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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)         ISCR Case No. 11-03095
)
Applicant for Security Clearance )
Appearances
For Government: Raashid, Williams, Esq. Department Counsel
John B. Glendon, Esq., Deputy Chief Department Counsel
For Applicant: Sheldon I. Cohen, Esq.
______________
Decision
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MASON, Paul J., Administrative Judge:
Given Applicant’s credible explanations of how he has changed some of his
business practices and what he would do in the future to change other practices, he has
mitigated the security concerns associated with the personal conduct guideline. Applicant’s
six monthly payments between December 2011 and June 2012 toward the ultimate
satisfaction of the civil judgment represents a meaningful track record of payments that
mitigates the financial concerns. Eligibility for access to classified information is granted.
Statement of the Case
Applicant certified and signed his Electronic Questionnaire for Investigations
Processing (e-QIP) on February 20, 2007. He was interviewed by an investigator from the
Office of Personnel Management (OPM) on May 17, 2010. (GE 12) On August 9, 2011,
Applicant agreed with and adopted the investigator’s interview summary of his May 17,
 GE 8 was not admitted in evidence because the same document appears as Exhibit 1 that is attached to HE1
2. (Tr. 35) GE 10 was not admitted because the same documents appear as Exhibit 2 that is attached to HE
2. (Tr. 38)
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2010, interview. (GE 11) He indicated the summary could be used at a security clearance
hearing to determine his security suitability. (GE 11) In an attachment to GE 11 dated
August 8, 2011, Applicant indicated he is currently an independent consultant to DoD. He
also provided contact information regarding consulting agreements and points of contact.
On September 20, 2011, DOHA issued a Statement of Reasons (SOR) detailing
security concerns under personal conduct (Guideline E) and financial considerations
(Guideline F). 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 (AG), effective
within the DoD on September 1, 2006..
Applicant submitted his answer to the SOR on October 12, 2011. DOHA issued a
notice of hearing on May 9, 2012, for a hearing on June 26, 2012. The hearing was held
as scheduled. At the hearing, 10 exhibits (GE 1, 2, 3, 4, 5, 6, 7, 9, 11, and 12) were
admitted into evidence in support of the Government’s case.  Applicant and six witnesses1
testified. Applicant’s 37 exhibits (AE A through AE KK) were admitted into evidence. Parts
of AE P were removed before the exhibit was admitted into evidence. There are eight
Hearing Exhibits (HE 1 through HE 8) that identify motions filed by the parties before the
hearing. HE 9 is a brief from Applicant addressing the financial considerations guideline.
DOHA received the transcript on July 3, 2012. The record closed on July 3, 2012. 
Rulings on Procedure
Shortly after the hearing began, I reviewed the written and oral motions filed by the
parties and reiterated my rulings on the motions for the record. (Tr. 8-15):
On May 18, 2012, Applicant filed a Motion in Limine Regarding Application of
Collateral Estoppel and Res Judicata in DOHA Cases. (HE 1) In that motion, Applicant
referred to ISCR Case No. 04-05712, citing three conditions that must be present to
collaterally estop a party from retrying issues litigated in an earlier criminal or civil
proceeding. Applicant argued that since two essential witnesses were prevented from
testifying in the earlier civil trial (CL - 2008-6380), Applicant was denied a full and fair
opportunity (the first prong of the three-prong test) to litigate the breach of contract
allegation and interference with contract or business relations allegation in the earlier civil
 One witness was a federal government employee who was told by his government counsel that as a2
government employee, he did not have to honor a subpoena in the civil trial. He did not appear. The second
employee could not be subpoenaed to testify because he was outside the jurisdiction. (HE 1 at 2)
 The deposition of this witness was entered into the civil trial record by Applicant. (HE 4, Exhibit 5 at 1094,3
AE HH at 1474-1475)
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action. (Tr. 8)  In Applicant’s view, the testimony of the two witnesses could have resulted2
in a civil verdict in Applicant’s favor. 
On June 18, 2012, Applicant submitted a request by email for a pre-hearing
conference to determine the Government’s position regarding his Motion in Limine. He
wanted to inform two of his witnesses whether to appear for the June 26, 2012 hearing.
