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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 09-01709
SSN: )
)
Applicant for Security Clearance )
Appearances
For Government: Gregg A. Cervi, Esquire, Department Counsel
For Applicant: Pro Se
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Decision
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HENRY, Mary E., Administrative Judge:
Based upon a review of the case file, pleadings, exhibits, and testimony, I  deny
Applicant’s eligibility for access to classified information.
Applicant executed and signed his Security Clearance Application (SF 86) on
November 1, 2008. The Defense Office of Hearings and Appeals (DOHA) issued
Applicant a Statement of Reasons (SOR) detailing security concerns under Guideline F
on August 20, 2009. 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. 
Brief, Department Counsel, footnote 1, p.2.1
Item 5; Item 6.2
Item 6.3
Id.4
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Applicant received the SOR and submitted a notarized, written response to the
SOR allegations on September 3, 2009. He requested a decision on the written record
in lieu of a hearing. 
Department Counsel prepared a File of Relevant Material (FORM) and mailed
Applicant a complete copy on October 19, 2009. Applicant received the FORM on
November 10, 2009. He had 30 days from receipt of the FORM to file objections and
submit material in refutation, extenuation, or mitigation. He did not submit a response or
additional evidence. DOHA assigned this case to me on March 5, 2010. The
government submitted nine exhibits, which have been marked as Item 1-9 and admitted
into the record. Applicant’s response to the SOR is Item 4.
Findings of Fact
In his Answer to the SOR, Applicant admitted the factual allegations in ¶¶ 1.a,
1.b, and 1.c of the SOR, with explanations. He did not provide additional information to
support his request for eligibility for a security clearance. 
Applicant, who is 58 years old, worked as a program manager for a Department
of Defense contractor. He does not currently work, as his employer laid him off in May
2009. His employer is still sponsoring him for a security clearance, because he is
eligible for rehire.  Applicant enlisted in the United States Army in 1971. He retired from1
the Army in 2000 at the rank of Chief Warrant Officer after serving 20 years on active
duty and seven years as an active reservist. He receives a military retirement and
veteran’s disability benefits.2
Applicant has been married several times. He is currently single, but living with
his last wife. He has two adult children and a stepchild.  3
In addition to his current unemployment, Applicant did not work between April
2008 and October 2008, and August 2001 and November 2001. Applicant’s current
financial problems began when he and his last wife separated in 2006 and divorced in
2007. During this marriage, he and his wife accumulated debt, including significant
credit card debt to pay for many items, including vacations. When they divorced, he
assumed responsibility for all their credit card debt and mortgage.4
In the last few years, Applicant paid a number of credit card debts, using an
equity line of credit and other credit cards. He then closed the paid accounts. After his
divorce, Applicant lacked sufficient funds to pay his mortgage, line of credit, and credit
Id.5
Item 2; Item 6.6
Item 6.7
Item 2; Item 6.8
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card bills. He could not make the regular monthly payments on his debts. Instead, he
paid these debts periodically. In August 2007, he placed his house for sale, but he was
unable to sell the house immediately. In early 2008, the mortgagor began foreclosure
proceedings. Before these proceedings concluded, an investor offered to pay Applicant
$1,000 for his house and to assume the mortgage. Applicant accepted this offer and
signed the deed over to the investor. He does not have any debts related to the
mortgage.5
Applicant currently owes $27,000 on one credit card (card 1), $10,000 on a
second credit card (card 2), and $35,000 on an equity line of credit (line of credit). He
contacted the card 1 creditor to develop a repayment plan. The card 1 creditor
requested a payment of $7,000 and a high monthly payment. Applicant could not pay
the money requested or meet the monthly payment. In November 2008, the card 2
creditor offered to settle Applicant’s debt in exchange for one $4,500 payment.
Applicant could not pay this amount in one payment. The card 2 creditor has declined to
work with Applicant on a payment plan. Applicant provided no information on his efforts
to repay the line of credit.6
Applicant contacted a debt settlement company in February 2008, which offered
to negotiate a settlement with each of his creditors for less than he owed. Initially, he did
not retain this company’s services, but changed his mind. He retained the services of
this company for six months. He terminated the company’s services after credit
companies contacted him, offering settlements lower that the debt counseling service
intended to negotiate on his behalf.  7
The debts listed in the SOR remain unpaid. Applicant plans to save his money to
pay his debts when he returns to work. His current monthly income is $2,228 from his
military retirement and disability income. His monthly expenses, including other debt
payment, total approximately $2,300 a month. His former spouse currently lives with
him, but her income is not mentioned. He did indicate she was willing to help pay his
debts, but did not explain how much she would contribute to the resolution of these
debts. During his meeting with the investigator and in his response to the SOR, he
indicated that he would save money to pay these debts. Both times he made this
statement, he was not working.8
Policies
When evaluating an applicant’s suitability for a security clearance, the
administrative judge must consider the revised adjudicative guidelines (AG). In addition
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to brief introductory explanations for each guideline, the adjudicative guidelines list
potentially disqualifying conditions and mitigating conditions, which are 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 the adjudicative process. The administrative judge’s overarching
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. 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, 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. . . .” An
applicant has the ultimate burden of persuasion for 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
an 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).  
