DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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)
-------------------------- )       ISCR Case No. 08-10168
SSN: ------------------ )
)
Applicant for Security Clearance )
Appearances
For Government: Francisco J. Mendez, Jr., Esq., Department Counsel
For Applicant: Pro Se
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 Decision
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WESLEY, Roger C., Administrative Judge:
Based upon a review of the case file, pleadings, and exhibits, eligibility for
access to classified information is denied.  
Statement of the Case
On April 9, 2010, the Defense Office of Hearings and Appeals (DOHA) issued a
Statement of Reasons (SOR) detailing reasons why DOHA could not make the
preliminary affirmative determination of eligibility for granting a security clearance, and
recommended referral to an administrative judge to determine whether a security
clearance should be granted, continued, denied, or revoked. 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 (AGs), effective within the
Department of Defense for SORs issued after September 1, 2006.
Applicant responded to the SOR on May 10, 2010, and elected to have her case
decided on the basis of the written record. Applicant received the File of Relevant
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Material (FORM) on July 19, 2010, and did not respond with any information within the
30 days permitted.  The case was assigned to me on October 7, 2010.  
Summary of Pleadings
Under Guideline F, Applicant is alleged to have accumulated 30 delinquent
debts, exceeding $18,000.  Specifically, his listed debts comprise creditor 1.a ($468);
creditor 1.b ($214); creditor 1.c ($242); creditor 1.d ($398); creditor 1.e ($769); creditor
1.f ($492); creditor 1.g ($36); creditor 1.h ($492); creditor 1.I ($905); creditor 1.j ($986);
creditor 1.k ($694); creditor 1.l ($1,075); creditor 1.m ($972); creditor 1.n ($272);
creditor 1.o ($7,473); creditor 1.p ($1,087); 1.q ($5,424); creditor 1.r ($91); creditor 1.s
($905); 1.t ($986); creditor 1.u ($337); creditor 1.v ($713); creditor 1.w ($954); creditor
1.y ($3,418); creditor 1.z ($257); creditor 1.aa ($1,135); creditor 1.bb ($347); creditor
1.cc ($406); and creditor 1.dd ($1,1187). Additionally, Applicant is alleged to have
petitioned for Chapter 13 bankruptcy relief, and converted the petition to one for
Chapter 7 bankruptcy protection in March 1998 (receiving his discharge in June 2002).  
In her response to the SOR, Applicant admitted some of the alleged debts, and
denied others.  She disputed a number of the debts, and committed to making progress
in the resolution of her remaining debts.  She requested six months to enable her to
make good-faith attempts in clearing her delinquent debts.
Findings of Fact
Applicant is a 38-year-old executive administrator for a defense contractor who
seeks a security clearance. The allegations covered in the SOR and admitted to by
Applicant are adopted as relevant and material findings.  Additional findings follow.
Applicant first married in 1996. She has a child from this marriage (Items 5 and
8).  Her first husband abandoned her in March 2002, and left her with insufficient
income to pay her bills and care for her child.  Her divorce was finalized in July 2004
(Item 8).  She has since remarried and claims improved finances. (see Item 8)
Applicant attended college between September 1990 and September 1992 and
received an associates degree in business management in August 2007. (Item 5)  She
held administrator positions with several companies before joining her current employer
in November 2005.
Applicant’s credit reports reveal a considerable history of financial difficulty.  In
March 1998, she petitioned for Chapter 13 relief.  She converted her Chapter 13
petition into a Chapter 7 straight bankruptcy petition in June 2001, and received her
Chapter 7 discharge in June 2002.  (see exs. 8 and 13)
Following her divorce, Applicant accumulated a number of additional delinquent
debts. Altogether, she accrued delinquent debts exceeding $18,000. She attributes
these additional debt problems to her ongoing divorce, and failure of her former
husband to provide any financial assistance. (Item 8)  One of the largest debts (creditor
1.o) involves a 2006 car repossession following her current husband’s loss of
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employment, and an ensuing deficiency balance of $7,473. (Items 8 and 11) Another
debt (creditor 1.a) involves a $468 judgment entered against her in December 2006.
(Items 8 and 11). Her remaining listed debts cover assorted medical and credit card
debts, some of which are unknown to her. (Items 8 and 11)   
In an effort to address her debts, Applicant contracted a debt consolidation firm
in November 2008. (Item 8) Records show that she identified her listed creditors from
her credit report and signed a payment agreement with the counseling firm. (Item 8)
Under the terms of her agreement, she obligated herself to pay the firm $377 a month
to make and fulfill payment agreements with her covered creditors. (Item 8)  
Applicant does not document any payment progress with her debt consolidation
firm. Nor does sjhe provide any proofs of addressing her creditors individually.
In the personal financial statement that Applicant furnished as a part of her
interrogatory answers in January 2009, Applicant reported net monthly income of
$2,437 for herself and $1,959 for her spouse. (Item 8). After allowing for $3,160 in
monthly expenses, she claimed a net monthly remainder of $638. (Item 8)  She has not
provided any proof of disputed debts with her creditors, or efforts to negotiate any
settlements, reduce payments, or engage any credit counseling agent to assist her in
addressing her debts.  
                           
