Item 2.1
Item 1.2
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                              DEPARTMENT OF DEFENSE
               DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 15-01557
)
)
Applicant for Security Clearance )
Appearances
For Government: Douglas Velvel, Esq., Department Counsel
For Applicant: J. Dale Gipson, Esq.
______________
Decision
______________
WHITE, David M., Administrative Judge:
Applicant formerly had some delinquent debts that arose without his knowledge.
He took responsible steps to address them, all are now resolved, and recurrence is
unlikely. Resulting security concerns were mitigated. Based on a review of the pleadings
and exhibits, eligibility for access to classified information is granted.
Statement of the Case 
Applicant submitted a security clearance application (SF-86) on March 31, 2014.1
On October 7, 2015, 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 under2
Executive Order 10865, Safeguarding Classified Information Within Industry (February
20, 1960), as amended; Department of Defense Directive 5220.6, Defense Industrial
Item 1.3
Department Counsel submitted five Items in support of the SOR allegations. Item 3 is an unsworn summary4
of an interview Applicant provided to an investigator from the Office of Personnel Management (OPM) on May
27, 2014. The summary was neither authenticated by a Government witness nor adopted by Applicant, so it
would not be admissible in evidence against him, over objection, pursuant to Directive ¶ E3.1.20. Department
Counsel included a note in the FORM advising Applicant of the potential inadmissibility of Item 3, and
indicating that, “the extent to which any facts contained therein are relied upon by the Government is
specifically noted within this FORM.” Applicant’s response to the FORM was prepared by his counsel, and
contained no objection to Item 3. I will not normally construe an unrepresented Applicant’s silence in response
to an attempt to introduce inadmissible evidence as a knowing waiver. However, in this case Applicant is
represented by counsel who was specifically put on notice of the opportunity to object to this evidence and
declined to do so. The Government relied on Item 3 only for the propositions that, according to Applicant, the
two significant debts alleged in the SOR were incurred by his wife without his knowledge because she had
a problem that caused her to “overshop.” (FORM at 2.) This explanation is consistent with all other record
evidence and not disputed by Applicant. Therefore, for the limited purpose that Department Counsel submitted
Item 3, as noted above, it is admitted into evidence. 
As noted in footnote 4, Item 3 is admitted for the limited purpose described therein.5
Item 2.6
2
Personnel Security Clearance Review Program (January 2, 1992), as amended
(Directive); and the Adjudicative Guidelines for Determining Eligibility for Access to
Classified Information that came into effect in the Department of Defense on September
1, 2006. 
Applicant submitted a written response to the SOR on November 9, 2015, and
requested that his case be decided by an administrative judge on the written record
without a hearing.  Department Counsel submitted the Government’s written case on3
January 27, 2016. A complete copy of the File of Relevant Material (FORM)  was4
received by Applicant on February 3, 2016, and he was afforded an opportunity to file
objections and submit material in refutation, extenuation, or mitigation within 30 days of
his receipt of the FORM. Applicant submitted a written response to the FORM on
February 26, 2016. He made no objection to any of the Items contained therein, which
are admitted into evidence.  Department Counsel did not object to the admissibility of5
Applicant’s response, which is admitted into evidence as Exhibit (AE) A. The Defense
Office of Hearings and Appeals (DOHA) assigned the case to me on March 29, 2016.
Findings of Fact
Applicant is 49 years old. He has worked as an engineer for a DoD contractor
since March 2003. He served honorably on active duty in the Army from 1986 to 1990,
and in the Army Reserve and National Guard from 1990 to 1999. He held a security
clearance throughout his military service and his current employment, without incident.
He graduated from high school in 1985, and earned a bachelor’s degree in 1998. He is
married, with two children ages 15 and 11.  6
Item 1.7
Item 1; Item 4 at 1.8
Item 1; Item 5 at 2.9
Item 1; Item 3; Item 4 at 2, 3; AE A.10
Item 1; Item 2.11
3
In his response to the SOR, Applicant admitted that he formerly owed the four
debts alleged in the SOR, explained their origins, and provided documents from each
creditor showing that he fully repaid each of them.  Applicant’s admissions are7
incorporated in the following findings.
SOR ¶ 1.a describes a $371 debt originally owed to a major telephone company
that became delinquent in January 2015. Applicant had to contact the company involved
on several occasions before he could find anyone who could identify what it involved.
