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                           DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 09-03672 
 SSN:   ) 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Alison O’Connell, Esquire, Department Counsel 
For Applicant: Pro Se 
 
 
______________ 
 
Decision 
______________ 
 
 
HOGAN, Erin C., Administrative Judge: 
 
Applicant submitted her security clearance questionnaire (e-QIP) on February 6, 
2009. On July 6, 2009, the Defense Office of Hearings and Appeals (DOHA) issued a 
Statement of Reasons (SOR) detailing the security concerns 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 within the Department of Defense for SORs issued after September 1, 2006.  
  
 On July 22, 2009, Applicant answered the SOR and requested a hearing before 
an administrative judge. Department Counsel was ready to proceed on July 27, 2009. 
The case was assigned to me on October 7, 2009. On October 9, 2009, a Notice of 
Hearing was issued, scheduling the hearing for November 2, 2009. The case was heard 
on that date. The Government offered eight exhibits which were admitted as 
Government Exhibits (Gov) 1 – 8. The Applicant testified and offered 18 exhibits which 
were admitted as Applicant Exhibits (AE) A - R. The record was held open until 
November 16, 2009, to allow Applicant to submit additional documents.  She timely 
 
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submitted an 18-page document that was admitted as AE S. Department Counsel’s 
response to AE S is marked as Hearing Exhibit (HE) I. An additional two-page 
document was submitted on November 17, 2009. It was admitted as AE T. Department 
Counsel’s response to AE T is marked as HE II. The transcript was received on 
November 10, 2009.  Based upon a review of the case file, pleadings, exhibits, and 
testimony, eligibility for access to classified information is granted. 
 
Findings of Fact 
 
 In her Answer to the SOR, Applicant admits SOR allegations 1.a, 1.c, and 1.d. 
She denies SOR allegations 1.b and 1.e.   
 
Applicant is a 35-year-old systems analyst with a Department of Defense 
contractor applying for a security clearance. She has worked for her current company 
since January 2008. This is her first time applying for a security clearance. She is a high 
school graduate and has 2 ½ years of college credit. She married in July 2001, but has 
been separated from her husband since August 2008. A divorce is pending. She and 
her husband have two children, a four-year-old son and an eight-year-old daughter. (Tr 
at 5-6, 46, 54-55, 88; Gov 1)  
 
Applicant filed for Chapter 7 bankruptcy on July 23, 2002. She listed total assets 
of $9,754 and total liabilities of $32,423. Her debts were discharged on October 30, 
2002. (Gov 6 at 5; Gov 7 at 4; Gov 8) Applicant filed for bankruptcy on the advice of her 
father-in-law. He is a real estate agent and advised Applicant and her husband that if 
they filed for bankruptcy they can expedite the process of qualifying for a mortgage. 
Some of the debts included in the bankruptcy were accounts that her mother opened in 
Applicant’s name when Applicant was still a minor. She admits that she had delinquent 
debts prior to her marriage. (Tr at 34-35, 56-58) 
 
Her background investigation revealed that she incurred the following delinquent 
accounts after the bankruptcy: a state tax lien that was filed on August 22, 2008, in the 
amount of $1,768 (SOR ¶ 1.b: Gov 4); a $93,000 second mortgage was past due in the 
amount of $9,188 in May 2009 (SOR ¶ 1.c: Gov 2 at 4; Gov 3 at 4-5, 8; Gov 6 at 9; Gov 
7 at 4); a $371,000 mortgage was past due in the amount of $19,582 in May 2009 (SOR 
¶ 1.d: Gov 2 at 4; Gov 3 at 4-5, 8; Gov 6 at 9; Gov 7 at 4). In June 2009, both the first 
and second mortgages were in foreclosure proceedings. (Gov 2 at 4, 9)  
 
Applicant’s husband was the primary breadwinner for the family. In 2003, 
Applicant discovered that her husband was using crack cocaine. He eventually became 
addicted to crack cocaine and had difficulty holding jobs. Applicant has had several 
periods of unemployment over the past six years. From November 2003 to May 2004, 
she was unemployed after resigning from her position as a flight attendant in order to 
take care of her daughter. Her husband was working at the time and worked unusual 
hours so child-care proved to be difficult.  From December 2004 to August 2005, 
Applicant was unemployed after she gave birth to her son. (Tr at 66-69; Gov 1, Section 
11; Gov 3 at 8-9) 
 
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Applicant’s husband’s drug addiction adversely affected the family finances. He 
would withdraw money from the family bank accounts and disappear for days. He could 
not hold a job. On December 6, 2003, he was arrested for driving under the influence of 
a controlled substance after Applicant discovered him in his car in the driveway passed 
out with a low pulse. He currently has not worked for over a year and a half. He does 
not provide child support. (Tr at 38, 65, 100-101; Gov 3 at 8-9; AE S at 16) 
 
