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    DEPARTMENT OF DEFENSE 
  DEFENSE OFFICE OF HEARINGS AND APPEALS 
  
  
 
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 14-04491 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Daniel F. Crowley, Esq., Department Counsel 
For Applicant: Pro se 
 
 
 
 
______________ 
 
Remand Decision 
______________ 
 
 
HEINY, Claude R., Administrative Judge: 
 
On February 11, 2016, a determination was made denying Applicant a security 
clearance to work in the defense industry. Applicant had two vehicles repossessed and 
nine delinquent accounts totaling more than $32,000. Initially, he provided 
documentation he had paid one delinquent obligation of approximately $500. Applicant 
appealed the denial and the case was remanded to consider documents submitted by 
Applicant. Applicant has adequately addressed the financial considerations and 
personal conduct security concerns. Clearance is granted. 
  
History of the Case 
 
 On March 26, 2015, acting under the relevant Executive Order and Department 
of Defense (DoD) Directive,1 the DoD issued a Statement of Reasons (SOR) detailing 
                                                          
1 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) effective within the DoD 
on September 1, 2006. 
 
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personal conduct and financial considerations security concerns. DoD adjudicators 
could not find that it was clearly consistent with the national interest to grant or continue 
Applicant’s security clearance. On April 8, 2015, Applicant answered the SOR and 
requested a hearing. On May 27, 2015, I was assigned the case. On June 16, 2015, the 
Defense Office of Hearings and Appeals (DOHA) issued a Notice of Hearing for a 
hearing to be convened on July 7, 2015.  
 
At the hearing, Government’s Exhibits (Ex.) 1 through 5 and Applicant’s Exhibit A 
were admitted without objection. Applicant testified at the hearing. The record was kept 
open to allow Applicant to present additional documents. Post-hearing documents were 
received and admitted without objection as Ex. B-E.2 On July 15, 2015, DOHA received 
the hearing transcript (Tr.). 
 
On February 11, 2016, a decision was made to deny Applicant’s clearance 
because of unmitigated financial considerations security concerns. Applicant appealed 
that determination stating he had submitted additional post-hearing documents not 
referenced in the decision. On April 15, 2016, the DOHA Appeal Board directed that the 
documents forwarded by Applicant with his appeal be considered and that a new 
decision be issued after having considered the documents. On remand, neither the 
Applicant’s appeal brief nor the documents he had apparently included with his brief 
were presented to me. I issued an Order to Produce Documents.(Hearing Exhibit I) Both 
parties were requested to submit all documents they wished considered, including any 
previously submitted documents.  
 
On May 4, 2016, Applicant submitted eight documents, but failed to resubmit, as 
directed, his original documents. Department Counsel had no objection to the new 
submissions and submitted no additional documents on behalf of the Government. 
Applicant’s original documents as admitted are Exhibits (Ex.) A through E and 
Applicants eight new submissions have been marked and admitted as Ex. F – M. 
 
Findings of Fact 
 
 The Findings of Facts found in the February 11, 2016 decision3 are incorporated 
into this decision as supplemented by the new post-hearing documents submitted by 
Applicant. After a thorough review of the pleadings, exhibits, testimony, and Applicant’s 
new submissions, I make the following findings of fact: 
 
Those original findings will be briefly summarized. Applicant is a 49-year-old part-
time aircraft servicer who has worked for a defense contractor since November 2010, 
and he seeks to obtain a security clearance. Since January 2002, he has worked 20 to 
28 hours a week as an aircraft servicer fueling aircraft. (Ex. 3, Tr. 21, 39) Since 1996, 
Applicant has worked a full-time civil service position, WG 9 – Step 5, as an aircraft 
inspector. (Ex. 3, Tr. 38) From April 1987 through June 1991, he honorably served in 
                                                          
2 On January 15, 2016, Applicant’s post-hearing submissions were forwarded by Department Counsel 
 
3 Those original findings will be briefly summarized in this decision.  
 
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the U.S. Marine Corps, separating as a corporal (E-4). (Ex. 1, Tr. 27) The U.S. 
Department of Veterans Affairs (VA) rates Applicant’s disability at 40 percent. (Tr. 22) 
His disability pay is $587 monthly. (Tr. 22) In 2005, Applicant filed for Chapter 7 
bankruptcy protection (SOR 1.a) asserting eight of the nine delinquent obligations were 
due to actions of his ex-wife, from whom he was divorced in September 2010. In 
September 2005, his debts were discharged.  
 
