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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
----------------------- )       ISCR Case No. 08-11741
SSN: --------------- )
)
Applicant for Security Clearance )
Appearances
For Government: Jennifer I. Goldstein, Esquire,  Department Counsel
                      Melvin A. Howry, Esquire, Department Counsel
     For Applicant: Pro se
September 21, 2010
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Decision
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MOGUL, Martin H., Administrative Judge:
On July 30, 2009, the Defense Office of Hearings and Appeals (DOHA) issued a
Statement of Reasons (SOR) detailing the security concerns under Guideline F for
Applicant. 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)
promulgated by the President on December 29, 2005, and effective within the
Department of Defense for SORs issued after September 1, 2006. 
 
On August 28, 2009, Applicant replied to the SOR (RSOR) in writing, and he
requested a hearing before an Administrative Judge. The case was assigned to this
Administrative Judge on September 18, 2009. DOHA first issued a notice of hearing on
November 16, 2009, and the hearing was first convened on December 17, 2009.  The
hearing was not concluded on the first day of hearing, and a second day of hearing was
required. DOHA issued a notice of hearing on December 18, 2009, and the second day
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of hearing was scheduled to be heard on January 21, 2010. Because of calendar
conflicts, DOHA issued a second notice of hearing on January 14, 2010, for the second
day of hearing,  and the second day of hearing was scheduled to be heard on February
4, 2010. On February 3, 2010, because of personal issues, the second hearing day was
cancelled and taken off calendar. DOHA issued a fourth notice of hearing on March 2,
2010, and the hearing was scheduled to be heard on March 18, 2010. DOHA issued a
fifth notice of hearing on March 16, 2010, and I convened the second day of hearing on
April 12, 2010. 
The Government offered Exhibits 1 through 6, which were received without
objection. Applicant testified on his own behalf and submitted Exhibits A through I at the
time of the first hearing, which were also admitted without objection. After the second
day of hearing, I granted Applicant’s request to keep the record open until April 19, 2010
to submit additional documents. He timely submitted several additional documents at
the second day of hearing, which have been identified and entered into evidence as
Exhibits J through L. He also submitted a number of documents post hearing second
day that have been identified and entered into evidence collectively as Exhibit M. DOHA
received the transcript for the first day of the hearing (Tr) on January 4, 2010, and the
transcript for the second day of the hearing on April 21, 2010. Based upon a review of
the case file, pleadings, exhibits, and the testimony of Applicant, eligibility for access to
classified information is granted.
Findings of Fact
In his RSOR, Applicant denied all of the SOR allegations.  After a complete and
thorough review of the evidence in the record, including Applicant's RSOR, the admitted
documents, and the testimony of Applicant, and upon due consideration of that
evidence, I make the following findings of fact: 
Applicant is 40 years old. He is unmarried, but was married from 1990 through
1997, and he has two children with his ex-wife, two other children from a previous
relationship and a fifth child, for whom the court has ordered him to pay child support.
He was in the United States Navy from 1986 to 1997, and he received an Honorable
Discharge. Applicant is employed by a defense contractor, and he seeks a DoD security
clearance in connection with his employment in the defense sector.
Guideline F, Financial Considerations
The SOR lists five allegations (1.a. through 1.e.) regarding financial difficulties
under Adjudicative Guideline F.  All of the allegations will be discussed below in the
same order as they were listed on the SOR:
1.a. This overdue debt is cited in the SOR in the amount of $4,654.  At the
hearing, Applicant testified that this debt was for a student loan, as was 1.b. (Tr at 30.)
He stated that both of these loans had been in default, but he had been making
payments of $150 month for approximately one year with a total amount of $2,000, and
the loan had been removed from the default category. Exhibit F, which is a letter from
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the Settlement Unit for the college funds owed by Applicant, dated October 28, 2009,
indicated that Applicant’s two education loans were rehabilitated and are no longer in
default. Applicant now pays $70 a month on these two loans per the agreement, since
he has now rehabilitated the loans. (Tr at 36-38.)
1.b. This overdue debt is cited in the SOR in the amount of $5,510. Applicant
testified that this debt, also for a student loan, has also been removed from the default
category, as reviewed in 1.a., above. Exhibit F confirms that this debt has been
rehabilitated.
1.c. This overdue debt is cited in the SOR in the amount of $4,200. Applicant
testified that this loan is for child support, which he has been paying in various amounts.
(Exhibit 3.) He averred that he was ordered to make payments for a child of whom he
had not been aware, and he is still not certain of the paternity.  He indicated that he was
in arrears because the court had ordered him to make child support payments, but he
had not received notice of the order for several years.  When he went to renew his
license in another state in 2007, that was when he learned of this debt. His wages are
now being garnished to make payments on this debt. 
Applicant testified that he has never been arrears for child support with the two
children he had with his ex-wife. However, he also was paying child support for a child
born out of wedlock, and he testified that he was in arrears for the child support of one
of these children. (Tr at 78-83.)
