1
                                                                     
                              DEPARTMENT OF DEFENSE
               DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 11-01355
)
)
Applicant for Security Clearance )
Appearances
For Government: Alison O’Connell, Esquire, Department Counsel
For Applicant: Pro se
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Decision
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WHITE, David M., Administrative Judge:
Applicant incurred substantial delinquent debts, including a second mortgage that
remains outstanding after foreclosure on his home, a loan for a repossessed car, and
several smaller collection accounts. For several years he has been financially
dependent on his brother and without a source of steady income. He failed to mitigate
resulting security concerns. Based upon a review of the pleadings, exhibits, and
testimony, eligibility for access to classified information is denied. 
Applicant submitted a security clearance application (SF 86) on July 13, 2010.
On April 8, 2011, the Defense Office of Hearings and Appeals (DOHA) issued a
Statement of Reasons (SOR) to Applicant, detailing security concerns 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 Directive 5220.6, Defense Industrial Personnel Security
Clearance Review Program (January 2, 1992), as amended (Directive); and the
Adjudicative Guidelines for Determining Eligibility for Access to Classified Information
effective within the Department of Defense on September 1, 2006. 
GE 1; Tr. 72-80, 85.1
AR.2
GE 2.3
Tr. 63-64.4
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Applicant answered the SOR in writing (AR) on April 25, 2011, and requested a
hearing before an administrative judge. Department Counsel was prepared to proceed
on July 22, 2011, and the case was assigned to me on August 1, 2011. DOHA issued a
Notice of Hearing on August 3, 2011, and I convened the hearing as scheduled on
September 13, 2011. The Government offered exhibits (GE) 1 through 4, which were
admitted without objection. Applicant offered exhibits (AE) A and B, which were
admitted without objection, and testified on his own behalf. Three witnesses also
testified for him. I granted Applicant’s request to leave the record open until October 7,
2011, for submission of additional evidence. DOHA received the transcript of the
hearing (Tr.) on September 26, 2011. Applicant timely submitted additional evidence,
which I marked AE C and admitted without objection. The record closed as scheduled.
Findings of Fact
Applicant is a 33-year-old former part-time employee of a defense contractor,
where he worked for two weeks with an interim clearance during mid-2010. The
contractor would like to hire him again if he obtains a security clearance. He worked as
a union carpenter from July 2002 through July 2009, and has essentially been
unemployed since then. He is a high school graduate who has no military service, and
this is his first application for a security clearance. He is recently divorced, after
separating from his wife in February 2008. His two stepsons, ages 17 and 15, live with
Applicant while the two sons he fathered, ages 8 and 7, live with his former wife.  In his1
response to the SOR, Applicant denied the allegations in SOR ¶¶ 1.b through 1.e, and
admitted those in SOR ¶¶ 1.a and 1.f through 1.g.  Applicant’s admissions, including his2
responses to DOHA interrogatories,  are incorporated in the following findings.3
In 2006 Applicant married his girlfriend of six years, with whom he had two
children. Concerning her, Applicant’s brother testified that:
She didn’t make a paycheck, if you will, during her job. She got under-the-
table money because she was an exotic dancer, so she didn’t have a pay
stub or a W-2 or anything like that. She really didn’t make a lot of pay - -
didn’t make payments on the house or the Denali or the Dell or anything
else. So when she left, she abandoned my brother to make this exorbitant
mortgage payment, which [another witness] explained how high it was. . . .
So she did very little as far as - - she did nothing, in my opinion, to help
with the financial situation, even though she made good enough money to
get her own apartment and feed herself and the two younger children.4
GE 2; AE C; Tr. 43-46, 86-87, 100-101.5
GE 2; Tr. 80-87. 6
GE 2; GE 4; AE B; Tr. 27, 87-91, 98-100.7
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During February 2006, Applicant and his wife purchased a home with a first
mortgage loan of $174,000 and a second mortgage loan of $43,500. These are the
debts alleged in SOR ¶¶ 1.c and 1.d. The first mortgage had a prepayment penalty of
around $21,000 to $23,000 if they sold the home before February 2008. During October
2007, Applicant contacted a real estate agent to inquire about selling the home, but they
did not list it for sale until April 2008 due to the penalty clause. They listed the home for
$240,000 but soon dropped the asking price to $230,000 because of deteriorating
market conditions. In March 2009 they accepted an offer for a short-sale at a price of
$170,000 but the bank holding the first mortgage had already started foreclosure
proceedings and did not accept the short sale proposal. After foreclosure, the bank sold
the home for $163,000. Applicant testified that neither mortgage holder has attempted
to collect the remaining deficiency balances. When he can afford to do so, he intends to
contact the second mortgage holder to arrange resolution of that debt.  5
Applicant’s wife abruptly left him and her two older sons in early February 2008.
