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DEPARTMENT OF DEFENSE 
DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
 [REDACTED] )  ISCR Case No. 15-02812 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Chris Morin, Esq., Department Counsel 
For Applicant: Pro se 
 
 
______________ 
 
Decision 
______________ 
 
 
HESS, Stephanie C., Administrative Judge: 
 
Applicant experienced financial difficulties due to circumstances beyond his 
control, but mitigated the concern by acting responsibly. Eligibility for access to 
classified information is granted. 
 
Statement of the Case 
 
Applicant submitted a security clearance application (e-QIP) on August 1, 2014. 
On October 5, 2015, the Department of Defense (DOD) sent him a Statement of 
Reasons (SOR), alleging security concerns under Guideline F. The DOD acted 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 (AG) implemented by DOD on September 1, 2006.  
  
Applicant answered the SOR on November 13, 2015, and requested a hearing 
before an administrative judge. Department Counsel was ready to proceed on 
December 15, 2015, and the case was assigned to me on March 14, 2016. On March 
23, 2016, the Defense Office of Hearings and Appeals (DOHA) notified Applicant that 
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the hearing was scheduled for April 13, 2016. I convened the hearing as scheduled. 
Government Exhibits (GX) 1 through 3 were admitted in evidence without objection. 
Applicant testified and submitted Applicant Exhibits (AX) A through P, which were 
admitted without objection. I kept the record open until April 27, 2016, to enable him to 
submit additional documentary evidence. He timely submitted AX Q1 through T, which I 
have admitted without objection. DOHA received the transcript (Tr.) on April 22, 2016. 
 
Findings of Fact 
 
The SOR alleges 23 delinquent debts, 22 of which total approximately $27,049. 
These delinquent debts include two student-loan accounts, eight medical bills, a cellular 
telephone bill, a cable service bill, and numerous credit-card accounts. The other 
alleged debt is for an unspecified amount due for the deficiency balance for a mortgage 
account that went into foreclosure. In his Answer, Applicant admitted SOR ¶¶ 1.a – the 
mortgage account, 1.b. – a student loan account, and 1.k – an insurance account, and 
denied the remaining allegations. He also gave a brief description of the status of each 
alleged debt. His admissions are incorporated in my findings of fact. The delinquent 
debts are reflected in Applicant’s credit bureau reports (CBR) dated August 2014, 
February 2015, and November 2015. (GX 2; GX 3; AX H.)  
 
Applicant is a 38-year-old instructor employed by a defense contractor since 
2006. He has held a clearance since August 2004. He served honorably in the U.S. 
Army from August 1995 until December 1998, and in the Army National Guard from 
January 1999 until March 2001. He attended college between August 2003 and June 
2005, and between August 2007 and June 2009. He and his first wife married in 2002 
and divorced in 2005. He and his current wife married in January 2013, and she has two 
sons, nine and eight years old, who reside with them. (Tr. 46-49.) He is considered to 
be trustworthy, reliable, and loyal by his supervisor, his former supervisor and current 
coworker, and other coworkers, most of whom have worked with Applicant for about 10 
or more years. (AX T.)  His April 2015 - March 2016 employment performance appraisal 
rated him as “Outstanding” in all applicable categories. (AX D.) His landlord states that 
he is trustworthy, reliable, and helpful, and that he pays his rent on time, if not early. (AX 
P.) 
 
Following Applicant’s divorce in 2005, he remained responsible for the marital 
debt. After several years, he was able to resolve the debts, and in 2008, he qualified for 
a Department of Veteran Affairs (VA) guaranteed loan, and secured a mortgage loan for 
the purchase of a house. In 2009, he met his current wife, and in 2010, she and her two 
sons moved in with Applicant, who became financially responsible for them as the sole 
income earner. The greater financial obligations placed a strain on Applicant’s financial 
resources, yet he was able to maintain his mortgage payments. Later in 2010, his future 
mother-in-law was diagnosed with cancer, and required financial and emotional support. 
(Answer.) As a result of the additional expenses, Applicant began falling behind on his 
financial obligations, including his student loans. (GX 1.) In 2011, he missed two or 
                                                            
