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                           DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
 
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 11-13994  
 ) 
Applicant for Security Clearance ) 
 
 
 
Appearances 
 
For Government: Gregg A. Cervi, Esquire, Department Counsel 
 
For Applicant: Pro se 
 
 
 
______________ 
 
Decision 
______________ 
 
O’BRIEN, Rita C., Administrative Judge: 
 
Based upon a review of the pleadings, exhibits, and File of Relevant Material 
(FORM), I conclude that Applicant has not mitigated the security concerns raised under 
the financial considerations guideline. Accordingly, his request for a security clearance 
is denied. 
 
Statement of the Case 
 
On February 8, 2013, the Department of Defense (DOD) issued Applicant a 
Statement of Reasons (SOR) (Item 1), pursuant to Executive Order 10865, 
Safeguarding Classified Information Within Industry, dated February 20, 1960, as 
amended; DoD directive 5220.6, Defense Industrial Personnel Security Clearance 
Review Program (Directive), dated January 2, 1992, as amended; and the adjudicative 
guidelines (AG) implemented by the DoD on September 1, 2006. The SOR listed 
security concerns addressed in the Directive under Guideline F (Financial 
 
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Considerations) of the AG. Applicant's Answer to the SOR was undated but was 
received by the Defense Office of Hearings and Appeals (DOHA) on February 22, 2013. 
Applicant admitted all the allegations, and requested a decision without a hearing. (Item 
4) 
 
Department Counsel submitted a FORM.1 in support of the Government’s 
preliminary decision to deny Applicant's request. The FORM was forwarded to Applicant 
on April 30, 2013, and he received it on May 8, 2013. He was given 30 days from the 
date he received the FORM to file a response. Applicant timely submitted a response 
that was undated but appears from the text to have been created on May 7, 2013. The 
case was assigned to me on June 4, 2014. 
 
Findings of Fact 
 
Applicant’s admissions in response to the SOR are incorporated as findings of 
fact. After a thorough review of the pleadings, the FORM, and Applicant’s response to 
the SOR, I make the following additional findings of fact. 
 
 Applicant is a 39-year-old high school graduate. He is not married, and does not 
have children. From 2001 to 2009, he was employed by a defense contractor as a 
switchboard operator. In May 2009, when the company operating the contract changed, 
Applicant retained the same position. In his August 2011 security clearance application, 
he reported receiving a secret security clearance in 2003. (Item 5) 
 
 In his September 2011 security interview, Applicant explained that when the new 
contractor took over his contract in 2009, his pay rate was reduced from $16 to $10 per 
hour. However, he stated that he was able to meet his current expenses, and to pay 
some past-due debts. More than one year later, in his December 2012 interrogatory 
response, he stated, “I do not have enough funds to pay off bills/debts that I currently 
own [sic] and then pay the bills that I need to pay to live (food, rent, gas, light, etc.).” In 
his February 2013 Answer, he noted that his current contract “only pays me enough to 
get by.” He stated that, nevertheless, he is responsible and is paying his bills timely. He 
commented, “True, I do have debt, but I can’t change that.” He also stated, “I am sure 
most of the debt on my credit should be written off and I will check with those soon.” 
(Items 4, 6) 
 
 In his May 2013 Response to the Government’s FORM, Applicant said he is 
“getting better with paying my bills” and is trying not to incur additional debts. Applicant 
described contacts he made with the creditors in May 2013. He stated he has contacted 
a debt relief company about resolving three debts (allegations 1.a, 1.d, and 1.e). He 
noted the company required $250 per month for three years, which he decided is more 
than he can afford. He also stated that “I don’t even know if I will have a job in a few 
                                                          
1 See Directive, Enclosure 3, Section E3.1.7. The FORM included eight documents (Items 1 - 8) proffered 
in support of the Government’s case. 
 
 
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months.” Applicant did not explain about why he thought he might become unemployed. 
(Response) 
 
 In his December 2012 personal financial statement, Applicant estimated that his 
net monthly income is $2,245 and estimated his expenses at $1,760. In addition, he 
listed debt payments of $489. When his combined expenses and debt payments 
($2,249) are subtracted from his income, he has a negative monthly remainder of $4. 
(Item 6) However, in his May 2013 Response, he provided a different estimate. He 
listed monthly expenses totaling $1,555. He also listed an ongoing payment of $80, and 
a $200 per month payment for his computer, which he completed paying off in May 
2013. The newer PFS does not list $300 per month for life insurance; it is not clear if he 
no longer has this expense, or he forgot to include it in his 2013 estimate. He also did 
not note whether his income had changed since his PFS of December 2012. (Item 6; 
Response) 
 
 Applicant admits the 12 debts alleged in the SOR, which are currently delinquent, 
charged off, or in collection status. These debts, which total $18,383, appear in 
Applicant's credit reports of August 2011 and December 2012.  
 
