1
 
                                                             
                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 14-06159
)
Applicant for Security Clearance )
Appearances
For Government: Braden M. Murphy, Esquire, Department Counsel
For Applicant: Pro se  
______________
Decision
______________
HENRY, Mary E., Administrative Judge:
Based upon a review of the pleadings and exhibits, Applicant’s eligibility for
access to classified information is granted.
Statement of the Case
Applicant completed an Electronic Questionnaire for Investigations Processing
(e-QIP) on January 30, 2013, which he signed on February 4, 2013. The Department of
Defense (DOD) Consolidated Adjudications Facility (CAF) issued Applicant a Statement
of Reasons (SOR) on January 22, 2015, 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. 
 
W hen  SOR allegations are controverted, the Government bears the burden of producing evidence sufficient1
to prove controverted allegations. Directive, ¶ E3.1.14. “That burden has two components. First, the
Government must establish by substantial evidence that the facts and events alleged in the SOR indeed took
place. Second, the Government must establish a nexus between the existence of the established facts and
events and a legitimate security concern.” See ISCR Case No. 07-18525 at 4 (App. Bd. Feb. 18, 2009),
(concurring and dissenting, in part) (citations omitted). 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. 08-06605 at 3 (App. Bd. Feb. 4, 2010); ISCR Case No. 08-07290 at 2 (App. Bd. Nov. 17,
2009).
Item 3; Item 4; AE B - AE G.2
Item 4.3
2
Applicant received the SOR. He submitted a notarized, written response to the
SOR allegations dated February 18, 2015, and he requested a decision on the written
record in lieu of a hearing.
Department Counsel prepared a file of relevant material (FORM) and mailed
Applicant a complete copy on June 1, 2015. Applicant received the FORM on June 19,
2015. He had 30 days from receipt of the FORM to file objections and submit material in
refutation, extenuation, or mitigation. He submitted a response dated July 6, 2015. The
Defense Office of Hearings and Appeals (DOHA) assigned this case to me on August 6,
2015. The Government submitted six exhibits, which have been marked as Items 1-6
and admitted into the record. Applicant’s response to the SOR has been marked as
Item 3, and the SOR has been marked as Item 1. His written response to the FORM is
admitted into the record as Applicant Exhibit (AE) A-M.
Findings of Fact
In his Answer to the SOR, Applicant admitted the factual allegations in ¶¶ 1.a -
1.d and 1.f of the SOR. His admissions are incorporated herein as findings of fact. He
denied the factual allegations in ¶ 1.e of the SOR.  He also provided additional1
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 49 years old, seeks employment as a contract investigator for a
DOD contractor. Applicant operates an independent investigative agency, which he
began in September 2005 after being unemployed from June 2004 until August 2005.
Applicant relocated his investigative agency in 2012. Applicant advised that his
investigative business has been slow and erratic over the years. Since 1991, he has
periodically held security clearances with various federal agencies.2
Applicant is a high school graduate. He received a bachelor’s degree in 1996 and
a master’s degree in 2005. Applicant enlisted as an inactive reservist in the United
States Navy and served from June 2005 until June 2007. He received an honorable
discharge in 2007. Applicant has never been married.3
Item 1; Item 3.4
Item 3; AE M.5
AE A; AE J.6
Item 3; Item 5; Item 6; AE A; AE C; AE L.7
Item 3, Attachment to the Response to the SOR.8
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The SOR lists three past-due education loans totaling $15,246. Applicant
borrowed this money from the Department of Education to pay for his master’s degree.
