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      DEPARTMENT OF DEFENSE      
 DEFENSE OFFICE OF HEARINGS AND APPEALS 
In the matter of: ) 
) 
) ISCR Case No. 16-01712 
) 
) 
Applicant for Security Clearance ) 
Appearances 
For Government: Adrienne Driskill, Esq., Department Counsel 
For Applicant: Pro se 
November 1, 2017 
______________ 
Decision 
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GOLDSTEIN, Jennifer, Administrative Judge: 
Applicant incurred more than $66,000 in delinquent debt over the past nine 
years, most of which he has been unable or unwilling to repay. Resulting security 
concerns were not mitigated. Based upon a review of the pleadings, testimony, and 
exhibits, national security eligibility is denied. 
History of Case 
On September 15, 2015, Applicant submitted an Electronic Questionnaire for 
Investigations Processing (e-QIP). On September 1, 2016, the Department of Defense 
Consolidated Adjudications Facility (DoD CAF) issued Applicant a Statement of 
Reasons (SOR) alleging security concerns 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 Directive 5220.6, 
Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as 
amended (Directive); and the adjudicative guidelines effective within the DoD after 
September 1, 2006.  
 
 
 
 
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 Applicant answered the SOR in writing on October 14, 2016 (Answer), and 
requested a hearing before an administrative judge. The Defense Office of Hearings 
and Appeals (DOHA) assigned the case to me on April 25, 2017. DOHA issued a Notice 
of Hearing on May 4, 2017, setting the hearing for July 27, 2017. On that date, 
Department Counsel offered Government Exhibits (GE) 1 through 7 into evidence. 
Applicant testified and offered Exhibits (AE) A through H into evidence. All exhibits were 
admitted without objection. I granted Applicant’s request to leave the record open until 
August 10, 2017, to permit submission of additional evidence. On August 8, 2017, 
Applicant submitted additional exhibits, which were marked AE I through AE M and 
admitted, without objection. DOHA received the hearing transcript (Tr.) on August 7, 
2017.  
 
The SOR in this case was issued under the adjudicative guidelines that came 
into effect within the DoD on September 1, 2006. Security Executive Agent Directive 
(SEAD) 4, National Security Adjudicative Guidelines, implemented new adjudicative 
guidelines that came into effect on June 8, 2017. All national security eligibility 
determinations issued on or after June 8, 2017, are to be decided using the new 
National Security Adjudicative Guidelines for Determining Eligibility for Access to 
Classified Information or Eligibility to Hold a Sensitive Position (AG), as promulgated in 
Appendix A of SEAD 4. I considered the previous adjudicative guidelines, as well as the 
new AG, in adjudicating Applicant’s national security eligibility. This decision is issued 
pursuant to, and cites, the new AG; but my decision would be the same under either set 
of guidelines. 
 
Findings of Fact 
 
 Applicant is employed as an electrical plater, and is applying to renew his 
security clearance in connection with that work. (GE 1; Tr. 36.) He admitted the 
allegations in SOR ¶¶ 1.k and 1.o. He denied the allegations in SOR ¶¶ 1.a through1.j, 
1.l through 1.n, and 1.p. (Answer; Tr. 9-10.) Applicant’s admissions are incorporated in 
the findings below.  
 
 Applicant is 61 years old. He is married. He has an adult son and an adult 
stepson. He has worked for his employer for 28 years and has held a security clearance 
for the duration of his employment. (GE 1: Tr. 31-32, 39.) 
 
 Applicant attributed his delinquent debts to the nationwide economic downturn in 
2008, and his wife’s seasonal employment. He explained that his work hours were 
reduced due to the economic downturn. He submitted earning statements that show his 
income declined between 2008 and 2016 from $57,000 annually to $38,000 annually. 
Further, in 2008 interest rates on his credit cards increased, and Applicant could no 
longer afford to make payments on them. (AE B; AE C; AE H; Tr. 28, 34, 40, 48.) 
 
