1 
 
 
                                                              
                           DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
 -------------------------------- )  ISCR Case No. 11-10108 
  ) 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Pamela C. Benson, Esquire, Department Counsel 
For Applicant: Pro se 
 
 
 
 
______________ 
 
Decision 
______________ 
 
 
HOWE, Philip S., Administrative Judge: 
 
On February 9, 2009, Applicant submitted her Electronic Questionnaire for 
Investigations Processing (e-QIP; SF 86). On January 2, 2013, the Department of 
Defense (DoD) issued Applicant a Statement of Reasons (SOR) detailing security 
concerns under Guideline F (Financial Considerations). The action was taken under 
Executive Order 10865, Safeguarding Classified Information within Industry (February 
20, 1960), as amended; Department of Defense Directive 5220.6, Defense Industrial 
Personnel Security Clearance Review Program (January 2, 1992), as amended 
(Directive); and the adjudicative guidelines (AG) effective within the Department of 
Defense on September 1, 2006.  
  
 Applicant acknowledged receipt of the SOR on January 8, 2013. She answered 
the SOR in writing on January 30, 2013, and requested a hearing before an 
administrative judge. Defense Office of Hearings and Appeals (DOHA) received the 
request on or after February 1, 2013. Department Counsel was prepared to proceed on 
April 30, 2013, and I received the case assignment on June 10, 2013. DOHA issued a 
 
2 
 
 
Notice of Hearing on August 2, 2013, and I convened the hearing as scheduled on 
August 19, 2013.  
 
The Government offered Exhibits 1 through 6, which were received without 
objection. Applicant testified and submitted Exhibit A, without objection. DOHA received 
the transcript of the hearing (Tr.) on August 30, 2013. I granted Applicant’s request to 
keep the record open until September 4, 2013, to submit additional matters.  Applicant 
requested additional time to submit documents and I extended the time to September 9, 
2013, without objection from Department Counsel. On September 9, 2013, she 
submitted Exhibits B to F, without objection. I marked as Exhibit G the Department 
Counsel’s email message relaying Applicant’s request to be put on probation for one 
year so that she can pay other debts listed in the SOR. The Department Counsel 
objected to this request because DOHA has no probation authority. The record closed 
on September 9, 2013. Based upon a review of the pleadings, exhibits, and testimony, 
eligibility for access to classified information is denied. 
 
Findings of Fact 
 
 In her Answer to the SOR Applicant admitted all the factual allegations of the 
SOR, with explanations. She also provided additional information to support her request 
for eligibility for a security clearance.   
 
 Applicant is 32 years old, married, and has four children, the oldest being 16 
years old. She has a heart condition and her husband is on disability. He is 31 years old 
and earns about $3,000 monthly when working full-time. They live with her parents 
because they had a fire at their house in 2009 and have been repairing it since then. 
They acquired the house when her husband inherited it in 2006. Their house has no 
mortgage on it. Applicant works for a defense contractor earning about $49,000 
annually. Her bi-monthly pay checks are about $1,400. She is the sole source of her 
family’s income. Applicant started working for the contractor about one year ago and 
has the title of a financial manager for her employer. (Tr. 20-24, 33-37, 48, 63, 70, 71; 
Exhibits 1, 2) 
 
Applicant has been married twice. She divorced her first husband in 2000. She 
had large debts from that marriage and filed Chapter 7 bankruptcy in 2005. Having 
married her present husband in 2003 she included his debts in that bankruptcy petition. 
The bankruptcy court discharged both of them of their delinquent debts in April 2006. 
(Tr. 46, 47; Exhibits 1-4, 6) 
 
Applicant transferred from her home city to another city 90 miles away in 2006 
when her job with the Defense Finance and Accounting Service (DFAS) was moved in a 
consolidation of offices. She needed a car for the commute. After starting her job in the 
new city she discovered in 2007 that she had a heart condition, which caused her 
problems. She took medical leave for three months in 2007, which adversely affected 
her ability to pay her debts. She tried to take a medical retirement but was denied. 
Applicant did not work from 2007 to 2009, except for managing her bar, discussed 
 
3 
 
 
below. In 2009 she started work in the financial management realm for a defense 
contractor. As contracts were won or lost in the bidding process, she managed to find 
similar positions with different contractors. She has not had heart seizure since 2012 
and takes medicine for her condition. (Tr. 32, 38, 40, 49; Exhibits 1-4, 6) 
 
