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DEPARTMENT OF DEFENSE 
DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
 [Redacted] )  ISCR Case No. 12-09196 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Alison O’Connell, Esq., Department Counsel 
For Applicant: Pro se 
 
 
______________ 
 
Decision 
______________ 
 
 
FOREMAN, LeRoy F., Administrative Judge: 
 
This case involves security concerns raised under Guidelines F (Financial 
Considerations) and E (Personal Conduct). Eligibility for access to classified information 
is denied. 
 
Statement of the Case 
 
Applicant submitted a security clearance application on November 7, 2011. On 
February 14, 2013, the Department of Defense (DOD) sent him a Statement of Reasons 
(SOR) alleging security concerns under Guidelines F and E. DOD acted under 
Executive Order 10865, Safeguarding Classified Information within Industry (February 
20, 1960), as amended; DOD Directive 5220.6, Defense Industrial Personnel Security 
Clearance Review Program (January 2, 1992), as amended (Directive); and the 
adjudicative guidelines (AG) implemented by DOD on September 1, 2006.  
 
 Applicant received the SOR on February 21, 2013; answered it on April 4, 2013; 
and requested a hearing before an administrative judge. Department Counsel was 
ready to proceed on June 28, 2013, and the case was assigned to me on July 15, 2013. 
The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on 
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August 9, 2013, scheduling the hearing for September 4, 2013. I convened the hearing 
as scheduled. Government Exhibits (GX) 1 through 8 were admitted in evidence without 
objection. GX 9 and 10 were admitted over Applicant’s objection and are discussed 
below. Applicant testified and submitted Applicant’s Exhibits (AX) A through M, which 
were admitted without objection. I kept the record open to enable Applicant to submit 
additional documentary evidence. He timely submitted AX N through S. Department 
Counsel’s comments regarding AX N through S are attached to the record as Hearing 
Exhibit I. DOHA received the transcript (Tr.) on September 12, 2013. The record closed 
on September 20, 2013. 
 
Evidentiary Issue 
 
 Applicant objected to the admission of GX 9 and 10, pertaining to his termination 
of employment alleged in SOR ¶ 2.a, on the ground that the documents did not reflect 
his signature or any indicia that he received them. I overruled his objection but reserved 
judgment on the factual question whether he had actual knowledge that he had been 
terminated for cause instead of voluntarily resigning. (Tr. 28-31.) 
 
Findings of Fact 
 
 In his answer to the SOR and follow-up correspondence, Applicant admitted 
SOR ¶¶ 1.a-1.i and 1.k-1.p. He provided evidence that the debts in SOR ¶¶ 1.f and 1.h 
had been paid. He denied the debt alleged in SOR ¶ 1.j. He denied the conduct alleged 
in SOR ¶¶ 2.a and 2.b. At the hearing, he recanted his admission of SOR ¶ 1.k. His 
admissions in his answer and at the hearing are incorporated in my findings of fact.  
 
 Applicant is a 46-year-old information technology security specialist employed by 
a federal contractor. He has worked for his current employer since April 2013. He has 
held clearances from other government agencies since June 2002, but he does not 
currently hold a clearance. 
 
 Applicant graduated from high school in June 1985. He received an associate’s 
degree in electronic technology from a technical school in October 1987. He attended a 
junior college from January 1989 to September 1990 but did not receive a degree. He 
intermittently attended a technical school from March 1999 to September 2006 but did 
not receive a degree. 
 
 Applicant worked for federal contractors from September 2000 to August 2005. 
The circumstances under which he left his employment in 2005 resulted in the 
allegation in SOR ¶ 2.a. He was self-employed from August 2005 to August 2009.1 He 
worked for non-federal employers from September 2008 to September 2010, 
overlapping his self-employment. He was unemployed from October 2010 to January 
2011. He worked for a non-federal employer from January 2011 to September 2011. He 
                                                          
1 In his security clearance application, Applicant stated that he was fired in April 2006 and self-employed 
after that date. (GX 1 at 18-20.) However, the termination notice is dated August 31, 2005, and Applicant 
testified that he worked for this federal contractor until August 2005. (GX 10; Tr. 52.) 
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held a part-time second job with a department store in September and October 2011, 
and he left this job under circumstances that resulted in the allegation in SOR ¶ 2.b. He 
worked for a federal contractor from September 2011 to April 2012, when he was 
terminated because his application for a security clearance, submitted in November 
2011, had not been resolved. (GX 2 at 11.) He was unemployed from April 2012 to April 
2013. He was offered a job in July 2012, but could not accept it because it required a 
security clearance. (GX 2 at 9; AX C at 2.) 
 
