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DEPARTMENT OF DEFENSE 
DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
In the matter of:    ) 
      ) 
     )  ISCR Case No. 16-03372 
     ) 
Applicant for Security Clearance  ) 
 
 
Appearances 
 
For Government: Julie R. Mendez, Esq., Deputy Chief Department Counsel 
For Applicant: Pro Se 
 
 
______________ 
 
Decision 
______________ 
 
 
CREAN, Thomas M., Administrative Judge: 
 
Based on a review of the pleadings, exhibits, and testimony, eligibility for access 
to classified information is granted. Applicant presented sufficient information to mitigate 
financial considerations security concerns. 
 
Statement of the Case 
 
On March 25, 2015, Applicant submitted an Electronic Questionnaire for 
Investigations Processing (e-QIP) to obtain a security clearance required for a position 
with a defense contractor. The Department of Defense (DOD) could not make the 
affirmative findings required to continue a security clearance. DOD issued to Applicant a 
Statement of Reasons (SOR), dated December 8, 2016, detailing security concerns for 
financial considerations under Guideline F. The action was taken under Executive Order 
(E.O.) 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 (AG) effective in the DOD on September 1, 2006. 
 
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Applicant answered the SOR on December 28, 2016. He admitted two (SOR 1.c 
and 1.e) and denied seven (SOR 1.a, 1.b, 1.d, 1.f -1.i) allegations of delinquent debt. 
Department Counsel was prepared to proceed on March 10, 2017, and I was assigned 
the case of September 26, 2017. DOD issued a notice of hearing on February 26, 2018, 
for a hearing on March 14, 2018. I convened the hearing as scheduled. The 
Government’s discovery letter was admitted as Hearing Exhibit I. The Government’s 
three exhibits (GX 1-3) were admitted into the record without objection. Applicant 
testified, and introduced 14 exhibits (AX A through AX N) that were admitted into the 
record without objection. I left the record open for Applicant to submit additional 
documents. Applicant timely submitted four additional documents that were admitted 
into the record as AX O, AX P, AX Q, and AX R. Department Counsel had no objection 
to admission of the documents. (GX 4 and GX 5) I received the transcript of the hearing 
(Tr.) on March 22, 2018. The record closed on May 14, 2018, after I received 
Applicant’s last exhibit. 
 
While this case was pending a decision, the Director of National Intelligence 
issued Security Executive Agent Directive 4, establishing National Security Adjudicative 
Guidelines for Determining Eligibility for access to Classified Information or Eligibility to 
Hold a Sensitive Position (AGs), which he made applicable to all individuals who require 
initial or continued eligibility for access to classified information or eligibility to hold a 
sensitive position. The new AGs supersede the September 1, 2006 AGs and were 
effective on or after June 8, 2017. Accordingly, I have evaluated Applicant’s security 
clearance eligibility under the new AGs.1 
 
Findings of Fact 
 
After a thorough review of the record, I make the following findings of fact. 
Applicant is a 35-year-old high school graduate who has taken some college level 
courses. He has never married, has no children, and never served in the military. He 
has been a security officer since April 2014, and was promoted to a security force 
program manager in August 2016. His starting yearly salary as a security officer was 
$58,000 to $62,000. His yearly salary as a program manager is now $79,000. (Tr. 18-
20; GX 1, e-QIP, dated March 25, 2015)   
 
The SOR lists, and credit reports (GX 2, dated September 6, 2016; GX 3, dated 
April 23, 2016) confirm the following delinquent debts for Applicant: past-due apartment 
rent in collection for $5,670 (SOR 1.a); a credit card account in collection for $1,587 
(SOR 1.b); a federal tax lien for $28,699 (SOR 1.c); a credit card in collection for $369 
(SOR 1.d); a telephone service account in collection for $1,281 (SOR 1.e); a credit card 
in collection for $871 (SOR 1.f); and three traffic camera tickets for $240 (SOR 1.g), 
$240 (SOR 1.h), and $55 (SOR 1.i). The total amount of delinquent debt is 
approximately $39,000.  
 
                                            
1 I considered Applicant’s case under both the September 1, 2006 AGs, and the June 8, 2017 
AGs. My decision would be the same under both AGs. 
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The rent debt at SOR 1.a is for an apartment that Applicant co-signed for his 
sister. His sister broke the lease by vacating the apartment before the lease terminated. 
Applicant, as the lease co-signer, was not advised by the landlord of the debt. He 
learned of the debt when his financial records were reviewed for a security clearance 
with another government agency. He talked to the landlord in August 2017, and learned 
his sister was not making payments on the debt. Applicant established a $150 a month 
payment plan with the landlord which is deducted automatically from his bank account. 
The $150 amount has continually been drafted since August 2017. (Tr. 20-25; AX H, 
Bank Statement, dated September 1, 2017) 
 
The debt at SOR 1.b is a credit card that Applicant co-signed for his sister at the 
same time he co-signed the apartment lease. He learned about this debt in the security 
clearance process. Once learning of the debt, he established a $115 monthly payment 
plan. He has continued to make the $115 payment since August 2017. (Tr. 25-27; AX D, 
Bank Statement, dated May 29, 2017) 
 
