DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of:                                           )
                                                                    )
---------------------------------- )       ISCR Case No. 10-03663
                )
)
Applicant for Security Clearance )
Appearances
For Government: Daniel Crowley, Esquire, Department Counsel
For Applicant: Pro se
______________
 Decision
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W ESLEY, Roger C., Administrative Judge:
 Based upon a review of the case file, pleadings, exhibits, and testimony, eligibility
for access to classified information is granted.
Statement of the Case
On July 26, 2010, the Defense Office of Hearings and Appeals (DOHA) issued a
Statement of Reasons (SOR) detailing reasons why DOHA could not make the
preliminary affirmative determination of eligibility for granting a security clearance, and
DOHA recommended referral to an administrative judge to determine whether a security
clearance should be granted, continued, denied, or revoked. 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 (AGs), and implemented by the Department
of Defense on September 1, 2006.
 
Applicant responded to the SOR on August 3, 2010.  The case was assigned to
me on September 27, 2010, and was scheduled for hearing on October 28, 2010. A
hearing was held on the scheduled date. At the hearing, the Government's case
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consisted of five exhibits (GEs 1-5). All of the Government’s exhibits were admitted.
Applicant relied on two witnesses (including himself) and six exhibits (AEs A-F), which
were admitted. The transcript (Tr.) was received on August 5,  2010. 
Summary of Pleadings
Under Guideline F, Applicant allegedly accumulated two delinquent debts, which
together exceed $36,000.  In his response to the SOR, Applicant admitted the first debt,
and denied the second one (claiming he settled the debt).  
      Findings of Fact
Applicant is a 53-year-old system engineer for a defense contractor who seeks a
security clearance. The allegation covered in the SOR and admitted by Applicant is
adopted as a relevant and material finding.  Additional findings follow.
Background
Applicant earned an Associate’s degree from an accredited community college in
June 1996. (GE 1; Tr. 43-44). He married his first and only spouse in March 1985.  He
and his spouse initiated divorce proceedings for non-financial reasons in 2005. (Tr. 33)
According to his security clearance application (e-QIP), their divorce was finalized in
October 2007. (GE 1) He has one stepchild from this marriage (age 29), but no children
born to Applicant and his ex-wife. (Tr. 42-43)
Between 1975 and 1981, Applicant served in the U.S. Air Force. (GE 1) He
received an honorable discharge in June 1981. (GE 1) Following his Air Force discharge,
Applicant worked for a defense contractor as an antenna mechanic and subsystem
engineer for about 20 years before leaving the state for other opportunities. (Tr. 44) After
experiencing a layoff with his new company in 2002, he and his wife returned to their
state of origin before their relocation. (Tr. 45-46).
Applicant’s finances
For the most part, Applicant was able to keep up with his bills (even during his
short layoff in 2002) after his Air Force discharge. (GE 4; Tr. 45-46)  Faced with a large
tax obligation, they opted to pay their IRS tax obligation first, and live off of their credit
cards in the short term. In the process of living on their credit cards, they accrued more
credit card debt than they anticipated.  (GE 4) 
During their marriage, Applicant deferred to his wife to manage their finances and
pay their bills. (Tr. 46) At no time during their marriage did Applicant and his wife seek
financial counseling. (Tr. 47)  
Before the finalization of their divorce in 2007, Applicant’s wife told him she was
filing for personal bankruptcy. Applicant found a number of his ex-wife’s scheduled debts
were marital debts. Since he chose not to pursue personal bankruptcy relief, he
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remained legally responsible for the debts, once his ex-wife received her bankruptcy
discharge. (Tr. 34)
Without informing Applicant, his ex-wife opened a credit card account with
creditor 1.a in May 1994. (see GEs 2, 4, and 5) This account became delinquent after
their separation. Following his ex-wife’s bankruptcy discharge, creditor 1.a made a
settlement offer to Applicant to pay off this $10,336 debt. Applicant provided
documentation at the hearing of his settlement offer made to the creditor in August 2010
(see AE B), and his ultimate  settlement arrangement with this creditor on this
outstanding debt. (see AE C; Tr. 40-41)  Under the terms of the payment agreement he
reached with this creditor in August 2010, Applicant is making monthly payments of
$175. (AE C) This monthly payment stream is scheduled to continue for 24 months, after
which Applicant’s scheduled  payments will increase to $310 a month. (AE C)
Besides the creditor card account she opened with the creditor covered in
subparagraph 1.a, Applicant’s wife opened a second credit card account with the same
creditor in June 1995. (see GEs 2 and 4) This account is not covered in the SOR.
