Consisting of the File of Relevant Material (FORM), Items 1-8.1
DOHA acted under Executive Order 10865, Safeguarding Classified Information within Industry (February2
20, 1990), as amended; Department of Defense (DoD) Directive 5220.6, Defense Industrial Personnel Security
Clearance Review Program  (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG)
effective within the DoD on 1 September 2006. 
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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
   )       ISCR Case No. 10-01240
SSN: )
)
Applicant for Security Clearance )
Appearances
For Government: William T. O’Neil, Esquire, Department Counsel
For Applicant: Pro se
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Decision
______________
METZ, John Grattan, Jr., Administrative Judge:
Based on the record in this case,  Applicant’s clearance is denied.1
On 26 July 2010, the Defense Office of Hearings and Appeals (DOHA) issued a
Statement of Reasons (SOR) to Applicant listing security concerns under Guideline F,
Financial Considerations.  Applicant timely answered and requested a decision without2
hearing. The record in this case closed 1 October 2010, the day Applicant’s response to
the Government’s FORM was due. Applicant provided no additional information. DOHA
assigned the case to me 8 November 2010. 
2
Findings of Fact
Applicant admitted the SOR financial allegations. He is a 49-year-old systems
administrator employed by a defense contractor since April 2008. He appears to have
held a clearance since April 2007.
The SOR alleges, Applicant admits, and government exhibits substantiate, eight
delinquent first and second mortgages totaling over $675,000, $112,000 of which is past
due. He has taken no concrete action to resolve his mortgages.
In 2006, Applicant bought four houses for $677,000 as investment properties.
He bought them from the same developer, two houses each in two different states.
Although Applicant paid some money toward loan costs, the developer required no
down payment, agreed to pay some fees associated with the houses for two years, and
committed to finding tenants for the houses.
After about a year, the developer went out of business. Applicant became
responsible for all the expenses of the four properties and had to find his own clients.
However, he was unable to rent the properties for enough rent to cover his costs. He
started to fall behind, and in summer 2008, stopped paying on the mortgages
altogether. He received collection notices from the banks, which he ignored. The banks
eventually foreclosed on the four properties, and they remain in foreclosure. Applicant
has had no contact with the banks since he stopped paying, and believes that he will
have no remaining liability to the banks after the foreclosure process is finished.
However, he provided no documentation to corroborate that claim. As he owes
substantially more than the current fair market value of the houses, a deficiency
remainder is likely.
Policies
The adjudicative guidelines (AG) list factors to evaluate a person’s suitability for
access to classified information. Administrative judges must assess disqualifying and
mitigating conditions under each issue fairly raised by the facts and situation presented.
Each decision must also show a fair, impartial, and commonsense consideration of the
factors listed in AG ¶ 2(a). The applicability of a disqualifying or mitigating condition is
not, by itself, conclusive. However, specific guidelines should be followed when a case
can be measured against them, as they are policy guidance governing the grant or
denial of a clearance. Considering the SOR allegations and the evidence as a whole,
the relevant adjudicative guideline is Guidelines F (Financial Considerations).
Security clearance decisions resolve whether it is clearly consistent with the
national interest to grant or continue an applicant’s security clearance. The Government
must prove, by substantial evidence, disputed facts alleged in the SOR. If it does, the
burden shifts to applicant to refute, extenuate, or mitigate the Government’s case.
Because no one has a right to a security clearance, the applicant bears a heavy burden
of persuasion.
See, Department of the Navy v. Egan, 484 U.S. 518 (1988).3
¶19 (a) inability or unwillingness to satisfy debts; (c) a history of not meeting financial obligations;4
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Persons with access to classified information enter into a fiduciary relationship
with the Government based on trust and confidence. Therefore, the Government has a
compelling interest in ensuring each applicant possesses the required judgement,
reliability, and trustworthiness of those who must protect national interests as their own.
The “clearly consistent with the national interest” standard compels deciding any
reasonable doubt about an Applicant’s suitability for access in favor of the Government.3
Analysis
The Government established a case for disqualification under Guideline F, and
Applicant did not mitigate the security concerns. Applicant is $112,000 past due on over
$675,000 in mortgages related to four properties he bought in 2006 as investments.4
Applicant does not appear to have been particularly qualified to take on such an
investment, but the circumstances of the purchases (100% financing, developer help to
pay some ongoing fees, and developer recruitment of tenants for Applicant) would have
warned any person with reasonable common sense that the deal was too good to be
true.
Even without the downturn in the housing market, the developer’s going out of
business was reasonably foreseeable. Further, the developer’s subsidy was going to
end in another year anyway, and Applicant had no apparent plan for dealing with that
eventuality. Applicant’s inability to cover his costs began before the housing market
declined. His completely walking away from his mortgages without any efforts to work
with the banks is irresponsible. He has not had any financial counseling, and has no
plan to deal with his debts. This is particularly true if he is incorrect and has a deficiency
remainder after the foreclosure process is completed. Even if he is correct, walking
away from his financial obligations is not a responsible action. Consequently, none of
the mitigating factors for financial considerations apply. Further, the record lacks any
information upon which to base a “whole-person” analysis. I conclude Guideline F
against Applicant.
Formal Findings
Paragraph 1. Guideline F: AGAINST APPLICANT
Subparagraphs a-h: Against Applicant
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Conclusion
Under the circumstances presented by the record in this case, it is not clearly
consistent with the national interest to grant or continue a security clearance for
Applicant. Clearance denied.
                                              
                                             
JOHN GRATTAN METZ, JR
Administrative Judge