1
 
                                                             
                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 08-09592
)
)
Applicant for Security Clearance )
Appearances
For Government: Caroline H. Jeffries, Esquire, Department Counsel
For Applicant: Pro se  
______________
Decision
______________
HENRY, Mary E., Administrative Judge:
Based upon a review of the pleadings, exhibits, and testimony, I  deny
Applicant’s eligibility for access to classified information.
Applicant signed an Electronic Questionnaire for Investigations Processing (e-
QIP) version of a security clearance application (SF-86) on May 6, 2008. The Defense
Office of Hearings and Appeals (DOHA) issued Applicant a Statement of Reasons
(SOR) on May 13, 2010 detailing security concerns under Guideline F, Financial
Considerations, that provided the basis for its preliminary decision to deny him a
security clearance. 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) implemented on September 1, 2006. 
 
Item 1; Response to SOR.1
Item 1.2
Id.3
2
Applicant acknowledged receipt of the SOR on May 19, 2010. He submitted a
notarized, written response to the SOR allegations dated June 3, 2010, and requested a
decision on the written record in lieu of a hearing. 
Department Counsel prepared a File of Relevant Material (FORM) and mailed
Applicant a complete copy on November 8, 2010. Applicant received the FORM on
November 22, 2010. He had 30 days from receipt of the FORM to file objections and
submit material in refutation, extenuation, or mitigation. He did not submit a response.
DOHA assigned this case to me on January 11, 2011. The Government submitted 13
exhibits, which have been marked as Items 1-13 and admitted into the record.
Applicant’s response to the SOR has been marked and admitted as Item 2, and the
SOR has been marked as Item 1.
Findings of Fact
In his Answer to the SOR, Applicant admitted the factual allegations in the SOR,
although he did not recognize the creditor in SOR ¶ 1.c. He assumed the debt was a
mortgage debt and therefore his. His admissions are incorporated herein as findings of
fact. He also provided additional information to support his request for eligibility for a
security clearance. After a complete and thorough review of the evidence of record, I
make the following additional findings of fact.  
Applicant, who is 45 years old, works as a security engineer for a Department of
Defense contractor, a job he has held since October 2009. He previously worked as a
senior security analyst for another Department of Defense contractor for six years. He
served on active duty in the United States Air Force for 13 years, leaving at the rank of
major. Applicant has held a security clearance for 20 years without incident.1
Applicant married in December 1987. He and his wife have three children, ages
24, 21, and 17. He holds a bachelor’s degree and a master’s degree.2
After leaving the Air Force, Applicant and his wife decided to reside in the area
which had been his last duty station. Except for six months in 2003 when he operated a
child care business, Applicant has worked in information technology for government
contractors since 2001.3
Applicant’s wife worked in the real estate business. Around 2006, they developed
a business plan to purchase real estate to use as rental property. After studying the
housing needs of the area in which they lived, their plan provided that they would buy
and furnish a rental property as well as provide telephone and internet services for
Item 4; Item 6; Item 8.4
Id.5
Id.; Item 7.6
Item 4; Item 6, Items 10-13.7
Applicant indicated that his wife’s net monthly income was $3,500 a month on his personal financial8
statement. Her leave and earnings statement shows $2,900. He has not submitted any evidence of additional
income for his wife; thus, the amount shown on her leave and earnings statement is more reliable and
controls. Item 6, Attachments 9 and 10.
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prospective tenants. They decided to rent the property to military personnel stationed in
the area for short periods of time or to civilians temporarily working in the area, using
the federal government per diem as the basis for their rental charge. The rent would pay
the mortgage on the properties.  4
Applicant and his wife purchased several properties in 2006 and 2007 as part of
their business plan and established a limited liability corporation. Initially, they
succeeded in renting their property as planned. By September 2007, their rental income
had declined, and they encountered problems meeting their mortgage payments as well
as other financial obligations. They fell behind in their mortgage and credit card
payments. Their inability to rent their property arose when the economy had begun to
slow down, and because hotel chains built properties in the area that competed for
tenants.5
In 2008, Applicant worked with the mortgage companies in an effort to resolve
his delinquent payments. He allowed two properties to be foreclosed and renegotiated
his mortgages on his home and one rental property. In November 2008, Applicant
signed mortgage loan modification agreements on the first and second mortgages on
his home and one rental property. He submitted documentation, indicating his
compliance with his new loan payments on his first mortgage loans through October
2009. He provided no information on the status of the rental property that went into the
foreclosure process.6
Likewise, in November 2008, Applicant and his wife contacted a debt solutions
company and enrolled in this company’s program to repay approximately $20,000 in
unsecured debts.  This company planned to charge him $3,000 for its services. After a
few months of participation, Applicant and his wife decided to withdraw from this service
and use the monthly payment to reduce their debts. The credit reports of record reflect
that Applicant has paid several past due credit card accounts which are not listed in the
SOR.7
Applicant’s wife obtained a full-time job in 2008. He submitted a copy of an
October 2008 leave and earnings statement for him and his wife. In 2008, his net
monthly pay totaled $4,800, and his wife’s net monthly pay totaled $2,900.  Applicant8
Item 6.9
Items 10-13. 10
Id.11
Id.12
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included $1,500 a month in rental income on his personal financial statement for a total
household income of $9,200. His monthly expenses totaled $6,651 and included $3,592
in first and second mortgage payments and $358 for the debt solutions company,
leaving a balance of $2,549 each month to pay his debts.9
The SOR identified 11 purportedly continuing delinquencies as reflected by credit
reports from 2008, 2009, and 2010, totaling approximately $740,000. Some accounts
have been transferred, reassigned, or sold to other creditors or collection agents. Other
accounts are referenced repeatedly in all of the credit reports, in many instances
duplicating other accounts listed, either under the same creditor or collection agency
name or under a different creditor or collection agency name. Some accounts are
identified by complete account numbers, while others are identified by partial account
numbers, in some instances eliminating the last four digits and in others eliminating
other digits.10
The May 9, 2008 credit report indicates that the debts listed in SOR ¶¶ 1.h and
1.k are properties in foreclosure, meaning that the mortgagor has obtained the property
and title to the property. The September 10, 2009, March 16, 2010 and September 10,
2010 credit reports show a zero balance on both of these mortgage debts. Based on
these credit reports, I find that Applicant does not owe any money to the mortgagor on
these debts.11
The $97,000 mortgage debt in SOR ¶ 1.j is listed on the May 9, 2008 credit
report as a charge off and closed account. This debt does not appear on the remaining
credit reports in the record. SOR ¶ 1.c identifies an unpaid debt of almost $89,000,
which is listed only on the September 10, 2010 credit report. The original creditor and
account number are not shown. Applicant did not recognize the debt, but has assumed
it is a mortgage and admitted the debt. These two debts may be the same, but this
determination cannot be made on the information in this record. These debts are not
resolved.  12
Applicant has not paid his monthly payments on his two second mortgages,
stating that he does not have sufficient funds to make his payments. His job changed in
2009, but he has not provided a new financial statement. He has not provided any
information showing a negative change in his finances. He has not given a reason for
his inability to continue with his agreed upon payments and his failure to pay his
Response to SOR.13
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remaining debts. Applicant has not provided updated information on the status of his
efforts to resolve the debts listed in the SOR.13
Policies
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 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 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.
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.
Under Directive ¶ E3.1.14, the Government must present evidence to establish
controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, an applicant is
responsible for presenting “witnesses and other evidence to rebut, explain, extenuate,
or mitigate facts admitted by applicant or proven by Department Counsel. . . .” An
applicant has the ultimate burden of persuasion for 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 an 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.
 
