DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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                                                                      )                                                          
           ----------------------------------                  )     ISCR  Case No.  11-01356           
                                                              )
)
Applicant for Security Clearance )
Appearances
For Government: Jeff Nagel, Esq., Department Counsel
For Applicant: Pro se
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 Decision
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WESLEY, Roger C., Administrative Judge:
Based upon a review of the pleadings, exhibits, and testimony, I conclude that
Applicant has not mitigated the security concerns regarding his finances. Eligibility for
access to classified information is denied. 
 
Statement of Case
On January 12, 2012, the Defense Office of Hearings and Appeals (DOHA)
issued a Statement of Reasons (SOR) detailing reasons why DOHA could not make the
preliminary affirmative determination of eligibility for granting a security clearance, and
recommended referral to an administrative judge to determine whether a security
clearance should be granted, continued, denied, or revoked. This 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 (AGs) implemented by the
Department of Defense on September 1, 2006.  
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Applicant responded to the SOR on February 8, 2012, and requested a hearing.
The case was assigned to me on May 17, 2012, and was scheduled for hearing on
June 26, 2012. At hearing, the Government's case consisted of six exhibits (GEs 1-6).
Applicant relied on one witness (himself) and presented six exhibits (AEs A-F). The
transcript (Tr.) was received on July 10, 2012. 
Procedural Issues
Before the close of the hearing, Applicant requested the record be kept open to
afford him the opportunity to supplement the record with documented payments and
endorsements. There being no objection from Department Counsel, and for good cause
shown, I granted Applicant 21 days to supplement the record. I afforded the
Government two days to respond. Within the time permitted, Applicant provided
documentation of his payments to creditors 1.a and 1.k, endorsements, and
performance evaluations. I admitted Applicant’s submissions as AEs G through J. 
Summary of Pleadings
Under Guideline F, Applicant allegedly accumulated 26 debts, exceeding
$55,000.  In his answer to the SOR, Applicant admitted most of the allegations without
explanations.  He denied the allegations covered by subparagraphs 1.p, 1.q, 1.t, and
1.y.  He provided no explanations for his denials in his response.
                 
Findings of Fact
Applicant is a 38-year-old integrator technician for a defense contractor where he
has been employed since March 2010. (GE 1) He seeks a security clearance. The
allegations covered in the SOR and admitted by Applicant are incorporated and adopted
as relevant and material findings. Additional findings follow.
Background
Applicant married in August 2003, and he has two children from this marriage.
(GE 1; Tr. 31-32) He separated from his wife in December 2007, and finalized his
divorce in April 2009. (GE 2 and AE F; Tr. 21) Since October 2007, he has cohabited
with another woman. (AE I)
Applicant claims no prior military service.  He attended an adult technical school
between May 1993 and June 1993, and received a certificate of completion. (GE 1) 
Appellant’s finances
Between July 2007 and August 2009, Applicant was employed by a trucking
company as an interstate truck driver. (GEs1 and 2) He encountered medical problems
with bleeding ulcers in 2009 and was laid off in August 2009. (GEs 1 and 2; Tr. 35-36)
He was unable to find new employment for almost a year, which complicated his
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already difficult divorce situation. (GE 2; Tr. 35-36) As a result, he experienced
difficulties paying his accumulated medical bills (creditors 1.a, 1.b, and 1.m) and his
child support obligations. (GEs 2-6; Tr. 37-38)
Between March 2005 and February 2007, Applicant was unemployed and lived
off his income from his 401(k) retirement fund, unemployment insurance, and his credit
cards. (GE 5; Tr. 29) Once he was laid off in March 2005, he ceased making payments
on all of his debts (GE 5; Tr. 32) and fell behind with his child support responsibilities. 
