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        DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
In the matter of: ) 
)
) ISCR Case No. 17-03922 
)
Applicant for Security Clearance ) 
Appearances 
For Government: Daniel F. Crowley, Esq., Department Counsel 
For Applicant: Pro se 
______________ 
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 November 27, 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 December 12, 2017, and requested a 
hearing before an administrative judge. The case was assigned to me on September 
12, 2018. The Defense Office of Hearings and Appeals (DOHA) issued a notice of 
hearing (NOH) on September 17, 2018, scheduling the hearing for October 9, 2018. I 
convened the hearing as scheduled. 
03/12/2019
 
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I appended to the record, as Hearing Exhibits (HE) I and II, the Government’s 
discovery letter and exhibit list. Government Exhibits (GE) 1 through 5 were admitted in 
evidence without objection. Applicant testified, called two witnesses, and submitted 
Applicant Exhibits (AE) A through P, which I admitted in evidence without objection. At 
Applicant’s request, I kept the record open until November 6, 2018, for additional 
evidence. By that date, Applicant submitted additional documentation, which I marked 
collectively as AE Q and admitted in evidence without objection. DOHA received the 
hearing transcript (Tr.) on October 16, 2018.  
  
Findings of Fact 
 
 Applicant admitted all of the SOR allegations. He is 57 years old. He married in 
1993 and divorced in 2008. He has an adult daughter, and both she and his grandson 
live with him.1 
 
 Applicant obtained a high school equivalency diploma in approximately 1980. He 
has attended college since 2010 but had not yet earned a degree. He honorably served 
in the U.S. military from 1982 to 1986. He has worked as a graphic artist for a DOD 
contractor since December 2016. He has never held a security clearance.2  
 
 Applicant attributed his delinquent debts to the 2008 economic downturn; his 
divorce; his job loss in 2010 and subsequent periods of unemployment or employment 
with limited income; and his diabetes-related expenses when he did not have health 
insurance. Applicant testified that through his divorce, he was held primarily responsible 
for the debts incurred during his marriage. After he lost his job of five years as a 
multimedia director at an architectural firm in May 2010, he went from an annual salary 
of $85,000 to being unemployed until June 2011. During this and his subsequent two 
periods of unemployment, he attended school through a program available to military 
veterans, and supported himself, in part, through student loans.3  
 
 Applicant worked as a truck driver from October 2011 to December 2012, until 
his diabetes affected his ability to work and he became unemployed for a second time 
until June 2013. He incurred medical expenses for his diabetes because he did not 
have health insurance. In 2011, though he worked as a janitor and did part-time work in 
computer animation through his service-disabled veteran-owned small business, he 
could not afford the mortgage on his $340,000 home that he purchased in around 
February 2009. He moved out and found tenants for his home, but fell behind on his 
mortgage when two separate tenants failed to pay rent and the homeowners’ 
association (HOA) fees from 2011 through 2014. During this period, he lived with his 
brother; he rented an inexpensive apartment at $700 monthly; and he lived with his best 
                                                     
1 Applicant’s response to the SOR; Tr. at 8, 76, 89; GE 1. 
 
2 Tr. at 8-9, 73, 76, 92-93; GE 1, 3; AE F, L, M. 
 
3 Tr. at 16-18, 34-109; GE 1, 3; AE E, F. 
 
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friend for seven months. He was unemployed for a third time, from June to December 
2016.4 
   
 The SOR alleges two judgments from 2014 and 2015 totaling $2,407 (SOR ¶¶ 
1.a-1.b) and six delinquent consumer accounts totaling $36,847 (SOR ¶¶ 1.c-1.h). The 
debts are established by a 2017 credit bureau report and court records. Applicant also 
disclosed and discussed his debts in his 2017 security clearance application (SCA) and 
2017 background interview.5  
 
