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    DEPARTMENT OF DEFENSE 
  DEFENSE OFFICE OF HEARINGS AND APPEALS 
  
  
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 15-04709 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Ray T. Blank 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 $70,000 in 
delinquent student loans upon which he is now making payments and $4,000 of other 
delinquent accounts. The SOR also alleges he falsified his Electronic Questionnaires for 
Investigations Processing (e-QIP). Applicant has mitigated the personal conduct and 
financial considerations security concerns. Clearance is granted. 
  
History of the Case 
 
 On February 10, 2016, acting under the relevant Executive Order and DoD 
Directive,1 the DoD issued a Statement of Reasons (SOR) detailing financial 
considerations and personal conduct 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 February 23, 2016, the Defense Office of Hearings and Appeals 
(DOHA0 received Applicant’s SOR answer and his request for a hearing. On May 17, 
                                                          
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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2016, the Defense Office of Hearings and Appeals (DOHA) issued a Notice of Hearing 
for a hearing to be convened on June 8, 2016. 
 
At the hearing, Government’s Exhibits (Ex.) 1 through 7 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. In July 2016, three 
additional documents were received and admitted as Ex. I, J, and K. On June 21, 2016, 
DOHA received the hearing transcript (Tr.). 
 
Findings of Fact 
 
In Applicant’s answer (Answer) to the SOR, he admitted the SOR debts and the 
falsification allegations. I incorporate Applicant’s admissions as facts. After a thorough 
review of the pleadings, exhibits, and submissions, I make the following additional 
findings of fact. 
 
 Applicant is a 37-year-old technician who has worked for a defense contractor 
since May 2014, and he seeks to obtain a security clearance. (Ex. 1) His annual salary 
is approximately $48,000. (Tr. 61) In May 2014, he divorced and has one son2 age 12 
for whom he pays $218 monthly child support. (Ex. 7) He is current on his child support 
obligation. (Ex. 7) Applicant’s manager, prior manager, and coworkers stated Applicant 
is trustworthy, reliable, flexible, and a hard worker who is willing to work long hours 
outside normal hours. (Ex. A,B,C,D) They say he has exemplary behavior and work 
ethic. 
 
 In August 2006, Applicant started attending classes at a technical institute, from 
which he graduated in 2011. (Ex. 1, Tr. 16) Following graduation, Applicant worked 
temporary jobs until obtaining a stable job in 2012.  
 
Prior to Applicant meeting his ex-wife, he had a single credit card. (SOR Answer) 
In March 2010, he married and it was agreed that since his then-wife was more 
experienced with credit that she should handle the household’s finances. (Tr. 17) His 
then-wife was “very adamant about her handling 100 percent of the finances for our 
household.” (Tr. 54) His then-wife worked the entire time they were married with an 
annual salary of $42,000. (Tr. 69)  
 
Applicant had faith that his then-wife was properly handling the household 
finances. He stated; 
 
I trusted her a lot, a whole lot. She never, to my face, gave me a reason 
not to trust her, but come to find out, she was not very trustworthy in the 
first place. She was a good liar. (Tr. 70)  
 
 
                                                          
2 Applicant first learned he had a son in 2014 and was to meet him for the first time the day following his 
hearing. (Tr. 62) 
 
 
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His faith in her was misplaced3 for she was juggling their bills attempting to pay the bills 
each month. His then-wife had a serious gambling problem, which he learned of the 
night before he moved out of the home. (Tr. 16, 18, 57, SOR Answer) Shortly after 
getting married, his then-wife filed for bankruptcy on those debts she and especially her 
prior husband had acquired prior to the marriage. Applicant and his then-wife never 
establish a joint bank account so Applicant would transfer money to his then-wife’s 
account for her to use to pay their bills. 
  
