1
 
                                                             
                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 10-06440
)
Applicant for Security Clearance )
Appearances
For Government: Fahryn Hoffman, Esquire, Department Counsel
For Applicant: Charles D. Radeline, Esquire  
______________
Decision
______________
HENRY, Mary E., Administrative Judge:
Based upon a review of the pleadings, exhibits, and testimony, Applicant’s
eligibility for access to classified information is granted.
Statement of the Case
Applicant signed an Electronic Questionnaire for Investigations Processing (e-
QIP) on February 5, 2010. The Defense Office of Hearings and Appeals (DOHA) issued
Applicant a Statement of Reasons (SOR) on February 14, 2012, 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 For Determining Eligibility for Access to
Classified Information (AG) implemented on September 1, 2006. 
 
W hen  SOR allegations are controverted, the Government bears the burden of producing evidence sufficient1
to prove controverted allegations. Directive, ¶ E3.1.14. “That burden has two components. First, the
Government must establish by substantial evidence that the facts and events alleged in the SOR indeed took
place. Second, the Government must establish a nexus between the existence of the established facts and
events and a legitimate security concern.” See ISCR Case No. 07-18525 at 4 (App. Bd. Feb. 18, 2009),
(concurring and dissenting, in part) (citations omitted). The guidelines presume a nexus or rational connection
between proven conduct under any of the criteria listed therein and an applicant’s security suitability. See
ISCR Case No. 08-06605 at 3 (App. Bd. Feb. 4, 2010); ISCR Case No. 08-07290 at 2 (App. Bd. Nov. 17,
2009).
GE 1; Tr. 43-44, 57.2
2
Applicant received the SOR on February 27, 2012 which he answered on March
1, 2012. Applicant retained counsel and requested a hearing before an administrative
judge. DOHA received the request, and Department Counsel was prepared to proceed
on April 12, 2012. I received the case assignment on May 1, 2012. DOHA issued a
Notice of Hearing on May 10, 2012, and I convened the hearing as scheduled on May
31, 2012. The Government offered exhibits (GE) marked as GE 1 through GE 8, which
were received and admitted into evidence without objection. Applicant testified. He
submitted exhibits (AE) marked as AE A through AE E, which were received and
admitted into evidence without objection. DOHA received the hearing transcript (Tr.) on
June 12, 2012. I held the record open until June 19, 2012, for Applicant to submit
additional matters. Applicant timely submitted AE F - AE J, which were received and
admitted into evidence without objection. The record closed on June 19, 2012.
Findings of Fact
In his Answer to the SOR, Applicant admitted the factual allegations in ¶¶ 1.a -
1.d of the SOR. He also admitted the factual allegation in ¶ 2.a of the SOR with
explanation, including a denial of any intentional conduct. His admissions are
incorporated herein as findings of fact.  He provided additional information to support1
his request for eligibility for a security clearance. After a complete and thorough review
of the evidence of record, I make the following additional findings of fact.  
Applicant, who is 32 years old, works in communications security for a
Department of Defense (DOD) contractor. He began his employment with his employer
more than 12 years ago. Over the years, he has steadily increased his work
responsibilities and duties. Applicant has held a DOD security clearance since 2003
without any violations of security procedures.2
Applicant graduated from high school in 1998 and attends college part-time. He
recently completed his associate’s degree and is continuing work towards his bachelor’s
degree in criminal justice. Applicant married in February 2006 and divorced in 2011. He
has two sons, ages 7 and 6. He has custody of his sons. Applicant and his sons live
with his parents. His former wife provides no financial support for his sons nor does he
pay her alimony. His former wife has three other children ages, 13, 11, and 9. Although
GE 1; Tr. 39, 65.3
Applicant testified that his wife usually got fired from her jobs, which made him assume she was not a good4
worker. Tr. 40.
Tr. 54-56.5
Applicant closed this account. He no longer charges items to the account, and the creditor no longer charges6
him interest on the account. He is paying down the principle on this debt. AE A; Tr. 65.
