DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
--------------------------------- )       ISCR Case No. 11-08619
)
Applicant for Security Clearance )
Appearances
For Government: Julie Mendez, Department Counsel
For Applicant: Pro se
February 12, 2013
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Decision
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LOKEY ANDERSON, Darlene D., Administrative Judge:
The Applicant submitted his Electronic Questionnaires for Investigations
Processing (e-QIP) on December 6, 2010.  (Government Exhibit 4.)  On August 31,
2012, the Defense of Defense (DoD), pursuant to Executive Order 10865 and
Department of Defense Directive 5220.6 (Directive), dated January 2, 1992, (as
amended), issued a Statement of Reasons (SOR) to the Applicant, which detailed
reasons why DOHA could not make the preliminary affirmative finding under the
Directive that it is clearly consistent with the national interest to grant or continue a
security clearance for the Applicant and recommended referral to an Administrative
Judge to determine whether clearance should be denied or revoked.
The Applicant responded to the SOR in writing on September 11, 2012, in which
he elected to have the case determined on a written record in lieu of a hearing.
Department Counsel submitted the Government’s File of Relevant Material (FORM) to
the Applicant on or about October 16, 2012.  The Applicant received the FORM on
October 25, 2012.  The Applicant was instructed to submit information in rebuttal,
extenuation or mitigation within 30 days of receipt.  The Applicant failed to submit a
reply to the FORM. This case was assigned to the undersigned on December 14, 2012.
Based upon a review of the pleadings and exhibits, eligibility for access to classified
information is denied.
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 FINDINGS OF FACT
The Applicant is 37 years old, never been married, and has no children.  He is
employed with a defense contractor as an Solutions Architect and is seeking to obtain a
security clearance in connection with this employment.
The Government opposes the Applicant's request for a security clearance, on the
basis of allegations set forth in the Statement of Reasons (SOR).  The following findings
of fact are entered as to each paragraph and guideline in the SOR:
Paragraph 1 (Guideline F - Financial Considerations)  The Government alleges that the
Applicant is ineligible for clearance because he is financially overextended and at risk of
having to engage in illegal acts to generate funds.      
The Applicant admitted allegations 1(a) and 1(c) set forth in the SOR under this
guideline.  He denies allegation 1(b) and contends that he settled the debt.  Credit
Reports of the Applicant dated June 25, 2012 and December 15, 2010, reflect that the
Applicant is indebted to each of the creditors set forth in the SOR in an amount totaling
in excess of $477,000.  (Government Exhibits 5 and 6.)  He has been working for his
current employer since February 2009.
In 2005, the Applicant and a friend purchased an investment property financed
with an adjustable rate first mortgage of $245,000 and a second mortgage of $100,000.
(Government Exhibit 7.)  His total monthly mortgage payment began at $2,500 and
adjusted up to $3,000 in 2007.  The Applicant was renting it out for $1,600 per month.
In 2007, he tried to get the loan modified but was unsuccessful.  The property was
subsequently foreclosed upon.  Due to the foreclosure, the second mortgage owned by
Wells Fargo was charged off in the approximate amount of $97,943.  The Applicant
contends that he set up a payment plan with a law firm to address the second
mortgage.  He states that he is currently making monthly payments of $658.00 toward
the debt.  (Government Exhibit 7.)  There is no evidence in the record to prove that the
payment he made was for the debt owed to the creditor.
The Applicant also took out a line of credit with Bank of America in order to pay
for expenses on the foreclosed investment property.  This account also became
delinquent and was placed for collection in the amount of $27,979.  (Government
Exhibit 5 and 6.)  The Applicant states that he arranged a settlement agreement through
his attorneys to satisfy this debt in the amount of $11,000.  He provided a copy of the
settlement offer letter from his attorneys.  (Government Exhibit 7.)  There is no evidence
in the record as to whether the Applicant complied with the terms of this offer.
The Applicant also has a delinquent mortgage debt related to his primary
residence.  In 2007, he purchased his primary residence and secured an adjustable rate
mortgage for this purchase.  His mortgage was with Aurora Bank for $352,000.
(Government Exhibit 5.)  The initial mortgage payment was $1,500, but was set to
adjust upward to $2,800 in January 2011.  In about December 2010, the Applicant
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began efforts to modify his loan but was denied.  His house ultimately went into
foreclosure.  (Government Exhibit 7.)  The Applicant has provided no documentation
related to the foreclosure, or whether the house was subsequently sold, or the status of
the mortgage.  Thus, it can be assumed that he still owes the debt and has not paid it.   
POLICIES
Enclosure 2 of the Directive sets forth adjudication policies divided into
"Disqualifying Factors" and "Mitigating Factors."  The following Disqualifying Factors
and Mitigating Factors are found to be applicable in this case:
Guideline F (Financial Considerations)
18.  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. 
Conditions that could raise a security concern:
19.(a) inability or unwillingness to satisfy debts; and
19.(c) a history of not meeting financial obligation. 
Conditions that could mitigate security concerns:
None.
In addition, as set forth in Enclosure 2 of the Directive at pages 18-19,  in
evaluating the relevance of an individual’s conduct, the Administrative Judge should
consider the following general factors:
a.  The nature, extent, and seriousness of the conduct and surrounding
circumstances;
     b.  The circumstances surrounding the conduct, to include knowledgeable
participation;
c.  The frequency and recency of the conduct;
d.  The individual’s age and maturity at the time of the conduct;
e.  The extent to which participation is voluntary;
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f.  The presence or absence of rehabilitation and other permanent behavior
changes;
g.  The motivation for the conduct; 
h. The potential for pressure, coercion, exploitation or duress; and
 i.  The likelihood of continuation or recurrence.