 Two senior supervisors from the government agency supported by Applicant 
from 2000 to 2005 submitted letters on his behalf. One supervisor described Applicant 
as technically proficient, knowledgeable, and “a consummate professional who can be 
[relied] on to follow through and resolve complex issues before they get out of hand and 
[require] escalation.” The supervisor stated that he “would not hesitate to bring him back 
on board if the situation presents itself.” (AX D at 1.) Another senior supervisor praised 
Applicant’s knowledge, technical skills, loyalty, and integrity. He described Applicant as 
willing to accept assignments, easy to work with, and timely and accurate with his work. 
(AX D at 2.) A former employer described Applicant as a talented technician with good 
judgment and acute awareness of safety issues, who instilled a sense of pride and 
dedication in members of his crew. (AX D at 7.) 
 
 An engineer manager for a federal agency for whom Applicant has been a 
security specialist since April 2013 strongly supports his application for a clearance. He 
states that Applicant has a “high level of conscientiousness,” attention to detail, and 
focus on customer service and satisfaction. He describes Applicant as a person with an 
exemplary work ethic, focus on the mission, and “an intangible energetic quality which 
can only be described with example—he is the first one on the scene to get into a boom 
bucket or get into a confined space to solve a challenging problem.” (AX D at 3.) 
 
 The service account engineer for Applicant’s current employer submitted the 
following comments: 
 
In addition to his technical skills, [Applicant] is trustworthy, has great 
character, and is an upstanding citizen and proactive member of our 
community. I have always trusted him with confidential company 
information and I have never found a reason to doubt or question him. I 
can confidently attest that he will never let anyone down. 
 
(AX P.) 
 
 Applicant’s supervisor from 1997 to 2002 also commented on his knowledge, 
skill, “thankless troubleshooting,” and calm demeanor during difficult assignments. He 
stated that Applicant would be a “great addition” to any company seeking to expand and 
become more competitive. (AX D at 4.) 
 
 Applicant married in June 2008 and divorced in May 2011. He has two 
daughters, now ages 18 and 6, and he is obligated to pay child support for them. 
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 Applicant is actively involved in his community and his church. He has been a 
volunteer high school basketball coach for ten years, and enjoys a reputation for 
excellence, commitment, and integrity. (AX D at 5-6.) The assistant principal at the high 
school where Applicant is a volunteer coach described him as “an extremely effective 
coach and volunteer,” who “strives for excellence in everything he participates in.” He 
considers Applicant a “hardworking, trustworthy man of integrity.” (AX Q.) 
 
 Applicant began operating his own company around 2004, in addition to his 
employment by a federal contractor. His personal company provided integration 
services for security systems. He testified that he informed the owner of the company 
that employed him about his personal business, and the owner told him that his 
personal business was not a problem so long as he did not directly compete with his 
employer or use his employer’s time or material for his own business. (Tr. 54, 57-58.) 
His personal business and his employer’s business overlapped, because they both 
dealt with security systems. (AX D at 1-2; Tr. 56.) 
 
In January 2005, the senior vice-president and chief operating officer for 
Applicant’s employer sent an email to numerous employees, including Applicant, 
reminding them of the company policy that prohibited employees from “pursuing 
activities which, in the judgment of the company, may be in conflict with our general 
welfare, have the appearance of impropriety or which might otherwise damage the 
company’s reputation and/or ability to conduct business.” The email listed certain 
improper employee activities, including “Employment as an employee, contractual, or 
otherwise with a competitor or adversary.” 
 
 On August 17, 2005, the program manager for Applicant’s employer prepared to 
bid on a contract. He received several documents pertaining to the contract, including 
an attendance sheet for a pre-bid walk-through with prospective bidders that had 
occurred on August 11, 2005. The attendance sheet reflected that Applicant participated 
in the walk-through and identified himself as representing his personal company. 
Applicant testified that he informed his employer’s on-site contracting officer that he 
would be away from the work site and that he used his personal vacation time to attend 
the pre-bid walk-through. He testified that he did not know that his employer intended to 
bid on the contract when he attended the pre-bid event. When he found out that his 
employer intended to bid on the contract, he informed the owner of the company that 
employed him, who told him that he could not bid on the contract. (Tr. 54-60.)  
 
Because Applicant’s time sheet reflected that he worked a full eight-hour day for 
his employer, his program manager concluded that he visited the prospective client on 
behalf of his own business while charging his time to his employer. The program 
manager requested that Applicant be terminated for improper conduct, a conflict of 
interest, and falsifying his time sheet. (GX 9.) A termination notice was prepared and 
signed by the company’s director of human services on August 31, 2005. (GX 10.) 
There are no indicia on the termination notice reflecting that it was delivered to 
Applicant. 
 
