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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 08-07359
SSN: )
)
Applicant for Security Clearance )
Appearances
For Government: Julie Mendez, 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 must be denied.
Applicant submitted her Electronic Questionnaires for Investigations Processing
(e-QIP), on March 5, 2008. On February 17, 2009, the Defense Office of Hearings and
Appeals (DOHA) issued Applicant 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 February 26, 2009. She
answered the SOR in writing on March 3, 2009, and requested a hearing before an
administrative judge. DOHA received the request on March 20, 2009. Department
Counsel was prepared to proceed on April 15, 2009 and I received the case assignment
GE 1 (e-QIP) at 6, 14-15; Tr. 25-26, 69-70.1
Tr. 23-26.2
Id. 24-31, 38; GE 2.3
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on April 16, 2009. DOHA issued a notice of hearing on April 20, 2009, and I convened
the hearing as scheduled on June 4, 2009. The government offered three exhibits (GE)
1 through 3, which were received and admitted into evidence without objection.
Applicant testified on her own behalf. She submitted three exhibits (AE) A through C,
which were received and admitted into evidence without objection. DOHA received the
transcript of the hearing (Tr.) on June 11, 2009. I held the record open until June 29,
2009, for Applicant to submit additional matters. On June 16, 2009, she submitted 14
exhibits, AE D through AE Q, without objection. The record closed on June 26, 2009.
Procedural and Evidentiary Rulings
Notice
At the hearing, Applicant indicated she received the notice of hearing more than
15 days before the hearing date. (Tr. at 12.) Thus, Applicant received the notice of
hearing date within the requirements of ¶ E3.1.8 of the Directive. 
Findings of Fact
In her Answer to the SOR, Applicant admitted the factual allegations in ¶¶ 1.f, 1.i,
1.j, 1.p, and 1.q of the SOR. She denied the remaining factual allegations of the SOR. 
Applicant, who is 37 years old, works for a Department of Defense contractor as
a claims analyst. She began her current employment in November 2007 in a temporary
position and became a permanent employee in June 2008.  1
Applicant graduated from college in 2003 with a degree in general studies. She
enrolled in a Master’s degree program in 2003, but has not completed the program.
Applicant married in 2002. She and her husband have two children, a son, age 4 and a
daughter, age 2. Her husband is a civil engineer.2
In 2003, after her son was born, Applicant lost her full-time job. She dropped out
of her master’s degree program as she could not afford to pay her tuition. She worked a
variety of part-time jobs for the next four years while taking care of her children. In 2007,
she ran a licensed day care center for seven months. She also worked as a part-time
fashion designer, work she still performs occasionally. Her husband lost his job in early
2008 and remained unemployed until October 2008. He did receive unemployment
benefits between $1,200 and $1,400 a month.3
Tr. 29-30, 67.4
AE F (Applicant’s earnings statement); AE J (Budget); AE N (Husband’s earnings statement); Tr. 85-95.5
GE 2 (Credit report, dated September 10, 2008); GE 3 (Credit report, dated December 5, 2008); GE 4 (Credit6
report, dated March 27, 2008).
Applicant provided an itemized list of medical bills being held by a collection service. Except for one $266 bill,7
all the medical bills are for the same hospital. Applicant acknowledges owing money to this hospital. Several
of the debts listed in the bill are not listed in the SOR. See AE I.
