DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
---------------------------------    )       ISCR Case No. 10-08075
)
)
Applicant for Security Clearance )
Appearances
For Government: Melvin A. Howry, Department Counsel
For Applicant: Sarah Kneisel, Attorney At Law
February 29, 2012
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Decision
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LOKEY ANDERSON, Darlene D., Administrative Judge:
Applicant submitted her Electronic Questionnaire for Investigations Processing
(e-QIP) dated May 26, 2010.  (Government Exhibit 1.)  On July 19, 2011, the Defense
Office of Hearings and Appeals (DOHA), pursuant to Executive Order 10865 (as
amended), and Department of Defense Directive 5220.6 (Directive), dated January 2,
1992, issued a Statement of Reasons (SOR) to the Applicant, which detailed the
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 a clearance should be denied or revoked.
 The Applicant responded to the SOR on August 31, 2011, and she requested a
hearing before a DOHA Administrative Judge.  This case was assigned to the
undersigned Administrative Judge on November 30, 2011.  A notice of hearing was
issued on December 7, 2011, scheduling the hearing for January 18, 2012. The
Government presented seven exhibits, referred to Government Exhibits 1 to 7, which
were admitted without objection.  The Applicant called one witness to testify and
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presented fifteen exhibits, referred to as Applicant’s Exhibits A through O, which were
admitted without objection.  The Applicant also testified on her own behalf.  The record
remained open until February 9, 2012, to allow the Applicant the opportunity to submit
additional documentation.  The Applicant submitted four Post-Hearing Exhibits, referred
to as Applicant’s Post-Hearing Exhibits AA through DD, which were admitted without
objection.  The official transcript (Tr.) was received on January 24, 2012.  Based upon a
review of the pleadings, exhibits, and testimony, eligibility for access to classified
information is denied.
FINDINGS OF FACT
The following Findings of Fact are based on the Applicant’s Answer to the SOR,
the testimony and the exhibits.  The Applicant is 51 years old, and has a Associate of
Arts Degree.  She is employed by a defense contractor as a Graphic Artist and is
seeking to obtain a security clearance in connection with her 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).  After a complete and
thorough review of the evidence in the record, and upon due consideration of the same,
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 a security clearance because she is financially overextended
and at risk to engage in illegal acts to generate funds. 
The Applicant denies each of the allegations set forth in the SOR under this
guideline.  Credit Reports of the Applicant dated June 16, 2010; May 4, 2011; and
January 11, 2012, collectively reflect that she owes each of the delinquent debts set
forth in the SOR totaling in excess of $35,000.  (Government Exhibits 2, 5 and 7.)  The
Applicant has worked for in the defense industry and for her current employer for the
past twenty-six years.  
Prior to 2001, the Applicant had excellent credit and paid her bills on time.  In
1993, she had twin daughters.  Since then, the Applicant has always been the sole
wage earner for her daughters and their father.  The Applicant was not used to
budgeting for a family, and used credit cards to purchased things that she could not
afford.  To resolve her indebtedness, in May 2001, the Applicant filed for Chapter 7
Bankruptcy.  Her debts were discharged in September 2001.  Following the bankruptcy,
she stopped using credit cards as much and was able to keep up with her payments.
In January 2004, the Applicant moved to a better neighborhood to raise her
daughters and to be closer to family members.  She learned that she could buy a house
and her mortgage payment would be less than her rent was in the city.  The only
problem would be the long commuting distance of 106 miles each way to work.  She
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decided that she could commute to work by bus.  The bus caused motion sickness that
she had not expected and she was forced to drive.  In 2006, her expenses skyrocketed
because gas prices increased from $3.50 a gallon to $5.00 a gallon and the wear and
tear on her car was expensive.  This continued until 2008.  She would borrow money
from her 401(K) to cover the difference in cost.  As a result she acquired a tax liability.  