Applicant believes his ex-wife listed this debt in her bankruptcy schedules. But after she
received her discharge, the creditor looked to Applicant as a co-obligor on this  account
as well. (Tr. 34-35)  In January 2009, Applicant contacted this creditor’s collection agent
to explore ways of settling this identified account. (GE 4)  Acting through its collection
agent in a January 2009 letter to Applicant, this creditor presented Applicant with a
settlement offer.  In this settlement offer, the creditor communicated its willingness to
accept  a lump-sum payment of $3,486 in full settlement of the debt.  (AE A; Tr. 35-36)
The creditor conditioned its settlement offer upon Applicant’s showing of acceptance by
transmitting his payment by January 30, 2009. Applicant documents his timely payment
of this account in full. (see AE A)
Sometime in 1988, Applicant and his wife opened an account with creditor 1.b.
(see GEs 2, 4 and 5) Before he was asked about the account in a scheduled interview
with an agent of the Office of Personnel Management (OPM) in February 2010, Applicant
was not familiar with the nature of the debt, or the balance due on the account. After the
interview, Applicant made contact with creditor 1.b. Applicant’s efforts produced a
settlement offer from the creditor in July 2010. (see AE D) This settlement offer consisted
of the creditor’s willingness to accept a lump sum payment of $8,000 in full settlement of
the outstanding debt. (Tr. 40) The creditor set a July 23, 2010 deadline for Applicant’s
acceptance of the offer. (AE D) Within the time permitted, Applicant tendered a check in
the amount of $8,000 in full satisfaction of the creditor 1.b debt. (AE D)  
Since 2009, Applicant has been generally able to stay current with his bills and
keep his finances in order. (Tr. 47) His most recent credit report reflects current balances
with all of his listed creditors. (see AE F) He currently nets $2,700 a month and has
monthly expenses of $2,677. (AE F) This leaves him with a small positive remainder. 
Applicant assured he was not aware of any applicable statutes of limitation on any
of his old marital debts and simply wants to pay them off. (Tr. 48)  He has no knowledge
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of any outstanding debts his wife accrued before she petitioned for Chapter 7 bankruptcy
protection. (Tr. 49)  
Endorsements
Applicant is well-regarded by his supervisors and co-workers (Tr. 54-56) A co-
worker who has known Applicant for 27 years described him as dependable and reliable.
This colleague, who himself has held a security clearance since 2006, recommends
Applicant to a position of trust. (Tr. 55-60) 
Policies
The AGs list guidelines to be used by administrative judges in the decision-
making process covering DOHA cases. These guidelines take into account factors that
could create a potential conflict of interest for the individual applicant, as well as
considerations that could affect the individual’s reliability, trustworthiness, and ability to
protect classified information. 
These guidelines include "[c]onditions that could raise a security concern and may
be disqualifying” (disqualifying conditions), if any, and many of the "[c]onditions that
could mitigate security concerns.” They must be considered before deciding whether or
not a security clearance should be granted, continued, or denied. The guidelines do not
require administrative judges to place exclusive reliance on the enumerated disqualifying
and mitigating conditions in the guidelines in arriving at a decision. Each of the
guidelines is to be evaluated in the context of the whole person in accordance with AG ¶
2(c) 
In addition to the relevant AGs, administrative judges must take into account the
pertinent considerations for assessing extenuation and mitigation set forth in AG ¶ 2(a)
of the revised AGs, which are intended to assist the judges in reaching a fair and
impartial commonsense decision based upon a careful consideration of the pertinent
guidelines within the context of the whole person. The adjudicative process is designed
to examine a sufficient period of an applicant’s life to enable predictive judgments to be
made about whether the applicant is an acceptable security risk. 
When evaluating an applicant’s conduct, the relevant guidelines are to be
considered together with the following AG ¶ 2(a) factors: (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 chances; (7) the motivation for the conduct; (8) the potential for
pressure, coercion, exploitation, or duress; and (9) the likelihood of continuation or
recurrence.
Viewing the issues raised and evidence as a whole, the following adjudication
policy concerns are pertinent herein:
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Financial Considerations
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.  Compulsive gambling is a concern as it may lead to financial
crimes including espionage.  Affluence that cannot be explained by known
sources of income is also a security concern.  It may indicate proceeds
from financially profitable criminal acts.  AG ¶ 18.
Burden of Proof
Under the Directive, a decision to grant or continue an applicant's request for
security clearance may be made only upon a threshold finding that to do so is clearly
consistent with the national interest.  Because the Directive requires administrative
judges to make a commonsense appraisal of the evidence accumulated in the record,
the ultimate determination of an applicant's eligibility for a security clearance depends, in
large part, on the relevance and materiality of that evidence. As with all adversarial
proceedings, the judge may draw only those inferences which have a reasonable and
logical basis from the evidence of record. 
The Government's initial burden is twofold: (1) It must prove by substantial
evidence any controverted facts alleged in the SOR; and (2) it must demonstrate that the
facts proven have a material bearing to the applicant's eligibility to obtain or maintain a
security clearance.  The required showing of material bearing, however, does not require
the Government to affirmatively demonstrate that the applicant has actually mishandled
or abused classified information before it can deny or revoke a security clearance.
Rather, consideration must take account of cognizable risks that an applicant may
deliberately or inadvertently fail to safeguard classified information.
