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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
) ISCR Case No. 10-03919
          )
Applicant for Security Clearance )
Appearances
For Government: Robert Kilmartin, Esq., Department Counsel
For Applicant: Pro se
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Decision
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CURRY, Marc E., Administrative Judge:
Although Applicant’s financial problems were caused by circumstances beyond
his control, he failed to establish that they are being resolved or are under control.
Clearance is denied.
Statement of the Case
On January 11, 2012, the Defense Office of Hearings and Appeals (DOHA)
issued a Statement of Reasons (SOR) to Applicant detailing security concerns under
Guidelines 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 by the Department of Defense on
September 1, 2006.
Applicant answered the SOR on February 15, 2012, admitting all of the
allegations except subparagraphs 1.g, 1.h, and 1.j, through 1.l. He requested a hearing,
Applicant obtained the bank loan to help his mother defray costs she incurred after his father was disabled1
by a heart attack in 2006. (GE 2 at 13; Tr. 41)
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and the case was assigned to me on April 12, 2012. A notice of hearing was issued on
April 20, 2012, scheduling the case for May 8, 2012. I held the hearing as scheduled,
considering Applicant’s testimony, and receiving six Government exhibits, marked as
Government Exhibits (GE) 1 through 6, and three Applicant exhibits (AE) marked as AE
A through C.  At Applicant’s request, I left the record open for him to submit an
additional exhibit. Within the time allotted, he did so, and I received it as AE D. DOHA
received the transcript (Tr.) on May 16, 2012.
Findings of Fact
Applicant is a 40-year-old man with two children, ages 11 and 9.  He has been
married twice previously, from 1994 to 2000, and from 2001 to 2007. Both marriages
ended in divorce. His two children are from his second marriage. Applicant and his ex-
wife share joint custody, and the children split their time equally between both parents.
(Tr. 14-15)
Applicant has a high school education. Since 2010, he has worked for a defense
contractor as a material handler. He has held a security clearance since 1991. From
1991 to 2006, Applicant enjoyed a successful career working as a carpenter for various
defense contractors. By 2006, he was a senior supervisory carpenter, the highest
position among carpenters where he worked. (Tr. 15) 
In 2006, Applicant was laid off from his job. The following year, he and his
second wife divorced. Between losing his job in 2006 and gaining his current job in
2010, Applicant worked as a self-employed handyman. By 2008, however, his annual
income had decreased from $78,000 per year in 2006 to $11,000 per year. (Tr. 37)
Although his income has steadily increased since then, he has yet to make more than a
third of the annual income he made before he lost his job in 2006. (Tr. 37)
Applicant’s drastic decrease in salary led to his inability to pay his bills. By
January 2012, he had accrued approximately $36,000 in delinquent debt, including the
deficiencies for two repossessed motorcycles totalling approximately $21,000
(subparagraphs 1.k and 1.l), multiple utility bills totalling approximately $2,000
(subparagraphs 1.a, 1.b, and 1.d), and a delinquent bank loan for approximately
$3,000.    (subparagraph 1.f)  1
Of the debts that Applicant denies, he contends that three of them, totalling
$7,325, were accrued by his second ex-wife. (subparagraphs 1.g, 1.h, 1.j) The domestic
court ordered Applicant’s ex-wife to pay these debts in a divorce decree. She did not
pay them. (Tr. 29)
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In 2008, Applicant was arrested and charged with writing a bad check for $2,100.
(subparagraph 1.m) This occurred after he wrote a check to purchase concrete from a
wholesaler. At the time, Applicant was working as a handyman. He needed the concrete
to complete a job for one of his customers. After he completed the work, his customer
did not pay him, and he did not have enough money in his business account to cover
the check he had used to purchase the concrete. Consistent with the court order,
Applicant paid the concrete manufacturer. (Tr. 24)
In 2010, Applicant’s father died. Although Applicant’s mother paid the majority of
the funeral expenses, he contributed $1,800. (Tr. 39) The restitution payment from the
bounced check, in addition to the money contributed to Applicant’s father’s funeral
expenses, further impeded Applicant’s ability to satisfy his delinquencies.
Unable to afford to pay his debts, Applicant, in March 2010, decided to file for
Chapter 7 bankruptcy protection. His attorney did not begin working on Applicant’s case
until Applicant paid him the $1,350 fee. (Tr. 17) Because of Applicant’s financial
difficulties, it took him two years to pay the fee. (AE C) 
As of May 21, 2012, Applicant’s attorney had prepared the bankruptcy petition,
but had not filed it. (AE D) Schedule F reports $29,000 of unsecured debt. The only
SOR debts listed in the bankruptcy are subparagraphs 1.f, a judgment for $3,096, and
the delinquency for one of the repossessed motorcycles, totalling $13,000
(subparagraph 1.k). In an undated letter to Applicant, his attorney advised him to “make
sure all creditors are listed” (underscore in the original, AE A at 1), and to provide their
account numbers and addresses. (AE A at 1) All of the delinquent SOR creditors are
listed in the credit reports that Department Counsel submitted. (GE 2-4) 
Policies
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 together with the factors listed in the
adjudicative process. 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.
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.” 
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 applicant or proven by department counsel. . . .” The
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applicant has the ultimate burden of persuasion for obtaining a favorable security
decision.
Analysis
Guideline F, Financial Considerations
Under this guideline, “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”
(AG ¶ 18). Applicant satisfied the court-ordered restitution listed in subparagraph 1.m,
therefore, I resolve it in his favor. The debts alleged in the other SOR delinquencies
remain outstanding and trigger the application of AG ¶ 19(a), “inability or unwillingness
to satisfy debts,” and AG ¶ 19(c), “a history of not meeting financial obligations.”
The following mitigating conditions under AG ¶ 20 are potentially applicable:
(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; and
(d) the individual initiated a good-faith effort to repay overdue creditors or
otherwise resolve debts.
Applicant’s financial problems began when he lost his job in 2006. Although he
had no period of unemployment, his income since losing the job in 2006 has been, on
average, less than two-thirds of what he earned in 2006. His financial problems were
further exacerbated by his divorce in 2007 and the costs he shared related to his
father’s disability and subsequent death. Unable to satisfy his delinquent debt, Applicant
decided to file for Chapter 7 bankruptcy and gradually saved money each month over a
two-year period for the attorney’s fee. AG ¶¶ 20(b) and 20(d) apply.
Although Applicant’s attorney has drafted the bankruptcy petition, he has not filed
it. Further, Applicant’s bankruptcy attorney explicitly advised Applicant to provide all of
the outstanding creditors for him to include in the petition. Applicant has not yet done
so. Currently, only 2 of the 12 SOR debts are listed in the petition. If a debt is not
scheduled for discharge and the creditor lacks actual knowledge of the bankruptcy
case, the bankruptcy court may decide not to discharge it. (11 U.S.C. § 523(a)(3) (1994
& 1997 Supp)  Under these circumstances, I cannot conclude that the problem is under
control. AG ¶ 20(c) does not apply.
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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. 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. 
Applicant’s financial problems were caused by circumstances beyond his control.
Although he is attempting to discharge his debts through the Chapter 7 bankruptcy
process, he has not yet provided his attorney with all of the information that he needs in
order to file the petition. Under these circumstances, it is too soon to conclude that
Applicant has mitigated the security concern.
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:
Paragraph 1, Guideline F: AGAINST APPLICANT
Subparagraphs 1.a - 1.l: Against Applicant
Subparagraph 1.m: For 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.
                                             
MARC E. CURRY
Administrative Judge