He finally determined that it apparently arose from a switch-over of his phone service,
and made full payment to the debt collection service that was then holding the account
on November 7, 2015.  8
SOR ¶ 1.d describes a $59 medical debt arising from an April 2014 hospital visit
by his daughter. It was placed for collection in September 2014 after the original creditor
failed to submit it to Applicant’s medical insurance company. Applicant unsuccessfully
attempted to get the debt processed through his insurance, then paid the debt himself
on October 31, 2015, in order to resolve it.9
SOR ¶¶ 1.b ($20,780) and 1.c ($10,567) describe two joint credit card accounts
that were opened in 2005 and used by Applicant’s wife without his knowledge. Both
accounts became delinquent, at their respective credit limits, in August 2012. During
that period, his wife was suffering from clinical depression and self-medicated by
shopping extensively. She has since been diagnosed with, and received successful
medical and psychological treatment for her depression. She remains under continuing
care from her physician, and no longer uses credit cards.10
Applicant’s wife originally incurred more delinquent credit card debt than is
reflected in the SOR. In October 2012, after becoming aware of the scope of the
problem, Applicant and his wife joined and made payments to a well-respected major
debt relief company to consolidate and resolve their debts. By October 2013, many of
those debts had been settled and paid. However, the bank holding the two accounts
listed in SOR ¶¶ 1.b and 1.c refused to negotiate reduced settlements with the
company. It instead charged-off the debts and issued IRS Forms 1099-C in 2014,
reflecting their cancellation. Applicant and his wife paid the resulting income taxes as
required.   11
Item 1; AE A.12
AE A.13
4
After receiving the October 2015 SOR that indicated the two charged-off credit
card accounts were still of security concern to the Government, Applicant approached
his company’s management to inform them of the situation. The company’s owner, for
whom he had then worked for more than 12 years and whose trust and faith he earned
during that time, offered to lend him $32,000 to pay off the accounts on terms that fit
within his budget. Applicant contacted the bank that had charged off those accounts,
and made full payments toward each account on November 2, 2015. On February 22,
2016, Applicant and the company’s owner executed a formal promissory note calling for
him to make 65 consecutive monthly payments of $506, starting March 15, 2016, to
repay the loan’s principal amount and accrued 1% annual interest.   12
Applicant provided a monthly family budget reflecting payments toward this loan,
his mortgage, other outstanding debts that are not delinquent, and family living
expenses that total $6,657. This amount included a $1,000 monthly payment toward a
loan from his 401(k) retirement account that was scheduled to end in April 2016 upon
completion of the repayment schedule. The budget also shows the net monthly income
of $8,057 that is earned by Applicant and his wife. This resulted in a monthly surplus of
$1,400 through April 2016, and $2,400 thereafter.
Significant trust and confidence in Applicant’s character was evidenced by the
owner of his company when she lent him sufficient funds to repay all of the formerly
delinquent debts he had not already resolved through the debt relief program. The
company president, who has known him throughout his employment and worked closely
with him on an important classified program over the past five years, wrote a letter
describing his trustworthiness, dedication, exemplary performance, initiative, and
behavior consistent with his position of trust. He also described a commendation
Applicant recently received from a senior Government Program Director for whom they
provide contract support services. The commendation discussed Applicant’s technical
excellence, dedication, expertise, professionalism, and untiring efforts, which repeatedly
and directly contributed to successful mission planning.13
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
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overarching adjudicative goal is a fair, impartial, and commonsense decision. According
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. 
Applicant did not dispute his responsibility for the SOR-alleged debts, so AG ¶ 20(e) does not pertain.  14
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The record evidence raised potential security concerns under two Guideline F
DCs, as set forth in AG ¶ 19: 
(a) inability or unwillingness to satisfy debts; and
(c) a history of not meeting financial obligations.
Applicant’s wife incurred a number of consumer debts without his knowledge
over at least a five-year period leading up to 2012. Most of them were resolved between
October 2012 and October 2013 through a debt relief/consolidation program, into which
they made regular monthly payments. The two small debts alleged in SOR ¶¶ 1.a and
1.d arose after this program was completed due to confusion and billing errors. They
were promptly repaid when brought to Applicant’s attention. The bank holding the two
larger debts alleged in SOR ¶¶ 1.b and 1.c declined to negotiate any settlement, and
instead charged off those accounts and issued IRS Forms 1099-C reporting
cancellation of the debts. Applicant paid the resulting income taxes, but later borrowed
funds on excellent terms to fully repay both accounts. Applicant presently has no
delinquent debt, and no other Guideline F DC was established.
The guideline includes four MCs in AG ¶ 20 that could mitigate security concerns
arising from Applicant’s financial situation and history:14
(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
(d) the individual initiated a good-faith effort to repay overdue creditors or
otherwise resolve debts.
Applicant’s circumstances and actions to resolve his formerly delinquent debts
establish substantial mitigation under all four of these MCs. The debts arose under
unique circumstances that were largely beyond his control because his wife, suffering
from clinical depression, incurred the two large ones without his knowledge. The two
small debts arose from billing confusion and were promptly resolved. Applicant
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attempted to negotiate resolution of the two credit card debts through a reputable debt
relief company, but the bank involved cancelled the debts instead and he paid the
resulting taxes. Nevertheless, to demonstrate his financial responsibility and
determination to repay his lawful creditors, he borrowed funds from his company
president on favorable terms and repaid both of those debts as well. His budget reflects
a significant monthly surplus, and his wife is under continuing and successful medical
treatment for her depression to prevent recurrence. Applicant’s former financial
problems are resolved, and all other indications show that his financial situation is under
control. 
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’s explanation for his
conduct with respect to the accrual of the debts in question is reasonable, and reflects
no serious doubts about his trustworthiness or reliability. He is a mature and responsible
engineer who has consistently performed in an exemplary manner in support of
important DoD classified programs. The potential for pressure, coercion, and duress
from his financial situation is nonexistent, and recurrence of similar circumstances is
unlikely. Overall, the record evidence leaves me with no doubt as to Applicant’s present
eligibility and suitability for a security clearance. He fully met his burden to mitigate the
security concerns arising from the alleged financial considerations.
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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: FOR APPLICANT
Subparagraphs 1.a through 1.d: 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.
                                              
DAVID M. WHITE
Administrative Judge