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                        DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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        )
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)       ISCR Case No. 14-00657
Applicant for Security Clearance  )
Appearances
For Government: David Hayes, Esq., Department Counsel
For Applicant: Pro se
                                                                            
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Decision
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LYNCH, Noreen, A., Administrative Judge:
On April 7, 2014, the Department of Defense (DOD) issued Applicant a
Statement of Reasons (SOR) alleging security concerns arising under Guideline F
(Financial Considerations). 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) 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 3, 2014. A notice of
hearing was issued on June 5, 2014, scheduling the hearing for June 26, 2014.
Government Exhibits (GX) 1-3 were admitted into evidence without objection. Applicant
testified. She submitted Applicant Exhibits (AX) A-I, which were admitted into the record
without objection. I kept the record open until July 10, 2014, for additional submissions.
Applicant timely submitted additional documents AX J through O. The transcript (Tr.)
was received on July 7, 2014. Based on a review of the pleadings, testimony, and
exhibits, eligibility for access to classified information is granted. 
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Findings of Fact
In her answer to the SOR, Applicant admitted the allegations under Guideline F
(Financial Considerations), with explanation.   
Applicant is a 37-year-old program analyst for a defense contractor. She
obtained her Associate’s degree and is taking courses to receive her Bachelor of
Science degree. Applicant is divorced, and she has two children.  Applicant has been
with her employer since November 2013. (AX B) However, she has worked in the
defense contracting field for many years. She has held a security clearance since about
1995. 
The SOR alleges an indebtedness for a past-due mortgage account in the
amount of $60,288; a charged-off account for $30,140; two parking tickets; and a 2007
judgment for $8,252. She disclosed the debts on her security clearance application.
Applicant had no financial difficulties until she lost her job in September 2012,
due to a reduction in force. (AX C) Her annual performance ratings had been “superior.”
At that time, Applicant had no delinquent debts. She received unemployment
compensation and looked for employment, but she was not successful in finding
employment until 2013.  (GX 1) 
The home that Applicant purchased in 2010 for approximately $490,000 had
monthly mortgage payments of $3,200.  She had a down payment of about $30,000. At
the time, Applicant earned about $82,359 and had a part-time job. Applicant could not
maintain the mortgage note when she lost her job. Applicant’s last mortgage payment
was September 2012. She tried to work with the bank to obtain a modification based on
her loss of employment. (AX L) She also tried to obtain a forbearance on the loan, but
was told that she was two months too late. (AX M) Applicant remains in the home, and
cares for the property. She pays the household expenses. Applicant maintains that she
has been in constant contact with the bank. However, the bank sold the loan several
times and the mortgage company changed. (AX K) In April 2014, a mediation occurred
which was not successful. (Tr. 48) In fact, the same day the bank denied Applicant a
modification, they sold the note to another company. (Tr. 45; AX H, N )
Applicant purchased a vehicle in 2010. The monthly car note was about $1,300.
She was making the car payments until she lost her job. The car has been
repossessed. She has not contacted the company yet because she wants to pay the
mortgage account. Applicant owes approximately $30,140. (GX 2)
Applicant loaned her car to a friend who received two parking tickets. Applicant
was not aware of the tickets. She testified that the ticket notices did not come to her
address. She paid both parking tickets this year. (AX D, E) 
Applicant consulted an attorney in March 2014 after the frustration of sending
numerous modification packets to various banks. Her attorney has advised her to
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pursue different options to manage the debt with the Homeowners Association (HOA)
and the collection account, in addition to the mortgage loan.  (AX F, J) The primary
focus has been on the home mortgage loan. The goal of the plan is to obtain payments
that Applicant can afford. The possibility of a settlement with the collection account for
the car is a goal being pursued by her attorney. (Tr. 47; AX J)
As to the 2009 judgment for the HOA past due account, ($8,252) Applicant has
not yet resolved the issue. She explained that she and her partner had been paying the
HOA dues when they lived in the development in 2007. (Tr. 61) Applicant stated that
she has never received any notice from the association.  She could not find any bank
statements to show a record of payment for the years that she lived in the development.
It is her intent to resolve the issue. 
 Applicant earns approximately $85,000 annually. (AX K) She receives child
support for her two children. The amount varies month to month, but is usually not less
than $850. (Tr. 27) After expenses and debt payments, she has a net remainder of
about $2,000. (GX 2) She has about $10,000 in a saving account. (Tr. 31) She is
current with her credit accounts. (Tr.52) Applicant has about $14,000 in credit card
debts. (Tr. 52) She has not purchased another car, but she is using a vehicle that a
friend has allowed her to use. 
Applicant submitted four character references from her former employer,
coworkers, and friends. (AX A) Each letter attests to her significant contribution to her
employer. Applicant is praised for her excellence in administrative detail and financial
service to the agency. She is a team player with great attention to detail. Applicant is
described as a person of integrity, loyalty, and trustworthiness. Applicant is dedicated to
her family and provides for them. She has worked with sensitive information without
incident for many years. 
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
 See also ISCR Case No. 94-1075 at 3-4 (App. Bd. Aug. 10, 1995).      1
 Department of the Navy v. Egan, 484 U.S. 518, 531 (1988).      2
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      3
 See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive      4
information), and EO 10865 § 7.
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      5
 Id.      6
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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 a1
preponderance of evidence.  The ultimate burden of persuasion is on the applicant.  2 3
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 clearance4
determinations should err, if they must, on the side of denials.”  Any reasonable doubt5
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 a6
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:
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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;
(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.
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Applicant incurred a delinquent debt on a past-due mortgage payment. She
admits that she has a collection account and an unpaid judgment. Her admissions and
her credit report confirm her debt. 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
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; and
(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’s delinquent debts are the result of conditions beyond her control, and
she has acted reasonably and responsibly in the situation. Applicant lost her
employment due to a reduction in force in September 2012. She could not find
employment until November 2013. She could not maintain her monthly mortgage
payment and contacted the bank immediately. She applied for a forbearance and later
for a loan modification. She has submitted several packages due to a change in the
loan service company. After much frustration, she contacted an attorney for advice. A
mediation occurred in April 2014. However, there was not a successful result.
Applicant’s attorney continues to work with the bank and another modification packet
has been sent. Applicant paid the parking tickets that were incurred as a result of a
friend using her car. Applicant prioritized the debts and the focus has been on the
mortgage loan. She intends to pursue and resolve the HOA judgment either by
settlement or another method. Her attorney advised her to concentrate efforts on the
home loan and then pursue the collection account and judgment. She is clearly making
efforts in regard to her mortgage loan. She retained counsel to pursue a plan to resolve
the other two debts. She has not walked away from her debts. She is engaged in the
process.  AG ¶¶ 20 (b), (c), and (d) apply.
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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 an applicant’s
conduct and all relevant 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. 
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 37 years old. She is a single mother who provides for her children. She has
held a security clearance without incident for many years. Before the reduction in force
and termination of her position, she had no financial difficulties.  She is a mature and
educated person who has worked in the defense contracting field for many years.  
Applicant has attempted to resolve the mortgage loan issue since the inception
of her unemployment. She hired an attorney after not being successful with the lenders.
She is following his plan of prioritizing the delinquent debts. She used her savings to
maintain and support her family. She has lived in her home and cared for the property.
She has been forthright and honest in her disclosures on her security clearance
application. She has documented her efforts. I have no doubts about her judgment,
reliability, and commitment to resolving her financial issues.  
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
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Subparagraph 1.d: For Applicant
Subparagraph 1.e: 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’s security clearance.
Clearance is granted. 
                                                     
NOREEN A. LYNCH.
Administrative Judge