 In September 2005, Applicant purchased a vehicle. The vehicle was 
repossessed and sold when he failed to make the required monthly payments. 
Following the sale of the vehicle, $12,968 remained owing on the loan (SOR 1.b). (Ex. 
2) The creditor agreed to settle the debt for $4,000, which Applicant has paid. (Ex. F) In 
September 2006, he purchased a van for his now ex-wife’s use. His ex-wife was 
awarded their marital home and van in the divorce and was supposed to make 
payments on these items. However, she defaulted on both the home and car loan 
resulting in the foreclosure4 of the home and repossession of the van. (Ex. 4, Tr. 25, 29) 
He never received any correspondence prior to or following the van’s repossession. (Tr. 
30) Following the repossession and sale, a $7,667 debt (SOR 1.e) remained. (Ex. 2) 
The creditor cancelled the debt and issued an Internal Revenue Service Form 1099-C. 
(Ex. H)  
 
  In 2007, Applicant signed an apartment lease for his ex-wife and her children. 
(Tr. 28) The debt (SOR 1.c, $3,182) was in default and went to collection in 2008. The 
creditor has acknowledged that Applicant has paid this account in full. (Ex. G) 
  
At the hearing, Applicant provided a document showing that in August 2015 he 
paid an undisclosed amount on a debt not listed in the SOR. His payment on a bank 
and trust account resulted in a zero balance owed on that obligation. (Ex. D) Available 
creditor correspondence (Ex. I) shows that the payment was to resolve the delinquent 
credit card debt listed in SOR 1.f, even though Applicant never indicated that the bank 
payment was to satisfy that debt. Applicant settled the debt for half of its balance. (Ex. I)  
 
 Applicant paid $785.82 on his $1,965 delinquent telephone account (SOR 1.g), 
which met his financial obligation to the collection agency. (Ex. J) He also settled a 
second delinquent telephone debt (SOR 1.i, $1,008) by paying $352.93. (Ex. K) The 
matter is settled, and the creditor has agreed not to pursue further collection actions. 
Applicant paid the entire amount due on his energy bill (SOR 1.j). (Ex. L) 
 
Applicant asserts the debts listed in SOR 1.d ($1,261) and SOR 1.h ($1,261) are 
the same delinquent obligation. Additionally, he asserts that the collection agency listed 
in SOR 1.d that was attempting to collect the debt is no longer in business. He has sent 
numerous letters attempting to locate and verify the debt, including to the energy 
company identified in SOR 1.h. The record contains no evidence of any response to his 
inquiry. (Ex. B-1, B-2, M-1, M-2, M-3)  
                                                          
4 The home went to foreclosure. (Tr. 24) Applicant’s June 2015 credit report indicates the credit granter 
on the house had reclaimed the collateral to settle the defaulted mortgage. (Ex. A) The balance on the 
account was zero. (Ex. A) 
 
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 In Applicant’s May 2013 Electronic Questionnaires for Investigations Processing 
(e-QIP), he answered “no” when asked about delinquencies involving routine accounts 
in Section 26. The question asked about repossessions, of which he had two; collection 
accounts, of which there were eight; charged-off accounts, of which there was one; and 
whether he was currently or had been more than 120 days delinquent on any account. 
(Ex. 1) He stated he was unfamiliar with working with computers and was pressed to 
return the form. He was assisted by a co-worker in completing the form. (Tr. 35) He 
stated he did not have account numbers or balances on the debts at the time he was 
completing the form. (Tr. 35) In his SOR response, he indicated he completed the e-QIP 
at work and did not have any pertinent account information with him. He also asserted 
he was not given time to research the information. Later in the same month, when 
questioned about his delinquent accounts, he stated he was unfamiliar with the majority 
of the debts on his credit report.  
 
