1 
 
                                                              
                        DEPARTMENT OF DEFENSE    
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
) 
  ) ISCR Case No. 10-10966 
 ) 
) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Eric H. Borgstrom, Esquire, Department Counsel 
For Applicant: Pro se 
 
 
 
______________ 
 
Decision 
______________ 
 
 
MATCHINSKI, Elizabeth M., Administrative Judge: 
 
Applicant is on probation following his felony conviction for stealing two network 
cards from his then employer in January 2009. Applicant owed $25,026.75 of his 
$38,697.75 in court-ordered restitution as of June 2011. He was also behind $17,000 in his 
mortgage payments and $2,561 on other consumer credit accounts as of October 2011. 
The criminal conduct, personal conduct, and financial considerations security concerns are 
not mitigated. Clearance denied. 
  
 Statement of the Case  
 
On October 26, 2011, the Defense Office of Hearings and Appeals (DOHA) issued a 
Statement of Reasons (SOR) to Applicant, detailing the security concerns under Guideline 
J (Criminal Conduct), Guideline E (Personal Conduct), and Guideline F (Financial 
Considerations), on why it was unable to find that it is clearly consistent with the national 
interest to grant him a security clearance. DOHA took action 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 
 
 
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Review Program (January 2, 1992), as amended (Directive); and the adjudicative 
guidelines (AG) effective within the Department of Defense on September 1, 2006. 
 
Applicant answered the SOR allegations on December 3, 2011, and he requested a 
decision without a hearing. On December 31, 2011, the Government submitted a File of 
Relevant Material (FORM) consisting of 15 exhibits (Items 1-15). DOHA forwarded a copy 
of the FORM to Applicant on January 10, 2012, and instructed him to respond within 30 
days of receipt. Applicant received the FORM on January 20, 2012. He elected not to 
respond by the February 19, 2012 due date, and on April 17, 2012, the case was assigned 
to me to consider whether it is clearly consistent with the national interest to grant or 
continue a security clearance for Applicant. 
 
Findings of Fact 
 
The SOR alleged under Guideline J that Applicant was arrested in June 2009 for 
two counts of felony theft by unlawful taking—movable property and one count of receiving 
stolen property, and that he was sentenced on the felony theft charges to four years of 
probation and $38,697.75 in restitution (SOR 1.a). Also, Applicant was allegedly sentenced 
to two years of probation following his arrest in April 1995 on two counts of felony forgery, 
theft by unlawful taking or disposition; two counts of theft by receiving stolen property; bad 
checks; security execution documents by deception; and criminal conspiracy (SOR 1.b). 
Applicant was allegedly arrested in April 1992 for simple assault, criminal conspiracy, and 
recklessly endangering another person (SOR 1.c), and around June 1991 for theft by 
unlawful taking—movable property and for receiving stolen property (SOR 1.d).  
 
In addition to cross-alleging Applicant’s arrest record under Guideline E (SOR 2.a), 
DOHA separately alleged that Applicant was terminated from his employment in January 
2009 for his theft of computer network switch cards, which he had intended to sell on the 
Internet (SOR 2.b). Under Guideline F, Applicant allegedly admitted that he stole the 
computer network switch cards from his then employer due to financial pressures and 
credit card debt (SOR 3.a). Also, he allegedly owed $19,561 in past-due debt (SOR 3.b-
3.g). 
 
Applicant admitted the allegations. With respect to SOR 2.b, he indicated that his 
employment termination in January 2009 for theft of computer network switch cards led to 
the June 2009 criminal charges in SOR 1.a. As for his delinquent debts, he averred that he 
was working to resolve the medical debt in SOR 3.b; had satisfied the debt in SOR 3.c; 
was pursuing a short sale to satisfy the mortgage delinquencies in SOR 3.d and 3.e; was 
on a payment plan with the creditor in SOR 3.f, and was negotiating a settlement of the 
debt in 3.g. After considering the Government’s FORM, including Applicant’s Answer (Item 
2), I make the following findings of fact. 
 