 The SOR alleges Applicant failed to list his delinquent accounts on his August 
2014 e-QIP. He did so because he was unaware of any debts at the time he completed 
the form. He asked his then-wife repeatedly about their finances only to be told 
everything was fine. His then-wife would intercept any delinquency notices in the mail 
before he arrived home from work. (Tr. 36, 56) She thought she would be able to 
recover and bring the delinquent accounts current. This did not happen. His student 
loans and single credit card account were not being paid. Repeatedly, he specifically 
asked his then-wife about his student loan payments and was told the loans were being 
paid. (Tr. 32) His then-wife was paying her bills, including making her monthly student 
loan payments, but not his. (Tr. 35, 70)  
 
Before Applicant completed his e-QIP, he specifically asked his then-wife about 
the status of their finances. She told him she had been checking their credit score on a 
regular basis and that everything was current. (SOR Answer, Tr. 30, 33) He believed 
her and answered the e-QIP accordingly. (Tr. 13, 59) He never independently verified 
their debts. (Tr. 18) 
 
 In August 2014, Applicant moved from the home to an apartment and struggled 
to get by pending the divorce. (Tr. 13) Shortly before moving out, he learned their car 
was being repossessed. (Tr. 35) With the change of address, he began to receive 
delinquency notices from creditors. In June 2015, a judgment (SOR 1. p) was entered 
against him for approximately $3,000 for his credit card account. He learned4 of the 
judgment when he went to make a purchase and his debit card was declined. His 
account had been attached and $1,140 removed. He arranged to repay the rest of the 
judgment at $250 per month. The judgment has now been paid and released. (Ex. G, H, 
Tr. 38) He was also paying the Internal Revenue Service (IRS) $75 monthly to address 
his tax debt for tax year 2014. As of March 2016, he owed the IRS $132. (SOR Answer) 
He made monthly payments for ten months before his taxes were paid. (Tr. 81)  
 
 Applicant acknowledged it was a mistake to trust his ex-wife and to fail to verify 
their finances. He says his mistake will not be repeated. Now that he is single, he has 
taken control over all of his financial matters. 
 
                                                          
3 Applicant stated, “I gave all my finances to her, which I admit was a stupid mistake, and [my finances 
were] wrecked . . . I should have been more on top of it.” (Tr. 35) 
 
4 The court papers had been served on Applicant’s then-wife, but she shredded the papers after receiving 
them and never told Applicant about the service or the lawsuit. (Tr. 37) 
  
 
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 The majority of the SOR delinquent accounts were student loans, 21 out of 25 
debts, with the Department of Education (DOE), Sallie Mae, and an account which was 
a government unsecured guaranteed loan (SOR 1.t) for education. Applicant’s April 
2016 credit report indicates that five of the accounts (SOR 1.v through SOR 1.z) have 
been transferred to another lender and reflect a zero balance. (Ex. 4) The majority of his 
student loans5 have been consolidated with one creditor. (Tr. 28, 68) He entered into a 
student loan rehabilitation program6 repayment agreement whereby he agreed to pay 
$196 monthly on the loan. (Ex E, F, I, Tr. 29) In March 2016, he started making his 
monthly repayment payment. (Tr. 29) The monthly payments are made by automatic 
drafts on his bank account. (Tr. 29) Additionally, his $1,097 2015 federal income tax 
refund was intercepted and applied to his student loan debt. (Tr. 81)  
 
 In June 2016, a Garnishment Cancellation Notice was issued by the holder of the 
student loans listed in: SOR 1.f, 1.g, 1.l, 1.n, and 1.q. releasing an order of withholding 
from earnings. (Ex. K)  
 
 Other than the student loan obligations, Applicant had two collection accounts 
and two charged-off accounts, which the SOR lists as totaling approximately $4,000. He 
asserts he never had an account with the lender listed in SOR 1.s ($672). (Tr. 39) He 
had no information about the $451 collection account (SOR 1.r), which appears on his 
2014 credit report, but not on his 2015 or 2016 credit reports. (Ex. 3, 4, 5) As previously 
indicated, Applicant paid off the debt listed in SOR 1.p of approximately $3,000, but 
fees, interest, and other expenses increase the amount he paid to $3,700. (Tr. 65) He 
said he wanted to get his student loans under control before starting on the small debts 
(Tr. 66) 
 
Applicant is current on his rent, utility bills, insurance, and vehicle payment. (Ex. 
I) He has a 2007 vehicle with $270 monthly payments. As of June 2015, the balance 
owed on his vehicle was $328. He has no credit cards. (Tr. 63) His monthly net 
remainder (monthly income less monthly expenses and debt payments) is between 
$500 and $800, which includes his pay from his second job. (Tr. 63)  
 
