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                               DEPARTMENT OF DEFENSE
                DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 11-13421
)
)
Applicant for Security Clearance )
Appearances
For Government: Jeff Nagel, Esq., Department Counsel
For Applicant: Pro se
May 31, 2013
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Decision
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GOLDSTEIN, Jennifer I., Administrative Judge:
The Statement of Reasons (SOR) identified Applicant as owing 7 delinquent
debts totaling $382,025. Additionally, Applicant discharged approximately $10,000 in
debt through Chapter 7 bankruptcy in March 2003. Applicant has resolved his debts.
Based on a review of the testimony, pleadings, and exhibits, eligibility for access to
classified information is granted.
Statement of the Case 
Applicant submitted an Electronic Questionnaire for Investigations Processing (e-
QIP) on July 14, 2011. On February 5, 2013, the Department of Defense issued an
SOR to Applicant, detailing 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
effective in the Department of Defense on September 1, 2006. 
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Applicant answered the SOR (Answer) on February 25, 2013. The Government
requested a hearing before an administrative judge from the Defense Office of Hearings
and Appeals (DOHA). The case was assigned to me on March 29, 2013. DOHA issued
a notice of hearing on April 3, 2013, scheduling the hearing for May 2, 2013. The
hearing was convened as scheduled. The Government offered Exhibits (GE) 1 through
7, which were admitted without objection. Applicant offered Exhibits (AE) A through H,
which were admitted without objection. Applicant testified on his own behalf. The record
was left open until May 23, 2013, for the receipt of additional documentation. On May
23, 2013, Applicant presented seven additional documents, marked AE I through AE O.
Department Counsel had no objections and they were admitted into evidence as
identified. DOHA received the transcript of the hearing (Tr.) on May 8, 2013.
Findings of Fact
Applicant is a 42-year-old government contractor. He has worked for his current
employer since 2011. Applicant served on active duty in the Navy for 20 years, and
retired as a petty officer first class (E-6) in May 2011. During his military service, he
deployed to both Afghanistan and Iraq. He held a security clearance the entire time he
was on active duty. Applicant possesses an MBA in Logistics. He married his current
wife in 2012. He was previously married to his ex-wife for ten years. They divorced in
May 2011. Applicant has two children with his ex-wife, ages 5 and 11. He also has a
step-son, age 17. (GE 1; Tr. 36-42, 71-73.)
The Government alleged that Applicant is ineligible for a clearance because he
made financial decisions that indicate poor self-control, lack of judgment, or
unwillingness to abide by rules and regulations, all of which raise questions about his
reliability, trustworthiness and ability to protect classified information. The SOR
identified 7 delinquent debts totaling $382,025, and a discharge of previous debt
through Chapter 7 bankruptcy in 2003. Applicant admitted the debts in his Answer as
alleged in SOR ¶¶ 1.a, 1.b, 1.c, 1.d, and 1.h. He denied SOR ¶¶ 1.e, 1.f, and 1.g.
(Answer.) 
Applicant filed Chapter 7 bankruptcy in November 2002. Prior to his marriage,
both Applicant and his ex-wife incurred a large amount of credit card debt. Applicant
was current on all of his accounts at the time of their marriage, but after their marriage,
his ex-wife would pay her accounts, but did not always make Applicant’s payments. As
a result, his accounts became delinquent. Applicant contacted an attorney and was
advised to file bankruptcy. He followed the attorney’s advice and approximately $10,000
worth of debts were discharged through bankruptcy in March 2003.(GE 2; Tr. 60.)
From Approximately 2003 to late 2008, Applicant’s ex-wife satisfied their bills in a
timely manner. However, when their marriage began to deteriorate, she again began
mismanaging their finances. Applicant attributes all of his current delinquent debts to his
ex-wife’s mismanagement of their finances while he was deployed for extended periods.
Applicant gave her power of attorney and she handled their bills during the course of
their marriage. All of their marital debts were assigned to Applicant in the divorce
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proceedings because he was employed and his former spouse was not. Applicant
testified that he has been addressing his debts since the divorce as he had funds
available. (GE 2; AE A; Tr. 34, 42-46.) His SOR listed debts are as follows:
Applicant was indebted on a delinquent account totaling $3,035, as alleged in
SOR ¶ 1.a. This account was opened by Applicant’s ex-wife. Applicant contacted this
creditor concerning this debt. He was told the account was being handled by a law
office. However, when he contacted the law office, it found no outstanding accounts that
matched Applicant’s social security number. Applicant is attempting to resolve this debt
but can’t locate the creditor. (AE I; AE L; Tr. 44-46.)