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 Applicant testified that his employer told him that his personal business 
presented a conflict of interest. (Tr. 61-63.) During a personal subject interview (PSI) in 
December 2011, he told the investigator that he was given a choice between working 
solely for his employer or keeping his personal business, and he chose to keep his 
personal business. (GX 3 at 5.) At the hearing, Applicant testified that he did not receive 
a termination notice, and he believed that he left his job by mutual agreement. (Tr. 53, 
61.) In his security clearance application, he stated that he quit after being told that he 
would be fired. (GX 1 at 20.) 
 
 Applicant testified that his personal business thrived during the first year after he 
left his job with the federal contractor, but his business began declining in 2008. He 
purchased a luxury vehicle in 2007, even though he took a pay cut when he became 
self-employed. After he married in June 2008, he commuted between his work site and 
his wife’s place of residence in another state. In 2009, he moved to the state where his 
wife lived and was employed by a state government agency. (Tr. 63-68.) 
 
Applicant began a part-time job with a department store in September 2011, 
working nights and weekends. On his security clearance application, Applicant 
disclosed that he was fired in October 2011 “for not clocking out.” (GX 1 at 13-14.) The 
summary of his December 2011 PSI recites the following: 
 
The incident occurred when subject came in to work on one day and 
forgot to clock in and out. To correct subject’s work time, subject came in 
the following day, which was his day off and clocked back in, with the idea 
that he would return at the end of the day and clock [out], without actually 
working. The reason he did this was to ensure that he was paid the correct 
amount of hours worked for the previous day. 
 
(GX 3 at 4.)  
 
In September 2012, DOHA sent Applicant interrogatories asking him to verify the 
accuracy of the PSI summary. The first interrogatory asked, “Does the report of 
investigation reflect accurately the information that you provided to the authorized 
investigator for the Department of Defense on the days you were interviewed?” 
Applicant answered, “Yes.” The second and third questions asked him to identify and 
correct anything that was not accurate in the PSI summary and invited him to add any 
additional information. He did not make any corrections or add any information. The 
fourth question asked, “Subject to any additions or deletions made above, do you agree 
with and adopt the investigator’s summary as accurately reflecting your interviews?” 
Again, he answered, “Yes.” (GX 3 at 2.) 
 
At the hearing, Applicant disputed the accuracy of the PSI summary regarding 
the circumstances of his termination from the part-time job. He testified that he went to 
the store on a Sunday morning to check his work schedule. He was a probationary 
employee because he had not yet worked for 90 days. He testified it was necessary to 
clock in to see the work schedule. He then left the store, went to church, and returned in 
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the afternoon. A store manager asked where he had been after he clocked in. When he 
explained what he had done, he was fired. (Tr. 99-105.) When asked why he did not 
correct the inaccuracies in the summary of his PSI when he was given the opportunity 
to do so in September 2012, he responded that he misunderstood the questions in the 
DOHA interrogatories. (Tr. 116-18.) 
 
Applicant attributed his financial problems to the business downturn that caused 
the failure of his personal business, his divorce, the illnesses of his mother and 
grandmother, and his unemployment from April 2012 to April 2013. The evidence 
concerning the debts alleged in the SOR is summarized below.  
 
SOR ¶ 1.a, unsatisfied judgment for $700, filed in June 2010. Applicant’s 
cousin hired him to install security monitoring equipment in his home and paid him a 
deposit. Installation was delayed because his cousin was deployed to another location, 
and when his cousin returned he changed his mind about installing the equipment. The 
cousin asked for his money back, but Applicant could not afford to repay him. In 
response to the SOR and at the hearing Applicant stated that he sent two $125 money 
orders to his cousin, but his cousin had not received them. He did not present any 
documentation that he purchased or sent the money orders. (Tr. 69-71.) However, after 
the hearing, he submitted evidence that he sent $150 to his cousin on September 11, 
2013. (AX O; AX R.)  
 
SOR ¶ 1.b, unpaid cable bill for $264, referred for collection in September 
2012. Applicant voluntarily disclosed this debt in his response to the DOHA financial 
interrogatories, and it is reflected in the September 2012 credit bureau report (CBR) that 
he attached to his responses. In response to the SOR, Applicant stated that he paid $20 
on this debt. However, he testified at the hearing that he had been unable to make any 
payments on this debt. (Tr. 72.) 
 
SOR ¶¶ 1.c and 1.d, a credit card account for $1,882 and a repossession 
deficiency of $16,626, both owed to the same creditor and charged off in March 
2011. Applicant was offered a payment agreement providing for biweekly $225 
payments that covered both debts, to begin in September 2012. (AX J.) He has not 
accepted the offer or made any payments. He testified that he needs to renegotiate the 
payment agreement because he cannot afford the $225 payments. (Tr. 75.) 
 
