The Government withdrew the allegations under Guideline B (Foreign Influence) at the start of the hearing.      1
(Tr. 7)
1
                                                             
                           
                        DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
        )
)
)       ISCR Case No. 11-14680
Applicant for Security Clearance  )
Appearances
For Government: Christopher Morin, Esq., Department Counsel
For Applicant: Sheldon I. Cohen, Esq.
                                                                            
______________
Decision
______________
LYNCH, Noreen, A., Administrative Judge:
On April 26, 2013, the Department of Defense (DoD) issued Applicant a
Statement of Reasons (SOR) alleging security concerns arising under Guideline F
(Financial Considerations) and Guideline B (Foreign Influence).  The action was taken1
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 June 21, 2013. A notice of
hearing was issued on June 26, 2013, scheduling the hearing for July 30, 2013.
Government Exhibits (GX) 1-5 were admitted into evidence, without objection. Applicant
testified, presented the testimony of three witnesses, and submitted Applicant Exhibits
2
(AX) A-U, which were admitted without objection. The transcript (Tr.) was received on
August 7, 2013. Based 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 denied the factual allegations under
Guideline F (Financial Considerations), with explanations. 
Applicant is a 40-year-old security guard employed by a defense contractor.
Applicant has held a security clearance since 2003. (Tr. 59) He has been with his
current employer since October 2012, but he has been employed as defense contractor
for more than seven years.
Applicant is a naturalized U.S. citizen who has lived in the United States since
August 25, 1999. He was 26 years old and supported himself with minimum wage jobs,
but his goal was to advance his education. At times he had two jobs and worked more
than 60 hours per week. His first marriage ended in divorce in 2003. He had no children
as a result of the marriage. He completed his undergraduate degree in accounting and
received a master’s degree in 2009. (GX 1) 
Sometime in 2005, Applicant  met a woman and they became engaged. In 2006,
Applicant wanted to purchase a home for them. They were both committed to the
purchase of the house and both would contribute to the mortgage. Applicant obtained
the help of a realtor, and in December 2006, Applicant was approved for the purchase
of a $425,000 home. (GX 2) The bank gave  him two mortgages: the first mortgage was
$340,000 and the second was $85,000. At the time, Applicant earned about $70,000.
The mortgages were in Applicant’s name only. Applicant testified credibly that the
lender specifically told him that after the first year, Applicant could refinance and
combine the loans to obtain the lower interest rate. (Tr. 91) Applicant’s fiancee
contributed to the home expenses, approximately $1,200 each month. Applicant’s
brother moved into the home, and he contributed $1,000 each month. Applicant paid
the $3,600 monthly mortgage payment until approximately late 2007.
A series of unfortunate events occurred beginning in late 2007 that caused
Applicant financial difficulties. Before the purchase of his home, he had no financial
problems and his credit reports confirm that he paid his accounts as agreed. (GX 2 )
In 2007, his fiancee lost her teaching job and decided to return to school.
Applicant helped her with her educational expenses, such as paying for textbooks. She
stopped paying for any household expenses since she was now in school and had no
income from a job. Applicant’s first child was also born in 2007. A second child was
born in 2008. (Tr. 76) Eventually, his fiancee left Applicant and took the children. He
pays child support for the two children. The monthly amount of $836 is automatically
deducted from his pay check. He has never been late with a payment. In addition, he
sends them extra money each month. 
At the hearing, the Government amended SOR 1.a to reflect the discharge in April 2013.      2
3
Applicant was working two jobs to pay the mortgage himself. He was also
providing for his child. Applicant could not maintain the mortgage without the assistance
of his girlfriend and his brother. At that point, on the advice of a realtor, he put the
house on the market for sale. He moved out of the house and rented an apartment.
When Applicant called the bank again for a lower interest rate, he was told that since he
had not been late with his payments, he could not get a lower interest rate. (Tr. 93)
They advised him to stop making payments on the mortgage, but they denied him a
modification or rate reduction. (Tr. 92) He also called other banks about getting another
mortgage loan. He was not successful.