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From 2003 until she returned to work in late 2007, Applicant’s husband provided
the primary household income. He managed the household finances, which he did not
discuss with Applicant. She is now involved in the household finances.4
Applicant currently earns $2,620 a month in gross income and $2,097 a month in
net income. Her husband earns $3,350 a month in gross income and $2,484 a month in
net income. Household net income each month totals $4,581. Household expenses
include $1,375 for rent, $900 for child car, $250 for groceries, $130 for telephone, cable
and internet, $225 for electric, $50 for water, $40 for church, $125 for education loans,
$75 for car insurance, $100 for gasoline, $75 for miscellaneous expenses, $200 for
entertainment, $260 for small bills, $550 for miscellaneous bills, and $135 for another
bill, for total monthly expenses of $4,490. Applicant’s budget provides some money
each month towards debt payment in the small bill and miscellaneous bill categories.5
After reviewing the credit reports dated March 27, 2008, September 10, 2008,
December 5, 2008, and the SOR, I have compiled a list of the total debts owed,
excluding any duplicate entries. I find that Appellant’s actual debts are as follows:6
SOR ¶ TYPE OF DEBT AMOUNT STATUS EVIDENCE
1.a State tax lien $  5,515.00 $1,678 actual
debt; $1,190 paid. 
GE 2; AE M
1.b Cell phone $     560.00 Unpaid; Cannot
located holder of
debt
GE 2; Tr. 40
1.c Medical bill $     330.00 Paid AE B; AE I7
1.d Medical bill $       75.00 Unpaid AE I
1.e Medical bill $       50.00 Paid GE 2, p. 38
1.f Medical bill $     250.00 Unpaid AE I
1.g Medical bill $       50.00 Paid GE 2, p. 38
1.h Medical bill $       50.00 Unpaid AE I
GE 2; AE M. Applicant received a notice from the Internal Revenue Service (IRS) that she owed $120 on her8
2008 taxes because of a miscalculation. She has sufficient income to pay this debt. 
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1.i Utility bill $     236.00 Paid AE B; AE D
1.j Store account $     145.00 Paid AE C
1.k Credit Card $     743.00 Unpaid GE 2; Tr. 51-52
1.l Credit Card $     662.00 Unpaid GE 2; Tr. 52-54
1.m Automobile loan $12,563.00 Paid $1,000 GE 2
1.n Education loan $     449.00 Forbearance AE E
1.o Collection/Medical $     168.00 Unknown;
Submitted to
insurance for
payment 2008
GE 2
1.p Education Loan $  1,862.00 Paid $134 GE 2; Tr. 65
Appellant’s husband did not pay their state income taxes for the years 2003,
2004, and 2005 because he did not know how to incorporate a land installment
mortgage on the forms. When she learned about the tax lien, Applicant contacted the
state tax office which recommended that they itemize their deductions. She hired a tax
accounting firm to work with her on this issue. With this firm’s assistance, she reduced
her tax liability from $5,515 to $1,465 plus $213 in interest. She paid $300 and the state
garnished her husband’s bank account. As a result of its garnishment, the state
received $890 towards the tax lien debt, leaving a balance of $498, including interest.
Her state tax lien remains as she owes taxes for 2008. Her total current tax liability is
$1,185. She plans to develop a repayment plan, but has not provided evidence of a plan
or payments.8
Applicant purchased a car in 2004. She paid the monthly payments for a period
of time, but fell behind in her payments. Her car was repossessed in 2007. Two
creditors notified Applicant that they held the debt on her car. One creditor is a
collection agency and the other creditor is an out-of-state law firm. Applicant negotiated
a $7,500 settlement of her car loan with the law firm in early 2008. She obtained funds
from a relative to pay the settlement. She paid $1,000 in January 2008 to the law firm
and asked for an invoice. The law firm refused to provide an invoice to her. In
September 2008, Applicant received notice that the debt had been transferred to the
collection agency. The $1,000 payment is not referenced in the documents received
from the collection agency. Applicant again negotiated a monthly payment plan, but has
not complied with the plan. She has requested an invoice from this company, which has
not been provided. Another law firm may now be involved in the collection of this debt.
