DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
             
In the matter of: )
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)     ISCR Case No.15-03775
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Applicant for Security Clearance                  )     
Appearances
For Government: Rhett Petcher, 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 January 29, 2016. 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. Revised Adjudicative
Guidelines were issued on December 10, 2016, and became effective on June 8,
2017.1
Applicant timely answered the SOR and requested a hearing. The case was
assigned to me on February 15, 2017. A notice of hearing was issued on March 27,
In this case, the SOR was issued under Adjudicative Guidelines effective within the Defense Department      1
on September 1, 2006. Revised Adjudicative Guidelines became effective June 8, 2017. My decision and
formal findings under the revised Guideline F would not be different under the 2006 Guidelines.
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2017, scheduling the hearing for June 22, 2017. Government Exhibits (GX) 1-4 were
admitted into evidence without objection. Applicant testified but did not submit any
exhibits for the record. The transcript was received on June 30, 2017.  Based on a
review of the pleadings, testimony, and exhibits, eligibility for access to classified
information is denied. 
Findings of Fact
In his answer to the SOR, Applicant admitted all allegations in SOR ¶¶ 1a, 1.b,
and 1c. He provided explanations for the allegations under Guideline F (Financial
Considerations).  
Applicant is a 44-year-old environmental specialist for a defense contractor. He
is single and has one child. He graduated from high school in 1991 and attended
technical courses. Due to lack of steady employment in the construction field, he sought
employment in the contracting field. He has worked for his current employer since 2014. 
Applicant completed his security clearance application (SCA)  in May 2014. (GX 1)
Financial Considerations
The SOR alleges that Applicant failed to file his Federal and state income tax
returns for tax years 2005 through 2013 and had a delinquent collection account in the
amount of $9,562.
Applicant stated that he was unemployed for the years 2011, 2012, and 2013,
and part of 2010, 2005, and 2006, when he was a stay at home father. He takes care of
his mother and the mother of his child. (GX 2) Applicant and his partner lived together
until 2013. She does not contribute financially to their child. She is not capable of taking
care of the child, thus Applicant’s son lives with him full time. Applicant has not filed any
formal papers with the court as to custody, because he does not have the money. (GX
2) 
Applicant disclosed in his SCA that he failed to file his tax returns since 2005 due
to unemployment and living in poverty. He stated that he refused welfare and was
depressed and stressed that he did not have enough money to sustain himself and his
family. He stated that he will resolve the financial issues. (Tr. 17) He also has other bills
to pay. Applicant was not certain how much he owed in taxes. Applicant added that he
probably has not filed his tax returns for the years 2007, 2008, 2009 and 2010. (GX 2)
  
Applicant explained during his 2014 investigative interview when he was late on
his mortgage account, he was able to borrow money from family or friends. In 2013, his
mother gave him about $28,000 to help him financially. He used his savings to pay for
his mortgage account, but when the mother of his child left the home and did not help
with the mortgage payments, he could not maintain his expenses. He did not receive
any unemployment benefits. At one point, he thought he would sell his home and move
in with his mother. (GX 2)
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Applicant further explained that the mother of his child abandoned them in 2013
and because he lost her income, financial issues were exacerbated. The mother of his
child has some mental health issues, which devastated Applicant and his son. He
looked for jobs and caught fish to eat.
At the hearing, Applicant stated that his partner is now back in the home and
sometimes works part time. She pays for her medications and sometimes buys some
groceries. (Tr.20)
In 2010, Applicant’s work was part time in the construction field. His last period of
stable, full-time work in the construction field was in 2009. Applicant has sufficient
income to live frugally week to week. He hunts for food, drives a ten-year-old truck, and 
does not make random purchases. He still hopes to sell his house. He has not received
financial counseling or established a debt consolidation plan.
As to the amount of $9,562 (SOR 1.c), this is the result of a credit card which
was opened in 2003 or 2004. He made payment until 2008, and he recalls in 2010 the
account was turned over to a collection agency. An offer of settlement was made to
Applicant, but he does not have the money to pay the settlement amount. The company
would not accept a payment plan. 
