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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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------------------------- )       ISCR Case No. 10-07289
)
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Applicant for Security Clearance )
Appearances
For Government: 
Melvin A. Howry, Esq., Department Counsel
For Applicant:
Pro se
March 2, 2012
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DECISION
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ROSS, Wilford H., Administrative Judge:
Applicant submitted his Electronic Questionnaire for Investigations Processing
(e-QIP) on March 2, 2010. (Government Exhibit 1.) On April 15, 2011, the Defense
Office of Hearings and Appeals (DOHA) issued a Statement of Reasons (SOR) detailing
the 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 (AG) effective within the
Department of Defense for SORs issued after September 1, 2006. 
 
Applicant answered the SOR in writing on May 26, 2011, and requested a
hearing before an administrative judge. Department Counsel was prepared to proceed
on June 29, 2011. This case was assigned to me on July 5, 2011. DOHA issued a
notice of hearing on July 26, 2011. I convened the hearing as scheduled on August 30,
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2011. The Government offered Government Exhibits 1 through 6, which were received
without objection. Applicant testified on his own behalf, and submitted Applicant Exhibits
A and B, which were also received without objection. Applicant asked that the record
remain open for the receipt of additional documents. Applicant submitted Applicant
Exhibit C on September 16, 2011, which was admitted without objection. DOHA
received the transcript (Tr) of the hearing on September 15, 2011. The record closed on
September 16, 2011. Based upon a review of the pleadings, exhibits, and testimony,
eligibility for access to classified information is granted.
Findings of Fact
Applicant is 37 and divorced. One of his two children just turned 18, and he
shares custody with his ex-wife of the second child, who is still a minor. He is employed
by a defense contractor and seeks to obtain a security clearance in connection with his
employment. 
Guideline F, Financial Considerations
The Government alleges that Applicant is ineligible for clearance because he is
financially overextended and, therefore, at risk of having to engage in illegal acts to
generate funds. Applicant denied the factual allegations in the SOR. He also submitted
additional information to support his request for a security clearance.
Applicant began work with his current employer in May 2009. (Government
Exhibit 1 at Section 13A.) His current employment is a full-time job with full benefits.
Applicant submitted an updated Personal Financial Statement after the hearing, which
shows that he is able to maintain his current debts without difficulty. (Applicant Exhibit C
at 20.)
The SOR alleges Applicant owed eight creditors $37,728 in past due
indebtedness. (SOR 1.a through 1.h.) The existence and amounts of these debts are
supported by credit reports concerning Applicant dated March 10, 2010; March 25,
2011; and August 24, 2011. (Government Exhibits 2, 4 and 6.) They are also confirmed
by Applicant’s e-QIP (Government Exhibit 1 at Section 26); his Financial & Interview
Verification Interrogatory dated February 25, 2011 (Government Exhibit 3); and the
documents accompanying his bankruptcy petition, further discussed below. Finally,
Applicant did not dispute the validity of any of these debts during his testimony.
Applicant stated that his financial difficulties were brought about by two events.
First, beginning in 2004, he and his wife separated and began a lengthy, difficult and
expensive divorce proceeding, which was not completed until 2008. Secondly, in
approximately 2007 or 2008, his prior employer cut his wages and reduced his benefits.
As a result of all of this, he had to use credit cards to pay day to day expenses, and
reached a point where he could not keep up on the payments. (Tr at 32-36.) After
obtaining his new employment, Applicant set about modifying his mortgage, which he
successfully did. (Tr at 34; Applicant Exhibit C at 11-12.) He also telephonically
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contacted all of the creditors set forth in the SOR, in an attempt to resolve the debts. He
was unable to do so, knew he was in a bad situation, and made the decision to file for
bankruptcy protection. (Tr at 37, 49-55.)
After saving enough money to pay for an attorney to represent him, Applicant
filed for protection under Chapter 7 of the Bankruptcy Code on August 19, 2011. (Tr at
38; Applicant Exhibit B.) The meeting of creditors was to be on October 17, 2011.
Objections for Discharge were due by December 16, 2011. All of the debts in the SOR
are included in either the original Schedule F (Applicant Exhibit B at 17-19), or the
Amended Schedule F, filed September 6, 2011 (Applicant Exhibit C at 7-16). Applicant
submitted evidence showing that he has received both credit counseling, and a
personal financial management course, as required by the bankruptcy court. (Applicant
Exhibits B at 8, and C at 6.)
Mitigation
Applicant submitted 15 recognition and award certificates from his employer.
These awards span his entire period of employment with his current employer and are
given because of his “outstanding performance and invaluable contributions.” (Appellant
Exhibit A.) 
Policies
Security clearance decisions are not made in a vacuum. When evaluating an
applicant’s suitability for a security clearance, the administrative judge must consider
the adjudicative guidelines. In addition to brief introductory explanations for each
guideline, the adjudicative guidelines list potentially disqualifying conditions and
mitigating conditions, which are to be used as appropriate 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 overarching
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. In addition, the administrative judge may also rely on his or her own
common sense, as well as knowledge of the law, human nature, and the ways of the
world, in making a reasoned decision.
The protection of the national security is the paramount consideration. AG ¶ 2(b)
requires that, “Any 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
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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 the applicant or proven by Department Counsel, and has the
ultimate burden of persuasion as to obtaining a favorable clearance 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. Security clearance decisions include, by
necessity, consideration of the possible risk that 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.
 
