DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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) ISCR Case No. 14-06349     
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Applicant for Security Clearance
Appearances
For Government: Tovah Minster, Esq. Department Counsel
For Applicant: Pro se
                                                                            
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Decision
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LYNCH, Noreen, A., Administrative Judge:
The Department of Defense (DOD) issued a Statement of Reasons (SOR) to
Applicant alleging security concerns arising under Guideline F (Financial
Considerations). The SOR was dated December 6, 2015. The action was taken under
Executive Order (EO) 10865, Safeguarding Classified Information within Industry
(February 20, 1960), as amended; DOD 5220.6, Defense Industrial Personnel Security
Clearance Review Program (January 2, 1992), as amended (Directive); and the
Adjudicative Guidelines (AG) implemented in September 2006. 
Applicant timely answered the SOR and requested a hearing before an
administrative judge. The case was assigned to me on August 11, 2016. A notice of
hearing, dated October 13, 2016, was issued  scheduling the hearing for November 15,
2016. Government Exhibits (GX 1-4) were admitted into the record. Applicant submitted
Applicant Exhibits (AX A-D). He testified, but did not present witnesses. I kept the
record open for additional documents until December 9, 2016. Applicant submitted (AX
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E–J), which were entered into the record without objection. The transcript was received
on November 21, 2016. Based on a review of the pleadings, testimony, and exhibits,
eligibility for access to classified information is granted. 
Findings of Fact
In his answer to the SOR, Applicant admitted the factual allegations under
Guideline F (Financial Considerations) with the exception of SOR 1.e, 1.j, 1.k, and 1.l. 
He  provided detailed explanations. Some of the delinquent debts were already paid,
disputed, or in a payment plan.
Applicant is a 28-year-old security officer for a defense contractor. He is not
married and has no children. He graduated from high school in 2007 and attended
community college classes for a period of time, but did not obtain a degree.  He served
in the military on active reserve duty from 2008 to 2016, receiving an honorable
discharge. He was deployed in 2010.  He lived with his mother in 2012 to save money
on expenses. Applicant has worked for his current employer since 2013. He believes he
was granted a security clearance in 2008 while in the military. (GX 1) He completed a
security clearance application in 2013. (GX 1)
Financial Considerations
The SOR alleges 12 delinquent debts including judgments, collection accounts,  
medical accounts, and student loan, which total approximately $30,000 (GX 4) He was
not aware of some of the alleged accounts.
Applicant had difficulty finding work after he left the military. He was unemployed
for about four or five months in 2011. He could not pay all his loans and bills. He began
to charge items on credit cards. He received unemployment benefits in the amount of
$370 a week. He had no other source of income. (Tr. 32)
As to SOR 1.a, a 2013 judgment in the amount of $1,733, Applicant presented
documentation that the judgment was settled for $1,079. (AX D, J) As to SOR 1.b, a
collection account in the amount of $2,065, Applicant is in a payment arrangement plan.
(AX A) He is current on the payments. (AX F) As to SOR 1.c, a collection  account in
the amount of $6,784, Applicant settled the account in August 2016. (AX G) As to
SOR1.d, a charged off account in the amount of $1,798, Applicant entered into a
payment plan and the account is paid. (AX C, H, I)  As to SOR 1.e, a collection account
in the amount of $1,671, Applicant believes he received a Form 1099-C. He could not
locate the form. It does not appear on his credit report. (AX K) As to SOR 1.f, a
collection account in the amount of $467, Applicant paid this account (AX J). However,
he does not recognize the account number that is associated with the phone account
on the SOR. (Tr. 41) This account shows as a dispute on his credit report.  As to SOR
1.g, a student loan in collection for an amount of $4,726, Applicant was under the
impression that the military was making the payments. He is researching the issue. (Tr.
43) As to the past-due account in SOR 1.h for $261, Applicant is current on the
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account. (AX K)  As to SOR 1.i, in the amount of $34, Applicant paid the account. (AX
J) 
As to SOR 1.j, a collection account in the amount of $170, Applicant stated that
he has been trying to obtain information about the account. (Tr 45)  As to SOR 1.k, a
collection account for $166, Applicant stated that he believed it was satisfied, but he is
not sure at this time. He is still trying to obtain information on the account. As to SOR
1.l, medical account in the amount of $383, Applicant denies that he owes this amount.
The issue has been an ongoing one with the insurance company. (Tr. 47) It does not
appear on his credit report. 
 Applicant’s annual salary is $56,000. (Tr. 29) He has a savings account. He has
a budget that he uses each month and is current with his daily bills. He has a small net
monthly remainder. He is current on his car payment and daily expenses. He has a
retirement account. (Tr. 52) Applicant has automatic monthly deductions from his
account to pay his bills timely. He is now monitoring his credit reports to ensure that he
is knowledgeable about his finances.
Policies
When evaluating an applicant’s suitability for a security clearance, an
administrative judge must consider the adjudicative guidelines (AG). In addition to brief
introductory explanations for each guideline, the adjudicative guidelines list potentially
disqualifying conditions and mitigating conditions. These guidelines are not inflexible
rules of law. Instead, recognizing the complexities of human behavior, they are applied
in conjunction with the factors listed in the adjudicative process. An administrative
judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision.
Under AG ¶ 2(c), this process is a conscientious scrutiny of a number of variables known
as the “whole-person concept.” An 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. Likewise, I have avoided drawing inferences grounded on mere
speculation or conjecture.
The Government must present evidence to establish controverted facts alleged in
the SOR. An applicant is responsible for presenting “witnesses and other evidence to
rebut, explain, extenuate, or mitigate facts admitted by applicant or proven by
