Item 5.1
Item 1.2
1
                                                                     
                               DEPARTMENT OF DEFENSE
                DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
---------, --------- ------ )       ISCR Case No. 09-02239
SSN: ------ ---- -------- )
)
Applicant for Security Clearance )
Appearances
For Government: Jeff A. Nagel, Esquire, Department Counsel
For Applicant: Pro se
______________
Decision
______________
WHITE, David M., Administrative Judge:
Applicant admittedly owed nine delinquent debts totaling more than $62,000. She
filed for Chapter 7 bankruptcy relief in August 2009, but failed to provide documentation
concerning the outcome of that case. Her December 2009 credit report makes no
mention of a bankruptcy filing, and she provided no evidence of other resolution of
those debts. 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 December 15,
2008.  On September 17, 2009, the Defense Office of Hearings and Appeals (DOHA)1
issued a Statement of Reasons (SOR) to Applicant, detailing security concerns under
Guideline F (Financial Considerations).  The action was taken under Executive Order2
10865, Safeguarding Classified Information within Industry (February 20, 1960), as
amended; Department of Defense Directive 5220.6, Defense Industrial Personnel
Items 3 and 4.3
The Government submitted 11 Items in support of the SOR allegations.4
Item 5.5
Item 3; Item 4; Item 7; Item 8.6
Item 4; Item 6.7
2
Security Clearance Review Program (January 2, 1992), as amended (Directive); and the
adjudicative guidelines effective within the Department of Defense for SORs issued
after September 1, 2006. 
Applicant answered the SOR in writing on September 25, 2009, and again on
November 22, 2009, and requested that her case be decided by an administrative judge
on the written record without a hearing.  Department Counsel submitted the3
Government’s written case on December 30, 2009. A complete copy of the File of
Relevant Material (FORM)  was provided to Applicant, and she was afforded an4
opportunity to file objections and submit material in refutation, extenuation, or mitigation
within 30 days of her receipt of the FORM. 
Applicant signed the document acknowledging receipt of her copy of the FORM
on January 22, 2010, and returned it to DOHA. She provided no further response to the
FORM within the 30-day period, did not request additional time to respond, and made
no objection to consideration of any evidence submitted by Department Counsel. I
received the case assignment on March 24, 2010.
Findings of Fact
Applicant is a 61-year-old employee of a defense contractor, where she was
hired in September 2008. She has no military service. This is her first application for a
security clearance. She is single, with one adult child who lives in a different state.
Applicant earned an associate’s degree in May 2006. Prior to her current job, she
worked in various occupations including as a telephone company agent, a pet groomer
and trainer, a school custodian, and a restaurant bar manager.  In her responses to the5
SOR, she formally admitted the allegations in SOR ¶¶ 1.a through 1.i. Applicant’s
admissions, including her responses to the SOR, and to DOHA interrogatories, are
incorporated in the following findings.
Applicant admitted owing each of the 9 delinquent debts alleged in SOR ¶ 1,
totaling $62,180.  All of these debts became delinquent in 2007 or 2008, after she was6
out of work for 2 months recovering from carpal tunnel surgery on both wrists and then
quit her pet grooming job due to problems with new ownership.  She neither7
documented, nor claimed to have completed, arrangements to repay any of these
debts. On August 26, 2009, she filed for Chapter 7 bankruptcy relief. She completed the
first of two credit counseling sessions required in connection with her bankruptcy on
Item 4. Applicant submitted only the “Notice of Chapter 7 Bankruptcy Case, Meeting of Creditors, & Dead-8
lines” page of her bankruptcy case file. Neither schedules, nor documentation concerning a final discharge
were provided. 
Item 3.9
Item 11.10
Item 6; Item 7.11
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May 26, 2009. This counseling session was conducted via the internet, and did not
include preparation of a debt repayment plan.  In her second response to the SOR,8
dated November 11, 2009, Applicant stated that she had “finished going through
bankruptcy for these bills,” but provided no additional documentation to substantiate the
status of her bankruptcy.  Department Counsel submitted a credit report for Applicant,9
dated December 30, 2009, which makes no mention of any bankruptcy filing or
discharge, and continues to reflect outstanding delinquent debts alleged in the SOR.  10
Applicant provided no evidence of financial counseling, except that noted above.
