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    DEPARTMENT OF DEFENSE 
  DEFENSE OFFICE OF HEARINGS AND APPEALS 
  
  
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 15-01495 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Adrienne Driskill, Esq., Department Counsel 
For Applicant: Pro se 
 
 
 
______________ 
 
Decision 
______________ 
 
HEINY, Claude R., Administrative Judge: 
 
Applicant contests the Department of Defense’s (DoD) intent to deny his eligibility 
for a security clearance to work in the defense industry. He had more than $37,000 in 
delinquent, charged-off, past-due, and collection accounts. He has documented 
payment of less than $1,300. He has failed to mitigate the financial considerations 
security concerns. Clearance is denied. 
  
History of the Case 
 
 On November 4, 2015, acting under the relevant Executive Order and DoD 
Directive,1 the DoD issued a Statement of Reasons (SOR) detailing 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 December 18, 2015, Applicant answered the SOR and requested a hearing. On July 
28, 2016, the Defense Office of Hearings and Appeals (DOHA) issued a Notice of 
Hearing for a hearing to be convened on August 25, 2016. 
 
                                                          
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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At the hearing, Government’s Exhibits (Ex.) 1 through 5 and Applicant’s Ex. A 
through H were admitted without objection. Applicant testified at the hearing. The record 
was kept open to allow Applicant to present additional documents. On September 8, 
2016, five additional documents were received and admitted as Ex. I through Ex. M. On 
September 2, 2016, DOHA received the hearing transcript (Tr.). 
 
Findings of Fact 
 
In Applicant’s answer (Answer) to the SOR, he admitted to all the SOR debts. I 
incorporate Applicant’s admissions as facts. After a thorough review of the pleadings, 
exhibits, submissions, and transcript. I make the following additional findings of fact. 
 
 Applicant is a 49-year-old lead software engineer who has worked for a defense 
contractor since November 2005, and he seeks to retain a security clearance. (Ex. 1) 
From 1986 through 2006, he served in the U.S. Air Force before honorably retiring. His 
monthly Air Force take-home retirement pay is $1,400. (Tr. 44) He takes home $2,963 
every two weeks from his main job. (Tr. 45) In addition to his full-time job, he has a part-
time job working 10 hours each weekend, which brings home an additional $150 every 
two weeks. (Tr. 45) His total combined take-home pay is approximately $98,000 a year. 
His employee performance evaluations indicate he exceeds expectations and is 
outstanding in judgment, dependability, and reliability. (Ex. H) 
 
 In 2000, Applicant and his wife filed for bankruptcy protection. (Tr. 37) The 
reason for filing is not part of the record. In 2011, he again considered filing for 
bankruptcy protection, but after discussing the matter with an attorney, it was decided it 
was better to negotiate with his creditors. (Tr. 37) In September 2012, Applicant made 
an unsworn declaration during a personal subject interview (PSI) during which his 
finances, including the delinquent accounts listed in SOR 1.l through SOR 1.w, were 
discussed. (Ex. 2)  
 
When Applicant completed his April 2014 Electronic Questionnaires for 
Investigations Processing (e-QIP), he indicated he had approximately $20,000 in 
delinquent credit card debt which had been incurred due to his son’s medical problems 
and his wife losing her job. (Ex. 1) He stated he worked with a credit solution company 
(company2) and asserted the delinquent debt on half of the credit accounts had been 
resolved. He was told he would have to resolve the other half with the collection 
agencies. (Ex. 1) He stated he was making monthly payments and expected all of his 
debts to be paid in full by December 2013. (Ex. 1)  
 
In November 2003, while Applicant was a member of the Air Force, his son was 
born with only one kidney and blockage in the other kidney. (Tr. 21) His son underwent 
12 surgeries. His wife lost her job as a customer service agent for a van line due to 
having to take her son to medical appointments and caring for him. The household went 
from two wage earners to one. (Tr. 23)  
                                                          
2 Applicant sought the services of a single debt solution company that is referred to in this decision as a 
“debt solution company” or simply “company.” 
 
