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DEPARTMENT OF DEFENSE 
DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
 [Redacted] )  ISCR Case No. 14-00990 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Fahryn Hoffman, Esq., Department Counsel 
For Applicant: Pro se 
 
 
______________ 
 
Decision 
______________ 
 
 
FOREMAN, LeRoy F., Administrative Judge: 
 
This case involves security concerns raised under Guideline F (Financial 
Considerations). Eligibility for access to classified information is denied. 
 
Statement of the Case 
 
Applicant submitted a security clearance application on July 17, 2013. On April 
28, 2014, the Department of Defense (DOD) sent him a Statement of Reasons (SOR) 
alleging security concerns under Guideline F. The 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 June 13, 2014; answered it on July 21, 2014; and 
requested a hearing before an administrative judge. Department Counsel was ready to 
proceed on August 14, 2014, and the case was assigned to me on August 19, 2014. 
The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on 
August 20, 2014, scheduling the hearing for September 11, 2014. I convened the 
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hearing as scheduled. Government Exhibits (GX) 1 through 5 were admitted in evidence 
without objection. Department Counsel’s letter to Applicant transmitting copies of the 
documents she intended to submit at the hearing is attached to the record as Hearing 
Exhibit (HX) I. Applicant testified but did not call any witnesses or submit any 
documents. I kept the record open until September 26, 2014, to enable him to submit 
documentary evidence. On September 26, 2014, Applicant requested one additional 
week to gather and submit documents, and I granted his request. (HX II.) He timely 
submitted Applicant’s Exhibit (AX) A, which was admitted without objection. Department 
Counsel’s comments regarding AX A are attached to the record as HX III. DOHA 
received the transcript (Tr.) on September 25, 2014. 
 
Findings of Fact 
 
 In his answer to the SOR, Applicant admitted ¶¶ 1.a, 1.d, 1.f, 1.h-1.j, and 1.l. He 
denied ¶¶ 1.b, 1.c, 1.e, 1.g, 1.k, and 1.m-1.q. Hs admissions in his answer and at the 
hearing are incorporated in my findings of fact.  
 
 Applicant is a 33-year-old employee of a defense contractor. He has worked for 
his current employer since October 2010. He worked for another defense contractor 
from August 2008 to September 2010. He served in the U.S. Navy from January 2002 
to August 2008 and received an honorable discharge. He has held a security clearance 
since August 2003.  
 
 Applicant married in September 2002 and divorced in February 2008. He married 
again in September 2008 and separated in November 2010. He has a nine-year-old 
stepdaughter. He has shared living expenses with his current cohabitant since the fall of 
2013. (Tr. 40.) 
 
 Applicant was injured in a motorcycle accident in March 2012. He was 
hospitalized for two weeks and unable to work for about four months.1 (Tr. 36.) His only 
income during his recovery period was disability pay. He usually earned net pay of 
about $1,200 per two-week pay period, but his income dropped to about $900 per pay 
period while he was disabled. (GX 3 at 10; Tr. 82.) His federal income tax records 
reflect that his gross wages for 2011 were $47,181; but in 2012 they dropped to 
$36,423. (AX A at 3-4.) 
 
 The SOR alleges 17 delinquent debts, which are listed in Applicant’s credit 
bureau report (CBR) dated August 9, 2013 (GX 2.) The evidence concerning these 
debts is summarized below. 
 
 SOR ¶ 1.a, judgment for unpaid rent filed in January 2014 ($2,486). Applicant 
admitted this debt. He has not taken any action to resolve it. (Tr. 41.) 
 
                                                          
1 In a personal subject interview (PSI) in August 2013, Applicant stated that he was unable to work for two 
months. (GX 3 at 10.) In his Answer to the SOR, he stated that he was unable to work for five months. At 
the hearing, he clarified that he was unable to work from March to July, a period of about four months. 
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 SOR ¶ 1.b, judgment filed in June 2012 ($7,728). Applicant denied this debt 
because he disagreed with the amount. (Tr. 50.) The debt arose from Applicant’s 
purchase of a motorcycle. He fell behind on his payments before his motorcycle 
accident and was trying to negotiate an agreement. The lender filed suit against him in 
January 2012. The case was continued twice, in February 2012 and April 2012, and a 
default judgment was entered against him in June 2012. (GX 4 at 5.) Four garnishments 
were imposed in October 2012, June 2013, September 2013, and May 2014. (GX 4 at 
7.) Applicant testified that $1,500 also was seized from his credit union account. (Tr. 
58.) Although the amount of the debt has been reduced by the garnishments, it remains 
unresolved. 
 
