1 
       DEPARTMENT OF DEFENSE 
   DEFENSE OFFICE OF HEARINGS AND APPEALS 
In the matter of: )
)
) ISCR Case No. 17-04218 
) 
Applicant for Security Clearance ) 
Appearances 
For Government: Gatha Manns, Esq., Department Counsel 
For Applicant: Pro se  
______________ 
Decision 
______________ 
MURPHY, Braden M., Administrative Judge: 
Applicant has several delinquent debts. They were incurred several years ago, 
but they remain ongoing and unresolved. He did not provide sufficient evidence to 
mitigate the financial security concern. Applicant’s eligibility for access to classified 
information is denied. 
Statement of the Case 
Applicant submitted a security clearance application (SCA) on April 17, 2016. On 
May 1, 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.1  
1 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 Security 
Executive Agent Directive 4, National Security Adjudicative Guidelines (AG) (December 10, 2016), 
effective June 8, 2017. 
02/27/2019
 
2 
 
 
 Applicant answered the SOR on June 2, 2018, and requested a hearing. The 
case was assigned to me on November 16, 2018. On November 26, 2018, a notice of 
hearing was issued scheduling the hearing for December 10, 2018. The hearing 
convened as scheduled. At the hearing, Department Counsel submitted Government’s 
Exhibits (GE) 1 through 5. Applicant testified but did not submit any exhibits. The 
hearing transcript (Tr.) was received on January 2, 2019.  
 
Amendment to the SOR 
 
 At the start of the hearing, I amended the SOR to correct the spelling of one of 
the words in the name of the creditor in SOR ¶¶ 1.a through 1.f, without objection. (Tr. 
15) 
 
Findings of Fact  
 
 Applicant admitted SOR ¶¶ 1.a - 1.g. His admissions are incorporated into the 
findings of fact. After a thorough and careful review of the pleadings and exhibits 
submitted, I make the following additional findings of fact.  
 
 Applicant is 28 years old. He is a high school graduate. He has never married 
and he has no children. He served in the U.S. Navy from April 2010 to February 2012, 
when he received a general discharge under honorable conditions. (Tr. 33-34; GE 1) 
 
 When Applicant was a junior sailor, he was walking on base one evening, and 
saw a debit card lying on the ground. He picked it up, and instead of turning it in to 
authorities, he used it for his own expenses, such as gas and utilities. He charged about 
$230 on the card before he was caught. (Tr. 31, 75-77; GE 5 at 6)  
 
 Soon thereafter, Applicant was interviewed by the Navy Criminal Investigative 
Service (NCIS). He was charged with violating Article 121 of the Uniform Code of 
Military Justice (larceny and wrongful appropriation), was referred to Captain’s Mast, 
where he received non-judicial punishment of 45 days restriction and 45 days extra 
duty, and reduced in rank. A few months later, he was notified that he was being given a 
general discharge under honorable conditions. (Tr. 33-36, 57-62; GE 1; GE 2) Applicant 
paid full restitution to the sailor whose debit card he misused.2 (Tr. 62, 77) 
 
 After leaving the Navy, Applicant was briefly unemployed. He then worked odd 
jobs from spring 2012 through the end of 2013. (Tr. 69) In January 2014, he was hired 
by a defense contractor. In October 2014, he took a job with the same employer in a 
new state. He divided his time between the two locations until September 2017, when 
he moved to the new state full time. (Tr. 69-72, 84-87) 
 
                                                          
2 The debit card Applicant found was issued by the same institution that is the creditor for all but one of 
the SOR debts, but none of them relate to that incident. (Tr. 75) 
 
3 
 
 
Applicant worked in that position from October 2014 until June 2016, when he 
and many others were laid off. He then worked odd jobs until February 2018, when he 
was rehired by his current employer and clearance sponsor. (Tr. 36-38, 54, 69, 84-87) 
 
 The SOR alleges that Applicant has about $17,000 in delinquent debt. Applicant 
incurred all of the debts during his time in the Navy, and all but one of the debts are to 
the same creditor, a credit union. The debts are listed on Applicant’s credit reports from 
June 2016, November 2017, and December 2018. (GE 2, GE 3, GE 4) Applicant used 
loans to finance the purchase of two motorcycles and a used car, and also had other 
loans and credit cards. This includes SOR ¶¶ 1.a ($7,433), 1.b ($5,416), 1.c ($2,156), 
1.d ($1,153), 1.e ($552), and 1.f ($4,094). (Tr. 38-43, 77-79) The accounts remain on a 
recent credit report. (GE 4) 
 
 In about 2012, Applicant received an e-mail on his military e-mail account 
concerning an overseas job offer. He applied for the job, but was soon asked to send 
money to the sender. This was a scam, as Applicant belatedly realized, but not before 
he took out another loan (SOR ¶ 1.f) to pay for it. (Tr. 40-43)  
 
 Applicant fell behind on his various accounts, and they were charged off or 
placed for collection. He later spoke to someone at the credit union in an attempt to 
settle his accounts, but took no further action to resolve them. (Tr. 43-49) As he 
testified, “I didn’t deal with it for so long that it was like, you just start new.” (Tr. 80) He 
has not reached out to the credit union recently to resolve his debts. (Tr. 83) 
 
