DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
---------------------------------- )      ISCR Case No. 12-02548
)
Applicant for Security Clearance )
Appearances
For Government: Jeff A. Nagel, Department Counsel
For Applicant: Pro se
April 5, 2013
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Decision
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LOKEY ANDERSON, Darlene D., Administrative Judge:
Applicant submitted his Electronic Questionnaires for Investigations Processing
(E-QIP) on June 8, 2011.  (Government Exhibit 1.)  On July 27, 2012, the Department 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) detailing the security concerns under Guideline F for Applicant. The
SOR set forth the reasons why DoD adjudicators 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 Applicant and recommended
referral to an administrative judge to determine whether clearance should be denied or
revoked.
Applicant responded to the SOR on October 8, 2012, and he requested an
administrative hearing before an administrative judge.  This case was assigned to the
undersigned on January 8, 2013.  A notice of hearing was issued on January 16, 2013,
and the hearing was scheduled for February 13, 2013.  At the hearing the Government
presented nine exhibits, referred to as Government Exhibits 1 through 9, which were
admitted without objection.  Applicant presented five exhibits, referred to as Applicant’s
Exhibits A through E, which were admitted without objection.  He also testified on his
own behalf.  The record remained open until close of business on February 19, 2013, to
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allow Applicant to submit additional documentation.  He submitted one Post-Hearing
Exhibit, referred to as Applicant’s Post-Hearing Exhibit A, which was admitted without
objection.  The official transcript (Tr.) was received on February 22, 2013.  Based upon
a review of the pleadings, exhibits, and testimony, eligibility for access to classified
information is granted.
 FINDINGS OF FACT
Applicant is 60 years old and married with four adult children.  He has a high
school diploma and some adult training.  He is employed with a defense contractor as
an Aircraft Mechanic and is seeking to obtain a security clearance in connection with
this employment.
The Government opposes 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
Applicant is ineligible for clearance because he is financially overextended and at risk of
having to engage in illegal acts to generate funds.      
Applicant admitted each of the allegations set forth in the SOR under this
guideline.  Credit Reports concerning Applicant dated July 5, 2007; June 18, 2011; May
18, 2012; July 23, 2012; December 14, 2012; and February 12, 2013, reflect that
Applicant was at one time indebted to each of the creditors set forth in the SOR, in an
amount totaling almost $20,000.  (Government Exhibits 4, 5 , 6,  7, 8, and 9)
Applicant received a security clearance for the first time in 2007.  He has never
had a security violation of any sort.  Prior to 2011, Applicant had no serious financial
problems.  He lived within his means and paid his bills on time.  In 2011, after the
deaths of his mother-in-law and father-in-law, he fell behind on his bills.  His wife was
forced to take time off from work for which she was not paid, which reduced the family
income.  It was also about this time that his mortgage payment and property taxes were
increased to the point that he could no longer afford them.  (Government Exhibit 3.)  He
also admitted that for about a year he and his wife were living beyond their means.  As
a result, the following debts alleged in the SOR became delinquent and owing.  
A delinquent credit card debt in the amount of $6,000 became outstanding.  (Tr.
p. 36.)  A dental bill owed to a creditor in the amount of $343.00 became outstanding.
(Tr. p. 36-37.)  A delinquent credit card debt owed to a creditor in the amount of $9,000
became outstanding. (Tr. p. 38.)  A delinquent home mortgage in the amount of $3,600
became outstanding.  (Tr. p. 38.)  A delinquent second on a mortgage loan in the
amount of $694.00 became outstanding.  Each of the debts, except one of the mortgage
loans have been included in a debt consolidation plan.  (Applicant’s Exhibits A and D.)
Applicant testified that his loan modification was approved on his personal residence
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and he included the delinquent debt in the new loan.  He has remained current with his
home mortgage.  Applicant submitted documentation showing that he has paid off other
delinquent debts not alleged in the SOR.  (Applicant’s Exhibit E.) 
Applicant testified that he spoke to an attorney about filing for Bankruptcy but
decided against it.  Unable to get cooperation from his creditors with payment
negotiations on his own, on August 30, 2012, he hired a debt consolidation company to
assist him in resolving his debts.  (Applicant’s Exhibits A and D.)  Since August 2012, he
has been paying into an escrow account in the amount of $125.00 a week for the
purpose of disbursing funds toward resolving his debts.  At the time of the hearing he
had paid about $500.00.  (Tr. p. 48.)  He believes that the company is making payment
arrangements with his creditors, and they estimate that it will take the Applicant five
years to resolve his debts.
