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                        DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 17-02494 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Nicholas Temple, Esq., Department Counsel 
For Applicant: Pro se 
 
08/29/2018 
______________ 
 
Decision 
______________ 
 
LYNCH, Noreen A., Administrative Judge: 
 
This case invokes security concerns raised under Guideline F (Financial 
Considerations). Applicant did not present sufficient evidence to mitigate the financial 
security concerns. Eligibility for access to classified information is denied. 
 
Statement of the Case 
 
On August 11, 2017, in accordance with 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. 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 timely answered the SOR, and requested a hearing before an 
administrative judge. (Answer.) The case was assigned to me on March 15, 2018. The 
Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on April 16, 
2018, scheduling the hearing for June 21, 2018. The hearing was convened as 
scheduled. The Government offered Government Exhibits (GE) 1 through 6, which were 
admitted. Applicant testified on his own behalf, and presented Applicant Exhibit (AE) A, 
which was admitted into the record without objection. I held the record open until July 5, 
2018 and at Applicant’s request, granted him an extension of time until August 5, 2018 
 
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for additional documentation. Applicant did not submit any information. DOHA received 
the transcript of the hearing (Tr.) on June 29, 2018. 
 
Findings of Fact 
 
Applicant, age 39, is married and has three children. Applicant graduated from high 
school in 1996, and has completed about two years of college. He served in the United 
States Army from 1996 to 2001. After that he joined the National Guard from 2001 until 
2004.   Applicant completed a security clearance application on March 21, 2015. He has 
held a security clearance since 2003. (GE 1)  He has worked for his current employer for 
two years. (Tr. 15) 
 
The SOR alleges that Applicant filed for Chapter 13 bankruptcy twice and both 
petitions were dismissed; that he has a 2016 Federal tax lien in the amount of $23,926; 
and that he has other delinquent medical debt in the amount of approximately $3,000. 
Applicant admitted the debts, and provided explanations. He provided documentation that 
the debt in SOR 1.e for $494 was paid in full in 2015. (AE A) 
 
Applicant acknowledged his financial difficulties in the past. He stated that it was 
never his intention to ignore debts, but due to certain life changes he could not always 
pay his bills at once. He bought a home in 2017 through the Department of Veteran’s 
Affairs (VA). He takes responsibility and has worked hard the past two years to get his 
credit in a good status. He stated that two collection accounts on his credit report will be 
taken care of soon and he is in the process of making payment arrangements to resolve 
all delinquent debts. He wanted to wait until after the closing on his home to decide the 
maximum amount that he could afford monthly. He knows he made mistakes and he 
continues to work hard to address them.  
 
As to SOR 1.a, Applicant admitted the medical account in the amount of $999, but 
at the hearing he stated that he is disputing the debt. He believes it may belong to his 
father. (Tr.16) He contacted the company last year. He was also told by his mortgage 
broker not to pay it because it could lower his credit score. He provided no documentation 
for his assertion that he has been disputing the debt. 
 
As to SOR 1.b, Applicant admitted the 2016 Federal Government tax lien in the 
amount of $23,926. He stated that he is currently on a payment plan of $400 monthly. He 
stated that the payments started in July 2016. (Tr.35) He did not produce any 
documentation for this assertion. He blamed the debt on a tax accountant who “mis-filed” 
his taxes for two years. He was audited. He called the IRS so that they would not garnish 
his wages. (Tr. 33) He reiterated that he set up a payment plan with the IRS. (Tr. 35) 
 
As to SOR 1.c, Applicant admitted that he filed a chapter 13 bankruptcy petition in 
March 2011 and that it was dismissed before he left for Afghanistan. (Tr. 32; GE 6) 
 
As to SOR d., Applicant filed in October 2009, for Chapter 13 Bankruptcy, which 
was dismissed in January 2011.  Applicant explained that both bankruptcy petitions were 
due to a pending home foreclosure. He bought his first home in 2008, but shortly 
 
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thereafter his wife stopped working to attend school. With the loss of her income and his 
overtime hours reduced, he could not make the mortgage payment. He asked the bank 
for a loan modification. He explained that the bank told him not to pay the mortgage 
payments for three months or until the process was completed. The bank required a sum 
of money and Applicant provided the sum of $2,000 or $3,000. After that they denied the 
loan modification. The bank asked Applicant to file another loan modification but then 
rejected it. They also stressed that he not pay the mortgage. This continued for about one 
year. To save his home in state L he filed for bankruptcy and was able to make some 
payments. Applicant noted that this bank was involved in a class action law suit for 
unethical dealings. (Tr.30-32) 
 
He filed another bankruptcy (SOR 1.c), but the payments were not affordable. He 
lost his contract job in 2009. Another twist occurred when Applicant was sent to 
Afghanistan. (Tr. 24) He took a job in state V when he returned in 2011. He lost the home 
but was given $1,000 in compensation as a result of the class action suit. (Tr. 32) He then 
was not responsible for the home that the bank foreclosed. (Tr. 32) He never received a 
notice for a deficiency balance.  
 
As to SOR 1 f, Applicant admits owing $30 for a medical account in collection. He 
stated that he paid the bill. (Tr.92) He stated that he paid it two years ago and it is no 
longer on his credit report.  
 
