DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 08-03134 
  ) 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Richard A. Stevens, Esquire, Department Counsel 
For Applicant: Pro Se 
 
 
 
______________ 
 
Decision 
______________ 
 
CREAN, Thomas M., Administrative Judge: 
 
Applicant submitted a Questionnaire for Sensitive Position (SF 86) on June 11, 
2007.  On December 10, 2008, the Defense Office of Hearings and Appeals (DOHA) 
issued a Statement of Reasons (SOR) for Applicant detailing security concerns for 
financial considerations under Guideline F.  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 acknowledged receipt of the SOR on December 22, 2008. 
 
 Applicant answered the SOR in writing on December 30, 2008.  He denied two of 
the allegations under Guideline F but admitted one allegation, that his home was 
foreclosed in 2004.  He provided detailed information on his finances, and requested a 
hearing before an administrative judge.  Department Counsel was prepared to proceed 
on January 28, 2009, and the case was assigned to me on March 11, 2009.  DOHA 
issued a notice of hearing on March 27, 2009, for a hearing on April 15, 2009.  I 
 
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convened the hearing as scheduled.  The government offered six exhibits, marked 
Government Exhibits (Gov. Ex.) 1 through 6, which were received without objection.  
Applicant submitted 15 documents, marked Applicant Exhibits (App. Ex.) A through O 
which were received and admitted to the record without objection.  Applicant testified on 
his behalf.  DOHA received the transcript of the hearing (Tr.) on April 30, 2009.  Based 
upon a review of the case file, pleadings, exhibits, and testimony, eligibility for access to 
classified information is granted. 
 
Procedural Issues 
 
 Department Counsel notified Applicant in early March 2009 that he had his 
request for hearing and sought Appellant's availability for a hearing.  After both parties 
consulted with me, I issued a Notice of Hearing on March 27, 2009, for a hearing on 
April 15, 2009.  Applicant received the Notice of Hearing on April 7, 2009.  Applicant is 
entitled to 15 days notice of a hearing (Directive, E3.1.8).  While Applicant knew of the 
hearing prior to March 27, 2009, official notice in this case was only about eight days.  
Applicant specifically waived his rights to the 15 days notice (Tr. 9).   
 
Findings of Fact 
 
 After a thorough reviewed of the pleadings, transcript, and exhibits, I make the 
following essential findings of fact.  Applicant admitted one and denied two of the 
allegations under Guideline F.  He provided additional information to support his request 
for eligibility for a security clearance. 
 
Applicant is 59 years old and has worked as a technician and database 
administrator for a defense contractor for almost ten years.  He has been married for 39 
years, and has two grown children.  He served almost 22 years on active duty in the Air 
Force as a technician for missile and communications equipment.  He successfully held 
a security clearance while on active duty.  He received an Honorable Discharge in 
September 1989 (Tr. 10-12; Gov. Ex. 1, Questionnaire for Sensitive Position, dated 
June 13, 1007; App. Ex. C, DD 214, Retirement Certificate and Retirement Orders, 
dated September 30, 1989).  In response to Interrogatories from security adjudicators, 
Applicant listed his monthly net salary as $4,450, with monthly expenses of $3,504 
which includes payments on his debts.  Applicant has net monthly disposable or 
discretionary funds of $946 (Gov. Ex. 2, Answer to Interrogatories, dated August 19, 
2008).  Applicant verified at the hearing that this information is still accurate (Tr. 32-34). 
 