Between March 2005 and August 2010, Applicant accumulated a number of
delinquent debts (13 in all) exceeding $25,000. (GEs 2 through 6) Under the terms of
his divorce judgment, Applicant shares joint legal custody of his children with his ex-
wife. (AE F) Applicant and his ex-wife were assigned joint responsibility for their marital
debts created during their marriage. (AE F) These assigned debts cover all of the listed
debts in the SOR. (GEs 3-6)  By the terms of the divorce judgment, Applicant became
responsible for child support for each of his children in the respective amounts of $350 a
month. (AE F) 
While Applicant’s residence was awarded to his ex-wife, he was assigned half of
the monthly mortgage obligation. (AE F) The mortgage on the residence, in turn, is
reported to be over $44,000 in arrears and over 120 days delinquent (i.e., $15,251).
Applicant has paid nothing towards this mortgage since his divorce was finalized and
relies on his ex-wife to cover the mortgage obligations. (AE E) Although his ex-wife
accepts responsibility for the mortgage and is seeking mortgage refinancing (AE E), she
has not to date obtained a new mortgage that excuses Applicant from any legal
responsibility. Until she is able to obtain new financing that excludes Applicant as a joint
obligor, Applicant remains a co-obligor on the joint note and mortgage and must be
treated as one when assessing his mortgage responsibilities.  
Applicant addressed several of his listed debts and documented payment of his
debt to creditor 1.b ($129), creditor 1.i ($392), and creditor 1.l ($190).(AEs A, B, and D;
Tr.  39, 45-46)  He provided probative proof of his partial payments to creditor 1.a ($50)
and creditor 1.k  ($50). (AEs G and H) He indicated he has a payment plan with creditor
1.c for $50 a month, but provided no documentation. (Tr. 40-41) He provided no
documentation either of any payments or payment plans covering creditor 1.d ($1,707),
creditor 1.e ($1,708), creditor 1.f ($702), creditor 1.h ($1,246), creditor 1.j ($633), or
creditor 1.m ($183). (Tr. 41-47) Applicant assures he is still working on resolving his
remaining debts, and hopes to address them soon. (Tr. 43-47)
Since returning to work with his current employer, Applicant is current with his
newest creditors. (Tr. 34) Addressing his creditors listed in the SOR, Applicant has paid
two listed creditors in full (totaling a little over $600) and has payment arrangements in
place with creditors 1.a and 1.k. (AEs B, D, G, and H) To date, he has made $50
payments to each of these creditors. His mortgage responsibilities with creditor 1.g are
still unclear. In the three years that have elapsed since his April 2009 divorce, Applicant
has paid nothing on the mortgage debt and believes he has no legal responsibility
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despite the joint and several terms of the mortgage and the 50-50 spousal allocation of
the divorce debt in the divorce judgment. (AE F) Without more input from Applicant, his
mortgage responsibilities cannot be accurately sorted out on the presented record.
Endorsements
Applicant is well regarded by his supervisor and coworkers. (AE I) His
performance evaluations rate Applicant satisfactorily in all phases of his work
responsibilities. (GEs I and J; Tr. 30) 
Policies
         The AGs list guidelines to be used by administrative judges in the decision-making
process covering DOHA cases. These guidelines take into account factors that could
create a potential conflict of interest for the individual applicant, as well as
considerations that could affect the individual’s reliability, trustworthiness, and ability to
protect classified information. 
These guidelines include "[c]onditions that could raise a security concern and
may be disqualifying” (disqualifying conditions), if any, and many of the "[c]onditions that
could mitigate security concerns.” They must be considered before deciding whether or
not a security clearance should be granted, continued, revoked, or denied. The
guidelines do not require administrative judges to place exclusive reliance on the
enumerated disqualifying and mitigating conditions in the guidelines in arriving at a
decision. Each of the guidelines is to be evaluated in the context of the whole person in
accordance with AG ¶ 2(c) 
In addition to the relevant AGs, administrative judges must take into account the
pertinent considerations for assessing extenuation and mitigation set forth in AG ¶ 2(a)
of the AGs. AG ¶ 2(a) is intended to assist the judges in reaching a fair and impartial
commonsense decision based upon a careful consideration of the pertinent guidelines
within the context of the whole person. The adjudicative process is designed to examine
a sufficient period of an applicant’s life to enable predictive judgments to be made about
whether the applicant is an acceptable security risk. 
