DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
----------------------- )       ISCR Case No. 07-17719
SSN: ----------------- )
)
Applicant for Security Clearance )
Appearances
For Government: Jeff A. Nagel, Esquire, Department Counsel
For Applicant: Pro Se
______________
 Decision
______________
WESLEY, Roger C., Administrative Judge:
History of Case
On June 1, 2008, the Defense Office of Hearings and Appeals (DOHA), pursuant
to Department of Defense Directive 5220.6 (Directive), dated January 2, 1992, and
Department of Defense (DoD) Regulation 5200.2-R, issued a Statement of Reasons
(SOR) to Applicant, which detailed reasons why DOHA could not make the preliminary
affirmative determination of eligibility for granting a security clearance, and
recommended referral to an administrative judge to determine whether a security
clearance should be granted, continued, denied or revoked.
Applicant responded to the SOR on July 8, 2008, and elected to have his case
decided on the basis of the written record.  Applicant received the File of Relevant
Material (FORM) on August 21, 2008.  Applicant did not submit any information in
response to the FORM.  The case was assigned to me on October 21, 2008.
2
Summary of Pleadings
Under Guideline F, Applicant is alleged to have accumulated 29 delinquent debts
exceeding $215,000.00. These allegations are framed by subparagraphs 1.a
through1.cc.  For his answer to the SOR, Applicant admitted most of the allegations,
admitted some of the underlying debts while denying any obligations to the listed
collection agency, and denied two of the allegations. 
Findings of Fact
Applicant is a 40-year-old employee for a defense contractor who seeks a
security clearance.  The allegations covered in the SOR and admitted to by Applicant
are adopted as relevant and material findings.  Additional findings follow.
Applicant is not married and has no children.  He lived with his grandmother for
many years (see ex. A).  Between 1993 and 2006 Applicant incurred considerable debts
which became delinquent.  Altogether, he accumulated 29 listed debts that exceed
$215,000.00.  Applicant’s credit reports corroborate the listed delinquent debts in the
SOR (compare exs. 5 through 8).
In an OPM interview given in February 2007, Applicant did not dispute any of the
listed debts listed in his credit report.  He declined to provide any releases for his
delinquent accounts, and failed to furnish any explanations for his heavy debt
accumulations.
Applicant has a net monthly income of $3,356.00.  His net monthly household
expenses total $2,011.00.  One of his creditors currently garnishes his wages for
$300.00 a month (see ex. 5).  He has a net monthly remainder of $1,045.00 (ex. 5).
Applicant traces his financial problems to 1997 when he began paying his
grandmother’s medical bills and supplementary living expenses (see ex. 5).  She was
very sick for a number of years and passed away in May 2006 (ex. A).  
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.
3
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.  Adjudication Guidelines (AG) ¶ 18.
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 traces his financial problems to 1997 when he began assuming major
responsibility for covering his grandmother’s medical bills.  Records indicate that he
4
accumulated over $215,000.00 in listed debts (even more based on his own
acknowledgments).  Applicant has not provided any creditor releases or documented
explanations of the reasons for his significant debt accumulations.  Considering the size
of his debt arrearage and the absence of any exhibited plausible explanations for the
accumulations,  these debts raise security significant concerns.
Applicant’s finances
Security concerns are raised under the financial considerations guideline of the
revised Adjudicative Guidelines where the individual Applicant 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 mis-steps in judgment
and questions about his reliability and trustworthiness are very much in evidence here
based on the compiled administrative record.
 Applicant’s accumulation of delinquent debts and his inability to explain them and
successfully address them warrants 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.”  These
disqualifying conditions cover the core concern of AG ¶ 18: poor self-control, lack of
judgment, or unwillingness to abide by rules and regulations, which, both individually and
collectively, can raise questions about an individual’s reliability, trustworthiness and
ability to safely occupy a position of trust.  
Applicant’s accumulated debts are traceable in part to financial set backs
associated with his grandmother’s medical bills.  Based on his very limited accounts of
his financial difficulties, partial application of 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,” is warranted
here.  
At this time, none of Applicant’s covered debts are documented to have been
paid, disputed, or settled.  They exceed $215,000.00 in the aggregate and represent a
considerable debt load based on his current income sources.  Applicant provides no
explanations of the circumstances that gave rise to the debts in issue, and provides no
evidence of any follow-through in addressing his outstanding debts.
Without more documented information to demonstrate Applicant is explaining and
addressing his significant debt accumulation, he cannot mitigate the Government’s
financial concerns.  Holding a security clearance involves the exercise of important
fiducial responsibilities, which include the expectancy of consistent trust and candor.
Financial stability in a person cleared for access to classified information is required
precisely to inspire trust and confidence in the holder of the clearance.  While a principal
5
concern of a clearance holder’s demonstrated financial difficulties is vulnerability to
coercion and influence, judgment and trust concerns are important concerns as well.
Use of a whole person assessment that takes into account all of the facts and
circumstances surrounding Applicant’s debt repayment efforts is insufficient to enable
him to surmount security concerns independent of the express disqualifying conditions
covered by AG ¶ 18.  Without any exhibited repayment and work-out efforts to
demonstrate progress in resolving his debts, it is not feasible to draw convincing
conclusions about his overall trustworthiness based on factors not covered in the
mitigating conditions of the guideline. 
In evaluating Guideline F cases, the Appeal Board has stressed the importance of
a “meaningful track record” in the management of an applicant’s finances, which
certainly includes evidence of actual debt reduction through repayments. See ISCR
Case No. 05-01920, at 5 (App. Bd. Mar. 1, 2007).  True, an applicant’s good-faith debt
repayment does not require that he demonstrate repayment of each and every listed
debt.  All that is required is that the applicant demonstrate that he developed a plan to
resolve his debts and taken significant actions to implement the plan.  See ISCR Case
No. 07-16013, at 2 (App. Bd. May 21, 2008); ISCR Case No. 04-09684, at 2 (App. Bd.
July 6, 2006). 
Applicant fails to meet Appeal Board requirements for repayment progress with
his listed creditors.  Absent some tangible form of payments and/or repayment plans on
his listed debts, safe predictive judgments about his finances cannot be made at this
time.
Taking into account all of the facts and circumstances surrounding Applicant’s
unsatisfied debts and overall presentation of payment histories, Applicant does not
mitigate security concerns related to his heavy debt accumulations.  Unfavorable
conclusions warrant with respect to the allegations covered by sub-paragraphs 1.a
through1.cc.
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): AGAINST APPLICANT    
Sub-paras. 1.a through 1.cc: Against Applicant
6
Conclusions
In light of all the circumstances presented by the record in this case, it is not
clearly consistent with the national interest to grant or continue Applicant’s security
clearance.  Clearance is denied.
                                          
Roger C. Wesley
Administrative Judge