1 
 
                                                              
DEPARTMENT OF DEFENSE 
DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
 [Redacted] )  ISCR Case No. 14-01740 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Fahryn Hoffman, Esq., Department Counsel 
For Applicant: Marisa Postma, Personal Representative 
 
 
 
______________ 
 
Decision 
______________ 
 
 
FOREMAN, LeRoy F., Administrative Judge: 
 
This case involves security concerns raised under Guidelines F (Financial 
Considerations) and E (Personal Conduct). Eligibility for access to classified information 
is denied. 
 
Statement of the Case 
 
Applicant submitted a security clearance application on November 22, 2013. On 
June 9, 2014, the Department of Defense (DOD) sent him a Statement of Reasons 
(SOR) alleging security concerns under Guidelines F and E. 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 19, 2014; answered it on July 3, 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. 
 
2 
 
 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 
hearing as scheduled. Government Exhibits (GX) 1, 2, 4, 5, and 7 were admitted in 
evidence without objection. GX 3 and 6 were not admitted, for the reasons set out 
below. Department Counsel’s letter to Applicant, providing him with copies of 
documents she intended to submit at the hearing, is attached to the record as Hearing 
Exhibit (HX) I. Applicant testified, called one witness, and submitted Applicant’s Exhibits 
(AX) A through C, which were admitted without objection.  
 
I kept the record open until September 23, 2014, to enable Applicant to submit 
additional documentary evidence. He timely submitted AX D through G, which were 
admitted without objection. Department Counsel’s comments regarding AX D through G 
are attached to the record as HX II. DOHA received the transcript (Tr.) on September 
25, 2014. 
 
Evidentiary Rulings 
 
 GX 3 and 6 are unauthenticated summaries of personal subject interviews 
conducted on December 7, 2013, and August 24, 2011. I explained the authentication 
requirement in Directive ¶ E3.1.20 to Applicant, and he declined to waive it. (Tr. 27-30.) 
Thus, I did not admit GX 3 and 6. 
 
Findings of Fact 
 
 In his answer to the SOR, Applicant admitted SOR ¶¶ 1.a-1.i. He admitted that 
his negative answers to two questions about delinquent debts and arrests (SOR ¶¶ 2.a 
and 2.b) on his SCA were incorrect, but he denied intentional falsification. I have treated 
his responses to SOR ¶¶ 2.a and 2.b as denials. His admissions in his answer and at 
the hearing are incorporated in my findings of fact.  
 
 Applicant married in July 1988. He and his wife have two daughters, ages 24 and 
25, and a 22-year-old son. One of their daughters lives with them and is pregnant with 
twins. Their daughter receives no financial help from the father of the twins. (Tr. 43, 92.) 
 
 Applicant served on active duty in the U.S. Navy from June 1985 to June 2005, 
retiring as a petty officer first class and receiving an honorable discharge. He worked in 
the private sector from June 2005 to February 2008. He worked for his current 
employer, a defense contractor, from March 2008 to September 2009, when he was 
terminated for “violation of base policies.” He was unemployed from September 2009 to 
September 2010, worked in the private sector from September 2010 to July 2011, and 
was rehired by the same defense contractor in July 2011. He received eligibility for a 
public trust position in 2011. (GX 1 at 9-16; GX 4.) 
 
 Applicant’s “violation of base policies” consisted of being stopped by police on a 
Navy base, where he worked as a contractor employee, for riding a motorcycle with no 
mirrors and an expired base registration. He was accused of directing vulgar language 
 
3 
 
at the policeman, attempting to flee, and illegally possessing a weapon (a knife in his 
boot). He was barred from the base for one year, which made it impossible for him to 
continue working for his employer. (GX 7.) 
 
