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                           DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
In the matter of: ) 
 ) 
 XXXXXXXXXX, XXXXX )  ISCR Case No. 12-10796 
  ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Chris Morin, Esq., Department Counsel 
For Applicant: Pro se 
 
 
______________ 
 
Decision 
______________ 
 
 
TUIDER, Robert J., Administrative Judge: 
 
Applicant failed to mitigate Guideline F (financial considerations) security 
concerns. Clearance is denied. 
 
Statement of the Case 
 
On April 18, 2012, Applicant submitted a Questionnaire for National Security 
Positions (SF-86). On January 28, 2015, the Department of Defense Consolidated 
Adjudications Facility (DOD CAF) issued a Statement of Reasons (SOR) to Applicant, 
pursuant to Executive Order 10865, Safeguarding Classified Information within Industry, 
dated February 20, 1960, as amended; DOD Directive 5220.6, Defense Industrial 
Personnel Security Clearance Review Program (Directive) dated January 2, 1992, as 
amended; and the adjudicative guidelines (AG) effective on September 1, 2006. 
 
The SOR alleged security concerns under Guideline F. The SOR detailed 
reasons why the DOD CAF was unable to find that it is clearly consistent with the 
national defense to grant a security clearance for Applicant, and it recommended that 
her case be submitted to an administrative judge for a determination whether her 
clearance should be granted or denied.  
 
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On February 11, 2015, Applicant answered the SOR. On June 1, 2015, 
Department Counsel was ready to proceed. On June 11, 2015, the Defense Office of 
Hearings and Appeals (DOHA) assigned Applicant’s case to me. On June 11, 2015, 
DOHA issued a hearing notice, setting the hearing for July 9, 2015. Applicant’s hearing 
was held as scheduled. At the hearing, Department Counsel offered Government 
Exhibits (GE) 1 through GE 4, which were received into evidence without objection. 
 
Applicant did not call any witnesses, testified, and offered Applicant Exhibits (AE) 
A through AE D, which were received into evidence without objection. On July 17, 2015, 
DOHA received the hearing transcript (Tr.). 
 
Findings of Fact 
 
 Applicant admitted all of the SOR allegations except for SOR ¶¶ 1.b and 1.k, 
which she denied. Her admissions are accepted as findings of fact. 
 
Background Information 
 
 Applicant is 51-year-old senior technician employed by a defense contractor 
since December 1998. She seeks a secret security clearance as a condition of her 
continued employment. (GE 1; Tr. 17-19) 
 
 Applicant completed her education as far as the 11th grade and has no further 
education beyond that. (GE 1; Tr. 20) She was previously married from June 1984 to 
November 2006. That marriage ended by divorce. Applicant has three adult children ---- 
a son in the Army, a daughter in the Air Force, and a son who just completed his 
enlistment in the Air Force. Applicant did not serve in the U.S. armed forces. (GE 1; Tr. 
21-24) 
 
Financial Considerations 
 
Applicant’s SOR alleges 12 separate debts totaling $31,424. Her debts range 
from a $95 past-due medical account to a charged-off $16,128 credit card account. She 
admitted all of the debts except for a $9,657 collection account (SOR ¶ 1.b) owed to a 
former landlord and a $431 collection account (SOR ¶ 1.k) owed to a cable company. 
(SOR ¶¶ 1.a – 1.l) These debts have been ongoing “probably since 2007.” (Tr. 56) 
 
Applicant attributed her financial problems to three events: (1) a 2005 house fire 
in which her marital home was completely destroyed; (2) a 2006 divorce that Applicant 
claims cost her “close to $30,000;” and (3) a 2006 hospitalization and loss of work. 
Applicant was reimbursed by insurance “a few months” after the fire and got by with “a 
lot of help from friends and family.” Her husband was in prison at the time of her 
divorce. She was in the hospital for two collapsed lungs and on life support for four 
days. Her husband had been released from prison on the same day she was released 
from the hospital, and was waiting for her at home with a gun. She described the 
experience as, “I actually escaped death twice in one week.” After she was released 
from the hospital, she went on disability that involved a recovery process that lasted 
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“about four or five months.” Applicant also claimed that her husband placed “a lot” of 
charges on one of her credit cards. (Tr. 24-32) 
 
Applicant denied two of her SOR debts as noted, but did not provide any 
documentation that she had contacted her creditors to dispute or otherwise resolve 
those debts.  These debts are documented in her May 2012 and November 2014 credit 
reports. (GE 3, GE 4; Tr. 39-44) To resolve her long-standing indebtedness, Applicant 
had retained a bankruptcy attorney and plans to file Chapter 13 bankruptcy. As of April 
6, 2015, she had paid $250 towards a required initial payment of $613 that included a 
$310 Chapter 13 filing fee; $53 for a credit report, credit counseling, and debtor 
education; and a $250 attorney fee, leaving a balance of $363. Applicant’s bankruptcy 
attorney requires the balance of $363 be paid before filing her case. (AE A – AE C; Tr. 
49-51) 
 
Applicant had not paid her bankruptcy attorney the balance owed because she 
was uncertain whether she would be laid off because of a company buyout. In short, 
Applicant planned to file Chapter 13 bankruptcy at some future date, but that was 
contingent on whether she retained her job, and if she retained her job, she would pay 
her bankruptcy attorney the balance owed, and proceed with filing bankruptcy. (Tr. 51-
55) 
 
During cross examination, Applicant stated that she had not filed or paid her 
2005 state and federal income taxes. (Tr. 33-38) Applicant has not completed financial 
counseling. (Tr. 49-50) During Applicant’s Office of Personnel Management Personal 
Subject Interview (OPM PSI) on July 5, 2012, she stated that she was currently in the 
process of filing her tax returns. The investigator also discussed her debts with her, and 
she acknowledged that she had delinquent accounts that needed to be paid. (GE 2) 
 
Applicant testified that her annual income was approximately $72,000. She 
estimates that after paying all of her monthly expenses, her net monthly remainder is 
“close to $1,000.” As of her hearing date, she had “about $400” in her savings account 
and “close to $700” in her checking account. Applicant has two modest retirement 
accounts. (Tr. 44-47) Applicant did not submit any character evidence. 
 
