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      DEPARTMENT OF DEFENSE 
     DEFENSE OFFICE OF HEARINGS AND APPEALS 
In the matter of: )
)
)       ISCR Case No: 18-00498 
) 
Applicant for Security Clearance ) 
Appearances 
For Government: Jeff Nagel, Esquire, Department Counsel 
For Applicant: Pro se 
______________ 
Decision 
______________ 
DAM, Shari, Administrative Judge: 
Applicant mitigated the financial considerations security concerns related to her 
history of delinquent debts. Based upon a review of the pleadings and exhibits, national 
security eligibility for access to classified information granted. 
Statement of Case 
On March 27, 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 April 24, 2018, and requested her case 
be decided by an administrative judge on the written record without a hearing (Item 1). 
On July 2, 2018, Department Counsel submitted the Government’s written case. A 
complete copy of the File of Relevant Material (FORM), containing six Items, was mailed 
to Applicant and received by her on July 13, 2018. The FORM notified Applicant that she 
had an opportunity to file objections and submit material in refutation, extenuation, or 
mitigation within 30 days of receipt of the FORM. Applicant timely submitted a response 
to the FORM in August 2018, which contained numerous documents. I marked that 
04/12/2019
 
 
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submission as Applicant’s Exhibit (AE) A. Items 1 through 6 and AE A are admitted into 
evidence without objection. The Defense Office of Hearings and Appeals (DOHA) 
assigned this case to me on October 16, 2018.  
 
 After reviewing the file, I reopened the record on March 13, 2019, to give Applicant 
an opportunity to provide additional evidence regarding the resolution of her delinquent 
debts. On March 27, 2019, Applicant timely submitted a cover letter with 24 pages. I 
marked that cover letter with attachments as AE B. Department Counsel had no objection 
to that exhibit. 
  
Findings of Fact  
 
 Applicant admitted all delinquent debts alleged in the SOR, except those in ¶¶ 1.g, 
1.j, and 1.l, which she said were paid. She admitted that she filed a Chapter 7 bankruptcy 
in 2010. (Item 1) 
 
 Applicant is 43 years old and never married. She graduated from high school in 
1992, and attended college for two years. She has a 19-year-old daughter from a previous 
relationship. She started working for her current employer, a defense contractor, in 
August 2016. Prior to this position, she experienced periods of unemployment between 
jobs. (Item 2)  
 
 On September 13, 2016, Applicant submitted a security clearance application 
(SCA). In it, she disclosed a garnishment, a bankruptcy, and delinquent accounts, 
including several medical debts. She stated that she could not afford to pay many of them 
because she was supporting other people and unemployed at times. She disclosed that 
she filed bankruptcy in January 2010 and subsequently discharged about $11,000 in 
delinquent debts. (Item 2) 
 
 On September 6, 2017, a government investigator interviewed Applicant about her 
background and information in her SCA, including financial matters. (Item 3) During the 
interview, she said that she filed bankruptcy because she was a single parent and could 
not pay all of her daughter’s medical bills and their living expenses. She used credit cards 
to pay bills at times. It is unknown if she received child support. (Item 3)   
 
 In her April 23, 2018 answer to the SOR, Applicant acknowledged that she had 
been financially irresponsible in the past. However, she stated that she has since learned 
to live within her means and has used a well-known financial management system to help 
resolve debts. She submitted several documents with her answer indicating that she had 
been making payments on some medical debts that were not alleged in the SOR. She 
also noted that in July 2017 she paid off two open credit cards. (Item 1)  
 
 In her August 7, 2018 response to the FORM, Applicant said that she paid off an 
installment loan on a vehicle she had purchased, and provided proof of the payment. (AE 
A) She also submitted a document indicating that, as of July 2018, she had paid about 
 
 
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$4,600 owed to a creditor for medical bills related to her daughter’s illness. The initial debt 
was about $9,000; the current balance is $5,139. She submitted a payment plan to 
resolve her outstanding debts, including the two largest debts alleged in the SOR: $6,873 
and $2,562. She intended to begin the plan in November 2018, and have the debts paid 
by August 2019. (AE A) In her March 27, 2019 submission, Applicant stated that she was 
unable to follow through on that payment plan because she incurred about $2,400 of 
unexpected automobile repairs in November 2018. She said she subsequently paid the 
car bills. (AE B)    
 
