DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
------------------------- )       ISCR Case No. 07-01967
SSN: ----------------- )
)
Applicant for Security Clearance )
Appearances
For Government: James F. Duffy, Esquire, Department Counsel
For Applicant: Per Se
______________
Amended Decision
______________
WESLEY, Roger C., Administrative Judge:
Statement of Case
On November 9, 2007, the Defense Office of Hearings and Appeals (DOHA),
pursuant to Executive Order 10865 and Department of Defense Directive 5220.6
(Directive), dated January 2, 1992, issued a Statement of Reasons (SOR) to Applicant,
which detailed reasons why DOHA could not make the preliminary affirmative finding
under the Directive that it is clearly consistent with the national interest to grant or
continue a security clearance for Applicant, and recommended referral to an
administrative judge to determine whether clearance should be granted, continued,
denied or revoked.
Applicant responded to the SOR on November 30, 2007, and requested a
hearing.  The case was assigned to me on January 2, 2008, and was scheduled for
hearing on January 29, 2008.  A hearing was held on January 29, 2008, for the purpose
of considering whether it would be clearly consistent with the national interest to grant,
continue, deny, or revoke Applicant’s security clearance.  At hearing, the Government's
case consisted of five exhibits; Applicant relied on one witness (herself) and 11 exhibits.
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The transcript (R.T.) was received on February 6, 2008.  Based upon a review of the
case file,. pleadings, exhibits, and testimony, eligibility to access classified information is
granted.
Procedural Rulings and Evidentiary Issues
Before the close of the hearing, Appellant requested leave to supplement the
record with documentation of her payments of several of her medical and consumer
creditors and efforts to contact listed creditors she cannot identify as her own.  For good
cause shown, Applicant was granted seven days to supplement the record.  Within the
time permitted, Applicant supplemented the record with documented payments and
contacts with a number of her listed creditors.  Her post-hearing exhibits were admitted
and considered.  
Summary of Pleadings
Under Guideline F, Applicant accumulated 28 debts exceeding $31,000.00.
Applicant admitted most of the listed debts but denied the allegations covered by
subparagraphs 1.d and 1.I on the grounds she does not recognize the debts as her
debts.  She denied subparagraph 1.q on the grounds the debt was paid when she sold
her house.   And she denied subparagraphs 1.s and 1.bb on the stated grounds they
were duplicates of debts covered by subparagraphs 1.k and 1.n. 
Findings of Fact
Applicant is a 38-year-old senior engineering associate for a defense contractor
who seeks a security clearance.  The allegations covered in the SOR and admitted by
Applicant are incorporated herein by reference and adopted as relevant and material
findings.  Additional findings follow.
Applicant accumulated 28 debts over a five-year period that exceed $31,000.00.
Many of her debts are medically related.  Some are linked to the period in 2004 when
her husband lost his job.
Applicant married H in 1990.  She has two sons from that marriage (ex. 1; R.T.,
at 74-75).  For the first three years of their marriage Applicant and her husband
maintained good control of their finances, despite living a little  beyond their means
(R.T., at 71).  When H lost his job in 2004, they began experiencing considerable
financial difficulties.  During this period, Appellant accrued considerable consumer debts
and medical debts associated with H’s hospitalization (R.T., at 62-63). 
Applicant’s financial problems compounded after her separation from H and his
relocating elsewhere.  She described her marriage to H as a violent one: H had an
alcohol problem, and had difficulty holding a job (R.T., at 71-72).   After H lost his job in
2004, they were forced to sell their home on a short sale basis, and move into a trailer
(R.T., at 38).  With their marriage severely strained, H moved out of their trailer in July
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2005, and moved to another state (R.T., at 38).   Applicant subsequently filed for
divorce, which was finalized in May 2006 (see ex. 1).  As a part of their divorce decree,
H was required to provide monthly child support of $300.00 a month. H makes only
sporadic child support payments, and has avoided scheduled child support hearings
(R.T., at 35, 72-73).  
Applicant’s three largest debts comprise deficiencies on two cars she obligated
herself on with her ex-spouse, and the cost of windows installed in her house that was
subsequently sold.  In 2000, she purchased an Altima for about $10,000.00.  When she
and H began having financial problems in 2004, the car was repossessed by creditor
1.r.  Applicant assures she never received notice of the public sale of the vehicle (R.T.,
at 40-43).  Because the listed deficiency so closely reflects the purchase price of the
car, Applicant does not believe the listed debts reflect any credited proceeds from the
sale of the car (see ex. 5; R.T., at 40-43).   As a result, she contests the validity of the
deficiency debt associated with creditor 1.
