1
                                                             
                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 08-07535
SSN: )
)
Applicant for Security Clearance )
Appearances
For Government: Emilio Jaksetic, Esquire, Department Counsel
For Applicant: Pro Se
______________
Decision
______________
HENRY, Mary E., Administrative Judge:
Based upon a review of the case file, pleadings, exhibits, and testimony,  I
conclude that Applicant’s eligibility for access to classified information is granted.
Applicant submitted her Security Clearance Application (SF 86), on March 30,
2007. On December 30, 2008, the Defense Office of Hearings and Appeals (DOHA)
issued a Statement of Reasons (SOR) detailing security concerns 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 January 8, 2009. She answered
the SOR in writing on February 2, 2009, and requested a hearing before an
W hen  SOR allegations are controverted, the government bears the burden of producing evidence sufficient1
to prove controverted allegations. Directive, ¶ E3.1.14. That burden has two components. First, the
government must establish by substantial evidence that the facts and events alleged in the SOR indeed took
place. Second, the government must establish a nexus between the existence of the established facts and
events and a legitimate security concern. See ISCR Case No. 07-18525 (App. Bd. Feb. 18, 2009), (concurring
and dissenting, in part).
GE 1 (Applicant’s security clearance); AE K; AE L; Tr. 17. 2
GE 1, supra note 2, at 9-14; Tr. 17, 32, 34.3
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administrative judge. DOHA received the request on January 12, 2009. Department
Counsel was prepared to proceed on February 27, 2008, and I received the case
assignment on March 3, 2009. DOHA issued a notice of hearing on March 6, 2009, and
I convened the hearing as scheduled on April 3, 2009. The government offered eight
exhibits (GE) 1 through 8, which were received and admitted into evidence without
objection. Applicant testified on her own behalf. She submitted 12 exhibits (AE) A
through L, which were received and admitted into evidence without objection. DOHA
received the transcript of the hearing (Tr.) on April 10, 2009. I held the record open until
April 17, 2009, to allow Applicant to submit additional matters. Applicant timely
submitted five exhibits, AE M through AE Q, which are admitted without objection. The
record closed on April 17, 2009.
Findings of Fact
In her Answer to the SOR, Applicant admitted the factual allegations in ¶¶ 1.a
and 1.c of the SOR. She denied the factual allegations in ¶ 1.b of the SOR.   1
Applicant, who is 52 years old, works as a technical consultant with a contractor
for a federal agency. She has worked for her employer for nearly 29 years, including for
20 years as a contractor with the same agency. Her manager for many years
recommends her for a clearance, stating that she is an honest person with a strong
character and excellent work ethic. A long-time friend describes her as hard-working,
trustworthy, and responsible, as well as a woman of high moral character. He also
recommends her for a clearance.  2
Applicant married her husband 34 years ago. They have three grown children, a
daughter, age 33, and two sons, ages 32 and 30. Her daughter and younger son live
with Applicant and her husband. Her older son is currently incarcerated in a state
corrections facility.3
In 1988, Applicant and her husband filed for Chapter 7 bankruptcy. Prior to this,
her husband operated a cleaning business. Financial problems caused by loss of
business created significant financial problems, which led to the bankruptcy filing. The
court discharged their debts in an Order dated September 28, 1988. Applicant has not
GE 3 (1998 bankruptcy petition); Tr. 22.4
Tr. 27-29.5
Tr. 27-30, 37-39. Because the transfer would occur several weeks after the hearing and the close of the6
record, documentation reflecting the transfer could not be provided.
AE F (letter, dated Sept. 24, 2008); Tr. 17-19.7
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filed another bankruptcy petition. Rather, she managed her finances and bills until
recently.4
Applicant’s husband started a hauling business after the close of his cleaning
business. In 1996, Applicant’s mother died, leaving her and her two brothers two
properties, which included two houses. She and her husband resolved all financial
problems concerning these properties within 18 months of her mother’s death.
