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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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-------------------------- )       ISCR Case No. 11-08727
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Applicant for Security Clearance )
Appearances
For Government: Melvin A. Howry, Esq., Department Counsel
For Applicant: Pro se
January 15, 2013
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DECISION
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ROSS, Wilford H., Administrative Judge:
Applicant submitted her Electronic Questionnaire for Investigations Processing
(e-QIP) on April 28, 2011. (Government Exhibit 1.) On April 13, 2012, the Department of
Defense 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 April 25, 2012, and requested a
hearing before an administrative judge (Answer). Department Counsel was prepared to
proceed on July 30, 2012. This case was assigned to me on August 24, 2012. DOHA
issued a notice of hearing on September 4, 2012. I convened the hearing as scheduled
on October 4, 2012. The Government offered Government Exhibits 1 through 7, which
were received without objection. Applicant testified on her own behalf, called one
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additional witness, and submitted Applicant Exhibits A through E, which were also
received without objection. Applicant asked that the record remain open for the receipt
of additional documents. Applicant submitted Applicant Exhibit F on October 24, 2012,
which was admitted without objection. DOHA received the transcript (Tr.) of the hearing
on October 11, 2012. The record closed on October 24, 2012. Based upon a review of
the pleadings, exhibits, and testimony, eligibility for access to classified information is
granted.
Findings of Fact
Applicant was 52 at the time of the hearing, 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 all the factual allegations in the SOR, except for
subparagraph 1.n. Those admissions are findings of fact. She also submitted additional
information to support her request for a security clearance.
Applicant and her husband were both employed in 2008, with a joint income of
approximately $98,000. Applicant’s husband was laid off from his employment on
November 6, 2008. Applicant was laid off from her employment on January 2, 2009.
(Applicant Exhibit C.) Their income in 2009 dropped to $36,000 and remained that way
in 2010, primarily from unemployment benefits, as well as temporary employment.
Applicant’s husband remains unemployed and his benefits have run out. He is retired
from his state National Guard, but is not yet eligible to receive retirement benefits.
Applicant began working for her current employer in February 2011, first as a temporary
employee, and then as a permanent employee. In 2011 their income was approximately
$42,000. (Tr. 62-65.) 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 B.)
The SOR contains 14 past-due debts, totalling $16,082. The existence of these
debts is supported by credit reports concerning the Applicant dated May 11, 2011;
February 13, 2012; June 26, 2012; and October 3, 2012. (Government Exhibits 2, 3, 5
and 7.) 
As a result of the dual unemployment of Applicant and her husband for over two
years, they were not able to maintain payments on their debts. Eventually, they decided
to resolve the debts by filing for bankruptcy on April 13, 2012, with the help of a
bankruptcy law firm. Applicant and her husband were granted a Discharge on July 23,
2012. (Applicant Exhibit D at 2.) The debts set forth in subparagraphs 1.c, 1.d, 1.e, 1.f,
1.g, 1.h, 1.I, and 1.j were specifically included in the bankruptcy Schedule F, “Creditors
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Holding Unsecured Nonpriority Claims.” (Applicant Exhibit D at 3-9.) These debts,
totalling $12,128, were discharged by operation of law.
The status of the other debts set forth in the SOR is as follows:
1.a. Applicant admits owing this past-due medical debt identified only as medical
account #30299912. This debt only appears on one credit report, that of February 13,
2012. (Government Exhibit 3.) A debt in this amount with this account number does not
appear in the Applicant’s Schedule F. However, there are several medical accounts set
forth in the Schedule F, in addition to the debts set forth in the SOR. (Tr. 57-59.) In
addition, this debt does not appear on the most recent credit reports of the Applicant.
Applicant retained an attorney, who represented her in this case. There does not appear
to be fraud in this case, and Applicant is entitled to a discharge of all debts, whether this
creditor received notice or not. This debt is discharged and resolved.
1.b. A state tax lien was filed against Applicant in January 2011 in the amount of
$2,360. This debt was released in August 2012, as shown in the credit report dated
October 3, 2012. (Government Exhibit 7.) This debt is resolved.
1.k. Applicant admitted owing this past-due debt in the amount of $50. Applicant
stated in her Answer that this was the same debt as that set forth in 1.m, below, and
was resolved by payment of $68.35 on April 19, 2012. Attached to Applicant’s Answer
was the email receipt from the creditor indicating that they received the payment. This
debt is resolved.
1.l. Applicant admitted owing this past-due debt in the amount of $102. Applicant
stated in her Answer that this debt was resolved by payment of $109.61 on April 19,
2012. Attached to Applicant’s Answer was the email receipt from the creditor indicating
that they received the payment. This debt is resolved.
1.m. Applicant admitted owing this past-due debt in the amount of $63. Applicant
stated in her Answer that this was the same debt as that set forth in 1.k, above, and was
resolved by payment of $68.35 on April 19, 2012. Attached to Applicant’s Answer was
the email receipt from the creditor indicating that they received the payment. This debt
is resolved.
1.n. Applicant has consistently denied owing this past-due debt to an alarm
company in the amount of $942. (Answer.) According to Applicant, she cancelled the
alarm service in the form required by the company, but they continued to bill her.
(Government Exhibit 4 at 10.) Applicant stated that she had filed a dispute with the
credit reporting services, as well as talking about the debt with the company several
times. (Tr. 54-57, 60-61.) This debt only appears on the credit report dated May 11,
2011. (Government Exhibit 2.) Applicant retained an attorney, who represented her in
the bankruptcy case. There does not appear to be fraud in this case, and Applicant is
entitled to a discharge of all debts, whether this creditor received notice or not. This debt
was either successfully disputed or is discharged and resolved.
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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
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
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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
evidence, had over $16,000 in past-due debt that was not resolved as of the date the
SOR was issued. 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 tremendous drop in her income, due
to Applicant and her husband both being laid off within two months of each other, and
both being unemployed for two years. Applicant’s husband continues to be unemployed.
There is no evidence of poor judgment on her part. Rather, she attempted to pay her
debts until she saw the only solution was to file for bankruptcy protection. The relatively
small amount of delinquent debt compared to the drastic reduction in family income over
two years of unemployment, and her resolution of the debts after regaining employment,
demonstrated that she acted responsibly under the circumstances.
Applicant has received financial counseling as required by the bankruptcy court.
In addition, her current financial situation is stable. (Tr. 65.) I find that Applicant “has
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received . . . counseling for the problem and/or there are clear indications that the
problem is being resolved or is under control,” as required by AG ¶ 20(c). 
Applicant and her husband finally made the decision to file bankruptcy after
fighting to stay above water for two years. They have been properly discharged of their
debts and have the tools to stay debt-free in the future. Accordingly, 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). 
Finally, the debt set forth in 1.n, even though not included in her Schedule F, is
legally discharged. Applicant also has consistently denied this debt and contacted the
creditor and credit reporting agencies about it. These actions bring her 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.” 
Applicant has acted in a way that shows good judgment, making the best she
could out of a very difficult situation. All of these mitigating conditions apply to the facts
of this case. Guideline F is found for Applicant.
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 her part. Rather, they were brought
about by the unexpected loss of income by Applicant and her husband due to their both
being laid off almost simultaneously. This difficult financial situation continued for two
years. Under AG ¶ 2(a)(2), I have considered the facts of Applicant’s debt history. As
stated above, this situation concerning the past-due debts are not indicative of her usual
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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)). There is a low likelihood of
recurrence because she resolved her delinquent debts and is currently living within her
means. (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.n: 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