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                            DEPARTMENT OF DEFENSE                                                  
             DEFENSE OFFICE OF HEARINGS AND APPEALS                               
           
             
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 17-01372 
  ) 
 ) 
Applicant for Security Clearance ) 
 
Appearances 
 
For Government: Tara R. Karoian, Esq., Department Counsel 
For Applicant: Pro se 
 
 
 
______________ 
  
Decision 
______________ 
 
 
DAM, Shari, Administrative Judge: 
 
Applicant mitigated the Guideline F, Financial Considerations, security concerns 
arising from his delinquent debts. National security eligibility for access to classified 
information is granted. 
 
History of Case 
 
On January 8, 2016, Applicant submitted a security clearance application (SF 86). 
On May 17, 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 
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 for Determining Eligibility for Access to Classified Information (AG), effective 
 
 
 
 
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within the DOD after September 1, 2006. On June 8, 2017, new AG were implemented 
and are effective for decisions issued after that date.1  
 
 Applicant answered the SOR in writing on June 5, 2017 (Answer), and requested 
a hearing before an administrative judge. The Defense Office of Hearings and Appeals 
(DOHA) assigned the case to me on February 21, 2018. DOHA issued a Notice of Hearing 
on March 13, 2018, setting the hearing for April 17, 2018. Department Counsel offered 
Government Exhibits (GE) 1 through 5 into evidence. Applicant testified, and offered 
Exhibits (AE) A through M into evidence. All exhibits were admitted without objection. 
DOHA received the hearing transcript (Tr.) on May 3, 2018. The record remained open 
until June 4, 2018, to permit submission of additional evidence. Applicant timely submitted 
a revised AE A-1 and B-1. He submitted another document that he marked as AE M. In 
order to avoid confusion with the previously admitted AE M, I marked that exhibit as AE 
M-1. He also submitted AE N through W. All post-hearing exhibits are admitted without 
objection.  
 
Findings of Fact 
 
 Applicant is 55 years old and divorced from his third wife.  He has an 18-year-old 
daughter from his second marriage. He enlisted into the Navy after high school but 
received a medical honorable discharge during boot camp. He works in the field of 
heating, ventilation, and air conditioning (HVAC). He started his current position with a 
federal contractor in October 2015. He was unemployed for six months prior to that. (Tr. 
29-32; GE 1) 
 
 Applicant attributed his financial problems to four factors: (1) In November 2013, 
Applicant was diagnosed with a cardiac problem. Subsequently, he was hospitalized for 
periods of time, including three week in January 2014, and then later. He lost his medical 
insurance at some point and was unable to pay for his medication. (2) Around the same 
time his father was sick, and Applicant cared for him until he died and then paid the funeral 
expenses. (3) In April 2014, Applicant’s employer died, and the business was sold. 
Subsequently the new owner went through a divorce, which affected the business and 
Applicant’s income. (4) In May 2014, Applicant’s girlfriend moved out of their apartment 
and took all of the household furnishings, unbeknownst to him, and left him with the bills. 
(Tr. 33-38; Answer)   
 
 Applicant’s sister and brother-in-law helped him during this difficult two years and 
loaned him money to pay his car loan. Applicant said that since obtaining a full-time 
position in October 2015, he has been paying delinquent debts and improving his financial 
situation. (Tr. 38-40; AE A)  
 
 In October 2017, Applicant was diagnosed with a tumor in his jaw. He has dental 
insurance, but it did not cover many of the costs associated with extractions and 
                                            
1 I considered the previous AG, effective September 1, 2006, as well as the new AG, effective June 8, 
2017. My decision would be the same under either set of guidelines. 
 
 
 
 
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surgeries. He has paid about $8,000 for those services. He used his federal and state tax 
refunds from 2017 to pay some of the dental bills. He said he works overtime when 
available to earn more money. (Tr. 40-41, 66) 
   
 Based on credit bureau reports (CBR) from February 2016, April 2017, and July 
2017, the SOR alleged 34 delinquent debts that accumulated between 2013 and 2015, 
and totaled over $35,000. They included 13 medical debts, unpaid child support, credit 
card debts, and miscellaneous debts. All of the debts have been resolved or are being 
resolved, except the $171 debt listed in SOR ¶ 1.ee, which Applicant is unable to locate 
the creditor. (Tr. 39; GE 3, 4, 5; AE A-1) 
 
 The following 25 SOR alleged debts are paid: 1.b for $1,148; 1.c for $1,111; 1.d 
for $848; 1.e for $749; 1.f for $744; 1.g for $663; 1.h for $525; 1.i for $513; 1.j for $511; 
1.k for $5092; 1.l for $163; 1.m for $6,1003; 1.o for $945; 1.p for $845; 1.q for $834; 1.r 
for $777; 1.s for $522; 1.t for $513; 1.u for $509; 1.y for $652; 1.bb for $275; 1.cc for $225; 
1.dd for $204; 1.gg for $126; and 1.hh for $111. These debts total $20,122 and were paid 
between March 2017 and May 2018, as noted on AE A-1, which references attached 
supporting documents. (AE A-1) 
 
 The following eight SOR alleged debts are being resolved through payment plans 
which Applicant recently established: 1.a for $3,636; 1.n for $2,345; 1.v for $5,388; 1.w 
for $1,920; 1.x for $990 (now $4,700); 1.z for $421; 1.aa for $352; and 1.ff for $149.  These 
debts total $14,211. As of May 2018, Applicant paid $1,531 on the plans, as noted on AE 
A-1, which references attached supporting documents. (AE-1) 
 
