DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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                                                                      )                                                          
           ----------------------------------                  )      ISCR  Case No.  14-03570          
                                                            )
)
Applicant for Security Clearance )
Appearances
For Government: Julie Mendez, Esq., Department Counsel
For Applicant: Pro se  
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 Decision
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WESLEY, Roger C., Administrative Judge:
Based upon a review of the pleadings, exhibits, and testimony, I conclude that
Applicant did not mitigate the security concerns regarding his financial considerations.
Eligibility for access to classified information is denied. 
 
Statement of Case
On October 16, 2014, the Department of Defense (DOD) Consolidated
Adjudications Facility (CAF) issued a Statement of Reasons (SOR) detailing reasons
why DOD adjudicators could not make the affirmative determination of eligibility for a
security clearance, and recommended referral to an administrative judge to determine
whether a security clearance should be granted, continued, denied, or revoked. 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
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amended (Directive); and the Adjudicative Guidelines (AGs) implemented by DOD on
September 1, 2006.  
Applicant responded to the SOR on October 29, 2014, and requested a hearing.
The case was assigned to me on December 5, 2014, and was scheduled for hearing on
December 31, 2014.  At hearing, the Government's case consisted of four exhibits (GEs
1-4). Applicant relied on one witness (himself) and five exhibits (AEs A-E). The transcript
(Tr.) was received on January 7, 2015. 
Procedural Issues
Before the close of the hearing, Applicant requested the record be kept open to
permit him the opportunity to supplement the record with documented payment of the
debt covered by subparagraph 1.b. For good cause shown, Applicant was granted five
days to supplement the record. The Government was afforded two days to respond. 
Within the time permitted, Applicant supplemented the record with a summary of
payments to his creditor 1.b and a letter from his student loan lender (not included as a
debt of concern in the SOR), on confirming his payment of his student loans in
September 2012. Applicant’s post-hearing submissions were admitted as AEs F-G.
Summary of Pleadings
Under Guideline F, Applicant allegedly (a) accrued a state tax lien in 2012 in the
amount of $308, (b) incurred an adverse judgment in 2011 in the amount of $4,095, and
(c) accumulated 11 delinquent debts. The alleged delinquent debts exceed $16,000.
In his response to the SOR, Applicant admitted most of the allegations. He denied
the allegations covered by subparagraphs 1.a (claiming the lien had been satisfied), 1.b
(claiming a reduced balance of $2,200), 1.g (claiming the owed amount was deducted
from veterans benefits), and 1.h (claiming he disputes the debt as he has in previous
years). Applicant claimed he has engaged a credit repair association to help him address
his debts. He claimed he got behind in his bills due to his becoming unemployed and
starting school in 2011. 
Applicant further claimed the money his wife made went towards the payment of
necessities (rent, food, and diapers). He claimed that the small hourly wages he made
from his work were not enough to pay his bills. And he claimed that he has just recently
returned to school, has young children to care for, and needs additional time to begin
addressing his creditors.  
      Findings of Fact
Applicant is a 34-year-old system administrator for a defense contractor who seeks
a security clearance. The allegations covered in the SOR and admitted by Applicant are
incorporated and adopted as relevant and material findings. Additional findings follow.
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Background
Applicant married his first spouse in January 2007, separated from her in 2009,
and divorced her in December 2011. (GEs 1 and 4; Tr. 39-4) He has no children from this
marriage. (GE 1) Unable to locate his first spouse to finalize divorce proceedings,
Applicant remarried in April 2010 while technically still married to his first spouse. (Tr. 39-
40)  He has one child and one stepchild from his current marriage. (GE 1; Tr. 41-42) 
Between May 1998 and February 2003, Applicant attended two local colleges.