The bad economy, the rise in the cost of gas, food, utilities and not being able to
work overtime caused her financial distress.  As a result, the following debts became
delinquent.  A judgment owed to a creditor in the amount of $5,958.00 was delinquent
and owing.  The Applicant has been making payments of $500.00 a month and now
owes about $3,000.  (Tr. p. 48)  A debt owed to a creditor in the amount of $270.00 was
delinquent and owing.  The debt was included in the Chapter 13 bankruptcy discussed
below.  (Tr. p. 48.)  A debt owed to a creditor in the amount of $75.00 was delinquent
and owing.  The Applicant has paid off the debt.  (Tr. p. 48.)  A debt owed to a creditor
in the amount of $102.00 was delinquent and owing.  The debt is included in the
Chapter 13.  (Tr. p. 49.)  A debt owed to a creditor in the amount of $964.00 was
delinquent and owing.  The debt is included in the Chapter 13.  (Tr. p. 49.)  A debt owed
to a creditor in the amount of $840.00 was delinquent and owing.  The debt is included
in the Chapter 13.  (Tr. p. 49.)  A debt owed to a creditor in the amount of  $2,184.00
was delinquent and owing.  The debt is included in the Chapter 13.  (Tr. p. 49.)  A debt
owed to a creditor in the amount of $4,418.00 was delinquent and owing.  The Applicant
modified her home loan and is current on her monthly payments of $767.00.  (Tr. p.p.
49 - 50, and Applicant’s Exhibits K and L.)  A debt owed to a creditor in the amount of
$45.00 was delinquent and owing.  The Applicant paid off the debt.  (Tr. p. 51.)  A debt
owed to a creditor in the amount of $283.00 was delinquent and owing.  (Tr. p. 51.)  The
debt is included in the Chapter 13. 
After modifying her home loan the Applicant realized that she still could not pay
off all of her debts.  In order to resolve them, she filed for Chapter 13 bankruptcy relief
in October 2011.  (Applicant’s Exhibit A.)  Instead of discharging her debt, she wanted
to pay off her debt.  She is currently paying $371.00 monthly to the bankruptcy trustee
that is going toward her delinquent debt.  The amount may increase in the future, and
she is prepared to pay the increased amount.  Applicant’s Post-Hearing Exhibits AA and
DD sets forth the recently approved repayment plan.  She is scheduled to pay $371.00
for two months; $486.00 for 53 months; and $646.00 for four months to resolve her
delinquent debt.  
Since filing for bankruptcy, the Applicant has completed credit counseling.  (See
Applicant’s Post-Hearing Exhibits BB, and CC, and Applicant’s Exhibit F.)  She has also
adopted a number of cost saving measures.  (Applicant’s Exhibit M.)  She now has a
budget and is living within her means.  She lives frugally.  She is riding to work in the
commuter van and sits in front so she does not get sick.  She is not using credit cards,
she shops at discount grocery stores, she is using her clothes line to reduce the utility
bills and she sets the thermostat at 60.  She is now able to save several hundred dollars
a month.  (Tr. p. 86.)             
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Paragraph 2 (Guideline E - Personal Conduct).  The Government alleges that the
Applicant is ineligible for a security clearance because she engaged in conduct which
shows dishonesty, questionable judgment, unreliability and/or untrustworthiness.
The Government alleges that from 1993 to 2009, the Applicant committed tax
fraud by claiming unauthorized child care exemptions and charitable donations to which
she was not entitled to avoid paying taxes.  The Applicant admits to claiming the
deductions for 1996 to 2000, but not in 1993, 1994 or 1995.  She admits that she made
a mistake and has been in contact with her tax preparer to amend the tax returns and
correct the situation.  (Applicant’s Exhibit N and Tr. p. 55.)  A letter from the Applicant’s
tax preparer indicates that there is a perceived misunderstanding about the child care
exemptions that were claimed by the Applicant.  The tax preparer states that under IRS
guidelines, the child care provider must be reported on form 2441 of the 1040 form,
which it was .  There is no requirement that a child care provider be licensed in order to
claim the exemption.  (Applicant’s Exhibit N.)  During those years, the Applicant’s
mother watched her two children while the Applicant was at work, and the Applicant
paid her mother $450.00 monthly to do so.  (Tr. p. 57.)  Accordingly, based upon this
information that has not been contradicted by the Government, I find for the Applicant
with respect to SOR allegation 1(a).  