 Applicant submitted a budget. His net monthly income is $3,605. After paying 
expenses, he has about $740 remaining for his repayment plans and other expenses. 
(AE M)  
 
 Applicant’s sister testified. She is aware of the circumstances surrounding her 
brother’s delinquent debts. She said he works 10 to 12 hour days, six days a week, trying 
to recover from his financial difficulties and delinquent debts. She believed that he has 
shown great progress toward that issue and managing his health problems. (Tr. 73-74)  
 
 Applicant’s supervisor submitted a letter of recommendation. He has known 
Applicant for over two years. He stated that Applicant is highly qualified for his position, 
holding certifications that other employees do not have. He considers Applicant to be a 
trustworthy and valued member of his team. (AE W)  
 
 
 
 
                                            
2 SOR ¶ 1.k and ¶ 1.u are duplicate debts. (Tr. 59) 
 
3 This debt was for unpaid child support. (Tr. 43) 
 
 
 
 
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Policies 
 
 When evaluating an applicant’s suitability for 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 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.  
 
 Directive ¶ E3.1.14 requires the Government to present evidence to establish 
controverted facts alleged in the SOR. Directive ¶ E3.1.15 states 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.) 
 
 
 
 
 
 
 
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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. Three 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. 
 
Applicant’s numerous delinquent debts began arising in 2013 and continued into 
2015, as documented by his admissions and the CBRs. He has been unable or unwilling 
to satisfy or resolve those debts until early 2017. These facts established prima facie 
evidence for the foregoing disqualifying conditions, and shift the burden to Applicant to 
mitigate the resulting security concerns. 
 
 The guideline includes conditions in AG ¶ 20 that could mitigate the security 
concerns arising from Applicant’s alleged financial difficulties. The following may 
potentially apply:  
 
(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 
 
 
 
 
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counseling service, and there are clear indications that the problem is being 
resolved or is under control; and 
 
(d) the individual initiated and is adhering to a good-faith effort to repay 
overdue creditors or otherwise resolve debts. 
 
 The series of circumstances that occurred between 2013 and 2015 and resulted 
in Applicant’s financial problems were beyond his control, and included serious and 
unexpected medical problems, employment issues, a family illness and death, and a 
personal relationship termination. When Applicant began working full-time and was no 
longer sick, he started addressing his debts and documenting that he acted responsibly 
under the circumstances. The evidence establishes mitigation under AG ¶ 20(b). 
Applicant did not provide evidence that he participated in credit or financial counseling; 
however, he presented evidence that he has resolved or is resolving 33 of the 34 alleged 
delinquent debts and they are coming under control. He established mitigation under AG 
¶ 20(c), and also under AG ¶ 20(d) as he made good-faith efforts to resolve his debts.   
 
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. I have incorporated my 
comments under Guideline F in my whole-person analysis. Some of the factors in AG ¶ 
2(d) were addressed under those guidelines, but some warrant additional comment. 
 
 Applicant is a mature individual who encountered serious personal issues that 
resulted in financial difficulties for a couple years. Subsequent to finding full employment 
in late 2015 and regaining his health, he slowly began addressing some debts in March 
2017, which was prior to the issuance of the SOR. Since then, he has satisfactorily 
 
 
 
 
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resolved or is resolving all of the alleged delinquent debts, except one small one because 
he cannot locate the creditor.  
 
 The Appeal Board has addressed a key element in the whole-person analysis in 
financial cases, stating:  
 
In evaluating Guideline F cases, the Board has previously noted that the 
concept of ‘meaningful track record’ necessarily includes evidence of actual 
debt reduction through payment of debts. However, an applicant is not 
required, as a matter of law, to establish that he has paid off each and every 
debt listed in the SOR. All that is required is that an applicant demonstrates 
that he has ‘. . . established a plan to resolve his financial problems and 
taken significant actions to implement that plan.’ The Judge can reasonably 
consider the entirety of an applicant’s financial situation and his actions in 
evaluating the extent to which that applicant’s plan for the reduction of his 
outstanding indebtedness is credible and realistic. See Directive ¶ E2.2 (a) 
(‘Available, reliable information about the person, past and present, 
favorable and unfavorable, should be considered in reaching a 
determination.’) There is no requirement that a plan provide for payments 
on all outstanding debts simultaneously. Rather, a reasonable plan (and 
concomitant conduct) may provide for the payment of such debts one at a 
time. Likewise, there is no requirement that the first debts actually paid in 
furtherance of a reasonable debt plan be the ones listed in the SOR.4 
 
 According to his budget, Applicant has sufficient money to continue making 
payments on repayment plans he established with eight creditors. He has paid and 
resolved 25 debts. During the hearing, he displayed candor and a commitment to financial 
stability. The likelihood that similar financial problems will recur or Applicant will stop 
making payments on the plans he initiated is minimal based on his efforts to-date and 
knowledge that similar problems could jeopardize his employment. Overall, the record 
evidence leaves me without doubt as to Applicant’s reliability, trustworthiness, good 
judgment, eligibility and suitability for a security clearance. He met 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 the Directive, are: 
 
  Paragraph 1, Guideline F:   FOR APPLICANT 
 
       Subparagraphs 1.a through 1.hh: For Applicant 
 
 
                                            
4 ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008) (internal citations omitted). 
 
 
 
 
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Conclusion 
 
 In light of all of the circumstances presented by the record in this case, it is clearly 
consistent with the interests of national security to grant Applicant access to classified 
information. National security eligibility is granted. 
                                        
 
         
SHARI DAM 
Administrative Judge