DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 16-00065
)
)
Applicant for Security Clearance )
Appearances
For Government: Bryan Olmos,  Esq., Department Counsel
For Applicant: Pro se
                                                                            
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Decision
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LYNCH, Noreen A., Administrative Judge:
On March 16, 2016, the Department of Defense (DOD) issued Applicant a
Statement of Reasons (SOR) listing security concerns arising under Guideline F
(Financial Considerations). The action was taken under Executive Order (EO) 10865,
Safeguarding Classified Information within Industry (February 20, 1960), as amended;
Department of Defense (DoD) Directive 5220.6, Defense Industrial Personnel Security
Clearance Review Program (January 2, 1992), as amended (Directive); and the
adjudicative guidelines (AG), implemented in September 2006. 
Applicant timely answered the SOR and requested a hearing before an
administrative judge. The case was assigned to me on August 12, 2016. A notice of
hearing, dated November 16, 2016, was issued, scheduling the case for February 7,
2017. Government Exhibits (GX) 1-3 were admitted into evidence without objection.
Applicant testified, presented one witness, and submitted Applicant Exhibits (AX) A-C ,1
which were admitted without objection. The transcript was received on February 14,
AX C had attachments A-L.      1
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2017. Based on a review of the pleadings, testimony, and exhibits, eligibility for access
to classified information is granted.
Findings of Fact
In her answer to the SOR, Applicant admitted the six allegations in the SOR
under Guideline F, with explanations for each item.
Applicant is 54 years old. She received her undergraduate degree in 1984.  She
is married and has two adult children. She works as an administrative specialist level 3
for a government contractor. She has been employed by her employer since 2014.
However, she has had many positions of responsibility throughout the years. (Tr. 22-26) 
Applicant was unemployed for about three months in 2014. She completed her first
security clearance application in 2015. (GX 1)
Applicant’s husband had a construction business which failed in 2009. He
started the company in 1990. In 1998, he had some hardship and filed for chapter 13
bankruptcy due to loss of contracts. (Tr. 31).  Applicant’s financial difficulties began in2
the period of time from 2006 until 2010 when the construction industry crumbled and
her husband had no income. She contacted a debt resolution group in 2010 and signed
an agreement with them. The group’s purpose was to make negotiated settlement with
the various creditors. (AX B) Applicant made payments to the group from 2010 to 2015
in the monthly amount of $812.84. The agreement was for a 60-month period. At that
time, Applicant estimates that the debt was about $80,000. She acknowledged that
some months she sent less but tried to make up the payments. (AX A) She included all
email correspondence from the group concerning payments. She contacted them
almost weekly. Applicant also made some direct payments to one of her creditors. (AX
A)
In 2015, Applicant was notified by the Consumer Protection Bureau that a law
suit had been filed against the group for fraud. Applicant did not receive any funds or
refunds from the group. (Tr. 67) She used an on-line portal when the company was in
business that showed amounts paid, etc., but that is no longer available. (Tr. 76) She
filed a claim against the group, but has not received any information. She estimates that
she had $2,000 or $3,000 in that fund. (Tr. 78)
The SOR alleges four delinquent collection accounts, a charged-off account, and
a past-due account. The total amount of delinquent debt is approximately $65,000.
As to  SOR allegation 1.a, for a collection account in the amount of $27,308,
Applicant received a FORM 1099-C in 2014.
As to SOR allegation 1.b, for a collection account in the amount of $19,907,
Applicant believed that was one of the accounts that the now defunct group was to
This was before Applicant married him.      2
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negotiate a settlement. She has not contacted them and she has not heard from them.
She spoke to an attorney who advised her they would help her settle the account if she
heard from them. (Tr. 82)
As to SOR debt 1.c, for a collection account in the amount of $9,577, Applicant
received a Form 1099-C in 2014 for cancellation of this debt. (AX A)
As to SOR allegation 1.d, for a collection account in the amount of $3,425,
Applicant has not heard from them and has not yet resolved the account. Again, she
testified that when contacted by them, she will ask her attorney to work with them on a
settlement.
As to SOR allegation 1.e, for a charged-off account, with no amount specified in
the SOR, the 2017 credit bureau report shows that the balance due is zero and past
due amount is zero. (GX 3)
As to SOR allegation 1.f., for an account that is past-due in the amount of
$1,986, Applicant settled the debt in 2016. (AX C, Tr. 21) This was the result of an
automobile that Applicant purchased for her daughter.
Applicant paid or settled several non-SOR accounts and provided documentation
that the accounts were resolved. (AX C, Tr. 18). Her 2017 credit bureau report shows
the majority of accounts as “pays as agreed” with zero balance. (GX 3) 
Applicant’s employment position is stable with good health benefits.  Applicant’s
annual salary is about $56,000. (AX A) Her husband is working now, but is paid on
commissions, so his salary is sporadic. (Tr. 36) He also has health issues and she is
paying medical bills in payment plans. Her son is also ill. (Tr. 86) She has a retirement
account and savings account. She acknowledged that years ago she borrowed from her
401(k) account to pay bills. She also used a family inheritance to pay bills. (Tr. 100) 
Applicant is current with all her expenses. She did not receive financial counseling
through the credit group.
