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                DEPARTMENT OF DEFENSE 
        DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
In the matter of: ) 
) 
 )       ISCR Case No. 15-00778 
) 
) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Andrew H. Henderson, Esquire, Department Counsel 
For Applicant: Pro se 
 
 
 
______________ 
 
Decision 
______________ 
 
WHITE, David M., Administrative Judge: 
 
Applicant has a lengthy history of financial irresponsibility and significant 
delinquent debt that he is without the means to resolve. Resulting security concerns were 
not mitigated. Based on a review of the pleadings, testimony, and exhibits, eligibility for 
access to classified information denied.  
 
Statement of the Case 
 
Applicant submitted a security clearance application on July 3, 2012. On October 
30, 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 under Executive Order 
10865, Safeguarding Classified Information Within Industry (February 20, 1960), as 
amended; Department of Defense Directive 5220.6, Defense Industrial Personnel 
Security Clearance Review Program (January 2, 1992), as amended (Directive); and the 
Adjudicative Guidelines for Determining Eligibility for Access to Classified Information, 
effective within the Department of Defense after September 1, 2006. 
  
 
 
 
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Applicant answered the SOR in writing (Answer) on November 25, 2015, and 
requested a hearing before an administrative judge. Department Counsel was prepared 
to proceed on April 14, 2016. The case was assigned to me on May 2, 2016. The Defense 
Office of Hearings and Appeals (DOHA) issued a Notice of Hearing on May 13, 2016, 
setting the hearing date for June 2, 2016, and I convened the hearing as scheduled. The 
Government offered Exhibits (GE) 1 through 5, which were admitted without objection 
except as to the weight to be afforded some entries on GE 5. (See Tr. 31-34.) Applicant 
offered Exhibits (AE) A through C, which were admitted without objection, and testified on 
his own behalf. I granted Applicant’s request to leave the record open until July 5, 2016, to 
permit him to submit additional evidence. On that date he submitted AE D, to which 
Department Counsel had no objection. AE D was admitted into the record, which closed 
as scheduled. DOHA received the transcript of the hearing (Tr.) on June 13, 2016.  
 
Findings of Fact 
 
Applicant is a 49-year-old employee of a defense contractor. He is a high school 
graduate who completed some college courses without earning a degree. He has held a 
security clearance since 2003, originally in connection with his service in the Air Force 
Reserve, and is seeking to renew it in connection with his current employment. He is 
married, with two children and two stepchildren. (GE 1;Tr. 6, 12, 67-68.) 
 
The SOR alleges 12 delinquent debts owed by Applicant, ranging from $24 to 
$16,456, and totaling $31,594. In his Answer, Applicant admitted the factual allegations 
concerning the delinquent debts set forth in SOR ¶¶ 1.b, 1.f, and 1.l, totaling $8,335. He 
admitted having received the medical services associated with the delinquent debts 
alleged in SOR ¶¶ 1.g, 1.h, 1.j, and 1.k, which total $331, but expressed surprise that 
those debts were outstanding and said he would work to pay them from his Health 
Savings Account. He denied the allegations in SOR ¶¶ 1.a and 1.c, totaling $21,819, 
because he claimed not to have any record or memory of those delinquent debts. He also 
denied the allegations in SOR ¶¶ 1.d, 1.e, and 1.i, totaling $1,109, and stated that those 
debts were supposed to have been settled. (Answer.) Applicant=s admissions, and 
accompanying explanations, are incorporated in the following findings. 
 
All of the SOR-listed delinquent debts, including those denied by Applicant, are 
reported on his credit bureau reports (CBR) dated July 19, 2012; January 15, 2015; 
and/or March 22, 2016. (GE 3; GE 4; GE 5.) In his Answer, Applicant admitted the Federal 
tax lien in the amount of $2,279 that was alleged in SOR ¶ 1.l. That lien amount was 
reported on his most recent CBR to have grown to $38,771; an amount which Applicant 
acknowledged reflected his total combined Federal income tax debt at that time. His 
history of failing to file and pay his Federal income taxes dates back to 1989. (GE 5 at 1; 
Tr. 35, 46-51, 61-62.)  
 
