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                        DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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)       ISCR Case No. 11-01406
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)
Applicant for Security Clearance
Appearances
For Government: Ray T. Blank, Jr. Esq., Department Counsel
For Applicant: Pro se
                                                                            
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Decision
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LYNCH, Noreen, A., Administrative Judge:
On November 3, 2011, the Defense Office of Hearings and Appeals (DOHA)
issued a Statement of Reasons (SOR) alleging security concerns arising 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) implemented in September 2006. 
Applicant timely answered the SOR and elected to have his case decided on the
record in lieu of a hearing. Department Counsel submitted the Government’s written
case on January 17, 2012. The FORM consisted of ten documents. Applicant received
a complete file of relevant material (FORM) on January 26, 2012, and was provided an
opportunity to file objections and submit material to refute, extenuate, or mitigate the
Government’s case.  Applicant did not submit a response. The case was assigned to
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me on March 30, 2012. Based on a review of the case file, eligibility for access to
classified information is denied.
Findings of Fact
In his answer to the SOR, Applicant admitted eight delinquent accounts under
the factual allegations under Guideline F (Financial Considerations). He denied or
disputed the remaining accounts, but noted he would send the creditors a settlement
offer. (Item 2) 
Applicant is a 43-year-old employee of a defense contractor. After he graduated
from high school in 1986, he joined the military. Applicant served in the U.S. Navy from
June 1986 until September 1990. He is married and has two children. Applicant has
worked for his current employer since May 1997. (Item 4) He  held a security clearance
during his military career and his current employment. (Item 5)
Applicant’s 22 delinquent debts alleged in the SOR total approximately
$32,212.00 (Item 4) The collection accounts include a charged-off auto loan account.
Some of the accounts have been delinquent since 2002. He has not provided any
information concerning payments on any of the delinquent debts. 
During his subject interview in November 2010, Applicant stated he was unaware
of any of the debts identified on his credit report. (Item 6) He claimed that he would
obtain a copy of his credit report and contact creditors to resolve any debts owed. When
he responded to DOHA interrogatories on April 27, 2011, he claimed the debts would be
disputed. (Item 6) Applicant submitted a series of letters to creditors, all dated April 29,
2011, claiming he had never opened accounts. He provided copies of letters dated
December 1, 2011, where he offered to “amicably settle” a portion of the debt through a
payment plan that would last from 5 to 36 months. (Item 2) However, he has not
provided any documentation concerning the resolution of any accounts, any creditor
acceptance of his proposed payment plan, or proof of any payments made. His credit
reports indicate that he has failed to make any payments on many of his delinquent
accounts for many years. 
Applicant has been steadily employed in his current position since May 1997.  He
did not present any information that he was unemployed. (Item 4). Applicant did not
provide a personal financial statement. The record does not reflect any financial
counseling. 
Policies
When evaluating an applicant’s suitability for a security clearance, an
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. These guidelines are not inflexible
rules of law. Instead, recognizing the complexities of human behavior, they are applied
in conjunction with the factors listed in the adjudicative process. An administrative
      1 See also ISCR Case No. 94-1075 at 3-4 (App. Bd. Aug. 10, 1995).
      2 Department of the Navy v. Egan, 484 U.S. 518, 531 (1988).
      3 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).
      4 See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive
information), and EO 10865 § 7.
      5 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).
      6 Id.
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judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision.
Under AG ¶ 2(c), this process is a conscientious scrutiny of a number of variables
known as the “whole-person concept.” An 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.
The Government must present evidence to establish controverted facts alleged in
the SOR. An applicant is responsible for presenting “witnesses and other evidence to
rebut, explain, extenuate, or mitigate facts admitted by applicant or proven by
Department Counsel. . . .”1 The burden of proof is something less than a preponderance
of evidence.2 The ultimate burden of persuasion is on the applicant.3 
A person seeking access to classified information enters into a fiduciary
relationship with the government based on 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 classified information. Such
decisions entail a certain degree of legally permissible extrapolation of 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.”4 “The clearly consistent standard indicates that security clearance
determinations should err, if they must, on the side of denials.”5 Any reasonable doubt
about whether an applicant should be allowed access to sensitive information must be
resolved in favor of protecting such information.6 The decision to deny an individual a
security clearance does not necessarily reflect badly on an applicant’s character. It is
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merely an indication that the applicant has not met the strict guidelines the President
and the Secretary of Defense established for issuing a clearance.