However, he earned no degree from either institution. He attended another college
between August 2011 and January 2013 and expects to receive his associate’s degree in
information technology in January 2014. (GE 1; Tr. 36, 39) 
Applicant enlisted in the Marine Corps Reserve in June 2000 and served four
years in the Inactive Reserve (IR) before entering on active duty in May 2004. (GE 4)
Between May 2004 and December 2010, Applicant was on active-duty status with the
Marine Corps. (GE 1) He was administratively separated from the Marine Corps in
December 2010 with a general discharge in lieu of a trial on charges of committing
adultery. (GEs 1 and 4; Tr. 42-43) Applicant continued his Marine Corps service in the IR
between December 2010 and June 2012. (Tr. 43) 
Applicant’s finances
Following his discharge from active-duty Marine Corps status in 2010, Applicant
could not find work and enrolled in a local college with a primary emphasis on information
technology. (GE 4; Tr. 32-33). Between April 2012 and April 2014, he held full-time and
part-time positions as a technician and security guard. (GEs 1 and 4; Tr. 33-34) 
For for the first five months of 2014, Applicant held a full-time position as a system
administrator with Company A. (GE 1 and AE C; Tr. 35-36) During this time, both he and
his wife were enrolled in college. (GEs 1 and 4) Finding insufficient time to devote to his
school work, he returned to part-time security guard work in November 2012. (Tr. 34)
With his limited income, he fell behind with his bills. To help with their bills, Applicant’s
wife maintained a full-time position with a local grocery chain. (Tr. 33)  Since April 2014,
Applicant has been employed by Company B as a system administrator, but cannot work
and draw a salary while his security clearance application is pending. (Tr. 62)
Applicant’s accumulated delinquent debts are comprised of the following: a state
tax lien in the amount of $308 (creditor 1.a), a 2011 adverse judgment for $4,095 (creditor
1.b), and 11 consumer debts exceeding $16,000 (creditors 1.c-1.m) Applicant has not
satisfied any of the listed debts. After claiming in his response that his state tax lien had
been satisfied administratively by the state creditor’s taxing authority, he corrected
himself at hearing and acknowledged the debt remains outstanding. (Tr. 59, 73-74) The
only debt he has affirmatively addressed is the creditor 1.b judgment. He assured he has
been making $100 monthly payments to this creditor and has reduced the judgment to
just $1,100. (Tr. 54, 71) Afforded an opportunity to document his payment history,
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Applicant provided a historical accounting of monthly $100 payments since June 2012
and a reported current balance of $3,000. (AE F) This credited balance is accepted as the
current balance owing on the creditor 1.b judgment. Applicant is credited, too, with paying
off his student loans (not listed in the SOR) in September 2012. (GE 3 and AE G)
After promising to address his remaining creditors in his interview with an
investigator from the Office of Personnel Management (OPM) investigator in May 2104,
Applicant has not been able to make payments or complete any repayment plans with
any of his remaining creditors. (GE 4 and AE A; Tr. 59-67). Nor has he followed up with
his repair firm to identify and validate reported delinquent debts in his credit reports. (Tr.
67-68) While his updated credit report confirmed the removal of a number of his old
debts, it does not indicate which ones, or the reasons for the removal.  By contrast, his
April 2014 credit report listed Applicant’s remaining outstanding debts and no reported
disputes. (GE 2) Although his December 2014 credit report lists a disputed account
(creditor 1.m), it does indicate any reasons for the dispute. (GE 3) 
Applicant assured that he wants to repay his listed delinquent debts but cannot do
so until he returns to work. (Tr. 67-70) And without a security clearance, his employer will
not permit him to return to gainful employment. 
Currently, Applicant earns nothing from gainful employment and is basically
surviving with his education loans. (Tr. 68-69) His wife is able to supplement his income
with part-time work that pays her $15 an hour as a part-time medic. (Tr. 68) She nets just
$1,031 bi-weekly and is able to help with grocery bills and rent.
