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               DEPARTMENT OF DEFENSE 
     DEFENSE OFFICE OF HEARINGS AND APPEALS 
 
 
 
 
In the matter of:  ) 
 ) 
  (Redacted)  )    ISCR Case No. 15-08255 
   ) 
Applicant for Security Clearance  ) 
 
 
Appearances 
 
For Government: Robert J. Kilmartin, Esq., Department Counsel 
For Applicant: Pro se 
 
 
______________ 
 
Decision 
______________ 
 
 
Applicant resigned from a fraternal organization in December 2009 after he had 
misappropriated funds for his personal use. He has begun repaying a $7,426 charged-off 
credit card debt, but concerns persist about his financial judgment and his personal 
conduct. Applicant intentionally concealed his financial problems during his background 
investigation. Clearance is denied. 
 
Statement of the Case 
 
 On July 8, 2016, the Department of Defense Consolidated Adjudications Facility 
(DOD CAF) issued a Statement of Reasons (SOR) to Applicant, detailing the security 
concerns under Guideline F, financial considerations, and Guideline E, personal conduct, 
and explaining why it was unable to find it clearly consistent with the national interest to 
grant or continue security clearance eligibility for him. The DOD CAF took the action under 
Executive Order (EO) 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 for Determining Eligibility for Access to Classified Information (AG) 
effective within the DOD on September 1, 2006. 
 
 
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On July 27, 2016, Applicant answered the SOR allegations and requested a hearing 
before an administrative judge from the Defense Office of Hearings and Appeals (DOHA). 
On September 20, 2016, the case was assigned to me to conduct a hearing to determine 
whether it is clearly consistent with the national interest to grant or continue a security 
clearance for Applicant. On September 27, 2016, I scheduled a hearing for October 19, 
2016. 
 
I convened the hearing as scheduled. Five Government exhibits (GEs 1-5) were 
admitted. GE 3 was admitted over Applicant’s expressed concerns about the accuracy of 
some of the information in the credit report. Twelve Applicant exhibits (AEs A-L) were 
admitted into evidence without objection. Applicant testified, as reflected in a transcript (Tr.) 
received on October 26, 2016. 
 
Summary of SOR Allegations and Response 
 
 The SOR alleges under Guideline F that Applicant owed two charged-off debts of 
$485 (SOR ¶ 1.a) and $7,426 (SOR ¶ 1.b) as of July 8, 2016, and that he misappropriated 
funds during his tenure as master of a fraternal organization in December 2009 (SOR ¶ 
1.c). Under Guideline E, Applicant is alleged to have deliberately falsified a February 2015 
security clearance application (SOR ¶ 2.a) and to have misrepresented facts during a 
September 2015 interview (SOR ¶ 2.b) by not disclosing his delinquent debts.  
 
 Applicant provided a detailed response in which he admitted the allegations. 
Concerning the debt in SOR ¶ 1.a, he indicated that he had not known that automatic 
payments toward the debt had stopped, and that he thought all this time that the debt had 
been paid. He had since paid the debt. Applicant explained that he had just established a 
plan with his creditor to repay the debt in SOR ¶ 1.b after he made previous attempts to 
settle the debt but no one was willing to work with him. As for the alleged misappropriation 
of funds, Applicant explained that he had a painting bill for his home and was short of 
money; that he borrowed funds from a fraternal organization with the approval of the 
lodge’s treasurer provided he repaid the debt the following week when his home-equity 
loan was closing. However, a trustee of the organization told him that he had to repay the 
funds “ASAP.” He explained that when his home-equity loan became available, he met with 
several trustees and repaid the funds. Applicant also admitted the Guideline E allegations. 
However, he then indicated that he did not disclose the debt in SOR ¶ 1.a because he 
believed it had been paid. He admitted that he had not disclosed the debt in SOR ¶ 1.b 
because of embarrassment and frustration. 
  
Findings of Fact 
 
 After considering the pleadings, exhibits, and transcript, I make the following 
findings of fact. 
 