Applicant submitted two character references attesting to her professionalism,
moral compass, and integrity.  A co-worker, who has known Applicant for 26 years
speaks to her honesty and can-do attitude. (AX C)
Applicant’s security manager testified that she has known Applicant for about
three years both professionally and personally. She applauds her character,
trustworthiness, and integrity. (Tr. 104) Applicant is a valued member of the team.  The
security manager is aware of the security concerns and has no difficulty recommending
Applicant for a security clearance. (Tr. 104) She sees Applicant on a daily basis.
Policies
When evaluating an applicant’s suitability for a security clearance, an
administrative judge must consider the adjudicative guidelines (AG). In addition to brief
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introductory explanations for each guideline, the adjudicative guidelines list potentially
disqualifying conditions and mitigating conditions. These guidelines are not inflexible
rules of law. Instead, recognizing the complexities of human behavior, they are applied
in conjunction with the factors listed in the adjudicative process. An administrative
judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision.
Under AG ¶ 2(c), this process is a conscientious scrutiny of a number of variables
known as the “whole-person concept.” An 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. 
The U.S. Government must present evidence to establish controverted facts
alleged in the SOR. An 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 burden of proof is something less than a3
preponderance of evidence.  The ultimate burden of persuasion is on the applicant.  4 5
A person seeking access to classified information enters into a fiduciary
relationship with the Government based on 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 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 as to the loyalty of the
applicant concerned.”  “The clearly consistent standard indicates that security clearance6
determinations should err, if they must, on the side of denials.”  Any reasonable doubt7
about whether an applicant should be allowed access to sensitive information must be
 See also ISCR Case No. 94-1075 at 3-4 (App. Bd. Aug. 10, 1995).      3
 Department of the Navy v. Egan, 484 U.S. 518, 531 (1988).      4
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      5
 See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive      6
information), and EO 10865 § 7.
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      7
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resolved in favor of protecting such information.  The decision to deny an individual a8
security clearance does not necessarily reflect badly on an applicant’s character. It is
merely an indication that the applicant has not met the strict guidelines the President
and the Secretary of Defense established for issuing a clearance.
Analysis
Guideline F, Financial Considerations
The security concern for financial considerations is set out in AG ¶ 18:
Failure or an 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.” It also states that “an individual who is
financially overextended is at risk of having to engage in illegal acts to
generate funds.
Applicant admitted she owed delinquent debts. The Government provided
credible evidence to establish the debts. Consequently, Financial Considerations
Disqualifying Conditions (FC DC) AG ¶ 19(a) (inability or unwillingness to satisfy debts),
and FC DC AG ¶ 19(c) (a history of not meeting financial obligations) apply. With such
conditions raised, it is left to Applicant to overcome the case against her and mitigate
security concerns.  
 Financial Considerations Mitigating Condition (FC MC) 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)  partially applies. The financial distress began when
Applicant’s husband’s business deteriorated and failed. The lack of an income caused
financial hardship and the family was supported on Applicant’s income. They are both
employed and have no new delinquent debt. Applicant’s husband has sporadic
employment and health issues.
Financial Considerations Mitigating Condition (FC MC) AG ¶ 20(b) (the
conditions that resulted in the behavior 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) 
applies.  As noted above, Applicant’s financial difficulties began with the loss of her
husband’s business income. Applicant signed an agreement with a group in 2010 to
help her negotiate her debts. She made payments until 2015. She stayed in contact
with them. She learned that they were defendants in a lawsuit in 2015. She never
 Id.      8
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received any money in refunds from them.  She settled some debts and paid several
non-SOR accounts. She is paying medical bills for her husband and son.
FC MC AG ¶ 20(d), (the individual initiated a good-faith effort to repay overdue
creditors or otherwise resolve debts) has application. Applicant took steps to pay non-
SOR debts and obtained professional services to help with the debts. She has received
Form 1099-C’s for two the debts. It is not clear why that occurred. She still has two
debts on the SOR, but her 2017 credit report shows many accounts “pay as agreed.” 
FC MC 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)  applies.
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 an applicant’s
conduct and all the 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. As noted above, the
ultimate burden of persuasion is on the applicant seeking a security clearance. 
I considered the potentially disqualifying and mitigating conditions in light of all
the facts and circumstances surrounding this case, as well as the whole-person factors.
Applicant is 54 years old. She has worked for her current employer since 2014.
Applicant was financially sound until her husband lost his business income. Her income
alone could not pay all bills. She has paid other non-SOR bills. Her credible testimony
and documentation provided convince me that in this case, she acted in a trustworthy
and responsible manner. 
Applicant has shown sound judgment and reliability throughout the years. She is
currently in good financial status. She persuaded me that she mitigated the
Government’s case concerning security concerns under the financial considerations
guideline. She met her burden of proof.   
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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 : FOR APPLICANT
Subparagraphs 1.a-1.f: 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.
Clearance is granted.
                                                     
NOREEN A. LYNCH
Administrative Judge
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