The date of the hearing was changed from December 3 to December 2, 2009.1
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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
------------------------ )       ISCR Case No. 09-02467
SSN: ---------------- )
)
Applicant for Security Clearance )
Appearances
For Government: Melvin A. Howry, Esq., Department Counsel
For Applicant: Arnold H. Wuhrman, Esq.
October 13, 2010
______________
DECISION
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ROSS, Wilford H., Administrative Judge:
Applicant submitted her Questionnaire for Sensitive Positions on January 7,
2009. (Government Exhibit 1.) On July 22, 2009, the Defense Office of Hearings and
Appeals (DOHA) issued a Statement of Reasons (SOR) detailing the security concerns
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 for SORs issued after September 1,
2006. 
 
Applicant answered the SOR in writing on August 21, 2009, and requested a
hearing before an administrative judge. Department Counsel was prepared to proceed
on September 18, 2009. This case was assigned to me on September 25, 2009. DOHA
issued notices of hearing on November 5 and November 23, 2009.  I convened the1
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hearing as scheduled on December 2, 2009. The Government offered Government
Exhibits 1 through 6, which were received without objection. Applicant testified on her
own behalf, called one additional witness, and submitted Applicant Exhibits A through
M, which were also received without objection. Applicant asked that the record remain
open for the receipt of additional documents. The Applicant submitted Applicant Exhibit
N on December 12, 2009, and it was admitted without objection. DOHA received the
transcript of the hearing on December 8, 2009. The record closed on December 12,
2009. Based upon a review of the case file, pleadings, exhibits, and testimony, eligibility
for access to classified information is granted.
Findings of Fact
Applicant is 60 and divorced. She is employed by a defense contractor and
seeks to retain a security clearance in connection with her employment. 
Guideline F, Financial Considerations
The Government alleges that Applicant is ineligible for clearance because she is
financially overextended and, therefore, at risk of having to engage in illegal acts to
generate funds. Applicant admits all the factual allegations in the SOR. Those
admissions are hereby deemed findings of fact.
Applicant testified that her financial problems began in 2005. At that time one of
her daughters, and two grandchildren, began living with Applicant. Applicant was the
sole wage earner, and was having to support four people. (Transcript at 61-65.)
In November 2007 the tenant in Applicant’s rental property vacated the house.
The property was severely damaged by the tenant, and it cost the Applicant over
$17,000 to get the house in a position to be sold. Once the house was in a saleable
condition, the housing market had collapsed and the Applicant could not sell the house
at a profit. It was eventually sold at a loss in April 2008. Even though the house was
sold at a loss, since it was a rental property Applicant wound up owing capital gains tax
in the amount of $18,000 to the state and federal governments. In addition, the
mortgage payment on Applicant’s own home had gone up because it was a variable
rate loan. (Transcript at 68-75; Applicant Exhibits I at 6, J and K.)
Applicant attempted unsuccessfully to work with her creditors during the
remainder of 2008 and into 2009. Eventually, Applicant made the difficult decision to file
for Chapter 13 bankruptcy protection. (Transcript at 75-77.) Her petition was filed on
June 1, 2009. The Chapter 13 plan was approved by the Bankruptcy Court on July 7,
2009. All of the debts listed in the SOR are included in the bankruptcy, which proposes
to pay non-priority unsecured creditors 18%. As of the date the record closed, Applicant
had made all six of the required monthly payments to the Bankruptcy Trustee. As part of
the bankruptcy process, Applicant successfully completed two financial counselling
courses. (Transcript at 78-91; Government Exhibit 4; Applicant Exhibits A, B, C, D, F, G
and H.)
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In addition to making payments to the Bankruptcy Trustee, Applicant is current
on her other debts. This includes making payments on her home mortgage, as is
confirmed by records from the mortgage company website. (Transcript at 85-86, 91-95;
Applicant Exhibits E and I.)
Mitigation
A co-worker of Applicant, who has known her over 20 years, testified on her
behalf. In supporting her request for a security clearance he stated: 
I have been her supervisor and I’ve been her manager throughout
the years at various points in both of our careers. I saw [Applicant’s] value
when I promoted her several times while as her manager and supervisor,
bringing her to the position where she’s at. . . . [Applicant] is the kind of
person that you simply show her the task and just completes it, does it,
monitors it, does it very well. (Transcript at 27-28.)
Applicant also submitted her latest performance reviews, as well as examples of
her work. (Applicant Exhibits L and M.) They show that she is a diligent and professional
employee, who exceeds performance requirements.
Policies
Security clearance decisions are not made in a vacuum. 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 to be used as appropriate 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. In addition, the administrative judge may also rely on his or her own
common sense, as well as knowledge of the law, human nature, and the ways of the
world, in making a reasoned 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
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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. Security clearance decisions include, by
necessity, consideration of the possible risk that 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.
 
