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DEPARTMENT OF DEFENSE 
DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
 [Redacted] )  ISCR Case No. 14-01204 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Eric H. Borgstrom, Esq., Department Counsel 
For Applicant: Pro se1 
 
 
______________ 
 
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 August 2, 2013. On May 
12, 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 answered the SOR on May 20, 2014, and requested a hearing before 
an administrative judge. Department Counsel was ready to proceed on July 30, 2014, 
and the case was assigned to me on August 1, 2014. The Defense Office of Hearings 
and Appeals (DOHA) issued a notice of hearing on August 8, 2014, scheduling the 
                                                          
1 Applicant is a licensed attorney in good standing with his state bar. 
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hearing for August 28, 2014. On August 26, 2014, Applicant requested a postponement 
due to a family emergency, and I granted his request. (Hearing Exhibit (HX) I.) On 
October 7, 2014, DOHA issued an amended notice of hearing, scheduling the hearing 
for October 28, 2014. I convened the hearing as scheduled. Government Exhibits (GX) 
1 through 5 were admitted in evidence without objection. Applicant testified and 
submitted Applicant’s Exhibit (AX) A, which was admitted without objection. DOHA 
received the transcript (Tr.) on November 7, 2014. 
 
Findings of Fact 
 
 In his answer to the SOR, Applicant admitted SOR ¶¶ 1.a-1.c and denied SOR ¶ 
1.d. His admissions in his answer and at the hearing are incorporated in my findings of 
fact.  
 
 Applicant is a 63-year-old security response agent employed by a federal 
contractor since March 2013. He has never held a security clearance. 
 
 Applicant married in May 1982. He and his wife have three adult children, ages 
38, 28, and 31. His wife is employed as a nurse. 
 
 Applicant was a police officer from October 1969 to December 1984, when he 
retired. After retirement, he worked in the security business, a restaurant supply 
business, and sold real estate. He attended college from August 1997 to May 1990 and 
received a bachelor’s degree. He attended law school from August 1990 to May 1993 
and received a juris doctor (JD) degree. He was admitted to practice in 1994. He was 
employed by a law firm and started making payments on his student loans in 1995. In 
January 1998, he and a law school classmate started their own firm, and a third partner 
joined the firm about 18 months later. He testified that the firm did “okay” but not “great,” 
because it took time to build a client base. His income from the law firm was inadequate 
to continue paying his student loans. He paid interest only for several years. (Tr. 16-17.)  
 
 In 2008, Applicant’s law firm was paid $250,000 for settling a lawsuit, and 
Applicant’s share of the fee was $135,000. He used his share of the fee to pay past-due 
bills, including his student loans and his home mortgage loan. He claimed that he was 
unable to pay his federal and state income taxes for 2008, because of his drastic 
increase in income. He contacted the federal and state tax authorities and negotiated 
payment agreements, and he began paying $406 per month on his federal tax debt. 
(GX 5 at 3; AX A.) He owed about $7,000 for state income tax. The state imposed a tax 
lien in October 2009. Applicant paid the taxes due, and the lien was released in August 
2012. (GX 5 at 4; Tr. 32.) 
 
In August 2009, a judgment for $10,511 was entered against Applicant for a 
delinquent credit card account. He testified that this debt was “put on the back burner” 
because of his other delinquent debts. The judgment is unsatisfied. (GX 4; Tr. 38.)  
 
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In December 2009, Applicant agreed to “retire” from the law firm because his 
share of the practice, which was largely devoted to real estate transactions, was no 
longer producing sufficient income. (Tr. 18.) He was unemployed until November 2011. 
He worked as a security officer from November 2011 to June 2012. In June 2012, he 
voluntarily left this job after his employer told him that his job would be downgraded and 
his pay reduced. (GX 1 at 12; Tr. 61.) He was unemployed from June 2012 to March 
2013, when he began his current job.  
 
In February 2012, a judgment for $64,318 was entered against Applicant for 
delinquent student loans. (GX 4.) Applicant testified that he received settlement offers 
“over the years,” but he could not afford to accept them. He has not made any 
payments on the judgment or tried to negotiate a lesser settlement amount. (GX 5 at 3; 
Tr. 51.)  
 
