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                        DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
------------------- )       ISCR Case No. 08-06658
SSN: ----------- )
)
Applicant for Security Clearance )
Appearances
For Government: Tovah A. Minster, Esq., Department Counsel
For Applicant: Pro Se
                                                                            
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Decision
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MARSHALL, Jr., Arthur E., Administrative Judge:
Applicant completed a security clearance application (SF-86) on June 20, 2007.
On April 9, 2009, the Defense Office of Hearings and Appeals (DOHA) issued a
Statement of Reasons (SOR) enumerating security concerns arising under Guideline F
(Financial Considerations). 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 for SORs issued after September 1, 2006. 
In a response notarized on May 5, 2009, Applicant admitted all four of the
allegations set forth in the SOR and declined a hearing on the record. Department
Counsel submitted a File of Relevant Materials (FORM), dated August 10, 2009.
Applicant received the FORM on August 17, 2009, but declined to file a response to its
contents. On October 8, 2009, the Director, DOHA, forwarded the case for assignment
to an administrative judge. I was assigned the case that day. Based on a review of the
 SOR allegations ¶¶ 1.c-1.d.      1
 Response to the SOR at 3.      2
 Id.      3
 SOR allegation ¶ 1.a.      4
 Response to the SOR at 2.      5
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case file, submissions, and exhibits, I find Applicant failed to meet his burden regarding
the security concerns raised. Security clearance is denied.
Findings of Fact
Applicant is a 46-year-old production manager who has worked for the same
defense contractor since October 1998. He has served in his present capacity since
April 2004. According to his SF-86, Applicant served in the military reserve for
approximately four years. He married in 1990 and has two minor children. He attended
college for about three years. In choosing an administrative determination without a
hearing, Applicant chose to rely on the written record. Because his submissions are
brief, the facts of record are scant. Consequently, these findings are based on materials
included in the FORM. 
At some unspecified time in the recent past, however, Applicant purchased a
used car hauler with the hopes of establishing a car towing business. The truck needed
approximately $30,000 in repairs. Additional revenue was lost as repairs were made.
He abandoned the enterprise when he could no longer afford the business-related
expenses. 
Applicant has two mortgages on his home for approximately $109,000 and
$437,000, respectively. They amount to a total of approximately $546,000.  He fell1
behind on his home loans when the hauling business failed. A loan for about $109,000
was written off by the lender. Applicant intends to repay the $109,000 loan “as our
income allows.”  The latter loan for approximately $437,000 was restructured under a2
repayment plan with more affordable terms.  Applicant did not submit documentation3
regarding his income history, the repayment plan, or any payments under that plan.
In addition, Applicant also financed two investment properties in 2007. Those
properties went into foreclosure. The first property left him indebted on a loan for about
$385,000.  Regarding this debt, he states: “It is my desire to start a repayment plan that4
will fit within our budget, as our income increases.”  He did not submit any documents5
reflecting his present income or financial resources, his wife’s most recent income, or a
current budget. The loan on the second investment property was for approximately
 SOR allegation ¶ 1.b. Applicant admitted to a debt of $264,308, although the FORM notes that the      6
obligation alleged, after foreclosure, was reduced through a deficiency judgment to only $94,000. FORM at
4.
 Response to the SOR at 2.       7
 Id.      8
 Id.      9
 Id.      10
 Id. and Id. at 3.      11
 Id. at 3.      12
 Id.      13
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$264,308.  Applicant states: “We are currently making a small monthly payment to a6
third party collector. . . .”  He did not submit any documentation regarding such7
payments.
Applicant admits responsibility for all four debts at issue. He stresses that his
current financial difficulty arises from his attempts to “build for the future,” not from
“living above one’s means.”  Neither he nor his wife gambles, uses drugs, or is the type8
to engage in criminal activity. His family leads a disciplined, healthy lifestyle. He drives
“the same car [he] paid $800 dollars for, three years ago.”  He has no credit card debt9
or revolving credit. Their vacation travel is limited: “We just don’t finance trips, so we
don’t take them if we can’t pay for them.”  But for his real estate debts, he states that10
he lives within his means, although no documentation was introduced indicating what
his income and expenses are.
Applicant unsuccessfully attempted to solicit investors and to execute short-sales
to avoid the foreclosures at issue. He was advised to consider bankruptcy, but would
rather address his debts through “hard work and persistence.”  His wife was laid off,11
but is now seeking a position requiring a security clearance. Applicant assumes she will
also face financial security concerns.”  If so, he is unsure they will be able to repay12
their loans.13
Policies
When evaluating an applicant’s suitability for a security clearance, an
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. These guidelines are not
inflexible rules of law. Instead, recognizing the complexities of human behavior, they
are applied in conjunction with the factors listed in the adjudicative process. An
administrative judge’s over-arching adjudicative goal is a fair, impartial and
commonsense decision. Under AG ¶ 2(c), this process is a conscientious scrutiny of a
 See also ISCR Case No. 94-1075 at 3-4 (App. Bd. Aug. 10, 1995).      14
 Department of the Navy v. Egan, 484 U.S. 518, 531 (1988).      15
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      16
 See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive      17
information), and EO 10865 § 7.
