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DEPARTMENT OF DEFENSE 
DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
In the matter of:    ) 
      ) 
      )  ISCR Case No. 14-02969 
     ) 
Applicant for Security Clearance  ) 
 
 
Appearances 
 
For Government: Adrienne M. Strzelczyk, Esq., Department Counsel 
For Applicant: Pro se 
 
 
______________ 
 
Decision 
______________ 
 
 
CREAN, Thomas M., Administrative Judge: 
 
Based on a review of the pleadings, exhibits, and testimony, eligibility for access 
to classified information is granted. Applicant presented sufficient information to mitigate 
financial security concerns. 
 
Statement of the Case 
 
On January 14, 2014, Applicant submitted an Electronic Questionnaire for 
Investigations Processing (e-QIP) to obtain a security clearance required for a position 
with a defense contractor. The Department of Defense (DOD) could not make the 
affirmative findings required to issue a security clearance. DOD issued Applicant a 
Statement of Reasons (SOR), dated September 5, 2014, detailing security concerns for 
financial considerations under Guideline F. 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 (AG) effective in the DOD on September 1, 2006.  
 
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Applicant answered the SOR on September 23, 2014. She admitted ten and 
denied five of the 15 allegations. Department Counsel was prepared to proceed on May 
27, 2015, and the case was assigned to me on June 8, 2015. DOD issued a notice of 
hearing on July 2, 2015, scheduling a hearing for July 30, 2015. I convened the hearing 
as scheduled. The Government offered three exhibits that I marked and admitted into 
the record without objection as Government Exhibits (GX) 1 through 3. Applicant 
testified and submitted four exhibits that I marked and admitted into the record without 
objection as Applicant Exhibits (AX) A through D. I held the record open for Applicant to 
submit additional documents. Applicant timely submitted five documents that I marked 
and admitted into the record without objection as AX E through J. (GX 4, e-mail, dated 
August 6, 2015) I received the transcript of the hearing (Tr.) on August 7, 2015. 
 
Findings of Fact 
 
After a thorough review of the pleadings, transcript, and exhibits, I make the 
following essential findings of fact.  
  
Applicant is 49 years old and has been employed as a web designer and 
program analyst for a defense contractor since September 2012. Applicant first married 
in September 1994 and divorced in June 1999. She married her present husband in 
September 2001. She has two grown children and one child in college. Applicant’s 
monthly net income prior to the SOR was approximately $5,000. Her net monthly 
expenses were approximately $4,000, leaving $1,000 monthly in discretionary income. 
After the SOR was issued, she could no longer use her company’s computer. Her 
company kept her employed, but her net salary was cut in half to approximately $2,200 
monthly. She lowered her expenses so that she is now living paycheck to paycheck. (Tr. 
19-21, 24-27, 30-32; GX 1, e-QIP, dated November 22, 2013) 
 
The SOR alleges,  and  credit reports (GX 2, dated February 6, 2014; and GX 3, 
dated July 28, 2014) confirm the following debts for Applicant: a judgment on a medical 
debt for $1,158 (SOR 1.a); medical debts in collection for $625 (SOR 1.b), $152 (SOR 
1.c), $597 (SOR 1.g), $227 (SOR 1.h), $240 (SOR 1.i), $4,249 (SOR 1.j), $78 (SOR 
1.k), $608 (SOR1.l), and $144 (SOR 1.m); a judgment for a credit card debt for $4,778 
(SOR 1.d); a credit card debt in collection for $4,553 (SOR 1.e); a television service 
debt in collection for $122 (SOR 1.f); an account in collection for $4,111 (SOR 1.n); and 
another credit card debt in collection for $549 (SOR 1.o). The total amount of the 
alleged delinquent debt is approximately $22,000.  
 
Applicant attributes her financial problems to her being the sole source of income 
for her family for the last ten years; to the theft of her identity when she was in college 
which she has been trying to resolve for over 15 years; periods of unemployment 
because of illness; and bills from medical treatment. Applicant’s husband is a sales 
representative for a mortar supply company. Because of the nature of the industry and 
the construction economy, he has not been able to find meaningful steady work in over 
ten years. When he is working, the most he contributes to the family income is $1,200 
monthly. When her identity was stolen as a college student, she filed police reports and 
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assisted in an investigation. At the time, she disputed debts with the credit reporting 
agencies and is still trying to have debts removed from her credit reports. The SOR 
debts she denied are the result of the identity theft. Applicant had three cancer 
surgeries and was placed on disability. She had difficulty getting the health insurance 
company to pay some of her medical bills. Applicant’s biggest challenge now in paying 
her debts is to identify the party holding the debt to be paid. If she can determine the 
person holding the debt, she will attempt to establish payment plans with them. She 
established some payment plans in the past. Since her salary has been reduced, she 
has not been able to remain current with the payment plan. Her cancer treatments have 
forced her to miss work and not be paid. Applicant estimates that she lost over 12 
months of salary in the last five years. (Tr. 19-24, 27-29, 32-33)  
 
