DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of:                                           )
                                                                    )
---------------------------------- )       ISCR Case No. 09-08325
)
)
Applicant for Security Clearance )
Appearances
For Government: Daniel Crowley, Esquire, Department Counsel
For Applicant: Pro se
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 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 August 4, 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) implemented by the Department of
Defense on September 1, 2006. 
Applicant responded to the SOR on August 24, 2010. The case was assigned to
me on September 27, 2010, and was scheduled on October 6, 2010, for hearing on
October 29, 2010. A hearing was held on the scheduled date. At the hearing, the
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Government's case consisted of four exhibits (GEs 1-4). Applicant relied on one witness
(herself) and six exhibits (AEs A-F). The transcript (Tr.) was received on November 8,
2010. 
Procedural Issues
Before the close of the hearing, Applicant requested leave to supplement the
record with bank statements reflecting bank savings for paying off her credit card debt
and an updated personal financial statement. For good cause shown, Applicant was
granted four days to supplement the record. Department Counsel was afforded three
days to respond. Within the time permitted, Applicant submitted for consideration a
personal financial statement, a bank letter verifying available funds, and payment
verification from her employer of payroll funds withheld to satisfy her outstanding debt
obligations.  (Ex. GE I).  Applicant’s submissions were admitted as AEs G through I.
Applicant asked for consideration of another submission, this one beyond the time
permitted to supplement the record.  In a faxed February 5, 2011 submission, Applicant
requests admission and consideration of correspondence from her student loan creditor
(creditor 1.b) that confirms its (a) grant of successful rehabilitation status to Applicant
and removal of the default and (b) its purchase of her student loan from its assigned
collection agent. Department Counsel interposed no substantive objections to the
submission. For good cause shown, Applicant’s February 14, 2011 submission is
accepted as AE J.
Summary of Pleadings
Under Guideline F, Applicant allegedly incurred two delinquent debts: a credit
card debt in the amount of $5,854 and a student loan debt in the amount of $41,114.  
In her August 2010 response to the SOR, Applicant admitted both allegations.
She claimed ongoing settlement negotiations with creditor 1.a and pending loan
rehabilitation status with creditor 1.b. 
      Findings of Fact
Applicant is a 45-year-old technical writer for a defense contractor, who seeks a
security clearance. The allegations covered in the SOR and admitted by Applicant are
adopted as relevant and material findings.  Additional findings follow.
Applicant married her first husband in June 1985. (GE 1) She has no children
from this marriage.  Records show that Applicant divorced her husband in February 1995
(GE 1; Tr. 39), and remarried in November 2008.  She has no children either from her
most recent marriage. (GE 1)  
Between August 1992 and 1994, Applicant attended a local community college.
She matriculated to an accredited university in 1995 and attended this university for two
years before taking a leave of absence. She returned to school several years later on a
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part-time-basis and earned a bachelor’s degree in communications from this same
university in 2010. (see GE ex. 1 and AE F; Tr. 40-41)  
Over the course of a four-year period between 2006 and 2009, Applicant worked
at various part time and seasonal jobs. She was unemployed between jobs (over four
months combined) in 2006, 2008, and 2009. (GE 1; Tr. 40-41, 56-57) Since June 2009,
she has worked in a part-time position with her current employer, and has received some
encouraging suggestions of a possible full time government contracting position should
the Air Force renew her employer’s contract, and she obtain her clearance. (see GEs 1
and 3 and AE E; Tr. 41).  However, she has no firm commitment from her employer as
yet. (Tr. 41-42) 
In September 1998, Applicant opened a credit card account with creditor 1.a.  She
used it primarily for gas and necessities, and accumulated no more than a $2,000
balance (Tr. 42)  She made intermittent payments on the account for a number of years.
She also made  several payments after it became delinquent in October 2008, and the
account was transferred to various collection agencies. (GEs 2 and 3; Tr. 42-43)
Applicant made contact with the creditor’s collection agents on several occasions and
asked for documented payment terms. (Tr. 43) She has never received any
documentation other than the original payoff letter she received in 2008. (Tr. 43-44)
Applicant’s credit reports reveal a charged-off debt of $5,854 with creditor 1.a in
June 2009. (GEs 2 and 4) She encountered repeated difficulties in making payment
arrangements with this creditor’s collection agencies, and she decided to save enough
money to pay off this creditor in full. (Tr. 44)  To date, Applicant has been able to set
aside over $2,500 towards the payment of her creditor 1.a debt. (Tr. 43-44)  Her most
recent bank statement reflects set-aside funds of $2,549 in her joint checking account e.
