1
 
                                                             
                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
 )       ISCR Case No. 14-05487
)
Applicant for Security Clearance )
Appearances
For Government: Daniel Crowley, Esquire, Department Counsel
For Applicant: Pro se  
______________
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 granted.
Statement of the Case
Applicant completed and certified an Electronic Questionnaire for Investigations
Processing (e-QIP) on March 19, 2013. The Department of Defense (DOD) issued
Applicant a Statement of Reasons (SOR) on November 24, 2014, 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; Tr. 26.1
GE 1; Tr. 25-26,2
2
Applicant received the SOR, and he answered it on December 22, 2014.
Applicant requested a hearing before an administrative judge with the Defense Office of
Hearings and Appeals (DOHA). Department Counsel was prepared to proceed on
February 7, 2015, and I received the case assignment on February 23, 2015. DOHA
issued a Notice of Hearing on March 9, 2015, and I convened the hearing as scheduled
on March 26, 2015. The Government offered exhibits (GE) marked as GE 1 through GE
3, which were received and admitted into evidence without objection. Applicant testified.
He submitted exhibits (AE) marked as AE A through AE N, which were received and
admitted into evidence without objection. DOHA received the hearing transcript (Tr.) on 
April 2, 2015. I held the record open until April 16, 2015, for Applicant to submit
additional matters. Applicant timely submitted multiple documents, which were received
without objection. On May 12, 2015, he submitted additional documentation beyond the
original submission date. Department Counsel did not object to the documents or to
reopening the record. The record is reopened and the additional document submissions
are received and admitted. The post-hearing documents are marked as AE O - AE HH.
The record closed on May 12, 2015.
Findings of Fact
In his Answer to the SOR, Applicant admitted all the factual allegations in the
SOR. His admissions are incorporated herein as findings of fact. He also provided
additional information to support his request for eligibility for a security clearance. After
a complete and thorough review of the evidence of record, I make the following findings
of fact.  
Applicant, who is 44 years old, works as a network administrative operator for a
DOD contractor. He began his current position in October 2012. He started working for
his current employer in October 2010 in another DOD contractor position out-of-the-
country. He also worked for his employer from March 2005 until July 2009, when he left
to move to another state. During this time, Applicant worked out-of-the-country from
March 2005 until June 2007. Applicant was unemployed from July 2009 until October
2009, when he accepted a position in configuration management. Applicant was laid off
from this job in February 2010.  1
Applicant graduated from high school. He later received an associate’s degree in
space systems technology and a bachelor’s degree in biology. Applicant is divorced. He
has a 14-year-old son for whom he pays child support. Applicant served in the United
States Air Force on active duty and in the reserves. He received an honorable
discharge.2
Applicant filed for bankruptcy in 2003 (SOR allegation 1.I). Prior to his bankruptcy
filing, Applicant experienced medical problems related to diabetes, which required at
GE 2; Tr. 37.3
GE 2; GE 3.4
GE 2; GE 3; AE C; AE D; AE W ; Tr. 27-34.5
GE 2; GE 3; AE E - AE G.6
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least two hospital stays. He incurred significant medical expenses for treatment of his
diabetes. During this time, he worked temporary jobs and served in the Air Force
reserves. He did not have health insurance from the military or his jobs, and his income
was insufficient to pay his medical bills.  3
The record contains two credit reports dated March 22, 2013 and June 27, 2014.
These reports reflect that Applicant pays many of his accounts “as agreed”. The reports
also show that Applicant paid or resolved four collection accounts and that after a
dispute, he resolved a mortgage debt. The credit reports also identify the debts listed in
SOR allegations 1.e through 1.h, which will be discussed below.4
The largest SOR collection account (1.e for $17,822) is for a car, which Applicant
voluntarily returned to the creditor. Applicant purchased a new Camaro in March 2011
while in the United States on leave from his out-of-country position. He left the car with
friend A. Applicant and friend A agreed that she would keep the Camaro in her garage
and, in exchange, she would have use of his 1999 Chevrolet Tahoe. They also agreed
that she could drive the Camaro just to keep it operational, that she would obtain
insurance if she wanted to drive the Camaro, and that she would maintain the car.