Prior to that time, he had been working up to 70 hours per week and earning enough
money to pay his bills. His older stepson was having some behavior problems, so he
could not continue to work such long hours and leave him alone after school. At the
same time, the economic downturn caused greatly reduced demand for his carpenter
services. Coincidentally in February 2008, the adjustable rate on their mortgages
caused the monthly payments to increase from around $1,400 to $2,300 per month.
Applicant could not afford to make these payments, fell behind, and eventually stopped
making mortgage payments altogether. As far as he understands, the foreclosure action
resolved him of any further debt on the first mortgage.  I take administrative notice of6
the applicable state law which precludes a lender who pursues a non-judicial
foreclosure process, as in this case, from suing to recover any potential deficiency
judgment.
Applicant’s next-largest delinquent debt involves the $12,089 collection account
alleged in SOR ¶ 1.e. That figure was reported by the collection agency in July 2010,
after Applicant made two payments of $200 each in May and June 2010 toward an
original amount due of $12,489. This debt arose when Applicant purchased the Denali,
mentioned above by his brother, for his wife with a loan in his own name. When they
separated, his wife took the car with the understanding that she would make the loan
payments. She did not do so and, after damaging the car in a minor accident,
abandoned it on the side of the road rather than pay for repairs. The lender contacted
Applicant, who told them where to locate and repossess the car. After the two initial
payments noted above, Applicant made $200 payments in July and August 2010, then
made $100 payments in October and December 2010, and each month from January to
May 2011. He testified that he continues to pay the creditor $100 per month, but missed
a couple monthly payments. He still owes at least $10,500 as of the record’s closing.7
AE A; AE C; Tr. 27, 91-92.8
AR; GE 3; GE 4; Tr. 93-95, 102-104.9
Tr. 67-69, 78-80, 114-115.10
Tr. 30-71, 114-115.11
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When Applicant’s wife left him, she also took a Dell computer that he had
purchased on credit. This is the $1,509 debt alleged in SOR ¶ 1.b. During May 2011
Applicant reached an agreement with the collection agency to settle this debt for a
series of monthly payments totaling $987. He made the final such payment on
September 6, 2011, and the creditor acknowledged settlement in full.8
Applicant admitted owing the remaining four smaller SOR-listed debts. These
include the $293 medical debt for services received by his son (¶ 1.a), the $17 and $128
collection accounts for traffic fines (¶¶ 1.f and 1.g), and the $81 garbage collection bill
that was placed for collection in March 2007 (¶ 1.h). He had not addressed any of these
debts as of the close of the record; instead choosing to address and resolve the larger
car and computer debts before paying the smaller ones. He has also undertaken to pay
about $3,000 in debt incurred by his eldest stepson to his County Court and Juvenile
Delinquent Services agency at a rate of $25 per month.  9
In February 2008, Applicant and his two stepsons moved out of their home to live
in his brother’s home to save money. His brother supported them financially while
Applicant was out of work, providing about $1,500 per month. He and his brother
worked with a third friend to start a business during that time, but never made any
money doing so. Finally, during the month before his hearing, Applicant resumed
performing some irregular carpenter work and became licensed to work as a bail bond
recovery agent. He hoped to begin earning about $3,000 per month from these two
jobs.10
Applicant’s real estate agent, and his attempted business partner, both of whom
also consider him a good friend, and his brother, all provided testimony praising his
responsibility, good work performance, reliability, and general good character.  His11
demeanor during the hearing was pleasant, open, sincere, and straightforward.
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 (DCs) and mitigating conditions (MCs), which are to be used 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
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factors listed in AG ¶ 2 describing the adjudicative process. The administrative judge’s
overarching adjudicative goal is a fair, impartial, and commonsense decision. According
to AG ¶¶ 2(a) and 2(c), the entire process is a conscientious scrutiny of applicable
guidelines in the context 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 the 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, “[t]he applicant is
responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or
mitigate facts admitted by the applicant or proven by Department Counsel, and has the
ultimate burden of persuasion as to obtaining a favorable clearance decision.” Section 7
of Executive Order 10865 provides: “[a]ny determination under this order adverse to an
applicant 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.”
A person applying for access to classified information seeks to enter 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.
Analysis
Guideline F, Financial Considerations
The security concerns relating to the guideline for financial considerations are set
out in AG ¶ 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.