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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 significant debt during his last marriage. He
has been unable to pay some obligations for a period of time. The evidence is sufficient
to raise these potentially disqualifying conditions.
In assessing whether an Applicant has established mitigation under Guideline F,
the Appeal Board provided the following guidance in ISCR Case No. 07-06482 at 3
(App. Bd. May 21, 2008):
In evaluating Guideline F cases, the Board has previously noted that the
concept of “‘meaningful track record’ necessarily includes evidence of
actual debt reduction through payment of debts.” See, e.g., ISCR Case
No. 05-01920 at 5 (App. Bd. Mar. 1, 200). However, an applicant is not
required, as a matter of law, to establish that he has paid off each and
every debt listed in the SOR. See, e.g., ISCR Case No. 02-25499 at 2
(App. Bd. Jun. 5, 2006). All that is required is that an applicant
demonstrate that he has “. . . established a plan to resolve his financial
problems and taken significant actions to implement that plan.” See, e.g.,
ISCR Case No. 04-09684 at 2 (App. Bd. Jul. 6, 2006). The Judge can
reasonably consider the entirety of an applicant’s financial situation and
his actions in evaluating the extent to which that applicant’s plan for the
reduction of his outstanding indebtedness is credible and realistic. See
Directive ¶ E2.2(a) (“Available, reliable information about the person, past
and present, favorable and unfavorable, should be considered in reaching
a determination.”) There is no requirement that a plan provide for
payments on all outstanding debts simultaneously. Rather, a reasonable
plan (and concomitant conduct) may provide for the payment of such
debts one at a time. See, e.g., ISCR Case No. 06-25584 at 4 (App. Bd.
Apr. 4, 2008). Likewise, there is no requirement that the first debts actually
AG ¶¶ 20(e) and 20(f) are not relevant in this case.9
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paid in furtherance of a reasonable debt plan be the ones listed in the SOR.
The guideline also includes examples of conditions that could mitigate security
concerns arising from financial difficulties. Under AG ¶ 20(a), mitigation may occur when
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
occurred within the last five or six years. His debts are the result of overspending, not
unusual circumstances. Because his debts are ongoing, they are recent. This mitigating
condition does not apply. 
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.@ While Applicant’s
financial problems arose during his marriage, his problems became severe when he
and his wife separated and divorced, and he assumed responsibility for all their
household debt after their divorce. He lacked sufficient income to pay all their debts.
Since his divorce in 2007, Applicant has experienced two periods of unemployment,
with his last unemployment beginning in May 2009 and continuing. In 2006 and 2007,
Applicant resolved many outstanding debts. However, he resolved credit card debt
through the use of other credit cards and an equity line of credit. These resolved
accounts are closed, and thus, not in use. However, he has not resolved the large debts
created by his use of credit to pay other credit debts. I find this mitigating condition
partially applicable. 
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). Similarly, AG & 20(d) applies where the
evidence shows Athe individual initiated a good-faith effort to repay overdue creditors or
otherwise resolve debts.@ Although Applicant did not receive financial counseling, he did
contact a debt resolution company. He retained the services of this company for six
months. However, the company did not pay any debts on his behalf. Applicant’s debts
remain unresolved. Applicant pays his current expenses, but lacks sufficient income to
pay his old debts. AG ¶ 20(c) is partially applicable, but AG ¶ 20(d) does not apply as
there is no evidence of a good faith resolution of his debts.9
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 relevant circumstances. The administrative judge should consider the
nine adjudicative process factors listed at AG ¶ 2(a):
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(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. 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 served in the military for
more than 25 years. With his retirement and disability income, he pays his usual
monthly expenses and several debts. This income does not provide him with sufficient
money to pay the debts listed in the SOR or to save money to pay these large debts.
Applicant’s future intentions to pay his debts, while laudable, are insufficient to establish
mitigation of the security concerns raised by his debts. Applicant has been unemployed
for much of the last two years. Again, because he is not working, he cannot pay his old
and substantial debts. Applicant’s unpaid debts remain a security concern.
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 his finances
under Guideline F.
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
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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