1
                                                             
                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
--------------------------- )       ISCR Case No. 10-10410
)
)
Applicant for Security Clearance )
Appearances
For Government: 
Melvin A. Howry, Esq., Department Counsel
For Applicant:
Pro se
March 8, 2012
______________
DECISION
______________
ROSS, Wilford H., Administrative Judge:
Applicant submitted her Electronic Questionnaire for Investigations Processing
(e-QIP) on April 17, 2009. (Government Exhibit 2.) On April 29, 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 24, 2011, and requested a
hearing before an administrative judge (Answer). 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
2
August 30, 2011. The Government offered Government Exhibits 1 through 9, which
were received without objection. Applicant testified on her own behalf, called one
additional witness, and submitted Applicant Exhibits A through X, which were also
received without objection. Applicant asked that the record remain open until September
16, 2011, for the receipt of additional documents. Applicant submitted Applicant Exhibits
Y through EE on September 7, 2011, which were admitted without objection. DOHA
received the transcript (Tr) of the hearing on September 8, 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 60 and married. She is employed by a defense contractor and seeks
to obtain a security clearance in connection with her employment. 
Guideline F, Financial Considerations
The Government alleges that Applicant is ineligible for clearance because she is
financially overextended and, therefore, at risk of having to engage in illegal acts to
generate funds. Applicant admitted the factual allegations in the SOR. Those
admissions are findings of fact. She also submitted additional information to support her
request for a security clearance.
The SOR contains three debts. Paragraphs 1.a and 1.c are the first and second
mortgages, respectively, of a house in State B. Both mortgages are held by the same
company, and were obtained at the same time. Paragraph 1.b. is a purchase money
note secured by a motor home owned by Applicant. The SOR alleges total
delinquencies of approximately $46,000, which is supported by credit reports of August
17, 2010; April 11, 2011; and August 24, 2011. (Government Exhibits 3, 7 and 9.) A
credit report supplied by Applicant dated January 11, 2011, also supports the existence
of the debts. (Government Exhibit 6 at Attachment 1.)
Applicant has worked in the defense industry for over 30 years. In 2000 she was
laid off from her job with Company One, in State A. She took a job in State B with
Company Two, at half her former salary. At approximately the same time, her husband
was injured and placed on permanent disability. Because of his injury, their income
dropped and her reduced salary could not support them. They began using credit cards
to pay bills. In 2002 she took a job with Company Three, which returned her to State A.
After commuting on weekends to State B, four hours each way, for several years, she
and her husband decided to sell the house in State B and return to State A. (Answer;
Government Exhibit 2 at Section 13A; Applicant Exhibit C; Tr at 74-75, 85-90.) 
As a result of continuing financial pressures, in 2008 Applicant began trying to
sell her house in State B. Unfortunately, the house was located in a very depressed
area, which was hard hit during the financial crisis, and she was unable to sell the
house for two years. Three attempts to complete a short sale of the property failed.
3
Eventually, the mortgage holder, who held both the first and second mortgage,
foreclosed on the property and sold it at a trustee sale on January 18, 2011. (Tr at 75-
77, 103.) 
Applicant and her husband have attempted to obtain information concerning the
trustee sale, as well as the current status of the first and second mortgages, without
success. In July 2011 they were advised that the first mortgage account had not yet
been updated with the results of the foreclosure sale. (Applicant Exhibit R.) In August
2011 Applicant’s husband sent an email to the mortgage company enquiring about
settling the second mortgage account. The reply email says only, “our [mortgage
company] records indicate this account has been charged off.” (Applicant Exhibit EE.)
He also testified that several phone calls were made to attempt to resolve this debt, to
no avail. At one point he was told by a mortgage company representative that they
would probably liquidate the second mortgage. (Applicant Exhibits AA and BB; Tr at
103-107.) A statement from the mortgage company dated August 27, 2011, is
confusing. It states that the first mortgage is, “Closed,” with no further details. It also
shows the second mortgage (also described as a home equity line of credit) without a
past due amount and still being active, even though the underlying property has been
sold. (Applicant Exhibit U.)
Applicant also owned a motor home at one time. She lived there during the week
while working in State A. When their financial situation began to deteriorate, Applicant
and her husband voluntarily returned the motor home to the lienholder. It was sold in
April 2010, which resulted in a total deficiency of approximately $13,000. (Applicant
Exhibit DD.) Applicant’s husband, who handles the family finances, has made several
phone calls to attempt to resolve this debt, to no avail. In fact, the last person he spoke
to from the original note holder, “said he had no record of the account at all.” (Applicant
Exhibit CC; Tr at 107-110.) The most recent credit report available, from August 24,
2011, shows that the debt has been transferred to a new collection agent. (Government
Exhibit 9.) Applicant’s husband has written this new agent in an attempt to resolve this
debt. (Applicant Exhibit CC.)
