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      DEPARTMENT OF DEFENSE 
     DEFENSE OFFICE OF HEARINGS AND APPEALS 
In the matter of: )
)
)       ISCR Case No: 18-01121 
) 
Applicant for Security Clearance ) 
Appearances 
For Government: David F. Hayes, Esquire, Department Counsel 
For Applicant: Pro se 
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Decision 
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DAM, Shari, Administrative Judge: 
Applicant failed to mitigate the financial considerations security concerns related 
to his history of delinquent debts. Based upon a review of the pleadings and exhibits, 
national security eligibility for access to classified information is denied.  
Statement of Case 
On April 30, 2018, the Department of Defense (DOD) issued Applicant a Statement 
of Reasons (SOR), detailing security concerns under Guideline F (Financial 
Considerations). Applicant answered the SOR on June 25, 2018, and requested his case 
be decided by an administrative judge on the written record without a hearing (Answer). 
On July 27, 2018, Department Counsel submitted the Government’s written case. A 
complete copy of the File of Relevant Material (FORM), containing five Items, was mailed 
to Applicant on August 2, 2018, and received by him on August 16, 2018. The FORM 
notified Applicant that he had an opportunity to file objections and submit material in 
refutation, extenuation, or mitigation within 30 days of receipt of the FORM. Applicant did 
not submit a response to the FORM or object to the Government’s evidence. Items 1 
02/11/2019
 
 
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through 5 are admitted into evidence without objection. The Defense Office of Hearings 
and Appeals (DOHA) assigned this case to me on December 13, 2018.  
 
Findings of Fact  
 
 Applicant admitted the seven delinquent debts alleged in the SOR. (Item 1) His 
admissions are incorporated into these findings. 
 
 Applicant is 46 years old, a high school graduate, and never married. He has three 
children. He lives with his girlfriend. In January 2013, he began a position with a defense 
contractor. In June 2016, he submitted a security clearance application (SCA). (Item 2) 
 
 Based on credit bureau reports (CBR) from August 2016, and January 2018, the 
SOR alleged seven debts that became delinquent between 2010 and 2016, and totaled 
$173,885. They included an automobile repossession, an unpaid credit card, two 
delinquent time-share debts Applicant purchased in 2006, an unpaid cell phone bill, and 
two delinquent student loans that he co-signed for his sister. (Items 4 and 5) 
 
 In September 2017, prior to the issuance of the April 2018 SOR, a government 
investigator interviewed Applicant about his delinquent debts. Applicant stated that he 
was no longer responsible for his sister’s student loans. He said he had been paying the 
delinquent credit card for a period of time, but then fell behind. He thought the time-share 
debts were resolved because he no longer heard from the person who sold them to him 
and his girlfriend. He indicated that he was working with the cell phone company to 
resolve its debt. He said he was still making payments on it. He stated that he had not 
participated in credit counseling. (Item 3) 
 
 In his Answer, Applicant explained that he fell behind on his debts in 2016 after he 
was hospitalized for two to three weeks. He also noted that he was unable to pay all of 
his debts because his hours were reduced, and he was not working overtime at his last 
job. (Item 1) 
 
 Applicant did not include any evidence confirming his assertions that he was no 
longer responsible for the student loans or timeshares, or that any of the other debts had 
been resolved. He did not provide a current budget or other information related to his 
financial status from which to determine his current financial reliability or his ability to pay 
the large debts.  
 
Policies 
 
This case is adjudicated 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 
 
 
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Determining Eligibility for Access to Classified Information or Eligibility to Hold a Sensitive 
Position (AG), effective within the DOD on June 8, 2017. 
  
 When evaluating an applicant’s suitability for national security eligibility, the 
administrative judge must consider the pertinent AG. In addition to brief introductory 
explanations of the security concern, the guidelines list potentially disqualifying conditions 
and mitigating conditions, which are to be used in evaluating an applicant’s national 
security eligibility. 
 
 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 AG ¶ 2 describing the adjudicative process. The administrative judge’s 
overarching adjudicative goal is a fair, impartial, and commonsense decision. The entire 
process is a conscientious scrutiny of applicable guidelines in the context 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. I have not drawn inferences based on mere speculation or 
conjecture.  
 
 Directive ¶ E3.1.14 requires the Government to 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 the applicant or proven by Department Counsel, and has the 
ultimate burden of persuasion as to obtaining a favorable clearance decision.”  
 
