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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
------------------------- )       ISCR Case No. 09-02559
SSN: ----------------- )
)
Applicant for Security Clearance )
Appearances
For Government: Jeff A. Nagel, Esquire, Department Counsel
For Applicant: Pro se
November 30, 2010
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Decision
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MOGUL, Martin H., Administrative Judge:
On May 27, 2010, 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 June 9, 2010, Applicant replied to the SOR (RSOR) in writing, and he
requested a hearing before an Administrative Judge. I received the case assignment on
July 13, 2010. DOHA issued a notice of hearing on July 29, 2010, and I convened the
hearing as scheduled on August 24, 2010. The Government offered Exhibits 1 through
7, which were received without objection. Applicant testified on his own behalf and
submitted Exhibit A at the time of hearing, which was also admitted without objection.
DOHA received the transcript of the hearing (Tr) on August 13, 2010. I granted
Applicant’s request to keep the record open until September 7, 2010, to submit
additional documents, and several additional documents were received, which have
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been identified collectively and entered into evidence as Exhibit B. 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 admitted all of the SOR allegations, 1.a. through 1.c. The
admitted allegations are incorporated herein as findings of fact. 
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 additional findings of fact: 
Applicant is 38 years old. He has been married three times and has two children.
Applicant is employed by a defense contractor as an electronic technician, and he
seeks a DoD security clearance in connection with his employment in the defense
sector.
Guideline F, Financial Considerations
The SOR lists three allegations regarding financial difficulties under Adjudicative
Guideline F.  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 $518. Applicant
testified that he attempted to negotiate a settlement with the creditors of these debts
but he was not successful. The debts have been included in the bankruptcy that was
filed on August 13, 2010. Applicant testified that it took him so long to file for bankruptcy
because he was extremely reluctant to do so. (Tr at 39 – 41.)
1.b. This overdue debt is cited in the SOR in the amount of $18,799. This debt
has been included in the bankruptcy.
1.c. This overdue debt is cited in the SOR in the amount of $693. This debt has
been included in the bankruptcy.
Applicant testified that his financial difficulties occurred when he started a full-
time landscaping business in 2004 or 2005, a business that he had worked part-time
previously, while he worked full-time for a defense contractor. When the economy
entered the recession, his business suffered a serious downturn. He testified that in
2006 his income was $63,000, and in 2007 his income reached approximately
$120,000. Ultimately, several of his major business clients were severely impacted by
the recession, and he lost their business, which severely damaged his company. He still
operates the business, but again on a part-time basis. (Tr at 32 – 36.) Applicant also
added that he was going through a difficult divorce at the same time. Finally, he had a
rental property with a mortgage that he could not pay after his tenant suddenly vacated
the premises, and it had to be sold in a short sale. The short sale resulted in an
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additional payment that had to be made to the state tax board, and Applicant has
worked out a payment plan to the IRS. (Tr at 37 – 38, 44.) 
Applicant testified that before he filed for bankruptcy, he engaged the services of
two different debt consolidation companies, but he could not successfully resolve his
overdue debts. He believed that he had no other option but to file bankruptcy. (Tr at 39
– 42.) Applicant also reiterated that his debts were not because he spent money
frivolously on unnecessary products, but rather on trucks and other construction
equipment that he used for his business. He also testified that before the downturn in
his business, his credit scores had been excellent. (Tr at 42 – 43.) 
Mitigation
Applicant offered into evidence several post hearing documents in Exhibit B.
These included his bankruptcy petition, which confirmed that a Chapter 7 Bankruptcy
had been filed for Applicant’s case on August 13, 2010, by his attorney, and that a
meeting of creditors was to be set on September 23, 2010.
In Exhibit B, Applicant also introduced a monthly personal financial statement,
which indicated that his total monthly net income was $4,468, and his monthly expenses
were $3,750, leaving a net remainder of $718 a month. Also, Applicant submitted the
documentation from both debt consolidation companies that he had engaged,
establishing his attempts to resolve his overdue debts. Exhibit B also includes the
documentation to show that Applicant is paying off his debt to the state tax board.
Applicant submitted a positive character letter in Exhibit A from his current
supervisor.  He was described as a “trustworthy employee” and “a very responsible
individual and has always been dependable in all that he does.” Five additional positive
character letters were offered in Exhibit B. These came from a 10 year coworker, who is
now a supervisor; his former wife, who is now a good friend; another friend; and one of
the clients of his landscaping business. He was described as “professional and
dependable and knowledgeable in the profession, ” “a good man and has always shown
strong character,” “is an amazing provider and a loyal friend,” and “very professional
and dependable worker, and a good example for everyone.”
Finally, in Exhibit B, Applicant did submit the documentation confirming that his
dissolution of marriage occurred on October 16, 2006, and which Applicant testified was
also part of the reason for his financial difficulties.   
Policies
When evaluating an applicant’s suitability for a security clearance, the
administrative judge must consider the 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).  
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
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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 debt. 
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 from the downturn of his
business, and also his divorce and the loss of a tenant in his rental property. I find that
Applicant has acted responsibly, as he first consulted with two different credit
consolidating companies, and when he was unable to resolve his debt, he used the
legal remedy of bankruptcy. Therefore, I find that this potentially mitigating condition is a
factor for consideration in this case. 
AG ¶  20 (d) is also applicable since Applicant has “initiated a good-faith effort to
repay overdue creditors or otherwise resolve debts.”  I find that this mitigating condition
is also a factor for consideration in this case.
I conclude that Applicant is in the process of resolving his overdue debt, and he
has established that he will be able to maintain more financial stability in the future.
Therefore, he has mitigated the financial concerns of the Government.
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.
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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 Conditions apply, 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.c.: For Applicant
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