 Applicant decided to sell the house. The realtor found some buyers who were
interested in the house, and received a few contracts. (AX D) They even had someone
for a short sale but did not get the approval of the bank. However, the realtor sent
Applicant an email on July 13, 2008, stating that the bank had sold the house at an
estate sale in April. (AX C)  Applicant credibly testified that he had no idea that this had
occurred. He called the bank and learned of the 2008 foreclosure. Applicant made
many efforts to contact the bank by phone, but there was no answer. The bank no
longer exists.  (Tr. 94)
The SOR alleges a Chapter 7 bankruptcy that was discharged in April 2013, and
six delinquent  debts for collection accounts, medical accounts, and a vehicle loan. The
debts include the two mortgages that were discharged in the bankruptcy. 
Applicant did not know that the second mortgage was listed on his credit report.
He consulted an attorney and was advised to file bankruptcy. He believed that when the
house went to foreclosure in 2008 the second mortgage was no longer an issue. He
learned that when he applied for positions in his professional field of accounting, he
would not get the job because of the credit reports that showed the amount owing on
the second mortgage. (Tr. 98) Upon the advice of his attorney, Applicant filed for
bankruptcy in January 2013.  His delinquent debts were discharged in April 2013. (GX2
5)
Applicant obtained a second job in July 2012 to help pay his delinquent debts.
He had used a credit card in 2006 to help paint the home he bought and to furnish the
home. The amount of delinquent debt on the card was $15,000. (SOR 1.b) The debt
has been discharged.
The cable bill that is listed as a collection account in SOR 1.c for $122 is paid.
The  item SOR 1.d relates to a car repossession. The amount of the delinquent debt is
$22,569. Applicant decided to buy a car in 2012 to rebuild his credit score. He made
payments on the car for one year. Due to his poor credit score, the interest rate was
24%. When he decide to file for bankruptcy, he contacted the lender stating his
intention to keep the vehicle. The lender stated that they did not receive his last
payment despite the fact that Applicant had an automatic payment deduction. At the
4
same time, his father died in Ethiopia. Applicant left the country to bury his father, and
when he returned to the United States the car was repossessed. (Tr. 109)
The medical debt that is listed for $350 has been paid. (SOR 1.g) Applicant’s
attorney provided documentation along with the schedule of bankruptcy that all debts
were discharged “whether listed or not.” 
. 
Applicant’s net monthly income is approximately $4,378. His net monthly
remainder is about $2,374.  He uses a budget and saves approximately $1,000 a
month. Applicant has incurred no new debts. He reduced his expenses and purchased
a used car for cash. He still hold two jobs so that he can provide child support and pay
all his bills. 
Applicant was candid in his explanation that he has worked two jobs during the
past years so that he could maintain his expenses. He did not live beyond his means or
spend money lavishly. He was approved for two mortgages to purchase a home in
2007. He was told, and he believed, that in one year the rates would be lowered and
consolidated into one loan. He had no reason not to trust the bank at that point in time.
He had no idea that his brother or his fiancee would not continue to pay toward the
mortgages. He acted reasonably and paid until he could no longer afford the $3,600
monthly mortgage. He called the bank but was told that since he had not missed any
payments that they would not refinance. He attempted to sell the house. When he had
contracts for a short sale, he could not get approval from the bank. He was credible in
that he did not know that the home had gone to foreclosure in 2008. 
Applicant submitted  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 )
Applicant’s supervisor, who has known him for about seven years, testified that
Applicant is a great employee. He is a helpful, respectful, and knowledgeable person
who is well liked by his peers and other employees in his building. He has never
received a reprimand. (Tr. 23) She considers him one of her best officers among the
almost 60 officers that she supervises. (Tr. 29) She described the strict training that he
completed for the job. Although she was not initially aware of the specific security
concern, when she learned about Applicant’s bankruptcy, her opinion of him did not
change. She noted that many people had been “caught” in a similar bind concerning
homes in this economic climate.