Applicant received many awards while on active duty.  He received two awards 
of the Meritorious Service Medal, four awards of the Air Force Commendation Medal 
(App. Ex. D, Citations, various dates), and five awards of the Air Force Good Conduct 
Medal (App. Ex. F, Citation, dated October 6, 1982).  He was also recognized as Career 
Non-Commissioned Officer of the Quarter for 1983 (App. Ex. E. Recommendation, 
dated November 22, 1983).  He received numerous Letters of Appreciation for his Air 
Force work (App. Ex. G, Letters of Appreciation, various dates), and a Letter of 
Commendation (App Ex. H, Letter of Commendation, April 8, 1980).  Applicant has 
 
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been recognized by various civic organizations for his volunteer contributions (App. Ex. 
I, Jaycees certificate, 1989; App. Ex. J, Youth Club Letter of Appreciation, dated April 2, 
1986; App. Ex. K, Muscular Dystrophy Association Letters of Appreciation, dated 
December 11, 1985; App. Ex. L, Special Olympic Appreciation Award, dated October 
14, 1985; and App. Ex. M, Girl Scout Service Certificate, dated June 8, 1983).     
 
Applicant has also been commended by his employer for his work.  A logistics 
manager for a defense contractor notes that she worked with Applicant for over ten 
years.  She regards him as professional and dependable and she relies on his insight 
for their work.  She states that he has high ethics and integrity.  The contract site 
manager for his company notes he has known Applicant for over five years.  Applicant 
shows he is an honest man with impeccable character and is a role model for others.  
He is always trustworthy and a man of his word.  The range manager for his company 
notes the he worked with Applicant for almost ten years and sees him on a daily basis.  
Applicant always conducts himself professionally and his work ethic and morale integrity 
are beyond reproach.  A co-worker and friend notes Applicant is honest and will go to 
extremes to help others.  When the co-worker became seriously ill, Applicant help 
ensure that the witness' medical insurance was able to pay for his medical expenses 
(App. Ex. N, Various Letters, dated in April 2009).   
 
Credit reports show that Applicant had the following delinquent debts; a charged 
off account on a second mortgage for $19,735 (SOR 1.a), an account in collection for 
$63 (SOR 1.b), and that his house was foreclosed in 2004 (SOR 1.c).  Applicant 
admitted SOR allegation 1.c, but denied both SOR allegations 1.a, and 1.b.  There is 
approximately $30,000 in other debts listed on the credit reports.  All these other debts 
are listed on the reports as being paid as agreed.  He pays more than the minimum at 
each payment.  He owns a 1998 and a 2002 vehicles that are paid (Tr. 34-37; Gov. Ex. 
3, Credit Report, dated June 14, 2007; Gov. Ex. 4, Credit Report, dated September 4, 
2008).   
 
After retiring from active duty in October 1989, Applicant worked various jobs.  In 
February 1992, he started working for a state agency he had worked for as a youth 
(App. Ex. B, Employee Action Form, dated January 24, 1992).  He purchased a house 
using a Veteran's Administration mortgage (VA).  He also took out a second mortgage 
to construct an in-ground swimming pool.  After working for the state agency for seven 
years, Applicant was offered a position with a defense contractor in another state 
working in the same field he worked while on active duty in the Air Force.  This 
necessitated a fast move to a new state.  He tried to sell his house in the original state 
but was unsuccessful.  He was successful in renting the house for a year.  After a year, 
he could neither sell the house nor find another renter.  He continued to pay the 
mortgage for at least another year while also paying the mortgage on his new house 
where he now lived and worked (Tr. 18-19; App. Ex. O, Applicant's statement, undated).   
 
Applicant had difficulty paying two mortgages and also keeping two houses in 
good repair.  He contacted the VA for guidance concerning the original house that was 
not occupied.  They suggested he let the house go to foreclosure.  He notified the 
 
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holder of both the first and second mortgage of his intent to let the house go to 
foreclosure so the companies could establish their claim in the foreclosure.  Both 
companies acknowledged receipt of the notification letter (App. Ex. A, Letters, dated 
March 11, 2003).  Both companies were also notified of the foreclosure by the court.  
The holder of the original or first mortgage established their claim in foreclosure but the 
second mortgage holder refused to establish a claim or participate in the foreclosure.  
The first mortgage holder tried to work with Applicant on the debt but the second 
mortgage holder (SOR 1.a) was uncooperative and continued to "harass" him 
concerning the loan.  He feels that if the second mortgage holder had perfected their 
claim in the foreclosure, their debt would have been settled.  In response to the SOR, 
Applicant included a summary of complaints from others gathered from the Internet 
concerning the actions of the second mortgage holder.  The house was valued at 
$100,000.  The first mortgage amount was approximately $78,000, and the second 
mortgage was approximately $20,000 (Tr. 38; App. Ex. O, Statement, undated; See 
Case file, Response to SOR, dated December 30, 2008).   
 