1  AX Q is an electronic mail exchange between Applicant and Department Counsel that includes an explanation of 
each of the additional exhibits submitted by Applicant. 
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three mortgage payments, and owed approximately $3,600 in arrears. (Tr. 35-36.) He 
contacted the lender, and attempted to negotiate an agreement whereby he would 
make additional monthly payments of approximately $500, until the arrearage was paid 
off. The lender demanded a full, lump-sum payment of the arrearage. He was unable to 
make this payment, and the lender initiated foreclosure. Upon learning of the 
foreclosure, he and his family vacated the house due to their concern of arriving home 
and finding themselves locked out. (Tr. 35-39.) He attempted to rent the house, but was 
unsuccessful. (Tr. 39.) Applicant’s wife also suffered from cancer, and the expense of 
her copays and other treatment-related costs not covered by insurance added to the 
family’s financial strain. (Tr. 79-81.) 
 Applicant incurred additional expenses when he moved his family into a rental 
house. His relationship with the owner started out well, however, the owner’s personal 
life was troubled, and after about 10 months, Applicant decided not to renew his lease. 
This decision resulted in discord with the owner, who filed for eviction, with damages. In 
June 2012, the owner was awarded a $5,000 judgment against Applicant, who states 
that the owner and her boyfriend perjured their testimony to secure the judgment. 
Applicant paid the unanticipated expense of the judgment, and has had no further 
contact with the owner.  
 Applicant and his family have lived in their current residence since 2012, with a 
rent-to-own contract that will be exercised once their credit issues are resolved. 
(Answer.) Applicant has not incurred any delinquent debt since 2012, and the majority 
of his past-due debts, including the mortgage debt, were incurred between 2009 and 
2011. (GX 3.) He and his family live within their means, and are current on their regular 
living expenses. Applicant’s wife is in charge of their finances, and testified that they 
usually have a surplus of $400 to $500 after their monthly bills are paid. (Tr. 73.) The 
monthly net remainder is used for unexpected expenses, such as recent car repairs or 
items for the children, and for medical costs. (Tr. 76.) 
From January 2015 through July 2015, and from November 2015 until the 
present time, Applicant has been enrolled in a program with a credit-repair company. He 
pays a monthly fee to the company, and the company contacts Applicant’s creditors and 
disputes, pays, or otherwise negotiates the resolution of his debts. (Answer; AX A.) He 
provided documentary evidence that shows that the following 18 SOR debts have been 
removed from his credit report: SOR ¶¶ 1.d, 1.e, and 1.i through 1.w. (AX K; AX L; AX 
N.) The following debts were identified as duplicates: SOR ¶¶ 1.k and 1.m, 1.l and 1.r, 
1.o and 1.q, and, 1.s and 1.v. (AX M; AX C; AX D; AX F; AX G.) The status of the 
unresolved debts is discussed below. 
 SOR ¶ 1.a – Mortgage loan. The November 2015 CBR shows a $0 balance. 
Applicant testified that the result of the foreclosure was that the lender sold the property 
to the VA, and any deficiency balance was absorbed by the VA, thereby resolving this 
debt. (Tr. 30.) AX R indicates that the loan was foreclosed in October 2011, and the 
house was sold at auction to the lender purchased for $125,382. The lender then sold 
the house to the VA, under the terms of the original loan for $165,140. In the event that 
Applicant seeks another VA-backed mortgage loan, he either has to pay the deficiency 
balance from the foreclosure to the VA, or his entitlement will be offset by the amount of 
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the deficiency balance. The VA will not actively attempt to collect the deficiency balance 
from Applicant. (AX Q.) Applicant received notification of a class-action lawsuit against 
the lender due to its foreclosure practices, which he joined, but has not received any 
information about the status of the lawsuit. (Tr. 40-41) 
SOR ¶¶ 1.b and 1.d – Student loans - $8,299 and $5,313. The balances on the 
November 2015 CBR were $6,215 and $3,979. Applicant’s annual tax refunds were 
captured to pay these debts. (Tr. 46-48.) In April 2016, Applicant entered a student loan 
rehabilitation program with the current loan holder under which the two consolidated 
loans totaled $10,521.26, which includes interest and collection fees. He agreed to 
make 10 consecutive monthly payments to the current loan holder, after which the loan 
holder will sell the loan to a participating lender. He will then be required to make 
monthly payments in an amount set by the new loan holder. (AX S.) SOR ¶ 1.d was 
deleted from Applicant’s CBR when the two loans were purchased by the current loan 
holder and consolidated. (AX K; AX S.) 
 SOR ¶ 1.c – Personal loan - $6,740. The November 2015 CBR shows this 
account as having been charged off 2011, and that Applicant has disputed the account.   
 SOR ¶ 1.f – credit-card account - $852. The November 2015 CBR shows a $0 
balance and that this account has been charged off, purchased by another lender, and 
that Applicant has disputed the account. The debt does not appear elsewhere on the 
CBR as owed to another lender. (AX H.) 
 SOR ¶¶ 1.g and 1.h – credit-card accounts to the same lender - $509 and $502. 
The November 2015 CBR shows these accounts as having been charged off in 2010, 
and that Applicant has disputed these accounts. 
Policies 
 
 “[N]o 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 applicants 
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.  
 
Eligibility for a security clearance is predicated upon the applicant’s meeting the 
criteria contained in the AG. These guidelines are not inflexible rules of law. Instead, 
recognizing the complexities of human behavior, an administrative judge applies these 
guidelines 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 and reliable information about the 
person, past and present, favorable and unfavorable. 
 
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 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 that 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 made “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. Thus, a decision to deny a security clearance 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. 92-1106 
at 3, 1993 WL 545051 at *3 (App. Bd. Oct. 7, 1993).  
 
 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 burden of proving a mitigating condition, 
and the burden of disproving it never shifts to the Government. See ISCR Case No. 02-
31154 at 5 (App. Bd. Sep. 22, 2005).  
 
