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DEPARTMENT OF DEFENSE 
DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of:    ) 
      ) 
     ) ISCR Case No. 12-00903 
     ) 
Applicant for Security Clearance  ) 
 
 
Appearances 
 
For Government: Richard Stevens, Esquire, Department Counsel 
For Applicant: Pro se 
 
 
______________ 
 
Decision 
______________ 
 
 
CREAN, Thomas M., Administrative Judge: 
 
Based on a review of the pleadings, exhibits, and testimony, eligibility for access 
to classified information is granted.  
 
Statement of the Case 
 
On August 3, 2011, Applicant submitted an Electronic Questionnaire for 
Investigations Processing (e-QIP) to obtain a security clearance required for a position 
with a defense contractor. After an investigation conducted by the Office of Personnel 
Management (OPM), the Defense Office of Hearings and Appeals (DOHA) issued an 
interrogatory to Applicant to clarify or augment potentially disqualifying information in 
her background. After reviewing the results of the background investigation and 
Applicant's response to the interrogatory, DOHA could not make the preliminary 
affirmative findings required to issue a security clearance. DOHA issued a Statement of 
Reasons (SOR), dated May 2, 2012, detailing security concerns for financial 
considerations. These actions were 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 
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(AG) effective in the Department of Defense on September 1, 2006. Applicant 
acknowledged receipt of the SOR on May 15, 2012. 
 
Applicant answered the SOR on June 1, 2012. She admitted all but 4 of the 15 
allegations under Adjudicative Guideline F. She denied the four allegations stating that 
the alleged debts were either duplicates of other debts, not her debts, or paid. 
Department Counsel was ready to proceed on June 13, 2012, and the case was 
assigned to me on June 27, 2012. DOHA issued a Notice of Hearing on June 28, 2012, 
scheduling a hearing for July 24, 2012. Applicant received the Notice of Hearing on July 
6, 2012. I convened the hearing as scheduled. The Government offered five exhibits 
that I marked and admitted into the record without objection as Government Exhibits 
(Gov. Ex.) 1 through 4. Applicant and one witness testified. Applicant offered seven 
exhibits that I marked and admitted into the record without objection as Applicant 
Exhibits (App. Ex.) A through G. I left the record open for Applicant to submit additional 
documents. Applicant timely submitted four documents, which I marked and admitted 
into the record as App. Ex. H through K. Department Counsel had no objection to the 
admission of the documents. (Gov. Ex. 6, Message, dated August 7 2012) DOHA 
received the transcript of the hearing (Tr.) on August 9, 2012. 
 
Findings of Fact 
 
After a thorough review of the pleadings, transcript, and exhibits, I make the 
following essential findings of fact.   
 
Applicant is 36 years old, and has been employed by a defense contractor since 
January 2012 as an administrative assistant for a military command. She is divorced 
and has three children living with her, ages 18, 17, and 11. Her oldest child just 
graduated from high school and will start college this year. The two older children are 
from a prior relationship. The father of those children has never provided child support. 
The youngest child is from her marriage. The father is an active duty soldier and 
provides approximately $300 a month in child support. However, he is not consistent 
with his child support payments. She served on active duty in the Army from January 
1997 until February 2008. She deployed twice from February 2003 until January 2004 to 
Iraq and from January 2005 until December 2005 to Kuwait. She first served as a 
wheeled vehicle mechanic before transferring to a signal military occupation specialty. 
She was discharged with an honorable discharge because she lacked an approved 
family care plan. After her discharge, she worked as an instructor for a defense 
contractor from March 2008 until June 2010, when the company’s contract was 
completed. She was unemployed from June 2010 until December 2010. She worked 
again as an instructor for the same contractor from December 2010 until November 
2011, when that contract was completed. She was unemployed from November 2011 
until January 2012, when the contractor placed her in her present position. (Tr. 11-13, 
26-30, 38-40; Gov. Ex. 1, e-QIP, dated August 3, 2011) 
 
Applicant’s monthly income is $1,309. She also receives $921 monthly in 
veteran’s disability payment, and $459 quarterly in GI bill educational benefits. She is 
shortly switching to the latest GI schooling benefit program which will pay her $1,000 
monthly while she is in school. At present, her total monthly income is approximately 
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$3,000, with $2,850 in monthly expenses, leaving discretionary funds of $150 per 
month. She has not included child support in her income. When Applicant was 
discharged, she received a lump sum payment of approximately $17,000. However, 
since she previously received a bonus for a reenlistment that she did not complete, she 
was required to pay back the bonus. Her first few disability payments were used to 
complete payment of the reenlistment bonus. (Tr. 43-47; Gov. Ex. 3, Personal Financial 
Statement, at 132) 
 
