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DEPARTMENT OF DEFENSE 
DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
 [Redacted] )  ISCR Case No. 15-05034 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Rhett E. Petcher, Esq., Department Counsel 
For Applicant: Pro se 
 
 
______________ 
 
Decision 
______________ 
 
 
FOREMAN, LeRoy F., Administrative Judge: 
 
This case involves security concerns raised under Guideline F (Financial 
Considerations). Eligibility for access to classified information is denied. 
 
Statement of the Case 
 
Applicant submitted a security clearance application (SCA) on October 31, 2014. 
On February 29, 2016, the Department of Defense Consolidated Adjudications Facility 
(DOD CAF) sent him a Statement of Reasons (SOR) alleging security concerns under 
Guideline F. The DOD CAF acted under Executive Order (Exec. Or.) 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 the DOD on September 1, 2006. The adjudicative guidelines are 
codified in 32 C.F.R. § 154, Appendix H (2006), and they replace the guidelines in 
Enclosure 2 to the Directive. 
 
 Applicant answered the SOR on March 26, 2016, and requested a hearing before 
an administrative judge. Department Counsel was ready to proceed on June 17, 2016, 
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and the case was assigned to me on July 20, 2016. On July 27, 2016, the Defense 
Office of Hearings and Appeals (DOHA) notified Applicant that the hearing was 
scheduled for August 17, 2016. I convened the hearing as scheduled. Government 
Exhibits (GX) 1 through 4 were admitted in evidence without objection. Applicant 
testified and submitted Applicant’s Exhibits (AX) A through D, which were admitted 
without objection. I kept the record open until September 2, 2016, to enable him to 
submit additional documentary evidence. He timely submitted AX E through J, which 
were admitted without objection. DOHA received the transcript (Tr.) on August 26, 2016. 
 
Findings of Fact1 
 
 In his answer to the SOR, Applicant admitted the allegations in SOR ¶¶ 1.c-1.t. 
He denied SOR ¶¶ 1.a and 1.b. His admissions in his answer and at the hearing are 
incorporated in my findings of fact.  
 
 Applicant is a 35-year-old sheet metal worker employed by a defense contractor 
since April 2013. His previous jobs were in the private sector. He was fired from a job in 
December 2009 for a safety violation (lifting merchandise over his head without using a 
step stool) and was unemployed for about six months. (Tr. 22, 28.) When he found a 
new job, he was making about $3.00 per hour less than his previous job. (Tr. 31.) He 
has never held a security clearance. 
 
 Applicant married in August 2008. He has three children, ages 13, 10, and 6. (Tr. 
24.) His wife was employed until 2010, when she became pregnant. Before her 
pregnancy, she was earning about $40,000 to $45,000 per year, and their household 
income was about $85,000 per year. (Tr. 32.) She returned to the workforce in 2013, 
and she now earns about $35,000 per year. (Tr. 30.) 
 
 When Applicant submitted his SCA, he reported that he failed to file his federal 
income tax return for 2012 and that he owed about $7,951 in federal taxes. (GX 1 at 
30.) He also disclosed numerous delinquent debts. 
 
 Based on the information in Applicant’s SCA, the SOR alleged that he failed to 
file his federal income tax return for 2012 (SOR ¶ 1.a). At the hearing, he testified that 
his wife misplaced her W-2 form, and so they filed their return without it. The Internal 
Revenue Service (IRS) tax return transcript reflects that they filed a joint return for 2012 
in April 2013 and were entitled to a refund of $8,931. He testified that the IRS deducted 
about $7,000 from their refund. However, the tax return transcript does not reflect a 
deduction or a tax debt. (Tr. 34-35; AX G.) They timely filed their federal income tax 
returns for 2013, 2014 and 2015, claiming refunds of $7,131; $7,777; and $8,415. (AX 
H, I, and J.) 
 
                                                          
1 Applicant’s personal information is extracted from his security clearance application (GX 1) unless 
otherwise indicated by a parenthetical citation to the record. 
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The SOR also alleges 19 delinquent debts, which are reflected in Applicant’s 
credit bureau reports from November 2014 (GX 2) and December 2015 (GX 3). The 
evidence concerning these debts is summarized below. 
 