Applicant is a 41-year-old director of broadband services for a telecommunications 
company that contracts with the DOD. He has worked with his employer since January 
2009, when he was fired from his previous job for the conduct alleged in SOR 1.a and 2.b. 
Applicant seeks his first security clearance. (Item 3.) 
 
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In September 1989, Applicant began studies for an associate’s degree, which was 
eventually conferred in May 1995. (Item 3.) The available record does not reflect the nature 
of Applicant’s employment, if any, during that time. He was arrested on July 7, 1991, and 
charged with theft by receiving stolen property and theft by unlawful taking or disposition. 
(Item 7.) Applicant quit his job as a teller without giving notice on June 24, 1991, and he 
intentionally tossed out the keys to the bank’s cash drawers instead of turning them over to 
the bank. (Item 4.) His case was transferred from municipal to county court, and on July 23, 
1991, a charge of receiving stolen property (business) was added. On September 4, 1991, 
Applicant was placed on accelerated rehabilitation. (Item 6.) 
 
On April 24, 1992, Applicant was involved in a road rage incident. After he and 
another motorist exchanged words, they had a fist fight. Applicant left the scene after he 
knocked the other motorist down. (Item 4.) On June 29, 1992, Applicant was arrested and 
charged with simple assault, criminal conspiracy, and recklessly endangering another 
person. He was found not guilty. (Items 4, 5, 8.) 
 
On April 21, 1995, Applicant went to his bank for a $10,000 cashier’s check, 
reportedly for a closing on a home later that day. The teller, a friend, gave him the check 
and also an envelope containing $7,000 cash in stolen customer deposits. Applicant claims 
he was “so wrapped up” in his house settlement that he didn’t think about what his friend 
was asking of him. Later that day, Applicant turned over the envelope to this friend at a gas 
station. Applicant asserts that his friend told him then that the money had been stolen. 
Surveillance cameras at the bank showed Applicant receiving the envelope from his friend. 
(Item 4.) On July 11, 1995, Applicant was arrested and charged in municipal court with 
forgery; theft by deception (two counts); theft by unlawful taking or disposition (two counts); 
securing executive documents by deception; bad checks; theft by receiving stolen property; 
and criminal conspiracy. On September 19, 1995, his case was transferred to county court. 
(Item 9.) On October 3, 1995, he was charged with two counts of theft by receiving stolen 
property and one count of theft by deception. The other charges remained the same. 
(Items 5, 10.) Applicant indicates that he was placed on probation for two years in an 
accelerated rehabilitation program, and then the charges were expunged from his record. 
(Item 4.) Court records indicate the charges were quashed on November 9, 1995. (Item 
10.) 
 
Applicant and his spouse married in October 1995. In August 2001, Applicant began 
working for a cable television provider as its director of quality assurance and testing. In 
May 2002, he and his spouse bought a new home, taking on a mortgage of $173,000. 
Through subsequent refinancing or loan transfers, their mortgage debt increased to 
$200,000 in September 2002, $246,400 in August 2003, and $280,000 in October 2005. In 
September 2006, Applicant and his spouse bought a new home for $495,000. (Item 4.) He 
initially financed through the builder, taking out a $396,256 individual mortgage. In October 
2006, he and his spouse opened a joint conventional mortgage loan of $401,600 with a 
bank (SOR 3.e). In March 2007, they took out a loan of $30,000, which they paid through a 
refinancing with a home equity loan of $59,450 in June 2007. Then, in December 2007, 
 
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they paid this second mortgage through a new loan of $62,142 with the same lender (SOR 
3.d). (Items 14, 15.) Their monthly mortgage payments totaled around $2,388. (Item 14.) 
 
