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       DEPARTMENT OF DEFENSE 
   DEFENSE OFFICE OF HEARINGS AND APPEALS 
In the matter of: )
)
) ISCR Case No. 15-01314 
) 
 
Applicant for Security Clearance ) 
Appearances 
For Government: Nicole A. Smith, Esq., Department Counsel 
For Applicant: Pro se 
__________ 
Decision 
__________ 
RIVERA, Juan J., Administrative Judge: 
Applicant’s evidence is insufficient to establish that she is financially responsible. 
Moreover, her failure to address her delinquent loan demonstrates questionable 
judgment, untrustworthiness, unreliability, and an unwillingness to comply with rules and 
regulations, all of which shows that she may not properly safeguard classified 
information. Clearance is denied. 
Statement of the Case 
Applicant submitted a security clearance application (SCA) on November 22, 
2013. She was interviewed by government investigators on October 2009 and 
September 2014. She made corrections to and adopted the summarized interviews on 
October 14, 2015. After reviewing the information gathered during the background 
investigation, the Department of Defense (DOD) issued a statement of reasons (SOR) 
on November 3, 2015, alleging security concerns under Guideline F (financial 
considerations) and Guideline E (personal conduct). Applicant answered the SOR on 
November 17, 2015, and requested a hearing before an administrative judge from the 
Defense Office of Hearings and Appeals (DOHA). 
 
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DOHA assigned the case to me on February 14, 2017, and issued a notice of 
hearing that same day, setting the hearing for March 3, 2017. At the hearing, the 
Government offered three exhibits (GE 1 through 3). Applicant testified on her own 
behalf and submitted three exhibits (AE 1 through 3). All exhibits were admitted as 
evidence without objections. DOHA received the hearing transcript (Tr.) on March 10, 
2017. 
 
Findings of Fact 
 
Applicant admitted in part and denied in part the SOR allegations. She admitted 
the SOR factual allegations: that in 2006 she took a loan for over $11,000 from a foreign 
bank, that she stopped paying it when she returned to the United States in 2007, and 
the bank obtained a judgment against her. She denied that those facts raise security 
concerns under Guidelines E and F. Her admissions to the SOR and at her hearing are 
incorporated herein as findings of fact. After a thorough review of the record evidence, I 
make the following additional findings of fact:  
 
Applicant is a 49-year-old employee of a federal contractor. She graduated from 
high school, and received a bachelor’s degree in May 1991. Applicant received a 
commission in the U.S. Army in January 1992 and served on active duty until February 
1995, when she was honorably discharged. She joined the Army National Guard where 
she served between March 1995 and June 1997. She was in the Inactive Reserve 
between June 1997 and March 1999. She then served in the Active Reserve between 
March 1999 and April 2000, when she received an honorable discharge. While in the 
Army, Applicant possessed a secret clearance issued in 1991. She applied for and was 
granted a secret clearance in 2009. 
 
Applicant married her first husband in 1991 and divorced in 2003. Applicant 
traveled to and stayed in a foreign country for six days to attend her best friend’s 
wedding in March 2002. (GE 2, p. 59) Apparently, during the wedding she met her 
future husband (V). She returned to the foreign country to visit friends for 30 days 
between April and May 2002. She lived with V before they were married in the foreign 
country between September 2003 and March 2004. (GE 2, p 58) She married V in 
October 2004 in the United States. (GE 2)  
 
Applicant lived with V and worked in the foreign country between August 2005 
and August 2007. (GE 2, p. 58) She sponsored V for U.S. citizenship. (GE 3) In her 
2009 SCA, she indicated V was a U.S. permanent resident and possessed a U.S. 
passport. (GE 2, p. 40; GE 2, p. 56) Applicant and V lived together in the United States 
at least between October 2007 and June 2009. (The day Applicant submitted her 2009 
SCA.) Applicant and V separated in July 2009 and divorced in December 2010. (GE 3) 
 
Applicant disclosed in her 2009 and 2013 SCAs the address and personal 
information for her mother-in-law, husband’s two brothers, sister, and other family and 
friends in the foreign country. She stated in the 2013 SCA that she supported V during 
 
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their marriage and while separated pending the divorce. She estimated the financial 
support provided was about $10,000. 
 