1.d. This overdue debt is cited in the SOR in the amount of $4,642. Applicant
testified that this debt is the same as 1.a., above. (Tr at 41-42.) He pointed to Exhibit F,
the letter from the Settlement Unit for the college funds, which refers to two student
loans, not the three, as are listed on the SOR. He also testified that he had only taken
out two education loans. (Tr at 62.) I find that this debt is a duplicate of 1.a., above. 
1e. This overdue debt is cited in the SOR in the amount of $294. Applicant
testified that he is unaware of the origin of this debt, and since it is not listed on his
credit report, he is unable to contact a creditor to inquire as to its origin. He is willing and
able to pay this debt, and has actually purchased a money order in the amount of $294
to pay this debt but he cannot locate the creditor, so he is unable to do so. (Tr at 56-58.)
Applicant testified that he got into financial difficulty after his sister died on 2002,
as she had four children, his nephew and three nieces, for whom he took responsibility
after her death. He also had his own business as a mechanic from August 2001 through
August 2006, and he indicated that, at times, the business was not very lucrative. He
then became unemployed, so he decided to return to school, and he received a
certificate in power plant maintenance, jet engines and reciprocating engines. (Tr at 39-
46.) This led to his education loan problems, as discussed above.
During the first day of hearing, based on new information elicited at the hearing
by the cross examination of Applicant, Department Counsel moved to amend the SOR,
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and add additional allegations. The following are the two new allegations which were
added to the SOR:
1.f.  “You failed to file your Federal and State income tax returns for tax year
2008.”
1.g.  “During the approximate period of August 2001 to August 2006, you failed to
report your full income to the Federal Government.” 
After the SOR was amended, at the request of Applicant, the hearing was
continued to give Applicant an opportunity to respond to the new allegations. As
discussed above , the second day of hearing  convened on April 12, 2010.
At the second day of hearing Applicant submitted documents partially showing he
had finally filed tax returns for tax years 2001 through 2009 on February 5, 2010.
(Exhibits K and L.)  He testified that he had not previously filed tax returns for those
years because he thought he could file the tax returns at a later date. He was not aware
they were due on a specific date. (Tr at 44-47.)
Mitigation
Applicant submitted documents confirming his Honorable Discharge from the
Navy on August 1997, and the receipt of several awards and letters of commendation,
during his service. (Exhibit M.) 
Applicant submitted a positive character letter in Exhibit E from his manager for
his current employer. He was described as someone who is an “extremely trust worthy,
(sic) ethical and dedicated employee who can be trusted to perform at the highest
expectation.”  Applicant also submitted five additional character letters from individuals
that have known him in his employment capacity. All of them were extremely positive
and laudatory. In one letter from one of his managers, it states, “His professionalism,
motivation, and work ethics have always been above reproach.” (Exhibit M.) 
Finally, Applicant submitted post hearing copies of his full Federal and state tax
returns for years 2001 through 2009. (Exhibit M.)  Based on the limited income made by
Applicant for these years, the returns showed that Applicant did not owe any Federal or
state tax for any of these years. 
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 are useful in
evaluating an applicant’s eligibility for access to classified information.
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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 over-arching
adjudicative goal is a fair, impartial and common sense 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 as to 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 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 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 and
could potentially apply in this case.  Under AG ¶ 19 (a), “an inability or unwillingness to
satisfy debts” is potentially disqualifying. Similarly under AG ¶ 19 (c), “a history of not
meeting financial obligations” may raise security concerns. I find that both of these
disqualifying conditions apply to Applicant in this case. The evidence has established
that Applicant accumulated significant delinquent debts. 
AG ¶ 20 provides conditions that could mitigate security concerns from financial
difficulties: Under AG ¶  20 (b), “it may be mitigating where 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.” As noted
above, Applicant testified that his financial problems resulted, in part, from the period
when he was unemployed or received reduced income. He also took on the
responsibility of taking care of the four children of his sister after her death. Applicant
has made a legitimate and good-faith effort towards making payments on his two
student loans and bringing them out of default mode, he is paying on his child support
arrearage, which occurred because he was not aware of the order of the court for him to
make payments. I find that Applicant has acted responsibly. Therefore, I find that this
mitigating condition is a factor for consideration in this case. 
Regarding the failure to file tax returns for tax years 2001 through 2008,
Applicant did violate the law by failing to file tax returns, even if he was unaware of his
duty to do so.  However, Applicant has attempted to mitigate the clear legal violation by
finally filing returns for those years, and since no money had been owed to the Federal
or state Governments for those years, this issue is not adverse under Financial
Concerns. Therefore, I conclude that Applicant has mitigated the Financial Concerns of
the Government.
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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. Based on all of the reasons cited
above as to why the Mitigating Condition applies, together with the very strong
recommendations on his behalf and his honorable service to the United States Navy, I
find that the record evidence leaves me with no significant questions or doubts as to
Applicant’s eligibility and suitability for a security clearance under the whole-person
concept. For all these reasons, I conclude Applicant has mitigated the security
concerns. 
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. through 1.g.: For Applicant
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Conclusion
In light of all of the circumstances presented by the record in this case, it is
clearly consistent with national security to grant Applicant eligibility for a security
clearance.  Eligibility for access to classified information is granted.
                                              
Martin H. Mogul
Administrative Judge