1 
 
 
                                                              
DEPARTMENT OF DEFENSE 
DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of:   ) 
     ) 
    )  ISCR Case No. 10-08186 
    ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Allison O’Connell, Esquire, Department Counsel 
For Applicant: Dennis Sysko, Esquire 
 
 
______________ 
 
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 February 24, 2010, 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 Department of Defense (DOD) issued an interrogatory to 
Applicant to clarify or augment potentially disqualifying information in his background. 
After reviewing the results of the background investigation and Applicant's response to 
the interrogatory, DOD could not make the preliminary affirmative findings required to 
issue a security clearance. DOD issued a Statement of Reasons (SOR), dated July 18, 
2012, to Applicant detailing security concerns for financial considerations under 
Guideline F, and personal conduct under Guideline E. These actions were taken under 
Executive Order 10865, Safeguarding Classified Information within Industry (February 
20, 1960), as amended; DOD Directive 5220.6, Defense Industrial Personnel Security 
Clearance Review Program (January 2, 1992), as amended (Directive); and the 
adjudicative guidelines (AG) effective in the DOD on September 1, 2006. 
2 
 
Applicant answered the SOR on July 26, 2012. He admitted allegations 1.b and 
1.c under Guideline F but denied allegation 1.a. He denied the three allegations under 
Guideline E. Department Counsel was prepared to proceed on October 16, 2012, and 
the case was assigned to me on October 19, 2012. DOD issued a Notice of Hearing on 
November 2, 2012, scheduling a hearing for November 27, 2012. I convened the 
hearing as scheduled. The Government offered 15 exhibits that I marked and admitted 
into the record without objection as Government Exhibits (Gov. Ex.) 1 through 15. 
Applicant and one witness testified. Applicant offered 17 exhibits that I marked and 
admitted into the record without objection as Applicant Exhibits (App. Ex.) A through Q. I 
received the transcript of the hearing (Tr.) on December 5, 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 43-year-old technology analyst for a defense contractor. He is a 
high school graduate with certificate training in technology. He has been employed by 
the defense contractor for almost four years. He married in April 1996 and has three 
children ages 11, 13, and 14. He has held a security clearance since the early 2000s. 
Applicant’s present yearly income is $111,000, and his wife’s yearly income is $48,000 
providing them a combined yearly income of over $150,000. Their total monthly net 
income is $9,146, with monthly expense of $7,366, leaving a net monthly remainder of 
$1,779. Applicant is current with his rent and his other debts and bills. (Tr. 40-43, 81-86; 
Gov. Ex. 1, e-QIP, dated February 24, 2010; Gov. Ex. 2, Response to Interrogatories, 
dated March 27, 2012; Gov. Ex. 5, Applicant’s Performance Growth Account Statement; 
Gov. E. 13, e-QIP, dated September 26, 2008; Applicant’s Declaration for Federal 
Employment, dated December 4, 2007; Gov. Ex. 15, e-QIP, dated December 18, 2007; 
App. Ex. J, Tax History, 2007 to 2011; App. Ex. K, Credit History dated November 11, 
2012; App. Ex. L, Pay Stub, dated November 16, 2012; App. Ex. O, lease, dated July 
15, 2011; App. Ex. P, Personal Financial Information) 
 
Under the financial consideration security clearance guideline, the SOR alleges 
that from October 2010 to February 2011 Applicant used his company-issued credit 
card for personal expenses in violation of company policy (SOR 1.a); that Applicant filed 
a Chapter 7 bankruptcy in March 2010 with liabilities of $685,951.34 which was 
discharged in November 2010 (SOR 1.b); and that Applicant filed a Chapter 13 
bankruptcy in April 2003 which was discharged in February 2005 (SOR 1.c). Under the 
personal conduct security clearance guideline, the SOR alleges that Applicant 
deliberately failed to disclose in response to a question on his security clearance 
application that he owed approximately $30,000 in federal and state taxes from 2006 
(SOR 2.a); that he deliberately failed to report on the security clearance application a 
criminal charge for confining an unattended child in February 2008 (SOR 2.b); and as 
noted in SOR allegation 1.a that he used his company-issued credit card for personal 
expenses in violation of company policy (SOR 2.c). Applicant admitted the bankruptcies 
but denied using the company-issued credit card in violation of company policy. He 
denied deliberately providing false information in response to questions on his security 
clearance application. 
3 
 