Finally, as emphasized in Section 7 of Executive Order 10865, “Any
determination under this order . . . 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.” 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
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. Under
AG & 19(a), an Ainability or unwillingness to satisfy debts@ is potentially disqualifying.
Similarly under AG & 19(c), Aa history of not meeting financial obligations@ may raise
security concerns. Applicant, by her own admission, and supported by the documentary
evidence, had substantial past-due debts. The evidence is sufficient to raise these
potentially disqualifying conditions.
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The guideline also includes examples of conditions that could mitigate security
concerns arising from financial difficulties. Under AG ¶ 20(a), the disqualifying condition
may be mitigated where Athe 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.@ In addition, AG
¶ 20(b) states that the disqualifying conditions may be mitigated 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.”
Applicant=s financial difficulties arose primarily because several members of her family
moved in with her, coupled with the difficulties involving selling her rental property. She
showed serious attempts to resolve her past due debts. The record shows that she has
included all her past due debts in bankruptcy, as well as paying all of her current debts.
At all times she has acted responsibly. These two mitigating conditions apply. 
Filing bankruptcy is an appropriate and legal way to resolve debts. Under the
particular circumstances of this case, I find that Applicant has “initiated a good-faith
effort to repay overdue creditors or otherwise resolve debts,” as required by AG ¶ 20(d).
Applicant received the financial counselling that is required by the Bankruptcy
Code. Her current financial situation is stable. I find that “there are clear indications that
the problem is being resolved or is under control,” as required by AG ¶ 20(c).
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 relevant circumstances. 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 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.      
I considered the potentially disqualifying and mitigating conditions in light of all
the relevant facts and circumstances surrounding this case. Applicant had some
financial problems, not of her making, but her current financial condition is stable. Under
AG ¶ 2(a)(2), I have considered the facts of the Applicant’s debt history. As stated at
length above, much of this was brought about because of a bad tenant, family issues,
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and the recession. Based on the record, I find that there have been permanent
behavioral changes under AG ¶ 2(a)(6). Accordingly, I find that there is little to no
potential for pressure, coercion, exploitation, or duress (AG ¶ 2(a)(8)); and that there is
no likelihood of recurrence (AG ¶ 2(a)(9)). 
Overall, the record evidence leaves me with no questions or doubts as to
Applicant’s eligibility and suitability for a security clearance. For all these reasons, I
conclude Applicant has mitigated the security concerns arising from her financial
situation. On balance, I conclude that Applicant has successfully overcome the
Government's case opposing her request for a security clearance.  Accordingly, the
evidence supports granting her request for a security clearance.
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: FOR APPLICANT
Subparagraphs 1.a. through 1.k.: For Applicant
Conclusion
In light of all of the circumstances presented by the record, it is clearly consistent
with the national interest to grant Applicant eligibility for a security clearance.  Eligibility
for access to classified information is granted.
                                              
WILFORD H. ROSS
Administrative Judge