Credit reports (Gov. Ex. 4, dated August 16, 2011, and Gov. Ex. 5, dated April 6, 
2012), Applicant’s answer to the interrogatory (Gov. Ex. 3, dated March 29, 2012), and 
Applicant’s testimony to a security investigator, (Gov. Ex. 2, Personal Subject Interview, 
dated August 29, 2011), show the following delinquent debts for Applicant: a judgment 
on a loan for $1,783 (SOR 1.a); a charged-off loan for $4,455 (SOR 1.b); another 
charged-off loan for $9,745 (SOR 1.c); a medical debt for $5,000 (SOR 1.d); a charged–
off credit card debt for $2,196 (SOR 1.e); a charged-off loan for $1,363 (SOR 1.f); a 
credit card collection account for $621 (SOR 1.g); a medical account in collection for 
$2,039 (SOR 1.h); a medical account in collection for $346 (SOR 1.i); a credit card 
account in collection for $1,931 (SOR 1.j); a loan in collection for $211 (SOR 1.k); a 
book club debt in collection for $87 (SOR 1.l); a credit card debt charged-off for $2,102 
(SOR 1.m); a credit card account in collection for $300 (SOR 1.n); and a medical 
account in collection for $826 (SOR 1.o). The total debt listed in the SOR is 
approximately $33,000. However, some debts are duplicates and the actual debt is 
lower. (Tr. 9-10) Applicant has paid other debts not listed in the SOR. The SOR debts 
are the debts she is still working to pay. (Tr. 23-25; See App. Ex. H, Bank letter, dated 
August 6, 2012)  
 
Applicant’s financial problems were caused by being a single mother, caring for 
three children without child support, caring for her sister’s three children without support, 
and caring for her parents. She had debts from her marriage that her husband did not 
help her pay. In 2007, while on active duty, Applicant agreed to care for three of her 
sister’s children as well as her mother and father. She had nine people in the household 
that she was supporting. In August 2007, her 13-year-old nephew burned himself with 
scalding water. He had to be treated at the emergency room. Applicant had a Power of 
Attorney to treat her nephew, but his medical care was to be paid by Alabama Medicaid. 
Even though the hospital sent the medical bills to Alabama, the bills have not been paid, 
and the hospital submitted bills to Applicant as the adult admitting the child for the care. 
Applicant and the hospital have continued to seek payment from the Alabama Medicaid 
plan. These bills are listed as delinquent debts at SOR 1.d, 1.h, and 1.o. (Tr. 23-40) 
 
The delinquent debt at SOR 1.a is also duplicated at SOR 1.j. This debt was for a 
revolving loan started in 2002 that Applicant and her former husband took out while on 
active duty to assist them in paying household expenses. They would pay the loan, and 
again borrow against the account. She reached a payment arrangement with the 
creditor in June 2011 and has been paying $119.35 monthly on the debt. The balance 
on the account in July 2012 was $230. She anticipated paying the debt in full in August 
2012. (Tr. 47-50; App. Ex. C, Receipt, dated May 24, 2012)  
 
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The debt at SOR 1.b is a bank loan Applicant used to attend her grandmother’s 
funeral. The creditor cancelled the debt and provided Appellant with a debt cancellation 
tax statement (Form 1099c). Applicant included the amount of the debt cancellation, as 
required, on her tax return for 2011. (Tr. 51-53, Gov. Ex. 3, Financial Documents, IRS 
Form 1099, at page. 149; App. Ex. J, tax return 2011) 
 
The loan at SOR 1.c was settled for $5,700. Applicant will start making payments 
on this settlement in August 2012 when she completes the payment on the debt at SOR 
1.a. (Tr. 53-56; Gov. Ex. 3. Financial Documents, Settlement letter, dated January 20, 
2012, at 151) 
 
The debts at SOR 1.d, 1.h. and 1.o are for Applicant’s nephew’s medical care 
when he was burned. Applicant is not responsible for the debt. It is the responsibility of 
Alabama Medicaid. Applicant was taking care of her sister’s children and had a Power 
of Attorney to request medical treatment for them. She was not responsible for the 
medical bills. (Tr. 56-57; App. Ex. F, Power of Attorney, dated August 31, 2007; App. 
Ex. I, Alabama Medicaid Eligibility, dated August 1, 2012) 
 
The debt at SOR 1.e is for a vacuum Applicant purchased when she returned 
from her last deployment. The debt is listed for $2.196, but she only paid $700 for the 
vacuum. The vacuum was from a reputable company that she purchased from the 
company’s door-to-door salesman as a used demonstrator model. When she received 
the vacuum, it did not work. She never used it and returned it to the salesman within a 
few days of purchase.  She disputes the debt to the company and the credit reporting 
agency. She has not heard from either the company or the credit reporting agency. (Tr. 
57-60) 
 
