DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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----------------------------------- )       ISCR Case No. 10-01656
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Applicant for Security Clearance )
Appearances
For Government: Daniel F. Crowley, Esquire, Department Counsel
For Applicant: Pro se
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 Decision
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WESLEY, Roger C., Administrative Judge:
Based upon a review of the pleadings, items, and legal arguments presented,
Applicant does not mitigate financial consideration security concerns. Clearance is
denied.
Statement of Case
On March 25, 2011, the Defense Office of Hearings and Appeals (DOHA) issued
a Statement of Reasons (SOR) detailing reasons why DOHA could not make the
preliminary affirmative determination of eligibility for granting a security clearance, and
recommended referral to an administrative judge to determine whether a security
clearance should be granted, continued, denied, or revoked. 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 (AGs) implemented by the
Department of Defense for SORs on September 1, 2006.
Applicant responded to the SOR on April 16, 2009, and elected to have his case
decided on the basis of the written record. Applicant received the file of relevant
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material (FORM) on May 26, 2011, and did not respond with any information. The case
was assigned to me on August 16, 2011.
Summary of Pleadings
Under Guideline F, Applicant is alleged to have accumulated 15 delinquent
debts, exceeding $64,000 as follows: creditor 1.a ($212); creditor 1.b ($90); creditor 1.c
($293); creditor 1.d ($9,745); creditor 1.e ($8,356); creditor 1.f ($20,148); creditor 1.g
($976); creditor 1.h ($568); creditor 1.i ($11,000); creditor 1.j ($251); creditor 1.k ($168);
creditor 1.l ($1,632); creditor 1.m ($784); creditor 1.n ($374); and creditor 1.o ($519).
In his response to the SOR, Applicant admitted most of the debts, but denied
others (i.e., creditors 1.g through 1.I and creditor 1.o).  He provided no explanations.  
Findings of Fact
Applicant is a 36-year-old security guard for a defense contractor who seeks a
security clearance. The allegations covered in the SOR and admitted to by Applicant
are adopted as relevant and material findings.  Additional findings follow.
                                  
Applicant has been married to his spouse since April 1996 and has no children
from this marriage. (Item 7) He has no military experience. (Item 7) Applicant attended
an accredited university between September 1994 and December 1994, but has no
certificate or degree from this institution.
Applicant accumulated a number of delinquent debts between 2006 and 2009.
His listed delinquencies are documented in both of his credit reports and exceed
$64,000 in aggregate indebtedness. (Items 5 and 6) Three of these debts (exceeding
$29,000 in the aggregate) represent deficiency balances on repossessed vehicles. 
Applicant’s largest listed debt (with creditor 1.f) represents a deficiency owing on
a repossessed mobile home in the listed amount of $20,408. He once occupied this
home.  Investigating a leak “from a big rain shower, he detected water leaking into the
ducts that were in the floor and found mold growing in the area. ((Item 7) This mold was
causing his family to get sick.  Because of the excessive mold in the home, Applicant
and his family abandoned the home and ceased paying on his mortgage. Since
repossessing the home, the lender has not moved it.  (Item 7)
Creditor 1.h and creditor 1.o reflect claimed duplicate debts that carry separately
reported accounts in Applicant’s credit reports. (Items 5 through 7) Applicant
acknowledged responsibility for both of these debts in his interrogatory responses and
provided no explanatory materials to document his claims.. (Item 7) The debts in the
credit reports reflect separate accounts that remain outstanding. The attached letter to
Applicant’s attorney from creditor 1.h of August 2010 confirmed only that the creditor
had closed the account and no longer was exercising collection action. (Item 2). The
creditor’s letter contained no payment or settlement initiatives involving Applicant.  For
payment purposes, the creditor 1.h debt remains unsatisfied.  
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 Applicant provides no explanations for his debt difficulties. His security
clearance application reports continuous employment between August 2007 and
September 2009. (Item 4) His personal financial statement reports net monthly income
of $2,552, monthly expenses of $2000, and a net monthly remainder of $552. (Item 7)
Without more financial information from Applicant about himself and his spouse during
the pertinent period of reported debt delinquencies, his monetary circumstances cannot
be properly evaluated.  
Afforded an opportunity to supplement the record, Applicant provided no
endorsements or performance evaluations on his behalf.  Nor did he provide any proof
of community and civic contributions.
Policies
The AGs list guidelines to be used by administrative judges in the decision-
making process covering DOHA cases. These guidelines take into account factors that
could create a potential conflict of interest for the individual applicant, as well as
considerations that could affect the individual’s reliability, trustworthiness, and ability to
protect classified information. These guidelines include "[c]onditions that could raise a
security concern and may be disqualifying” (disqualifying conditions), if any, and many
of the "[c]onditions that could mitigate security concerns.” These guidelines must be
considered before deciding whether or not a security clearance should be granted,
continued, or denied. The guidelines do not require administrative judges to place
exclusive reliance on the enumerated disqualifying and mitigating conditions in the
guidelines in arriving at a decision. Each of the guidelines is to be evaluated in the
context of the whole person in accordance with AG ¶ 2(c). 
In addition to the relevant AGs, administrative judges must take into account the
pertinent considerations for assessing extenuation and mitigation set forth in AG ¶ 2(a)
of the revised AGs, which are intended to assist the judges in reaching a fair and
impartial commonsense decision based upon a careful consideration of the pertinent
guidelines within the context of the whole person. The adjudicative process is designed
to examine a sufficient period of an applicant’s life to enable predictive judgments to be
made about whether the applicant is an acceptable security risk. 
When evaluating an applicant’s conduct, the relevant guidelines are to be
considered together with the following AG ¶ 2(a) factors: (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 chances; (7) the motivation for the conduct; (8) the potential for
pressure, coercion, exploitation, or duress; and (9) the likelihood of continuation or
recurrence.
Viewing the issues raised and evidence as a whole, the following individual
guidelines are pertinent in this case:
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Financial Considerations
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.  Compulsive gambling is a concern as it may lead to financial
crimes including espionage.  Affluence that cannot be explained by known
sources of income is also a security concern.  It may indicate proceeds
from financially profitable criminal acts. AG ¶ 18.
Burden of Proof
Under the AGs, a decision to grant or continue an applicant's security
clearance may be made only upon a threshold finding that to do so is clearly
consistent with the national interest.  Because the Directive requires administrative
judges to make a commonsense appraisal of the evidence accumulated in the record,
the ultimate determination of an applicant's eligibility for a security clearance depends,
in large part, on the relevance and materiality of that evidence. See Kungys v. United
States, 485 U.S. 759, 792-800 (1988).  As with all adversarial proceedings, the judge
may draw only those inferences which have a reasonable and logical basis from the
evidence of record. 
The Government's initial burden is twofold: (1) it must prove by substantial
evidence any controverted facts alleged in the SOR, and (2) it must demonstrate that
the facts proven have a material bearing to the applicant's eligibility to obtain or
maintain a security clearance. The required materiality showing, however, does not
require the Government to affirmatively demonstrate that the applicant has actually
mishandled or abused classified information before it can deny or revoke a security
clearance. Rather, the judge must consider and weigh the cognizable risks that an
applicant may deliberately or inadvertently fail to safeguard classified information.
Once the Government meets its initial burden of proof of establishing admitted
or controverted facts, the evidentiary burden shifts to the applicant for the purpose of
establishing his or her security worthiness through evidence of refutation, extenuation,
or mitigation.  Based on the requirement of  Exec. Or. 10865 that all security
clearances be clearly consistent with the national interest, the applicant has the
ultimate burden of demonstrating his or her clearance eligibility. “[S]ecurity-clearance
determinations should err, if they must, on the side of denials.” See Department of the
Navy v. Egan, 484 U.S. 518, 531 (1988). 
Analysis  
Applicant is a security guard of a defense contractor.  Between 2006 and 2009,
he accumulated a number of delinquent debts (including deficiency balances resulting
from several vehicle repossessions). His accumulation of delinquent debts and his
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past inability and unwillingness to address these debts warrant the application of two
of the disqualifying conditions (DC) of the Guidelines: DC ¶ 19(a), “inability or
unwillingness to satisfy debts,” and ¶19(c) “a history of not meeting financial
obligations.”
Applicant’s pleading admissions of the debts covered in the SOR negate the
need for any independent proof (see McCormick on Evidence, § 262 (6th ed. 2006)).
Each of Applicant’s listed debts are fully documented in his latest credit reports and
provide ample corroboration of his debts. His listed debts remain unpaid and
unresolved by voluntary means.
Based on the documented materials in the FORM, no extenuating
circumstances are associated with Applicant’s inability to pay or otherwise resolve his
debts. Moreover, some judgment problems persist over Applicant’s unexplained
delinquencies and his failure to demonstrate he acted responsibly in addressing his
listed debts once the underemployment conditions that contributed to the
delinquencies had passed or eased, and his finances had improved. See ISCR Case
03-01059 at 3 (App. Bd. Sep. 24, 2004).  Not only are his listed debt delinquencies
ongoing, but he has failed to address them in any tangible way.  Mitigation credit is
not available to Applicant based on the evidence developed in this record.         
                                          
