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DEPARTMENT OF DEFENSE 
DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
In the matter of:    ) 
      ) 
      )  ISCR Case No. 11-14860 
     ) 
Applicant for Security Clearance  ) 
 
 
Appearances 
 
For Government: Adrienne M. Strzelczyk, Esq., Department Counsel 
For Applicant: Timothy F. Sceviour, Esq. 
 
 
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Decision 
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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 May 1, 2014, Applicant submitted an Electronic Questionnaire for 
Investigations Processing (e-QIP) to obtain a security clearance required for a position 
with a defense contractor. She had previously submitted two e-QIPs on which no action 
was taken because the initial company employing Applicant lost the supporting 
government contract. An investigation was conducted by the Office of Personnel 
Management (OPM), and Applicant was interviewed on July 1, 2014. After considering 
the results of the investigation, the Department of Defense (DOD) issued Applicant a 
Statement of Reasons (SOR), dated January 31, 2015, 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 
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Review Program (January 2, 1992), as amended (Directive); and the adjudicative 
guidelines (AG) effective in the DOD on September 1, 2006.  
 
Applicant answered the SOR on March 24, 2015, admitting the six financial 
allegations with explanation. 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 31, 2015. I convened the hearing 
as scheduled. The Government offered five exhibits that I marked and admitted into the 
record without objection as Government Exhibits (GX) 1 through 5. Applicant testified 
and submitted 16 exhibits that I marked and admitted into the record without objection 
as Applicant Exhibits (AX) A through P. I received the transcript of the hearing (Tr.) on 
August 10, 2015. 
 
Findings of Fact 
 
After a thorough review of the pleadings, transcript, and exhibits, I make the 
following findings of fact.  
  
Applicant is 44 years old and has been employed as a ground safety analysist for 
a government contractor since 2011. She served on active duty in the Air Force from 
1991 until 2003, and in the Air Force Reserves from 2003 until receiving an honorable 
discharge in 2005. Applicant married a fellow member of the Air Force in September 
1993, and they divorced in June 2002. She married another Air Force member in June 
2005, and they divorced in April 2010. She had a child with each of her husbands. (Tr. 
11-12, 20-23; GX 1, e-QIP, dated April 29, 2014; AX A, Final Divorce Decree, dated 
April 1, 2010) 
 
When Applicant divorced in 2010, she agreed that she would provide her 
husband $3,000 to pay his debts. She also decided that she would move back to the 
area where she was raised and get support from her family. In actuality, her family did 
not provide her much meaningful support. Applicant used cash advances from a credit 
card to pay the $3,000 owed her husband and the $9,000 in moving expenses. 
Applicant could not find meaningful and profitable employment from April 2010 until July 
2011. During this time, she did work at any small jobs she could find, and she received 
food assistance from her relatives in the area. She mainly subsisted on public 
assistance support payments for both her and her children, and a Department of 
Veterans Affairs (VA) disability payment. She had to use credit cards, as reflected in the 
debts noted in the SOR, to purchase necessary items for her and her children.  
 
In July 2011, she was offered a position as a ground safely analysist by a 
government contractor. She moved from the area where she was to a new location. 
Shortly after starting work with the government contractor, the government contractor 
lost the support contract. Applicant was fortunately rehired by the new contractor. 
Shortly after commencing work on the contract, the new contractor learned they were 
incorrectly billing the government for work performed. To compensate, the government 
contractor cut Applicant’s salary the equivalent of over $11,000 per year reducing 
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Applicant’s yearly salary of $66,000 to $55,000. Applicant’s present net monthly income, 
which includes salary, support payments, and VA disability pay, is approximately 
$3,700. Her expenses are approximately $3,300 a month, leaving about $300 in 
discretionary funds each month. In 2014, Applicant became sick and was out of work for 
12 weeks. During the time, she was on sick leave and received only 66% of her normal 
pay. Applicant relied again on credit cards to supplement her income for purchasing 
necessities. (Tr. 23-25, 57-63; AX B, AX C, AX D) 
 
Credit Reports (GX 3, dated January 23, 2013; GX 4, dated May 15, 2014; and 
GX 5, dated November 19, 2014), as well as Applicant’s admissions in response to the 
SOR and her testimony at the hearing confirm the following delinquent debts a credit 
card debt charged off for $12,353 (SOR 1.a); two credit card debts to the same creditor 
charged off for $9,438 (SOR 1.b), and $8,884 (SOR 1.c); another credit card debt 
charged off by a different bank creditor for $6,968 (SOR 1.d); a bank credit card debt in 
collection for $6,346 (SOR 1.e); and another credit card debt in collection for $2,664 
(SOR 1.f). Applicant’s plan to resolve the debt was to pay her smaller debts first before 
moving to resolve the larger debts. She paid the smaller debts, leaving only the large 
credit card debts as delinquent. At one time, she considered bankruptcy but she never 
filed the required information.  
 