Applicant was indebted on a delinquent account totaling $2,949, as alleged in
SOR ¶ 1.b. Applicant testified this debt was for a loan his ex-wife procured. Applicant
testified that he began making monthly payments of $109 on this debt. Applicant settled
this account on April 26, 2013, for $1,474. He provided a copy of his bank statement
showing a $1,474 payment to this creditor on April 26, 2013. Applicant has addressed
this debt. (AE F; AE G; AE M; Tr. 47.)
Applicant was indebted on a delinquent account totaling $2,200, as alleged in
SOR ¶ 1.c. Applicant believes this debt is a duplicate of SOR ¶ 1.a. However, the
account numbers on his April 30, 2013 credit report entries for these debts identified in
¶ ¶ 1.a. and 1.c. are not the same. This debt is unresolved. (Tr. 47-48.)
Applicant was indebted on a delinquent mortgage totaling $91,663, as alleged in
SOR ¶ 1.d. Applicant purchased this property in late 2009. Applicant’s ex-wife lived in
the home. Applicant attempted to rent the home out, but due to the decline in the
housing market, the area was unsafe and he could not secure renters. Applicant also
attempted to short sell the home or get a loan modification, but the bank was not willing
to negotiate with Applicant. This home was subsequently foreclosed upon. This debt is
listed as a zero balance on his April 30, 2013 credit report. This debt is resolved. (GE 7;
AE A; AE I; Tr. 49-51.)
Applicant was indebted on a student loan  totaling $9,788, as alleged in SOR ¶
1.e. Applicant’s ex-wife stopped paying his student loan approximately six months
before their divorce. Applicant provided documentation that shows he consolidated his
student loan with another creditor. His April 30, 2013 credit report reflects that his
consolidated student loan is in good standing. This debt is resolved. (GE 7; AE B; AE C;
Tr.51-53.)
Applicant was indebted on a auto loan totaling $390, as alleged in SOR ¶ 1.f.
Applicant testified he paid off the debt in 2011. The creditor sent Applicant the title for
the vehicle once the debt was paid off. He presented a copy of the title showing no liens
on the vehicle, as evidence this debt was paid. This delinquency is satisfied. (AE D; Tr.
53-54.)
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Applicant was indebted on a totaling $272,000, as alleged in SOR ¶ 1.g. This
debt is for a delinquent mortgage. Applicant and his ex-wife purchased this home in
October 2008, so that his ex-wife could like closer to her ailing mother. They mistakenly
believed sat the time that they would be able to rent out their other property. Applicant’s
ex-wife stopped making payments on the mortgage in December 2008. Applicant
testified he attempted to sell this property but was unable to get a short-sale approved.
The bank advised him his only option was foreclosure. He followed that advice.
Applicant’s credit report dated July 28, 2011 reflects that the property was foreclosed
upon. It states, “creditor reclaimed collateral to settle defaulted mortgage” and lists a
zero balance due. This debt is resolved. (GE 2; GE 4; Tr. 54-58, 68.)
Applicant now manages his finances. He rentsan apartment and has no
immediate plans to invest in real estate. He has money left over at the end of the month,
which he is using to pay off his delinquent accounts. He has only one credit card and
that card has a zero balance. He is current on his child support. (Tr 60-66, 71.)
Applicant is well respected by a senior chief that served with him in the Navy.
The senior chief opined that Applicant’s current financial problems are the direct result
of his recent divorce and should not reflect negatively on Applicant’s character and
integrity. Applicant was awarded the Navy and Marine Corps Achievement Medal; a
Navu Unit Commendation; three Meritorious Unit Commendations; the Navy “E” Ribbon;
and five Good Conduct Medals. (AE J; AE N.)
Policies
When evaluating an applicant’s suitability for a security clearance, the
administrative judge must consider the adjudicative guidelines (AG). In addition to brief
introductory explanations for each guideline, the adjudicative guidelines list potentially
disqualifying conditions (DCs) and mitigating conditions (MCs), which are to be used 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 AG ¶ 2 describing the adjudicative process. The administrative judge’s
overarching adjudicative goal is a fair, impartial, and commonsense decision. According
to AG ¶¶ 2(a) and 2(c), the entire process is a conscientious scrutiny of applicable
guidelines in the context 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.
The protection of the national security is the paramount consideration. AG ¶ 2(b)
requires that “[a]ny doubt concerning personnel being considered for access to
classified information will be resolved in favor of the 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. 
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Under Directive ¶ E3.1.14, the Government must present evidence to establish
controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, “[t]he 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.” Section 7
of Executive Order 10865 provides: “[a]ny 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.”
A person applying for access to classified information seeks to enter 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. Decisions include, by necessity, consideration of
the possible risk 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.
Analysis
Guideline F, Financial Considerations
The security concerns under the guideline for financial considerations are set out
in AG ¶ 18, which reads in pertinent part:      
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. 