The debt at SOR 1.c is a tax lien from February 2011 for federal income taxes of 
$7,500 for tax year 2006 (AX K, Tax Transcript), and $15,000 for tax year 2007 (AX l, 
Tax Transcript). In 2003, Applicant was just starting to earn income and he was not 
knowledgeable about the federal tax system. The company he was working for did not 
withhold taxes from his pay for three years. He did not file his tax returns in 2009. The 
Internal Revenue Service (IRS) contacted him in 2010, and filed substitute tax returns 
for him for 2009 and some previous tax years. Applicant established a payment plan 
with the IRS for monthly payments of $350 to satisfy the tax lien for both 2009 and 2010 
tax years. He was making payments on line and alternating the tax year for which the 
payment was allocated each month. He also received a federal income tax assessment 
of $1,124 for tax year 2012. (AX M, Tax Transcript). In November 2015, the IRS 
informed Applicant that since he was paying for different tax years, he was required to 
have an agreement for each year. (Tr. 32-38) 
 
The IRS informed Applicant in August 2017 that they had not received his 2015 
and 2016 tax returns. Applicant had contracted with a tax preparer to file his taxes for 
him. The IRS told Applicant that they could not make a new payment agreement with 
him until he filed his prior years and 2017 tax returns. After reviewing the tax returns, 
the IRS would make a payment arrangement with Applicant for all of the federal taxes 
he owed. He had a professional tax preparer recalculate his prior years’ returns and 
complete his 2017 tax return. Applicant has not received a new payment plan from the 
IRS, but he made a $400 good-faith payment to the IRS on May 14, 2018, anticipating 
the amount of taxes he will owe. (Tr. 38-44; AX R, Receipt and Bank Statement, dated 
May 14, 2018)  
 
Applicant also owes state taxes for tax years prior to 2014. He has an agreement 
with the state to pay $95 monthly to satisfy his state tax debt. He has been making 
payments since August 2017. (Tr. 37-39; AX F, Agreement dated August 8, 2017; AX N, 
Receipt, dated March 13, 2018) 
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The debt at SOR 1.d is a credit card account in collection for $329. The account 
was paid in full and closed in December 2016. (Tr. 27-28; AX R, Credit Report, at 11) 
 
The debt at SOR 1.e is a cellphone debt in collection. Applicant co-signed for a 
cellphone service account for his mother. His mother was making payments but lost her 
job and could no longer afford the phone. Applicant learned of this debt during the 
security clearance process. He reached an agreement in July 2017 with the collection 
agency to pay $131 monthly on the debt. He has been making the payment since then 
by automatic deduction from his account. (Tr. 28-29; AX E, Receipt, dated July 24, 
2017) 
 
The debt at SOR 1.f is a credit card debt. The Government’s credit report shows 
the debt has been paid and satisfied. (Tr.29-30; GX 2, Credit Report) 
 
The debts at SOR 1.g, 1.h, and 1.i are traffic camera tickets from a city. Applicant 
contacted the city to learn more about the tickets. Since the tickets were prior to 2009, 
the city did not have information on the tickets. He disputed the tickets through the 
credit reporting agency and the tickets were removed from his credit report, since the 
city could not verify the tickets were issued to Applicant. (Tr. 30-32)  
Policies 
 
When evaluating an applicant’s suitability for a security clearance, the 
administrative judge must consider the adjudicative guidelines. In addition to brief 
introductory explanations for each guideline, the adjudicative guidelines list potentially 
disqualifying conditions and mitigating conditions, which must be considered 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, these guidelines are applied in conjunction with the 
factors listed in the adjudicative process. The administrative judge’s overarching 
adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶ 
2(c), the entire process is a conscientious scrutiny 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.  
 
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, 
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or mitigate facts admitted by applicant or proven by Department Counsel. . . . .” The 
applicant has the ultimate burden of persuasion in seeking a favorable security decision. 
 
A person who seeks access to classified information enters 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 that the applicant may deliberately or inadvertently fail to 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. 
 
Analysis 
 
Financial Considerations 
 
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 a person’s reliability, 
trustworthiness, and ability to protect classified or sensitive information. (AG ¶ 18) The 
financial security concern is broader than the possibility that an individual might 
knowingly compromise classified information to raise money. It encompasses concerns 
about an individual’s responsibility, trustworthiness, and good judgment. Security 
clearance adjudications are based on an evaluation of an individual’s reliability and 
trustworthiness. An individual who is financially irresponsible may also be irresponsible, 
unconcerned, or careless in his or her obligations to protect classified information. 
Behaving responsibly or irresponsibly in one aspect of life provides an indication of how 
a person may behave in other aspects of life. 
 
A person’s relationship with his or her creditors is a private matter until evidence 
is uncovered demonstrating an inability or unwillingness to meet financial obligations. 
Absent evidence of strong extenuating or mitigating circumstances, an applicant with a 
history of serious or recurring financial difficulties is in a situation of risk inconsistent 
with the holding of a security clearance. An applicant is required to manage his or her 
finances in such a way as to meet financial obligations.  
 