The debt at SOR 1.f is a credit card debt. Applicant received the card as a 
promotion item. It had a supposed credit balance of $300 when she received it. 
However, because of the fees charged, the available credit was only approximately 
$100. The debt is listed at $673 on the credit report. The creditor agreed to a payment 
of $50 a month on the debt. The first payment was due in early August 2012 shortly 
after the hearing. (Tr. 60-63, Gov. Ex. 3, Financial documents, Settlement offer, dated 
February 8, 2012, at 153; Gov. ex. 4, Credit Report, Debt, at Page 65) 
 
The credit card debt at SOR 1.g is also duplicated at SOR 1.n. Applicant reached 
a payment plan with the creditor in June 2012 and pays $75 monthly on the debt. The 
payments are current and the debt will be paid in February 2013. (Tr. 63-63.; App. Ex. 
D, Letter, dated June 8, 2012; App. Ex. E, Payment Schedule, dated June 1, 2012) 
 
Applicant has attempted to gain information on the 2007 medical debt at SOR 1.i. 
She thought the debt was for her daughter’s dental care that was not covered by the 
military medical system. She contacted the military medical system and the dentist that 
treated her daughter to learn of the debt. Both indicated that they have no information 
on the debt. She has not paid the debt since she does not know the reason for the debt. 
(Tr. 67-68) 
 
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The debt listed at SOR 1.k is from Applicant’s her former husband’s bank 
account. He believes the debt may be for a late charge after he closed the account. He 
is attempting to resolve the debt with the bank. It is not her debt. (Tr. 67) 
 
The debt at SOR 1.l was for a book club. Applicant opened the account before 
she deployed. She does not know if she received the books since she was deployed. 
She paid the account in full. (Tr. 67-68; App. Ex. B, Letter, dated June 1, 2012) 
 
The debt at SOR 1.m is for another revolving loan Applicant and her former 
husband used to pay living expenses in approximately 1999-2001. She and her 
husband paid some of the loan before incurring additional loans. Her husband is 
responsible for the debt but is not paying the loan. She contacted the creditor to make 
arrangements for monthly payments on the account. She and the creditor have not yet 
reached an agreement. (Tr. 68-70) 
 
Applicant’s friend and fellow worker testified that she has known Applicant since 
2009, and she sees Applicant about five days a week. They are both single parents with 
similar aged children who have the same problems and financial concerns. Applicant is 
a help to her to overcome her financial issues. They were laid off by the same defense 
contractor at the same time, but Applicant was able to find work immediately. She 
knows that Applicant is working diligently to resolve her financial issues. (Tr. 77-79) 
 
A former military supervisor wrote that he has known Applicant for over eight 
years both in the military and as a civilian contractor. Applicant is a person of good 
moral character who works hard, is dedicated, and never leaves a job unfinished. 
Applicant has integrity so he recommends that she be granted access to classified 
information. (App. Ex. G, letter, undated). A former fellow soldier wrote that she has 
known Applicant for over ten years. Applicant has always been a good leader, 
considerate of others, and dedicated to her work. She has a powerful sense of duty and 
is committed to her family. She is the one person that the writer trusts. (App. Ex. K, 
letter, dated July 18, 2012) 
 
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 must 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 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. 
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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 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. 
 
Analysis 
 
Financial Considerations 
 
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 ¶ 18) Similarly, an individual who is financially irresponsible may also be 
irresponsible, unconcerned, or careless in his or her obligations to protect classified 
information. Behaving responsibly or irresponsibly in one aspect of life provides an 
indication of how a person may behave in other aspects of life.  
 
A person’s relationship with her creditors is a private matter until evidence is 
uncovered demonstrating an inability or unwillingness to repay debts under agreed 
terms. Absent evidence of strong extenuating or mitigating circumstances, an applicant 
with a history of serious or recurring financial difficulties is in a situation of risk 
inconsistent with the holding of a security clearance. An applicant is not required to be 
debt free, but is required to manage his finances in such a way as to meet his financial 
obligations. Applicant's delinquent debts established by credit reports and Applicant’s 
admissions raise Financial Considerations Disqualifying Conditions AG ¶ 19(a) (inability 
or unwillingness to satisfy debts); and AG ¶ 19(c) (a history of not meeting financial 
obligations). The evidence indicates an inability and not an unwillingness to satisfy debt. 
Applicant incurred financial problems from being a single mother raising three children 
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with little to no child support, helping to raise her sister’s children and support her 
parents, and because some medical expenses that were covered by a state health plan 
were not paid.  
 
