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   DEPARTMENT OF DEFENSE 
 DEFENSE OFFICE OF HEARINGS AND APPEALS 
In the matter of: )
)
) ISCR Case No. 18-02048 
) 
Applicant for Security Clearance ) 
Appearances 
For Government: David F. Hayes, Esq., Department Counsel 
For Applicant: Pro se 
___________ 
Decision 
___________ 
HEINY, Claude, Administrative Judge: 
Applicant’s statement of reasons (SOR)1 alleged unpaid federal taxes for tax year 
2009, a past-due mortgage, and 35 additional delinquent medical obligations. She failed 
to mitigate the security concerns under Guideline F, financial considerations. Applicant’s 
eligibility for access to classified information is denied.  
Statement of the Case 
Acting under the relevant Executive Order and DoD Directive,2 on August 17, 
2018, the DoD issued a Statement of Reasons (SOR) detailing security concerns under 
Guideline F, financial considerations. On September 7, 2018, Applicant answered the 
SOR and elected to have the matter decided without a hearing. On September 19, 2018, 
1 The record fails to contain the final page of the SOR. It is clear from the record that no additional SOR 
allegations were alleged. 
2 Executive Order 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 effective within the DoD on June 
8, 2017.  
03/04/2019
   
 
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Defense Office of Hearings and Appeals (DOHA) Department Counsel (DC) submitted 
the Government's case in a File of Relevant Material (FORM). The FORM contained five 
attachments (Items). Applicant’s response to the FORM was due on December 14, 2018. 
No response to the FORM has been received by DOHA. On February 8, 2019, I was 
assigned the case.  
 
Evidentiary Ruling 
 
 Department Counsel submitted as Item 3 a summary of a subject interview of 
Applicant conducted on March 27, 2018. The summary was part of the DoD Report of 
Investigation (ROI) in Applicant’s case. Under ¶ E3.1.20 of the Directive, a DoD personnel 
background report of investigation may be received in evidence and considered with an 
authenticating witness, provided it is otherwise admissible under the Federal Rules of 
Evidence. The interview summary did not bear the authentication required for 
admissibility under ¶ E3.1.20. 
 
 In ISCR Case No. 16-03126 decided on January 24, 2018, the Appeal Board held 
that it was not error for an administrative judge to admit and consider a summary of 
personal subject interview where the applicant was placed on notice of her opportunity to 
object to consideration of the summary; the applicant filed no objection to it; and there is 
no indication that the summary contained inaccurate information. In this case, Applicant 
was provided a copy of the FORM and advised of her opportunity to submit objections or 
material that she wanted the administrative judge to consider. The FORM advised 
Applicant of the following: 
 
Note to Applicant: Exhibit 3 is a summary of your Personal Subject Interview 
(PSI) and is being provided to the Administrative Judge for consideration as 
part of the record evidence in this case. In your response to this [FORM], 
you can comment on whether the PSI summary accurately reflects the 
information you provided to the authorized OPM investigator(s) and you can 
make any corrections, additions, deletions, and updates necessary to make 
the summary clear and accurate. Alternatively, you can object on the ground 
that the report is unauthenticated by a Government witness. If no objections 
are raised in your response to the FORM, or if you do not respond to the 
FORM, the Administrative Judge may determine that you have waived any 
objections to the admissibility of the summary and may consider the 
summary as evidence in your case. 
 
 Concerning whether Applicant understood the meaning of authentication or the 
legal consequences of waiver, Applicant’s pro se status does not confer any due process 
rights or protections beyond those afforded her if she was represented by legal counsel. 
She was advised in ¶ E3.1.4 of the Directive that she may request a hearing. In ¶ E3.1.15, 
she was advised that she is responsible for presenting evidence to rebut, explain, or 
mitigate facts admitted by her or proven by Department Counsel and that she has the 
ultimate burden of persuasion as to obtaining a favorable clearance decision. While the 
Directive does not specifically provide for a waiver of the authentication requirement, 
   
 
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Applicant was placed on sufficient notice of her opportunity to object to the admissibility 
of the interview summary, to comment on the interview summary, and to make any 
corrections, deletions, or updates to the information in the report. Applicant is a college 
graduate, who can reasonably be held to have understood the note, and she did not 
respond to the FORM. Accordingly, I accepted Item 3 in the record, subject to issues of 
relevance and materiality in light of the entire record. 
 
