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        DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
In the matter of: ) 
)
) ISCR Case No. 17-03281 
)
Applicant for Security Clearance ) 
Appearances 
For Government: Alison O’Connell, Esq., Department Counsel 
For Applicant: Alan V. Edmunds, Esq. 
______________ 
Decision 
______________ 
GARCIA, Candace Le’i, Administrative Judge: 
Applicant mitigated the financial considerations security concerns. Eligibility for 
access to classified information is granted.  
Statement of the Case 
On October 17, 2017, the Department of Defense (DOD) issued a Statement of 
Reasons (SOR) to Applicant detailing security concerns under Guideline F (financial 
considerations). The action was taken under Executive Order (Exec. Or.) 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) implemented by DOD on June 8, 2017. 
Applicant responded to the SOR on November 2, 2017, and requested a hearing 
before an administrative judge. The case was assigned to me on May 10, 2018. The 
Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on May 24, 
2018, scheduling the hearing for June 14, 2018. I convened the hearing as scheduled. 
01/10/2019
 
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I appended to the record, as Hearing Exhibits (HE) I, II, and III, respectively, the 
Government’s discovery letter and exhibit list, and Applicant’s exhibit list. Government 
Exhibits (GE) 1 through 3 were admitted in evidence without objection. Applicant 
testified, called one witness, and submitted Applicant Exhibits (AE) A through S, which 
were admitted in evidence without objection. DOHA received the hearing transcript (Tr.) 
on June 25, 2018.  
 
Findings of Fact 
 
 Applicant denied both of the SOR allegations. She is 52 years old. She married 
in 1986, divorced in 2009, and remarried in 2015. She has two children, both of whom 
are adults.1 
 
 Applicant earned a bachelor’s degree in 2012. She has worked for her current 
employer, a defense contractor, since 2017. She previously worked for another defense 
contractor from 2006 through 2017. She has held a security clearance since around 
2008.2  
   
 The SOR alleges two delinquent consumer accounts totaling $31,491 (SOR ¶¶ 
1.a - 1.b). The allegations are established by an October 2016 credit report. SOR ¶ 1.a 
is for a $14,510 charged-off credit card, and SOR ¶ 1.b is for a $16,981 credit card in 
collection. Applicant opened both credit cards between 2004 and 2006. She used them 
primarily for her tuition expenses, as well as for household expenses and wedding 
expenses for her daughter in 2008.3  
 
 Applicant attributed her delinquent debts to her 2008 separation and 2009 
divorce. The divorce decree held her responsible for five debts, two of which were the 
debts in SOR ¶¶ 1.a and 1.b. She went from a two-income to a single-income 
household, at a time when she earned approximately $40,000 annually. She received 
spousal support for only a few months after the divorce. She did not receive child 
support, as both of her children were adults, but she continued to support one child who 
lived with her after the divorce. She was in school part-time from 2006 through 2012, 
and though her then-employer provided tuition reimbursement, it was not at 100%.4  
 
 In 2009, Applicant closed all five of her credit cards for which she was held 
responsible, and she retained the services of a debt consolidation company to assist 
her with settling them, to include SOR ¶¶ 1.a. and 1.b, as she did not have the income 
to pay her outstanding debts in full. She chose to try to resolve her outstanding debts 
rather than join her ex-husband’s bankruptcy that he filed in 2009. She testified that she 
worked with and made payments to the debt consolidation company for three years, 
                                                     
1 Applicant’s response to the SOR; Tr. at 16-17, 27-31, 38; GE 1; AE D, E. 
 
2 Tr. at 26-27, 39-41; GE 1; AE C, D, G. 
 
3 Tr. at 25-60. 
 
4 Applicant’s response to the SOR; Tr. at 25-60; GE 1, 3; AE C, I, J.  
 
 
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from 2009 through 2012, in an effort to resolve her outstanding debts. She indicated 
that the debt consolidation company successfully settled three of her credit cards, to 
include another credit card that she had with the same creditor in SOR ¶ 1.b. The 2016 
credit report corroborates Applicant’s claim that she resolved several other outstanding 
debts.5 
 
 Applicant testified that the debt consolidation company was unable to settle SOR 
¶¶ 1.a. and 1.b. She indicated that the creditor for SOR ¶ 1.a was unwilling to work with 
a third party to settle the debt, and the debt in SOR ¶ 1.b was charged off in 2010 
before a settlement could be reached. She did not subsequently attempt to negotiate a 
settlement directly with both creditors because when the debt consolidation company 
“called me and told me . . . that they were not able to settle those, I thought we were 
done. Since they were not able to, I didn’t realize that I might be able to.” She also 
indicated that at the time, her limited income prevented her from paying both debts in 
full, as she did not receive a significant pay raise until after she earned her degree in 
2012.6 
 
 After she received the SOR in October 2017, Applicant testified that she 
immediately contacted both of the creditors for SOR ¶¶ 1.a. and 1.b, in an attempt to 
settle both accounts. She indicated that she had multiple conversations with the creditor 
for SOR ¶1.a, and she requested documentation regarding her efforts to settle the debt 
to no avail. She also indicated that she was told by both creditors that both accounts 
were archived and no longer in collection, and that she should reach out to the credit 
reporting agencies if she continued to have problems with her credit report.  Both debts 
are not reported on her recent credit reports from 2017 and 2018, and she has not had 
any such problems with her credit report. She could not recall if she ever received an 
IRS Form 1099-A for either debt. She acknowledged that neither creditor told her that 
they would not accept payment towards her accounts, but stated that she and her 
husband would have paid both debts if she were given information about where she 
could send payment.7 
 