When evaluating an applicant’s conduct, the relevant guidelines are to be
considered together with the following AG ¶ 2(a) factors: 
(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 chances; (7) the
motivation for the conduct; (8) the potential for pressure, coercion,
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exploitation, or duress; and (9) the likelihood of continuation or
recurrence.
       Viewing the issues raised and evidence as a whole, the following adjudication policy
factors are pertinent herein:
Financial Considerations
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.” 
Adjudicative Guidelines, ¶ 18.
Burden of Proof
By virtue of the principles and policies framed by the AGs, a decision to grant or
continue an applicant's security clearance may be made only upon a threshold finding
that to do so is clearly consistent with the national interest.  Because the Directive
requires administrative judges to make a commonsense appraisal of the evidence
accumulated in the record, the ultimate determination of an applicant's eligibility for a
security clearance depends, in large part, on the relevance and materiality of that
evidence. See United States v. Gaudin, 515 U.S. 506, 509-511 (1995). As with all
adversarial proceedings, the judge may draw only those inferences which have a
reasonable and logical basis from the evidence of record.  Conversely, the judge cannot
draw factual inferences that are grounded on speculation or conjecture.
The Government's initial burden is twofold: (1) it must prove by substantial
evidence any controverted facts alleged in the SOR, and (2) it must demonstrate that the
facts proven have a material bearing to the applicant's eligibility to obtain or maintain a
security clearance. The required materiality showing, however, does not require the
Government to affirmatively demonstrate that the applicant has actually mishandled or
abused classified information before it can deny or revoke a security clearance. Rather,
the judge must consider and weigh the cognizable risks that an applicant may
deliberately or inadvertently fail to safeguard classified information.
Once the Government meets its initial burden of proof of establishing admitted or
controverted facts, the evidentiary burden shifts to the applicant for the purpose of
establishing his or her security worthiness through evidence of refutation, extenuation, or
mitigation.  Based on the requirement of  Exec. Or. 10865 that all security clearances be
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clearly consistent with the national interest, the applicant has the ultimate burden of
demonstrating his or her clearance eligibility. “[S]ecurity-clearance determinations should
err, if they must, on the side of denials.” See Department of the Navy v. Egan, 484 U.S.
518, 531 (1988).  And because all security clearances must be clearly consistent with the
national interest, the burden of persuasion must remain with the Applicant.
Analysis  
Applicant is an integrator technician whose credit reports list 13 delinquent debts.
All of these debts have either been charged off or assigned for collection. While several
of the debts are disputed, they presumptively belong to Applicant and are imputed to
him, absent convincing documentation to the contrary. 
Security concerns are raised under the financial considerations guideline of the
AGs when an individual applicant is so financially overextended as to indicate poor self-
control, lack of judgment, or unwillingness to abide by rules and regulations, which can
raise questions about the individual’s reliability, trustworthiness, and ability to protect
classified information, and place the person at risk of having to engage in illegal acts to
generate funds. Applicant’s accumulation of presumptively valid delinquent debts (based
on produced credit reports) and his past inability to resolve these debts by the disputes
process available to him warrant the application of two of the disqualifying conditions
(DC) of the Guidelines: ¶ DC 19(a), “inability or unwillingness to satisfy debts,” and
¶19(c) “a history of not meeting financial obligations.”
Holding a security clearance involves the exercise of important fiducial
responsibilities, among which is the expectancy of consistent trust and candor.  Financial
stability in a person cleared to access classified information is required precisely to
inspire trust and confidence in the holder of the clearance. While the principal concern of
a clearance holder’s demonstrated financial difficulties is vulnerability to coercion and
influence, judgment and trust concerns are implicit in financial cases.
