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      DEPARTMENT OF DEFENSE      
 DEFENSE OFFICE OF HEARINGS AND APPEALS 
In the matter of: ) 
) 
) ISCR Case No. 16-03760 
) 
) 
Applicant for Security Clearance ) 
Appearances 
For Government: Adrienne Driskill, Esq., Department Counsel 
For Applicant: Pro se 
November 14, 2017 
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Decision 
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GOLDSTEIN, Jennifer, Administrative Judge: 
Applicant incurred more than $35,000 in delinquent debt over the past eight 
years, which he discharged in Chapter 7 bankruptcy. 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 April 17, 2015, Applicant submitted an Electronic Questionnaire for 
Investigations Processing (e-QIP). On January 5, 2017, 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 January 24, 2017 (Answer), and 
requested a hearing before an administrative judge. The Defense Office of Hearings 
and Appeals (DOHA) assigned the case to me on April 20, 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 6 into evidence. 
Applicant testified and offered Exhibits (AE) A through D into evidence. All exhibits were 
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 47 years old. He is divorced. He is employed as an electrical 
technician, and is applying to renew his security clearance in connection with that work. 
He has worked for his employer for 13 years. (GE 1; Tr. 24-25, 36.) He admitted the 
delinquent debts alleged in SOR ¶¶ 1.a through 1.p. (Answer.) Applicant’s admissions 
are incorporated in the findings below.  
 
 Applicant attributed his $35,000 in delinquent debts to “overusing” credit cards 
and co-signing vehicle loans for family members. (Tr. 23.) He purchased clothing, 
electronics and a computer with the credit cards. (Tr. 37.) He also disclosed that he 
gambled at a casino twice a month and estimated he spent $800 to $1,000 per month 
on those trips. (Tr. 32, 38-39.) He testified his take-home pay was $2,800 per month. 
(Tr. 39.) He intended to work out payment arrangements with his creditors, but never 
did so. (Tr. 35.)  
 
 Applicant filed Chapter 7 bankruptcy on January 23, 2017. He elected to file 
bankruptcy because he wanted his security clearance to be renewed. (Tr. 47.) He 
completed the financial counseling required to file bankruptcy. (AE B; AE C; AE D; Tr. 
51.) His debts were discharged on April 25, 2017. (AE A.) 
 
 SOR ¶ 1.a alleged Applicant was indebted on a charged-off account in the 
amount of $9,914. This debt was reported delinquent in 2011. This debt is included in 
Applicant’s January 2017 Chapter 7 bankruptcy petition. (GE 4; GE 6.) 
 
 
 
 
 
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 SOR ¶ 1.b alleged Applicant was indebted on a charged-off account in the 
amount of $6,738. This debt was reported delinquent in 2011. This debt is included in 
Applicant’s January 2017 Chapter 7 bankruptcy petition. (GE 5; GE 6.) 
 
 SOR ¶ 1.c alleged Applicant was indebted on a charged-off account in the 
amount of $4,095. This debt was reported delinquent in 2011. This debt is included in 
Applicant’s January 2017 Chapter 7 bankruptcy petition. (GE 5; GE 6.) 
 
 SOR ¶ 1.d alleged Applicant was indebted on a charged-off account in the 
amount of $2,396. This debt was reported delinquent in 2013. This debt is included in 
Applicant’s January 2017 Chapter 7 bankruptcy petition. (GE 4; GE 5; GE 6.) 
 
 SOR ¶ 1.e alleged Applicant was indebted on a charged-off account in the 
amount of $1,621. This debt was reported delinquent in 2013. This debt is included in 
Applicant’s January 2017 Chapter 7 bankruptcy petition. (GE 4; GE 5; GE 6.) 
 
 SOR ¶ 1.f alleged Applicant was indebted on a collection account in the amount 
of $636. This debt was reported delinquent in 2012. This debt is included in Applicant’s 
January 2017 Chapter 7 bankruptcy petition. (GE 4; GE 6.) 
 
 SOR ¶ 1.g alleged Applicant was indebted on a charged-off account in the 
amount of $636. This debt was reported delinquent in 2015. This debt is included in 
Applicant’s January 2017 Chapter 7 bankruptcy petition. (GE 4; GE 5; GE 6.) 
 
