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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 11-14191
)
)
Applicant for Security Clearance )
Appearances
For Government: Melvin A. Howry, Esquire, Department Counsel
For Applicant: Jason P. Turner, Esquire
September 9, 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 November 18, 2010.  On February 27, 2013, 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 answered the SOR in writing through counsel on March 22, 2013, and
requested a hearing before an Administrative Judge.  DOHA received the request on
March 26, 2013, and I received the case assignment on May 13, 2013.  DOHA issued a
notice of hearing on May 22, 2013, and I convened the hearing as scheduled on June
25, 2013.  The Government offered Exhibits (GXs) 1 through 10, which were received
without objection.  Applicant testified on his own behalf and submitted Exhibits (AppXs)
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A through H, which were received without objection.  DOHA received the transcript of
the hearing (TR) on July 3, 2013.  I granted Applicant’s request to keep the record open
until July 24, 2013, to submit additional matters.  On July 24, 2013, he submitted Exhibit
I, which was received without objection.  As the undersigned was on leave until the end
of July, the record closed on August 1, 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.  He also provided additional information to support his request
for eligibility for a security clearance.
Guideline F - Financial Considerations
Applicant is retired from the Navy.  (TR at page 44 line 13 to page 45 line 22, and
at page 105 lines 2~5.)  He was diagnosed with cancer “in late 2006,” which resulted in
his wife becoming his “sole care giver.”  (TR at page 50 line 9 to page 59 line 19.)  She
handled their financial situation poorly during this medical crisis.  (Id.)  She turned to
gambling, and attempted to cover her gaming loses by failing to withhold any monies
from her paycheck to pay their taxes.  (TR at page 50 line 9 to page 59 line 19, and
AppX B.)  Applicant discovered these deficiencies in 2010; and despite his wife
contracting cancer that year and dying of the disease only a month prior to his hearing,
he has addressed their past-due indebtedness.  (AppX A.)
1.g.  Applicant and his spouse filed for the protection of a Chapter 7 bankruptcy
in September of 2010.  (TR at page 49 lines 8~18, at page 64 line 15 to page 69 line 11,
at page 114 line 14 to page 116 line 16, and at page 117 line 7 to page 118 line 2.)
Because they could not pass the “means test” as their combined income at the time of
the filing was too high, their bankruptcy petition was converted to a Chapter 13 in
January of 2011.  (Id.)  However, due to his spouse’s cancer, which resulted the loss of
her significant income, they could not keep up with their court ordered payments and
the Chapter 13 was dismissed in September of 2011.  (TR at page 49 lines 8~18, at
page 64 line 15 to page 69 line 11, at page 114 line 14 to page 116 line 16, and at page
117 line 7 to page 118 line 2.)
1.f.  Applicant and his spouse again filed for the protection of a Chapter 7
bankruptcy in July of 2012.  (TR at page 70 line 3 to page 71 line 13, and at page 129
lines 11~21.)  Their unsecured debts were discharged in October of 2012.  (Id.)  As of
January of 2013, Applicant has a positive monthly cash flow of about $1,991, and no
past-due indebtedness.  (TR at page 73 at page 9 to page 74 line 16, and GX 7 at page
11.)
1.a.~1.d.  It is alleged that Applicant is indebted to the Internal Revenue Service
(IRS) in the amount of about $19,000.  Applicant set up a payment plan by which he
was making monthly payments of $222 towards a $17,955 deficiency.  (TR at page 75
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line 3 to page 78 line 16, and AppX E.)  This is evidenced by documents from the IRS.
(AppX E.)  However, Applicant has recently received monies from his deceased
spouse’s life insurance, and with said monies he has paid his debt to the IRS.  (AppX I.)
This is evidenced by his banking records.  (AppX I at page 4.)
1.f.  It is alleged that Applicant is indebted to a state taxing authority for about
$7,384.  Applicant set up a payment plan by which he was making monthly payments of
$150 towards this tax deficiency.  (TR at page 129 line 22 to page 130 line 5, and AppX
H.)  This is evidenced by a document from the Applicant’s bank.  (AppX H at page 2.)
Again, Applicant has recently received monies from his deceased spouse’s life
insurance, and with said monies he has paid his debt to the state taxing authority.
(AppX I.)  This is evidenced by his banking records.  (AppX I at page 5.)
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.
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
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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 2010.  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, . . . unexpected medical emergency, . . . ), and the individual acted
responsibly under the circumstances,” may be mitigating.  Applicant was forced to file
for the protection of a Chapter 7 bankruptcy due to his family’s significant loss of income
since 2010.  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 October 2012 bankruptcy
discharge, and by paying off the IRS and his state’s taxing authority.
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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
workplace speak most highly of him.  (AppX F.)  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, 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
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
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Subparagraph 1.g. 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