 A person applying for national security eligibility seeks to enter 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 national 
security eligibility. Decisions include, by necessity, consideration of the possible risk the 
applicant may deliberately or inadvertently fail to protect or safeguard classified 
information. Such decisions entail a certain degree of legally permissible extrapolation as 
to potential, rather than actual, risk of compromise of classified or sensitive information.  
  
 
 
 
 
 
 
 
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Analysis 
 
Guideline F: Financial Considerations 
 
 The security concerns relating to the guideline for financial considerations are set 
out in AG ¶ 18, which reads in pertinent part:       
 
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 personal 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. 
 
This concern is broader than the possibility that an individual might 
knowingly compromise classified information in order to raise money. It 
encompasses concerns about an individual’s self-control, judgment, and 
other qualities essential to protecting classified information. An individual 
who is financially irresponsible may also be irresponsible, unconcerned, or 
negligent in handling and safeguarding classified information.1 
  
 AG ¶ 19 describes two conditions that could raise security concerns and may be 
disqualifying in this case:  
 
(a) inability to satisfy debts; and 
 
(c) a history of not meeting financial obligations.  
 
Based on his admissions and CBRs, Applicant has a history of being unable to 
meet financial obligations, which began in 2010 and continues into the present. The 
evidence raises security concerns under the above disqualifying conditions, and shifts the 
burden to Applicant to rebut, extenuate, or mitigate those concerns.  
 
 The guideline includes conditions in AG ¶ 20 that could mitigate security concerns 
arising from Applicant’s financial problems. Five 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;  
                                                 
1 See ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012). 
 
 
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(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, or 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 debt; 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 
 
 There is insufficient record evidence to establish full mitigation under any of the 
above mitigating conditions. The seven delinquent debts alleged in the SOR arose 
between 2010 and 2016 and remain unresolved. The evidence does not establish 
mitigation under AG ¶ 20 (a). Applicant attributed his financial problems to a 
hospitalization and reduction of work hours in 2016, which were circumstances beyond 
his control. However, that situation does not address delinquent debts that arose prior to 
2016. He did not provide evidence that he attempted to responsibly manage his financial 
obligations. AG ¶ 20(b) partially applies. There is no evidence that Applicant participated 
in credit or financial counseling, and that his delinquent debts are being resolved and are 
under control. AG ¶ 20(c) does not apply. He did not provide evidence that he has made-
good faith efforts to repay or resolve any debts. AG ¶ 20(d) does not apply. Although 
Appellant said he is no longer responsible for some debts, he did not submit evidence to 
prove his assertions and establish mitigation under AG ¶ 20(e). 
 
Whole-Person Concept 
 
 Under the whole-person concept, the administrative judge must evaluate an 
applicant’s national security eligibility 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 
 
 
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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. 
 
 According to AG ¶ 2(c), the ultimate determination of whether to grant national 
security eligibility must be an overall commonsense judgment based upon careful 
consideration of the applicable guidelines and the whole-person concept. 
 
I considered the potentially disqualifying and mitigating conditions in light of all 
pertinent facts and circumstances surrounding this case. I have incorporated my 
comments under Guideline F 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 a mature individual, who has been working for a defense contractor 
since 2013. During a September 2017 background interview, he discussed his delinquent 
debts. In the April 2018 SOR, the Government placed him on notice that his debts raised 
security concerns. After reviewing his Answer to the SOR, Department Counsel notified 
him in the FORM that he failed to submit sufficient documentation to address the status 
of the debts and to mitigate the financial allegations. Despite that notice, he did not 
provide evidence to confirm that he had resolved any of the debts, including the large 
student loans totaling over $148,000. At this time, he has failed to present evidence of 
mitigation, including a track record of responsibly managing debts and financial 
obligations. He failed to meet his burden to mitigate the security concerns arising under 
the guideline for financial considerations. 
 
Formal Findings 
 
 Formal findings for or against Applicant on the allegations set forth in the SOR, as 
required by ¶ E3.1.25 of Enclosure 3 of the Directive, are: 
 
 Paragraph 1, Guideline F:          AGAINST APPLICANT 
 
  Subparagraphs 1.a through 1.g:      Against Applicant 
    
Conclusion 
 
 In light of all of the circumstances presented by the record in this case, it is not 
clearly consistent with the national interest to grant Applicant access to classified 
information. National security eligibility is denied. 
                                                 
   
 
SHARI DAM 
Administrative Judge