1
                                                                     
                               DEPARTMENT OF DEFENSE
                DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 12-01100
)
)
Applicant for Security Clearance )
Appearances
For Government: Jeff Nagel, Esq., Department Counsel
For Applicant: Pro se
May 9, 2013
______________
Decision
______________
GOLDSTEIN, Jennifer I., Administrative Judge:
The Statement of Reasons (SOR) identified Applicant as owing six delinquent
debts totaling $62,974.47. Applicant has resolved three of her delinquent accounts. She
is making payments on a fourth debt. She plans to address the remaining delinquent
accounts, totaling $14,038.47, when the funds become available. She has worked
diligently to address her delinquent accounts since becoming employed in 2010, after a
long period of unemployment and underemployment. She can be trusted to continue to
resolve all of her indebtedness. 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 February 24, 2011. On November 20, 2012, 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
2
Program (January 2, 1992), as amended (Directive); and the adjudicative guidelines
effective in the Department of Defense on September 1, 2006. 
Applicant answered the SOR (Answer) on December 22, 2012. In her Answer,
she requested a hearing before an administrative judge from the Defense Office of
Hearings and Appeals (DOHA). The case was assigned to another administrative judge
on February 15, 2013, and was reassigned to me on March 25, 2013. DOHA issued a
Notice of Hearing on March 29, 2013, scheduling the hearing for April 22, 2013. The
hearing was convened as scheduled by video teleconference. The Government offered
Exhibits (GE) 1 through 6, which were admitted without objection. Applicant offered
Exhibits (AE) A through V, which were admitted without objection. Applicant testified on
her own behalf. The record was left open until May 2, 2013, for the receipt of additional
documentation. On April 26 and 30, 2013, Applicant presented additional exhibits,
marked AE W through AE X. Department Counsel had no objections and they were
admitted into evidence as identified. Department Counsel presented one additional
exhibit, marked GE 7, which was admitted without objection. DOHA received the
transcript of the hearing (Tr.) on April 30, 2013.
Findings of Fact
Applicant is a 49-year-old government contractor. She has worked for her current
employer since August 2010. She attended community college from August 2005 to
November 2008, but did not receive a degree. She is divorced and has one adult child.
(GE 1; Tr. 57-58.)
The Government alleged that Applicant is ineligible for a clearance because she
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 her
reliability, trustworthiness and ability to protect classified information. The SOR
identified six delinquent debts totaling $62,974.47. Applicant admitted each of the debts
in her Answer, with explanations. (Answer.) Her debts are as follows:
Applicant is indebted on a delinquent account in the amount of $47,121 (as
alleged in SOR ¶ 1.a). Applicant testified that she attempted to negotiate a settlement
with this creditor for years. On March 7, 2013, she received a written settlement
agreement from this creditor. She agreed to pay $1,000 on March 31, 2013, and make
$200 per month payments for 125 months beginning April 30, 2013. Applicant
presented copies of cancelled checks showing she paid this creditor $1,000 on March
22, 2013 and $200 on April 12, 2013. Applicant is addressing this debt. (AE V; AE X; Tr.
39-42, 51.)
Applicant was indebted on a delinquent medical account in the amount of $1,447
(as alleged in SOR ¶ 1.b). This debt was for post-operative physical therapy that
Applicant believed would be covered by insurance. Applicant satisfied this debt on
February 21, 2013, as evidenced by her bank statement. Applicant’s most recent credit
report also reflects that this debt was satisfied. (GE 7; AE T; Tr. 42.)
3
Applicant is indebted on a delinquent collection account in the amount of
$10,077.47 (as alleged in SOR ¶ 1.c). This debt was for a credit card. Applicant plans to
contact the collection agent for this account after she has satisfied some of her other
delinquent accounts. She testified she does not currently have the disposable income to
address this debt. This debt is unresolved. (Tr. 42.)
Applicant was indebted on a delinquent collections account for cable television
services in the amount of $228 (as alleged in SOR ¶ 1.d). Applicant provided a receipt
from this creditor showing that on April 23, 2013, this debt was paid in full. (AE X; Tr.
43-44, 52.)
Applicant was indebted on a delinquent medical account in the amount of $140
(as alleged in SOR ¶ 1.e). Applicant testified that she paid this debt. She presented a
letter from the creditor, dated April 8, 2013, which indicated the delinquency would be
deleted from her credit report. This debt is resolved. (AE W; Tr. 44-45.)
Applicant is indebted on a delinquent account in the amount of $3,961 (as
alleged in SOR ¶ 1.f). She testified that she had not yet addressed this debt. This debt
is unresolved. (Tr. 45.)
