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   DEPARTMENT OF DEFENSE 
       DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 14-03602 
  ) 
Applicant for Security Clearance  ) 
 
 
Appearances 
 
For Government: Benjamin Dorsey, Esq., Department Counsel 
For Applicant: Pro se 
 
 
___________ 
 
Decision 
___________ 
 
 
RIVERA, Juan J., Administrative Judge: 
 
 Applicant submitted a security clearance application (SCA) on December 18, 2013. 
On August 11, 2014, the Department of Defense (DOD) issued Applicant a Statement of 
Reasons (SOR) alleging security concerns under Guideline F (financial considerations).1 
Applicant answered the SOR on September 9, 2014, and requested a hearing, which was 
held on May 20, 2016. Government exhibits (GE) 1 through 7, and Applicant’s exhibits 
(AE) 1 through 8, were admitted into evidence. The transcript was received on June 1, 
2016. On November 29, 2016, I informed Department Counsel of my intent to issue a 
summary disposition in Applicant’s favor. He had no objections. (Hearing Exhibit 1 (email 
correspondence)) 
  
In 2007, Applicant and his wife started a business. They leased expensive 
equipment (SOR ¶ 1.a ($92,991)), opened a small business administration loan (SOR ¶ 
1.b ($62,382)), and leased office space (SOR ¶ 1.d ($55,509)). The business was initially 
successful, but the recession from 2008-2011 reduced their sales and they closed the 
business in 2011. When the business failed, Applicant used his credit card to pay for living 
and business expenses, and legal fees (SOR ¶ 1.c ($25,777)). Applicant tried to 
                                            
1 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 (Directive) (January 2, 1992), as amended; and the Adjudicative Guidelines for 
Determining Eligibility for Access to Classified Information (AG), implemented by the DOD on September 
1, 2006. 
 
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consolidate or sell his business; he sold two of his leases, but one remained; and tried to 
negotiate an equitable conclusion, but it all failed. The creditors file suit and obtained the 
three judgments against Applicant.   
 
Applicant filed for Chapter 7 bankruptcy protection in February 2014, and the 
accounts alleged in SOR ¶¶ 1.a and 1.d were discharged in May 2014. The creditor of 
the account alleged in SOR ¶ 1.c wrote off the debt and issued Applicant an IRS Form 
1099-C, which he filed with his income tax return. Concerning the account alleged in SOR 
¶ 1.b, in 2013 Applicant made a partial payment on that judgment. The final payment 
($28,000) was made in 2015 after Applicant sold his home and paid the mortgage. This 
debt is paid in full.  
 
 Department Counsel presented sufficient evidence to establish the Guideline F 
security concerns. Based on the record evidence as a whole, I conclude Applicant 
demonstrated a good-faith effort to resolve his debts, sought financial counseling, and 
legally resolved his SOR debts. Applicant presented sufficient evidence to explain, 
extenuate, and mitigate the financial considerations concerns. Specifically, I find 
mitigating conditions AG ¶¶ 20(a) through 20(d) are applicable to this case. Applicant’s 
past financial problems do not create doubt about his current reliability, trustworthiness, 
good judgment, and ability to protect classified information. I find that it is clearly 
consistent with the national interest to grant Applicant eligibility for access to classified 
information.  
 
 
 
____________________________ 
JUAN J. RIVERA 
Administrative Judge