 Applicant submitted a Questionnaire for Public Trust Positions in July 2001. He 
disclosed that he was fired in September 2009 for “violation of company policy.” (GX 4 
at 4.) In response to a question whether, in the past seven years, he had been arrested 
for, charged with, or convicted of any offenses, he disclosed the incident on the Navy 
base. He answered “No” to questions whether, in the past seven years, he had any 
judgments rendered against him and whether he was currently more than 180 days 
delinquent on any debts. (GX 4 at 7.) He admitted at the hearing that he was confronted 
with his financial record by a security investigator, and that he told the investigator that 
he was unaware of his delinquent debts because his wife handled the family finances. 
(Tr. 50-51.) He also admitted that he filed a Chapter 13 petition in October 2003 and 
that it was dismissed in February 2004. (Tr. 59.)  
 
 When Applicant submitted his SCA in November 2013, he answered “No” to two 
questions: (1) whether, during the past seven years, he had a judgment entered against 
him, had bills or debts turned over to a collection agency, or had been more than 120 
days delinquent on any debt; and (2) whether, during the past seven years, he had 
been arrested by any police officer, sheriff, marshal or another type of law enforcement 
officer. He did not disclose any judgments, delinquent debts, or his arrest on the Navy 
base. 
 
 Applicant’s credit bureau report (CBR) dated December 27, 2013 (GX 2), reflects 
the following debts: 
 
 SOR ¶ 1.a: unsatisfied judgment filed in July 2012 ($11,860); 
 
 SOR ¶ 1.b: unsatisfied judgment for unpaid medical bill filed in May 2012 ($412); 
 
SOR ¶ 1.c: unsatisfied judgment for unpaid medical bill filed in April 2009 
($294); 
 
SOR ¶ 1.d: mortgage loan 90 days or more past due, with last activity in 
December 2013 ($1,904, with balance of $114,350); 
 
SOR ¶ 1.e: delinquent car loan charged off in April 2013 ($6,013); 
 
SOR ¶ 1.f: delinquent debt referred for collection in April 2007 ($942); 
 
SOR ¶ 1.g: credit card account 60 days or more past due, with last activity 
in October 2013 ($90, with balance of $400); 
 
SOR ¶ 1.h: credit card account 60 days or more past due, with last activity 
in November 2013 ($60, with balance of $322); and 
 
4 
 
SOR ¶ 1.i: credit card account 120 days or more past due, with last activity 
in August 2013 ($197, with balance of $313). 
 
 In his answer to the SOR, Applicant attributed the delinquent medical bills to a 
motorcycle accident in February 2004. He was on active duty at the time and assumed 
that all medical expenses were covered by TRICARE. He attributed his other delinquent 
debts to inattention during his Navy service, when he was frequently deployed and 
relied on his wife to manage the family finances. He stated that he answered “No” to the 
financial questions on his November 2013 SCA because he was unaware of his 
delinquent debts.  
 
Applicant stated in his answer that he answered “No” to the question about 
arrests, because he did not realize that he was under arrest. At the hearing, he testified 
that he consulted with security personnel at the Navy base and concluded that he had 
been detained, but not arrested. (Tr. 72-73.) At the hearing, he admitted that he was 
handcuffed, transported to the police station in a police vehicle, and held for several 
hours. (Tr. 74.) He also admitted that, when he applied for a public trust position in July 
2011, he answered “Yes” to the same question and disclosed his September 2009 
arrest at the Navy base. At the hearing, he testified that he was in a rush when he 
completed the November 2013 SCA and “didn’t even think about the background check” 
that was completed in 2011. (Tr. 54.)  
 
 On September 12, 2014, the day after the hearing, Applicant and his wife filed a 
joint petition for Chapter 13 bankruptcy. (AX A, AX E through G.) They listed assets of 
$269,610 (including the family home valued at $250,110) and liabilities of $173,107. (AX 
G at 11.) All the creditors alleged in the SOR are included in the bankruptcy. In addition 
to the delinquent car loan alleged in SOR ¶ 1.e, Applicant testified that his pay was 
being garnished for another delinquent car loan, which is included in the Chapter 13 
bankruptcy petition but not alleged in the SOR.1 (Tr. 67-69.) In the bankruptcy petition, 
Applicant and his wife listed total monthly income of $6,652 and expenses of $5,816. 
Applicant has been advised by his attorney that the monthly payments to the Chapter 
13 trustee probably will be $500 or $600. (Tr. 93.) 
 
