1 
      DEPARTMENT OF DEFENSE 
     DEFENSE OFFICE OF HEARINGS AND APPEALS 
In the matter of:  ) 
 ) 
 ) ISCR Case No. 17-04384 
 ) 
Applicant for Security Clearance  ) 
Appearances 
For Government: Nicholas T. Temple, Esq., Department Counsel 
For Applicant: Pro se 
______________ 
Decision 
______________ 
MATCHINSKI, Elizabeth M., Administrative Judge: 
Applicant defaulted on a mortgage loan and on two credit-card accounts. The 
mortgage was released after he abandoned the property. He made no payments on 
$20,054 in charged-off credit-card delinquencies because they are no longer legally 
collectible. Concerns about his financial judgment persist. Clearance is denied. 
Statement of the Case 
On January 16, 2018, the Department of Defense Consolidated Adjudications 
Facility (DOD CAF) issued a Statement of Reasons (SOR) to Applicant, detailing security 
concerns under Guideline F, financial considerations. The SOR explained why the DOD 
CAF was unable to find it clearly consistent with the national interest to grant or continue 
security clearance eligibility for him. The DOD CAF took the action 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 National Security Adjudicative 
Guidelines for Determining Eligibility for Access to Classified Information or Eligibility to 
Hold a Sensitive Position (AG) effective within the DOD on June 8, 2017. 
12/17/2018
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Applicant responded to the SOR on March 1, 2018, and requested a hearing before 
an administrative judge from the Defense Office of Hearings and Appeals (DOHA). On July 
18, 2018, the case was assigned to me to conduct a hearing to determine whether it is 
clearly consistent with the national interest to grant or continue a security clearance for 
Applicant. On August 6, 2018, I scheduled a hearing for September 18, 2018. 
 
At the hearing, five Government exhibits (GEs 1-5) were admitted. A March 28, 
2018 letter forwarding the proposed GEs to Applicant was marked as a hearing exhibit (HE 
1) for the record but not admitted in evidence. Six Applicant exhibits (AEs A-F) were 
admitted in evidence. Applicant testified, as reflected in a transcript (Tr.) received on 
September 27, 2018. 
 
I held the record open, initially for six weeks, for post-hearing documentation from 
Applicant. On October 29, 2018, Applicant submitted a letter from an attorney (AE G), and 
requested a three-week extension to submit more evidence. On November 5, 2018, 
Department Counsel expressed no objection to AE G, but opposed an additional extension 
on the basis that Applicant had made little attempt in the time allotted to contact his 
creditors. I admitted AE G into the record and extended the deadline to November 26, 
2018. On November 8, 2017, Applicant submitted comments by email, which I accepted 
into the record as AE H without any response from the Government. On November 26, 
2018, Applicant submitted an email with a billing statement from his attorney, which was 
marked as AE I and entered into evidence, the Government having no objections. 
 
Findings of Fact 
 
 The SOR alleges under Guideline F that, as of January 16, 2018, Applicant was 
past due $14,588 on a mortgage in foreclosure status with a $109,401 balance (SOR ¶ 
1.a), and that he owed charged-off credit card balances of $11,984 (SOR ¶ 1.b) and 
$8,070 (SOR ¶ 1.c). When he responded to the SOR in March 2018, Applicant admitted 
the debts, which he attributed to loss of a job and an economic downturn in the information 
technology sector in his previous locale, which made it difficult for him to find a job at an 
income needed to cover all his financial obligations. He indicated that the mortgage 
delinquency was settled without a final judgment of foreclosure. Applicant explained that he 
had no success in negotiating a settlement of the credit card debts. After considering the 
pleadings, exhibits, and transcript, I make the following findings of fact. 
 
Applicant is a 46-year-old information technology network engineer. He has a 
bachelor’s degree in computer science awarded in June 1996, and a master’s degree in 
business administration awarded in December 2000. He began working for his current 
employer, a defense contractor, in September 2016. (GEs 1-2.) 
 
