1 
 
 
                                                              
DEPARTMENT OF DEFENSE 
DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
In the matter of:    ) 
      ) 
                 ) ISCR Case No. 10-03716 
     ) 
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 June 5, 2010, Applicant submitted an Electronic Questionnaire for 
Investigations Processing (e-QIP) to retain 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 
interrogatories to Applicant to explain potentially disqualifying information in his 
background. After reviewing the results of the background investigation and Applicant's 
responses to the interrogatories, DOHA could not make the preliminary affirmative 
findings required to issue a security clearance. DOHA issued a Statement of Reasons 
(SOR), dated May 22, 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 (AG) 
effective in the Department of Defense on September 1, 2006. Applicant acknowledged 
receipt of the SOR on June 4, 2012. 
2 
 
Applicant answered the SOR on June 19, 2012. He admitted eight and denied 
four of the allegations. Department Counsel was ready to proceed on July 10, 2012. 
The case was assigned to me on July 18, 2012, and DOHA issued a Notice of Hearing 
on July 19, 2012, scheduling a hearing for August 15, 2012. I convened the hearing as 
scheduled. The Government offered six exhibits that I marked and admitted into the 
record without objection as Government Exhibits (Gov. Ex.) 1 through 6. Applicant 
testified, and submitted four documents that I marked and admitted into the record 
without objection as Applicant Exhibits (App. Ex.) A through D. I left the record open for 
Applicant to submit additional documents. Applicant timely submitted six documents, 
which I marked and admitted into the record as App. Ex. E through J. The Government 
had no objection to admission of the documents. (Gov. Ex. 7, e-Mail, dated September 
5, 2012). DOHA received the transcript of the hearing (Tr.) on September 4, 2012. 
 
Findings of Fact 
 
After a thorough review of the pleadings, transcript, and exhibits, I make the 
following essential findings of fact.   
 
Applicant is a 47-year-old electronics technician for a defense contractor. 
Applicant served on active duty in the Army from 1983 until 1987. He then served on 
active duty in the Marine Corps from January 1990 until May 2006. He retired as a 
gunnery sergeant (E-7) with an honorable discharge. During his time in the Marine 
Corps, he received five awards of the Good Conduct Medal, four awards of the Navy 
Achievement Medal, the combat action award, and four sea service deployment 
awards. His performance was rated as sustained superior performance. He deployed 
twice to Iraq while on active duty. He has been married since February 1991 and has a 
stepson and three grandchildren. (Tr. 8-20; Gov. Ex. 1, e-QIP, dated January 5, 2010)  
 
Applicant’s defense contractor supervisor states that Applicant has been an 
electronics technician for them since December 2009. He is an exemplary employee 
with the skills required of an experienced electronics technician. He is dependable, 
hard-working, and honest. He demonstrated the ability to work independently with 
minimal supervision. He is also a good team member. The supervisor has never had to 
question Applicant’s integrity or character. He recommends that Applicant retain his 
access to classified information. (App. Ex. A, Letter, dated August 2, 2012) 
 
Credit reports (Gov. Ex. 4, dated January 8, 2010; Gov. Ex. 5, dated November 
7, 2011; and Gov. Ex. 6, dated March 7, 2012) show the following delinquent debts for 
Applicant: $140 in collection for cable service (SOR 1.a); $2,901 in collection on a car 
loan account (SOR1.b); $547 in collection for television service (SOR 1.c); $1,377 past 
due on a loan (SOR 1.d); $822 in collection on a loan (SOR 1.e); $109 in for a city tax 
(SOR 1.f): $346 in collection on an unknown account (SOR 1.g); $240 in collection for a 
loan (SOR 1.h); $165 in collection for Insurance (SOR 1.i); $382 in collection for an 
electric service bill; $951 charged-off for a home telephone account (SOR 1.k); and 
$11,122 charged-off for a car loan (SOR 1.l). Applicant noted that his initial credit report 
showed 17 delinquent debts totaling approximately $45,144. He paid many of the debts 
and his current credit report shows six delinquent debts totaling approximately $17,957. 
The total of the SOR debts is $19,000, with one debt, SOR 1.l for $11,120, being over 
3 
 
60% of the debt listed. Applicant is paying a debt from the military exchange not listed in 
the SOR through allotment from his retired pay. (Tr. 7-8; App. Ex. B, Letter, dated 
August 15, 2012) 
 
Applicant was not ready to retire from the Marine Corps in 2006 but his family 
wanted him to slow down and be at home more. After retiring, he immediately started 
working with a defense contractor. After a few years, his wife wanted to move closer to 
her grandchildren so he took a non-defense related position. In 2009, the defense 
contractor asked him to return to their employment to support training of Marines. He 
has worked for the defense contractor for over two years as an electronics technician 
supporting aircraft simulator training.  
 