 During 2012, Applicant’s wife worked an unusual amount of overtime as a nurse, 
earning about $105,000 from February through June 2012. They decided to travel 
across the United States for about two months. (Tr. 24-25.) The trip expenses totaled 
about $7,500. (Tr. 27.) They claimed that they were unable to pay their federal and state 
income taxes resulting from their increased joint income during 2012.  
 
In June 2013, Applicant and his wife negotiated another payment agreement for 
their federal tax debt. They are now paying a total of $700 per month for the combined 
tax debts for 2008 and 2012. Their total tax debt is now about $27,857. (AX A.) 
 
 Applicant’s police pension is about $3,000 per month. (Tr. 21.) His wife earns 
about $90,000 per year. His net weekly income from his primary job is about $240. He 
works a second job for 16 hours a week, earning another $240. (Tr. 29-30.) His wife 
intends to resign from her current job and return to part-time work for an agency, 
because she is recovering from a hip replacement. (Tr. 28-29.)  
 
 Applicant’s family home is in his wife’s name because of his poor credit. They 
purchased the home for $600,000, with a $480,000 loan secured by a first mortgage 
and a $120,000 loan secured by a second mortgage. The value of the home is now 
about $420,000. They refinanced the home in 2006 and took out equity for repairs and 
upgrades. (Tr. 35-36.) Their current monthly payments are $3,400 for the loans, 
insurance, and property taxes. They are currently now seeking a loan modification and 
have not made any house payments for about ten months. (Tr. 42.) Applicant has not 
sought or received financial counseling. (Tr. 51, 55.) 
 
 Applicant’s credit bureau reports (CBRs) reflect a delinquent medical debt for 
$174. (GX 2 at 1; GX 3 at 5.) Applicant denies owing this debt, because it should have 
been covered by his medical insurance. (GX 5 at 4-5.) He has not contacted the  
creditor or the credit reporting bureau to dispute the debt. (Tr. 50-51.) It is not resolved. 
 
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 Applicant and his wife took foreign vacations of 6-10 days in January 2010, 
January 2012, February 2013, and March 2014. He estimates that they spent about 
$2,200 for each trip. (GX 1 at 31-33; Tr. 31-32.) 
 
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).   
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 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 a federal income tax debt of about $57,000 for tax years 2008 
and 2012 (SOR ¶ 1.a); a judgment for about $10,511 for a delinquent credit card 
account (SOR ¶ 1.b); a judgment for about $64,318 for delinquent student loans (SOR ¶ 
1.c); and a delinquent medical bill for $174 (SOR ¶ 1.d). 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 and his credit bureau reports 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”). 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; 
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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 debts are numerous, recent, and did 
not occur under circumstances making them unlikely to recur. 
 
 AG ¶ 20(b) is not established. The downturn in the real estate market that 
adversely affected Applicant’s area of practice was a circumstance beyond his control. 
Arguably, his spike in income in 2008 and his wife’s spike in income in 2012 were 
circumstances beyond his control, but the tax debts that followed were due to his failure 
to set aside sufficient funds to pay the increased taxes. Applicant’s decision to quit his 
job rather than work for less pay after his position was downgraded in 2012 was not a 
circumstance beyond his control. He acted somewhat responsibly regarding his tax 
debts by paying the state income taxes and setting up a payment plan for his federal tax 
debt. He has not acted responsibly in response to the judgment for delinquent student 
loans or the judgment for a delinquent credit card account. He has chosen to spend his 
discretionary money for vacations rather than resolve his delinquent debts. He has not 
acted responsibly toward the medical debt, because he has not contacted the creditor, 
disputed the debt, or taken any action to resolve it. 
 
 AG ¶ 20(c) is not established, because Applicant has not sought or received 
financial counseling, and his financial problems are not under control. AG ¶ 20(d) is 
established for the federal tax debt, but it is not established for the student loans, 
delinquent credit card debt, or the medical debt. AG ¶ 20(e) is not established, because 
Applicant has not disputed any of the debts alleged in the SOR. 
 
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 
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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 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 served as a police officer for many years. 
He hoped to earn a comfortable living as a lawyer, but he was disappointed. When he 
was unable to meet his financial obligations, he did not adjust his lifestyle. He spent his 
discretionary money on vacations instead of using it to resolve his debts. 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 
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 
 
  Subparagraph 1.a:     For Applicant 
 
  Subparagraphs 1.b-1.d:    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