Findings of Fact 
 
In Applicant’s answer to the SOR, she admitted she owed $8,000 in Federal 
income tax for tax year 2009, and admitted to the delinquency on her mortgage payment, 
but asserted there had been a loan modification. She asserted she had paid four of the 
delinquent medical obligations and that three of the listed debts were duplications. She 
admitted owing the additional 28 delinquent medical debts. After a thorough review of the 
pleadings and exhibits, I make the following additional findings of fact. 
 
Applicant is a 54-year-old electrical engineer, who has worked for her employer 
since September 2017. (Item 1) She has never married or served in the military. In 
December 1996, she obtained her bachelor’s degree, and in June 2010, obtained her 
master’s degree. (Ex. 2) 
 
On Applicant’s September 2017 Electronic Questionnaires for Investigations 
Processing (e-QIP) she listed a $20,500 second mortgage taken out for a new roof on 
her home on which she planned to negotiate a repayment plan whereby she would pay 
$200 monthly. (Ex. 1, Ex. 2, Ex. 3) She listed $100,000 past due on her primary mortgage 
and planned to pay $1,000 monthly once a modification of the mortgage loan was 
reached. (Ex. 2) She listed $15,000 owned on medical debts and that she was negotiating 
a settlement estimating her monthly payments would be $100. She also listed a $500 
telephone bill and $500 cable bill on her e-QIP. These two debts are not listed as debts 
of concern on her SOR. (Ex. 2) On her e-QIP, she explained her financial problems were 
due to loss of income, underemployment, and medical expenses. (Ex. 2) During her 
March 27, 2018 enhanced subject interview, she was questioned about all of her 
delinquent financial obligations and specifically about all of the SOR delinquent 
obligations. (Ex. 3)  
 
 In the FORM, Department Counsel stated: 
 
Applicant appears to have been actively engaged in attempting to resolve 
her debt through payments in full, negotiations with creditors and arranging 
payment plans. She has a desire to solve her financial issues, but there is 
no documentation substantiating any efforts. Additional documentation 
added to this FORM by the Applicant would be beneficial for mitigation and 
review by the administrative judge. 
 
   
 
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No response to the FORM was received, which, of course, means there is no 
documentation of record supporting her assertions of payment, negotiating with her 
creditors, or repayment plans received. 
 
 In Applicant’s September 2018 SOR Response, she says she was unemployed 
from June 2009 through June 2011 and had incurred a Federal tax debt for 2009. (Ex. 1) 
She admitted the tax debt was unpaid, and stated an intention to “start making payments 
beginning next year.” (Ex. 1) Between May 2014 and September 2017, she was 
underemployed at minimum wage and not working in her profession as an engineer. (Ex. 
1)  
 
 In 2010, due to Applicant’s unemployment, her home went into foreclosure 
proceedings. Her monthly mortgage obligation was $998. She was 36 months behind on 
her mortgage payments at the time of the foreclosure. (Ex. 3) From June 2011 through 
June 2013, she was working full time as an electrical engineer. However, the mortgage 
company would not accept payments from her until the matter of her mortgage 
delinquency was heard in court. She fails to explain why she was not setting aside her 
monthly mortgage in a separate account while she was full-time employed so she could 
apply the money to her mortgage once a court ruling was made. As of July 2017, she 
owed $101,374 on the home and was $64,641 past due on her payments. (Ex. 3)  
 
In September 2017, the mortgage company was ordered to modify Applicant’s loan 
and in July 2018, a modification was made. Applicant asserts she began making 
payments in August 2018. The scheduled monthly mortgage payments are $1,106. (Ex. 
3) She provided no documentation supporting her assertion of payments. 
 