Finally, as emphasized in Section 7 of Executive Order 10865, “Any
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.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites
for access to classified or sensitive information).  
Analysis
Guideline F, Financial Considerations
The security concern for Financial Considerations is 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. 
The guideline notes several conditions that could raise security concerns. Under
AG & 19(a), an Ainability or unwillingness to satisfy debts@ is potentially disqualifying.
Similarly under AG & 19(c), Aa history of not meeting financial obligations@ may raise
security concerns. Applicant, by his own admission, and supported by the documentary
evidence, had a considerable number of debts that he could not resolve. The evidence
is sufficient to raise these potentially disqualifying conditions.
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The guideline also includes examples of conditions that could mitigate security
concerns arising from financial difficulties. Under AG ¶ 20(a), the disqualifying condition
may be mitigated where Athe 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.@ In addition, AG
¶ 20(b) states that the disqualifying conditions may be mitigated where “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.”  
The evidence shows that both of the above mitigating conditions apply to
Applicant. His financial situation was caused by a drop in his income, due to his hours
and benefits being cut by his then employer, and a years-long divorce battle. There is
no evidence of poor judgment on his part. Once he got his new job and his finances
stabilized, Applicant worked to resolve his financial situation. Only after he successfully
modified his mortgage, which remains current; and found that the other creditors would
not cooperate with him, did he make the difficult decision to file for Chapter 7
bankruptcy protection. This is a legal remedy that will allow Applicant to have a fresh
start with his finances. Based on the particular facts of this case, I find that he has
“initiated a good-faith effort to repay overdue creditors or otherwise resolve debts,” as
required by AG ¶ 20(d).
Applicant has received financial counseling. As found above, his current financial
situation is stable. I find that “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,” as required by AG ¶ 20(c).
The Applicant has acted in a way that shows good judgment, making the best he
could out of a difficult situation. All of these mitigating conditions apply to the facts of
this case. (See ISCR Case No. 09-08533 (App. Bd. Oct. 6, 2010).)
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 relevant circumstances. 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. 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
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for the conduct; (8) the potential for pressure, coercion, exploitation, or
duress; and (9) the likelihood of continuation or recurrence.      
I considered the potentially disqualifying and mitigating conditions in light of all
the relevant facts and circumstances surrounding this case. Applicant’s financial
difficulties were not a result of poor judgment on his part. Since he was employed in
2009 by his current employer his financial condition has stabilized. His debts will be
resolved by the legal avenue of bankruptcy. Under AG ¶ 2(a)(2), I have considered the
facts of Applicant’s debt history. As stated at length above, this was brought about
because of a divorce and job issues. Based on the record, I find that there have been
permanent behavioral changes under AG ¶ 2(a)(6). Accordingly, I find that there is little
to no potential for pressure, coercion, exploitation, or duress (AG ¶ 2(a)(8)); and that
there is a low likelihood of recurrence (AG ¶ 2(a)(9)). 
Overall, 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
situation. On balance, I conclude that Applicant has successfully mitigated the
Government's case opposing his request for a security clearance.  Accordingly, the
evidence supports granting his request for a security clearance.
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: FOR APPLICANT
Subparagraphs 1.a through 1.h: For Applicant
Conclusion
In light of all of the circumstances presented by the record, it is clearly consistent
with the national interest to grant Applicant eligibility for a security clearance.  Eligibility
for access to classified information is granted.
                                              
WILFORD H. ROSS
Administrative Judge