AE H; Tr. 60-71.7
3
he has no required financial responsibility for these children, he has provided some
financial support to his former wife, when the children needed food.3
In 2000, Applicant purchased a house for $55,000. His girlfriend, at the time,
shared the expenses related to the house. When that relationship ended, his brother
moved into the house and shared the expenses. At the time he met his wife, she
worked in the cleaning services industry. After they married, he anticipated that she
would continue to provide income to the household. During their marriage, she worked
full-time for three to six months, then periodically at part-time jobs.  With five children4
and only his income to support the family, he resorted to using credit cards to pay for
food, utilities, and other necessities of life. In 2007, he refinanced his house for $80,000,
with a one-year adjustable rate mortgage. He received between $5,000 and $10,000
cash from the settlement. He is not sure how he used the money, but he thinks he paid
a credit card debt and maybe purchased a car. After the refinance, his mortgage
increased from $450 a month to $670 a month. By 2009, he could no longer pay the
mortgage and his other bills.5
Applicant’s employer increased his hourly rate from $16.55 an hour to $16.96 an
hour beginning with the April 28, 2012 pay period. Applicant’s current monthly gross
income is $2,713. After deductions for taxes, insurance, retirement, legal services,
fitness, health savings account, and two loans, Applicant receives $1,526 a month in net
pay. He received a one-time award of $500 in May 2012. Applicant pays his parents
around $250 a month towards living expenses. His other monthly expenses include
$300 for car insurance, $200 for gasoline and car maintenance, $110 on a credit card,6
and $200 for clothes and entertainment for his children. His monthly expenses total
$1,060. He directs an additional $200 a month to his savings account, which now has
an approximate balance of $800. Out of his monthly remainder of $266, he usually gives
his former wife $50 to help with food or other living expenses. He sometimes provides
some money to his brother and purchases cigarettes for himself.7
Applicant pays his taxes. For the tax year 2011, he received a tax refund
between $8,000 and $9,000. He used this money to pay his SOR debts and to purchase
an eight-year-old car. His truck was destroyed in an accident in late 2011. The credit
GE 2; GE 4; GE 6 - GE 8; Tr. 58.8
Applicant had lent his truck to his former wife. W hile his former wife was in the hospital, her sister drove his9
truck and received a moving motor vehicle violation ticket. He and his former wife were unaware of the ticket,
which he paid. AE A; Tr. 29-31.
AE A - AE C; AE I; Tr. 26-29, 50-53.10
GE 4- GE 8; AE A; AE E; AE F; Tr. 32-33; 54-56, 77.11
AE G; Tr. 70, 75. 12
4
reports of record reflect that Applicant paid many bills in a timely fashion and that he fell
behind in some bills after his marriage.8
The SOR identifies four unpaid debts. Using his tax refund, Applicant resolved
the following SOR debts: a charged-off credit card in the amount of $1,134 (¶ 1.a), a
credit card collection account in the amount of $2,058 (¶ 1.b), and a $65 parking ticket
in collections (¶ 1.d).  Applicant verified that these debts are fully paid or resolved.9 10
When his refinanced monthly mortgage payment increased after one year,
Applicant encountered difficulties paying his mortgage and his other bills. Applicant
submitted loan modification papers to the mortgage company several times in an
attempt to work out a new payment structure for his loan. The mortgage company
denied receiving his paperwork, and he stopped pursuing the loan modification request.
He eventually defaulted on the loan, which has a current unpaid balance of $80,000.
The mortgage company initiated foreclosure proceedings, which are not complete.
Claimant is now represented by legal counsel, who is attempting to resolve this debt
with the mortgage company. Applicant, through his counsel, has suggested a deed-in-
lieu or a short-sale as a way to resolve his outstanding mortgage debt. The mortgage
company has not rejected or accepted his suggestion nor has it proceeded with the
foreclosure action.11
After the hearing, Applicant completed a credit counseling course. Applicant does
not intend to open credit card accounts in the future. He plans to pay off his remaining
credit card debt as soon as possible.12
When he completed his security clearance application (e-QIP), Applicant
answered “no” to the following questions in Section 26: Financial Record:
f.  Have you defaulted on any type loan? 
n.  Are you currently over 90 days delinquent on any debt(s)?
Applicant admits his answers, but he denies any intent to hide his financial
situation from the Government. He denied being behind in his mortgage when he
completed his e-QIP. The February 18, 2010 credit report does not indicate that he had
Response to SOR; GE 1; GE 2; Tr. 33-35, 47-49.13
GE 1; AE D; Tr. 34-35.14
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defaulted on his mortgage and that the foreclosure process had started. It did reflect
that he was behind in his mortgage payments. He listed other debts, but he did not
believe a charged-off debt was a current debt that needed to be listed on his e-QIP. He
now knows that he should have answered “yes” to the second question.13
When he completed his e-QIP, Applicant answered “yes” to the following
questions in Section 26: Financial Record:
g. Have you had bills or debts turned over to a collection agency?
h. Have you had any account or credit card suspended, charged off, or
cancelled for failing to pay as agreed?