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In August 2007, Applicant sought the services of a debt solutions company. (Ex. 
L, Answer, 24) Applicant states “that was really a bad choice.” (Tr. 24) The company 
advised Applicant to stop any payments he was making to creditors on a list provided by 
him to be included in the debt solution plan. (Ex. L, Answer) The plan listed 18 accounts 
7 of which are listed in the SOR. These delinquent SOR obligations are: the charged-off 
accounts in SOR 1.b, 1.j, 1.l, and 1.p; plus the debts in 1.o, 1.q, and 1.u. (Ex. L) The 
company told him his debts would all be paid by July 2010. (Ex. 2) 
 
The company was paid monthly and received a total of $2,500 for their services. 
For this fee the company was to negotiate on Applicant’s behalf with his creditors. Once 
a settlement offer was negotiated, Applicant was informed of the offer and told to pay it. 
He made payments on various accounts over the next 36 months. (Answer) He had 
entered into a three-year contract with the company and stopped his involvement with 
the company when the contract ended. (Tr. 25)  
 
Applicant asserts the debts in SOR 1.a ($1,715), 1.l ($9,889), 1.m ($1,563), 1.n 
($1,400), 1.o ($1,058), 1.p ($1,078), 1.q ($2,690), 1.r ($5,254), 1.s ($3,337), 1.t ($309), 
1.u ($1,108), 1.v ($1,590), and 1.w ($303) were negotiated by the debt solution 
company. No documentation was provided for the eight additional SOR debts. Applicant 
asserts these debts were also included in the plan, but are not listed in Ex. L. He 
asserts that even though he made payments on these obligations they were still 
charged off by the creditors. The first payment was made in August 2007 and the last 
payment was made in July 2010. (Ex. L) The creditors must have forgiven some of 
Applicant’s debt because he was informed by the Internal Revenue Service (IRS) that 
he had to pay income tax on the outstanding balances forgiven by each creditor. 
(Answer) However, Applicant did not provide any IRS forms showing which creditors 
forgave delinquent debts and how much was forgiven. 
 
In November 2013, Applicant’s wife was diagnosed with Stage 3 breast cancer. 
(Ex. D, E, Tr. 26) She underwent 68 weeks of chemo therapy which caused her to be 
severely ill and unable to work. (Answer) Following her chemo therapy, she completed 
33 radiation treatments in the following six week period. (Answer) She was terminated 
from her job for missing too many days of work. During her recovery, she suffered from 
neuropathy, losing feeling in her left arm and numbness in her left foot. (Tr. 26) 
 
On Valentine’s Day, February 14, 2015, Applicant’s wife suffered a massive heart 
attack. (Ex. F, Tr. 27, Answer) She spent a week in the hospital and then had 12 weeks 
of recovery. She was back at work for three days when she suffered from stress 
induced angina and was rushed to the hospital with severe chest pains. (Ex. G, Tr. 28) 
The medical expenses from the medical treatment, hospital stay, and after care were 
not entirely covered by TRICARE. She applied for social security disability payments, 
but was turned down because she had insufficient quarters of work to qualify for social 
security disability. 
 
 At an undisclosed date, Applicant sought assistance from a professional financial 
counselor and was told he should not attempt to address all his delinquent debt at once, 
 
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but to concentrate on paying only two or three creditors at a time. (Tr. 34) He was also 
informed to start with the accounts with the smallest balances.  
 Starting in March 2016, Applicant began $25 monthly payments to the charged-
off debts listed in SOR 1.f ($657), SOR 1.g ($610), and SOR 1.i ($436). (Exs. I, J) In 
March 2016, he started making $87 monthly payments on the charged-off account in 
SOR 1.h ($521). These payments paid the debt (SOR 1.h) in full as of August 2016. 
(Exs. C, I, J) In March 2016, Applicant paid the debt listed in SOR 1.k ($230). (Ex. B, Tr. 
47) 
Applicant sent a settlement offer to the collection company collecting the 
charged-off debt listed in SOR 1.b ($1,176) and offered to settle the matter for $500. 
(Ex. K, Tr. 39) He also sent a letter to another creditor offering to pay the charged-off 
debt listed in SOR 1.a ($1,715) by making 12 monthly payments of $142.96. (Ex. K) If 
accepted, the offer would pay the entire amount owed on this debt. In September 2016, 
he stated he would be submitting copies on a monthly basis of all future payments to 
the creditors. (Ex. I) No future documents evidencing payments were received.   
 Applicant provided no documents showing payment or negotiations with the 
creditors listed in SOR 1.c ($973), SOR 1.d ($737), and SOR 1.e ($717). He asserted, 
in his SOR Answer, that he had an agreement with the collection agencies in SOR 1.b 
($1,176), 1.c ($973), and 1.d ($737) to pay $50 monthly on these delinquent accounts 
until they are paid. He expected these debts to be paid in full between February 2016 
and October 2016. (Answer) In December 2015, he said he had made agreements to 
pay $25 monthly on the delinquent accounts in SOR 1.e ($717), 1.f ($657), 1.j ($399), 
and 1.k ($230), to pay $51 on the delinquent debt listed in SOR 1.g ($610), and $43 
monthly on the debt in SOR 1.i ($436). (Answer) No documentation was received 
showing any repayment agreements with any collection agencies or payments in accord 
with those arrangements other than on the other debts in SOR 1.f, SOR 1.g, and SOR 
1.i.  
 
