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                        DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 11-12569 
  ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Kathryn D. MacKinnon, Esq., Deputy Chief Department Counsel 
For Applicant: Pro se 
 
 
 
______________ 
 
Decision 
______________ 
 
 
DUFFY, James F., Administrative Judge: 
 
Applicant failed to mitigate the security concerns arising under Guideline F,  
Financial Considerations. Eligibility for access to classified information is denied.  
 
Statement of the Case 
 
On May 4, 2011, Applicant submitted an Electronic Questionnaire for 
Investigations Processing (e-QIP). On May 8, 2013, the Department of Defense (DOD) 
issued Applicant a Statement of Reasons (SOR) detailing security concerns under 
Guideline F. This action was taken under Executive Order (EO) 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 on September 1, 2006. 
 
The SOR set forth reasons why DOD could not find under the Directive that it is 
clearly consistent with the national interest to grant or continue Applicant’s eligibility for 
a security clearance. On June 12, 2013, Applicant answered the SOR and elected to 
have her case decided on the written record in lieu of a hearing. On June 24, 2013, 
 
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Department Counsel submitted the Government’s File of Relevant Material (FORM) that 
contained documents identified as Items 1 through 9.  
 
On June 24, 2013, the Defense Office of Hearings and Appeals (DOHA) sent 
Applicant a copy of the FORM with instructions to submit any additional information and 
objections within 30 days of its receipt. Applicant received the FORM on July 2, 2013, 
and did not submit any objections or additional matters within the allotted period. The 
case was assigned to me on September 3, 2013.  
 
Findings of Facts 
 
Applicant is a 41-year-old employee of a federal contractor. She works part time 
as an executive/administrative assistant for two employers. She has worked for one of 
those employers since March 2011 and for the other since July 2010. She graduated 
from high school in 1990, has attended college since 2008, but has not yet earned a 
college degree. She is separated from her husband. She has two children, ages 16 and 
20. She has held a security clearance since about 2004 without incident.1 
 
 The SOR alleged that Applicant had 29 delinquent debt, totaling $34,201, and 
that she was granted a Chapter 7 bankruptcy discharge in January 2004. In her Answer 
to the SOR, Applicant admitted each of the SOR allegations with comments.2 
  
 In April 2003, a Special Agent of the Defense Security Service interviewed 
Applicant about her financial problems. During that interview, she stated that her 
problems started in 1996 when her husband lost his leg and her mother passed away 
shortly thereafter. She indicated that she had a kidney transplant and that she was 
spending about $1,000 a month for medications. Her personal financial statement (PFS) 
in 2003 had a net monthly remainder of a negative $1,327.3  
 
Applicant filed Chapter 7 bankruptcy in October 2003. At the time of her kidney 
transplant, Applicant was employed with medical insurance. However, her employer 
filed for bankruptcy and Applicant lost her medical insurance. The hospital advised her 
that her kidney transplant, which cost approximately $200,000, was not covered by 
medical insurance. Her medical bills prompted her to file Chapter 7 bankruptcy. In 
January 2004, her debts were discharged in that bankruptcy.4 
 
From October 2006 to March 2007, Applicant was unemployed. She was 
unemployed again from December 2007 to July 2010. Although she was registered to 
work at a temporary employment agency from September 2009 to July 2010, she only 
worked one week during that period because she was sick and hospitalized. 
                                                          
1 Item 4. 
2 Items 1 and 3.  
3 Item 9. 
 
4 Items 4, 5, 6, 7, and 8. 
 
 
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Consequently, she was unemployed for almost three years between October 2006 and 
July 2010.5 
 
 In her e-QIP, Applicant stated: 
 
. . . I had a kidney transplant in March 2003, since then I had health issues 
from 2006 to 2010 on and off. I have experienced renal rejection and will 
need another transplant or dialysis in the future. Severe health issues and 
lack of being able to work caused me to get behind on some financial 
obligations but I fully intend to satisfy all of my financial obligations.6 
 
In her Office of Personnel Management (OPM) interview dated June 22, 2011, 
Applicant stated that her financial situation was further complicated because her 
husband was unable to work due to his disability. She indicated that his income was 
limited to social security disability payments. She and her husband now maintain 
separate residences.7   
 
 In her OPM interview, Applicant also reportedly stated that she was struggling to 
meet her living expenses. The summary of the interview further indicated: 
 
[She] intends to work immediately on [the] delinquent debts and already 
has begun to contact creditors and has made several payment 
arrangements to begin resolving delinquent debt. [She] will continue to 
work with creditors to take care of her remaining debts. [She] also 
developed a financial plan to track her expenses and income, including 
payment agreements with delinquent creditors. [She] has reached the 
point of being able to remain current with her payments of monthly 
recurring expenses and is paying them on time. [She] intends to pay 
smaller delinquencies first and then begin working on the larger 
delinquencies. [She] avoids credit to [pay] recurring debts and will 
continue to do so in the future.8  
 
In her Answer to the SOR, Applicant stated: 
 
. . . I have a terminal kidney disease. I was diagnosed with this disease at 
16 and this disease has led me to have a kidney transplant in March 2003. 
Since my transplant, I have had many complications which impact my 
ability to work. I went through a transition period after my transplant of 
having to pay for expensive medication out of pocket ($3,000 a month) in 
order to be able to live or go without these medications. Without these 
                                                          