 In March 2004, Applicant’s car was repossessed. Both she and her husband 
were unemployed at the time. The balance owed on the car loan after the repossession 
was $16,405. In 2006, Applicant and her husband entered into a settlement agreement 
pertaining to the deficiency judgment. They paid $4,000. Approximately, $11,000 of the 
debt owed was forgiven by the creditor and reported to the Internal Revenue Service 
(IRS) as income. Applicant did not understand that this would be reported as income. 
The IRS later contacted Applicant notifying her that she and her husband owed taxes 
for tax year 2006.  Applicant and her husband still owe the IRS $3,384. Applicant wants 
the divorce decree to hold her husband responsible for part of the debt. (Tr at 70-71, 79-
82, 100-101; Gov 3 at 8-9; AE C; AE D; AE J; AE Q)  
 
In October 2006, Applicant and her husband purchased a home for $465,000. 
They financed the home with two mortgages in the amounts of $93,000 and $371,000. 
When asked under cross-examination why she purchased a home with her husband 
while aware that he was a drug addict, Applicant stated that at the time she no longer 
had seen evidence of drug use.  Her husband was employed and appeared to have 
stopped his substance abuse. Even though she did not say it, she implied that she 
wanted to save the marriage. In January 2007, Applicant and her husband became 
delinquent on their mortgage payments. Her husband’s substance abuse problems re-
surfaced as well. In April 2008, they applied for a loan modification because her 
husband was unemployed. The loan modification was not approved until October 2008, 
three months after Applicant moved out. (Tr at 36, 76-77; Gov 3 at 8-9)       
                             
In April 2008, she found crack cocaine in her house. Her son was 2 ½ at the 
time. She realized that she needed to start planning to move out for the safety of her 
children because her husband’s behavior was getting more unpredictable and violent.  
He physically attacked her in late July 2008. She moved out with the children in August 
2008.  (Tr at 37-39, 59, 87-88; Gov 3 at 8-9) 
 
After Applicant moved out, she believed that the home went to foreclosure. She 
did not make payments on the home and her husband did not make payments on the 
home. She believes the last time payments were made on the home was in 2008. She 
was instructed to not make payments on the home when she applied for the loan 
modification. She later discovered that the home was not in foreclosure. She was 
advised that if she was awarded the home in her divorce decree, the bank would work 
with her to have the mortgage adjusted. Her husband was formally served Applicant’s 
petition for divorce on November 14, 2009. She requests the house in her divorce 
paperwork. (Tr at 40-41, 88-89; Gov 1, section 28; Gov 2 at 4, 9; AE M; AE N; AE O; AE 
T)       
 
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A state tax lien was filed against Applicant and her husband on August 22, 2008, 
in the amount of $1,768. Applicant initially denied that she owed this debt. She was not 
aware of the tax lien. She had previously paid off a state tax lien through a wage 
garnishment in 2006. When she contacted the state comptroller’s office, she discovered 
the tax lien was a valid debt. She wrote a letter to the state comptroller’s office stating 
that she is willing to pay 50 percent of the debt, but believes her husband should be 
responsible for 50 percent of the debt. She paid the state 10 percent of the balance 
owed and submitted an application for tax amnesty in September 2009. She has not 
received a reply from the state comptroller’s office. If she is required to pay the full 
amount of the lien she will do it, but believes her husband should be responsible for half 
of the debt. (Tr at 47-49, 100-101; AE A at 1; AE B; AE H)  
 
Applicant resolved several delinquent accounts that were not alleged in the SOR. 
She has been working to keep her financial situation current. (Tr at 51, 73, 89-92; Gov 
1, section 28; Gov 2; AE A) She sought financial counseling from a company over the 
phone in July 2009 and August 2009. She has progressed in her job and is able to take 
care of herself and her two children. Her current annual salary is $90,000. If she is 
awarded the home in the divorce and the mortgage companies continue to work with 
her, she claims she is able to pay the mortgage payment, which she anticipates will be 
$3,408 monthly. (Tr at 52, 55, 94-95, 101-102; AE S at 14) 
 
Applicant’s net monthly income is $7,049. Her expenses include rent $1,950; 
groceries $175, utilities $200; car expenses $200; daycare $600; car $388.80. She also 
lists eight credit cards with balances of $2,000, $480, $300, $161; $1,400; $300; $230, 
and $480.  She makes monthly payments to each card ranging from $15 to $67. The 
total amount applied towards her credit cards each month is $207.  Her total monthly 
expenses total $3,720. After expenses, she has approximately $3,320 in discretionary 
funds. (Tr at 96 – 97; Gov 2 at 12)   
 
Applicant received an outstanding performance rating for the performance period 
beginning February 2008 and ending February 2009. (AE S at 8 – 15) Applicant’s co-
worker provided a letter stating that she has worked with Applicant for two years. 
Applicant has integrity and works hard. She is a talented systems analyst with excellent 
communication skills and a strong moral compass. (AE R)  
 
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 overarching 
 
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adjudicative goal is a fair, impartial, and commonsense 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.  
 
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 
 
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overextended is at risk of having to engage in illegal acts to generate 
funds.  
 