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The evidence raised security concerns under two Guideline F DCs, as set forth in
AG ¶ 19(a) “inability or unwillingness to satisfy debts”; and ¶ 19(c) “a history of not
meeting financial obligations.” There is no evidence of frivolous or irresponsible
spending, deceptive or illegal financial practices, or financial issues caused by any
misconduct on Applicant’s part. His SOR-alleged financial problems began with a minor
unpaid garbage bill in March 2007, but essentially date from February 2008 when his
adjustable mortgage payments increased while his income substantially decreased due
to reduced working hours caused by the deteriorating economy and his wife leaving him
with responsibility for her troubled teenage son. He became financially dependent on his
brother, who helped him make payments to resolve one delinquent debt and reduce
another one by $1,500. He recently attempted to resume working, but did not
demonstrate any earnings or employment prospects that might restore his ability to
satisfy his debts or end his history of not meeting financial obligations. The evidence
establishes each of the allegations set forth in the SOR, thereby shifting the burden to
Applicant to prove mitigation.
The guideline includes five conditions in AG ¶ 20 that could mitigate the security
concerns arising from Applicant’s financial problems:
(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; 
(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;
(c) the person has received or is receiving counseling for the problem
and/or there are clear indications that the problem is being resolved or is
under control;
(d) the individual initiated a good-faith effort to repay overdue creditors or
otherwise resolve debts; and
(e) the individual has a reasonable basis to dispute the legitimacy of the
past-due debt which is the cause of the problem and provides
documented proof to substantiate the basis of the dispute or provides
evidence of actions to resolve the issue.
Applicant incurred substantial mortgage and automobile debt in 2006 and 2007
that exceeded his ability to repay starting in early 2008. These were voluntary decisions
reflecting poor judgment and little foresight. His current lack of income precludes a
finding that such circumstances are unlikely to recur or that his judgment has improved.
The ongoing nature of more than $53,800 in delinquent debt, and the failure to address
ISCR Case No. 06-12930 at 2 (App. Bd. Mar. 17, 2008) (quoting ISCR Case No. 04-09684 at 2-3 (App.12
Bd. Jul. 6, 2006)). 
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debts as small as $17, $81, and $128 over the past four years prevent finding significant
mitigation under AG ¶ 20(a).
Little, if any, mitigation under AG ¶ 20(b) was established either. Applicant’s
financial problems were not caused by his wife leaving him since she apparently
contributed little toward their family finances prior to that time. Her departure merely
relieved him of support obligations toward her and their two younger children. He chose
to undertake financial and parental responsibility for his wife’s two older children and to
reduce his work hours and income to do so. This was a generous and morally laudable
decision, but one that was entirely within his control and financially unwise and
irresponsible. 
Applicant has not undergone personal financial counseling. He resolved one
$1,509 delinquent debt and paid $1,500 toward another with his brother’s assistance,
but demonstrated no source of steady income or other ability to resolve more than
$53,000 in remaining delinquent debt. Thus, mitigation was not established under AG
¶¶ 20(c) and (d). Applicant did not dispute that he formerly owed any of the debts
alleged in the SOR, so AG ¶ 20(e) has no relevance in this case. 
As the Appeal Board has ruled concerning the successful mitigation of security
concerns arising from financial considerations, “[a]n applicant is not required to show
that [he] has completely paid off [his] indebtedness, only that [he] has established a
reasonable plan to resolve [his] debts and has ‘taken significant actions to implement
that plan.’”  This applicant could not yet demonstrate a reasonable plan to continue12
resolving his debts, and does not have the means to implement such a plan in the
foreseeable future. 
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 relevant 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. 
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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.   
I considered the potentially disqualifying and mitigating conditions in light of all
pertinent facts and circumstances surrounding this case. Applicant is a genuine and
kind individual who is highly regarded by, and dedicated to, his family and friends.
However, he does not have sufficient income to continue resolution of his substantial
remaining delinquent debts without the risk of incurring additional debt. 
Applicant is a mature and experienced individual, who is fully accountable for his
situation. The potential for pressure, coercion, exploitation, or duress from his financial
situation is undiminished, and he has not yet demonstrated a sufficient pattern of
financial responsibility to show that the financial concerns are unlikely to continue or
recur. 
Overall, the record evidence creates substantial doubt as to Applicant’s present
eligibility and suitability for a security clearance. He failed to meet his burden to mitigate
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 ¶ E3.1.25 of Enclosure 3 of the Directive, are:
Paragraph 1, Guideline F: AGAINST APPLICANT
Subparagraph 1.a: Against Applicant
Subparagraph 1.b: For Applicant
Subparagraphs 1.c through 1.h: Against Applicant
Conclusion
In light of all of the circumstances presented by the record in this case, it is not
clearly consistent with the national interest to grant Applicant eligibility for a security
clearance. Eligibility for access to classified information is denied.
                                              
DAVID M. WHITE
Administrative Judge