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                          DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 17-01177 
  )   
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Jeff Nagel, Esq., Department Counsel 
For Applicant: Pro se 
 
 
March 28, 2018 
______________ 
 
Decision 
______________ 
 
 
MOGUL, Martin H., Administrative Judge: 
 
Statement of the Case 
 
On May 10, 2017, in accordance with Department of Defense (DoD) Directive 
5220.6, as amended (Directive), the Department of Defense issued Applicant a 
Statement of Reasons (SOR) alleging facts that raise security concerns under Guideline 
F.1 The SOR further informed Applicant that, based on information available to the 
government, DoD adjudicators could not make the preliminary affirmative finding it is 
clearly consistent with the national interest to grant or continue Applicant’s security 
clearance. 
 
Applicant replied to the SOR on May 24, 2017, including five enclosures, and 
requested a hearing before an administrative judge. (RSOR.) The case was assigned to 
me on July 5, 2017. The Defense Office of Hearings and Appeals (DOHA) issued a 
                                                          
1 I considered the previous Adjudicative Guidelines, effective September 1, 2006, as well as the new 
Adjudicative Guidelines, effective June 8, 2017. My decision would be the same if the case was 
considered under the previous Adjudicative Guidelines, effective September 1, 2006. 
 
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notice of hearing on July 26, 2017, setting the hearing for September 6, 2017. The 
hearing was convened as scheduled on that date.  
 
At the hearing, the Government offered Exhibits 1 through 6, which were 
admitted without objection.  Applicant testified on his own behalf and presented two 
documents, which were identified and entered into evidence without objection as 
Exhibits A and B. The record was left open until September 29, 2017, for receipt of 
additional documentation. Additional documents were timely received and have been 
entered into evidence without objection as Exhibits C through M. Applicant submitted 
one additional document on February 21, 2018, long after the record had closed; but 
because Department Counsel had no objection and the document is relevant, this 
document has been entered into evidence as Exhibit N.  DOHA received the transcript 
of the hearing (TR) on September 14, 2017. Based upon a review of the pleadings, 
exhibits, and the testimony of Applicant, eligibility for access to classified information is 
granted.  
 
Findings of Fact 
 
 After a complete and thorough review of the evidence in the record, as described 
above, and upon due consideration of that evidence, I make the following findings of 
fact:  
 
 Applicant is 31 years old.  He has never been married, and he has no children. 
Applicant earned a Bachelor’s degree in Electrical Engineering in 2014. Applicant has 
been employed by a defense contractor as a Systems Engineer since 2016, and he 
seeks a DoD security clearance in connection with his employment in the defense 
sector. (Tr at 23-25.)  
 
Guideline F, Financial Considerations  
 
 The SOR lists eight allegations (1.a. through 1.h.) regarding financial difficulties, 
specifically delinquent and overdue debts, under Adjudicative Guideline F. All of the 
SOR allegations were admitted by Applicant on his RSOR. The debts will be discussed 
below in the order they were listed on the SOR: 
 
 1.a. This overdue debt is cited in the SOR for a delinquent account in the amount 
of $21,487. In his RSOR Applicant wrote that this was not his debt, and he was in the 
process of resolving this debt. At the hearing, Applicant testified that all of his debts 
from education loans had been purchased by one creditor, and this debt was not 
included with his other education loans. He stated that the law firm that he had hired to 
help him resolve his debts was trying to confirm whether this was actually his debt 
before he began trying to pay it off. (Tr at 25-27.) I find that Applicant has a good faith 
belief that this debt is not his and he has been disputing this debt.     
 
 1.b. This overdue debt is cited in the SOR for a delinquent account in the amount 
of $3,184. In his RSOR Applicant wrote that he was in the process of resolving this 
debt. At the hearing, Applicant testified that he has been trying to contact the creditor so 
 
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that he can pay off this debt, which he does not dispute, but the only creditor he could 
locate did not have information on this debt. He also has the law firm trying to determine 
who he should pay, but thus far he has not found the proper entity to pay to resolve this 
debt. (Tr at 30-31.) In post-hearing Exhibit D Applicant has established that he now has 
a payment plan in place to resolve this debt, and at the time of the submission, he had 
made one payment of $125 toward this debt.  I find that this debt is now being resolved, 
and is scheduled to be paid in full by May 2018.  
 
