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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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---------------------- )       ISCR Case No. 12-09681
)
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Applicant for Security Clearance )
Appearances
For Government: Jeff Nagel, Esquire, Department Counsel 
For Applicant: Pro se
June 25, 2013
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Decision
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MOGUL, Martin H., Administrative Judge:
On October 15, 2012, the Department of Defense (DoD) issued a Statement of
Reasons (SOR) detailing the security concerns under Guideline F for Applicant. 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. 
 
On November 7, 2012, Applicant replied to the SOR (RSOR) in writing, and she
requested a hearing before an Administrative Judge (AJ). The case was assigned to
this AJ on March 25, 2013. DOHA issued a notice of hearing on April 3, 2013, and the
hearing was convened as scheduled on May 6, 2013. The Government offered Exhibits
1 through 5, which were received without objection. Applicant testified on her own
behalf and submitted Exhibits A through E, which were also admitted without objection.
Applicant’s husband also testified on her behalf. The record was kept open until May 20,
2013, to allow Applicant to submit additional evidence. The documents that were timely
received have been identified and entered into evidence without objection as Exhibits F
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through L. DOHA received the transcript of the hearing (Tr) on May 14, 2013. Based
upon a review of the pleadings, exhibits, and the testimony of Applicant and her
husband, eligibility for access to classified information is granted.
Findings of Fact
After a complete and thorough review of the evidence in the record, including
Applicant's RSOR, the admitted documents, and the testimony of Applicant and her
husband, and upon due consideration of that evidence, I make the following findings of
fact: 
Applicant is 52 years old. She is married, and she has a son and two daughters.
She earned an Associate of Science Degree in Electronics in 2012. Applicant has been
employed by a defense contractor for 11 years, and she seeks a DoD security
clearance in connection with her employment in the defense sector.
Guideline F, Financial Considerations
The SOR lists eight allegations (1.a. through h.) regarding financial difficulties,
under Adjudicative Guideline F. The allegations will be discussed below in the same
order as they were listed on the SOR:
1.a. This overdue debt is cited in the SOR in the amount of $4,852. Applicant
denied this allegation in her RSOR. At the hearing, Applicant testified that this is not her
debt. She first learned of the debt when a creditor sought to garnish her wages for a
judgement against her for this debt. (Tr at 32-38.) Exhibit 2 includes two letters sent
from Applicant  to the attorney for this creditor in which she informs the attorney that the
address listed is not her address and this is not her debt. 
Among the post-hearing documents submitted by Applicant were two letters that
Applicant wrote to the credit reporting agencies, informing them that this was not her
debt. (Exhibit F.) Also Applicant included an Ex Parte Application to Set Aside
Judgement and Dismiss Case filed by the attorney for the creditor for this debt because
the judgment was filed against the wrong party, and an Order Setting Aside the
Judgement and Dismissing the Case against Applicant, signed by the judge on January
29, 2013. (Exhibit H.) I find that this erroneous debt has been resolved through
Applicant’s efforts.
1.b. This overdue debt is cited in the SOR in the amount of $1,790. Applicant
admitted this allegation in her RSOR. Applicant testified that this debt is unpaid, but she
has contacted the creditor and has agreed to a payment plan. (Tr at 52-53.) Exhibit L
includes information from Applicant that she has made an arrangement for a monthly
payment to this creditor. I find that this debt has not been resolved, but Applicant has
begun the process of paying this debt.
1.c. This overdue debt is cited in the SOR in the amount of $207,000. Applicant
denied this allegation in her RSOR. Applicant testified that this debt was for the first
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mortgage of her primary residence. Because she returned to school full-time and her
work hours were reduced, she fell behind in paying her mortgage. She attempted to
work with the bank in an attempt to modify her loan, including withdrawing $17,000 from
her 401K and paying it to the bank and continually completing all of the forms sent to
her by the bank. But despite her best efforts, the bank foreclosed and auctioned off her
home. She contacted her Congressman requesting help, and she received a letter back
from him indicating he would look into the matter, but her home was not returned. (Tr at
42-50.) (Exhibit A.) 
It is Applicant’s contention that State Bill (CB) 1178 Section 580b, referred to as
the anti-deficiency statute, and referred to by Applicant in her RSOR and during her
testimony, would limit the creditor’s right to only pursue the value of the property in the
foreclosure sale. I find that based on this statute, this debt is no longer owing by
Applicant.
1.d. This overdue debt is cited in the SOR in the amount of $8,881. Applicant
denied this allegation in her RSOR.  Applicant testified that this debt is for a second
mortgage for the same home as 1.c., above. It is Applicant’s contention that this debt is
not owed for the same reason as that cited in 1.c., and I concur. Based on the statute
and the testimony of Applicant and her husband, I find that this debt is no longer owing
by Applicant.
1.e. This overdue debt is cited in the SOR in the amount of $2,216. Applicant
admitted this allegation in her RSOR. Applicant testified that this debt has been paid. (Tr
at 51-52.) Exhibit C establishes that Applicant has paid off this debt. I find that this debt
has been resolved.
1.f. This overdue debt is cited in the SOR in the amount of $566. Applicant
admitted this allegation in her RSOR. Applicant testified that this debt has been paid. (Tr
at 53-54.) Exhibit B establishes that Applicant has paid off this debt. I find that this debt
has been resolved.
1.g. This overdue debt is cited in the SOR in the amount of $1,588. Applicant
admitted this allegation in her RSOR. She testified that she determined, based on a
conversation with the creditor, that this debt is the same as 1.b., above. (Tr at 54-55.)   I
find that this debt is being resolved, but it is still owed. 
1.h. This overdue debt is cited in the SOR in the amount of $1,073. Applicant
admitted this allegation in her RSOR. She testified that she has not been able to contact
this creditor. She attempted to ascertain if this company had a phone number, but she
was informed from the information operator that there is no listing anywhere in the
country for this company. (Tr at 55-56.) I find that Applicant has made a good-faith effort
to contact this creditor, but she has been unable to do so. 
As reviewed above, Applicant testified that her financial problems occurred
because she returned to school full-time and her work hours were reduced. She also
had some unanticipated costs for her son. Finally, she sends money to her mother in
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the United States and to her family in the Philippines when they need assistance, which
has also contributed to their financial problems. (Tr at 42, 61-62.)  
Applicant testified that she has two additional debts for student loans, for one she
pays $215 a month and the other she pays $249 a month. She is current for both of
these debts. (Tr at 56-58.) Applicant also testified that she has been renting her current
place of living for 18 months, and she has never been behind on her rent. She and her
husband own their vehicles outright so there are no payments required, and she pays
insurance costs in a timely manner. Applicant also indicated that she took a financial
course at her church, consisting of four classes, and that she and her husband now
budget their money. She averred that they are now quite frugal in that they rarely eat
out of the home or go to the movies. (Tr at 64-74.)
Mitigation
Applicant’s husband testified on Applicant’s behalf. He is 47 years of age, and he
and Applicant have been married since 1990. Applicant confirmed that neither of them
was aware of the debt listed as 1.a., until Applicant was contacted at her employment
that they were going to garnish her wages. He confirmed that they had never signed a
document to indicate that they had received the initial summons and complaint. He also
confirmed that he spoke with the creditor and SOR allegation1.b. and 1.g. are for the
the same debt. 
Additionally, Applicant’s husband confirmed that he and Applicant had sent five
different completed packets of forms requested by the bank, and his wife withdrew
$17,000 from her company’s 401k and send it to the bank, all in an attempt to keep their
home. Despite their best efforts and the promises of bank representatives, the home
was ultimately foreclosed by the bank. Finally, he testified that they had been informed
from real estate attorneys that SB 1178 would cover both their first and second
mortgages, so they would not owe anything for their home after it was sold in
foreclosure. He also reiterated that they had never been contacted by the bank after
their home foreclosure to indicate that they still owed any money. (Tr at 77-88.) 
As reviewed above, Applicant submitted a number of post-hearing documents
that have been entered into evidence. Exhibit I included eight very positive character
letters submitted on behalf of Applicant. She was described as “trustworthy and faithful
in her duties,” “an upright citizen,” and “a woman of great integrity.”
Finally, Applicant noted that she graduated from college in 2012, and she had
perfect attendance for two years. (Tr at 75-76.) Exhibit J includes Applicant’s diploma,
signifying that she earned an Associate of Science Degree on March 11, 2012, and a
special award that she received for “Perfect Attendance.”
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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 and mitigating conditions, which are useful 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 over-arching
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.
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.
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 applicant or proven by Department Counsel. . . .” The
Applicant has the ultimate burden of persuasion as to obtaining a favorable security
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. 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.
 