Applicant’s brother testified that Applicant has helped him greatly in the past few
years. He described his brother as a generous man. He explained that he lived with his
brother in the above-mentioned house, but had to leave because his girlfriend became
pregnant and they had to find a larger place for themselves. He confirmed that he paid
 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
5
Applicant $1,000 a month, as rent,  for almost one year toward the mortgage. (Tr. 41)
Applicant’s brother noted that Applicant is very helpful in the Ethiopian community
development program. (Tr.46)
A close friend and federal employee testified that he has known Applicant since
2002. They met while Applicant was attending a community college program.  They
have remained friends. Together they formed the Ethiopian Community Development
Program in 2004.   (AX 2 ) They founded the nonprofit organization to aid Ethiopian
immigrants in the completion of necessary forms, counsel them about job searches,
contribute food to needy persons, and assist in finding housing. (AX T) Applicant was
not paid for his work. He contributed funds to the organization over the years.
Applicant’s friend described him as a kind, responsible, and decent individual. (Tr. 62)
He was aware that Applicant’s home was foreclosed in 2008. 
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
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
 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
6
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
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
disqualifying:
(a) inability or unwillingness to satisfy debts;
7
(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 filed a petition for a Chapter 7 bankruptcy and his nonpriority
unsecured debts were discharged in April 2013. He admits that he had delinquent
debts, his vehicle was repossessed, and that his home went to foreclosure in 2008.
Consequently, the evidence is sufficient to raise disqualifying conditions in ¶ 19(a) and
19(c). 
AG ¶ 20 provides conditions that could mitigate security concerns. The following
are potentially relevant:
(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
8
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 events in 2007. He was
approved to purchase a home in 2006 and his brother and girlfriend contributed to the
mortgage.  When they stopped contributing to the mortgage payment after one year,
Applicant could not maintain the payment. He called the bank and tried to have the
loans refinanced.  He unsuccessfully tried to sell the home. The bank is no longer in
existence. Applicant worked two jobs to pay his bills and to provide for his children. He
has never been late with his child support payments. On the advice of an attorney, he
filed for bankruptcy, and his nonpriority debts were discharged in April 2013. He no
longer has delinquent debt. He has reduced his expenses and lives modestly. He is
saving money. He benefitted from the financial counseling component of the
bankruptcy. When he was able, he paid his delinquent debts. His current financial
status is stable. He has a savings account. He has not acquired any new delinquent
debt.  AG ¶¶ 20 (a), (b), (c) and (d) 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
for the conduct; (8) the potential for pressure, coercion, exploitation, or
duress; and (9) the likelihood of continuation or recurrence. 
9
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 40-year-old employee of defense contractor who has held a security
clearance since 2003. He is a naturalized U.S. citizen who has lived in the United
States since 1999. He has worked hard and has advanced his education by obtaining
undergraduate and graduate degrees in accounting.  He has been employed by
defense contractors for a number of years. He obtained his undergraduate degree at
night while working during the day. Applicant has received many favorable
recommendations. He is active in the community. 
Applicant provides child support for his children. He has never been late on a
child support payment. He was approved for a home purchase in 2006. He wanted to
have a home for his fiancee. When his fiancee and his brother could not help him pay
the mortgage, he could not maintain the mortgage payment. He obtained a second job.
He was not successful in selling his home due to the economic situation. He believed
the bank when they advised him that after one year, he could refinance the two
mortgages. 
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
2007.  He acted reasonably under the circumstances but he was advised to file for
bankruptcy. His delinquent debts were discharged in April 2013. He still works two jobs.
He is resolved to save money.  He disclosed his financial situation on his security
clearance application.  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.g: For Applicant
Paragraph 2, Guideline B: WITHDRAWN
Subparagraphs 2.a-2.b: Withdrawn
10
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