DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 09-00292 
  ) 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Richard Stevens, Esquire, Department Counsel 
For Applicant: Michael Mumford, Personal Representative 
 
 
______________ 
 
Decision 
______________ 
 
CREAN, Thomas M., Administrative Judge: 
 
Applicant submitted a Questionnaire for Sensitive Positions (SF 86) for an 
upgrade of her security clearance with a defense contractor on August 20, 2008. After 
an investigation conducted by the Office of Personnel Management (OPM), the Defense 
Office of Hearings and Appeals (DOHA) issued a Statement of Reasons (SOR), dated 
August 28, 2009, to Applicant detailing security concerns for financial considerations 
under Guideline F. 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 adjudicative guidelines 
(AG) effective within the Department of Defense on September 1, 2006. Applicant 
acknowledged receipt of the SOR on August 31, 2009. 
 
 Applicant answered the SOR on October 9, 2009, admitting the four allegations 
under Guideline F with explanation. Initially, Applicant requested a decision on the 
written record. Subsequently after talking to Department Counsel, Applicant requested a 
hearing before an administrative judge. (Court Exhibit I, Request, dated January 7, 
2010) Department Counsel was prepared to proceed on January 13, 2010, and the 
case was assigned to me the next day. DOHA issued a Notice of Hearing on January 
 
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27, 2010, scheduling a hearing for March 12, 2010. I convened the hearing as 
scheduled. The government offered seven exhibits, marked Government Exhibits (Gov. 
Ex.) 1 through 7 which were admitted without objection. Applicant and one witness 
testified on her behalf. Applicant offered eight exhibits marked Applicant Exhibits (App. 
Ex.) A through H which were admitted without objection. DOHA received the transcript 
of the hearing (Tr.) on March 22, 2010. I kept the record open for Applicant to submit 
additional documents. Applicant timely filed four additional documents marked App. Ex. 
I through L, which were received without objection. (Gov. Ex. 8, Memorandum, dated 
March 26, 2010) Based on a review of the case file, pleadings, exhibits, and testimony, 
eligibility for access to classified information is granted.  
 
Findings of Fact 
 
 Applicant admitted the four factual allegations in the SOR with explanation. I 
included Applicant's explanation in my findings of fact. After a thorough review of the 
pleadings, transcript, and exhibits, I make the following essential findings of fact.   
 
Applicant is 44 years old, and has worked as a software engineer in the defense 
industry for over 21 years. Most of her employment was with one defense contractor. 
She is a college graduate with a bachelor's degree in electrical engineering awarded in 
1989, and a master's degree in computer science awarded in 2004. She has held a 
security clearance for over 21 years. She married in 1993, and has two children ages 
ten and fourteen. Applicant's yearly salary is approximately $94,000. Her husband's 
yearly salary as a health care business analyst has fluctuated but is now approximately 
$48,000, for a yearly family income of $142,000. Applicant and her husband estimate 
their monthly discretionary funds are approximately $700. (Tr. 11-19, 51-57; Gov. Ex. 1, 
SF 86, dated august 20, 2008; Gov. Ex. 5, Statement, dated October 23, 2003)  
 
Credit reports (Gov. Ex. 6, Credit report, dated September 20, 2008; and Gov. 
Ex. 7, Credit report, dated July 8, 2009) show the following delinquent debts for 
Applicant: a charge off loan for $9,142 (SOR 1.a); a charged off credit card account for 
$8,726 (SOR 1.b); a collection account on a credit card for $1,354 (SOR 1.c); and a 
mortgage debt past due more than 120 days on a balance of $382,000 (SOR 1.d). 
 
The delinquent debt at SOR 1.d concerns Applicant's mortgage. Applicant and 
her husband had good credit history until they purchased a house in 2005 and 
encountered mortgage administration and payment problems. The couple purchased a 
lot in a subdivision and had a house built on it starting in 2005. The house was financed 
by a mortgage. The initial mortgage payments included only principle and interest and 
not taxes since the house was new and the amount of tax on the house was unknown. 
Applicant and her husband were advised to anticipate the property taxes to be 
approximately $6,000. In March 2006, they received the annual tax assessment which 
was lower, since they only paid property tax for an unimproved lot for part of the tax 
years. They paid the bill since they had been keeping funds aside for that purpose. 
They continued to keep funds aside in 2006.  
 
