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       DEPARTMENT OF DEFENSE 
   DEFENSE OFFICE OF HEARINGS AND APPEALS 
In the matter of: )
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[NAME REDACTED] )       ISCR Case No. 18-01765 
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Applicant for Security Clearance ) 
Appearances 
For Government: Aubrey DeAngelis, Esq., Department Counsel 
For Applicant: Michael J. Harris, Esq. 
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Decision 
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MALONE, Matthew E., Administrative Judge: 
Applicant presented sufficient information to mitigate the security concerns about 
her financial problems and unpaid debts. Her request for continued security clearance 
eligibility is granted. 
Statement of the Case 
On October 19, 2016, Applicant submitted an Electronic Questionnaire for 
Investigations Processing (e-QIP) to renew her eligibility for a security clearance required 
for her employment with a federal contractor. Based on the results of the ensuing 
background investigation, adjudicators for the Department of Defense (DOD) could not 
03/14/2019
 
 
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determine that it is clearly consistent with the interests of national security for Applicant 
to have a security clearance.1 
 
 On June 29, 2018, DOD issued a Statement of Reasons (SOR) alleging facts that 
raise security concerns under the adjudicative guideline for financial considerations 
(Guideline F). Applicant timely responded to the SOR (Answer) and requested a hearing.  
 
 I received the case on September 16, 2018, and convened the requested hearing 
on, December 12, 2018. The parties appeared as scheduled. Department Counsel 
proffered Government Exhibits (GX) 1 – 5. Applicant and two witnesses testified. 
Applicant also proffered Applicant Exhibits (AX) A – V. All exhibits were admitted without 
objection. I received a transcript of the hearing (Tr.) on January 2, 2019. 
 
Findings of Fact 
 
 Under Guideline F, the Government alleged Applicant owed $24,631.38 for three 
delinquent or past-due debts (SOR 1.a – 1.c). SOR 1.a and 1.b allege debts for unpaid 
income taxes totaling $7,121.38 for the 2013 and 2014 tax years. SOR 1.c alleges a 
delinquent credit card account for $17,510. In response to the SOR, Applicant admitted 
each allegation and provided extensive information about her financial circumstances 
over the past ten years. (Answer) In addition to the facts thus established, I make the 
following additional findings of fact. 
 
 Applicant is 41 years old. She has completed post-high school vocational training 
and, between 2006 and 2017, extensive DOD-sponsored acquisitions training. Applicant 
has held a security clearance since 2006 for a series of jobs in the defense industry. (GX 
1) 
 
 Applicant and her husband, a major in the U.S. Air Force Reserve, have been 
married since October 2009. Applicant was married twice previously. Her first marriage 
ended in 2007, and she has one 19-year-old child from that marriage. Applicant and her 
current husband have one child, age 8, together. Her husband also has two children -- an 
11-year-old son and another now-adult child who was still a minor when they married --   
from before his marriage to Applicant. Currently, Applicant’s children live with her and her 
husband, who also shares custody of his 11-year-old. That child lived with them until 
about 2012. (Answer; GX 1 – 3) 
 
 Applicant and her husband each brought debt to their marriage. In addition, they 
used the credit card addressed in SOR 1.c to pay for their wedding. For the most part, 
they have each managed their personal finances separately and were able to pay down 
existing debts, including the SOR 1.c credit card, while meeting their regular obligations. 
Applicant avers that events around the time their child was born in August 2010 as the 
beginning of their recent financial problems. The child was born a month early after a 
                                                 
1 Required by Executive Order 10865, as amended, and by DOD Directive 5220.6 (Directive), as amended. 
 
 
 
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difficult pregnancy. As a result, Applicant was unable to work for a few months and was 
eligible for short-term disability benefits from her company; however, the paperwork for 
those benefits was not properly processed, and Applicant was without any income during 
her time away from work. (Answer; GX 2; GX 3; Tr. 19, 51 – 52, 54 – 56, 77 – 78) 
 
 Applicant’s husband was on active duty in the Air Force when they got married. 
Because he was dissatisfied with his career path, he took advantage of an early-release 
monetary incentive and left active duty in 2011. He then affiliated with an Air Force 
Reserve command that allowed him to work in his preferred technical field. Since 2011, 
he has primarily earned his income through a series of temporary active duty orders of 
between 90 and 180 days. Unfortunately, there were also times between orders when he 
earned no income for two to four months on average. In 2012, Applicant’s husband 
obtained work as a defense contractor, but he was laid off in 2013 when the contract 
ended. After several months of unemployment, Applicant’s husband found work as a 
civilian employee at a nearby Air Force base; however, he is again on full-time active duty 
orders through 2022. (Answer; GX 2; GX 3; Tr. 23 – 25, 36 – 40) 
 
