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                               DEPARTMENT OF DEFENSE
                DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 11-11336
)
)
Applicant for Security Clearance )
Appearances
For Government: Melvin A. Howry, Esq., Department Counsel
For Applicant: Paula Phinney, Esq.
May 21, 2013
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Decision
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GOLDSTEIN, Jennifer I., Administrative Judge:
The Statement of Reasons (SOR) identified Applicant as owing 14 delinquent
debts totaling $40,094. Additionally, his home was foreclosed upon in December 2008.
Applicant is making payments on two debts. The remainder of Applicant’s debts are
resolved. Based on a review of the testimony, pleadings and exhibits, eligibility for
access to classified information is granted.
Statement of the Case 
Applicant submitted an Electronic Questionnaire for Investigations Processing (e-
QIP) on June 6, 2011. On January 11, 2013, the Department of Defense issued an SOR
to Applicant, detailing security concerns under Guideline F (Financial Considerations).
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 effective in
the Department of Defense on September 1, 2006. 
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Applicant answered the SOR (Answer) on February 11, 2013, and requested a
hearing before an administrative judge from the Defense Office of Hearings and
Appeals (DOHA). The case was assigned to me on April 1, 2013. DOHA issued a notice
of hearing on April 2, 2013, scheduling the hearing for April 24, 2013. The hearing was
convened as scheduled. The Government offered Exhibits (GE) 1 through 8, which
were admitted without objection. Applicant offered Exhibits (AE) A through DD, which
were admitted without objection. Applicant testified on his own behalf. The record was
left open until May 6, 2013, for the receipt of additional documentation. On May 6, 2013,
Applicant presented additional exhibits, marked AE EE through AE LL. Department
Counsel had no objections and they were admitted into evidence as identified. DOHA
received the transcript of the hearing (Tr.) on May 6, 2013.
Findings of Fact
Applicant is a 45-year-old government contractor. Applicant served in the Marine
Corps from 1986 to 2008. He achieved the rank of gunnery sergeant (E-7). He has been
married for 25 years. Applicant and his wife have three children, ages 25, 22, and 16.
(GE 3; AE R; Tr. 41-48, 116-117.)
The Government alleged that Applicant is ineligible for a clearance because he
has made financial decisions that indicate poor self-control, lack of judgment, or
unwillingness to abide by rules and regulations, all of which raise questions about his
reliability, trustworthiness and ability to protect classified information. The SOR
identified Applicant as owing 14 delinquent debts totaling $40,094, as identified on five
credit reports and Applicant’s Answers to Interrogatories. Applicant denied each of the
debts in his Answer, with the exception of SOR ¶¶ 1.i, 1.k, and 1.o, which he admitted.
(Answer; GE 1; GE 2; GE 4; GE 5; GE 6; GE 8.) His debts are as follows:
Applicant is indebted on a judgment in the amount of $948 (as alleged in SOR ¶
1.a).  This debt was for unpaid  community association dues. Applicant presented
documentation from the court that acknowledges satisfaction of the judgment. This debt
is satisfied. (AE A; Tr. 64-66.)
Applicant was indebted on a collection account in the amount of $4,520 (as
alleged in SOR ¶ 1.b). This debt was for a water softener system that Applicant installed
in his former home. Applicant provided a letter from this creditor that acknowledged
Applicant agreed to make payments of $100 per month for 31 months, beginning
February 15, 2013. Applicant provided documentation showing he made two timely
payments to this creditor according to the agreement. Applicant is addressing this debt.
(AE B; AE KK; Tr. 66-68.)
Applicant was indebted on a delinquent medical debt in the amount of $107 (as
alleged in SOR ¶ 1.c). Applicant produced a letter from this creditor that indicated
Applicant “completely satisfied [his] obligation to our office.” This debt is satisfied. (GE
5; AE C; Tr. 68-71.)
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Applicant was indebted on a collection account in the amount of $627 (as alleged
in SOR ¶ 1.d). This debt was for a cell phone and became delinquent when Applicant
was unemployed. Applicant provided a letter from the collection agent that shows this
debt is paid in full. This debt is satisfied. (AE D; Tr. 71-72.)
Applicant is indebted on a collection account in the amount of $3,058 (as alleged
in SOR ¶ 1.e). This debt is a duplicate of SOR ¶ 1.b. Applicant is making payments on
this debt, as set out above. (AE B; AE E; AE KK; Tr. 66-68, 72-74.)
Applicant was indebted on a collection account for a wireless cable bill in the
amount of $622 (as alleged in SOR ¶ 1.f). Applicant provided a letter from the collection
agent that shows this debt is paid in full. This debt is satisfied. (AE E; AE F; Tr. 74-76.)