By late 2008, Applicant was feeling the strain of his mortgages, credit card, and auto 
loan debt. He and his spouse apparently ran up between $120,000 and $130,000 in credit 
card debt on “close to two dozen” accounts. (Item 4.) A credit card account with a $2,669 
balance had been in collection since October 2008 (not alleged). He paid on a $9,774 loan 
for an all-terrain vehicle (ATV) only from April 2008 to August 2008, although he later 
settled the loan for less than its full balance after the ATV had been repossessed and the 
account placed for collection. In August 2009, the lender in SOR 3.d charged off a $4,463 
balance for a computer Applicant bought in May 2003.
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 (Items 14, 15.) 
 
 On January 12, 2009, Applicant stole two computer network switch cards from his 
employer’s laboratory with the intent of selling them on the Internet for around $3,000. 
(Items 4, 11, 12.) Fearful that he would eventually get caught, he informed his manager 
about the theft, and he was terminated from his employment for cause. In late January 
2009, Applicant received an offer of employment from his current employer. Applicant did 
not inform his new employer about his termination from the cable company, and he began 
working for the defense contractor in February 2009. (Items 3, 4.) 
 
 In late April 2009, Applicant was arrested for the theft of the switch cards. He was 
charged with two counts of theft by unlawful taking and with one count of receiving stolen 
property. (Item 11.) In June 2009, his case was transferred to county court. On November 
20, 2009, he pled guilty to two counts of theft by unlawful taking. On January 15, 2010, 
Applicant was sentenced to two consecutive two-year probation terms, and ordered to pay 
$38,697.75 in restitution, a $10 fine, and costs and fees totaling $1,102.50. The receiving 
stolen property charge was withdrawn. Applicant was required to meet with his probation 
officer in person on a monthly basis starting in February 2010. (Items 4, 12.) Applicant 
made $250 payments, and in September 2010, he paid $9,535. However, there were other 
months (May 2010, October 2010, December 2010, and February 2011) where he paid 
nothing. (Item 12.) On February 22, 2011, Applicant agreed to pay $813 per month until his 
unpaid fines, costs, and restitution of $28,425.25 were paid in full. (Item 2.) As of June 20, 
2011, Applicant owed $942.50 in costs and fees and $25,026.75 of the restitution. He was 
behind $806 in his payments to the court. (Item 12.) 
 
On June 8, 2010, Applicant completed an Electronic Questionnaire for Investigations 
Processing (e-QIP). In response to the police record inquiries, Applicant listed his felony 
conviction on two counts of theft by unlawful taking. In response to the employment record 
inquiries, Applicant disclosed that he had been fired from his last employer for “removing 
company property without prior authorization.” Applicant answered “Yes” to two of the 
financial record inquiries: 26.b, concerning any possessions or property voluntarily or 
involuntarily repossessed or foreclosed in the last seven years, and 26.h, any accounts or 
                                                 
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Applicant’s credit report shows two lines of credit with the same lender. The first, opened in March 2003 
(x2137) with a high credit of $5,988, had an outstanding charge-off balance of $4,463 as of February 2010. 
The second account (x6201), with a high credit of $4,760, was listed as a “paid charge off” account as of 
February 2010. (Item 14.) 
 
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credit cards suspended, charged off, or cancelled for failing to pay as agreed in the last 
seven years. Applicant listed a debt of $4,000 for the ATV, on which he was making 
payments on the deficiency balance, and the $5,000 computer debt (SOR 3.c). He 
indicated he was on a repayment plan for the computer debt. (Item 3.) 
 
As of June 24, 2010, Applicant was reportedly paying his mortgages as agreed. 
Applicant had brought current five credit card accounts with balances totaling $15,900, 
including the debts in SOR 1.f and 1.g. Another account was past due $188 on a $9,162 
balance (not alleged). Applicant reportedly owed collection balances of $2,668 on a 
revolving charge account (not alleged), which he apparently settled, and $4,165 for the 
computer, which he claims he was repaying. (Items 4, 15.) 
  
