The hearing was originally scheduled for October 10, 2013. The case was postponed due to the      1
government closure. A hearing was rescheduled for October 29, 2013, but was postponed because Applicant
informed the Government that he had obtained legal representation. The attorney had not entered an
appearance and was not present on October 29, 2013, as he had been in an automobile accident. Applicant
decided to proceed without any representation for the next scheduled hearing.
1
                                                             
                           
                        DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
        )
)
)       ISCR Case No. 12-00539
Applicant for Security Clearance  )
Appearances
For Government: Allison O’Connell, Esq., Department Counsel
For Applicant: Pro se
                                                                            
______________
Decision
______________
LYNCH, Noreen, A., Administrative Judge:
On June 19, 2013, the Department of Defense (DOD) issued Applicant a
Statement of Reasons (SOR) alleging security concerns arising 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
(AG) implemented in September 2006. 
Applicant timely answered the SOR and requested a hearing before an
administrative judge. The case was assigned to me on August 27, 2013.  A third notice1
of hearing was issued on November 1, 2013, scheduling the hearing for November 5,
2
2013.  Government Exhibits (GX) 1-5  were admitted into evidence, without objection.
Applicant testified, and submitted Applicant Exhibits (AX) A-D. At Applicant’s request, I
held the record open until November 22, 2013. Applicant timely submitted
documentation which was admitted into the record without objection. The exhibits were
marked as (AX) E and F. The transcript (Tr.) was received on November 8, 2013.
Based on a review of the pleadings, testimony, and exhibits, eligibility for access to
classified information is denied.
Findings of Fact
In his answer to the SOR, Applicant admitted the factual allegations under
Guideline F (Financial Considerations), with explanation, with the exception of SOR  1.g
and 1.j. 
Applicant is a 30-year-old logistics manager employed by a defense contractor.
He graduated from high school and attended college earning 46 credits. He is single
and has five children. Applicant has held a security clearance since 2001. (Tr. 25) He
has been with his current employer since August 2011. (GX 1) However, he has worked
for defense contractors  since September  2001.
The SOR alleges Applicant is indebted to the Internal Revenue Service (IRS) for
federal taxes and penalties in the amount of $13,000; past-due state taxes in the
amount of $6,000; ten collection accounts; and 21 unpaid traffic tickets totaling
$4,000.The alleged amount of delinquent indebtedness is approximately $31,000.
Applicant explained that the nature of his job as a contractor involved periods of
unemployment. (Tr.11) He was unemployed for a year and a half beginning in
November 2010. This led to an inability to remain current with his bills.  However, he
has been gainfully employed since 2011. He took part-time temporary positions to
support himself. Applicant elaborated on his situation and explained that he has a child
support obligation for two children. The amount is automatically deducted each month
from his pay. Applicant disclosed that none of his children live with him. He also
provides for his other three children, but he does not have a written child support
obligation. (Tr. 41) This issue has been ongoing since 2003. He is paying his arrears.
However, child support is not an SOR allegation. Applicant submitted documentation
that he has reduced his arrears. (AX F)
As to the federal tax issue in SOR 1.a, Applicant did not have sufficient money
withheld from his pay and thus, he owed money to the IRS. He stated his tax problems
started in 2005. He recently spoke to the IRS and wishes to arrange a payment plan.
He disclosed that he has a tax lien in the amount of $800 that was filed in 2005. (Tr.38)
Applicant believes he became delinquent on his state taxes (SOR 1.b) in 2008. In 2012,
he started a payment plan but defaulted due to other expenses. He made one $400
payment. He has not made any payments since March or April 2012. 
The debt alleged in SOR 1.c is the result of an apartment lease that Applicant
signed for a friend. The person moved out without paying the bill and Applicant is
3
responsible for it. He does not deny that he owes the money. He is including it in the
debt consolidation plan. He also stated the debt in SOR 1.h ( $898) is included in his
debt consolidation plan. 
Applicant paid the debt in SOR 1.g and 1.j  for ($794) and ($207)  (AX A and D).