Section 20 (Foreign Activities) of the 2009 and 2013 SCAs asked Applicant to 
disclose whether she had any foreign financial interests. She disclosed the she had a 
bank account opened in June 2006 that was closed in August 2007. (GE 2, p. 52; GE 3, 
p. 35-36) Section 26 (Financial Record) of the 2009 SCA asked Applicant to disclose 
whether she had any financial problems, including defaulting on any type of loan, or had 
a judgment entered against her. Applicant answered “No” to all the financial questions. 
She failed to disclose she had defaulted on a loan and two credit card accounts and the 
creditor obtained a judgment against her. Applicant claimed she did not know she was 
delinquent on the loan and the creditor had secured a judgment against her at the time 
she submitted the 2009 SCA. 
 
Section 26 (Financial Record) of the 2013 SCA asked Applicant to disclose 
whether she had any financial problems, including defaulting on any type of loan, or had 
had a judgment entered against her. Applicant disclosed some state tax issues resulting 
from disputed income taxes charged by two states for income from a foreign country. 
However, she answered “No” to all the other financial questions. She disclosed no other 
financial problems. She denied defaulting on any type of loans, or having a judgment 
entered against her.  
 
Applicant’s employment history indicates that she worked as a corporate recruiter 
between January 2002 and April 2002; was unemployed for the next two months; and 
worked as a lodge worker from June to September 2002. She was unemployed 
between September 2002 and August 2004; worked as a dog trainer between August 
2004 and August 2005; and worked as a veterinary assistant from December 2004 to 
August 2005. Applicant was unemployed between August 2005 and November 2005. 
She worked for a private company between November 2005 and July 2006 
 
Applicant worked for a U.S. federal contractor between August 2006 and August 
2007. The federal contractor detailed her to work in a foreign country. She returned to 
the United States and worked for two different federal contractors between September 
2007 and July 2011, and between July 2011 and November 2013. Applicant’s current 
employer and clearance sponsor hired her in November 2013. She has been working 
for the same employer since.  
 
Between September 2003 and sometime in 2006, Applicant opened two credit 
card accounts and took out a loan (solely in her name), from a foreign bank while she 
was working and living in the foreign country with her former husband. (GE 2) Applicant 
claimed the loan was for her mother-in-law. (GE 3) In her answer to the SOR, Applicant 
stated her former mother-in-law’s home desperately needed repairs and V asked her to 
take out the loan because he had bad credit and did not qualify for it.  
 
Applicant left the foreign country in September 2007 and returned to the United 
States to start a new job. She claimed she and V agreed that he would pay the loan and 
 
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credit card debt before following her into the United States. She further claimed she did 
not find out that V did not pay the credit cards or the loan, and that the bank obtained a 
judgment against her in the foreign country, until sometime around July 2009. Applicant 
stated during her interviews that she was working on resolving her debt with the 
assistance of a friend who lived in the foreign country. She indicated that all the 
accounts were closed by then, but stated her willingness to pay the loan if she could 
find a contact or communicate with the bank. (GE 3) 
 
In her SOR answer, and at her hearing, Applicant claimed that after finding out 
about the judgment she tried to contact the bank, but by then she did not have any 
information about the credit cards or the loan account numbers. She averred her 
Spanish had deteriorated to the point she could no longer communicate. She asked for 
assistance from a friend who lived in the foreign country, but was not successful. The 
only documentary evidence Applicant submitted to show her efforts to contact the bank 
and resolve her debts was an email she allegedly attempted to send to a bank agent on 
February 18, 2016. (AE 2) Except for this undelivered email, Applicant submitted no 
documentary evidence to corroborate her claims of efforts to remain in contact with the 
bank or to otherwise resolve the judgment against her.   
 