SOR ¶ 1.e, student loan for $11,406, referred for collection in November 
2009. Applicant entered into a loan rehabilitation program in August 2012, requiring him 
to make nine consecutive monthly payments of $100. (GX 2 at 2-8.) He was unable to 
make the payments due to his unemployment. (GX 3 at 13.) At the hearing he submitted 
evidence that he made a credit card payment of $103 on August 28, 2013. (AX G at 1.) 
He also presented evidence that he has a payment agreement for another student loan, 
not alleged in the SOR, reflecting a balance due of $310 and providing for monthly $10 
payments beginning on August 15, 2013. (AX G at 2-3.) After the hearing, he submitted 
evidence of a payment agreement on the loan alleged in the SOR, providing for monthly 
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$104 payments and documentation reflecting that the first payment was posted on 
September 11, 2013. (AX N.)  
 
SOR ¶¶ 1.f, 1.g, and 1.h, parking tickets for $55, $300, and $55, referred for 
collection in June 2011. Applicant has paid the two $55 tickets. (AX K.) In his 
response to the SOR, he stated that he paid $25 on the $300 ticket, but he provided no 
documentation of payment. At the hearing, he testified that he paid $50 on the $300 
ticket, but he provided no documentation. (Tr. 78.) 
 
SOR ¶ 1.i, repossession deficiency of $36,730, referred for collection in 
October 2008. Applicant purchased a vehicle for $47,918 in 2007, when his personal 
business was thriving, but after the business downturn he voluntarily surrendered his 
vehicle. He testified that he was promised that he would not owe any deficiency, but he 
did not provide any documentation of this promise. He testified that he contacted the 
creditor several times but was unable to negotiate a payment plan. (Tr. 79-81.) His 
December 2011 CBR reflects a balance due of $33,287; and his July 2012 CBR reflects 
a balance due of $35,515. (GX 4 at 2; GX 5 at 8.) In August 2012, the creditor offered to 
settle the debt for $23,642, but Applicant was financially unable to accept the offer. (AX 
F.) 
 
SOR ¶ 1.j, credit card account for $1,845, referred for collection in October 
2008. Applicant denied this debt in his response to the SOR. At the hearing, he testified 
that he disputed the debt with the credit bureau and that the dispute was resolved in his 
favor. (Tr. 82-83.) However, the debt was reflected on his December 2011 and July 
2012 CBRs. (GX 4 at 1; GX 5 at 8.) He did not present any documentation of his dispute 
or its resolution. 
 
SOR ¶ 1.k, medical account for $215, referred for collection in November 
2011. Applicant admitted this debt in response to the SOR, but he recanted his 
admission at the hearing. He testified that he successfully disputed the debt and it was 
removed from his credit record. (Tr. 85-87.) He did not present any documentation of his 
dispute or its resolution. However, it was not reflected on his July 2012 CBR, suggesting 
that it was deleted as a result of the dispute. (GX 4; GX 5 at 9.) 
 
SOR ¶ 1.l, child support arrearage of $9,124. At the hearing, Applicant 
admitted that he fell behind on his child support payments while he was unemployed. 
His court-ordered child support payments are now being automatically deducted from 
his pay. (AX I at 8-13; Tr. 87-89.) 
 
SOR ¶¶ 1.m and 1.n, federal income tax debts ($2,028 for 2011; $3,325 for 
2010). Applicant testified that his federal tax debts arose when his personal business 
was audited and some of his business deductions were disallowed. (Tr. 95-96.) He did 
not file his federal income tax return for 2010 until August 2012, and he did not file his 
2011 return until May 2012. (GX 3 at 71, 74.) He attributed the untimely returns to his 
divorce and the illness of his mother and grandmother. (Tr. 94.) He testified that he 
timely filed his 2012 return. (Tr. 97.) In April 2013, the Internal Revenue Service (IRS) 
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notified him that it was closing the collection case for his debts because of his inability to 
pay the taxes due. (Answer to SOR.) In May 2013, the U.S. Tax Court determined that 
he owed the following additional amounts for the years preceding 2010 and 2011: 
$10,315 for 2006; $1,229 for 2007; $7,075 for 2008; and $9,570 for 2009. (AX M.) 
Applicant testified that he had negotiated a payment plan with the IRS providing for 
monthly $50 payments, but he did not provide any documentation of the agreement or 
payments on the debt. (Tr. 93.) 
 
SOR ¶ 1.o, state tax debt of $2,075 for tax year 2010. Applicant testified that 
he had negotiated a payment plan for this debt in July 2013 but had not made any 
payments under the plan. (Tr. 97-98.) He tendered a $95 payment on this tax debt but it 
was returned unpaid because no bank account number was on the check. (AX H.) 
 