 SOR ¶¶ 1.a through 1.j alleged ten delinquent student loans that Applicant 
obtained in approximately 2010, totaling an estimated $39,000. Applicant claimed he 
asked this creditor to set up automatic payments from his bank account, but was told 
 
 
 
 
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that was not possible unless he defaulted on the loans. Beginning in August 2011, he 
ceased voluntary payments on these loans. As a result, Applicant’s wages have been 
garnished by this creditor since 2011 to satisfy this debt. He has not negotiated a 
separate payment arrangement with this creditor, because the garnishment is automatic 
and forces him to repay this debt on a monthly basis. He is “using it as a tool to get 
done what [he] need[s] to get done as fast as possible.” (Tr. 44.) The garnishment is 
fixed at 16% or 17% of Applicant’s gross income. The amount garnished fluctuates, 
depending the number of hours Applicant works in a pay period. His pay has been 
garnished regularly for the past six years, as documented in his transaction report. He 
has resolved approximately $31,000 of this original debt plus accrued interest. 
However, $30,757.36 remains owing. (GE 3; GE 6; GE 7; AE C; AE D; AE E; AE F; AE 
G; AE J; AE K; AE L; AE M; AE N; Tr. 42-47.) 
 
 SOR ¶ 1.k alleged Applicant was indebted on a collection account in the amount 
of $277. This debt was for unpaid insurance and was placed for collections in 2011. He 
indicated he would have repaid this account, but the debt has been sold. He does not 
know who currently holds this account. It is unresolved. (GE 7; AE H; Tr. 33-34, 48-49.) 
 
 SOR ¶ 1.l alleged Applicant was indebted on a charged-off account in the 
amount of $6,034. This debt was for a credit card that was charged-off in October 2015. 
It is unresolved. (GE 7; Tr. 49-51.) 
 
 SOR ¶ 1.m alleged Applicant was indebted on a collection account in the amount 
of $1,574. Applicant contested this debt in 2008 because he believed that the charges 
were in excess of the contractual agreement. However, he produced no documentation 
to support his claim. His credit report, dated October 2015, reflects that this account 
was opened in March 2011. This debt is unresolved. (GE 7; AE H; Tr. 51-53.) 
 
 SOR ¶ 1.n alleged Applicant was indebted on a collection account in the amount 
of $8,462. This debt was reported delinquent in 2015. Applicant does not recognize this 
account. It is unresolved. (GE 7; Tr. 53-54.) 
 
 SOR ¶ 1.o alleged Applicant was indebted on a collection account in the amount 
of $6,600. Applicant testified this debt was “one of the first ones [he was] going to pay.” 
However, he failed to produce documentation of any action to resolve this debt. This 
debt has been delinquent since 2009. (GE 7; Tr. 55.) 
 
 SOR ¶ 1.p alleged Applicant was indebted on a collection account in the amount 
of $4,704. Applicant intends to resolve this debt, but does not have the funds to do so at 
the current time. It has been delinquent since 2015. (GE 7; Tr. 55-56.) 
 
 Applicant testified that he no longer relies on credit cards. His wife is taking 
classes to improve her potential to earn additional income. (Tr. 58.) He indicated his 
credit score has slowly improved since 2004. (AE A.) His personal financial statement 
showed he had approximately $138 left over after his monthly expenses were satisfied, 
and was making payments on one $800 unalleged debt out of those available funds. 
 
 
 
 
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(GE 4.) Applicant has $5,000 in savings. (Tr. 61.) He files his state and Federal income 
tax returns on time annually and does not owe any unpaid taxes. (Tr. 63-64.)  
  
Policies 
 
 When evaluating an applicant’s suitability for national security eligibility, the 
administrative judge must consider the adjudicative guidelines. In addition to brief 
introductory explanations for each guideline, the adjudicative guidelines (AG) list 
potentially disqualifying conditions and mitigating conditions, which are to be used in 
evaluating an applicant’s national security eligibility. 
 
 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 AG ¶ 2 describing the adjudicative process. The administrative judge’s 
overarching adjudicative goal is a fair, impartial, and commonsense decision. The entire 
process is a conscientious scrutiny of applicable guidelines in the context 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 national security 
eligibility will be resolved in favor of the 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. I have not drawn inferences based on mere 
speculation or conjecture.  
 
 Directive ¶ E3.1.14 requires the Government to present evidence to establish 
controverted facts alleged in the SOR. Directive ¶ E3.1.15 says that an “applicant is 
responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or 
mitigate facts admitted by the applicant or proven by Department Counsel, and has the 
ultimate burden of persuasion as to obtaining a favorable clearance decision.”  
 
 A person applying for national security eligibility seeks to enter into a fiduciary 
relationship with the Government predicated upon 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 national security eligibility. Decisions include, by necessity, consideration of the 
possible risk the applicant may deliberately or inadvertently fail to protect or safeguard 
classified information. Such decisions entail a certain degree of legally permissible 
extrapolation as to potential, rather than actual, risk of compromise of classified or 
sensitive information.  
 