The only budget information she provided, from which to determine her present or future
solvency, consisted of undocumented statements to the investigator from the Office of
Personnel Management (OPM) in February 2009, and estimates contained in a letter
she submitted on May 19, 2009. During the interview, she said her average monthly
income was about $1,405, and her monthly expenses averaged about $1,267, leaving
her a net remainder of $138. In her May letter, she said her monthly bills were “about
$1,023 per month before eating,” and she made between $900 to $1,100 per month.  11
Applicant submitted no other evidence describing her character, trustworthiness,
or work performance. Department Counsel pointed out her lack of documentation
concerning completion of bankruptcy proceedings, or other form of debt resolution, in
the Argument section of the FORM, and identified the need for her to submit such
documentation to establish mitigation. Applicant failed to respond to the FORM with any
additional information. I was unable to evaluate her credibility, demeanor, or character
in person since she elected to have her case decided without a hearing.
Policies
When evaluating an applicant’s suitability for a security clearance, the
administrative judge must consider the 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
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to AG ¶¶ 2(a) and 2(c), the entire process is a conscientious scrutiny of applicable
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. 
FORM at 4.12
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Department Counsel argued that the evidence established security concerns
under two Guideline F DCs, as set forth in AG ¶ 19: 
(a) inability or unwillingness to satisfy debts; and
(c) a history of not meeting financial obligations.  12
Applicant has been unable to satisfy nine delinquent debts, totaling more than
$62,000, which arose between 2007 and 2008. DC 19(a) and (c) were clearly
established, thereby shifting the burden to Applicant to rebut, extenuate, or mitigate the
resulting security concerns. 
The guideline includes four conditions in AG ¶ 20 that could mitigate security
concerns arising from Applicant’s financial difficulties:
(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; 
(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;
(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; and 
(d) the individual initiated a good-faith effort to repay overdue creditors or
otherwise resolve debts.
Applicant’s financial concerns involve nine different accounts, span the past three
years, and continue to date, with no documentation of any effective steps toward
resolution. She did not demonstrate that these obligations will be resolved anytime
soon, or that she can avoid additional delinquencies in the future. The evidence does
not support the application of MC 20(a). 
Applicant was underemployed for some of the time since 2007, but she provided
no evidence tending to show that the causes of this underemployment were largely
beyond her control. She was off work for two months due to carpal tunnel surgeries, but
other than these scheduled surgeries, she made no showing that the debts she incurred
arose from conditions that were beyond her control. She told the OPM investigator that
she quit her pet grooming job in 2007 because of problems she had with the new owner
Item 7 at 5.13
ISCR Case No. 06-12930 at 2 (App. Bd. Mar. 17, 2008) (quoting ISCR Case No. 04-09684 at 2-3 (App.14
Bd. Jul. 6, 2006)). 
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of the business.  Finally, she provided nothing to substantiate that she acted13
responsibly under the circumstances, so only limited mitigation under MC 20(b) was
established.
Applicant documented minimal financial counseling, and provided insufficient
evidence of a good-faith effort to resolve her outstanding debts. If she can demonstrate
that her former debts were discharged in bankruptcy, and that her present financial
situation has improved to the point that she will not incur additional delinquent debt, that
would provide much stronger mitigation should she reapply for a clearance when she is
eligible to do so. On the present record, however, Applicant failed to establish mitigation
under MC 20(c) or MC 20(d). “An applicant is not required to show that she has
completely paid off her indebtedness, only that she has established a reasonable plan
to resolve her debts and has taken significant actions to implement that plan.”14
Applicant failed to meet her burden in this regard.
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
relevant facts and circumstances surrounding this case. Applicant is a mature,
educated, and experienced individual, who is responsible for her voluntary choices and
conduct that underlie the security concerns expressed in the SOR. Her financial
irresponsibility spans the past three years, and continues at present from all indications
in the record. She demonstrated little effective effort to resolve her debts since gaining
her current employment almost two years ago. She remains subject to coercion and
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duress from her financial obligations, and made no showing that such problems are
unlikely to continue or recur. 
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 her 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.i: 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