 The two judgments in SOR ¶¶ 1.a and 1.b for $2,407 from 2014 and 2015 stem 
from Applicant’s tenants’ failure to pay rent and HOA fees for his home. Applicant 
testified that he used money from his 401k retirement account to resolve both 
judgments. The judgments were paid in December 2017.6  
 
 SOR ¶ 1.c is for a credit card charged off for $3,050. Applicant testified that this 
was a joint credit card with his then wife, which he used to pay his mortgage. Applicant 
provided documentation reflecting that he settled this debt for $1,835 and paid it in 
October 2018.7 
 
 SOR ¶ 1.d is for a credit card charged off for $7,708. Applicant was the primary 
account holder but he permitted his then wife to be an authorized user. Applicant 
testified that she continued to use the card after the divorce, but the card was later 
destroyed. Applicant testified that he disputed this debt through the credit repair service 
Lexington Law, and the debt was consequently removed from his credit. He also 
indicated that he attempted to contact the creditor to settle the debt, but was told that he 
could not do so because the debt was forgiven. He indicated that he had not yet 
received an IRS Form 1099-C from the creditor, despite his attempts to obtain one.8 
 
 SOR ¶ 1.e is for a $294 charged-off account for a printer, which later turned out 
to not work. Applicant provided documentation to show that he paid this debt.9 
 
 SOR ¶ 1.f is for a $24,927 charged-off debt-consolidation loan. Applicant 
obtained the loan in 2009 to resolve debts from his marriage that were lingering after his 
divorce. He indicated that after he lost his job, he used money from his 401(k) 
retirement account to pay down the balance of this debt to $13,504, with the intention of 
continuing to pay it once he found a job. He exhausted the money from his retirement 
account and was unable to find another job, so the balance climbed to $24,927.  He 
                                                     
4 Tr. at 16-18, 34-109; GE 1, 2; AE D, E, F, G, H, I, J, L. 
 
5 GE 1-5; AE Q. 
 
6 Tr. at 57-58, 60-63, 72, 80; GE 3-5; AE A, B, G, H, I, J, Q. 
 
7 Tr. at 63-65, 67-69, 72; GE 3; AE Q. 
 
8 Tr. at 63-65, 67-69, 72, 80-82, 102-105; AE N, Q. 
 
9 Tr. at 65-68, 71-72, 80-81; AE C, Q. 
 
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testified that he was advised by Lexington Law to obtain another debt-consolidation loan 
to resolve it. However, he provided documentation to show that he instead settled the 
debt in October 2018 for $13,804, for which he would pay at $100 monthly until it was 
paid in full.10 
 
 SOR ¶ 1.g is for a $676 apartment fee placed in collection. Applicant was 
charged a fee by his apartment for his daughter living with him. Applicant indicated that 
he paid this debt in June 2017. He provided documentation reflecting that this debt is 
paid.11 
 
 SOR ¶ 1.h is for a telecommunication account charged off for $192. Applicant 
indicated that he paid this debt in June 2017. He testified that he requested that the 
creditor send him documentation reflecting his payment, but the creditor did not comply. 
He provided documentation from the creditor reflecting that the debt was being removed 
from his credit reports.12 
 
 Applicant brought his mortgage current by utilizing a program available through 
his mortgage holder that permitted him to make partial mortgage payments, while 
tacking the remainder onto the balance of the loan. He exhausted the money from his 
401k retirement account, obtained a student loan, and supplemented with money from 
his janitorial and computer animation work to make his mortgage payments. He 
indicated that he has not had problems paying his mortgage since obtaining his current 
job. He testified that he is current on his monthly mortgage payments of $2,167, and he 
has been current on his two monthly HOA fees totaling $240 since November 2017.13 
 
