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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
------------------------ )       ISCR Case No. 11-13999
)
Applicant for Security Clearance )
Appearances
For Government: Melvin A. Howry, Esquire, Department Counsel
For Applicant: Lawrence Miller, Esquire
August 28, 2013
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DECISION
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ROSS, Wilford H., Administrative Judge:
Applicant submitted his Electronic Questionnaire for Investigations Processing
(e-QIP), on July 13, 2011. (Government Exhibit 1.)  On March 22, 2013, the Department
of Defense issued a Statement of Reasons (SOR) detailing the security concerns under
Guideline F (Financial Considerations) concerning Applicant. 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) effective within the
Department of Defense on September 1, 2006. 
 
Applicant answered the SOR in writing on April 18, 2013, and requested a
hearing before an administrative judge. Department Counsel was prepared to proceed
on May 14, 2013. This case was assigned to me on May 23, 2013. DOHA issued a
notice of hearing on May 30, 2013. I convened the hearing as scheduled on July 22,
2013. The Government offered Government Exhibits 1 through 6, which were admitted.
(Tr. 14-33.) Government Exhibit 7 for Identification was not admitted. (Tr. 106-109.)
Applicant testified on his own behalf. Applicant asked that the record remain open for
the receipt of additional documents. Applicant submitted Applicant Exhibit A on August
Applicant submitted evidence showing that he files his tax returns in a timely fashion. (Government Exhibit1
2 at 9-18.)
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12, 2013, and it was admitted without objection. DOHA received the transcript of the
hearing (Tr.) on July 30, 2013. The record closed on August 12, 2013. Based upon a
review of the pleadings, exhibits, and testimony, eligibility for access to classified
information is granted.
Findings of Fact
Applicant is 62 and single. He is employed by a defense contractor and seeks to
obtain a security clearance in connection with his employment.
Paragraph 1 (Guideline F, Financial Considerations)
The Government alleges in this paragraph that Applicant is ineligible for
clearance because he is financially overextended and therefore potentially unreliable,
untrustworthy, or at risk of having to engage in illegal acts to generate funds. Applicant
admitted all the allegations in the SOR under this Paragraph. Those admissions are
findings of fact. He also submitted additional information to support his request for a
security clearance.
The SOR lists 10 delinquent debts, totaling approximately $79,593. The
existence and amount of these debts is supported by credit reports dated July 23, 2011;
December 9, 2012; March 5, 2013; and July 16, 2013. (Government Exhibits  3, 4, 5,
and 6.) (See also Interrogatories dated February 12, 2013. (Government Exhibit 2.))
The current status of the debts is as follows:
1.a. Applicant admits that he is indebted to the Internal Revenue Service (IRS)
for unpaid taxes.  He has had a payment arrangement with the IRS for approximately1
two years. The original agreement was for his 2007, 2008 and 2009 taxes. The 2007
taxes have been paid. However, the agreement has been amended to include taxes
owed for 2010 and 2011. Accordingly, as of August 2013 Applicant owed the IRS
$10,012.77. He currently pays $175 a month on this arrangement, which is an increase
of $25 over his prior payments and is acceptable to the IRS. (Government Exhibit 2 at
19-24; Applicant Exhibit A at 13-15.; Tr. 39-44, 92-95.) This debt is being resolved.
1.b. Applicant admits that he was indebted to his state taxing authority for
unpaid taxes. He had a payment arrangement with his state to pay off his back taxes for
2007, 2008 and 2009. He provided evidence showing that he has successfully paid all
of his state back taxes. (Applicant Exhibit A at 3-8; Tr. 44-46, 95-97.) This debt is
resolved.
1.c. Applicant admits that he is indebted to a creditor for a credit card debt in
the amount of $1,374. Applicant entered into an agreement with a debt resolution
company in January 2013 to resolve his delinquent debts. He has been making regular
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monthly payments to this company since that time. Through an oversight this debt was
not included in the original plan. Applicant submitted evidence showing that this debt
has now been included in the program. (Government Exhibit 2 at 25-31; Applicant
Exhibit A at 9-12; Tr. 46-53, 60, 62-66.) This debt is being resolved.
