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                   DEPARTMENT OF DEFENSE 
          DEFENSE OFFICE OF HEARINGS AND APPEALS       
        
   
In the matter of: ) 
 ) 
  )       ISCR Case: 11-09034 
  ) 
Applicant for Security Clearance ) 
 
 
Appearances 
For Government: Gregg A. Cervi, Esquire, Department Counsel 
For Applicant: Pro se 
 
 
 
______________ 
Decision 
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DAM, Shari, Administrative Judge: 
 Applicant submitted a security clearance application on October 20, 2010. (Item 
5.) On August 10, 2012, the Department of Defense (DOD) issued Applicant a 
Statement of Reasons (SOR) detailing security concerns under Guideline F (Financial 
Considerations). (Item 1.) 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) implemented by the Department of Defense on September 
1, 2006.  
 Applicant answered the SOR on August 17, 2012, and requested that her case 
be decided by an administrative judge on the written record without a hearing. (Item 4.) 
Department Counsel submitted the Government’s written case on November 26, 2012. 
A complete copy of the File of Relevant Material (FORM), containing 12 Items, was 
provided to Applicant, and she was afforded an opportunity to file objections and submit 
 
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material in refutation, extenuation, or mitigation within 30 days of her receipt of the 
FORM.   
 Applicant signed the document acknowledging receipt of her copy of the FORM 
on November 30, 2012, and returned it to the Department of Defense Office of Hearings 
and Appeals (DOHA). She did not submit additional documents for the record. I 
received the case assignment on January 4, 2013. 
Findings of Fact 
 Applicant is a 40-year-old employee of a defense contractor. She earned an 
associate’s degree in information technology in 1992. She was married to her first 
husband from 1997 to 2003. She married her second husband in 2004, but is now 
separated. She has two children, ages 8 and 13. Her second husband was convicted of 
aggravated battery of his girlfriend and the negligent use of a firearm. He has been 
incarcerated since August 2010. No divorce action is pending. (Items 5, 6.) 
 Applicant was employed from August 2000 to July 2007 with her current 
employer, a defense contractor. She was then unemployed until February 2008 at which 
time she found work with a private company. She worked until September 2009 when 
she again became unemployed. In August 2010 she obtained a position as a drafter 
with her current employer. (Item 5.) 
 In August 2010 Applicant completed an Electronic Questionnaires for 
Investigations Processing (e-QIP). During a November 2010 interview with a 
government investigator regarding her delinquent debts, Applicant stated that her 
financial situation was improving since starting employment in August 2010. She 
intended to begin addressing her debts. (Item 6.) 
 Applicant has a history of financial difficulties. In November 1994 she filed a 
Chapter 7 Bankruptcy petition and discharged those delinquent debts in March 1995.  
The amount of the discharged debt is not included in this record. In March 2005 she 
filed another Chapter 7 Bankruptcy petition, and discharged about $83,000 of 
delinquent debts in June 2005. It included medical bills, automobile loans, and credit 
card bills. That debt accumulated after she began working part time. (Item 6.) 
 Applicant attributed her current financial problems to an 11-month period of 
unemployment prior to her current position, and her role as a single parent supporting 
two children as a result of her second husband’s arrest and conviction. Although she 
receives child support for one child, she does not have sufficient money to adequately 
support herself and family.  
 In her Answer Applicant admitted owing the 14 delinquent debts alleged in the 
SOR, totaling $43,299. (Item 4.) According to credit reports included in the record, the 
debts accumulated between 2004 and 2012. (Items 10, 11, 12.) In February 2011 she 
wrote three of her creditors and offered settlements, but did not receive a response. She 
resolved two delinquent debts not alleged on the SOR. (Item 7.) All other debts remain 
 
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unpaid or unresolved. She did not present documentary evidence that she participated 
in credit or financial counseling or that she uses or has been using a budget to manage 
and monitor her finances.    
 Applicant earns an annual salary of $36,712 and receives $8,400 in child support 
for a total yearly income of $45,112. Her net monthly income is $2,959 and expenses 
are $2,485. She pays about $387 toward her student loan and an outstanding personal 
loan. She has about $86 remaining at the end of the month.  
 Applicant stated in her Answer that her financial situation would not cause her to 
engage in illegal behavior. She has attempted to do the best she could with her 
finances. (Item 4.)  
Policies 
 When evaluating an applicant’s suitability for a security clearance, the 
administrative judge must consider the adjudicative guidelines (AG). In addition to brief 
introductory explanations for each guideline, the adjudicative guidelines list potentially 
disqualifying conditions and mitigating conditions, which are to be used in evaluating an 
applicant’s eligibility for access to classified information. 
These guidelines are not inflexible rules of law. Instead, recognizing the 
complexities of human behavior, these guidelines are applied in conjunction with the 
factors listed in AG ¶ 2 describing the adjudicative process. The administrative judge’s 
overarching adjudicative goal is a fair, impartial, and commonsense decision. According 
to AG ¶¶ 2(a) and 2(c), the entire process is a conscientious scrutiny of applicable 
guidelines in the context of a number of variables known as the whole-person concept. 
The administrative judge must consider all available, reliable information about the 
person, past and present, favorable and unfavorable, in making a decision. 
The protection of the national security is the paramount consideration. AG ¶ 2(b) 
requires that “[a]ny doubt concerning personnel being considered for access to 
classified information will be resolved in favor of the 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. Likewise, I have avoided drawing inferences 
grounded on mere speculation or conjecture.  
Pursuant to Directive ¶ E3.1.14, the Government must present evidence to 
establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, “[t]he 
applicant is responsible for presenting witnesses and other evidence to rebut, explain, 
extenuate, or mitigate facts admitted by the applicant or proven by Department Counsel, 
and has the ultimate burden of persuasion as to obtaining a favorable clearance 
decision.” Section 7 of Executive Order 10865 provides: “[a]ny determination under this 
order adverse to an applicant shall be a determination in terms of the national interest 
and shall in no sense be a determination as to the loyalty of the applicant concerned.” 
 
