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       DEPARTMENT OF DEFENSE 
   DEFENSE OFFICE OF HEARINGS AND APPEALS 
In the matter of: )
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[NAME REDACTED] )       ADP Case No. 17-04117 
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Applicant for Position of Trust ) 
Appearances 
For Government: Aubrey DeAngelis, Esq., Department Counsel 
For Applicant:  Pro se 
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Decision 
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MALONE, Matthew E., Administrative Judge: 
Available information is sufficient to mitigate the trustworthiness concerns raised 
by Applicant’s financial problems. His request for eligibility to occupy a position of trust is 
granted. 
Statement of the Case 
On February 20, 2017, Applicant submitted an Electronic Questionnaire for 
Investigations Processing (e-QIP) to obtain eligibility for an ADP I/II/III position for his job 
with a defense contractor. After reviewing the results of the ensuing background 
02/28/2019
 
 
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investigation, DOD adjudicators were unable to determine that it is clearly consistent with 
the interests of national security to grant Applicant’s request for a position of trust.1  
 
 On April 16, 2018, DOD issued Applicant a Statement of Reasons (SOR) alleging 
facts raising trustworthiness concerns addressed through the adjudicative guideline (AG)2 
for financial considerations (Guideline F). Applicant timely responded to the SOR 
(Answer) and requested a hearing.  
 
 I received the case on September 19, 2018, and scheduled the hearing for 
December 11, 2018. The parties appeared as scheduled. Department Counsel submitted 
Government Exhibits (GX) 1 – 5. Applicant testified and presented Applicant Exhibits (AX) 
A – D. I held the record open after the hearing to receive from Applicant additional relevant 
information. The record closed on December 17, 2018, when I received Applicant’s post-
hearing submission, presenting AX E – I.3 All exhibits were admitted without objection. I 
received a transcript of the hearing (Tr.) on January 7, 2019. 
 
Findings of Fact 
 
 Under Guideline F, the Government alleged that Applicant owed $524,191 for four 
delinquent or past-due debts (SOR 1.a – 1.d). The $67,363 debt alleged at SOR 1.c is for 
unpaid federal income taxes for the 2014 tax year. The $425,873 debt alleged at SOR 
1.d is for a delinquent small business loan being enforced by a civil judgment against 
Applicant, whose pay is being garnished at a rate of $400 every other week. In response, 
Applicant denied SOR 1.a – 1.c, but admitted SOR 1.d. As to SOR 1.b, Applicant averred, 
and the Government agreed, that the credit card at issue belonged to his father (now 
deceased). SOR 1.b is resolved for Applicant. (Answer; GX 2; GX 3; Tr. 35, 41) 
 
 The remaining SOR allegations are supported by Applicant’s e-QIP disclosures, 
his responses to DOHA interrogatories and the SOR, and three credit reports obtained 
during Applicant’s background investigation and by DOD CAF adjudicators. In addition to 
the facts thus established, I make the following findings of fact. 
 
 Applicant is 63 years old and employed by a defense contractor in a position that 
requires eligibility for a position of trust, because his duties include safeguarding 
personally identifiable information (PII) and access to sensitive facilities. Applicant has 
worked for his current employer since January 2017. (GX 1; GX 2; Tr. 38) 
                                                 
1 Required by DOD Directive 5220.6, as amended (Directive). 
 
2 The current adjudicative guidelines were issued by the Director of National Intelligence on December 10, 
2016, to be effective for all adjudications on or after June 8, 2017. 
 
3 AX E is a letter of recommendation, dated December 16, 2018 (one page); AX F is a repayment agreement 
regarding the debt alleged at SOR 1.a, dated March 28, 2018 (one page); AX G is a billing statement from 
Applicant’s accountant, dated May 31, 2016 (one page); AX H is billing and payment information from a tax 
preparation service, dated June 6, 2013 (two pages); and AX I is a copy of Applicant’s most recent 
performance evaluation, dated November 27, 2018 (five pages). 
 
