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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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------------------------- )       ISCR Case No. 09-04511
)
)
Applicant for Security Clearance )
Appearances
For Government: 
Jeff A. Nagel, Esq., Department Counsel
For Applicant:
Pro se
January 14, 2011
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DECISION
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ROSS, Wilford H., Administrative Judge:
Applicant submitted his Electronic Questionnaire for Investigations Processing on
August 20, 2008. (Government Exhibit 1.) On January 25, 2010, the Defense Office of
Hearings and Appeals (DOHA) issued a Statement of Reasons (SOR) detailing the
security concerns under Guideline F. 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) effective within the Department of Defense for SORs
issued after September 1, 2006. 
 
Applicant answered the SOR in writing on February 10, 2010, and requested a
hearing before an administrative judge (Answer). Department Counsel was prepared to
proceed on January 5, 2010. This case was assigned to me on March 22, 2010. DOHA
issued a notice of hearing on March 29, 2010. I convened the hearing as scheduled on
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April 22, 2010. The Government offered Government Exhibits 1 through 9, which were
received without objection. Applicant testified on his own behalf, and submitted
Applicant Exhibits A through G, which were also received without objection. Applicant
asked that the record remain open for the receipt of additional documents. Applicant
submitted Applicant Exhibit H on May 5, 2010, and it was admitted without objection.
DOHA received the transcript of the hearing on May 4, 2010. The record closed on May
5, 2010. Based upon a review of the pleadings, exhibits, and testimony, eligibility for
access to classified information is granted.
Findings of Fact
Applicant is 32, married, and has one child. He is employed by a defense
contractor and seeks to retain a security clearance in connection with his employment. 
Guideline F, Financial Considerations
The Government alleges that Applicant is ineligible for clearance because he is
financially overextended and, therefore, at risk of having to engage in illegal acts to
generate funds. Applicant admitted both of the factual allegations in the SOR. The
admissions are deemed findings of fact. He also submitted additional information to
support his request for a security clearance.
The two allegations in the SOR concern the first and second mortgages on a
house the Applicant owned in a large city in the Midwestern part of the country. (House
One.) The total indebtedness for the mortgages is $214,064.
Applicant moved to the Midwest in 2004 from the Southwest part of the United
States. He went there because of a job that offered him more money and a chance for
advancement. He and his wife purchased House One with the first mortgage, and
acquired the second mortgage in 2006. The second mortgage was acquired, in part, to
help with medical bills related to knee surgery on the Applicant’s wife. In addition to her
medical problems, Applicant’s daughter is an asthma sufferer, which is exacerbated by
the humidity and cold weather in the Midwest. (Tr. 42-43, 58.)
Two events happened in 2008. First, the national economic downturn occurred,
which wiped out any equity Applicant had in House One and left him underwater on the
mortgages. Second, a company in the city where the Applicant lived before 2004
offered him a job, for more money and the opportunity to move back to the Southwest.
(Tr. 58-59.)
Applicant talked to several real estate agents about the feasability of selling
House One. He was told that, because of the depressed housing market, he was too far
underwater to be successful. If the Applicant took the new job, he knew that it would be
impossible to make payments on two houses.
Applicant has stated that, if there is a deficiency judgment after the foreclosure is completed, he will pay it.1
(Tr. 50-53.) 
Applicant showed that a $94 delinquency to a creditor shown on Government Exhibit 10 was the result of a2
continuing mistake by the creditor. (Tr. 64-69; Applicant Exhibit G.)
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Applicant fully informed his prospective employer of his housing situation and
that the odds were he would have to let House One go to foreclosure in order to take
the new job and move back to the Southwest. (Applicant Exhibit C.) With that
knowledge, Applicant was hired, moved to the Southwest, and bought a new house.
Once he had relocated in August 2008, Applicant informed his mortgage
company that he would no longer be able to make payments on House One and he
wanted to sign a deed in lieu of foreclosure to the mortgage company. The mortgage
company refused and said that Applicant had to not pay his mortgage for three months
before they would talk to him. After three months he again contacted the mortgage
company and was told that he would have to put the house up for sale for three months
before they would accept a deed in lieu. The house was underwater, so Applicant
elected to wait for foreclosure. In February 2009, Applicant informed his company, and it
informed the Government, that a foreclosure was imminent. (Tr. 53-54; Applicant Exhibit
A.) In March 2009 the bank which had taken over the mortgage company’s assets filed
suit to foreclose. Applicant responded to the suit and stated he was willing to waive his
right to reinstatement if the bank gave up the right to a deficiency judgment. (Applicant
Exhibit B.) Applicant subsequently talked to the law firm representing the bank and told
them he wished to expedite the process and complete the foreclosure. Instead of
expediting the process, his request has slowed the process down and the court date
had been continued several times while the bank tries to find a way to work with the
Applicant. As stated earlier, Applicant cannot afford two mortgages and wants to
conclude the process.  He has contacted the bank and law firm over the telephone and
in writing, but has not received a response. As of the time the record closed the
Applicant did not know whether the foreclosure process had been completed. (Tr. 30-
35, 47-50, 56-57, 61; Government Exhibit 4; Applicant Exhibits D, E and F.)1
The evidence shows that Applicant is able to maintain his regular mortgage
payment on his house in the Southwest, and pay all of his regular debts. (Tr. 44-47;
Government Exhibit 9.)2
Mitigation
Applicant’s current supervisor submitted a letter. He states, “His [Applicant’s]
character, work ethics, integrity and teamwork attitude are beyond reproach.” (Applicant
Exhibit H at 3.) 
Applicant was a highly successful and decorated active duty member of the
United States Coast Guard from 1997 to 2002. (Applicant Exhibit H at 4-18.)
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Policies
Security clearance decisions are not made in a vacuum. 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 to be used as appropriate 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. In addition, the administrative judge may also rely on his or her own
common sense, as well as knowledge of the law, human nature, and the ways of the
world, in making a reasoned 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. Security clearance decisions include, by
necessity, consideration of the possible risk that 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.
 
