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      DEPARTMENT OF DEFENSE 
DEFENSE OFFICE OF HEARINGS AND APPEALS 
In the matter of: )
)
) ISCR Case No. 16-03163 
) 
Applicant for Security Clearance ) 
Appearances 
For Government: Adrienne Driskill, Esq., Department Counsel 
For Applicant: Pro se 
______________ 
Decision 
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HEINY, Claude R., Administrative Judge: 
Applicant contests the Department of Defense’s (DoD) intent to deny his eligibility 
for a security clearance to work in the defense industry. At one time, after being 
unemployed for six months, he was past due on four student loans, past due on a home 
equity line of credit, and owed approximately $15,500 for two medical debts. The line of 
credit against his home equity was paid when his house sold. He is current on the 
consolidation of his student loans. He has made sufficient progress toward resolving his 
past-due debts and delinquent obligations to continue his security clearance eligibility. 
Applicant’s eligibility for access to classified information is granted.  
Statement of the Case 
On December 4, 2016, the Department of Defense Consolidated Adjudications 
Facility (DoD CAF) issued a Statement of Reasons (SOR) to Applicant, detailing the 
security concerns under Guideline F, financial considerations, and explaining why it was 
02/13/2019
 
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unable to find it clearly consistent with the national interest to grant or continue security 
clearance eligibility for him.1  
 
On January 9, 2017, Applicant answered the SOR allegations and requested a 
hearing before an administrative judge from the Defense Office of Hearings and Appeals 
(DOHA). On February 7, 2018, DOHA issued a Notice of Hearing scheduling a hearing 
that was conducted on February 26, 2018.  
 
Five Government exhibits (Ex. 1-5) and two Applicant’s exhibits (Ex. A and B) were 
admitted into evidence without objection. Records submitted by Applicant as attachments 
to his answer were considered. Applicant testified, as reflected in a transcript (Tr.) 
received on March 6, 2018. I held the record open after the hearing for Applicant to submit 
additional documents, which were received and admitted into the record as Ex. C – C-3. 
 
While this case was pending a decision, the Director of National Intelligence issued 
Security Executive Agent Directive 4, establishing the National Security Adjudicative 
Guidelines for Determining Eligibility for Access to Classified Information or Eligibility to 
Hold a Sensitive Position (AGs), which he made applicable to all covered individuals who 
require initial or continued eligibility for access to classified information or eligibility to hold 
a sensitive position. The new AGs supersede the Sept. 1, 2006 AGs and are effective “for 
all covered individuals” on or after June 8, 2017. Accordingly, I have evaluated Applicant’s 
security clearance eligibility under the new AGs.2 
 
Findings of Fact 
 
In Applicant’s answer to the SOR, he admitted the delinquent obligations (SOR 1.a 
-1.f), specifically admitting a $15,149 (SOR 1.a) medical debt, which he had been told 
was covered by his health insurance, but later he learned the majority of the cost was not 
covered by his insurance. (Tr. 21) He admitted he owed four student loans (SOR 1.c -1.f) 
that were for his daughter’s college education. The loans totaling approximately $35,500 
were $2,572 past due. He denied being more than 120 days delinquent on a $32,478 
(SOR 1.g) home equity loan, which he asserted had been paid when he sold his home in 
June 2016. After a thorough review of the pleadings and exhibits, I make the following 
findings of fact. 
 
 
 
 
                                                          
1 The DoD CAF took the action 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 within the DoD on September 1, 
2006. 
 
2 Application of the AGs that were in effect as of the issuance of the SOR would not change my decision in 
this case. The new AGs are available at http://ogc.osd.mil/doha/5220-6 R20170608.pdf. 
  
 
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Applicant is a 64-year-old aircraft technical design engineer who has worked for a 
defense contractor since July 2015. (Ex. 2) He seeks a favorable security clearance 
determination. (Ex 2) He is married and has a 31-year-old son, a 32-year-old daughter3, 
and a 36-year-old stepdaughter. (Ex. 2) His annual income, with overtime, is 
approximately $110,000. (Tr. 44) His wife is not employed.  
 
From November 2004 until January 2015, Applicant had worked as a contractor 
for an aircraft manufacturing company. From January 2015 through July 2015, he was 
unemployed due to company downsizing. (Tr. 43) In July 2015, he obtained a contractor’s 
position with the same aircraft manufacturing company, but the position required him to 
move to a new state. (Ex. 2) As a result of the move, he sold his house and had to pay 
the cost of the 2,000 mile move. (SOR Response, Tr. 12).  
 