SOR ¶ 1.g ($765) is a debt to a health club in the geographic location where 
Applicant served in the Navy. Applicant said he notified the gym that he was quitting 
membership when he moved. The account shows no activity after he left the area in 
January 2014. Applicant disputed the account and it no longer appears on his credit 
report. (Tr. 49-51, 72-75; GE 2 at 9; GE 4; GE 5 at 8) 
 
 Applicant later engaged a debt resolution firm to help him clean up his credit. He 
paid them $99 a month for 14 months. He now has other credit cards that he is using 
more responsibly to improve his credit rating. He has received informal advice from 
family members on how to improve his credit but has not pursued formal credit 
counseling. (Tr. 62-64, 83)  
 
Applicant also acknowledged that for a three-year period, he did not file his tax 
returns. He later filed all those returns. He also acknowledged that at the time of the 
hearing (December 2018) his 2017 tax returns remained unfiled.3 (Tr. 64-68, 89-90) 
 
Applicant makes $19.36 an hour. He works full time, He earned about $40,000 in 
2018. He pays $1,600 in rent and is current. He lives with a cohabitant, his girlfriend. He 
has no other debts but for those in the SOR. He also has a part-time, evening job as a 
security guard, earning $80 a night two or three nights a week. He said he was unable 
                                                          
3 Applicant’s tax issues are not alleged in the SOR, so I have not considered them as disqualifying 
conduct. 
 
4 
 
 
to address his debts because his employment was not particularly stable. He also 
wanted to focus on more recent expenses once he started his new life in a new location. 
(Tr. 49-54, 68) 
 
 Applicant acknowledged his mistakes. He accepted blame for accruing his older 
debts, and for not addressing them responsibly. He noted that he has not accrued any 
newer debt, and that he works hard and stays out of trouble. (Tr. 92-93) 
 
Policies 
 
 It is well established that no one has a right to a security clearance. As the 
Supreme Court noted in Department of the Navy v. Egan, “the clearly consistent 
standard indicates that security determinations should err, if they must, on the side of 
denials.”4 
 
 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 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, 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 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. Likewise, I have not drawn inferences grounded on 
mere speculation or conjecture. 
 
Under Directive ¶ E3.1.14, the Government must present evidence to establish 
controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, an “applicant is 
responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or 
mitigate facts admitted by applicant or proven by Department Counsel and has the 
ultimate burden of persuasion to obtain a favorable security decision.” 
 
                                                          
4 Department of Navy v. Egan, 484 U.S. 518, 531 (1988).  
 
5 
 
 
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. 
 
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. . . . 
 
The financial considerations guideline sets forth several conditions that could 
raise security concerns under AG ¶ 19. The following are potentially applicable: AG ¶¶ 
19(a) (inability to satisfy debts); and 19(c) (a history of not meeting financial obligations). 
 
 Conditions that could mitigate 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; 
 
 
6 
 
 
(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 to resolve the issue. 
 
 AG ¶ 20(e) applies to mitigate SOR ¶ 1.g, the debt to the health club. While 
Applicant admitted the debt, he disputed its validity, and it no longer appears on his 
credit report. His other debts, all to the credit union, remain outstanding and unresolved.  
 
 Applicant’s debts were all incurred during his brief time in the Navy, which ended 
in early 2012, now several years ago. Although the debts are old, Applicant has also 
never taken any serious steps to resolve them in the time since then. He has been 
content to “start new,” as he put it, by focusing on his more recent accounts. The fact 
remains, however, that his delinquent debts to the credit union are ongoing and 
unresolved. They are a “continuing course of conduct,”5 even though they are dated. As 
such, they continue to cast doubt on Applicant’s current judgment, reliability, and 
trustworthiness.  
 
 Applicant had not filed his 2017 tax returns as of the date of the hearing, and he 
acknowledged filing several years of earlier returns late as well. While not alleged as 
disqualifying conduct, Applicant’s irresponsible handling of his duties as a taxpayer 
serves as another example of the security concerns already evident due to his ongoing 
debts. AG ¶ 20(a) does not apply.  
 
 Applicant’s debts are the result of overspending. He financed the purchase of a 
car and two motorcycles while he was a junior sailor in the Navy, and took out several 
other loans as well. AG ¶ 20(b) has some application because he had some 
employment instability in recent years, and that circumstance impacted his ability to 
address his debts. Nevertheless, he has yet to address his debts in a responsible way, 
so AG ¶ 20(b) does not fully apply. Similarly, Applicant simply has not established 
enough of a track record of financial responsibility or of good-faith efforts to repay his 
debts for AG ¶ 20(d) to apply. Applicant has not participated in formal credit counseling 
from a reputable source, and his debts are not yet resolved or under control. AG ¶ 20(c) 
does not apply.  
 
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):  
                                                          
5 ISCR Case No. 15-06532 at 3 (App. Bd. Feb. 16, 2017). 
 
 
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. 
 
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. Applicant needs to establish a track record of 
financial stability and of good-faith steady payments towards his debts before he can 
establish that he is a suitable candidate for access to classified information. Overall, the 
record evidence leaves me with questions and doubts as to Applicant’s eligibility for 
access to classified information.  
 
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.f:   Against Applicant 
  Subparagraph 1.g:     For Applicant 
     
Conclusion 
 
 In light of all of the circumstances presented by the record, it is not clearly 
consistent with the interests of national security to grant Applicant eligibility for access to 
classified information. Eligibility for access to classified information is denied. 
 
                                                     
_____________________________ 
Braden M. Murphy 
Administrative Judge