Subsequent to her mother’s death, her brother, who lived in another state, moved home
and started living in their mother’s house. To help him with resettling, Applicant and the
other brother offered to pay the expenses on their mother’s home.  An aunt and uncle
live in the second, smaller house, which they have lived in for many years prior to her
mother’s death.5
Applicant’s aunt and uncle pay her $100 to $200 a month for their housing. For
10 years, her brother has not paid any costs towards the upkeep of property in which he
lives. Recently, Applicant told this brother he needed to take financial responsibility for
his housing. He recently paid her $600 and she has requested that he pay at least $300
a month to her. She plans to transfer the title and the mortgage on the house to this
brother in May as she wants her name removed from both documents. She is current on
her recurring bills.6
In 2006, Applicant’s husband, at age 54, began dialysis treatment for renal
failure. He continued to work in his business, but less often. Doctors decided that her
husband was a candidate for a kidney transplant. While preparing her husband for his
kidney transplant, doctors discovered her husband also had heart problems. In May
2008, doctors performed triple by-pass surgery on her husband. He has recovered from
this surgery, but is not working.7
 In the fall of 2008, doctors resumed preparing her husband for his kidney
transplant. Testing revealed that her incarcerated son was a perfect match and this son
offered to provide his father with a kidney. The state corrections office advised Applicant
that she must pay all the costs of transporting her son from prison to the hospital and
back. The state estimated the cost at $7,800 and requested payment prior to the
surgery. Tests also revealed that her husband suffered from cirrhosis of the liver. In
February 2009, doctors performed a liver transplant using an organ from a cadaver and
intended to the kidney transplant at the same time. The doctors decided against using
her son’s kidney and to use the cadaver kidney. Problems arose and the doctors
postponed the kidney transplant. Applicant’s husband continues on dialysis and will
AE D (Letter, dated May 23, 2008); AE E (letter, dated Nov. 13, 2008); AE I (Dec. 22, 2008); Tr. 18,  20-21,8
34.
GE 2; AE M (pay sheet from part-time job); AE Q (pay sheet from contractor position); Tr. 29, 32, 58-59.9
Applicant listed life insurance as a monthly expense on her personal financial statement, but her records10
indicate this money is deducted from her pay check. GE 2, supra note 8, at 5; AE Q.
GE 2, supra note 8, at 5; GE 8 (Credit report, dated April 3, 2009); Tr. 56-64.11
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undergo a kidney transplant in the future. Currently, doctors are treating him for
hepatitis. He applied for social security disability twice and social security denied his
application twice.8
Applicant earns approximately $65,000 a year. In March 2009, she received a
one-time $7,500 bonus. After deductions, her net monthly pay averages approximately
$2,300 a month. Applicant obtained a part-time job in the fall 2008. She usually works
Tuesday through Saturday, 4:15 a.m. to 7:00 a.m. for a total of 13.75 hours. Her hours
fluctuate each week, which impacts her net pay. This employer recently increased her
hourly rate of pay from $9.50 an hour to $9.75 an hour. Her net pay in February 2009
totaled $483 and for two weeks in March 2009 totaled $156. Her monthly income from
her part-time job averages $375. Her son contributes $250 a month to household
expenses and buys groceries regularly. Her daughter generally pays the telephone bill
of approximately $200 each month and Applicant receives an average of $150  a month
for rent from her aunt and uncle. Her total monthly income averages approximately
$3,300.9
Since her husband’s illness and loss of income, Applicant has experienced
difficulties meeting her monthly expenses. Her monthly mortgage on her home,
including escrow fees, totals $1,600. The mortgage, including escrow fees, on her
mother’s property amounts to $947 a month; the loan for her husband’s truck is $318;
and a personal loan for husband is $142. She pays $330 in utilities and $700 in other
expenses, excluding groceries.  Her monthly expenses total approximately $4,037.10
Each month she incurs a deficit of approximately $700 without including the cost of
food.11
Because of her husband’s illness, Applicant has incurred additional unanticipated
expenses. His medical treatment has been performed at a major hospital 135 miles
from their home, which necessitates payment of hotel bills and other travel expenses. In
November 2008, she borrowed money from her 401K retirement account to pay
expenses. She also missed her mortgage payment for several months. Because the
corrections department required her to pay the $7,800 before it would transport her son,
she used her mortgage money to pay the bill. During this time, she has worked with her
creditors, who have been cooperative. When the doctors decided not to use her
AE G: AE H: AE J; Tr. 34-35, 54-55.12
Tr. 49-54, 65.13
SOR; GE 5 (Credit report, dated Apr. 6, 2007); AE 6 (Credit report, dated May 30, 2008); GE 7 (Credit report,14
dated Apr. 25, 2008); GE 8, supra note 10; Tr. 24.