He disputed the telecommunications bill ($1,198) in SOR 1.d. He has current service
with the company. It is not listed on his credit report.  He also disputed the medical bills
in 1.f. ($98). At the hearing, he provided  no documentation for the dispute. Applicant
believes the debt in SOR 1.e for $721 for cable is now $148 for equipment that was not
returned. He noted that it was included in his debt consolidation plan. (Tr.55) After the
hearing, he submitted an undated credit report that shows a balance of $229. (AX F)
Applicant paid the debt in SOR 1.i for telecommunications and submitted
documentation after the hearing that it was settled. (AX E)
The debts listed in SOR 1.k to 1.ee are parking tickets that are not paid.
Applicant explained that his girlfriend used his car and she received the parking tickets
and did not pay them. He did not know that the unpaid parking tickets were on his credit
report until the recent investigation for his security clearance. The unpaid tickets are
from 2005 until 2008. (Tr. 61)  He began receiving notices about the tickets in 2010.
Applicant’s friend has not yet taken care of the tickets. Applicant plans to pay the
tickets, but he has not yet paid any of them. (Tr. 64)
As to SOR allegations 1.ff ($154) and 1.gg ($187), Applicant stated that he paid
these bills. He was not sure that he had a receipt. He believe he paid them in
September 2012. Applicant submitted documentation after the hearing, but it was not
clear that it was related the debt in 1.ff. The debt in 1.gg could be a duplicate account
for phone service that was listed in 1.i which is paid. 
In June 2013, Applicant obtained the services of a credit counseling company to
consolidate his debts  (AX C) The collection accounts listed in the SOR are included in
the plan. Applicant pays $257 a month. He has made four payments to date. The
company negotiates on his behalf to settle the delinquent debts. One bill has been paid.
The expected time frame for the plan is approximately two years. 
 . 
Applicant’s annual income is approximately $50,000. His net monthly remainder
after expenses is about $220. Applicant earns about $200 a month for his participation
in playing church music. He is current on his monthly expenses. His car note is paid.
He has received financial counseling. He has no new debts. (AX B)
Applicant was candid and forthright. He admits to his delinquent bills, but stated
that the nature of the contract business involves unemployment. His work fluctuates
and he is always desirous to find something permanent that will provide for his needs.
Recently, he has taken action with respect to consolidating his bills. He also
acknowledges that he has student loans in deferment. (Tr.67)
 See also ISCR Case No. 94-1075 at 3-4 (App. Bd. Aug. 10, 1995).      2
 Department of the Navy v. Egan, 484 U.S. 518, 531 (1988).      3
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      4
 See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive      5
information), and EO 10865 § 7.
4
Policies
When evaluating an applicant’s suitability for a security clearance, an
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. These guidelines are not inflexible
rules of law. Instead, recognizing the complexities of human behavior, they are applied
in conjunction with the factors listed in the adjudicative process. An administrative
judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision.
Under AG ¶ 2(c), this process is a conscientious scrutiny of a number of variables
known as the “whole-person concept.” An 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. Likewise, I have avoided drawing inferences
grounded on mere speculation or conjecture.
The Government must present evidence to establish controverted facts alleged
in the SOR. 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. . . .”  The burden of proof is something less than a2
preponderance of evidence.  The ultimate burden of persuasion is on the applicant.  3 4
A person seeking access to classified information enters into a fiduciary
relationship with the Government based on 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 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 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.”  “The clearly consistent standard indicates that security clearance5
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      6
 Id.      7
5
determinations should err, if they must, on the side of denials.”  Any reasonable doubt6
about whether an applicant should be allowed access to sensitive information must be
resolved in favor of protecting such information.  The decision to deny an individual a7
security clearance does not necessarily reflect badly on an applicant’s character. It is
merely an indication that the applicant has not met the strict guidelines the President
and the Secretary of Defense established for issuing a clearance.