 
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 After graduating from high school, Applicant received training as a paramedic and 
has worked in that field for most of his adult life. He and his wife have been married since 
July 1982. He has three children, all adults with children of their own. Applicant and his 
family lived in State A until 2001. Since then, he has resided in State B, residing in, and 
paying the mortgage for, a house owned by his late father. Applicant currently is the sole 
income earner for his wife, who is medically disabled, and two of his adult children and 
their three children, two of whom have special needs. (Answer; GX 1; GX 2; AX A; AX D; 
Tr. 51 – 54) 
 
 In 1998, while working in State A as a self-employed paramedic, Applicant sought 
to expand his business by seeking a contract for non-emergency patient transport 
services with a city in State A. As a prerequisite for such a contract, he obtained from the 
city a certificate of need for those services. That certificate was valid for a limited period 
of time, in which it was incumbent on Applicant to get his business up and running. To 
that end, he obtained approval for a loan to be guaranteed by the Small Business 
Administration (SBA) through a local bank. With part of the money he had requested in 
hand, Applicant proceeded to obtain equipment and to lease and renovate a building to 
house his business. Unfortunately, the bank that was to provide the loan failed to fully 
fund the loan Applicant had requested. Before Applicant could resolve matters with the 
bank (which later went out of business), the certificate of need expired and Applicant 
could not begin doing business with the city as he had planned. He had to auction off the 
equipment he had purchased, but still owed between $150,000 and $200,000 for the 
portion of the loan that was funded, which he could not afford to pay. (Answer; GX 1; GX 
2; AX A; Tr. 32 – 35, 54 – 58)  
 
 In 2002, after the original lender went out of business, the creditor listed in SOR 
1.d bought the account and obtained a civil judgment against Applicant to enforce the 
debt through levy and wage garnishment. Over the past 18 years, the amount owed under 
that judgment, has grown to more than $608,000 as a result of a 10 percent interest rate 
assigned to the debt. Starting in 2002, every time Applicant has obtained new 
employment, as much as 25 percent of his pay has been garnished by the creditor. On 
one occasion, the garnishment made it more advantageous for Applicant to choose to 
collect unemployment and public assistance rather than work for a net income that was 
insufficient, after garnishment, to support his family. In 2014, Applicant exhausted his 
retirement savings account ($8,700) in an unsuccessful attempt to settle this debt. 
Currently, $400 of Applicant’s bi-weekly pay is garnished for this debt. In 2013, Applicant 
consulted a bankruptcy attorney who advised him that he could not include an SBA-
guaranteed loan in a bankruptcy petition. At the current rate of wage garnishment, 
Applicant will be unable to resolve the SOR 1.d debt in his lifetime.  (Answer; GX 1; GX 
2; AX A; AX B; Tr. 26 – 27, 41 – 43, 60 – 61) 
 
 Applicant’s business continued after his failed attempt to expand. He did not wrap 
up the incorporated business until 2016. The tax debt addressed in SOR 1.c arose after 
he used a nationally-known tax service to prepare his state and federal returns starting in 
2014. That tax service characterized Applicant’s business as a Subchapter-S corporation, 
meaning that any income from the business flowed through the business to Applicant as 
 
 
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personal income. Because of these complications, Applicant was late in filing his tax 
returns between 2012 and 2015.4 In 2016, when Applicant filed his 2014 tax return, it 
resulted in a debt for unpaid income taxes totaling about $50,000. That debt has since 
grown, through interest and penalties, to nearly $68,000. In 2016, Applicant consulted 
with an accountant who advised that filing as a Subchapter-S corporation was a mistake 
and that he should have filed as a sole proprietor. Applicant has no outstanding federal 
and state income tax returns and he is currently negotiating a monthly repayment plan 
with the IRS. He does not yet know how much he will have to pay, but he has obtained a 
second job with a medical transport company to earn the extra money he will need for 
that debt. Applicant disclosed the debt in his e-QIP, but it is not listed as a delinquency in 
any of the credit reports obtained by the Government. (Answer; GX 1 – 5; AX A; AX B; 
AX G; AX H; Tr. 34 – 36, 43 – 48, 50, 59 – 60) 
 
 In addition to being self-employed, Applicant worked in several paramedic and 
emergency medical services positions between 2002 and 2016. A job as a paramedic on 
an offshore oil platform provided him with a significant increase in pay and benefits; 
however, he lost that job in May 2016 due to a fall in oil prices that resulted in numerous 
oil-industry layoffs. Applicant was unemployed from May 2016 until being hired for his 
current job in January 2017. While he was unemployed, Applicant relied on 
unemployment benefits and food assistance programs to support his family. He also used 
a credit card to make ends meet, but he was unable to stay current on the balance due. 
That debt is reflected in SOR 1.a. After Applicant started his current job and again had a 
steady income, he entered into a repayment agreement whereby he would pay $100 
monthly on this debt. In March 2018, Applicant negotiated a new repayment plan and now 
pays $25 monthly until February 2019, at which time he will be able make further 
settlement arrangements. (Answer; GX 1 – 5; AX A; AX F; Tr. 36 – 37, 40) 
 