(HE 2) 
On June 19, 2012, the Government filed a Brief in Opposition to the Motion in
Limine, arguing that collateral estoppel applies to preclude re-litigation of issues already
decided in the earlier civil action. (HE 3) The Government argued that Applicant’s civil trial
afforded him a complete opportunity to litigate the issues that he should not be allowed to
re-litigate in the DOHA security clearance hearing. (Tr. 9-10)
On July 19, 2012, Applicant’s counsel filed a Motion to Reconsider the Government’s
Brief in Opposition to Applicant’s Motion in Limine. (HE 4) Applicant reiterated his claim of
being denied a full and fair opportunity to present his case at the civil trial. The testimony
of the two witnesses, referred to in Applicant’s earlier Motion in Limine, would have testified
that Applicant did not interfere with contractual relations of the plaintiff in the civil trial, and
their testimony could have resulted in a civil judgment in his favor. Applicant claimed that
a third witness (Applicant’s civil trial counsel) should be allowed to testify that he could not
subpoena either of the two witnesses (referred to in Applicant’s earlier motion) because one
was a federal government employee and the other was outside the jurisdiction.  Applicant3
also argued that the civil trial plaintiff’s refusal to accept a settlement or payment plan to
resolve the civil judgment was designed to contribute to a denial of Applicant’s security
clearance. 
On June 20, 2012, at 11 a.m., a telephone conference was conducted with
Applicant’s counsel, the Government’s counsel, and myself. After hearing the positions of
both parties on Applicant’s written motion in Limine, along with an oral motion by the
government to postpone the case to a future date, I denied Applicant’s Motion in Limine.
I decided the doctrine of collateral estoppel applied to preclude re-litigation of those issues
already decided in earlier civil case. (Tr. 11) I denied the Government’s motion to postpone
the case. 
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On June 20, 2012, at 2:15 p.m., I received an email from Applicant’s counsel
averring that I reconsider my collateral estoppel ruling in light of the remand decision of the
ISCR Case No. 11-00180 (App. Bd. June 19, 2012), and allow three witnesses to testify
about the interference of contractual claims against Applicant in the earlier civil trial. (HE
5) The cited Appeal Board decision was provided to Applicant by the Government earlier
in the afternoon of June 20, 2012. (HE 6) In the cited decision, the DOHA Appeal Board
remanded the case to the Administrative Judge to allow the parties to present “any
additional evidence regarding the civil trial and [Applicant’s] underlying conduct for the
Judge’s consideration.” (Id. at 8) 
Later in the afternoon of June 20, 2012 (5:33 p.m.), the Government submitted an
email to me indicating that the Appeal Board’s remand decision in ISCR Case No. 11-
00180 (App. Bd. June 19, 2012) did not affect my earlier collateral estoppel ruling. Rather,
according to the Government, the Appeal Board case allowed Applicant an opportunity to
present evidence in mitigation. The Government argued that Applicant’s Motion for
Reconsideration be denied. (HE 7) 
In an email dated June 22, 2012, I denied Applicant’s Motion to Reconsider my
ruling made at the end of the telephone conference on June 20, 2012. Collateral estoppel
applies to preclude a re-litigation of the issues already decided in the earlier civil action. I
indicated that following the guidance of the foregoing Appeal Board decision, I would relax
the third prong of the collateral test (the unfairness prong), and allow the parties to
introduce additional evidence from the civil trial record, including additional evidence in
explanation or mitigation by Applicant. (HE 8) The Board’s guidance is as follows:
It is the conclusion of the Board that the case should be remanded to the
Judge for further proceedings. The parties should be afforded an opportunity
to present any additional evidence regarding the civil trial and [Applicant’s]
underlying conduct for the Judge’s consideration. These matters should
include, but are necessarily limited to, the civil trial pleadings, opening and
closing statements of the attorneys, direct and cross-examination of
Applicant, and any special findings of the jury. Any additional evidence
submitted by a party is subject to review and objection by the party opponent,
with the limitation the Board has concluded that the collateral estoppel
doctrine shall not preclude Applicant from submitting evidence in mitigation.
