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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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--------------------------- )       ISCR Case No. 10-01188
)
Applicant for Security Clearance )
Appearances
For Government: Tovah A. Minster, Esquire, Department Counsel
For Applicant: Pro se
April 5, 2011
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DECISION
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ROSS, Wilford H., Administrative Judge:
Applicant submitted her Electronic Questionnaire for Investigations Processing
(e-QIP), on September 4, 2009. (Item 5.)  On September 14, 2010, the Defense Office
of Hearings and Appeals (DOHA) issued a Statement of Reasons (SOR) detailing the
security concerns under Guideline F (Financial Considerations) concerning Applicant.
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 (AG)
effective within the Department of Defense for SORs issued after September 1, 2006. 
 
Applicant submitted an Answer to the SOR on September 28, 2010, and
requested a decision be made without a hearing.  Department Counsel submitted a File
or Relevant Material (FORM) to the Applicant on October 14, 2010. Applicant received
the FORM on October 22, 2010, and was given 30 days to submit any additional
information. Applicant submitted additional information (Response). Department
Counsel did not object to Applicant’s information and it is admitted into evidence as
Applicant’s Exhibit A. The case was assigned to me on December 10, 2010. Based
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upon a review of the case file, pleadings, and exhibits, eligibility for access to classified
information is denied.
Findings of Fact
Applicant is 46 and divorced.  She is employed by a defense contractor and
seeks to obtain a security clearance in connection with her employment. 
Guideline F, Financial Considerations
The Government alleges in this paragraph that Applicant is ineligible for
clearance because she is financially overextended and therefore at risk of having to
engage in illegal acts to generate funds. Applicant admitted subparagraph 1.e. That
admission is deemed a finding of fact. She denied the remaining nine subparagraphs.
(1.a. through 1.d. and 1.f. through 1.j.) She also submitted additional information to
support her request for a security clearance.
1.a. Applicant denies that she is indebted to a medical creditor in the amount
of $95. She states in her Response, “Applicant does not recognize this charge and is
skeptical as to its legitimacy. Applicant has been double billed in the past by medical
facilities.” The debt appears in the Government credit report of August 21, 2010, (Item
8) and in the November 17, 2010, credit report provided by Applicant in her Response.
There is no evidence that Applicant formally disputed this debt with the credit bureaus
or made other actions to determine the validity of this debt. It is unresolved.
1.b. Applicant denies that she is indebted to a medical creditor in the amount
of $50. She stated in her answers to a set of interrogatories propounded by the
Government that she had previously paid this debt in full. (Item 7 at 6.) The debt
appears in the Government credit report of August 21, 2010, with the annotation,
“Consumer disputes this account information.” (Item 8.) This debt does not appear in
the most recent, November 17, 2010, credit report provided by Applicant. This debt has
been disputed.
1.c. Applicant denies that she is indebted to a bank for a line of credit in the
amount of $26,152. She admits that she had this account with the bank, and that it is
not paid. She states that the debt has been “charged off” and, therefore, forgiven. (See
Item 7 at page 6.) The most recent credit reports show the account “charged off as bad
debt.” (Item 8; Response.) While collection efforts may have stopped, there is no
evidence that the debt has been forgiven by the creditor and it remains a liability of the
Applicant. She has not made any payments on this debt and there is no evidence that
she will make payments on this debt. It is unresolved.
1.d. Applicant denies that she is indebted to a college for tuition in the amount
of $3,679. According to Applicant in an interview with an investigator from the Office of
Personnel Management in October 2009, she made an arrangement with the college to
pay $10 a month on this delinquency, but was unable to maintain payments. (Item 6 at
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9.) Applicant has made no recent payments on this debt, and there is no evidence that
she is going to make payments on this debt. It is unresolved.
1.e. Applicant admits that she was indebted on a mortgage for a house that
was foreclosed upon in 2009. According to Applicant, this occurred because of a two
year gap between being laid off from a banking job in 2007 and finding employment in
the defense industry in 2009. She used her retirement and funds from her 401(k)
account to attempt to remain current on her mortgage. She was unable to do so and the
house was foreclosed on and sold in August 2009. (Items 7 and 8; Response.) Based
on the available records this debt was resolved by the foreclosure.
1.f. Applicant denies that she is indebted on a second mortgage in the amount
of $105,351 for the house the was foreclosed upon in 2009. According to Applicant, this
occurred because of a two year gap between being laid off from a banking job in 2007
and finding employment in the defense industry in 2009. She used her retirement and
funds from her 401(k) account to attempt to remain current on her mortgage. She was
unable to do so and the house was foreclosed on and sold in August 2009. The credit
report dated November 17, 2010, shows this mortgage as “Payment after charge
off/collection.” (Response.) Based on the available records this debt was resolved by
the foreclosure.
1.g. Applicant denies that she is indebted to a creditor for a delinquent debt in
the amount of $817. (Item 7 at 28.) Applicant states in her response to interrogatories
that she has paid this debt, but provided no evidence to support this statement. (Item 7
at 6.) This debt does not appear on the most recent credit report of the Applicant
contained in the Response. Based on all of the available evidence, I find this debt is
unresolved.
