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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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-------------------------- )       ISCR Case No. 11-03577
)
)
Applicant for Security Clearance )
Appearances
For Government: 
Melvin A. Howry, Esq., Department Counsel
For Applicant:
Pro se
August 3, 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 November 17, 2010. (Government Exhibit 1.) On February 14, 2012, 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 March 9, 2012, and requested a
hearing before an administrative judge. Department Counsel was prepared to proceed
on April 30, 2012. This case was assigned to me on May 8, 2012. DOHA issued a
notice of hearing on May 10, 2012. I convened the hearing as scheduled on June 8,
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2012. The Government offered Government Exhibits 1 through 7, which were received
without objection. Applicant testified on his own behalf, and submitted Applicant Exhibits
A through J, which were also received without objection. Applicant asked that the record
remain open until June 29, 2012, for the receipt of additional documents. Applicant
submitted Applicant Exhibit K on June 27, 2012, which was admitted without objection.
DOHA received the transcript (Tr.) of the hearing on June 20, 2012. The record closed
on June 29, 2012. Based upon a review of the pleadings, exhibits, and testimony,
eligibility for access to classified information is granted.
Findings of Fact
Applicant is 36, and divorced with custody of his two children. 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 admitted the factual allegations in subparagraphs 1.a through
1.g of the SOR. Those admissions are findings of fact. Regarding subparagraph 1.h,
Applicant submitted and Department Counsel agreed that it was a duplicate of
subparagraph 1.a. Upon motion of the Department Counsel, subparagraph 1.h was
stricken from the SOR. (Tr. 43-44.) Applicant also submitted additional information to
support his request for a security clearance.
Applicant served in the Navy from 1995 to 2002, and received an honorable
discharge. After his naval service he began working in the mortgage industry. He was
successful. By 2004 and 2005, in conjunction with his then wife’s income, his taxable
income was $144,648 and $157,297, respectively. (Applicant Exhibit K at 7-13.) The
company he was working for went out of business in 2007. Applicant then began a
series of jobs with different entities in the mortgage industry, at the same time the
financial crisis was hitting its peak in 2008-2010. (Government Exhibit 1, Section 13; Tr.
30.) In 2007 his income had dropped to $90,000, and most of that money was from his
wife’s employment. (Tr. 56-57.)
Applicant and his wife were divorced in 2008. Starting in that year Applicant’s
income took a precipitous drop as the financial crisis deepened. In 2008 his taxable
income was $15,050; in 2009 it was $10,387; and in 2010 it was $22,528. (Applicant
Exhibits G, H, and I.) He began working with his current employer in August 2010, doing
the same kind of work he did in the Navy. Applicant testified that his gross income for
taxable year 2011 was approximately $63,000. (Tr. 39-40.)
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Applicant described his financial situation this way:
I was able to kind of live off savings for a while, that I had accumulated
before; but, by about the middle of 2008, it just became apparent that I
had to make decisions whether I was going to pay a credit card bill or, you
know, pay electric bill. It was a difficult decision. I knew it was going to,
you know, obviously lead to destroying my credit, but, you know, I had to
do it just to kind of survive at that point. (Tr. 31.) (See Tr. 59-62.)
Applicant got custody of his minor children beginning in 2009. Providing the
necessities for his children seriously impacted on his ability to repay any of his old
debts, even after he began his current employment in August 2010. At one time
Applicant was paying rent in two places because his daughter was attending an
advanced school in one city where his lease had not expired, while Applicant had begun
working in another city, which was a considerable distance away. (Government Exhibit
4; Tr. 33-34.)
Beginning in March 2012, once his life and financial situation had stabilized,
Applicant began working to resolve his delinquent credit, which amounted to $23,552.
(Government Exhibits 2, 3 and 7.) He settled and paid the $2,650 debt set forth in
subparagraph 1.b. (Applicant Exhibit D; Tr. 34, 37, 44-45.)
He has also been working with budget consultants at the Fleet and Family
Service office at the naval base where he works, as well as his county Consumer Credit
Counseling Service (CCCS). Because of the physical separation between where he
lives and works and the location of the CCCS office, this has taken a while longer than
he wanted. He made his initial payment to set up the program in June 2012, which has
been confirmed by the CCCS. Other than subparagraph 1.b, all the remaining past-due
debts are included in the debt management plan. He will be paying $450 per month
towards the debt management plan, which is well within his budget. (Applicant Exhibits
F, J, and K at 3, 4, 13, 14; Tr. 35, 45-55.) 