AE N (2007 tax form); AE O (2006 tax forms); AE P (2005 tax forms).15
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incarcerated son’s kidney, the state returned the money she paid. She used this money
to pay her overdue mortgage payments.12
Applicant acknowledged that she is behind in the taxes for the property where
her aunt and uncle live and that she has tax issues related to her husband’s business
and business truck. She is working on these issues with staff at the tax office. She
states that she has always juggled her bill payments.13
The credit reports of record reflect a $45,000 and $22,000 debt with a bank, and
otherwise a generally good debt payment history. Department Counsel agreed at the
hearing that these debts are the same. Thus, the SOR alleges nonpayment of the
$45,000 debt. Applicant indicated this debt relates to her husband’s truck, which has
now been sold and his business closed. Applicant paid this debt through a settlement
with the bank.14
Applicant provided copies of her income tax returns for the tax years 2005, 2006
and 2007. In 2007, she had a significant increase in income from capital gains after
selling her husband’s business property. His actual income for that year was $5,500.
She did not owe taxes in any of these years; rather she received a significant refund
each year. Throughout the clearance process, Applicant has provided information about
her financial problems.15
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(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.
After any decision, the losing party has a right to appeal the case to the Defense Office of Hearings and16
Appeals  Appeal Board. The Appeal Board’s review authority is limited to determining whether three tests are
met:
E3.1.32.1. The Adm inistrative Judge’s findings of fact are supported by such relevant
evidence as a reasonable mind might accept as adequate to support a conclusion in light of
all the contrary evidence in the same record. In making this review, the Appeal Board shall
give deference to the credibility determinations of the Administrative Judge:
E3.a.32.2. The Administrative Judge adhered to the procedures required by E.O. 10865
(enclosure 1) and this Directive: or
E3.1.32.3. The Administrative Judge’s rulings or conclusions are arbitrary, capricious, or
contrary to law.
The Appeal Board does not conduct a “de novo determination”, recognizing that its members have
no opportunity to observe witnesses and make credibility determinations. The Supreme Court in United States
v. Raddatz, 447 U.S. 667, 690 (1980) succinctly defined the phrase “de novo determination”:
[This legal term] has an accepted meaning in the law. It means an independent determination
of a controversy that accords no deference to any prior resolution of the same controversy.
Thus, in Renegotiation Board v. Bannercraft Clothing Co., 415 U.S. 1, 23 [(1974)], the Court
had occasion to define “de novo proceeding” as a review that was “unfettered by any
prejudice from the [prior] agency proceeding and free from any claim that the [agency’s]
determination is supported by substantial evidence.” In United States v. First City National
Bank, 386 U.S. 361,368 [(1967)], this Court observed that “review de novo” means “that the
court should make an independent determination of the issues” and should not give any
special weight to the [prior] determination of the administrative agency.
(Internal footnotes omitted). See ISCR Case No. 07-10396 (App. Bd., Oct. 2, 2008) and ISCR Case No. 07-
07144 (App. Bd., Oct. 7, 2008). In ISCR Case No. 05-01820 (App. Bd. Dec 14, 2006), the Appeal Board
criticized the administrative judge’s analysis, supporting grant of a clearance for a PRC-related Applicant, and
then decided the case itself. Judge W hite’s dissenting opinion cogently explains why credibility determinations
and ultimately the decision whether to grant or deny a clearance should be left to the judge who makes
witness credibility determinations. Id. at 5-7. See also ISCR Case No. 04-06386 at 10-11 (App. Bd. Aug. 25,
2006)(Harvey, J., dissenting) (discussing limitations on Appeal Board’s authority to reverse hearing-level
judicial decisions and recommending remand of cases to resolve material, prejudicial error) and ISCR Case
No. 07-03307 (App. Bd. Sept. 29, 2008). Compliance with the Agency’s rules and regulations is required. See
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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.  16
United States ex. rel. Acardi  v. Shaughnessy, 347 U.S. 260, 268 (1954); Lopez v. FAA, 318 F.3d 242, 247-
248 (D.C. Cir 2003); Nickelson  v. United States, 284 F. Supp.2d 387, 390 (E.D. Va. 2003)(explaining standard
of review).