 Applicant has not participated in budget or credit counseling, but anticipates 
enrolling in a formal course in the future. (AE B) She submitted a budget. Her net monthly 
income is $3,010. Her expenses are about $3,000, and include payments of about $400 
on delinquent debts and a $100 payment to the IRS.1 (AE B at 19)   
 
 Based on Applicant’s admissions and credit bureau reports (CBR) from October 
2016, January 2018, and June 2018, the SOR alleged a 2010 Chapter 7 bankruptcy and 
16 debts that became delinquent between 2012 and 2016, and totaled $15,822. Eleven 
allegations were unpaid medical debts and totaled $5,199. (Items 4, 5, 6) The status of 
each alleged SOR debt is as follows: 
 
 (¶ 1.a) This $6,873 debt is the balance owed to an automobile loan company for a 
repossessed vehicle after it was sold at an auction Applicant said she voluntarily 
relinquished the car because she could not afford it. She is trying to resolve smaller debts 
before working on the larger debts. (Item 3; AE B). It remains unresolved. 
 
 (¶ 1.b) This $1,120 medical debt was paid in November 2015, as documented by 
Applicant during her September 2017 interview. (Item 3) It is resolved. 
 
  (¶ 1.c) This $809 medical debt was paid in December 2016, as documented during 
her September 2017 interview. (Item 3) It is resolved. 
  
 (¶ 1.d) This $637 medical debt was paid in January 2018. (AE B at 13) It is 
resolved. 
 
  (¶ 1.e) Applicant is unable to locate the creditor for this $599 medical debt based 
on the information in the January 2018 CBR. (AE B) It is unresolved.  
 
 (¶ 1.f) Applicant settled the $535 credit card debt. She made a $144 payment on 
it on March 22, 2019, and is scheduled to make the final payment of $144 on April 2019. 
(Item 6; AE B) It is being resolved. 
 
 (¶ 1.g) This $461 medical debt was paid in January 2018. (AE B at 14) It is 
resolved. 
                                                 
1 There is no information in the record about this tax debt.  
 
 
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(¶ 1.h) Applicant settled the $416 credit card debt for $225, and paid it on March 
18, 2019. (AE B at 8) It is resolved. 
 
 (¶ 1.i) Applicant has been unable to locate the medical creditor for the $253 
medical debt listed on the January 2018 CBR.2 (Item 5; AE B) It is unresolved. 
 
 (¶ 1.j) The $237 collections account for an unpaid electric bill was paid, as 
documented during Applicant’s September 2017 interview. (Item 3) It is resolved. 
 
 (¶ 1.k) The $130 medical debt was paid in February 2019. (AE A at 15) It is 
resolved. 
 
 (¶ 1.l) The $56 medical debt was paid, as documented during Applicant’s 
September 2017 interview. (Item 3) It is resolved. 
 
 (¶ 1.m) This $2,562 cell phone debt is unpaid. Applicant said that she is trying to 
resolve smaller debts before working on larger debts. (Item 4; AE B) It is unresolved. 
 
 (¶ 1.n) Applicant has been unable to locate the medical creditor for this $727 
medical debt.3 (Item 4; AE B) It is unresolved. 
 
 (¶ 1.o) The $233 medical debt has a balance of $180. Applicant made a payment 
on the debt in February 2019. (AE B at 16) It is being resolved. 
 
 (¶ 1.p) This $174 medical debt was paid in full in December 2018. (AE B at 17) It 
is resolved. 
 
 SOR ¶ 1.q alleged that in January 2010, Applicant filed a Chapter 7 bankruptcy. In 
May 2010, the bankruptcy was discharged. She estimated that the court discharged about 
$11,000 of delinquent debts. Applicant said she filed the bankruptcy because she was a 
single mother raising her daughter and could not afford to pay medical bills and other 
expenses at that time. (Item 3) 
 
 Applicant submitted letters of recommendation from family members. They praise 
her hardworking and honest nature. (AE A) Applicant’s project manager is aware of the 
financial problems alleged as part of the security clearance process, but does not believe 
they interfere with Applicant’s work or trustworthiness. Applicant’s supervisor, who is also 
the human resource manager, stated that Applicant is an exemplary employee. (AE A) 
 
 
 
 
                                                 
2 There is no identified creditor on this CBR or telephone number listed for this debt.  
 
3 There is no identified creditor on this CBR or telephone number listed for this debt. 
 
 
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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 
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. 
 
