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                           DEPARTMENT OF DEFENSE 
            DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 17-01791 
  ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Adrienne Driskill, Esq., Department Counsel 
For Applicant: Pro se 
 
 
 
______________ 
 
 
Decision 
______________ 
 
 
GOLDSTEIN, Jennifer, Administrative Judge: 
 
Applicant failed to mitigate the security concerns arising under Guideline F, 
Financial Considerations. His ongoing history of indebtedness and failure to timely pay 
Federal income tax obligations remain a concern. National security eligibility for access 
to classified information is denied.  
 
Statement of the Case 
 
On August 10, 2017, the Department of Defense Consolidated Adjudications 
Facility (DOD CAF) issued to Applicant a Statement of Reasons (SOR) detailing 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 (AG) effective within the DOD on June 8, 2017.  
 
 
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Applicant answered the SOR in writing (Answer) on September 26, 2017, and 
requested a hearing before an administrative judge. The case was assigned to me on 
November 15, 2017. The Defense Office of Hearings and Appeals (DOHA) issued a 
Notice of Hearing on December 13, 2017. I convened the hearing as scheduled on 
January 8, 2018. The Government offered Government Exhibits (GE) 1 through 5, which 
were admitted without objection. Applicant testified on his own behalf and presented 
Applicant Exhibits (AE) A through D, which were admitted without objection. DOHA 
received the transcript of the hearing (Tr.) on January 12, 2018. The record was left open 
for the receipt of additional evidence until January 29, 2018. On January 28, 2018, AE E 
through AE K, were submitted and received without objection. The record closed as 
scheduled on January 29, 2018. 
 
Findings of Fact 
 
 Applicant admitted SOR allegations 1.a through 1.f, with explanations. After a 
thorough and careful review of the testimony, pleadings, and exhibits, I make the following 
findings of fact: 
 
 Applicant is 36 years old, and is married. He has no children. He is a high school 
graduate. He has worked for his employer, a government contractor, since January 2016. 
(GE 1; Tr. 20.) 
 
 Applicant attributes his financial delinquencies to a series of events beyond his 
control. He lost his home to foreclosure in 2010, due to the nationwide recession. His 
work hours were reduced during that time, and he did not have sufficient funds to make 
ends meet. He relied on credit cards to pay his living expenses. Additionally, he 
experienced two periods of unemployment: from April 2014 to September 2014, and from 
February 2015 to January 2016. His wife was also unemployed from April 2014 to January 
2016. (Tr. 22-26.) 
 
 Applicant was alleged to be indebted to a bank on a judgment filed against him in 
2011, in the amount of $5,034, as stated in SOR subparagraph 1.a. Applicant was also 
alleged to be indebted to the same underlying creditor in the amount of $7,034, as stated 
in SOR subparagraph 1.e. These are the same debt. He testified that this debt was 
possibly for a delinquent credit card. He inquired about the status of this judgment with 
the clerk of court and was told the judgment remained “open.” It no longer appears on his 
most recent credit report, but he never paid this debt. It is unresolved. (GE 3; Tr. 26-31.) 
 
  Applicant was alleged to be indebted to the Federal government on a tax lien filed 
in 2015, in the amount of $25,639, as stated in SOR subparagraph 1.b. He explained the 
tax lien was a result of: 
 
not having the right deduction out of our paychecks because of cost of living 
in the [area omitted] is outrageous, and we were trying to live, so we had to 
try to adjust the amounts so that we could pay for all the things we had, and 
unfortunately, at the end of the year, it was too much for us to pay them, so 
 
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we would try to set up a payment. We would start paying, but it would never 
go down. So then the next year would come and it would be the same 
situation ‘cause we were - - we would change it a little bit so that we could 
pay the payments every month, but it just kept stacking and stacking up. 
(Tr. 40-41.) 
 
The lien covered delinquent Federal taxes from tax years 2009 through 2012. He 
made payments via installment agreements with the Internal Revenue Service (IRS) 
several times including: from approximately June 2012 to August 2014, and from June 
2015 to February 2016, but those agreements ceased due to nonpayment. In August 
2017, he hired a lawyer to negotiate a payment plan that he can afford to resolve this 
obligation. He pays the law firm approximately $460 per month for their services, on a 
total contract price of $6,500. No payment agreement with the IRS had been documented 
by the close of the record. The law firm filed an application for the withdrawal of tax lien 
on October 12, 2017. The documentation does not establish whether that application was 
approved. Applicant’s Federal tax debt remains unresolved. (GE 2; GE 4; AE B; AE G; 
Tr. 21, 40-49, 62.) 
 
 Applicant was alleged to be indebted on a collection account in the amount of $331, 
as stated in SOR subparagraph 1.c. This debt became delinquent in May 2014. It was for 
a utility bill from a previous residence. Applicant paid this debt in August 2017. (GE 3; GE 
5; AE A; AE C; A D; Tr. 31-32.) 
 
 Applicant was alleged to be indebted on a collection account in the amount of $315, 
as stated in SOR subparagraph 1.d. This debt became delinquent in August 2013. It was 
paid for less than the full balance, as reflected on Applicant’s September 22, 2017 credit 
report. (GE 5; AE A; AE C; AE D; Tr. 32-34.) 
 
 Applicant was alleged to be indebted on a collection account in the amount of 
$4,287, as stated in SOR subparagraph 1.f. Applicant testified that this debt was related 
to a repossessed automobile. It became delinquent in June 2010. After receiving the 
SOR, Applicant contacted this creditor, but was unable to reach a payment agreement. It 
is unresolved.  (GE 3; Tr. 37-40.) 
 