 Before and after her child was born in August 2010, Applicant experienced a series 
of job-related and other unforeseen problems that impacted her income. Before the child 
was born, Applicant and her husband had been living in State A but he was transferred 
to State B, where they now live. Because Applicant’s pregnancy was complicated, and 
because her older child was still in school in State A, she did not immediately accompany 
him. This resulted in added expenses for two residences on top of the expenses later 
incurred for moving and for special care for Applicant’s child. As already discussed, she 
lost income when her short-term disability benefits. After the couple settled in State B, 
Applicant and her husband unexpectedly had to take over full-time care of his 11-year-
old child, who was beset by numerous emotional and psychological problems. In addition 
to added expenses, care for that child often meant time away from work and lost income. 
By 2012, Applicant had fallen behind on several credit card accounts, including the debt 
at SOR 1.c. After Applicant’s husband found work, they had more money but his schedule 
often meant he was not able to help with running their household. Additionally, Applicant’s 
employer was not paying her the salary she thought they had agreed to when she was 
hired in 2010. When the contract she supported through that job ended in 2016, 
Applicant’s next employment paid her about 20 percent less. Between being unable to 
coordinate day-to-day management of the household finances because of her husband’s 
unavailability, and a lack of expected income, several bills and other routine obligations 
went unattended. (Answer; GX 1 – 3; Tr. 18 – 21, 51 – 56, 61 – 68, 77 – 80) 
 
 Applicant’s tax problems began in 2011. When her husband received his early 
release from active duty, no taxes were withheld from the incentive bonus he received. 
They were unable to pay the resulting $13,000 tax bill, but they established a repayment 
plan in April 2012 through which they satisfied their tax debt in May 2018. For reasons 
related to loss of income, Applicant and her husband also were unable to pay their 2013 
and 2014 taxes on time. As of May 2018, as alleged in SOR 1.a and 1.b, they owed a 
total of $7,121.38. Those tax bills were satisfied between August and September 2018 
 
 
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as a result of payments made starting in October 2016. The most recent credit report 
produced by the Government does not reflect any past-due tax obligations. (GX 2 – 5; 
Answer; AX A; Tr. 22 – 23, 38 – 39, 57, 81 – 83) 
 
 Between 2012 and 2016, Applicant and her husband struggled to meet their 
regular financial obligations in addition to a variety of unexpected events (two car wrecks, 
failed appliances, and unplanned travel in connection with Applicant’s stepchild’s moves 
to and from his mother’s home in State C). Additionally, since 2012, when Applicant’s 
stepchild’s mother regained custody, Applicant’s husband has been paying $600 each 
month in child support. Additionally, Applicant’s husband had to pay additional child 
support for several years for his older child. Applicant’s efforts to resolve her debts were 
slowed further when she and her husband separated in November 2016, thus incurring 
additional expenses for two separate residences and for legal fees associated with a 
contemplated divorce. The couple reconciled in April 2018. (Answer; GX 2; GX 3; Tr. 18 
– 21, 33 – 35, 53 – 54, 78 – 80, 87 – 88) 
 
 The last time Applicant was able to make any payments or attempts to negotiate 
a resolution of the debt at SOR 1.c was 2013, when she learned the debt had been 
charged off as a business loss. Between 2013 and 2018, Applicant chose instead to 
resolve other debts that were within her means to pay. In 2018, Applicant was able to 
negotiate a repayment agreement with the SOR 1.c creditor and, in July 2018, began 
paying $200 each month according to that agreement. After resolving her tax debts, 
Applicant began paying as much as $400 more each month to accelerate resolution of 
that debt. (Answer; GX 1 – 3; AX B; AX C; Tr. 30 – 31, 51, 57 – 61, 80 – 81) 
 
 Applicant’s finances are currently sound. A townhouse they owned as a rental 
property has been sold, thus freeing up extra funds and their income is again sufficient to 
pay their debts and meet all of their routine obligations. Applicant and her husband have 
not incurred any new unpaid debts. They have filed their taxes as required since 2014, 
and they have ensured that sufficient taxes are being withheld from their pay so they will 
avoid any unpayable tax bills in the future. The most recent credit report produced in this 
case does not reflect any adverse financial information. (Answer; GX 5; Tr. 81 – 83) 
 
 Applicant presented extensive information regarding her job performance and her 
overall character. A witness testified about Applicant’s significant generosity and about 
Applicant’s volunteer activities at her child’s school and at a community food bank. 
Applicant has a superior record of performance and enjoys a solid reputation for 
professionalism throughout her career in the defense industry. Among the observations 
of government and industrial coworkers and supervisors is that Applicant has a spotless 
record of safeguarding sensitive information and is exceedingly reliable and trustworthy. 
(Answer; AX D – V; Tr. 28 – 30, 41 – 47) 
  
 
 
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Policies 
 
 Each security clearance decision must be a fair, impartial, and commonsense 
determination based on examination of all available relevant and material information,2 
and consideration of the pertinent criteria and adjudication policy in the adjudicative 
guidelines (AG).3 Decisions must also reflect consideration of the factors listed in ¶ 2(d) 
of the guidelines. Commonly referred to as the “whole-person” concept, those factors are:  
 
  (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. 
 