The second of Applicant’s major debts reflects a reported deficiency on another
vehicle purchased by Applicant.  In 2004, she and her husband purchased a Buick for
about $13,000.00.  She assures she made payments on the vehicle for about six to
eight months before her husband moved to another state and took the car with him
(R.T., at 41-42).  H defaulted on his payments for the car, and the creditor (creditor 1.p)
came to Applicant’s house looking for the vehicle (R.T., at 43).  Applicant informed
creditor 1.p of H’s whereabouts (R.T., at 43), and subsequently learned that the creditor
repossessed the vehicle.  After the sale, a deficiency was assessed in the amount of
$8,651.00 (see ex. 5; R.T., at 66-67).  This amount is apparently still owed on the
vehicle to creditor 1.p, which Applicant does not dispute  (R.T., at 68-70).  
Applicant’s third major debt (creditor 1.q) for some windows that were installed in
her home in 2002 (see exs. 5 and K).  After H lost his job in 2004, they were forced to
sell the home by means of a “short sale” to avert foreclosure (R.T., at 45-46).  Applicant
disputes this creditor 1.q debt based on her expressed belief that the obligation was
absorbed by the loan assumed by the buyer of the house.   Her efforts to verify
satisfaction of this debt have not been fruitful (see ex. L; R.T., at 45-46).
In the past, Applicant disputed a number of the debts listed in the SOR.  In her
post-hearing submissions, she documented her disputed debts with creditor 1.m (ex. N),
creditors 1.b and creditors 1.f through 1.h (see exs. 5, K and L through T), creditor 1.l
(ex. K), creditor 1.o (ex. L), and creditor 1.q  (R.T., at 54-61, 64-65).  Most of these
debts have since been removed from her most recent credit report (see ex. K).
Applicant is also able to document her payments to several of her listed creditors:
creditor 1.a (ex. O), creditor 1.k (see exs. 2 and M), creditor 1.m (see ex. N),  and
creditors 1.w through 1.aa (see exs. A through G, P, Q, R, S and T; R.T., at 47-56,62-
70).  She assures, too, that she has paid creditors 1.c, 1.l and 1.t, which are no longer
reflected in her credit report (see ex. K; R.T., at 52-62).  Albeit, she has not been able to
provide any additional payment documentation.
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Applicant also disputes two of the listed debts (creditors 1.s and 1.bb) on the
grounds that they are duplicates of the listed debts covered by subparagraphs 1.k and
1.s, respectively.  The respective debts cover roughly the same amounts and identify
either the same creditor (in the case of creditors 1.s and 1.k) or the same type of
collection account (creditors 1.n and 1.bb).  Applicant’s claims are corroborated by her
credit reports (see exs. 4 and 5), reflect plausible and credible explanations, and are
accepted.   
While she has sought formal counseling regarding her finances, Applicant has
relied on the advice of a well known radio commentator in her community who
recommends to listeners with debt problems to pay their smaller debts first, before
addressing their larger debts (R.T., at 76-77).  Appellant has been following this advice
to the best of her ability.  She estimates to have a minus $73.00 remainder each month
in her most recent financial statement (see ex. 2; R.T., at 81).  She lives in her father’s
house with her two sons and has had to expend considerable money on utilities and
repairs in this very old house (R.T., at 78-79).  She pays her sister over $300.00 a
month on the car she is purchasing from her (R.T., at 73-74, 80-81).  To pay some of
her listed old debts with the limited income she has, she has had to borrow from her
sister and work odd jobs at her church for extra money (R.T., at 81-82).
Applicant is highly regarded by her supervisors, co-workers and friends.  The
director of her office for the past 18 months of her employment describes her as a very
trustworthy, dependable, and responsible administrative assistant who performs her
assigned duties flawlessly (see ex. J).  Management personnel in her department who
work with her on a daily basis characterize her as highly ethical, dependable, and
trustworthy (ex. J).  Her pastor describes her as a “model of sincere and true faith” with
unquestionable integrity and trustworthiness (ex. J).  And her good friend and junior
high math teacher in her community credits her with extraordinary help with her
students as a full-time teacher’s aide (ex. J).  She is known to have impressed other
teachers and staff with the responsible way she accepted and handled her various tasks
and responsibilities (see ex. J).
Policies
The revised Adjudicative Guidelines for Determining Eligibility for Access to
Classified Information (effective September 2006) list Guidelines to be considered by
judges in the decision making process covering DOHA cases.  These Guidelines require
the judge to consider all of the "Conditions that could raise a security concern and may
be disqualifying” (Disqualifying Conditions), if any, and all of the "Mitigating Conditions,"
if any, before deciding whether or not a security clearance should be granted, continued
or denied.  The Guidelines do not require the judge to assess these factors exclusively
in arriving at a decision.  In addition to the relevant Adjudicative Guidelines, judges must
take into account the pertinent considerations for assessing extenuation and mitigation
set forth in E.2.2 of the Adjudicative Process of Enclosure 2 of the Directive, which are
intended to assist the judges in reaching a fair and impartial common sense decision.
