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DEPARTMENT OF DEFENSE 
DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
 [Redacted] )  ISCR Case No. 15-03995 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Nicole A. Smith, Esq., Department Counsel 
For Applicant: Crystina M. O’Brien, Esq. 
 
 
______________ 
 
Decision 
______________ 
 
 
FOREMAN, LeRoy F., Administrative Judge: 
 
This case involves security concerns raised under Guideline F (Financial 
Considerations). Eligibility for access to classified information is denied. 
 
Statement of the Case 
 
Applicant submitted a security clearance application (SCA) on August 28, 2014, 
seeking to continue a clearance he received in 2004. On January 17, 2016, the 
Department of Defense Consolidated Adjudications Facility (DOD CAF) sent him a 
Statement of Reasons (SOR) alleging security concerns under Guideline F. The DOD 
CAF acted under Executive Order (Exec. Or.) 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) implemented by the DOD on 
September 1, 2006. The adjudicative guidelines are codified in 32 C.F.R. § 154, 
Appendix H (2006), and they replace the guidelines in Enclosure 2 to the Directive. 
 
 Applicant answered the SOR on February 11, 2016, and requested a hearing 
before an administrative judge. Department Counsel was ready to proceed on 
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September 7, 2016, and the case was assigned to me on September 14, 2016. On the 
same day, the Defense Office of Hearings and Appeals (DOHA) notified Applicant that 
the hearing was scheduled for September 29, 2016. On September 20, 2016, Applicant 
retained counsel, who requested that the hearing be postponed. I granted the request 
on September 21, 2016. On October 21, 2016, DOHA notified Applicant’s counsel that 
the hearing was rescheduled for November 16, 2016. I convened the hearing as 
rescheduled. Government Exhibits (GX) 1 through 3 were admitted in evidence without 
objection. Applicant testified, presented the testimony of three witnesses, and submitted 
Applicant’s Exhibits (AX) A through F, which were admitted without objection. DOHA 
received the transcript (Tr.) on November 29, 2016. 
 
Findings of Fact1 
 
 In his answer to the SOR, Applicant admitted all the allegations. His admissions 
in his answer and at the hearing are incorporated in my findings of fact.  
 
 Applicant is a 59-year-old chemist employed by a defense contractor since June 
1979. He was hired shortly after he received a bachelor’s degree in May 1979. He has 
held a security clearance since April 2004. 
 
 Applicant married in February 1983 and divorced in January 2004. He has two 
adult children, who were born during the marriage.  
 
 When Applicant submitted his SCA in August 2014, he disclosed that he failed to 
file his federal income tax returns for tax years 2009 and 2010. His failure to file federal 
and state tax returns is alleged in SOR ¶ 1.a. He also disclosed a delinquent credit-card 
account and a delinquent student loan incurred for his daughter’s college education. 
(GX 1 at 25-29; GX 2 at 4-5.) The delinquent student loan is alleged in SOR ¶ 1.b and 
reflected in his credit bureau report (CBR) from September 2014. (GX 3 at 5.) A 
collection account for telephone service is alleged in SOR ¶ 1.c and reflected in the 
same CBR. (GX 3 at 7.) 
 
 In 2004, Applicant’s wife left him for another woman, leaving him responsible for 
a number of marital debts. When Applicant divorced, he and his wife had more than 
$20,000 in credit-card debt, which they split. Applicant refinanced the mortgage loan on 
the marital home and used some of the equity to pay his share of the marital debts and 
to buy his wife’s share of the equity in the home, so that he and his children would have 
a place to live. (Tr. 58-59.) Applicant is required to pay spousal support of $1,600 per 
month. (Tr. 61, 69.) 
 
At about the same time, Applicant’s daughter was diagnosed with lupus and 
dropped out of school. His father was killed in a car accident in 2005, and his mother 
died from cancer a year later. Applicant was appointed as executor of his mother’s 
                                                          
1 Applicant’s personal information is extracted from his security clearance application (GX 1) unless 
otherwise indicated by a parenthetical citation to the record. 
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estate. The estate is still not settled, due to an overpayment to his mother from a state 
retirement plan. (Tr. 62-64.)  
 
