DEPARTMENT OF DEFENSE
               DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
----------------------- )       ISCR Case No. 15-03548
)
Applicant for Security Clearance )
Appearances
For Government: Mary M. Foreman, Esquire, Department Counsel
For Applicant: Pro se
January 9, 2017
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DECISION
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ROSS, Wilford H., Administrative Judge:
Applicant submitted his Electronic Questionnaire for Investigations Processing
(e-QIP), on April 17, 2013. (Item 4.)  On October 25, 2015, the Department of Defense
issued a Statement of Reasons (SOR) detailing the security concerns under Guideline F
(Financial Considerations) regarding Applicant. 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 (AG) effective within the Department of Defense on September
1, 2006. 
 
Applicant answered the SOR in writing, with supporting documentation, on
November 9, 2015, and requested a decision by an administrative judge without a
hearing. (Item 2.) Department Counsel submitted the Government’s written case
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(FORM) to Applicant on January 21, 2016.  Applicant acknowledged receipt of the1
FORM on January 30, 2016. He was given 30 days from receipt of the FORM to submit
any additional documentation. Applicant submitted additional information on February 5,
2016. Department Counsel had no objection to my considering the documents, and they
are admitted collectively as Applicant Exhibit A. The case was assigned to me on April
26, 2016. Based upon a review of the pleadings and exhibits, eligibility for access to
classified information is granted.
Findings of Fact
Applicant is 36, and recently married to his second wife. He is employed by a
defense contractor, and seeks to obtain a security clearance in connection with his
employment.
Paragraph 1 (Guideline F, Financial Considerations)
The Government alleges in this paragraph that Applicant is ineligible for
clearance because he is financially overextended and therefore potentially unreliable,
untrustworthy, or at risk of having to engage in illegal acts to generate funds. Applicant
admitted SOR allegations 1.a, 1.b, and 1.d. He denied 1.c. He also submitted additional
information to support his request for a security clearance.
The SOR lists four delinquent debts (1.a through 1.d), totaling approximately
$42,537. The existence and amount of the debts is supported by admissions in Item 2
and its attachments, including a credit report dated October 30, 2015; Item 3 at Section
26; or by credit reports dated April 24, 2013; March 25, 2015; and October 5, 2015.
(Items 5, 6, and 7.)
The current status of the debts is as follows:
1.a. Applicant admitted that he owed a collection agent $9,056 for a past-due
account with the original creditor account number starting 5422. He submitted evidence
that he had reached a payment arrangement with this creditor on November 9, 2015.
(Item 2 at 1, 3.) This debt is being resolved.
1.b. Applicant admitted that he owed a past-due debt on a repossessed
automobile in the amount of $22,336. He submitted documentation with his answer
showing that the creditor cancelled the debt, and issued Applicant a Form 1099. (Item 2
at 2, 4-7.) Applicant also submitted documentation showing that he properly listed the
Department Counsel submitted seven Items in support of the SOR allegations. Item 4 is inadmissible, and1
will not be considered as evidence in this case. It is the summary of an unsworn interview of Applicant
conducted by an interviewer from the Office of Personnel Management on May 2, 2013. It was never adopted
by Applicant as his own statement, or otherwise certified by him to be accurate. Under Directive ¶ E3.1.20,
this Report of Investigation summary is inadmissible in the absence of an authenticating witness. Given
Applicant’s admissions, it is also cumulative. 
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debt forgiveness as income on his 2013 Federal taxes. He established an installment
agreement with the IRS and has paid these taxes in full. (Item 2 at 3-4, 14.) After
receiving the FORM, Applicant decided that cancellation of this debt, and payment of
taxes concerning it, was insufficient to show DoD that he was financially responsible.
Accordingly, “I [Applicant] have reached a settlement agreement for the amount of
$10,051. I will be making monthly payments in the amount of $837.58 for 11 months to
satisfy this debt completely. I made my first payment on February 4, 2016.” (Applicant
Exhibit A at 2.) This debt is resolved.
1.c. Applicant denied that he owed this past-due debt to a credit union. He
stated that it is the same account as that set forth in allegation 1.a, above. The credit
report dated October 30, 2015, shows this debt with the same account number starting
5422. (Item 2.) Applicant has submitted sufficient evidence to show that this debt is the
same as the debt set forth in 1.a, which is being resolved. 
1.d. Applicant admitted that he owed a past-due credit card debt in the amount
of $2,817. He submitted documentation with his answer showing that the creditor
cancelled the debt, and issued Applicant a Form 1099. Applicant also submitted
documentation showing that he properly listed the debt forgiveness as income on his
2014 Federal taxes. (Item 2 at 2, 8-10.) After receiving the FORM, Applicant decided
that cancellation of this debt, and properly listing it as income on his income tax return,
was insufficient to show DoD that he was financially responsible. Accordingly, he has
been in contact with the successor creditor to see what else they may want him to do to
resolve this debt. (Applicant Exhibit A at 3-4.) This debt is resolved.
