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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
                    )       ISCR Case No. 09-05680
SSN: )
)
Applicant for Security Clearance )
Appearances
For Government: Gina Marine, Esquire, Department Counsel
For Applicant: Pro se  
______________
Decision
______________
HENRY, Mary E., Administrative Judge:
Based upon a review of the case file, pleadings, exhibits, and testimony, I grant
Applicant’s eligibility for access to classified information.
Applicant signed her Electronic Questionnaire for Investigations Processing (e-
QIP) on June 23, 2009. The Defense Office of Hearings and Appeals (DOHA) issued
Applicant a Statement of Reasons (SOR) on September 25, 2009 detailing security
concerns under Guideline F, Financial Considerations, that provided the basis for its
preliminary decision to deny her a security clearance. 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) implemented on September 1, 2006. 
 
Applicant received the SOR, and submitted an answer to the SOR in writing on
October 19, 2009. Applicant requested a hearing before an administrative judge. DOHA
GE 1; Tr. 18, 20, 42.1
GE 1; Tr. 18.2
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received the request and Department Counsel was prepared to proceed in October
2009. DOHA initially assigned this case to another administrative judge on February 22,
2010, who proposed a hearing on April 8, 2010. Applicant timely filed a request for a
continuance of her hearing for medical reasons. The administrative judge granted her
request for a continuance. DOHA reassigned the case to me on April 20, 2010 for
workload considerations. DOHA issued a notice of hearing on May 7, 2010, and I
convened the hearing as scheduled on May 27, 2010. The Government offered three
exhibits (GE), which were admitted into evidence as GE 1 through 3 without objection.
Applicant testified and submitted 10 exhibits (AE), which were admitted into evidence as
AE A through J without objection. DOHA received the transcript of the hearing (Tr.) on
June 11, 2010. I held the record open until June 28, 2010, for Applicant to submit
additional matters. Applicant timely submitted Exhibits AE K through AE EE, without
objection. The record closed on June 28, 2010.
Procedural and Evidentiary Rulings
Notice
Applicant received the hearing notice on May 18, 2010, less than 15 days before
the hearing. I advised Applicant of her right under ¶ E3.1.8 of the Directive to 15 days
notice before the hearing. (Tr. 8) Applicant affirmatively waived her right to 15 days
notice. (Id.) 
Findings of Fact
In her Answer to the SOR, Applicant admitted the factual allegations in the SOR.
Her admissions are incorporated herein as findings of fact. She also provided additional
information to support her request for eligibility for a security clearance. After a complete
and thorough review of the evidence of record, I make the following additional findings
of fact.  
Applicant, who is 42 years old, works as an acquisitions program analyst in
administrative support for a Department of Defense contractor. She began her current
job in June 2009.1
Applicant was born in the former Union of Soviet Socialist Republics (Russia).
She moved to the United States when she was 12 years old and became a naturalized
United States citizen in 1987. She received a bachelor’s degree in French and
economics. She married in 2000. She has three children, ages 7, 5, and 5 months (born
in April 2010), and a 23-year-old step-daughter.2
AE N; Tr. 21.3
GE 1; 21, 24-25.4
AE 0; AE Q; AE R; AE T; AE DD; Tr. 22, 26, 83.5
GE 3; Tr. 26, 28, 54-56.6
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Applicant’s husband owns and operates a small construction business. His
business involves construction, remodeling, and home inspections. Applicant and her
husband also own residential rental properties. When they started dating in the late
1990s, her husband owned both units of a duplex and she owned a property. After they
married, Applicant and her husband would purchase a property, live in it while they
renovated it, then rent the property, and purchase and move to their next house They
continued this process until 2005. By 2005, they owned a total of seven properties,
including both units of a duplex. They lived in one property and rented the other
properties. They purchased these properties as an investment for their retirement and
their children’s education.3
Applicant worked full-time until 2004, when she decided to stay home after the
birth of her second child. She began working part-time in her husband’s business and
managing the rental properties. His business provided the only source of their
household income. The rental income generally covered the costs associated with their
rental properties.4
In 2006, Applicant’s husband’s business earned less income than in prior years
because, as part of their long-term investment plan, they renovated a house and built an
addition to it. Her husband’s business income improved in 2007. However, by the end of
2007 or early 2008, his business began to decline as a result of the economic downturn.
The construction and housing business work, including home inspections, stopped.
Their rental business also began to suffer, as several tenants stopped paying rent after
they lost their jobs. Applicant evicted two tenants in the summer of 2008. She rented
one of these properties again and her family moved into the other property. She evicted
five tenants, including the new tenant, in 2009 for the nonpayment of rent. In addition to
lost rental income, Applicant incurred at least $2,500 in legal costs for these evictions.