Shortly after their mother’s death, Applicant’s brother suffered serious health 
issues, spending six months in an emergency defibrillator vest, and Applicant took care 
of his brother until he recovered. His brother testified at the hearing and corroborated 
Applicant’s testimony about the multiple stressful events that occurred from 2004 until 
about 2007 or 2008. (Tr. 44-50.) 
 
 Applicant testified that the stressful events in his personal life caused him to 
delay filing his federal and state tax returns for tax years 2007 through 2015.2 (Tr. 29.) 
He was interviewed by a security investigator in November 2014, and he told the 
investigator that he knew that he needed to resolve his tax issues. (Tr. 53-55.) 
 
 In August 2016, Applicant hired a certified public accountant (CPA) to assist him 
in filing his federal and state income tax returns. The CPA filed the past-due returns in 
October 2016. Applicant did not owe any federal or state taxes for any of the tax years 
between 2007 and 2015, but he forfeited refunds by failing to timely file. Because he 
owed no taxes, he was not required to pay any penalties. (Tr. 26-31; AX D; AX E.) 
 
 Applicant obtained several student loans for his daughter in 2002. He fell behind 
on the loan alleged in SOR ¶ 1.b around 2006. He testified that he knew that the loan 
probably would be referred for collection, but he was focused more on his tax issues. 
He paid off the student loan alleged in SOR ¶ 1.b as well as his daughter’s other 
student loans in early November 2016, shortly before the hearing. (Tr. 57; AX B; AX C.) 
He used some of the proceeds from his mother’s estate as well as his own savings to 
pay off the student loans. (Tr. 65.) 
 
 Applicant’s November 2014 CBR reflected a $145 debt for cellphone service, 
referred for collection in December 2009. Applicant testified that he had several 
telephone conversations with the creditor, in which the creditor agreed that he did not 
owe the debt. Applicant asked the creditor for proof that he owed the debt, but he 
received nothing. He has not paid the debt or filed a dispute with the credit bureau. (Tr. 
60-61.) However, the debt does not appear on his October 2016 CBR. (AX A.) Since 
less than seven years have elapsed since the debt was referred for collection, the 
absence of the debt on the current CBR indicates that it probably was resolved.3 
                                                          
2 The SOR does not allege failure to file for tax years 2007, 2008, and 2011 through 2015. Conduct not 
alleged in the SOR may be considered to assess an applicant=s credibility; to decide whether a particular 
adjudicative guideline is applicable; to evaluate evidence of extenuation, mitigation, or changed 
circumstances; to consider whether an applicant has demonstrated successful rehabilitation; or as part of 
a whole-person analysis. ISCR Case No. 03-20327 at 4 (App. Bd. Oct. 26, 2006). I have considered the 
evidence of his failure to file for the unalleged tax years for these limited purposes. 
 
3 Under the Fair Credit Reporting Act, a credit report may not list accounts placed for collection or 
charged off that antedate the credit report by more than seven years, or until the statute of limitations has 
run, whichever is longer. The exceptions to this prohibition do not apply to this debt. 10 U.S.C. § 1681c.  
 
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 Applicant’s annual pay is about $105,000, and he has a net monthly remainder of 
about $1,000 after paying all bills and expenses. He lives frugally and drives a ten-year-
old car. He has about $17,000 in savings. All his debts are current. His most recent 
CBR reflects no adverse entries. (Tr. 71-73; AX A.) 
 
 The supervisor for the laboratory in which Applicant works has known Applicant 
since 1979. He testified that there is no one in the laboratory who is qualified to replace 
Applicant. He considers Applicant “very professional,” and he has never had any reason 
to believe that Applicant is a threat to national security. (Tr. 36-39.) 
 