SOR ¶ 1.p, state tax debt (different state than SOR ¶ 1.o) of $1,568 for tax 
year 2011. In September 2012, Applicant negotiated a 24-month payment agreement 
for this debt, providing for monthly $73.35 payments. (AX E.) However, he was unable 
to make the payments. (Tr. 98-99.) 
 
In September 2012, Applicant submitted a personal financial statement (PFS) to 
DOHA in response to financial interrogatories. At that time, his only income was 
unemployment benefits of $430 per week. (Answer to SOR.) His PFS reflected gross 
monthly income of $1,600, deductions from gross income of $320, expenses of $1,633, 
debt payment obligations of $1,756, and a monthly shortfall of about $2,400. (GX 3 at 
19.) 
 
Applicant currently earns about $42,000 per year. (Tr. 49-50.) In his previous 
employment from 2000-2005, he was earning between $60,000 and $70,000 per year. 
(Tr. 51-53.) He estimated that his net income during the first full year of operating his 
own business was between $30,000 and $40,000. (Tr. 66.)  
 
Applicant recently moved to another state and lives with his family because of his 
limited income. He pays his mother $200-$300 per month and his cousin about $150 
per month. He helps care for his grandmother, who is in a nursing home, and spends 
small sums of money for her, buying her dinner, snacks, and small gifts. (Tr. 73-74.) 
 
Applicant presented no evidence that he contacted the creditors alleged in SOR 
¶¶ 1.c, 1.d, 1.i, and 1.p or resumed his agreed payments after April 2013, when he 
returned to the workforce. He claimed to have made a payment on the debt alleged in 
SOR ¶ 1.g, but he provided no documentation of the payment. He claimed to have 
negotiated a payment plan for his federal tax debt, but he provided no documentation of 
an agreement or any payments. He has taken no action to resolve the debt in SOR ¶¶ 
1.b. 
 
Applicant contacted a credit counselor in July 2013. (AX B.) He testified that he 
hopes to include all his unresolved debts in a debt management plan. As of the date of 
the hearing, he had not yet signed a contract with the counselor or formulated a 
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payment plan for his delinquent debts. (Tr. 71-72.) After the hearing, he presented an 
email reminding him of his first appointment with a financial counselor. (AX S.)  
 
Policies 
 
 “[N]o one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 
484 U.S. 518, 528 (1988). As Commander in Chief, the President has the authority to 
“control access to information bearing on national security and to determine whether an 
individual is sufficiently trustworthy to have access to such information.” Id. at 527. The 
President has authorized the Secretary of Defense or his designee to grant applicants 
eligibility for access to classified information “only upon a finding that it is clearly 
consistent with the national interest to do so.” Exec. Or. 10865, Safeguarding Classified 
Information within Industry § 2 (Feb. 20, 1960), as amended.   
 
Eligibility for a security clearance is predicated upon the applicant meeting the 
criteria contained in the AG. These guidelines are not inflexible rules of law. Instead, 
recognizing the complexities of human behavior, an administrative judge applies these 
guidelines in conjunction with an evaluation of the whole person. An administrative 
judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. An 
administrative judge must consider all available and reliable information about the 
person, past and present, favorable and unfavorable. 
 
 The Government reposes a high degree of trust and confidence in persons with 
access to classified information. This relationship transcends normal duty hours and 
endures throughout off-duty hours. Decisions include, by necessity, consideration of the 
possible risk that the applicant may deliberately or inadvertently fail to safeguard 
classified information. Such decisions entail a certain degree of legally permissible 
extrapolation about potential, rather than actual, risk of compromise of classified 
information. 
 
Clearance decisions must be made “in terms of the national interest and shall in 
no sense be a determination as to the loyalty of the applicant concerned.”  See Exec. 
Or. 10865 § 7. Thus, a decision to deny a security clearance is merely an indication the 
applicant has not met the strict guidelines the President and the Secretary of Defense 
have established for issuing a clearance. 
 
 Initially, the Government must establish, by substantial evidence, conditions in 
the personal or professional history of the applicant that may disqualify the applicant 
from being eligible for access to classified information. The Government has the burden 
of establishing controverted facts alleged in the SOR. See Egan, 484 U.S. at 531.  
“Substantial evidence” is “more than a scintilla but less than a preponderance.”  See v. 
Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994). The guidelines 
presume a nexus or rational connection between proven conduct under any of the 
criteria listed therein and an applicant’s security suitability. See ISCR Case No. 92-1106 
at 3, 1993 WL 545051 at *3 (App. Bd. Oct. 7, 1993).   
 
10 
 
 Once the Government establishes a disqualifying condition by substantial 
evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the 
facts. Directive ¶ E3.1.15. An applicant has the burden of proving a mitigating condition, 
and the burden of disproving it never shifts to the Government. See ISCR Case No. 02-
31154 at 5 (App. Bd. Sep. 22, 2005).  
 