Applicant and his ex-wife married in March 1998 and purchased a home. They had 
a daughter in 2001. In April 2004, they moved to a new locale. They bought a home, 
obtaining a mortgage loan for $60,000. They began having marital difficulties, and decided 
to separate in 2006. (GE 1; Tr. 40-41.) They sold their marital home for approximately what 
they owed on the mortgage. They also sold a parcel of land to settle some debts. In August 
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2006, Applicant’s ex-wife purchased a home for herself and their daughter. She paid for 
the home in part with an $88,400 mortgage loan on which Applicant was also liable. The 
mortgage payments were $768 a month. Applicant resided with his ex-wife and his 
daughter until February 2007, when he purchased a residence for himself with a mortgage 
loan of $101,200, on which his ex-wife was also liable (SOR ¶ 1.a). His mortgage loan 
payments were approximately $916 monthly. They jointly obtained a $25,300 home-equity 
loan, to be repaid at $103 monthly. Applicant was employed as an information technology 
manager at the time. (Answer; GEs 1-5; AE F; Tr. 40-42, 45-46.) 
 
Applicant and his ex-wife were able to maintain the mortgage payments on their 
respective residences for a few years. In March 2009, Applicant left his job of six years 
after his employer hired someone else to maintain a program that Applicant had 
upgraded.1  Applicant started his own computer business, but his self-employment income 
was not sufficient to cover all of his bills. He relied on credit cards, retirement savings, and 
financial assistance from his father, to pay his living expenses, mortgage, and car payment. 
He obtained a car loan of $13,982 in July 2007 that he repaid at $277 a month until it was 
fully satisfied in January 2012. (Answer; GEs 1-2; Tr. 42, 47.) 
 
In July 2012, Applicant and his ex-wife became delinquent on the mortgage loan 
(SOR ¶ 1.a) and on the home-equity loan for his then residence. Applicant consulted with a 
realtor in late September 2012 for help with the paperwork “to get out from under the 
house.” Applicant moved out of the house in November 2012 (Tr. 47-48) and prepared 
paperwork to deed the property in lieu of foreclosure, which the lender rejected in April 
2013. (AE E.) The lender wanted to do a short sale, but rejected an offer of $50,000 for the 
property. (Tr. 43.) When the mortgage account became past due for $14,588, the lender 
initiated foreclosure proceedings. (GEs 1-5.) 
 
In February 2013, Applicant obtained part-time employment with a home-
improvement retailer. (GE 1; Tr. 43.) His credit-card account in SOR ¶ 1.b was closed in 
March 2013 for nonpayment since December 19, 2012. A credit line obtained in February 
2008 (SOR ¶ 1.c) was likewise closed in March 2013 for nonpayment after December 19, 
2012. As of August 2016, the balances of the charged-off accounts were $11,984 (SOR ¶ 
1.b) and $8,070 (SOR ¶ 1.c). Another credit-card account, which had a credit limit of 
$7,200 but a high credit of $12,369, was placed for collection after no payments were 
made after February 2013. Applicant settled the debt for less than its full balance by 
January 2014. (GE 3.) 
 
 With his divorce not yet finalized, Applicant relocated to his present area in August 
2013 for a full-time position with the home-improvement retailer. He took on a second job 
with another retailer for a short time, and was able to pay his bills but not get ahead. (GE 1; 
AE E; Tr. 43-44.) On October 10, 2013, the lender released the mortgage on his previous 
residence, and on October 31, 2013, issued a 1099-A Form, Acquisition of Abandonment 
                                                 
1 Applicant indicated on his August 2016 security clearance application that he left his job for “health reasons.” 
(GE 1.) When he responded to the SOR, he indicated that he lost his job after the employer hired someone at 
a much lower salary to maintain the system Applicant upgraded. (Answer.) He provided no documentation 
showing that he was laid off.  
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of Secured Property.2 At the time, Applicant and his ex-wife owed a principal balance of 
$91,282 on their mortgage loan, and the property was valued at $105,570. (AE F; 42-44, 
48.) Applicant’s understanding was that he and his ex-wife no longer had any obligation on 
the loan or on the home-equity loan. (Tr. 49.) 
 
 Applicant’s gross income for tax purposes was $31,005 in 2014, $30,696 in 2015, 
and $21,609 in 2016. (AE B.) He collected worker’s compensation in 2016 after injuring his 
knee on the job, which was not taxable. (Tr. 44-45.) 
 
