1
 
                                                             
                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 11-14689
)
Applicant for Security Clearance )
Appearances
For Government: Caroline Heintzelman, Esquire, Department Counsel
For Applicant: James E. Watson, Personal Representative
______________
Decision
______________
HENRY, Mary E., Administrative Judge:
Based upon a review of the pleadings, exhibits, and testimony, Applicant’s
eligibility for access to classified information is denied.
Statement of the Case
Applicant completed and certified an Electronic Questionnaire for Investigations
Processing (e-QIP) on September 27, 2011. The Department of Defense (DOD) issued
Applicant a Statement of Reasons (SOR) on June 5, 2013, 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; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance
Review Program (January 2, 1992), as amended (Directive); and the Adjudicative
Guidelines For Determining Eligibility for Access to Classified Information (AG),
implemented on September 1, 2006. 
 
GE 1; GE 2; Tr. 34, 37.1
GE 1; GE 2; Tr. 38-40.2
2
Applicant received the SOR on July 17, 2013, and she answered it on August 5,
2013. Applicant requested a hearing before an administrative judge with the Defense
Office of Hearings and Appeals (DOHA) and designated a personal representative.
Department Counsel was prepared to proceed on September 12, 2013, and I received
the case assignment on September 26, 2013. DOHA issued a Notice of Hearing on
September 30, 2013, and I convened the hearing as scheduled on October 17, 2013.
The Government offered exhibits (GE) marked as GE 1 through GE 10, which were
received and admitted into evidence without objection. GE 4 was admitted for purposes
limited to the financial issues in this case. Applicant testified. She submitted exhibits
(AE) marked as AE A and AE B, which were received and admitted into evidence
without objection. DOHA received the hearing transcript (Tr.) on October 28, 2013. I
held the record open until November 1, 2013, for Applicant to submit additional matters.
Applicant did not submit any additional evidence. The record closed on November 1,
2013.
Procedural Ruling 
Notice
Applicant received the notice of the date, time and place of the hearing less than
15 days before the hearing. I advised Applicant of her right under ¶ E3.1.8. of the
Directive to receive the notice 15 days before the hearing. After consulting with her
personal representative, Applicant affirmatively waived this right under the Directive. (Tr.
9.)
Findings of Fact
In her Answer to the SOR, Applicant admitted all the factual allegations in the
SOR. Her admissions are incorporated herein as findings of fact. After a complete and
thorough review of the evidence of record, I make the following findings of fact.  
Applicant, who is 58 years old, works as an assembler technician for a DOD
contractor. She has worked in her job for 31 years. The records does not reflect any
disciplinary problems during her years of employment. Applicant has held a security
clearance since 1982 without incident.1
Applicant married her first husband in 1974, and they divorced in 1997. She has
three sons, ages 39, 34, and 29. She married her current husband, an immigrant, in
2005. He currently resides and works in construction outside the United States. She
attended college part-time from January 2002 until June 2004. She received a
vocational certificate in June 2004.2
Documentation in the record does not explain the need to file a second Chapter 13 bankruptcy petition on3
the same day as the first Chapter 13 bankruptcy petition was discharged. GE 8. If the 1995 Chapter 13 petition
had been dismissed, then a new filing is appropriate.
GE 8 - GE 10; Tr. 32, 72.4
In her personal subject interview on October 24, 2011, Applicant stated that the strike occurred in 2008 and5
she broke her ankle in 2009, but could not provide specific dates for these events. (GE 2) At the hearing, she
provided specific dates for these occurrences. (Tr. 40-42) Because she provided specific dates at the hearing,
I find the hearing dates to be more accurate.
Tr. 41-42, 89.6
Tr. 70-71, 91.7
GE 2; GE 3; Tr. 38-39, 42-44, 80.8
3
Applicant and her first husband filed a Chapter 13 bankruptcy petition in October
1995, which was “discharged” on January 29, 1997. On the same day, Applicant and
her first husband filed a new Chapter 13 bankruptcy petition.  Upon the3
recommendation of the bankruptcy trustee, the court dismissed Applicant’s second
Chapter 13 case on May 1, 1998 because Applicant and her husband could not proceed
to confirmation of a payment plan. Shortly thereafter, Applicant, as the sole petitioner,
filed a Chapter 7 bankruptcy petition on September 14, 1998, and her existing debts
were discharged on January 6, 1999.4
In early November 2006, Applicant’s union initiated a strike against her employer.