During his absence from the United States, friend A drove the Camaro more than
agreed and involved the car in at least one accident. Friend A incurred significant
expenses related to the Camaro. Friend A and Applicant eventually agreed that friend A
would purchase the Camaro with the proceeds from the sale of her house. Friend A
never purchased the Camaro nor did she repay the nearly $10,000 in expenses
Applicant incurred because of her use of the car. Applicant retained a lawyer and
eventually sued her in court. He obtained a judgment for over $57,000. Friend A has not
paid the judgment. Shortly before the hearing, Applicant offered to settle the judgment
for $37,000 (after learning where she lived and worked) to be paid at the rate of $400 a
month and former friend A agreed. If former friend A fails to comply with these
settlement terms, Applicant will garnish her wages. In the meantime, Applicant initiated
a payment plan with the creditor in July 2014. He made payments totaling $1,775 and
will continue with payments of $200 a month. His payment plan is not dependent upon
his former friend A’s agreement to repay him the judgment.5
The remaining three SOR collection debts total $661. Applicant paid the $84 debt
in allegation 1.g and pays $15 monthly on the $246 in allegation 1.h. His remaining
balance on this debt, as of March 9, 2015, was $111. Applicant disputed the $331 debt
with the cell phone carrier in allegation 1.f beginning in January 2011. His efforts to
resolve the debt have been unsuccessful.6
GE 1; AE A; AE B; AE K; AE N; AE P - AE R; AE Z; AE AA; Tr. 41-44.7
AE K; AE M; AE S; AE T; Tr. 38-40.8
AE H; AE I; AE L; AE N; AE U; AE V; AE Z.9
GE 2; GE 3; AE P - AE V.10
4
The SOR alleges that Applicant failed to file his tax returns for the tax years 2011
through 2013 (allegation 1.a), that Applicant owes $4,223 on his 2009 federal income
taxes (allegation 1.c), and that Applicant owes $293 on his 2010 federal income taxes
(allegation 1.d). Applicant provided tax transcripts from the IRS, which show that he filed
his 2008, 2009, and 2010 federal income taxes in 2011. The Internal Revenue Service
(IRS) received these tax returns on April 22, 2011 and filed his returns as of June 6,
2011. The tax transcripts reflected that Applicant requested an extension of time in 2008
and that he established an installment agreement for payment of his unpaid taxes in
June 2011 for the tax years 2008 and 2009 and in January 2012 for the tax year 2010.
The tax transcripts show that he made monthly payments and that he has paid all the
taxes owing for these years. The IRS applied part of his tax refund for the tax year 2014
to pay the remaining balance on his 2009 and 2010 taxes.7
Applicant mailed his federal income tax documents for the tax year 2011 to the
IRS in April 2012, but the IRS returned the documents to him because he had not
signed his return. He misplaced the documents, then forgot about filing his return.
Applicant mailed his 2011 and 2012 tax returns in 2014, which the IRS received on
September 19, 2014 and September 22, 2014, respectively. The IRS processed and
filed both returns on October 20, 2014, according to the tax transcripts for these years.
Applicant does not owe any additional taxes for the 2011 tax year, but he owes $96 for
the tax year 2012.8
Applicant requested an extension of time to file his 2013 federal income tax
return. He mailed his 2013 federal tax returns in December 2014, which the IRS
received on December 24, 2014. The IRS filed and processed this return on March 9,
2015. The IRS tax transcripts indicate that he owes the IRS approximately $2,454 in
taxes, penalties, interest, and fees for the tax year 2013. Before he filed his tax returns
for the 2014 tax year, Applicant and the IRS entered into a payment plan for his unpaid
taxes after he contacted the IRS on December 16, 2014. Under the payment plan,
Applicant will pay $100 a month on his tax debt. Applicant timely filed his federal income
taxes for the tax year 2014. The IRS applied his refund for the tax year 2014 to past-due
taxes.9
The tax transcripts and the credit reports of record do not indicate that the IRS
filed a tax lien against Applicant or garnished his wages. Applicant denies that his
wages were garnished to pay his past-due taxes or that the IRS filed a lien against him.
Applicant is working with a financial advisor.10
AE J; AE DD - AE HH.11
For tax withholding purposes, Applicant claims zero exemptions as a single person for both federal and state12
taxes. AE Y.