Applicant noted that her current financial situation is good. She lives within her 
financial means, has good credit ratings, and pays her bills on time. (AE 1) She believes 
she is a financially responsible person. She recently purchased a home and the 
mortgage is solely on her name. (AE 3) 
 
Policies 
 
The SOR was issued under Executive Order 10865, Safeguarding Classified 
Information Within Industry (February 20, 1960), as amended; DOD Directive 5220.6, 
Defense Industrial Personnel Security Clearance Review Program (Directive) (January 
2, 1992), as amended; and the Adjudicative Guidelines for Determining Eligibility for 
Access to Classified Information (AG), implemented by the DOD on September 1, 2006.  
 
While the case was pending a decision, the Director of National Intelligence 
implemented Security Executive Agent Directive (SEAD) 4, National Security 
Adjudicative Guidelines (AG), effective June 8, 2017, which replaced the 2006 AG, and 
are applicable to all adjudicative decisions issued on or after June 8, 2017. I decided 
this case under the current AGs implemented by SEAD 4. 
 
Eligibility for access to classified information may be granted “only upon a finding 
that it is clearly consistent with the national interest to do so.” Exec. Or. 10865, 
Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960), as amended. 
The U.S. Supreme Court has recognized the substantial discretion of the Executive 
Branch 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). 
 
 
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The AG list disqualifying and mitigating conditions for evaluating a person’s 
suitability for access to classified information. Any one disqualifying or mitigating 
condition is not, by itself, conclusive. However, the AG should be followed where a case 
can be measured against them, as they represent policy guidance governing access to 
classified information. Each decision must reflect a fair, impartial, and commonsense 
consideration of the whole person and the factors listed in SEAD 4, App. A ¶¶ 2(d) and 
2(f). All available, reliable information about the person, past and present, favorable and 
unfavorable, must be considered.  
 
Security clearance decisions resolve whether it is clearly consistent with the 
national interest to grant or continue an applicant’s security clearance. The Government 
must prove, by substantial evidence, controverted facts alleged in the SOR. If it does, 
the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the facts. The 
applicant bears the heavy burden of demonstrating that it is clearly consistent with the 
national interest to grant or continue his or her security clearance.  
 
Persons with access to classified information enter into a fiduciary relationship 
with the Government based on trust and confidence. Thus, the Government has a 
compelling interest in ensuring each applicant possesses the requisite judgment, 
reliability, and trustworthiness of those who must protect national interest as their own. 
The “clearly consistent with the national interest” standard compels resolution of any 
reasonable doubt about an applicant’s suitability for access in favor of the Government. 
“[S]ecurity clearance determinations should err, if they must, on the side of denials.” 
Egan, 484 U.S. at 531; SEAD 4, ¶ E(4); SEAD 4, App. A, ¶¶ 1(d) and 2(b). Clearance 
decisions are not a determination of the loyalty of the applicant concerned. They are 
merely an indication that the applicant has or has not met the strict guidelines the 
Government has established for issuing a clearance. 
 
Analysis 
 
Financial Considerations 
 
AG ¶ 18 articulates the security concern relating to financial problems:  
 
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 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 overextended is at greater risk of having to 
engage in illegal or otherwise questionable acts to generate funds . . . .  
 
 
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Applicant’s history of failure to satisfy her debt and to meet her financial 
obligations is documented in the record. Between 2003 and 2006, she took out an 
$11,000 loan from a foreign bank while she was living there. In September 2007, she 
returned to the United States and stop paying the loan. The bank obtained a judgment 
against Applicant that remains unpaid. AG ¶ 19 provides three disqualifying conditions 
that could raise a security concern 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.” This appears to be a case of 
Applicant’s unwillingness to satisfy her debs. The record established the above 
disqualifying conditions, requiring additional inquiry about the possible applicability of 
mitigating conditions.  
 