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      18
 Id.      19
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number of variables known as the “whole person concept.” An 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.
The United States Government (Government) must present evidence to
establish controverted facts alleged in the SOR. An 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 burden of proof is14
something less than a preponderance of evidence.  The ultimate burden of persuasion15
is on the applicant.  16
A person seeking access to classified information enters into a fiduciary
relationship with the Government based on 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.”  “The clearly consistent standard indicates that security17
clearance determinations should err, if they must, on the side of denials.”  Any18
reasonable doubt about whether an applicant should be allowed access to sensitive
information must be resolved in favor of protecting such information.  The decision to19
deny an individual a security clearance does not necessarily reflect badly on an
applicant’s character. It is merely an indication that the applicant has not met the strict
 Revised Adjudicative Guideline (AG) ¶ 18.      20
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guidelines the President and the Secretary of Defense established for issuing a
clearance.
Guideline F (Financial Considerations) is the most pertinent to the case.
Applicable conditions that could raise a security concern and may be disqualifying, as
well as those which would mitigate such concerns, are set forth and discussed below.
Analysis
Guideline F – Financial Considerations
Under Guideline F, “failure or an inability to live within one’s means, satisfy
debts, and meet financial obligations may indicate poor self-control, lack of judgment, or
an 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.”  The Directive sets out several potentially disqualifying conditions under20
this guideline. Applicant admitted he has over $1,000,000 in real estate-related debt.
Such delinquent debt is sufficient to raise security concerns under financial
considerations disqualifying condition (FC DC) AG ¶ 19(a) (“inability or unwillingness to
satisfy debts”) and FC DC AG ¶ 19(c) (“a history of not meeting financial obligations”).
Consequently, the burden shifts to Applicant to overcome the case against him and
mitigate security concerns. 
Applicant tried to start a sideline business in automobile hauling, but
approximately $30,000 in repairs and business disruptions forced him to abandon the
business. Trying to sustain that business affected his ability to make timely payments
on, at least, his $546,000 in mortgages on his personal residence. To the extent the
failing business affected the family’s ability to make timely mortgage payments,
financial considerations mitigating condition (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”) and FC MC AG ¶ 20(b) (“the conditions that
resulted in the behavior 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”) apply. 
Applicant was advised by someone to consider bankruptcy, but there is no
evidence he received financial counseling. There is no documentation of progress in
paying his debts. Therefore, neither FC MC AG ¶ 20(c) (“the 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”) nor FC MC AG ¶ 20(d) (“the individual initiated a
good-faith effort to repay overdue creditors or otherwise resolve debts”) applies. No
other FC MCs apply.
 Indeed, the $30,000 car hauling business loss, without more evidence, appears to be a relatively minor      21
financial setback in contrast to real estate obligations exceeding $1,000,000.
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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 an 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. 
Under AG ¶ 2(c), the ultimate determination of whether to grant eligibility for a
security clearance must be an overall commonsense judgment based upon careful
consideration of the guidelines and the whole person concept. As noted above, the
ultimate burden of persuasion is on the applicant seeking a security clearance. 
I considered the potentially disqualifying and mitigating conditions in light of all
the facts and circumstances surrounding this case, as well as the “whole person”
factors. Multiple facts speak in Applicant’s favor. He is a mature man who has raised a
family and been with the same employer for over a decade. He served in the United
States military. He and his wife attempted to establish a sideline business and
purchased investment properties in the hopes of building for their future.
Multiple facts also speak against Applicant. He provided no documentation
regarding his efforts to address any of the debts at issue, nor did he provide any
evidence regarding his income, his wife’s former income, his financial resources, or a
budget. Consequently, whether he has been living within his means cannot be
confirmed. Such information is particularly important given his financial caution
regarding his car and vacation plans versus his approximately $550,000 in residential
home loans. Further, while his inability to find investors or short-sell his investment
properties could be blamed on the current recession, it is unclear as to how he ever
made timely payments on the additional $500,000 in obligations generated by his
ownership of those properties.  In choosing an administrative determination, Applicant21
failed to offer sufficient documentation regarding his efforts to address his debts. He
also failed to offer evidence as to the financial context in which his debts and his efforts
could be considered. The burden in these proceedings is on the applicant. Based on
the unelaborated record, financial considerations security concerns remain. Therefore, I
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conclude it is not clearly consistent with national security to grant Applicant a security
clearance. Clearance is denied. 
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: Against Applicant
Subparagraph 1.d: Against Applicant
Conclusion
In light of all of the circumstances presented by the record in this case, it is not
clearly consistent with national security to grant Applicant a security clearance.
Clearance is denied.
ARTHUR E. MARSHALL, JR.
Administrative Judge