 Despite ongoing issues with some credit card accounts, and Applicant having to pay 
restitution, Applicant and his spouse bought new cars every few years. In March 2009, they 
traded in a car bought in 2007 for a Nissan Murano financed through a loan of $31,390, to 
be repaid at $504 per month for 72 months. They kept the Murano until January 2011, 
when they traded it in for a Pathfinder, financed through a loan of $30,210 with a different 
lender. As for their second vehicle, Applicant opened a car loan of $23,641 in November 
2009, to be repaid at $512 per month. One year later, in November 2010, he had a new 
loan of $25,666 with monthly payments of $495. As of March 2011, Applicant and his 
spouse were paying $1,119 per month for two cars ($495 per month on the November 
2010 loan and $624 on the January 2011 loan). (Items 4, 13, 14.) 
 
  On May 5, 2011, Applicant was interviewed by an authorized investigator for the 
DOD. Applicant admitted his arrest record. He had deliberately failed to turn over the keys 
to the bank when he quit in 1991, had a fist fight with the other driver in 1992, and had 
accepted the envelope from his bank teller friend in 1995, knowing that it contained cash. 
However, Applicant denied any knowing conspiracy, claiming he did not think about what 
his friend was asking him to do. After the incident, he terminated his friendship with the 
bank teller. Applicant attributed his theft of the computer network switch cards from his 
former employer in 2009 to the financial pressures of a high mortgage and extensive credit 
card debt. He admitted that while his spouse and a security manager for his employer were 
aware of his termination and arrest, neither his parents nor his present supervisor knew 
about it. Applicant denied it could be a source of blackmail, coercion, or influence. He also 
denied any intent to steal in the future. Concerning his financial matters, Applicant admitted 
that he and his spouse were living beyond their means before 2009. He satisfied the 
deficiency balance on the loan for the ATV through payments between April 2009 and late 
2010 with funds from his income tax refund and 401(K) assets. As for the computer (SOR 
1.c), Applicant explained that he purchased two computer systems, so had two lines of 
credit. When he lost his job in January 2009, he asked to be placed on a payment 
schedule. He denied either of the loans was ever delinquent. He claimed that he and his 
spouse were now living within their means and no longer spending extravagantly. Most of 
their credit card accounts were closed out. He indicated he had only two active credit card 
accounts, and his spouse had two or three retail charge cards. (Item 4.) 
 
 
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 While Applicant continued to make the car payments on terms agreed on by the 
lenders, he had fallen behind $2,000 in his second mortgage (SOR 3.d) and $15,000 in his 
first mortgage (SOR 3.e) by August 2011. The last activity on their accounts occurred in 
April 2011. As of September 2011, his credit card account in SOR 1.f was $223 past due 
on a $931 balance. (Item 13.) On October 4, 2011, the lender offered to bring his account 
current on receipt of $290 by October 25, 2011. The creditor was willing to accept $67 by 
that date, but his account would still be considered delinquent. (Item 2.) The debt in SOR 
3.g was past due $398 with a $2,938.81 balance as of October 2011. On October 11, 
2011, the creditor offered to settle his debt on receipt of a lump sum payment of $1,028.58 
within 25 days. Applicant contacted the company in December 2011 and asked for more 
favorable terms. (Item 2.) There is no evidence that he made any payments. Also, as of 
October 2011, the account for his first computer had been charged off in the amount of 
$1,774.
2
 In August 2011, a medical debt of $166 from March 2011 was placed for 
collection (SOR 3.b). A retail clothing store charge account opened in April 2008 was 
delinquent in the amount of $62 on a $768 balance (not alleged). (Item 13.) 
 
 On November 22, 2011, Applicant and his spouse agreed to sell their home for 
$355,000, which was less than the total principal balances of their first ($399,447.36) and 
second ($60,213.70) mortgages owed to the same lender. The contract to sell was 
contingent on their lienholder’s willingness to accept less than the balances to release the 
liens. (Item 2.) The available record contains no evidence that the lienholder agreed to the 
short sale. 
   
Policies 
 
The U.S. Supreme Court has recognized the substantial discretion the Executive 
Branch has in regulating access to information pertaining to national security,  emphasizing 
that “no one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 
U.S. 518, 528 (1988). 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 required to be considered 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 overall 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 
                                                 
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Applicant claimed that the debt has been paid in full. While he presented a credit record entry showing a zero 
balance, the account entry pertains to the account opened in August 2007, which was for the second 
computer. The first account, which was opened in May 2003, has not been shown to be resolved. 
 