Once the Government meets its initial burden of proof of establishing admitted or
controverted facts, the burden of proof shifts to the applicant for the purpose of
establishing his or his security worthiness through evidence of refutation, extenuation or
mitigation of the Government's case.  Because Executive Order 10865 requires that all
security clearances be clearly consistent with the national interest, “security-clearance
determinations should err, if they must, on the side of denials.” See Department of the
Navy v. Egan, 484 U.S. 518, 531 (1988).
Analysis  
Applicant is a respected system engineer of a defense contractor who
accumulated two major marital debts prior to his separation and divorce in 2007.
Because his wife (by herself) filed for personal bankruptcy in 2005, and received her
discharge, creditors 1.a and 1.b pressed Applicant for payment of the debts.  Although
these two listed debts are likely barred by his state’s statute of limitations, Applicant has
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never sought to rely on any statute of limitations bar to avoid responsibility for these two
debts.  Because of their size, the two listed delinquent debts raised initial security
concerns. 
Applicant’s accumulated debt delinquencies warrant the application of two of the
disqualifying conditions (DC) of the financial consideration guideline: DC ¶ 19(a),
“inability or unwillingness to satisfy debts,” and DC ¶19(c) “a history of not meeting
financial obligations.” Although his ex-spouse bears considerable responsibility for these
debts, her no-asset bankruptcy left Applicant as the only remaining obligor subject to any
potential legal recourse.   
Holding a security clearance involves a fiduciary relationship between the
Government and the clearance holder. Quite apart from any agreement the clearance
holder may have signed with the Government, the nature of the clearance holder’s duties
and access to classified information necessarily impose important duties of trust and
candor on the clearance holder that are considerably higher than those typically imposed
on government employees and contractors involved in other lines of government
business.  See Snepp v. United States, 444 U.S. 507, 511 n.6 (1980).  Failure of the
applicant to make concerted efforts to pay or resolve her debts when able to do so raises
security-significant concerns about the sufficiency of the applicant’s demonstrated trust
and judgment necessary to safeguard classified information.
Addressing his two listed debts, Applicant documents his repayment of both
debts. He has a good-faith repayment arrangement in place with his subparagraph 1.a
creditor, and he has paid off his creditor 1.b debt in full.  He documents three good-faith
payments toward the discharge of his creditor 1.a debt and shows good promise of
fulfilling his remaining payment responsibilities. Applicant is current with his all of his
debts and has kept his finances in stable order since at least 2009.  Evaluating all of his
repayment efforts contextually, and considering the extenuating circumstances
associated with his divorce and his loss of a potential sources of financial assistance,
Applicant may be credited with considerable progress to date in regaining control of his
finances. 
Based on his evidentiary showing, Applicant’s proofs are sufficient to establish
significant extenuating circumstances associated with his debt accumulations. As a
result, MC  ¶ 20(b) of the financial considerations guideline, “the conditions that resulted
in the behavior 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),” applies to Applicant’s circumstances. 
Applicant’s repayment efforts entitle him to mitigation credit under MC ¶ 20(d),
“the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve
debts.,” and MC ¶ 20(e), “the individual has a reasonable basis to dispute the legitimacy
of the past-due debt which is the cause of the problem and provides documented proof
to substantiate the basis of the dispute or provides evidence of actions to resolve the
issue.” These mitigating conditions apply to Applicant’s situation, considering (a) his
initial difficulties in identifying the debts following his divorce and his wife’s bankruptcy,
and (b) his substantial repayment efforts after being alerted of outstanding balances with
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creditors 1.a and 1.b and satisfying himself that the listed debts belonged to him as
reported. 
Based on a whole-person assessment, Applicant surmounts the judgment
questions raised by his accumulation of two substantial marital debts during his 21-year
marriage to his ex-spouse. When alerted to the two debts that were discharged in his ex-
wife’s bankruptcy without payment, Applicant accepted responsibility for these aged and
time-barred debts and completed repayment arrangements with the two creditors. His
positive endorsement from his co-worker and colleague of over 27 years merits
considerable praise and commendation. In balance, he has shown sufficient tangible
effort in addressing his two major debts to mitigate his listed delinquent debts and
demonstrate restored control over his finances. Favorable conclusions warrant with
respect to the allegations covered by subparagraphs 1.a and 1.b.   
Formal Findings 
In reviewing the allegations of the SOR in the context of the findings of fact,
conclusions, and the factors and conditions listed above, I make the following separate
formal findings with respect to Applicant's eligibility for a security clearance.
GUIDELINE F (FINANCIAL CONSIDERATIONS):       FOR APPLICANT
Subparas 1.a and 1.b :                     For Applicant
Conclusions
In light of all the circumstances presented by the record in this case, it is clearly
consistent with the national interest to grant or continue Applicant's security clearance. 
Clearance is granted.
                                  
Roger C. Wesley
Administrative Judge
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