The delinquent credit card at SOR 1.a was used to pay the $3,000 Applicant was 
required to pay her husband after the divorce and the expenses when she moved after 
leaving active duty. The delinquent credit cards at SOR 1.b and 1.c were mainly used to 
purchase necessary items for Applicant and her children. Applicant tried to make 
payment arrangements for these debts, but the creditors wanted a significant payment 
she could not afford. Instead, the creditors, on their own initiative, forgave the debts and 
provided Applicant the appropriate IRS form 1099-c to report the forgiven debt as 
income on her tax return. Applicant included the amount forgiven for the debt at SOR 
1.a on her 2013 tax return, and the amount forgiven for SOR 1.b and 1.c on her 2014 
tax return. The taxes on the forgiven debts have been paid, and the debts are resolved. 
(Tr. 26-28, 39-42, 43-45; AX C, dated December 31, 2014; AX D, dated January 1, 
2014; AX E, dated January 17, 2014) 
 
Applicant has been in contact with the collection agency creditor holding the 
debts of $6,968 at SOR 1.d, and $6,346 at SOR 1.e. Applicant and the collection 
agency creditor were able to agree on a payment plan for each of the debts. The funds 
are automatically paid from Applicant’s account. Applicant is current under the payment 
plans. (Tr. 29-31; AX F, Letter, dated February 6, 2015; AX G, Letter, dated July 23, 
2015; AX H, Letter, dated April 13, 2015; AX I, Bank Statement, dated June 30, 2015)    
 
The delinquent debt of $2,664 is for a home improvement store credit card. 
Applicant has a payment plan of $50 each pay period which is taken directly from her 
credit union account. The amount owed on this debt has been reduced to less than 
$2,400. (Tr. 31-32; AX J, Letter, dated June 22, 2015; AX K, Bank Statement, dated 
June 30, 2015) 
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Applicant’s performance reviews for calendar years 2013 and 2014 show an 
overall excellent performance rating of 5 out of 5. Applicant’s program manager wrote 
that he has known Applicant for over two years, and she is a reliable and responsive 
employee. As an example of her being reliable and responsive, the program manager 
noted that Applicant was required to travel for the company shortly after she came on 
board. She had not received a company credit card, so the witness loaned Applicant 
$1,000 with the understanding that Applicant would return the money shortly after 
returning. Applicant paid the funds back immediately after returning. (AX N, Letter, 
undated)  
 
One of Applicant’s friends wrote that Applicant is very positive and is committed 
to her children, church, and community.  She is supportive, dependable, and 
trustworthy. (AX O, Letter, dated June 3, 2015)  
 
Applicant’s direct supervisor noted that he has known Applicant for the last three 
years, and she has been an excellent employee. She continually learns new skills to 
assist the customer and enhance her position in the company. She has exceptional 
character and consistently performs at a high level. (AX P, 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, 
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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. 
 
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 after her 
second divorce and moving to a new location. She was unable to find good employment 
with sufficient income to care for herself and her two children. She received public 
assistance and had to rely on the use of credit cards to buy necessities. She incurred 
delinquent debt later when her salary was cut by her DOD contractor employer because 
of their mistake in billing the government under the contract. Applicant’s history of 
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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 
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 
 
(d) the individual has initiated a good-faith effort to repay the overdue 
creditors or otherwise resolve debts.  
 
These mitigating conditions apply. Applicant incurred delinquent debt from her 
second divorce and moving to be near her family for support. She did not immediately 
find financially sound employment and incurred debt. After a year, she found good 
employment with a defense contractor, but her employer cut her salary to make up for 
their billing mistake. These conditions that led to her delinquent debt were beyond her 
control and are unlikely to recur. She acted responsibly towards her debts by contacting 
her creditors, paying her smaller debts, and attempting to negotiate payment plans for 
her remaining credit card debts. Three of the debts were forgiven by the creditors, and 
she is current with negotiated payment plans on the remaining three debts. 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 
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implement that plan. Applicant established a meaningful track record of debt payment. 
She paid and resolved some small debts. Three of the debts were forgiven by the 
creditors who provided Applicant with the required tax form to report the forgiven debts 
as income on her tax returns. While the forgiving of the debts is not actually payment of 
the debts by Applicant, the debts are resolved. Applicant’s good-faith effort was in 
taking the action she was required to take in reporting the forgiven debts as income and 
paying the taxes on the forgiven debts. She is current with payment plans for the 
remaining three debts. Applicant has shown that she acted with reasonableness, 
prudence, honesty, and an adherence to duty and obligation towards her finances. 
 
Applicant has shown that she is managing her personal financial obligations 
reasonably and responsibly, and her financial problems are being resolved. There is 
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. Three of Applicant’s 
delinquent debts have been forgiven by the creditors, and she paid the taxes on the 
forgiven debts. She is current with payment plans for the three remaining debts. 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 
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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.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 access to classified information is granted. 
 
 
 
_________________ 
THOMAS M. CREAN 
Administrative Judge