 Although Applicant indicated in his November 2015 Answer that he would address 
his delinquent medical debts by using his Health Savings Account, he offered no 
evidence of having done so before the record closed in July 2016. The only evidence 
 
 
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Applicant submitted concerning his medical debts was an April 28, 2015 account 
statement from a medical provider, citing an account number that does not match any of 
the medical debts alleged in the SOR, which showed an outstanding unpaid balance of 
$265. (Answer; AE D.)  
 
 Applicant claimed that he submitted several years of unfiled Federal income tax 
returns and an Offer in Compromise (OIC) to the Internal Revenue Service (IRS) in an 
attempt to resolve his Federal income tax delinquencies. The documents he provided 
were unsigned and offered no indication that any of them had been submitted to the IRS. 
His latest draft Offer in Compromise form reflected a net monthly income of $6,347 and 
monthly expenses of $7,376 resulting in a monthly deficit of $1,029. In Section 3 of that 
document, he said that he was seeking the OIC because he was not making enough 
money to keep up with his regular bills and needed to improve his credit rating to reduce 
interest rates he is being charged. Applicant has not sought or participated in financial 
counseling, and essentially did nothing to pursue resolution of any of his alleged 
delinquencies since receiving his SOR. (Answer; AE D; Tr. 51-66, 75.)    
 
 Applicant provided no evidence from supervisors, colleagues, associates, or 
family members concerning his character, trustworthiness, work performance, or track 
record with respect to following regulations and procedures relating to protection of 
sensitive information.  
      
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 
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[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. 
 
 
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Under Directive & E3.1.14, the Government must present evidence to establish 
controverted facts alleged in the SOR. Under Directive & E3.1.15, A[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[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 relating to 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.  
 
This concern is broader than the possibility that an individual might knowingly 
compromise classified information in order to raise money. It encompasses concerns 
about an individual’s self-control, judgment, and other qualities essential to protecting 
classified information. An individual who is financially irresponsible may also be 
irresponsible, unconcerned, or negligent in handling and safeguarding classified 
information.1 
 
 
 
 
                                                 
1 See ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012). 
 
 
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 AG ¶ 19 describes two conditions that could raise security concerns and may be 
disqualifying in this case:  
 
(a) inability or unwillingness to satisfy debts; and 
 
(c) a history of not meeting financial obligations. 
 
 Applicant has a history of not meeting his financial obligations, which began in 
1989 and continues to date. He admits having insufficient income to pay his delinquent 
debts, and a monthly deficit of more than $1,000 that prevents meeting ongoing 
obligations. The evidence raises both of the above disqualifying conditions, thereby 
shifting the burden to Applicant to rebut, extenuate, or mitigate those concerns.  
 
 The guideline includes five conditions in AG ¶ 20 that could mitigate security 
concerns arising from Applicant’s financial difficulties: 
 
(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’s delinquencies are ongoing, and he made no effective effort to address 
any of his SOR-listed debts, including four that involved less than $100. His budget does 
not provide sufficient funds to meet his regular monthly expenses. The evidence does not 
establish mitigation under AG ¶ 20(a). There is no evidence that the financial problems 
are attributable to circumstances beyond his control, or that he has responsibly handled 
his financial obligations, which would be necessary to establish mitigation under AG ¶ 
20(b).  
 
 
 
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 Applicant has not participated in financial counseling, and his budget does 
not demonstrate that his financial problems are under control. The evidence 
establishes no mitigation under AG ¶¶ 20(c) or (d). He did not provide any 
reasonable basis to dispute the legitimacy of the SOR-alleged debts, or document 
a basis for any such dispute, so no mitigation was established under AG ¶ 20(e). 
 
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 is a sincere and 
mature individual, with a consistent professional history of loyal service to the United 
States. However, he has a lengthy history of financial irresponsibility and all record 
evidence indicates that his situation is more likely to deteriorate than to improve. His 
actions have neither eliminated the potential for pressure, coercion, or duress, nor made 
the continuation or recurrence of security concerns unlikely. Overall, the record evidence 
creates significant doubt as to Applicant=s present eligibility and suitability for a security 
clearance. 
 
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:   AGAINST APPLICANT 
 
Subparagraphs 1.a through 1.l:  Against Applicant 
 
 
 
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Conclusion 
 
In light of all of the circumstances presented by the record in this case, it is not 
clearly consistent with the national interest to grant or continue Applicant=s eligibility for a 
security clearance. Eligibility for access to classified information is denied. 
                                                  
 
 
DAVID M. WHITE 
Administrative Judge