SOR allegation 1.a is the charged off of the second mortgage by the mortgage 
holder that did not participate in the foreclosure.  SOR allegation 1.c, which Applicant 
admits, is that the house was foreclosed in 2004.  Applicant never heard from the VA 
concerning the foreclosure, and did not receive any papers from the foreclosure.  He 
has never received correspondence concerning any further debt from the first mortgage 
holder or the VA.  There is no mention of a claim by the first mortgage holder on any 
credit report.  He assumes the first mortgage holder had been satisfied by the 
foreclosure (Tr. 37-39).  
 
Delinquent debt SOR 1.b is an account in collection for $63 for an electrical 
company.  Applicant was not aware of any debt owed to an electrical company.  He 
inquired of the collection agency concerning the debt but they refused to provide him 
any information.  He has not been sent a bill concerning electrical service.  He never 
had electrical work done on the house that was foreclosed.  Applicant's only explanation 
for the debt concerns a house he lived in prior to the house that was foreclosed.  His 
sister-in-law lived in this house after him, and the electrical service was still in 
Applicant's name.  When the sister-in-law left the house, the electricity was to be shut 
off and transferred to new owners or tenants.  He is not sure that the transfer was timely 
and he may have been charged for about one month of electrical use by others.  He has 
never received a bill from the electric utility (Tr. 39-41).   
 
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. 
 
 
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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(c), 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. 
 
Analysis 
 
Financial Consideration: 
 
 Under financial considerations, 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 (AG ¶ 18).  Similarly, an individual who is financially 
irresponsible may also be irresponsible, unconcerned, or careless in their obligations to 
protect classified information. Behaving responsibly or irresponsibly in one aspect of life 
provides an indication of how a person may behave in other aspects of life.  
 
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 A person’s relationship with his creditors is a private matter until evidence is 
uncovered demonstrating an inability or unwillingness to repay debts under agreed 
terms.  Absent evidence of strong extenuating or mitigating circumstances, an applicant 
with a history of serious or recurring financial difficulties is in a situation of risk 
inconsistent with the holding of a security clearance.  An applicant is not required to be 
debt free, but is required to manage his finances in such a way as to meet his financial 
obligations.  The delinquent debts for a second mortgage and an unpaid utility bill as 
listed on the credit reports are a security concern raising Financial Consideration 
Disqualifying Conditions (FC DC) AG ¶ 19(a) (inability or unwillingness to satisfy debts), 
and FC DC AG ¶ 19(c) (a history of not meeting financial obligations).   
 
 I considered the Financial Considerations Mitigating Conditions (FC MC) raised 
by Applicant's testimony.  FC MC AG ¶ 20(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) 
applies.  While the mortgage foreclosure took place in 2004, the second mortgage still 
has not been satisfied.  Also, the electrical debt from 2002 still has not been paid.  While 
these are current debts, they arose under unusual circumstances.  His house was 
foreclosed and the creditors notified.  One creditor participated in the foreclosure and 
was paid.  The other creditor did not participate and was not paid.  He has been current 
on mortgage payments for his present residence for over ten years.  The circumstances 
around the electrical utility debt are unknown.  These two debts are not likely to recur 
since he is current on his present mortgage and his utility bills.  All present debts are 
paid as agreed.  The debts do not cast doubt on his current reliability, trustworthiness, 
or good judgment.  Applicant is solidly employed and his debts are under control.  His 
financial problems should not recur.   
 