GE 2, p. 30-31, 53-61.9
AE E; Tr. 61-63.10
GE 2; AE K.11
AE G; AE H.12
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Applicant does not know who owns the debt at the present time and is not making
payments until she can determine who holds the debt and what is actually owed.9
Applicant verified that education loans with the federal government are
consolidated and currently in forbearance. She has another education loan with the
state. Although she believes this loan is consolidated with her other education loans,
she has not provided evidence that supports her belief.10
The government forwarded interrogatories to Applicant in August 2008, seeking
information about 16 debts. Applicant responded, providing proof that she had paid four
debts and made payments on three other debts. She also indicated she contacted her
creditors, but had not fully resolved the debts. She also showed she obtained a small
loan from her credit union which she has paid.  11
Applicant’s most recent performance evaluation shows an overall rating of
satisfactory. She received a mix of excellent and satisfactory ratings on the individual
elements. Her customers praise her manner and skills in working with them.  12
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.
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
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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).  
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 delinquent debts over a period of time. She
has been unable to pay her debts. The evidence is sufficient to raise these potentially
disqualifying conditions, requiring a closer examination.
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The guideline also includes examples of conditions that could mitigate security
concerns arising from financial difficulties. Under AG ¶ 20(a), the disqualifying
conditions 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 began in 2003 and continue. The potentially 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 financial
problems began when she worked part-time. Her problems increased when her
husband lost his job just as she returned to work full-time. His job loss decreased the
amount of household income available to repay debts. Despite the loss of his income,
she has paid her usual living expenses and some of her smaller debts since he did
receive unemployment benefits. She acted reasonably under the circumstances. I find
this potentially mitigating condition is a factor for consideration in this case. 
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). Applicant has not received financial
counseling. Although some debts are paid, she has not demonstrated that her finances
are under control. This mitigating condition is not applicable.
AG & 20(d) applies where the evidence shows Athe individual initiated a good-
faith effort to repay overdue creditors or otherwise resolve debts.@ Applicant resolved
several of her delinquent debts, either by payment or settlement. She has not resolved
all of her debts, particularly her larger debts. I conclude this  mitigating condition
partially applies.
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. 
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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.
I considered the potentially disqualifying and mitigating conditions in light of all
the facts and circumstances surrounding this case. Applicant’s financial problems began
when she lost her full-time employment. She continued to work, but generally on a part-
time basis while she cared for her young children. Just after she returned to full-time
employment, her husband lost his job and did not find another job for over nine months.
She accumulated debt, due in part, to circumstances largely beyond her control,
including job loss and underemployment. Her debts also arose, in part, because of poor
financial management. She has taken steps to resolve some of her debts even before
she received the interrogatories or SOR. She developed payment plans, but did not
comply with the terms of her agreements. She continues to struggle with her bills, in
part because she does not have a definitive plan of action. Her efforts at resolution of
her debts are commendable, but she needs to do more before she is granted a security
clearance. She needs to establish a consistent track record of managing her finances,
payment of debt and compliance with debt repayment plans.  
Overall, the record evidence leaves me with questions and doubts as to
Applicant’s eligibility and suitability for a security clearance. For all these reasons, I
conclude Applicant has not 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: AGAINST APPLICANT
Subparagraph 1.a: Against Applicant
Subparagraph 1.b: Against Applicant
Subparagraph 1.c: For Applicant
Subparagraph 1.d: Against Applicant
Subparagraph 1.e: For Applicant
Subparagraph 1.f: Against Applicant
Subparagraph 1.g: For Applicant
Subparagraph 1.h: Against Applicant
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Subparagraph 1.i: For Applicant
Subparagraph 1.j: For Applicant
Subparagraph 1.k: Against Applicant
Subparagraph 1.l: Against Applicant
Subparagraph 1.m: Against Applicant
Subparagraph 1.n: For Applicant
Subparagraph 1.o: Against Applicant
Subparagraph 1.p: Against Applicant
Subparagraph 1.q: For Applicant
Conclusion
In light of all of the circumstances presented by the record in this case, it is not
clearly consistent with the national interest to grant Applicant eligibility for a security
clearance.  Eligibility for access to classified information is denied.
                                                              
MARY E. HENRY
Administrative Judge