 
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Their mortgage company, in keeping with the common business practice, sold 
the mortgage to another mortgage company who in turn sold it again to another 
mortgage company. In March 2007, when the property taxes became due, the new 
mortgage company paid the property tax without notifying Applicant. When Applicant's 
husband called the tax office to pay the 2007 property tax assessment, he was informed 
that the mortgage company had already paid the property tax. Applicant's husband 
immediately called the mortgage company, offering to reimburse them for the 2007 
taxes. Instead the mortgage company informed him that they would amortize the 
payments over the next year. The mortgage company also increased their payments to 
reflect the anticipated following year's tax assessment. Their monthly payments 
increased almost $2,000. Applicant and her husband paid $4,791.40, as requested by 
the mortgage company, from March 2007 until March 2008. In March 2008, the monthly 
mortgage payment dropped to approximately $2,798. Applicant has paid the monthly 
mortgage on time each month in the amount requested by the mortgage company. 
However because of the tax payment issue, the mortgage company reported that the 
mortgage was past due in some amount. Applicant and her husband requested a 
mortgage loan modification which has been approved by the mortgage company. This 
will further lower their monthly mortgage payments. (Tr. 32-66; App. Ex. G, Bank 
Statements from March 2008 until February 2010; App. Ex. G, Mortgage Account 
Statement, dated August 29, 2008; App. Ex. I, Loan Modification, dated October 27, 
2009) 
 
The delinquent debt at SOR 1.a is for a loan of $7,000 that with interest and fees 
is now for $9,142. Applicant and her husband used the loan to pay living expenses 
when the mortgage payments were in dispute and the payments increased by over 
$2,000. Applicant received a settlement offer from the loan company for $5,443.70. 
However, Applicant is paying the loan by automatic direct deposit at the rate of $400 per 
month. Applicant has paid over $1,300 from December 2009 until the hearing in March 
2010. (Tr. 21-26; App. Ex. A, Settlement offer, dated December 224, 2009; App. Ex B, 
C, D, Bank Statements January, February, March 2010)  
 
The delinquent debt at SOR 1.b is for a credit card Applicant and her husband 
used to pay living expenses while their mortgage payments were in flux. Applicant 
already had the credit card with a balance owed when the mortgage issue occurred. 
Applicant is making $300 monthly automatic direct deposit payments on this account. 
(Tr. 21-26; App. Ex. M, Bank Statement, dated March 24, 2010)   
 
The delinquent debt at SOR 1.c is for a credit card. The debt was paid in full in 
October 2009. (Answer to SOR, Letter, dated October 29, 2009) 
 
Applicant has received special awards for her exceptional performance with the 
defense contractor. (App. Ex. F, Certificate, dated December 15, 2006) Her 
performance ratings show that she meets or exceed expectations for her job 
performance. (App. Ex. K, Rating, May 2008, June 2009; App. Ex. L, Performance 
rating, January 2003 to December 2003) 
 
 
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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(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, 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 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 
 
Financial Considerations: 
 
 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 
 
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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 
(AG ¶ 18). Similarly, an individual who is financially irresponsible may also be 
irresponsible, unconcerned, or careless in their obligations to protect classified 
information. Behaving responsibly or irresponsibly in one aspect of life provides an 
indication of how a person may behave in other aspects of life.  
 
 A person’s relationship with her creditors is a private matter until evidence is 
uncovered demonstrating an inability or unwillingness to repay debts under agreed 
terms. Absent evidence of strong extenuating or mitigating circumstances, an applicant 
with a history of serious or recurring financial difficulties is in a situation of risk 
inconsistent with the holding of a security clearance. An applicant is not required to be 
debt free, but is required to manage her finances in such a way as to meet her financial 
obligations. Applicant's delinquent debts as reported in credit reports and admitted by 
Applicant are a security concern raising Financial Consideration Disqualifying 
Conditions (FC DC) AG ¶ 19(a) (inability or unwillingness to satisfy debts), and FC DC 
AG ¶ 19(c) (a history of not meeting financial obligations). Applicant incurred delinquent 
debts when her mortgage was miscalculated and she and her husband used credit 
cards and a loan to pay living expenses.  
 
