. This ruling
makes her eligible for Medicare, which will reduce her prescription costs (AE C), and
may help her with delinquent medical bills back to January 2009 (AE H). SSA is
currently paying Applicant $500 per month. However, the disability insurer is seeking to
recoup its payments made during the time Applicant has been found to be eligible for
SSA disability payments.
The SOR alleges, and Government exhibits (GE 3, 5) substantiate, 40 delinquent
debts totaling nearly $41,000. However, SOR debt 1.mm is a duplicate of debt 1.a and
debt 1.d is a duplicate of debt 1.b, so 38 debts totaling just over $38,000 are at issue.
Accordingly, I find debts 1.a and 1.d for Applicant. Applicant’s August 2010 clearance
application (GE 1) disclosed a number of delinquent debts, which she largely confirmed
during her interview with a government investigator in June 2009 (GE 2). 
The five debts Applicant denies (SOR 1.b-e, 1.ll) are judgments obtained against
her for unpaid rent. Although the credit reports show that the judgments remain unpaid,
Applicant produced an August 2011 letter from the landlord showing that her accounts
were current (Answer), and Applicant continues to reside in the apartment.  However,3
she acknowledges sometimes not being able to pay her rent, and turning to friends or
church groups for help.
Applicant’s delinquent debts consist of two education loan accounts totaling over
$20,000 (SOR 1.aa and 1.bb), 15 medical accounts totaling nearly $7,000, seven
telephone accounts totaling nearly $1,300, two insurance accounts totaling nearly
$1,000, and state and federal income tax debt totaling over $3,300. Applicant claimed,
without corroboration, that she had a repayment plan with the Internal Revenue Service
and had been making payments. In November 2011, after the hearing, she settled four
telephone accounts (SOR 1.f, 1.I-k) totaling $330—less than what she owed. Similarly,
3
she paid two medical accounts (SOR 1.x, 1.y) totaling $53 after the hearing. She paid
$280 on a medical account in September 2011, but did not link it to any of the alleged
SOR debts.
Applicant has been the victim of a series of very unfortunate events since 2001.
In September 2001, Applicant fell at work and hurt her back. At the time, she had
medical insurance which covered most of her expenses. In October 2001, she had her
first back surgery. Her recovery was long and painful. She was able to return to work in
April 2003, but was under a lot of pain. She worked until December 2003, when the pain
became too unbearable to continue to work. She had her second back surgery in
January 2004. 
In April 2004, her father fell ill, and she traveled to see him, using borrowed
money. He died after a short illness. In November 2004, she founded her company (AE
H). However, the company currently exists only on paper. Nevertheless, there is the
prospect of Government contract work for the company if she can obtain her clearance
(AE G). She would then begin to hire employees (who themselves would have to obtain
clearances), and actually be hired by Government agencies to provide IT services. She
claims, again without corroboration, to have a funding company that will give her a
$10,000,000 line of credit for her startup costs once she has her clearance.
In 2005, Applicant was in an automobile accident that was the other driver’s fault.
While she did not require another surgery, the injury only aggravated her bad back.
Because the other driver was at fault, her medical bills were covered. In June 2007,
Applicant’s brother was beaten into a coma. Applicant borrowed money to go see him in
the hospital, and when he died in February 2008 (AE H), she borrowed money to bury
him (AE D, E).
Applicant claims (AE I) to have made arrangements with most of her creditors.
While she provided some proof of payments made and accounts paid, most of her
arrangements are uncorroborated. She would otherwise be eligible for a hardship
deferment on her education loans, but to get the deferment, she has to make minimum
monthly payments for six months to rehabilitate the loans. She cannot afford the
monthly payments. Applicant claimed that she has had financial counseling, but
provided no documentation. She did not submit a budget. Applicant provided no work or
character references.
Policies
The adjudicative guidelines (AG) list factors for evaluating a person’s suitability
for access to classified information. Administrative judges must assess disqualifying and
mitigating conditions under each issue fairly raised by the facts and situation presented.
Each decision must also reflect a fair, impartial, and commonsense consideration of the
factors listed in AG ¶ 2(a). Any one disqualifying or mitigating condition is not, by itself,
conclusive. However, specific adjudicative guidelines should be followed where a case
can be measured against them, as they represent policy guidance governing access to
See, Department of the Navy v. Egan, 484 U.S. 518 (1988).4
¶19.(a) inability or unwillingness to satisfy debts; ( c) a history of not meeting financial obligations;5
¶20 (a) the behavior happened so long ago, was so infrequent, or occurred under such circumstances that6
it is unlikely to recur . . . 
¶20.(b) the conditions that resulted in the financial problem were largely beyond the person’s control . . . and7
the individual acted responsibly under the circumstances;
4
classified information. Considering the SOR allegations and the evidence as a whole,
the relevant adjudicative guideline is Guideline F (Financial Considerations).
Security clearance decisions resolve whether it is clearly consistent with the
national interest to grant or continue an applicant’s security clearance. The Government
must prove, by substantial evidence, controverted facts alleged in the SOR. If it does,
the burden shifts to applicant to refute, extenuate, or mitigate the Government’s case.
Because no one has a right to a security clearance, the applicant bears a heavy burden
of persuasion.
Persons with access to classified information enter into a fiduciary relationship
with the Government based on trust and confidence. Therefore, the Government has a
compelling interest in ensuring each applicant possesses the requisite judgement,
reliability, and trustworthiness of those who must protect national interests as their own.
The “clearly consistent with the national interest” standard compels resolution of any
reasonable doubt about an applicant’s suitability for access in favor of the Government.4
Analysis
The Government established a case for disqualification under Guideline F, and
Applicant did not fully mitigate the security concerns. Applicant has a history of financial
difficulties going back several years.  Once the Government established the5
indebtedness, the burden shifted to Applicant to show her clearance worthiness, which
she was unable to do.
The mitigating factors for financial considerations provide little help to Applicant,
certainly not enough to fully mitigate the security concerns. Her financial difficulties are
both recent and multiple, and not apparently due to unusual circumstances not likely to
recur.  No reasonable person would conclude that the series of calamities that have6
befallen Applicant are not circumstances beyond her control, nor that she has acted
irresponsibly in addressing her debts.  While Applicant has taken little action to address7
her debts, she has had little means to do so. Nevertheless, Applicant has been under
fairly severe financial pressure for ten years.
 Applicant has overcome many personal hardships to found her company and get
it qualified for Government contracts. But granting her clearance puts the cart before the
horse. Progress on her debts relies on too many contingencies. Assuming that she gets
¶20.(c)  the person has received or is receiving counseling for the problem and there are clear indications8
that the problem is being resolved or is under control;
¶20.(d) the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.9
5
a line of credit for her startup costs, she still has to hire employees (who she then must
pay), get Government work, and get paid long enough to address her debts. Put
another way, the pendency of those contracts does nothing to show that she is gaining
control over her finances  or will be able to establish and meet payment arrangements8
for her delinquent debts.  Unless she is able to find Government work that does not9
require a clearance, it is difficult to imagine how her debts can be resolved in the
reasonably foreseeable future. I resolve Guideline F against Applicant. Assessment of
the whole-person factors yields no different result.
Formal Findings
Paragraph 1. Guideline F: AGAINST APPLICANT
Subparagraphs a-e, ll: For Applicant
Subparagraphs f–kk, mm-nn: Against Applicant
Conclusion
Under 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 denied.
                                              
                                             
JOHN GRATTAN METZ, JR
Administrative Judge