The guideline notes several disqualifying conditions that could raise security 
concerns. I find Financial Considerations Disqualifying Condition (FC DC) &19(a) (an 
inability or unwillingness to satisfy debts); and FC DC &19(c), (a history of not meeting 
financial obligations) apply to Applicant’s case. Applicant has had financial difficulties for 
several years. In 2002, she filed for Chapter 7 bankruptcy and received a bankruptcy 
discharge. She continued to incur delinquent accounts after the bankruptcy discharge. 
She and her husband defaulted on two mortgages valued at $93,000 and $371,000 for 
a home that they purchased in October 2006. She and her husband have an 
outstanding state tax lien in the amount of $1,768. Although not alleged in the SOR, 
Applicant and her husband have a federal tax debt in the amount $3,384 related to the 
$11,000 debt forgiveness owed from a 2004 automobile repossession. Applicant 
resolved several other delinquent accounts that were incurred after her bankruptcy prior 
to the SOR being issued.  
 
The Government’s substantial evidence and Applicant’s own admissions raise 
security concerns under Guideline F. The burden shifted to Applicant to produce 
evidence to rebut, explain, extenuate, or mitigate the security concerns. (Directive 
¶E3.1.15) An applicant has the burden of proving a mitigating condition, and the burden 
of disproving it never shifts to the government. (See ISCR Case No. 02-31154 at 5 
(App. Bd. September 22, 2005))  
 
The guideline also includes examples of conditions that could mitigate security 
concerns arising from financial difficulties. Financial Considerations Mitigating Condition 
(FC MC) ¶ 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) is not applicable 
because Applicant’s history of financial irresponsibility. She admits that most of the 
debts included in her Chapter 7 bankruptcy were incurred prior to her marriage. While 
Applicant is in the process of negotiating settlement agreements with the creditors 
alleged in the SOR, she received no response as to her proposals at the close of the 
record.   
 
 FC MC & 20(b) (the 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) applies. Applicant is in the middle of divorce 
proceedings. Her husband’s crack cocaine addiction created most of the recent family 
financial problems. While Applicant was well aware of her husband’s substance abuse 
problems when she purchased a home with him in October 2006, she believed that he 
had turned a corner, most likely out of desire to keep her marriage together. When it 
was evident that her husband was using again, she eventually moved out of the marital 
residence in August 2008 with her children. She has resolved several delinquent 
accounts that were not alleged in the SOR. She has taken steps to resolve the 
 
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remaining delinquent accounts which include the two mortgages, a state tax lien, and a 
federal tax debt that was not alleged in the SOR.  She is waiting for her divorce 
settlement to determine whether she can renegotiate the two mortgages on the home. 
She acted responsibly under the circumstances. She supports two young children while 
receiving no child support from her husband. He has been unemployed for the past year 
and a half. His employment was sporadic during their marriage because of his 
substance abuse problems.  
 
FC MC ¶ 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) applies. Applicant attended two telephonic financial counseling sessions in July 
and August 2009. She earns a sufficient income to make the mortgage payment if she 
is awarded the house in the divorce property settlement. She is also capable of paying 
the full amount of the outstanding state and federal tax debt if her husband does not pay 
half of the debt.  Once her divorce is final, it is likely Applicant’s financial situation will be 
resolved.  
 
FC MC & 20(d) (the individual initiated a good-faith effort to repay overdue 
creditors or otherwise resolve debts) applies. Applicant resolved several delinquent 
accounts before the SOR was issued. She has communicated with the mortgage 
company, the IRS, and the state comptroller’s office regarding the outstanding debts. If 
she is awarded the home in the divorce proceedings, her income is sufficient to make 
the mortgage payments. Applicant wants the divorce settlement to hold her husband 
responsible for 50 percent of the federal and state tax as a matter of principle. It is 
unlikely that her husband will be able to pay the debts even if he is held responsible 
because of his substance abuse problems and unemployment. She is capable of paying 
the debt if he does not. While the debts are not fully resolved, Applicant demonstrated a 
good-faith effort to resolve the accounts.  
 
Applicant has not mitigated the concerns raised under Guideline F.  
  
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 commonsense 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 previous 
bankruptcy in 2002 and the delinquent accounts incurred after the bankruptcy. I 
considered Applicant’s husband’s crack cocaine addiction and sporadic employment  
contributed a large part to the financial problems. While Applicant did not exercise the 
best judgment purchasing a home with her husband while aware of his substance 
abuse problems, her actions are understandable in the view of attempting to save her 
marriage and provide a home for her two young children. Applicant has fully informed 
the government of her financial issues and pending divorce. She is taking action to 
resolve the situation. While the status of the two mortgages, the state tax lien, and the 
federal tax debt remain unresolved, Applicant has been negotiating with all of the 
parties and is able to resolve these accounts if required to be responsible for the debts. 
Under the unique circumstances of this case, I conclude Applicant mitigated the security 
concerns raised under 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 
  Subparagraph 1.d:    For Applicant 
  Subparagraph 1.e:    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. 
 
                                                
_________________ 
ERIN C. HOGAN 
Administrative Judge