During the strike, she did not receive pay from her employer. She did work part-time in
retail sales. She returned to work January 22, 2007. Nine months later, Applicant broke
her ankle. She remained off work until February 11, 2008.  During this time, she5
received disability income, which was 75% of her base pay; however, Applicant stopped
paying many of her bills as she lacked sufficient income.6
Applicant files her income tax returns each year. After she filed her federal tax
return for the tax year 2007, the Internal Revenue Service (IRS) determined that she
owed an additional $2,000 in income taxes. She and the IRS agreed to a payment plan,
and at her request, she paid the IRS through regular deductions from her pay. She paid
this debt in full in 2011.7
Applicant’s father died in 2010. She paid $2,000 towards his funeral costs.
Applicant received notice in November 2011 that her husband was not covered under
her health coverage plan and that she needed to repay $1,590 for non-covered medical
expenses, which she did. In 2012, her mother needed surgery, and she contributed
$1,200 towards the cost.  8
Applicant’s husband was employed sporadically from 2007 until 2010. In 2010,
her husband was informed that his permanent residency status would expire. He was
Applicant’s spouse acquired his permanent resident status through a former marriage. His marriage to9
Applicant did not stop his deportation. GE 2, p.9.
GE 2.10
GE 3; GE 5 - GE 7.11
GE 2; GE 3; AE B; Tr. 33.12
4
deported from the United States in 2010 and has not returned to live in the United
States.  The loss of his income has impacted her financial ability to repay her debts.9 10
Applicant purchased a house in 2003 and a Deed of Trust through Company A
was recorded on August 1, 2007. She sold the house, and she resolved her mortgage
debt with company A, as shown by the documents in the record. In 2005, Applicant
purchased a second home with a mortgage from Company B. Applicant financed the
property with an adjustable rate mortgage. Her initial payment was $1,000 a month.
When the payments increased, she could not pay the new amount. She continued to
pay the original $1,000 monthly amount. She applied for a loan modification with
Company B in 2008 or 2009, but Company B denied her request. Company B
proceeded with foreclosure on the house, and she surrendered possession of the house
on June 23, 2011. Company B paid her a relocation fee of $1,500 at this time. Applicant
does not owe any debt on this property.11
In 2009, Applicant contacted a credit service company. She was unable to
comply with the plan terms because of a wage garnishment. In 2011, Applicant
contacted a debt consolidation company to help her resolve her debts as she could not
pay all her debts at once. She met with a company representative in December 2011.
She did not continue a working relationship with this company because she received
poor information from the company. She attempted to resolve her debts on her own and
said she had done so with her smaller debts. A few days before the hearing, Applicant
retained the services of a debt resolution company. The company worked out a budget
with her, and she signed an agreement with them on October 16, 2013. Under her plan,
she will pay $359 a month towards the resolution of her debts. She was to make her
first payment on October 21, 2013. She took one financial counseling class with this
company, and she plans to participate in additional classes through this company.12
The SOR identifies 15 unpaid debts. The SOR and credit reports dated October
4, 2011, February 4, 2013, and September 12, 2013 identify the following debts owed
by Applicant:
SOR ¶ TYPE AMOUNT STATUS EVIDENCE
1.a Collection $    317.00 Paid AE A
1.b Cell phone $    882.00 Payment plan AE B; Tr. 26, 48
Applicant testified that this debt was included in her payment plan with the debt solution company, but this13
account is not listed in the contract. AE B. Based on the October 4, 2011 credit report information, the original
creditor is the same creditor identified in SOR ¶ 1.f. Applicant is disputing this account.