 The presence or absence of a disqualifying or mitigating condition is not 
determinative of a conclusion for or against an applicant. 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 access to classified 
information. A security clearance decision is intended only to resolve whether it is clearly 
consistent with the national interest4 for an applicant to either receive or continue to have 
access to classified information.  
 
 The Government bears the initial burden of producing admissible information on 
which it based the preliminary decision to deny or revoke a security clearance 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 has a “right” to a security 
clearance, an applicant bears a heavy burden of persuasion.5 A person who has access 
to classified information enters into a fiduciary relationship with the Government based 
on trust and confidence. Thus, the Government has a compelling interest in ensuring each 
applicant possesses the requisite judgment, reliability and trustworthiness of one who will 
protect the national interests as his or her own. The “clearly consistent with the national 
                                                 
2 See Directive. 6.3. 
 
3 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. 
 
4 See Department of the Navy v. Egan, 484 U.S. 518 (1988). 
 
5 See Egan, 484 U.S. at 528, 531. 
 
 
 
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interest” standard compels resolution of any reasonable doubt about an applicant’s 
suitability for access in favor of the Government.6 
 
Analysis 
 
Financial Considerations  
 
 The Government established Applicant accrued the delinquent debts alleged in the 
SOR. When the SOR was issued, those debts had not yet been resolved. That information 
reasonably raised a security concern about Applicant’s finances that is articulated at 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. 
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. 
 
More specifically, available information supported 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). Applicant and her husband did not pay their income taxes on time for the 2011, 
2013 and 2014 tax years. They also accrued significant credit-card debt through one 
delinquent account that was unresolved for almost ten years. 
 
By contrast, Applicant established that her debts arose from events and 
circumstances beyond her control. This included significant fluctuations in income, a 
marital separation, and other events that adversely impacted their finances. Applicant 
acted in a responsible manner under the circumstances. Although not addressed through 
the SOR, over the past five years, Applicant has resolved numerous other debts while 
trying to pay or otherwise resolve the debts listed in the SOR. In 2016, Applicant 
proactively addressed her tax debts through repayment plans with the IRS. Those debts 
are now paid. Attempts in 2012 and 2013 to negotiate with the SOR 1.c creditor were 
unsuccessful. Nonetheless, she continued resolving other debts and, more recently, was 
                                                 
6 See Egan; AG ¶ 2(b). 
 
 
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able to establish a repayment agreement regarding SOR 1.c. Since July 2018, Applicant 
has made regular monthly payments, and more recently, has increased the amount she 
pays under that plan by using the money previously earmarked for her tax debts. 
Applicant has not incurred any new delinquencies, and the record does not show that her 
financial problems were caused by poor decision making, irresponsible spending, or 
misconduct. 
 
All of the foregoing supports application of the following AG ¶ 20 mitigating 
conditions: 
  
(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 person has received or is receiving counseling for the problem and/or 
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 debts; and 
 
(g) the individual has made arrangements with the appropriate tax authority 
to file or pay the amount owed and is in compliance with those 
arrangements. 
 
 On balance, I conclude the record as a whole is sufficient to mitigate the security 
concerns raised by the Government’s information about Applicant’s finances. 
 
I also have evaluated this record in the context of the whole-person factors listed 
in AG ¶ 2(d). Particularly noteworthy is the information regarding Applicant’s response to 
adverse financial circumstances. It reflects well on Applicant’s judgment and reliability. 
Further, the testimony and recommendations about Applicant’s character is significant. 
Applicant has a reputation for generosity, volunteerism, and integrity that supports a 
favorable assessment of her suitability for access to classified information. A fair and 
commonsense assessment of the record evidence as a whole shows the security 
concerns about his finances are mitigated. 
  
 
 
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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.c:  For Applicant 
 
Conclusion 
 
 In light of all of the foregoing, it is clearly consistent with the interests of national 
security for Applicant to have access to classified information. Applicant’s request for a 
security clearance is granted. 
 
 
 
                                        
MATTHEW E. MALONE 
Administrative Judge