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                        DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
 )       ISCR Case No. 09-07069
)
)
Applicant for Security Clearance )
Appearances
For Government: Tovah Minster, Esq., Department Counsel
For Applicant: Pro se
                                                                            
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Decision
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LYNCH, Noreen A., Administrative Judge:
On December 3, 2010, the Defense Office of Hearings and Appeals (DOHA)
issued a Statement of Reasons (SOR) alleging security concerns arising under
Guideline F (Financial Considerations). The action was taken under Executive Order
10865, Safeguarding Classified Information within Industry (February 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), implemented in September 2006. 
Applicant timely answered the SOR and requested a hearing. DOHA assigned
the case to me on January 25, 2011. A notice of hearing was issued on February 17,
2011, and the case was heard on April 1, 2011. Department Counsel offered six
exhibits, which were admitted without objection as Government Exhibits (GE) 1-6.
Applicant testified and submitted exhibits AE A through AE K (with attachments) at the
hearing, which were admitted without objection. DOHA received the transcript (Tr.) on
April 11, 2011. Based on a review of the pleadings, submissions, testimony, and
exhibits, I find Applicant met her burden regarding the security concerns raised.
Security clearance is granted.
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Findings of Fact
In Applicant’s answer to the SOR, she denied factual allegations in the SOR ¶¶
1.c, 1.d, 1.e, 1.g, and 1.h with explanation. She admitted the remaining allegations. I
incorporate her admissions to the SOR allegations into the findings of fact. After a
thorough review of the pleadings, exhibits, and testimony, I make the following
additional findings of fact. 
Applicant is a 36-year-old employee for the Army National Guard. She graduated
from high school in 1992. She has taken online college classes. Applicant married in
1993 and divorced in 2002. She is the custodial parent of her three biological children
and two adopted children. She has worked for her current employer since February
2008. (GE 1)
In 1992, Applicant’s oldest daughter was born with severe health problems. She
was hospitalized many times. At 18 months old, Applicant’s daughter was diagnosed
with cardiomyopathy. (AE K) Applicant held a temporary job with no paid leave or health
insurance. Her husband had a job earning $8 an hour. Applicant lost time from work so
that she could care for her daughter. Her husband had just started his job, and he did
not have health insurance. Due to the many hospitalizations, medications, and
emergency visits, the medical bills accumulated. When Applicant’s daughter returned
home from the hospital, she was on a medication that required Applicant to remain
home. Applicant’s loss of income and her husband’s low income prevented them from
paying all their expenses. (Tr. 25) They sought help by contacting an attorney who
advised them to file a petition for bankruptcy. In April 2000, Applicant filed for Chapter 7
bankruptcy. The bankruptcy was discharged in July 2000. (GE 5) 
Applicant and her husband divorced in August 2002. Applicant had a permanent
position with the state. She was making a modest income. Her ex-husband paid $225 a
week in child support for their three children. He also agreed to pay the medical bills,
but he did not do so. Applicant decided to purchase a home for her family. In 2003, she
qualified for a mortgage and bought an older house. She paid $130,000 for the home.
Shortly after purchasing the home, Applicant decided to help foster children. She
received the appropriate training in 2004. Applicant initially accepted two foster children.
(Tr. 26)
After she moved into her home, Applicant learned that there were many repairs
that needed to be addressed. The boiler and oil tank stopped working. Her utility bill
was $400. She had a flood in the kitchen due to a hot water tank malfunction. Applicant
could not maintain the mortgage with the high repairs. She refinanced the house to
obtain additional funds to pay her bills. Her mortgage increased by $400 a month. At
this point, Applicant could not maintain the mortgage. She contacted her creditors. Her
plan was to pay a small amount on her bills. However, with her income not increasing,
she was unable to continue with the plan. (GE 2) 
Applicant decided to file for Chapter 13 bankruptcy in April 2005. (GE 6) All of
her debts were included in the bankruptcy. Applicant paid $295 monthly under the
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bankruptcy plan until June 2006. At that time, she decided to sell her home. She was ill-
advised and believed that if she had the bankruptcy dismissed, it would be easier to sell
her home, and she could just pay her debts on her own. She acknowledges that this
may not have been the best decision. When she attempted to contact the creditors on
her own there was confusion because the accounts still appeared under the
bankruptcy, and the creditors did not want to work with Applicant.