 Applicant currently has little money remaining each month after expenses, 
including debt repayments and garnishments. His wife suffers from serious medical 
problems, the medications for which cost as much as $3,000 each month. His medical 
insurance only covers 80 percent of her medical bills. He and his wife have applied for 
Social Security disability benefits, but that process is not likely to finish for another year. 
Applicant has not incurred any new unpaid debts since he started working again in 
January 2017. He is well-regarded by his current supervisor as reliable, honest, 
hardworking, and professional. Applicant’s only performance evaluation to date reflects 
excellent work and trustworthiness. (Answer; GX 1 – 5; AX A; AX E; AX I; Tr. 48 – 50)  
 
Policies 
 
 Eligibility for a position of public trust must be based on a determination that it is 
“clearly consistent with the interests of national security” to do so.5 All such adjudications 
                                                 
4 He is now current on all of his state and federal income tax reporting. (GX 2; Tr. 31, 48) 
 
5 Security Executive Agent Directive (SEAD) 4, Appendix A, Paragraph 1(d).  
 
 
 
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must adhere to the procedural protections in the Directive before any adverse 
determination may be made. Each decision must be a fair, impartial, and commonsense 
determination based on examination of all available relevant and material information,6 
and consideration of the pertinent criteria and adjudication policies in the adjudicative 
guidelines. Decisions must also reflect consideration of the factors, commonly referred to 
as the “whole-person” concept, listed in the guidelines at AG ¶ 2(d).7 The presence or 
absence of a disqualifying or mitigating condition is not, by itself, conclusive. However, 
specific applicable guidelines should be followed whenever a case can be measured 
against them as they represent policy guidance governing the grant or denial of eligibility 
for a position of trust. 
 
 The Government bears the initial burden of producing admissible information on 
which it based the preliminary decision to deny or revoke a position of trust for an 
applicant. Additionally, the Government must be able to prove controverted facts alleged 
in the SOR. If the Government meets its burden, it then falls to the applicant to refute, 
extenuate, or mitigate the Government’s case. Because no one is entitled to a position of 
trust, an applicant bears a heavy burden of persuasion. A person who has access to 
sensitive information enters into a fiduciary relationship with the Government based on 
trust and confidence. Thus, the Government has a compelling interest in ensuring 
applicants possess the requisite judgment, reliability, and trustworthiness of one who will 
protect sensitive information as his or her own. Any reasonable doubt about an applicant’s 
suitability for access should be resolved in favor of the Government. 
 
Analysis 
 
Financial Considerations 
 
 The facts established by this record reasonably raise a trustworthiness concern 
about Applicant’s finances that is addressed, in relevant part, at AG ¶ 18, as follows: 
 
  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 
                                                 
6 Directive, 6.3. 
 
7  (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. 
 
 
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individual who is financially overextended is at greater risk of having to 
engage in illegal or otherwise questionable acts to generate funds. 
Affluence that cannot be explained by known sources of income is also a 
security concern insofar as it may result from criminal activity, including 
espionage. 
 
Applicant’s financial problems arose from a failed expansion of his small business 
between 1998 and 2000. The original debt incurred (alleged at SOR 1.d) was about one-
third of the amount he now owes. For about 15 years, this obligation has been addressed 
through involuntary wage garnishment at a rate that will never result in full repayment, 
especially with an ongoing 10 percent interest rate. Additionally, Applicant incurred a debt 
(alleged at SOR 1.c) for unpaid taxes as a result of a 2014 income tax year return filed 
as a Subchapter-S corporation rather than as a sole proprietorship. Finally, Applicant 
accrued unpaid debt (alleged at SOR 1.a) from his reliance on a credit card to meet 
expenses while he was unemployed for eight months before being hired by his current 
employer. Applicant has been repaying that debt through a plan agreed to by the creditor 
in early 2017. Aside from the debt at SOR 1.b, which was actually his late father’s account, 
none of the debts alleged in the SOR have been resolved. This information requires 
application of the disqualifying conditions at AG ¶¶ 19(a) (inability to satisfy debts); 19(c) 
(a history of not meeting financial obligations); and 19(f) (failure to file or fraudulently filing 
annual Federal, state, or local income tax returns or failure to pay annual Federal, state, 
or local income tax as required). 
 