Endorsements and awards
Applicant was well regarded by the supervisor of the firm who he worked for in
2014. (AE C) This supervisor described Applicant as polite and professional, and above
reproach. He assured that Applicant would be welcomed back at his company. During
recent years in college, Applicant excelled in college and earned recognition on the
school’s honor lists for both 2012 and 2013. (AEs B and D) He also completed his
requirements for network certifications in 2013 and 2014. (AE E)
Policies
           The AGs list guidelines to be used by administrative judges in the decision-making
process covering security clearance cases. These guidelines take into account factors
that could create a potential conflict of interest for the individual applicant, as well as
considerations that could affect the individual’s reliability, trustworthiness, and ability to
protect classified information. These guidelines include "[c]onditions that could raise a
security concern and may be disqualifying” (disqualifying conditions), if any, and many of
the "[c]onditions that could mitigate security concerns.”  They must be considered before
deciding whether or not a security clearance should be granted, continued, or denied. The
guidelines do not require administrative judges to place exclusive reliance on the
enumerated disqualifying and mitigating conditions in the guidelines in arriving at a
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decision. Each of the guidelines is to be evaluated in the context of the whole person in
accordance with AG ¶ 2(c)
In addition to the relevant AGs, administrative judges must take into account the
pertinent considerations for assessing extenuation and mitigation set forth in AG ¶ 2(a) of
the AGs, which are intended to assist the judges in reaching a fair and impartial
commonsense decision based upon a careful consideration of the pertinent guidelines
within the context of the whole person. 
The adjudicative process is designed to examine a sufficient period of an
applicant’s life to enable predictive judgments to be made about whether the applicant is
an acceptable security risk. The following AG ¶ 2(a) factors are pertinent: (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 chances; (7) the motivation for the conduct; (8) the potential for
pressure, coercion, exploitation, or duress; and (9) the likelihood of continuation or
recurrence.
 Viewing the issues raised and evidence as a whole, the following individual
guidelines are pertinent in this case:
Financial Considerations
The Concern: 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.  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 ¶ 18.
Burden of Proof
By virtue of the principles and policies framed by the AGs, a decision to grant or
continue an applicant's security clearance may be made only upon a threshold finding
that to do so is clearly consistent with the national interest.  Because the Directive
requires administrative judges to make a commonsense appraisal of the evidence
accumulated in the record, the ultimate determination of an applicant's eligibility for a
security clearance depends, in large part, on the relevance and materiality of that
evidence. See United States, v. Gaudin, 515 U.S. 506, 509-511 (1995).  As with all
adversarial proceedings, the judge may draw only those inferences which have a
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reasonable and logical basis from the evidence of record.  Conversely, the judge may
not draw factual inferences that are grounded on speculation or conjecture.
The Government's initial burden is twofold: (1) it must prove by substantial
evidence any controverted facts alleged in the SOR, and (2) it must demonstrate that
the facts proven have a material bearing to the applicant's eligibility to obtain or maintain
a security clearance. The required materiality showing, however, does not require the
Government to affirmatively demonstrate that the applicant has actually mishandled or
abused classified information before it can deny or revoke a security clearance. Rather,
the judge must consider and weigh the cognizable risks that an applicant may
deliberately or inadvertently fail to safeguard classified information.
Once the Government meets its initial burden of proof of establishing admitted or
controverted facts, the evidentiary burden shifts to the applicant for the purpose of
establishing his or her security worthiness through evidence of refutation, extenuation,
or mitigation.  Based on the requirement of  Exec. Or. 10865 that all security clearances
be clearly consistent with the national interest, the applicant has the ultimate burden of
demonstrating his or her clearance eligibility. “[S]ecurity-clearance determinations
should err, if they must, on the side of denials.” See Department of the Navy v. Egan,
484 U.S. 518, 531 (1988). 
Analysis  
Security concerns are raised over Applicant’s history of a state tax lien, and
adverse judgment, and 11 delinquent consumer debts exceeding $16,000. Applicant’s
accrued debts are attributable to both recurrent unemployment and underemployment
problems following his military discharge and ensuing judgment lapses in the
management of his financial affairs. His debt delinquencies invite the application of two
of the disqualifying conditions (DC) of the Guidelines: DC ¶ 19(a), “inability or
unwillingness to satisfy debts;” and DC ¶ 19(c), “a history of not meeting financial
obligations.”
Holding a security clearance involves the exercise of important fiducial
responsibilities, among which is the expectancy of consistent trust and candor.
Financial stability in a person cleared to access classified information is required
precisely to inspire trust and confidence in the holder of the clearance. While the
principal concern of a clearance holder’s demonstrated financial difficulties is
vulnerability to coercion and influence, judgment and trust concerns are also explicit in
financial cases.