Applicant was attending technology courses when he married in 1996. He 
completed his schooling in 1998 and starting his career in technology. He was not 
making a good salary at that time. His wife had been employed in her family’s business 
and was the primary source of their income. Her yearly income was approximately 
$50,000, and his yearly income was approximately $30,000. They purchased a home in 
1998 for approximately $160,000 with monthly mortgage payments of approximately 
$1,100. In four years, they had three children (1998, 1999, and 2001). His wife had to 
stop working in 1999 shortly after the birth of their first child. The children all had 
medical issues associated with being diagnosed with autism, Asperger’s syndrome, 
attention deficit disorder, and learning disabilities. The children’s medical condition 
required Applicant’s wife to stay home to care for the children. There were also 
significant monthly expenses from the children for professional care, prescriptions, 
treatment, and special training. Applicant and his wife modified their living expenses to 
attempt to accommodate the lower income. (Tr. 43-46, 93-99; App. Ex. M, Medical 
Conditions, undated) 
 
During the early part of their marriage, Applicant’s wife managed the family 
finances since she was at home and had the financial ability. They were unable to 
continue to meet all of their expenses in part because of the significant medical 
expenses. Applicant did have health insurance but it did not cover all of the children’s 
medical expenses and special training. In 2003, Applicant’s wife told him that they were 
having financial problems and the bank intended to start foreclosure proceedings on 
their house. They decided to file a Chapter 13 bankruptcy to gain some time to 
restructure their finances or sell the house. They made the $435 monthly bankruptcy 
payments for approximately 18 months until they sold the house in September 2004 for 
a profit and had a net gain of $10,000. Applicant was required to pay rent on a new 
place to live for a year in advance because of their poor credit rating from the 
bankruptcy. The profit from the sale of the house was used to pay the advanced rent. 
(Tr. 46-48; App. Ex. D, Settlement Documents, dated August 19, 2004) 
 
Applicant’s wife subsequently received a significant inheritance of between 
$300,000 and $400,000. The funds were used in part to pay the approximately $25,000 
remaining bankruptcy debts. All debts in the bankruptcy, except for a car, were paid in 
full and the bankruptcy debts discharged in May 2005. The car loan was also paid in full 
later. (Tr. 48-52, 100-106; Gov. Ex. 6, Bankruptcy Documents, dated April 9, 2003; Gov. 
Ex. 10, App. Ex. E, Bankruptcy Discharge, dated May 18, 2005) 
 
Applicant and his wife wanted to move to a location having better schools for the 
children, providing opportunities for his wife to be employed, and having a better work 
commute for Applicant. They wanted the children in special schooling with better access 
to care givers. In August 2006, Applicant and his wife used over $300,000 of her 
inheritance to make a down payment on a new house. They also used the funds to 
purchase other items including a motorcycle and furniture. The price of the house was 
approximately $700,000. The large down payment was required because of the status 
of their finances from the previous bankruptcy. They had now used all of the 
inheritance. The initial mortgage was an adjustable rate with monthly payments of 
$2,600. They had anticipated that his wife would find employment and there would be 
financial stability. She initially found employment but was laid off a number of times. 
4 
 
There was a point where it was more economically feasible for her to stay home than to 
pay child care expenses. At this time, his monthly net income was approximately 
$3,800. (Tr. 53-62, 106-111, 117-120) 
 
