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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
------------------------ )       ISCR Case No. 07-08126
SSN: ---------------- )
)
Applicant for Security Clearance )
Appearances
For Government: Daniel F. Crowley, Esquire, Department Counsel
For Applicant: Pro Se
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Decision
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LYNCH, Noreen A., Administrative Judge:
Applicant submitted her Security Clearance Application (SF 86), on March 18,
2006. On December 18, 2007, the Defense Office of Hearings and Appeals (DOHA)
issued a Statement of Reasons (SOR) detailing the security concerns under Guideline F
for Applicant. The action was taken under Executive Order 10865, Safeguarding
Classified Information within Industry (February 20, 1960), as amended; Department of
Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review
Program (January 2, 1992), as amended (Directive), and the revised adjudicative
guidelines (AG) promulgated by the President on December 29, 2005, and effective
within the Department of Defense for SORs issued after September 1, 2006. 
 
Applicant requested a hearing before an Administrative Judge. I received the
case assignment on March 11, 2008. DOHA issued a notice of hearing on April 8, 2008,
and I convened the hearing as scheduled on May 6, 2008. The government offered
Exhibits (GE) 1 through 5 which were received without objection. Applicant testified on
her own behalf and submitted Exhibits (AE) A through K. The record was kept open until
May 15, 2008. Applicant timely submitted documents that are marked AE L through P.
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Department counsel had no objection to the post hearing submissions. The record
closed on May 16, 2008. DOHA received the transcript of the hearing (Tr) on May 15,
2008. Based upon a review of the case file, pleadings, exhibits, and testimony, eligibility
for access to classified information is granted.
Findings of Fact
In her Answer to the SOR, dated February 20, 2008 Applicant admitted the
factual allegations in ¶¶ 1.a through 1.o of the SOR. Applicant provided additional
information to support her request for eligibility for a security clearance. 
Applicant is a 37-year-old employee of a defense contractor. Applicant graduated
from high school in 1989 and received her undergraduate paralegal degree in 1992 (Tr.
33). Recently, she also earned a U.S. export compliance officer certification. 
Applicant is single, and has no children. She was employed as a paralegal and
worked for various law firms from 1992 until 2000. She began working for a nonprofit
organization in 2001. She had no health insurance and received a low salary
(approximately $13,000 a year) when she was employed with the nonprofit organization.
(Tr. 37) She has had many medical problems. As a result, she incurred many medical
bills (GE 3).
Applicant did not receive a W-2 form for her wages. She was given a 1099 form
(Tr. 37). Applicant did not make estimated tax payments. She accumulated debt to the
Internal Revenue Service (IRS) for her unpaid taxes for the tax year 2001 in the amount
of $2,356.46 (interest/penalty). For tax year 2002, Applicant owed approximately
$6,873.95 (interest/penalty) for unpaid taxes. Finally, for tax year 2003, Applicant owed
$6,504.73 (interest/penalty) for unpaid taxes (GE 4).
The IRS notified Applicant in 2003-2004 concerning her unpaid taxes for the
years noted above. Applicant was deemed uncollectible at some point due to her low
salary (Tr. 45).  
Applicant has had health problems for at least fifteen years. Initially, she had a
problem with her kidney. When she was finally diagnosed with kidney stones in 2001,
she became very ill. She lost 80 pounds. Due to her medical problems, she could not
work for a period of time in 2001-2002 (Tr.) 34. She had surgery in 2002 (Tr. 40).
In 2003, Applicant suffered from endometriosis. She had two different surgeries.
At one point in time, she was out of work for six weeks. Applicant’s consistent health
insurance coverage started in September 2004 (Tr. 43). She is now healthy and working
full time in a steady position. However, she has approximately $14,800 in medical bills.
Applicant has been employed in her current position since January 2006. She is
well regarded by her colleagues. She is making more money than she ever did before
this employment. Her supervisor commends her for her flawless personal integrity,
The IRS sent Applicant a letter on May 5, 2008 advising her that they applied an overpayment ($572.14) from1
her 2001 tax return to the unpaid balance of the other federal taxes she owed (AE J).
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trustworthiness and hard-working dedication to the company mission. She has maturity,
good judgment, diligence in her work and intelligence (AE A-C). Applicant’s manger
testified at the hearing as to her punctuality, diligence, and thoroughness in her work.
Applicant handles the sensitive material for the company with no problems (Tr. 69). She
recommends Applicant highly and without reservation for a security clearance. 
Applicant is proud and happy to serve in this position. She loves her country and
believes she is making a contribution to her country. She loves what she does and
understands that her employer has total confidence in her (GE 4).
SOR ¶¶ 1.a and 1.b are for the unpaid federal taxes with interest/penalties.
Applicant owed $2,356.46 for tax year 2001. For tax year 2002, she owed $6,873.95
The IRS released the liens for the tax years 2001 and 2002 after Applicant paid $12,600
to the IRS in March 2008 (AE D-E). She did not have to take out a loan to pay the taxes.
Thus, she avoided getting into more debt. Instead, her parents gave her the money to
pay the taxes and she does not have to pay them back. Applicant requested the IRS to
reduce the penalties and interest on her taxes. They explained that would not be
possible (AE G-H). Applicant appealed the decision. The IRS granted the request and
explained to Applicant that this is a one-time consideration. Applicant is waiting to
receive a notice of penalty adjustment. That amount will be applied to the unpaid tax for
tax year 2003 (allegation 1.c). Applicant estimates that the remaining amount will be
$2,000 to $3,000.  She will pay that and then receive a certificate of release for tax year1
2003 (Tr. 54).
SOR ¶ 1.d is a medical bill for $125; 1.e is a medical bill for $295; 1.f is a medical
bill for $125; 1.g is a medical bill for $314; 1.h is for a hospital bill for $961; 1.i is a
medical bill for $666; 1.j is a hospital bill for $9,608. SOR 1 l is another medical bill for