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Viewing the issues raised and evidence as a whole, the following adjudication
policy factors are pertinent herein:
Financial Considerations
The Concern: “Failure or inability 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 information.  An
individual who is financially overextended is at risk of having to engage in illegal acts to
generate funds.  Compulsive gambling is a concern as it may lead to financial crimes
including espionage.  Affluence that cannot be explained by known sources of income
is also a security concern.  It may indicate proceeds from financially profitable criminal
acts.”
Burden of Proof
By virtue of the precepts framed by the revised Adjudicative Guidelines, a
decision to grant or continue an applicant's security clearance may be made only upon
a threshold finding that to do so is clearly consistent with the national interest.
Because the Directive requires Administrative Judges to make a common sense
appraisal of the evidence accumulated in the record, the ultimate determination of an
applicant's eligibility for a security clearance depends, in large part, on the relevance
and materiality of that evidence.  As with all adversary proceedings, the Judge may
draw only those inferences which have a reasonable and logical basis from the
evidence of record.  Conversely, the Judge cannot draw factual inferences that are
grounded on speculation or conjecture.
The Government's initial burden is twofold: (1) It must prove any controverted
fact[s] alleged in the Statement of Reasons and (2) it must demonstrate that the facts
proven have a material bearing  to the applicant's eligibility to obtain or maintain a
security clearance.  The required showing of material bearing, however, does not
require the Government to affirmatively demonstrate that the applicant has actually
mishandled or abused classified information before it can deny or revoke a security
clearance. Rather, consideration must take account of cognizable risks that an
applicant may deliberately or inadvertently fail to safeguard classified information.
Once the Government meets its initial burden of proof of establishing admitted
or controverted facts, the burden of persuasion shifts to the applicant for the purpose of
establishing his or her security worthiness through evidence of refutation, extenuation
or mitigation of the Government's case.
Analysis  
Applicant is a senior engineering associate for a defense contractor who
accumulated a number of delinquent debts over a five-year period spanning 2004: and
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2007, some disputed and some acknowledged..  Considered together, and without
resolution, they raise  security significant concerns.
Security concerns are raised under the financial considerations guideline of the
revised Adjudicative Guidelines where the individual appellant is so financially
overextended as to indicate poor self-control, lack of judgment, or unwillingness to
abide by rules and regulations, which can raise questions about the individual’s
reliability, trustworthiness and ability to protect classified information, and place the
person at risk of having to engage in illegal acts to generate funds.  Applicant’s
accumulation of delinquent debts and her past inability to address most of these debts
warrant the application of two of the disqualifying conditions (DC) of the Guidelines for
financial considerations: DC 19(a) “inability or unwillingness to satisfy debts” and DC
19©) “a history of not meeting financial obligations.”
Applicant’s debts are attributable in part to income shortages following her
divorce. With little child support from her former husband, and no health insurance for a
considerable time before she obtained her current position, she has had to struggle
financially as a single parent with little income to cover her medical needs and family
necessities.  Several of her debts (including her three largest debts) were jointly
created with her ex-husband who departed without bearing any responsibility for the
remaining marital obligations. These debts include the deficiency balances on two
vehicle repossessions, as well as the debt associated with window installations on the
house she and her former husband jointly sold before their divorce.   Applicant believes
this latter debt was incorporated in the mortgage loan assumed by the buyers of the of
the house.  Although, she has not been able to provide any documentation of any
buyer’s assumption of this debt.  Applicant continues to dispute a number of the other
listed debts, some or all of which may belong to her ex-husband.  
Since receiving the SOR, Applicant has initiated considerable efforts to resolve
the debts she acknowledges as her own, and dispute those she insists are not.
Specifically, she is able to document payments to some of her listed creditors (creditors
1.a, 1.k, 1.m, and 1.w through 1.aa and provide corroborated explanations of several
duplicated debts (i.e., creditors 1.n and 1.bb and creditors 1.k and 1.s).
To be sure, Applicant has not been able to document payment or dispute of all
of the listed debts.  Just the same, she assures she has paid several of the creditors
that she is not able to document (i.e., creditors 1.c, 1.l, and 1.t), which are no longer
reflected on her most recent credit report.  She has not been able to document any
resolution of her three largest debts (creditors p, q and r); they remain outstanding.
With the help of her sister, her work income, and the small amounts of money she
receives from doing odd jobs at her church, she hopes to address her remaining debts.
Given Applicant’s exhibited extenuating circumstances associated with her
sudden loss of marital income in 2004, her ensuing divorce with little child support from
her former husband, the limited resources that have been available to her to address
her old debts, and her documented  responsible efforts to resolve her acknowledged
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debts, Applicant may rely on MC 20 (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,
and the individual acted responsibly under the circumstances,” of the Guidelines for
financial considerations.  Extenuating circumstances continue to impact Applicant in
her current efforts to resolve her accumulated debts.  
