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        DEPARTMENT OF DEFENSE 
   DEFENSE OFFICE OF HEARINGS AND APPEALS 
In the matter of: )
)
) ISCR Case No. 18-01441 
) 
Applicant for Security Clearance ) 
Appearances 
For Government: Mary Margaret Foreman, Esq., Department Counsel 
For Applicant: Pro se 
05/31/2019 
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Decision 
______________ 
Gregg A. Cervi, Administrative Judge 
This case involves security concerns raised under Guideline F (Financial 
Considerations). Eligibility for access to classified information is denied. 
Statement of the Case 
Applicant submitted a security clearance application (SCA) on September 13, 
2016. On June 14, 2018, the Department of Defense Consolidated Adjudications Facility 
(DOD CAF) sent him a statement of reasons (SOR) alleging security concerns under 
Guideline F.1 Applicant answered the SOR on September 25, 2018, and requested a 
hearing. 
1 The DOD CAF acted under Executive Order (Exec. Or.) 10865, Safeguarding Classified Information within 
Industry (February 20, 1960), as amended; and DOD Directive 5220.6, Defense Industrial Personnel 
Security Clearance Review Program (January 2, 1992), as amended (Directive). The Adjudicative 
Guidelines (AG) were revised effective June 8, 2017, and apply herein. 
 
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The case was assigned to me on November 14, 2018. The Defense Office of 
Hearings and Appeals (DOHA) issued a notice of hearing on December 12, 2018, 
scheduling the hearing for January 23, 2019. The hearing was convened as scheduled. 
Government Exhibits (GE) 1 through 10 were admitted in evidence without objection. 
Applicant testified. The record was held open to permit Applicant to submit documentary 
evidence in mitigation, but no evidence was submitted. DOHA received the hearing 
transcript (Tr.) on January 31, 2019. 
 
Findings of Fact 
 
Applicant is a 53-year-old information technology support technician, employed by 
a defense contractor since 2009. He graduated from high school in 1984. He married in 
2002 and has seven children, three of whom live with him. Applicant has never held a 
security clearance. 
 
The SOR alleges Applicant is delinquent on 17 debts totaling over $65,000; failed 
to pay Federal income taxes for tax years 1995-1997, 1999, and 2000-2012; owes the 
IRS for a tax lien totaling $13,930; and filed Chapter 13 bankruptcies in 1992, 2008, 2010, 
2011, and twice in 2012. All of the bankruptcy filings were dismissed except for 1992 that 
was discharged in 1995, and 2012 that was discharged in 2017. The SOR allegations are 
supported by substantial evidence. Applicant admitted the SOR allegations with 
explanations except he denied a debt in SOR ¶ 1.m that he did not recognize. For some 
debts he claimed to have included them in a credit repair agreement, and for others, he 
claimed to have a payment plan. No documentary evidence of payment plans or credit 
repair efforts was submitted. 
 
Applicant attributes his poor financial status largely to caring for his parents in their 
latter years and helping with their financial needs. His father passed away in 2005 and 
his mother passed away in 2012. Both suffered from illnesses and did not have the 
financial means to fully support themselves. Applicant’s spouse has had an erratic 
employment history due to medical conditions. Applicant also had a significant child-
support obligation to satisfy. He used the Chapter 13 bankruptcy system to attempt to 
gain control of his finances, however three of the bankruptcies were dismissed due to 
Applicant’s failure to make plan payments, or in one instance, failure to file required 
documentation. In his final bankruptcy discharged in 2017, he claimed $81,106 in 
unsecured debts, and paid $31,281 in disbursements to creditors.  
 
Applicant testified that he could not pay his taxes when due, but he started a 
repayment plan with the IRS in November 2018. At the time of the hearing, he testified 
that he made two monthly payments toward the plan, and that $418 per month will be 
automatically deducted from his checking account. He noted that he owes the IRS about 
$28,000. Applicant stated he has made three monthly installments toward a utility 
company debt (SOR ¶ 1.j), and owes about $500. No documentary evidence has been 
offered to show that SOR debts have been addressed.  
 
 
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Applicant spoke to a credit repair agency in 2018 and paid the initial fees, however 
he has not shown that the company has made any progress with his debts. He admitted 
during testimony that he is delinquent on payments on a credit card debt that he obtained 
to rebuild his credit because other financial needs arose. He also testified that he is behind 
on student loan payments. These debts are not reflected on the SOR. He also admitted 
that he has been irresponsible with debts and financially overextended over the years, 
and currently lives paycheck-to-paycheck. His spouse is not working and his children help 
pay utility bills because they do not want to see him in a poor financial situation. 
 
Law and Policies 
 
“[N]o one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 
484 U.S. 518, 528 (1988). As Commander in Chief, the President has the authority to 
“control access to information bearing on national security and to determine whether an 
individual is sufficiently trustworthy to have access to such information.” Id. at 527. The 
President has authorized the Secretary of Defense or his designee to grant applicants 
eligibility for access to classified information “only upon a finding that it is clearly 
consistent with the national interest to do so.” Exec. Or. 10865 § 2. 
 
National security eligibility is predicated upon the applicant meeting the criteria 
contained in the adjudicative guidelines. These guidelines are not inflexible rules of law. 
Instead, recognizing the complexities of human behavior, an administrative judge applies 
these guidelines in conjunction with an evaluation of the whole person. An administrative 
judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. An 
administrative judge must consider a person’s stability, trustworthiness, reliability, 
discretion, character, honesty, and judgment. AG ¶ 1(b). 
 