 Applicant’s manager, who has known him for about eight years and interacted 
with him daily, submitted a letter indicating that he was aware of Applicant’s financial 
issues in general, and he believed that Applicant “did not handle that situation well.” He 
stated that Applicant has never seemed to live beyond his means or exhibit any type of 
irresponsible behavior. He described Applicant as an “extraordinarily hard worker” and 
“very dedicated.” He stated that the other chemists working with Appellant in the 
laboratory could eventually replace him, but they are several years away from stepping 
into his shoes. (AX F.) 
 
Policies 
 
 “[N]o one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 
484 U.S. 518, 528 (1988). As Commander in Chief, the President has the authority to 
“control access to information bearing on national security and to determine whether an 
individual is sufficiently trustworthy to have access to such information.” Id. at 527. The 
President has authorized the Secretary of Defense or his designee to grant applicants 
eligibility for access to classified information “only upon a finding that it is clearly 
consistent with the national interest to do so.” Exec. Or. 10865 § 2.  
 
Eligibility for a security clearance is predicated upon the applicant meeting the 
criteria contained in the AG. These guidelines are not inflexible rules of law. Instead, 
recognizing the complexities of human behavior, an administrative judge applies these 
guidelines in conjunction with an evaluation of the whole person. An administrative 
judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. An 
administrative judge must consider all available and reliable information about the 
person, past and present, favorable and unfavorable. 
 
 The Government reposes a high degree of trust and confidence in persons with 
access to classified information. This relationship transcends normal duty hours and 
endures throughout off-duty hours. Decisions include, by necessity, consideration of the 
possible risk that the applicant may deliberately or inadvertently fail to safeguard 
classified information. Such decisions entail a certain degree of legally permissible 
extrapolation about potential, rather than actual, risk of compromise of classified 
information 
 
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Clearance decisions must be made “in terms of the national interest and shall in 
no sense be a determination as to the loyalty of the applicant concerned.” Exec. Or. 
10865 § 7. Thus, a decision to deny a security clearance is merely an indication the 
applicant has not met the strict guidelines the President and the Secretary of Defense 
have established for issuing a clearance. 
 
 Initially, the Government must establish, by substantial evidence, conditions in 
the personal or professional history of the applicant that may disqualify the applicant 
from being eligible for access to classified information. The Government has the burden 
of establishing controverted facts alleged in the SOR. See Egan, 484 U.S. at 531. 
“Substantial evidence” is “more than a scintilla but less than a preponderance.” See v. 
Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994). The guidelines 
presume a nexus or rational connection between proven conduct under any of the 
criteria listed therein and an applicant’s security suitability. See ISCR Case No. 92-1106 
at 3, 1993 WL 545051 at *3 (App. Bd. Oct. 7, 1993).   
 
 Once the Government establishes a disqualifying condition by substantial 
evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the 
facts. Directive ¶ E3.1.15. An applicant has the burden of proving a mitigating condition, 
and the burden of disproving it never shifts to the Government. See ISCR Case No. 02-
31154 at 5 (App. Bd. Sep. 22, 2005).  
 
An applicant “has the ultimate burden of demonstrating that it is clearly consistent 
with the national interest to grant or continue his security clearance.” ISCR Case No. 
01-20700 at 3 (App. Bd. Dec. 19, 2002). “[S]ecurity clearance determinations should err, 
if they must, on the side of denials.” Egan, 484 U.S. at 531; see AG ¶ 2(b).  
 
Analysis 
 
Guideline F, Financial Considerations 
 
The concern under this guideline 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. 
 
 This concern is broader than the possibility that a person might knowingly 
compromise classified information to raise money. It encompasses concerns about a 
person’s self-control, judgment, and other qualities essential to protecting classified 
information. A person who is financially irresponsible may also be irresponsible, 
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unconcerned, or negligent in handling and safeguarding classified information. See 
ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012). 
 
 Applicant’s admissions and his credit bureau report establish three disqualifying 
conditions under this guideline: AG ¶ 19(a) (“inability or unwillingness to satisfy debts”); 
AG ¶ 19(c) (“a history of not meeting financial obligations”); and AG ¶ 19(g) (“failure to 
file annual Federal, state, or local income tax returns as required or the fraudulent filing 
of the same.”) 
 