Applicant and his wife refinanced the house twice to obtain funds to renovate the 
house. In November 2006, they received over $53,000 from a refinancing and used the 
funds to finish the basement. However, the mortgage broker fees were over $37,000 
increasing their mortgage. In August 2007, they again refinanced realizing $47,000 to 
build a deck and do other work. Again, the mortgage broker fees were over $29,000 
again increasing their mortgage. Applicant and his wife at the time did not realize the 
high mortgage broker fees. If they had realized the cost of refinancing, they would not 
have refinanced the mortgage. The monthly mortgage payments were now 
approximately $3,700. (Tr. 63-67, 112-115; App. Ex. F, Settlement Documents, dated 
November 29, 2006; App. Ex. G, Settlement Document, dated August 8, 2007) 
 
The housing market collapsed and Applicant’s house was now worth less than 
his mortgage. (App. Ex. H, Housing Valuations, undated) His wife was also unemployed 
for at least eight months in 2008. Applicant was unable to pay the mortgage and meet 
his other expenses. He tried to refinance the mortgage but it lowered the monthly 
payments less than $100. An increase in the property taxes negated any savings. In 
addition, Applicant and his wife found a new autism program to assist with the education 
and socialization of their children. They wanted to enroll their children in the program 
even though the monthly expenses were significant. (Tr. 52-62; App. Ex. N, Pamphlet)  
 
Applicant made the mortgage payments until sometime in early 2010. They were 
using payday loans to get by each month. There came a point where they had to decide 
how they could manage their finances and have their children in the autism program 
which was an unanticipated expense. They moved from the house in August 2010, and 
were unable to pay other bills because of the medical demands. They filed for a Chapter 
7 bankruptcy in March 2010, and their debts were discharged on November 8, 2010. In 
completing the bankruptcy Applicant and his wife attended the mandatory credit and 
financial counseling. He learned a lot about financial planning from the counseling. (Tr. 
79-80, 115-124; Gov. Ex. 4, Bankruptcy Documents, dated March 23, 2010; Gov. Ex. 7, 
8, 9, 10, and 11, Credit Bureau Reports, various dated in 2007, 2008, 2010, and 2012; 
App. Ex. I, Credit Counseling Statements, dated March 18, 2010) 
 
Applicant received a credit card from his employer issued by a major credit 
company to use for his travel expenses with the company. He would charge travel 
expenses to the card, submit the charges to his company, receive reimbursements, and 
pay the credit card company bill. The credit card bill came to Applicant and the only 
notice to the company was when the bill had not been paid on time. When Applicant 
received the reimbursement from the company, he would give the check to his wife who 
was to pay the credit card bill. Applicant believed that the card could be used for 
personal expenses as long as the bill was paid in full at the end of the month. Applicant 
signed the policy documents provided by his employer outlining the policy that the card 
would not be used for personal expenses but just business expenses. He did not read 
the documents when he signed them because they were in a file with other employment 
information. (Tr. 62-69, 129-140, 165-168) 
5 
 
In October 2010, Applicant’s wife asked him to use the company credit card for 
personal expenses so their bank debit card could be used as a resource to pay other 
debts. He used the card for everyday personal purchases and expenses. Applicant 
believed that his wife was paying the credit card bill in full each month. He did not know 
that there was a large balance of over $6,000, and the card was not paid until he was 
confronted about the debt by his company in February 2011. He was counseled and 
now clearly knows that he cannot use the company-issued credit card for personal 
expenses. Applicant agreed to a payment schedule on February 17, 2011, and the debt 
was paid in full by May 31, 2011. (Tr. 69- 71, 125-129; App. Ex. C, Payment schedule 
and paid in full notice, dated May 31, 2011) 
 
A part of the inheritance received by Applicant’s wife was subject to federal 
taxes. While the tax debt was to his wife, Applicant was also liable because they filed 
their taxes jointly. Applicant’s wife thought she may have some taxable income in the 
inheritance but did not believe it was very much. They used the entire inheritance as a 
down payment on the second house and make other purchases. In 2007, they were 
advised that they had a tax debt of approximately $34,000. They established a payment 
plan with the Internal Revenue Service. (Tr. 71-72,146-152) 
 