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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
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. 
AG ¶ 19 describes the disqualifying conditions that could raise security concerns.
I have considered all the conditions, and especially the following:
(a) inability or unwillingness to satisfy debts; and
(c) a history of not meeting financial obligations. 
Applicant developed significant financial problems when economic and business
changes impeded the ability of Applicant and his wife to obtain tenants for their rental
property. He incurred significant unpaid debt, some of which remains unresolved. These
two disqualifying conditions apply.
The Financial Considerations guideline also includes conditions that can mitigate
security concerns. I have considered mitigating factors AG ¶ 20(a) through 20(f), and
especially the following:
(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
downturn, unexpected medical emergency, or a death, divorce or
separation), and the individual acted responsibly under the circumstances;
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(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 financial problems began with the economic downturn in 2007. He
lost income from his rental properties, making it difficult for him to meet his financial
obligations. He renegotiated two of his four mortgages and his wife started working full-
time at a salaried position. He paid some of his credit card debt through payment plans.
Because two of his properties went into foreclosure, and since he has not complied with
his agreement to pay his renegotiated second mortgages, only partial application of AG
¶ 20(b) is warranted.
Applicant contacted and retained the services of a debt solutions company in
2008. He made his required payments for several months until he realized that he could
use this money to resolve his debts on his own. He resolved several of his credit card
debts, but other debts remain unpaid. He does not owe money on the mortgages listed
in SOR ¶¶ 1.h and 1.k. AG ¶ 20(c) is partially applicable. The remaining mitigating
conditions are not applicable in this case.  
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 an 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. 
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 decision to grant or
deny a security clearance requires a careful weighing of all relevant factors, both
favorable and unfavorable. In so doing, an administrative judge must review all the
evidence of record, not a single item in isolation, to determine if a security concern is
established and then whether it is mitigated. A determination of an applicant’s eligibility
for a security clearance should not be made as punishment for specific past conduct,
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but on a reasonable and careful evaluation of all the evidence of record to decide if a
nexus exists between established facts and a legitimate security concern. 
In reaching a conclusion, I considered the potentially disqualifying and mitigating
conditions in light of all the facts and circumstances surrounding this case. When the
economic downturn impacted his finances, Applicant took positive steps to work out his
financial problems. He renegotiated two mortgages; he hired a debt resolution
company; he paid several of his credit card debts; and his wife accepted a full-time
salaried job. He provided information on all that he had done in 2008 and 2009.
However, he has not complied with his agreement to pay his renegotiated second
mortgages, even though these payments are included as part of his monthly living
expenses. He has not explained why he cannot resolve the smaller debts listed in the
SOR, given the $2,500 he has each month after payment of his living expenses. He has
not provided information showing a change in his circumstances since 2009, leaving a
void of information in the record about his current finances. He has not provided any
reason as to why he continues to have these financial problems. Applicant’s lack of
explanation about his current finances and efforts to resolve his debts leaves me no
option, but to deny his request for a security clearance.
Overall, the record evidence leaves me with questions or doubts as to Applicant’s
eligibility and suitability for a security clearance. For all these reasons, I conclude
Applicant has not mitigated the security concerns arising from his finances under
Guideline F.
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: AGAINST APPLICANT
Subparagraphs 1.a-1.g: Against Applicant
Subparagraph 1.h: For Applicant
Subparagraph 1.i: Against Applicant
Subparagraph 1.j: Against Applicant
Subparagraph 1.k: For Applicant
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Conclusion
In light of all of the circumstances presented by the record in this case, it is not
clearly consistent with the national interest to grant Applicant eligibility for a security
clearance.  Eligibility for access to classified information is denied.
                                                              
MARY E. HENRY
Administrative Judge