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                        DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
        )
 )
)       ISCR Case No. 11-13065
Applicant for Security Clearance  )
Appearances
For Government: Christopher Morin, Esq., Department Counsel
For Applicant: Pro se
                                                                            
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Decision
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LYNCH, Noreen, A., Administrative Judge:
On January 17, 2013, the Department of Defense (DoD) issued Applicant a
Statement of Reasons (SOR) alleging security concerns arising under Guideline F
(Financial Considerations). The action was taken under Executive Order 10865,
Safeguarding Classified Information within Industry (February 20, 1960), as amended;
DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review
Program (January 2, 1992), as amended (Directive); and the Adjudicative Guidelines
(AG) implemented in September 2006. 
Applicant timely answered the SOR and requested a hearing before an
administrative judge. The case was assigned to me on March 28, 2013. A notice of
hearing was issued on April 5, 2013, scheduling the hearing for May 9, 2013.
Government Exhibits (GX) 1-5 were admitted into evidence, without objection. Applicant
testified, and submitted Applicant Exhibits (AX) A-I, which were admitted without
objection. I kept the record open until June 10, 2013, for Applicant to submit additional
documentation. He timely submitted a packet marked as AX J which  was entered into
the record without objection. The transcript (Tr.) was received on May 21, 2013. Based
Applicant’s wife moved to Europe with her daughter at one point and wanted Applicant to pay for travel      1
expenses. 
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on a review of the pleadings, testimony, and exhibits, eligibility for access to classified
information is granted.
Findings of Fact
In his answer to the SOR, Applicant admitted the factual allegations under
Guideline F (Financial Considerations), with explanations. 
Applicant is a 45-year-old engineer employed by a defense contractor. He
graduated from high school and received his undergraduate degree in 2000. Applicant
served honorably in the U.S. Army from 1992 until 1999. His marriage ended in divorce
in 1996 (AX A) He has one grown child from his marriage. Applicant has held a security
clearance since 1989. (Tr. 59) He has been with his current employer since 2000.
Applicant was awarded custody of his daughter when his marriage ended. (AX B)
His ex-wife was ordered to pay child support, but she did not comply with the order. In
1998, his ex-wife kidnapped Applicant’s daughter and took her to another state. (AX F)  
In 2004, Applicant transferred to a different state with his same employer, and he
purchased a home. In 2004-2005, Applicant accrued large debts and legal fees
($19,000) as a result of a custody law suit filed by his exwife. (AX C) The suit was
eventually dismissed. (AX D) However, Applicant was saddled with a great amount of
debt, including attorney fees and travel expenses for his daughter to visit her mother.1
Before this time, he had not had any financial difficulties. As a single parent, he
provided for his daughter and was paying her college tuition. By 2007, he was
experiencing difficulty with paying his mortgage and other bills.
In 2007, he was offered a position with the same company in a less expensive
geographic area, and Applicant decided to move. His house did not sell despite
lowering the price and using a realtor for advice. The real estate market decline
affected sales of homes, and Applicant’s home went to foreclosure in 2009. 
In 2008, Applicant began earning a steady income. He was financially stable and
saving money. In 2009, he was in a position to pay his delinquent debts. His security
clearance investigation began at this juncture. During his subject interview, he
discussed his delinquent debts. He believed that he would be contacted again after the
interview to discuss how he would remedy the financial issues that were causing a
security concern. He thought about filing for bankruptcy but was advised that would not
be a good way to resolve his debts, given the fact that he holds a security clearance.
(Tr. 48)
The SOR alleges six delinquent  debts for collection accounts, medical accounts,
and a mortgage loan that went to foreclosure. The approximate amount of delinquent
Applicant had mortgage insurance and believes that any deficiency has been resolved.       2
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debt is approximately $24,000. The balance on the mortgage account that foreclosed is
allegedly $219,062. 
Applicant researched his credit and obtained credit reports. He could not
determine who held the $240 medical account alleged in SOR 1.a. He is willing and
able to pay the bill, but the credit bureau did not provide any help in locating the
account. (Tr. 40) He found the account holder for the medical bill and paid the amount
in full in May 2013. (AX J)
The account for $4,921, which is a charged-off credit account is in repayment
status. (SOR 1.b) Applicant was paying the account, but he received a settlement offer
with a reduced amount ($904), and he has paid the account in full. (AX I)
Applicant has a $6,606 collection account (SOR 1.c). When he contacted the
account holder to pay the debt, he learned that the account was sold to another entity.
