Item 5.1
Item 1.2
1
                                                                     
                               DEPARTMENT OF DEFENSE
                DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
------------, --------- ----------- )       ISCR Case No. 09-06058
SSN: ------ ---- -------- )
)
Applicant for Security Clearance )
Appearances
For Government: Alison O’Connell, Esquire, Department Counsel
For Applicant: Pro se
______________
Decision
______________
WHITE, David M., Administrative Judge:
Applicant endured several periods of unforeseen unemployment due to the
severe downturn in the construction industry in 2008. Several of his debts became
delinquent, including his home mortgage. He relocated to obtain his present
employment, has resolved all of his formerly delinquent debts, and has mitigated the
resulting security concerns. Based upon a review of the case file, pleadings, and
exhibits, eligibility for access to classified information is granted. 
Applicant submitted a security clearance application (SF 86) on May 22, 2009.1
On March 26, 2010, the Defense Office of Hearings and Appeals (DOHA) issued a
Statement of Reasons (SOR) to Applicant, detailing security concerns under Guideline
F (Financial Considerations).  The action was taken under Executive Order 10865,2
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
Item 4.3
The Government submitted 12 Items in support of the SOR allegations.4
Items 5 and 6; AFR.5
Item 4.6
Items 6, 7, and 8. 7
Items 5, 6, and 10; AFR. 8
2
adjudicative guidelines effective within the Department of Defense for SORs issued
after September 1, 2006. 
Applicant answered the SOR in writing (AR) on April 19, 2010, and requested
that his case be decided by an administrative judge on the written record without a
hearing.  Department Counsel submitted the Government’s written case on July 7,3
2010. On July 8, 2010, a complete copy of the File of Relevant Material (FORM)  was4
mailed to Applicant, and he was afforded an opportunity to file objections and submit
material in refutation, extenuation, or mitigation within 30 days of his receipt of the
FORM. Applicant returned the signed document acknowledging receipt of his copy of
the FORM on July 18, 2010, and submitted a timely written response on August 8,
2010. Applicant made no objection to consideration of any evidence submitted by
Department Counsel, but did submit additional comments and evidence for
consideration. Department Counsel had no objection to the admissibility of Applicant’s
response to the FORM (AFR). I received the case assignment on August 31, 2010.
Findings of Fact
Applicant is a 32-year-old employee of a defense contractor, where he was hired
in May 2009. He served as an Electronics Technician in the Navy from August 1997 to
September 2006, when he was honorably discharged at pay grade E-5. He held a
Secret security clearance during most of his enlistment, and earned two Navy-Marine
Corps Achievement Medals. He is married, but separated from his wife pending a future
divorce. They have two children, ages nine and six.  In his response to the SOR, he5
admitted both of the factual allegations in SOR.  Applicant’s admissions, including his6
responses to the SOR, to the FORM, and to DOHA interrogatories,  are incorporated in7
the following findings.
After Applicant left the Navy in 2006, he was hired as a union laborer by the
construction company where his wife’s father was the superintendent. Although the job
involved seasonal layoffs for a few months each winter, it paid very well. He and his wife
purchased a house in June 2007, with a mortgage loan of $231,000. Monthly payments
on this loan were $1,877. At the time, he was earning sufficient income that his wife did
not need to work and started attending school. In August 2007, she took out a $4301
student loan for this purpose.8
Item 5; Item 10 at 2; Item 11; AFR.9
Item 6 at 1; Item 11 at 4; Item 10 at 2; AFR.10
Items 6, 7, and 8; AFR. 11
Item 6 at 8.12
3
Applicant’s credit problems began when he was laid off due to the sharp
downturn in the construction industry in 2008. He was only able to find work during 10 of
the 17 months between December 2007 and May 2009, when he began his current job.
His wife quit school and began working, and he collected unemployment compensation,
but their income was insufficient to meet all of their bills. They stopped making
mortgage payments in November 2008, and their lender began foreclosure proceedings
in May 2009. As of March 2010, the past-due amount was $30,124, as alleged in SOR ¶
1.b. Applicant listed his delinquent mortgage loan and six other delinquent credit
accounts, totaling $23,629, on his May 2009 SF 86.9
Applicant’s current job pays well, and includes substantial amounts of time
working overseas. Since he began working again, he has repaid all of his formerly
delinquent debt except for his home mortgage. His wife’s student loan was reportedly
paid as agreed on his June 2009 credit report, but was reported to be 180 days past
due in the amount of $214 on his March 2010 credit report. Appellant had mistakenly
believed that his wife was going to pay this debt, and did not realize it was delinquent
until he received the SOR listing it at ¶ 1.a. In June 2010, he negotiated a payment plan
with the collection agency holding the debt, and began making the agreed payments.10
In March 2009, Applicant contacted his mortgage lender to attempt to negotiate a
modification that would permit him to keep the house. The process took a long time due
to the large number of borrowers undergoing similar problems. He maintained regular
correspondence with the lender, and was eventually offered a “Forbearance Plan
Agreement” in December 2009. The plan called for him to make three monthly
payments of $1,999, as a show of good faith, after which the lender would set a new
payment plan. Since this required payments that were higher than the original
payments, Applicant rejected this offer and listed his house for sale. After the house
remained on the market for 90 days without selling, his lender informed him that he and
the property qualified for resolution of the debt through the Deed in Lieu of Foreclosure
process. Under this program, which Applicant intends to accept upon his return from
overseas during the autumn of 2010, the lender will accept a deed transferring
ownership of the house to it in full satisfaction of the loan amount, with no right to
pursue any deficiency claim.  11
Applicant provided no evidence of financial counseling. The budget information
he provided on a personal financial statement, submitted with his interrogatory response
dated February 17, 2010, showed a monthly surplus of $1,108.  Applicant submitted12
letters from three current and former program managers under whom he performed
work on Government programs. All three described his outstanding character,
AFR.13
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trustworthiness, integrity, and work performance; and expressed their confidence in his
ability to successfully hold a security clearance.  I was unable to evaluate his credibility,13
demeanor, or character in person since he elected to have his case decided without a
hearing.