In 2015, Applicant missed two or three mortgage payments on his loan for his 
previous residence and worked with the Making Home Affordable Program. (Ex. 3) For 
approximately a year, from July 2015 through June 2016, he was paying his $800 
mortgage at his old location and paying for a hotel at his new location, which left no extra 
money. (Ex. 3, Tr. 35) The SOR lists $1,869 as being 120 days past due on a $32,478 
home equity line of credit. (SOR 1.g) In June 2016, he sold his home. (Ex. 3) All 
outstanding debts were paid at the time of sale, including the mortgage and equity line of 
credit. (Tr. 28, SOR Response) He received $87,858 at the time of sale representing his 
equity in the home. (SOR Response)  
 
Three months after he sold his previous home, Applicant purchased a new home 
at his new location. (Tr. 30) The home he purchased has been paid for in full. (Tr. 39) He 
asserted he has $25,000 in savings and $5,000 in his checking account. (Tr. 40) His 
vehicles are paid for and he has no loan payments apart from his payment on his 
consolidated student loan. (Tr. 40) His only large monthly expenditure is $1,600 for health 
insurance. (Tr. 48)  
 
In 2015, when Applicant was unemployed, he was unable to make student loan 
payments. The student loans were for his daughter’s college education and had been 
obtained between November 2005 and October 2008. (Ex. 4) The loans totaling 
approximately $35,500 were $2,572 past due. In June 2017, he contacted the federal 
loan servicing company which serviced the student loans in order to consolidate the four 
loans. (Ex. C-3) The servicing company’s February 2018 letter indicates he owed $39,203 
on the student loans with monthly payments of $270. (Ex. C-1) At that time, he was zero 
days delinquent on the loan and had unpaid interest of $57. (Ex. B) The student loan 
payment is automatically debited from his bank account. (Tr. 47) He asserts he has made 
his monthly payments in a timely manner since March 2017. (Tr. 37)  
 
During his June 2016 enhanced subject interview, he stated his intention was to 
first buy a house and then establish a payment plan to resolve the student loan obligation. 
(Ex. 3) At that time, he believed he could pay off all of the student loans in three to five 
years. (Ex. 3)  
                                                          
3 At the hearing, Applicant stated his daughter was 24 year old and was living with him. (Tr. 23)  
 
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In March 2017, Applicant agreed to pay a financial repair company approximately 
$600 over six months to assist him in restoring his credit profile and maximizing his credit 
score. (Ex. C-2, Tr. 46) He had one financial counseling session with the company. (Tr. 
38) He had incurred a $15,489 medical collection debt (SOR 1.a) when he had a stent 
inserted in the blood vessel going to his liver. (Tr. 44) He had medical insurance, and 
prior to the procedure had been told the medical procedure would be covered by his 
insurance. (Tr. 24) After the procedure, he learned most of the cost was not covered by 
his insurance. The medical debt no longer appears on his credit report. (Tr. 24, Ex. 6)  
 
 Applicant’s November 2015 credit report lists the four past-due student loans, a 
past-due home equity line of credit, a past-due mortgage, and the medical collection debt 
(SOR 1.a $15,489). (Ex. 4) It also list 18 accounts as being “paid as agreed.” His August 
2016 credit report lists a zero balance on his home equity line of credit and mortgage 
loan. (Ex. 4) The credit report lists the medical collection account, but does not list any 
amount as past due on the debt. (Ex. 5) His February 2018 credit report lists no collection 
accounts or any past-due amounts. (Ex. 6) The medical debt no longer appears as a debt 
on his February 2018 credit report. (Ex. 6) He asserted he paid the $115 medical debt 
(SOR 1.b). (Tr. 27) The debt does not appear on either of his most recent credit reports. 
(Ex. 5, Ex. 6) 
 
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 must 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 overarching 
adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶ 2(a), 
the adjudication process is an examination of a sufficient period and a careful weight of a 
number of variables of an individual’s life to make an affirmative determination that the 
individual is an acceptable security risk. This is known as the whole-person concept.  
 
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 
 
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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 
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 Executive Order 10865 provides that decisions shall be “in terms of 
the national interest and shall in no sense be a determination of 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 
 
 Adjudicative Guideline (AG) ¶ 18 articulates the security concerns relating to 
financial problems: 
 
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 . . . An individual who is financially 
overextended is at greater risk of having to engage in illegal or otherwise 
questionable acts to generate funds. 
 
Additionally, an individual who is financially irresponsible may also be 
irresponsible, unconcerned, negligent, or careless in properly handling and safeguarding 
classified information. Behaving responsibly or irresponsibly in one aspect of life provides 
an indication of how a person may behave in other aspects of life. 
 
A person’s relationship with his creditors is a private matter until evidence is 
uncovered demonstrating an inability or unwillingness to repay debts under agreed-upon 
terms. Absent evidence of strong extenuating or mitigating circumstances, an applicant 
with a history of serious or recurring financial difficulties is in a position of risk that is 
inconsistent with holding a security clearance. An applicant is not required to be debt free, 
but is required to manage his finances to meet his financial obligations. 
 