Analysis
Guideline F, Financial Considerations
AG ¶ 18 expresses the security concern pertaining to financial considerations:
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 over-
extended is at risk of having to engage in illegal acts to generate funds.
Compulsive gambling is a concern as it may lead to financial crimes
including espionage. Affluence that cannot be explained by known
sources of income is also a security concern. It may indicate proceeds
from financially profitable criminal acts.
AG ¶ 19 describes conditions that could raise a security concern and may be
disqualifying:
(a) inability or unwillingness to satisfy debts;
(b) indebtedness caused by frivolous or irresponsible spending and the
absence of any evidence of willingness or intent to pay the debt or
establish a realistic plan to pay the debt;
(c) a history of not meeting financial obligations;
(d) deceptive or illegal financial practices such as embezzlement,
employee theft, check fraud, income tax evasion, expense account fraud,
filing deceptive loan statements, and other intentional financial breaches
of trust;
(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;
6
(f) financial problems that are linked to drug abuse, alcoholism, gambling
problems, or other issues of security concern;
(g) failure to file annual Federal, state, or local income tax returns as
required or the fraudulent filing of the same;
(h) unexplained affluence, as shown by a lifestyle or standard of living,
increase in net worth, or money transfers that cannot be explained by
subject's known legal sources of income; and
(i) compulsive or addictive gambling as indicated by an unsuccessful
attempt to stop gambling, "chasing losses" (i.e. increasing the bets or
returning another day in an effort to get even), concealment of gambling
losses, borrowing money to fund gambling or pay gambling debts, family
conflict or other problems caused by gambling.
Applicant admits the delinquent debts and unpaid federal and state taxes.
Consequently, the evidence is sufficient to raise disqualifying conditions in ¶ 19(a)
19(c), and 19(g). 
AG ¶ 20 provides conditions that could mitigate security concerns. The following
are potentially relevant:
(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’s delinquent federal tax debt has been ongoing since 2005. He has a
state tax debt from 2008 and a tax lien. He did not timely file his taxes in that period of
7
time, and failed to have sufficient funds withheld from his salary to pay the taxes owed.
He stopped his payment plan on both federal and state taxes due to lack of income. He
has no current plan in place. In 2013, he obtained the services of a company to help
negotiate with the creditors, and have his debts settled.  
Applicant did not produce documentation to show that he has actually paid any
additional taxes to the IRS or the state.  Applicant plans to pay the tax debts but he
does not yet have a plan in place. He recently started a debt consolidation plan, but it is
too soon, given the amount of debt, to know whether Applicant can resolve his debts.
Applicant has not met his burden in this case to fully mitigate the financial
considerations security concern.
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
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. As noted above, the
ultimate burden of persuasion is on the applicant seeking a security clearance. 
I considered the potentially disqualifying and mitigating conditions in light of all
the facts and circumstances surrounding this case as well as the whole-person factors.
Applicant is a 30-year-old employee of defense contractor who has held a security
clearance since 2001. He has five children. He pays child support for two children and
provides financial help to the other three. He is attending college classes to improve his
skills. He has experienced some unemployment, but has tax issues occurring before
the unemployment.
Applicant was candid and forthright at the hearing. He realizes that his debts
have been ongoing for a period of time. He realizes that his first tax issue began in
2005. He has tried to arrange payment plans, but he has not been consistent. He has
federal and state tax debt in the approximate amount of $19,000. He has a tax lien of
$800. Applicant has not been able to pay the many outstanding parking tickets. He has
8
recently started a debt consolidation plan for the collection accounts. The majority of
debts are unresolved.
He recently obtained the services of a company to consolidate his debts. He has
paid approximately $1,500 total for the nearly $31,000 delinquent debts and overdue
taxes.  It is not clear that his debts will be resolved in the near future. Any doubts that
arise must be resolved in favor of the government. Applicant has not met his burden of
proof in this case.  
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-1gg: 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 continue Applicant’s security clearance.
Clearance is denied. 
                                                     
NOREEN A. LYNCH.
Administrative Judge