 Applicant is current on his monthly truck payment, which, because of his poor 
credit, has a 21 percent interest rate. (Tr. 40) He pays approximately $2,000 monthly on 
his two vehicle payments and vehicle insurance. (Ex. A-1) He owes approximately 
$105,000 on his home, which has a $175,000 appraisal value. (Tr. 44) He has 
approximately $24,000 in his 401(k) retirement plan, with $6,000 or $7,000 in loans 
against it. (Tr. 45) He sporadically receives letters from creditors. 
 
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. 
 
 
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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 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 
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 problems: 
 
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 
 
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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. 
 
Applicant had 20 charged-off, past due, or collection accounts totaling more than 
$36,000. Disqualifying Conditions AG ¶ 19(a), “inability or unwillingness to satisfy debts” 
and AG ¶ 19(c), “a history of not meeting financial obligations” apply.  
 
Once a concern arises regarding an Applicant’s security clearance eligibility, 
there is a strong presumption against the grant or maintenance of a security clearance.3 
 
 AG ¶ 20 list six Financial Considerations Mitigating Conditions that might apply: 
 
(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 
                                                          
3 The Appeal Board concisely explained an applicant’s responsibility for proving the applicability of mitigating 
conditions as follows:  
 
Once a concern arises regarding an Applicant’s security clearance eligibility, there is a strong 
presumption against the grant or maintenance of a security clearance. See Dorfmont v. Brown, 913 
F. 2d 1399, 1401 (9th Cir. 1990), cert. denied, 499 U.S. 905 (1991). After the Government 
presents evidence raising security concerns, the burden shifts to the applicant to rebut or mitigate 
those concerns. See Directive ¶ E3.1.15. The standard applicable in security clearance decisions is 
that articulated in Egan, supra. “Any doubt concerning personnel being considered for access to 
classified information will be resolved in favor of the national security.” Directive, Enclosure 2 ¶ 
2(b).  
 
ISCR Case No. 10-04641 at 4 (App. Bd. Sept. 24, 2013).  
 
 
 
 
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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 legitimancy of the 
past-due debt which is the cause of the problem and provided 
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. 
 
Of the 20 delinquent SOR accounts, Applicant provided documentation showing 
payment on two debts (SOR 1.h, $521 and SOR 1.k, $230). He is paying $75 monthly 
on three other accounts (SOR 1.f, $657; SOR 1.g, $610; SOR 1.i. $436). Between 
March 2016 and September 2016, he paid $525 on these accounts. He has 
documented that since first being asked about his delinquent accounts in September 
2012, he has paid $1,276 on delinquent obligations totaling more than $36,000. His 
annual take-home income is more than $97,000. 
 
Applicant asserts he made additional payments when working with a debt 
solution company, but provided no documentation supporting his assertion. He provided 
no documents showing payment to the creditors listed in the program. Some of the 
creditors may have forgiven a portion of the debt making that portion taxable income to 
Applicant. But he never provided copies of those IRS forms, any information concerning 
which creditors forgave the debt owed, or how much was forgiven. He asserts he made 
two settlement offers on two delinquent accounts (SOR 1.a and SOR 1.b), but there is 
no documentation showing the creditors accepted the offers or that payment was made 
in accord with those offers. 
 
