1
 
                                                             
                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
    )       ISCR Case No. 14-04998
)
Applicant for Security Clearance )
Appearances
For Government: Caroline Heintzelman, Esquire, Department Counsel
For Applicant: Ryan C. Nerney, Esquire  
______________
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 an Electronic Questionnaire for Investigations Processing
(e-QIP) on March 6, 2014, which he signed on March 7, 2014. The Department of
Defense (DOD) Consolidated Adjudications Facility (CAF) issued Applicant a Statement
of Reasons (SOR) on February 4, 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).
GE 1; AE C; Tr. 18-21. 2
2
Applicant received the SOR on February 11, 2015, and he answered it on March
2, 2015. Applicant requested a hearing before an administrative judge with the Defense
Office of Hearings and Appeals (DOHA). Department Counsel was prepared to proceed
on May 27, 2015, and I received the case assignment on June 8, 2015. DOHA issued a
Notice of Hearing on June 25, 2015, and I convened the hearing as scheduled on July
16, 2015. The Government offered exhibits (GE) marked as GE 1 through GE 4, which
were received and admitted into evidence without objection. Applicant testified. He
submitted exhibits (AE) marked as AE A through AE F, which were received and
admitted into evidence without objection. DOHA received the hearing transcript (Tr.) on
July 24, 2015. I held the record open until August 16, 2015, for Applicant to submit
additional matters. Applicant timely submitted AE G, which was received and admitted
without objection. The record closed on August 16, 2015.
     
Findings of Fact
In his Answer to the SOR, Applicant admitted the factual allegations in ¶ 1.b of
the SOR. His admission is incorporated herein as findings of fact. He denied the factual
allegations in ¶¶ 1.a, and 1.c - 1.e of the SOR.  He also provided additional information1
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 39 years old, works as the Director of an aviation program for a
DOD contractor. Applicant began working for his current employer in 2003, and he has
been in his current position for one year. In 2007, his employer selected him to
participate in a leadership program. A former Office of Personnel Management (OPM)
security clearance investigator wrote a letter of recommendation for Applicant. She has
known him for five years and describes him as an individual who is respectful of the
importance of protecting information and has never exhibited behavior that was not
consistent with national security. To the best of her knowledge, he has never broken
any laws or exhibited poor self-control, lack of judgment, or an unwillingness to abide by
rules and regulations. She considers him reliable and trustworthy to protect classified
information.2
Applicant graduated from high school. He holds a bachelor’s degree in general
engineering science and a bachelor’s degree in electrical engineering. He is single, but
Tr. 8-19, 40.3
AE D.4
GE 2; Tr. 26-31.5
The Internal Revenue Service normally grants the first extension of time for six months, making Applicant’s6
2014 income tax return due on October 15, 2015.
GE 2; AE G; Tr. 26-31.7
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he was engaged in 2006 to his long-time girlfriend. The engagement and relationship
ended in 2009.  3
Applicant currently earns $13,905 a month in gross income, and he receives
$9,418 a month in net income after deductions for taxes, social security, retirement
payments, and insurances. He also receives $1,395 in rent from a property he owns.
His monthly expenses include $1,850 for rent, $1,019 for the mortgage on his rental
property, $800 for groceries, $40 for clothing and dry cleaning, $235 on utilities, $264 on
gasoline and car insurance, $249 on insurance, $1,960 on miscellaneous matters, $578
on education loans, and $582 on an automobile loan (he drives a 2008 car). His
monthly expenses total $7,945, leaving $2,868 available for debt payment.4
In 2009, Applicant’s then fiance3e started a business. She also worked, but her
income was insufficient to fund the business and pay her share of household expenses.
He provided financial assistance to her, often using a credit card. When their
relationship ended and she moved, he became responsible for all the household
expenses. He fell behind on the payment of many debts, including his mortgage and
credit cards, because at that time, he lacked sufficient income to meet all his expenses.