 I considered Financial Considerations Mitigating Conditions (FC MC) AG ¶ 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), and FC MC AG ¶ 20(b) (the 
conditions that resulted in the financial problems 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). The mitigating conditions apply. Applicant's delinquent debts 
occurred when her mortgage company paid the property tax on the property 
unbeknownst to Applicant and then doubled her mortgage payments. Applicant and her 
husband continued to make their monthly mortgage payments as requested by the 
mortgage company. They set aside funds for property taxes as recommended by the 
mortgage company. Applicant had to use credit cards and a loan to meet their living 
expenses. The mortgage problem occurred under very unusual circumstances and was 
beyond Applicant's control. She acted reasonably by having the mortgage modified, and 
timely making her mortgage payments as requested by the mortgage company. She 
paid one of the debts incurred to meet living expenses and has payments plan for the 
two remaining debts.  
 
I considered FC MC AG ¶ 20(d) (the individual has initiated a good-faith effort to 
repay the overdue creditors or otherwise resolve debts). For FC MC AG ¶ 20(d) to 
apply, there must be an “ability” to repay the debts, the “desire” to repay, and “evidence” 
of a good-faith effort to repay. A systematic method of handling debts is needed. 
Applicant must establish a "meaningful track record" of debt payment. A "meaningful 
track record" of debt payment can be established by evidence of actual debt payments 
 
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or reduction of debt through payment of debts. An applicant is not required to establish 
that she paid each and every debt listed. The entirety of an Applicant’s financial 
situation and her actions can reasonably be considered in evaluating the extent to which 
that Applicant’s plan for the reduction of his outstanding indebtedness is credible and 
realistic. 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. Likewise, there is no requirement that the first debts actually 
paid in furtherance of a reasonable debt plan be the ones listed in the SOR. All that is 
required is that Applicant demonstrates she has established a plan to resolve her 
financial problems and taken significant actions to implement that plan.   
 
Applicant's financial problems were caused by a condition beyond her control. 
She and her husband paid their mortgage and set aside funds to pay the property taxes. 
The mortgage company without notice to Applicant paid the property tax increasing her 
mortgage payments. She used credit cards and a loan to pay their normal living 
expenses. She is current with her mortgage and has entered a loan modification to keep 
payments within her limits. She paid one loan in full and is making monthly automatic 
payments on the other two loans. Applicant's actions paying and resolving her 
delinquent debts is significant and credible information to establish a meaning track 
record of debt payment, and shows that she acted reasonably under the circumstances.  
 
Whole-Person Analysis  
 
 Under the whole-person concept, the administrative judge must evaluate an 
applicant’s security eligibility by considering the totality of the applicant’s conduct and all 
the circumstances. An 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 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 that Applicant is a 
highly regarded employee with excellent performance ratings. She held a security 
 
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clearance for over 21 years with no security issues. Her record shows she is 
trustworthy, reliable, honest, competent, capable, and exercises good judgment.  
 
Applicant established a "meaningful track record" of debt payment, including 
evidence of actual debt reduction through payment of debts. Applicant presented 
sufficient information to show she is taking reasonable and responsible action to resolve 
her financial issues. Her mortgage issues, which started her financial problems, were 
caused by her mortgage company and not by her. She is current with her mortgage and 
has the ability to make her mortgage payments. She paid one of her other debts and 
has payment plans and is paying her two remaining debts. Applicant's management of 
her finances and payment of past obligations indicates she will be concerned, 
responsible, and careful regarding classified information. Applicant mitigated security 
concerns based on her finances. Overall, on balance the record evidence leaves me 
without questions and doubts as to Applicant’s eligibility and suitability for a security 
clearance. For all these reasons, I conclude Applicant mitigated security concerns 
arising from 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 
 
  Subparagraphs 1.a - 1.d:  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. 
 
 
 
_________________ 
THOMAS M. CREAN 
Administrative Judge