 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 her admissions and CBRs, Applicant has a history of being unable to 
meet financial obligations, which began prior to her filing a Chapter 7 bankruptcy 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. Four 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, or a death, divorce or separation, clear 
victimization by predatory lending practices, or identity theft), and the 
individual acted responsibly under the circumstances; 
 
 
 
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(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. 
 
Applicant has had ongoing financial problems since 2010, when she filed a 
Chapter 7 bankruptcy. Although she has resolved or is resolving 11 of the 16 delinquent 
debts, five remain unresolved. The evidence establishes limited mitigation under AG ¶ 
20(a). Applicant attributed the delinquent debts and bankruptcy to having insufficient 
money to support herself and daughter, and to pay medical expenses. It is unknown 
whether she received child support. She also admitted that she had irresponsibly 
managed her money at some point. To the extent that the financial problems arose from 
circumstances beyond her control and she attempted to manage them through payment 
plans and a budget, AG ¶ 20(b) partially applies. There is insufficient evidence that she 
participated in formal credit or financial counseling and that all delinquent debts are under 
control. AG ¶ 20(c) does not apply. She provided evidence that she made good-faith 
efforts to repay or resolve 11 of the 16 delinquent SOR-alleged debts, including two debts 
that were paid after she received the order re-opening the record. She established some 
mitigation under AG ¶ 20(d) as to those debts. She provided evidence that in July 2018, 
she paid off her current automobile loan. She has significantly reduced the balance on a 
large debt owed to a creditor, further demonstrating good-faith efforts to address debts 
and establishing the application of AG ¶ 20(d).  
 
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 
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. 
 
 
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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 began working for a defense contractor in 
August 2016. In her September 2016 SCA, she honestly disclosed derogatory information 
related to her finances and delinquent debts, including a 2010 Chapter 7 bankruptcy. 
Since working in her current position, she has been steadily resolving debts, including 
one that was not alleged on the SOR. She resolved, or is resolving, 11 of the 16 alleged 
debts that total $4,889. She stated she intends to address the two largest SOR debts, 
$6,873, and $2,562, after she finishes paying smaller debts. She has a budget that 
includes payments on delinquent debts. The Appeal Board has addressed a key element 
in the whole-person analysis in financial cases stating: 
 
. . . the concept of meaningful track record necessarily includes evidence of 
actual debt reduction through payment of debts. However, an applicant is 
not required, as a matter of law, to establish that he has paid off each and 
every debt listed in the SOR. All that is required is that an applicant 
demonstrates that he has established a plan to resolve his financial 
problems and taken significant actions to implement that plan. The Judge 
can reasonably consider the entirety of an applicant’s financial situation and 
his actions in evaluating the extent to which that applicant’s plan for the 
reduction of his outstanding indebtedness is credible and realistic.4 
 
 Applicant established a track record of managing debts and finances, and is 
demonstrating reliability. Her employer is aware of the financial problems and continues 
to support her request for a security clearance. Applicant is cognizant that further financial 
delinquencies or problems may jeopardize her position with the defense contractor. She 
has satisfactorily exhibited a commitment to resolving the delinquent debts. Based on her 
actions to date, I do not have questions or concerns about her reliability, trustworthiness, 
or good judgment. I find she mitigated the security concerns raised under Guideline F, 
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:          FOR APPLICANT 
 
  Subparagraphs 1.a through 1.q:    For Applicant 
    
                                                 
4 ISCR Case No. 07-06482 at 2-3) App. Bd. May 21, 2008) (internal citations and quotation marks omitted). 
 
 
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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 access to classified information. 
National security eligibility is granted. 
                                                 
   
 
SHARI DAM 
Administrative Judge