Mitigation credit is also available to Applicant based on her credible proofs of
payment, age of the debts, and good-faith disputes.  Applicant is able to demonstrate
credible disputes with a number of her creditors and initiated repayment efforts with
most of her smaller creditors.  Age of the debts at issue is covered by two of the
mitigating conditions for financial considerations: MC 20(a), “the behavior happened so
long ago, was so infrequent, or occurred under circumstances that it is unlikely to recur
and does not cast doubt on the individual’s reliability, trustworthiness, or good
judgment,” has applicability, while not dispositive.  MC (d), “the individual initiated a
good-faith effort to repay overdue creditors or otherwise resolve debts,” has some
applicability.  MC 20(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,” has applicability as well relative to the listed creditors she disputes. 
Applicant seriously disputes her three major debts with creditors 1.p, 1.q, and
1.r.  Whether any of these debts are valid any more is not clear.  Two of the debts
(creditors 1.q and 1.r) originated in 2002 (creditor 1.q) and 2000 (creditor 1.r),
respectively, and show no activity in the accounts since 2003.  For these accounts,
regardless of whether they reflect otherwise valid debts owing, they may no longer be
enforceable under the State’s applicable statute of limitations for written contracts.  
The state statute of limitations in Applicant’s state for claims based on a written
contract is four years (see 16.004(a)(3) of T Civ. Practice and Remedies Code) and
claims not otherwise provided for (see 16.051 of T Civ. Practice and Remedies Code). 
Only Applicant’s Buick purchase in November 2004 does not appear to be barred by
the State’s four-year statute of limitation.  This is the vehicle H took with him when he
separated from Applicant and  assumed implicit responsibility for making the required
payments.  While Applicant may have continuing joint and several liability for this debt,
there would appear to be little risk of collection on the debt or justification for attributing
judgment lapses to Applicant under all the circumstances considered.     
While potentially applicable statutes of limitation have not been recognized by
our Appeal Board to absorb security risks associated with unresolved delinquent debts.
Statutes of limitation in general are considered important policy tools for discouraging
plaintiffs from pursuing stale claims and promoting finality in litigation.  They have never
been equated with good-faith efforts, though, to repay overdue creditors.  See, e.g.,
ISCR Case No. 02-30304, at 3 (App. Bd. April 2004)(quoting ISCR Case No. 99-9020,
at 5-6 (App. Bd. June 2001).  Weight, if any, to be assigned to potentially statutes of
limitations under the new Guidelines should be considered in light of all the
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circumstances surrounding the existing debts, and must take account of the Applicant’s
entire history of demonstrated trust and responsibility.  Viewed in this whole person
light, the controlling state statute of limitation for written contracts is  entitled to be
accorded significant mitigation weight in evaluating Applicant’s overall financial risk. 
                                                        
While the counseling advice Applicant relied on does not technically fit the
definition of counseling services under the Guidelines, she is to be credited with
earnestly looking for sources of financial advice with the resources available to her and
taking productive advantage of the public advice she received in addressing her debts. 
She may take limited advantage MC 20©), “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.”  Based on her initiated efforts to date, prospects for her
gaining important insights in handling her finances in the future appear to be promising.
Holding a security clearance involves the exercise of important fiducial
responsibilities, among which is the expectancy of consistent trust and candor.
Financial stability in a person cleared to access classified information is required
precisely to inspire trust and confidence in the holder of the clearance.  While the
principal concern of a clearance holder’s demonstrated financial difficulties is
vulnerability to coercion and influence, judgment and trust concerns are implicit in
financial cases (as here).
Taking into account all of the facts and circumstances surrounding Applicant’s
debt accumulations, her documented steps taken to resolve them, and the
responsibility and trustworthiness she is credited with in her work, church, and personal
life as a struggling single parent, Applicant mitigates security concerns related to both
her disputed debts and her proven debt delinquencies.  Favorable conclusions warrant
with respect to the allegations covered by sub-paragraphs 1.a through 1.bb of the
SOR.
In reaching my decision, I have considered the evidence as a whole, including
each of the E2.2 factors enumerated in the Adjudicative Guidelines of the Directive.
Formal Findings
In reviewing the allegations of the SOR and ensuing conclusions reached in the
context of the findings of fact, conclusions, conditions, and the factors listed above, I
make the following formal findings:
GUIDELINE F: (FINANCIAL CONSIDERATIONS): FOR APPLICANT
Sub-paras. 1.a through 1.bb: FOR APPLICANT
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Conclusions
In light of all the circumstances presented by the record in this case, it is clearly
consistent with the national interest to grant or continue Applicant’s security clearance.
Clearance is granted.
                                          
Roger C. Wesley
Administrative Judge