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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).  
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 accumulated some delinquent debt and was unable to pay
some obligations for a period of time after her husband became ill. 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
AG ¶¶ 20(e) and (f) are not applicable in this case.17
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on the individual=s current reliability, trustworthiness, or good judgment.@ Applicant=s
financial worries arose after her husband became ill. This mitigating condition is not
applicable. 
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.@ Applicant’s husband
started dialysis in 2006 and continues with it. Over the last three years, her husband
has undergone triple bypass surgery and a liver transplant. He is currently being treated
for hepatitis and undergoing dialysis, while he waits for a kidney transplant. His health
problems have increased incidental expenses related to his medical care and caused
the loss of his income as he is not working. The medical problems of Applicant’s
husband are a circumstance beyond her control. Despite her significant financial
problems, Applicant pays her bills. Although she has not always been timely, she works
with her creditors when problems arise. She does not ignore her financial issues. I find
this mitigating condition applies. 
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.@ Although Applicant has not received financial counseling, she
has resolved the only debt listed in the SOR through settlement. While she continues to
have some financial problems, she pays her bills and has not incurred excessive unpaid
debts. Her financial issues are under control. I conclude these  mitigating conditions
apply.17
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) 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. 
Future promises are not relevant to a determination of an Applicant’s security worthiness. In this case, her18
track record for managing her debt shows she will follow through on this decision.
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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. The decision to grant or
deny a security clearance requires a careful weighing of all relevant factors, both
favorable and unfavorable. In so doing, an administrative judge must review all the
evidence of record, not a single item in isolation, to determine if a security concern is
established and then whether it is mitigated. A determination of an applicant’s eligibility
for a security clearance should not be made as punishment for specific past conduct,
but on a reasonable and careful evaluation of all the evidence of record to decide if a
nexus exists between established facts and a legitimate security concern. 
In reaching a conclusion, I considered the potentially disqualifying and mitigating
conditions in light of all the facts and circumstances surrounding this case. Applicant
and her husband used the bankruptcy progress to discharge debts in 1987. More
recently, Applicant has experienced difficulties paying her regular bills and at times,
does not have enough income to pay her monthly expenses.
Under the whole person concept, the mitigating evidence is more substantial. For
nearly 20 years after Applicant and her husband filed bankruptcy, they paid their bills
and managed their finances. Financial difficulties arose when her husband developed
renal failure in 2006 and needed to undergo dialysis on a regular basis. As his kidneys
began to fail, doctors determined he would be a good candidate for a kidney transplant
and that his incarcerated son was a match. In order for his son to come to the hospital
to donate his kidney, the state required Applicant to pay $7,800 for the cost of
transporting and guarding her son while he was out of prison. In preparation for his
transplant, doctors discovered first a heart problem, necessitating triply by-pass surgery,
and later cirrhosis of the liver, which lead to a liver transplant and a delay in the kidney
transplant. During this time, the financial contribution of Applicant’s husband to
household expenses ended. Her younger son and daughter are now living at home and
do help with some monthly household expenses.
Applicant and her brothers decided to keep their mother’s properties after she
died in 1996. For more than 10 years, Applicant has paid the cost of these properties,
while receiving no financial assistance from her brother who lives in the house and
minimal financial assistance from her aunt and uncle who live in the second house on
the property. Applicant has finally demanded money from her brother and credibly
testified that she will transfer the title and mortgage to her mother’s property to the
brother who lives in it.  With the loss of this expense, Applicant will have sufficient18
money each month to cover her living expenses.
During the last three years, Applicant has worked diligently to keep her bills paid
and her expenses under control. She has not lived excessively. She contacted her
creditors about her financial problems and worked with them to resolve payment issues.
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Her regular expenses are paid. Her debts cannot be a source of improper pressure or
duress. 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. While she still has financial issues, particularly with property taxes, these
issues do not raise security concerns, as her track record indicates she will resolve her
remaining tax issues. (See AG & 2(a)(1).)
Overall, the record evidence leaves me without questions or doubts as to
Applicant’s eligibility and suitability for a security clearance. For all these reasons, I
conclude Applicant mitigated the security concerns arising from her 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 the national interest to grant Applicant eligibility for a security
clearance.  Eligibility for access to classified information is granted.
                                                              
MARY E. HENRY
Administrative Judge