Applicant is a 52-year-old high school graduate with some community college credits 
toward an associate degree. He began working for his defense contractor employer as a 
mail clerk in October 1988, although because he was laid off in approximately August 1991 
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and recalled in May 1992, he has a “bridged” hire date of May 1989. Applicant held a DOD 
secret clearance until June 2010, when his clearance was upgraded to top secret. 
Applicant has held his current position of transportation specialist since the fall of 2013. 
(GEs 1, 2.) 
 
Applicant continued to live with his parents as a single adult. His maternal 
grandmother lived nearby. In December 1996, when Applicant was 32, his grandmother 
deeded her home to him, reserving for herself a life estate in the premises. (AE K.) After 
his grandmother’s death in September 2008, Applicant’s married sister, his only sibling, 
resided in the house. (AE H; Tr. 43, 50.) 
 
In April 2005, Applicant’s father died. (Tr. 50-51.) Of the $9,338 in funeral expenses 
for his father, Applicant paid $3,878. (AE F; Tr. 52.) His mother paid the remainder. (Tr. 
40.) In May 2005, Applicant’s mother deeded her home to him while reserving for herself a 
life estate in the premises. (AE L.) In 2006, Applicant’s mother had a recurrence of cancer 
initially diagnosed in 2000 or 2001. (AE G; Tr. 40, 51.) Applicant, who was a longtime 
member of a fraternal organization (AE I; Tr. 41), “borrowed” $1,500 from the lodge with 
the intention of repaying the funds. He needed the funds to pay an oil bill while his mother 
was at home in hospice care. Applicant knew his request was improper, but the lodge’s 
then treasurer approved it with the expectation that it would be repaid. Applicant testified 
that the treasurer told him to repay the debt when he could. (Tr. 61-64.) Applicant asserts 
that he repaid approximately $200, but that he “lost track of paying the money back.” (Tr. 
40, 65.) He presented no evidence that the debt has been repaid.  
 
In November 2007, Applicant’s mother died. Applicant’s sister contracted to pay 
their mother’s funeral costs totaling $10,360. (AE G; Tr. 53.) 
 
On December 3, 2009, Applicant was serving his third tenure as master of the lodge 
when he asked the organization’s treasurer if he could borrow $2,400 from the fraternal 
organization. Applicant owed a contractor for painting his residence, and the painter was 
not willing to wait until Applicant obtained a home-equity loan that he expected in a week. 
The treasurer gave him the funds, but notified a lodge trustee about Applicant’s loan. 
Applicant understood that he had fiduciary duties to the lodge members (Tr. 58), but he 
was facing financial pressure from owning the homes that had belonged to his parents and 
grandmother, from collection efforts for his mother’s funeral expenses, and from the 
expenses of his upcoming wedding. (AE H; Tr. 42-43.) 
 
On December 4, 2009, Applicant was contacted by the trustee lodge about the 
$2,400 loan. He promised the trustee that he would repay $2,400 in full the following week. 
Available credit information shows that Applicant obtained an $81,995 home improvement 
loan in December 2009. (GE 3.) On December 7, 2009, Applicant had a meeting with the 
trustee and with three past masters of the lodge. Two of the past masters expressed 
concern that Applicant took liberties with his position in that he should have followed proper 
procedures and presented his loan request to the lodge members. (Tr. 60.) The lodge had 
a relief fund. Applicant was confronted about his previous loan of $1,500 from the 
organization in 2007 to pay an oil bill, which he claims had been approved by the then 
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master of the lodge. Applicant expressed his belief that he had repaid the debt by check, 
but the organization had no records of the debt having been paid, and he could not 
substantiate repayment. Applicant resigned from the lodge on December 7, 2009. He 
claims he left under good terms and was just “burned out” as master. (GE 5; Tr. 67, 70.) 
 