Analysis
Guideline F, Financial Considerations
AG ¶ 18 expresses the security concern pertaining to financial considerations:
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 over-
extended 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.
AG ¶ 19 describes conditions that could raise a security concern and may be
disqualifying:
(a) inability or unwillingness to satisfy debts;
(b) indebtedness caused by frivolous or irresponsible spending and the
absence of any evidence of willingness or intent to pay the debt or
establish a realistic plan to pay the debt;
(c) a history of not meeting financial obligations;
(d) deceptive or illegal financial practices such as embezzlement,
employee theft, check fraud, income tax evasion, expense account fraud,
filing deceptive loan statements, and other intentional financial breaches
of trust;
(e) consistent spending beyond one's means, which may be indicated by
excessive indebtedness, significant negative cash flow, high debt-to-
income ratio, and/or other financial analysis;
(f) financial problems that are linked to drug abuse, alcoholism, gambling
problems, or other issues of security concern;
(g) failure to file annual Federal, state, or local income tax returns as
required or the fraudulent filing of the same;
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(h) unexplained affluence, as shown by a lifestyle or standard of living,
increase in net worth, or money transfers that cannot be explained by
subject's known legal sources of income; and
(i) compulsive or addictive gambling as indicated by an unsuccessful
attempt to stop gambling, "chasing losses" (i.e. increasing the bets or
returning another day in an effort to get even), concealment of gambling
losses, borrowing money to fund gambling or pay gambling debts, family
conflict or other problems caused by gambling.
Applicant’s admissions and his credit reports confirm that he has had a
significant number of delinquent debts in the amount of approximately $32,000. The
debts are confirmed in his credit reports. They span from 2002 until the present time.
Consequently, the evidence is sufficient to raise disqualifying conditions ¶¶ 19(a) and
19(c).
AG ¶ 20 provides conditions that could mitigate security concerns:
(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;
(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; and
(f) the affluence resulted from a legal source of income.
Applicant has not provided any information to show that he has paid the
delinquent debts or has a plan to repay the debts. Although he wrote many letters of
dispute and settlement, he has no documentation from any creditors accepting a
payment plan. He has not reported financial counseling. He has been gainfully
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employed since 1997, and has not raised any circumstances beyond his control that
would contribute to his financial problems.  None of the mitigating conditions apply.
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 an applicant’s
conduct and all the 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. 
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. As noted above, the
ultimate burden of persuasion is on the applicant seeking a security clearance. 
I considered the potentially disqualifying and mitigating conditions in light of all
the facts and circumstances surrounding this case, as well as the whole-person factors.
Applicant served in the military and has held a security clearance for many years. He
has been employed with his current employer since 1997. He has delinquent accounts
that have not bee paid in many years. He has not demonstrated a personal commitment
to make any payments over a long period of time. He has not shown that any of his
listed debts are not his responsibility or have been resolved.  Applicant has provided no
insight into circumstance which caused such extensive debts to accumulate or efforts to
reduce expenses. He has claimed ignorance of the debts.  
Applicant has not provided any information to show that he is a changed person
or that he has taken action to resolve his delinquent SOR debts. At this point, I have
doubts about his judgment and reliability. Any doubts must be resolved in favor of the
Government. Applicant has not met his burden in this case. He has not mitigated the
security concerns under financial consideration guideline. Clearance is denied.
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:
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Paragraph 1, Guideline F: AGAINST APPLICANT
Subparagraphs 1.a-1.v: 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 a security clearance.
Clearance is denied. 
                                                     
NOREEN A. LYNCH.
Administrative Judge