Tr. 26-27, 56-57.14
Tr. 27, 30-31, 50-51, 57.15
5
1.c Collection $    415.00 Paid on 9/24/13 Tr. 26, 49
1.d Medical bill $      75.00 Paid on 10/11/13 Tr. 27, 50
1.e Collection $      87.00 Paid on 10/11/13 Tr. 27, 50
1.f Collection $ 1,013.00 Disputing as not her
account; 10/14/11
credit report shows
original creditor is
debt in SOR ¶ 1.m
Tr. 27, 50
1.g Collection $ 1,979.00 Payment plan AE B
1.h Collection $ 3,688.00 Payment plan AE B
1.i Repossession $ 7,334.00 Settled for $3,500, in
payment plan to
begin 11/2013
Tr. 29-30, 55-56
1.j Collection $      61.00 Paid 2010, disputing Tr. 30, 56
1.k Credit card $ 1,894.00    Disputing as not her
account
Tr. 30, 57
1.l Collection $    410.00 Duplicate of 1.c Tr. 30-31, 64
1.m Collection $ 1,013.00 Same as SOR ¶ 1.f Tr. 30-31, 6413
1.n Credit Card $ 7,968.00 Payment plan AE B; Tr. 31, 66
1.o Collection $    264.00 Disputing as not her
account
Tr. 31, 68-69
Applicant testified that she recently paid the debts in SOR ¶¶ 1.c - 1.e and that
she was waiting for verification of her payments.  She has not provided proof of her14
payments. She also testified that she is disputing the debts in SOR ¶ 1.f, 1.j, 1.k, 1.m,
and 1.o with the assistance of the debt resolution company. She had just begun this
process with the company and did not provide proof that she was disputing these
debts.  15
GE 3, p. 18-19; Tr. 82.16
GE 3; AE B; Tr. 83-84.17
6
Applicant’s earnings statement reflected that she completed payment of a
garnishment as of March 7, 2013. She explained that this garnishment paid off the debt
owed on her husband’s repossessed car. With the payment of this garnishment, her
monthly net income increased by approximately $700.16
Applicant earns $3,832 a month in gross income, not including overtime, and she
receives $2,412 a month in net income. Her monthly expenses total $1,965 based on
the budget she prepared with the debt consolidation company. She agreed to pay the
debt consolidation company $359 a month, leaving $88 a month in discretionary
income. Applicant testified that she regularly works overtime and that since her overtime
work has been consistent, she expects it to continue. With her overtime, she can pay
her obligations. Applicant has $800 in savings, and she no longer uses credit cards.
She pays two small loans through payroll deductions. She does not have a car
payment.17
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 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, these guidelines are applied 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, an applicant is
responsible for presenting “witnesses and other evidence to rebut, explain, extenuate,
or mitigate facts admitted by applicant or proven by Department Counsel. . . .” An
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applicant has the ultimate burden of persuasion for obtaining 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 an 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. 
AG ¶ 19 describes the disqualifying conditions that could raise security concerns.
I have considered all the conditions, and the following are potentially applicable: 
(a) inability or unwillingness to satisfy debts; and
(c) a history of not meeting financial obligations. 
Applicant developed significant financial problems when her union went on strike
in 2006, and she broke her ankle in 2007. She had unexpected expenses in 2009,
2010, 2011, and 2012. Most of the debts have not been resolved. These two
disqualifying conditions apply.
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The Financial Considerations guideline also includes examples of conditions that
can mitigate security concerns. I have considered mitigating factors AG ¶ 20(a) through
¶ 20(f), and the following 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;
(d) the individual initiated a good-faith effort to repay overdue creditors or
otherwise resolve debts; and
(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 filed bankruptcy in 1998 following her separation and subsequent
divorce from her husband because she could not pay all their bills on her salary. Her
more recent financial problems began following a strike in 2006 and her reduction in
income while she recovered from a broken ankle. During this time, her husband worked
sporadically which added to the financial stress of the household. With his deportation in
2010, she lost whatever income contribution he made to the household. In the last three
years, she paid one-time expenses including $2,000 towards her father’s funeral,
$1,200 towards her mother’s surgery, $1,600 for her husband’s medical bills, and a
garnishment. These expenses absorbed her remaining discretionary income. In 2009,
she sought help from a debt consolidation company. She could not meet the required
payments because she lacked sufficient household income. In 2011, she again
contacted a debt resolution company for assistance, but did not proceed with this
company after receiving bad information. She contacted several of her creditors and
worked out payment arrangements for some of her debt. Just prior to the hearing, she
again contacted a debt resolution company and agreed to a payment plan. The
evidence reflects that circumstances beyond her control created her finance problems
and that she acted responsibly about some of her debts. She has received some
financial counseling and appears to be taking control of her debts through the debt
resolution company. She stated that she resolved some of her debts on her own
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initiative and she has disputed several debts, which are not hers, but she did not
provide supporting documentation. AG ¶¶ 20(b)-20(e) are partially applicable.
