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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
------------------------ )       ISCR Case No. 12-03600
)
Applicant for Security Clearance )
Appearances
For Government: Jeff Nagel, Esquire, Department Counsel
For Applicant: Pro se
March 14, 2014
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DECISION
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ROSS, Wilford H., Administrative Judge:
Applicant submitted his Electronic Questionnaire for Investigations Processing
(e-QIP), on September 9, 2011. (Government Exhibit 1.)  On September 10, 2013, the
Department of Defense issued a Statement of Reasons (SOR) detailing the security
concerns under Guideline F (Financial Considerations) concerning 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 on September 1, 2006. 
 
Applicant answered the SOR in writing on November 13, and December 3, 2013
(Answer), and requested a hearing before an administrative judge. Department Counsel
was prepared to proceed on January 6, 2014. This case was assigned to me on
January 16, 2014. DOHA issued a notice of hearing on January 24, 2014. I convened
the hearing as scheduled on February 13, 2014. The Government offered Government
Exhibits 1 through 9, which were admitted without objection. Applicant testified on his
own behalf, and submitted Applicant Exhibits A through L, also without objection.
Applicant asked that the record remain open for the receipt of additional documents.
Credit bureau reports dated January 21, 2005; June 27, 2013; January 6, 2014; and February 12, 2014, do1
not show any of the debts set forth in the SOR as being owing or past due. (Government Exhibits 3, 6, 7, and
8.)
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Applicant submitted Applicant Exhibits M through Q on February 27, 2014, and they
were admitted without objection. DOHA received the transcript of the hearing (Tr.) on
February 25, 2014. The record closed on February 27, 2014. Based upon a review of
the pleadings, exhibits, and testimony, eligibility for access to classified information is
granted.
Findings of Fact
Applicant is 56 and married. He is employed by a defense contractor and seeks
to retain a security clearance in connection with his employment.
Paragraph 1 (Guideline F, Financial Considerations)
The Government alleges in this paragraph that Applicant is ineligible for
clearance because he is financially overextended and therefore potentially unreliable,
untrustworthy, or at risk of having to engage in illegal acts to generate funds. Applicant
admitted subparagraph 1.c in the SOR under this Paragraph. That admission is a
finding of fact. He denied the remaining allegations. He also submitted additional
information to support his request for a security clearance.
The SOR lists six delinquent debts, totaling approximately $54,318. The
existence and amount of the debts set forth in subparagraphs 1.a, 1.b, 1.c, 1.e, and 1.f,
is supported by credit reports dated December 2, 2008; and November 22, 2011.
(Government Exhibits 4, and 5.) (See also Interrogatories dated August 8, 2013.
(Government Exhibit 2.))  Subparagraph 1.d states that support for the existence of the1
past due debt of $825 is found in a credit report dated November 29, 2012. No credit
report of that date was submitted into evidence, and none of the other credit reports in
the record report such a debt. 
Applicant honorably retired from the United States Marine Corps in 1995 after 20
years of service. Beginning in 1996 until 2004 Applicant worked as a security specialist
with the United States Congress. At that time Applicant’s wife received a job offer out of
state, and they moved in order for her to take the job. Applicant indicated that his
financial difficulties began in about 2007, when several different problems occurred
almost simultaneously. First, the severe housing downturn affected their ability to pay
for their house, further described under 1.c, below. Second, Applicant’s wife was
diagnosed with cancer and was off of work for 16 weeks in 2008. Third, their daughter,
who is a special-needs person with a seizure disorder, was hospitalized several times
with very serious medical issues. The financial squeeze that they were then under
caused them not to be able to pay the medical debts described below in a timely
fashion. This financial situation continued to affect them until approximately 2011.
Applicant states, “To the best of my knowledge all outstanding medical bills have been
The first mortgage holder was one of the mortgage companies involved in the Independent Foreclosure2
Review process involving the Office of Comptroller of the Currency and the Board of Governors of the Federal
Reserve System. Applicant received a monetary payment “in connection with an enforcement action related
to deficient mortgage servicing and foreclosure processes.” (Applicant Exhibit G.) (See Independent
Foreclosure Review, https://independentforeclosurereview.com (accessed March 11, 2014).)
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taken care of. . . . We have received no other delinquencies and all insurance issues
have been resolved.” (Government Exhibit 2 at 15; Tr. 37-40.) Applicant’s current
financial situation is stable. (Government Exhibit 2 at 8; Tr. 49-54.)
The current status of the debts is as follows:
1.a. Applicant denies that he owes a hospital $252 for a past-due debt.
Applicant stated that he has paid this debt, and submitted a statement from the
collection agency for the hospital stating, “Your account is now settled in full.”
(Applicant Exhibit I; Tr. 41-44.) This debt is resolved.