Finally, as emphasized in Section 7 of Executive Order 10865, “Any
determination under this order . . . 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
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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 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. 
The guideline notes several conditions that could raise security concerns. Under
AG & 19(a), an Ainability or unwillingness to satisfy debts@ is potentially disqualifying.
Similarly under AG & 19(c), Aa history of not meeting financial obligations@ may raise
security concerns. Applicant, by his own admission, and supported by the documentary
evidence, has failed to pay his two mortgages on House One. The evidence is sufficient
to raise these potentially disqualifying conditions.
The guideline also includes examples of conditions that could mitigate security
concerns arising from financial difficulties. Under AG ¶ 20(a), the disqualifying condition
may be mitigated where Athe 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.@ In addition, AG
¶ 20(b) states that the disqualifying conditions may be mitigated 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.”  
This is a somewhat unusual situation. Applicant was faced with a choice of
staying in a job in a city where the weather was having a continuing impact on his
family’s health, however, he did have the ability to pay his mortgage. Or he could accept
the job with his current employer, move back to the Southwest, buy a home and let
House One go into foreclosure, or file a deed in lieu. This decision was not made lightly
by the Applicant, but in his opinion it was in his family’s best interest. The downturn in
the economy made it virtually impossible to sell House One, the mortgage company
was taken over by a bank, which caused additional turmoil, and he has received
virtually no correspondence from the bank or their law firm in over a year.
The Applicant has acted in a way that shows good judgment, making the best he
could out of a difficult situation. The housing downturn is obviously a situation out of the
Applicant’s control and he did act responsibly under his particular circumstances. Both
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of these mitigating conditions apply to the facts of this case. (See ISCR Case No. 09-
08533 (App. Bd. Oct. 6, 2010.)
Applicant has not received financial counselling. However, as found above, his
current financial situation is stable. I find that “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,” as required by AG ¶ 20(c).
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 relevant circumstances. 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 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.      
I considered the potentially disqualifying and mitigating conditions in light of all
the relevant facts and circumstances surrounding this case. Applicant made a difficult
choice, which resulted in House One being foreclosed on. His decision was not made
lightly, nor did it show poor judgment on his part. Applicant made his decision, which
was reasonable under the circumstances of this case, with full knowledge of the
potential impact, including on his security clearance. (See Tr. 49.) Under AG ¶ 2(a)(2), I
have considered the facts of the Applicant’s debt history. As stated at length above,
much of this was brought about because of the economic downturn. Based on the
record, I find that there have been permanent behavioral changes under AG ¶ 2(a)(6).
Accordingly, I find that there is little to no potential for pressure, coercion, exploitation,
or duress (AG ¶ 2(a)(8)); and that there is no likelihood of recurrence (AG ¶ 2(a)(9)). 
Overall, the record evidence leaves me with no questions or doubts as to
Applicant’s eligibility and suitability for a security clearance. For all these reasons, I
conclude Applicant has mitigated the security concerns arising from his financial
situation. On balance, I conclude that Applicant has successfully overcome the
Government's case opposing his request for a security clearance.  Accordingly, the
evidence supports granting his request for a security clearance.
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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, it is clearly consistent
with the national interest to grant Applicant eligibility for a security clearance.  Eligibility
for access to classified information is granted.
                                              
WILFORD H. ROSS
Administrative Judge