However, the company is no longer in business. He attempted to pay the original
account holder, but they refused to accept payment. (Tr. 42) Applicant submitted
information post-hearing that confirms that the account was sold, but reflects a zero
balance. (AX J) 
Applicant obtained a second job in July 2012 to help pay his delinquent debts.
He submitted documentation that his second mortgage of $30,000 is resolved as he
provided a 1099-C. (AX E) However, the first mortgage of $219,000 (SOR 1.d) is still in
an unknown status. (Tr. 34) Applicant contacted the mortgage company but has not
received information. In 2009, the house was sold after the foreclosure, but Applicant
has not been able to determine the status, but plans to contact them in writing for an
update.  (Tr.39) Applicant contacted the mortgage loan account holder and received a
letter from them stating that the balance is zero. (AX J) He also contacted the registrar
in the county where the property was located to show the state of the deed. He still has
not received a response from the registrar’s office. 2
Applicant submitted documentation that he has paid $859 on the account that
was 120 days late. (SOR 1.e) (AX J)
Applicant also researched the collection account for $9,238 (SOR 1.f). He tried
to pay the account but the company is no longer in business. He provided
documentation to substantiate his claim. (AX I)
Applicant submitted documentation before the hearing that other accounts not
listed on the SOR were paid. (GX 2) Applicant also explained that he does not use
credit cards. He pays cash for items. 
Applicant’s net monthly income is approximately $4,476. His net monthly
remainder is about $600. Applicant maintains a separate checking account. He
contributes to a 401(k), which is about $30,000. He uses a budget and saves. Applicant
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has incurred no new debts since 2008. His car note is paid. Applicant’s fiancee lives
with him. They share household expenses. He has not received financial counseling.
Applicant was candid in his explanation that he did not contact some of his
creditors earlier due to ignorance and depression. As a single parent, he provided for
his daughter, established a new household and paid tuition for his daughter. He was
candid when he stated that he should have been more proactive with the creditors in
previous years. He disclosed his financial difficulties when he completed his security
clearance application. He is remedying his financial difficulties. He has paid the majority
of the delinquent accounts and stands ready to rectify any deficiency that there might
exist with the mortgage account holder. 
Applicant submitted three letters of recommendation from associates in his
company. Each letter describes Applicant as a person of honor and character.
Applicant is committed to his work and demonstrates great compassion and
temperance in all matters.  Applicant is described as diligent and professional. He has
been attentive in his duty to protect classified information. He is a mentor to young
engineers in the company. Applicant is a stable family man with commitment to
community and to country. (AX H)
Policies
When evaluating an applicant’s suitability for a security clearance, an
administrative judge must consider the adjudicative guidelines (AG). In addition to brief
introductory explanations for each guideline, the adjudicative guidelines list potentially
disqualifying conditions and mitigating conditions. These guidelines are not inflexible
rules of law. Instead, recognizing the complexities of human behavior, they are applied
in conjunction with the factors listed in the adjudicative process. An administrative
judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision.
Under AG ¶ 2(c), this process is a conscientious scrutiny of a number of variables
known as the “whole-person concept.” An 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 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.
The Government must present evidence to establish controverted facts alleged
in the SOR. An applicant is responsible for presenting “witnesses and other evidence to
rebut, explain, extenuate, or mitigate facts admitted by applicant or proven by
 See also ISCR Case No. 94-1075 at 3-4 (App. Bd. Aug. 10, 1995).      3
 Department of the Navy v. Egan, 484 U.S. 518, 531 (1988).      4
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      5
 See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive      6
information), and EO 10865 § 7.
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      7
 Id.      8
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Department Counsel. . . .”  The burden of proof is something less than a3
preponderance of evidence.  The ultimate burden of persuasion is on the applicant.  4 5
A person seeking access to classified information enters into a fiduciary
relationship with the Government based on 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 classified information. Such
decisions entail a certain degree of legally permissible extrapolation of potential, rather
than actual, risk of compromise of classified information.
 
Section 7 of Executive Order 10865 provides that decisions shall be “in terms of
the national interest and shall in no sense be a determination as to the loyalty of the
applicant concerned.”  “The clearly consistent standard indicates that security clearance6
determinations should err, if they must, on the side of denials.”  Any reasonable doubt7
about whether an applicant should be allowed access to sensitive information must be
resolved in favor of protecting such information.  The decision to deny an individual a8
security clearance does not necessarily reflect badly on an applicant’s character. It is
merely an indication that the applicant has not met the strict guidelines the President
and the Secretary of Defense established for issuing a clearance.
Analysis
Guideline F, Financial Considerations
AG ¶ 18 expresses the security concern pertaining to financial considerations:
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 over-
extended is at risk of having to engage in illegal acts to generate funds.