 1.c. This overdue debt is cited in the SOR for a delinquent account in the amount 
of $625. In his RSOR Applicant wrote that he was in the process of resolving this debt. 
At the hearing, Applicant testified that he has paid off this debt. (Tr at 31-32.) Exhibits 6, 
B, and post-hearing Exhibit E establish that this debt has been resolved.  
 
 1.d. This overdue debt is cited in the SOR for a delinquent account in the amount 
of $170. In his RSOR Applicant wrote that he was in the process of resolving this debt. 
At the hearing, Applicant testified that he has paid off this debt. (Tr at 32-33.) Exhibits 6, 
A, and post-hearing Exhibit F establish that this debt has been resolved. 
            
1.e. This overdue debt is cited in the SOR for a delinquent judgment filed against 
him in 2011 in the amount of $3,803. In his RSOR Applicant wrote that this debt was 
paid off and it was removed from his credit report. At the hearing, Applicant testified that 
this was a debt from the unemployment office that, unbeknownst to him, had been 
overpaying him for unemployment compensation. He stated that this debt was paid off 
several years ago, as it was taken out of his tax return. Applicant had no evidence at the 
hearing to establish that the debt was resolved. (Tr at 33-34.) Post-hearing Exhibit G 
has established that this debt has been resolved. 
 
1.f. This overdue debt is cited in the SOR for a delinquent account in the amount 
of $1,301. In his RSOR Applicant wrote that this debt was paid off and it was removed 
from his credit report. At the hearing, Applicant testified that he has paid off this debt, 
but he had no evidence at the hearing to establish that the debt was resolved. (Tr at 
35.)  Post-hearing Exhibit H has established that this debt has been resolved. 
  
1.g. This overdue debt is cited in the SOR for a delinquent account in the amount 
of $242. In his RSOR Applicant wrote that this debt was paid off and it was removed 
from his credit report. At the hearing, Applicant testified that he has paid off this debt, 
but he had no evidence at the hearing to establish that the debt was resolved. (Tr at 
35.) Post-hearing Exhibit I has established that this debt has been resolved. 
 
1.h. This overdue debt is cited in the SOR for a delinquent account in the amount 
of $1,073. In his RSOR Applicant wrote that this debt was paid off and it was removed 
from his credit report. At the hearing, Applicant testified that he has paid off this debt, 
but he had no evidence at the hearing to establish that the debt was resolved. (Tr at 
38.) Post-hearing Exhibit J consisted of a letter from Applicant to the creditor confirming 
that this debt had been paid. It also contained a letter from the creditor indicating that 
they did not have record of this debt.  
 
 
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Appellant wrote on his RSOR and testified at the hearing that he hired a law firm 
in January 2016, when he began his current employment, to help resolve the debts 
listed as delinquent on his credit report. He also stated that the law firm is continuing to 
work on his behalf to help him resolve his debts. (Tr at 27-28.) Applicant submitted a 
letter from the law firm confirming they have been hired to help Applicant's with his 
debts. They wrote that they are working for him to help verify that the debts listed on his 
credit reports were accurate, because there was some reason to doubt the accuracy of 
some of the debts listed. (RSOR Enclosure 1.) 
 
He explained that after having a good paying job in the railroad industry from 
2012 to January 2015, he fell behind on his debts after he was laid off in 2015, which 
resulted in him being unemployed for most of 2015.  He contended that all of the SOR 
debts were incurred during this period of unemployment. During this time when he could 
not obtain full-time employment he did obtain a Bachelor’s degree in Electrical 
Engineering and Communications Technology. In 2016, he was hired by his current 
employer at a good salary, and this has allowed him to work towards resolving his debts 
and fixing his credit. (Tr at 28-30.) Applicant further testified that he is now able to pay 
all of his current debts, and he has $11,000 in a company 401k and $6,000 in his credit 
union. (Tr at 39-41.)  
 
In a post-hearing closing argument submitted by Applicant, he indicated that he 
has continued to work diligently to resolve any of his overdue debts. He also offered 
evidence that as of September 2017, he received an increase in salary of approximately 
$11,000 a year to $85,000. (Exhibits K and L.) Finally, Applicant submitted documents 
showing that he has been timely paying for his automobile, and it has now been paid in 
full. (Exhibits M and N.) 
 
