Consisting of the transcript (Tr.), Government’s exhibits (GE) 1-4, and Applicant’s exhibits (AE) A-F. AE F1
was timely received post-hearing.
DOHA acted under Executive Order 10865, Safeguarding Classified Information Within Industry (February2
20, 1960), as amended; Department of Defense (DoD) Directive 5220.6, Defense Industrial Personnel Security
Clearance Review Program  (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG)
effective within the DoD on 1 September 2006. 
1
            
            
            
            
     
                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 09–06011
)
Applicant for Security Clearance )
Appearances
For Government: David F. Hayes, Esquire, Department Counsel
For Applicant: Pro se
______________
Decision
______________
METZ, John Grattan, Jr., Administrative Judge:
Based on the record in this case,  Applicant’s clearance is denied.1
On 4 May 2010, the Defense Office of Hearings and Appeals (DOHA) sent
Applicant a Statement of Reasons (SOR) detailing security concerns under Guideline F,
Financial Considerations.  Applicant timely answered the SOR and requested a hearing.2
DOHA assigned the case to me 3 August 2010, and I convened a hearing 25 August
2010. DOHA received the transcript 3 September 2010.
However, the only July 2010 payment of $200 documented by Applicant (AE D) refers to an account not3
alleged in the SOR, not her electric bill. She appears to have made a $100 payment on this unalleged account
in early July 2010 (AE F) and she also made a $100 payment in August 2010, after the hearing.
2
Findings of Fact
Applicant denied the SOR allegations. She is a 51-year-old security officer
employed part-time by a defense contractor since May 2002. She was also employed
as a security officer by another defense contractor full-time since May 2007. She has
not previously held a clearance, but requires one for her work with this employer. She is
not currently employed with this second defense contractor, but is eligible for rehire if
she gets her clearance. Except for the unemployment described below, she has been
continuously employed as a security officer since May 2001. She has three children with
her first husband, but was divorced during the pertinent time periods covered by this
case. She remarried in December 2009.
The SOR alleges, and Government exhibits (GE 3-4) substantiate, 12 delinquent
debts totaling over $400,000. The delinquent accounts consist of three charged-off
accounts, seven collection accounts (one of which is a delinquent second mortgage)
and two home mortgages in foreclosure.
Applicant attributes her financial problems to being unemployed from February
2007 to August 2007 as a result of injuries she sustained in a slip-and-fall accident. Her
finances got out of control and she has had minimal success in getting them back in
order.
 