Applicant provided documentary information that the judgment at SOR 1.a has 
been satisfied. (Tr. 33, AX A, Judgment Satisfaction, dated November 13, 2014; AX B, 
Attorney Letter, dated February 4, 2015). Applicant was unable to determine the 
creditors for the medical debts at SOR 1.b and 1.c, so these debts have not been paid. 
(Tr. 33-34) Applicant contested some debts with the credit reporting agencies because 
of identity theft. The debts at SOR 1.e, and SOR 1.o, have been deleted from her credit 
report. Other debts not listed on the SOR have also been deleted. She is still waiting for 
resolution of her dispute for the debt at SOR 1.n. (AX I, Dispute letter and Notice of 
action and credit report entries, dated October 14, 2014)  
 
Applicant initially denied the debt for television service debt at SOR 1.f. Because 
of the small amount of the debt she contacted the original creditor, but they no longer 
have the debt. She tried to find the creditor holding the debt, but has been unsuccessful. 
(Tr. 37-38, 41-42) She presented information that the medical debts at SOR 1.h, 1.k, 
and 1.m have been paid in full. (AX G, AX H, and AX J, Cancelled checks and Paid-in-
Full Letter). She presented information that she has payment plans for the medical 
debts at SOR 1.j, 1.g, 1.i, and 1.l. (AX F, Letter, undated) She did not provide any 
information to establish that payments are being made under these plans. She provided 
documentary proof in her response to the SOR that the judgment at SOR 1.d has been 
vacated. (Tr. 38-42) 
 
Applicant presented two letters of recommendation. One of Applicant’s friends 
wrote that she served on a local ladies sports board with Applicant. Applicant was a 
hard worker with a strong work ethic. Applicant is now the president of the board. In this 
position, she is the liaison with the national organization and ensures the league is in 
compliance with all sport’s national rules. The writer is aware of Applicant has overcome 
many medical and fiscal challenges. Applicant has a strong sense of what is right and 
wrong. She demonstrated that she is trustworthy and reliable. (AX C, Letter, dated June 
30, 2015)  
 
One of Applicant’s work supervisors, a retired Navy senior chief petty officer, 
wrote that Applicant worked under her supervision for almost three years. Applicant is a 
model employee, a hard worker, punctual, trustworthy, reliable, honest, and ethical. Her 
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service to the company has been exemplary, and she received numerous accolades 
from the company’s customers. (AX D, Letter, dated July 24, 2015) 
 
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 must be considered 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, 
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, the applicant is 
responsible for presenting “witnesses and other evidence to rebut, explain, extenuate, 
or mitigate facts admitted by applicant or proven by Department Counsel. . . . .” The 
applicant has the ultimate burden of persuasion in seeking 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 that the applicant may deliberately or inadvertently fail to 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. 
 
 
 
 
 
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Analysis 
 
Financial Considerations 
 
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. (AG ¶ 18) An individual who 
is financially overextended is at risk of having to engage in illegal acts to generate 
funds. However, the security concern is broader than the possibility that an individual 
might knowingly compromise classified information to raise money. It encompasses 
concerns about an individual’s responsibility, trustworthiness, and good judgment. 
Security clearance adjudications are based on an evaluation of an individual’s reliability 
and trustworthiness. It is not a debt-collection procedure. An individual who is financially 
irresponsible may also be irresponsible, unconcerned, or careless in his or her 
obligations to protect classified information. Behaving responsibly or irresponsibly in one 
aspect of life provides an indication of how a person may behave in other aspects of life.  
 
A person’s relationship with his or her creditors is a private matter until evidence 
is uncovered demonstrating an inability or unwillingness to repay debts under agreed 
terms. Absent evidence of strong extenuating or mitigating circumstances, an applicant 
with a history of serious or recurring financial difficulties is at risk of acting inconsistently 
with holding a security clearance. An applicant is not required to be debt free, but is 
required to manage his or her finances in such a way as to meet their financial 
obligations.  
 
