Applicant retained Ms. Leanne M. Innet, Esquire, to help him prepare for the hearing, but they both stated1
that she was not retained to appear in person during the hearing. I informed both of them that he could ask
to put the hearing in recess and contact her by telephone for advice at any time he so desired. (Tr. 6-13.)
1
                                                                     
                              DEPARTMENT OF DEFENSE
               DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 14-04653
)
)
Applicant for Security Clearance )
Appearances
For Government: Caroline E. Heintzelman, Esquire, Department Counsel
For Applicant: Pro se1
______________
Decision
______________
WHITE, David M., Administrative Judge:
Applicant incurred significant delinquent debt during the past five years, and
failed to file or pay Federal income taxes as required. He repaid some debts, but fell
more than $33,000 behind on his home mortgage while doing so. The evidence is
insufficient to mitigate resulting security concerns. Based upon a review of the
pleadings, testimony, and exhibits, eligibility for access to classified information is
denied. 
Statement of the Case
Applicant submitted a security clearance application (SF 86) on June 21, 2011.
On December 8, 2014, the Department of Defense Consolidated Adjudications Facility
(DoD CAF) issued a Statement of Reasons (SOR) to Applicant, 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; Department of Defense Directive 5220.6, Defense Industrial
2
Personnel Security Clearance Review Program (January 2, 1992), as amended
(Directive); and the Adjudicative Guidelines for Determining Eligibility for Access to
Classified Information, effective within the Department of Defense after September 1,
2006. 
Applicant answered the SOR in writing (AR) on March 5, 2015, and requested a
hearing before an administrative judge. Department Counsel was prepared to proceed
on June 29, 2015. The case was assigned to me on July 9, 2015. The Defense Office of
Hearings and Appeals (DOHA) issued a Notice of Hearing on July 21, 2015, and I
convened the hearing, as scheduled, on August 12, 2015. The Government offered
Exhibits (GE) 1 through 5, which were admitted without objection. Applicant testified on
his own behalf and offered exhibits (AE) A through I, which were admitted without
objection. I granted Applicant’s request to leave the record open until August 26, 2015,
for submission of additional evidence. DOHA received the transcript of the hearing (Tr.)
on August 19, 2015. Applicant did not submit any additional evidence during the time
allotted, nor did he request additional time to do so, and the record closed as
scheduled. 
Findings of Fact
Applicant is a 50-year-old field service engineer who has worked for a defense
contractor since March 2012. He worked as a technical specialist for another defense
contractor from February 2008 until November 2011, when that company lost the
contract under which he had been working. In March 2008 he retired in pay grade E-6,
with an honorable discharge, after active duty service in the U.S. Army that began in
November 1987. He is married, with three children ages 28, 25, and 18, all of whom
currently reside with him. He held a security clearance throughout most of his military
service and subsequent employment by defense contractors. (GE 1; GE 2; Tr. 9-13,
54.) 
In his response to the SOR, Applicant admitted all of the allegations concerning
his financial history, except SOR ¶ 1.b and part of SOR ¶ 1.a. (AR.) Applicant’s
admissions are incorporated in the following findings.
Applicant’s wife managed their family finances for many years due to his work
demands and frequent periods of lengthy travel away from home. In 2010, after she had
purchased a small business, she hired an accountant to prepare their Federal income
taxes. She was dismayed to learn that they owed $8,618 more in taxes than had been
withheld during the year, and they did not have funds to pay those taxes. From the
unsigned copies of their 2010 Form 1040 submitted with Applicant’s SOR response and
in AE A, it is unclear whether they filed that return without paying the taxes or simply
failed to file it altogether. In his response to ¶ 1.j of the DoD CAF Financial
Interrogatories (GE 2), Applicant admitted that he had not filed his Federal tax returns
for tax years 2010 to 2012. One of the two unsigned copies of their 2010 return contains
the date, “4/14/11,” as the date the accountant prepared the return. Applicant’s and his
wife’s signature blocks are blank and undated. The copy of that return he submitted in
3
AE A does not show a date in the Tax Preparer’s block. His wife testified that she (and
he) did not file their subsequent year tax returns due to the amount of unpaid taxes from
2010. (AR; GE 2; AE A; Tr.85-86.)
Applicant and his wife said that they filed their Federal income tax returns for tax
years 2011 through 2013 in March 2015. He submitted unsigned and undated copies of
those tax returns indicating that a tax preparer completed the returns for them on March
4, and 5, 2015. His SOR response was dated March 5, 2015. He also submitted an
unsigned and undated copy of a Federal tax return for 2014 during his hearing. These
four tax returns indicated that Applicant and his wife were due refunds of $696 for 2011;
$3,207 for 2012; and $1,420 for 2014; but owed an additional $227 in taxes for 2013.