 Applicant incurred an $8,000 federal tax debt (SOR 1. a) when she withdrew funds 
from her 401(k) retirement plan in 2009. She used the funds to prevent foreclosure on her 
home. (Ex. 3) Initially her tax liability was $15,000, but the amount was reduced to $8,000 
when a tax refund was intercepted and applied to the tax debt. (Ex. 3) She asserted she 
worked with the Internal Revenue Service (IRS) concerning the debt, and she receives a 
letter every six months informing her of the balance owed. (Ex. 3)  
 
 The SOR alleges 35 delinquent medical debts, totaling $12,146. The debts include 
13 debts of less than $100 each, 12 debts of between $100 and $200 each, 7 debts of 
more than $200 each, and 3 debts that are duplication of other debts. In July 2015, 
Applicant had a knee replacement. Her medical health insurance had a high deductible 
resulting in her insurance paying a smaller amount of her medical expenses. (Ex. 1) She 
made her co-payments. In May 2016, she fell and broke her knee cap. Her high deductible 
again made her insurance reimbursement low. She said she had to negotiate a settlement 
for her medical expenses incurred in 2015 and 2016. 
 
 In September 2017, Applicant returned to full-time employment as an electrical 
engineer. At the time of her March 2018 enhanced subject interview, she asserted with 
her current employment she will be able to repay her delinquent financial obligations. (Ex. 
3) She expressed an intention to have all of her medical debts paid within two years. (Ex. 
   
 
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3) She asserts since returning to full-time employment, she is paying a bill a month. She 
asserted when she responded to the SOR she had paid the $858 medical bill (SOR 1.s, 
SOR 1.t is a duplicate debt), the $831 medical debt (SOR 1.u), the $531 medical bill (SOR 
1.v), and the $150 collection debt (SOR 1.z) in August 2018 (Ex. 1) She provided no 
documentation supporting her assertions of payment of these debts. 
 
 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 must be considered 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 adjudication process is an examination of a sufficient period and a careful weight of a 
number of variables of an individual’s life to make an affirmative determination that the 
individual is an acceptable security risk. This is known as the whole-person concept.  
 
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.  
 
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 applicant or proven by Department Counsel. . . .” The applicant 
has the ultimate burden of persuasion to obtain a favorable security decision.  
 
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 Executive Order 10865 provides that decisions shall be “in terms of 
the national interest and shall in no sense be a determination of the loyalty of the applicant 
   
 
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concerned.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access 
to classified or sensitive information).  
 
Analysis 
 
Guideline F, Financial Considerations 
 
 Adjudicative Guideline (AG) ¶ 18 articulates the security concerns relating to 
financial problems: 
 
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 . . . An individual who is financially 
overextended is at greater risk of having to engage in illegal or otherwise 
questionable acts to generate funds. 
 
Additionally, an individual who is financially irresponsible may also be 
irresponsible, unconcerned, negligent, or careless in properly handling and safeguarding 
classified information. Behaving responsibly or irresponsibly in one aspect of life provides 
an indication of how a person may behave in other aspects of life. 
 
A person’s relationship with her creditors is a private matter until evidence is 
uncovered demonstrating an inability or unwillingness to repay debts under agreed upon 
terms. Absent evidence of strong extenuating or mitigating circumstances, an applicant 
with a history of serious or recurring financial difficulties is in a position of risk that is 
inconsistent with holding a security clearance. An applicant is not required to be debt free, 
but is required to manage her finances to meet her financial obligations. 
 
Applicant owes the IRS $8,000 for tax year 2009 due to her withdrawing funds 
from her 401(k) retirement plan. She was also more than $64,000 past due on her 
mortgage and owed 32 medical collections accounts totally more than $12,000. AG ¶ 19 
includes four disqualifying conditions that could raise a security concern any may be 
disqualifying in this case: “(a) inability to satisfy debts;” “(b) unwillingness to satisfy debts 
regardless of the ability to do so;” “(c) a history of not meeting financial obligations;” and 
“(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 Government’s evidence and Applicant’s own admissions raise security 
concerns under AG ¶¶ 19(a), 19(b), 19(c), and 19(f). The burden shifted to Applicant to 
produce evidence to rebut, explain, extenuate, or mitigate the security concerns. 
(Directive ¶ E3.1.15) An applicant has the burden of proving a mitigating condition, and 
the burden of disproving it never shifts to the Government. (See ISCR Case No. 02-31154 
at 5 (App. Bd. September 22, 2005)). Applicant has the burden of presenting evidence of 
   
 
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explanation, extenuation, or mitigation to overcome the financial considerations security 
concerns.  
 
