DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
------------------------------ )           ISCR Case No. 10-02886
------------------------------ )
)
Applicant for Security Clearance )
Appearances
For Government: Jeff A. Nagel, Department Counsel
For Applicant: Pro se
January 10, 2011
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Decision
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LOKEY ANDERSON, Darlene D., Administrative Judge:
Applicant submitted his Electronic Questionnaires for Investigations Processing
(e-QIP) on October 29, 2009.  (Government Exhibit 1.)  On September 1, 2010, the
Defense Office of Hearings and Appeals (DOHA), pursuant to Executive Order 10865
and Department of Defense Directive 5220.6 (Directive), dated January 2, 1992, (as
amended), issued a Statement of Reasons (SOR) to the Applicant, which detailed
reasons why DOHA could not make the preliminary affirmative finding under the
Directive that it is clearly consistent with the national interest to grant or continue a
security clearance for the Applicant and recommended referral to an Administrative
Judge to determine whether clearance should be denied or revoked.
The Applicant responded to the SOR on September 18, 2010, and he requested
a hearing before a DOHA Administrative Judge.  This case was assigned to the
undersigned on October 22, 2010.  A notice of hearing was issued on October 29, 2010,
and the hearing was scheduled for November 16, 2010.  At the hearing the Government
presented seven exhibits, referred to as Government Exhibits 1 through 7.  The
Applicant presented no exhibits at the hearing.  He testified on his own behalf.  The
record remained open until close of business on December 17, 2010, to allow the
Applicant the opportunity to submit additional documentation.  The Applicant submitted
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twenty-seven Post-Hearing Exhibits, consisting of seventy-one pages, which were
admitted without objection, as Applicant’s Post-Hearing Exhibits A through W that
include exhibits CC, DD, MM and OO.  The official transcript (Tr.) was received on
November 30, 2010.  Based upon a review of the case file, pleadings, exhibits, and
testimony, eligibility for access to classified information is denied.
 FINDINGS OF FACT
The Applicant is 57 years old, and married with one child.  He has a high school
diploma and has completed three years of college.  He is employed as a Productions
Scheduling Planner by a defense contractor and is seeking to obtain a security
clearance in connection with this employment.
The Government opposes the Applicant's request for a security clearance, on the
basis of allegations set forth in the Statement of Reasons (SOR).  The following findings
of fact are entered as to each paragraph and guideline in the SOR:
Paragraph 1 (Guideline F - Financial Considerations)  The Government alleges that the
Applicant is ineligible for clearance because he is financially overextended and at risk of
having to engage in illegal acts to generate funds.      
The Applicant comes from a military family.  His father was a highly decorated
Army World War II and Korean War veteran, and his brother a highly decorated Army
veteran who served in Vietnam.  (Applicant’s Post-Hearing Exhibit E.)   
From 1997 to 2005, the Applicant was employed with his brother’s company and
by 2005, earned approximately $88,000 annually, and became accustomed to living on
that income.  In 2005, the Applicant was laid off from his job, as his brother’s company
went out of business due to the poor economy.  The Applicant found the job market
dismal.  He got another job but was laid off a couple months later.  He was out of work
for about three months before he started working again for about a ten months before
his contract ended in December 2008.  With each job he got, he took a pay reduction.
He continued to pay his bills as best he could with his reduced salary and used his
savings account that contained about $35,000, until it was depleted about a year ago.
(Applicant’s Post-Hearing Exhibit M.) He eventually stopped making his mortgage
payments and could no longer pay his other delinquent bills.  In April, 2009, he was
hired by his current employer where he earns $53,000 annually.  At that time, the
Applicant contacted his creditors about his financial situation and informed them that his
plan was to file bankruptcy.    
The Applicant admits to each of the debts set forth in the SOR, except 1(a), a
debt in the amount of $23.00 and 1(n), a debt in the amount of $430.00.  He disputes
these two debts and believes the creditors to be mistaken. Credit Reports of the
Applicant dated December 10, 2009; April 30, 2010; July 7, 2010; and October 20,
2010; reflect that the Applicant is indebted to each of the creditors set forth in the SOR,
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for credit card debt, in an amount totaling almost $100,000, not counting his mortgage
arrearage.  (Government Exhibits 3, 4, 5, 6 and 7.)  
The following delinquent debts are listed in the SOR: Allegation 1(b).  A debt
owed to a creditor in the amount of $8,503.00 remains outstanding.  Allegation 1(c).  A
debt owed to a creditor in the amount of $2,973.00 remains outstanding.  Allegation
1(d).  A debt owed to a creditor in the amount of $5,233.00 remains outstanding.
