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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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--------------------------- )       ISCR Case No. 12-00993
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Applicant for Security Clearance )
Appearances
For Government: Daniel F. Crowley, Esquire, Department Counsel
For Applicant: Pro se
January 10, 2014
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Decision
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MOGUL, Martin H., Administrative Judge:
On April 25, 2013, in accordance with Department of Defense (DoD) Directive
5220.6, the DoD issued a Statement of Reasons (SOR) detailing the security concerns
under Guideline F for Applicant. (Item 1.) The action was taken 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) effective within the Department of Defense after September 1, 2006. 
 
On July 7, 2013, Applicant replied to the SOR (RSOR) in writing, and he
requested that his case be decided on the written record in lieu of a hearing. (Item 2.)
On September 26, 2013, Department Counsel issued the Department's written case. A
complete copy of the file of relevant material (FORM) was provided to Applicant. In the
FORM, Department Counsel offered seven documentary exhibits. (Items 1-7.) Applicant
was given the opportunity to file objections and submit material in refutation,
extenuation, or mitigation. A response was due on November 2, 2013. Applicant did not
submit a response. The case was assigned to this Administrative Judge on November
26, 2013.
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Based upon a review of the pleadings and exhibits, eligibility for access to
classified information is denied.
Findings of Fact
After a complete and thorough review of the evidence in the record, including
Applicant's RSOR, and the FORM, and upon due consideration of that evidence, I make
the following findings of fact: 
Applicant is 41 years old.  He is employed by a defense contractor, and he seeks
a DoD security clearance in connection with his employment in the defense sector.
Guideline F, Financial Considerations
The SOR lists nine allegations (1.a. through 1.i.) regarding financial difficulties,
specifically overdue debts, under Adjudicative Guideline F. No evidence was introduced
to show that any of the debts listed on the SOR has been resolved or reduced. The
debts 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 for a medical account in the amount of
$240.  Applicant admitted this SOR allegation in his RSOR. (Item 2.) I do not find that
this debt has been resolved or reduced. 
1.b. This overdue debt is cited in the SOR for a collection account in the amount
of $200. Applicant admitted this SOR allegation in his RSOR. (Item 2.) I do not find that
this debt has been resolved or reduced. 
1.c. This overdue debt is cited in the SOR for a collection account in the amount
of $3,261.  Applicant admitted this SOR allegation in his RSOR. (Item 2.) I do not find
that this debt has been resolved or reduced. 
1.d. This overdue debt is cited in the SOR for a collection account in the amount
of $2,010.  Applicant admitted this SOR allegation in his RSOR. (Item 2.) In Applicant’s
Subject Interview, he contended that this debt is the same as the debt listed as 1.c.,
above. (Item 7.)  However, there are different account numbers in the credit reports, for
each of these debts. (Items 5,6.) Applicant has not produced any evidence to establish
that these two debts are the same. I therefore, find that this debt is not the same as 1.c.,
and I do not find that this debt has been resolved or reduced. 
1.e. This overdue debt is cited in the SOR for a collection account in the amount
of $6,738.  Applicant admitted this SOR allegation in his RSOR. (Item 2.) I do not find
that this debt has been resolved or reduced. 
1.f. This overdue debt is cited in the SOR for a collection account in the amount
of $6,851.  Applicant admitted this SOR allegation in his RSOR. (Item 2.) I do not find
that this debt has been resolved or reduced. 
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1.g. This overdue debt is cited in the SOR for a collection account in the amount
of $2,392.  Applicant admitted this SOR allegation in his RSOR. (Item 2.) I do not find
that this debt has been resolved or reduced. 
1.h. This overdue debt is cited in the SOR for a collection account in the amount
of $2,392.  Applicant admitted this SOR allegation in his RSOR. (Item 2.) In Applicant’s
Subject Interview, he contended that this debt is the same as the debt listed as 1.g.,
above. (Item 7.) However, there are different account numbers in the credit reports, for
each of these debts. (Items 5,6.) Applicant has not produced any evidence to establish
that these two debts are the same. I therefore, find that this debt is not the same as
1.g., and I do not find that this debt has been resolved or reduced. 
1.i. This overdue debt is cited in the SOR for a charged off account in the amount
of $1,067.  Applicant denied this SOR allegation in his RSOR, claiming that he had no
record of this debt. (Item 2.) The Credit Report, dated November 15, 2013, at page 12
shows this debt is owed by Applicant. (Item 5.) I do not find that this debt has been
resolved or reduced. 
Applicant explained in his RSOR that he and his wife are Realtors, and while it
was not uncommon to go for several months without receiving commission checks, in
2007, when the real estate market began its crash, the time without paychecks
expanded to several months and they realized they had a problem. During this period,
they also owned three homes that they were attempting to sell, and for which they had
monthly mortgage payments. 
As a result of no income and payments due for three homes, they began to
deplete their savings quickly. They changed their careers and opened a lawn care
business that just supplied enough income to take care of the essentials. Applicant
wrote in the RSOR that since 2007 they only pay cash for what they need. Applicant did
take out a credit card to use when he is traveling, but he pays it off immediately. Finally,
Applicant indicated that they have started to pay off his wife’s debts, and soon they will
start paying off his debts. However, no evidence was introduced to show that any of the
debts listed on the SOR have been resolved or reduced. 
In Applicant’s Subject Interview, he explained that in 2006, he and his wife
bought five new homes for investment purposes, in addition to their own residence.
They hoped to be able to sell the homes, but they were unable to do so. Sometime in
either 2006 or 2007, they were unable to make the mortgage payments, and all of the
homes were returned to the builder. (Item 7.)
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.
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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 that 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 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
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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 accumulated significant delinquent debt, most of which has been overdue
for several years. 
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.” While a
business downturn is part of the reason for Applicant’s financial difficulties, I also find
that his purchasing of five homes on speculation, when he clearly did not have the
income to make the required payments, shows poor judgement, and his action was
certainly within his control.  Also, since there is no evidence that Applicant has made
any attempt to resolve the overdue debts listed on the SOR, which were incurred
several years ago, I do not find that Applicant has acted responsibly. Therefore, this
mitigating condition is not applicable in this case. 
Because Applicant indicated on his Subject Interview that he never received
financial counseling or debt consolidation services I do not find that AG ¶ 20(c) is
applicable. (Item 7.) Additionally, I do not find that AG ¶ 20(d) is applicable, since
Applicant has not “initiated a good-faith effort to repay overdue creditors or otherwise
resolve debts [listed on the SOR].”  Finally, I do not find any other mitigating condition
applies to this case. Therefore, I find Guideline F against Applicant.
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
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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 the lack of evidence to
establish that Applicant has made any attempt to resolve the past-due debts listed on
the SOR, I find that the record evidence leaves me with significant questions and 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 not 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 ¶ E3.1.25 of Enclosure 3 of the Directive, are:
Paragraph 1, Guideline F: AGAINST APPLICANT
Subparagraphs 1.a. - 1.i.: 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.
                                              
Martin H. Mogul
Administrative Judge