Most of Applicant’s accrued debts are the result of extenuating circumstances.
His recurrent incidences of unemployment and underemployment following his 2010
discharge from active-duty military service imposed considerable cost burdens on
himself and his wife in managing their finances. These cost impositions were significant
and entitle him to partial benefit of MC ¶ 20(b), “the conditions that resulted in the
financial problem were largely beyond the person’s control (e.g., loss of employment, a
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business downturn, unexpected medical emergency, or a death, divorce or separation),
and the individual acted responsibly under the circumstances.”
Most of Applicant’s recent payment problems are associated with his lack of work
pending the outcome of his security clearance application. To Applicant’s credit, he has
paid down his creditor 1.b judgment and utilized a credit repair firm to validate his
remaining debts. Still, more could have been expected of Applicant from the income he
and his wife earned from their jobs between April 2012 and April 2014. So, while there
are considerable extenuating circumstances associated with his delinquent accounts,
too many of Applicant’s debts remain outstanding to enable him to take full advantage
of the “acted responsibly” prong of MC ¶ 20(b). Under these circumstances, Applicant’s
modest repayment efforts to date entitle him to no more than partial application of MC ¶
20(d). 
 
Based on Applicant’s limited repayment efforts to date, mitigation credit is not
available to him. By virtue of the age and non-enforcement status of the debts, MC
20(a), “the behavior happened so long ago, was so infrequent, or occurred under
circumstances that it is unlikely to recur and does not cast doubt on the individual’s
reliability, trustworthiness, or good judgment,” has only limited applicability to his
remaining unpaid debts.
Applicant’s limited repayment efforts (i.e., with creditor 1.b), and failure to attempt
any negotiated repayment plans reflect too little progress to enable him to demonstrate
satisfactory repayment progress in accordance with the criteria established by the
Appeal Board for assessing an applicant’s efforts to rectify his poor financial condition
with responsible efforts considering his circumstances. See ISCR Case No. 08-06567 at
2-3 (App. Bd. Oct. 29, 2009). Applicant’s modest repayment actions are not enough to
enable him to meet the Appeal’s Board requirements for stabilizing his finances. ISCR
Case No. 07-06482 (App. Bd. May 21 2008); see ISCR Case No. 05-11366 at 4 n.9
(App. Bd. Jan. 12, 2007) (citing ISCR Case No. 99-0462 at 4 (App. Bd. May 25, 2000));
ISCR Case No. 99-0012 at 4 (App. Bd. Dec. 1, 1999).   
From a whole-person standpoint, Applicant documents some repayment
progress with his creditor 1.b judgment creditor and ongoing efforts with the assistance
of his credit repair firm to verify the legitimacy of his remaining creditors, but not enough
to facilitate safe predictions about his ability to manage his finances in the future. With
his remaining creditors, he has made no tangible payment progress, and has failed to
demonstrate sufficient payment track record that meets minimum Appeal Board criteria.
While he is well-regarded by his supervisor  and has produced solid academic credits,
his record of civic and community contributions is still very limited. 
Overall, Applicant’s repayment actions to date, although somewhat
understandable considering his recurrent problems with finding gainful full-time
employment, are insufficient to meet mitigation requirements imposed by the guideline
governing his finances. More time is needed for Applicant to restore his finances to
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stable levels consistent with minimum clearance eligibility requirements. Unfavorable
conclusions are warranted with respect to the allegations covered by Guideline F.
Formal Findings
In reviewing the allegations of the SOR and ensuing conclusions reached in the
context of the findings of fact, conclusions, conditions, and the factors listed above, I
make the following formal findings:
GUIDELINE F (FINANCIAL CONSIDERATIONS):   AGAINST APPLICANT
Subparas. 1.a, 1.c-1j:                             Against Applicant
Subparas. 1.b:                                        For Applicant
                 C  o  n   clusions         
In light of all the circumstances presented by the record in this case, it is not
clearly consistent with the national interest to grant or continue Applicant’s security
clearance.  Clearance is denied.
                                          
Roger C. Wesley
Administrative Judge 
                                        
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