Applicant sold the home and used the profit to secure another home. One of her
foster children suddenly became ill in 2006. The child died shortly after. This event was
devastating for Applicant and may have influenced her to stop her bankruptcy
payments. She acknowledged that she had difficulty focusing. She had been taking
college classes online and had to stop due to lack of concentration. (Tr. 27) 
The SOR lists eight delinquent accounts totaling approximately $15,000. The
debts include medical accounts, a vehicle repossession, and a judgment. The credit
reports confirm them. (GE 3, 4, and 5) Applicant denied many of the debts because
they were already paid or included in her 2005 bankruptcy. Thus, they were not new
debts. 
At the hearing, Applicant presented documentation that she has paid the
accounts in SOR ¶ 1.c through 1.e, which totaled $575; ¶ 1.h and ¶ 1.i. for a total of
$8,000. (AE B-H). She has two accounts in a payment plan for SOR ¶ 1. f and 1.j. The
payment plan for SOR ¶ 1.f consisted of three payments to settle the account for
$3,700. The remaining payment of $500 was to be paid in April when she receives her
income tax refund.
  
At the hearing, Applicant explained that her current position pays almost $20,000
more than her previous one. She has not been delinquent on any debts in three years.
Applicant’s monthly net income from her employment is $5,600. She receives $975 a
month in child support. Applicant also receives an adoptive subsidy of approximately
$1,570 per month. Applicant has a budget and received financial counseling. She has a
bank account and some savings. Applicant is current on her daily expenses and her car
loan. She has a net monthly remainder of approximately $2,000. 
Applicant’s employer describes her as an exemplary employee, who conducts
herself with professionalism, and who is highly regarded by her peers. (AE A) She is a
great asset to the company. Applicant is described as highly motivated with skills and
abilities that highlight her maturity and integrity. Her employer is aware of the financial
issues and approves of her efforts to address and resolve them. She is recommended
for a security clearance. (AE A)
Applicant submitted numerous character references, attesting to her devotion to
duty and her professionalism. A coworker describes Applicant as extremely competent,
efficient, and organized. She is described as a true asset to any organization. 
 See also ISCR Case No. 94-1075 at 3-4 (App. Bd. Aug. 10, 1995).      1
 Department of the Navy v. Egan, 484 U.S. 518, 531 (1988).      2
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      3
 See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive      4
information), and EO 10865 § 7.
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Policies
When evaluating an applicant’s suitability for a security clearance, an
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. These guidelines are not inflexible
rules of law. Instead, recognizing the complexities of human behavior, they are applied
in conjunction with the factors listed in the adjudicative process. An administrative
judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision.
Under AG ¶ 2(c), this process is a conscientious scrutiny of a number of variables
known as the “whole-person concept.” An administrative judge must consider all
available, reliable information about the person, past and present, favorable and
unfavorable, in making a 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.
The Government must present evidence to establish controverted facts alleged
in the SOR. An 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 burden of proof is something less than a1
preponderance of evidence.  The ultimate burden of persuasion is on the applicant.  2 3
A person seeking access to classified information enters into a fiduciary
relationship with the Government based on 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. Decisions include, by necessity, consideration of the possible risk
the applicant may deliberately or inadvertently fail to protect classified information. Such
decisions entail a certain degree of legally permissible extrapolation of potential, rather
than actual, risk of compromise of classified information.
 
Section 7 of Executive Order 10865 provides that decisions shall be “in terms of
the national interest and shall in no sense be a determination as to the loyalty of the
applicant concerned.”  “The clearly consistent standard indicates that security clearance4
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      5
 Id.      6
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determinations should err, if they must, on the side of denials.”  Any reasonable doubt5
about whether an applicant should be allowed access to sensitive information must be
resolved in favor of protecting such information.  The decision to deny an individual a6
security clearance does not necessarily reflect badly on an applicant’s character. It is
merely an indication that the applicant has not met the strict guidelines the President
and the Secretary of Defense established for issuing a clearance.