Applicant’s financial problems were the result of several issues. First, while
serving in the Navy, he got divorced from his first wife in 2008 and assumed many of
the debts from the marriage. Second, after being honorably discharged in May 2008, he
was laid off from civilian work twice - the first time from February to April 2009, then
from July 2009 to September 2010. In September 2010, in order to find a permanent
job, he moved across the country, but was required to repay his employer an $8,000
relocation allowance. Deductions from his pay lasted until January 2012. Third, though
he filed his tax returns on time, he owed additional taxes for tax years 2008, 2011, and
2013.  He has successfully repaid all of his tax debts. (Applicant Exhibit A.)2
Policies
Security clearance decisions are not made in a vacuum.  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 and
mitigating conditions, which are to be used as appropriate in evaluating an applicant’s
eligibility for access to classified information.
The 2013 tax issue was due to the additional income from the cancellation of debt discussed under 1.b,2
above.
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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
over-arching 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.  In addition, the administrative judge may also rely on
his or her own common sense, as well as knowledge of the law, human nature, and the
ways of the world, in making a reasoned decision.
The protection of the national security is the paramount consideration. AG ¶ 2(b)
requires that, “Any 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.
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
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.”
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. Security clearance decisions include, by
necessity, consideration of the possible risk that 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.
 Finally, as emphasized in Section 7 of Executive Order 10865, “Any
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.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites
for access to classified or sensitive information).  
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Analysis
Paragraph 1 (Guideline F, Financial Considerations)
The security concern relating to the guideline for Financial Considerations 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. 
The guideline notes several conditions that could raise security concerns. Under
AG & 19(a), an Ainability or unwillingness to satisfy debts@ is potentially disqualifying. 
Similarly under AG & 19(c), Aa history of not meeting financial obligations@ may raise
security concerns. Applicant, by his own admission, and supported by the documentary
evidence, had three delinquent accounts that he formerly could not resolve. The
evidence is sufficient to raise these potentially disqualifying conditions.
The guideline also includes examples of conditions that could mitigate security
concerns arising from financial difficulties. AG ¶ 20(a) states that it may be mitigating
where “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) states that it can be
mitigating when, “the conditions that resulted in the financial problem were largely
beyond the person’s control (e.g, loss of employment, . . ., or a death, divorce, or
separation), and the individual acted responsibly under the circumstances.” Applicant
went through several years of financial difficulty, brought about by his inability to find
permanent work, his divorce, and the impact of the debt in 1.b being cancelled by the
creditor in 2013, with tax implications for Applicant.
The record shows that Applicant has not ignored any of his financial obligations.
He has worked diligently to resolve them over several years, to the extent his finances
allow. This includes approaching the creditor in 1.b to attempt to resolve the debt after
receiving the FORM, even though that debt had been cancelled, Applicant appropriately
applied the amount of the cancellation to his taxes as income, and paid taxes on that
amount. Regarding 1.a, he has made a payment arrangement with the creditor. I find
that Applicant has “initiated a good-faith effort to repay overdue creditors or otherwise
resolve debts,” as required by AG ¶ 20(d). I also find that “there are clear indications
that the problem is being resolved or is under control,” as required by AG ¶ 20(c). 
Applicant has acted in a way that shows good judgment, beginning work long
before issuance of the SOR to resolve his financial situation. As the DOHA Appeal
Board has said, “An applicant is not required to show that [he] has completely paid off
[his] indebtedness, only that [he] has established a reasonable plan to resolve [his]
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debts and has taken significant actions to implement that plan.”  In addition, “There is3
no requirement that a plan provide for payments on all outstanding debts
simultaneously. Rather, a reasonable plan (and concomitant conduct) may provide for
the payment of such debts one at a time. Likewise, there is no requirement that the first
debts actually paid in furtherance of a reasonable debt plan be the ones listed in the
SOR.”  Applicant has done that. All of the cited mitigating conditions apply to the facts of4
this case. Paragraph 1 is found for Applicant.
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 the relevant circumstances. 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. The administrative judge must 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.      
I considered the potentially disqualifying and mitigating conditions in light of all
the relevant facts and circumstances surrounding this case. The discussion under
Guideline F, above, applies here as well. While Applicant has had financial problems in
the past, almost all have been resolved, and he has the knowledge and ability to avoid
such problems in the future. He is working in good faith to resolve the remaining debt.
Under AG ¶ 2(a)(2), I have considered the facts of Applicant’s debt history.
Based on the record, I find that there have been permanent behavioral changes under
AG ¶ 2(a)(6). Accordingly, I find that there is little to no potential for pressure, coercion,
exploitation, or duress (AG ¶ 2(a)(8)); and that there is a low likelihood of recurrence
(AG ¶ 2(a)(9)). 
Overall, the record evidence leaves me with no questions or doubts as to
Applicant’s eligibility and suitability for a security clearance. For all these reasons, I
conclude Applicant has mitigated the security concerns arising from his financial
ISCR Case No. 06-12930 at 2 (App. Bd. Mar. 17, 2008) (quoting ISCR Case No. 04-09684 at 2-3 (App. Bd.3
Jul. 6, 2006)).
ISCR Case No. 07-06482 at 3 (App. Bd. May 21, 2008) (internal citations omitted).4
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situation. Accordingly, the evidence supports granting his request 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: FOR APPLICANT
Subparagraphs 1.a through 1.d: 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 eligibility for a security
clearance.  Eligibility for access to classified information is granted.
WILFORD H. ROSS
Administrative Judge
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