When Applicant completed his security clearance application in February 2010, 
he knew of the payments of the inheritance tax to the IRS. In response to question 26 
which asked if he failed to pay Federal, state, or other taxes required by law, Applicant 
responded “no.” Applicant believed that he did not have to list this tax debt because he 
was paying the taxes per the agreement. They were current with all payments so he did 
not believe he owed a tax obligation. The tax obligation has now been paid in full. (Tr. 
72-73, 152-160; Gov. Ex. 2, Response to Interrogatory, dated March 27, 2012, at 518-
519) 
 
In February 2008, Applicant had his two youngest children, ages nine and seven, 
in his car with him. The age in the state to leave a child unattended in a car was eight. 
They had stopped to get something to eat so the boys had food and toys with them. 
Applicant saw a sale on electronics at a store and he wanted to make a purchase. The 
boys did not want to leave the car since they were occupied. Applicant parked the car 
close to the store, found the item he wanted, but he had to go into the store to complete 
the purchase. An individual reported to the state police that the children were in the car 
unattended. When Applicant exited the store, a state policeman was at the car. 
Applicant was never handcuffed, placed in a jail cell, or required to post bail. The police 
officer merely took Applicant’s phone number. The policeman consulted the state’s 
attorney who decided to pursue the matter. The officer called Applicant and asked him 
to come to the police station to sign a document. Applicant did go to the station and 
signed the document. The police officer advised him to hire an attorney. The attorney 
advised him that he would take care of the matter since it was a family court issue. He 
later met the attorney at the courthouse and was told the matter was settled and on the 
stet docket. He was advised if he got in any additional trouble the matter could be 
reinstated. He was told he was free to go. It appears the police officer did not follow the 
proper procedures for this type allegation. (Tr. 73-77; Gov. E. 12, Case Information 
Record; App. Ex. B, Statute for Unattended Child and Letter, dated September 6, 2012) 
 
6 
 
In completing the security clearance application, Applicant answered no to 
question 22 asking if he had ever been issued a summons, citation, ticket, or appeared 
in court in a criminal proceeding against him. The statute that Applicant was charged 
under is a family court statute with trial in the state district court. When completing the 
security clearance application, Applicant was confused since he was told it was a family 
court matter. Prior to completing the security clearance application, Applicant discussed 
his responses with his wife. They concluded that the matter did not fit the requirement to 
be reported on the application. Applicant signed a charging sheet at the police station. 
However, because his attorney told him it was a family court matter, he believed the 
matter was not criminal but a family court issue. (Tr. 77-79, 160-165; App. Ex. B, State 
Statute, Unattended Child) 
 
Applicant’s wife testified that she worked in her family’s business for 13 years as 
an accountant. She was employed in the family business when she and Applicant 
married. She stopped working in 2001 to care for her children and was unemployed until 
2006. She then had some sporadic employment until the middle of 2008. In 2001, her 
income was more than her husband’s. When she stopped working in 2001, the family 
lost a lot of income. In addition, they had significant medical expenses for the children. 
Their house was to be foreclosed because they could not pay the mortgage. They filed 
a Chapter 13 bankruptcy in 2003 to stay the foreclosure. The house was sold in 2005 
and the bankruptcy paid off. At the time, she was managing the family finances. She did 
not tell Applicant that they had significant financial issues. She tried to manage the 
problem herself. (Tr. 169-180) 
 
Applicant and his wife used the remainder from the sale of the first house to pay 
a year’s rent on a place to live because of poor credit from the bankruptcy. Her mother 
passed away and she inherited approximately $400,000. They used most of her 
inheritance for a down payment on a new home. They refinanced the home twice to 
finish the basement and add a deck. They also used the refinance funds to pay some of 
the taxes owed on the inheritance. They negotiated a payment plan with the IRS for the 
remaining taxes that were owed. She could not return to work because she had to care 
for the children. One child was unable to be sent to a babysitter or go to school because 
of his condition. She tried working but could not keep a job because of the demands of 
child care. They found a program for autism that would help the children learn life skills 
with their illness. It was expensive, costing about $400 monthly. The results for the 
children were good. Their mortgage payments were high and they could no longer 
afford the house which had decreased significantly in value because of the housing 
financial crisis. The only option to keep the children in the program and care for them 
was to get out from under their housing costs and file a Chapter 7 bankruptcy. She and 
her husband attended financial and budget counseling as part of the bankruptcy and 
they learned a lot of good practices. (Tr. 180-190, 194-196) 
 