On July 21, 2015, Applicant requested IRS transcripts of the tax returns in question in
order to document that they had been filed and the taxes were paid. He was granted
additional time after his hearing to obtain these transcripts, but he failed to submit them
or any other evidence concerning the actual filing and payment status of these taxes.
(AR; GE 2; AE A; Tr. 35, 60-61, 94-95.) 
Applicant provided documentation showing that in November 2012 he fully repaid
the mortgage loan that he previously held in connection with a former residence in
another state that went into foreclosure after he unsuccessfully tried to convert it into a
rental property. This debt, alleged in SOR ¶ 1.b, is resolved. (AR; GE 2; AE B; Tr. 36,
64-66, 68-71.)
On March 5, 2015, Applicant made a final payment to settle the delinquent debt
alleged in SOR ¶ 1.c for a negotiated lesser amount. This debt, which first became
delinquent in March 2012, is resolved. (AR; AE C; Tr. 36-37.)
Applicant’s salary is being garnished for the delinquent $1,224 student loan debt
alleged in SOR ¶ 1.d. This debt, which had been delinquent since February 2010, is
being involuntarily resolved. (AE D; Tr. 37.)
On August 6, 2015, Applicant paid $690 to resolve the student loan debt alleged
in SOR ¶ 1.e. This debt, which had been delinquent since March 2010, is resolved. (AE
E; Tr. 37-38.) 
The two delinquencies to a major bank, alleged in SOR ¶¶ 1.f and 1.h, represent
different credit report listings concerning the same account. Record evidence shows
that this debt has been fully repaid and has a zero balance due. (AR; GE 3; GE 4; GE 5;
AE G; Tr. 38-44, 46-47.)
The two delinquencies to a different major bank and a collection agency for that
bank, alleged in SOR ¶¶ 1.g and 1.i, also represent different credit report listings
concerning a $2,853 credit card balance that became delinquent in May 2009. The
collection agency obtained a judgment against Applicant for that amount in May 2013,
and his recent communications with the creditor indicate that the amount due has grown
4
to $4,006. No agreement has been reached to resolve this debt. (AR; GE 2; GE 5; AE
F; AE I; Tr. 44-46, 49-51.)
Applicant resolved some of the SOR-listed debts, but has not made any
payments toward his home mortgage loan since May 2014, and the lender has initiated
foreclosure proceedings. He anticipated being forced to leave the property and find
rental accommodations for his family within 30 days following his hearing. He also had
not paid his recent property taxes on the home. As of June 2015, his home mortgage
payments were about $33,000 past due, with an outstanding balance of about $242,700
on the loan. He estimated the value of the home at $150,000 to $160,000. (AE I; Tr. 51-
52, 61-67, 71-75, 78, 84-85, 87.)
Applicant and his wife opened a small retail business that generates some cash
flow. They operate this business independently of their family finances, and any profits
realized from it have been reinvested in the business. (Tr. 66, 79, 97-98.) Applicant and
his wife recently purchased a used car for her to drive. (Tr. 82.) 
One of their adult children suffers from drug addiction, and they have chosen to
spend a significant, but unspecified, amount of their resources for a series of
rehabilitation programs and fees for criminal defense attorney services. (Tr. 80, 87-89.)
Applicant’s tax returns indicate that his income has fluctuated over the past five
years, but he testified that his base salary is about $72,000 per year. His testimony
demonstrated minimal knowledge of the family budget, and he has not sought any
financial counseling. (Tr. 55-60, 68, 83.)
Applicant’s lead engineer wrote a character reference letter describing his high
degree of accountability, responsibility, honesty, and trustworthiness. Applicant has
performed in demanding and dangerous environments, displaying good judgment and
achieving outstanding results. Applicant earned a Meritorious Service Medal, six Army
Commendation Medals, a Joint Service Achievement Medal, five Army Achievement
Medals, six Army Good Conduct Medals, and various unit and service awards during his
Army career. (AE H.)
Policies
When evaluating an applicant’s suitability for a security clearance, the
administrative judge must consider the adjudicative guidelines (AG). In addition to brief
introductory explanations for each guideline, the adjudicative guidelines list potentially
disqualifying conditions (DCs) and mitigating conditions (MCs), which are to be 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 AG ¶ 2 describing the adjudicative process. The administrative judge’s
overarching adjudicative goal is a fair, impartial, and commonsense decision. According
5
to AG ¶¶ 2(a) and 2(c), the entire process is a conscientious scrutiny of applicable
guidelines in the context 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 the 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. Likewise, I have avoided drawing inferences
grounded on mere speculation or conjecture.