 On August 2, 2016, Applicant completed and certified to the accuracy of a 
Questionnaire for National Security Positions (SF 86) to work for his current employer. In 
response to the delinquency involving routine accounts, Applicant listed the delinquent 
mortgage, which he indicated was resolved in October 2013 through return of the property. 
He also listed the defaulted home-equity line of credit as resolved in October 2013. 
Applicant listed the charged-off credit card for $11,984 (SOR ¶ 1.b), and indicated that he 
had not taken any actions to resolve it because of a lack of income. He disclosed the 
defaulted credit account for $8,070 (SOR ¶ 1.c), but stated in part: “Checking—I received a 
‘gains’ tax form for a write off but still shows on credit report—will need to call and correct 
them showing that I owe money.” (GE 1.) In September 2016, Applicant began working for 
his current employer at an annual salary of $80,000. (Tr. 57.) 
 
 On September 28, 2017, Applicant was interviewed by an authorized investigator for 
the Office of Personnel Management (OPM). Applicant explained that he signed over the 
deed in lieu of foreclosure to resolve the defaulted mortgage (SOR ¶ 1.a) and related 
home-equity loans on the property. He indicated that he could not maintain the loan 
payments because of low-paying jobs and insufficient income while self-employed. He 
asserted that he was still in negotiations with his creditors to settle his $11,984 and $8,020 
credit-card delinquencies. He had settled a $12,369 credit-card collection debt for $2,000. 
Applicant volunteered that he began working part time for the home-improvement retailer in 
early September 2017 in addition to maintaining his full-time job with a defense contractor.3 
(GE 2.) 
                                                 
2 As the borrower, Applicant was instructed on the 1099-A that if he abandoned the property, he may have 
income from the discharge of indebtedness in the amount of the unpaid balance of his cancelled debt. (AE F.) 
The market value of the property as of October 2013 exceeded the principal loan balance by $14,288.34, but 
Applicant and his ex-wife were $14,588 past-due on the loan at the time it was released. There is no evidence 
that the lender has pursued Applicant for any deficiency, even though the debt was still on his credit record as 
of March 2018. (GE 5.) For tax purposes, abandonment is treated differently from foreclosure. Generally, 
abandonment is not treated as a sale or exchange of the property while a foreclosure is treated as a sale or 
exchange. If the amount realized from an abandonment is more than an individual’s adjusted basis, it amounts 
to a gain, if less, then it is a loss. See IRS Publication 544.  If property is abandoned that secures a debt for 
which one is personally liable (recourse debt) and the debt is cancelled, the individual realizes ordinary income 
equal to the canceled debt. That income must be reported on an individual’s tax return unless one of the 
exceptions or exclusions applies. See IRS Publication 4681. There is no evidence that the mortgage holder 
issued a 1099-C cancelling the debt. As to whether Applicant reported release of responsibility for the debt as 
income on his tax returns for 2013, Applicant testified that an accountant handled his and his then wife’s 
income tax returns, which were filed separately. He indicated that he did not receive a copy of his return and 
could provide no information in that regard. (Tr. 62-63.) 
  
3Applicant testified at his September 2018 hearing that he has held the part-time job for four or five months. 
5 
 
  In November 2017, Equifax reported the delinquent mortgage (SOR ¶ 1.a) as 
$14,588 past due as of November 2014. The defaulted credit cards (SOR ¶¶ 1.b and 1.c) 
were reported as unpaid charge-offs. (GE 4.) In January 2018, the DOD CAF issued an 
SOR to Applicant because of the mortgage and two credit-card delinquencies. In response 
to the SOR, Applicant indicated that the mortgage was settled without a foreclosure, but 
that he had been unable “to get any recourse” regarding the credit-card debts. (Answer.) 
As of March 2018, the mortgage was on his credit record as a “foreclosure” and past due 
for $14,588. No payments had been made toward the $11,984 and $8,070 charged-off 
credit delinquencies. Applicant was making payments on terms acceptable to his creditor 
on a credit card with a $1,000 limit opened in January 2017. (GE 5.) The card is self-
funded in that Applicant deposits $1,000 and can charge against his balance. (Tr. 58.) 
 