The delinquent debt at SOR 1.a ($772) has been in collection since October
2009 and involves a rent dispute over a security deposit. Applicant paid $25 on the debt
in February 2010. By May 2010, the account balance had grown to nearly $1,400, when
she settled the account for $1,000. She paid $600 down, and was to make two monthly
payments of $200 in May and June 2010 (Answer). However, she was unable to make
the scheduled payments, although she paid $100 in July 2010 (AE D). She claimed (Tr.
103) that she would be able to pay the remaining $300 by the end of August 2010, but
provided no proof of payment in her post-hearing submission (AE F).
The delinquent debt at SOR 1.b ($11) was the balance on a medical debt after
insurance paid its portion of the bill. Applicant paid the debt in February 2010 (GE 2).
Applicant settled the cable bill at SOR 1.c ($189) for an undisclosed amount in May
2010 (Answer). In May 2010, Applicant made a $69 payment on the delinquent electric
bill at SOR 1.d ($545)(Answer). She appears to have made a pre-authorized payment of
$119 in July 2010. Applicant claims without corroboration (Tr. 44) that the account is
current, and that she made a $200 payment in July 2010, reducing the balance to
$189.  Applicant paid the debt at SOR 1.e ($136) in full in February 2010 (Answer).3
Based on an April 2010 credit report (GE 4).4
Applicant documented no other payments on this account. At best, the stated balances suggest Applicant5
may have made payments in late April 2010, late May 2010, and late June 2010, in addition to the two
payments she documented.
However, the creditor’s letter is dated March 2010.6
Unfortunately, the July 2010 bank statement that documents two of the three payments also shows that7
Applicant had three checks returned for insufficient funds, each of which incurred a $35 dollar overdraft fee.
Further, the bank statement showed that she also had five other checks returned for insufficient funds over
the previous six months for which she paid the same overdraft fee.
3
Applicant claimed (Tr. 48-49) that she had begun a repayment plan on SOR debt
1.f ($1,617)  in 2008, had stopped payments temporarily because of more pressing4
needs, and had resumed paying $50 per month in January 2009. Her June 2009 credit
report (GE 3) tends to support that claim. The creditor reported that the account was
now current, but had been 60-days past due four or more times, with a balance of
$1,542. Applicant suggested that she had continued to make regular payments directly
to the original creditor and had reduced the balance to $1,200, but the evidence belies
that claim. In her April 2010 credit report (GE 4), the account had been charged off in
April 2010 with a balance of $1,617. The reported date of last activity was May 2009,
the same date reported in the June 2009 credit report. Applicant documented a $50
payment in late July 2010 on a balance of $1,517 and a $50 payment in late August
2010 on a balance of $1,367.  However, by 2010, the account was handled by a5
collection agent, contrary to Applicant’s claim (Tr. 50) that she was dealing directly with
the original creditor.
In June 2009, the creditor at SOR 1.g ($1,239) offered to settle the account for
$716 (GE 2) conditioned on payments in July 2009 ($127), August 2009 ($206), early
September 2009 ($204), and late September 2009 ($179). However, Applicant did not
have the funds to take advantage of the settlement offer. She made a $150 payment in
July 2010 (AE B), leaving a balance of $550.6
 Applicant paid $414 on SOR debt 1.h ($1,792) in February 2010 (GE 2).  In May
2010, the creditor agreed to settle the remaining balance (now grown to $2,200) for
additional monthly payments of $331 paid in May 2010, June 2010, July 2010, August
2010, and September 2010. However, she could not meet the established schedule.
She started a month late, made the first payment in late June 2010, the second in early
July 2010, and the third in late July 2010 (AE F), as scheduled.  Nevertheless, the7
record does not reflect when or if the last payments were made. The August 2010
payment was due before the record in this case was closed, yet Applicant provided no
proof of payment. Applicant settled SOR debt 1.l ($160) by paying $135 in May 2010
(Answer). 
The remaining three debts [1.i ($46,495), 1.j ($334,442), and 1.k ($15,982 past
due on a $209,600 mortgage)] concern two houses Applicant bought in 2006. In
4
January 2006, she bought her first house for about $266,000. She put $10,000 down,
and secured the remainder with a $209,600 first mortgage (1.k) and a $46,495 second
mortgage (1.I). She bought this house to live in with her children. She bought a second
house in August 2006 as an investment, putting no money down on a $334,442
mortgage (1.j). She hoped to rent the house for a while and then sell it for a profit, the
proceeds of which she planned to use to pay her children’s college expenses.
Unfortunately, Applicant is not financially sophisticated and had no financial
education. She had problems keeping her investment property rented, and all three
loans had escalator or balloon provisions that would increase her costs over time. Her
injury and subsequent unemployment in February 2007 put an end to her real-estate
ambitions. Nevertheless, Applicant tried to keep the loans current and worked with her
creditors.
In January 2009, Applicant reached an agreement with her second mortgage
holder to bring her delinquent account current by making monthly payments in January,
February, March, and April 2009. She was unable to make the scheduled payments, but
in April 2009 she reached an agreement with both her first and second mortgage
holders for a short sale of the property within certain limits. In June 2009, Applicant
contracted to sell the house (at a figure that met the lender’s limits), conditioned on a
satisfactory inspection. The record does not show if the buyer found the property
unsatisfactory, but the buyer did rescind the sale.
The first mortgage holder foreclosed on the property, and sold the house at
auction in late 2009. The deficiency was about $138,000, but Applicant states that
neither the first nor second mortgage holders have contacted her, so she does not know
what continuing liability she may have.
The first mortgage holder on her investment property also foreclosed, and the
property was scheduled to be auctioned in May 2009 (AE E). Applicant states that the
mortgage holder has not contacted her, so she does not know if there was a deficiency
on the house sale.
Applicant’s credit reports show several accounts (not alleged in the SOR) that
were previously past due, but which were now current. In her answer and her exhibits,
she documented other delinquent debts that she had satisfied or brought current. It