(AE H)  
Applicant has been delinquent on her federally-insured student loan accounts
(creditor 1.b) since March 2006. (GEs 2 and 4) While she has made payments on these
accounts for the past eight months (missing only May 2010), she has experienced
difficulties in eliciting a long-term payment arrangement from creditor 1.b. (Tr. 45) As of
August 27, 2010, Applicant owed $47,718 on her student loan account. (see AE A) Her
furnished account balance as of October 5, 2010 is $47,465, and reflects post-dated
checks for depositing in the respective amounts of $520 for the months of March 2010
through October 2010 (save for one month). (see AEs C and D; Tr. 45-49)   
Applicant was told by her creditor 1.b collection representatives that upon receipt
of 10 timely $520 payments, the creditor may be able to place the account in
rehabilitation status. (Tr. 48-51) Applicant’s post-hearing submissions reflect ongoing
monthly payments to creditor 1.b and restoration of her student loan account (creditor
1.b) to rehabilitation status. Based on its receipt of 10 regular monthly payments from
Applicant, her original student loan creditor confirmed its repurchase of the loan from its
collection agent, and removal of the loan from default status. (see AE J)
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While Applicant has not arranged for any financial counseling, she understands
her financial management responsibilities and is firmly resolved to discharging her only
two delinquent debts while keeping all of her others accounts in current status. (Tr. 53-
55)  
Applicant is well-regarded by her CEO, recruiter, and colleagues. She documents
numerous credits for her contributions to her employer’s technical writing projects. (see
AE C) Her character references describe her as very conscientious, reliable, and
trustworthy.They credit her with demonstrated good character and excellent performance
in the execution of her assigned responsibilities as a technical writer.  (see AE C)  
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, revoked, 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.
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Viewing the issues raised and evidence as a whole, the following adjudication
policy concerns are pertinent herein:
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 employee of a defense contractor who accumulated a
number of delinquent debts during recurrent periods of unemployment and
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underemployment. She has been earnest in her efforts to resolve her two delinquent
debts with the limited income sources available to her.
Applicant’s two 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.” They have been in delinquent status for some time.
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 her two listed debts, Applicant has encountered repeated difficulties in
her attempts to make payment arrangements with creditor 1.a; she has elected to
establish a savings account to accumulate enough money to pay off the creditor in full.
She has made good-faith efforts to save enough to pay off creditor 1.a, and to bring her
student loan account into rehabilitation status. So far, she is making good progress in
resolving these two delinquent accounts (creditors 1.a and 1.b). In the supplemental
submission she recently provided, she documents her student loan creditor’s crediting
her with loan rehabilitation and removal of the default. Her student loan account is now
considered by her lender to be in current status. 
Evaluating all of her repayment efforts contextually, and given the difficult
unemployment and underemployment issues she has had to manage the past few years
while completing her academic credits for her bachelor’s degree, Applicant may be
credited with serious, good-faith efforts to resolve her debts and regain control of her
finances. She has made considerable progress to date in regaining control of her
finances and shows good promise for fulfilling her remaining debt obligations.
Based on her evidentiary showing, Applicant’s proofs are sufficient to establish
significant extenuating circumstances associated with her 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 her to mitigation credit under MC ¶ 20(d), “the
individual initiated a good-faith effort to repay overdue creditors or otherwise resolve
debts,” as well. Applicant has demonstrated credible resolve in addressing her only two
delinquent debts (creditors 1.a and 1.b). These mitigating conditions have application to
Applicant’s situation, considering her earnest repayment efforts. 
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In  balance, Applicant has shown good faith in addressing her debts since joining
her current employer in 2009. And, with good prospects for returning to full-time
employment with her employer, she demonstrates that she is now firmly in control of her
finances and can be expected to stay current with her debts.
Based on a whole-person assessment, Applicant surmounts the judgment
questions raised by her accumulation of two major delinquent debts during recurrent
periods of unemployment and underemployment. Her positive endorsements from her
CEO, recruiter, and coworkers merit considerable praise and commendation. In balance,
she has shown sufficient tangible effort in addressing her only listed delinquent debts to
mitigate security concerns over these two debts and demonstrate restored control over
her finances. 
Taking into account all of the extenuating facts and circumstances surrounding
Applicant’s debt accumulations, her limited resources during her recurrent periods of
unemployment and underemployment, and the concerted steps she has mounted to
address both of her delinquent debts, safe predictive judgments can be made about her
ability and intentions to repay her accrued debts and restore her finances to stable levels
commensurate with her holding a security clearance. 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
Subparagraphs 1.a through 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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