Applicant attributed the delinquent debts to a period of unemployment from April
2008 through June 2009. She documented that prior to her unemployment, she had
excellent credit, although she had high balances on some accounts. She was able to
maintain payments on all debts. In April 2008, Applicant accepted an “Enhanced
Surplus-Reduction Offer (ESRO)” from her employer, after ten years of service,
because her position was eliminated. Her employer offered Applicant the option to move
out of state to keep her job, but she elected to accept the ESRO because she owned
two local properties, including her residence and one rental property. At the time she
accepted the ESRO, she was making approximately $84,000 in wages annually. She
received a lump-sum payout of approximately $46,158.59. She filed for unemployment
in May 2008. She supported herself with her savings and unemployment compensation
while she was unemployed. She attempted to find work, to no avail. She began
struggling to make her mortgage payments and pay monthly bills. Additionally, she
incurred unexpected expenses when her mother and pets became ill.  (AE A; AE B; AE
C; Tr. 35-36.)
In September 2008 Applicant underwent foot surgery, which was covered by her
insurance. After the surgery, she required physical therapy. Her doctor told her the
physical therapy would be covered under continuation of care, although her health
insurance had lapsed. However, the insurance company refused the claim and the
account was placed for collections (as alleged in SOR ¶ 1.b). This medical procedure
and post-operative care hindered Applicant’s ability to get another job and repay her
bills. (AE D.)
Applicant testified that she worked to resolve her mortgage debt first. She
presented evidence that she attempted to refinance her properties three times, but was
4
unable to do so.  The value of the properties had declined and her mortgages exceeded
the properties’ value. Her realtor, who wrote a letter in support of Applicant, advised her
to sell the properties. She was able to short sell one of her properties in 2009. She short
sold her other property in 2011.(AE J; AE K; AE O.) 
In June 2009, Applicant started a small business to try to earn an income. She
worked at the business until the fall of 2010, when she closed it because she was
unable to make it profitable. (GE 2; AE F; AE G; Tr. 36, 49.)
Applicant was hired by a government contractor in August 2010. Applicant
explained that she has been paying off her creditors as funds were available, since she
began employment with the government contractor. She presented documentation that
showed she had numerous other delinquent accounts that she resolved since 2010.
(GE 1; GE 2; AE H; AE P; AE Q; Tr. 38.)  She testified:
I just want to say that I am doing the best I can to pay off all this back debt
as well as trying to stay current on the debts that happen every day in day
to day life.  Obviously, as it took me well over 10 years  to accumulate it,
it's a little unreasonable to be able to pay it all off in two years so I'm doing
the best I can. And I will continue to do the best I can. (Tr. 46.)
Applicant’s income, as stated in her 2012 Federal income tax return, was
$78,554. She testified that she has a net remainder of approximately $340 per month
after expenses, which she uses to satisfy her delinquent accounts. She no longer has
credit cards. (GE 2; AE R; Tr. 53-56.)
Applicant is respected by her friends who wrote letters on her behalf. They
indicate Applicant is honest and reliable. She was awarded two certificates from her
employer in recognition of her productivity and self sacrifice. (AE S; AE X.)
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.
5
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
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. 
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).
6
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; 
(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 her unemployment.
Her financial situation was exacerbated by foot surgery, and illness of her mother and
pets. These were circumstances beyond her control. She was unable to find
employment and tried to start her own business to support herself. The business was
not profitable and she fell further into debt. She finally was able to secure employment
in 2010. Since that time, she has addressed numerous delinquent accounts, one by
one. Applicant’s financial problems were largely caused by factors beyond her control
and she has acted responsibly under the circumstances. She developed a plan to work
with her creditors, as her funds allowed, to repay her debts.
7
Applicant has resolved three SOR-listed delinquent accounts. She is making
payments on a fourth debt. She plans to address the remaining delinquent accounts,
totaling $14,038.47, when she has money available. Applicant testified that she is doing
the best she can with a  limited income to repay the debts. She intends to continue
making payments on her debts until they are all satisfied. She is incurring no new debt
and has no credit cards. She is living within her means.
Applicant has made a good-faith effort to pay four of her debts. AG ¶ 20 (d) is
applicable concerning SOR ¶¶ 1.a, 1.b, 1.d, and 1.e. She does not receive full mitigation
under AG ¶ 20 (d) because she has not recently contacted the creditors in SOR ¶¶ 1.c
and 1.f, and is not making payments on these accounts. However, Applicant has
sufficiently managed her finances to convince me that there are clear indications that
her financial problems are being resolved and are under control. They occurred under
circumstances that are unlikely to recur and do not cast doubt on her current reliability,
trustworthiness, and good judgment. She plans to pay the debts in ¶¶ 1.c and 1.f when
she has the funds to do so. Her history of working diligently since 2010 to pay her
delinquent accounts, along with her reputation for honesty and integrity, indicates that
she will fulfill this promise. AG ¶¶ 20 (a), 20 (b), and 20 (c) are applicable.
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 and work with her. Applicant was honest and candid about her
finances. Before receiving the SOR, Applicant was acting responsibly to resolve her
debts. As indicated above, an applicant is not required to establish that she 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.
8
Applicant has responsibly resolved most of her financial problems and demonstrated a
commitment to resolving those that remain outstanding. She has sufficient income to
avoid financial problems in the future. Her 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 her 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.f: 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.
                                              
JENNIFER I. GOLDSTEIN
Administrative Judge