Allegation 1(e).  A debt owed to a creditor in the amount of $2,640.00 remains
outstanding.  Allegation 1(f).  A debt owed to a creditor in the amount of $1,640.00
remains outstanding.  Allegation 1(g).  A debt owed to a creditor in the amount of
$1,287.00 remains outstanding.  Allegation 1(h).  A debt owed to a creditor in the
amount of $326.00 remains outstanding.  Allegation 1(i).  A debt owed to a creditor in
the amount of $2,227.00 remains outstanding.  Allegation 1(j).  A debt owed to a
creditor in the amount of $3,296.00 remains outstanding.  Allegation 1(k).  A debt owed
to a creditor in the amount of $33,353.00 remains outstanding.  Allegation 1(l).  A debt
owed to a creditor in the amount of $23,827.00 remains outstanding.  Allegation 1(m).
A debt owed to a creditor in the amount of $5,216.00 remains outstanding.  Allegation
1(o).  A debt owed to a creditor in the amount of $322.00 remains outstanding.  The
Applicant has not provided any documentary evidence to support the fact that he has
paid off, or starting making payments toward any of the debts set forth in the SOR.  
Three days before the hearing, the Applicant hired an attorney who plans to file
for Chapter 13 Bankruptcy relief on his behalf.  (Tr. p. 55 and Applicant’s Post-Hearing
Exhibits A, B and C.)  The Applicant is still in the process of paying the attorney fees
before the bankruptcy petition will be filed.  He projects that it will take five or six months
before he is able to file the bankruptcy petition.  (Tr. p. 50.)  In August 2010, the
Applicant received results of the loan modification on his home and the payments were
reduced by about $500.00 monthly.  (Tr. p. 38 and Applicant’s Post-Hearing Exhibits D
and DD.)    
Numerous letters of recommendation from his professional associates, family
and friends who know the Applicant well, including his direct Manager and supervisor,
sister-in-law and brothers attest to the Applicant’s overall outstanding character.  The
Applicant is described as a natural leader, who is a hard working, motivated, highly
ethical and a dedicated employee.  He is considered a valuable asset to his company,
and a team player, who is reliable, honest and trustworthy.  He is highly recommended
for a position of trust.  (Applicant’s Post-Hearing Exhibits N, O, OO, P, Q, R, S, T, U, V
and W.)  
The Applicant’s performance appraisal from 2009, reflects ratings of either
“exceeds performance requirements” or “outstanding” in every category, except one
where he “meets performance requirements.”  (Applicant’s Post-Hearing Exhibit F.)  The
Applicant received a promotion and pay raise in April 2010.  (Applicant’s Post-Hearing
Exhibit G.)
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POLICIES
Enclosure 2 of the Directive sets forth adjudication policies divided into
"Disqualifying Factors" and "Mitigating Factors."  The following Disqualifying Factors
and Mitigating Factors are found to be applicable in this case:
Guideline F (Financial Considerations)
18.  The Concern.  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. 
Conditions that could raise a security concern:
19.(a) inability or unwillingness to satisfy debts; 
19.(c) a history of not meeting financial obligation. 
Conditions that could mitigate security concerns:
None.
In addition, as set forth in Enclosure 2 of the Directive at pages 18-19,  in
evaluating the relevance of an individual’s conduct, the Administrative Judge should
consider the following general factors:
a.  The nature, extent, and seriousness of the conduct and surrounding
circumstances;
     b.  The circumstances surrounding the conduct, to include knowledgeable
participation;
c.  The frequency and recency of the conduct;
d.  The individual’s age and maturity at the time of the conduct;
e.  The extent to which participation is voluntary;
f.  The presence or absence of rehabilitation and other permanent behavior
changes;
g.  The motivation for the conduct; 
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h. The potential for pressure, coercion, exploitation or duress; and
 i.  The likelihood of continuation or recurrence.
The eligibility criteria established in the DoD Directive identify personal
characteristics and conduct which are reasonably related to the ultimate question,
posed in Section 2 of Executive Order 10865, of whether it is “clearly consistent with the
national interest” to grant an Applicant’s request for access to classified information.
The DoD Directive states, “The adjudicative process is an examination of a
sufficient period of a person’s life to make an affirmative determination that the person is
an acceptable security risk.  Eligibility for access to classified information is predicted
upon the individual meeting these personnel security guidelines.  The adjudicative
process is the careful weighing of a number of variables known as the whole-person
concept.  Available, reliable information about the person, past and present, favorable
and unfavorable should be considered in reaching a determination.” The Administrative
Judge can draw only those inferences or conclusions that have reasonable and logical
basis in the evidence of record.  The Judge cannot draw inferences or conclusions
based on evidence which is speculative or conjectural in nature.  Finally, as emphasized
by President Eisenhower in 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 concerned.”