On May 11, 2010, Applicant was interviewed by an authorized investigator for the 
Office of Personnel Management (OPM) about allegations that he misappropriated funds of 
the fraternal organization. Applicant acknowledged that he had resigned from the 
organization on December 7, 2009, four days after he borrowed $2,400 to pay his painter. 
Applicant asserted that he had repaid the $2,400 by personal check during his meeting 
with the trustee and past masters on December 7, 2009. He also recalled that he told the 
trustee in January 2010 that he would discuss repayment of the $1,500 from 2007 after his 
wedding. Applicant told the OPM investigator that he had repaid the $1,500. He indicated 
that he resigned from the lodge because he was “burned out” but also because one of the 
former lodge masters was upset with him. (GE 5.) 
 
In May 2010, Applicant married his spouse, who had been a good friend of his 
sister. (GE 1; Tr. 43.) He paid off the $81,995 home-equity loan on his then residence 
through a new home-equity loan of $110,000 in May 2010. (GE 3.) In July 2010, 
Applicant’s sister received a demand for payment of her mother’s funeral expenses. With 
late fees and attorney’s fees, the debt totaled $11,880. In August 2010, Applicant obtained 
a new line of credit for $25,000, using as equity the home that he acquired from his 
grandmother. (GE 3; Tr. 80.) On August 6, 2010, Applicant used some of his new line of 
credit to pay his mother’s burial costs from 2007. (AE H; Tr. 54) 
 
Applicant’s sister apparently assumed that Applicant would continue to pay the 
property taxes and other expenses on their grandmother’s house since he owned the 
home. Her failure to contribute financially became an issue in Applicant’s marriage and 
ultimately led to Applicant being estranged from his sister since August 2013. (GE 2; Tr. 
43-44.) Applicant asked his sister to leave the property. In June 2014, Applicant sold his 
residence (the house that he had acquired from his mother), paying off the home-equity 
loan on the property. (GE 1; Tr. 44-47.) He and his spouse moved into the home vacated 
by his sister. (GE 1.) 
 
Applicant owed a charged-off balance of $7,426 with his credit union (SOR ¶ 1.b) 
which was not resolved in the sale of his residence. (GE 3.) The credit union demanded 
payment in full, which Applicant could not afford. Applicant offered to pay half of the 
balance in a lump sum and then to make smaller payments. According to Applicant, “it just 
ceased to be an issue” in that the credit union continued to demand the full amount and 
would not work with him about accepting smaller payments. (Tr. 48-49.) Applicant did not 
set aside any funds to resolve the debt in the future. (Tr. 77.) 
 
 On February 11, 2015, Applicant completed and certified to the accuracy of a 
Questionnaire for National Security Positions (SF 86) to renew his security clearance 
eligibility. Applicant responded negatively to the financial record inquiries, including to 
whether, in the past seven years, he had any account or credit card suspended, charged 
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off, or cancelled for failing to pay as agreed. He also denied that he was currently over 120 
days delinquent on any debt. (GE 1.) Applicant was ashamed to admit that he owed 
charged-off balances. (Tr. 50, 75.) 
 
 As of February 25, 2015, Applicant was making timely payments on an automobile 
loan obtained for $33,227 in February 2009, but his loan had been 30 days past due 39 
times, including for most of 2013 and 2014. A credit card account opened in February 1999 
was $407 past due on a balance of $485 (SOR ¶ 1.a). The account was charged off in 
September 2012 after no activity since July 2011. His credit card with the credit union 
(SOR ¶ 1.b) had been charged off around May 2011 and was in collection for $7,426. He 
struggled to make his payments when he had two home-equity loans and was 30 days late 
29 times on his $25,000 home-equity line of credit. He brought the loan current after he 
paid off his other home-equity loan in the summer of 2014. (GE 3.) 
 