An applicant “has the ultimate burden of demonstrating that it is clearly consistent 
with the national interest to grant or continue his security clearance.” ISCR Case No. 
01-20700 at 3 (App. Bd. Dec. 19, 2002). “[S]ecurity clearance determinations should err, 
if they must, on the side of denials.” Egan, 484 U.S. at 531; see AG ¶ 2(b).  
 
Analysis 
 
Guideline F, Financial Considerations 
 
 The SOR alleges 16 delinquent debts totaling $88,198. The concern under this 
guideline 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. 
 
 This concern is broader than the possibility that an individual might knowingly 
compromise classified information in order to raise money. It encompasses concerns 
about an individual’s self-control, judgment, and other qualities essential to protecting 
classified information. An individual who is financially irresponsible may also be 
irresponsible, unconcerned, or negligent in handling and safeguarding classified 
information. See ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012). 
 
 The following disqualifying conditions under this guideline are potentially 
applicable:  
 
AG ¶ 19(a): inability or unwillingness to satisfy debts;  
 
AG ¶ 19(c): a history of not meeting financial obligations; 
 
AG ¶ 19(e): consistent spending beyond one’s means, which may be 
indicated by excessive indebtedness, significant negative cash flow, high 
debt-to-income ratio, and/or other financial analysis; and 
 
AG ¶ 19(g): failure to file annual Federal, state, or local income tax returns 
as required or the fraudulent filing of the same. 
11 
 
 Applicant’s CBRs, admissions during the PSI, responses to DOHA 
interrogatories, answer to the SOR, and testimony at the hearing establish AG ¶ 19(a) 
and AG ¶ 19(c). His purchase of an expensive vehicle in 2007, after taking a 
substantial pay cut to establish his own business, was an imprudent and extravagant 
expense. However, this single purchase does not establish “consistent spending 
beyond one’s means” within the meaning of AG ¶ 19(e).  
 
 Applicant’s failure to timely file his federal income tax returns for 2010 and 2011 
establishes AG ¶ 19(g). However, failure to file tax returns was not alleged in the SOR, 
and thus it may not be an independent basis for denying his application for a clearance. 
His failure to file timely returns contributed to the tax debts alleged in SOR ¶¶ 1.m and 
1.n. Conduct not specially alleged in the SOR may be considered to assess an 
applicant=s credibility; to decide whether a particular adjudicative guideline is applicable; 
to evaluate evidence of extenuation, mitigation, or changed circumstances; to consider 
whether an applicant has demonstrated successful rehabilitation; or as part of a whole-
person analysis. ISCR Case No. 03-20327 at 4 (App. Bd. Oct. 26, 2006) (citations 
omitted). I have considered his failure to file timely tax returns for these limited 
purposes. 
 
 The following mitigating conditions are potentially applicable: 
 
AG ¶ 20(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; 
 
AG ¶ 20(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; 
 
AG ¶ 20(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; 
 
AG ¶ 20(d): the individual initiated a good-faith effort to repay overdue 
creditors or otherwise resolve debts; and 
 
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. 
 
 AG ¶ 20(a) is not established. Applicant’s delinquent debts are numerous, recent, 
and did not occur under circumstances making them unlikely to recur. 
 
12 
 
 AG ¶ 20(b) is not fully established. Applicant encountered several conditions 
beyond his control: the business downturn that contributed to the failure of his business; 
his marital breakup; and his one-year unemployment preceding his current employment. 
However, his loss of employment in 2006 was the product of his choice to keep his 
private business rather than close it and keep the well-paying job he had held since 
2000. His loss of his part-time job in October 2011 was due to his failure to follow the 
rules regarding time cards. Furthermore, Applicant has not acted responsibly. His 
purchase of an expensive vehicle after taking a pay cut and before establishing a 
pattern of profitability in his private business was irresponsible. His failures to timely file 
his income tax returns in 2010 and 2011 exacerbated his tax problems. Even though he 
has been employed since April 2012, he has not satisfied the judgment in SOR ¶ 1.a, 
made any payments on the debts in SOR ¶¶ 1.b, 1.m, or 1.n, or resumed payments on 
the debts in SOR ¶¶ 1.c, 1.d, 1.o, and 1.p. 
 
 AG ¶ 20(c) is not fully established. Applicant has arranged for financial 
counseling, but has just begun the program, and there are no “clear indications” that his 
financial problems are being resolved. 
 
AG ¶ 20(d) is not fully established. “Good faith” within the meaning of this 
mitigating condition means acting in a way that shows reasonableness, prudence, 
honesty, and adherence to duty or obligation. ISCR Case No. 99-0201, 1999 WL 
1442346 at *4 (App. Bd. Oct. 12, 1999).  
 