From June 20, 2009, to June 27, 2009, the Applicant was suspended from work
for violating her company’s labor reporting policies.  As a result, she was placed on
probation for one year.  She explained that her supervisor gave her permission to take
work home, and so she did.  When she reported to work, it was not always during the
hours she was supposed to, but she always made up the time.  (Tr. p. 61.)  She would
swipe out of the company and not swipe back in until the next day.  However, her time
card would say something different.  She also did not take her lunches. As a result of
this violation, for one year the Applicant was not allowed to take work home.  After her
probation was up, she was once again able to take work home.  (Tr. p. 83.)  
In December 2009, another government agency revoked her program access
due to her financial consideration and personal conduct as they related to her admitted
tax fraud and time card fraud.
The Applicant’s sister testified that the Applicant is a level-headed individual who
is honest, reliable, and truthful, and who has learned from her mistakes.  (Tr. pp. 30 -
33.)  
 
Letters of recommendation from the Applicant’s sister as well as a past
supervisor, senior managers, and coworkers, who have known and worked with the
Applicant for many years, attest to her talent ability, reliability, honesty, loyalty,
conscientious nature, generous attitude, ethical disposition, sensitivity, and hardworking
nature.  She is recommended for a security clearance. (Applicant’s Exhibit G.)
The Applicant received an award of achievement for successfully completing “7
Habits of Highly Effective People,” April 12-20, 2011. (Applicant’s Exhibit I.)
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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.  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.
Conditions that could raise a security concern:
19.(a) inability or unwillingness to satisfy debts;
19.(c) a history of not meeting financial obligations.
Conditions that could mitigate security concerns:
20.(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;
20.(d) the individual initiated a good-faith effort to repay overdue creditors or
otherwise resolve debts.
Guideline E (Personal Conduct)
15.  The Concern.  Conduct involving questionable judgment, lack of candor,
dishonesty, or unwillingness to comply with rules and regulations can raise questions
about an individual’s reliability, trustworthiness and ability to protect classified
information.  Of special interest is any failure to provide truthful and candid answers
during the security clearance process or any other failure to cooperate with the security
clearance process.
Condition that could raise a security concern:
16.(c) credible adverse information in several adjudicative issue areas that is not
sufficient for an adverse determination under any other single guideline, but which when
considered as a whole, supports a whole-person assessment of questionable judgment,
untrustworthiness, unreliability, lack of candor, unwillingness to comply with rules and
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regulations, or other characteristics indicating that the person may not properly
safeguard protected information.
Conditions that could mitigate security concerns:
17.(d) the individual has acknowledged the behavior and obtained counseling to
change the behavior or taken other positive steps to alleviate the stressors,
circumstances, or factors that caused untrustworthy, unreliable, or other inappropriate
behavior, and such behavior is unlikely to recur.
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;
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 behavioral
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
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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, a security clearance 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 such access may be involved in
instances of financial irresponsibility and misconduct, which demonstrates poor
judgment or unreliability.
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 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), and that she engaged in rule
violations indicative of poor personal conduct (Guideline E).  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.
In 2001, the Applicant lived beyond her means and was forced to file for Chapter
7 Bankruptcy and discharge her debts. Just four months ago, the Applicant filed for
Chapter 13 bankruptcy in order to work toward resolving her indebtedness.  Hopefully,
this time she has learned from her mistakes and will not have to resort to bankruptcy
again.  She seems to understand her mistakes and has adopted some cost saving
measures to ensure that it does happen again.  However, at the present time, she
remains excessively indebted.  She has just started her Chapter 13 repayment plan.