Applicant was indebted on a collection account in the amount of $109 (as alleged
in SOR ¶ 1.g). This debt was for a personal loan. A letter from the creditor indicated that
this debt was paid in full on February 8, 2013. (AE G; Tr. 77-78.)
Applicant was indebted on a collection account in the amount of $3,730 (as
alleged in SOR ¶ 1.h). Applicant provided a letter from this creditor that acknowledged
he agreed to make payments of $100 per month. Applicant provided documentation
showing he made two timely payments to this creditor according to the agreement.
Applicant is addressing this debt. (AE G; AE JJ; Tr. 78-81.)
Applicant was indebted on a vehicle that was repossessed in the amount of
$23,248 (as alleged in SOR ¶ 1.i). Applicant contacted the creditor to arrange payments
and learned that this debt was part of a class action suit against the creditor. The
creditor informed Applicant by letter dated April 23, 2013, that as part of the settlement
of the suit Applicant’s account had been closed and the deficiency was deleted from
Applicant’s credit report. This debt is resolved. (AE AA; Tr. 82-84.)
Applicant was indebted on a collection account in the amount of $528 (as alleged
in SOR ¶ 1.j). This debt was for an unpaid dental bill. Applicant produced a letter from
this creditor showing this debt is paid in full. This debt has been satisfied. (AE I; Tr. 85-
87.)
Applicant was indebted on a collection account in the amount of $1,413 (as
alleged in SOR ¶ 1.k). This debt was for a time-share property that Applicant purchased
in 2003. He was unable to make payments on this property when he was unemployed
and the debt became delinquent. Applicant produced an account statement showing
this debt as “$0 past due” and “$0 current balance.” This debt is resolved. (AE J; Tr. 87-
89.)
Applicant was indebted on a collection account in the amount of $170 (as alleged
in SOR ¶ 1.l).  This debt was for cable television services. Applicant produced a letter
from this creditor showing this debt was paid in full on February 7, 2013. This debt is
resolved. (AE K; Tr. 90-91.)
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Applicant was indebted on a collection account in the amount of $393 (as alleged
in SOR ¶ 1.m). This debt belonged to Applicant’s son, who bears the same name as
Applicant. Applicant satisfied this debt on February 5, 2013. (AE L; Tr. 91-92.)
Applicant was indebted on a collection account in the amount of $621 (as alleged
in SOR ¶ 1.n). Applicant provided a letter from this creditor that stated this debt was a
duplicate of the debt alleged above in SOR ¶ 1.f. This debt is satisfied. (AE E; AE F; AE
M; Tr. 74-76, 92-94.)
Applicant’s home was foreclosed upon in December 2008 (as alleged in SOR ¶
1.o). He purchased his home in January 2005. It was the first time he had purchased a
home and was not financially savvy. He purchased the home for $408,000. He put
$4,000 down and financed the rest of the purchase with two mortgages. The first was
for approximately $367,000. The second was for approximately $50,000. He believed
that the first mortgage had a fixed-interest rate at the time he signed the loan
documentation. However, in January 2008, the monthly payments due on the first
mortgage doubled from $2,200 to $4,400. At that time, he learned he had an adjustable
rate mortgage. In July 2008, the interest rates on the first mortgage adjusted again, and
his payments went up to $8,800 per month. His second mortgage also had adjustable
interest rates. When the interest rates increased, he could no longer afford to make his
payments. He attempted to refinance the property, but the refinance applications were
denied because he owed more on the loans than the property was worth. Applicant
abandoned the home in December 2008. He provided documentation from the creditors
of both the first and second mortgages that shows he owes nothing further on either
mortgage. (AE W; AE X; AE LL; Tr. 41-63, 108-116, 118-120.)
Applicant attributed his debts to a number of causes. When he retired from the
Marine Corps in 2008, he went from a salary of $6,200 per month to retirement pay of
$2,000 per month. He had a job lined up before he left the Marine Corps, but it was only
for four months. Applicant was unemployed from January 2009 to August 2011,
although he was actively looking for work. His wife also suffered a job loss in April 2009,
and they were unable to pay their delinquent accounts. In February and April of 2009,
Applicant’s wife also incurred significant debt for medical procedures that were
medically necessary, although not covered by their medical insurance. (Tr. 41-48.)
Applicant was hired by his current employer in August 2011. Since that time, he
and his wife prioritized creditors and worked to pay off their delinquent debts. He is
often deployed overseas and placed his wife in charge of their bills. She admitted in a
declaration that she has “not always kept [their] accounts in good order.” However, both
Applicant and his wife have recently completed credit counseling classes on “Setting
Your Financial Goals and Creating a Budget;” “Banking;” and “Understanding Credit &
Credit Reports.” They both are committed to repaying their debts and to building a
savings to avoid debt in the future. Applicant now earns a monthly take-home pay of
$10,000. His monthly remainder, after meeting all of his expenses, is $5,900. He has
been using all of the remainder to satisfy his delinquent accounts listed above. Given
his monthly surplus, he expects to pay off his two remaining debts faster than his
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agreement with the creditors and grow his savings. (GE 6; AE V; AE BB; AE II; Tr. 47-
48, 94-98, 112, 120.)
