DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
             
In the matter of: )
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)
 )     ISCR Case No.15-01454
 )
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Applicant for Security Clearance                   )    
Appearances
For Government: Julie Mendez, Esq. Department Counsel
For Applicant: Pro se
                                                                            
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Decision
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LYNCH, Noreen, A., Administrative Judge:
On August 27, 2015, The Department of Defense (DOD) issued a Statement of
Reasons (SOR) to Applicant alleging 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;
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. The hearing was originally scheduled for August
4, 2017, but Applicant did not appear. During an August 4, 2017 phone call with
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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Department Counsel, Applicant stated that he “forgot about the hearing.” I rescheduled
Applicant’s hearing, sending an amended notice, for August 18, 2017. Government
Exhibits (GX) 1-4 were admitted into evidence without objection. Applicant testified but
submitted no documents. I kept the record open until September 5, 2017. Applicant did
not submit any documents. On that date, he asked for an extension of time, and I kept
the record open until September 11, 2017. Applicant did not submit any documentation
and the record was closed. The transcript was received on August 28, 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 denied the allegation at SOR ¶¶ 1.b and 1.c.
He admitted SOR ¶¶ 1.d-1.e. He neither admitted or denied ¶ 1.a, but believed the
account was closed. He also provided explanations with his responses.  
Applicant is a 45-year-old security guard for a defense contractor. He divorced in
2012 and has three children. He obtained a GED in 1991. He served in the Army
Reserve from April 1992 until April 2001. He has been with his current employer for five
years.  He completed his security clearance application (SCA)  in July 2013. He has not
previously held a security clearance. (GX 1)
Financial Considerations
The SOR alleges that Applicant has four delinquent debts, which total
approximately $113,383. The delinquent debts include three collection accounts, and a
past-due primary mortgage account. The SOR also alleges that Applicant failed to
timely file his 2011 and 2012 Federal income tax returns.2
Applicant’s answer provided some reasons for the delinquent accounts. He
noted that in the process of divorce, he “signed over the rights” to his home to his ex-
wife and that the house was sold in a short sale.  He believes the short sale was at
some point in 2016. He paid other bills to provide for his children, but he admitted that
he fell behind on things he needed to do. He pays child support. The Federal tax
returns were in the process of being prepared so that he could file. 
As to SOR ¶ 1.a, a collection account in the amount of $634, Applicant stated
that the account was paid. He had no documentation to confirm his assertion.
As to SOR ¶ 1.b, Applicant denied this past-due mortgage account in the amount
of $112,527 because the house was sold and he no longer owned the property. He
noted his wife took over the house, but she did not pay the mortgage. There was no
legal settlement agreement providing that his ex-wife would take legal ownership of the
At the end of the hearing, DC made a motion to amend the SOR to conform to the evidence. Applicant did      2
not timely file his Federal income tax return from 2013-2016 (1.f) In addition, Applicant failed to timely file his
state income tax returns for 2011-2016 (1.g) The SOR was amended. Motion granted.
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home.  It was sold in a short sale. He provided no documentation to prove this claim.
He does not recall receiving any tax paperwork related to the sale of the house. (Tr. 21)
He stated that this account should not be on his credit report, because there was no
deficiency balance. (Tr. 16)
As to SOR ¶ 1.c, a collection account for $117, he denied owing the account as
he never had service with the company. He disputed the account, but he provided no
evidence of the dispute.
As to SOR ¶ 1.d, a collection account in the amount of $105, he believes this
was a parking ticket and he intends to pay the account. (Tr. 17) He also thought he paid
some parking tickets, but he knows he still has some outstanding ones.
As to SOR ¶ 1.e, the failure to file timely his Federal tax returns for 2011 and
2012, Applicant stated that he fell and was hurt and could not work. He has a plan to be
debt free in six months to a year. He still has not filed the Federal returns, but he plans
to do so. He also has not filed the 2013-2016 Federal income tax returns. (Tr. 22)
Applicant’s salary was $69,000 a year. He was injured in December 2016 and
returned to work August 10  2017. He is in court attempting to get worker’sth
compensation. He did not provide details. He did not receive unemployment benefits.
He used some savings to pay daily expenses and he moved and lives with his father.
(Tr. 24) Since he returned to work, he is an hourly wage earner. He believes he earns
$22 an hour.  He has not obtained any financial counseling. (Tr. 26)
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 national security
eligibility 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.
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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 preponderance3
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 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 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
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
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
 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
 Id.      8
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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
The Government produced credible evidence to establish the delinquent debts
and the non-filing of Federal and state income tax returns.  Consequently, the evidence
sufficient to raise disqualifying conditions. ¶¶ 19(a), 19(c), 19(b) and 19 (g).
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
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
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(g) the individual has made arrangements with the appropriate tax authority to file
or pay the amount owed and is in compliance with those arrangements.
Applicant separated, divorced, and encountered delinquent debt. He also fell and
could not work, which was an event beyond his control. He has encountered many
challenges to provide for his children. However, he has ongoing financial problems and
has not presented any evidence that he is resolving his delinquent debts. With lack of
any documentation of his efforts, it is not possible to find that he has acted responsibly
in this case. He has not had financial counseling, nor did he present documentation that
he has a clear plan to resolve his debts or income tax returns. He admitted that he has
not filed his Federal or state income tax returns from 2011 through 2016. MC AG ¶¶ 20
(a), (b), (c), (d and (g) do not apply. He has not met his burden to alleviate the security
concerns under the financial considerations guideline.
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. 
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 45 years old. He served in the Army Reserve. He is divorced and has
three children. His divorce and injury impacted his ability to pay his debts. He now lives
with his father as his income has been reduced. He pays child support. He was given
time to provide documentation to show what he has paid and how he is resolving his
income tax returns. He has not provided any evidence that he has rectified his financial
situation in any way. He did not submit documentation despite the extended period of
time I kept the record open. He did not articulate what plan he has to file his Federal and
state income tax returns for the years in question. He intends to pay his debts, but a
promise to pay is not sufficient to carry his burden.  
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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 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.g:  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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