 During a subject interview on September 9, 2015, an OPM investigator asked 
Applicant all of the financial questions on the SF 86. Applicant responded negatively to 
each question. He was then reminded that he was under oath and confronted with the 
adverse credit information on his credit record. He acknowledged the delinquent debts and 
admitted that he had intentionally falsified his SF 86 and lied regarding his financial 
difficulties because he was embarrassed. Applicant explained that he had fallen behind on 
the credit card account in SOR ¶ 1.a when the balance was $600, but that he had entered 
into a repayment arrangement approximately three years ago and was repaying the debt at 
$30 a month. Applicant indicated that he had used the credit card in SOR ¶ 1.b for general 
household purchases, holiday shopping, and his parents’ funeral expenses. After the 
account was placed for collection, he attempted to make repayment arrangements, but the 
creditor wanted payment in full. He had no communication with the creditor about the debt 
in the past year, but the creditor had also not taken any legal action against him for the 
debt. Applicant expressed an intention to contact the creditor in the near future about a 
possible resolution. He admitted that he had been delinquent in the past on the $110,000 
and $25,000 home-equity lines of credit, but the first loan was now closed and the other 
home-equity loan was current. Applicant expressed regret for his lack of candor about his 
financial issues. (GE 2.) 
 
 Applicant underwent voluntary counseling with a licensed independent certified 
social worker (LICSW) for several months in 2015 for assistance in dealing with “recent 
losses and personal stress that impacted his daily activities, such as managing his financial 
obligations.” Applicant was extremely embarrassed by his lack of focus to his financial 
obligations. In the opinion of the LICSW, Applicant showed marked improvement in 
overcoming his issues. The LICSW was confident that Applicant’s ability to manage his 
obligations would not be an issue in the future. (AE C.) 
 
 As of May 4, 2016, the creditors in SOR ¶¶ 1.a and 1.b were reporting no payments 
on the debts since September 2012 and May 2011, respectively. Applicant was repaying 
his $25,000 home-equity loan at $80 a month and had been current in his payments since 
July 2014. Applicant had paid off his $33,227 car loan in August 2015. He had no new 
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credit accounts on his record. (GE 4.) In February 2016, his spouse obtained a car loan of 
$24,000, to be repaid at $403 per month for six years. (Tr. 81-83.) 
  
In response to DOHA interrogatories, Applicant indicated on June 9, 2016, that he 
was progressing toward full satisfaction on the debt in SOR ¶ 1.a. Concerning his larger 
credit card delinquency in SOR ¶ 1.b, Applicant indicated that he was going to contact the 
credit union about resolving the debt with a written repayment agreement. About his failure 
to disclose his financial delinquencies, Applicant explained: 
 
I failed to disclose my financial obligations because I felt a sense of 
embarrassment, but I realize that by not being truthful from the beginning I let 
my emotions deter myself from providing full disclosure. I feel a sense of 
remorse over the actions I have taken and apologize for those actions. 
 
(GE 2.) Applicant made two payments of $242 by check on June 16, 2016, and June 29, 
2016, to fully satisfy the debt in SOR ¶ 1.a. (AE A.) As of July 27, 2016, Applicant had an 
agreement in place with his credit union to repay the charged-off credit card debt in SOR ¶ 
1.b. As of October 18, 2016, Applicant had made four payments at $50 a month toward the 
debt. (Tr. 66.) The credit union is expecting him to start $100 payments. (AE B; Tr. 79.) 
The lender confirms that Applicant has been working diligently to reduce the charged-off 
credit card debt. Applicant is considered a valued member of the credit union. (AE B.) 
 
 In response to the SOR allegations, Applicant indicated on July 26, 2016, that he 
had been making regular payments from his checking account toward the debt in SOR ¶ 
1.a and was not aware when he completed his SF 86 that payments had stopped from his 
checking account. He asserted that “all this time [he] thought the account was paid in full.” 
About the debt in SOR ¶ 1.b, he claimed he “made previous attempts to settle the debt but 
no one from the bank was willing to work with [him] until now.” About his misappropriation 
of lodge funds, Applicant indicated that “[he] felt slightly intimidated by [his painter’s] 
demeanor and was at a loss with how to proceed.” He claimed he had every intention of 
repaying the lodge and that the treasurer approved his loan (“I made it clear that [the 
treasurer] had approved my request of borrowing the money.”). (Answer.) 
 