Under AG ¶ 20(a), Applicant got behind on his finances due to unusual 
circumstances. In 2003, his son was born with serious medical problems. Applicant was 
active duty military at the time, which would have covered the majority of the medical 
expenses. However, his wife had to miss work related to her son’s medical treatment 
and she lost her job. The couple went from a two-income family to a one-income 
household. Those events happened more than ten years ago. The record is silent as to 
why Applicant had to file for bankruptcy protection in 2000, but that filing should have 
made him very aware of the importance of making sure his debts were timely paid. 
 
In December 2013, Applicant’s wife was diagnosed with Stage 3 cancer. In 
February 2015, his wife suffered a massive heart attack and could no longer work. The 
medical expenses from the medical treatment, hospital stay, and after care were not 
 
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entirely covered by TRICARE. Again, these were unexpected medical emergencies. For 
AG ¶ 20(a) and AG & 20(b) to apply there must not only be the unusual conditions or 
unexpected medical emergencies, but Applicant must act reasonably under the 
circumstances. Having documented payments of less than $1,300 over a four year 
period, is not acting reasonably.  
 
Under AG & 20(c) there is no showing of any financial counseling. Nor are there 
clear indications the problem is being resolved. I find $75 per month payments 
insufficient to timely resolve the delinquent accounts. AG & 20(c) does not apply. Under 
& 20(d), Applicant has paid two delinquent obligations, is making monthly payments on 
three more, and is attempting to reach settlement agreements on two other delinquent 
accounts. AG & 20(d) applies to the two debts he has paid and to the three on which he 
has made monthly payments. In his SOR Answer, he stated he had made repayment 
arrangements with a number of creditors. At hearing, he did not provide copies of those 
agreements or show payments in accord with those agreements. 
 
There is no documentation showing any repayment agreements or payments on 
the remaining 15 SOR delinquent obligations. Applicant asserts he made payment on a 
number of these delinquent accounts between August 2007 and July 2010 and a 
number of the creditors informed the IRS that some part of his debt had been forgiven. 
However, the only documentation related to the debt solutions company was a one-
page list of the obligations to be covered by the plan. There is no showing of any 
payments being made to the creditors or any documentation showing the debts were 
forgiven in whole or in part. 
 
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 experienced financial problem due 
 
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to medical problems outside of his control. Those medical problems resulted in his wife 
losing her job after their son was born in 2003. His wife also suffered serious medical 
problems in 2013 and 2015.  
 
Applicant’s household income is more than $97,000. He has known of the 
Government’s concern about his finances since his September 2012 interview when he 
was confronted about his finances and each of more than half of the SOR delinquent 
obligations. In November 2015, the SOR reasserted the Government’s concern about 
his delinquent obligations. Since being aware of the Government’s concern, he has 
documented payment of less than $1,300. He currently makes combined payments of 
$75 monthly on three accounts. This provides little confidence that he will be able to 
address the remainder of the SOR delinquent obligations in a timely manner. 
 
This decision should not be construed as a determination that Applicant cannot 
or will not attain the state of true reform and rehabilitation necessary to be eligible for a 
security clearance. The determination of an individual’s eligibility and suitability for a 
security clearance is not a once in a lifetime occurrence, but is based on applying the 
factors, both disqualifying and mitigating, to the evidence presented. Under Applicant=s 
current circumstances, a clearance is not warranted. In the future, if Applicant has paid 
his delinquent obligations, documented the payment of SOR delinquent obligations, 
established compliance with repayment plans or otherwise substantially addressed his 
past-due obligations, he may well demonstrate persuasive evidence of his security 
worthiness.  
  
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). Payments are being made to some of his creditors, but the monthly payments 
are small. Overall, the record evidence leaves me with questions and doubts about 
Applicant’s eligibility and suitability for a security clearance. For these reasons, I 
conclude Applicant has not mitigated the security concerns arising from his delinquent 
financial obligations. 
 
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, Financial Considerations:  AGAINST APPLICANT 
 
Subparagraphs 1.a – 1.e:    Against Applicant 
 
Subparagraphs 1.f – 1.i:    For Applicant 
 
Subparagraph 1.j:     Against Applicant 
 
Subparagraph 1.k:     For Applicant 
 
 
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Subparagraphs 1.l – 1.w:    Against Applicant 
 
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 Applicant a security clearance. 
Eligibility for access to classified information is denied.  
 
 
 
______________________ 
CLAUDE R. HEINY II 
Administrative Judge