This may include the $400 monthly payment from friend A.13
AE X; AE Y.14
AE I; AE O.15
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The SOR alleges that Applicant did not file his income tax returns with State B for
tax years 2012 and 2013. Applicant provided documentation concerning his income tax
account with State B. These documents reflect that he owed additional taxes for the tax
years 2008, 2009, 2010, and 2013; that he entered into payment agreements with State
B; and that he has resolved all his tax debts with State B.11
Applicant currently earns approximately $5,676 a month in gross income and
receives approximately $3,061 a month in net income after deductions for taxes, social
security, medical, insurance, and two loan payments.  Applicant’s financial statement12
reflects $600 of additional income not shown on his earnings statement or otherwise
explained.  Applicant’s budget reflects monthly expenses totaling $2,524 including two13
SOR debt repayments ($215) and child support ($400), but not including food and
miscellaneous expenses or his $100 a month tax payment to the IRS. His income
covers his expenses.14
Applicant submitted eight letters of recommendation. Five indicated knowledge of
his financial issues. All speak highly of Applicant as a person and individual. His
coworkers and supervisors describe him as extremely knowledgeable in his job and a
hard worker. They consider him ethical and trustworthy. His friends describe him as
loyal and trustworthy. All recommend him for a security clearance.15
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,
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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
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: 
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(a) inability or unwillingness to satisfy debts;
(c) a history of not meeting financial obligations; and
(g) failure to file annual Federal, state, or local income tax returns as
required or the fraudulent filing of the same. 
Applicant developed financial problems after he left his car in the care of friend A
in 2011, creating a substantial unpaid car debt. He failed to file his federal and state
income tax returns on time for many years. These  disqualifying conditions apply.
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:
(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 was unemployed for three months in 2009, then laid-off in early 2010.
He immediately found new employment in 2010 and does not claim that his three
months of unemployment created financial problems for him. In 2011, Applicant and
friend A agreed that she would keep his new Camaro in a garage for him and in
exchange, she could drive his older Tahoe. She was authorized limited use of the
Camaro. She did not comply with the terms of the agreement. Instead, she drove the
Camaro more than authorized and incurred damages and other expenses as a result.
Her actions were largely beyond Applicant’s control, particularly since he was working
out-of-the-country. Applicant acted reasonably about this situation because he retained
an attorney to help him recover his expenses and file a lawsuit against friend A. He is
now attempting to recover the judgment awarded to him since he knows where friend A
works and lives. Independently of friend A’s obligation, he has a payment plan to
resolve the debt on the Camaro. AG ¶ 20(b) applies only to SOR allegation 1.e. 
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Applicant is working with a financial advisor on managing his income and
expenses. He developed a reasonable budget that addresses his current expenses and
includes his payment plans. He has addressed the debts in the SOR, and he taken
control of his finances. Before the issuance of the SOR, he contacted the creditors for
his largest debt and one small debt. He developed a manageable payment plan with
both and has complied with the agreed upon terms. In 2011, he worked out his first
payment plan with the IRS. He again contacted the IRS in late 2014 and developed a
new payment plan for his remaining tax debt. He has made good faith effort to resolve
his debts. AG ¶¶ 20(c) and 20(d) apply. 
Applicant disputed the $331 cell phone beginning in 2011 because he did not ask
for or use the service for which he was billed because he lived out-of-the-country. He
had a reasonable basis to dispute the debt, which he has been unable to resolve. AG ¶
20(e) applies to SOR allegation 1.f only.
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):
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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
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.
The evidence in support of granting a security clearance to Applicant under the
whole-person concept is more substantial than the evidence in support of denial. For all
these reasons, I conclude Applicant mitigated the security concerns arising from his
finances under Guideline F. The evidence of record reflects a pattern of filing his federal
and state income tax returns late, which shows a lack of responsibility and failure to
comply with his obligations as a United States citizen. To his credit, Applicant eventually
filed his federal and state income tax returns prior to the IRS seeking to recover the
taxes owed through liens and garnishments. Once he filed his returns, he twice
developed payment plans for any unpaid taxes and the penalties, fees, and interest
owed. He has resolved the past due state taxes identified in the SOR, and he has a
payment plan for the remaining monies owed to the IRS. In taking action on his debts.
Applicant’s largest debt relates to the Camaro and the unusual circumstances under
which it arose. He took action to recover the costs incurred because of the actions of
friend A and has an agreement for her to pay him the money owed. On his own
initiative, he developed payment plans for two SOR debts and paid the smallest debt.
The credit reports reflect that he has a history and track record for debt payment.
Applicant has not ignored his obligations. His supervisors and coworkers are aware of
his financial problems. None of them believe that Applicant will compromise classified
information because of his financial issues. Rather, they consider him highly trustworthy
based on his work ethics and conduct. Overall, the record evidence leaves me without
questions or doubts as to Applicant’s eligibility and suitability for a security clearance.
Applicant has mitigated the security concerns about his 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: FOR APPLICANT
Subparagraphs 1.a-1.i: For Applicant
Conclusion
In light of all of the circumstances presented by the record in this case, it is
clearly consistent with the national interest to grant Applicant eligibility for a security
clearance.  Eligibility for a security clearance is granted.
                                                              
MARY E. HENRY
Administrative Judge