Applicant and her husband incurred repair expenses to these properties after their
tenants had been evicted. Some tenants damaged the property in retaliation for their
eviction.5
By late summer of 2008, Applicant and her husband realized the recession was
not ending. Both began to apply for jobs. She obtained her current job after 10 months
of job searching. During this time, they used savings, rental income, and credit cards to
pay their bills and repairs expenses on their rental property. They accumulated
significant debt on five credit cards. By late 2008, they defaulted on their mortgage
payments on their rental properties. They paid the mortgage on their personal
residence. They also fell behind on their large credit card payments, but paid the
smaller credit accounts.6
AE E.7
AE D; Response to SOR.8
Response to the SOR; Tr. 41-45.9
AE J; AE K; AE L; Tr. 30, 32-34, 78-79.10
Applicant did not work in March, April, and the first week of May 2010 as she was on maternity leave. She11
received short-term disability during this time. She provided documentation showing her disability income in
April and early May. Her May earnings statement indicated a lower income because she did not work the first
week of May. AE W .
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In October 2009, Applicant and her husband met with a financial advisor to
discuss their financial situation. He reviewed their business and rental investments. He
attributed their financial problems to the economic downturn and a decrease in
construction work for her husband. He indicated that they had “good financial
stewardship” until the economic downturn. They lived modestly, spent frugally, and
displayed financial discipline.   Their accountant verified that they had financial stability7
until the economic downturn in late 2007.8
Applicant and her husband also met with an attorney in 2009 to discuss their
legal options. He discussed filing for bankruptcy, but also suggested that they contact
their mortgage lenders and creditors to try and develop a mutually beneficial resolution
to their financial problems. One credit card company offered to settle her account for
one-third of its balance if Applicant paid the offer in cash in full. She did not have the
money to make this payment and the creditor refused to accept a monthly payment plan
on the offer. Her attorney confirmed that the mortgage lenders and creditors would not
work with her. On the advice of her attorney, Applicant stopped making payments on all
her credit cards.     9
           Applicant and her husband filed for bankruptcy on March 4, 2010. They included
all their properties and credit card debts in the bankruptcy petition, which includes all the
debts listed in the SOR. Applicant attended and completed the personal financial
management course required by the bankruptcy court. The mortgage holders on several
of their properties changed in 2009, which accounts for a change in the debt ownership
of some SOR mortgage debt. None of the creditors appeared for the bankruptcy
creditors’ meeting. Applicant and her husband reaffirmed the mortgage debt on their
personal residence, which has been timely paid throughout the last two years. They
also reaffirmed two personal loans against their 2000 truck and 2002 minivan. The
bankruptcy court discharged their remaining debts under Chapter 7 on June 17, 2010.10
Applicant earns approximately $4,190 a month in gross income and $3,645 in net
income.  Applicant’s husband obtained part-time work with a builder in 2009. His11
worked began to decline in April 2010. He earned a total gross income of $8,356
through May 31, 2010 from his part-time job. His remodeling business work has started
to increase and Applicant anticipates he will again receive income from his business.
AE W ; AE X; AE Y.12
AE Z; AE AA,; AE BB; AE CC.13
GE 1; GE 2; AE F.14
AE A; AE B; AE C; Response to SOR.15
AE F; AE G; AE H; AE I. 16
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Their monthly expenses total approximately $3,870. With her husband’s income,
Applicant has sufficient income to pay her monthly expenses. Some expenses are more
flexible than others.  12
Applicant attempted to obtain copies of her monthly statements from four credit
card companies. She received some information on two accounts. By the time she
closed one account in 2007, she had paid more than $4,200 in charges. In one month ,
she made a $3,800 payment. On the second account, she showed that she paid twice
the minimum payment in May 2007.13
Applicant borrowed $10,000 from a long-time friend in 2005 and repaid her friend
with interest within a year. The credit reports of record reflect that Applicant paid her
mortgage payments, paid mortgage debts in full, paid her credit cards as agreed, and
paid credit cards in full. The credit reports also indicate that Applicant started falling
behind on her mortgages in late 2008 and on her credit card payments around the same
time.14
The Vice President of Applicant’s employer and the Chief of Contracts with the
Government highly recommend Applicant for a security clearance. Both describe her as
trustworthy, dependable, and loyal. She has good judgment and is a person of integrity.
Because of these qualities, they selected her to work on a very sensitive General
Accounting Office audit, They praise her handling of this job assignment. Applicant
volunteers with the local sheriff’s office, teaching self-defense classes and working as
an interpreter in French and Russian. ,15
Friends and former co-workers also describe her as trustworthy, honest, and
hard-working. Two friends indicated that she paid her bills and helped them to learn to
manage their finances. She has not taken a vacation in 10 years.16
Policies
When evaluating an applicant’s suitability for a security clearance, the
administrative judge must consider the adjudicative guidelines. In addition to brief
introductory explanations for each guideline, the adjudicative guidelines list potentially
disqualifying conditions and mitigating conditions, which are used 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 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, an applicant is
responsible for presenting “witnesses and other evidence to rebut, explain, extenuate,
or mitigate facts admitted by applicant or proven by Department Counsel. . . .” An
applicant has the ultimate burden of persuasion for 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 an 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).  