 SOR ¶ 1.b: federal tax debt for tax year 2012 ($7,951). The IRS tax transcript 
for this tax year reflects that Applicant was entitled to a refund, and there is no evidence 
of unpaid federal taxes in the record. (AX G.) Applicant has refuted this allegation. 
 
 SOR ¶ 1.c: judgment filed in May 2014 for unpaid rent ($1,000). Applicant 
testified that this debt was incurred before he was laid off. (Tr. 43.) He contacted the 
creditor in June 2015. (Tr. 42.) In June 2016, he paid $1,936 to this creditor and 
obtained a statement from the creditor that the debt was settled. (AX C.) The amount of 
the payment appears to be the total of two unsatisfied judgments filed by this creditor, 
one of which was alleged in the SOR. The debt has been resolved. 
 
 SOR ¶ 1.d: judgment filed in January 2014 ($715). Applicant testified that this 
debt is a credit-card account. He testified that he has not attempted to resolve this debt 
because he gave higher priority to resolving a delinquent auto loan.2 (Tr. 45.)   
 
 SOR ¶¶ 1.e-1.h, 1.k, 1.l, and 1.r-1.t: medical bills placed for collection ($76; 
$103; $1,194; $102; $342; $59; $358; $174; and $451). Applicant testified that these 
medical bills were incurred when one of his children became ill, and his medical 
insurance had not yet taken effect. He has not contacted the creditors or taken any 
action to resolve these debts. (Tr. 50-51, 54, 59.) 
 
 SOR ¶ 1.i: utility bill placed for collection ($449). After the hearing, Applicant 
submitted a statement that he had orally agreed to a payment agreement for this debt. 
He had not provided any documentation of the agreement or made any payments by 
the time the record closed. (AX E.) 
 
 SOR ¶ 1.j: cellphone bill placed for collection ($1,101). On August 29, 2016, 
Applicant entered into a payment agreement under which the debt will be paid in full in 
August 2017. The first payment was due on September 9, 2016, after the record closed. 
(AX F.) 
 
 SOR ¶ 1.m: credit-card account placed for collection ($768). Applicant 
telephonically contacted the current collection agency for this debt, but he had not yet 
discussed a settlement by the time the record closed. (AX E.) 
 
 SOR ¶ 1.n: cable and internet bill placed for collection ($944). Applicant has 
not taken any action to resolve this debt. (Tr. 55.) 
 
                                                          
2 The delinquent auto loan was incurred after Applicant cosigned a car loan for his wife, his wife was 
unable to make the payments, and they voluntarily surrendered the auto in March 2016. He and his wife 
currently owe about $7,749 on the auto loan, and in June 2016 they began making payments of $356 per 
month on the debt. (AX B; Tr. 45-50.) The delinquent auto loan is not alleged in the SOR. 
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 SOR ¶ 1.o: unsecured loan placed for collection ($697). Applicant obtained 
this loan in 2012. He has taken no action to resolve this debt. (Tr. 56.) 
 
 SOR ¶ 1.p: fitness center bill placed for collection ($480). Applicant signed a 
contract for a gym membership and was unable to cancel the contract. He contacted the 
creditor, who expressed willingness to settle the debt, but Applicant has taken no further 
action to resolve the debt. (Tr. 57-58.) 
 
 SOR ¶ 1.q: cable bill placed for collection ($457). Applicant testified that he 
contacted the creditor, who expressed willingness to settle the debt, but he has taken 
no further action to resolve the debt. (Tr. 58.) 
 
 Applicant’s wages were garnished in February and May 2015 for a delinquent 
automobile loan. The debt was satisfied in July 2015. (GX 3 at 1.) His wages were 
garnished again in June 2016 for delinquent state taxes of about $1,200. (GX 4; Tr. 38.) 
As of the date of the hearing, Applicant owed about $800 in state taxes. (Tr. 40.) These 
debts are not alleged in the SOR.3 
 
 Applicant testified that his take-home pay is about $2,300 per month, and his 
wife’s is about $1,400. His rent is $1,300 per month. He estimated that his other 
monthly expenses are cellphones ($200); Internet service ($100); utilities ($260), car 
insurance ($200); and gasoline for two cars ($340). He has no car payments. If his 
estimates are accurate, he has net monthly remainder of about $1,300. He testified that 
he could not remember how much he has left after paying all expenses (Tr. 64.) He has 
about $8,000 in his 401(k) retirement account. He and his wife have separate bank 
accounts. He testified that he has about $700 in savings but he does not know how 
much his wife has. (Tr. 64-65.) 
 
