DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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--------------------------------- )       ISCR Case No. 10-03710
)
)
Applicant for Security Clearance )
Appearances
For Government: Jeff Nagel, Department Counsel
For Applicant: Pro se
September 25, 2011
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Decision
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LOKEY ANDERSON, Darlene D., Administrative Judge:
Applicant submitted her Electronic Questionnaires for Investigations Processing
(e-QIP) on February 1, 2010.  (Government Exhibit 1.)  On April 8, 2011, 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.
The Applicant responded to the SOR on April 8, 2011, the document was
notarized on April 12, 2011, and she requested an administrative hearing before a
DOHA Administrative Judge.  This case was assigned to the undersigned on May 24,
2011.  A notice of hearing was issued on June 8, 2011, and the hearing was scheduled
for July 12, 2011.  At the hearing the Government presented seven exhibits, referred to
as Government Exhibits 1 through 7, which were admitted without objection.  The
Applicant called one witness and presented four exhibits, referred to as Applicant’s
Exhibits A through D, which were also admitted without objection.  She also testified on
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her own behalf.  The record remained open until close of business on August 15, 2011,
to allow the Applicant the opportunity to submit additional documentation.  The
Applicant submitted no additional documentation.  The official transcript (Tr.) was
received on July 21, 2011.  Based upon a review of the pleadings, exhibits, and
testimony, eligibility for access to classified information is denied.
 FINDINGS OF FACT
The Applicant is 51 years old and married a second time.  She is a high school
graduate.  She is employed with a defense contractor as an Engineering Technician
and is seeking to obtain a security clearance in connection with this 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 she is financially overextended and at risk
of having to engage in illegal acts to generate funds.      
The Applicant admitted each of the allegations set forth in the SOR.  Credit
Reports of the Applicant dated February 6, 2010; September 14, 2010; February 24,
2011; May 10, 2011; and July 11, 2011, reflect that the Applicant was indebted to each
of the creditors set forth in the SOR, in an amount totaling approximately $135,000.00.
(Government Exhibits 3, 4, 5, 6 and 7.)
The Applicant has worked for her current employer since 1978, for almost thirty
years.  She has maintained a security clearance most of that time and has never had a
security violation.  (Tr. p. 35.)  In 1995, she got married, and for fifteen years lived a
lavish lifestyle with her husband.  He earned between $200,000 and $255,000 annually,
she earned about $50,000 annually, and she could spend whatever she wanted.  (Tr. p.
54.)  They purchased a house together and both had a number of credit cards in each
of their names that they charged up. (Tr. p. 38.)  They paid their bills on time, had no
bad debt, and had excellent credit.  In 2008, the Applicant and her husband divorced.
The divorce decree required the Applicant to pay her ex-husband $175,000 which she
could only obtain by refinancing the house.  She did so, and paid him off.  To complicate
matters, in 2009, she lost her job due to a lack of project funding.  She was laid off for
eight months.  During this period she contacted her creditors and informed them of her
situation, but they were not interested in dealing with her.  She realized at that point that
she had a serious financial problem as she was accustomed to her lavish lifestyle, and
had not yet made the adjustment to living on less income.  
In March 2009 the Applicant married her current husband.  He works between 20
and 35 hours a week and earns between $400.00 and $700.00 weekly.  (Tr. p. 68.)  The
Applicant was called back to work after eight months of unemployment.  She tried to sell
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the house, with the hopes that she could use most of the profit to pay off her delinquent
debts.  She was unable to sell the house.  She refinanced the mortgage and now has
an adjustable loan that makes her payments affordable.  In September 2009, she hired
a debt negotiation firm to help resolve her indebtedness.  She became very
disappointed with the limited progress the firm was making toward resolving her debts,
since she had paid them a total of $8,000, which was $900.00 a month for eight months
to a year, and they had only paid off one of the Applicant’s debts for $1,200.  (Tr. p. 66.)
In late 2009 or early 2010, she consulted an attorney who told her that she had been
“ripped off” and advised her to file bankruptcy.  She hired the attorney who prepared
documentation for a Chapter 7 bankruptcy.  The Applicant was later informed that she
did not qualify because of her income.  Her attorney then went to a Chapter 13, but the
repayment plan of $2,600 monthly was more than the Applicant could afford.  (Tr. p.
31.)  Her attorney then advised her to hold on until her circumstances changed enough
in order to meet the income requirement.  Since she has been recently laid off, her
attorney advised her that she can re-file for Chapter 7 and that she will now qualify.  The
Applicant plans to file Chapter 7 bankruptcy with the next two months.  (Tr. p. 28 and
Applicant’s Exhibit A.)  The Applicant plans to include each of the creditors listed in the
SOR.    
The following credit card debts remain owing: 1(a). A debt to a creditor in the
amount of $10,307.  1(b). A debt owed to a creditor in the amount of $1,838.  1(c). A
debt owed to a creditor in the amount of $4,894.  1(d). A debt owed to a creditor in the
amount of $3,897.  1(e). A debt owed to a creditor in the amount of $4,525.  1(f). A debt
owed to a creditor in the amount of $5,879.  1(g). A debt owed to a creditor in the
amount of $3,765.  1(h). A debt owed to a creditor in the amount of $2,960.  1(i). A debt
owed to a creditor in the amount of $1,227.  1(j). A debt to a creditor in the amount of
$592.  1(k). A debt owed to a creditor in the amount of $1,016.  1(l). A debt owed to a
creditor in the amount of $1,840.  1(m). A debt owed to a creditor in the amount of
$14,281.  1(n). A debt owed to a creditor in the amount of $808.00.  1(o). A debt owed
to a creditor in the amount of $2,477.  1(p). A debt owed to a creditor in the amount of
$3,466.  1(q). A debt owed to a creditor in the amount of $3,457.  1(r). A debt owed to a
creditor in the amount of $6,774.  1(s). A debt to a creditor in the amount of $2,219.