Analysis
Guideline F, Financial Considerations
The security concern 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
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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. 
AG ¶ 19 describes the disqualifying conditions that could raise security concerns.
I have considered all the conditions, and especially the following:
19(a) inability or unwillingness to satisfy debts.  
19(c) a history of not meeting financial obligations. 
Appellant developed significant financial problems when the economy moved into
a  recession. She defaulted on all but one of her mortgages in late 2008 and fell behind
in her credit card payments a short time later. She could not pay her debts for some
time. These two disqualifying conditions apply.
The Financial Considerations guideline also includes conditions that can mitigate
security concerns. I have considered mitigating factors AG ¶ 20(a) through 20(f), and
especially the following:
20(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.
20(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.
Applicant paid her bills, including the mortgages on her residence and seven
rental properties regularly and on time until late 2008. By this time, the country had
been in a recession for more than a year. The recession impacted the construction
industry very hard. Her husband’s construction-related business stopped. Applicant
used her savings to pay bills and then her credit cards. When she and her husband
realized the recession would continue indefinitely, they sought stable employment. After
10 months of job searching, she obtained her current position. Her husband found part-
time work. In the fall of 2009, they sought financial assistance from a financial advisor
and an attorney. The attorney suggested that they attempt to renegotiate their
mortgages and seek lower payments on their credit cards. Their efforts failed, as the
creditors declined to work with her. They filed bankruptcy in March 2010 and the court
discharged their debts on June 17, 2010, thus, her debts are resolved. She completed a
financial counseling course as required by the bankruptcy court.  The above mitigating
conditions apply in this case.
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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 an 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. The decision to grant or deny a
security clearance requires a careful weighing of all relevant factors, both favorable and
unfavorable. In so doing, an administrative judge must review all the evidence of record,
not a single item in isolation, to determine if a security concern is established and then
whether it is mitigated. A determination of an applicant’s eligibility for a security
clearance should not be made as punishment for specific past conduct, but on a
reasonable and careful evaluation of all the evidence of record to decide if a nexus
exists between established facts and a legitimate security concern. 
The evidence in support of granting a security clearance to Applicant under the
whole-person concept is more substantial than the evidence in support of denial. In
reaching a conclusion, I considered the potentially disqualifying and mitigating
conditions in light of all the facts and circumstances surrounding this case. Applicant
paid her bills for many years, including repaying a $10,000 loan from a friend, and lived
within her financial means until the 2008. Her financial advisor and her accountant
confirm that she and her husband had solid finances. With the loss of business and
rental income from her rental properties, Applicant stopped paying her mortgages,
except her residence, and her monthly payments on her large credit card debts.
Applicant started a job search in 2008 to help provide income into her household,
as her husband’s business could no longer support the family. Her husband obtained
part-time in 2009, and she eventually obtained a job. Her tenants lost their jobs and
stopped paying the rent. Until the recession, Applicant and her husband paid their bills.
Because the recession did not quickly resolve, they sought guidance to resolve their
financial crisis. When the creditors refused to work with them, they followed their
attorney’s advice and filed for Chapter 7 bankruptcy. The court discharged her debts in
June 2010. She reaffirmed three debts listed in their bankruptcy. She lives within her
financial means and pays her current bills. She and her husband own an 8-year-old car
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and a 10-year-old car. They have not taken a vacation in 10 years. They do not live
extravagantly.  
Applicant and her husband decided to buy, repair, and rent houses as an
investment for their future. They intended for these properties to finance their retirement
and their children’s education. By 2005, they owned seven rental units. The rental
income and her husband’s business income provided sufficient income to meet all their
mortgages and living expenses as the economy was working They made decisions
about purchasing property and repairing it, using the information they knew. After the
repair of each property, they successfully rented it. For many years, they paid all their
bills. When the economy spiraled downward, her husband’s construction jobs ceased.
Their tenants lost jobs and stopped paying the rent, causing a further income loss for
Applicant. They evicted tenants, some of whom damaged the property in retaliation. The
evictions increased her expenses and reduced her income. Until 2008, they had
financial stability based on the decisions they made and their hard work.
Applicant’s employer, co-workers, and friends describe her as an honest,
dependable, reliable, and hard-working individual. She is well-respected at work and
viewed as trustworthy. She taught friends about financial management and they are
grateful. The issue is not simply whether all her debts are paid: it is whether her
financial circumstances raise concerns about her fitness to hold a security clearance.
But for the recession, Applicant always paid her bills and managed her finances. There
is little likelihood that she and her husband will return to the property rental business.
Her recent financial problems are not a source of concern.
Overall, the record evidence leaves me without questions or doubts about
Applicant’s eligibility and suitability for a security clearance. For all these reasons, I
conclude Applicant mitigated the security concerns arising from her finances under
Guideline F.
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.o: 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 the national interest to grant Applicant eligibility for a security
clearance.  Eligibility for access to classified information is granted.
                                                              
MARY E. HENRY
Administrative Judge