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 (DCs) and mitigating conditions (MCs), which are to be used 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 AG ¶ 2 describing the adjudicative process. The administrative judge’s
overarching adjudicative goal is a fair, impartial, and commonsense decision. According
to AG ¶¶ 2(a) and 2(c), the entire process is a conscientious scrutiny of applicable
guidelines in the context 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 the 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, “[t]he applicant is
responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or
mitigate facts admitted by the applicant or proven by Department Counsel, and has the
ultimate burden of persuasion as to obtaining a favorable clearance decision.” Section 7
of Executive Order 10865 provides: “[a]ny determination under this order adverse to an
applicant 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.”
A person applying for access to classified information seeks to enter 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
FORM at 4.14
5
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.
Analysis
Guideline F, Financial Considerations
The security concerns relating to the guideline for financial considerations are 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. 
Department Counsel argued that the evidence established security concerns
under two Guideline F DCs, as set forth in AG ¶ 19: 
(a) inability or unwillingness to satisfy debts; and
(c) a history of not meeting financial obligations.  14
Applicant was unable to satisfy some of his debts starting in late 2008. He had no
prior history of financial problems. In May 2009, he separated from his family to accept
his current job and resolved all his delinquent debt except his mortgage loan. He has
been actively engaged with his mortgage lender seeking to resolve that debt, and has
been offered full satisfaction through a Deed in Lieu of Foreclosure agreement that he
intends to execute upon his pending return from work overseas. The evidence initially
supported security concerns under DCs 19(a), and 19(c), thereby shifting the burden to
Applicant to rebut, extenuate, or mitigate those concerns. 
The guideline includes four conditions in AG ¶ 20 that could mitigate security
concerns arising from Applicant’s financial difficulties:
(a) the 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; 
(b) the conditions that resulted in the financial problem were largely
beyond the person’s control (e.g., loss of employment, a business
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downturn, unexpected medical emergency, or a death, divorce or
separation), and the individual acted responsibly under the circumstances;
(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; and
(d) the individual initiated a good-faith effort to repay overdue creditors or
otherwise resolve debts.
Applicant’s delinquent debts arose over a brief period preceding his security
clearance application, and were largely resolved by the time the SOR was issued. The
circumstances under which the delinquencies occurred were largely beyond his control
since they resulted from his unexpected unemployment due to the sharp downturn in
the construction industry during 2008. He relocated to accept a good-paying job after it
became clear that the local economy was not going to improve in time to resolve his
debts. His current income is sufficient for him to have resolved all former delinquencies,
and makes it unlikely that financial difficulties will recur. These circumstances do not
cast doubt on Applicant’s reliability, trustworthiness or good judgment. The evidence
accordingly supports substantial mitigation under MCs 20(a) and 20(b). 
Although Applicant did not undergo financial counseling, he realized what he
needed to do to pay his debts and has done so. As of the close of the record, the only
remaining delinquent debt was his home mortgage, and he had an offer from the
creditor to fully satisfy that debt by transferring ownership of the home through a Deed
in Lieu of Foreclosure agreement. Applicant intends to accept this offer, which will
eliminate that debt. MCs 20(c) and 20(d) are therefore fully applicable to mitigate any
ongoing security concerns formerly arising from these debts. Applicant did not dispute
any SOR-listed debt, so MC 20(e), concerning disputed debts, is inapplicable. 
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 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. 
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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
relevant facts and circumstances surrounding this case. Applicant is a mature and
experienced individual, who suffered through several unforeseen periods of
unemployment due to the economic downturn in 2008. He relocated to accept his
current employment, and promptly resolved all of the delinquent debts that arose due to
his temporary inability to pay them. He had no prior history of financial problems, and is
sufficiently solvent with his present income to avoid future financial difficulties. 
Applicant’s only delinquent debt remaining as of the close of the record was his
home mortgage, and he plans to accept the creditor’s offer to fully resolve that debt by
transferring ownership in lieu of foreclosure proceedings as soon as he returns from
working overseas. Applicant has eliminated any potential for pressure, coercion,
exploitation, or duress, and demonstrated that such problems are unlikely to continue or
recur. His current and former project managers unanimously praise his responsibility,
dedication, and integrity.
Overall, the record evidence creates substantial confidence as to Applicant’s
present eligibility and suitability for a security clearance. For all these reasons, I
conclude Applicant has fully mitigated the security concerns arising from his financial
considerations. 
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
Subparagraph 1.a: For Applicant
Subparagraph 1.b: For Applicant
Conclusion
In light of all of the circumstances presented by the record in this case, it is
clearly consistent with the interests of national security to grant Applicant eligibility for a
security clearance. Eligibility for access to classified information is granted.
                                              
DAVID M. WHITE
Administrative Judge