 Applicant managed and owned a bar in her area for five years. She sold the bar 
in August 2012 for a price of about $50,000 by trading the bar for a Corvette 
automobile, which she then traded to an auto dealer for a sports utility vehicle and about 
$30,000 in cash. With that money Applicant paid $19,000 in debts owed by the bar 
because they followed the liquor license that the bar had. The debts were incurred by 
her husband’s grandfather when he owned the bar. Her husband wants to pay the 
additional debt of a tax lien of $9,000 dating from before 2005 so that his mother and 
sister are not liable for them. He is trying to pay on the installment basis with the Internal 
Revenue Service (IRS). Applicant had a balance of $10,000 she used to pay for some 
house repairs. (Tr. 24- 26, 31,36, 60, 86; Exhibits 1-4, 6) 
 
 On her 2009 SF-86 Applicant listed her automobiles as a 2005 Chrysler Pacifica 
and a 2004 Cadillac CTS. Those two automobiles were wrecked in an accident in front 
of her parent’s house in April 2013 when a speeding automobile crashed into them. She 
and her husband bought two new cars in the past year.  Applicant bought a 2012 
Chevrolet Traverse when her older car, which she apparently purchased before the 
accident kept breaking down and had to be replaced. After the crash in front of her 
parent’s house her husband purchased a Chevrolet Malibu. The total purchase price of 
both vehicles was almost $50,000. She has two credit accounts for the vehicles, with 
balances of $22,152 and $18,093 for a total of $40,245. She made a down payment on 
the Traverse of $13,000 and has a monthly payment of $497. The Malibu’s monthly car 
payment is $475. They pay $350 monthly insurance on the cars for a basic policy under 
state law. As stated above, her pay check each pay period is about $1,400 from which 
she has to pay these car expenses and support her family. (Tr. 63-65; Exhibits 3, 4, 6) 
  
 Applicant admitted the 24 allegations listed in the SOR. The first allegation is that 
she filed Chapter 7 bankruptcy in October 2005 and was discharged in April 2006. The 
remaining 23 allegations total $11,406 of delinquent debt. The delinquencies in 13 of 
the allegations are under $200 each. One debt is dated in 2006, several from 2007, and 
the others from later years up to the present time. Applicant claims she tried to contact 
the creditors to resolve the debts, but made no progress because the debts kept being 
sold and bought by collection agencies. She also wanted her business attorney to 
handle the debt problem but his fee was too high for her to pay. (Tr. 31; SOR; Exhibits 
1-6) 
 
 Applicant is attempting to repay some of her debts through a debt management 
firm. She pays a standard amount of money on the 10th of each month to the company. 
This money goes into an escrow account controlled by the debt management company. 
Her initial fee was $150. She started that program in May 2013, five months after her 
receipt of the SOR. That plan shows a total debt to be repaid of $8,830, not the amount 
of $11,406 listed in the SOR. There are seven debts listed in the SOR that are also 
 
4 
 
 
listed in the debt repayment plan. They are subparagraphs 1.c for $102; 1.l for $1,379; 
1.o for $80 (though the plan lists the debt as $179); 1.p for $6,671; 1.q for $314; 1.t for 
$349; and 1.x for $188. The remaining 16 SOR debts are not in the debt repayment 
plan. The debts listed in the SOR and the debt repayment program are unresolved. 
They are in the process of resolution but no schedule for payment or priority plan of 
payment was submitted. (Tr. 42-45, 56-59, 66, 67, 75, 76; Exhibits 1-6, A-G) 
 
Applicant claims she paid her student loans, a medical account for $136 listed in 
Subparagraph 1.b of the SOR, a $70 medical bill that does not appear in the SOR, and 
a bank judgment for $11,355 in 2009 that is not listed in her SOR. However, there is no 
documentary proof of such payments, except for the student loans she repaid in 2011 
for $3,209 and the bank judgment that was paid and satisfied in June 2011. (Tr. 42-45, 
56-59, 66, 67, 75, 76; Exhibits 1-6, A-G) 
 
 Applicant receives child support of $375 monthly from the father of her first two 
children. Her husband pays about $400 in child support for his child from a prior 
relationship.  (Tr. 34, 63, 91; Exhibits 1-4, 6, A –G) 
 
 Applicant submitted three letters of recommendation from three supervisors. 
They all rate her highly in the categories of professionalism, character, and hard work, 
ability to accomplish complicated and tedious tasks in half the time of her peers, 
trustworthiness, and integrity. They highly recommend her for employment and a 
security clearance. (Answer attachments) 
 
Policies 
 
 When evaluating an applicant’s suitability for a security clearance, the 
administrative judge must consider the adjudicative guidelines (AG). In addition to brief 
introductory explanations for each guideline, the adjudicative guidelines list potentially 
disqualifying conditions and mitigating conditions, which are useful 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 (AG ¶ 2(a)). 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 
 
5 
 
 
the evidence contained in the record. Likewise, I have avoided drawing inferences 
grounded on mere speculation or conjecture. 
 