 The SOR alleges Applicant failed to list a 1999 arrest for Reckless Use of 
Explosives and Possession of Explosives without a license. He was 19 years old and 
asserts he was using homemade fireworks to clear brush out of a field. (Ex. 7) He 
learned in high school chemistry class to mix chemicals together to create flash 
fireworks. (Tr. 43) He asserts he was not acting maliciously, but “was just a curious kid.” 
(Tr. 75) He would clear brush and use the flash fireworks to start the bonfire. (Tr. 43) 
The explosives charges were dropped as part of a plea agreement. (Tr. 75) He stated, 
“[m]y lawyer said that that (sic) case – that everything pertaining to that case had been 
sealed and expunged.” (Tr. 45) He also said, 
 
                                                          
5 Applicant is unsure the student loan in SOR 1.t is part of the consolidation. (Tr. 67) 
 
6 After nine months of timely payments the student loan would be brought out of default. (Tr. 30) 
 
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I was under the impression that if the charges were dropped, that you 
were not officially charged with them, because you never go to court for 
them, and you’re never convicted of them. (Tr. 75) 
 
 The explosives-related arrest occurred four days after being arrested for 
possession of a controlled substance for which he was arrested, found guilty, and 
served his sentence. (Ex. 5, 6, Tr. 75) He listed the drug arrest and conviction on his e-
QIP. (Ex. 1) In December 2004, following the period of probation, he received a first 
offenders pardon. Applicant was unsure if he should list the arrest and charges due to 
his pardon and sought guidance from a qualified individual ─ his facility security officer 
(FSO). (Tr. 71) Applicant asserts his FSO said, “Do not divulge that information on 
there, he said, because if it’s been sealed or expunged, then it’s not an admissible thing 
on the e-QIP.” (Tr. 46) This was an incorrect response by the FSO. Following a lengthy 
telephone call with his FSO, the FSO incorrectly responded in an April 2014 email which 
read, “You are correct with your assumption. Expunged arrests and convictions should 
not be disclosed as they are sealed records that do not show up on your background.” 
(SOR Answer, Tr. 74) He took the advice to mean he did not have to list his explosives-
related arrest. 
 
 The e-QIP section on Applicant’s police action states, “For this section report 
information regardless of whether the record in your case has been sealed, expunged, 
or otherwise stricken from the court record, or the charge was dismissed.” (Ex. 1) Even 
with this admonishment, Applicant followed the FSO’s advice and answered “no” to the 
question asking if he had ever been charged with an offense involving firearms or 
explosives.  
 
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. 
 
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 
 
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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 
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 
 
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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’s student loans and one additional account became delinquent. 
Disqualifying Conditions AG ¶ 19(a), “inability or unwillingness to satisfy debts” and AG 
¶ 19(c), “a history of not meeting financial obligations” apply.  
 
 Four Financial Considerations Mitigating Conditions under AG ¶¶ 20 are 
potentially applicable: 
 
(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 
 
Under AG ¶ 20(a), obtaining the student loans did not occur under unusual 
conditions, but the failure to timely pay those loans was an unusual condition unlikely to 
recur. His failure to make timely repayment does not cast doubt on Applicant’s current 
reliability, trustworthiness, or good judgment. Applicant was wrong in trusting his ex-wife 
with the family finances and failing to verify the debts were being timely paid. He paid 
one creditor, repaid the IRS, is making monthly payments on his student loans, and is 
current on other debts. This shows reasonable action on his part. AG ¶ 20(a) and AG & 
20(b) apply. 
 
Applicant does not have a lengthy track record of making student loan payments. 
However, he does have a history of making a repayment arrangement with a creditor 
and honoring that agreement and doing the same with the IRS. Based on Applicant’s 
past conduct in addressing other delinquent debts and being current on other financial 
obligations, it is likely he will honor his student loan agreement. 
 
Under AG & 20(c) and & 20(d), as previously stated, Applicant has reached a 
settlement agreement with the holder of his student loan obligations and is making his 
monthly payments. He paid an additional delinquent obligation (SOR 1.p, $2,978), and 
he entered into a repayment agreement with the IRS, which he honored. Having 
 
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honored the repayment agreement on another debt, he is likely to continue making his 
monthly payments on his current student loan repayment agreement. AG & 20(c) and & 
20(d) apply. Applicant has established a track record of debt payment mitigating the 
financial considerations security concerns.  
 