5 Items 4 and 5. 
 
6 Item 4 at 42. 
 
7 Items 6. 
 
8 Items 6. 
 
 
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medications I would die so I endured the hardship for a while until I 
received the necessary medical help. At one point I had to receive blood 
transfusions every other month in order to be able to function. In this time I 
accumulated excessive medical bills as well as other bills which I am in 
the process of paying through [an organization] and that I intend to satisfy. 
Last year my kidney transplant failed and I had to be put on home dialysis. 
I perform dialysis 7 days a week, every 4 hours and this allows me the 
freedom to still work and live a productive life. This current position has 
allowed me the flexibility to work from home or make-up work in case I am 
sick and thus giving me steady income. This allows me to make payments 
and keep track of my bills. I am currently and will continue to satisfy my 
financial obligations.9 
 
 The SOR debts were either placed for collection or had dates of first delinquency/ 
dates of last activity that span from August 2006 (SOR ¶ 1.x) to April 2013 (SOR ¶1.a). 
Eight of those debts were listed for collection in 2012. At least 15 of them, totaling 
$4,630, are medical debts.10  
 
In her Answer to the SOR, Applicant stated that she satisfied the debt for $54 in 
SOR ¶ 1.i, but provided no proof of that payment. In admitting each of the other 
delinquent debts, she indicated that she was unable to pay off the debt or make 
payments under a repayment plan because of her health problems. She provided no 
proof of any payments toward the alleged debts.11 
 
 In the FORM, Department Counsel noted that Applicant submitted no 
documentary proof to corroborate her health problems, but also indicated there was no 
basis for suspecting her claims were not accurately reported. Department Counsel 
further indicated that Applicant needed to provide proof of her efforts taken to resolve 
her debts. Applicant failed to respond to the FORM.12 
 
 Applicant submitted a personal financial statement (PFS) dated November 30, 
2012, that reflected her total net monthly income was $2,800, that her total monthly 
expenses were $1,878, and that her monthly debt payments were $534, which left her a 
net monthly remainder of $388.13 
 
 
 
 
                                                          
9 Item 4.  
10 Items 1, 6, 7, and 8. 
 
11 Item 3. 
 
12 FORM. 
 
13 Item 6. 
 
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Policies 
 
 When evaluating an applicant’s suitability for a security clearance, the 
administrative judge must consider the adjudicative guidelines. 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, administrative judges apply the guidelines in 
conjunction with the factors listed in the adjudicative process. The administrative judge’s 
overarching 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. 
 
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 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.  
 
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.” The 
applicant has the ultimate burden of persuasion to obtain a favorable security 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. Decisions include, by necessity, consideration of 
the possible risk the applicant may deliberately or inadvertently fail to safeguard 
classified information. Such decisions entail a certain degree of legally permissible 
extrapolation of potential, rather than actual, risk of compromise of classified 
information. 
 
Section 7 of EO 10865 provides that adverse decisions shall be “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).   
 
 
 
 
 
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Analysis 
 
Guideline F, Financial Considerations 
 
The security concern for financial considerations is set out in AG ¶ 18 as follows: 
 
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. Two are potentially applicable in this case:   
 
 (a) inability or unwillingness to satisfy debts; and  
 
 (c) a history of not meeting financial obligations. 
 
  Applicant was granted a Chapter 7 bankruptcy discharge in 2004. Since then, 
she accumulated delinquent debts that she was unable or unwilling to satisfy for an 
extended period. This evidence is sufficient to raise the above disqualifying conditions. 
 
  Several financial considerations mitigating conditions under AG ¶ 20 are 
potentially applicable: 
 
(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 presented a compelling case that her financial problems were the 
result of conditions largely beyond her control. She has had chronic health problems for 
 
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many years. She had a kidney transplant in 2003. Since then, she encountered many 
medical complications and had to pay out of pocket for expensive medications. Due to 
her medical problems, she was unemployed for about three years from October 2006 to 
July 2010. She began working again in July 2010 and has been working two part-time 
jobs since March 2011. In 2012, her transplant failed. She currently undergoes daily 
dialysis. Additionally, her husband is disabled and his income is limited to social security 
disability payments.  
 
 To merit full credit under AG ¶ 20(b), however, an applicant must not only 
establish that his or her financial problems were largely the result of conditions beyond 
his or her control, but also that he or she acted responsibly under the circumstances. 
Little is known about the steps Applicant has taken to resolve her financial problems. In 
November 2012, Applicant indicated that she had a net monthly remainder of about 
$388. No evidence, however, was presented that she was using a portion of that 
remainder to pay off the smaller debts. In short, insufficient information was presented 
to establish that Applicant acted responsibly under the circumstances. AG ¶ 20(b) 
partially applies.    
 
 Applicant’s debts are ongoing and significant. They cover a number of years 
since her bankruptcy. Many of them are recent, indicating her financial situation has not 
stabilized. She provided no proof of payments toward any of the alleged debts. 
Insufficient evidence was presented to conclude that her financial problems are either 
under control or are being resolved. She presented no realistic plan for resolving them. 
From the evidence presented, I am unable to determine that her financial problems are 
unlikely to recur. AG ¶¶ 20(a), 20(c), 20(d) do 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 
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. 
 
 
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I considered the potentially disqualifying and mitigating conditions in light of all 
relevant facts and circumstances surrounding this case. I have incorporated my 
comments under Guideline F in my whole-person analysis. Some of the factors in AG ¶ 
2(a) were addressed under that guideline, but some warrant additional comment.  
 
Minimal whole-person evidence has been presented in this case. Despite the 
presence of some mitigation -- particularly Applicant’s chronic medical problems -- the 
record evidence leaves me with questions and doubts about her eligibility and suitability 
for a security clearance. In conclusion, Applicant failed to mitigate the financial security 
concerns.  
 
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: 
 
Paragraph 1, Guideline F:  AGAINST APPLICANT 
Subparagraphs 1.a – 1.dd:  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. 
                                                
    
 
________________________ 
James F. Duffy 
Administrative Judge