Her understanding of the use of the company credit card was it could be used for 
other than business expenses as long as the bill was paid each month. She told her 
husband to use the card for personal expenses to free up some other funds. She did not 
realize that the card could not be used in this manner. She paid the credit card bills 
when received but fell behind at times. (Tr. 190-191) 
 
7 
 
She and her husband discussed his response to the question on the security 
clearance application concerning taxes owed. She read the question as asking if they 
had any taxes that had not been paid or not being paid. Since they had an agreement 
with the IRS to pay the taxes and were current with the payments, she did not believe 
that the taxes needed to be reported. (Tr. 191-192) 
 
She and her husband discussed whether to list the unattended child matter. They 
were under the impression it was a family court matter and not criminal. Her husband 
had not received any information about the charges and only signed a document at the 
police station at the request of the police officer. (Tr. 192-193) 
 
Her children are currently doing well in school. The situation with their children 
has improved greatly since 2001. However, their out-of-pocket medical expenses after 
insurance are now about $12,000 yearly. She and her husband have stable 
employment, are stable financially, and meet their bills and expenses with funds 
remaining. They sparingly use credit cards. They have made financial mistakes in the 
past and have learned from those mistakes. They want to maintain their financial 
stability so they can continue to care for their children. (Tr. 194-206) 
 
Applicant presented 11 character letters of reference from government 
employees, contractors he worked with, friends, and fellow employees. They all attest to 
his strong character in caring for his children. They also note that he is an excellent 
employee and has good working relationships with everyone. He is efficient and 
effective in the performance of his duties. The individuals providing character letters 
have access to classified information. They all attest to Applicant’s excellent reliability, 
judgment and trustworthiness. They all believe he should have access to classified 
information. (App. Ex. A (3), letter, dated September 6, 2012; App. Ex. Q, Letters, 
various dates) 
 
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. 
 
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 
8 
 
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 is at risk and 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 filed a Chapter 13 bankruptcy in 2003 and a Chapter 7 bankruptcy in 2008 
raising Financial Considerations Disqualifying Conditions AG ¶ 19(a) (inability or 
unwillingness to satisfy debts); and AG ¶ 19(c) (a history of not meeting financial 
obligations). Even though the bankruptcies were either paid off or discharged, the 
evidence indicates both an inability and an unwillingness to satisfy debt.  
 
Applicant used his company-issued credit card to purchase personal items in 
violation of company policy. This raises Financial Considerations Disqualifying 
9 
 
Condition 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).   
 
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.  
 
Bankruptcy is a legal and permissible means of resolving debt. Bankruptcy as a 
result of financial irresponsibility is of security concern. Also of concern is a failure to 
change financial practices after the bankruptcy or continued financial irresponsibility. 
For security clearance purposes, the causes leading to the filing of a bankruptcy should 
be examined to determine if an applicant acted reasonably and responsibly. Applicant 
incurred debt because of medical expenses for his children with autism, Asperger’s 
syndrome, and developmental disabilities. The family lost his wife’s income when she 
was unable to work because she had to care for the children. He filed a Chapter 13 
bankruptcy in 2003 to stave off foreclosure of his house. The bankruptcy payments 
were made and the house sold realizing a profit. The debts were paid off. He acted 
reasonably and responsibly under the circumstances.  
 
