DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
             
In the matter of: )
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)     ISCR Case No.15-02533
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Applicant for Security Clearance                  )     
Appearances
For Government: Nicole A. Smith, Esq., Department Counsel
For Applicant: Pro se
                                                                            
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Decision
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LYNCH, Noreen, A., Administrative Judge:
The Department of Defense (DOD) issued a Statement of Reasons (SOR) to
Applicant alleging security concerns arising under Guideline F (Financial
Considerations). The SOR was dated October 2, 2015. The action was taken under
Executive Order (EO) 10865, Safeguarding Classified Information within Industry
(February 20, 1960), as amended; DOD 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 decision based on the
written record in lieu of a hearing. Department Counsel submitted a File of Relevant
Material (FORM), dated April 21, 2016.  Applicant received the FORM on May 3, 2016.1
Applicant did not respond to the FORM. The case was assigned to me on March 21,
The Government submitted six items for the record.      1
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2017. Based on a review of the case file, eligibility for access to classified information is
denied. 
Findings of Fact
In his answer to the SOR, Applicant admitted the single allegation listed on the
SOR under Guideline F (Financial Considerations). He provided no additional
information or explanations. (Item 2)
Applicant is a 27-year-old who is a welder for a defense contractor. He is single
and has one minor child. He obtained his GED in 2007 and received a certification
degree in welding from a technical institute in 2012. Applicant has worked for his
current employer since 2014. He completed a security clearance application in  2014.
(Item 3 )
Financial Considerations
The SOR alleges a single allegation, specifically that Applicant filed for chapter 7
bankruptcy in October 2014, which was discharged in February 2015. (Item 1)
Applicant’s liabilities, which were discharged, totaled $35,000. (Item 6)
Applicant was unemployed from May 2010 to September 2010, while he was
incarcerated. He stated that his financial difficulties began in June 2010. He began
employment in September 2010 as a full time employee and then part time while he
attended school. (Item 4) He worked for various employers in low-paying jobs until he
obtained his position with his current employer in 2014. 
Applicant disclosed in his 2014 security clearance application and in his
investigative interview that his financial difficulties began when he was incarcerated. In
his security clearance application, he stated that he intended to use a debt
consolidation company to resolve his debts. (GX 1) Also, during his investigative
interview, he disclosed his various debts and stated that he would try to file a petition for
chapter 7 bankruptcy. He eventually filed for the Chapter 7 in October 2014. When he
filed the bankruptcy petition, he listed his income as $2,357.78. (Item 5)
Applicant’s 2014 credit bureau report reflects that he is current on his child
support. He had student loans in deferment.  (Item 5)
Applicant did not respond to the FORM to explain what if anything he did to
resolve any debts until he filed for bankruptcy in 2014. Without such information it is not
possible to assess what attempts, if any, Applicant made to resolve any of his
delinquent debts before 2014. He started employment in 2010 and after returning to
full-time employment in 2010, he could have made some small payments to various
accounts. Applicant did not meet his burden of proof in this case. He did not provide
information to mitigate the security concerns under the financial considerations
guideline.
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Policies
When evaluating an applicant’s suitability for a security clearance, an
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. 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. Likewise, I have avoided drawing inferences grounded on mere
speculation or conjecture.
The 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 a preponderance2
of evidence.  The ultimate burden of persuasion is on the applicant.  3 4
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 EO 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 clearance5
 See also ISCR Case No. 94-1075 at 3-4 (App. Bd. Aug. 10, 1995).      2
 Department of the Navy v. Egan, 484 U.S. 518, 531 (1988).      3
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      4
 See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive      5
information), and EO 10865 § 7.
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determinations should err, if they must, on the side of denials.”  Any reasonable doubt6
about whether an applicant should be allowed access to sensitive information must be
resolved in favor of protecting such information.  The decision to deny an individual a7
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
AG ¶ 18 expresses the security concern pertaining to financial considerations:
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 over-
extended is at risk of having to engage in illegal acts to generate funds.
Compulsive gambling is a concern as it may lead to financial crimes
including espionage. Affluence that cannot be explained by known sources
of income is also a security concern. It may indicate proceeds from
financially profitable criminal acts.
AG ¶ 19 describes conditions that could raise a security concern and may be
disqualifying:
(a) inability or unwillingness to satisfy debts;
(b) indebtedness caused by frivolous or irresponsible spending and the
absence of any evidence of willingness or intent to pay the debt or
establish a realistic plan to pay the debt;
(c) a history of not meeting financial obligations;
The Government produced credible evidence to establish that Applicant filed for
Chapter 7 bankruptcy in October 2014 and the debts were discharged in 2014. Applicant
admits the single allegation. Consequently, the evidence is sufficient to raise
disqualifying conditions ¶¶ 19(a), and 19(c)
AG ¶ 20 provides conditions that could mitigate the security concerns:
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      6
 Id.      7
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(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
(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.
Applicant has been employed since September 2010, but provided no information
that he attempted to resolve his delinquent debt. While he was unemployed, and this
exacerbated any financial issues, he waited until 2014 to file for bankruptcy to resolve
his financial debts. He told his investigator that he would try to consolidate his debts, but
he chose bankruptcy, which is a legal means to resolve debts. He had some
circumstances beyond his control, but he has not shown any evidence that he made
good faith efforts after returning to work in 2010 to repay his creditors. Thus 20(b)
cannot apply as he did not show that he acted responsibly under the circumstances. No
other mitigating factors apply in this case.
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. 
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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 27 years old. He has a minor child who he supports. He has been working
since 2010 in various positions. He was unemployed for a period of time, but he has not
provided any information that he acted responsibly to resolve some or all of his
delinquent debts. He filed forCchapter 7 bankruptcy in 2014, and the debts were
discharged in 2014. That is a legal means to resolve debts. However, Applicant did not
provide information to carry his burden of proof in this case by providing information as
to his actions taken before 2014 to address his debts. 
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: AGAINST APPLICANT
Subparagraph 1.a: 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.
Clearance is denied. 
                                                     
NOREEN A. LYNCH
Administrative Judge
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