 In May 2013, Applicant completed a personal subject interview (PSI) during 
which his delinquent obligations were discussed. (Ex. 3) He acknowledged two 
delinquent accounts. (Ex. A) He stated he did not list his other delinquent accounts 
because he had no knowledge of them and had never received any collection letters 
concerning them. (Ex.2) He asserts he never intentionally provided false information. 
 
Policies 
 
 When evaluating an applicant’s suitability for a security clearance, the 
administrative judge must consider the adjudicative guidelines. In addition to brief 
introductory explanations for each guideline, the adjudicative guidelines list potentially 
disqualifying conditions and mitigating conditions, which must be considered 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 the adjudicative process. The administrative judge’s overarching 
adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶ 
2(c), the entire process is a conscientious scrutiny 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 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. 
 
Under Directive ¶ E3.1.14, the Government must present evidence to establish 
controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, the applicant is 
 
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responsible for presenting “witnesses and other evidence to rebut, explain, extenuate, 
or mitigate facts admitted by applicant or proven by Department Counsel. . . .” The 
applicant has the ultimate burden of persuasion to obtain a favorable security decision.  
 
A person who seeks access to classified information enters 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 safeguard 
classified information. Such decisions entail a certain degree of legally permissible 
extrapolation of potential, rather than actual, risk of compromise of classified 
information. 
  
Section 7 of Executive Order 10865 provides that decisions shall be “in terms of 
the national interest and shall in no sense be a determination of the loyalty of the 
applicant concerned.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites 
for access to classified or sensitive information).  
 
Analysis 
 
Guideline F, Financial Considerations 
 
 Adjudicative Guideline (AG) ¶ 18 articulates the security concerns relating to 
financial considerations: 
 
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. 
 
Additionally, an individual who is financially irresponsible may also be 
irresponsible, unconcerned, negligent, or careless in properly handling and 
safeguarding classified information. Behaving responsibly or irresponsibly in one aspect 
of life provides an indication of how a person may behave in other aspects of life. 
 
A person’s relationship with his creditors is a private matter until evidence is 
uncovered demonstrating an inability or unwillingness to repay debts under agreed-
upon terms. Absent evidence of strong extenuating or mitigating circumstances, an 
applicant with a history of serious or recurring financial difficulties is in a position of risk 
that is inconsistent with holding a security clearance. An applicant is not required to be 
debt free, but is required to manage his finances to meet his financial obligations. 
 
 
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 Applicant owed more than $32,000 following two vehicle repossessions and the 
default on nine charged-off or collection accounts. Disqualifying Conditions AG ¶ 19(a), 
“inability or unwillingness to satisfy debts” and AG ¶ 19(c), “a history of not meeting 
financial obligations” apply.  
 
 Five Financial Considerations Mitigating Conditions under AG ¶¶ 20 are 
potentially applicable: 
 
(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. 
 
Applicant has been full-time employed since 1996, has had a part-time job since 
2002 and also receives approximately $600 monthly in VA disability compensation. He 
has had two vehicles repossessed and incurred additional delinquent accounts. All of 
his delinquent account have been settled and paid or the creditor cancelled the debt. No 
creditors are pursuing further action seeking payment on his delinquent accounts. 
Applicant’s financial problems were due in part to his divorce and actions of his ex-wife. 
These are events beyond his control. The mitigating condition listed in AG ¶ 20(b) 
applies. 
 
In June 2014, Applicant received credit or financial counseling and agreed to 
start making payments on his debts. All of his delinquent debts have now been 
addressed. The mitigating condition listed in AG ¶ 20(c) applies. The mitigating 
condition listed in AG ¶ 20(d) applies to his delinquent obligations because of his good-
faith effort to repay his delinquent obligations.  
 