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 § 2.  
 
Eligibility for a security clearance is predicated upon the applicant meeting the 
criteria contained in the AG. These guidelines are not inflexible rules of law. Instead, 
                                                          
3 Conduct not alleged in the SOR may be considered to assess an applicant=s credibility; to decide 
whether a particular adjudicative guideline is applicable; to evaluate evidence of extenuation, mitigation, 
or changed circumstances; to consider whether an applicant has demonstrated successful rehabilitation; 
or as part of a whole-person analysis. ISCR Case No. 03-20327 at 4 (App. Bd. Oct. 26, 2006). I have 
considered the delinquent debts not alleged in the SOR for these limited purposes. 
 
 
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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. 
 
 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.” 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).  
 
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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 
overextended is at risk of having to engage in illegal acts to generate 
funds. 
 
 This concern is broader than the possibility that a person might knowingly 
compromise classified information to raise money. It encompasses concerns about a 
person’s self-control, judgment, and other qualities essential to protecting classified 
information. A person 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 admissions, corroborated by his credit bureau reports, establish 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”). Applicant 
refuted the allegations that he failed to timely file his tax return for 2012 (SOR ¶ 1.a) and 
that he was indebted to the IRS for $7,951 for tax year 2012 (SOR ¶ 1.b). Thus, AG ¶ 
19(g) (“failure to file annual Federal, state, or local income tax returns as required or the 
fraudulent filing of the same”) is not established. 
 
 The following mitigating conditions under this guideline are potentially applicable: 
 
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; 
 
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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. 
 
 AG ¶ 20(a) is not established. Applicant’s delinquent debts are numerous, recent, 
and were not incurred under circumstances making them unlikely to recur. 
 
 AG ¶ 20(b) is not fully established. Applicant encountered several conditions that 
were largely beyond his control: his pay reduction after being laid off, his wife’s 
unemployment during pregnancy and the birth of a child, and his children’s uninsured 
medical expenses. He receives limited credit under this mitigating condition for his six-
month period of unemployment, because it occurred after he was fired for a safety 
violation. He has acted responsibly regarding the judgment in SOR ¶ 1.c and the 
cellphone bill in SOR ¶ 1.j. He contacted the creditors in SOR ¶¶ 1.p and 1.q, but he 
has not responded to their offers to settle the debts. He claimed that he had a payment 
agreement for the utility bill in SOR ¶ 1.i, but he submitted no documentation of 
payments or a payment agreement. He has not contacted the medical creditors or made 
any payments, even though the debts in SOR ¶¶ 1.e, 1.f, 1.h and 1.l are for nominal 
amounts. He has taken no action to resolve the debts in SOR ¶¶ 1.d, 1.n, and 1.o. 
 
 AG ¶ 20(c) is not established. Applicant has not sought or received financial 
counseling, and his financial situation is not under control 
 
 AG ¶ 20(d) is established for the debts in SOR ¶ 1.c and 1.j. It is not established 
for the other debts alleged in the SOR.  
 
 AG ¶ 20(e) is not established for the debts alleged in SOR ¶ 1.c-1.t. because 
Applicant has not disputed them. He denied owing the federal tax debt alleged in SOR ¶ 
1.b and presented evidence refuting it.  
 
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 
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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.  
 
 I have incorporated my comments under Guideline f and I have considered the 
factors in AG ¶ 2(a). 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 not mitigated the security concerns raised by his delinquent 
debts. Accordingly, I conclude he has not 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 
 
 I make the following formal findings on the allegations in the SOR: 
 
 Paragraph 1, Guideline F (Financial Considerations): AGAINST APPLICANT 
 
  Paragraphs 1.a-1.c:     For Applicant 
 
  Paragraphs 1.d-1.i:     Against Applicant 
 
  Paragraph 1.j:     For Applicant 
 
  Paragraphs 1.k-1.t:     Against Applicant 
 
Conclusion 
 
 I conclude that 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. 
 
 
 
 
LeRoy F. Foreman 
Administrative Judge