DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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------------------------- )       ISCR Case No. 08-11216
SSN: ----------------- )
)
Applicant for Security Clearance )
Appearances
For Government: Alison O’Connell, Esquire, Department Counsel
For Applicant: Pro Se
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 Decision
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WESLEY, Roger C., Administrative Judge:
History of Case
On April 17, 2009, the Defense Office of Hearings and Appeals (DOHA) issued a
Statement of Reasons (SOR) detailing 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.  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 (AGs) promulgated by the
President on December 29, 2005, and effective within the Department of Defense for
SORs issued after September 1, 2006.
Applicant responded to the SOR on May 12, 2009, and elected to have his case
decided on the basis of the written record. Applicant received the File of Relevant
Material (FORM) on June 2, 2009, and did not respond with any information. The case
was assigned to me on July 31, 2009.   Based upon a review of the case file, pleadings,
and exhibits, eligibility for access to classified information is denied. 
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Summary of Pleadings
Under Guideline F, Applicant is alleged to have accumulated 19 delinquent debts
exceeding $26,000. They are comprised of delinquent consumer accounts, medical
debts, and deficiency debts associated with two vehicle repossessions.
In his response to the SOR, Applicant admitted each of the allegations.  He
provided no explanations for his admitted debts. 
Findings of Fact
Applicant is a 26-year-old production support technician 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 married in February 2005 and has two children from his marriage, ages
four and three (ex. 4).  Records document that he divorced his wife October 2007 (ex.
4).  Applicant was awarded a high school diploma in 2001 (see ex. 4).
Since 2001, Applicant has accumulated a number of delinquent debts.  His listed
delinquencies appear in virtually all of his credit reports documented in the record (see
exs. 6 and 8).  His listed debts include three repossessed vehicles: two in 2003 and
another in 2005 (ex. 6).  
Based on the information contained in his January 2008 credit report, Applicant
purchased a vehicle in July 2002 for $23,443 under an installment agreement he
arranged with the seller (see ex. 6).  He defaulted in his agreement in December 2002,
and he surrendered the vehicle to the creditor in January 2003 (ex. 6).  Sale of the
vehicle produced an $8,822 deficiency balance, which the creditor charged off in April
2005.  The deficiency from this repossession is not reflected in the SOR.  
Applicant surrendered another vehicle in December 2003 (see ex. 6).  According
to his January 2008 credit report, he purchased a vehicle in September 2002 from
creditor 1.d for approximately $7,213 (see ex. 6).  His credit report shows he defaulted
in his monthly car payments sometime in 2003.  Following his voluntary surrender of the
vehicle to the creditor in December 2003, creditor 1.d charged off a debt balance of
$5,144 in February 2004 (ex. 6).  Whether the seller was able to recover any proceeds
from a public sale is unclear. Applicant’s most recent credit report lists a delinquency
balance of $6,787 with creditor 1.d (see ex. 7).  Without any information from Applicant
to challenge the amount of the reported deficiency by this creditor, inferences warrant
that Applicant remains indebted to creditor 1.d for the stated amount ($6,787) in his
latest credit report (ex. 7). 
In 2005, a third creditor (creditor 1. r) repossessed a vehicle from Applicant.
Applicant’s January 2008 credit report indicates he purchased the vehicle in February
2004 for $7,021 from creditor 1.r, and defaulted  in January 2005, or thereabouts.  
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Records show that creditor 1.r repossessed Applicant’s vehicle in January 2005
(see exs. 6 and 7).  Although, it is not clear whether the vehicle ever produced any
proceeds from a public sale, Applicant does not dispute the deficiency owing following
the repossession, and offered no documented proof of any sale credits or satisfaction of
any owed deficiency to the creditor on this account. Inferences warrant, accordingly,
that Applicant remains indebted to creditor 1.r for the full amount of the charged off loan
balance.
Besides his major debts associated with his vehicle deficiencies, Applicant
incurred a number of other debts: some medically-related and others consumer-based.
These remaining debts number 17 and exceed $12,000 in aggregate indebtedness.
How Applicant came to be indebted to these listed creditors and delinquent in his
payments is unclear. Applicant provided no documentation of the origins of these debts,
his payment history, or how he became delinquent.  All that can be gleaned from the
exhibits is that Applicant accrued the debts listed in the SOR and documented in the
accompanying credit reports and ceased paying on them between 2002 and 2005 (see
exs. 6 and 7).  
Afforded an opportunity to supplement the FORM, Applicant declined to so. He
provided no endorsements or performance evaluations in his behalf.  Nor did he provide
any proofs of community and civic contributions.
Policies
The revised AGs (effective September 2006) list guidelines to be considered by
judges in the decision-making process covering DOHA cases. These guidelines take
into account factors that could create a potential conflict of interest for the individual
applicant, as well as considerations that could affect the individual’s reliability,
trustworthiness, and ability to protect classified information. These guidelines include
"[c]onditions that could raise a security concern and may be disqualifying” (disqualifying
conditions), if any, and all of the "[c]onditions that could mitigate security concerns,” if
any. These guidelines must be considered before deciding whether or not a security
clearance should be granted, continued, or denied.  Although, the guidelines do not
require judges to place exclusive reliance on the enumerated disqualifying and
mitigating conditions in the guidelines in arriving at a decision. 
In addition to the relevant AGs, judges must take into account the pertinent
considerations for assessing extenuation and mitigation set forth in 2(a) of the revised
AGs, which are intended to assist the judges in reaching a fair and impartial
commonsense decision based upon a careful consideration of the pertinent guidelines
within the context of the whole person. The adjudicative process is designed to examine
a sufficient period of an applicant’s life to enable predictive judgments to be made about
whether the applicant is an acceptable security risk. 
When evaluating an applicant’s conduct, the relevant guidelines are to be
considered together with the following 2(a) factors: (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
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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 chances; (7) the motivation for the conduct; (8) the potential for
pressure, coercion, exploitation, or duress; and (9) the likelihood of continuation or
recurrence.
Viewing the issues raised and evidence as a whole, the following individual
guidelines 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. AG, ¶ 18.
Burden of Proof
By virtue of the principles and policies framed by the revised AGs, 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 commonsense 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. See Kungys v. United States, 485 U.S. 759, 792-800
(1988).  As with all adversarial 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 by substantial
evidence any controverted facts alleged in the SOR, 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 materiality showing, 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 evidentiary burden shifts to the applicant for the purpose of
establishing his or her security worthiness through evidence of refutation, extenuation,
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or mitigation.  Based on the requirement of  Exec. Or. 10865 that all security
clearances be clearly consistent with the national interest, the applicant has the
ultimate burden of demonstrating his clearance eligibility. “[S]ecurity-clearance
determinations should err, if they must, on the side of denials.” See Department of the
Navy v. Egan, 484 U.S. 518, 531 (1988). 
Analysis  
Applicant is an employee of a defense contractor who accumulated a number
of delinquent debts (several are related to vehicle repossessions) between 2002 and
2005. His accumulation of delinquent debts and his past inability and unwillingness to
address these debts warrant the application of two of the disqualifying conditions (DC)
of the Guidelines: DC ¶ 19(a), “inability or unwillingness to satisfy debts,” and ¶19(c)
“a history of not meeting financial obligations.”
Applicant’s pleading admissions of the debts covered in the SOR (sometimes
referred to as judicial admissions) negate the need for any independent proof (see
McCormick on Evidence, § 262 (3d ed. 1984)).  Each of Applicant’s listed debts are
fully documented in his latest credit reports and provide ample independent proof of
his debts.
Applicant’s debts are both unexplained and unresolved. To date, he has not
manifested any efforts to address these debts, despite extended opportunities to
supplement the FORM materials furnished him. 
Without any documented payment history or tangible plan to resolve the listed
debts, Applicant cannot be credited with any manifest progress to date in regaining
control of his finances and provides no hard assurances of any commitment to resolve
his debts in the foreseeable future.  Applicant’s finances still require a good deal of
effort on his  part to fully stabilize them. 
Based on the documented materials in the FORM, Applicant has not
demonstrated any extenuating circumstances associated with the delinquent debts he
accrued over several years.  Consequently, MC  ¶ 20(b) of the financial considerations
guideline, “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 responsibility,”
is not available to him.  Some judgment problems persist, too, over the delinquencies
he has failed to explain or address.
Moreover, even if Applicant’s debt delinquencies did arise due to circumstances
outside of his control, he could have been reasonably expected to address his debts in
a responsible way once the conditions that contributed to the delinquencies had
passed or eased, and his finances had improved. See ISCR Case 03-01059 at 3 (App.
Bd. Sep. 24, 2004).  Not only are his listed debt delinquencies ongoing, but he has
failed to address them in any visible way.  
                                                    