Applicant’s Post-Hearing Exhibit is a letter of participation from the debt
consolidation company that shows each of Applicant’s creditors, (that includes some
not alleged in the SOR), the estimated balance owed on the account, and the account
number.  It appears that Applicant has paid off three of his delinquent debts so far.
        
A letter from Applicant’s manager indicates that in his opinion, Applicant has
been a positive example of what a Technician should aspire to become at all levels.  He
takes pride in his work, accomplishes tasks with great success, has good attendance,
and never complains about his job assignments.  He is considered a mentor and role
model and a true asset to the organization.  (Applicant’s Exhibit B.)
Other letters of recommendation from his lead at work, and family friends attest
to Applicant’s great character and integrity.  He is considered to be honest and
trustworthy, respectful, compassionate, and a good worker.  He is recommended for a
security clearance.  (Applicant’s Exhibit C.)
Applicant’s personal financial statement indicates that he and his wife bring home
between $6,000 and $7,000 monthly.  Incorporating the debt consolidation plan, at the
end of the month, they are able to pay their debts and even save some money.  He
further testified that he would never do anything to jeopardize our national security or
the lives and safety of our service member.  (Tr. p. 54.) 
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:
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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:
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;
20.(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 
20.(d) the individual initiated a good-faith effort to repay overdue creditors or
otherwise resolve debts.
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;
f.  The presence or absence of rehabilitation and other permanent behavioral
changes;
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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
udge 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
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.”
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, 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.
In this case the Government has met its initial burden of proving that Applicant
has been financially irresponsible (Guideline F).  This evidence indicates possible poor
judgment, unreliability and untrustworthiness on the part of Applicant.  Because of the
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scope and nature of Applicant's conduct, I conclude there is a nexus or connection with
his security clearance eligibility.
The evidence shows that Applicant became financially indebted in 2011 for
several reasons.  After several deaths in his family, related expenses, and his wife
taking time off from work, his bills began to snowball.  In addition, he candidly admitted
that he and his wife were, for about a year, living beyond their means.  For the past
year, he has been working hard to resolve his indebtedness.  He hired a debt
management company, and set up an escrow account that he is contributing to on a
weekly basis in order to have sufficient funds available to pay his delinquent debts.  One
by one, the debt consolidation plan is attacking the bills and resolving them.
Regardless of whether he receives a security clearance, Applicant testified that he plans
to continue following the plan which will take five years in order to become debt free.
He is now living on and following a strict financial budget.
      
He understands that he must remain fiscally responsible at all times if he is to
hold a security clearance.  He has made a good-faith effort to resolve his past-due
indebtedness.  He has not incurred any new debt and is living within a budget.  He has
clearly demonstrated that he can properly handle his financial affairs.  There is clear
evidence of financial rehabilitation and he must continue to follow through with his plan
and resolve his debts.  Considering all of the evidence, Applicant has 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.  However, Mitigating Conditions 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; 20.(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 20.(d) the
individual initiated a good-faith effort to repay overdue creditors or otherwise resolve
debts also apply.  Accordingly, I find for Applicant under Guideline F (Financial
Considerations).    
I have also considered the “whole-person concept” in evaluating 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 good judgement, trustworthiness,
reliability, candor, and a willingness to comply with rules and regulations, and/or other
characteristics indicating that the person may properly safeguard classified information.
  I have considered all of the evidence presented, including Applicant’s favorable
letters of recommendation and his favorable work history.  They mitigate the negative
effects of his financial indebtedness and the effects that it can have on his ability to
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safeguard classified information.  On balance, it is concluded that Applicant has
overcome the Government's case opposing his request for a security clearance.
Accordingly, the evidence supports a finding for Applicant as to the factual and
conclusionary allegations expressed in Paragraph 1 of the SOR.   
     FORMAL FINDINGS
Formal findings For or Against Applicant on the allegations in the SOR, as
required by Paragraph 25 of Enclosure 3 of the Directive are:
Paragraph 1: For Applicant.
        Subpara.  1.a.: For Applicant.
    Subpara.  1.b.: For Applicant.
      Subpara.  1.c.: For Applicant.
    Subpara.  1.d.: For Applicant.
     Subpara.  1.e.: For Applicant.
  DECISION
In light of all the circumstances presented by the record in this case, it is clearly
consistent with the national interest to grant or continue a security clearance for
Applicant. Eligibility for access to classified information is granted.
  Darlene Lokey Anderson
Administrative Judge