appears that she began addressing her debts around the time she met with the
government investigator in June 2009, although she may have taken some action
before then. She has not obtained financial counseling or taken any financial
management training. She presented no evidence of a budget.
Policies
The adjudicative guidelines (AG) list factors for evaluating a person’s suitability
for access to classified information. Administrative judges must assess disqualifying and
mitigating conditions under each issue fairly raised by the facts and situation presented.
See, Department of the Navy v. Egan, 484 U.S. 518 (1988).8
¶19.(a) inability or unwillingness to satisfy debts; ( c) a history of not meeting financial obligations;9
¶20 (a) the behavior happened so long ago, was so infrequent, or occurred under such circumstances that10
it is unlikely to recur . . . 
5
Each decision must also reflect a fair, impartial, and commonsense consideration of the
factors listed in AG ¶ 2(a). Any one disqualifying or mitigating condition is not, by itself,
conclusive. However, specific adjudicative guidelines should be followed where a case
can be measured against them, as they represent policy guidance governing access to
classified information. Considering the SOR allegations and the evidence as a whole,
the relevant adjudicative guideline is Guideline F (Financial Considerations).
Security clearance decisions resolve whether it is clearly consistent with the
national interest to grant or continue an applicant’s security clearance. The Government
must prove, by substantial evidence, controverted facts alleged in the SOR. If it does,
the burden shifts to applicant to refute, extenuate, or mitigate the Government’s case.
Because no one has a right to a security clearance, the applicant bears a heavy burden
of persuasion.
Persons with access to classified information enter into a fiduciary relationship
with the Government based on trust and confidence. Therefore, the Government has a
compelling interest in ensuring each applicant possesses the requisite judgement,
reliability, and trustworthiness of those who must protect national interests as their own.
The “clearly consistent with the national interest” standard compels resolution of any
reasonable doubt about an applicant’s suitability for access in favor of the Government.8
Analysis
The Government established a case for disqualification under Guideline F, and
Applicant did not mitigate the security concerns. Applicant has a history of financial
difficulties going back several years.  Although she has made some progress on her9
debts, that progress is insufficient to overcome the security concerns raised by her
financial situation.
The mitigating factors for financial considerations provide insufficient help to
Applicant. Her financial difficulties are both recent and multiple.  The problems are10
largely due to circumstances beyond her control (unemployment), although one can
question the wisdom of a person with little financial experience or training buying two
houses within seven months of each other.
Applicant’s efforts to address her debts have been mixed. She appears to have
started addressing her delinquent accounts well before the SOR was issued, because
the credit reports and Applicant’s exhibits show several accounts that were delinquent
but are now current. She paid debt 1.e before the SOR was issued. She paid or settled
¶20.(b) the conditions that resulted in the financial problem were largely beyond the person’s control . . . and11
the individual acted responsibly under the circumstances;
¶20.(c)  the person has received or is receiving counseling for the problem and there are clear indications12
that the problem is being resolved or is under control;
¶20.(d) the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.13
6
debts 1.b, 1.c, and 1.l after the SOR was issued. She settled debt 1.a, made the lump-
sum payment required by the agreement, but then could not make the two final
payments as scheduled. She made a partial payment in July 2010, but did not pay the
balance buy the end of August as she indicated she could.
Applicant claimed in her answer to have paid debt 1.d, but documented only
partial payments, one in May 2010, one in July 2010. She claimed also to have paid
debt 1.f. The record reflects that she made some payments on the account in 2009 and
had brought it current, but by May 2010 the account was again delinquent, had been
charged off by the original creditor, and referred to collection. Applicant documented two
$50 payments in July and August 2010 that reduced the outstanding balance only a bit
lower than the amount alleged in the SOR.
Applicant had a settlement offer of more than 50% from the creditor for debt 1.g
in June 2009, with four payments from July 2009 to September 2009. She made one
payment in July 2010. She reached a settlement agreement with the creditor for debt
1.h in May 2010, but was unable to start payments as scheduled. However, it appears
that she has caught up through July 2010.
Applicant’s three mortgages (1.i, 1.j, and 1.k) remain unresolved to the extent
that she has not shown that has no remaining liability to the mortgage holders after the
foreclosure sales. She had acted to address two of the mortgages through a short sale,
but the sale fell through. This exemplifies her efforts to address the debts alleged in the
SOR: Applicant pursues (belatedly in some instances) a good-faith resolution of a debt
only to find that she is unable to begin payments on time, or to make all the payments
required, or to retain complete records of her payments. In this regard her efforts to deal
with her delinquent debts are only partly satisfactory.  She has had no credit11
counseling or financial management training, and does not appear to have a budget
covering her day-to-day finances and her repayment plans. Despite the progress she
has made, she paid overdraft fees on eight returned checks in the first seven months of
2010. This suggests that substantial progress remains to be made to bring her financial
problems under control.  The payments that have been paid have been paid largely in12
a timely, good-faith manner,  but her inability to see some of the repayment plans13
through to completion demonstrates just how much her finances remain unsettled. I
resolve Guideline F against Applicant. Consideration of the whole-person factors yields
no different result.
7
Formal Findings
Paragraph 1. Guideline F: AGAINST APPLICANT
Subparagraphs a–d: Against Applicant
Subparagraph e: For Applicant
Subparagraphs f–l: Against Applicant
Conclusion
Under 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
Applicant. Clearance denied.
                                              
                                             
JOHN GRATTAN METZ, JR
Administrative Judge