1.b. Applicant denies that he is indebted to a medical provider’s collection
agency in the amount of $235. Applicant stated that he has paid this debt, and all other
debts owed to this agency, which amounted to $1,245. He provided five paid in full
letters from this collection agency, as well as a copy of an email between his wife and
this collection agency concerning payments. (Answer at 1, 10-11; Applicant Exhibit J;
Tr. 44.) This debt is resolved.
1.c. Applicant admits that he was indebted to a mortgage company for a
second mortgage in the amount of $52,173. This debt concerns s Applicant’s home that
he bought after his family moved. The house was purchased for approximately
$325,000 in 2004 using an adjustable rate mortgage for the first. Beginning in 2007
Applicant began having difficulties paying the first mortgage because of the severe
increases in the adjustable monthly payments, as well as problems with the mortgage
company itself. This resulted in a three year struggle for Applicant and his wife to work
out a loan modification with the first mortgagor, or a short sale. During this time the
value of the house was reduced to approximately $121,000 while their monthly
mortgage payments rose from $1,889 a month to over $4,000 a month. During this time
Applicant retained counsel to assist them in dealing with the first mortgage company.
(Applicant Exhibit E.) Despite their best efforts, the house was foreclosed on by the first
mortgage holder in February 2011. (Government Exhibit 9; Applicant Exhibit L.)  The2
second mortgage holder was paid all during this process, and was notified of the
foreclosure activity. After the foreclosure Applicant did not receive any further
communication from the second mortgage holder, and Applicant assumed that their
interest had been resolved. (Applicant Exhibit A at 1-5; Tr. 55-65.) Subsequent to the
hearing Applicant contacted the second mortgage holder, who indicated they had no
records from the first mortgage holder stating that the house had been foreclosed on. In
accordance with a request from the second mortgage holder, Applicant has forwarded
an old credit report showing the house foreclosure so that this creditor can do their due
diligence and reduce or forgive the Applicant’s debt. (Applicant Exhibits M, P, and Q.)
This debt is being resolved.
Applicant Exhibit H is a letter from a collection agency dated January 22, 2013, concerning the same original3
creditor as that set forth in Applicant Exhibit N. It states that the “account is closed in our office.”
It is noted that the collection agency for this debt is the same as that set forth in Applicant Exhibit H, which4
states that the Applicant’s account at that collection agency was closed.
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1.d. Applicant denies that he is indebted to a medical creditor in the amount of
$825. As stated, the credit report the Government refers to in the SOR is not part of the
record. A review of the available credit reports, and the Applicant’s Interrogatories, also
failed to show a debt in this amount. Applicant states in his Answer at page 2, “The
SOR stated that these [SOR 1.d, 1.e, and 1.f] are Medical Bills appearing on my Credit
Report. I pulled my recent Credit Report and they are not showing. These may be old
accounts that were paid off when we paid . . . old medical bills that had not cleared
through our insurance.” (See Tr. 44-45.) Based on all of the available information, I find
this debt is resolved, if it ever existed.
1.e. Applicant denies that he is indebted to a medical creditor in the amount of
$522. Applicant states in his Answer at page 2, “The SOR stated that these [SOR 1.d,
1.e, and 1.f] are Medical Bills appearing on my Credit Report. I pulled my recent Credit
Report and they are not showing. These may be old accounts that were paid off when
we paid . . . old medical bills that had not cleared through our insurance.” 
Applicant testified:
I don’t recall that one at all. As a matter of fact, we have a letter at home
that is stating that similar amount that just came the other day requesting
$522, and we have no idea what it’s for. . . . So, we’ve asked them to
provide us with more information; and, when we get that information . . . If
it’s a legitimate debt, it will be paid.” 
(Tr. 45-46, 71-73; Applicant Exhibit N.)  Based on all of the available information, I find3
that this debt is either resolved, or is being resolved.
1.f. Applicant denies that he is indebted to a medical creditor in the amount of
$311. Applicant states in his Answer at page 2, “The SOR stated that these [SOR 1.d,
1.e, and 1.f] are Medical Bills appearing on my Credit Report. I pulled my recent Credit
Report and they are not showing. These may be old accounts that were paid off when
we paid . . . old medical bills that had not cleared through our insurance.” Applicant
further stated that he was unsure about this particular debt. However, he also stated,
“All of the medical bills are paid, sir.” (Tr. 46.)  Based on all of the available information,4
I find that this debt is resolved.
Mitigation
Applicant submitted documentation showing that he is a highly respected person.
Applicant Exhibit D consists of seven letters of recommendation from co-workers, a
former supervisor and people in the community. Two of the letter are from retired
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service members. Applicant is described as someone whose “integrity is beyond
reproach.” He is further described as someone who “always holds himself accountable
for his actions and is eager to help other employees do the same.” 