Compulsive gambling is a concern as it may lead to financial crimes
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including espionage. Affluence that cannot be explained by known
sources of income is also a security concern. It may indicate proceeds
from financially profitable criminal acts.
AG ¶ 19 describes conditions that could raise a security concern and may be
relevant:
(a) inability or unwillingness to satisfy debts;
(b) indebtedness caused by frivolous or irresponsible spending and the
absence of any evidence of willingness or intent to pay the debt or
establish a realistic plan to pay the debt;
(c) a history of not meeting financial obligations;
(d) deceptive or illegal financial practices such as embezzlement,
employee theft, check fraud, income tax evasion, expense account fraud,
filing deceptive loan statements, and other intentional financial breaches
of trust;
(e) consistent spending beyond one's means, which may be indicated by
excessive indebtedness, significant negative cash flow, high debt-to-
income ratio, and/or other financial analysis;
(f) financial problems that are linked to drug abuse, alcoholism, gambling
problems, or other issues of security concern;
(g) failure to file annual Federal, state, or local income tax returns as
required or the fraudulent filing of the same;
(h) unexplained affluence, as shown by a lifestyle or standard of living,
increase in net worth, or money transfers that cannot be explained by
subject's known legal sources of income; and
(i) compulsive or addictive gambling as indicated by an unsuccessful
attempt to stop gambling, "chasing losses" (i.e. increasing the bets or
returning another day in an effort to get even), concealment of gambling
losses, borrowing money to fund gambling or pay gambling debts, family
conflict or other problems caused by gambling.
Applicant admits that he has delinquent debts and that his home went to
foreclosure in 2009. Consequently, the evidence is sufficient to raise disqualifying
condition ¶ 19(a) and 19(c). 
AG ¶ 20 provides conditions that could mitigate security concerns. The following
are potentially relevant:
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(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;
(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; and
(f) the affluence resulted from a legal source of income.
Applicant had no financial difficulties before the divorce and custody battle that
began in 2005.  He incurred large legal bills to defend against a lawsuit for custody of
his daughter. He provided for his daughter without any child support from his exwife. He
was not successful in selling his home due to economic conditions. He believes that
there is no deficiency to pay on the first mortgage. If there is, he is able to resolve the
deficiency. When he was able, he paid his delinquent debts. His current financial status
is stable. He has a savings account and a retirement account. Applicant paid various
small accounts before the hearing. He has not acquired any new delinquent debt since
2008. He has not received financial counseling.   AG ¶¶ 20 (a), (b), (d) and (e) 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 an applicant’s
conduct and all the 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
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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. As noted above, the
ultimate burden of persuasion is on the applicant seeking a security clearance. 
I considered the potentially disqualifying and mitigating conditions in light of all
the facts and circumstances surrounding this case as well as the whole-person factors.
Applicant is a 45-year-old employee of defense contractor who has held a security
clearance since 1989. He served honorably in the military. He has been employed by
defense contractors for a number of years. He obtained his undergraduate degree at
night while working. As a single parent, he provided financially for his daughter. His
custody battle cost him time and money. He incurred legal fees which he paid but the
legal fees prevented him from paying other bills. He obtained a second job. He moved
to another state to reduce living expenses. He was not successful in selling his home
due to the economic situation. He had mortgage insurance and believes that there is no
deficiency owed. The insurer can potentially sue Applicant for the loss, but he is willing
to resolve the deficiency if that happens.
Applicant was candid at the hearing and credible in his testimony. He had no
financial difficulties until the above described events beyond his control happened in
2004 and 2005.  He admitted that he could have been more proactive initially with the
accounts. He prioritized financial issues. He tried to contact creditors but was unable to
locate some of them. He disclosed his financial situation on his security clearance
application. He believed that OPM would get back to him and tell him what he needed
to do to resolve the security issues under the financial considerations guideline.
Applicant has excellent references from his employer. He has held a security clearance
without incident. 
Applicant met his burden of proof in this case.  Clearance is granted. 
Formal Findings
Formal findings for or against Applicant on the allegations set forth in the SOR,
as required by section E3.1.25 of Enclosure 3 of the Directive, are:
Paragraph 1, Guideline F: FOR  APPLICANT
Subparagraphs 1.a-1.f: For Applicant
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Conclusion
In light of all of the circumstances presented by the record in this case, it is
clearly consistent with the national interest to continue Applicant’s security clearance.
Clearance is granted. 
                                                     
NOREEN A. LYNCH.
Administrative Judge