Department Counsel asserted, and the record evidence established, security
concerns under two Guideline F DCs, as set forth in AG ¶ 19: 
(a) inability or unwillingness to satisfy debts; and
(c) a history of not meeting financial obligations. 
Applicant accumulated a significant amount of delinquent debt that he discharged
through bankruptcy in 2003. He continued to accrue additional delinquent mortgage and
consumer debts after 2007. The evidence supports the application of AG ¶¶ 19(a) and
(c), thereby shifting the burden to Applicant to rebut, extenuate, or mitigate those
concerns. 
1See ISCR Case No. 09-02160 (App. Bd. Jun. 21, 2010). 
2See ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008).
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The guideline includes five conditions in AG ¶ 20 that could mitigate security
concerns arising from Applicant’s financial difficulties:
(a) the 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; 
(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;
(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;
(d) the individual initiated a good-faith effort to repay overdue creditors or
otherwise resolve debts; and
(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.
A security clearance adjudication is not a debt collection procedure. It is a
process designed to evaluate an applicant’s judgment, reliability, and trustworthiness.1
An applicant is not required, as a matter of law, to establish resolution of every debt
alleged in the SOR. An applicant need only establish a plan to resolve the financial
problems and take significant actions to implement the plan. There is no requirement
that an applicant make payments on all delinquent debts simultaneously, nor is there a
requirement that the debts alleged in the SOR be paid first.2 However, Applicant must
demonstrate a meaningful track record with respect to the resolution of his debts. 
In the instant case, Applicant’s financial delinquencies are ongoing, but Applicant
is actively working to resolve those that are still outstanding. Applicant satisfied two
debts as listed in SOR ¶¶ 1.b. and 1.f. He consolidated the debt in ¶ 1.e and is current
on his payments to that creditor. The debts in SOR ¶¶ 1.d and 1.g were satisfied
through foreclosure. He is in the process of researching the debts listed in SOR ¶¶ 1.a
and 1.c. Applicant’s financial difficulties began shortly after Applicant’s marriage to his
ex-wife. They continued for the duration of their marriage, which resulted in divorce.
Applicant’s ex-wife’s mismanagement of their funds is directly to blame for Applicant’s
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financial problems. AG ¶ 20(b) does not apply because Applicant was on notice of his
mismanagement after he was forced to file bankruptcy in 2002. However,  AG ¶ 20(a)
applies because Applicant and his ex-wife are now divorced. He is handling his finances
and addressing his creditors one-by-one, as funds are available. He plans to pay off all
of his debts. Given his circumstances, Applicant is now acting responsibly and can be
expected to continue to work at resolving his remaining delinquencies. Future financial
problems are unlikely to recur and do not cast doubt on his current reliability,
trustworthiness, or good judgment. Further, there are clear indications that Applicant’s
financial problems are now under control and that he has initiated a good-faith effort to
resolve his debts. AG ¶¶ 20(c) and 20(d) apply.
Applicant did not present evidence that he is disputing any of his delinquent
accounts. AG ¶ 20(e) does not apply.
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 relevant circumstances. 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. 
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.   
I considered the potentially disqualifying and mitigating conditions in light of all
pertinent facts and circumstances surrounding this case. Applicant is highly respected
by a senior chief that worked with him. He honorably served in the Navy for over 20
years and was deployed in combat zones. His financial delinquencies were caused by
the mismanagement of their funds by his ex-wife. Applicant is no longer married to her.
He has diligently worked to slowly repay his delinquent obligations, with the exception of
the mortgages, which have been resolved through foreclosures. Applicant has matured,
and now understands the importance of maintaining a watchful eye on all of his
finances. He no longer purchases things which he can not afford. 
As indicated above, an applicant is not required to establish that he has paid
every debt listed in the SOR. All that is required is that an applicant establish a plan to
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resolve the financial problems and take significant actions to implement the plan.
Applicant has responsibly resolved almost all of his financial problems, thereby
demonstrating the significant action required. He has sufficient income to avoid financial
problems in the future. His finances do not constitute a security concern.
Overall, the record evidence leaves me without doubt as to Applicant’s present
eligibility and suitability for a security clearance. For all these reasons, I conclude
Applicant mitigated the security concerns arising from his financial considerations.
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
Subparagraph 1.a: For Applicant
Subparagraph 1.b: For Applicant
Subparagraph 1.c: For Applicant
Subparagraph 1.d: For Applicant
Subparagraph 1.e: For Applicant
Subparagraph 1.f: For Applicant
Subparagraph 1.g: For Applicant
Subparagraph 1.h: For Applicant
Conclusion
In light of all of the circumstances presented by the record in this case, it is
clearly consistent with the national interest to grant Applicant eligibility for a security
clearance. Eligibility for access to classified information is granted.
                                              
JENNIFER I. GOLDSTEIN
Administrative Judge