$2,130; 1.o is a medical bill for $535. These are not paid. Applicant has received
financial counseling and is in the process of contacting the outstanding debtors to obtain
a billing statement and begin a repayment plan (AE O).
SOR 1.k is a phone bill for $101. Applicant paid this right after the hearing and
submitted documentation (AE N). Applicant also paid two more bills after the hearing
and submitted documentation for proof of payment for SOR ¶ 1.m ($50) and SOR ¶ 1.n
($50). 
At the hearing Applicant explained her plan to resolve her medical bills and debt.
She will pay the smaller bills first. 
Applicant’s current monthly net income is approximately $2,770. After monthly
deductions and expenses of $1,300, she pays on her student loan, and current medical
bills. Applicant then has a net remainder of $235 a month (AE K). She has a budget.
She owns her vehicle (Tr. 63).
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Policies
When evaluating an Applicant’s suitability for a security clearance, the
Administrative Judge must consider the revised adjudicative guidelines (AG). In addition
to brief introductory explanations for each guideline, the adjudicative guidelines list
potentially disqualifying conditions and mitigating conditions, which are useful 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 over-arching
adjudicative goal is a fair, impartial and common sense decision. According to AG ¶ 2,
the entire process is a conscientious scrutiny 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 access to
classified information will be resolved in favor of 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. Likewise, I have avoided drawing inferences
grounded on mere speculation or conjecture.
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 as to obtaining 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 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 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 as to the loyalty of the
applicant concerned.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites
for access to classified or sensitive information). 
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Analysis
Guideline F, Financial Considerations
The security concern relating to the guideline for Financial Considerations is set
out in AG & 18:      
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. 
The guideline notes several conditions that could raise security concerns. Under
AG & 19(a), an Ainability or unwillingness to satisfy debts@ is potentially disqualifying.
Similarly under AG & 19(c), Aa history of not meeting financial obligations@ may raise
security concerns. Applicant had unpaid taxes for years 2001-2003. She also has
delinquent medical debts that total about $14,800. She has not been able to pay them
for a period of time. The evidence is sufficient to raise these potentially disqualifying
conditions, requiring a closer examination.
The guideline also includes examples of conditions that could mitigate security
concerns arising from financial difficulties. Under AG ¶ 20(a), the disqualifying condition
may be mitigated where Athe 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.@ Applicant=s
financial worries partially arose due to her illness, underemployment and lack of health
insurance. She is now earning a steady, full time income. The Applicant’s problems
have been ongoing, but she is now resolving them. Her medical situation has improved.
This potentially mitigating condition applies in part. 
Under AG & 20(b), it may be mitigating where Athe 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.@ As noted above, the
financial problems arose from her lower earnings, lack of health insurance, ill health and
medical bills. She acted responsibly by working and living modestly during her
underemployment. However, she did not pay the IRS taxes for three years. I find this
potentially mitigating condition applies in part. 
Evidence that Athe 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@
is potentially mitigating under AG & 20(c). Similarly, AG & 20(d) applies where the
evidence shows Athe individual initiated a good-faith effort to repay overdue creditors or
otherwise resolve debts.@ Applicant has started financial counseling recently. She has
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paid her taxes to the IRS for the years 2001-2002. She is awaiting a final amount for the
2003 tax year. She has a plan to pay her debts. I conclude these potentially mitigating
conditions apply in part.
AG ¶ 20(e) applies where the evidence shows “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.” In this case, this does not apply.
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(a): “(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) 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 common sense judgment based upon careful
consideration of the guidelines and the whole person concept.       
I considered the potentially disqualifying and mitigating conditions in light of all
the facts and circumstances surrounding this case.  Applicant is a hardworking single
person. She had health problems which sometimes impeded her ability to work.
Applicant also had a period of underemployment and no health insurance that made it
difficult for her to pay all her medical bills. She has finally found a good paying position.
She has never made the income that she is making now. Her employer recommends
her highly. Her colleagues believe she is a great asset to the company. She has
struggled financially for a long period of time. She does not live beyond her means. She
takes pride in her job and is described as trustworthy. Of course, the issue is not simply
whether all her debts are paidBit is whether her financial circumstances raise concerns
about her fitness to hold a security clearance. Applicant has a plan to address her
delinquent medical debts. She has met her burden of proof in this case to overcome the
government’s case. 
Overall, the record evidence leaves me without questions and doubts as to
Applicant’s eligibility and suitability for a security clearance. For all these reasons, I
conclude Applicant has mitigated the security concerns arising from financial
considerations.
 
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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: FOR APPLICANT
Subparagraphs 1.a-1.o: For Applicant
Conclusion
In light of all of the circumstances presented by the record in this case, it is
clearly consistent with national security to grant Applicant eligibility for a security
clearance.  Eligibility for access to classified information is granted.
                                              
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NOREEN A. LYNCH
Administrative Judge