A security clearance adjudication is aimed at evaluating an individual’s judgment, 
reliability, and trustworthiness. It is not a debt-collection procedure. ISCR Case No. 09-
02160 (App. Bd. Jun. 21, 2010.) A person is not required, as a matter of law, to 
establish resolution of every debt alleged in the SOR. He or she need only establish a 
plan to resolve financial problems and take significant actions to implement the plan. 
The adjudicative guidelines do not require that an individual make payments on all 
delinquent debts simultaneously, nor do they require that the debts alleged in the SOR 
be paid first. See ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008). 
 
Applicant made a $150 payment on the judgment in SOR ¶ 1.a after the hearing. 
The timing of his payment suggests that it was motivated more by his desire to obtain a 
clearance and protect his job than a sense of obligation to the creditor. Evidence of past 
irresponsibility is not mitigated by payment of debts only under pressure of qualifying for 
a security clearance.   
 
Applicant paid the two parking tickets alleged in SOR ¶¶ 1.f and 1.h. He has 
payment plans in place to resolve the debts in SOR ¶¶ 1.c, 1.d, 1.e, 1.l, 1.o, and 1.p. He 
has begun to made payments on the debts in SOR ¶¶ 1.e and 1.l. He has not 
addressed the unpaid cable bill in SOR ¶ 1.b, resumed the payments on the debts in 
SOR ¶¶ 1.c and 1.d, paid the balance of the parking ticket alleged in SOR ¶ 1.g, or 
taken any action to resolve the repossession deficiency in SOR ¶ 1.i. Even if he is able 
to establish a payment plan for the delinquent federal taxes alleged in SOR ¶¶ 1.m and 
1.n, he will need to establish a track record of compliance to establish this mitigating 
13 
 
condition. He is hoping that his financial counselor will help him devise a plan to resolve 
his remaining unpaid debts, but he does not yet have a plan. I conclude that AG ¶ 20(d) 
is established for the debts alleged in SOR ¶¶ 1.e, 1.f, 1.h, and 1.l, but it is not 
established for the other delinquent debts alleged in the SOR.  
 
 AG ¶ 20(e) is established for the medical debt in SOR ¶ 1.k. It is not established 
for the other delinquent debts alleged in the SOR. 
 
Guideline E, Personal Conduct 
 
 The SOR alleges that Applicant was terminated from a job in August 2005 for a 
conflict of interest and falsifying a time sheet (SOR ¶ 2.a). It also alleges that he was 
terminated from a job in October 2011 for falsifying a timecard (SOR ¶ 2.b.). The 
concern under this guideline is set out in AG ¶ 15 in pertinent part as follows: “Conduct 
involving questionable judgment, lack of candor, dishonesty, or unwillingness to comply 
with rules and regulations can raise questions about an individual’s reliability, 
trustworthiness and ability to protect classified information.”  
 
 The evidence is conflicting regarding the circumstances under which Applicant 
left his job in August 2005. Applicant testified that he voluntarily left his employment 
after being given the option of closing his personal business or resigning. In his security 
clearance application, he stated that he quit after being told he would be fired. The 
Government submitted a termination notice, but no evidence that it was delivered to 
applicant. Whether Applicant was fired or resigned because of the conflict of interest 
need not be resolved, because the evidence establishes that he left his job under 
unfavorable circumstances.  
 
 Applicant testified that he used vacation time to attend a pre-bid conference, but 
his program manager’s request for termination recites that Applicant submitted a time 
sheet reflecting that he worked a full eight hours for his employer on the day in question. 
Applicant presented no documentary evidence supporting his assertion that he used 
vacation time to attend the pre-bid conference. However, I am not satisfied that 
Applicant intentionally falsified his time sheet. I conclude that it was more likely that he 
simply conducted personal business during the workday, which was a violation of the 
company policy. 
 
 With respect to the termination of Applicant’s part-time job in October 2011, the 
uncontroverted evidence shows that he was fired. However, I am not satisfied that he 
falsified his timecard, as alleged. The evidence reflects that, during his short period of 
employment, he did not follow the rules for clocking in an out. Instead, he retroactively 
manipulated the timecards to reflect his time actually worked. In doing so, he subverted 
the purpose of the timecard system.  
 
