DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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---------------------------------- )           ISCR Case No. 10-01463
 )
)
Applicant for Security Clearance )
Appearances
For Government: Jeff Nagel, Department Counsel
For Applicant: Pro se 
March 14, 2011
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Decision
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LOKEY ANDERSON, Darlene D., Administrative Judge:
Applicant submitted her Questionnaire for Sensitive Positions (SF-86) on June
20, 2008.  (Government Exhibit 1.)  On a date uncertain, 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 August 24, 2010, and he requested a
hearing before a DOHA Administrative Judge.  This case was assigned to the
undersigned on January 26, 2011.  A notice of hearing was issued that same day, and
the hearing was scheduled for February 18, 2011.  At the hearing the Government
presented eight exhibits, referred to as Government Exhibits 1 through 8.  The Applicant
presented one exhibit, referred to as Applicant’s Exhibit A.  He also testified on his own
behalf.  The record remained open until close of business on March 10, 2011, to allow
the Applicant the opportunity to submit additional documentation.  The Applicant
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submitted two Post-Hearing Exhibits, consisting of five pages, which were admitted
without objection, as Applicant’s Post-Hearing Exhibits A through D that included in the
record.  The official transcript (Tr.) was received on February 25, 2011.  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 33 years old and married with two children.  She has a
Bachelors of Science degree in Chemistry.  She was employed as by a defense
contractor in their Forensic Laboratory Program.  She is subject to being rehired, and is
seeking to obtain a security clearance in connection with her 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 she is financially overextended and at risk
of having to engage in illegal acts to generate funds.      
The Applicant admits each of the six delinquent debts set forth in the SOR
totaling approximately $190,000.00.  Credit Reports of the Applicant dated July 19,
2008; October 22, 2009; June 4, 2010; October 12, 2010; and February 13, 2011, also
reflect that the Applicant is indebted to each of the creditors set forth in the SOR.
(Government Exhibits 4, 5, 6,  7 and 8.)  
The Applicant was deployed to Iraq on a job assignment from July 2008 to July
2009.  She took the position to assist her financial recovery as portions of her pay were
tax-free.  (Tr. p. 33.)  She testified that she has since paid off an auto loan, a credit card
account, saved money to purchase a car outright, and paid off her husband’s carpet
cleaning and restoration equipment.  (Tr. p. 30-31.)  Although her financial problems
began in 2003, until the beginning of 2008, the Applicant always paid her bills on time.   
She explained that in 2003, she purchased a home for $ 402,000 and wanted to
sell it in 2005.  Before the house could be sold, and after she had already purchased
another home for $ 635,000, she learned that there were unforeseen, necessary, costly
repairs that had to be done, specifically structural foundation problems and termite
damage that needed repair.  To sell the first house she had to re-roof the front section
of the house, address grade and drainage issues, replace counter tops and carpeting
and repaint the interior and exterior.  The total costs of repairs was  $7,000.00.  
During this time, the Applicant continued making the mortgage payments on both
the first and second houses.  She used her savings to cover the costs.  It took one year
to sell the first house and she spent $ 70,000 and had a total loss of almost $100,000
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from the initial appraised value.  Her initial plan to have the profit from the first home pay
off the second mortgage on the second home was not realized.  There was no net profit
from the sale of the house, which made the second house unaffordable.  The Applicant
sold the second house for what she bought it for and then purchased a third house for
$495,000.  Since September 2009, she has been working on obtaining a loan
modification that will adjust her payment of $ 3,600.00 to $ 1,870.00.  (Tr. p. 42.)  She is
no longer making her mortgage payments.  In the event that she does not get the loan
modification, she will be forced to move from the house and plans to file Bankruptcy to
discharge her debts.  (Tr. p. 55.)  The decrease in the economy also adversely affected
her husbands carpet cleaning business.  
         
She has recently retained an attorney to assist in loan modification assistance
and hired a credit counseling company to help with the debt repayment of credit card
accounts.  The goal is to reduce her overall indebtedness.  She states that her attorney
advised her to focus on her primary mortgage prior to resolving her other delinquencies.
She has paid off equipment for her husband’s business, a credit card account and an
auto loan.  She is continuing to pay work toward resolving her debts. 
The Applicant has made no payments toward any of the debts in the SOR and
each of the debts remains owing.  A debt owed to a bank for a delinquent credit card
account in the amount of $ 2,413.00 remains owing.  (Tr. p. 54.)  A debt owed to bank
for a delinquent credit card account in the amount of $ 27,901.00 remains owing.  A
debt owed to a bank for a delinquent credit card account in the amount of $ 8,569.00
remains owing.  A debt owed to bank for a mortgage account that is more than 120
days past due in the amount of $ 34,941.00 remains owing.  A debt owed to a bank for
the second mortgage on the house she currently lives in is past due in the amount of 
$ 90,849.00.  A debt owed to a bank for a delinquent credit card account in the amount
of $15,501.00 remains owing.  If the loan modification is approved, she will have
sufficient monies to pay these debts and she plans to.  In the event that she does not
get the loan modification on her mortgage, she plans to file bankruptcy and discharge
each of the debts set forth in the SOR.  (Tr. p. 60.)
The Applicant received a Certificate of Appreciation dated December 18, 2009,
for her work with the defense contractor in Iraq.  (Applicant’s Post-Hearing Exhibit A.) 
Applicant’s performance review for her current job dated January 24, 2011, is
favorable.  (Applicant’s Post-Hearing Exhibit B.)
   
A letter of recommendation from the a representative from the Department of the
Army who worked with the Applicant in Iraq indicates that the Applicant’s highly
specialized skill set is critical to the government’s expansion forensic capabilities.  He
states that, “It is a rare individual indeed that can serve and excel in these extreme
conditions”.  The Applicant is further described as having a “dedicated work ethic, and
positive attitude even while in the dangerous Iraqi theater of operations which was an
inspiration for all” . (Applicant’s Post-Hearing Exhibit D.)
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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 predicated
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 her security clearance eligibility.
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The evidence shows that circumstances largely beyond her control, namely the
downturn in the economy primarily caused her delinquent indebtedness.  Her husbands
struggling business, and by purchasing houses she could not really afford, the Applicant
simply got to deep over her head.  Although for the most part she made the payments
on time, each time she down sized and purchased a less expensive house, she
continued to have financial trouble.  She was forced to deplete her savings and live off
credit cards to pay for unanticipated house repairs and to cover the mortgage
payments.  In regard to her current house, the third house, she is hoping to obtain a
loan modification on her mortgage that will enable her to pay her bills and resolve her
delinquent debts.  In the event that she does not get the modification, she will file
bankruptcy.  She has also hired an attorney to assist her in resolving her debts.  At the
present time, however, all of her delinquent debts remain owing.  Given the extent of his
indebtedness, and the fact that she has not yet started the process to resolve these
debts, she presently does not qualify for access to classified information.  Although
arguably Mitigating Condition 19(b) could apply because the Applicant acted responsibly
in some circumstances, it is not controlling in this case.  The Applicant remains
excessively indebted.    
Under the particular circumstances of this case, the Applicant’s delinquent debts
remain owing and have not yet been addressed.  There is insufficient evidence of
financial rehabilitation at this time.  The Applicant has not clearly demonstrated that she
can properly handle her financial affairs or that she 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
obligations 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 her financial indebtedness and the effects that it can have on her
ability to safeguard classified information.  On balance, it is concluded that the Applicant
has not overcome the Government's case opposing her 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.
   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