 Applicant purchased a legal plan through his part-time job with the home-
improvement retailer, and in approximately July 2018, he consulted with an attorney, 
primarily about routine legal services. (Tr. 54.) Applicant advised the attorney that he had 
two old credit-card accounts that he last used six years ago and were closed in 2013. The 
attorney advised him to look into the applicable state statute of limitations regarding debt 
collection. According to Applicant, the attorney stated that if it was close to the date barring 
legal collection, he would suggest “just let it ride.” (Tr. 29-30.) Applicant already knew that 
the state in which he incurred his credit debts has a three-year statute of limitations for 
credit-card debts. (Tr. 56.) He learned that the state has a five-year statute of limitations on 
written contracts, and that the state in which he has resided since August 2013 was more 
favorable to creditors in that it has a six-year statute of limitations for all financial contracts. 
(AEs D, G; Tr. 56.) Applicant considered the credit-card delinquencies “off the books and 
off [his] plate.” Thinking he had a slim chance of obtaining the security clearance needed to 
keep his job, he made no effort to resolve his delinquent debts as of September 2018. (AE 
D; Tr. 49-50, 56.) 
 
 Applicant’s current annual income from his defense-contractor job is approximately 
$80,105. (Tr. 44-45, 51, 57.) He had $3,635 in combined checking account deposits as of 
September 2018, but his rent check had not yet cleared. (Tr. 26.) He had $13,272 in his 
savings accounts. (AE C.) Applicant has been building his savings for emergency 
expenses because of his difficulty getting consumer credit. (Tr. 51-52.) He averaged 
$2,195 in monthly bill expenses from April 2018 to September 2018, which included rent at 
$1,435 per month but excluded food, personal care items, and other miscellaneous 
expenses. (AE B.) Applicant pays $100 in child support per month and has his daughter on 
his health insurance. (Tr. 52.) Applicant recently purchased a motorcycle for $700 cash that 
he uses on occasion to keep down the mileage on his 2007 model-year vehicle, which has 
160,000 miles on the engine. (Tr. 53.) 
 
 At his hearing, Applicant admitted that he did not want to reach out to his creditors to 
resolve the credit-card delinquencies because it would “restart the time clock” on the debts 
if he was going to be denied security clearance eligibility because of the defaulted 
mortgage. (Tr. 30.) He expressed a willingness to contact his creditors and attempt good-
                                                                                                                                                             
(Tr. 57.) He discrepantly gave a start date of September 9, 2017, for his part-time employment during his 
subject interview in late September 2017. (GE 2.) The discrepancy was not clarified. 
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faith settlements. I held the record open for over two months for Applicant to present 
evidence of settlement efforts. Applicant presented a letter from his attorney who rendered 
his professional opinion that Applicant’s debts are no longer legally collectible because the 
laws of the state where the debts were incurred are likely controlling, and it has been more 
than three years since Applicant’s last payment on the credit accounts. Regarding the 
defaulted mortgage, the attorney indicated that the five-year statute of limitations for written 
contracts has expired because Applicant defaulted on the loan before the October 31, 
2013 date of abandonment of the property. (AE G.) The attorney billed Applicant $1,091 for 
his services providing advice and his legal opinion on the debt matters. (AE I.) 
 
 On November 8, 2018, Applicant explained that he would have resolved his past-
due credit-card debts two years ago if he had not been told by a co-worker that he would 
be disqualified from having a security clearance granted if he had a bankruptcy or a 
foreclosure on his record. Applicant requested that he be granted three months to address 
his credit issues, and that, if he fails to do so, Department Counsel could appeal a 
favorable grant. (AE H.) I held the record open to November 26, 2018, for proof of any 
efforts to resolve the SOR debts. On November 26, 2018, Applicant responded that he 
used the time to contact his creditors, but he had not been able to resolve the issues. He 
admitted that he is “conflicted” about resolving the debts because they are so close to 
dropping from his credit record, but that to get a clearance and work the issue in a short 
time as a requirement for continued employment would be the only option to “accept the 
punishment of having 7 more years of bad debt.” (AE I.)  
  
 Applicant provides engineering support for a U.S. military program on a military 
base. The program manager has been able to rely on him “to be polite, inquisitive, 
professional and a team player in any area of [their] work.” Applicant has been “punctual, 
dedicated and passionate about his work.” (AE A.) 
 
 Applicant also provided character reference letters from personal associates and 
friends. Applicant has been active in his church. He has demonstrated honesty and 
reliability in his dealings with his pastor. A longtime friend also attested to Applicant’s 
trustworthiness. A former co-worker and small business partner indicated that Applicant 
has always upheld the strictest of moral standards. Applicant was described as “efficient, 
detail-oriented, and extremely competent” by a former colleague. They met in 1999 while 
performing contract work for a defense contractor. Applicant has been “a go-to resource” 
for him on more than one occasion when he needed help on projects. He has known 
Applicant to “lead by example when it came to ensuring the safety and security of 
information and people both professionally and personally.” (AE A.) 
 