Analysis
Guideline F, Financial Considerations
The security concern for Financial Considerations is set out in AG ¶ 18:
Failure or an 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.” It also states that “an individual who
is financially overextended is at risk of having to engage in
illegal acts to generate funds.
Applicant had numerous delinquent debts in the approximate amount of $15,000
for a number of years. She filed for Chapter 7 Bankruptcy in April 2000, which was
discharged in July 2000. She also filed for Chapter 13 bankruptcy in January 2005, but
stopped the payments in June 2006. The bankruptcy was dismissed. Consequently,
Financial Considerations Disqualifying Condition (FC DC) AG ¶ 19(a) (inability or
unwillingness to satisfy debts), and FC DC AG ¶ 19(c) (a history of not meeting financial
obligations) apply. With such conditions raised, it is left to Applicant to overcome the
case against her and mitigate security concerns.  
Applicant’s first bankruptcy occurred as a result of the severe medical condition
that her oldest daughter has. Combined with her husband’s low-paying work and her
temporary income, Applicant could not pay her bills, and she filed for bankruptcy in
2000. The second bankruptcy in 2005 was the result of separation and divorce. She
also bought a home that was old and needed many repairs. She could not maintain the
home and pay the repairs. Applicant filed for Chapter 13 bankruptcy and paid the
monthly payment until June 2006. She determined that she would pay the creditors on
her own and stopped her bankruptcy payments. Since then she has no incurred new
debt. She has no new debt. Consequently, Financial Considerations Mitigating
Condition (FCMC) AG ¶ 20(a) (the 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) applies.
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Financial Considerations Mitigating Condition (FC MC) AG ¶ 20(b) (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 under the circumstances)
applies. As noted above, Applicant was faced with hardship due to her daughter’s
medical condition and her low income. Her separation and divorce caused more
difficulty. She had a traumatic incident when she had a foster child who died. She was
devastated and lost her focus for a period. These are circumstances beyond her control
which impacted her finances, She filed for bankruptcy protection to manage her bills.
When her bankruptcy was dismissed, she contacted her creditors. She acted
reasonably under the circumstances. 
FC MC AG ¶ 20(d), (the individual initiated a good-faith effort to repay overdue
creditors or otherwise resolve debts) applies. Applicant provided evidence of payments
for her delinquent accounts. She is in the final stages of repayment for two accounts.
Applicant completed financial counseling, developed a budget, and pays her monthly
expenses. FC MC AG ¶ 20(c) (the person has received or is receiving counseling for
the problem and there are clear indications that the problem is being resolved or is
under control) applies.
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 an applicant’s
conduct and all the circumstances. The administrative judge should 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 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. 
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. As noted above, the
ultimate burden of persuasion is on the applicant seeking a security clearance. 
I considered the potentially disqualifying and mitigating conditions in light of all
the facts and circumstances surrounding this case as well as the “whole-person”
factors. Applicant is 36 years old. She is described by her current employer as an
exemplary employee. She is a responsible parent of three biological and two adopted
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children. Applicant has worked hard to improve her financial status through education
and better employment. She has secured a position that enables her to pay all her
expenses and save money. 
The unexpected medical condition of her daughter and her separation and
divorce were the main reasons she filed for bankruptcy twice. She never shirked her
responsibilities. She may have been misguided by allowing the Chapter 13 bankruptcy
to be dismissed after she had paid successfully for one year. However, she has worked
diligently to pay her delinquent bills. She has also adopted two foster children. She has
documented and testified credibly that she has worked since high school. She has
taken responsibility for her situation. Applicant was candid and forthright in the entire
security clearance process. She disclosed her financial delinquencies on her security
clearance application. She was organized at the hearing and has shown her resolve.
Applicant impressed me as a professional who is determined to resolve the final hurdle
in her financial situation. I have no doubts about her sincerity and find that it is clearly
consistent with the national interest to grant a security clearance. 
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: FOR APPLICANT
Subparagraphs 1.a through 1.j: For Applicant
Conclusion
In light of all of the circumstances presented by the record in this case, it is
clearly consistent with the national interest to grant Applicant a security clearance.
Clearance is granted.
                                                     
NOREEN A. LYNCH.
Administrative Judge