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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 to obtain 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 
that the applicant may deliberately or inadvertently fail to 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 J, Criminal Conduct 
 
 The security concern for criminal conduct is set out in AG ¶ 30: “Criminal activity 
creates doubt about a person’s judgment, reliability, and trustworthiness. By its very nature, 
it calls into question a person’s ability or willingness to comply with laws, rules and 
regulations.” The security concerns under AG ¶ 31(a), “a single serious crime or multiple 
lesser offenses,” AG ¶ 31(c), “allegation or admission of criminal conduct, regardless of 
whether the person was formally charged, formally prosecuted or convicted,” and AG ¶ 
31(d), “individual is currently on parole or probation,” apply. Applicant is currently serving a 
four-year probation sentence for felony theft from his previous employer in January 2009. 
Available court records show Applicant was not convicted of the 1991, 1992, and 1995 
criminal charges. However, AG ¶ 31(c) applies in that he admits that he deliberately tossed 
the bank’s keys in 1991, and that he punched another motorist in 1992. As for the 1995 
charges, Applicant accepted the envelope from his bank teller friend. He asserts that he 
did not know the source of the funds. Yet, he knew the envelope contained cash, and he 
apparently agreed to meet his friend at a gas station to turn over the money. It is difficult to 
accept that he was an unwitting participant in the 1995 crime. Irrespective of whether 
culpability was established in the 1995 theft of bank customer deposits, his 2009 theft of 
the computer network switch cards from his previous employer raises such serious criminal 
conduct concerns to require of him a heavy burden in mitigation. 
 
 Applicant submits that his felony theft from his employer was isolated. AG ¶ 32(a), 
“so much time has elapsed since the criminal behavior happened, or it happened under 
 
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such unusual circumstances that it is unlikely to recur and does not cast doubt on the 
individual’s reliability, trustworthiness, or good judgment,” cannot reasonably apply in 
mitigation of his felonious conduct in light of its relative recency and his present 
probationary status. Applicant has served about half of his probation term. Moreover, he 
agreed to make minimum payments of $813 per month to the probation office until his 
fines/costs and restitution, totaling $28,425.25 as of February 22, 2011, were paid in full.  
Applicant was behind $806 in his payments as of June 20, 2011. 
 
 AG ¶ 32(b), “the person was pressured or coerced into committing the act and those 
pressures are no longer present in the person’s life,” is not pertinent because Applicant 
stole from his employer to alleviate his own financial problems. He was not pressured to 
toss the bank keys in 1991 or to engage the other motorist in a fist fight in 1992. He was 
not forced to take envelope from the bank in 1995. AG ¶ 32(c), “evidence that the person 
did not commit the offense,” applies in part in that the evidence falls short of establishing 
some of the charges filed against Applicant in the 1990s. For example, the record before 
me for review does not prove Applicant forged any documents or issued bad checks. 
 
 Applicant’s current probationary status does not preclude a finding of reform under 
AG ¶ 32(d), “there is evidence of successful rehabilitation; including but not limited to the 
passage of time without recurrence of criminal activity, remorse or restitution, job training or 
higher education, good employment record, or constructive community involvement.” That 
being said, it is a disqualifying condition that makes mitigation more difficult. The state has 
yet to release him from his sentence. While there is no evidence of recurrence since 2009, 
Applicant’s history of theft-related activity is not mitigated by overdue restitution. Applicant 
paid only $250 to the court in January 2011 and nothing in February 2011. Yet, around that 
time, he traded in a vehicle that he had owned for only two years for another car, raising 
his monthly payment by $120. Applicant’s candor about his January 2009 theft on his e-
QIP and during his interview is some evidence of reform, but it is not enough to overcome 
the criminal conduct concerns. 
 
Guideline E, Personal Conduct 
 
The security concern for personal conduct is set out in AG ¶ 15: 
 
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. 
 