Five mitigating conditions under AG ¶ 20 are potentially applicable: 
 
(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), and the individual acted responsibly under the circumstances; 
  
(c) the person has received or is receiving counseling for the problem 
and/or there are clear indications that the problem is being resolved or is 
under control; 
 
(d) the individual initiated a good-faith effort to repay overdue creditors or 
otherwise resolve debts;1 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 
                                            
1 The Appeal Board has previously explained what constitutes a “good faith” effort to repay 
overdue creditors or otherwise resolve debts:  
 
In order to qualify for application of [the “good faith” mitigating condition], an applicant 
must present evidence showing either a good-faith effort to repay overdue creditors or 
some other good-faith action aimed at resolving the applicant’s debts. The Directive does 
not define the term “good-faith.” However, the Board has indicated that the concept of 
good-faith “requires a showing that a person acts in a way that shows reasonableness, 
prudence, honesty, and adherence to duty or obligation.” Accordingly, an applicant must 
do more than merely show that he or she relied on a legally available option (such as 
bankruptcy) in order to claim the benefit of [the “good faith” mitigating condition]. 
 
(internal citation and footnote omitted) ISCR Case No. 02-30304 at 3 (App. Bd. Apr. 20, 2004) (quoting 
ISCR Case No. 99-9020 at 5-6 (App. Bd. Jun. 4, 2001)).   
 
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documented proof to substantiate the basis of the dispute or provides 
evidence of actions to resolve the issue. 
 
The Appeal Board concisely explained Applicant’s responsibility for proving the 
applicability of mitigating conditions as follows:  
 
Once a concern arises regarding an Applicant’s security clearance 
eligibility, there is a strong presumption against the grant or maintenance 
of a security clearance. See Dorfmont v. Brown, 913 F. 2d 1399, 1401 (9th 
Cir. 1990), cert. denied, 499 U.S. 905 (1991). After the Government 
presents evidence raising security concerns, the burden shifts to the 
applicant to rebut or mitigate those concerns. See Directive ¶ E3.1.15. The 
standard applicable in security clearance decisions is that articulated in 
Egan, supra. “Any doubt concerning personnel being considered for 
access to classified information will be resolved in favor of the national 
security.” Directive, Enclosure 2 ¶ 2(b).  
 
ISCR Case No. 10-04641 at 4 (App. Bd. Sep. 24, 2013).  
 
 None of the financial considerations mitigating conditions are fully raised by the 
facts in this case and they do not mitigate the security concerns. Applicant has not paid 
the judgment. Her financial problems are recent and ongoing. Applicant explained that 
she took out the loan, at the urging of her then husband, to help her mother-in-law 
repair her home. Nevertheless, her evidence is insufficient to establish her financial 
problems resulted from circumstances beyond her control. Even if they were, she 
presented no evidence of a good-faith effort to pay her loan or that she was financially 
responsible under her circumstances. There is no evidence she participated in financial 
counseling.  
 
Guideline E, Personal Conduct 
 
  AG ¶ 15 articulates the security concern for personal conduct: 
 
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 or any other 
failure to cooperate with the security clearance process. 
 
  Between 2003 and 2006, Applicant took out an $11,000 loan from a foreign bank 
while she was living in a foreign country. In September 2007, she returned to the United 
States and stop paying the loan. The bank obtained a judgment against Applicant that 
remains unpaid. Although not alleged, I note that Applicant omitted relevant and 
material information from her 2009 and 2014 SCAs when she failed to disclose that she 
had an unpaid loan in collection by a foreign bank.  
 
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  Nevertheless, Applicant demonstrated lack of judgment and subjected herself to 
possible exploitation when she became indebted to a foreign bank while working as an 
employee of a federal contractor in the foreign country. Applicant’s deliberate failure to 
pay her loan would trigger the applicability the following disqualifying conditions under 
AG ¶ 16: 
 
(c) credible adverse information in several adjudicative issue areas that is 
not sufficient for an adverse determination under any other single 
guideline, but which, when considered as a whole, supports a whole-
person assessment of questionable judgment, untrustworthiness, 
unreliability, lack of candor, unwillingness to comply with rules and 
regulations, or other characteristics indicating that the individual may not 
properly safeguard classified or sensitive information; and  
 