1(t). A debt owed to a creditor in the amount of $10,589.  1(u). A debt owed to a creditor
in the amount of $6,774.  1(v). A debt owed to a creditor in the amount of $9,623.  1(w).
A debt owed to a creditor in the amount of $2,241.  1(x). A debt owed to a creditor in the
amount of $6,774.  1(y). A debt owed to a creditor in the amount of $1,409.  1(z). A debt
owed to a creditor in the amount of $7,125.  1(a)(a). A debt owed to a creditor in the
amount of $9,985.  1(b)(b). A debt owed to a creditor in the amount of $13,109.  1(c)(c).
A debt owed to a creditor in the amount of $2,816.  (See Applicant’s Answer to the
SOR.)                                             
                                     
The Applicant’s husband testified that in about September 2008, the Applicant
put the house up for sale and two days before escrow was to close the deal fell through.
Most of the debt listed in the SOR was accumulated during her previous marriage.  He
and the Applicant live within their means and pay their bills on time.  (Tr. pp. 45 - 46.)   
                        
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Letters of recommendation submitted on behalf of the Applicant from her Branch
Manager; coworkers, and a customer, who have known the Applicant for many years,
reflect that the Applicant  is an excellent employee who is a hard worker, self-sufficient,
with experience and skills that have been valuable to the company.  She is described as
conscientious, dedicated to her job and dependable.  She has worked with classified
information and adhered to all security rules and regulations in the performance of her
duties.  She is highly recommended for a security clearance.  (Applicant’s Exhibits B, C
and 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; and
19.(c) a history of not meeting financial obligation. 
Conditions that could mitigate security concerns:
20.(b) the conditions that resulted in the financial problem 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;
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;
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     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.”
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.
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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 or her 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 her security clearance eligibility.
The evidence shows that circumstances largely beyond the Applicant’s control,
namely, her divorce followed by an unexpected job lay-off in 2009, caused her financial
difficulties.  In addition, to comply with the divorce decree she had to refinance the
house to pay off her husband, which added $175,000 in debt to her loan.  For eight
months she was out of work, lived on credit cards, and accumulated more debt.
Admittedly, since September 2009 she has tried a number of things to resolve her debt.
She tried to sell her house, but was unable to do so.  She hired a debt negotiation firm
and paid them for services for almost a year, but made little or no progress.  She then
hired an attorney to file bankruptcy on her behalf.  She is now planning to file for
Chapter 7, and believes that she will now qualify to do so.  However, at the present
time, she has not yet filed.        
Under the particular circumstance of this case, the Applicant has not met her
burden of proving that she is worthy of a security clearance.  She has not addressed
even one of her delinquent debts in the SOR.  Thus, it cannot be said that she has
made a good-faith effort to resolve her past due indebtedness.  She has not set up a
payment plan or made any attempt to pay her debts.  She remains excessively
indebted.  She has not shown that she is or has been reasonably, responsibly or
prudently addressing her financial situation.  She obviously does not understand the
importance of paying her bills on time.  At this time, there is insufficient evidence of
financial rehabilitation.  The Applicant has not demonstrated that she can properly
handle her financial affairs or that she is fiscally responsible.  Assuming that she follows
through with her bankruptcy and discharges her debts, and then shows that she does
not acquire new debt that she is unable to pay, she may be eligible for a security
clearance in the future.  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.  Although Mitigating Conditions 20.(b) the conditions that resulted in
the financial problem were largely beyond the person’s control (e.g., loss of
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employment, a business downturn, unexpected medical emergency, or a death, divorce
or separation), and the individual acted responsibly under the circumstances, applies, it
is not controlling.  Although she hired several entities in efforts to resolve her
indebtedness, she made no progress.  She remains excessively indebted.  Thus, she
has not done enough to show that she is fiscally responsible.  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, including her favourable letters of
recommendation.  Under the particular facts of this case, the totality of the conduct set
forth above, when viewed under all of the guidelines 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.  It does not mitigate the negative
effects of her financial indebtedness and the effects that it can have on her ability to
safeguard classified information.  On balance, it is concluded that the Applicant has not
overcome the Government's case opposing her 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.: Against 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.
     Subpara.  1.j.: Against the Applicant.
    Subpara.  1.k.: Against the Applicant.
        Subpara.  1.l.: Against the Applicant.
    Subpara.  1.m.: Against the Applicant.
      Subpara.  1.n.: Against the Applicant.
    Subpara.  1.o.: Against the Applicant.
     Subpara.  1.p.: Against the Applicant.
    Subpara.  1.q.: Against the Applicant.
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    Subpara.  1.r.: Against the Applicant.
      Subpara.  1.s.: Against the Applicant.
    Subpara.  1.t.: Against the Applicant.
     Subpara.  1.u.: Against the Applicant.
    Subpara.  1.v.: Against the Applicant.
     Subpara.  1.w.: Against the Applicant.
    Subpara.  1.x.: Against the Applicant.
    Subpara.  1.y.: Against the Applicant.
      Subpara.  1.z.: Against the Applicant.
    Subpara.  1.a.a: Against the Applicant.
     Subpara.  1.b.b: Against the Applicant.
    Subpara.  1.c.c: Against the Applicant.
  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