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DEPARTMENT OF DEFENSE 
DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
 [Redacted]1 )  ISCR Case No. 14-02434 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: David F. Hayes, Esq., Department Counsel 
For Applicant: Pro se 
 
 
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Decision 
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FOREMAN, LeRoy F., Administrative Judge: 
 
This case involves security concerns raised under Guidelines F (Financial 
Considerations) and E (Personal Conduct). Applicant refuted the allegations under 
Guideline E but did not mitigate the concerns under Guideline F. Eligibility for access to 
classified information is denied. 
 
Statement of the Case 
 
Applicant submitted a security clearance application (SCA) on February 20, 
2014. On October 27, 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 the DOD on September 1, 2006.  
                                                          
1 At the hearing, Applicant pointed out that his middle name was misspelled in the SOR and notice of 
hearing. On my own motion, I corrected the SOR. (Tr. 21-22.) This decision reflects the correct spelling of 
Applicant’s name.  
 
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 Applicant answered the SOR on December 22, 2014, and requested a hearing 
before an administrative judge. Department Counsel was ready to proceed on February 
26, 2015, and the case was assigned to me on March 4, 2015. The Defense Office of 
Hearings and Appeals (DOHA) issued a notice of hearing on the same day, scheduling 
the hearing for March 24, 2015. I convened the hearing as scheduled. Government 
Exhibits (GX) 1 through 4 were admitted in evidence without objection. Applicant 
testified and submitted Applicant’s Exhibits (AX) A and B, which were admitted without 
objection. I kept the record open until April 15, 2015, to enable Applicant to submit 
additional documentary evidence. He timely submitted AX C through K, which were 
admitted without objection. DOHA received the transcript (Tr.) on April 2, 2015. 
 
Procedural Issues 
 
 On April 24, 2015, Applicant’s security manager notified the DOD Consolidated 
Adjudications Facility that Applicant no longer required a clearance. The 
correspondence was forwarded to DOHA and received on May 27, 2015. The Directive 
¶ 4.4 provides, “Actions pursuant to this Directive shall cease upon termination of the 
applicant’s need for access to classified information except in those cases in which . . . 
[a] hearing has commenced.” Since a hearing was conducted in this case, I have issued 
this decision instead of terminating processing of this case.  
 
Findings of Fact 
 
 In his answer to the SOR, Applicant admitted the allegations in SOR ¶¶ 1.a-1.x 
and 1.z. He denied the allegation in SOR ¶ 1.y. He neither admitted nor denied the 
allegations in SOR ¶¶ 2.a and 2.b. I have treated his lack of response 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 is a 25-year-old shipwright employed by a defense contractor at a 
naval shipyard since November 2011. He graduated from high school in June 2008 and 
received an associate’s degree in computer drafting in April 2011. He has never 
married. He has no children. He has never held a security clearance.  
 
 When Applicant submitted his SCA, he disclosed that he had not filed his federal 
and state income tax returns for 2010 and 2011, owed $4,500 in federal income taxes, 
and had a payment plan for his federal tax debt. He stated that he thought he could file 
his federal tax returns every three years. He also disclosed delinquent rent payments 
totaling $3,000, a delinquent credit card debt of $1,065 that he attributed to identity 
fraud, and a jewelry store debt of $450. He answered “No” to questions asking if in the 
past seven years he had any property repossessed or foreclosed; had any bills turned 
over to collection agencies; or had an accounts or credit cards suspended, charged off, 
or cancelled for nonpayment. He also answered “No” to a question whether he was 
currently more than 120 days delinquent on any debt. (GX 1 at 31-37.) 
 
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 Applicant testified that he did not check his credit bureau report (CBR) before 
submitting his SCA. He listed only the debts that he could remember or look up. He 
denied intentionally falsifying his SCA. (Tr. 38.) 
 
 Applicant’s failure to timely file his federal and state income tax returns for 2010, 
2011, and 2012 is alleged in SOR ¶ 1.y, and his federal income tax debt is alleged in 
SOR ¶ 1.z. The SOR alleges 24 other debts totaling about $35,092 that are reflected on 
his credit bureau reports (CBRs) dated February 28, 2013; March 20, 2014; and 
February 6, 2015. (GX 2, 3, and 4.) Twelve are medical debts ranging from $25 to 
$4,489. Three are student loans totaling $16,587.  
 