Mitigation 
 
 Applicant submitted an extremely positive and laudatory character letter from his 
current direct supervisor. He was described as “always respectful of privacy (other 
persons and corporate), rules, restrictions, and regulations. (RSOR Enclosure 5.) 
 
Policies 
 
 When evaluating an applicant’s suitability for a security clearance, the 
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, which are to be used in evaluating an 
applicant’s eligibility for access to classified information. 
 
These guidelines are not inflexible rules of law. Instead, recognizing the 
complexities of human behavior, administrative judges apply the guidelines 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. According to AG ¶ 2(a), the entire process is a conscientious 
scrutiny of a number of variables known as the whole-person concept. The 
 
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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.  
 
Under Directive ¶ E3.1.14, the Government must present evidence to establish 
controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, the “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 who applies for access to classified information 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 access to classified information. 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 information. 
 
Section 7 of Executive Order (EO) 10865 provides that adverse 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.” See also EO 12968, Section 3.1(b) (listing multiple 
prerequisites for access to classified or sensitive information).  
 
Analysis 
 
Guideline F, Financial Considerations 
 
 The security concern relating to the guideline for Financial Considerations is set 
out in AG ¶ 18: 
 
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 overextended is at greater risk of having to 
engage in illegal or otherwise questionable acts to generate funds. 
 
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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. 
 
The guideline notes several conditions that could raise security concerns under 
AG ¶ 19:   
 
(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; 
 
(d) deceptive or illegal financial practices such as embezzlement, 
employee theft, check fraud, expense account fraud, mortgage fraud, filing 
deceptive loan statements and other intentional financial breaches of trust; 
 
(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; 
 
(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; 
 
(g) unexplained affluence, as shown by a lifestyle or standard of living, 
increase in net worth, or money transfers that are inconsistent with known 
legal sources of income; 
 
(h) borrowing money or engaging in significant financial transactions to 
fund gambling or pay gambling debts; and 
 
(i) concealing gambling losses, family conflict, or other problems caused 
by gambling. 
 
  Applicant has had a number delinquent debts for several years. The evidence is 
sufficient to raise disqualifying conditions (a) and (c) are in this case  
 
 AG ¶ 20 provides conditions that could mitigate security concerns. I considered 
all of the mitigating conditions under AG ¶ 20 including: 
 
(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; 
 
 
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(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, 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; 
 
(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; 
(f) the affluence resulted from a legal source of income; and 
 
(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 attributed his delinquencies to his loss of income for a one year period. 
This is a circumstance beyond his control, and he has attempted to resolve his financial 
delinquencies by furthering his education and finding a better job. He has also engaged 
the services of a law firm to help him resolve all of his debts. Applicant has also 
provided documents establishing that the SOR delinquent debts are either resolved, are 
being resolved or are in legitimate dispute. I find that he has acted reasonably and 
responsibly with respect to his debts. Mitigation under AG ¶ 20(b) and (d) have been 
established. Applicant has also established that he is earning a significant salary, and 
he is now able to live within his means. Therefore, Guideline F is found for Applicant.  
 
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 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 
 
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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.  
 
I considered the potentially disqualifying and mitigating conditions in light of all 
facts and circumstances surrounding this case. I have incorporated my comments under 
Guideline F in my whole-person analysis.  
 
Overall, the record evidence leaves me with no significant questions or doubts as 
to Applicant’s eligibility and suitability for a security clearance. For all these reasons, I 
conclude Applicant has mitigated the Financial Considerations security concerns under 
the whole-person concept.  
 
Formal Findings 
 
 Formal findings for or against Applicant on the allegations set forth in the SOR, 
as required by ¶ E3.1.25 of the Directive, are: 
 
Paragraph 1, Guideline F:   FOR APPLICANT 
 
  Subparagraph 1.a:    For Applicant 
Subparagraph 1.b:    For Applicant 
Subparagraph 1.c:    For Applicant 
Subparagraph 1.d:    For Applicant  
Subparagraph 1.e:    For Applicant 
Subparagraph 1.f:    For Applicant 
Subparagraph 1.g:    For Applicant 
Subparagraph 1.h:    For Applicant 
 
Conclusion 
 
 In light of all of the circumstances presented by the record in this case, it is 
clearly consistent with the national interest to grant Applicant eligibility for a security 
clearance. National security eligibility for access to classified information is granted. 
 
 
 
 
Martin H. Mogul 
Administrative Judge