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Department Counsel. . . .”  The burden of proof is something less than a preponderance1
of evidence.  The ultimate burden of persuasion is on the applicant.  2 3
A person seeking access to classified information enters into a fiduciary
relationship with the Government based on 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 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 as to the loyalty of the
applicant concerned.”  “The clearly consistent standard indicates that security clearance4
determinations should err, if they must, on the side of denials.”  Any reasonable doubt5
about whether an applicant should be allowed access to sensitive information must be
resolved in favor of protecting such information.  The decision to deny an individual a6
security clearance does not necessarily reflect badly on an applicant’s character. It is
merely an indication that the applicant has not met the strict guidelines the President
and the Secretary of Defense established for issuing a clearance.
Analysis
Guideline F, Financial Considerations
AG ¶ 18 expresses the security concern pertaining 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 over-
extended is at risk of having to engage in illegal acts to generate funds.
Compulsive gambling is a concern as it may lead to financial crimes
 See also ISCR Case No. 94-1075 at 3-4 (App. Bd. Aug. 10, 1995).      1
 Department of the Navy v. Egan, 484 U.S. 518, 531 (1988).      2
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      3
 See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive      4
information), and EO 10865 § 7.
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      5
 Id.      6
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including espionage. Affluence that cannot be explained by known sources
of income is also a security concern. It may indicate proceeds from
financially profitable criminal acts.
AG ¶ 19 describes conditions that could raise a security concern and may be
disqualifying:
(a) inability or unwillingness to satisfy debts;
(b) indebtedness caused by frivolous or irresponsible spending and the
absence of any evidence of willingness or intent to pay the debt or
establish a realistic plan to pay the debt;
(c) a history of not meeting financial obligations;
(d) deceptive or illegal financial practices such as embezzlement,
employee theft, check fraud, income tax evasion, expense account fraud,
filing deceptive loan statements, and other intentional financial breaches of
trust;
(e) consistent spending beyond one's means, which may be indicated by
excessive indebtedness, significant negative cash flow, high debt-to-
income ratio, and/or other financial analysis;
(f) financial problems that are linked to drug abuse, alcoholism, gambling
problems, or other issues of security concern;
(g) failure to file annual Federal, state, or local income tax returns as
required or the fraudulent filing of the same;
(h) unexplained affluence, as shown by a lifestyle or standard of living,
increase in net worth, or money transfers that cannot be explained by
subject's known legal sources of income; and
(i) compulsive or addictive gambling as indicated by an unsuccessful
attempt to stop gambling, "chasing losses" (i.e. increasing the bets or
returning another day in an effort to get even), concealment of gambling
losses, borrowing money to fund gambling or pay gambling debts, family
conflict or other problems caused by gambling.
Applicant admits to  delinquent debts that are listed in the SOR. The Government
produced credible evidence to establish the debts. Consequently, the evidence is
sufficient to raise disqualifying conditions ¶¶ 19(a) and 19(c).
AG ¶ 20 provides conditions that could mitigate the security concerns:
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(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;
(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; and
(f) the affluence resulted from a legal source of income.
After leaving the military, Applicant was unemployed for a period of time. He lived
with his mother to reduce his expenses. He went to school to improve his employment
opportunities He satisfied a judgment and paid or settled several of his debts. He
entered into payment plans for most of the SOR debts and provided post-hearing
submissions for documentation.  He paid other non-SOR debts. He had circumstances
that caused him financial difficulty. He took care of basic expenses. He did not ignore his
creditors. He was credible and candid at the hearing that he did not know about some of
the delinquent debts. He successfully disputed certain accounts. He is researching a few
accounts such as the student loan and the medical account. He is now monitoring his
credit. He has shown a commitment to resolving his debts. AG ¶ 20 (b), (c), (d) and (e)
apply.
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 an applicant’s
conduct and all the 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
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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. As noted above, the
ultimate burden of persuasion is on the applicant seeking a security clearance. 
I considered the potentially disqualifying and mitigating conditions in light of all the
facts and circumstances surrounding this case, as well as the whole-person factors.
 
Applicant is 28 years old and served in the military, receiving an honorable
discharge. He was unemployed for a period of time. He continued to go to school to
improve his job opportunities. He takes responsibility for what he owes. He paid some
smaller SOR debts, as well as some non-SOR debts. He was credible and candid that
he has been addressing his delinquent debts. He has paid, resolved, settled, or made
payment arrangements for most of the SOR debts. He provided documentation of his
payments and other evidence of payment arrangements. Applicant established that he
has taken sufficient actions to reasonably and responsibly, within his limited finances,
resolve delinquent debts. Applicant has shown that he can responsibly manage his
financial obligations. He has no credit card debts. He supplemented the record with
financial information. Overall, the record evidence leaves me without questions and
doubts as to his judgment, trustworthiness, reliability, and eligibility for his security
clearance. I conclude that Applicant has presented sufficient evidence of mitigation of
his financial considerations security concern.
. 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, Guideline F: FOR APPLICANT
Subparagraphs 1.a-1.l: For Applicant
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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.
Clearance is granted. 
                                                     
NOREEN A. LYNCH.
Administrative Judge
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