1.d. Applicant admits that he is indebted to a creditor for a credit card debt in
the amount of $21,880. Applicant entered into an agreement with a debt resolution
company in January 2013 to resolve his delinquent debts. This debt was included in the
original plan.(Government Exhibit 2 at 25-31; Applicant Exhibit A at 9-12; Tr. 53-57.)
This debt is being resolved.
1.e. Applicant admits that he is indebted to a creditor for a credit card debt in
the amount of $9,905. Applicant entered into an agreement with a debt resolution
company in January 2013 to resolve his delinquent debts. This debt was included in the
original plan. Applicant submitted evidence showing that a payment arrangement has
been made reducing this debt to $4,398. (Government Exhibit 2 at 25-31; Applicant
Exhibit A at 9-12; Tr. 57-59.) This debt is being resolved.
1.f. Applicant admits that he is indebted to a creditor for a credit card debt in
the amount of $15,382. Applicant entered into an agreement with a debt resolution
company in January 2013 to resolve his delinquent debts. This debt was included in the
original plan. Applicant submitted evidence showing that a payment arrangement has
been made reducing this debt to $6,125. (Government Exhibit 2 at 25-31; Applicant
Exhibit A at 9-12; Tr. 59.) This debt is being resolved.
1.g. Applicant admits that he is indebted to a creditor for a credit card debt in
the amount of $8,187. Applicant entered into an agreement with a debt resolution
company in January 2013 to resolve his delinquent debts. This debt was included in the
original plan. (Government Exhibit 2 at 25-31; Applicant Exhibit A at 9-12; Tr. 60.) This
debt is being resolved.
1.h. Applicant admits that he is indebted to a creditor for a credit card debt in
the amount of $14,070. Applicant entered into an agreement with a debt resolution
company in January 2013 to resolve his delinquent debts. Through an oversight this
debt was not included in the original plan. Applicant submitted evidence showing that
this debt has now been included in the program. (Government Exhibit 2 at 25-31;
Applicant Exhibit A at 9-12; Tr.60-62.) This debt is being resolved.
1.i. Applicant admits that he is indebted to a creditor for a credit card debt in
the amount of $2,946. Applicant entered into an agreement with a debt resolution
company in January 2013 to resolve his delinquent debts. This debt was included in the
original plan.(Government Exhibit 2 at 25-31; Applicant Exhibit A at 9-12; Tr. 62.) This
debt is being resolved.
1.j. Applicant admits that he was indebted for a cell phone bill in the amount of
$82. Applicant is still a customer of this phone company. He submitted his most recent
bill showing that he is making regular payments. Applicant has attempted to resolve this
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debt with the creditor, which appears to concern a closed account, without success.
(Applicant Exhibit A at 16-17; Tr. 66-70.) 
Applicant testified that his financial problems began when he had a bad breakup
with his then-girlfriend in approximately 2005. When she lost her job he took on all the
expenses of the relationship, including taking care of her mother’s medical expenses,
and eventually her mother’s funeral expenses. (Tr. 70-73.) Applicant also has had some
unexpected dental expenses, which have also increased his debt. (Tr. 97-98.) 
Applicant discussed how he attempted to resolve his debt situation with his
creditors himself, before it got out of hand. He was unable to get satisfactory results this
way, so he did research on debt resolution companies and found one that does not get
paid until all the debts are resolved and paid off. (Tr. 98-103.)
Applicant lives very frugally and showed that he has the financial ability to both
pay his current indebtedness, as well as pay his past-due indebtedness through the
facilities of the debt resolution program. (Government Exhibit 2 at 7-8, 22-23; Tr. 74-85.)
Policies
Security clearance decisions are not made in a vacuum.  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 as appropriate 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 over-arching
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.  In addition, the administrative judge may also rely on his or her own common
sense, as well as knowledge of the law, human nature, and the ways of the world, in
making a reasoned decision.