Adverse information in credit reports can normally meet the substantial evidence 
standard to establish financial delinquency. Applicant had financial difficulties because 
she was the sole income for the family, had medial issues that led to periods of 
unemployment and medical debts, and her identity was stolen resulting in debts not 
belonging to her. Applicant’s history of delinquent debts is documented in her credit 
reports and her testimony at the hearing. Applicant’s delinquent debts are a security 
concern. The evidence is sufficient to raise security concerns under Financial 
Considerations Disqualifying Conditions AG ¶ 19(a) (inability or unwillingness to satisfy 
debts); and AG ¶ 19(c) (a history of not meeting financial obligations). The evidence 
indicates an inability and not an unwillingness to satisfy debt.  
 
 I considered the following Financial Considerations Mitigating Conditions under 
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; 
 
(b) the conditions that resulted in the financial problems were largely 
beyond the person’s control (e.g., loss of employment, a business 
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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;  
 
(d) the individual has initiated a good-faith effort to repay the 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. 
 
These mitigating conditions apply. Applicant incurred delinquent debt when she 
was the sole source of income in the family; her income was cut in half because of her 
lack of eligibility for access to classified information; and she incurred periods of 
unemployment and debts because of medical issues. The conditions that led to her 
delinquent debt were beyond her control and are unlikely to recur. She acted 
responsibly towards her debts by attempting to contact her creditors, disputing debts 
she did not recognize, paying debts she could, and negotiating payment plans for other 
debts. She was unable to learn of the creditors holding three of her debts, so she is 
unable to pay them. While Applicant did not present evidence of financial counseling, 
she is resolving her debts, and they are under control. 
 
Applicant established her good-faith initiative to pay her debts. For a good-faith 
effort, there must be an ability to repay the debts, the desire to repay, and evidence of a 
good-faith effort to repay. Good faith means acting in a way that shows reasonableness, 
prudence, honesty, and adherence to duty and obligation. A systematic method of 
handling debts is needed. Applicant must establish a meaningful track record of debt 
payment. A meaningful track record of debt payment can be established by evidence of 
actual debt payments or reduction of debt through payment of debts. A promise to pay 
delinquent debts is not a substitute for a track record of paying debts in a timely manner 
and acting in a financially responsible manner. Applicant must establish that she has a 
reasonable plan to resolve financial problems and has taken significant action to 
implement that plan. Applicant established a meaningful track record of debt payment 
by paying five of the delinquent debts, paying other debts not listed in the SOR, and 
having a payment plan for four other debts. She has shown that she acted with 
reasonableness, prudence, honesty, and an adherence to duty and obligation towards 
her finances. 
 
Applicant disputed three of the debts with the credit reporting agencies. Two 
debts have been resolved and removed from the credit reports by the credit reporting 
agencies. One disputed debt is still to be resolved.  
 
Applicant has shown that she is managing her personal financial obligations 
reasonably and responsibly, and her financial problems are being resolved. There is 
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ample evidence of responsible behavior, good judgment, and reliability. Based on all of 
the financial information, I conclude that Applicant has mitigated security concerns 
based on financial considerations. 
 
Whole-Person Analysis 
 
Under the whole-person concept, the administrative judge must evaluate an 
applicant’s security eligibility 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. 
 
Under AG ¶ 2(c), the ultimate determination of whether to grant a security clearance 
must be an overall commonsense judgment based upon careful consideration of the 
guidelines and the whole-person concept.  
 
 I considered the potentially disqualifying and mitigating conditions in light of all 
the facts and circumstances surrounding this case. I considered the views of Applicant’s 
friend and supervisor and her excellent job performance. Applicant has paid a third of 
her SOR debts, another third have been disputed or are unknown, and a third are being 
paid under a payment plan. This information shows Applicant’s responsible 
management of her finances. Applicant presented sufficient information to establish that 
she is acting reasonably and responsibly towards her finances, and that she will 
continue to responsibly manage her financial obligations. Overall, the record evidence 
leaves me without questions or doubts as to Applicant’s judgment, reliability, 
trustworthiness, and eligibility and suitability for a security clearance. For all these 
reasons, I conclude that Applicant has mitigated security concerns arising under the 
financial considerations guideline. Eligibility for access to classified information is 
granted. 
 
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.o:  For Applicant 
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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 access to classified information is granted. 
 
 
 
_________________ 
THOMAS M. CREAN 
Administrative Judge