The Judge should then issue a new decision after consideration of any new
evidence that is properly brought before her. (Id. at 7-8) 
The last hearing exhibit is a memorandum filed by Applicant on May 18, 2012,
supporting his claim that he is currently involved in a good-faith repayment plan to resolve
the civil judgment. (HE 9) 
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During the presentation of Applicant’s exhibits, the Government objected to certain
portions of AE P, a character reference of one of the individuals identified in Applicant’s
Motion in Limine as the Government employee who was supposedly prevented from
testifying. (Tr. 43-52) Because certain portions of the individual’s character reference
contain his view of whether Applicant interfered with contractual relations of the plaintiff
(Company A) in the civil action, I sustained the Government’s objection in part and
overruled it in part. The first paragraph of the exhibit is admitted into evidence. The second
paragraph is inadmissible, except for the last sentence of the paragraph. The third
paragraph is inadmissible. The fourth paragraph is admissible. (Tr. 51-52) 
Findings of Fact
The first paragraph of the SOR, which alleges adverse behavior under the personal
conduct guideline, contains seven subparagraphs that represent the seven counts in a civil
complaint filed against Applicant in May 2008. On June 26, 2009, a jury returned a verdict
against Applicant under the first six counts and for him under the seventh count. Applicant
admitted the seven subparagraphs of SOR ¶ 1. The second paragraph of the SOR alleges
financial considerations and identifies the remaining portion of the monetary judgment
against Applicant that he still owed as of September 2011, the date of the SOR. Applicant
admitted the subparagraph (SOR ¶ 2(a)). 
Applicant is 55 years old. He has been married since August 1980. (Tr. 146) He has
a son 28 years old and a daughter 25 years old. In September 1995, he received a
bachelor’s degree in history and English, and a master’s degree in aerospace science from
an aeronautical university. (e-QIP at 10-11; Tr. 164-165) 
Applicant served in the U.S. Air Force from May 1981 until he received his honorable
discharge in September 1998. (AE U) He spent four additional years in Air Force Reserve
until his honorable discharge in April 2002. (AE V). Applicant was trained as a navigator.
He flew in 27 combat missions during the Gulf War. He began the Air Force navigation
warfare program with Reference R (Tr. 168-175) He received the Distinguished Flying
Cross. (AE A) In November 2004, he also received an award from the Secretary of the Air
Force for his contributions to global positioning systems (AE AA) 
Applicant has held sensitive compartmented information access (SCI) since April
2002. He has never had a security clearance or special access suspended or denied. (GE
1 at 39; Tr. 168) He has never had a security violation. (Tr. 168)
Following his honorable discharge from the Air Force, Applicant began his
employment at Company A (plaintiff in the June 2009 civil action) in May 1998 by signing
an agreement of employment which included a “nondisclosure of company data” provision
and a “work in conflict or for hire outside the company” provision. As a full-time employee,
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Applicant owed duties of loyalty and fidelity to Company A, and the duty of highest fidelity
to his employer after he became vice president for business development and special
access programs (SAP) in November 2002. (GE 4 at 4-5) The employment agreement did
not include a covenant not to compete after terminating employment with Company A. (AE
GG at 158)
Applicant and another individual (Party C), who also was employed by Company A,
decided to establish their own company (Company B) at some time between January and
April 2007. (GE 4 at 6, GE 12 at 1) From April to the end of December 2007, Applicant
indicated he was working full-time for Company A and pursuing clients for Company B. (GE
12 at 2) He resigned from Company A at the end of December 2007 to work full-time for
Company C. (AE JJ 1142-1145)
Civil Proceedings
In May 2008, Company A filed a civil lawsuit (CL-2008-6380) against Applicant,
Party C, and Company B. The complaint alleged:
1. Breach of contract against Applicant and Party C (SOR ¶ 1.a); 
2. Breach of duty and fidelity and loyalty against Applicant and Party C (SOR ¶ 1.b);
3. Breach of fiduciary duty against Applicant (SOR ¶ 1.c);
4. Tortious interference with contract and/or business relation(s) against Applicant, Party
C, and Applicant’s Company B (SOR ¶ 1.d);
5. Tortious interference with business expectancy against Applicant, Party C, and
Applicant’s Company B (SOR ¶ 1.e);
6. Conspiracy to injure Company A by Applicant and Party C (SOR ¶ 1.f); and
7. [State] uniform trade secrets act-conversion and misappropriation of trade secrets
against Applicant and Party C (SOR ¶ 1.g).
Applicant retained an attorney. (Tr. 62) The jury trial began on June 22, 2009.