After Applicant retired from the Marine Corps, his wife had significant criminal 
expenses stemming from criminal and illegal drug activity starting in 2006. She also had 
significant medical expenses for treatment of drug addiction. He paid over $12,000 in 
legal fees, fines, costs, and probation. Her medical treatment for drug addiction was not 
covered by his health insurance so he also incurred significant fees of over $17,000 for 
her medical care. He paid the expenses from his monthly income. The legal and drug 
problems have been resolved and he anticipates no future expenses in these areas. 
Applicant’s financial statements show income from his position with the defense 
contractor of approximately $78,000 a year and retired pay of $24,000 a year, for a total 
yearly income of over $102,000. His personal financial statement shows a net monthly 
income of $5,893.75, monthly expenses of $3,882, leaving monthly disposable funds of 
approximately $2,051. (Tr. 20-30; Gov. Ex. 3, Response to Interrogatory, dated 
February 13, 2012 at 3; App. Ex. D, Retired Income Statement, dated July 23, 2012) 
 
The debt at SOR 1.a is for cable service at one of Applicant’s former residence. 
He contacted the collection agency and was told that they no longer had the debt. He 
contacted the original creditor and was referred back to the collection agency. Applicant 
is unable to determine who he should send payment to on this debt. (Tr. 31-32; App. Ex. 
E, e-mail, dated September 4, 2012) 
 
The debt listed at SOR 1.b is for the balance owed on a car that was stolen and 
destroyed. The amount of the debt is the difference between the amount owed on the 
debt and the insurance payment for the stolen car. Applicant has been unsuccessful in 
settling the debt with the collection agency. (Tr. 32-34; App. Ex. E. e-mail, dated 
September 4, 2012) 
 
The debt at SOR 1.c is for cable service. The debt has been paid in full. (Tr. 34; 
App. Ex C, Bank Transaction, dated May 25, 2012)  
 
At the hearing, Applicant noted he had not paid the debt at SOR 1.d. After the 
hearing, he stated he mailed a letter to the creditor requesting a payment plan for the 
debt. (Tr. 34-36; App. Ex. E, e-mail, dated September 4, 2012) 
 
Applicant does not have any information on the debt at SOR 1.e. He disputed the 
debt with the credit reporting agency. The debt has been removed from his credit 
reports. (Tr. 36-38; App. Ex. E, e-mail, September 4, 2012) 
4 
 
At the hearing, Applicant stated he had contacted the creditor for the debt at 
SOR 1.f but they were unable to provide him information concerning the debt. After the 
hearing, he learned the debt was for only $71.17. He provided a bank transaction to 
establish he paid the debt in full. (Tr. 38, App. Ex. E, e-mail, dated September 4, 2012; 
App. Ex. F, bank transaction, dated August 30, 2012) 
 
At the hearing, Applicant stated he disputed the debt at SOR 1.g with the credit 
reporting agencies. The debt has been removed from his credit reports. (Tr. 39; App. 
Ex. E, e-mail, dated September 4, 2012)  
 
Applicant disputed the insurance company debt at SOR 1.i. He stated that his 
account was in good standing when he cancelled his insurance. He disputed the debt 
with the credit reporting agencies and it has been removed from his credit reports. (Tr. 
39-40; App. Ex. E, e-mail, dated September 4, 2012) 
 
Prior to the hearing, Applicant had not contacted the creditors for the debts at 
SOR 1.h, 1.j, and 1.k. (Tr. 40-43) After the hearing he presented evidence that the debt 
at SOR 1.h was paid in full. (App. Ex. G, bank transaction, dated August 31, 2012). He 
presented evidence the debt at SOR 1.j has been paid in full. (App. Ex. H, bank 
transaction, dated August 31, 2012). Applicant reached a settlement with the phone 
company for the $951 debt at SOR 1.k. The debt was settled for $475.83. (App. Ex. I, 
Settlement Letter, dated August 17, 2012) The settlement has been paid. (App. Ex J, 
bank transaction, dated August 31, 2012) 
 
At the hearing, Applicant stated that the car loan debt at SOR 1.l was for his 
wife’s car. The car was purchased in 2006 and the loan went to default in 2008 and the 
car was repossessed. He believes the amount owed when it was repossessed was 
approximately $8,843. Prior to the hearing, he had contacted the creditor to arrange a 
settlement but they could not agree on a payment plan. The creditor requested a bigger 
payment than Applicant could afford. (Tr. 43-44) After the hearing, Applicant again 
attempted to reach an agreed payment plan with the creditor. There is no agreed 
payment plan. (App. Ex. E. e-mail, dated September 4, 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, 
5 
 
reliable information about the person, past and present, favorable and unfavorable, in 
making a decision. 
 
