Item 5.1
Item 1.2
1
                                                                     
                               DEPARTMENT OF DEFENSE
                DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
---------, -------- --------- )       ISCR Case No. 08-10897
SSN: ------ ---- -------- )
)
Applicant for Security Clearance )
Appearances
For Government: Gregg A. Cervi, Esquire, Department Counsel
For Applicant: Pro Se
______________
Decision
______________
WHITE, David M., Administrative Judge:
Applicant accrued 15 delinquent debts totaling over $26,000, in addition to more
than $237,000 in delinquent first and second mortgage loans that are in foreclosure
proceedings. This followed his 2001 Chapter 7 bankruptcy discharge. He demonstrated
no effort to resolve any of these debts except a very recent filing of another Chapter 7
bankruptcy petition, and provided no evidence to establish ongoing solvency or
otherwise mitigate financial security concerns. Based upon a review of the case file,
pleadings, and exhibits, eligibility for access to classified information is denied. 
Applicant submitted a security clearance application (SF 86) on May 25, 2005.1
On July 13, 2009, the Defense Office of Hearings and Appeals (DOHA) issued a
Statement of Reasons (SOR) to Applicant, detailing security concerns under Guideline
F (Financial Considerations).  The action was taken under Executive Order 10865,2
Safeguarding Classified Information within Industry (February 20, 1960), as amended;
Item 4.3
The Government submitted ten Items in support of the SOR allegations.4
Item 5 at 1, 5-6, 13-14, 18; AFR at 3.5
Item 7; Item 5 at 7-10.6
2
Department of Defense Directive 5220.6, Defense Industrial Personnel Security
Clearance Review Program (January 2, 1992), as amended (Directive); and the revised
adjudicative guidelines promulgated by the President on December 29, 2005, and
effective within the Department of Defense for SORs issued after September 1, 2006. 
Applicant answered the SOR in writing on August 4, 2009, and requested that his
case be decided by an administrative judge on the written record without a hearing.3
Department Counsel submitted the Government’s written case on September 9, 2009. A
complete copy of the File of Relevant Material (FORM)  was provided to Applicant, and4
he was afforded an opportunity to file objections and submit material in refutation,
extenuation, or mitigation within 30 days of his receipt of the FORM. 
Applicant signed the document acknowledging receipt of his copy of the FORM
on September 14, 2009, and returned it to DOHA. He submitted further evidence and
comments in response to the FORM on October 27, 2009, well past the October 14,
2009, deadline, and expressed some objections to the accuracy of Department
Counsel’s factual assertions. Department Counsel received Applicant’s FORM response
(AFR) on November 2, 2009, and included it in the record with a memorandum of the
same date in which he expressed no objection to its consideration despite its
untimeliness. I received the case assignment on November 12, 2009.
Findings of Fact
Applicant is a 45-year-old employee of a defense contractor, where he began
working in November 2004. He has no military service, and this is his first application for
a security clearance. He is married for the fourth time, with six children now living with
him, and four others who live elsewhere.  In his response to the SOR, he formally5
admitted each allegation. Applicant’s admissions, including his responses to the SOR
and FORM, and to DOHA interrogatories, are incorporated in the following findings.
Applicant filed for Chapter 7 bankruptcy relief in March 2001, with $87,767 in
total liabilities. The proceedings resulted in discharge of his debts in July 2001, the
same month his second divorce became final and two months before his third marriage.
The record contains insufficient information about the circumstances that led Applicant
to seek bankruptcy relief in 2001 to support findings about its causes or
reasonableness. His SF 86 reflected continuous employment from 1990 to the time the
bankruptcy was filed, with the exception of five months of unemployment from April to
September 2000.  6
Item 4 at 4-5; Item 6 at 3-7; Item 8 at 4, 12; AFR at 4.7
Item 4 at 4-5; Item 10; AFR at 4-5.8
Department Counsel cites Item 6 as the source of his comments about Applicant’s Personal Financial9
Statement at page 7 of the FORM. That information was not included in Item 6 or elsewhere.
3
Applicant’s third wife had a severe substance abuse problem. She spent so
much money supporting her addictions that Applicant had to use credit cards and loans
that he could not afford to repay in order to keep the family fed and housed. He
purchased a home with a $232,000 mortgage loan in April 2005. In May 2007, he took
out a second mortgage loan for $95,700. In October and November 2007, he began
defaulting on his multiple credit card and mortgage debts. Not including his mortgage
loans, he had 15 delinquent debts totaling $26,034, as listed in the SOR. All of these
debts were incurred in his name only, but his wife had access to the funds. By
September 2008, the outstanding balance on the second mortgage was $107,658, and
the home was in foreclosure.  7
Applicant offered no evidence of payment toward, or other attempt to resolve,
any of these debts. In August 2009, he and his fourth wife filed his second Chapter 7
bankruptcy proceeding. Although he provided no schedules or other documentation
concerning which debts he is seeking to discharge, the bankruptcy would presumably
cover all of the SOR-listed debt, as well as thousands of dollars Applicant said that he
owes in legal and other professional fees as a result of his third divorce proceedings.  8
The record contains no evidence about Applicant’s current income, living
expenses, or ability to resolve his delinquent debts and avoid incurring additional ones.9
He provided no evidence concerning the quality of his recent professional performance,
the level of responsibility his duties entail, or his track record with respect to handling
sensitive information and observation of security procedures. He submitted no character
references or other evidence tending to establish good judgment, trustworthiness, or
reliability. I was unable to evaluate his credibility, demeanor, or character in person
since he elected to have his case decided without a hearing.  