Company A presented evidence. Applicant and Party C presented evidence and Company
A presented rebuttal evidence. After the trial concluded on June 26, 2009, the presiding
judge furnished instructions to the jury and they began deliberations. The jury returned a
verdict against Applicant on the same day. The first six counts were found against Applicant
and the seventh count for him. The jury awarded compensatory damages against Applicant
for $57,000 damages and $130,000 in punitive damages. (GE 6) Post-trial motions were
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denied. On June 29, 2009, the presiding judge suspended judgment to entertain post-trial
motions and take other action deemed appropriate. (GE 6, 7) On September 18, 2009, the
presiding judge filed a Final Order and Judgment setting forth the verdict and damages
specified by the jury. (GE 2 at I-10-I-11, GE 7) 
On December 18, 2009, Applicant’s attorney filed an appeal of the verdict and
damage award to the state supreme court. The one assignment of error was that the
presiding judge committed error by refusing to set aside the jury verdict and judgment
notwithstanding Company A’s failure to prove that Applicant and Party C’s conduct
proximately caused injury to Company A. (AE II) On April 21, 2010, the state supreme court
indicated that, after reviewing the arguments for and against the appeal, it found no
reversible error in the judgment complained of. The state supreme court refused the
petition for appeal. (GE 9)
On April 22, 2010, the day after the appeal was denied, Applicant asked his civil trial
attorney to negotiate a payment plan with Company A. (AE D) The attorney tried repeatedly
but unsuccessfully to work out a settlement plan or a percentage of earnings agreement.
(AE E; Tr. 73) Company A informed the attorney that they would continue to recover the
judgment through the collection process. Company A recovered $14,997 through
garnishment proceedings of Applicant’s bank account. Company A garnished Applicant’s
two other employers without success. (GE 2 at I-8-I-26) Although Company A never agreed
to a payment plan, they discontinued garnishment proceedings for unknown reasons.
Applicant began monthly payments of $3,000 in December 2011, and has made six
payments totaling $18,000. (Tr. 71; AE G, H, I, J, T, FF) Through garnishment and monthly
payments, Applicant has reduced the balance of the civil judgment by approximately
$33,000. He intends to continue making the monthly payments because, “It’s a debt that
I owe. I pay my debts.” (Tr. 187)
Applicant did not believe there was any conflict between the business of Company
B and Company A because B’s business was in the sale and marketing of unmanned aerial
vehicles (UAV). In his view, Company A was prohibited by government contract from
manufacturing or selling any equipment. (GE 12 at 1-2) He testified that because Company
A had a hardware exclusion clause in all their DoD contracts, they could not do sales and
marketing. (AE JJ at 1129; Tr. 191) Applicant did not believe he interfered with Company
A’s customer relations. On November 26, 2007, he submitted his resignation letter to the
president of Company A, stating that he would notify his customers (Government agencies)
no later than the end of November 2007 of his decision to leave Company A at the end of
the year. He indicated that he would try to find replacement employees of Company A to
continue customer relationships before and after he left Company A. (AE JJ at 1143-1145)
Applicant believed that he resigned on good terms with Company A. (Tr. 184) After he
resigned, he never tried to contact Company A’s client’s intending to obtain Company A’s
business. (Tr. 187) 
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When Applicant was asked whether the June 2009 jury verdict altered his opinion
in any way, he replied, “Yes sir. I have learned a very hard and costly lesson that you need
to make sure that you’re very clean in every business relationship that you have, and
there’s no ambiguity. It’s black and white.” (Tr. 188) Applicant was asked what he would
do differently if he was leaving Company A. He replied:
If I had to do it all over again I would probably inform them of my intentions
of what I was doing better that I did when I left. I would have made sure that
they understood what I was going and doing and that I did not interfere with
anything they were doing. (Tr. 189)
Applicant was then asked whether he learned any long-term lessons from the jury verdict.
He replied that he takes a closer look at business relationships and potential conflicts of
interest. In the last two years, he has turned down two potential business opportunities
because of the potential conflict with his ongoing tasks with his government customer. (Tr.
190) Applicant also testified that:
The second thing I’ve learned is that you need to be completely aboveboard
with everybody. There should be no gray in the world. It’s got to be black and
white. There needs to be clear demarcation lines in what you’re doing and
how you’re doing, how you conduct your business. (Tr. 190) 
When asked whether in hindsight, did Applicant sense some gray in the manner he
conducted himself (with Company A), Applicant responded:
Well, no. When I left [Company A] I didn’t believe that what - -what they were
doing was nothing what I was going to go do with [Company B]. I mean,
[Company B] was going to be focused on doing sales and marketing of
unmanned aerial vehicles, UAVs, which is something that Company A didn’t
do and Company A couldn’t do because they had a hardware exclusion
clause in all their DoD contracts. (Tr. 190-191)
At page 192 of the transcript, Applicant indicated that based on the jury’s interpretation of
his conduct, he would not take certain actions:
Well, the first thing, I wouldn’t have let Party C take a path along with me
setting up Company B until he had departed. That would be the first thing.