Policies 
 
The U.S. Supreme Court has recognized the substantial discretion of the 
Executive Branch in regulating access to information pertaining to national security 
emphasizing, “no 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 
applicant’s 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.    
 
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Eligibility for a security clearance is predicated upon the applicant meeting the 
criteria contained in the adjudicative guidelines. These guidelines are not inflexible rules 
of law. Instead, recognizing the complexities of human behavior, these guidelines are 
applied 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, 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 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 “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. 
See also Executive Order 12968 (Aug. 2, 1995), § 3.1. Thus, nothing in this Decision 
should be construed to suggest that I have based this decision, in whole or in part, on 
any express or implied determination about applicant’s allegiance, loyalty, or patriotism. 
It 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. 95-0611 
at 2 (App. Bd. May 2, 1996).      
 
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 ultimate burden of demonstrating that it 
is clearly consistent with the national interest to grant or continue her security 
clearance.” ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002). The burden of 
disproving a mitigating condition never shifts to the Government. See ISCR Case No. 
02-31154 at 5 (App. Bd. Sep. 22, 2005). “[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 
 
AG ¶ 18 articulates the security concern relating to financial problems: 
 
Failure or inability to live within one’s means, satisfy debts, and meet 
financial obligations may indicate poor self-control, lack of judgment, or 
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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 provides two disqualifying conditions that could raise a security concern 
and may be disqualifying in this case: “(a) inability or unwillingness to satisfy debts;” and 
“(c) a history of not meeting financial obligations.”  In ISCR Case No. 08-12184 at 7 
(App. Bd. Jan. 7, 2010), the Appeal Board explained: 
 
It is well-settled that adverse information from a credit report can normally 
meet the substantial evidence standard and the government’s obligations 
under [Directive] ¶ E3.1.14 for pertinent allegations. At that point, the 
burden shifts to applicant to establish either that [he or] she is not 
responsible for the debt or that matters in mitigation apply. (internal 
citation omitted). Applicant’s history of delinquent debt is documented in 
his credit reports and in the evidence presented. 
 
Applicant’s history of delinquent debt is established by the evidence presented. 
The Government established disqualifying conditions AG ¶¶ 19(a) and 19(c).   
 
  Five financial considerations mitigating conditions under AG ¶¶ 20 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; 
 
(d) the individual initiated a good-faith effort to repay 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. 
 
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Considering the record evidence as a whole,1 I conclude none of the five 
financial considerations mitigating conditions above are applicable or partially applicable 
to explain, extenuate, or mitigate the security concern related to Applicant’s ongoing 
indebtedness since 2007. Potential mitigating conditions are also not applicable given 
the length of time that has elapsed since the events described in 2006 occurred. 
Applicant could be well on her way to resolving her debts through the Chapter 13 
bankruptcy process, but for reasons discussed, she chose to defer paying $363 to her 
bankruptcy attorney. Of further concern, Applicant had not paid or filed her 2005 state 
and federal income taxes.   
 
With that said, a security clearance case is not aimed at collecting debts or 
enforcing tax laws.2 Rather the purpose is to evaluate an applicant’s judgment, 
reliability, and trustworthiness consistent with the security guidelines in the Directive. In 
evaluating Guideline F cases, the Appeal Board has established the following standard: 
 
The Board has previously noted that the concept of a meaningful track 
record necessarily includes evidence of actual debt reduction through 
payment of debts. However, an applicant is not required, as a matter of 
law, to establish that [she] has paid off each and every debt listed in the 
SOR. All that is required is that an applicant demonstrate that [she] has 
established a plan to resolve [her] financial problems and taken significant 
actions to implement that plan. 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 [her] 
outstanding indebtedness is credible and realistic. 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 
payments of such debts one at a time. 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.3 
 
After weighing the relevant disqualifying and mitigating conditions and evaluating 
the evidence in light of the whole-person concept,4 I conclude Applicant did not present 
sufficient evidence to explain, extenuate, and mitigate the Guideline F security concern. 
Accordingly, Applicant has not met her ultimate burden of persuasion to show that it is 
clearly consistent with the national interest to grant her eligibility for access to classified 
information. 
 
                                                          
1
 See ISCR Case No. 03-02374 at 4 (App. Bd. Jan. 26, 2006) (citing ISCR Case No. 02-22173 at 
4 (App. Bd. May 26, 2004)). When making a recency analysis for AG ¶ 20(a), all debts are considered as 
a whole. 
 
2
 ISCR Case No. 09-02160 (App. Bd. Jun. 21, 2010). 
 
3
 ISCR Case No. 07-06482 at 3 (App. Bd. May 21, 2008) (citations and quotation marks omitted). 
 
4
 AG ¶ 2(a) (1)-(9). 
 
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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:    AGAINST APPLICANT 
 
  Subparagraphs 1.a - 1.l:   Against Applicant 
 
Conclusion 
 
In light of all the circumstances presented by the record in this case, it is not 
clearly consistent with the national interest to grant or continue Applicant’s eligibility for 
a security clearance. Clearance is denied. 
 
 
 
____________________________ 
Robert J. Tuider 
Administrative Judge