 
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Applicant has provided sufficient evidence indicating he has addressed all of his 
delinquent obligations except for the same obligation that is alleged in SOR 1.d and 1.h. 
He has sent numerous letters to the creditors attempting to locate and verify this debt, 
which have gone unanswered. There is little more he can do to address this debt. There 
are two delinquent obligations, given they pertain to the same debt and it has not been 
verified AG ¶ 20(e) applies to SOR 1.d and 1.h. 
 
Guideline E, Personal Conduct 
 
AG ¶ 15 explains why personal conduct is a security concern stating: 
 
Conduct involving questionable judgment, lack of candor, dishonesty, or 
unwillingness to comply with rules and regulations can raise questions 
about an individual's reliability, trustworthiness and ability to protect 
classified information. Of special interest is any failure to provide truthful 
and candid answers during the security clearance process or any other 
failure to cooperate with the security clearance process. 
 
With respect to the alleged personal conduct concerns involving failing to list his 
financial problems on his e-QIP, the pertinent disqualifying condition is AG ¶ 16(a), 
which is established if there is a deliberate omission, concealment, or falsification of 
relevant factors from any personal security questionnaire. Applicant answered “no” 
when questioned about financial delinquencies when completing his e-QIP. He said he 
was unaware of some of the debts and did not know account balances or numbers 
when completing the form. He was in a rush to complete his e-QIP. 
 
The Government has an interest in examining all relevant and material adverse 
information about an applicant before making a clearance decision. The Government 
relies on applicants to truthfully disclose adverse information in a timely fashion, not 
when it is perceived to be prudent or convenient. Further, an applicant’s willingness to 
report adverse information about himself provides some indication of his willingness to 
report inadvertent security violations or other security concerns in the future, something 
the Government relies on to perform damage assessments and limit the compromise of 
classified information.  
 
The Government has shown Applicant's answers on his e-QIP were incorrect, but 
this does not prove Applicant deliberately failed to disclose information about his 
finances. He was unaware of the majority of the SOR delinquent obligations when he 
completed his e-QIP. Deliberate omission, concealment, or falsification of a material fact 
in any written document or oral statement to the Government, when applying for a 
security clearance, is a security concern. But every inaccurate statement is not a 
falsification. A falsification must be deliberate and material. It is deliberate if it is done 
knowingly and willfully.  
 
When Applicant completed his e-QIP, he was aware he had some debt; however, 
he was unaware of the account numbers or the balances on those debts. It was not until 
 
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he was questioned about his finances that he learned the extent of his delinquent 
accounts. Having observed Applicant’s demeanor and listened to his testimony, I accept 
his denial of intentional falsification and find that his answers were not deliberate 
omissions, concealments, or falsifications.  
 
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 
the facts and circumstances surrounding this case. Applicant honorably served in the 
U.S. Marine Corps. At the time the initial decision was made all the documents sent by 
Applicant had not been received and made a part of the record. After reviewing the 
documents submitted in his Response to the Order to Produce Documents, he has 
provided sufficient evidence indicating he has addressed all of his delinquent 
obligations, except, as previously noted, the same obligation that appears in SOR 1.d 
and 1.h. Numerous letters by him to the creditors attempting to locate and verify this 
debt have gone unanswered. There is little more he can do to address this debt.  
 
The issue is not simply whether all his debts are paid—it is whether his financial 
circumstances raise concerns about his fitness to hold a security clearance. See AG & 
2(a)(1). Overall, the record evidence leaves me without questions and doubts about 
Applicant’s eligibility and suitability for a security clearance. For all these reasons, I 
conclude Applicant mitigated the personal conduct and financial considerations security 
concerns. 
 
 
 
 
 
 
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Formal Findings 
 
 Formal findings for or against Applicant on the allegations set forth in the SOR, 
as required by section E3.1.25 of Enclosure 3 of the Directive, are: 
 
 Paragraph 1, Financial Considerations: FOR APPLICANT 
 
  Subparagraphs 1.a – 1.j:  For Applicant 
 
 Paragraph 2, Personal Conduct:  FOR APPLICANT 
 
  Subparagraph 2.a:   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 a security clearance. 
Eligibility for access to classified information is granted.  
 
 
 
______________________ 
CLAUDE R. HEINY II 
Administrative Judge