DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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------------------------------ )       ISCR Case No. 10-03020
)
)
Applicant for Security Clearance )
Appearances
For Government: Jeff A. Nagel, Department Counsel
For Applicant: Pro se
March 23, 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 January 18, 2010.  (Government Exhibit 1.)  On August 17, 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.
Applicant acknowledged receipt of the SOR on August 23, 2010.  He answered
the SOR in writing on September 4, 2010, and requested a hearing before a DOHA
Administrative Judge.  The case was assigned to another Administrative Judge on
November 3, 2010, and reassigned to the undersigned on November 4, 2010.  A notice
of hearing was issued on January 3, 2011, and the matter was scheduled for hearing on
January 21, 2011.  At the hearing, the Government presented six exhibits, referred to as
Government Exhibits 1 through 6, which were received without objection. The Applicant
presented four exhibits, referred to as Applicant’s Exhibits A through D, which were
received without objection. The Applicant also testified on his own behalf.  The record
remained open until close of business on February 25, 2011, to allow the Applicant to
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submit additional documentation.  The Applicant submitted one exhibit referred to as
Applicant’s Post-Hearing Exhibit A that was admitted without objection.  DOHA received
the transcript of the hearing (Tr.) on February 3, 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 61 years old.  He is married and has a Bachelor’s of Science
Degree in Electrical Engineering and some graduate school.  He is employed by a
defense contractor as a Systems Test Engineer and is seeking to obtain a security
clearance in connection with his 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 denies each of the eight delinquent debts set forth in the SOR.  He
admits only allegation 1(a), that alleges a 1984 Bankruptcy.  The eight delinquent debts
total in excess of $20,000.  Credit Reports of the Applicant dated January 27, 2010;
October 13, 2010; and January 14, 2011, reflect that each of the delinquent debts
remain owing.  (Government Exhibits 4, 5 and 6).  Although the Applicant admits that he
originally owed a certain amount to each creditor in the SOR, he disputes the amount
the creditors state he owes.   
The Applicant has worked for the defense industry and held a security clearance
for thirty-three years without a security violation.  Over the past of thirty-three years, he
has experienced several lay-off periods that have negatively impacted his financial
situation.  Following a lay-off period, he later became re-employed and each time
increased his salary.  In 1984, he was earning $30,000 a year, and since 2008, he has
been earning $118,000 annually.  (Tr. pp. 61 and 63.)  
In 1984, while employed with another defense contractor, and earning $30,000
yearly, he was laid-off for about five months and fell behind on his bills.  Upon the
advice of his attorney, in June 1985, he filed for Chapter 7 Bankruptcy and discharged
approximately $40,000 in mainly credit card debt in November 1985.  In retrospect, the
Applicant is disappointed with the attorney’s advice; and believes that he should not
have filed for bankruptcy because before he did, he had good credit.  (Tr. p. 51.)
Following this bankruptcy, the Applicant was debt free.
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In 2004, the Applicant experienced another four or five month period of
unemployment, and accumulated the delinquent debt set forth in the SOR.  During this
period, he depleted his retirement money of $35,000 to live on, and again fell into credit
card debt.  (Tr. p. 55.)  In January 2007, he contacted each of his delinquent creditors
by letter.  Since the creditors had closed his accounts that had negatively affected his
credit rating, he informed them of his concern, that their business relationship had been
severed, that he was disputing the amount of the debt owed, and that the creditor
should repair his credit.  (Applicant’s Exhibit B.)  The Applicant testified that he received
no response from the creditors.  The Applicant states that in the beginning, he was
making payments, but with his other expenses such as rent and COBRA he ran out of
money.  (Tr. p. 34.)  There is no evidence in the record of any payments made. 
   