Applicant presented five letters of recommendation, from four retired Marines
who served with Applicant, and from Applicant’s martial arts instructor. Each wrote of
Applicant’s high moral character, trustworthiness, and dedication. One letter noted
Applicant “was entrusted with highly classified material and was accountable for
equipment in excess of $2 million” and “maintained these accounts flawlessly.” Among
Applicant’s many accomplishments during his Marine Corps service, he was awarded
two Navy and Marine Corps Achievement Medals; a Combat Action Ribbon; a Navy
Unit Commendation; three Navy Meritorious Unit Commendations; seven Marine Corps
Good Conduct Medals; a Marine Corps Expeditionary Medal; and two National Defense
Service Medals. His current employer rates Applicant’s performance as “Exceeds
Requirements” or “Exceptional” in all areas. (AE N; AE O; AE P; AEQ; AE R; AE S; AE;
T; AE U.)
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 (DCs) and mitigating conditions (MCs), 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. 
Under 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
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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.”
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 under the guideline for financial considerations are set out
in AG ¶ 18, which reads in pertinent part:      
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. 
Department Counsel asserted, and the record evidence established, security
concerns under two Guideline F DCs, as set forth in AG ¶ 19: 
(a) inability or unwillingness to satisfy debts; and
(c) a history of not meeting financial obligations. 
Applicant was unable or unwilling to resolve a large amount of delinquent debt
that began accumulating in 2008. The evidence supports the application of AG ¶¶ 19(a)
and (c), thereby shifting the burden to Applicant to rebut, extenuate, or mitigate those
concerns. 
The guideline includes four 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; 
1See ISCR Case No. 09-02160 (App. Bd. Jun. 21, 2010). 
2See ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008).
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(b) the conditions that resulted in the financial problem 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;
(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
(d) the individual initiated a good-faith effort to repay overdue creditors or
otherwise resolve debts.
A security clearance adjudication is not a debt collection procedure. It is a
process designed to evaluate an applicant’s judgment, reliability, and trustworthiness.1
An applicant is not required, as a matter of law, to establish resolution of every debt
alleged in the SOR. An applicant need only establish a plan to resolve the financial
problems and take significant actions to implement the plan. There is no requirement
that an applicant make payments on all delinquent debts simultaneously, nor is there a
requirement that the debts alleged in the SOR be paid first.2
Applicant’s financial difficulties began in 2008 as the result of his unemployment.
His financial problems were exacerbated by his wife’s subsequent unemployment and
her health problems. Applicant’s financial problems were largely caused by factors
beyond his control. While his wife prioritized repaying her health care expenses over
their delinquent debt in the past, they have resolved nearly all of their past-due
accounts. Applicant only has two accounts that are not resolved, and he has written
agreements with both of those creditors to accept payments of $100 per month on each
account. He produced documentation that he has made two payments to both creditors
under the agreements. Applicant earns a significant monthly income and has the ability
to avoid future financial delinquencies. After attending financial counseling, he now has
the tools to manage his finances and avoid delinquencies in the future. 
Applicant’s financial problems are being resolved and are under control. They
occurred under circumstances that are unlikely to recur and do not cast doubt on his
current reliability, trustworthiness, and good judgment. Applicant made a good-faith
effort to pay his debts. AG ¶¶ 20(a), 20(b), 20(c), and 20(d) are applicable.
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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
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 highly respected
by those who know him. Applicant was honest and candid about his finances. Even
before receiving the SOR, Applicant was acting responsibly to resolve his debts. As
indicated above, an applicant is not required to establish that he has paid every debt
listed in the SOR. All that is required is that an applicant establish a plan to resolve the
financial problems and take significant actions to implement the plan. Applicant has
responsibly resolved almost all of his financial problems, thereby demonstrating the
significant action required. He has a plan to repay his remaining two delinquent
accounts. His finances do not constitute a security concern.
Overall, the record evidence leaves me without doubt as to Applicant’s present
eligibility and suitability for a security clearance. For all these reasons, I conclude
Applicant mitigated the security concerns arising from his financial considerations.
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: FOR APPLICANT
Subparagraph 1.a through 1.o: 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 the national interest to grant Applicant eligibility for a security
clearance. Eligibility for access to classified information is granted.
                                              
JENNIFER I. GOLDSTEIN
Administrative Judge