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 (DCs) and mitigating conditions (MCs), which are to
be used 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 AG ¶ 2 describing the adjudicative process. The administrative judge’s
overarching adjudicative goal is a fair, impartial, and commonsense decision. According
to AG ¶¶ 2(a) and 2(c), the entire process is a conscientious scrutiny of applicable
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guidelines in the context 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 the 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, “[t]he applicant is
responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or
mitigate facts admitted by the applicant or proven by Department Counsel, and has the
ultimate burden of persuasion as to obtaining a favorable clearance decision.” Section 7
of Executive Order 10865 provides: “[a]ny determination under this order adverse to an
applicant shall be a determination in terms of the national interest and shall in no sense
be a determination as to the loyalty of the applicant concerned.”
A person applying for access to classified information seeks to enter 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.
Analysis
Guideline F, Financial Considerations
The security concerns relating to the guideline for financial considerations are 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. 
Department Counsel argued that the evidence established security concerns
under three Guideline F DCs, as set forth in AG ¶ 19: “(a) inability or unwillingness to
FORM at 6.10
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satisfy debts;” “(b) indebtedness caused by frivolous or irresponsible spending and the
absence of any evidence of willingness or intent to pay the debt or establish a realistic
plan to pay the debt;” and “(c) a history of not meeting financial obligations.”  Applicant10
has been unwilling or unable to satisfy any of his SOR-listed delinquent debts since late
2007, and failed to provide any evidence of his willingness or ability to do so in the
future. DC 19(a) is clearly established. He has demonstrated a long history of not
meeting financial obligations dating back to his first bankruptcy, including a failure to
address any of his delinquencies after becoming aware of the security concerns raised
by such conduct. Security concerns under DC 19(c) are also supported on this record.
However, this record contains no evidence to establish that Applicant’s debts were
caused by frivolous or irresponsible spending on his part. The evidence indicates that
his third wife’s substance abuse was the principal source of his financial problems over
the past three or four years. To the extent he participated in that arrangement while
trying to make their marriage succeed, he is responsible for the debts he incurred. His
actions in that regard have not been shown to be frivolous, however. Accordingly, DC
19(b) is not supported by the evidence.
The guideline includes four conditions in AG ¶ 20 that could mitigate security
concerns arising from Applicant’s financial difficulties. Under MC 20(a), disqualifying
conditions may be mitigated where “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.”
Applicant’s financial irresponsibility is recent, involves numerous creditors, and
continues to date. He remains substantially in debt, and he provided no evidence
concerning his current financial situation that would support a finding that delinquent
indebtedness is unlikely to recur. The evidence does not support application of this
potentially mitigating condition. 
Under MC 20(b), it may be mitigating where “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.” Applicant has worked
continuously in his current position over the past five years, but his only effort to
address any of these delinquencies is to file for Chapter 7 bankruptcy relief for the
second time in nine years. He offered no evidence that any debt was incurred due to
causes beyond his control. Although his income funded his third wife’s substance
abuse, he originated each SOR-listed debt in only his name. He also did not
demonstrate that he responsibly reduced non-essential spending in reaction to his
mounting debts. Applicant did not establish mitigation of his presently delinquent debts,
or of his financial history as a whole, under this provision.
Evidence that “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”
is potentially mitigating under MC 20(c). Similarly, MC 20(d) applies where the evidence
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shows “the individual initiated a good-faith effort to repay overdue creditors or otherwise
resolve debts.” Applicant established minimal mitigation under these two provisions
because he offered no evidence of financial counseling, and failed to address any
delinquency other than filing for bankruptcy after responding to the SOR. Moreover, the
absence of evidence demonstrating his current solvency or ability to resolve his
outstanding delinquencies precludes findings of “clear indications that the problem is
being resolved or is under control,” or “a good-faith effort.” Insufficient evidence was
presented to alleviate the substantial security concerns raised by the length and degree
of financial irresponsibility that continues to date. 
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 relevant 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.     
I considered the potentially disqualifying and mitigating conditions in light of all
the relevant facts and circumstances surrounding this case. Applicant is a mature
individual who is responsible for his voluntary choices and conduct that underlie the
security concerns expressed in the SOR. He established a consistent pattern of
financial irresponsibility dating back at least nine years, with no evidence of any efforts
to resolve his outstanding obligations other than seeking to be excused from meeting
his freely assumed financial obligations for a second time in that period. 
Applicant failed to demonstrate financial rehabilitation or evidence of solvency
from the present time forward, so recurrence and worsening of his financial concerns
were not shown to be unlikely. He continues to bear financial obligations for significant
past debt and ongoing living expenses. He accordingly remains subject to pressure,
exploitation, or duress. The record contains insufficient other evidence about his
character, trustworthiness, or responsibility to mitigate these concerns. 
7
Overall, the record evidence creates substantial doubt as to Applicant’s present
eligibility and suitability for a security clearance. For all these reasons, I conclude
Applicant has not mitigated the security concerns arising from his financial
considerations. 
Formal Findings
Formal findings for or against Applicant on the allegations set forth in the SOR,
as required by ¶ E3.1.25 of Enclosure 3 of the Directive, are:
Paragraph 1, Guideline F: AGAINST APPLICANT
Subparagraphs 1.a through 1.r: Against Applicant
Conclusion
In light of all of the circumstances presented by the record in this case, it is not
clearly consistent with the interests of national security to grant Applicant eligibility for a
security clearance. Eligibility for access to classified information is denied.
                                              
DAVID M. WHITE
Administrative Judge