Between May 2011 and November 30, 2011, Applicant made seven monthly payments
of $30 each (total $210) to the United States Department of Education by way of a
payment center. In May 2012, he received a letter from the Department of the Treasury
Management Service about his largest student loan. The Treasury Department applied
two federal payments of $7,562 and $402, totaling $7,964, to his student loan debt. The
$7,964 payment left a $1 balance, effectively eliminating this debt.  4
In a letter dated February 4, 2013, the Department of Education advised
Applicant that he paid $1,866 in interest on loans in default. With his response to the
SOR, Applicant provided documents which indicate that he made nine monthly
payments of $25 each, totaling $225, from April 2014 through December 2014 to the
Department of Education. In his response to the FORM, Applicant submitted additional
documentation showing eight monthly payments of $25 each, totaling $200, to the
Department of Education for payments due between January 2015 and August 2015.5
Applicant completed documentation with a limited partnership representing the
Department of Education to rehabilitate his student loans. In a letter dated July 2, 2015,
the company stated that Applicant could pay $25 a month for nine months to rehabilitate
his student loans based on his income. Applicant had made two payments under the
agreement. All three of Applicant’s student loans identified in the SOR are listed in the
consolidated payment with a single, but different, loan number.6
SOR allegation 1.d ($365) concerns a credit account opened in June 2002 with a
date of last activity of September 2006. Applicant believes that this debt was included in
his 2004 bankruptcy petition. The court discharged his debts on March 30, 2005. The
debt is listed on the February 2013 credit report, but it is not listed on the more recent
credit reports. The record lacks conclusive evidence of payment of this bill. However, in
August 2011, the Department of Homeland Security granted Applicant a security
clearance. No mention was made about this debt in his background investigation, and it
did not prevent the grant of a security clearance.7
Applicant acknowledged filing for bankruptcy in 2004. The court discharged his
debts, except his school loans, in March 2005. Applicant provided documentation
showing that he paid the debt in SOR allegation 1.e ($55) in April 2013 after meeting
with the investigator from the Office of Personnel Management (OPM).  8
4
Applicant’s current income and expenses are unknown. He did not provide a
budget or other information about his monthly income and expenses. His credit reports
did not indicate a misuse of credit cards, nor do the reports show efforts to obtain loans
to finance a lifestyle.
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 potentiall
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,
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
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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: 
(a) inability or unwillingness to satisfy debts; and
(c) a history of not meeting financial obligations. 
Applicant developed significant financial problems when he lost his job in 2004
and has worked sporadically since. Some debts have not been resolved. These two
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; and
(d) the individual initiated a good-faith effort to repay overdue creditors or
otherwise resolve debts.
Applicant lost his job in 2004. He never found full-time, gainful employment
again. In September 2005, after more than a year of unemployment, Applicant started
his own private investigation business. His work levels ebb and flow with the economy.
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The changing dynmics of the economy make it difficult for him to control the volume of
work coming to him as a small independent business. The loss of business directly
connected to the economy is factor beyond his control. He worked to resolve his student
loan debts in 2011 and 2012 when he had more work and income to pay the loans. In
May 2014, before the issuance of the SOR, he reached an agreement with the
Department of Education to pay $25 a month on his school loans. He has complied with
the terms of the agreement. Even though he has made these small payments as a show
of good faith, the Department of Education transferred his debt to a collection agent.
Applicant negotiated a plan to rehabilitate his school loans with the collection agent, and
he has made the first two payments as agreed. Applicant has acted reasonably under
the circumstances. AG  ¶¶ 20(b) and 20(d) apply.
Applicant paid the $55 debt in SOR allegation 1.e in 2013 after learning that the
debt existed. Applicant filed bankruptcy more than 10 years ago. Except for his student
loans, he has managed his income and expenses. He lives frugally, and he does not
incur credit card debt or other types of debt. The $365 may have been discharged in
bankruptcy, but Applicant did not provide a list of his creditors included in his bankruptcy
petition, which would show the inclusion of this debt. The debt is not listed on more
recent credit reports for unknown reasons. Given he maintains control over his finances
and does not live beyond his income level, this debt does not raise a security concern.
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,
In assessing whether an applicant has established mitigation under Guideline F, the Appeal Board provided9
the following guidance in ISCR Case No. 07-06482 at 3 (App. Bd. May 21, 2008):
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.
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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.  9
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. In
reaching a conclusion, I considered the potentially disqualifying and mitigating
conditions in light of all the facts and circumstances surrounding this case. Since filing
his bankruptcy petition more than 10 years ago, Applicant has lived frugally and has not
used credit of any type to finance a lifestyle. He pays his school debt regularly and
continues to work with the creditor to rehabilitate his loans. His ability to fully pay the
loans depends upon his ability to create more work for himself. In the meantime, he
pays an amount he can afford and is acceptable to the creditor. He has taken
affirmative action to pay or resolve most of the delinquent debts raising security
concerns. (See AG & 2(a)(6).) The one small debt that he has not definitively shown is
resolved cannot be a source of improper pressure or duress. Of course, the issue is not
simply whether all his debts are paid: it is whether his financial circumstances raise
concerns about his fitness to hold a position of trust. While one debt remains
unresolved, it is insufficient to raise security concerns. (See AG & 2(a)(1).)  Overall, the
evidence of record reflects that Applicant manages his limited income.
Overall, the record evidence leaves me without questions or doubts as to
Applicant’s eligibility and suitability for a security clearance. For all these reasons, I
conclude Applicant mitigated the security concerns arising from 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
Subparagraph 1.a: For Applicant
Subparagraph 1.b: For Applicant
Subparagraph 1.c: For Applicant
Subparagraph 1.d: For Applicant
Subparagraph 1.e: For Applicant
Subparagraph 1.f: 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