The second thing is I would have informed Company A exactly what I was
going to do. I did tell them that I was going off to work UAVs but clearly I
wouldn’t have done anything to establish a company while I was in their
employment. (Tr. 191-192)
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Since Applicant’s departure from Company A and the civil judgment, he has
experienced stress. He has reduced employment opportunities within Government. He
focuses more attention to contractual relationships. (Tr. 193)
Character Evidence
Applicant called five witnesses to testify about his character. Witness D is a systems
engineer for a contractor. He provided a written character reference. (AE M) He is engaged
in projects for the U.S. Air Force and the Army. He has held a security clearance for 20
years. He has known Applicant since 1995 when Applicant was employed by the Air Force
in charge of navigation warfare and Witness D was a contractor. In the last three to four
years that Witness D and Applicant have been working on Army programs, Witness D has
observed no inappropriate conduct by Applicant. Witness D has dined at Applicant’s house.
Applicant volunteers on the weekends at a hobby shop. In Witness D’s opinion, Applicant
has never put his interests above those of the Government. Witness D recommends
Applicant for a security clearance based on his flawless integrity. (Tr. 84-89)
Witness E, currently a consultant and tavern owner, was a 17-year-employee of a
contractor that provided support for an Army installation. He has held a security clearance
since 1977, and is familiar with security clearance requirements. He first met Applicant in
2004 or 2005 when Applicant was working in navigation warfare for Company A. Witness
E worked with Applicant about three or four years supporting Witness E, who was the
program manager and contractor special security officer for the contractor. After their
working relationship ended in 2008, Witness E had only sporadic contact, and has not
worked with Applicant on any contracts or subcontracts in the last two years. Based on his
observations of Applicant over the years, Witness E considers Applicant to be a dedicated
and honest person who does not waste the taxpayer’s money. (Tr. 100-110)
Witness F, who also provided a character reference (AE N), testified that he is a
senior manager for a defense contractor. Along with other tasks, he has been involved in
navigation warfare and has known Applicant since 1996 when Applicant was at the
Government office (Air Force) operating the navigation warfare program. From 1998 to
2008, Witness F had only occasional contact with Applicant, but in the last three years, his
contact with Applicant has been regular in performing several modeling simulation analyses
for the Air Force. From communicating daily and traveling with Applicant regularly, Witness
F opines that Applicant is very professional and reliable. Applicant’s honesty and integrity
were demonstrated recently when he concluded that a global positioning system (GPS) test
not be conducted because critical equipment that would maximize the potential benefit of
the test was unavailable. Witness F has requested that Applicant be a consultant on an
ongoing Army contract. (Tr. 114-127) 
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Witness G testified that he has been employed by a defense contractor as manager
of technical strategy for navigation warfare since March 2011. He also provided a character
reference. (AE P) Before his managerial job, he was technical adviser of electronic warfare,
and program manager for technical signals intelligence at the other Government agency
(AGA). Witness G has known Applicant since 2004 when they were working on the coalition
war program. At the time, Witness G worked as a technical advisor and Applicant worked
as Company A’s representative in navigation warfare. The coalition warfare program was
funded until 2006 or 2007. When funding again became available, the program was
transferred from another DoD agency to the AGA, and Applicant and Witness G put
together concepts of flying UAVS to establish electronic support capabilities. Witness G
believes Applicant is an honest and loyal person who consistently produces an outstanding
job performance. During their job-related travels between 2004 and 2010, Applicant always
acted appropriately during dining engagements, never consuming alcohol to excess. On
an infrequent basis, Witness G has met Applicant and his wife for dinner. Witness G wants
to hire Applicant as a consultant for a project. (Tr. 129-143)
Applicant’s wife testified that she has been married to him since 1980. She
described the challenges of raising two children with Applicant being away from the
household on military deployments. The primary reason Applicant resigned his Air Force
commission two years before he was eligible for retirement was to be with his family. He
joined Company A in July 1998 and left at the end of 2007 because he always wanted to
be his own boss, and his long-term vision for Company A appeared to be different from that
held by the president of Company A. (Tr. 145-153)
Applicant’s wife pays the family bills while he is responsible for the business
account. They have never been intentionally late paying any bills. The family has never had
financial problems except for the civil judgment. Applicant coached hockey for
approximately four years and received a trophy from an area high school in 2004. (AE Z)
He also coached his children’s soccer and baseball teams. He volunteers at a hobby shop
on the weekends. He meets periodically at the hobby shop with other individuals of a