Applicant provided no endorsements or documentation of community activities
and awards. Nor did she provide any performance evaluations or military service
records. 
Policies
The AGs list guidelines to be used by administrative judges in the decision-
making process covering DOHA cases. These guidelines take into account factors that
could create a potential conflict of interest for the individual applicant, as well as
considerations that could affect the individual’s reliability, trustworthiness, and ability to
protect classified information. These guidelines include "[c]onditions that could raise a
security concern and may be disqualifying” (disqualifying conditions), if any, and many
of the "[c]onditions that could mitigate security concerns.” These guidelines must be
considered before deciding whether or not a security clearance should be granted,
continued, or denied. The guidelines do not require administrative judges to place
exclusive reliance on the enumerated disqualifying and mitigating conditions in the
guidelines in arriving at a decision. Each of the guidelines is to be evaluated in the
context of the whole person in accordance with AG ¶ 2(c). 
In addition to the relevant AGs, administrative judges must take into account the
pertinent considerations for assessing extenuation and mitigation set forth in AG ¶ 2(a)
of the revised AGs, which are intended to assist the judges in reaching a fair and
impartial commonsense decision based upon a careful consideration of the pertinent
guidelines within the context of the whole person. The adjudicative process is designed
to examine a sufficient period of an applicant’s life to enable predictive judgments to be
made about whether the applicant is an acceptable security risk. 
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When evaluating an applicant’s conduct, the relevant guidelines are to be
considered together with the following AG ¶ 2(a) factors: (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 chances; (7) the motivation for the conduct; (8) the potential for
pressure, coercion, exploitation, or duress; and (9) the likelihood of continuation or
recurrence.
Viewing the issues raised and evidence as a whole, the following individual
guidelines are pertinent in this case:
Financial Considerations
The Concern: 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.  Compulsive gambling is a concern as it may lead to financial
crimes including espionage.  Affluence that cannot be explained by known
sources of income is also a security concern.  It may indicate proceeds
from financially profitable criminal acts. AG ¶ 18.
Burden of Proof
By virtue of the principles and policies framed by the AGs, a decision to grant
or continue an applicant's security clearance may be made only upon a threshold
finding that to do so is clearly consistent with the national interest.  Because the
Directive requires administrative judges to make a commonsense appraisal of the
evidence accumulated in the record, the ultimate determination of an applicant's
eligibility for a security clearance depends, in large part, on the relevance and
materiality of that evidence. See Kungys v. United States, 485 U.S. 759, 792-800
(1988).  As with all adversarial proceedings, the judge may draw only those inferences
which have a reasonable and logical basis from the evidence of record.  Conversely,
the judge cannot draw factual inferences that are grounded on speculation or
conjecture.
The Government's initial burden is twofold: (1) it must prove by substantial
evidence any controverted facts alleged in the SOR, and (2) it must demonstrate that
the facts proven have a material bearing to the applicant's eligibility to obtain or
maintain a security clearance. The required materiality showing, however, does not
require the Government to affirmatively demonstrate that the applicant has actually
mishandled or abused classified information before it can deny or revoke a security
clearance. Rather, the judge must consider and weigh the cognizable risks that an
applicant may deliberately or inadvertently fail to safeguard classified information.
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Once the Government meets its initial burden of proof of establishing admitted
or controverted facts, the evidentiary burden shifts to the applicant for the purpose of
establishing his or her security worthiness through evidence of refutation, extenuation,
or mitigation.  Based on the requirement of  Exec. Or. 10865 that all security
clearances be clearly consistent with the national interest, the applicant has the
ultimate burden of demonstrating his or her clearance eligibility. “[S]ecurity-clearance
determinations should err, if they must, on the side of denials.” See Department of the
Navy v. Egan, 484 U.S. 518, 531 (1988). 
Analysis  
Applicant is an executive administrator with a defense contractor who
accumulated a number of delinquent debts during her two marriages. Her
accumulation of additional delinquent debts following her divorce from her first
husband and bankruptcy discharge, and her past inability and unwillingness to
address these debts, warrant the application of two of the disqualifying conditions
(DC) of the Guidelines: DC ¶ 19(a), “inability or unwillingness to satisfy debts,” and DC
¶ 19(c) “a history of not meeting financial obligations.”
Applicant’s debts are attributable in part to her divorce from her first husband
and her current husband’s inability to find well-paying work following his layoff in 2006.
To date, she has been unable to document any follow-through with the debt
consolidation program she agreed to, or payment arrangements with any of her listed
individual creditors. Collectively, her remaining delinquent debts exceed $18,000, and
have not been fully addressed to date.    
Based on the documented materials in the FORM, some extenuating
circumstances are associated with Applicant’s inability to pay or otherwise resolve her
debts.  Partially available to Applicant is MC ¶ 20(b), “the conditions that resulted in
the behavior 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.” Without more information from
Applicant about the efforts she has made to resolve debts that are hers and dispute
those she denies, the evidence is insufficient to credit her with responsible corrective
measures once her finances improved.
Moreover, some judgment problems persist, too, over Applicant’s unexplained
delinquencies and her failure to demonstrate she acted responsibly in addressing her
listed debts with the net monthly remainder she and her current husband claimed in
January 2009. Mitigation requires a demonstration of earnest repayment efforts once
the unemployment conditions that contributed to the delinquencies had passed or
eased, and her finances had improved. See ISCR Case 03-01059 at 3 (App. Bd. Sep.
24, 2004). 
Not only are Applicant’s listed debt delinquencies ongoing, but she has failed to
address them in any tangible way. Mitigation credit is not available to Applicant based
on the evidence developed in this record.         
                                          