Holding a security clearance involves a fiduciary relationship between the
Government and the clearance holder. Quite apart from any agreement the clearance
holder may have signed with the Government, the nature of the clearance holder’s
duties and access to classified information necessarily imposes important duties of
trust and candor on the clearance holder that are considerably higher than those
typically imposed on Government employees and contractors involved in other lines of
Government business.  See Snepp v. United States, 444 U.S. 507, 511 n.6 (1980). 
While the principal concern of a clearance holder’s demonstrated financial
difficulties is vulnerability to coercion and influence, judgment and trust concerns are
also explicit in financial cases.  Failure of the applicant to make concerted efforts to
pay or resolve his debts when able to do so raises security-significant concerns about
whether the applicant has demonstrated the trust and judgment necessary to
safeguard classified information.
Whole-person assessment does not enable Applicant to surmount the
judgment questions raised by his accumulation of delinquent debts, which remain
unpaid and unresolved. Endorsements and performance evaluations might have been
helpful in making a whole-person assessment of his overall clearance eligibility, but
were not provided. Overall, clearance eligibility assessment of Applicant based on the
limited amount of information available for consideration in this record does not
enable him to establish judgment and trust levels sufficient to overcome security
concerns arising out of his accumulation of delinquent debts.
Taking into account all of the documented facts and circumstances surrounding
Applicant’s debt accumulations, his lack of any exhibited explanations for his debt
accruals, and his failure to provide any proof of corrective actions taken to address his
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old debts, it is still soon to make safe predictive judgments about Applicant’s ability to
repay his debts and restore his finances to stable levels commensurate with the
minimum requirements for holding a security clearance. Unfavorable conclusions
warrant with respect to the allegations covered by subparagraphs 1.a through 1.o.  
Formal Findings
In reviewing the allegations of the SOR and ensuing conclusions reached in the
context of the findings of fact, conclusions, conditions, and the factors listed above, I
make the following formal findings:
GUIDELINE F (FINANCIAL CONSIDERATIONS): AGAINST APPLICANT
   
Subparas. 1.a through 1.o:     Against Applicant
Conclusions
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 Applicant’s security
clearance.  Clearance is denied.
                                          
Roger C. Wesley
Administrative Judge 
                                        
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