modeling club, and has been recognized by club members. (AE DD) His wife believes he
is a loyal, honest person whose caring and concerned attitude has been adopted by his
children. (Tr. 154-162)
Several individuals wrote character references about Applicant. Reference K, a
colonel with 24 years of experience in the U.S. Air Force, met Applicant in 1996 and worked
with him until 1998, and from 2004 to 2007. In 2009, Applicant was assigned to assist
Reference K on an electronic warfare project designed to protect warfighters’ use of global
positioning devices. Based on 16 years of observation, the colonel could think of no other
person who has compiled as much experience in electronic warfare as Applicant. He
recommends Applicant for a security clearance. (AE K)
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Reference L, a retired colonel who served in the U.S. Air Force for 30 years, has
known Applicant since 1999. After being hired by Applicant in 2003, Reference L worked
for Company A from 2003 until 2007, when he took another position in joint navigation
warfare. He believes that Applicant’s involvement in navigation warfare from the middle
1990s to the current time supports a continuation of his security clearance. (AE L) 
Reference O, a team leader at a U.S. Air Force research lab, who has held a
security clearance since 1979, met Applicant in June 1996 and worked on several projects
with him, or has provided funding to hire him as a subcontractor for navigation warfare
input. She believes Applicant has an excellent reputation in navigation warfare testing
experience. He is trustworthy. (AE O)
Reference Q, a group leader who has been employed by a defense contractor since
1984, has worked with Applicant and the navigation warfare program since 1996. Based
on the projects they have worked on together, Reference Q knows that Applicant is an
honest person who is dedicated to doing what is right and best for the Government. (AE
Q)
Reference R, a program manager at a U.S. Air Force research lab, has been
employed at the same location for more than 37 years. She has known Applicant for 20
years and believes he has unique expertise in navigation warfare. He has always been
concerned about the best interests of the Government. She recommends that his security
clearance be reinstated. (AE R) Because she is a federal civilian employee, her command
informed her she could not appear to testify for Applicant. (AE X)
Applicant’s U.S. Air Force service awards, medals, commendations, and certificates
of recognition appear in the 21 pages of AE W. His vitae appears in AE A. 
Policies
When evaluating an applicant's suitability for a security clearance, the administrative
judge must consider the AG. Each guideline lists potentially disqualifying conditions and
mitigating conditions, which are useful in evaluating an applicant's eligibility for access to
classified information.
The administrative judge's ultimate goal is to reach a fair and impartial decision that
is based on common sense. The decision should also include a careful, thorough
evaluation of a number of variables known as the "whole-person concept" that brings
together all available, reliable information about the person, past and present, favorable
and unfavorable, in making a decision. Decisions include, by necessity, consideration of
the possible risk the applicant may deliberately or inadvertently fail to protect or safeguard
classified information. Such decisions entail a certain degree of legally permissible
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extrapolation as to the potential, rather than actual, risk of compromise of classified
information.
Under Directive ¶ E3.1.14., the Government must present evidence to establish
controverted facts alleged in the SOR. Under Directive ¶ E3.1.l5., 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 demonstrate that it is clearly consistent with the
national interest that he be granted eligibility for a security clearance. 
Analysis
Personal Conduct
The security concern for personal conduct is set forth in AG ¶ 15:
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. 
AG ¶ 16 contains two disqualifying conditions that are relevant to Applicant’s
conduct with Ms. V:
AG ¶ 16(c) credible adverse information in several adjudicative areas that is
not sufficient for an adverse determination under any other single guideline,
but which, when considered as a whole, supports a whole-person
assessment of questionable judgment, untrustworthiness, unreliability, lack
of candor, unwillingness to comply with rules and regulations, or other
characteristics indicating that they may not properly safeguard classified
information; and 
AG ¶ 16(d) credible adverse information that is not explicitly covered under
any other guideline and may not be sufficient by itself for an adverse
determination, but which, when combined with all available information
supports a whole-person assessment of questionable judgment,
untrustworthiness, unreliability, lack of candor, unwillingness to comply with
rules and regulations, or other characteristics indicating the person may not
properly safeguard protected information. This includes but is not limited to
consideration of: (1) untrustworthy or unreliable behavior to include breach
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of client confidentiality, release of proprietary information, unauthorized
release of sensitive corporate or other government protected information; (2)
disruptive, violent, or other behavior in the workplace; (3) a pattern of
dishonesty or rule violations; and (4) evidence of significant misuse of
government or other employer’s time or resources.