 Applicant’s criminal involvement raises questionable judgment concerns under AG ¶ 
15. The Government separately alleged Applicant’s employment termination for stealing 
the computer network cards, which he planned to sell on the Internet (SOR 2.b). Neither is 
cognizable under Guideline E absent the felony conduct, which is already alleged in SOR 
2.a. Applicant’s employment termination is a consequence of his felony theft, and 
 
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Applicant’s motivation proves its intentional nature. Applicant’s criminal behavior is more 
appropriately addressed under Guideline J, and only one of the disqualifying conditions is 
directly implicated. Applicant’s concealment of his felony arrest from his parents and from 
his employer raises independent security concerns under Guideline E, AG ¶ 16(e): 
 
Personal conduct, or concealment of information about one’s conduct, that 
creates a vulnerability to exploitation, manipulation, or duress, such as (1) 
engaging in activities which, if known, may affect the person’s personal, 
professional, or community standing. 
 
 For the reasons already discussed under AG ¶ 32(d) supra, the personal conduct 
concerns raised by his criminal behavior are not mitigated under AG ¶ 17(c), “the offense is 
so minor, or so much times has passed, or the behavior is so infrequent, or it happened 
under such unique circumstances that it is unlikely to recur and does not cast doubt on the 
individual’s reliability, trustworthiness, or good judgment.” Applicant submits that the 
financial pressures that led him to steal from his employer have been alleviated in that he 
and his spouse are no longer spending extravagantly. His latest credit report shows that he 
has reduced his overall consumer credit debt substantially. Nonetheless, because he is 
behind on his mortgages and owes around $25,000 in restitution, it would be premature to 
apply AG ¶ 17(d): 
 
The individual has acknowledged the behavior and obtained counseling to 
change the behavior or taken other positive steps to alleviate the stressors, 
circumstances, or factors that caused untrustworthy, unreliable, or other 
inappropriate behavior, and such behavior is unlikely to recur. 
 
 Applicant denies vulnerability, despite his failure to inform his parents of his arrest 
and conviction, or his present supervisor of the circumstances that led to him leaving his 
previous job. As for his spouse, it would be difficult to hide his conviction from her, given 
the loss of his employment and his restitution payments. When Applicant accepted his 
present job, he did not inform the company of his theft from his previous employer. 
Applicant has since told a company security manager something about it, and he reported 
his involuntary termination from his previous job on his e-QIP. His disclosures of his felony 
conviction and employment termination on his e-QIP warrant consideration of AG ¶ 17(e), 
“the individual has taken positive steps to reduce or eliminate vulnerability to exploitation, 
manipulation, or duress.” Yet, to the extent that AG ¶ 17(e) applies, it does not fully 
mitigate the concerns about Applicant’s judgment, reliability, and trustworthiness. 
 
Guideline F, Financial Considerations 
 
The security concern 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 
 
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protect classified information. An individual who is financially overextended is 
at risk of having to engage in illegal acts to generate funds. 
 
 Guideline F notes several conditions that could raise security concerns. Applicant 
and his spouse incurred over $120,000 in credit card debt. Their financial overextension 
led him to violate his fiduciary duty to his then employer in January 2009. He stole two 
computer network switch cards valued around $38,697.75, well in excess of the $3,000 
that he planned to ask for them on the Internet. While Applicant settled several debts for 
less than their full balances, he and his spouse were behind in their mortgages around 
$17,000, and on some other consumer credit accounts (SOR 3.b, 3.f, and 3.g) as of 
October 2011. The following Guideline F concerns are established under AG ¶ 19:  
 
(a) inability or unwillingness to satisfy debts; 
 
(c) a history of not meeting financial obligations; 
 
(e) consistent spending beyond one’s means, which may be indicated by 
excessive indebtedness, significant negative cash flow, high debt-to-income 
ratio, and/or other financial analysis. 
 