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Holding a security clearance involves the exercise of important fiducial
responsibilities, among which is the expectancy of consistent trust and candor.  See
Snepp v. United States, 444 U.S. 507, 511n.6 (1980). 
Financial stability in a person cleared to access classified information is
required precisely to inspire trust and confidence in the holder of the clearance.  While
the principal concern of a clearance holder’s demonstrated financial difficulties is
vulnerability to coercion and influence, judgment and trust concerns are explicit in
financial cases.  Failure of the applicant to make concerted efforts to pay or resolve
his (or her) debts when able to do so raises security-significant concerns about the
sufficiency of the applicant’s demonstrated trust and judgment necessary to safeguard
classified information.
Whole-person assessment does not enable Applicant to surmount the judgment
questions raised by his accumulation of delinquent debts (some quite large). Since
graduating from high school in 2001, he has not shown any manifest effort in
addressing any of his covered debts to mitigate his still delinquent accounts.
Resolution of his delinquent accounts is a critical prerequisite to his regaining control
of his  finances.
While youth, immaturity, and the strains of managing a family household might
have played a considerable role in his accumulation of so many debts over a relatively
short period, Applicant failed to provide any explanatory material for consideration.
Endorsements and performance evaluations might have been helpful, too, in making a
whole-person assessment of his overall clearance eligibility, but were not provided.
Overall, clearance eligibility assessment of Applicant based on the  limited amount of
information available for consideration in this record does not enable him to establish
judgment and trust levels sufficient to enable him to overcome appraised security
concerns arising out his accumulation of delinquent debts.
Taking into account all of the documented facts and circumstances surrounding
Applicant’s debt accumulations, his youth and family commitments, his lack of any
exhibited explanations for his debt accruals, and his failure to provide any proof of
corrective actions taken to address his old debts, it is still soon to make safe predictive
judgments about Applicant’s ability to repay his debts and restore his finances to
stable levels commensurate with his holding a security clearance. Unfavorable
conclusions warrant with respect to the allegations covered by subparagraphs 1.a
through 1.s. 
In reaching my decision, I have considered the evidence as a whole, including
each of the 2(a) factors enumerated in the revised AGs.
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:
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GUIDELINE F (FINANCES):         AGAINST APPLICANT
   
Sub-paras. 1.a through 1.s: Against Applicant
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 
                                        
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