 SOR ¶ 1.c, personal loan, charged off and referred for collection in 
November 2009 ($2,439). In his response to the SOR, Applicant denied this debt 
because it was charged off. At the hearing, he admitted that he owed the money and 
has not resolved the debt. (Tr. 60-61.) 
 
 SOR ¶ 1.d, personal loan, charged off in February 2013 ($1,330). Applicant 
admitted this debt. He has not taken any action to resolve it. (Tr. 42.) 
 
 SOR ¶ 1.e, personal loan, charged off in September 2012 ($590). In his 
response to the SOR, Applicant denied this debt because it was charged off. At the 
hearing, he admitted that he owed the debt and has not resolved it. (Tr. 61.) 
 
 SOR ¶ 1.f, cell phone account, referred for collection in September 2012 
($393). Applicant admitted this debt. He contacted the creditor in July 2014 to determine 
what was required to set up a payment agreement, but he had not reached an 
agreement as of the date the record closed. (Tr. 43-45.) 
 
 SOR ¶ 1.g, cell phone account, referred for collection in February 2012 
($636). In his response to the SOR, Applicant denied this debt. At the hearing, he 
admitted that he owed the debt and it is unresolved. (Tr. 62.) 
 
 SOR ¶ 1.h, fitness club account, referred for collection in July 2012 ($592). 
Applicant admitted this debt but has not taken any action to resolve it. (Tr. 43.) 
 
 SOR 1.i, cell phone account, referred for collection in March 2013 ($548). 
Applicant admitted this debt but has not taken any action to resolve it. (Tr. 46.) 
 
 SOR ¶ 1.j, self-storage bill, referred for collection in July 2012 ($448). 
Applicant admitted this debt. His property in the storage unit was seized. He contacted 
the creditor, but he was unable to negotiate a payment agreement. (Tr. 46-48.) 
 
 SOR ¶ 1.k, medical bill, referred for collection in August 2012 ($348); SOR ¶ 
1.m, medical bill, referred for collection in August 2012 ($293); SOR ¶ 1.n, medical 
bill, referred for collection in August 2012 ($272); and SOR ¶ 1.p, medical bill, 
referred for collection in August 2012 ($170). Applicant denied these debts. After his 
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motorcycle accident, he was hospitalized in a civilian facility and then transferred to a 
military medical facility. His treatment record at the military facility reflects that his 
treatment was covered by TRICARE. (AX A at 5.) When he received medical bills from 
the civilian facility, he sent them to his private insurance company. He received 
collection letters from the civilian providers, but he ignored them because he was 
waiting for the insurance company to pay the medical bills. (GX 3 at 12-13; AX A at 6.) 
At the hearing, he admitted that he had not followed up on the status of his medical 
debts since 2012. (Tr. 64.) 
 
 SOR ¶ 1.l, self-storage bill, referred for collection in June 2012 ($308). 
Applicant admitted this debt for a second storage unit. His property was seized, but the 
debt is not resolved. (Tr. 48-49.) 
 
 SOR ¶ 1.o, cable service bill, referred for collection in August 2012 ($266). 
In his answer to the SOR, Applicant denied this debt. At the hearing, he admitted that 
he owed the debt and it is unresolved. (Tr. 65.) 
 
 SOR ¶ 1.q, insurance bill, referred for collection on an unknown date ($99). 
Applicant denied this debt because he still has insurance with the same company. He 
has not contacted the insurance company to determine the basis for the $99 debt. It is 
unresolved. (Tr. 66-67.) 
 