 Finally, as emphasized in Section 7 of Executive Order 10865, “[a]ny 
determination under this order adverse to an applicant shall be a determination in terms 
of the national interest and shall in no sense be a determination as to the loyalty of the 
 
 
 
 
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applicant concerned.” See also Executive Order 12968, Section 3.1(b) (listing multiple 
prerequisites for access to classified or sensitive information.) 
 
Analysis 
 
Guideline F: Financial Considerations 
 
 The security concerns relating to the guideline for financial considerations are set 
out in AG ¶ 18, which reads in pertinent part:       
 
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 personal security concern such as excessive gambling, mental 
health conditions, substance misuse, or alcohol abuse or dependence. An 
individual who is financially overextended is at greater risk of having to 
engage in illegal or otherwise questionable acts to generate funds. 
 
 AG ¶ 19 describes three conditions that could raise security concerns and may 
be disqualifying in this case:  
 
(a) inability to satisfy debts; 
 
(b) unwillingness to satisfy debts regardless of the ability to do so; and 
 
(c) a history of not meeting financial obligations. 
 
Applicant is paying his student loans through a garnishment from his pay. He 
failed to document payments to any of his other creditors. He has been unable or 
unwilling to repay these debts. These financial issues date back over nine years, and 
continue to date. These facts establish prima facie support for the foregoing 
disqualifying conditions, and shift the burden to Applicant to mitigate those concerns. 
 
 The guideline includes five conditions in AG ¶ 20 that could mitigate the security 
concerns arising from Applicant’s alleged financial difficulties:  
 
(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 
 
 
 
 
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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 individual has received or is receiving financial 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 
 
(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 continues to owe more than $30,000 in student loan debt. His other 
SOR alleged debts remain unaddressed and unresolved. His financial statement, 
showing a $138 monthly surplus, does not demonstrate sufficient funds to resolve his 
remaining debts. While his wife is working to increase her earning potential, he failed to 
establish that such problems will not recur. Mitigation was not established under AG ¶ 
20(a).  
 
Applicant claimed that some of his debt problems were caused by his 
underemployment, and his wife’s seasonal job. However, Applicant provided no 
information as to how he has been responsibly handling his debts while they were 
arising. Forcing a creditor to seek garnishment does not establish responsible action 
with respect to the student loans. Mitigation was not established under AG ¶ 20(b).  
 
No evidence of financial counseling from a legitimate and credible source was 
provided. Further, there are no clear indications that Applicant’s financial problems are 
under control. While his student loans are being resolved through garnishment, there is 
no evidence of a good-faith effort to resolve that debt or others. Accordingly, Applicant 
failed to establish mitigation of financial security concerns under the provisions of AG ¶¶ 
20(c) or 20(d). 
 
Applicant produced neither evidence to establish he has a reasonable basis to 
dispute the legitimacy of any of his past-due debts, nor documented proof to 
substantiate any basis of the dispute. AG ¶¶ 20(e) has not been established. 
 
Whole-Person Concept 
 
 Under the whole-person concept, the administrative judge must evaluate an 
applicant’s national security eligibility by considering the totality of the applicant’s 
 
 
 
 
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conduct and all relevant 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. 
 
According to AG ¶ 2(c), the ultimate determination of whether to grant national security 
eligibility must be an overall commonsense judgment based upon careful consideration 
of the applicable guidelines and the whole-person concept.  
 
I considered the potentially disqualifying and mitigating conditions in light of all 
pertinent facts and circumstances surrounding this case. Applicant is a mature adult, 
who is accountable for his choices to incur substantial debt and not repay it. He 
continues to owe more than $58,000 in delinquent debt that he accumulated over the 
past nine years, and either could not or chose not to repay. There is insufficient 
evidence of rehabilitation and the potential for pressure, exploitation, or duress remains 
undiminished. Overall, the evidence creates significant doubt as to Applicant’s 
judgment, eligibility, and suitability for a security clearance. He failed to meet his burden 
to mitigate the security concerns arising under the guideline for financial considerations.  
 
Formal Findings 
 
 Formal findings for or against Applicant on the allegations set forth in the SOR, 
as required by ¶ E3.1.25 of Enclosure 3 of the Directive, are: 
 
 Paragraph 1, Guideline F:   AGAINST APPLICANT 
 
  Subparagraphs 1.a through 1.p:   Against Applicant 
 
Conclusion 
 
 In light of all of the circumstances presented by the record in this case, it is not 
clearly consistent with the interests of national security to grant Applicant eligibility for a 
security clearance. National security eligibility for access to classified information is 
denied. 
                                        
         
 
Jennifer Goldstein 
Administrative Judge