The family purchased a house using a large inheritance to make a significant 
down payment. They twice refinanced the house to take funds to make improvements 
on the house and pay inheritance taxes. His wife still was unable to work full-time 
because of the need to care for the children. The children were still incurring significant 
medical expense beyond insurance. The housing market collapsed and the house was 
valued less than the mortgage. Applicant could no longer afford the mortgage, pay his 
children’s medical expenses, and pay his other bills when due. He filed a Chapter 7 
bankruptcy in 2010 and their debts were discharged.  
 
Applicant acted reasonably and responsibly under the circumstances. In 
hindsight, he may have purchased a bigger and more expensive house than he could 
afford on his salary only. However, he wanted to move to an area where the schooling 
was better for his children and his wife could find good steady employment. Applicant 
and his wife used an inheritance to make a large down payment to afford the house. 
Unfortunately, the demands of child care prevented his wife from steady employment.  
The cost of medical care and therapy for the children continued to increase, and the 
housing market collapsed. These were conditions beyond his control and are likely not 
to recur. Under the circumstances, he acted reasonably and responsibly by filing the 
Chapter 7 bankruptcy. His present finances are under control and he has not incurred 
any additional debt. He has sufficient funds each month to meet his financial 
responsibilities with funds remaining. Applicant established that he acted responsibly 
towards his debts under the circumstances. 
10 
 
I also considered the mitigating conditions in AG ¶¶ 20(a) and (c) in regard to the 
allegation that Applicant used his company-issued credit card for personal expenses in 
violation of company policy. I also considered AG ¶ 20(d) (the individual has initiated a 
good-faith effort to repay the overdue creditors or otherwise resolve debts) in regard to 
this allegation. 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 mistakenly believed he could use the company-issued credit card for 
personal purchases as long as the bill was paid each month. Applicant’s wife asked him 
to use the company-issued credit card for personal purchases to free other credit cards 
for normal family purchases. When confronted with the policy on company credit card 
use, Applicant established a payment plan and the debt is paid in full. Applicant has 
resolved his past delinquent debts showing a meaningful track record of paying debts. 
He established a reasonable and prudent adherence to his financial obligations. His 
past financial issues do not reflect adversely on his trustworthiness, honesty, and good 
judgment.   
 
I also considered Financial Consideration Mitigating Condition 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). Applicant and his wife 
received the required financial counseling when they filed a Chapter 7 bankruptcy in 
2010. They learned budgeting and good financial practices from the counseling and 
their finances are now stable and under control. Based on all of the financial information 
available to include the information provided by Applicant, I conclude that Applicant has 
mitigated security concerns based on financial considerations. 
 
Personal Conduct 
 
A security concern is raised for personal conduct based on Applicant's responses 
to financial and criminal questions on his e-QIP. Personal conduct is a security concern 
because conduct involving questionable judgment, untrustworthiness, unreliability, or 
unwillingness to comply with rules and regulations can raise questions about an 
individual’s reliability, trustworthiness, and ability to protect classified and sensitive 
information. Of special interest is any failure to provide truthful and candid answers 
during the process to determine eligibility for access to classified information or any 
other failure to cooperate with this process (AG ¶ 15). Personal conduct is always a 
security concern because it asks whether the person’s past conduct justifies confidence 
the person can be trusted to properly safeguard classified or sensitive information. 
Authorization for a security clearance depends on the individual providing correct and 
accurate information. If a person conceals or provides false information, the security 
clearance process cannot function properly to ensure that granting access to classified 
or sensitive information is in the best interest of the United States Government.  
 
11 
 
Applicant and his wife owed federal taxes from an inheritance she received. At 
the time he completed the security clearance application, he was current on an IRS 
payment plan to pay the taxes. On his e-QIP application for a security clearance, 
Applicant responded “no” to the question concerning whether he failed to pay taxes as 
required by law. Also, Applicant had received a citation for an offense concerning 
leaving a child unattended in a car. He answered “no” to a question concerning whether 
he had been issued a summons, citation, or ticket to appear in court on a criminal 
proceeding against him. His failure to list his tax debt and the unattended child criminal 
charge raises a security concern under Personal Conduct Disqualifying Condition AG ¶ 
16(a) (the deliberate omission concealment, or falsification of relevant and material facts 
from any personnel security questionnaire, personal history, or similar form used to 
conduct investigations, to determine security eligibility or trustworthiness).  
 