Policies 
 
The U.S. Supreme Court has recognized the substantial discretion the Executive 
Branch has in regulating access to information pertaining to national security,  emphasizing 
that “no one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 
U.S. 518, 528 (1988). When evaluating an applicant’s suitability for a security clearance, 
the administrative judge must consider the adjudicative guidelines. In addition to brief 
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introductory explanations for each guideline, the adjudicative guidelines list potentially 
disqualifying conditions and mitigating conditions, which are required to 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 overall 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 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, or 
mitigate facts admitted by applicant or proven by Department Counsel. . . .” The applicant 
has the ultimate burden of persuasion to obtain 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 about potential, 
rather than actual, risk of compromise of classified information. Section 7 of EO 10865 
provides that 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 concerns about financial considerations are articulated 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 
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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. . . . 
 
 The Appeal Board explained the scope and rationale for the financial considerations 
security concern in ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012) (citation omitted) 
as follows: 
 
This concern is broader than the possibility that an applicant might knowingly 
compromise classified information in order to raise money in satisfaction of 
his or her debts. Rather, it requires a Judge to examine the totality of an 
applicant’s financial history and circumstances. The Judge must consider 
pertinent evidence regarding the applicant’s self-control, judgment, and other 
qualities essential to protecting the national secrets as well as the 
vulnerabilities inherent in the circumstances. The Directive presumes a 
nexus between proven conduct under any of the Guidelines and an 
applicant’s security eligibility. 
 
Applicant’s admissions and the available credit reports establish the delinquencies 
alleged in the SOR. In 2012, Applicant and his ex-wife defaulted on a mortgage loan for his 
then residence. Applicant made no payments on the credit cards in SOR ¶¶ 1.b and 1.c 
after December 2012, and his accounts were closed in March 2013 because of 
nonpayment. Disqualifying conditions AG ¶¶ 19(a), “inability to satisfy debts,” and 19(c), “a 
history of not meeting financial obligations,” apply. Moreover, AG ¶ 19(b), “unwillingness to 
satisfy debts regardless of the ability to do so,” is implicated. Applicant chose to ignore the 
credit-card delinquencies even after obtaining his present job at a salary of $80,000 a year 
because collection was legally barred in the state in which he incurred the debts. 
 
Applicant has the burden of establishing that matters in mitigation apply. One or 
more of the following conditions under AG ¶ 20 may apply: 
 
(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 person has received or is receiving 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; 
 
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(d) the individual initiated and is adhering to a good-faith effort to repay 
overdue creditors or otherwise resolve debts; and 
 
(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. 
 
Although the delinquencies were incurred more than five years ago, AG ¶ 20(a) is 
not mitigating of his years of disregard of his legitimate indebtedness. He has made no 
payments toward the debts, even though they continue to adversely affect his credit. 
 
AG ¶ 20(b) has some applicability in that the debts were caused by 
underemployment. Whether he resigned voluntarily from his job in March 2009 for health 
reasons, was laid off, or forced out when his employer hired someone else to manage the 
system he had upgraded, Applicant was unable to find work in the information technology 
sector for the income needed to meet all his financial obligations. As a self-employed 
computer engineer, he had no control over the market for his services. Even though his 
debts may be attributed to conditions beyond his control, Applicant must also demonstrate 
that he acted responsibly under the circumstances to address his delinquent debts. 
Regarding the delinquent mortgage, he offered to deed the property in lieu of foreclosure 
and tried a short sale before the lender deemed the property abandoned and released the 
mortgage. Applicant and his spouse were $14,588 past due on their loan at the time. He 
was released from the mortgage in October 2013, although there is no indication that his 
debt was cancelled. Even giving him some time to stabilize his finances after he began his 
defense-contractor employment in September 2016, he did not demonstrate an adherence 
to his financial obligations by ignoring known credit card delinquencies because they were 
no longer legally collectible in the state where the debts were incurred. 
 