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 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. The decision to grant or
deny a security clearance requires a careful weighing of all relevant factors, both
favorable and unfavorable. In so doing, an administrative judge must review all the
evidence of record, not a single item in isolation, to determine if a security concern is
established and then whether it is mitigated. A determination of an applicant’s eligibility
for a security clearance should not be made as punishment for specific past conduct,
but on a reasonable and careful evaluation of all the evidence of record to decide if a
nexus exists between established facts and a legitimate security concern. 
In assessing whether an Applicant has established mitigation under Guideline F,
the Appeal Board provided the following guidance in ISCR Case No. 07-06482 at 3
(App. Bd. May 21, 2008):
In evaluating Guideline F cases, the Board has previously noted that the
concept of “‘meaningful track record’ necessarily includes evidence of
actual debt reduction through payment of debts.” See, e.g., ISCR Case
No. 05-01920 at 5 (App. Bd. Mar. 1, 2007). However, an applicant is not
required, as a matter of law, to establish that he has paid off each and
every debt listed in the SOR. See, e.g., ISCR Case No. 02-25499 at 2
(App. Bd. Jun. 5, 2006). All that is required is that an applicant
demonstrate that he has “. . . established a plan to resolve his financial
problems and taken significant actions to implement that plan.” See, e.g.,
ISCR Case No. 04-09684 at 2 (App. Bd. Jul. 6, 2006). The Judge can
reasonably consider the entirety of an applicant’s financial situation and
his actions in evaluating the extent to which that applicant’s plan for the
10
reduction of his outstanding indebtedness is credible and realistic. See
Directive ¶ E2.2(a) (“Available, reliable information about the person, past
and present, favorable and unfavorable, should be considered in reaching
a determination.”) There is no requirement that a plan provide for
payments on all outstanding debts simultaneously. Rather, a reasonable
plan (and concomitant conduct) may provide for the payment of such
debts one at a time. See, e.g., ISCR Case No. 06-25584 at 4 (App. Bd.
Apr. 4, 2008). Likewise, there is no requirement that the first debts actually
paid in furtherance of a reasonable debt plan be the ones listed in the
SOR.
In reaching a conclusion, I considered the potentially disqualifying and mitigating
conditions in light of all the facts and circumstances surrounding this case. Applicant’s
more recent financial problems began with a union strike and a broken ankle.
Unexpected expenses related to her father’s funeral, her mother’s surgery, medical bills
and a garnishment, as well as the loss of her husband’s income to the household,
contributed to her inability to pay most of her remaining debts until recently.
Circumstances largely beyond her control created her financial problems. Her monthly
income limited how much of her debt she could resolved at any given time. The
garnishment ended several months ago, giving her more monthly income to pay her
debts. A few days before the hearing, she contracted with a debt resolution company for
assistance with resolving her debts. Applicant is taking the right steps towards the
resolution of her debts. While she said that she paid several small debts, she has not
provided proof of her payments, nor has she provided documentation to show that she
made her first payment under her debt resolution plan. Likewise, she did not provide
proof that she was disputing the debts in SOR ¶¶ 1.f, 1.j, 1.k, and 1.o or that she made
the payments under her independently negotiated settlement of the debt in SOR ¶1.i.
Without this documentation, she has not shown a track record for resolution of her
outstanding debts whether by payment or removal following dispute. Her debts remain a
security concern. I recognize that she has worked at her job and held a security
clearance for many years without incident. However, these factors are insufficient to
overcome the Government’s case or to relieve her of her duty to resolve her debts. She
needs more time to get her finances in order. 
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 has not mitigated the security concerns arising from her finances under
Guideline F.
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Formal Findings
Formal findings for or against Applicant 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
Subparagraph 1.a: For Applicant
Subparagraph 1.b: For Applicant
Subparagraphs 1.c-1.k: Against Applicant
Subparagraph 1.l: For Applicant
Subparagraph 1.m: For Applicant
Subparagraph 1.n: Against Applicant
Subparagraph 1.o: Against Applicant
Subparagraphs 1.p-1.r For 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.
                                                              
MARY E. HENRY
Administrative Judge