In addition to answering “yes” to these questions, Applicant listed the debts identified in
SOR ¶¶ 1.b and 1.d.14
Policies
When evaluating an applicant’s suitability for a security clearance, the
administrative judge must consider the adjudicative guidelines. In addition to brief
introductory explanations for each guideline, the adjudicative guidelines list potentially
disqualifying conditions and mitigating conditions, which are used in evaluating an
applicant’s eligibility for access to classified information.
These guidelines are not inflexible rules of law. Instead, recognizing the
complexities of human behavior, these guidelines are applied in conjunction with the
factors listed in the adjudicative process. The administrative judge’s overarching
adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶
2(c), the entire process is a conscientious scrutiny of a number of variables known as
the “whole-person concept.” The administrative judge must consider all available,
reliable information about the person, past and present, favorable and unfavorable, in
making a decision.
The protection of the national security is the paramount consideration. AG ¶ 2(b)
requires that “[a]ny doubt concerning personnel being considered for access to
classified information will be resolved in favor of national security.” In reaching this
decision, I have drawn only those conclusions that are reasonable, logical, and based
on the evidence contained in the record.
Under Directive ¶ E3.1.14, the Government must present evidence to establish
controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, an applicant is
responsible for presenting “witnesses and other evidence to rebut, explain, extenuate,
6
or mitigate facts admitted by applicant or proven by Department Counsel. . . .” An
applicant has the ultimate burden of persuasion for obtaining a favorable security
decision.
A person who seeks access to classified information enters into a fiduciary
relationship with the Government predicated upon trust and confidence. This
relationship transcends normal duty hours and endures throughout off-duty hours. The
Government reposes a high degree of trust and confidence in individuals to whom it
grants access to classified information. Decisions include, by necessity, consideration of
the possible risk an applicant may deliberately or inadvertently fail to protect or
safeguard classified information. Such decisions entail a certain degree of legally
permissible extrapolation as to potential, rather than actual, risk of compromise of
classified information.
 
Section 7 of Executive Order 10865 provides that decisions shall be “in terms of
the national interest and shall in no sense be a determination as to the loyalty of the
applicant concerned.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites
for access to classified or sensitive information).  
Analysis
Guideline F, Financial Considerations
The security concern relating to the guideline for Financial Considerations is set
out in AG & 18:      
Failure or inability to live within one=s means, satisfy debts, and meet
financial obligations may indicate poor self-control, lack of judgment, or
unwillingness to abide by rules and regulations, all of which can raise
questions about an individual=s reliability, trustworthiness and ability to
protect classified information. An individual who is financially overextended
is at risk of having to engage in illegal acts to generate funds. 
AG ¶ 19 describes the disqualifying conditions that could raise security concerns.
I have considered all the conditions, and the following are potentially applicable: 
(a) inability or unwillingness to satisfy debts; and
(c) a history of not meeting financial obligations. 
Appellant developed significant financial problems after he married and assumed
responsibility for five children. He lacked sufficient income to pay all of his living
expenses, which resulted in past-due debts and a mortgage loan foreclosure
proceeding. These two disqualifying conditions apply.
7
The Financial Considerations guideline also includes examples of conditions that
can mitigate security concerns. I have considered mitigating factors AG ¶ 20(a) through
20(f), and the following are potentially applicable:
(b) the conditions that resulted in the financial problem were largely
beyond the person=s control (e.g., loss of employment, a business
downturn, unexpected medical emergency, or a death, divorce or
separation), and the individual acted responsibly under the circumstances;
(c) the person has received or is receiving counseling for the problem
and/or there are clear indications that the problem is being resolved or is
under control; and
(d) the individual initiated a good-faith effort to repay overdue creditors or
otherwise resolve debts.
In assessing whether an Applicant has established mitigation under Guideline F,
the Appeal Board provided the following guidance in ISCR Case No. 07-06482 at 3
(App. Bd. May 21, 2008):
In evaluating Guideline F cases, the Board has previously noted that the
concept of “‘meaningful track record’ necessarily includes evidence of
actual debt reduction through payment of debts.” See, e.g., ISCR Case
No. 05-01920 at 5 (App. Bd. Mar. 1, 2007). However, an applicant is not
required, as a matter of law, to establish that he has paid off each and
every debt listed in the SOR. See, e.g., ISCR Case No. 02-25499 at 2
(App. Bd. Jun. 5, 2006). All that is required is that an applicant
demonstrate that he has “. . . established a plan to resolve his financial
problems and taken significant actions to implement that plan.” See, e.g.,
ISCR Case No. 04-09684 at 2 (App. Bd. Jul. 6, 2006). The Judge can
reasonably consider the entirety of an applicant’s financial situation and
his actions in evaluating the extent to which that applicant’s plan for the
reduction of his outstanding indebtedness is credible and realistic. See
Directive ¶ E2.2(a) (“Available, reliable information about the person, past
and present, favorable and unfavorable, should be considered in reaching
a determination.”) There is no requirement that a plan provide for
payments on all outstanding debts simultaneously. Rather, a reasonable
plan (and concomitant conduct) may provide for the payment of such
debts one at a time. See, e.g., ISCR Case No. 06-25584 at 4 (App. Bd.