Under Directive ¶ E3.1.14, the Government must present evidence to establish 
controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, an “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.  Decisions include, by necessity, consideration 
of the possible risk the applicant may deliberately or inadvertently fail to protect or 
safeguard classified information. Such decisions entail a certain degree of legally 
permissible extrapolation as to potential, rather than actual, risk of compromise of 
classified information. 
  
Section 7 of Executive Order 10865 provides that 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).   
 
Analysis 
 
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 at AG ¶ 19 contains nine disqualifying conditions that could raise 
security concerns.  Two conditions are applicable to the facts found in this case: 
 
(a) inability or unwillingness to satisfy debts; and   
 
(c) a history of not meeting financial obligations. 
 
 
6 
 
 
Applicant accumulated $11,406 in delinquent debt from 2006 to the present time 
that remains unpaid.  Applicant has 23 delinquent debts listed in the SOR. Her current 
debts were incurred after her 2005-2006 Chapter 7 bankruptcy.  
 
The guideline in AG ¶ 20 contains six conditions that could mitigate security 
concerns arising from financial difficulties. Two conditions may be applicable:   
 
(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; 
and 
 
(d) the individual initiated a good-faith effort to repay overdue creditors or 
otherwise resolve debts. 
  
Applicant was unemployed for two years. During that time she managed her bar. 
She also had a heart condition, for which she continues to take prescribed medication.  
That medical situation made it difficult for her to commute to her new job location in a 
city other than her home town. However, Applicant did incur numerous debts during the 
past six years that she did not appear to make any effort to repay. Finally, after 
receiving the SOR, she retained a debt management company that has not repaid any 
of the debts during the three months that they have taken Applicant’s monthly payments 
of $215. Applicant has not acted responsibly under the mitigating condition. AG ¶ 20 (b) 
does not apply. 
 
Applicant did retain the debt management company. She is making regular 
automatic payments to them. From her testimony and the documents about the 
repayment arrangements, it is clear Applicant believes she has made a start to repaying 
her delinquent debts. However, only seven debts listed in the SOR appear on the 
Exhibit E, which is the list of debts from the debt repayment plan. AG ¶ 20 (d) does not 
apply because of Applicant has not made a good-faith efforts to repay her delinquent 
debts in an orderly manner. She is only paying part of her delinquent debts under the 
debt repayment program and did not submit any information about any efforts to repay 
the remaining 16 delinquent debts.  
 
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 an applicant’s 
conduct and all the 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 
 
7 
 
 
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.  
 
 AG ¶ 2(c) requires each case must be judged on its own merits.  Under AG ¶ 
2(c), the ultimate determination of whether to grant eligibility for a security clearance 
must be an overall commonsense judgment based upon careful consideration of the 
guidelines and the whole-person concept.        
 
I considered the potentially disqualifying and mitigating conditions in light of all 
the facts and circumstances surrounding this case. Applicant is involved with her 
husband’s family and their bar with its tax debts. Her house burned three years ago and 
she, with her husband, have taken an extraordinary time to have it repaired. Meanwhile, 
to replace two older model automobiles damaged in a residential neighborhood 
collision, they purchased two new model automobiles and currently have car debt of 
$40,425 with monthly payments of $975 for both cars. These were excessive purchases 
under the circumstances of Applicant’s delinquent debts. She could have paid her debts 
from the money received from the various transactions involving the bar that she used 
for her car down payment. It is obvious that the medical and family situations have 
diverted Applicant’s attention from her duty to repay her debts. This demonstrates a lack 
of judgment on her part. It also shows unreliability.  
 
I considered the excellent recommendations from her supervisors. They show 
Applicant is an excellent worker in that organized environment. However, she does not 
seem to be able to pay her delinquent debts in a timely manner, which with her financial 
management experience should be easy for her to do.  
 
Overall, the record evidence leaves me with questions or doubts as to Applicant’s 
eligibility and suitability for a security clearance. For all these reasons, I conclude 
Applicant did not mitigate the security concerns arising from her financial 
considerations. I conclude the whole person concept against Applicant. 
 
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:   AGAINST APPLICANT 
 
 Subparagraph 1.a to 1.x:   Against Applicant 
 
 
 
    
 
8 
 
 
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. 
 
 
                                                     
_________________ 
PHILIP S. HOWE 
Administrative Judge