The protection of the national security is the paramount consideration. AG ¶ 2(b)
requires that, “Any doubt concerning personnel being considered for access to
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. Likewise, I have avoided drawing inferences
grounded on mere speculation or conjecture.
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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 the applicant or proven by Department Counsel, and has the
ultimate burden of persuasion as to obtaining a favorable clearance 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. Security clearance decisions include, by
necessity, consideration of the possible risk that 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.
 
Finally, as emphasized in Section 7 of Executive Order 10865, “Any
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.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites
for access to classified or sensitive information).  
Analysis
Paragraph 1 (Guideline F, Financial Considerations)
The security concern relating to the guideline for Financial Considerations is 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. 
The guideline notes several conditions that could raise security concerns. Under
AG & 19(a), an Ainability or unwillingness to satisfy debts@ is potentially disqualifying.
Similarly under AG & 19(c), Aa history of not meeting financial obligations@ may raise
security concerns. Applicant, by his own admission, and supported by the documentary
evidence, had ten delinquent accounts that he could not resolve. The evidence is
sufficient to raise these potentially disqualifying conditions.
The guideline also includes examples of conditions that could mitigate security
concerns arising from financial difficulties. Under AG ¶ 20(a), disqualifying conditions
may be mitigated where Athe behavior happened so long ago, was so infrequent, or
ISCR Case No. 06-12930 at 2 (App. Bd. Mar. 17, 2008) (quoting ISCR Case No. 04-09684 at 2-3 (App. Bd.2
Jul. 6, 2006)).
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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.@ In addition, AG
¶ 20(b) states that disqualifying conditions may be mitigated where “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.”  
The evidence shows that both of the above mitigating conditions apply to
Applicant. It appears that the majority of this debt was incurred as a result of the
breakup with his girlfriend, and some medical debts. Applicant has not tried to avoid this
situation, but after being unable to resolve it himself he has successfully turned to a
professional debt resolution company. In fact, it is to his credit that he signed with this
company before he was issued the SOR. He has been making regular payments to this
company, and they have already reached payment arrangements with two of his
creditors. In addition, he has paid off his state tax debt and is reducing his Federal tax
liability in a manner acceptable to the IRS. Based on the particular facts of this case, I
find that he has “initiated a good-faith effort to repay overdue creditors or otherwise
resolve debts,” as required by AG ¶ 20(d).
Applicant has not received financial counseling. However, as found above, his
current financial situation is stable. I find that “there are clear indications that the
problem is being resolved or is under control,” as required by AG ¶ 20(c). 
Finally, Applicant has been proactive in contacting the remaining creditor, the cell
phone bill for $82, and attempting to resolve that debt. This action brings him under the
orbit of AG ¶ 20(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 has acted in a way that shows good judgment, making the best he
could out of a difficult situation. As the DOHA Appeal Board has said, “An applicant is
not required to show that [he] has completely paid off [his] indebtedness, only that [he]
has established a reasonable plan to resolve [his] debts and has taken significant
actions to implement that plan.”  All of these mitigating conditions apply to the facts of2
this case.
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 the relevant circumstances. 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
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concept. The administrative judge must 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.      
I considered the potentially disqualifying and mitigating conditions in light of all
the relevant facts and circumstances surrounding this case. The discussion under
Guideline F, above, applies here as well. While Applicant has had financial problems for
several years, he is well on the road to having them resolved. 
Under AG ¶ 2(a)(2), I have considered the facts of Applicant’s debt history.
Based on the record, I find that there have been permanent behavioral changes under
AG ¶ 2(a)(6). Accordingly, I find that there is little to no potential for pressure, coercion,
exploitation, or duress (AG ¶ 2(a)(8)); and that there is a low likelihood of recurrence
(AG ¶ 2(a)(9)). 
Overall, the record evidence leaves me with no questions or doubts as to
Applicant’s eligibility and suitability for a security clearance. For all these reasons, I
conclude Applicant has mitigated the security concerns arising from his financial
situation. Accordingly, the evidence supports granting his request 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: FOR APPLICANT
Subparagraphs 1.a. through 1.j.: 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.
WILFORD H. ROSS
Administrative Judge