The Appeal Board concisely explained Applicant’s responsibility for proving the 
applicability of mitigating conditions as follows:  
 
Once a concern arises regarding an Applicant’s security clearance 
eligibility, there is a strong presumption against the grant or maintenance of 
a security clearance. See Dorfmont v. Brown, 913 F. 2d 1399, 1401 (9th 
Cir. 1990), cert. denied, 499 U.S. 905 (1991). After the Government 
presents evidence raising security concerns, the burden shifts to the 
applicant to rebut or mitigate those concerns. See Directive ¶ E3.1.15. The 
standard applicable in security clearance decisions is that articulated in 
Egan, supra. “Any doubt concerning personnel being considered for access 
to classified information will be resolved in favor of the national security.” 
Directive, Enclosure 2 ¶ 2(b).  
 
ISCR Case No. 10-04641 at 4 (App. Bd. Sept. 24, 2013).  
 
The following mitigating conditions under AG ¶ 20 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; 
 
(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. 
Applicant’s delinquent debts are “a continuing course of conduct. She asserts she 
has paid some of the debts, but provided no documentation of any payments. The FORM 
put her on notice that providing documentation substantiating her efforts to address her 
delinquent obligations would be beneficial for mitigation. No documentation was received.  
Applicant owes $8,000 in Federal income tax for tax year 2009. The tax obligation 
remains unpaid. In her September 2018 SOR response, she said she would start making 
payments toward her tax delinquency in 2019. She also stated she had been working with 
   
 
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the IRS to address her tax obligation. However, she provided no documentation 
supporting this assertion. She says her mortgage has been modified, and she has been 
making her monthly mortgage payments since August 2018. She provided no 
documentation showing payments on her mortgage. She asserted she paid four 
delinquent medical obligations, which totaled approximately $2,400, in August 2018. It 
was her intent to pay one delinquent debt each month, but she provided no documentation 
showing repayment.  
 
Applicant timely filed her Federal income tax return for tax year 2009, but her tax 
debt still has security implications. The Appeal Board has held as follows:  
 
Failure to file tax returns suggests that an applicant has a problem with 
complying with well-established governmental rules and systems. Voluntary 
compliance with such rules and systems is essential for protecting classified 
information. ISCR Case No. 01-05340 at 3 (App. Bd. Dec. 20, 2002). As we 
have noted in the past, a clearance adjudication is not directed at collecting 
debts. See, e.g., ISCR Case No. 07-08049 at 5 (App. Bd. Jul. 22, 2008). By 
the same token, neither is it directed toward inducing an applicant to file tax 
returns. Rather, it is a proceeding aimed at evaluating an applicant’s 
judgment and reliability. Id. A person who fails repeatedly to fulfill his or her 
legal obligations does not demonstrate the high degree of good judgment 
and reliability required of those granted access to classified information. 
See, e.g., ISCR Case No. 14-01894 at 5 (App. Bd. Aug. 18, 2015). See 
Cafeteria & Restaurant Workers Union Local 473 v. McElroy, 284 F.2d 173, 
183 (D.C. Cir. 1960), aff’d, 367 U.S. 886 (1961).  
 
The Appeal Board ruled that “even in instances where an “[a]pplicant has 
purportedly corrected [his or her] federal tax problem, and the fact that [applicant] is now 
motivated to prevent such problems in the future, does not preclude careful consideration 
of [a]pplicant’s security worthiness in light of [his or her] longstanding prior behavior 
evidencing irresponsibility” including a failure to timely file federal income tax returns. See 
ISCR Case No. 15-01031 at 3 and note 3 (App. Bd. June 15, 2016). 
 