 1.a, 1.g - Retail purchases ($3,337) Applicant paid timely on a furniture account 
(1.a, $2,391) until his drop in income in 2009. In his May 2013 Response, Applicant 
stated he contacted the creditor in May. The creditor asked him to pay $100 per month, 
which Applicant could not afford. He plans to try to pay $25 or $50 monthly, but did not 
know if the creditor will accept it. Applicant stated in his security interview that he did not 
recognize the creditor at ¶1.g ($946), but in his Answer he stated that it related to a 
computer purchase in the 1990s, which he failed to pay after losing his job. In his 
Response, Applicant noted that the debt at ¶1.g “has been charged off,” with no further 
comment. (Items 4, 6; Response)  
 
 1.b - Cable account ($209) – Applicant discontinued his account because he 
was dissatisfied with the service. He spoke with the creditor on May 7, 2013, and was 
informed that the correct balance was $64.41. He planned to start payments on May 30, 
2013 of $25 or $35 every two weeks. (Items 4, 6; Response) 
 
 1.c - credit card debt ($446) - Applicant believes a friend opened this account 
without his permission. There is no evidence he disputed the debt with the credit 
agencies. In his Response, Applicant noted that the debt at ¶1.c “has been charged off,” 
with no further comment. (Items 4, 6; Response) 
 
 1.d - Car loan ($2,942) -  Applicant bought a car in 2011 for $8,067. Shortly 
thereafter, it broke down. The lender repossessed it a few months after Applicant 
purchased it. He believes the loan balance was $6,200, and that after the car was sold, 
he owed about $2,200. (Items 4, 6; Response) 
  
 1.e – Car loan ($5,351) – Applicant bought a car in 2006 for $14,000 and made 
timely payments. However, he then gave the car to his sister, who failed to make the 
 
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payments. The car was repossessed in about 2009. In his 2011 security interview, 
Applicant stated he would contact the creditor to set up a payment plan. In his SOR 
Answer, he said the lender informed him the car was charged off. (Items 4, 6; 
Response) 
 
 1.f, 1.k - Medical debts ($559) – Applicant stated the debt at ¶1.f ($213) is for 
unpaid medical expenses related to a car accident. He does not have medical 
insurance. The unpaid debt at ¶ 1.k ($346) is for his treatment for the flu. In his 2013 
Response, in relation to his medical debts, Applicant stated he “will have to call and try 
to come up with a payment plan.” (Item 4; Response) 
  
 1.h, 1.l - Cell phone accounts ($223) – Applicant claims his roommate opened 
the account at ¶ 1.h ($101) without his permission. The evidence does not indicate that 
he disputed this debt with the credit agencies. In regard to the cell phone account at ¶1.l 
($122), Applicant stated, “If I want to return to [company] I would have to pay balance.” 
In his 2013 Response, Applicant noted both balances are small, and he might be able to 
make small payments. He has not contacted either creditor. (Items 4, 6; Response) 
 
 1.i, 1.j - Student loans ($5,316) – Applicant no longer attends school, and his 
student loans became due because they were no longer deferred. In his December 
2012 interrogatory response, Applicant stated, “My [student] loans are on with [sic] a 
consolidation service. I have called and they want me to pay more than I can so 
payments have not been made.” (Item 6) However, his February 2013 Answer appears 
to indicate that his pay is being garnished by the lender. Applicant stated,  
 
These accounts are with a consliated [sic] company. They were on 
forbearance but since I am not in school right now I am supposed to pay. I 
was paying the IRS (Department of Education) they and I agreed to have 
wages taken out of account to bring account current. I have applied for 
economic hardships with [company]. (Item 4) 
 
In his May 2013 Response, Applicant stated the loans are now deferred “due to 
economic hardships.” (Response) 
 
 At his 2011 security interview, Applicant stated he would contact the creditors for 
the accounts he disputes and determine if they are valid debts. There is no evidence he 
filed disputes with the credit agencies. He also planned to set up payment plans with 
small monthly payments for the other delinquent debts. In his May 2013 Response, he 
stated that he is “currently trying to work with [credit repair company] to fix my credit 
score that my credit report has due to my problems with my debt due to my younger 
years.” He gave no additional information about working with the credit repair company. 
(Items 5, 6; Response)  
 
 
 
 
 
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Policies 
 
Each security clearance decision must be a fair, impartial, and commonsense 
determination based on examination of all available relevant and material information, 
and consideration of the pertinent criteria and adjudication policy in the AG.2 Decisions 
must also reflect consideration of the factors listed in ¶ 2(a) of the guidelines, commonly 
referred to as the “whole-person” concept. The presence or absence of a disqualifying 
or mitigating condition does not determine a conclusion for or against an applicant. 
However, specific applicable guidelines are followed when a case can be measured 
against them, as they represent policy guidance governing the grant or denial of access 
to classified information. In this case, the pleadings and the information presented by 
the parties require consideration of the security concerns and adjudicative factors 
addressed under Guideline F (financial considerations). 
 