  Concerning potentially mitigating conditions, Applicant has substantially reduced the 
extent of his outstanding credit card balances. While this indicates some effort on his part 
to get his spending under control, he stopped making his mortgage payments in April 2011. 
His October 2011 credit report also shows no activity on the consumer credit debts in SOR 
3.c and 3.f since May 2011. The medical debt was placed for collection in August 2011. AG 
¶ 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,” is not pertinent to such recent financial 
difficulty. 
 
 Nor are there any circumstances that would reasonably implicate AG ¶ 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.” Applicant’s financial problems are the result of poor spending decisions 
and then his own misconduct in an effort to alleviate the financial stress. 
 
 In his favor, Applicant settled several accounts that had been past due in the last 
few years. As of November 2011, he and his spouse were pursuing a short sale to address 
their delinquent mortgages. He was apparently under a payment plan with the creditor in 
SOR 1.f. These efforts implicate AG ¶ 20(d), “the individual initiated a good-faith effort to 
repay overdue creditors or otherwise resolve debts.” However, with no evidence that their 
lender has agreed to a short sale of their home, no recent payments toward the debts in 
SOR 3.c or 3.g, and a substantial amount of restitution yet to be paid, it would be 
premature to find the financial concerns to be mitigated. AG ¶ 20(c), “the person has 
 
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received or is receiving counseling for the problem and/or there are clear indications that 
the problem is being resolved or is under control,” is not established. 
 
 Applicant challenged the outstanding delinquency in SOR 3.c by providing evidence 
that a loan with the creditor had been paid after charge off. Applicant acknowledged to the 
investigator in May 2011 that he had two lines of credit with the same lender for computers. 
The debt reportedly past due in the amount of $1,774 is not on the account shown as paid, 
and he presented no other evidence that could implicate AG ¶ 20(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.” 
 
Whole-Person Concept 
 
Under the whole-person concept, the administrative judge must consider the totality 
of an applicant’s conduct and all relevant circumstances in light of the nine adjudicative 
process factors in AG ¶ 2(a).
3
 
 
Applicant has already demonstrated a willingness to engage in illegal acts to 
generate the funds needed to alleviate personal financial problems. He intends no 
recurrence, but his theft from an employer raises very serious doubts about whether he can 
be counted on to fulfill the fiduciary obligations of a security clearance. Concerns of 
financial irresponsibility also persist, despite his settlement of several past-due accounts 
before the SOR was issued. In January 2011, when he owed more than $28,000 in unpaid 
restitution, Applicant and his spouse traded in a vehicle purchased in March 2009, raising 
their monthly payment from $504 to $624. With $1,119 in monthly car payments for two 
vehicles, it is not surprising that they stopped paying their mortgages for a house that they 
evidently could not afford. Applicant has completed only half of his criminal sentence, and 
he lacks a sustained track record of timely payments on his financial obligations. It is not 
clearly consistent with the national interest to grant him 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 J:  AGAINST APPLICANT 
 
                                                 
3 
The factors under AG ¶ 2(a) are as follows: 
 
(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. 
 
 12 
Subparagraph 1.a:  Against Applicant 
Subparagraph 1.b:  Against Applicant 
Subparagraph 1.c:  Against Applicant 
Subparagraph 1.d:  Against Applicant 
 
 Paragraph 2, Guideline E:  AGAINST APPLICANT 
 
  Subparagraph 2.a:  Against Applicant 
  Subparagraph 2.b:  For Applicant
4
 
 
 Paragraph 3, Guideline F:  AGAINST APPLICANT 
 
  Subparagraph 3.a:  Against Applicant 
  Subparagraph 3.b:  Against Applicant 
  Subparagraph 3.c:  Against Applicant 
  Subparagraph 3.d:  Against Applicant 
  Subparagraph 3.e:  Against Applicant 
  Subparagraph 3.f:  For Applicant 
  Subparagraph 3.g:  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. 
 
 
________________________ 
Elizabeth M. Matchinski 
Administrative Judge 
                                                 
4
The allegation is found for Applicant because the conduct of concern is already covered under SOR 2.a.