The protection of the national security is the paramount consideration. AG ¶ 2(b) 
requires that “[a]ny doubt concerning personnel being considered for access to 
classified information will be resolved in favor of national security.” In reaching this 
decision, I have drawn only those conclusions that are reasonable, logical, and based 
on the evidence contained in the record.  
 
Under Directive ¶ E3.1.14, the Government must present evidence to establish 
controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, the applicant is 
responsible for presenting “witnesses and other evidence to rebut, explain, extenuate, 
or mitigate facts admitted by applicant or proven by Department Counsel. . . . .” The 
applicant has the ultimate burden of persuasion in seeking a favorable security decision. 
 
A person who seeks access to classified information enters into a fiduciary 
relationship with the Government predicated upon trust and confidence. This 
relationship transcends normal duty hours and endures throughout off-duty hours. The 
Government reposes a high degree of trust and confidence in individuals to whom it 
grants access to classified information. Decisions include, by necessity, consideration of 
the possible risk 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 his 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 exhibits a 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 
6 
 
obligations). The evidence does not indicate whether there is an inability or an 
unwillingness to satisfy debt.  
 
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 paid his wife’s significant medical and legal 
debts stemming from criminal conduct and drug involvement. His wife’s debts were 
incurred under the unusual circumstance of her involvement in criminal activity fueled by 
drug involvement. His wife’s legal debts consisted of fines, fees, and attorney’s bills. 
She incurred medical expenses for treatment of drug addiction not covered by her 
husband’s health insurance. He was able to pay other family debts but some became 
delinquent. Even though he was late in taking action on the still unpaid debts, he acted 
responsibly under the circumstances towards these delinquent debts by paying them or 
attempting to reach settlements. He disputed some debts and they have been removed 
from his credit reports. He paid debts not listed in the SOR. He has sufficient income to 
live within his means and pay his present debts. He has steady and good employment, 
and is not likely to incur additional debts. His wife’s legal and medical issues have been 
resolved. His finances are under control. Applicant established that he acted 
responsibly towards his 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 periodic payment to reduce debts. Applicant is not required to 
establish that he paid each and every debt listed. All that is required is that Applicant 
has an established plan to resolve his financial problems, and show he has taken 
significant actions to implement that plan. 
 
I also 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 
actions to resolve the issue). Applicant disputed three debts with the credit reporting 
agencies. The debts have been removed from his credit reports and have been 
resolved.  
 
Applicant established that he has or is paying debts not included on the SOR. He 
paid five of the 12 debts listed in the SOR. He disputed three debts that have been 
removed from his credit report. He cannot find the creditor to pay on another debt. He is 
negotiating settlement agreements on the remaining three debts. Applicant established 
7 
 
that he paid or is attempting to pay the debts listed in the SOR. His efforts to pay his 
debts are significant and credible information to show a desire to resolve debt. His 
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. His past delinquent debts do not reflect 
adversely on his trustworthiness, honesty, and good judgment. His financial problems 
are resolved and his finances are under control. Based on all of the financial information 
provided by Applicant, he 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 excellent 
service on active duty in the Army and Marine Corps. I considered the awards he 
received on active duty, his two deployments to Iraq, and his continued support to 
Marines. I considered the opinion of his supervisor concerning his work ethic and 
honesty. Applicant’s wife incurred significant legal and medical debt through her own 
criminal misconduct and drug involvement. Applicant paid these legal and medical 
debts, but he did not pay all of the family’s other debts resulting in delinquent debts. He 
paid some delinquent debts not listed in the SOR. He presented evidence of payment of 
some of the SOR debts. He presented evidence that he disputed some of the SOR 
debts and they were removed from his credit reports. He presented evidence of his 
attempts to learn of the proper creditor or reach settlements on the remaining SOR 
debts. Applicant established his good-faith efforts to pay or resolve his delinquent debts. 
His actions to pay or resolve his past financial obligations indicate that he will be 
concerned, responsible, and careful regarding classified information. 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 
security concerns arising from financial considerations.  
8 
 
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.l:  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