Neither AG ¶ 20(c) nor AG ¶ 20(d) has been shown to fully apply. There is no 
evidence that Applicant is being pursued for any debt on the mortgage loan. However, 
abandonment of a financial obligation is not a good-faith effort to resolve a debt. Regarding 
the statute of limitations, the Appeal Board recently reaffirmed its long-held position about 
debts that are no longer legally collectible, as follows: 
 
The security significance of long delinquent debts is not diminished merely 
because the debts have become legally unenforceable owing to the passage 
of time. Security clearance decisions are not controlled or limited by any 
statute of limitation, and reliance on the non-collectability of a debt does not 
constitute a good-faith effort to resolve that debt within the meaning of the 
Directive. A security clearance adjudication is not a proceeding aimed at 
collecting an applicant’s personal debts. Rather a security clearance 
adjudication is a proceeding aimed at evaluating an applicant’s judgment, 
reliability, and trustworthiness to make a decision about the applicant’s 
security eligibility. Accordingly, even if a delinquent debt is legally 
unenforceable . . . , the federal government is entitled to consider the facts 
10 
 
and circumstances surrounding an applicant’s conduct in incurring and failing 
to satisfy the debt in a timely manner. 
 
ISCR Case No. 17-01473 at 5 (App. Bd. Aug. 10, 2018) (quoting ISCR Case No. 10-03656 
at 3 (App. Bd. Jan. 19, 2011)). 
 
Applicant was on notice as of his September 2017 interview that his delinquent 
debts were of concern to the DOD. He indicated at that time that he was still under 
negotiations to settle his delinquent credit-card accounts. He now admits that he did not 
intend to resolve them because the statute of limitations had run. Even before he consulted 
with an attorney in July 2018, he did not see a reason to address his delinquent debts, 
thinking that he had a slim chance of obtaining a security clearance. While it may be 
financially advantageous for Applicant to wait for the debts to drop from his credit report, it 
casts doubt on his judgment and reliability with regard to complying with security rules and 
regulations. 
 
Applicant’s financial situation has stabilized in that he is able to meet all of his 
current financial obligations. He has managed to accumulate approximately $13,272 in 
savings, which would indicate that he has some funds available to make payments toward 
his delinquent debts. After his hearing, Applicant requested that he be granted a security 
clearance conditionally for two to three months to give him time to address his debts, and if 
he fails to do so, the Government can then appeal the favorable grant. I have considered 
the exceptions in Appendix C of the Directive4 and decline to apply them, particularly in this 
case where Applicant was given more than two months after his hearing to show that he is 
currently engaged in any debt-resolution efforts or repayment plans. While he may now be 
willing to accept “the punishment of having 7 more years of bad debt,” it is not enough to 
warrant an exception. The Appeal Board has consistently held that a promise to pay a debt 
in the future is not a substitute for a track record of paying debts in a timely manner. See 
e.g., ISCR Case No. 09-05390 at 2 (App. Bd. Oct. 22, 2010). Applicant has not mitigated 
the financial considerations security concerns. 
 
Whole-Person Concept 
 
In assessing the whole person, the administrative judge must consider the totality of 
an applicant’s conduct and all relevant circumstances in light of the nine adjudicative 
process factors in AG ¶ 2(d). The analysis under Guideline F is incorporated in my whole-
person analysis. Some of the factors in AG ¶ 2(d) were addressed under that guideline, but 
some warrant additional comment. 
 
 Applicant has been a productive and dedicated employee for a defense contractor. 
His government customer has been able to rely on him for engineering support. Yet, it is 
well settled that once a concern arises regarding an applicant’s security clearance 
eligibility, there is a strong presumption against the grant or renewal of a security 
                                                 
4 Appendix C of Security Executive Agent Directive (SEAD) 4 grants DOHA administrative judges the 
discretionary authority to grant initial or continued eligibility for a security clearance despite the presence of an 
issue(s) that can be partially but not completely mitigated with the provision of additional security measures. 
11 
 
clearance. See Dorfmont v. Brown, 913 F. 2d 1399, 1401 (9th Cir. 1990). For the reasons 
noted, I cannot find that it is clearly consistent with the national interest to grant Applicant 
security-clearance eligibility at this time. 
 
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:   AGAINST APPLICANT 
 
Subparagraphs 1.a-1.c:   Against Applicant 
 
Conclusion 
 
In light of all of the circumstances, it not is clearly consistent with the national 
interest to grant Applicant eligibility for a security clearance. Eligibility for access to 
classified information is denied. 
 
 
_____________________ 
Elizabeth M. Matchinski 
Administrative Judge