Apr. 4, 2008). Likewise, there is no requirement that the first debts actually
paid in furtherance of a reasonable debt plan be the ones listed in the
SOR.
Applicant’s financial problems began when he married and assumed
responsibility for three stepchildren plus his own two children. His wife worked
sporadically, which resulted in his income being the primary, and most of the time, the
In ISCR Case No. 08-06567 at 3 (App. Bd. Oct. 29, 2009) the Appeal Board addressed a situation where15
an Applicant, who had been sporadically unemployed and lacked the ability to pay his creditors, noting that
“it will be a long time at best before he has paid” all of his creditors. The Applicant was living on unemployment
compensation at the time of his hearing. The Appeal Board explained that such a circumstance was not
necessarily a bar to having access to classified information stating:
However, the Board has previously noted that an applicant is not required to be debt-free nor
to develop a plan for paying off all debts immediately or simultaneously. All that is required
is that an applicant act responsibly given his circumstances and develop a reasonable plan
for repayment, accompanied by “concomitant conduct,” that is, actions which evidence a
serious intent to effectuate the plan. See ISCR Case No. 07-06482 at 3 (App. Bd. May 21,
2008).
ISCR Case No. 08-06567 at 3 (App. Bd. Oct. 29, 2009).  The Applicant in ISCR Case No. 08-06567 used his
limited resources to (1) resolve some of his debts; (2) had a repayment plan for the remaining debts; and (3)
took “reasonable actions to effectuate that plan.” Id. The Appeal Board remanded the Administrative Judge’s
decision because it did not “articulate a satisfactory explanation for his conclusions,” emphasizing the
Administrative Judge did “not explain[] what he believes that Applicant could or should have done under the
circumstances that he has not already done to rectify his poor financial condition, or why the approach taken
by Applicant was not “responsible” in light of his limited circumstances.” Id.  
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only household income. His income alone was insufficient to pay the daily living costs
for a large family. He refinanced his house in an effort to resolve some of his financial
problems, but this decision ultimately created more financial problems for him. He and
his wife divorced. Since their divorce, Applicant has reduced his living expenses. By
living with his parents, Applicant significantly reduced his monthly housing expenses.
His parents help with child care, which saves him a significant amount of money each
month and allows him to use his income to pay other bills. He used his tax refund to
settle and pay three SOR debts and to buy an eight-year-old car to replace his
destroyed truck. He recently took a financial counseling course. He does not live
extravagantly and lives within his monthly income. He does not intend to obtain credit
cards, as he understands the problems created by uncontrolled use of them. Finally,
Applicant retained counsel to help him resolve his mortgage foreclosure problem. Since
the bank has not finalized the foreclosure action, Applicant’s counsel has requested the
bank to accept a deed-in-lieu or to approve a short-sale of the property to settle
Applicant’s mortgage debt. The bank has not agreed or disagreed with this offer. Thus,
the foreclosure proceeding remains an active lawsuit.15
Applicant has a track record of paying many of his bills in the past. His marriage
and efforts to support five children on a limited income led to unpaid bills. Once his
divorce finalized and his personal living situation stabilized, Applicant started working on
his debts. By the time the SOR was issued, he had resolved all his SOR debts, but the
mortgage debt. Through his counsel, he is working to fully resolve this debt with the
mortgage company. He has done all he can do at this time and must now wait for the
mortgage company to decide what it will do. He has been paying monthly on one
remaining credit card debt. Applicant has mitigated the security concerns under AG ¶¶
20(b), 20(c), and 20(d). 
See ISCR Case No. 03-09483 at 4 (App. Bd. Nov.17, 2004)(explaining holding in ISCR Case No. 02-2313316
at 5 (App. Bd. Jun. 9, 2004)).
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Guideline E, Personal Conduct
AG ¶ 15 expresses the security concern pertaining to personal conduct:
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.
AG ¶ 16 describes the disqualifying conditions that could raise security concerns.
I have considered all the conditions, and the following is potentially applicable: 
(a) deliberate omission, concealment, or falsification of relevant facts from
any personnel security questionnaire, personal history statement, or
similar form used to conduct investigations, determine employment
qualifications, award benefits or status, determine security clearance
eligibility or trustworthiness, or award fiduciary responsibilities.
