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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 11-10892
)
)
Applicant for Security Clearance )
Appearances
For Government: Melvin A. Howry, Esquire, Department Counsel
For Applicant: Pro se
August 8, 2013
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Decision
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CEFOLA, Richard A., Administrative Judge:
Applicant submitted his Electronic Questionnaires for Investigations Processing
(e-QIP) on May 10, 2011.  On November 27, 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 after September 1, 2006. 
Applicant acknowledged receipt of the SOR on December 11, 2012.  He
answered the SOR in writing on December 20, 2012, and requested a hearing before
an Administrative Judge.  DOHA received the request on December 28, 2012, and I
received the case assignment on February 19, 2013.  DOHA issued a notice of hearing
on March 19, 2013, and I convened the hearing as scheduled on April 3, 2013.  The
Government offered Exhibits (GXs) 1 through 7, which were received without objection.
Applicant testified on his own behalf and submitted Exhibits (AppXs) A and B, which
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were received without objection.  DOHA received the transcript of the hearing (TR) on
April 11, 2013.  I granted Applicant’s requests, one made at his hearing and the other
after his hearing, to keep the record open until June 3, 2013, to submit additional
matters.  On April 24, 2013, he submitted Exhibits C and D, and on May 3, 2013, he
submitted Exhibit E, which were received without objection. The record closed on June
3, 2013.  Based upon a review of the pleadings, exhibits, and testimony, eligibility for
access to classified information is granted.
Findings of Fact
In his Answer to the SOR, Applicant admitted all the factual allegations of the
SOR, with explanations.
Guideline F - Financial Considerations
Applicant was a real estate appraiser.  (TR at page 40 line 4 to page 41 line 7,
see also at page 24 line 8 to page 33 line 14.)  In 2007, he had a dispute with a major
bank over its lending practices; and as a result, his referrals were cut by 90%.  (Id.)
This loss of income was further exacerbated by the collapse of the real estate market in
2008.  (TR at page 40 line 4 to page 41 line 7.)  To address his financial difficulties,
Applicant hired counsel and filed a Chapter 7 Bankruptcy petition on April 22, 2013.
(AppXs D and E.)
1.a.  Applicant admits that he is indebted to creditor A on a medical debt in the
amount of about $633.  (TR at page 33 line 18 to page 43 line 2.)  This debt is included
in Applicant’s bankruptcy petition.  (AppX E at page 12.)
1.b.  Applicant admits that he is indebted to creditor B on another medical debt in
the amount of about $125.  (TR at page 33 line 18 to page 43 line 2.)  This debt is
included in Applicant’s bankruptcy petition.  (AppX E at page 14.)
1.c.  Applicant admits that he is indebted to creditor C on a third medical debt in
the amount of about $760.  (TR at page 33 line 18 to page 43 line 2.)  This debt is
included in Applicant’s bankruptcy petition.  (AppX E at page 13.)
1.d.  Applicant admits that he is indebted to creditor D on a credit card debt in the
amount of about $2,400.  (TR at page 33 line 18 to page 43 line 2.)  This debt is
included in Applicant’s bankruptcy petition.  (AppX E at page 12.)
1.e. and 1.k.  These are the same debt.  Applicant admits that he is indebted to
creditor E on another credit card debt in the amount of about $11,834.  (TR at page 33
line 18 to page 43 line 2.)  This debt is included in Applicant’s bankruptcy petition.
(AppX E at page 12.)
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1.f. and 1.g.  Applicant admits that he is indebted to creditor F on two accounts
totaling about $1,126.  (TR at page 33 line 18 to page 43 line 2.)  These debts are
included in Applicant’s bankruptcy petition.  (AppX E at pages 20 and 21.)
1.h. and 1.i.  Applicant admits that he is indebted to creditor H on two accounts
totaling about $960.  (TR at page 33 line 18 to page 43 line 2.)  These debts are
included in Applicant’s bankruptcy petition.  (AppX E at page 18.)
1.j.  Applicant admits that he is indebted to creditor J on a cell phone debt in the
amount of about $279.  (TR at page 33 line 18 to page 43 line 2.)  This debt is included
in Applicant’s bankruptcy petition.  (AppX E at page 21.)
1.k.  This debt has already been discussed, above.
1.l.~1.p.  Applicant is indebted to the Internal Revenue Service (IRS) in an
amount totaling about $22,000.  Pursuant to an agreement with the IRS, he is making
monthly payments of $50 towards this tax debt which will be increased to $325 in
October 2013.  (TR at page 34 line 3 to page 35 line 7, and AppX C at pages 3~5.)
1.q.  Applicant admits that he is indebted to creditor Q on a store debt in the
amount of about $421.  (TR at page 33 line 18 to page 43 line 2.)  This debt is included
in Applicant’s bankruptcy petition.  (AppX E at page 17.)
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
Paragraph 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.
Paragraph 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.
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Under Directive Paragraph E3.1.14, the Government must present evidence to
establish controverted facts alleged in the SOR.  Under Directive Paragraph 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).
Analysis
Guideline F - Financial Considerations
The security concern relating to the guideline for Financial Considerations is set
out in Paragraph 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.  Under
Subparagraph 19(a), an “inability or unwillingness to satisfy debts@ is potentially
disqualifying.  Similarly under Subparagraph 19(c), “a history of not meeting financial
obligations@ may raise security concerns.  Applicant has had difficulty meeting his
financial obligations since 2007.  However, I find two countervailing Mitigating
Conditions that are applicable here.  Under Subparagraph 20 (b), where “the conditions
that resulted in the financial problem were largely beyond the person’s control (e.g. loss
of employment, a business downturn, . . . ), and the individual acted responsibly under
the circumstances,” may be mitigating.  Applicant was forced to file for the protection of
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a Chapter 7 Bankruptcy due to his significant loss of income since 2007.  Under
Subparagraph 20 (d), it may also be mitigating where “the individual initiated a good-
faith effort to repay overdue creditors or otherwise resolve debts.”  Applicant has
addressed all of his debts through his April 2013 bankruptcy filing, and through his
payment agreement with the IRS.
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 Applicant’s
conduct and all the circumstances.  Under Paragraph 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.
The administrative judge should also consider the nine adjudicative process
factors listed at AG Paragraph 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.
I considered all of the evidence, including the potentially disqualifying and
mitigating conditions surrounding this case.  Those who know Applicant in the
community and in the workplace speak most highly of him, as evidenced by the
testimony of his former employer, of a coworker, and of a neighbor.  (TR at page 43 line
10 to page 59 line 21.)  The record evidence leaves me without questions and doubts
as to Applicant’s eligibility and suitability for a security clearance.  For this reason, I
conclude Applicant has 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 section 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
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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
Subparagraph 1.i. For Applicant
Subparagraph 1.j. For Applicant
Subparagraph 1.k. For Applicant
Subparagraph 1.l. For Applicant
Subparagraph 1.m. For Applicant
Subparagraph 1.n. For Applicant
Subparagraph 1.o. For Applicant
Subparagraph 1.p. For Applicant
Subparagraph 1.q. 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.
Richard A. Cefola
Administrative Judge