I considered Financial Considerations Mitigating Conditions 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) and AG ¶ 20(b) (the conditions 
that resulted in the financial problems 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). 
These mitigating conditions apply.  
 
Applicant’s debts were incurred by conditions beyond her control. She does not 
receive child support for her two oldest children. She divorced her husband but does not 
receive consistent child support from him for her youngest child. She had periods of 
unemployment that affected her ability to pay her debts. Some of the medical expenses 
and other debts are not her responsibility. She has a clear understanding of the status 
of her finances, and acted responsibly towards her debts. Applicant inquired of creditors 
about all of her debts. She reached settlements on some debts, and has paid or is 
paying at least seven of the debts. She disputed another debt, and has no information 
to initiate payment on another debt. She established that four of the debts are not her 
responsibility, but the responsibility of either her former husband or a state Medicaid 
program. She settled one debt and she will start making payments on this debt shortly. 
She received a tax form from the creditor on another debt that she included in her tax 
return. She is negotiating a settlement on a debt that is the responsibility of her former 
husband. She has plans to shortly start making payments on two debts after completing 
payment on other debts. She has sufficient income to live within her means, and pay 
delinquent debts as funds become available. She is current with her present debts, has 
not incurred additional delinquent debts, and does not use credit cards. She is current 
with her taxes. She has steady and good employment, and is not likely to incur 
additional debts. Her finances are under control. Applicant established that she acted 
responsibly towards her debts under the circumstances. 
 
I considered AG ¶ 20(d) (the individual has initiated a good-faith effort to repay 
the overdue creditors or otherwise resolve debts). For AG ¶ 20(d) to apply, there must 
be an “ability” to repay the debts, the “desire” to repay, and “evidence” of a good-faith 
effort to repay. Good faith means acting in a way that shows reasonableness, prudence, 
honesty, and adherence to duty and obligation. A systematic method of handling debts 
is needed. Applicant must establish a "meaningful track record" of debt payment. A 
"meaningful track record" of debt payment can be established by evidence of actual 
debt payments or reduction of debt through payment of debts. Applicant is not required 
to establish that she paid each and every debt listed. All that is required is that Applicant 
has an established plan to resolve her financial problems, and show she has taken 
significant actions to implement that plan. 
 
Applicant is resolving her delinquent debts. She settled, paid, or is paying seven 
of her debts. She paid the taxes on another debt that was forgiven. Her husband is 
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paying a debt that is his responsibility. Three of the debts are the responsibility of a 
state Medicaid plan. She is current with her present debts. Her effort to settle and pay 
her debts is significant and credible information to show a desire to resolve debt. Her 
payment of debts establishes a meaningful track record of debt payment. These efforts 
show a reasonable and prudent adherence to financial obligations, and establish a 
good-faith effort to resolve and pay debts.  
 
I have considered 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 
action to resolve the issue). Applicant disputes a debt on a consumer product that was 
defective. She returned the product to the salesman and notified the creditor of her 
dispute.  
 
Applicant’s past delinquent debts do not reflect adversely on her trustworthiness, 
honesty, and good judgment. Based on all of the financial information provided by 
Applicant, she has mitigated security concerns based on financial considerations. 
 
Whole-Person Analysis 
 
Under the whole-person concept, the administrative judge must evaluate an 
applicant’s security eligibility by considering the totality of the applicant’s conduct and all 
relevant circumstances. An 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 a security clearance 
must be an overall commonsense judgment based upon careful consideration of the 
guidelines and the whole-person concept.  
 
I considered the potentially disqualifying and mitigating conditions in light of all 
the facts and circumstances surrounding this case. I considered Applicant’s 11 years of 
honorable active duty Army service and her two deployments to combat theaters. I 
considered that Applicant’s financial problems were caused by circumstances beyond 
her control. Some of the debts are not her responsibility but that of her former husband 
or a state Medicaid program. She settled and paid most of her delinquent debts, and 
has a credible plan to pay the remaining debts. Applicant established a good-faith effort 
to pay or resolve her delinquent debts. Her actions to resolve her past financial 
obligations indicate that she will be concerned, responsible, and careful regarding 
classified information. Overall, the record evidence leaves me without questions and 
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doubts as to Applicant’s eligibility and suitability for a security clearance. For all these 
reasons, I conclude Applicant mitigated security concerns arising from financial 
considerations. She is granted 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 1.a – 1.o:  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. 
 
 
 
_________________ 
THOMAS M. CREAN 
Administrative Judge