Applicant denied an intentional falsification for the missing material information 
on the application. While there is a security concern for an omission, concealment, or 
falsification of a material fact in any written document or oral statement to the 
Government when applying for a security clearance, not every omission, concealment, 
or inaccurate statement is a falsification. A falsification must be deliberate and material. 
It is deliberate if it is done knowingly and willfully with intent to deceive. Applicant stated 
he was confused whether the inheritance tax qualified as a failure to pay taxes since he 
had an agreement with the IRS and he was current with his payments. He did not 
believe he owed any taxes because they were being paid. As for the unattended child 
issue, he did not believe it was criminal because he was never arrested, jailed, or 
placed on bail. His attorney advised him and it was adjudicated in family court. I find 
Applicant’s testimony concerning his confusion responding to the security clearance 
application questions to be reasonable and credible. He is not an attorney and not 
sophisticated in understanding the intent and meaning of the questions. He did not 
intentionally and deliberately fail to respond accurately to the questions on the security 
clearance application.  
 
In regard to the allegation concerning using the company credit card for personal 
purchases in violation of company policy, I considered Personal Conduct Disqualifying 
Condition AG ¶ 16(f) (violation of a written or recorded commitment made by the 
individual to the employer as a condition of employment). Applicant’s was issued a 
credit card by his company to use only for business travel expenses according to the 
company policy. He signed the documents outlining the company policy on use of the 
credit card. However, he did not read the document because it was given him with other 
human resource documents. When he and his wife were having financial issues in 
October 2010, he used the card as requested by his wife for personal purchases rather 
than his personal credit card. They were trying to keep a good cash flow for their 
personal finances so they we spreading the purchases over different cards. 
 
Applicant reasonably and honestly believed he could use the card for personal 
purchases as long as the bill was paid each month. Unknown to Applicant, his wife, who 
was managing the family finances, did not pay the debt when due. I have considered 
Personal Conduct Mitigating Condition AG ¶ 17(d) (the individual has acknowledged the 
behavior and obtained counseling to change the behavior or taken other positive steps 
to alleviate the stressors, circumstances, or factors that caused untrustworthy, 
12 
 
unreliable, or other inappropriate behavior, and such behavior is unlikely to recur). 
When advised of the debt and the correct policy interpretation, Applicant established a 
payment plan, and the debt has been paid in full. He understands the company policy 
and his finances are under control. This problem is unlikely to recur. Applicant did not 
deliberately fail to provide accurate information on his security clearance applicant and 
other personal conduct problems are unlikely to recur. I find for Applicant as to security 
concerns under the personal conduct guideline.  
 
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 consider the favorable information 
provided by Applicant’s friends, coworkers, and colleagues. I considered that Applicant 
is an excellent employee and successfully held a security clearance since 2000. I 
considered that Applicant’s financial problems were caused by circumstances beyond 
his control. He acted reasonably and responsibly towards his finances under the 
circumstances. He appropriately filed for bankruptcy protection to hold off foreclosure. 
He filed bankruptcy again because he had debts he could not pay because of his 
children’s medical expenses, his wife’s inability to work because she had to care for the 
children, and the downturn in the housing market. He is current with his present debts. 
Applicant established a good-faith effort to pay or resolve his debts. Applicant’s efforts 
to pay and resolve his financial obligations indicates that he will be concerned, 
responsible, and careful regarding classified information. He did not deliberately fail to 
provide correct and accurate information on his security clearance application. In 
addition, he did not deliberately fail to follow the company guidance on use of his 
company credit card. 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 that Applicant has mitigated security concerns arising under the 
financial considerations and personal conduct guidelines. Eligibility for access to 
classified information is granted.  
13 
 
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.c:  For Applicant 
 
Paragraph 2, Guideline E:   FOR APPLICANT 
 
 Subparagraphs 2.a – 2.c:  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