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Holding a security clearance involves a fiduciary relationship between the
Government and the clearance holder. Quite apart from any agreement the clearance
holder may have signed with the Government, the nature of the clearance holder’s
duties and access to classified information necessarily imposes important duties of
trust and candor on the clearance holder that are considerably higher than those
typically imposed on Government employees and contractors involved in other lines of
Government business. See Snepp v. United States, 444 U.S. 507, 511 n.6 (1980).
Failure of the applicant to make concerted efforts to pay or resolve her debts when
able to do so raises security-significant concerns about whether the applicant has
demonstrated the trust and judgment necessary to safeguard classified information.
Whole-person assessment does not enable Applicant to surmount the
judgment questions raised by her accumulation of delinquent debts. Since reporting  a
positive remainder in 2009, she has not shown enough manifest effort in addressing
any of her covered debts to mitigate her still delinquent accounts.  Resolution of her
delinquent accounts is a critical prerequisite to her regaining control of her  finances.
While divorce and unemployment conditions might have played a considerable
role in her accumulation of so many debts over recurrent periods, Applicant failed to
provide any explanatory material for consideration.  Potentially helpful endorsements
and performance evaluations were not provided either. Overall, clearance eligibility
assessment of Applicant based on the limited amount of information available for
consideration in this record does not enable her to establish judgment and trust levels
sufficient to overcome security concerns arising out of her accumulation of delinquent
debts.
Taking into account all of the documented facts and circumstances surrounding
Applicant’s debt accumulations, her lack of any exhibited explanations for her debt
accruals, and her failure to provide any proof of  corrective actions taken to address
her old debts, it is still soon to make safe predictive judgments about Applicant’s
ability to repay her debts and restore her finances to stable levels commensurate with
the minimum requirements for holding a security clearance.  Unfavorable conclusions
warrant with respect to the allegations covered by subparagraphs 1.a through 1.dd. 
Formal Findings
In reviewing the allegations of the SOR and ensuing conclusions reached in the
context of the findings of fact, conclusions, conditions, and the factors listed above, I
make the following formal findings:
GUIDELINE F (FINANCIAL CONSIDERATIONS): AGAINST APPLICANT
   
Subparas. 1.a through 1.dd:      Against Applicant
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Conclusions
In light of all the circumstances presented by the record in this case, it is not
clearly consistent with the national interest to grant or continue Applicant’s security
clearance.  Clearance is denied.
                                          
Roger C. Wesley
Administrative Judge 
                                        
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