 At the time of the hearing, Applicant was on paid medical leave because of an 
injury to his rotator cuff. His injury was due to previous participation in sports and not 
work-related or due to a specific traumatic event. (Tr. 54.) He is receiving about $1,100 
per month. When he is able to work a full 40-hour week, his monthly take-home pay is 
about $2,700. (Tr. 48.)  
 
Applicant attributed his financial problems to bad money management. He 
testified that he and his brother have each been providing $500 to $600 in financial 
assistance to his mother, who is very ill and unable to work. After paying his share of his 
mother’s living expenses, he usually had about $1,200 per month remaining for his 
living expenses. ((Tr. 21, 47-50.) 
 
Applicant was scheduled for surgery on March 31, 2015 (AX A.) He had 11 
physical therapy appointments scheduled during April and May. (AX B.) The medical 
debts alleged in the SOR are related to previous treatment of his injured rotator cuff. 
(AX C.)  
 
Applicant testified that he filed his 2012 federal and state income tax returns on 
time but had not filed his returns for 2013 and 2014. (Tr. 44, 51.) After the hearing, he 
submitted a document reflecting that he filed a federal tax return on April 15, 2015. His 
document does not reflect whether it was for tax year 2014 or previous years. (AX G.) 
He submitted evidence of five $25 payments and one $363 payment on medical bills, 
but he has not presented evidence linking these payments to the debts alleged in the 
SOR. (AX I.) He also presented evidence of a $300 payment to reinstate his medical 
insurance. (AX J.) 
 
Applicant testified that the jewelry store debt was paid, but he submitted no 
documentary evidence of payment. He provided evidence that he was making monthly 
$50 payments on the housing debt in SOR ¶ 1.r. (AX F.) He testified that he originally 
owed federal income taxes of about $5,000, but that he had reduced his tax debt to 
about $2,300 through a payment plan providing for monthly $55 payments. (Tr. 46.) 
However, he provided no documentary evidence of a payment plan or payments made. 
He testified that he had settled a $2,000 housing debt not alleged in the SOR. (Tr. 26.) 
Except for the debt in SOR ¶ 1.r, he presented no documentary evidence of actions to 
resolve any of the debts alleged in the SOR. 
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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).   
 
 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, 
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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). 
 
 Applicant’s admissions, corroborated by his CBRs, 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 under this guideline 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; 
 
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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. 
 
 None of the above mitigating conditions are established. Applicant’s debts are 
numerous, recent, and were not incurred under circumstances making them unlikely to 
recur. He has not received financial counseling. He has not disputed any of the debts. 
Except for the debt in SOR ¶ 1.r, he has not presented evidence of any payments or 
payment agreements. He has no plan for attaining financial stability. The medical debts 
alleged in the SOR were likely caused by conditions beyond his control, but he has not 
acted reasonably. He submitted evidence of some payments on medical debts, but he 
has not shown that the payments applied to the debts alleged in the SOR.  
 
Guideline E, Personal Conduct 
 The SOR alleges that Applicant falsified his SCA by failing to fully disclose the 
extent of his financial problems. 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, personal history statement, or similar form used to conduct 
investigations, determine employment qualifications, award benefits or status, 
determine security clearance eligibility or trustworthiness, or award fiduciary 
responsibilities.”  
 
 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 
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clearance application was deliberate. ISCR Case No. 08-05637 (App. Bd. Sep. 9, 
2010).  
 
 When Applicant submitted his SCA, he disclosed several delinquent debts and 
his failure to timely file his income tax returns. He did not examine his CBR before 
submitting his SCA. He testified that he disclosed the debts he could remember or look 
up. His explanation, considered in light of his general lack of financial awareness, is 
credible and plausible. I conclude that AG ¶ 16(a) is not established. No other 
disqualifying conditions under this guideline are established. 
 
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 
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. 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 raised by his delinquent debts and failure 
to timely file his federal and state tax returns. Accordingly, I conclude he has not carried 
his burden of showing that it is clearly consistent with the national interest to grant 
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 
  Subparagraph 1.r:     For Applicant 
  Subparagraphs 1.s-1.z:    Against Applicant 
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 Paragraph 2, Guideline E (Personal Conduct):  FOR APPLICANT 
 
  Subparagraphs 2.a-2.b:    For 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