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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
------------------------ )       ISCR Case No. 09-02926
SSN: ---------------- )
)
Applicant for Security Clearance )
Appearances
For Government: Julie R. Mendez, Esquire, Department Counsel
For Applicant: Pro Se
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Decision
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LYNCH, Noreen A., Administrative Judge:
On December 8, 2009, the Defense Office of Hearings and Appeals (DOHA)
issued Applicant a Statement of Reasons (SOR) detailing security concerns under
Guideline F (Financial Considerations). DOHA acted 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) effective within the Department of Defense on September
1, 2006. 
 
On December 28, 2009, Applicant answered the SOR. He requested a decision
on the record in lieu of a hearing. Department Counsel submitted the governments’s
written case on January 27, 2010. Applicant received a complete file of relevant material
(FORM) on February 4, 2010, and was provided the opportunity to file objections, and
submit material to refute, extenuate, or mitigate the government’s case.  Applicant
submitted a letter dated March 14, 2010. DOHA assigned the case to me on March 19,
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2010. Based upon a review of the case file, pleadings, and exhibits, Applicant’s eligibility
for access to classified information is denied.
Findings of Fact
In his Answer to the SOR, Applicant admitted the factual allegations in ¶¶ 1.a
through 1.d, 1.f, 1g, and 1.l. He denied the remaining factual allegations. He submitted
additional information to support his case. 
Applicant is a 30-year-old employee of a defense contractor. He graduated from
high school in 1998, and earned an undergraduate degree in economics in December
2004 (Item 4). He is currently attending courses at a university. He is married and has
one daughter, who was born in 2007. He has been with his current employer since
November 2008. He has never held a security clearance.
Before Applicant’s current employment, he worked for several companies. He
also had periods of unemployment. In January 2008, Applicant was laid off until April
2008. During that time, he received unemployment. He was employed from April 2008
until October 2008 as a real estate loan officer. His pay was based on commission, and
he did not earn sufficient income to support his family. He decided to resign from that
position to take a job in the construction field. At the time, Applicant’s wife did not work
as she was on unpaid maternity leave (Item 3). 
Applicant’s reduced income in 2008 caused him to miss payments on his
accounts. The delinquent debt of $130 for a credit card (SOR 1.a); the delinquent debt
of $6,553 for a credit card (SOR 1.b), and a charged-off phone account for $253 (SOR
1.c) are not paid although Applicant intended to settle them. The largest delinquent
debt, for $29,311 (SOR 1.d), is the result of a second mortgage. His primary mortgage
is past due in the amount of $3,020 (SOR 1.f). Applicant’s charged-off auto loan for
$10,601 (SOR 1.g) is the result of a 2008 voluntary repossession. Applicant is past due
on another auto loan for $399 (SOR 1.e). Applicant admitted that he owes
approximately $50,000 in delinquent debts (Item 3). The delinquent debt on a TV
account for $830 (SOR 1.l) is also admitted, but not paid. He intended to resolve these
debts by various payment plans, but he did not produce any documentation.
Applicant denies that his student loans (SOR 1.h through 1.k are delinquent. He
produced documentation that the loans are currently in forbearance until March 2010
(Item 5). 
Applicant’s net monthly income (including his wife’s current income) is
approximately $4,470 (Item 6). He has a small savings account. He has not obtained
any financial counseling.
In March 2010, Applicant and his wife met with an attorney to seek advice on
filing a Chapter 13 bankruptcy. They developed a plan to address the delinquent
accounts that are listed in the SOR. The plan will be discharged in five years. The
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projected monthly plan is $630. Applicant is confident that he will be able to resume
payment levels on his mortgage ($1,153) and his daily expenses. He will have no car
payment. Applicant is scheduled to meet later in March 2010 to “officially file” the
Chapter 13 bankruptcy.
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 must be considered
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,
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, 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 to obtain 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 (EO) 10865 provides that decisions shall be “in
terms of the national interest and shall in no sense be a determination as to the loyalty
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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 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. By his own admission, Applicant accumulated delinquent debts on
many accounts totaling approximately $50,000. His credit reports confirm the debts. He
has decided to file for Chapter 13 bankruptcy. The evidence is sufficient to raise these
disqualifying conditions.
The guideline also includes examples of conditions that could mitigate security
concerns arising from financial difficulties. Under AG ¶ 20(a), the disqualifying condition
may be mitigated where 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 still
has significant unresolved delinquent debts. Applicant intends to file for Chapter 13
bankruptcy in March 2010. This mitigating condition does not apply.  
Under AG & 20(b), the disqualifying condition may be mitigated 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.@ Applicant has had several periods of unemployment. When
he lost his jobs and could not find work, he incurred delinquent debts. In 2008, when he
found employment, he was receiving a steady salary. At that point, he did not pay his
delinquent debts or arrange for a repayment plan. He disputed the student loans
because they were in forbearance. He is ultimately responsible for the accounts.
Applicant has not acted responsibly in paying his accounts under the circumstances.
This mitigating condition applies in part.
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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.@ Applicant has not received formal financial counseling
according to the record evidence. He has not resolved the majority of his delinquent
debts. He has now decided to file for Chapter 13 bankruptcy. This is a legal means of
resolving debts, but his filing is not official, and he has yet to start the bankruptcy
payment plan. His debts are not discharged. His efforts are insufficient to carry his
burden in this case. I conclude these mitigating conditions do not apply.
Applicant’s act of filing for bankruptcy, even if he should receive a discharge in
bankruptcy, does not preclude assessing the security significance of Applicant’s overall
financial problems. He has not established a track record of financial reform. 
AG ¶ 20(e) applies where the evidence shows “the individual has a reasonable
basis to dispute the legitimacy of the past due debt which is the cause of the problem
and provides documented proof to substantiate the basis of the dispute or provides
evidence of actions to resolve the issue.” As stated above, Applicant’s student loans are
not delinquent. He provided documentation to support his assertion. This mitigating
condition applies to SOR allegations 1.h through 1.k.
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.
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 and conclude they are insufficient to
overcome the government’s case. Applicant has worked all his adult life. He has
supported his family. He obtained a degree so that he could enhance employment
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opportunities. He has experienced unemployment on various occasions. He is a hard
worker. He intends to pay his bills when he is financially stable. However, he has not
acted responsibly under the circumstances. When he obtained steady employment, he
did not address his delinquent debts. He had no repayment plan beyond a generalized
intent to pay his creditors. In March 2010, Applicant decided to file for bankruptcy. This
is the first step of a legal means to resolve his debts. However, he has not established a
track record of payments. His plan is not “officially filed.” This plan is insufficient to meet
his burden. Applicant has not mitigated security concerns under the financial
considerations guideline.
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 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: AGAINST APPLICANT
Subparagraphs 1.a: through 1.l: 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 eligibility for a security
clearance. Eligibility for access to classified information is denied.
                                              
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NOREEN A. LYNCH
Administrative Judge