Credit reports and Applicant’s admissions reveal that Applicant has delinquent 
consumer, credit card, and tax debts. The evidence is sufficient to raise the following 
security concerns under Financial Considerations Disqualifying Conditions AG ¶ 19: 
 
(a) inability to satisfy debts; 
 
(c) a history of not meeting financial obligations; and  
 
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(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. 
 
The available evidence shows that Applicant was not able to resolve the 
delinquent debts. This raises issues about Applicant’s ability to meet his financial 
obligations. Once the Government has established an adverse financial issue, the 
Applicant has the responsibility to refute or mitigate the issue. 
  
I considered the following Financial Consideration Mitigating Conditions under 
AG ¶ 20: 
 
(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 problems 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 counselling 
service, and there are clear indications that the problem is being resolved 
or is under control;  
 
(d) the individual has initiated and is adhering to a good-faith effort to 
repay the 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 substantial the basis of the dispute or provides 
evidence of actions to resolve the issue; 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’s debts are numerous and recent. Three of the debts were incurred 
because Applicant co-signed a lease and a loan for the same relative, and for cellphone 
service for another relative. The relatives defaulted and did not pay the debts when due. 
While Applicant is legally responsible as a co-signer, the debts were incurred by 
circumstances beyond his control when the primary parties did not meet their financial 
obligations. His first employer did not withhold funds from his pay for taxes so he 
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incurred income tax debt. He has other debts because of low income jobs. He received 
three traffic camera tickets. He learned of most of the debts during the security 
clearance process. These circumstances causing the debts can recur.  
 
Applicant acted in good faith towards his debts. Good faith means acting in a way 
that shows reasonableness, prudence, honesty, and adherence to duty and obligation. 
Applicant is not required to be debt-free. All that is required is that Applicant act 
responsibly given his circumstances. Applicant must establish that he has a reasonable 
plan to resolve financial problems, and that he has taken significant action to implement 
that plan. Applicant’s plan must show a systematic method of handling debts, and 
Applicant must establish a meaningful track record of debt payment. A meaningful track 
record of debt payment can be established by evidence of actual debt payments or 
reduction of debt through payment of debts. His plan does not require paying off all 
debts immediately or simultaneously. A promise to pay delinquent debts is not a 
substitute for a track record of paying debts in a timely manner and acting in a 
financially responsible manner.  
 
Applicant acted responsibly under the circumstances, and he provided adequate 
information on his plans to pay and resolve his delinquent debts. Applicant is current 
with payment arrangements he entered to pay the three debts incurred because he co-
signed financial agreements for relatives. Applicant provided significant documents to 
establish he is making regular payments on the debts at SOR 1.a, 1.b, and 1.e. He 
established that he paid the debts at SOR 1.d and 1.f. Applicant provided sufficient 
documentation to establish that he entered or is still negotiating payment plans to 
resolve both his federal and state income tax liabilities and is current with the plans to 
pay the tax lien at SOR 1.c. He disputed the three traffic camera tickets at SOR 1.g, 1.h, 
and 1.i. The dispute was resolved in his favor and the debts were removed from his 
credit report. Applicant did not present any evidence of financial counseling.  
 
Applicant has shown sufficient action to resolve his delinquent debts. Applicant 
provided enough details and sufficient documentation to show proof of payments, 
correspondence to or from the creditors to establish maintenance of contact, evidence 
of attempts to negotiate payment plans, or other evidence of progress or resolution. 
There is sufficient evidence to establish why Applicant was unable to make greater 
progress resolving his debts. There is sufficient assurance that his financial problems 
are being resolved, are under control, and will not recur in the future. He has shown a 
good-faith effort to resolve these debts. His reasonable and responsible actions towards 
his finances is a strong indication that he will protect and safeguard classified or 
sensitive information. Under all these circumstances, Applicant mitigated financial 
security concerns.  
 
 
 
 
Whole-Person Concept 
 
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Under the whole-person concept, an administrative judge must evaluate an 
applicant’s eligibility for access to classified information 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. 
 
Under AG ¶ 2(c), the ultimate determination of whether to grant eligibility for access to 
classified information must be an overall common-sense 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 
the facts and circumstances surrounding this case. Applicant established that he took 
reasonable and responsible action to resolve his financial obligations. Applicant 
demonstrated appropriate management of his finances and showed a record of action 
to resolve financial issues. Overall, the record evidence leaves me without questions 
and doubts concerning Applicant’s judgment, reliability, and trustworthiness. He has 
established his suitability for access to classified information. For all these reasons, I 
conclude Applicant mitigated the security concerns arising from his financial situation.  
 
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:   FOR APPLICANT 
  
 Subparagraphs 1.a – 1.i:   For Applicant 
 
 
 
 
 
 
 
 
Conclusion 
 
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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 access to 
classified information. Eligibility for access to classified information is granted. 
 
 
 
_________________ 
THOMAS M. CREAN 
Administrative Judge