In June 2013, Applicant borrowed about $35,750 to buy a new truck. He has a 
75-month loan with payments of $728 per month. Both Applicant and his cohabitant 
obtained the loan, because Applicant’s credit rating was too low to obtain a loan. He 
needed to replace his truck because his old one broke down, but he had no explanation 
for not buying a less expensive vehicle. (Tr. 86-88.) 
 
 Applicant submitted a personal financial statement (PFS) in response to DOHA 
interrogatories reflecting net monthly income of $1,132, expenses of $1,262, and debt 
payments of $250 per month. (GX 3 at 7.) He testified that the PFS is inaccurate, and 
his net monthly remainder is about $250 or $300. After the hearing, he submitted an 
updated PFS reflecting monthly income of $3,200. He listed housing expenses of 
$1,275; transportation expenses of $1,116 (including the $736 payment on the new 
truck); food cost of $300; personal care costs of $100; federal and state taxes of $536; 
and contributions to retirement account of $73, leaving a monthly shortfall of $200. (AX 
A at 2.) His updated PFS does not provide for any debt payments, other than the loan 
for the new truck.  
 
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 
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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).   
 
 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).  
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Analysis 
 
Guideline F, Financial Considerations 
 
 The SOR alleges 17 delinquent debts totaling about $19,000. 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). 
 
 Applicant’s admissions, testimony at the hearing, and August 2013 CBR 
establish two disqualifying conditions under this guideline: AG ¶ 19(a) (“inability or 
unwillingness to satisfy debts”) and AG ¶ 19(c) (“a history of not meeting financial 
obligations”).2 The following mitigating conditions are potentially relevant: 
 
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; 
 
                                                          
2 Applicant’s purchase of a new truck in spite of his inability to pay his debts would appear to raise AG ¶ 
19(e) (“consistent spending beyond one’s means”), but it is not alleged in the SOR. As such, it cannot be 
used as an independent basis for denying or revoking his security clearance. However, conduct not 
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). I have his purchase of 
the truck for these limited purposes.  
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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 and 
ongoing. His motorcycle accident is a circumstance not likely to recur, but his payments 
on the motorcycle were delinquent before the accident. 
 
 AG ¶ 20(b) is not established. Applicant’s motorcycle accident was a 
circumstance beyond his control, but the payments on the motorcycle were delinquent 
before the accident, and he has not acted responsibly after returning to work. He 
contacted the creditors for the debts in SOR ¶¶ 1.f, 1.j, and 1.l, but he has taken no 
significant actions to resolve his other debts. 
 
 AG ¶¶ 20(c) and 20(d) are not established. Applicant has not sought or received 
financial counseling. He has made no payments and negotiated no payment 
agreements. The collections for the debt in SOR ¶ 1.b were by involuntary garnishment, 
which does not constitute a good-faith effort to repay the debt. 
 
 AG ¶ 20(e) is not established. Applicant disputed the amount of the debt in SOR 
¶ 1.b, but not the underlying debt. He justifiably believes that some of his medical debts 
should have been paid by TRICARE or private insurance, but has taken no action since 
2012 to resolve the question whether his medical care was covered.  
 
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 
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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 Guideline F in my whole-person 
analysis. Some of the factors in AG ¶ 2(a) were addressed under that guideline, but 
some warrant additional comment. 
 
 Applicant has worked for his current employer since October 2010, previously 
served honorably in the U.S. Navy, and has held a security clearance since August 
2003. However, he has paid little attention to his financial obligations. He recently 
incurred a $35,000 debt to buy a new truck, even though he could not qualify for a loan 
in his own name. He appears to have no grasp of his financial situation and little 
understanding of the importance of being financially responsible. 
 
 After weighing the disqualifying and mitigating conditions under Guideline F, 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. Accordingly, I 
conclude he has not carried his burden of showing that it is clearly consistent with the 
national interest to continue his 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.q:    Against Applicant 
 
Conclusion 
 
 I conclude that it is not clearly consistent with the national interest to continue 
Applicant’s eligibility for a security clearance. Eligibility for access to classified 
information is denied. 
 
 
 
 
LeRoy F. Foreman 
Administrative Judge