 FC MC ¶ 20(b) (the conditions that resulted in the financial problems 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) applies.  Applicant encountered financial 
problem when he moved to another location for a new job and could not sell his house.  
He rented the house for a year and continued to pay the mortgage for another year.  
When he could no longer afford to pay two mortgages, he consulted the mortgage 
guarantor for advice how to proceed.  He was told to go to foreclosure.  He notified the 
mortgage holders of the foreclosure.  One mortgage holder participated and was paid.  
The other mortgage holder did not participate and has not been paid.  The house 
appears to be valued at a sufficient price to satisfy both mortgage holders.  He inquired 
about the electrical utility debt but was not provided any information by the utility or 
collection agency.  Applicant acted responsibly under the circumstances to control and 
manage his debts. 
 
 FC MC ¶ 20(d) (the individual has initiated a good-faith effort to repay the 
overdue creditors or otherwise resolve debts) applies.  For FC MC ¶ 20(d) to apply, 
there must be an “ability” to repay the debts, the “desire” to repay, and “evidence” of a 
good-faith effort to repay.  A systematic, concrete method of handling debts is needed.  
 
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Applicant has the ability to pay the debts, has shown a strong desire to pay them, and 
has shown a good-faith effort to pay them.  Applicant notified the second mortgage 
holder of the foreclosure action but that creditor decided not to participate in the 
foreclosure.  The second mortgage holder was not paid in the foreclosure since they did 
not participate.  It appears the sale of the house would have generated sufficient funds 
to cover this creditor.  The creditor was not paid through their actions and not a refusal 
by Applicant to pay the mortgage.  The creditor and collection agent for the electrical 
utility debt refused to provide Applicant sufficient information to pay the debt.  Applicant 
has not incurred additional delinquent debts and all of his debts are paid as agreed.  
Applicant acted responsibly towards his debts, and established his good-faith efforts to 
resolve his debts.  He mitigated security concerns for his financial situation. 
 
 “Whole Person” Analysis  
 
 Under the whole person concept, the Administrative Judge must evaluate an 
applicant’s security eligibility by considering the totality of the applicant’s conduct and all 
the circumstances. An 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) 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. 
 
Under AG ¶ 2(c), the ultimate determination of whether to grant 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.  I considered Applicant's 22 years of 
active duty and honorable retirement from the Air force.  I considered he successfully 
held a security clearance while on active duty.  I considered his awards and decorations 
for military service.  I also considered the opinion of his supervisors and coworkers as to 
his professionalism, honesty, reliability, trustworthiness, and judgment.  I considered his 
excellent and extensive civil volunteerism.  Applicant encountered mortgage problems 
when he took a new position in another state and tried to sell his house.  He could not 
sell it but continued to either rent it or pay the mortgage for two years.  When he could 
no longer afford to pay two mortgages, he received guidance from the mortgage 
guarantor to go to foreclosure.  He notified the mortgage holders of the foreclosure.  
One participated in the foreclosure and that debt was satisfied.  The other refused to 
participate and that debt is not satisfied.  Applicant did all he could to satisfy and clear 
the mortgages on this house.  He paid the mortgage for two years after moving and 
 
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followed the advice of the mortgage guarantor about going to foreclosure.  He is 
unaware of a debt to an electrical utility and the collection agency refused to provide 
information for him to understand and pay the debt.  Applicant lives within his means 
and meets his personal financial obligations.  All of his present debts are paid as 
agreed.  His actions do not indicate poor self control, lack of judgment, or unwillingness 
to abide by rules and regulations.  He is not financially overextended, and his finances 
do not create a security concern.  Overall, on balance the record evidence leaves me 
with no questions or 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.  
 
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 
 
  Subparagraph 1.a:   For Applicant 
  Subparagraph 1.b:   For Applicant 
  Subparagraph 1.c:   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. 
 
 
 
_________________ 
THOMAS M. CREAN 
Administrative Judge