As to the SOR allegations 1.a and 1.b, Applicant stated that he just could not
seem to filing his income tax returns. He needed an accountant but he is unable to
afford to hire one. (Tr. 29) He stated that he has now filed his 2014-2016. He claims
that he still needs help to prepare the unfiled ones. (Tr. 31) He is still uncertain how
much he owes in taxes, if anything. (Tr. 32)
 The 2016 credit bureau report in the file shows that Applicant has various
accounts that reflect that he pays as agreed. (GX 3) It also confirms the collection
account. He is current on his mortgage loan. (GX 4) 
Applicant earns about $53,000 a year. He believes he has $7,000 in savings,
which he needs to pay property taxes. His home is now paid in full. (Tr. 39) He may
have to buy a new truck soon. Some months Applicant has a positive net remainder. 
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,
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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 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 clearance5
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.
 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.
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      6
 Id.      7
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Analysis
Guideline F, Financial Considerations
AG ¶ 18 expresses the security concern pertaining to financial considerations:
Failure 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 or sensitive information. Financial distress can also be
caused or exacerbated by, and thus can be a possible indicator of, other
issues of personnel security concern such as excessive gambling, mental
health conditions, substance misuse, or alcohol abuse or dependence. An
individual who is financially over-extended is at a greater risk of having to
engage in illegal or otherwise questionable acts to generate funds. 
Affluence that cannot be explained by known sources of income is also a
security concern insofar as it may result from criminal activity, including
espionage.
AG ¶ 19 describes conditions that could raise a security concern and may be
disqualifying:
(a) inability to satisfy debts;
(b) unwillingness to satisfy debts regardless of the ability to do so;
(c) a history of not meeting financial obligations; and
(f) failure to file or fraudulently filing annual  Federal, state, or local income
tax returns or failure to pay annual Federal, state, or local income tax as
required;
The Government produced credible evidence to establish the delinquent debts
and the failure to file federal and state tax returns from 2005 to 2013. Consequently, the
evidence is sufficient to raise disqualifying conditions ¶¶ 19(a), 19(c) and 19(f).
AG ¶ 20 provides conditions that could mitigate the security concerns:
(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, clear
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victimization by predatory lending practices, or identity theft), and the
individual acted responsibly under the circumstances;
(c) the person has received or is receiving counseling for the problem from
a legitimate and credible source, such as a non-profit credit counseling
service; and there are clear indications that the problem is being resolved
or is under control;
(d) the individual initiated and is adhering to a good-faith effort to repay
overdue creditors or otherwise resolve debts; and
(g) the individual has made arrangement with the appropriate tax authority to file
or pay the amount owed and is in compliance with those arrangements.
Applicant had unsteady employment as a construction worker. He was
unemployed for many years, which explains some earlier financial problems. He found
employment but his partner and the mother of his child abandoned them in 2013, and he
lost her income. She does not contribute financially to household expenses. Applicant
helped his mother. He also tried to help his partner. He could not maintain his expenses.
He used his savings and borrowed money. He lives frugally, but he does not have
sufficient income to arrange a settlement offer for the collection account. He has not
received any counseling.  Mitigating condition  AG ¶ 20(b) applies in part. None of the
other mitigating conditions apply.
 Applicant incurred financial debt and has not filed his federal and state returns
for many years. He supported his family and his mother despite the fact that he did not
have much income. Applicant now has steady employment and earns about $50,000  a
year.  However, he has not met his burden to mitigate the financial security concerns 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(d)
(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 44 years old. He worked in the construction field for many years, but
did not have steady employment. He was unemployed for many years. He supported his
child on his income when his partner could not work and left the Applicant and his son.
She is now working part time. Applicant could not maintain his expenses on his income
alone. He has a collection account but did not have enough money to pay for a
settlement offer. 
Applicant has not filed his federal and state tax returns for many years. He has
filed his 2014-2016 tax returns. He intends to pay his debts and file his tax returns but he
needs help. He still has unresolved debt despite his good intentions. He has supported
his son who is seven years old. He always searched for employment. He tried to help his
partner with her illness. 
After weighing the disqualifying and mitigating conditions under Guideline F, and
evaluating all the record evidence in the context of the whole person, I conclude
Applicant has not mitigated the security concerns under Guideline F. Accordingly, I
conclude that he has not carried his burden of showing that it is clearly consistent with
the national interest to grant him eligibility for access to classified information.
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
Subparagraphs 1.a-1.c:  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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