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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
------------------- )       ISCR Case No. 14-01450
)
Applicant for Security Clearance )
Appearances
For Government: Jeff Nagel, Esquire, Department Counsel
For Applicant: Craig E. Dwyer, Esquire
July 29, 2015
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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, 2013. (Government Exhibit 1.) On August 18, 2014, 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 September 3, 2014 (Answer), and
requested a hearing before an administrative judge. Department Counsel was prepared
to proceed on February 3, 2015. This case was assigned to me on March 2, 2015. The
Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on May 11,
2015. I convened the hearing as scheduled on June 17, 2015. The Government offered
Government Exhibits 1 through 5, which were admitted without objection. Applicant
testified on his own behalf, and submitted Applicant Exhibits A through I, also without
objection. Applicant asked that the record remain open for the receipt of additional
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documents. Applicant submitted Applicant Exhibit J on June 24, 2015; and Applicant
Exhibit K on June 29, 2015. Both exhibits were admitted without objection. DOHA
received the transcript of the hearing (Tr.) on June 25, 2015. The record closed on June
29, 2015. Based upon a review of the pleadings, exhibits, and testimony, eligibility for
access to classified information is granted.
Findings of Fact
Applicant is 58, and married to his second wife. Applicant retired in 2012 after a
very distinguished 32 years of military service. (Applicant Exhibit I; Tr. 35-38.) 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
denied all four of the allegations in the SOR. He also submitted additional information to
support his request for a security clearance.
Applicant was married to his first wife for about 14 years while he was in the
military and often deployed. During the time Applicant was deployed his ex-wife would
incur debts without his knowledge or consent. This was a major cause of Applicant’s
financial issues. He filed for divorce in July 2011. (Tr. 17-19, 47-48.)
Applicant began working to settle his past-due debts in February 2011. At that
time Applicant retained counsel, who also represented him at this hearing, to resolve
the debts in the SOR. (Applicant Exhibit J; Tr. 19-21, 48-50.)
The SOR lists four delinquent debts, totaling approximately $56,790. The
existence and amount of the debts is supported by credit reports dated August 3, 2011;
November 21, 2013; January 26, 2015; and June 10, 2015. (Government Exhibits 2, 3,
4, and 5.)
The current status of the debts is as follows:
1.a. Applicant denies that he currently owes $16,314 for a past-due credit card
debt. Applicant paid that debt on May 22, 2015, as evidenced by a letter from
Applicant’s counsel to the creditor, a check from Applicant to creditor, and a letter from
the creditor stating that the debt has been settled. (Applicant Exhibits A, B, and C; Tr.
21-25.) This debt is resolved.
1.b. Applicant denies that he currently owes $8,704 for a past-due credit card
debt for an account with the last four digits 3968. Government Exhibits 3 and 4 show
this as being a charged-off account. However, Applicant’s counsel received a letter from
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the creditor dated July 29, 2014, and a check to Applicant for $3,723.13. The bank letter
states, “We want you to know that we appreciate your commitment to our country and
pride ourselves on serving you. Based on a recent review of your account we may not
have provided you the level of service you deserve and are providing you this check.
There is nothing you need to do other than cash your check.” Applicant has not been
contacted by anyone connected with this bank since this letter. (Applicant Exhibits D,
and E; Tr. 25-30.) Based on all available evidence, I find this debt is resolved.
1.c. Applicant denies that he currently owes $2,781 for a past-due credit card
debt. He testified that his lawyer had not been able to contact this creditor. On
December 11, 2011, Applicant prepared a letter to this creditor stating that his attorney
could contact the creditor for him. On December 12, 2011, Applicant’s counsel sent a
letter to the creditor confirming his representation and stating, “I am currently
investigating [Applicant’s] financial problems and possible creditor settlement
alternatives.” Applicant’s attorney also submitted a declaration stating that he had called
the creditor in both January and February 2012. There was no response to either the
letter or telephone calls. Subsequent to the hearing Applicant’s attorney successfully
contacted the bank, who stated that the debt had been cancelled in 2012 and that an
IRS Form 1099 had been sent to Applicant. Applicant stated he had never received it. A
copy of the Form 1099 was subsequently sent to Applicant’s counsel, indicating that the
debt had been cancelled on October 27, 2012. (Applicant Exhibits J and K; Tr. 29-30,
40-43.)  This debt is resolved.
1.d. Applicant denies that he currently owes $29,000 for a past-due loan.
Applicant paid that debt on January 16, 2012, as evidenced by a letter from Applicant’s
counsel to the creditor, a check from Applicant’s father to the creditor, and a letter from
the creditor stating that the debt has been settled. (Applicant Exhibits F, G, and H; Tr.
30-34.) This debt is resolved.
Applicant’s current financial situation is stable. He is able to pay his monthly
debts. (Tr. 43-46.)
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
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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.”
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
ISCR Case No. 06-12930 at 2 (App. Bd. Mar. 17, 2008) (quoting ISCR Case No. 04-09684 at 2-3 (App. Bd.1
Jul. 6, 2006)).
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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 four delinquent accounts that he formerly could not resolve. 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
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 actions by
his ex-wife. Applicant did not try to avoid this situation, but has worked hard to resolve it.
As stated, he retained counsel even before he retired from the military to attempt to pay
these debts off. Two have been paid, on one debt he received money from the creditor,
and the last debt was forgiven by that creditor in 2012. 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,
Applicant engaged legal counsel to assist him in resolving the delinquencies, and 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). 
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 of1
this case.
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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 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
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.d.: For Applicant
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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