A security clearance decision is intended only to resolve whether it is clearly 
consistent with the national interest3 for an applicant to either receive or continue to 
have access to classified information. The Government bears the initial burden of 
producing admissible information on which it based the preliminary decision to deny or 
revoke a security clearance for an applicant. Additionally, the Government must be able 
to prove controverted facts alleged in the SOR. If the Government meets its burden, it 
then falls to applicant to refute, extenuate or mitigate the Government’s case.  
 
Because no one has a “right” to a security clearance, an applicant bears a heavy 
burden of persuasion.4 A person who has access to classified information enters into a 
fiduciary relationship with the Government based on trust and confidence. Therefore, 
the Government has a compelling interest in ensuring each applicant possesses the 
requisite judgment, reliability and trustworthiness of one who will protect the national 
interests as her or her own. The “clearly consistent with the national interest” standard 
compels resolution of any reasonable doubt about an applicant’s suitability for access in 
favor of the Government.5 
 
Analysis 
 
Guideline F, Financial Considerations 
 
AG ¶ 18 expresses the security concern pertaining to financial considerations: 
 
Failure or inability to live within one's means, satisfy debts, 
and meet financial obligations may indicate poor self-control, 
                                                          
2 Directive. 6.3. 
 
3 See Department of the Navy v. Egan, 484 U.S. 518 (1988). 
 
4 See Egan, 484 U.S. at 528, 531. 
 
5 See Egan; Adjudicative Guidelines, ¶ 2(b). 
 
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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 over-
extended is at risk of having to engage in illegal acts to 
generate funds. . . . 
 
 Applicant has a history of delinquent debts, because his credit report shows that 
his delinquencies began several years ago. As of the date of the SOR, his past-due 
debts totaled more than $18,000. His history of failing to meet his financial obligations 
supports application of disqualifying conditions AG ¶ 19(a) (inability or unwillingness to 
satisfy debts) and AG ¶ 19(c) (a history of not meeting financial obligations). His 
delinquencies appear to stem from an inability rather than a unwillingness to pay his 
debts. 
 
 Under AG ¶ 20, the following conditions can potentially mitigate security 
concerns:  
 
(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.  
 
 Applicant’s failure to meet his financial obligations did not occur in the distant 
past, because his debts are currently delinquent. His unresolved financial situation casts 
doubt on his reliability, and AG ¶ 20(a) cannot be applied. 
 
 In 2009, Applicant’s pay rate was reduced from $16 per hour to $10 per hour 
when a new company assumed control of his contract. However, there is little evidence 
to show if Applicant acted responsibly under the circumstances. Applicant receives 
limited mitigation under AG ¶ 20(b). 
 
 Although Applicant said in 2011 that he would formally dispute some of his debts, 
and would work on setting up payment plans, the file contains no evidence that he took 
 
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such actions at that time, or in 2012. In 2013, after receiving the Government’s FORM, 
Applicant states that he contacted a credit repair agency. However, he provided no 
evidence supporting that claim. He also stated that he contacted a debt relief company, 
but could not afford the payment they required. He provided no evidence of his contact 
with this company. If he did contact such agencies, his efforts are quite recent. He has 
no substantiated payment plans in place, and his debts are not under control. AG ¶¶ 
20(c) and (d) cannot be applied.  
 
Whole-Person Concept 
 
 Under the whole-person concept, an administrative judge must evaluate an 
applicant’s security eligibility by considering the totality of the applicant’s conduct and all 
the circumstances. I have evaluated the facts presented and have applied the 
appropriate adjudicative factors under the cited Guideline. I have also reviewed the 
record before me in the context of the whole-person factors listed in 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.  
 
 Over the past several years, Applicant has accrued more than $18,000 in 
delinquent debt. He has been aware that delinquent debts are a security concern since 
at least 2011, when he completed his security clearance application. Applicant stated in 
2011 that he would verify the debts he disputed. However, Applicant failed to make this 
effort, which would have indicated the appropriate concern about his financial 
obligations.  
 
 Applicant does not have a plan in place to deal with his delinquencies. He 
contacted some creditors in May 2013, after he received the Government’s FORM. He 
made contact with a debt-relief firm within the past two months, but could not afford to 
retain it. His efforts to deal with his debts have been too recent to reflect a good-faith 
desire to resolve them. Applicant has not paid any SOR debts, and has no plan in place 
to do so. Applicants are not required to be debt-free; however, they are expected to 
develop a plan to resolve their debts, and provide evidence that they are implementing 
that plan. The Government’s doubts about Applicant's suitability to hold a security 
clearance remain, and must be resolved in favor of the national interest.6 
 
 
 
                                                          
6 See Egan; Adjudicative Guidelines, ¶ 2(b).  
 
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Formal Findings 
 
 Formal findings on the allegations set forth in the SOR, as required by section 
E3.1.25 of Enclosure 3 of the Directive, are as follows: 
 
Paragraph 1, Guideline F:   AGAINST APPLICANT 
 
 Subparagraphs 1.a – 1.l   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 allow Applicant access to classified 
information. Applicant’s request for a security clearance is denied. 
 
 
 
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RITA C. O’BRIEN 
Administrative Judge