(e) personal conduct, or concealment of information about one's conduct, 
that creates a vulnerability to exploitation, manipulation, or duress by a 
foreign intelligence entity or other individual or group. Such conduct 
includes: 
 
(1) engaging in activities which, if known, could affect the person's 
personal, professional, or community standing . . . .  
  I find that the above disqualifying conditions are applicable. Additional inquiry 
about the possible applicability of mitigating conditions is required. 
 AG ¶ 17 lists two conditions that are somewhat raised by the facts and could 
potentially mitigate the personal conduct security concerns: 
(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; and 
(e) the individual has taken positive steps to reduce or eliminate 
vulnerability to exploitation, manipulation, or duress.  
 Considering the evidence as a whole, I find that Applicant’s evidence is 
insufficient to mitigate the Guideline E security concerns. I considered Applicant’s 
deliberate default of her loan as serious questionable behavior that is unmitigated by the 
passage of time. Moreover, her behavior continues to create doubts on her current 
reliability, trustworthiness, and good judgment. Also, she has not taken positive steps to 
reduce or eliminate her vulnerability to exploitation, manipulation, or duress. 
 In reaching my decision, I considered that Applicant travelled to the foreign 
country frequently and resided there for extended periods to visit friends. She lived in 
the foreign country with V before they were married between September 2003 and 
 
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March 2004. She married V in the United States in October 2004, and then went on to 
live with V and worked in the foreign country between August 2005 and August 2007. 
Applicant and V lived together in the United States at least between October 2007 and 
July 2009 when they separated. I also note that in her 2009 SCA, Applicant thoroughly 
documented her then husband’s family in the foreign country, including his mother’s 
personal information, and that of his siblings and friends.  
 Applicant’s personal contacts and long-time immersion in the foreign country 
make it difficult to believe that she could not communicate with the bank to resolve her 
debt. I also find it incredible that she could not contact or communicate in English with 
the bank personnel.  
 Applicant claimed that she and V agreed that he would pay her loan and credit 
card debts after she returned to the United States and prior to him following her into the 
United States. She further claimed she did not know V failed to pay the loan until they 
separated in July 2009 and were pending a divorce. Considering the evidence as a 
whole, Applicant’s claims of reliance on V to pay the loan are not credible. Applicant had 
to take out the loan in her name because V had bad credit. She stated in her 2014 SCA 
that she financially supported V during the whole period they were together and up until 
the divorce. She calculated she spent about $10,000 supporting V. Thus, Applicant 
knew that V did not have the financial means to pay the $11,000 loan in a couple of 
months. Considering the evidence as a whole, I find Applicant’s testimony lacks 
credibility and her evidence in mitigation is questionable. 
Whole-Person Concept 
 
 I considered the potentially disqualifying and mitigating conditions in light of all 
the facts and circumstances surrounding this case, and under the whole-person 
concept. SEAD 4, App. A, ¶¶ 2(a), 2(d) and 2(f). I have incorporated my comments 
under Guidelines F and E in my whole-person analysis. Some of these factors were 
addressed under that guideline, but some warrant additional comment. 
 
Applicant, 49, has been employed with federal contractors since 2006. She failed 
to demonstrate financial responsibility. The financial considerations security concerns 
are not mitigated. Moreover, her deliberate default of her loan demonstrates 
questionable judgment, untrustworthiness, unreliability, and an unwillingness to comply 
with rules and regulations, all of which shows that she may not properly safeguard 
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 E:     AGAINST APPLICANT 
 
 
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  Subparagraph 1.a:     Against Applicant 
 
  Paragraph 2, Guideline F:     AGAINST APPLICANT 
 
  Subparagraph 2.a:     Against Applicant 
 
Conclusion 
 
In light of all the circumstances presented by the record in this case, it is not 
clearly consistent with the national security interests of the United States to grant 
eligibility for a security clearance to Applicant. Clearance is denied. 
 
 
 
____________________________ 
JUAN J. RIVERA 
Administrative Judge