 The following mitigating conditions under this guideline are potentially applicable: 
 
AG ¶ 20(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; 
 
AG ¶ 20(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; 
 
AG ¶ 20(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; 
 
AG ¶ 20(d): the individual initiated a good-faith effort to repay overdue 
creditors or otherwise resolve debts; and 
 
AG ¶ 20(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. 
 
 AG ¶ 20(a) is not established. Applicant’s delinquent debts are numerous, recent, 
and were not incurred under circumstances making them unlikely to recur. 
 
AG ¶ 20(b) is not established. Although Applicant encountered several conditions 
largely beyond his control, he has not acted responsibly. His last major crisis was 
around 2006, but he had done nothing to resolve his tax issues when he was 
interviewed by a security investigator six years later, and he did not hire a CPA until 
almost two years after his interview with the security investigator. His delay in taking 
action to resolve his tax problem for many years and then taking action only after his 
security clearance was in jeopardy show that he lacks the good judgment and reliability 
required of persons who are granted access to classified information. ISCR Case No. 
14-04159 (App. Bd. Aug. 1, 2016); See also ISCR Case No. 14-05794 (App. Bd. July 7, 
2016); ISCR Case No. 14-05476 (App. Bd. Mar. 25, 2016). Similarly, he knew the 
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student loan was delinquent in 2006, but he did take any action to resolve it until 
October 2016, ten years later. He testified that he initially disputed the cellphone debt, 
but he presented no documentary evidence of the basis for the dispute. However, the 
evidence indicates that the debt is resolved. 
 
 AG ¶ 20(c) is partially established. Applicant has not received financial 
counseling within the meaning of this mitigating condition, but his financial and tax 
problems have been resolved. 
 
 AG ¶ 20(d) is not established. This mitigating condition requires a showing of 
good faith, which means acting in a way that shows reasonableness, prudence, 
honesty, and adherence to duty or obligation. ISCR Case No. 99-0201, 1999 WL 
1442346 at *4 (App. Bd. Oct. 12, 1999). Evidence of past irresponsibility is not mitigated 
by payment of debts only under pressure of qualifying for a security clearance. A 
security clearance adjudication is an evaluation of an individual’s judgment, reliability, 
and trustworthiness. It is not a debt-collection procedure. ISCR Case No. 09-02160 
(App. Bd. Jun. 21, 2010.) Even if an individual has paid the delinquent debts, the 
circumstances underlying the debts and their eventual resolution are relevant to 
determining the individual’s eligibility for a clearance. ISCR Case No. 15-00216 (App. 
Bd. Oct. 24, 2016.) 
 
 AG ¶ 20(e) is not established. Applicant did not dispute the allegations in SOR ¶¶ 
1.a and 1.b. He testified that he telephonically disputed the debt in SOR ¶ 1.c, but he 
provided no documentary evidence showing a dispute or its basis. 
 
Whole-Person Concept 
 
 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. In applying the whole-
person concept, an 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. An 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.  
 
 I have incorporated my comments under Guideline F in my whole-person 
analysis and I have considered the factors in AG ¶ 2(a). After weighing the disqualifying 
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and mitigating conditions under Guideline F, and evaluating all the evidence in the 
context of the whole person, I conclude Applicant has not mitigated the security 
concerns raised by his failure to timely file his federal and state tax returns and his 
failure to timely resolve the delinquent student loan. Accordingly, I conclude he has not 
carried his burden of showing that it is clearly consistent with the national interest to 
continue his eligibility for access to classified information. 
 
Formal Findings 
 
 I make the following formal findings on the allegations in the SOR: 
 
 Paragraph 1, Guideline F (Financial Considerations): AGAINST APPLICANT 
 
  Subparagraphs 1.a-1.b:    Against Applicant 
 
  Subparagraphs 1.c:     For Applicant 
 
Conclusion 
 
 I conclude that it is not clearly consistent with the national interest to continue 
Applicant’s eligibility for access to classified information. Clearance is denied. 
 
 
 
 
LeRoy F. Foreman 
Administrative Judge