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A person applying for access to classified information seeks to enter 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 the applicant may deliberately or inadvertently fail to protect or 
safeguard classified information. Such decisions entail a certain degree of legally 
permissible extrapolation as to potential, rather than actual, risk of compromise of 
classified information. 
Analysis 
Guideline F, Financial Considerations 
 The security concerns relating to the guideline for financial considerations are set 
out in AG ¶ 18:       
Failure or inability to live within one’s means, satisfy debts, and meet 
financial obligations may indicate poor self-control, lack of judgment, or 
unwillingness to abide by rules and regulations, all of which can raise 
questions about an individual’s reliability, trustworthiness and ability to 
protect classified information. An individual who is financially 
overextended is at risk of having to engage in illegal acts to generate 
funds.  
 AG ¶ 19 describes two conditions that could raise a security concern and may be 
disqualifying in this case:  
(a) inability or unwillingness to satisfy debts; and 
(c) a history of not meeting financial obligations. 
Appellant has a 20-year history of accumulating delinquent debts that she has 
been unable or unwilling to satisfy. Twice her inability to satisfy debts resulted in 
petitioning for bankruptcy, in 1994 and 2005. The evidence is sufficient to raise the 
application of the above two disqualifying conditions.  
 
 The guideline includes five conditions in AG ¶ 20 that could mitigate security 
concerns arising from Applicant’s financial difficulties: 
(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;  
(b) the conditions that resulted in the financial problem were largely 
beyond the person’s control (e.g., loss of employment, a business 
 
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downturn, unexpected medical emergency, or a death, divorce or 
separation), and the individual acted responsibly under the circumstances; 
(c) the person has received or is receiving counseling for the problem 
and/or there are clear indications that the problem is being resolved or is 
under control;  
(d) the individual initiated a good-faith effort to repay overdue creditors or 
otherwise resolve debts; and 
(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’s debts, in excess of $43,000, became delinquent between 2004 and 
2012, and continue to be unpaid or unresolved to-date. Applicant failed to demonstrate 
that such problems are unlikely to continue or recur, or that her financial reliability and 
trustworthiness have improved. The evidence does not support the application of AG ¶ 
20(a).  
AG ¶ 20(b) has partial application. Applicant experienced an 11-month period of 
unemployment prior to obtaining her position in August 2010, the same month that her 
husband went to prison. Those circumstances contributed to her financial delinquencies 
and were beyond her control. However, evidence that she attempted to responsibly 
manage the debts while they were accumulating is necessary for the full application of 
this mitigating condition. She did not present any evidence supporting that prong of this 
condition. AG ¶ 20(c) does not apply either. Applicant did not present sufficient 
evidence that she participated in financial or credit counseling, and offered no 
documentation to establish clear indications that her problems are being resolved or 
under control. She provided some proof that in February 2011 she proposed resolving 
three delinquent debts, but failed to obtain cooperation from those creditors. Mitigation 
under AG ¶ 20(d) is minimal. She admitted each SOR-listed debt, so AG ¶ 20(e) does 
not apply. 
 
Whole-Person Concept 
 Under the whole-person concept, the administrative judge must evaluate an 
applicant’s eligibility for a security clearance by considering the totality of the applicant’s 
conduct and all relevant circumstances. The administrative judge should consider the 
nine adjudicative process factors listed at AG ¶ 2(a):  
(1) the nature, extent, and seriousness of the conduct; (2) the 
circumstances surrounding the conduct, to include knowledgeable 
participation; (3) the frequency and recency of the conduct; (4) the 
individual’s age and maturity at the time of the conduct; (5) the extent to 
 
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which participation is voluntary; (6) the presence or absence of 
rehabilitation and other permanent behavioral changes; (7) the motivation 
for the conduct; (8) the potential for pressure, coercion, exploitation, or 
duress; and (9) the likelihood of continuation or recurrence.  
Under AG ¶ 2(c), the ultimate determination of whether to grant eligibility for a security 
clearance must be an overall commonsense judgment based upon careful consideration 
of the guidelines and the whole-person concept.    
 I considered the potentially disqualifying and mitigating conditions in light of all 
pertinent facts and circumstances surrounding this case. Applicant is an adult, who is 
responsible for her choices and conduct that underlie the security concerns expressed 
in the SOR. Her financial problems span the past twenty years, and continue to the 
present. She has filed two bankruptcies to dispose of delinquent debt, the last one in 
2005 when the court discharged about $83,000. To date, she has about $43,300 of 
delinquent debts and neither the means nor a plan to address them. She offered 
insufficient evidence of rehabilitation or of responsible actions to mitigate her financial 
issues. Overall, the record evidence leaves me with doubt as to Applicant’s present 
eligibility and suitability for a security clearance. 
Formal Findings 
 Formal findings for or against Applicant on the allegations set forth in the SOR, 
as required by ¶ E3.1.25 of Enclosure 3 of the Directive, are: 
 Paragraph 1, Guideline F:   AGAINST APPLICANT 
  Subparagraphs 1.a through 1.p:  Against Applicant 
Conclusion 
 In light of all of the circumstances presented by the record in this case, it is not 
clearly consistent with the national interest to grant Applicant eligibility for a security 
clearance. Eligibility for access to classified information is denied. 
 
SHARI DAM 
Administrative Judge