 Applicant’s annual salary from his defense contractor employment is approximately 
$47,000. It was approximately $40,000 in 2007 when he improperly borrowed $1,500 from 
the lodge to pay an oil bill. His spouse’s employment income is about $34,000 annually. He 
testified that their monthly household discretionary income is $1,000 after paying the bills. 
Applicant’s spouse handles their finances. To Applicant’s knowledge, they have about 
$300 in their joint checking account. (Tr. 76-79.) He and his spouse used their $2,500 
income tax refund for tax year 2015 to pay some bills, including her credit card debt, and 
they deposited the remainder in a money market account that has a balance of $2,000. (Tr. 
84.) 
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Character References 
 
 Applicant’s work duties include receiving and distributing shipments, preparing 
customs forms, and performing courier duties as needed. (AE J.) Applicant’s supervisor 
considers Applicant to be an asset to their organization. Likewise, a longtime co-worker, 
who serves as the classified material custodian, attested to Applicant being very diligent in 
the handling of classified shipments. Applicant has consistently demonstrated 
trustworthiness in every aspect of his duties. He has no hesitation about recommending 
Applicant for continued security clearance eligibility as he has found Applicant’s character 
and personal integrity to be “entirely unimpeachable.”  Another co-worker, who has worked 
in the classified material control center for 30 years and is familiar with Applicant’s work for 
25 years, has never had a reason to question Applicant’s honesty and trustworthiness in 
fulfilling his job responsibilities. He too has no concerns about Applicant retaining his 
security clearance. (AE D.) None of Applicant’s co-workers mention knowing about the 
issues in the SOR. 
 
Policies 
 
The U.S. Supreme Court has recognized the substantial discretion the Executive 
Branch has in regulating access to information pertaining to national security,  emphasizing 
that “no one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 
U.S. 518, 528 (1988). 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 are required to 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 overall 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 
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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 
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. 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.” See also EO 12968, Section 
3.1(b) (listing multiple prerequisites for access to classified or sensitive information). 
 
Analysis 
 
Guideline F, Financial Considerations 
 
 The security concerns about financial considerations are set forth 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. 
 
 The evidence establishes that Applicant stopped paying on two credit card accounts 
in 2011. Balances of $485 (SOR ¶ 1.a) and $7,426 (SOR ¶ 1.b) were charged off and 
referred for collection. Disqualifying conditions AG ¶ 19(a), “inability or unwillingness to 
satisfy debts,” and AG ¶ 19(c), “a history of not meeting financial obligations,” apply. 
Additionally, Applicant twice misappropriated the funds of a fraternal organization in that he 
improperly “borrowed” $1,500 in 2007 and $2,400 in December 2009 for personal 
purposes. When confronted in December 2009 by a lodge trustee and some previous 
lodge masters about violating his fiduciary obligation to the lodge by acquiring funds for 
personal use outside normal channels, Applicant promised to repay the $2,400 in a week. 
He presented no corroboration for his claim that the debt has been repaid. Assuming he 
repaid the $2,400 with some of his home-equity loan, he acknowledged in October 2016 
that he had paid only about $200 toward the $1,500 taken in 2007. AG ¶¶ 19(a) and 19(c) 
apply to the lodge’s funds that have not been repaid. Applicant may not have set out to 
permanently deprive the lodge of its funds, but his financial breach of trust raises security 
concerns as contemplated within AG ¶ 19(d), which provides: 
 
(d) deceptive or illegal financial practices such as embezzlement, employee 
theft, check fraud, income tax evasion, expenses account fraud, filing 
deceptive loan statements, and other intentional financial breaches of trust. 
 
