The Government submitted nine items in support of its case.      1
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                        DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 10-09946
)
)
Applicant for Security Clearance )
Appearances
For Government: Tovah A. Minster, Esq., Department Counsel
For Applicant: Pro se
                                                                            
______________
Decision
______________
LYNCH, Noreen A., Administrative Judge:
On May 13, 2011, the Defense Office of Hearings and Appeals (DOHA) issued a
Statement of Reasons (SOR) listing 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 an administrative
determination. Department Counsel submitted a File of Relevant Material (FORM),
dated June 27, 2011.  Applicant received the FORM on July 1, 2011, and timely1
submitted additional information. On August 4, 2011, the Director, DOHA, forwarded
the case for assignment to an administrative judge. I received the case assignment on
August 5, 2011. Based on a review of the case file, submissions, and exhibits, I find
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Applicant met her burden regarding the security concerns raised. Security clearance is
granted.
Findings of Fact
In her answer to the SOR, Applicant denied the factual allegations with
explanations (SOR ¶¶ 1.a-1.b under Guideline F (Financial Considerations).  
Applicant is a 39-year-old employee of a defense contractor seeking to obtain a
security clearance. She graduated from high school and attended college from 1990
until 1993 and again from 2004 until 2005. She did not obtain a degree. Applicant is
unmarried and has one son. Applicant has held a security clearance since 2003. She
has worked for her current employer since April 2004. (Item 5)
The SOR lists two delinquent accounts totaling $38,000. The delinquencies
include a charged-off mortgage in the amount of $31,662, and a collection account in
the amount of $7,198. Applicant denied the debts totaling approximately $38,000.
However, the credit reports confirm them. (Items 7, 8 and 9) She also acknowledged on
her August 2010 security clearance application that she had other accounts that were in
repayment status. Applicant listed various judgments, garnishments, and delinquent
accounts on her security clearance application based on a copy of a recent credit
report. (Item 6) 
Applicant purchased a home in August 2005 with an adjustable rate mortgage
(ARM) consisting of two loans. She wanted to refinance but due to declining real estate
prices, she could not. When the ARM expired, her mortgage increased by $700 a
month. She attempted to meet her increased financial obligations by renting a part of
the home from 2007 until 2009. (Response to FORM) 
During the 2007-2009 time frame, Applicant had unexpected medical expenses.
She was in an automobile accident in 2008, and she had extensive dental work in 2007.
The dental bill was more than $10,000. These additional unexpected expenses
contributed to her financial difficulties. She has paid several medical accounts. (Item 6)
In 2010, Applicant attempted several loan modifications for her mortgages. She
also tried the Home Affordable Modification Program (HAMP). She rejected the initial
offer that the mortgagor made to her because the change in the monthly payment was
too small. The second offer, that she accepted, resulted in the mortgage payment still
being too high. Applicant believed both loans would be “rolled” into one loan
modification program. At first, this was not the case. However, when a short sale of
Applicant’s home occurred on June 24, 2011, the second loan was included in the sale
of the property. (Response to FORM) Applicant provided a copy of the settlement
statement to support her claim. (Response to FORM)
Applicant provided documentation that the collection account (SOR ¶ b) is paid
in full for $4,000. (Response to FORM and Item 4) This credit card delinquency
occurred in part due to Applicant’s mortgage problems in 2007. She made minimum
 See also ISCR Case No. 94-1075 at 3-4 (App. Bd. Aug. 10, 1995).      2
 Department of the Navy v. Egan, 484 U.S. 518, 531 (1988).      3
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      4
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payments from 2007 until August 2010. The account was turned over to a collection
agency and Applicant arranged a payment plan because she did not have sufficient
funds to pay the entire amount. 
Applicant acknowledged that some of her financial difficulties began because
she was overextended. She did not produce evidence of financial counseling. She has
a personal financial statement that reveals her monthly net income is $4,747. After
expenses, she has a net remainder of $448. She is current on her daily expenses. She
noted that she also receives $300 a month for child support. She has a checking and
savings account as noted on recent pay statements. 
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 United States 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 a2
preponderance of evidence.  The ultimate burden of persuasion is on the applicant.  3 4
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
 See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive      5
information), and EO 10865 § 7.
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      6
 Id.      7
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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 clearance5
determinations should err, if they must, on the side of denials.”  Any reasonable doubt6
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 a7
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 delinquent debts amounting to $38,000. Although she denied the
debts in her answer to the SOR, she acknowledged others in her interview and her
security clearance application. 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 debts were recent. The home mortgage was a problem due to the
real estate market and her ARM. This could not have been predicted. Consequently,
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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.
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, Applicant had additional financial difficulties with her ARM and
attempts to refinance her home. She tried to reduce her expenses by having a tenant in
her home. She also attempted home loan modifications. Her home eventually was sold
in a short sale. She also incurred medical expenses which impacted her ability to timely
pay her debts. I find that she acted reasonably under the circumstances. This mitigating
condition applies.
FC MC AG ¶ 20(d), (the individual initiated a good-faith effort to repay overdue
creditors or otherwise resolve debts) applies. Applicant provided documentation that
she has resolved the debts listed in the SOR. She had a payment plan prior to the final
resolution of the collection account. She did not present evidence that she received
financial counseling which obviates the applicability of FC MC AG ¶ 20(c) (the person
has received or is receiving counseling for the problem. However, there are clear
indications that the problem is being resolved or is under control).
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.
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Applicant is 39 years old. She has worked for her current employer since April 2004.
She has one child. She has completed college classes but has not yet obtained her
undergraduate degree. She has held a security clearance since late 2003 without
incident.
Applicant purchased a home in 2005 with an ARM. She had difficulty refinancing
when the real estate market crashed. She did all she could to keep her home. It
eventually sold in a short sale in June 2011. Applicant provided documentation that she
resolved her credit card collection account. She has resolved her debts. 
Applicant submitted sufficient information or evidence to mitigate the security
concerns raised in her case. Clearance is granted. 
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- 1.b: 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