 Applicant’s friend and co-worker testified that she has known Applicant for three 
years, spent “numerous hours” working with him, and traveled with him to work-related 
field locations. She considers him “very trustworthy” and “someone you can count on 
                                                          
1 Applicant’s arrest on the Navy base, his termination from employment after being barred from the base, 
and the garnishment of his pay were not alleged in the SOR. Conduct not alleged in the SOR may not be 
used as an independent basis for denying or revoking a security clearance, but it 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 considered Applicant’s conduct that was not alleged in the 
SOR for these limited purposes. 
 
 
5 
 
and rely on if you heed help or assistance for anything.” She testified that Applicant is 
one of the first people to volunteer for assignments. (Tr. 34-40.) 
 
 Applicant’s immediate supervisor and his site manager submitted letters stating 
that Applicant is “an exemplary employee.” (AX B; AX C; Tr. 79-80.) Another supervisor 
submitted a letter stating that his work ethic and leadership set him apart from his peers, 
that he “can always be called upon to do the job right the first time,” and his integrity has 
never been in question. (AX D.) 
 
 Applicant loves his job. He testified that, other than spending time with his family, 
there is nothing that he would rather do. (Tr. 41.) He testified that his wife handled the 
family finances when he was on active duty in the Navy, and that he became 
accustomed to having her take care of financial matters without his involvement. (Tr. 63-
64, 82-83.) 
 
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 
 
6 
 
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).  
 
Analysis 
 
Guideline F, Financial Considerations 
 
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). 
 
 
7 
 
 Applicant’s admissions and his December 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”). 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; 
 
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 were 
not incurred under circumstances making them unlikely to recur. 
 
 AG ¶ 20(b) is not established. Applicant attributed his medical debts to a 
motorcycle accident in February 2004. However, the judgments for medical bills were 
filed in April 2009 and May 2012, long after the motorcycle accident. Even if the 
judgments were the result of his accident in 2004, he has not acted responsibly, 
because he did nothing to resolve them. 
 
 AG ¶ 20(c) is not established. Except for the counseling required by the 
bankruptcy courts, Applicant has not sought or received financial counseling, and his 
financial problems are not yet under control. Even if his bankruptcy petition is granted, I 
am not convinced that he will comply with any payment plan established by the 
bankruptcy court. He initiated a Chapter 13 bankruptcy in October 2003 but it was 
dismissed within four months. He does not have a track record of compliance with 
financial obligations. 
 
 AG ¶ 20(d) is not established. Good faith means acting in a way that shows 
reasonableness, prudence, honesty, and adherence to duty or obligation. ISCR Case 
 
8 
 
No. 99-0201, 1999 WL 1442346 at *4 (App. Bd. Oct. 12, 1999). While bankruptcy is a 
legally available option, it does not constitute a “good-faith” effort. See ISCR Case No. 
03-20327 (App. Bd. Oct. 26, 2006). Furthermore, Applicant does not have a track record 
of compliance with his financial obligations.  
 
 AG ¶ 20(e) is not established. Applicant has not disputed any of the debts 
alleged in the SOR.  
 