 Mitigating condition 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,” applies 
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in that the misappropriation of the lodge’s funds and credit card defaults are not recent. 
Yet, even assuming that Applicant repaid the $2,400 to the lodge in December 2009, AG ¶ 
20(a) does not fully mitigate the financial concerns in light of Applicant’s failure to take 
timely steps to address the credit card delinquencies and the funds improperly obtained 
from the lodge in 2007. While he indicated during his September 2015 subject interview 
that he was repaying the credit card debt at $30 a month and that he planned to continue 
to make payments on the debt, available credit reports show no payments on the debt from 
October 2012 through May 2016. He claimed in his response to the SOR that he did not 
know automatic payments had ceased on the debt in SOR ¶ 1.a. Either Applicant was not 
paying the debt or he failed to pay attention. Either way, his irresponsibility is not mitigated 
under AG ¶ 20(b).  
 
 Applicant attributes his financial problems to the costs of owning two properties, 
burial expenses for his parents, and wedding costs. Applicant was deeded his 
grandmother’s home in December 1996 and his mother’s home in May 2005, although 
there is no evidence that Applicant was burdened with all the costs of homeownership 
before the deaths of his mother in November 2007 and grandmother in September 2008. 
He had unexpected burial costs for his mother because of his sister’s refusal to fulfill he 
contractual responsibility, so AG ¶ 20(b) has some applicability. It provides: 
 
(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. 
 
 However, Applicant did not act responsibly under AG ¶ 20(b) when he overextended 
himself on credit (SOR ¶ 1.b). He also exercised poor financial judgment when he 
misappropriated funds belonging to a fraternal organization to pay for painting at his 
residence. Applicant did not provide a reasonable explanation for why he could not have 
waited for disbursement of the home-equity loan to arrange for the painting of his home. 
Furthermore, he was not proactive in addressing the financial issues of security concern 
apart from possibly repaying the $2,400 debt to the lodge in December 2009. He knew as 
of his subject interview in May 2010 that his misappropriation of funds was of concern to 
the DOD. He claimed that the $1,500 debt from 2007 had been repaid. He now admits that 
he likely did not fully repay the debt. He showed similar disregard of the $7,426 credit card 
debt. The credit union demanded full payment after he sold his home in approximately 
June 2014. Applicant ignored the debt until June 2016, when, in response to DOHA 
interrogatories, he indicated that he would be in touch with his credit union to resolve the 
debt. Despite being confronted about the debt during his September 2015 interview, he set 
aside no money toward resolving it. 
 
 Applicant had counseling with a LICSW in 2015, partially to address his lack of 
focus on his financial matters, and the LICSW is confident about Applicant’s ability to 
manage his obligations in the future. Applicant satisfies the counseling component of AG ¶ 
20(c), “the person has received or is receiving counseling for the problem and/or there are 
clear indications that the problem is resolved or is under control.” His financial situation 
10 
 
appears to have stabilized. Applicant’s latest available credit report from May 2016 shows 
a history of timely payments on his home-equity and car loans since the fall of 2014, when, 
with the sale of the house acquired from his mother, he no longer had the expenses of two 
properties and two home-equity loans. He claims to have about $1,000 in monthly 
discretionary income, and he has no new credit accounts.  
 
 AG ¶ 20(d), “the individual initiated a good-faith effort to repay overdue creditors or 
otherwise resolve debts,” has limited applicability. Applicant claimed in September 2015 
that he was making $30 monthly payments on the debt in SOR ¶ 1.a, but credit reports 
show no payments from October 2012 through May 2016. Applicant is credited with making 
two payments in June 2016 to fully satisfy the credit card delinquency in SOR ¶ 1.a, 
although the timing of those payments would suggest that the DOHA interrogatories was a 
primary motivator in satisfying that debt and working with the credit union to address his 
larger credit card delinquency. 
 
