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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 10-07097
)
)
Applicant for Security Clearance )
Appearances
For Government: Melvin A. Howry, Esquire, Department Counsel
For Applicant: Steve Gardella, Esquire
January 6, 2012
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Decision
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CEFOLA, Richard A., Administrative Judge:
The Applicant submitted his Electronic Questionnaires for Investigations
Processing (e-QIP) on January 21, 2010.  On May 24, 2011, the Defense Office of
Hearings and Appeals (DOHA) issued a Statement of Reasons (SOR) detailing the
security concerns under Guideline F for the 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 after September 1, 2006. 
The Applicant acknowledged receipt of the SOR on June 1, 2011.  He answered
the SOR in writing through counsel on June 16, 2011, and requested a hearing before
an Administrative Judge.  DOHA received the request on June 20, 2011, and it was
assigned to another Judge.  The case was reassigned to the undersigned on
September 26, 2011.  DOHA already issued a notice of hearing on September 21,
2011, and I convened the hearing as scheduled on October 26, 2011.  The Government
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offered Exhibits (GXs) 1 through 5, which were received without objection.  The
Applicant testified on his own behalf, as did his supervisor, and submitted Exhibits
(AppXs) A through N, which were received without objection.  DOHA received the
transcript of the hearing (TR) on November 2, 2011.  The record closed on November 2,
2011.  Based upon a review of the pleadings, exhibits, and testimony, eligibility for
access to classified information is granted.
Procedural and Evidentiary Rulings
Request for Administrative Notice
Department Counsel submitted a formal request that I take administrative notice
of certain facts relating to Deficiency Judgments.  The request was granted.  The
documents were not admitted into evidence, but are included in the record.
Findings of Fact
In his Answer to the SOR, the Applicant denied the factual allegations in the
three Subparagraphs of the SOR. 
Guideline F - Financial Considerations
The Applicant was divorced in November of 2010.  (TR at page 34 line 23 to
page 37 line 3, and AppX J.)  Pursuant to the divorce decree, it was ordered that their
two houses, one a rental and the other their residence, be sold.  (Id.)  This is evidenced
by the divorce decree.  (AppX J.)  As a result, both properties were sold by way of a
short sale, which will be discussed under the three Subparagraphs of the SOR, below.
Prior to his divorce, the Applicant had no financial difficulties.  (TR at page 43 line 20 to
page 44 line 3.)  He has also recently taken a “credit counseling class.”  (TR at page 45
line 16 to page 46 line 19, and AppX I.)
1.a. and 1.b.  It is alleged that the Applicant is past due on his rental property in
the amount of about $13,996, on its first mortgage, to Creditor B; and in the amount of
about $2,530, on its second mortgage, to Creditor A.  (GX 5 at pages 1 and 2.)  Both of
these mortgages have been paid, as evidenced by the escrow documents.  (TR at page
37 line 21 to page 38 line 15, at page 39 lines 13~18, at page 40 line 11 to page 42 line
7, and AppX G at page 3.)
1.c.  It is alleged that the Applicant is past due on his residential property in the
amount of about $41,530, on its second mortgage, to Creditor C.  (GX 5 at pages 3.)
This mortgage has been paid, as evidenced by a document from the lender.  (TR at
page 37 lines 9~20, at page 39 lines 19~22, at page 42 line 8 to page 43 line 19, at
page 44 line 4 to page 45 line 2, and AppX N.)
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Policies
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 useful 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.
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
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.  Decisions include, by necessity, consideration
of the possible risk 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.
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.”  See also EO 12968, Section 3.1(b) (listing multiple prerequisites
for access to classified or sensitive information).
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Analysis
Guideline F - Financial Considerations
The security concern relating to the guideline for Financial Considerations is set
out in Paragraph 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
Subparagraph 19(a), an “inability or unwillingness to satisfy debts@ is potentially
disqualifying.  Similarly under Subparagraph 19(c), “a history of not meeting financial
obligations@ may raise security concerns.  As the result of his divorce, the Applicant had
significant past due debts, related to two properties.
However, the countervailing second and fourth Mitigation Conditions are clearly
applicable here.  The Mitigating Condition found in Subparagraph 20(b) is applicable
where “the conditions that resulted in the financial problem were largely beyond the
person’s control (e.g., . . . divorce or separation), and the individual acted responsibly
under the circumstances.@  Here, the Applicant’s debts are directly related to his divorce,
and he has addressed all of the alleged past due debts.  Subparagraph 20(d) is
applicable where “the individual initiated a good-faith effort to repay overdue creditors or
otherwise resolve debts.”  Pursuant to the short sales, the Applicant has paid all of his
past due debts.
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 circumstances.  Under Paragraph 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 should also consider the nine adjudicative process
factors listed at AG Paragraph 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 all of the evidence, including the potentially disqualifying and
mitigating conditions surrounding this case.  Here, his Supervisor speaks most highly of
the Applicant.  (TR at page 25 line 23 to page 32 line 2.)  The record evidence leaves
me with no questions or doubts as to Applicant’s eligibility and suitability for a security
clearance.  For all these reasons, I conclude Applicant has mitigated the security
concerns arising from his Financial Considerations.
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.c. 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 eligibility for a security
clearance.  Eligibility for access to classified information is granted.
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Richard A. Cefola
Administrative Judge