Guideline E, Personal Conduct 
The concern under this guideline is set out in AG ¶ 15:  
Conduct involving questionable judgment, lack of candor, dishonesty, or 
unwillingness to comply with rules and regulations can raise questions 
about an individual’s reliability, trustworthiness and ability to protect 
classified information. Of special interest is any failure to provide truthful 
and candid answers during the security clearance process or any other 
failure to cooperate with the security clearance process.   
 The relevant disqualifying condition in this case is AG ¶ 16(a): “deliberate 
omission, concealment, or falsification of relevant facts from any personnel security 
questionnaire . . . .” When a falsification allegation is controverted, as in this case, the 
Government has the burden of proving it. An omission, standing alone, does not prove 
falsification. An administrative judge must consider the record evidence as a whole to 
determine an applicant’s state of mind at the time of the omission.  See ISCR Case No. 
03-09483 at 4 (App. Bd. Nov. 17, 2004). An applicant’s level of education and business 
experience are relevant to determining whether a failure to disclose relevant information 
on a security clearance application was deliberate. ISCR Case No. 08-05637 (App. Bd. 
Sep. 9, 2010). 
 
 When Applicant submitted his application for public trust position in July 2011, he 
answered “No” to the financial questions, was confronted with his debts by a security 
investigator, and claimed that he was unaware of his delinquent debts because his wife 
handled the family finances. When he submitted his November 2013 SCA, his financial 
situation was basically unchanged. Nevertheless, he again answered “No” to the 
pertinent financial questions, and at the hearing he gave the same excuse for not 
disclosing his delinquent debts.  
 
 When Applicant applied for a public trust position in July 2011, he disclosed his 
September 2009 arrest on the Navy base. He did not disclose it in his November 2013 
SCA, explaining that he had since decided that he was detained but not arrested, even 
though he had been handcuffed, transported to the police station, and held for several 
hours.  
 
 
9 
 
 I find Applicant’s explanations for not disclosing his delinquent debts and his 
September 2009 arrest on his current SCA implausible and unconvincing. Accordingly, I 
conclude that the disqualifying condition in AG ¶ 16(a) is established. 
 
 The following mitigating conditions are potentially relevant: 
 
AG ¶ 17(a): the individual made prompt, good-faith efforts to correct the 
omission, concealment, or falsification before being confronted with the 
facts; 
 
AG ¶ 17(c): the offense is so minor, or so much time has passed, or the 
behavior is so infrequent, or it happened under such unique 
circumstances that it is unlikely to recur and does not cast doubt on the 
individual's reliability, trustworthiness, or good judgment; and 
 
AG ¶ 17(e): the individual has taken positive steps to reduce or eliminate 
vulnerability to exploitation, manipulation, or duress. 
 
 AG ¶ 17(a) is not established. Applicant did not disclose his delinquent debts and 
his arrest until he was confronted with the evidence.  
 
 AG ¶ 17(c) is not established. Applicant’s falsifications were not minor because 
they undermined the integrity of the security clearance process. They were recent, 
because they occurred during his current application for a security clearance. They did 
not occur under unique circumstances. 
 
 AG ¶ 17(e) is established. Applicant eventually admitted his delinquent debts in 
his response to the SOR and at the hearing. He reluctantly admitted at the hearing that 
he had been arrested. 
 
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 
which participation is voluntary; (6) the presence or absence of 
rehabilitation and other permanent behavioral changes; (7) the motivation 
 
10 
 
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 Guidelines F and E in my whole-person 
analysis. Some of the factors in AG ¶ 2(a) were addressed under those guidelines, but 
some warrant additional comment. 
 
 Applicant served honorably for 20 years in the U.S. Navy. He has a good 
reputation among his supervisors and coworkers. He has held a public trust position 
since 2011. He is deeply devoted to his work. Nevertheless, his lack of attention to his 
financial obligations and his lack of candor during the security clearance process raise 
doubts about his reliability, trustworthiness, and good judgment. 
 
 After weighing the disqualifying and mitigating conditions under Guidelines F and 
E, and evaluating all the evidence in the context of the whole person, I conclude 
Applicant has not mitigated the security concerns raised by his financial problems and 
his lack of candor during the security clearance process. 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 
 
  Subparagraphs 1.a-1.i:    Against Applicant 
 
 Paragraph 2, Guideline E (Personal Conduct):  AGAINST APPLICANT 
 
  Subparagraphs 2.a-2.b:    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