His credit report dated October 20, 2017, reflects one additional delinquent debt in 
the amount of $2,289. Applicant testified that the creditor has been unwilling to accept 
payments. (GE 5; Tr. 59-60.) 
 
Applicant has not attended financial counseling recently. He claims he and his wife 
now live within their means and have “learned our lesson.” (Tr. 52-53.) He relocated to a 
less expensive city where there is a lower cost of living. He utilizes a budget to plan for 
his recurring expenses. (Tr. 52-59.)  
 
Applicant presented letters of support from his wife and three close friends. They 
all attest to Applicant’s trustworthiness and dedication to his job. (AE H; AE I; AE J; and 
AE K.) 
 
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Policies 
 
 When evaluating an applicant’s national security eligibility, the administrative judge 
must consider the AG. In addition to brief introductory explanations for each guideline, 
the AG list potentially disqualifying conditions and mitigating conditions, which are 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, 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. 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. Likewise, I have avoided drawing inferences grounded on mere 
speculation or conjecture. 
 
Under Directive ¶ E3.1.14, the Government must present evidence to establish 
controverted facts alleged in the SOR. Directive ¶ E3.1.15 states 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 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 an 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. 
 
Finally, Section 7 of 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).  
 
 
 
  
 
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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. 
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. 
 
AG ¶ 19 provides conditions that could raise security concerns. The following are 
potentially applicable:  
 
 (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; and 
 
(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. 
 
 Applicant has a history of not meeting his financial obligations. He failed to timely 
pay his Federal income tax obligations from 2009 to 2012, which resulted in a $25,639 
tax lien that was filed against him in 2015. He also had four1 unresolved delinquent debts 
that became delinquent between 2010 and 2014, which total $9,967. There is sufficient 
evidence to raise substantial security concerns under the above disqualifying conditions. 
 
  
                                                          
1 SOR subparagraphs 1.a and 1.e allege the same underlying debt, and as a result will be counted as one 
debt. 
 
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The guideline also includes conditions that could mitigate security concerns arising 
from Applicant’s financial difficulties. The following 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, 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; 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 history of financial delinquencies is demonstrated by his current and 
old unresolved debts. He admitted he failed to timely pay his Federal income tax 
obligations. He resolved two small consumer accounts, but two other debts remain 
unaddressed, despite no longer appearing on his credit report. While he plans to resolve 
his Federal tax debt with the help of a law firm, he does not yet have an accepted payment 
agreement. He has no plan to resolve his remaining consumer debts. His debt is ongoing 
and casts doubt on his reliability and judgment. AG ¶ 20(a) does not apply.  
 
 Applicant attributed his financial problems to a series of events, including 
underemployment, unemployment, and the nationwide economic downturn. These were 
conditions beyond his control. However, the record lacks documentation to show he 
reasonably and responsibly addressed his delinquencies while they were accumulating. 
He did not have the funds available to make payments on his consumer debts, so he 
ignored them until they fell off his credit report. While he did negotiate past installment 
 
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agreements with the IRS, he failed to responsibly fulfill those agreements. Full mitigation 
under AG ¶ 20(b) is not established.  
 
 Applicant provided documentation that he has contracted with a law firm to attempt 
to resolve his Federal tax lien. They provided him guidance on how to best manage and 
resolve the tax lien. However because no payments have been documented to the  
IRS, there is insufficient evidence to conclude that his Federal tax delinquency is under 
control. With respect to his consumer debts, Applicant resolved two debts in good faith. 
There is no evidence that he is making a good-faith effort to repay his remaining creditors. 
The evidence does not establish full mitigation under AG ¶¶ 20(c) or 20(d) concerning his 
overall financial situation.  
 
 Applicant did not dispute any of the debts alleged in the SOR. AG ¶ 20(e) does not 
apply. 
 
 Applicant testified that the law firm will make arrangements on his behalf to pay 
the IRS for his delinquent income tax debts. However, he has no repayment plan currently 
in effect. His Federal tax debt is unresolved. He did not fully mitigate the Government’s 
concern under AG ¶ 20(g). 
 
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 the 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 national security 
eligibility 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 
pertinent facts and circumstances surrounding this case. Applicant is respected by his 
wife and friends and is considered trustworthy. His financial problems occurred largely 
due to factors beyond his control, including two significantly long periods of 
unemployment. He has taken efforts to avoid incurring delinquent debt in the future like 
relocating to an area with a lower cost of living. However, he has been unable to recover 
 
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from the turmoil that his and his wife’s unemployment caused in his financial life. While 
he has hired a law firm to help him with his Federal tax debt and has paid two small debts, 
he has not established a track record of responsibly managing and resolving delinquent 
debts or repairing his credit. Applicant has not provided sufficient evidence about his 
overall financial stability from which to determine that further tax problems or financial 
delinquencies are unlikely. The record evidence leaves me with questions and doubts as 
to Applicant’s eligibility and suitability for a security clearance. For all these reasons, I 
conclude Applicant failed to mitigate the security concerns arising under Guideline F.  
 
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:    Against Applicant 
  Subparagraphs 1.b:    Against Applicant  
Subparagraphs 1.c:    For Applicant 
Subparagraphs 1.d:    For Applicant 
Subparagraphs 1.e:    For Applicant 
Subparagraphs 1.f:    Against Applicant   
 
Conclusion 
 
 In light of all of the circumstances presented by the record in this case, it is not 
clearly consistent with the national interest to grant Applicant access to classified 
information. National security eligibility is denied. 
 
 
                                                     
_____________________________ 
Jennifer I. Goldstein 
Administrative Judge