1.h. Applicant denies that she is indebted on a medical debt in the amount of
$725. The recent credit report contained in the Response shows this debt as a
“Payment after charge off/collection.” It has been resolved.
1.i. Applicant denies that she is indebted to a creditor for a delinquent debt in
the amount of $117. (Item 7 at 29-30.) Applicant states in her response to
interrogatories that she has paid this debt, but provided no evidence to support this
statement. (Item 7 at 6.) This debt does not appear on the most recent credit report of
the Applicant contained in the Response. Based on all of the available evidence, I find
this debt is unresolved.
1.j. Applicant denies that she is indebted to a creditor for a delinquent debt in
the amount of $739. (Item 9 at 3.) Applicant states in her response to interrogatories
that she has paid this debt, but provided no evidence to support this statement. (Item 7
at 6.) This debt does not appear on the most recent credit report contained in the
Response. Based on all of the available evidence, I find this debt is unresolved.
Applicant states that she was unable to pay her debts due to a job layoff and
subsequent two year unemployment. The two credit reports submitted by the Applicant,
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dated March 5, 2010, and November 17, 2010, show that Applicant’s credit has
improved slightly. (Item 7 at 10-31; Response.) The most recent credit report appears to
show that she is paying her current debts in a timely manner. However, Applicant did
not submit a budget, even though she stated she now has one, or any plan to show how
she would resolve the remaining delinquencies.
Applicant states that she “is performing well at [her] current job, received a raise
and a bonus within the first year of employment.” (Response at 9.) However, she
provided no other evidence concerning the quality of her professional performance, the
level of responsibility her duties entail, or her track record with respect to handling
sensitive information and observation of security procedures. She submitted no
character references or other evidence tending to establish good judgment,
trustworthiness, or reliability. I was unable to evaluate her credibility, demeanor, or
character in person since she elected to have her case decided without a hearing. 
Policies
Security clearance decisions are not made in a vacuum.  When evaluating an
applicant’s suitability for a security clearance, the administrative judge must consider
the adjudicative guidelines (AG). In addition to brief introductory explanations for each
guideline, the adjudicative guidelines list potentially disqualifying conditions and
mitigating conditions, which are to be used as appropriate in evaluating an applicant’s
eligibility for access to classified information.
These guidelines are not inflexible rules of law. Instead, recognizing the
complexities of human behavior, these guidelines are applied in conjunction with the
factors listed in the adjudicative process. The administrative judge’s over-arching
adjudicative goal is a fair, impartial and commonsense decision. According to AG ¶ 2(c),
the entire process is a conscientious scrutiny of a number of variables known as the
“whole-person concept.” The administrative judge must consider all available, reliable
information about the person, past and present, favorable and unfavorable, in making a
decision.  In addition, the administrative judge may also rely on his or her own common
sense, as well as knowledge of the law, human nature, and the ways of the world, in
making a reasoned decision.
The protection of the national security is the paramount consideration. AG ¶ 2(b)
requires that “[a]ny doubt concerning personnel being considered for access to
classified information will be resolved in favor of national security.” In reaching this
decision, I have drawn only those conclusions that are reasonable, logical and based on
the evidence contained in the record. Likewise, I have avoided drawing inferences
grounded on mere speculation or conjecture.
Under Directive ¶ E3.1.14, the Government must present evidence to establish
controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, the applicant is
responsible for presenting “witnesses and other evidence to rebut, explain, extenuate,
or mitigate facts admitted by applicant or proven by Department Counsel. . . .” The
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applicant has the ultimate burden of persuasion as to obtaining a favorable security
decision. 
A person who seeks access to classified information enters into a fiduciary
relationship with the Government predicated upon trust and confidence. This
relationship transcends normal duty hours and endures throughout off-duty hours. The
Government reposes a high degree of trust and confidence in individuals to whom it
grants access to classified information. Security clearance decisions include, by
necessity, consideration of the possible risk that the applicant may deliberately or
inadvertently fail to protect or safeguard classified information. Such decisions entail a
certain degree of legally permissible extrapolation as to potential, rather than actual, risk
of compromise of classified information.
 
Finally, as emphasized in Section 7 of 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.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access
to classified or sensitive information).  
Analysis
Guideline F, Financial Considerations
The security concern relating to the guideline for Financial Considerations is set
out in AG & 18:      
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. 
The guideline notes several conditions that could raise security concerns. Under
AG & 19(a), an Ainability or unwillingness to satisfy debts@ is potentially disqualifying.
Similarly under AG & 19(c), Aa history of not meeting financial obligations@ may raise
security concerns. The Applicant, by her own admission, or as shown by Government
exhibits, had approximately $137,725 in past due debts, all of which have been due and
owing for several years. The evidence is sufficient to raise these potentially disqualifying
conditions.