Applicant has rented a house since February 2011. Applicant’s current landlord
submitted a letter stating, “[Applicant] and his family have been ideal tenants from the
beginning. Rent has always been paid on time without hesitation and we have not had
any delinquent charges on his account since it was opened.” (Applicant Exhibit C.)
Applicant submitted two credit reports dated February 27, 2014. With the
exception of the debt described in 1.e, above, all of his accounts are current. (Applicant
Exhibits N and O.) 
Policies
Security clearance decisions are not made in a vacuum.  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 to be used as appropriate 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 AG ¶ 2 describing 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.  In addition, the administrative judge may also rely on
his or her own common sense, as well as knowledge of the law, human nature, and the
ways of the world, in making a reasoned decision.
The protection of the national security is the paramount consideration. AG ¶ 2(b)
requires that, “Any 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 the applicant or proven by Department Counsel, and has the
ultimate burden of persuasion as to obtaining a favorable clearance decision.”
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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. Security clearance 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.
 
Finally, as emphasized in Section 7 of Executive Order 10865, “Any
determination under this order adverse to an applicant shall be a determination 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
Paragraph 1 (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 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
AG & 19(a), an Ainability or unwillingness to satisfy debts@ is potentially disqualifying.
Similarly under AG & 19(c), Aa history of not meeting financial obligations@ may raise
security concerns. Applicant, by his own admission, and supported by the documentary
evidence, had five delinquent accounts that he formerly could not resolve. As noted
above, there is considerable doubt as to the existence of the debt set forth in
subparagraph 1.d. The evidence is sufficient to raise these potentially disqualifying
conditions.
The guideline also includes examples of conditions that could mitigate security
concerns arising from financial difficulties. Under AG ¶ 20(a), disqualifying conditions
may be mitigated where Athe 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.@ In addition, AG
¶ 20(b) states that disqualifying conditions may be mitigated where “the conditions that
resulted in the financial problem were largely beyond the person’s control (e.g., loss of
ISCR Case No. 06-12930 at 2 (App. Bd. Mar. 17, 2008) (quoting ISCR Case No. 04-09684 at 2-3 (App. Bd.5
Jul. 6, 2006)).
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employment, a business downturn, unexpected medical emergency, or a death, divorce
or separation), and the individual acted responsibly under the circumstances.”  
The evidence shows that both of the above mitigating conditions apply to
Applicant. It appears that the majority of this debt was incurred as a result of the
downturn in the real estate market, and some medical debts. Applicant has not tried to
avoid this situation, but has worked hard to resolve it. He and his wife, who also holds a
security clearance, have paid off all of the past-due medical debt. They fell prey to what
can be viewed as sharp practices by their first mortgage holder, which resulted in their
receiving a financial settlement related to their foreclosure process. Based on the
particular facts of this case, I find that he has “initiated a good-faith effort to repay
overdue creditors or otherwise resolve debts,” as required by AG ¶ 20(d).
Applicant has not received financial counseling. However, as found above, his
current financial situation is stable. I find that “there are clear indications that the
problem is being resolved or is under control,” as required by AG ¶ 20(c). 
Finally, Applicant has been proactive in contacting the remaining creditor, the
second mortgage holder, and attempting to resolve that debt. His belief that this debt
had been resolved by the foreclosure, especially given the problems he had with the
mortgage companies, is reasonable. This action brings him under the orbit of AG ¶
20(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.” 
Applicant has acted in a way that shows good judgment, making the best he
could out of a difficult situation. As the DOHA Appeal Board has said, “An applicant is
not required to show that [he] has completely paid off [his] indebtedness, only that [he]
has established a reasonable plan to resolve [his] debts and has taken significant
actions to implement that plan.”  All of these mitigating conditions apply to the facts of5
this case.
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 relevant circumstances. 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. The administrative judge must 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
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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 the potentially disqualifying and mitigating conditions in light of all
the relevant facts and circumstances surrounding this case. The discussion under
Guideline F, above, applies here as well. While Applicant has had financial problems in
the past, they have been resolved, and he has the knowledge and ability to avoid such
problems in the future. 
Under AG ¶ 2(a)(2), I have considered the facts of Applicant’s debt history.
Based on the record, I find that there have been permanent behavioral changes under
AG ¶ 2(a)(6). Accordingly, I find that there is little to no potential for pressure, coercion,
exploitation, or duress (AG ¶ 2(a)(8)); and that there is a low likelihood of recurrence
(AG ¶ 2(a)(9)). 
Overall, the record evidence leaves me with no questions or doubts as to
Applicant’s eligibility and suitability for a security clearance. For all these reasons, I
conclude Applicant has mitigated the security concerns arising from his financial
situation. Accordingly, the evidence supports granting his request for a security
clearance.
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: FOR APPLICANT
Subparagraphs 1.a. through 1.f.: 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.
WILFORD H. ROSS
Administrative Judge