An applicant “has the ultimate burden of demonstrating that it is clearly consistent 
with the national interest to grant or continue his security clearance.” ISCR Case No. 
01-20700 at 3 (App. Bd. Dec. 19, 2002). “[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 
 
Guideline F, Financial Considerations 
 
The concern under this guideline 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 
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overextended is at risk of having to engage in illegal acts to generate 
funds. 
 
 This concern is broader than the possibility that an individual might knowingly 
compromise classified information in order to raise money. It encompasses concerns 
about an individual’s self-control, judgment, and other qualities essential to protecting 
classified information. An individual who is financially irresponsible may also be 
irresponsible, unconcerned, or negligent in handling and safeguarding classified 
information. See ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012). 
  
 Applicant’s testimony, corroborated by the record evidence, establishes two 
disqualifying conditions under this guideline: AG ¶ 19(a) (“inability or unwillingness to 
satisfy debts”) and AG ¶ 19(c) (“a history of not meeting financial obligations”).  
 
 However, a person can mitigate concerns about his ability to handle and 
safeguard classified information raised by his financial circumstances by establishing 
one or more of the mitigating conditions listed under the guideline. The relevant 
mitigating conditions in this case are: 
 
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; 
 
AG ¶ 20(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;  
 
AG ¶ 20(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;  
 
AG ¶ 20(d): the individual initiated a good-faith effort to repay overdue 
creditors or otherwise resolve debts; and 
 
AG ¶ 20(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. 
 
 Before his mother-in-law’s illness, Applicant was overall able to meet his financial 
obligations. However, the additional expenses caused by providing for his mother-in-
law, combined with increased living expenses, resulted in several missed mortgage 
payments. Thus began the downward spiral of Applicant’s finances.  The circumstances 
contributing to his financial woes were largely beyond his control, including medical 
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expenses for his mother-in-law and his wife, and the judgment in favor of his former 
landlord. He acted responsibly under the circumstances by attempting to resolve his 
mortgage issues with the lender, and by contracting with the credit-repair company 
about 10 months before he received the SOR. Through the actions of the credit-repair 
company, all but seven of the SOR debts have been removed from Applicant’s CBR.  
While he only recently entered the student loan rehabilitation program, which addresses 
two of the unresolved SOR debts, he knew that his loans were being paid, in part, 
through his annual tax refunds. The deficiency balance stemming from the VA loan is 
not being actively collected, and it does not appear on his most recent CBR. Applicant 
has disputed each of the remaining SOR debts, and the debt alleged in SOR ¶ 1.f is not 
on the most recent CBR.   
 
 Applicant acted in good faith by entering the student-loan rehabilitation program, 
and by contracting with the credit-repair company to dispute, pay, or otherwise resolve 
his debts. “Good faith” means acting in a way that shows reasonableness, prudence, 
honesty, and adherence to duty or obligation. ISCR Case No. 99-0201, 1999 WL 
1442346 at *4 (App. Bd. Oct. 12, 1999). A security clearance adjudication is an 
evaluation of a person’s judgment, reliability, and trustworthiness. It is not a debt-
collection procedure. ISCR Case No. 09-02160 (App. Bd. Jun. 21, 2010.) A person is 
not required to establish resolution of every debt alleged in the SOR. He or she need 
only establish a plan to resolve financial problems and take significant actions to 
implement the plan. The adjudicative guidelines do not require that a person make 
payments on all delinquent debts simultaneously, nor do they require that the debts 
alleged in the SOR be paid first. See ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 
2008). 
  
 Applicant has not incurred any delinquent debt since 2012, and the 
circumstances which led to his indebtedness are unlikely to recur, and do not cast doubt 
on his current reliability, trustworthiness, or good judgment. He is addressing his 
outstanding debts, and currently lives within his means. AG ¶¶ 20(a) through 20(e) 
apply.  
  
Whole-Person Concept 
 
 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. In applying the whole-
person concept, an 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. 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 
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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.  
 
 I have incorporated my comments under Guideline F in my whole-person 
analysis. Some of the factors in AG ¶ 2(a) were addressed under that guideline, but I 
have also considered the following: 
 
 Applicant served honorably in the military. Despite a series of financial hardships, 
he lives within his means, and provides for his family. I am confident that Applicant will 
continue his good-faith efforts to resolve his remaining delinquent debts. 
  
 After weighing the disqualifying and mitigating conditions under Guideline F, and 
evaluating all the evidence in the context of the whole person, I conclude Applicant has 
mitigated the security concerns raised by his delinquent debts. Accordingly, I conclude 
he has carried his burden of showing that it is clearly consistent with the national 
interest to grant him eligibility for access to classified information. 
 
Formal Findings 
 
As required by section E3.1.25 of Enclosure 3 of the Directive, I make the 
following formal findings on the allegations in the SOR: 
  
 Paragraph 1, Guideline F (Financial Considerations): FOR APPLICANT 
 
  Subparagraphs 1.a – 1.w:    For Applicant 
 
Conclusion 
 
 I conclude that it is clearly consistent with the national interest to grant 
Applicant’s eligibility for a security clearance. Eligibility for access to classified 
information is granted. 
 
 
 
Stephanie C. Hess 
Administrative Judge