KEYWORD: Guideline F
DIGEST: Applicant’s having held a clearance for many years without incident does not preclude
the Government from denying him one due to his financial problems.  Hearing Office decisions
are not binding on the Board.  The Board cannot consider new evidence on appeal.  Adverse
decision affirmed.  
CASENO: 09-00395.a1
DATE: 06/08/2010
DATE: June 8, 2010
In Re:
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Applicant for Security Clearance
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ISCR Case No. 09-00395
APPEAL BOARD DECISION
APPEARANCES
FOR GOVERNMENT
James B. Norman, Esq., Chief Department Counsel
FOR APPLICANT
Pro se
The Defense Office of Hearings and Appeals (DOHA) declined to grant Applicant a security
clearance.  On July 9, 2009, DOHA issued a statement of reasons (SOR) advising Applicant of the
basis for that decision–security concerns raised under Guideline F (Financial Considerations) of
Department of Defense Directive 5220.6 (Jan. 2, 1992, as amended) (Directive).  Applicant
requested a hearing.  On May 18, 2010, after the hearing, Administrative Judge Rita C. O’Brien
denied Applicant’s request for a security clearance.  Applicant appealed pursuant to Directive ¶¶
E3.1.28 and E3.1.30.
Applicant raised the following issues on appeal: whether the Judge erred in her evaluation
The Judge stated that she was considering the purchase of these two unalleged properties as part of the whole1
person analysis.  Although Applicant has challenged her whole person analysis, we find no reason to conclude that the
Judge erred.  Evidence concerning these properties is relevant to an evaluation of such factors as the nature, extent and
seriousness of Applicant’s financial situation; the circumstances underlying Applicant’s conduct; the frequency and
recency of Applicant’s conduct; and the presence or absence of rehabilitation.  See Directive ¶ E2.2(a).  
of Applicant’s credibility; whether the Judge erred in her application of the pertinent mitigating
conditions; and whether the Judge’s application of the whole-person factors was erroneous.  Finding
no error, we affirm.
Applicant began working for Federal contractors in 2001 in the field of information systems
security.  He began working for his current employer, a Defense contractor, in 2008.  He is married
with four children, two of which are from a previous marriage.  He served in the Navy from 1995
to 1999, receiving his first security clearance during that time.  
He started investing in real estate in 2005.  He purchased an undeveloped lot (Lot A) for
$186,000, financing 100% of the purchase.  Later that year he purchased a house for $660,000,
financing 100% of the price by means of two mortgages.  The Judge also found that Applicant
purchased two other properties, which were not alleged in the SOR.  Both were undeveloped lots,
although he built a house on one.   1
Applicant subsequently put Lot A up for sale.  This was done in 2005, even though he
testified that he had purchased it as a long-term investment.  He was unsuccessful in his attempts to
sell Lot A.  In 2007, his wife gave birth to twins, which affected his financial situation.  He became
unable to pay his mortgages and contacted his creditors to see if he could work out a favorable
resolution.  Although the lender for Lot A and the lender on the first mortgage for his house were
willing to negotiate loan modifications, the lender on the second mortgage on the house was not. 
Applicant used credit cards to help with his mortgage payments, as well as a personal loan
to the same effect.  He entered into a contract with a consumer credit agency to assist him in settling
his delinquent credit card debts.  Additionally, on the advice of an attorney, Applicant filed for
Chapter 7 bankruptcy protection.  He was discharged in bankruptcy just prior to the hearing in his
case.  
Applicant enjoys an excellent reputation for the quality of his job performance, for his
trustworthiness, and for his integrity. 
In the Analysis portion of the Decision, the Judge stated, 
When Applicant purchased properties that were beyond his ability to afford, even
with his substantial salary, he was not acting reasonably . . . His speculating was
neither prudent nor successful.  It led to bankruptcy and the loss of his family’s
home.  Applicant’s past risky conduct, and his contradictory testimony, indicate a
lack of credibility, reliability, and good judgment.  Overall, doubts remain as to
Applicant’s suitability for a security clearance.  Decision at 7-8, 9.  
Accordingly, the Judge denied Applicant’s request for a clearance.   
Applicant challenges the Judge’s credibility determination.  Specifically, he contends that
the Judge erred in concluding that he had given inconsistent reasons during the hearing for having
made the real estate purchases at issue here.  We have considered Applicant’s argument in light of
the record.  Applicant testified that he purchased the properties as investments for his retirement and
his children’s education. Tr. at 35.  He also testified that he intended to “flip” the properties to make
money (Tr. at 78), which is not totally consistent with the previous statement.  Additionally,
Applicant’s attempt to explain his reasons for the purchases was somewhat confusing.  Tr. at 77.
We find no reason to disturb the Judge’s credibility determination.  See Directive ¶ E3.1.32.1.    
Applicant draws attention to record evidence that he has held a security clearance for many
years without incident or concern.  The Judge was required to consider this, along with all the other
evidence in the record.  However, the government need not wait until an individual mishandles or
fails to safeguard classified information before it can make an unfavorable security clearance
decision.  ISCR Case No. 08-00435 at 3 (App. Bd. Jan. 22, 2009), citing Adams v. Laird, 420 F. 2d
230, 238-239 (D. C. Cir. 1969), cert. denied 397 U.S. 1039 (1970).  Applicant cites to new evidence
in support of his appeal.  For example, he has attached to his Appeal Brief a timeline charting the
collapse of the U.S. housing market circa 2007.  However, we cannot consider this new evidence.
See Directive ¶ E3.1.29. (“No new evidence shall be received or considered by the Appeal Board”).
See also ISCR Case No. 08-06875 at 2 (App. Bd. Oct. 29, 2009); ISCR Case No. 08-06518 at 2
(App. Bd. Mar. 3, 2009).  
Applicant cites to other Hearing Office decisions which, he contends, support his case for
mitigation.  The Board gives due consideration to these cases.  However, each case must be decided
upon its own merits.  Directive, Enclosure 2 ¶ 2 (b).  Moreover, Hearing Office decisions are binding
neither on other Hearing Office Judges nor on the Board.  See ISCR Case No. 06-24121 at 2 (App.
Bd. Feb. 5, 2008).  Applicant’s case has significant differences from those which he cites, in terms
of the extent of his mortgage indebtedness and his substantial credit card debt as well.  
After reviewing the record, we conclude that the Judge examined the relevant data and
articulated a satisfactory explanation for the decision, “including a ‘rational connection between the
facts found and the choice made,’” both as to the mitigating conditions and the whole-person factors.
Motor Vehicle Mfrs. Ass’n of the United States v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43
(1983)(quoting Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962)).  The Judge
gave due consideration to Applicant’s mitigating evidence, noting that the housing downturn and the
birth of twins were circumstances outside his control which affected his financial condition.
However, she reasonably explained that Applicant’s having incurred such extensive mortgage debt
in relation to his income undermines his claim of reliability and good judgement.  The Judge’s
adverse decision is sustainable on this record.  “The general standard is that a clearance may be
granted only when ‘clearly consistent with the interests of the national security.’”  Department of the
Navy v. Egan, 484 U.S. 518, 528 (1988). 
Order
The Judge’s adverse security clearance decision is AFFIRMED.  
Signed: Jeffrey D. Billett              
Jeffrey D. Billett
Administrative Judge
Member, Appeal Board
Signed: William S. Fields            
William S. Fields
Administrative Judge
Member, Appeal Board
Signed: James E. Moody            
James E. Moody
Administrative Judge
Member, Appeal Board