As to SOR 1.g, a collection account in the amount of $1,577, Applicant believes 
this is for a cable service. A box was not returned to the company. He admits the debt, 
but he stated that he sent the cable equipment. His mortgage broker told him not to pay 
the account. Now, Applicant stated that his current intention is to make arrangements to 
pay the account. 
 
Applicant’s net monthly income is about $9,000, which includes his wife’s earnings. 
(Tr. 37) He has a monthly budget. He obtained financial counseling independent of the 
bankruptcy process. He has a monthly net remainder of about $1,000.  (Tr. 40) 
 
 
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 (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 
 
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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, “Any 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. 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 seeks access to classified information enters into 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 EO  10865, “Any 
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 EO 12968, Section 3.1(b) (listing multiple prerequisites 
for access to classified or sensitive information.) 
 
Analysis 
 
Guideline F (Financial Considerations) 
 
The concern under this guideline 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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 This concern is broader than the possibility that a person might knowingly 
compromise classified information to raise money. It encompasses concerns about a 
person’s self-control, judgment, and other qualities essential to protecting classified 
information. A person who is financially irresponsible may also be irresponsible, 
unconcerned, or negligent in handling and safeguarding classified information. See ISCR 
Case No. 11-05365 at 3 (App. Bd. May 1, 2012). 
 
 Applicant’s admissions, corroborated by his credit reports, and bankruptcy filings, 
establish three disqualifying conditions under this guideline: AG ¶ 19(a) (“inability to 
satisfy debts”), AG ¶ 19(c) (“a history of not meeting financial obligations”) and 19(f) 
(…..”failure to pay annual Federal ..income tax as required.” 
 
 The security concerns raised in the SOR may be mitigated by any of the following 
potentially applicable factors: 
 
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; 
 
AG ¶ 20(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; 
 
AG ¶ 20(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;  
 
AG ¶ 20(d): the individual initiated and is adhering to a good-faith effort to 
repay overdue creditors or otherwise resolve debts; and 
 
AG ¶ 20 (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 the result of unemployment for him and unemployment for 
his wife. He filed a Chapter 13 bankruptcy petition to keep his home from foreclosure in 
2011. He made payments on one bankruptcy, but it was dismissed. Another bankruptcy 
in 2009 was filed due to his wife having no employment. Applicant tried to obtain a loan 
modification from the bank several times, but after telling him not to pay the mortgage, 
the home was still foreclosed. Due to the nature of a class action suit against the bank, 
Applicant was compensated and absolved of any deficiency balance. He has been 
gainfully employed for two years. His tax returns were mis-filed and according to 
Applicant, he has a tax lien that he owes to the Federal Government. Applicant stated 
 
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that he has a payment plan in place with the IRS and that the plan is current. He received  
counseling through the bankruptcy process. He paid the debt in SOR 1.g and plans to 
pay the other debts. He did not have documentation for the other debt that he paid. AG ¶ 
20(a) is fully established as to the two bankruptcy petitions which were tied to the loan 
modifications and petitions. They were time bound to a possible home foreclosure and 
loan modification with a particular bank. Applicant was credible in his testimony with 
respect to the bankruptcies, which are legitimate means of resolving debt.  
 
AG ¶ 20(b) is not established. While Applicant’s unemployment was a condition 
beyond his control, he has not acted responsibly to address the resulting debts. He did 
not provide documentation that he has a plan in place with the IRS for the tax lien. He 
was given an extension of time to produce documentation, but he did not submit any 
information. He did not pay several other debts. 
 
AG ¶ 20(c) is fully established. However, 20(d) and 20(g) are not fully established. 
Applicant received financial counseling as a result of his bankruptcy petition. He admitted 
that he would pay two other debts and that he would produce documentation of his current 
plan with the IRS. He did not have documentation to support this allegation. Promises to 
pay other debts in the future are not sufficient for mitigation. He provided insufficient 
documentation to support the claim. Applicant has not met his burden to mitigate the 
financial concerns set out in the SOR.  
 
 
Whole-Person Concept 
 
 Under AG ¶ 2(c), the ultimate determination of whether the granting or continuing 
of national security eligibility is clearly consistent with the interests of national security 
must be an overall commonsense judgment based upon careful consideration of the 
applicable guidelines, each of which is to be evaluated in the context of the whole person. 
An 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. 
 
 I have incorporated my comments under Guideline F in my whole-person analysis, 
and I have considered the factors in AG ¶ 2(d). After weighing the disqualifying and 
mitigating conditions under Guideline F, and evaluating all the evidence in the context of 
the whole person, including his many years of military service, and work abroad as a 
contractor, I conclude that Applicant has not mitigated the security concerns raised by his 
financial indebtedness. Accordingly, Applicant has not carried his burden of showing that 
 
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it is clearly consistent with the national interest to grant him eligibility for access to 
classified information. 
 
 
 
Formal Findings 
 
I make the following formal findings on the allegations in the SOR: 
 
Paragraph 1, Guideline F:    AGAINST APPLICANT 
 
Subparagraph 1.a:   Against Applicant 
Subparagraphs 1.c-e:  For Applicant 
Subparagraphs 1.f-g:  Against Applicant 
 
      Conclusion 
 
I conclude that it is not clearly consistent with the national interest to continue 
Applicant’s eligibility for access to classified information. Clearance is denied. 
 
 
 
 
Noreen A. Lynch 
Administrative Judge