In June 2009, the civil jury returned a verdict finding that Applicant: (1) breached his
employment contract with Company A; (2) breached his duty of loyalty and fidelity to
Company A; (3) breached his fiduciary duty to Company A; (4) engaged in tortious
interference with contracts and business relations of Company A; (5) engaged in tortious
interference with business expectancies of Company A; and (6) conspired to injure the
business of Company A. Applicant’s adverse conduct raises security concerns under AG
¶¶ 16(c) and 16(d) (3) a pattern of dishonesty and rules violations. 
There are two mitigating conditions under AG ¶ 17 that are potentially applicable to
the circumstances in this case. Those conditions are: 
AG ¶ 17(c) the offense was so minor, or so much time 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; and
AG ¶ 17(d) the individual has acknowledged the behavior and obtained
counseling to change the behavior or taken other positive steps to alleviate
stressors, circumstances, or factors that caused untrustworthy, unreliable or
other inappropriate behavior, and such behavior is unlikely to recur.
Applicant’s adverse conduct was not minor because it occurred over at least an
eight-month period in 2007 when he was working for Company A and Company B. Though
Applicant has consistently maintained that he did not breach any contract or interfere with
contract relations since the business objectives of Company A and C were different, the
jury verdict confirms the opposite conclusion. However, having weighed all the disqualifying
evidence with the mitigating evidence, I am convinced that Applicant’s underlying behavior
occurred under circumstances that are unlikely to recur. The character evidence from the
witnesses and the written endorsements outline Applicant’s positive impact in the military,
particularly in the area of navigation and electronic warfare. The character evidence
consistently demonstrates that he is trustworthy, reliable, and resourceful with taxpayer’s
money. Applicant receives some credit under AG ¶ 17(c).
When Applicant was asked to characterize his behavior and what he would do
differently in the future if the circumstances were the same, he responded that he did not
believe he had done anything wrong. But he testified that he had learned a hard lesson
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about clean business relationships. He stated he would be more specific in stating his
intentions about the exact nature of his work in the future. After describing the need for
clarity and no black or gray area in business relationships, Applicant reiterated he did not
believe there was any gray area in the way he resigned from Company A. However, he
recognized a short time later in his testimony that he would not have established Company
B while he was still in Company A’s employ. His acknowledgment that he could not form
Company B while still in the employ of Company A, and do a better job in defining his
business relationships, entitles Applicant to mitigation under AG ¶ 17(d). 
Financial Considerations 
Paragraph 18 of the AG sets forth the security concern related to 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. Compulsive gambling is a concern
as it may lead to financial crimes including espionage. Affluence that cannot
be explained by known sources of income is also a security concern. It may
indicate proceeds from financially profitable criminal acts.
The two disqualifying conditions under AG ¶ 19 are: 
AG ¶ 19(a) inability or unwillingness to satisfy debts; and
AG ¶ 19(d) deceptive or illegal financial practices such as embezzlement,
employee theft, check fraud, income tax evasion, expense account fraud,
filing deceptive loan statements, and other intentional financial breaches of
trust.
On June 26, 2009, a civil jury returned a verdict against Applicant of counts 1-6 and
count 7 in his favor. A judgment was entered against him for $57,000 in compensatory
damages and $130,000 in punitive damages. On April 21, 2010, the state supreme court
notified Applicant that his appeal of the jury verdict had been denied. On April 22, 2010,
Applicant requested by email that his civil trial attorney work out a settlement. The attorney
repeatedly tried to work out a payment plan, settlement, or a percentage of earnings
arrangement. Company A declined the proposals, choosing instead to continue with the
collection process over negotiation. The garnishment process yielded Company A
approximately $14,997. AG ¶ 19(a) applies to Applicant’s inability but not unwillingness to
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satisfy the judgment. AG ¶ 19(d) applies to the jury’s determination of Applicant’s breach
of contract, interference of contract relations and business expectancy, and conspiring to
injure Company A’s business. 
Four conditions under AG ¶ 20 could potentially mitigate Applicant’s delinquent
indebtedness: 
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; 
AG ¶ 20(b) the conditions that resulted in the financial problem were largely
beyond the person’s control, and the person acted responsibly under the
circumstances; 
AG ¶ 20(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
AG ¶ 20(d) the individual initiated a good-faith effort to repay overdue
creditors or otherwise resolve debts.
Considering the evidence as a whole, I conclude that Applicant is entitled to partial
credit under AG ¶ 20(a) for the same reasons that I have identified under AG ¶ 17(c).