Applicant asserts he never had an account with the creditor listed in SOR 1.s 
($672) and the debt in SOR 1.r ($451) does not appear on his two most recent credit 
reports. The charged-off account in SOR 1.u does not list an amount owed to the 
creditor. These three debts total approximately $1,100 and as such are not of sufficient 
magnitude to have a security significance under the financial considerations guideline.  
 
Guideline E, Personal Conduct 
 
The security concern under this guideline is as follows: 
 
Conduct involving questionable judgment, lack of candor, dishonesty, or 
unwillingness to comply with rules and regulations can raise questions 
about an individual’s reliability, trustworthiness, and ability to protect 
classified information. Of special interest is any failure to provide truthful 
and candid answers during the security clearance process or any other 
failure to cooperate with the security clearance process. (AG ¶ 15)  
 
The Government has shown Applicant failed to list his delinquent accounts and 
his arrest for explosives on his August 2014 e-QIP. But this does not prove the 
Applicant deliberately failed to disclose information about his finances and arrest. The 
Applicant has denied intentional falsification. Deliberate omission, concealment, or 
falsification of a material fact in any written document or oral statement to the 
Government when applying for a security clearance is a security concern. But every 
inaccurate statement is not a falsification. A falsification must be deliberate and 
material. It is deliberate if it is done knowingly and willfully. An omission concerning 
delinquent obligations is not deliberate if the person did not know of their existence.  
 
Prior to completing his e-QIP Applicant repeatedly asked his then-wife about the 
status of their finances. She indicated everything was alright and he relied on her 
assurances without personally verifying the information. His then-wife lied, but Applicant 
did not know it when he relied upon that information to complete his e-QIP. He 
answered “no” concerning delinquent debts, but that is what he believed was true at the 
time. There was no lie or intentional falsification about his debts.  
 
AG ¶ 17 (b) provides a condition that could mitigate the security concerns: 
 
(b) the refusal or failure to cooperate, omission, or concealment was 
caused or significantly contributed to by improper or inadequate advice of 
authorized personnel or legal counsel advising or instructing the individual 
specifically concerning the security clearance process. Upon being made 
aware of the requirement to cooperate or provide the information, the 
individual cooperated fully and truthfully; 
 
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Applicant was arrested in June 1999 on drug charges and four days later for 
possession of explosives. As part of a plea agreement, the explosives-related charges 
were dropped and Applicant was sentenced on the drug possession charges. After 
completing his sentence, including the required period of probation, he received a 
pardon. He listed his drug conviction when he completed his e-QIP, which was the more 
serious charge. He did not list his arrest for explosives possession because he believed 
he did not have to list it as it had been dismissed. He had a lengthy discussion with his 
company’s FSO, who advised Applicant that he did not have to list the arrest. This 
advice was incorrect, but Applicant’s reliance on this advice when he completed his e-
QIP was reasonable. AG ¶¶ 17(b) applies. After observing Applicant’s demeanor and 
evaluating all the evidence of record, I found his testimony credible on the falsification 
issue. The allegation that he intentionally falsified his e-QIP with intent to deceive is 
unsubstantiated. 
 
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 
problems when his ex-wife failed to pay his student loans and one additional account. 
He has made arrangements to pay his student loans and complied with the terms of that 
agreement. He is not living beyond his means. He is current on his payments on his 
student loans. His current job provides him sufficient funds to address his obligations. 
He is current on his rent, utility bills, insurance, and car payment. His payment history 
indicates he will continue making timely, monthly payments on his debts until the 
obligations are paid.  
 
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 & 
 
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2(a)(1). He answered his e-QIP based on the information he had about his finances and 
based on the advice of his FSO. There was no intentional falsification of his e-QIP. 
Overall, the record evidence leaves me without questions and doubts about Applicant’s 
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 section E3.1.25 of Enclosure 3 of the Directive, are: 
 
 Paragraph 1, Financial Considerations: FOR APPLICANT 
 
  Subparagraphs 1.a through 1.z: For Applicant 
 
Paragraph 2, Personal Conduct:  FOR APPLICANT 
 
 Subparagraphs 2.a and 2.b: 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 a security clearance. 
Eligibility for access to classified information is granted.  
 
 
 
______________________ 
CLAUDE R. HEINY II 
Administrative Judge