The following debts became delinquent and owing.  Most of the debt is
delinquent credit card debt.  (Tr. p. 31.)  A delinquent debt owed to a creditor in the
amount of $3,476.00 remains owing.  Applicant claims that the original debt was
$500.00, that the statute of limitations has run and the debt is no longer enforceable,
and it is no longer reflected on his credit report.  (Applicant’s Answer to SOR.)  A
delinquent debt owed to a creditor in the amount of $2,744.00 remains owing. 
Applicant claims that the original debt was $400.00, that the statute of limitations has
run, and the debt is no longer enforceable.  (Applicant’s Answer to SOR.)  A delinquent
debt owed to a creditor in the amount of $2,101.00 remains owing.  Applicant claims
that the statute of limitations has run, the debt is no longer enforceable, and it is no
longer reflected on his credit report.  (Applicant’s Answer to SOR.)  A delinquent debt
owed to a creditor in the amount of $1,972.00 remains owing.  Applicant claims that the
statute of limitations has run, the debt is no longer enforceable, and it is no longer
reflected on his credit report.  (Applicant’s Answer to SOR.)  A delinquent debt owed to
a creditor in the amount of $4,044.00 remains owing.  Applicant claims that the original
debt was $1000, that the statute of limitations has run, the debt is no longer
enforceable, and it is no longer reflected on his credit report.  (Applicant’s Answer to
SOR.)  A delinquent debt owed to a creditor in the amount of $2,088.00 remains owing.
Applicant claims that the original debt was $670.00, that the statute of limitations has
run, and the debt is no longer enforceable.  (Applicant’s Answer to SOR.)  A delinquent
debt owed to a creditor in the amount of $3,309.00 remains owing.  Applicant claims
that the statute of limitations has run, the debt is no longer enforceable, and it is no
longer reflected on his credit report.  (Applicant’s Answer to SOR.)  A delinquent debt
owed to a creditor in the amount of $1,868.00 remains owing.  Applicant claims that the
statute of limitations has run, the debt is no longer enforceable, and it is no longer
reflected on his credit report.  (Applicant’s Answer to SOR.) 
The Applicant indicates now that he has no intent to pay the creditors listed in the
SOR.  He basically asserts the argument that the debts are old and he is protected by
the Fair Debt Collections Act and the Statute of Limitations.  (Applicant’s Exhibit C.)  He
does not believe that he is legally obligated to pay the debts and plans to have no
further contact with the creditors.  His logic is that since the creditors have increased the
amount of the original debt that he charged, which now includes possible interest,
penalties and or late fees etc. that he does not believe he owes, if he contacts the
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creditor he will be validating the debt and owe the entire debt.  (Tr. pp. 32-35, 40 and
Government 2 and Applicant’s Post-Hearing Exhibit A.)
The Applicant states that he is current with all of his monthly expenses and does
not and has never lived beyond his means.  At the end of the month he has between
$700.00 and $1,000 left over for emergencies.  (Tr. p. 61.)  He has about $25,000 in a
401(K) plan and a small pension.  (Tr. pp. 65-66.)  He plans to retire in five years.  
Applicant’s performance appraisals from the periods January 2005 through
December 2005, January 2006 through December 2006, January 2007 through
December 2007 and January 2008 through December 2008 all reflect that he either
meets performance requirements, exceeds performance requirements or is outstanding.
(Applicant’s Exhibit A.)
The Applicant has received several of awards and certificates from his employers
over the years for outstanding work performance.  (Applicant’s Exhibit A.) 
A letter of appreciation was received from the Applicant’s Project Manager in
2001, for his time hard work and a job well done at work.  (Applicant’s Exhibit D.)
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.
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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; 
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.”
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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 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.
Given the fact that the Applicant’s bankruptcy was in June 1985, over twenty-five
years ago, I do not find it to be of security significance and find for the Applicant under
allegation 1(a). 
The remaining evidence shows that the Applicant’s financial problems may have
started as a result of a job lay-off, but they certainly have not continued due to lack of
financial ability.  Since 2008, the Applicant has been employed full time and has been
earning well over six figures annually.  Based upon his testimony, he has sufficient
monies left over after his monthly expenses that he could use to pay his delinquent
debts if he wanted to.  Instead, he has chosen not to pay them.  He has researched the
Fair Debt Collection Act and the Statute of Limitation and is of the opinion that he has
no legal responsibility to pay the debts.  Most of them are old debts and have now fallen
off of his credit report.  He believes that by attempting to resolve and pay these old
debts, he would suffer financial duress and serve no purpose.  However, based upon
the fact that the debts are the Applicant’s and they all remain owing, he has not
demonstrated that he is trustworthy.
 
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.  
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The Applicant has not shown sufficient good judgment since his most recent job
layoff placed him in his current financial situation.  In this matter, the Fair Debt
Collections Act and the Statute of Limitations may apply.  However, under the
circumstances, he has not made a good faith effort to resolve his indebtedness, and
there is insufficient evidence of financial rehabilitation.  The Applicant has ignored his
debts and not demonstrated that he can properly handle his financial affairs.
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 under all of the guidelines viewed as a whole, support a
whole-person assessment of poor judgement, untrustworthiness, unreliability, a 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 come close
to mitigating the negative effects of his financial indebtedness and its impact on his
ability to safeguard classified information.  On balance, it is concluded that the Applicant
has failed to 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.    
     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.: For 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.
   
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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