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.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites
for access to classified or sensitive information). 
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Analysis
Guideline F, Financial Considerations
The security concern relating to the guideline 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 and
could potentially apply in this case.  Under AG ¶ 19 (a), “an inability or unwillingness to
satisfy debts” is potentially disqualifying. Similarly under AG ¶ 19 (c), “a history of not
meeting financial obligations” may raise security concerns. I find that both of these
disqualifying conditions apply to Applicant in this case. The evidence has established
that Applicant has accumulated significant delinquent debt. 
AG ¶ 20 provides conditions that could mitigate security concerns from financial
difficulties: Under AG ¶  20 (b), it may be mitigating 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.” As noted
above, Applicant testified that her financial problems resulted as a result of her hours
being cut at work and her helping her mother and other family members with their
finances.   
Applicant has been responsible in her attempt to resolve her debts. Her efforts to
save her home, by completing five different packets of forms requested by the bank and
then taking the step to withdraw $17,000 from her 401k to pay the bank, have been
exemplary and based on the evidence it appears that the failure of the bank to deal
fairly with Applicant and her husband is the reason that the home was foreclosed. The
first debt listed in the SOR, 1.a., was clearly not Applicant’s debt, and based on her
efforts, the judgement for that debt has been set aside. Two of the other debts on the
SOR, 1.e. and 1.f., have been paid, and Applicant has a payment plan to resolve 1.b,
which is a duplicate of 1.g. Finally, Applicant has been unable to contact the creditors
for 1.h., despite her best efforts. Therefore, I find that this mitigating condition is a factor
for consideration in this case. 
AG ¶  20(c) is also applicable since I find that Applicant “has received counseling
for the problem and there are clear indications that the problem is being resolved.”
Finally, AG ¶ 20(d) applies since I find that Applicant has “initiated a good-faith effort” to
“resolve debts,” as reviewed above. I find that these three mitigating conditions are all
factors for consideration in this case.
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Based on Applicant’s current financial situation, I conclude that Applicant has
mitigated the financial concerns of the Government.
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 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
the facts and circumstances surrounding this case. Based on all of the reasons cited
above as to why the mitigating conditions apply, I find that the record evidence leaves
me with no significant questions or doubts as to Applicant’s eligibility and suitability for a
security clearance under the whole-person concept. For all these reasons, I conclude
Applicant has mitigated the security concerns under the whole-person concept. 
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. -1h.: 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 grant Applicant eligibility for a security
clearance.  Eligibility for access to classified information is granted.
                                              
Martin H. Mogul
Administrative Judge