 As of his hearing in October 2016, Applicant had made four $50 payments toward 
the $7,426 credit card debt. The Appeal Board has held that an applicant is not required to 
establish that he has paid off each debt in the SOR, or even that the first debts paid be 
those in the SOR.1 However, an applicant needs to show that he has a plan to resolve his 
debts and that he has taken significant steps to implement his plan. Given Applicant’s 
history of late payments on his home-equity loans, his years of inattention to his credit card 
delinquencies, the recency of his repayment plan for the credit card delinquency in SOR ¶ 
1.b, and no proof that he repaid the funds misappropriated from the fraternal organization, 
a longer track record of financial responsibility is required to fully mitigate the concerns 
about Applicant’s financial judgment. 
                                                 
1 The DOHA Appeal Board stated in ISCR Case No. 07-06482, decided on May 21, 2008, in part: 
 
In evaluating Guideline F cases, the Board has previously noted that the concept of 
“‘meaningful track record’ necessarily includes evidence of actual debt reduction through 
payment of debts.” See, e.g., ISCR Case No. 05-01920 at 5 (App. Bd. Mar. 1, 2007). 
However, an applicant is not required, as a matter of law, to establish that he has paid off 
each and every debt listed in the SOR. See, e.g., ISCR Case No. 02-25499 at 2 (App. Bd. 
Jun. 5, 2006). All that is required is that an applicant demonstrate[s] that he has “. . . 
established a plan to resolve his financial problems and taken significant actions to 
implement that plan.” See, e.g., ISCR Case No. 04-09684 at 2 (App. Bd. Jul. 6, 2006). The 
Judge can reasonably consider the entirety of an applicant’s financial situation and his 
actions in evaluating the extent to which that applicant’s plan for the reduction of his 
outstanding indebtedness is credible and realistic. See Directive ¶ E2.2(a) (“Available, 
reliable information about the person, past and present, favorable and unfavorable, should be 
considered in reaching a determination.”) There is no requirement that a plan provide for 
payments on all outstanding debts simultaneously. Rather, a reasonable plan (and 
concomitant conduct) may provide for the payment of such debts one at a time. See, e.g., 
ISCR Case No. 06-25584 at 4 (App. Bd. Apr.4, 2008). Likewise, there is no requirement that 
the first debts actually paid in furtherance of a reasonable debt plan be the ones listed in the 
SOR. 
 
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Guideline E, Personal Conduct 
 
 The security concern about personal conduct is articulated in AG ¶ 15: 
 
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. 
 
 The SOR alleges, and the evidence establishes, that Applicant failed to comply with 
his obligation of full disclosure by falsely denying any financial delinquencies when he 
completed his February 2015 SF 86 and when he was first questioned about any 
delinquent debts during his September 2015 interview with an OPM investigator. Two 
disqualifying conditions under AG ¶ 16 apply because of his deliberate concealment of 
relevant and material financial delinquencies during the application and investigation for his 
continued security eligibility. These conditions are as follows: 
 
(a) deliberate omission, concealment, or falsification of relevant facts from 
any personnel security questionnaire, personal history statement, or similar 
form used to conduct investigations, determine employment qualifications, 
award benefits or status, determine security clearance eligibility or 
trustworthiness, or award fiduciary responsibilities; and 
 
(b) deliberately providing false or misleading information concerning relevant 
facts to an employer, investigator, security official, competent medical 
authority, or other official government representative. 
 
 None of the mitigating conditions under AG ¶ 17 fully applies. Applicant’s belated 
admissions about his delinquent debts came after the OPM interviewer confronted him with 
the adverse credit information on his record. He did not make the good-faith voluntary 
rectification needed to establish AG ¶ 17(a), “the individual made prompt, good-faith efforts 
to correct the omission, concealment, or falsification before being confronted with the 
facts.”  
 
 Moreover, Applicant’s deliberate falsifications cannot reasonably be characterized 
as minor or so far in the past to qualify for mitigation under AG ¶ 17(c), which provides: 
 
(c) the offense is so minor, or so much time has passed, or the behavior is so 
infrequent, or it happened under such unique circumstances that it is unlikely 
to recur and does not cast doubt on the individual’s reliability, 
trustworthiness, or good judgment. 
 