 The following disqualifying conditions under this guideline are potentially 
applicable: 
14 
 
AG ¶ 16(c): credible adverse information in several adjudicative issue 
areas that is not sufficient for an adverse determination under any other 
single guideline, but which, when considered as a whole, supports a 
whole-person assessment of questionable judgment, untrustworthiness, 
unreliability, lack of candor, unwillingness to comply with rules and 
regulations, or other characteristics indicating that the person may not 
properly safeguard protected information; 
AG ¶ 16(d): credible adverse information that is not explicitly covered 
under any other guideline and may not be sufficient by itself for an 
adverse determination, but which, when combined with all available 
information supports a whole-person assessment of questionable 
judgment, untrustworthiness, unreliability, lack of candor, unwillingness to 
comply with rules and regulations, or other characteristics indicating that 
the person may not properly safeguard protected information. This 
includes but is not limited to consideration of . . . a pattern of dishonesty or 
rule violations; and  
AG ¶ 16(e): personal conduct, or concealment of information about one's 
conduct, that creates a vulnerability to exploitation, manipulation, or 
duress, such as . . . engaging in activities which, if known, may affect the 
person's personal, professional, or community standing.  
 While evidence regarding the two terminations of employment falls short of 
proving deliberately fraudulent conduct, it establishes Applicant’s inability or 
unwillingness to follow rules, and it proves conduct that adversely affects his personal 
and professional standing. Thus, I conclude that AG ¶¶ 16(c), (d), and (e) are 
established. 
The following mitigating conditions are potentially applicable: 
AG ¶ 17(c): the offense is so minor, or so much time has passed, or the 
behavior is so infrequent, or it happened under such unique 
circumstances that it is unlikely to recur and does not cast doubt on the 
individual's reliability, trustworthiness, or good judgment; 
 
AG ¶ 17(d): the individual has acknowledged the behavior and obtained 
counseling to change the behavior or taken other positive steps to 
alleviate the stressors, circumstances, or factors that caused 
untrustworthy, unreliable, or other inappropriate behavior, and such 
behavior is unlikely to recur; and 
 
AG ¶ 17(e): the individual has taken positive steps to reduce or eliminate 
vulnerability to exploitation, manipulation, or duress. 
 
15 
 
 AG ¶ 17(c) is not established. Applicant’s termination for a timecard infraction in 
October 2011 was arguably a minor offense, and his unfavorable termination because 
of a conflict of interest in August 2005 was more than eight years ago. However, 
Applicant’s conflict of interest in August 2005, failure to file income tax returns in 2010 
and 2011, timecard infraction in October 2011, and his neglect of financial 
responsibilities show a pattern of rule violations and irresponsible behavior that casts 
doubt on his current reliability, trustworthiness, and good judgment. 
 
 AG ¶ 17(d) is not established. Applicant has not acknowledged the irresponsible 
behavior that led to his two job terminations, he has not received behavioral counseling, 
and he faces the same stressors and circumstances that contributed to his behavior. 
 
 AG ¶ 17(e) is partially established. Applicant disclosed his two unfavorable job 
terminations on his current security clearance application, but the record does not 
reflect whether he disclosed his employment history to his current employer. 
 
Whole-Person Concept 
 
 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. In applying the whole-
person concept, an 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. An 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.  
 
 I have incorporated my comments under Guidelines F and E in my whole-person 
analysis. Some of the factors in AG ¶ 2(a) were addressed under those guidelines, but 
some warrant additional comment. 
 
 Applicant is amiable, personable, hardworking, and skilled. These traits make it 
understandable why former supervisors and clients regard him highly. He was candid 
and sincere at the hearing. However, his terminations of employment and financial 
problems occurred when he was in his 40s, at an age when he was expected to 
exercise mature judgment and responsibility. He has taken some steps to right his 
financial ship, but he does not yet have a comprehensive, realistic plan to resolve his 
financial problems, nor has he established a track record of financial responsibility.  
16 
 
 After weighing the disqualifying and mitigating conditions under Guideline F and 
E, and evaluating all the evidence in the context of the whole person, I conclude 
Applicant has not mitigated the security concerns based on financial considerations and 
personal conduct. Accordingly, I conclude he has not carried his burden of showing that 
it is clearly consistent with the national interest to grant him eligibility for access to 
classified information. 
 
Formal Findings 
 
 I make the following formal findings on the allegations in the SOR: 
 
 Paragraph 1, Guideline F (Financial Considerations): AGAINST APPLICANT 
 
  Subparagraphs 1.a-1.d:    Against Applicant 
  Subparagraphs 1.e-1.f:    For Applicant 
  Subparagraph 1.g:     Against Applicant 
  Subparagraph 1.h:     For Applicant 
  Subparagraph 1.i-1.j:    Against Applicant 
  Subparagraphs 1.k-1.l:    For Applicant 
  Subparagraphs 1.m-1.p:    Against Applicant 
 
 Paragraph 2, Guideline E (Personal Conduct):  AGAINST APPLICANT 
 
  Subparagraphs 2.a-2.b:    Against Applicant 
   
Conclusion 
 
 I conclude that 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. 
 
 
 
LeRoy F. Foreman 
Administrative Judge