He worked with the mortgage lender and renegotiated his mortgage, which prevented
foreclosure on his house. His mortgage remains current as reflected in the credit
reports. One by one, Applicant paid the past due amounts on other past-due debts,
except one credit card. She has refused to pay the debt.5
Applicant contacted the creditor in SOR allegation 1.b ($24,473) about monthly
payments on his debt. Initially, the creditor demanded full payment of the debt, and later
requested monthly payments of between $800 and $1,000 a month, which he could not
afford to pay at the time. More recently, this creditor decided to forgive his indebtedness
and issued a form 1099-C for the full debt on December 31, 2014. The debt forgiven will
be included as his income for the tax year 2014. Applicant’s accountant obtained an
extension of time to file his 2014 income tax return.  His 2014 income tax return has not6
yet been filed.7
The four remaining SOR debts total $358 and became past due between 2011
and March 2014. Like his statement to the investigator from the Office of Personnel
Management (OPM), Applicant expressed no knowledge of these small debts. He
disputed the debts and a current account unknown to him on line with the credit
GE 2; GE 3; AE A; AE B; Tr. 22-26.8
AE F; AE G; Tr. 30-32.9
Tr. 34 -36.10
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reporting bureaus. He did not keep a copy of his disputes; however, the credit reports
dated April 24, 2015 and June 18, 2015 do not list these debts or the disputed current
account. Applicant received a letter from the creditor in allegation 1.d ($100) advising
that it was removing the debt from his credit reports.8
Just prior to the hearing, Applicant contacted a credit counseling company that
would assist him in resolving the large SOR debt. Given that he has received a form
1099-C, this may not be necessary. He planned to talk with his accountant about the
resolution of this debt.  9
Applicant indicated that since 2009, he has changed his view on money
management. He places the maximum amount of money allowed by law into his
retirement savings, and he is putting aside savings equal to one year’s worth of
expenses. He also talks with any serious lady friend about money and has ended two
relationships because of a differing view.10
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,
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
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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: 
(a) inability or unwillingness to satisfy debts; and
(c) a history of not meeting financial obligations. 
Applicant developed financial problems when his engagement ended in 2009 and
his fiancee moved out of their home. He was unable to pay all his bills for a time. The
above disqualifying conditions are applicable.
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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:
(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 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
(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’s financial problems began when his engagement ended in 2009,
causing a loss of household income and resulting in his inability to pay all his bills and
expenses. He contacted his mortgage lender and worked out a modification of his
mortgage, which prevented a foreclosure on his house. His mortgage is current. He paid
several smaller bills during this time, but he was unable to develop a reasonable
repayment plan with the creditor in allegation 1.b. He acted reasonably under the
circumstances by contacting his creditors and resolving those debts that he could
resolve. Less than a year ago, the creditor in allegation 1.b decided to forgive this
indebtedness and issued a form 1099-C. The debt forgiven will be included as income
for the tax year 2014. Applicant financial problems occurred during a single period of
time six years ago after he and his fiance3e ended their relationship. AG ¶¶ 20(a) and
20(b) are applicable.
Applicant pays his customary living expenses. Although small, Applicant disputed
the remaining SOR debts because the debts were unknown to him. He also disputed an
account listed as current on his credit report because he did not recognize the account.
He had a legitimate reason to dispute these debts, which have been removed from his
credit report. These debts are still legally collectible and too new to drop off his credit
report. Thus, the absence of the debts from his 2015 credit reports is the result of his
dispute. AG ¶¶ 20(c) and 20(e) are applicable.
In assessing whether an applicant has established mitigation under Guideline F, the Appeal Board provided11
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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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.11
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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. Applicant
sought to help his former fiance3e build her business. When they ended their
engagement, she left him with all the household bills and a large credit card debt. She
has refused to repay this debt. Since helping her, Applicant has changed his approach
to money. He saves for retirement, and he is saving enough money to pay a full year of
expenses should he be unable to work for any reason. He also discusses finances with
any woman he is seriously dating. He understands fully the problems from 2009 and
seeks not to repeat these problems. His bills are current, and his debts are resolved. He
does not live extravagantly. In reviewing al the evidence of record and Applicant’s
actions, his past debts 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. They do not.
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.
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
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