She will need to follow the plan for an extended period of time to ensure the
Government that she can demonstrate financial responsibility.  She currently falls short
of that.  She has not presented sufficient evidence to demonstrate a track record of
financial responsibility and has not yet resolved her financial indebtedness.
There is insufficient evidence of financial rehabilitation at this time.  Under
Guideline F (Financial Considerations), Disqualifying Conditions 19.(a) inability or
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unwillingness to satisfy debts and 19.(c) a history of not meeting financial obligations
apply.  Although Mitigating Conditions 20.(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, and 20.(d) the individual initiated a good-faith effort to
repay overdue creditors or otherwise resolve debts also apply, they are not controlling.
The Applicant has recently started to resolve her indebtedness.  She has indeed made
a good faith effort to repay her overdue creditors or otherwise resolve her debts, and
she is commended for doing so.  However, she must follow through for some extended
time to show that she can resolve her debts before she can become eligible for access
to classified information.  Accordingly, I find against the Applicant under Guideline F
(Financial Considerations).  
Furthermore, with respect to Guideline E, the Applicant engaged in poor personal
conduct that reflects negatively on her ability to be trusted with the national secrets.
The Applicant’s pattern of misconduct involving rule violations, by claiming unauthorized
charitable donations on her tax returns in order to avoid taxes and by violating her
company’s labor reporting policies, committing time card fraud, and by having her
program access revoked just two and a half years ago, demonstrates poor judgment,
unreliability and untrustworthiness.  The Applicant acknowledges her mistakes, and
indicates that she has changed her ways.  She is commended for this, but at this point,
more time in rehabilitation is necessary to convince the Government that she can be
trusted.  Under the particular circumstances of this case, the Applicant falls short of this
requirement at this time.  The Applicant may reapply in one year and by then, assuming
she follows her intentions, her financial situation will vastly improve, and her past
misconduct will be in the distant past.  This will improve her opportunities to meet the
eligibility requirements for access to classified information.  
Disqualifying Condition 16.(c) credible adverse information in several adjudicative
issue areas that is not sufficient for an adverse determination under any other single
guideline, but which when considered as a whole, supports a whole-person assessment
of questionable judgment, untrustworthiness, unreliability, lack of candor, unwillingness
to comply with rules and regulations, or other characteristics indicating that the person
may not properly safeguard protected information applies.  Mitigating Condition 17.(d)
the individual has acknowledged the behavior and obtained counseling to change the
behavior or taken other positive steps to alleviate the stressors, circumstances, or
factors that caused untrustworthy, unreliable, or other inappropriate behavior, and such
behavior is unlikely to recur also applies, but is not controlling in this case.  The fact that
the Applicant, with her level of experience and expertise working for the defense
department, engaged in this type of misconduct is indicative of a need for further
rehabilitation.
I have also considered the “whole-person concept” in evaluating the Applicant’s
eligibility for access to classified information, including her favorable letters of
recommendation and the testimony from her sister.  However, under the particular facts
of this case, the totality of the conduct set forth under all of the guidelines viewed as a
whole, support a whole person assessment of questionable judgement,
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untrustworthiness, unreliability, lack of candor, unwillingness to comply with rules and
regulations, or other characteristics indicating that the person may not properly
safeguard classified information.  
On balance, it is concluded that the Applicant has failed to 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 Paragraphs 1 and 2 of the Government's Statement of
Reasons.
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.: For 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.
Paragraph 2: For the Applicant.
    Subpara.  2.a.: Against the Applicant.
    Subpara.  2.b.: Against the Applicant.
    Subpara.  2.c.: Against the Applicant.
DECISION
In light of the circumstances presented by the record in this case, it is not clearly
consistent with the national interests to grant or continue a security clearance for the
Applicant.
  Darlene Lokey Anderson
Administrative Judge
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