Applicant’s present financial situation is stable. 2011 was the first year since
2007 that he was employed regularly for the entire year. Even though his current
income is approximately half of what it was in 2006-7, he lives in a significantly lower
cost area and is able to pay his current monthly expenses without a problem. He had to
purchase a used car for transportation in August 2011, and has been maintaining his
monthly payments for that without a problem. (Applicant Exhibit E; Tr. 38, 59.)
Mitigation
Applicant is a well-respected person and employee. He submitted a letter from
his site manager. This person, with knowledge of the issues in the SOR, says Applicant
has been “very proactive in trying to take the necessary steps required to obtain his
clearance.” The site manager also states, “[Applicant] has been an exemplary employee
and a real asset to our team.” (Applicant Exhibit A.)
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A friend who has known Applicant for eight years, both in the Navy and in civilian
life, also submitted a letter on Applicant’s behalf. It is very laudatory. (Applicant Exhibit
B.)
Finally, he is also a member in good standing of his union, and has “met all the
financial requirements” for membership. (Applicant Exhibit C.)
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
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
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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 concerns for Financial Considerations are 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 approximately $23,000 in past-due indebtedness that he could not
resolve for several years. 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 those mitigating conditions apply to Applicant. Through no
fault of his own, his income dropped almost 90% in a period of two years during the
financial crisis. In addition, he was unemployed or underemployed for over two years
before finally getting full time employment in August 2010. Finally, he had the financial
pressures of having to take care of his two minor children once he received custody of
them. At all times he behaved responsibly, even though he could not pay the past-due
ISCR Case No. 06-12930 at 2 (App. Bd. Mar. 17, 2008) (quoting ISCR Case No. 04-09684 at 2-3 (App. Bd.1
Jul. 6, 2006)).
ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008) (internal citations omitted).2
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debts. While he is in indebted, it is highly commendable under these circumstances that
he did not get more than $23,000 in debt. There is no evidence of poor judgment on his
part. 
Once his financial condition had reached a position of stability, Applicant began
the process of paying his past-due debts. He paid one debt in full, and has a reasonable
plan with his local CCCS, a non-profit organization recommended by his Fleet and
Family Support office, to pay the others. That plan, while in the early stages, is
reasonable and he expresses a credible intent to carry through with the plan. Based on
the particular facts of this case, I also find that he has “initiated a good-faith effort to
repay overdue creditors or otherwise resolve debts,” as required by AG ¶ 20(d).
As found above, Applicant’s current financial situation is stable. In addition,
Applicant has been proactive in attempting to resolve the debts through the CCCS
process. I find that “there are clear indications that the problem is being resolved or is
under control,” as required by AG ¶ 20(c).
The Appeal Board has explained, “An applicant is not required to show that [he]
has completely paid off [his] indebtedness, only that [he] has established a reasonable
plan to resolve [his] debts and has taken significant actions to implement that plan.”1
In evaluating Guideline F cases, the Board has previously noted that the concept
of “‘meaningful track record’ necessarily includes evidence of actual debt reduction
through payment of debts.” However, an applicant is not required, as a matter of law, to
establish that he has paid off each and every debt listed in the SOR. All that is required
is that an applicant demonstrates that he has “. . . established a plan to resolve his
financial problems and taken significant actions to implement that plan.” The Judge can
reasonably consider the entirety of an applicant’s financial situation and his actions in
evaluating the extent to which that applicant’s plan for the reduction of his outstanding
indebtedness is credible and realistic. See Directive ¶ E2.2(a) (‘Available, reliable
information about the person, past and present, favorable and unfavorable, should be
considered in reaching a determination.’) There is no requirement that a plan provide for
payments on all outstanding debts simultaneously. Rather, a reasonable plan (and
concomitant conduct) may provide for the payment of such debts one at a time.
Likewise, there is no requirement that the first debts actually paid in furtherance of a
reasonable debt plan be the ones listed in the SOR.2
The Applicant has acted in a way that shows good judgment, making the best he
could out of a difficult situation. He has taken “significant actions” to implement his plan
to repay his remaining creditors. The stated mitigating conditions apply to the facts of
this case.
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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. 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
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. Rather, as described above,
they were brought about by the turmoil in the mortgage industry as well as the general
economy, which particularly affected him since he was employed in the mortgage
industry. Under AG ¶ 2(a)(2), I have considered the facts of Applicant’s debt history. As
stated above, this situation concerning his past-due debts is an aberration, which he is
resolving, and not indicative of his usual conduct. Based on the record, I find that there
have been permanent behavioral changes under AG ¶ 2(a)(6). In light of the relatively
small amount of delinquent debt, and his manageable plan to methodically resolve it
while avoiding new debt, 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. Accordingly, the evidence supports granting his request for a security
clearance.
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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.g: 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