 SOR ¶ 1.h alleged Applicant was indebted on a collection account in the amount 
of $512. This debt is included in Applicant’s January 2017 Chapter 7 bankruptcy 
petition. (GE 4; GE 6.) 
 
 SOR ¶ 1.i alleged Applicant was indebted on a collection account in the amount 
of $2,206. This debt was reported delinquent in 2013. This debt is included in 
Applicant’s January 2017 Chapter 7 bankruptcy petition. (GE 5; GE 6.) 
 
 SOR ¶ 1.j alleged Applicant was indebted on a charged-off account in the 
amount of $1,268. This debt was charged-off in 2009. This debt is included in 
Applicant’s January 2017 Chapter 7 bankruptcy petition. (GE 5; GE 6.) 
 
 SOR ¶ 1.k alleged Applicant was indebted on a collection account in the amount 
of $942. This debt was reported delinquent in 2010. This debt is included in Applicant’s 
January 2017 Chapter 7 bankruptcy petition. (GE 5; GE 6.) 
 
 SOR ¶ 1.l alleged Applicant was indebted on a collection account in the amount 
of $646. This debt was reported delinquent in 2010. This debt is included in Applicant’s 
January 2017 Chapter 7 bankruptcy petition. (GE 5; GE 6.) 
 
 SOR ¶ 1.m alleged Applicant was indebted on a collection account in the amount 
of $127. This debt was reported delinquent in 2009. Applicant’s May 6, 2015 credit 
 
 
 
 
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report reflects Applicant was “making payments” on this collection account. Applicant 
was resolving this debt. This debt is also included in Applicant’s January 2017 Chapter 
7 bankruptcy petition. (GE 5; GE 6.) 
 
 SOR ¶ 1.n alleged Applicant was indebted on a collection account in the amount 
of $1,587. This debt was reported delinquent in 2015. This debt is included in 
Applicant’s January 2017 Chapter 7 bankruptcy petition. (GE 5; GE 6.) 
 
 SOR ¶ 1.o alleged Applicant was indebted on a collection account in the amount 
of $1,297. This debt was reported delinquent in 2015. This debt is included in 
Applicant’s January 2017 Chapter 7 bankruptcy petition. (GE 5; GE 6.) 
 
 SOR ¶ 1.p alleged Applicant was indebted on a collection account in the amount 
of $1,066. This debt was reported delinquent in 2015. This debt is included in 
Applicant’s January 2017 Chapter 7 bankruptcy petition. (GE 5; GE 6.) 
 
 Applicant has not incurred any additional debt in the past two years. (AE A.) He 
has reduced his gambling to $500 per month. (Tr. 56.) He intends to rebuild his credit 
and save for his future. (Tr. 59.) However, his current monthly expenses exceed his 
income. (Tr. 64.)  
  
Policies 
 
 When evaluating an applicant’s 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.  
 
 
 
 
 
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 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 
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 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; 
 
 
 
 
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(c) a history of not meeting financial obligations; and 
 
(e) consistent spending beyond one's means or frivolous or irresponsible 
spending, which may be indicated by excessive indebtedness, significant 
negative cash flow, a history of late payments or of non-payment, or other 
negative financial indicators. 
 
Applicant accumulated approximately $35,000 in delinquent consumer debt from 
2009 to 2015. He took little action to resolve those debts while they were accruing. He 
spent beyond his means, while at time same time, spending approximately one third of 
his monthly take-home pay gambling. He has been unable or unwilling to repay these 
debts. These financial issues date back over eight years. 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 
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 accepted responsibility for his delinquent debts and attributed them to 
his overspending. While he resolved his SOR-alleged debts through his Chapter 7 
bankruptcy, he failed to establish that he has changed his financial practices. He 
 
 
 
 
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documented that he completed the requisite bankruptcy financial counseling, but 
continues to spend more than he earns. Further, he continues to gamble, although at a 
slightly reduced rate. There are no clear indications that Applicant’s financial problems 
are under control. 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. None of the above mitigating conditions have 
been fully established by the record evidence. 
 
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 
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 gamble, despite his financial troubles. 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 
 
 
 
 
 
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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