The guideline also includes examples of conditions that could mitigate security
concerns arising from financial difficulties. Under AG ¶ 20(a), the disqualifying condition
may be mitigated where Athe behavior happened so long ago, was so infrequent, or
occurred under such circumstances that it is unlikely to recur and does not cast doubt
on the individual=s current reliability, trustworthiness, or good judgment.@ Applicant=s
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financial difficulties arose in about 2007 and continue to date. While she has paid, or
resolved, a substantial amount of her debts, she still has approximately $31,599 worth
of debt that she has not yet resolved. This mitigating condition has some application to
this case. 
AG ¶ 20(b) states that the disqualifying conditions may be mitigated where “the
conditions that resulted in the financial problem were largely beyond the person’s
control (e.g., loss of employment, a business downturn. . .), and the individual acted
responsibly under the circumstances.”  Applicant submits that her financial situation was
brought about by her lay-off and two year job search, and that she currently is financially
stable and acted responsibly. While this mitigating condition may appear to have facial
applicability, it us undercut by her failure to show any evidence that the remaining debts
have been forgiven or paid. It is especially disturbing that Applicant, who worked in the
financial sector, views a charge off as equivalent to forgiveness of a debt, when they are
in fact two vastly different things. Applicant has known for close to a year the specific
debts that were of concern to the Government. Even with that knowledge, she failed to
produce documentary evidence to support her statements concerning payments or
forgiveness of debts. This mitigating condition is not applicable to this case.
Applicant has initiated a good-faith effort to pay off her creditors.  However, there
remain gaps in her payments.  Accordingly, AG ¶ 20(d) “the individual initiated a good-
faith effort to repay overdue creditors or otherwise resolve debts” has minimal
application in this case.  
Applicant has shown that she has properly disputed several of the debts in the
SOR. Accordingly, I find that AG ¶ 20(e) has some application since she 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.”
However, she remains over $31,000.00 in debt. Given the fact that I cannot find
that “there are clear indications that the problem is being resolved or is under control,”
as required by AG ¶ 20(c).
Whole-Person Concept
Under the whole-person concept, the administrative judge must evaluate an
applicant’s eligibility for a security clearance by considering the totality of the applicant’s
conduct and all the relevant circumstances. Under AG ¶ 2(c), the ultimate determination
of whether to grant eligibility for a security clearance must be an overall commonsense
judgment based upon careful consideration of the guidelines and the whole-person
concept. The administrative judge must consider the nine adjudicative process factors
listed at AG ¶ 2(a): 
(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
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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 changes; (7) the motivation
for the conduct; (8) the potential for pressure, coercion, exploitation, or
duress; and (9) the likelihood of continuation or recurrence.      
I considered the potentially disqualifying and mitigating conditions in light of all
the facts and circumstances surrounding this case. The Applicant is under financial
strain, and has been for several years. Her debt situation is not yet under full control.
Under AG ¶ 2(a)(3), the Applicant’s conduct is recent.  Based on the state of the record,
particularly the failure to account for all of her past due debts, I cannot find that there
have been permanent behavioral changes under AG ¶ 2(a)(6). Accordingly, at the
present time, I find that there is the potential for pressure, coercion, exploitation, or
duress (AG ¶ 2(a)(8)); and that there is a high likelihood of recurrence (AG ¶ 2(a)(9)). 
This is a close case. Applicant showed evidence that she was laid-off and that
this was the primary cause of her financial problems. She showed that she is on the
path of financial stability. However, as stated above, there are unanswered questions
about over $31,000 in past due indebtedness. Unless and until Applicant is able to
resolve those questions, she is not eligible for a security clearance.
Overall, the record evidence leaves me with questions or doubts as to Applicant’s
eligibility and suitability for a security clearance. For all these reasons, I conclude the
Applicant has not mitigated the security concerns arising from her financial situation at
this time. 
On balance, it is concluded that the Applicant has not successfully overcome the
Government's case opposing her request for a DoD security clearance.  Accordingly,
the evidence supports a finding against the Applicant as to the factual and
conclusionary allegations expressed in Paragraph 1 of the Government's Statement of
Reasons.
Formal Findings
Formal findings for or against Applicant on the allegations set forth in the SOR,
as required by section E3.1.25 of Enclosure 3 of the Directive, are:
Paragraph 1, Guideline F: AGAINST THE APPLICANT
Subparagraph 1.a: Against the Applicant
Subparagraph 1.b.: For the Applicant
Subparagraph 1.c.: Against the Applicant
Subparagraph 1.d.: Against the Applicant
Subparagraph 1.e.: For the Applicant
Subparagraph 1.f.: For the Applicant
Subparagraph 1.g.: Against the Applicant
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Subparagraph 1.h.: For the Applicant
Subparagraph 1.i.: Against the Applicant
Subparagraph 1.j.: For the Applicant
Conclusion
In light of all of the circumstances presented by the record in this case, it is not
clearly consistent with the national interest to grant Applicant eligibility for a security
clearance.  Eligibility for access to classified information is denied.
                                              
WILFORD H. ROSS
Administrative Judge