The SOR lists two medical collection accounts, $2,572 as past due on four student 
loans, and $1,869 past due on a home equity line of credit. AG ¶ 19 includes two qualifying 
 
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conditions that could raise a security concern and may be disqualifying in this case: “(a) 
inability to satisfy debts,” and “(c) a history of not meeting financial obligations.” The 
Government’s evidence and Applicant’s own admissions raise security concerns under 
AG ¶¶ 19(a) and 19(c). The burden shifted to Applicant to produce evidence to rebut, 
explain, extenuate, or mitigate the security concerns. (Directive ¶ E3.1.15) An applicant 
has the burden of proving a mitigating condition, and the burden of disproving it never 
shifts to the Government. (See ISCR Case No. 02-31154 at 5 (App. Bd. Sept. 22, 2005)). 
 
 Four of the seven Financial Considerations 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 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; and 
 
(d) the individual initiated and is adhering to a good-faith effort to repay 
overdue creditors or otherwise resolve debts. 
 
Applicant was $1,869 past due on a $32,478 home equity line of credit. In June 
2016, the debt was paid when his house sold. At that time, he received almost $88,000 
in equity from the home sale. He purchased a new house that is paid in full as are his 
vehicles.  
 
In 2015, Applicant was out of work for six months when his company downsized. 
He incurred moving expenses when he obtained a new job 2,000 miles away. For a year, 
until his house sold, he had to make his mortgage payments as well as paying for a motel 
stay. When he was unemployed, four student loans went past due. In May 2017, he 
consolidated the four loans and entered into an agreement whereby the monthly loan 
payment on the consolidated loans would be automatically deducted from his account. 
As of February 2018, there was no delinquency on the student loan debt. He asserts he 
paid the $115 medical debt. Neither that medical debt, nor the larger medical debt appear 
on his most current credit report. His annual salary is $110,000, and he has $30,000 in 
his saving and checking accounts.  
 
 
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Applicant’s November 2015 credit reports, listed the past due accounts and the 
two medical collection accounts, but also listed 18 accounts as being paid as agreed. 
That November 2015 credit report followed his six months of unemployment from January 
through July 2015.  
 
AG ¶ 20(b) applies. Applicant’s financial situation was compromised by his six 
months of unemployment and having to make his mortgage payments at his previous 
location while also paying for a motel stay at his new location. Loss of employment is a 
factor beyond his control as is having to relocate 2,000 miles for a new job. Additionally, 
he had a medical procedure to have a stent inserted into a blood vessel. Prior to the 
procedure, he was told the cost would be covered by insurance. After the procedure, he 
learned the majority of the cost was not covered by his insurance. Such a procedure is 
not elective surgery. It may not have been a medical emergency, but it did result in a debt 
that was largely beyond his control.  
 
AG ¶¶ 20(c) and 20(d) apply. He received financial counseling, his home equity 
line of credit debt was paid, and he is current on the student loan payments. He initiated, 
and is adhering to, a good-faith effort to repay his past-due student loans. His income and 
amounts on deposit in his checking and saving accounts, indicate he has sufficient 
income and funds to resolve his debts, especially when he has no house or vehicle 
payments.  
 
 The medical debts do not appear on Applicant’s current credit report. He has 
sufficient income and savings to address the medical debt should that debt be pursued 
by the creditor. There is no indication the creditor is pursuing the debt.  
 
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 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 eligibility for a 
security clearance must be an overall common sense 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 
 
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surrounding this case. My comments under Guideline F are 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 is 64 years old, and he has been employed by a DoD contractor as an 
aircraft engineer since July 2015. A security clearance adjudication is an evaluation of an 
individual’s judgment, reliability, and trustworthiness. It is not a debt-collection procedure. 
The largest of his obligations are the student loans. At one time the loans were past due, 
but have now been consolidated and he is current on his payment on the debt. Incurring 
student loans is seen as an obligation incurred to improve his daughter’s life, with respect 
to future employment and career prospects, and, as such, are viewed differently than a 
debt obligation for a new car or credit card debt.  
 
There is no indication in the record as to the status of the larger of the two medical 
debts. It is clear that the debt no longer appears on Applicant’s credit report. There are 
numerous reasons why a debt may no longer appear on a credit report. However, there 
is no indication the creditor is pursuing collection of the medical debt. Should the creditor 
pursue collection, Applicant has sufficient income and savings to address the debt.  
 
I have carefully applied the law, as set forth in Egan, Exec. Or. 10865, the Directive, 
DOD Manual 5200.02, and the AGs, to the facts and circumstances in the context of the 
whole person. The issue is not simply whether all the delinquent obligations have been 
paid—it is whether his financial circumstances raise concerns about his fitness to hold a 
security clearance. (See AG & 2(c)) Overall, the record evidence leaves me without 
questions and doubts about Applicant’s eligibility and suitability for a security clearance. 
For all these reasons, I conclude Applicant has 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, Financial Considerations: FOR APPLICANT 
 
  Subparagraphs 1.a – 1.g:  For Applicant 
  
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 a security clearance. Eligibility for 
access to classified information is granted.  
 
_______________________ 
CLAUDE R. HEINY II 
Administrative Judge