Applicant states that before 2009 she had excellent credit. Credit reports
provided by the Government dated May 19, 2004; and April 25, 2009, confirm that fact.
Prior to the SOR being issued, Applicant took two withdrawals from her pension plan.
She used this money to resolve several other delinquent debts, which are not alleged in
the SOR. (Government Exhibit 6 at Attachments 3, 4 and 7; Tr at 91-93.) Applicant
submitted an updated Personal Financial Statement at the hearing, which shows that
she is able to maintain her current debts without difficulty. (Applicant Exhibit S.) In
addition, she and her husband are financially stable, with substantial savings. (Tr at 78-
79.) They are ready and willing to resolve these remaining debts, as soon as someone
will talk to them. (Government Exhibit 6 at Attachment 5; Tr at 111-113.) 
Mitigation
Applicant is a well respected person and employee. She submitted letters of
recommendation from co-workers, including supervisors, security managers, and
4
corporate counsel. The security managers state that Applicant was very pro-active in
informing her employers of the financial situation as it developed and that, “[Applicant]
has always displayed a great degree of honesty, integrity, responsibility, and
trustworthiness.” (Applicant Exhibits E and F.) A corporate vice president, who has
worked with Applicant for over 20 years, states that she “has always held herself to the
highest ethical standards of personal and business conduct.” (Applicant Exhibit G.) 
An organizational psychologist who has worked with Applicant on a daily basis
for a year and half states, “I can say with confidence that she has been and continues to
be a role model for those around her to inspire personal and professional accountability
and ethical behavior.” (Applicant Exhibit H.) An attorney, who has worked in the defense
industry with Applicant for over ten years, states, “I found her [Applicant], among other
characteristics, to be highly ethical, extremely intelligent, and above all honest to a
fault.” (Applicant Exhibit I.)
A human resources professional for Applicant’s employer provided Applicant
Exhibit J. She has known for Applicant for seven years and states, “I have always
known her [Applicant] to be hardworking, ethical and committed to her family and her
work.” Finally, Applicant’s current supervisor, who has known her for over ten years and
supervised her for two, commented on Applicant’s reputation for having a “very high
standard of ethics.” She also states, “Based on my experience, [Applicant] is one of the
most trustworthy people I know.” (Applicant Exhibit K.)
Applicant provided her performance reviews for every year from 2004 through
2010, except for 2007. All of these reports describe Applicant as someone who
“consistently exceeds her established goals.” (Applicant Exhibits L through Q; Tr at 70.)
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.
5
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
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 her own admission, and supported by the documentary
6
evidence, had two mortgages and a motor home debt that she could not resolve. The
evidence is sufficient to raise these potentially disqualifying conditions.
The guideline also includes examples of conditions that could mitigate security
concerns arising from financial difficulties. Under AG ¶ 20(a), disqualifying conditions
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 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. Her financial situation was caused by a drop in her income, due to a job lay-
off and her husband’s debilitating injury. There is no evidence of poor judgment on her
part. Her home was foreclosed on by the bank after a two year effort to arrange a short
sale. The location of her foreclosed house is in a state which was extremely hard hit by
the housing crisis. She and her husband have repeatedly attempted to resolve the
second mortgage, and the motor home debt. Based on the particular facts of this case, I
find that she has “initiated a good-faith effort to repay overdue creditors or otherwise
resolve debts,” as required by AG ¶ 20(d).
Applicant has not received financial counseling. However, as found above, her
current financial situation is stable. I find that “there are clear indications that the
problem is being resolved or is under control,” as required by AG ¶ 20(c). In addition,
Applicant and her husband have been proactive in contacting her remaining creditors,
and attempting to resolve the debts. Their actions bring them under the orbit of AG ¶
20(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.” 
The Applicant has acted in a way that shows good judgment, making the best
she could out of a difficult situation. All of these mitigating conditions apply to the facts
of this case.
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): 
7
(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.      
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 her part. Rather, they were brought
about by the turmoil in the real estate market in 2008 and 2009, and the unexpected
loss of income by Applicant and her husband. Under AG ¶ 2(a)(2), I have considered
the facts of Applicant’s debt history. As stated above, this situation concerning the
foreclosed house and returned motor home are aberrations, and not indicative of her
usual conduct. 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 her financial
situation. Accordingly, the evidence supports granting her 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.c: For Applicant
8
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