The eligibility criteria established in the DoD Directive identify personal
characteristics and conduct, which are reasonably related to the ultimate question,
posed in Section 2 of Executive Order 10865, of whether it is “clearly consistent with the
national interest” to grant an Applicant’s request for access to classified information.
The DoD Directive states, “The adjudicative process is an examination of a
sufficient period of a person’s life to make an affirmative determination that the person is
an acceptable security risk.  Eligibility for access to classified information is predicated
upon the individual meeting these personnel security guidelines.  The adjudicative
process is the careful weighing of a number of variables known as the whole-person
concept.  Available, reliable information about the person, past and present, favorable
and unfavorable should be considered in reaching a determination.” The Administrative
Judge can draw only those inferences or conclusions that have reasonable and logical
basis in the evidence of record.  The Judge cannot draw inferences or conclusions
based on evidence, which is speculative or conjectural in nature.  Finally, as
emphasized by President Eisenhower in Executive Order 10865, “Any determination
under this order . . . 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.”
CONCLUSIONS
In the defense industry, the security of classified industrial secrets is entrusted to
civilian workers who must be counted upon to safeguard such sensitive information
twenty-four hours per day, seven days per week.  The Government is therefore
appropriately concerned when available information indicates that an Applicant for
clearance may be involved in instances of financial irresponsibility or dishonesty, which
demonstrates poor judgment or unreliability.
It is the Government’s responsibility to present substantial evidence to support
the finding of a nexus, or rational connection, between the Applicant’s conduct and the
holding of a security clearance.  If such a case has been established, the burden then
shifts to the Applicant to go forward with evidence in rebuttal, explanation or mitigation,
which is sufficient to overcome or outweigh the Government’s case.  The Applicant
bears the ultimate burden of persuasion in proving that it is clearly consistent with the
national interest to grant him or her a security clearance.
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In this case the Government has met its initial burden of proving that the
Applicant has been financially irresponsible (Guideline F).  The evidence indicates poor
judgment, unreliability and untrustworthiness on the part of the Applicant.  Because of
the scope and nature of the Applicant's conduct, I conclude there is a nexus or
connection with his security clearance eligibility.
The evidence shows that the Applicant made some poor choices that
overextended him financially.  His financial investments included two properties which
were foreclosed upon because he entered into adjustment rate mortgages that adjusted
upward that he could not afford to pay.  He contends that he has paid one of the debts
off entirely and is currently making payments to resolve the other.  The Applicant failed
to reply to the FORM and did not provide sufficient evidence to establish mitigation
here.  He did not provide sufficient documentation to corroborate his assertions.
Assuming he has paid off one of the debts and is making payments toward the other, he
still remains tremendously indebted to the creditor for the loan on his primary residence
in the amount of approximately $353,000.  He has not explained anything concerning
the status of that debt and it remains unresolved and unaddressed.   
Under the particular circumstances of this case, the Applicant has not met his
burden of proving that he is worthy of a security clearance.  It is the Applicant’s burden
to prove that he has resolved his delinquent debts.  In this case, he has fallen short of
showing this.  Thus, it cannot be said that he has made a good-faith effort to resolve his
past-due indebtedness.  He has not shown that he is or has been reasonably,
responsibly or prudently addressing his financial situation.  Assuming that he continues
to work to resolve his debts, and then shows that he has not acquired any new debt that
he is unable to pay, and that he provides adequate documentation to support his
payments and what they are for, he may be eligible for a security clearance in the
future.  However, not at this time.  Considering all of the evidence, the Applicant has not
introduced persuasive evidence in rebuttal, explanation or mitigation that is sufficient to
overcome the Government's case. 
Under Guideline F (Financial Considerations), Disqualifying Conditions 19.(a)
inability or unwillingness to satisfy debts; and 19.(c) a history of not meeting financial
obligations, apply.  Mitigating Condition 20.(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 applies, but is not
controlling.  Accordingly, I find against the Applicant under Guideline F (Financial
Considerations).    
I have also considered the “whole-person concept” in evaluating the Applicant’s
eligibility for access to classified information.  Under the particular facts of this case, the
totality of the conduct set forth above, when viewed under all of the guidelines as a
whole, support a whole-person assessment of poor judgement, untrustworthiness,
unreliability, a lack of candor, an unwillingness to comply with rules and regulations,
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and/or other characteristics indicating that the person may not properly safeguard
classified information.
I have considered all of the evidence presented.  It does not mitigate the negative
effects of his financial indebtedness and the effects that it can have on his ability to
safeguard classified information.  On balance, it is concluded that the Applicant has not
overcome the Government's case opposing his request for a security clearance.
Accordingly, the evidence supports a finding against the Applicant as to the factual and
conclusionary allegations expressed in Paragraph 1 of the SOR.     
     FORMAL FINDINGS
Formal findings For or Against the Applicant on the allegations in the SOR, as
required by Paragraph 25 of Enclosure 3 of the Directive are:
Paragraph 1: Against the Applicant.
        Subpara.  1.a.: Against the Applicant.
    Subpara.  1.b.: Against the Applicant.
      Subpara.  1.c.: Against the Applicant.
DECISION
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 a security clearance for
the Applicant.
  Darlene Lokey Anderson
Administrative Judge