Under Directive ¶ E3.1.14, the Government must present evidence to establish
controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, “[t]he applicant is
responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or
mitigate facts admitted by the applicant or proven by Department Counsel, and has the
ultimate burden of persuasion as to obtaining a favorable clearance decision.” Section 7
of Executive Order 10865 provides: “[a]ny determination under this order adverse to an
applicant shall be a determination in terms of the national interest and shall in no sense
be a determination as to the loyalty of the applicant concerned.”
A person applying for access to classified information seeks to enter 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 the 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.
Analysis
Guideline F, Financial Considerations
The security concerns under the guideline for financial considerations are set out
in AG ¶ 18, which reads in pertinent part:      
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. 
6
The record evidence potentially raises security concerns under three Guideline F
DCs, as set forth in AG ¶ 19: 
(a) inability or unwillingness to satisfy debts;
(c) a history of not meeting financial obligations; and
(g) failure to file annual Federal, state, or local income tax returns as
required or the fraudulent filing of the same. 
Applicant’s history of significant delinquent debts goes back more than five years,
and continues to date. He failed to file his Federal income tax returns for several of
those years, and did not follow through on his stated intent to demonstrate that he has
since done so. These debts and his history of financial irresponsibility raise security
concerns under DCs 19(a), (c), and (g), thereby shifting the burden to Applicant to
rebut, extenuate, or mitigate those concerns.
The guideline includes five conditions in AG ¶ 20 that could mitigate security
concerns arising from Applicant’s financial difficulties:
(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.
Some of Applicant’s SOR-listed delinquent debts are significant and ongoing,
without indication that the circumstances under which they arose have changed. He
resolved some of those debts, but did so while failing to make more than $33,000 in
payments toward his home mortgage that came due since May 2014. His history of
7
financial irresponsibility spans many years, despite regular employment during all but
four months while between jobs. He therefore failed to establish substantial mitigation
under MC 20(a). 
Applicant also offered insufficient evidence to support mitigation under MC 20(b).
He voluntarily incurred all of the debt in question. His choice to spend significant
resources toward multiple rehabilitation programs and criminal defense fees for an adult
son is commendable, but represents a voluntary decision to neglect other financial
obligations. His small business generated profits that he chose to reinvest rather than
pay lawful creditors. He did not demonstrate responsible action under the
circumstances.
Applicant provided no evidence of credit counseling, budget planning, or changes
to bring his financial situation under control. He showed no substantial progress toward
overall debt resolution, and did not establish mitigation of his delinquent debts under
MC 20(c) or (d). He resolved some SOR-listed delinquencies, but did so while failing to
pay more than $33,000 in mortgage payments on his residence. His Federal income tax
filing and payment issues also remain unresolved. MC 20(e) is not pertinent since
Applicant admitted that all debts alleged in the SOR were his.
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 the 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.   
I considered the potentially disqualifying and mitigating conditions in light of all
pertinent facts and circumstances surrounding this case. Applicant incurred substantial
delinquent indebtedness that he made some effort to repay, but only while incurring
other delinquencies. He failed to file his Federal income tax returns for several years,
and failed to prove that he did so or resolved his delinquent tax debt. His financial
situation remains untenable, creating the ongoing potential for pressure and duress, and
8
demonstrating questionable judgment and reliability. He presented insufficient evidence
to show that his financial situation will not continue to deteriorate, to support a finding
that continuation or recurrence are unlikely, or that behavioral changes demonstrate
rehabilitation. He is a mature and experienced individual who is accountable for his
choices and financial irresponsibility. Overall, the record evidence creates ongoing
doubt as to Applicant’s present eligibility and suitability for a security clearance.
Formal Findings
Formal findings for or against Applicant on the allegations set forth in the SOR,
as required by ¶ E3.1.25 of Enclosure 3 of the Directive, are:
Paragraph 1, Guideline F: AGAINST APPLICANT
Subparagraph 1.a: Against 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
Subparagraph 1.g: Against Applicant
Subparagraph 1.h: For Applicant
Subparagraph 1.i: Against Applicant
Conclusion
In light of all of the circumstances presented by the record in this case, it is not
clearly consistent with the national interest to grant Applicant eligibility for a security
clearance. Eligibility for access to classified information is denied.
                                              
DAVID M. WHITE
Administrative Judge