Applicant has not sufficiently satisfied any of the mitigating conditions to overcome 
the financial considerations security concerns raised by her extensive delinquencies. AG 
¶ 20(a) does not apply because the behavior did not happen long ago. The behavior was 
not infrequent since there were a large number of delinquent debts. She had periods of 
unemployment, underemployment, and medical expenses, which are factors beyond her 
control. However, Applicant must demonstrate she has acted responsibly under the 
circumstances. Even though she asserted she has acted responsibly by repaying some 
of her debts, she failed to document her actions. AG ¶ 20(b) does not apply. 
 
There is no evidence of Applicant having received financial counseling or that her 
financial problems are resolved or under control. AG ¶ 20(c) does not apply. She asserts 
she has paid some of the debts, but without documentation she has failed to establish a 
good-faith effort to repay her creditors. Even if she paid a few of her debts, those efforts 
   
 
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are insufficient to establish AG ¶ 20(d) given the number of delinquent accounts with no 
repayment plans established. AG ¶ 20(d) does not apply. In this instance AG ¶ 20(g) does 
not apply. Even though Applicant has filed her 2009 tax return, she has failed to document 
her communication with the IRS. Additionally, she has not started repaying the $8,000 
outstanding tax delinquency.  
 
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 the 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.  
 
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 have incorporated my comments under 
Guideline F in my whole-person analysis. Some of the factors in AG ¶ 2(d) were 
addressed under those guidelines, but some warrant additional comment.  
 
 As Department Counsel stated in the FORM, it appeared Applicant had been 
actively engaged in attempting to resolve her debt through payments in full, negotiations 
with creditors, arranging payment plans, and has a desire to solve her financial issues. 
However, she failed to provide documentation substantiating her efforts even after being 
informed documentation would be beneficial for mitigation.  
 
Although Applicant has made assertions to the contrary, there is no documentary 
evidence Applicant has contacted her creditors and has paid some of her delinquent 
obligations. An applicant is not required to be debt-free or to develop a plan for paying off 
all debts immediately or simultaneously, but she is required to act responsibly given her 
circumstances and develop a reasonable plan for repayment, accompanied by 
“concomitant conduct,” that is, actions which evidence a serious intent to effectuate the 
plan. See ISCR Case No. 07-06482 at 3 (App. Bd. May 21, 2008). What constitutes 
responsible behavior depends on the facts of a given case. Applicant’s poor financial 
condition originated in part from periods of unemployment and medical problems. She 
must document she has established a plan to resolve financial problems and taken 
significant action to implement the plan, which is not shown in the record.  
 
   
 
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In requesting an administrative determination, Applicant chose to rely on the 
written record. In so doing, however, she failed to submit sufficient information or 
evidence to supplement the record with relevant and material facts regarding her 
circumstances, articulate her position, and mitigate the financial security concerns. She 
failed to offer evidence of financial counseling or provide documentation regarding her 
past efforts to address her delinquent debt. By failing to provide such information, and in 
relying solely on her explanation in her SOR Response, financial considerations security 
concerns remain.  
 
This decision should not be construed as a determination that Applicant cannot or 
will not attain the state of true reform and rehabilitation necessary to be eligible for a 
security clearance. The determination of an individual’s eligibility and suitability for a 
security clearance is not a once-in-a-lifetime occurrence, but is based on applying the 
factors, both disqualifying and mitigating, to the evidence presented. Under Applicant=s 
current circumstances, a clearance is not warranted. In the future, Applicant may well 
demonstrate persuasive evidence of her security worthiness.  
 
The issue is not simply whether all the delinquent obligations have been paid—it 
is whether her financial circumstances raise concerns about her fitness to hold a security 
clearance. (See AG & 2(c)). Overall, the record evidence due to a lack of documentation 
leaves me with questions and doubts about Applicant’s eligibility and suitability for a 
security clearance. For all these reasons, I conclude Applicant failed to mitigate the 
financial considerations 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, Financial Considerations: AGAINST APPLICANT 
 
 Subparagraphs 1.a – 1.c, 1.e – 1.m,  
1.o – 1.s, and 1.u – 1.kk:   Against Applicant 
 
Subparagraphs 1.d., 1.n, and 1.t: For Applicant (duplicate debts) 
    
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 a security clearance. 
Eligibility for access to classified information is denied.  
 
 
_______________________ 
CLAUDE R. HEINY II 
Administrative Judge