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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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)       ISCR Case No. 11-14361
)
)
Applicant for Security Clearance )
Appearances
For Government: Jeff Nagel, Esquire, Department Counsel
For Applicant: Pro se
December 4, 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 September 20, 2011.  On April 15, 2013, the Department of Defense (DOD)
issued a Statement of Reasons (SOR) detailing the security concerns under Guidelines
F and B 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 May 2, 2013.  He answered the
SOR in writing on May 17, 2013, and requested a hearing before an Administrative
Judge.  DOHA received the request on May 23, 2013, and I received the case
assignment on September 17, 2013.  DOHA issued a notice of hearing on September
18, 2013, and I convened the hearing as scheduled on October 15, 2013.  The
Government offered Exhibits (GXs) 1 through 7, which were received without objection.
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Applicant testified on his own behalf.  DOHA received the transcript of the hearing (TR)
on October 23, 2013.  I granted Applicant’s request to keep the record open until
November 15, 2013, to submit additional matters.  On November 15, 2013, he
submitted Exhibits (AppXs) A and B, which were received without objection. The record
closed on November 15, 2013.  Based upon a review of the pleadings, exhibits, and
testimony, eligibility for access to classified information is denied.
Procedural and Evidentiary Rulings
Motion to Withdraw
Department Counsel moved to withdraw Subparagraph 2.a. of the SOR, which
incorporated Guideline B.  (TR at page 6 line 13 to page line 7.)  There being no
objection by Applicant, the Government’s motion was granted.  Guideline B is no longer
in issue.
Findings of Fact
In his Answer to the SOR, Applicant denied the factual allegations in
Subparagraph 1.a. of the SOR.
Guideline F - Financial Considerations
Applicant is a 43 year old Ph. D., married with two children, and works for a
Government Contractor.  (TR at page 23 line 3 to page 25 line 24.)
1.a.  It is alleged that Applicant owes Creditor 2 the past-due amount of about
$34,913 on a second mortgage.  (GX 7 at page 2.)  He denies this allegation.
In 2008, Applicant purchased a home for what he believes to have been
“$595,000.”  (TR at page 27 lines 16~27.)  This purchase was made “prior to the market
collapse” in 2008.  (TR at page 27 lines 22~24.)  According to Applicant, “It was a - - it’s
called a piggy back loan.  So, it was an 80/15/5 [loan arrangement].  80 percent on the
first loan [to Creditor 1], 15 percent on the second [to Creditor 2], five percent down
payment.”  (TR at page 28 lines 5~8.)  The monthly payments on the first mortgage
“was $3,014.54,” and on the second mortgage “was $1,392.16.”  (TR at page 29 lines
5~15.)  However, Applicant could not keep up with his monthly payments; and as a
result, the house eventually went into foreclosure in April of 2011.  (TR at page 30 line 5
to page 41 line 3.)
Applicant has submitted an IRS “Form 1099-A” from Creditor 1, and three
October 13, 2013, credit reports showing a “Past Due” “Balance” to Creditor 2 in the
amount of $34,913.  (AppXs A and B at pages 2~4.)  He has also submitted a dispute
letter to Creditor 2, disputing that he owes anything.  (AppX B at page 1.)  Applicant
believes the Form 1099-A covers both the first and second mortgage.  (TR at page 42
lines 2~17.)
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Under the Code of Civil Procedure, Sections 577~582, from the state where the
foreclosed property is located, it is clear that the primary mortgage is covered by the
statute; i.e., that no deficiency judgment can be rendered against Applicant vis-a-vis the
first loan.  Not so clear, however, is that a second mortgage is also covered as to any
deficiency judgment.  As Applicant has the burden of demonstrating that he does not
owe the alleged debt to Creditor 2, and has instead submitted three October 13, 2013,
credit reports showing a “Past Due” “Balance” to Creditor 2, I find this second mortgage
debt is still outstanding.
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.  (AG Paragraph 2.)  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.  AG
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
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
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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 a significant past-due debt,
which he has not yet resolved.
I can find no countervailing Mitigating Condition that is applicable here.
Subparagraph 20(b) recognizes that the 2008 crash in the housing market was a
condition largely beyond Applicant’s control, but he must act “reasonably under the
circumstances.”  He has yet to resolve his $34,000 past-due debt on a second
mortgage for a house he abandoned in April of 2011, more that two years ago.
Accordingly, Applicant has not met his burden of persuasion.
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.  Under AG 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.
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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.  The record evidence leaves me with
questions and doubts as to Applicant’s eligibility and suitability for a security clearance.
Applicant has over $34,000 in past-due indebtedness that he has yet to resolve.  If he
resolves this debt, he may be eligible for access to classified information in the future.
For these reasons, I conclude Applicant has not mitigated the security concerns under
the whole-person concept 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: AGAINST APPLICANT
Subparagraph 1.a. Against Applicant
Conclusion
In light of all of the circumstances presented by the record in this case, it is not
clearly consistent with the national interest to grant Applicant eligibility for a security
clearance.  Eligibility for access to classified information is denied.
Richard A. Cefola
Administrative Judge