  As of the date of the hearing, Applicant and her husband earned a combined 
income of $255,000 annually. Their assets, to include their home, total approximately 
$529,000. Applicant testified that she likely took a credit counseling course when she 
enrolled with the debt consolidation company, and she took another such course on the 
date of the hearing. She indicated that she learned budgeting skills and she manages 
and pays her bills in a timely manner. Their budget reflects a substantial positive net 
remainder after their monthly expenses are paid. She does not have any other 
delinquent debts.8 
 
                                                     
5 Tr. at 25-60; GE 3; AE H, R. 
 
6 Tr. at 25-60; AE H. 
 
7 Tr. at 25-60; GE 2; AE A, O. 
 
8 Tr. at 19, 22, 25-28, 32, 35-37; GE 1-3; AE A, B, K, L, M, N, O, P, Q, S. 
 
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 As of the date of the hearing, Applicant’s husband worked as a program manager 
for a defense contractor and held a security clearance since 1984. He met Applicant in 
2008. He testified that he was aware of both of Applicant’s delinquent debts and he also 
attributed them to her divorce. He testified that she told him that she previously 
attempted to resolve both debts through a debt consolidation company. He also testified 
that she told him that when she recently contacted both creditors, she was told that the 
accounts were archived and the debts no longer existed. He consequently advised her 
to ask both creditors to provide documentation reflecting such, which she did to no avail. 
He testified that they would have paid both debts if they were still outstanding. He 
testified that she had taken a credit counseling course, and he described her approach 
to handling finances as frugal. He testified that they handle their finances jointly, they do 
not have any delinquent debts, and they have timely filed their income tax returns. A 
number of character references described Applicant as a trustworthy, honest, and 
reliable individual.9 
 
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 are to be 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, administrative judges apply the guidelines 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(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.”  
 
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 the 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 
                                                     
9 Tr. at 15-25; AE D, F, Q, R. 
 
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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 the applicant may deliberately or inadvertently fail to safeguard 
classified information. Such decisions entail a certain degree of legally permissible 
extrapolation of potential, rather than actual, risk of compromise of classified 
information. 
 
Section 7 of Exec. Or. 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 Exec. Or. 12968, Section 3.1(b) (listing multiple 
prerequisites for access to classified or sensitive information).   
 
Analysis 
 
Guideline F, Financial Considerations 
 
The security concern 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 . . . . 
 
The guideline notes several conditions that could raise security concerns under 
AG ¶ 19. The following are potentially applicable 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 was unable to pay her debts. The evidence is sufficient to raise AG ¶¶ 
19(a) and 19(c) as disqualifying conditions. Applicant has had the ability since at least 
2012 to try to resolve the debts in SOR ¶¶ 1.a. and 1.b. She credibly testified that she 
did not realize she could attempt to do so after the debt consolidation company was 
unsuccessful in their attempts at settling both accounts. She also credibly testified that 
she was willing and attempted to do so when she contacted both creditors after she 
received the SOR, but was unable to since both creditors told her that the accounts 
were archived and no longer outstanding. As such, I find that AG ¶ 19(b) is not 
established. 
 
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  Conditions that could mitigate the financial considerations security concerns are 
provided under AG ¶ 20. The following 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; 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. 
 
Conditions beyond Applicant’s control, as previously discussed, contributed to 
her financial problems. Thus, the first prong of AG ¶ 20(b) applies. For the full 
application of AG ¶ 20(b), she must provide evidence that she acted responsibly under 
his circumstances. Applicant credibly testified that she tried to resolve both of the SOR 
debts, as well as three other debts that were outstanding at the time, through the debt 
consolidation company that she worked with for three years. When the company was 
unsuccessful in settling both accounts, she credibly testified that she did not realize she 
could attempt to do so. She also credibly testified that she attempted to settle both 
accounts after she received the SOR, but was told by both creditors that the accounts 
were archived and no longer outstanding. I find that AG ¶¶ 20(b) and 20(e) apply. 
 
A security clearance adjudication is an evaluation of an individual’s judgment, 
reliability, and trustworthiness. It is not a debt-collection procedure. See ISCR Case 
No. 09-02160 (App. Bd. Jun. 21, 2010). The adjudicative guidelines do not require that 
an individual make payments on all delinquent debts simultaneously, pay the debts 
alleged in the SOR first, or establish resolution of every debt alleged in the SOR. He or 
she need only establish a plan to resolve financial problems and take significant 
actions to implement the plan. See ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 
2008). 
 
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 There is sufficient evidence to conclude that Applicant acted responsibly under 
her circumstances to address her delinquent debts. She obtained credit counseling 
through the debt consolidation company, and she took another such course on the date 
of the hearing. Both of the SOR debts are not reported on her recent credit reports from 
2017 and 2018, and she does not have any other delinquent debts. Her finances are 
under control and there is sufficient evidence to conclude that her financial problems are 
unlikely to recur. Her debts do not cast doubt on her current reliability, trustworthiness, 
and good judgment. AG ¶¶ 20(a), 20(c), and 20(d) are established. 
 
Whole-Person Concept 
 
 Under the whole-person concept, the administrative judge must evaluate an 
applicant’s eligibility for a security clearance 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 a 
security clearance 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 
the facts and circumstances surrounding this case. I have incorporated my comments 
under Guideline F in my whole-person analysis. Overall, the record evidence leaves me 
without questions and doubts as to Applicant’s eligibility and suitability for a security 
clearance. I conclude Applicant mitigated the financial considerations security concerns.  
 
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 
 
Subparagraph 1.a – 1.b:    For Applicant 
 
 
 
 
 
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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 national interest to grant Applicant’s eligibility for a security 
clearance. Eligibility for access to classified information is granted. 
 
 
 
________________________ 
Candace Le’i Garcia 
Administrative Judge