For AG ¶ 16(a) to apply, Applicant’s omission must be deliberate. The
Government established that Applicant omitted material facts from his February 2010 e-
QIP, when he failed to acknowledge he had debts more than 90 days delinquent. This
information is material to the evaluation of Applicant’s trustworthiness and honesty. In
his response and at the hearing, he denied that he intentionally falsified his answers on
his e-QIP and an intent to hide his debts from the Government. When the allegation of
falsification is controverted, the Government has the burden of proving it. Proof of an
omission, standing alone, does not establish or prove an applicant’s intent or state of
mind when the omission occurred. An administrative judge must consider the record
evidence as a whole to determine whether there is direct or circumstantial evidence
concerning an applicant’s intent or state of mind at the time the omission occurred.16
Applicant answered “yes” to two financial questions, then listed two SOR debts
on his e-QIP. He did not list his mortgage as defaulted because he believed he was
current on it when he completed the e-QIP. In fact, his mortgage payments were past-
due, but the mortgage company had not proceeded with foreclosure, a process which
would indicate the mortgage company had decided that Applicant was in default on his
loan. Thus, he did not intentionally falsify his answer to question 26(f). Because
Applicant listed two unpaid debts on his e-QIP, he clearly did not intend to hide his
financial problems from the Government. I find that Applicant’s omissions were not
intentional. The Government has not established that the Applicant intentionally omitted
material information from his 2010 e-QIP under AG ¶ 16(a).
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Whole-Person Concept
Under the whole-person concept, the administrative judge must evaluate an
applicant’s eligibility for a security clearance by considering the totality of an applicant’s
conduct and all relevant circumstances. The administrative judge should consider the
nine adjudicative process factors listed at AG ¶ 2(a):
(1) the nature, extent, and seriousness of the conduct; (2) the
circumstances surrounding the conduct, to include knowledgeable
participation; (3) the frequency and recency of the conduct; (4) the
individual’s age and maturity at the time of the conduct; (5) the extent to
which participation is voluntary; (6) the presence or absence of
rehabilitation and other permanent behavioral changes; (7) the motivation
for the conduct; (8) the potential for pressure, coercion, exploitation, or
duress; and (9) the likelihood of continuation or recurrence. 
Under AG ¶ 2(c), the ultimate determination of whether to grant eligibility for a
security clearance must be an overall commonsense judgment based upon careful
consideration of the guidelines and the whole-person concept. The decision to grant or
deny a security clearance requires a careful weighing of all relevant factors, both
favorable and unfavorable. In so doing, an administrative judge must review all the
evidence of record, not a single item in isolation, to determine if a security concern is
established and then whether it is mitigated. A determination of an applicant’s eligibility
for a security clearance should not be made as punishment for specific past conduct,
but on a reasonable and careful evaluation of all the evidence of record to decide if a
nexus exists between established facts and a legitimate security concern. 
In reaching a conclusion, I considered the potentially disqualifying and mitigating
conditions in light of all the facts and circumstances surrounding this case. Applicant’s
financial problems stem from his marriage and efforts to support a family of seven on a
limited income. He did not spend his money on luxury items, but on the necessities of
life such as food, transportation, and utilities. Since his marriage ended, Applicant has
managed his income and provided for his young sons by reducing his monthly
expenses. He has acted responsibly about his debts and has taken control of his
finances. His parents help with housing and child care, which has enabled him to
resolve his financial problems. With the help of his counsel, his mortgage debt will, in all
likelihood, be resolved shortly. Applicant is a responsible person, as shown by his taking
custody of his sons and still providing some money to his former wife for her children’s
needs. He continues with college, which reflects his efforts to improve himself and his
education. Most significantly, he has taken affirmative action to pay or resolve most of
the delinquent debts raising security concerns. (See AG & 2(a)(6).) Of course, the issue
is not simply whether all his debts are paid; it is whether his financial circumstances
raise concerns about his fitness to hold a security clearance. While his mortgage debt is
not yet resolved as the process takes time, this debt is insufficient to raise security
concerns. (See AG & 2(a)(1).)
11
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 his finances under
Guideline F and his personal conduct under guideline E.
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: For Applicant
Subparagraph 1.b: For Applicant
Subparagraph 1.c: For Applicant
Subparagraph 1.d: For Applicant
Paragraph 2, Guideline E: FOR APPLICANT
Subparagraph 2.a: For Applicant
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.
                                                              
MARY E. HENRY
Administrative Judge