Furthermore, except for the civil judgment, Applicant has never had financial problems.
To receive mitigation under AG ¶ 20(b), an applicant should show that “the
conditions that resulted in the financial problem were largely beyond the person’s control,”
and that the individual acted responsibly under the circumstances.” The mitigation condition
is inapplicable because it was his inappropriate conduct that resulted in a jury verdict and
judgment against him in June 2009.
Applicant is entitled to some credit under AG ¶ 20(c) and 20(d) because there are
clear indications that he is resolving the judgment in a systematic manner. The first $14,997
was paid through the collection process. Since December 2011, Applicant has initiated a
good-faith effort to repay Company A by furnishing six monthly payments of $3,000 totaling
$18,000. He intends to continue to honor the payment plan. SOR ¶ 2(a) is resolved in
Applicant’s favor.
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Whole-Person Concept 
I have examined the evidence under the disqualifying and mitigating conditions of
the personal conduct and financial considerations guidelines. I have also weighed the
circumstances within the context of nine variables known as the whole-person concept. In
evaluating the relevance of an individual's conduct, the administrative judge should
consider the following factors:
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 the participation was 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 a commonsense judgment based on careful consideration of
the guidelines and the whole-person concept.
In early 2007, Applicant established Company B when he was still employed full-time
by Company A. After he departed Company A at the end of December 2007, the company
filed a lawsuit against him in May 2008 alleging breach of contract, breach of duty and
loyalty, tortious interference with contract and business relations and business expectancy,
and conspiracy to injure Company A’s business. Applicant was represented by counsel and
presented evidence. On June 26, 2009, a jury returned a verdict and judgment against
Applicant. The presiding judge confirmed the verdict and judgment. Though Applicant did
not believe he had done anything wrong, I conclude the jury verdict clearly changed his
thinking about what he would and would not do in his business relations in the future.
Applicant credibly testified about the necessity that all business relationships contain no
ambiguity. He stated he should have expressed his intentions of what he was going to do
after he left Company A. In the past two years, Applicant has turned down two expected
business opportunities because of the potential conflict of interest with his business
customer. Finally, Applicant stated he would not have done anything to establish a
company while he was still employed by Company A. Judging by the totality of the
evidence, I am persuaded that he realizes that he used poor business judgment in
establishing Company B while working full-time with Company A, and not being more
forthright about his future employment intentions as he neared the end of his employment
with Company A. I conclude he will not repeat this conduct in the future. Applicant has
mitigated the security concerns associated with personal conduct. 
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On April 22, 2010, the day after the state supreme court notified Applicant’s attorney
that his appeal of the civil verdict and judgment had been denied, Applicant asked his
attorney to negotiate a payment plan or settlement with Company A. The attorney tried to
structure a payment plan or settlement. He suggested a percentage of earnings
arrangement. Company A, after informing Applicant’s attorney they decided to use the
collection process, received $14,997 via garnishment of Applicant’s bank account. When
Company A discontinued garnishment for unknown reasons, Applicant began making
monthly payments on the judgment in December 2011. He has made six monthly payments
($18,000) between December 2011 and June 2012. Even though he still owes more than
$150,000, he credibly testified he intends to keep making payments on the judgment
because he pays his debts. I find his payment plan credible and made in good faith, even
though he did not begin making the payments until three months after he received the
SOR. Except for the civil judgment, there is no indication that Applicant has any other
financial problems. He is not financially overextended. After reviewing the entire record of
Applicant’s efforts to resolve the civil judgment, I conclude that he has developed a
meaningful track record of debt reduction in line with the definition rendered by the DOHA
Appeal Board in ISCR Case No. 07-06482 at 3 (App. Bd. May 21, 2008)
Considering the evidence as a whole, Applicant’s poor business judgment during
2007 is overshadowed by his reputation for trustworthiness, reliability, and good judgment
that he has demonstrated in his 22-year military career and subsequently in the defense
contractor community. On balance, I conclude that Applicant has met his ultimate burden
of persuasion in establishing that he warrants security clearance access.
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 E): FOR APPLICANT
Subparagraph 1.a (1) through (7): For Applicant
Paragraph 2 (Guideline F): FOR APPLICANT
Subparagraph 2.a: For Applicant
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Conclusion
In light of all of the circumstances presented by the record in this case, it is clearly
consistent with national interest to grant Applicant eligibility for a security clearance.
Eligibility for access to classified information is granted. 
Paul J. Mason
Administrative Judge