CONCLUSIONS
In the defense industry, the security of classified industrial secrets is entrusted to
civilian workers who must be counted upon to safeguard such sensitive information
twenty-four hours per day, seven days per week.  The Government is therefore
appropriately concerned when available information indicates that an Applicant for
clearance may be involved in instances of financial irresponsibility, which demonstrates
poor judgment or unreliability.
It is the Government’s responsibility to present substantial evidence to support
the finding of a nexus, or rational connection, between the Applicant’s conduct and the
holding of a security clearance.  If such a case has been established, the burden then
shifts to the Applicant to go forward with evidence in rebuttal, explanation or mitigation
which is sufficient to overcome or outweigh the Government’s case.  The Applicant
bears the ultimate burden of persuasion in proving that it is clearly consistent with the
national interest to grant him or her a security clearance.
In this case the Government has met its initial burden of proving that the
Applicant has been financially irresponsible (Guideline F).  This evidence indicates poor
judgment, unreliability and untrustworthiness on the part of the Applicant.  Because of
the scope and nature of the Applicant's conduct, I conclude there is a nexus or
connection with his security clearance eligibility.
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The evidence shows that due to periods of unemployment and underemployment
the Applicant became excessively indebted.  Adjusting from living on $88,000 annually
in 2005, to $53,000 now, has obviously been difficult.  He has tried to pay his bills but
has not been able to get a good handle on the matter.  To his credit, he has decided to
file for bankruptcy to resolve his debts.  He has hired an attorney and plans to file for
Chapter 13 Bankruptcy.  He is now in the process of starting to resolve his delinquent
debts.  Given the extent of his indebtedness, and the fact that he has only started the
process, he presently does not qualify for access to classified information.    
Under the particular circumstances of this case, the Applicant’s delinquent debts
remain owing and have not yet been addressed.  His plan to file bankruptcy has not
been completed, and he has not started a payment plan with his creditors.  There is
insufficient evidence of financial rehabilitation at this time.  The Applicant has not clearly
demonstrated that he can properly handle his financial affairs or that he is fiscally
responsible.  Considering all of the evidence, the Applicant has not introduced
persuasive evidence in rebuttal, explanation or mitigation that is sufficient to overcome
the Government's case. 
Under Guideline F (Financial Considerations), Disqualifying Conditions 19.(a)
inability or unwillingness to satisfy debts; and 19.(c) a history of not meeting financial
obligation apply.  None of the mitigating conditions are applicable.  Accordingly, I find
against the Applicant under Guideline F (Financial Considerations).    
I have also considered the “whole-person concept” in evaluating the Applicant’s
eligibility for access to classified information.  Under the particular facts of this case, the
totality of the conduct set forth above, when viewed under all of the guidelines as a
whole, support a whole-person assessment of poor judgement, untrustworthiness,
unreliability, lack of candor, an unwillingness to comply with rules and regulations,
and/or other characteristics indicating that the person may not properly safeguard
classified information.
 
 I have considered all of the evidence presented.  However, it does not mitigate
the negative effects of his financial indebtedness and the effects that it can have on his
ability to safeguard classified information.  On balance, it is concluded that the Applicant
has not overcome the Government's case opposing his request for a security clearance.
Accordingly, the evidence supports a finding against the Applicant as to the factual and
conclusionary allegations expressed in Paragraph 1 of the SOR.   
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     FORMAL FINDINGS
Formal findings For or Against the Applicant on the allegations in the SOR, as
required by Paragraph 25 of Enclosure 3 of the Directive are:
Paragraph 1: Against the Applicant.
        Subpara.  1.a.: Against the Applicant.
    Subpara.  1.b.: Against the Applicant.
      Subpara.  1.c.: Against the Applicant.
    Subpara.  1.d.: Against the Applicant.
     Subpara.  1.e.: Against the Applicant.
    Subpara.  1.f.: Against the Applicant.
      Subpara.  1.g.: Against the Applicant.
    Subpara.  1.h.: Against the Applicant
        Subpara.  1.i.: Against the Applicant.
    Subpara.  1.j.: Against the Applicant.
      Subpara.  1.k.: Against the Applicant.
    Subpara.  1.l.: Against the Applicant.
     Subpara.  1.m.: Against the Applicant.
      Subpara.  1.n.: Against the Applicant.
    Subpara.  1.o.: Against the Applicant.
    
   DECISION
In light of all 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
the Applicant.
  Darlene Lokey Anderson
Administrative Judge