The Government reposes a high degree of trust and confidence in persons with 
access to classified information. This relationship transcends normal duty hours and 
endures throughout off-duty hours. Decisions include, by necessity, consideration of the 
possible risk that the applicant may deliberately or inadvertently fail to safeguard 
classified information. Such decisions entail a certain degree of legally permissible 
extrapolation about potential, rather than actual, risk of compromise of classified 
information. 
 
Clearance decisions must be made “in terms of the national interest and shall in 
no sense be a determination as to the loyalty of the applicant concerned.” Exec. Or. 10865  
§ 7. Thus, a decision to deny a security clearance is merely an indication the applicant 
has not met the strict guidelines the President and the Secretary of Defense have 
established for issuing a clearance. 
 
Initially, the Government must establish, by substantial evidence, conditions in the 
personal or professional history of the applicant that may disqualify the applicant from 
being eligible for access to classified information. The Government has the burden of 
establishing controverted facts alleged in the SOR. Egan, 484 U.S. at 531. “Substantial 
evidence” is “more than a scintilla but less than a preponderance.” See v. Washington 
 
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Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994). The guidelines presume a 
nexus or rational connection between proven conduct under any of the criteria listed 
therein and an applicant’s security suitability. See, e.g., ISCR Case No. 12-01295 at 3 
(App. Bd. Jan. 20, 2015). 
 
Once the Government establishes a disqualifying condition by substantial 
evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the 
facts. 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, e.g., ISCR Case No. 
02-31154 at 5 (App. Bd. Sep. 22, 2005). 
 
An applicant “has the ultimate burden of demonstrating that it is clearly consistent 
with the national interest to grant or continue his security clearance.” ISCR Case No. 01- 
20700 at 3 (App. Bd. Dec. 19, 2002). “[S]ecurity clearance determinations should err, if 
they must, on the side of denials.” Egan, 484 U.S. at 531; see, AG ¶ 1(d). 
 
Analysis 
 
 
 
Financial Considerations 
The security concern under this guideline 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. . . .  
 
The relevant disqualifying conditions under AG ¶ 19 include: 
 
(a) inability to satisfy debts; 
 
(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. 
 
Applicant’s admissions and the documentary evidence are sufficient to establish 
the disqualifying conditions above. 
 
The following mitigating conditions under AG ¶ 20 are potentially relevant: 
 
 
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(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 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 debts; 
 
(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; 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 financial status was likely negatively impacted by his spouse’s erratic 
employment and health issues, his significant child support obligations, and his support 
for his parents during their lives. However, he admitted to irresponsible financial practices 
and being financially overextended. Applicant has often availed himself of the bankruptcy 
court, and sought to discharge debts through the Chapter 13 process. Bankruptcy is a 
recognized method of addressing debts and he successfully completed two bankruptcies, 
however he continued to incur debts and has long-standing unpaid obligations to the IRS 
for delinquent taxes. Although he testified that his tax debts are being repaid in a payment 
plan, he has not shown documentary evidence of a plan or a reliable history of payments 
under such a plan to determine that he is responsibly repaying the debt. Although his 
bankruptcies are largely mitigated, he has not shown that his other SOR debts have been 
adequately addressed. 
 
The Appeal Board has long held: 
 
Security requirements include consideration of a person’s judgment, 
reliability, and a sense of his or her legal obligations. Cafeteria & Restaurant 
Workers Union, Local 473 v. McElroy, 284 F.2d 173, 183 (D.C. Cir. 1960), 
aff’d, 367 U.S. 886 (1961). Failure to comply with Federal tax laws suggests 
 
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that an applicant has a problem with abiding by well-established 
government rules and regulations. Voluntary compliance with rules and 
regulations is essential for protecting classified information. See, e.g., 
ISCR Case No. 14-04437 at 3 (App. Bd. Apr. 15, 2016). 
 
Applicant’s lack of financial responsibility with regard to tax obligations and other 
debts, as well as a series of bankruptcy filings, show a history of financial difficulties that 
have not been overcome to date. He has incurred additional debt despite his 2017 
Chapter 13 discharge, and has only begun to make payments on his substantial tax 
obligations. Applicant has retained a credit repair agency and presumably completed 
court-ordered financial counseling, but he has not shown an improved financial status. 
Overall, based on the record presented, I am unable to conclude that Applicant’s financial 
problems are under control or are unlikely to recur. No conditions fully apply to mitigate 
his delinquent tax obligations and other debts. 
 
Whole-Person Concept 
 
 Under AG ¶¶ 2(a), 2(c), and 2(d), the ultimate determination of whether to grant 
national security eligibility must be an overall commonsense judgment based upon careful 
consideration of the guidelines and the 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).2 Although adverse information concerning a single criterion 
may not be sufficient for an unfavorable eligibility determination, the individual may be 
found ineligible if available information reflects a recent or recurring pattern of 
questionable judgment, irresponsibility, or unstable behavior. AG ¶ 2(e). 
 
I considered all of the potentially disqualifying and mitigating conditions in light of 
all the facts and circumstances surrounding this case. I have incorporated my findings of 
fact and comments under Guideline F in my whole-person analysis. Applicant’s personal 
difficulties do not overcome his history of financial irresponsibility. 
 
Accordingly, I conclude Applicant has not carried his burden of showing that it is 
clearly consistent with the national security interests of the United States to grant him 
eligibility for access to classified information. 
 
 
 
 
                                                     
2 (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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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:    AGAINST APPLICANT 
 
Subparagraphs 1.a - 1.f:     For Applicant 
 
Subparagraphs 1.g – 1.p:    Against Applicant 
 
Conclusion 
 
I conclude that it is not clearly consistent with the national security interests of the 
United States to grant Applicant eligibility for access to classified information. Clearance 
is denied. 
 
 
_______________________ 
Gregg A. Cervi 
Administrative Judge