Applicant certified to the accuracy of his SF 86 statements after being informed in writing 
that a knowing and willful false statement could be punished by a fine or imprisonment or 
both under Title 18, Section 1001 of the United States Code. His false certification 
12 
 
constituted criminal conduct that raises serious concerns about his judgment and 
trustworthiness. 
 
 Applicant shows some reform under AG ¶ 20(d) by acknowledging his lack of candor 
and expressing remorse. AG ¶ 20(d) provides: 
 
(d) the individual has acknowledged the behavior and obtained counseling to 
change the behavior or taken other positive steps to alleviate the stressors, 
circumstances, or factors that caused untrustworthy, unreliable, or other 
inappropriate behavior, and such behavior is unlikely to recur. 
 
Yet, Applicant’s reform is incomplete to the extent that he minimizes or excuses his 
behavior by claiming that he had thought “all this time” that his debt in SOR ¶ 1.a had been 
paid and by asserting that “stressors, circumstances, and other factors” caused him to 
answer the SF 86 and interview inquiries as he did. I have considered the favorable 
assessment of the LICSW, but I continue to have concerns about Applicant’s judgment, 
reliability, and trustworthiness. 
 
Whole-Person Concept 
 
Under the whole-person concept, the administrative judge must consider the totality 
of an applicant’s conduct and all relevant circumstances in light of the nine adjudicative 
process factors in AG ¶ 2(a).2 The analyses under Guideline F and Guideline E are 
incorporated in my whole-person analysis. Some of the factors in AG ¶ 2(a) were 
addressed under that guideline, but some warrant additional comment. 
 
 The security clearance adjudication is not aimed at collecting an applicant’s 
personal debts. Rather, it involves an evaluation of an applicant’s judgment, reliability, and 
trustworthiness in light of the security guidelines in the Directive. See ISCR Case No. 09-
02160 (App. Bd. Jun. 21, 2010). Applicant raised considerable doubts about his financial 
judgment by improperly obtaining funds from a fraternal organization in 2007 and again in 
2009 to pay for personal expenses. He claims that the lodge treasurer in 2009 had no 
issues with him borrowing the money, but the evidence suggests otherwise because the 
treasurer notified a lodge trustee. Applicant is a longtime security clearance holder with no 
record of any security violations or infractions. However, when faced with financial stress, 
he put his personal interest ahead of his fiduciary obligation to lodge members. More 
recently, he raised considerable doubts about whether the government can reasonably rely 
on his representations when he lied on his SF 86 and to an OPM investigator. His 
                                                 
2 The factors under AG ¶ 2(a) are as follows: 
 
(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.  
13 
 
falsifications in a security context raise a serious security concern. The protection of 
national security relies on applicants to self-report conduct that jeopardizes security, even 
when that disclosure might damage the applicant’s career. Applicant has shown that he 
cannot be trusted to disclose potentially derogatory information. It is well settled that once a 
concern arises regarding an applicant’s security clearance eligibility, there is a strong 
presumption against the grant or renewal of a security clearance. See Dorfmont v. Brown, 
913 F. 2d 1399, 1401 (9th Cir. 1990). For the reasons noted above, I am unable to find that 
it is clearly consistent with the national interest to grant or continue Applicant’s security 
clearance eligibility. 
 
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:   For Applicant 
   Subparagraph 1.b:   Against Applicant 
   Subparagraph 1.c:   Against Applicant 
 
  Paragraph 2, Guideline E:   AGAINST APPLICANT 
 
   Subparagraph 2.a:   Against Applicant 
   Subparagraph 2.b:   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 or continue Applicant’s eligibility for a 
security clearance. Eligibility for access to classified information is denied. 
 
 
_____________________ 
Elizabeth M. Matchinski 
Administrative Judge