 Applicant testified that he has worked diligently to improve his credit score by 
tackling his debts one at a time. He testified that he prioritized bringing a delinquent 
student loan current, which he did in June 2018, and paying other bills not alleged in the 
SOR. He testified that he has received telephonic financial counseling from Lexington 
Law once every two months since June 2017, and he pays them $68 monthly. He 
testified that he took their advice to continue rebuilding his credit by timely paying his 
bills, so that he could obtain a debt-consolidation loan to resolve any remaining debts at 
once; he had not obtained such a loan as of the date of the hearing. Meanwhile, he 
testified that Lexington Law was negotiating with his creditors for forgiveness of any 
interest and penalties on his outstanding accounts. He provided a copy of his budget, 
reflecting a monthly income of $4,876 and a monthly net remainder after expenses of 
$785. He testified that he has not had a credit card for eight to ten years, and his sole 
line of credit was for his car. He testified that he commutes 106 miles daily to get to and 
from work.14 
                                                     
10 Tr. at 68-69, 71-73, 78-80, 102-105; GE 1, 3; AE C, N, Q. 
 
11 Tr. at 71-72, 106-107; GE 3; AE Q. 
 
12 Tr. at 71-72, 100; GE 3; AE Q. 
 
13 Tr. at 16-18, 34-109; GE 1, 3; AE C, K, O, N. 
 
14 Tr. at 16-18, 34-109; GE 1, 3; AE C, K, E, L, N, O, P, Q. 
 
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 Applicant’s brother testified that Applicant lived with him after losing his job. The 
brother testified that he was aware that Applicant had just purchased his “dream home,” 
and encouraged Applicant to find tenants to live in it. He corroborated Applicant’s 
testimony that Applicant worked as a truck driver, then as a janitor, to make ends meet. 
The brother testified that one set of tenants sued Applicant when he attempted to move 
back into his home. When they lost, they vandalized the home, which Applicant had to 
spend money to repair. The brother testified that Applicant’s strength of character pulled 
him through his difficult times.15 
 
 Applicant’s best friend of 25 years testified that Applicant also lived with him for 
around seven months in 2014, when Applicant faced difficult times and could not afford 
to pay the mortgage on his home. He testified that he never witnessed Applicant live 
beyond his means. He testified that he found it commendable, and a reflection of 
Applicant’s dedication, perseverance, and commitment, that Applicant ultimately held 
onto his home without having to file bankruptcy. As a clearance holder, the witness 
vouched for Applicant’s trustworthiness.16 
 
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.  
 
                                                     
15 Tr. at 47-56. 
 
16 Tr. at 34-45. 
 
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 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 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; and 
 
(c) a history of not meeting financial obligations. 
 
 Applicant was unable to pay his debts. The evidence is sufficient to raise AG ¶¶ 
19(a) and 19(c) as disqualifying conditions.  
 
  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 
 
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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; and 
 
(d) the individual initiated and is adhering to a good-faith effort to repay 
overdue creditors or otherwise resolve debts.  
 
Conditions beyond Applicant’s control, as previously discussed, contributed to his 
financial problems. Thus, the first prong of AG ¶ 20(b) applies. For the full application of 
AG ¶ 20(b), he must provide evidence that he acted responsibly under his 
circumstances. He credibly testified that he tried to continue to pay his debts during his 
period of hardship, by using his 401k retirement account, student loans, and the limited 
income from his computer animation work. He continued his efforts upon receipt of the 
SOR and when he had the financial capability to resolve his debts once he obtained his 
current employment. He also sought and received credit counseling. He provided 
documentation to show that he paid all of his debts, with the exception of SOR ¶¶ 1.d 
and 1.f. He was awaiting an IRS Form 1099-C from the creditor for SOR ¶ 1.d, and he 
settled SOR ¶ 1.f and was scheduled to make payments of $100 monthly until this debt 
is paid. I find that AG ¶¶ 20(a), 20(b), 20(c), and 20(d) 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):  
 
(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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 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 or 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 
 
Subparagraphs 1.a – 1.h:    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’s eligibility for a security 
clearance. Eligibility for access to classified information is granted. 
 
 
 
________________________ 
Candace Le’i Garcia 
Administrative Judge