Extenuating circumstances are associated with most of Applicant’s delinquent
debts he accumulated while medically weakened, out of work for extended periods, and
enmeshed in a complicated divorce proceeding. MC ¶ 20(b), “the conditions that resulted
in the behavior 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,” applies to Applicant’s
situation. 
Still, Applicant retained the responsibility to address his debts when he was
financially able. Employed by his current employer since March 2010, he could be
reasonably expected to address his old debts and work out payment plans with those
creditors he could not pay off. Follow-up measures like this were required of Applicant to
satisfy the good-faith and due diligence repayment requirements of MC ¶ 20(d), “the
individual initiated a good-faith effort to repay overdue creditors or otherwise resolve
debts,” and the counseling/control requirements of MC ¶ 20(c), “the person has received
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counseling for the problem and/or there are clear indications that the problem is being
resolved or is under control.” This mitigating condition has little application to Applicant.
To date, he is able to document full payments to three of his creditors and modest
payment plans with two other creditors. The balance of his debts remain unresolved with
no concrete plans in place for addressing these debts. 
Under the circumstances, Applicant can take very little advantage of either of
these mitigating conditions. For while an applicant need not have paid or resolved every
one of his proven debts or addressed all of his debts simultaneously, he needs a credible
plan to resolve his financial problems, accompanied by implementing actions. See ISCR
Case No. 07-06488 (App. Bd. May 21, 2008) By the proofs presented, Applicant has no
current viable plan in effect to resolve his debts.
To be sure, some of Applicant’s listed delinquent debts predate 2008 and are now
time-barred by his state’s pertinent statute of limitations. His state’s statute of limitations
for written contracts and open-ended accounts (like credit card debts) is four years. See
§337 of CC. When applied, the state statute bars enforcement of debts over four years
delinquent. Applicant has not asked for statute of limitations protection, and it is not
available to him in any case under Appeal Board guidance. Over time, the Appeal Board
has shown general consistency in disallowing applicant claims to mitigation based on
charge-offs and limitation bars on debts previously unpaid due to cited extenuating
circumstances.  Cf. ISCR Case No. 07-16427 at 3-4 and n.6 (App. Bd. Feb. 4, 2010);
ISCR Case No. 08-01122 at 5 and n.3 (App. Bd. Feb. 9, 2009) No different application of
the mitigation guidelines are warranted in Applicant’s situation.
                                              
Consideration of Applicant’s background and the circumstances surrounding his
medical issues, his debt accumulations, his recurrent periods of unemployment, and his
lack of follow-up efforts to address the bulk of his accumulated debts makes it very
difficult to credit Applicant with the degree of good judgment, reliability, and
trustworthiness necessary to satisfy security clearance eligibility criteria. Applicant’s
evidence provides insufficient indicators of  his ability to be trusted in times of stress. His
corrective efforts taken to date are insufficient to enable him to meet his evidentiary
burden of mitigating the covered debts. 
From a whole-person standpoint, the evidence is insufficient to demonstrate that
Applicant has mounted sufficient good-faith efforts to resolve his debts. In making a
whole-person assessment, careful consideration was given to the respective burdens of
proof established in Egan (supra), the AGs, and the facts and circumstances of this case
in the context of the whole-person. Unfavorable conclusions warrant with respect to the
allegations covered by the financial considerations guideline. 
       
Formal Findings
In reviewing the allegations of the SOR and ensuing conclusions reached in the
context of the findings of fact, conclusions, conditions, and the factors listed above, I
make the following formal findings:
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GUIDELINE F: (FINANCIAL CONSIDERATIONS): AGAINST APPLICANT
Subparagraphs , 1.c through 1.h, 1.j, Against Applicant
1.k, and 1.m:
Subparagraphs 1.a, 1.b, 1.i, and 1.l: For Applicant 
                               
Conclusions
In light of all the circumstances presented by the record in this case, it is not
clearly consistent with the national interest to grant or continue Applicant’s security
clearance.  Clearance is denied.
                                          
Roger C. Wesley
Administrative Judge