The following AG ¶ 20 mitigating conditions are potentially applicable here: 
 
(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; and 
 
(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. 
 
 As to Applicant’s delinquent small business loan at SOR 1.d, but for the failure of 
his bank to fully fund the SBA loan on which he relied to start his business, Applicant 
would at least have been able to expand his business rather than default on that obligation 
20 years ago. Applicant has paid what he can, even liquidating his retirement savings. He 
also was advised that he cannot liquidate this debt through bankruptcy. Although wage 
garnishment is involuntary, it is the route this creditor has chosen to pursue in its claim 
against Applicant, but it will never result in satisfaction of the debt. Applicant, for his part, 
continues to work and has adjusted his finances to the best of his ability to support his 
family with what remains after the garnished wages are deducted from his pay. 
 
 
 
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 As to Applicant’s unpaid taxes, it is not clear that a delinquency exists. No such 
entry is found in his credit history. Nonetheless, he acknowledges the debt and is ready 
to make what payments he can by taking a second job. Although not specifically alleged, 
Applicant was late in filing some of his tax returns between 2012 and 2015. He has since 
brought his filing status current and is working with the IRS to establish an affordable 
repayment plan for his 2014 taxes. 
 
 Finally, soon after he was hired by his current employer, Applicant established a 
repayment plan with the collection agency for a credit card account he used to excess 
while unemployed. His efforts to resolve that account continue. Based on all of the 
foregoing, I conclude that Applicant’s debts arose from unusual circumstances and events 
that were beyond his control. Applicant experienced an unexpected failure by his bank in 
1998 and debt from a poorly executed tax return in 2016. Additionally, he has had to 
support his entire family, including his disabled wife, thus limiting his ability to make more 
progress on those debts that he might be able to resolve. In response to those 
circumstances, Applicant has tried to address his debts to the best of his ability, and to 
manage his finances responsibly so as to avoid any additional unpaid debts. AG ¶¶ 20(a) 
and 20(b) apply. 
 
 The continued presence of unpaid debts is not, by itself, disqualifying. Financial 
problems present a two-fold inquiry. First, does the presence of unpaid debt or other 
unresolved financial burdens present a likelihood that Applicant would resort to illegal acts 
or other conduct that might compromise national interests? Here, that appears unlikely. 
Applicant is a solid employee with an excellent record in his current position. His employer 
supports Applicant’s request for eligibility and regards Applicant as a trustworthy and 
integral member of his team. In addition, Applicant has worked steadily in his chosen 
profession for most of his adult life, he is working a second job solely to repay his tax 
debt, and he has no record of improper conduct of any kind. 
 
 Second, did Applicant’s financial problems arise from irresponsible decisions, poor 
judgment, or other factors that indicate he is unreliable or untrustworthy? I conclude they 
did not. Applicant’s tax and small business debts arose from circumstances beyond his 
control. His credit card debt accrued during a period of unemployment and, under the 
circumstances, was an understandable use of personal credit, which he is now repaying.  
At present, his personal finances are sound, in that, he is able to meet all of his current 
obligations. The record evidence as a whole regarding Applicant’s judgment is sufficient 
to mitigate the trustworthiness concerns raised by Applicant’s financial problems. 
 
 I have evaluated the facts and have applied the appropriate adjudicative factors 
under Guideline F. I also have reviewed the record before me in the context of the whole-
person factors listed in AG ¶ 2(d). Although Applicant is not debt-free, his response to his 
financial problems has been prudent under the circumstances. Combined with the 
favorable information about his character and reliability, this record supports a fair and 
commonsense conclusion in favor of Applicant. 
 
 
 
 
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Formal Findings 
 
 Formal findings 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 
 
Subparagraphs 1.a - 1.d:  For Applicant 
 
Conclusion 
 
 In light of all of the foregoing, it is clearly consistent with the interests of national 
security for Applicant to occupy a position of trust. Applicant’s request for public trust 
eligibility is granted. 
 
 
 
____________________ 
MATTHEW E. MALONE 
Administrative Judge