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                              DEPARTMENT OF DEFENSE
               DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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)       ISCR Case No. 12-08157
)
)
Applicant for Security Clearance )
Appearances
For Government: Caroline E. Heintzelman, Esquire, Department Counsel
For Applicant: Pro se
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Decision
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WHITE, David M., Administrative Judge:
Applicant incurred substantial delinquent indebtedness but, despite regular full-
time employment, demonstrated neither means nor effective efforts to resolve it. The
evidence is insufficient to mitigate resulting security concerns. Based upon a review of
the pleadings, testimony, and exhibits, eligibility for access to classified information is
denied. 
Statement of the Case
Applicant submitted a security clearance application (SF 86) on January April 25,
2012. On October 10, 2014, the Department of Defense Consolidated Adjudications
Facility (DoD CAF) issued a Statement of Reasons (SOR) to Applicant, detailing
security concerns under Guideline F (Financial Considerations). 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 for Determining Eligibility for
Access to Classified Information, effective within the Department of Defense after
September 1, 2006. 
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Applicant answered the SOR in writing (AR) on November 14, 2014, and
requested a hearing before an administrative judge. Department Counsel was prepared
to proceed on February 3, 2015. The case was assigned to me on February 19, 2015.
The Defense Office of Hearings and Appeals (DOHA) issued a Notice of Hearing on
February 25, 2015, and I convened the hearing, as scheduled, on March 18, 2015. The
Government offered Exhibits (GE) 1 through 5, which were admitted after Applicant’s
objections were determined to go to the accuracy and weight, not admissibility, of her
prior sworn admissions. Applicant testified on her own behalf; presented witness
testimony from her fiancé (hereinafter referred to as “W”); and offered exhibits (AE) A
through G, which were admitted without objection. I granted Applicant’s request to leave
the record open until April 8, 2015, for submission of additional evidence, then granted
her additional time to organize and submit her voluminous post-hearing submissions
due to problems attempting to transmit them via email. DOHA received the transcript of
the hearing (Tr.) on March 26, 2015. Applicant eventually submitted additional evidence
by regular mail, which was marked and admitted as AE H without objection, and the
record closed. 
Findings of Fact
Applicant is a 49-year-old employee of a defense contractor, where she has
worked in unclassified areas since August 2006. Preceding that employment, she had
been employed by municipal governments since January 2003. She is divorced, with
four sons ranging in age from 23 to 28. She earned a GED in 1985, an associate’s
degree from a community college in 1995, and a bachelor’s degree from a for-profit
online university in 2009. She has no military service and has never held a security
clearance. (GE 1.) In her response to the SOR, Applicant denied all of the allegations
concerning her delinquent debts set forth in SOR ¶¶ 1.a through 1.h.
SOR ¶¶ 1.a and 1.b allege two delinquent student loan debts, totaling
approximately $49,000. Applicant cosigned with her eldest son on these loans in August
2006 and October 2005, respectively, in connection with his undergraduate education.
The original loan disbursements were $16,760 (in 2006), and $10,695 (in 2005).
Applicant showed that her pay was garnished about $1,200 for a delinquent student
loan in April and May of 2012, after which her employer received a release and stopped
the garnishment. (AE H, Part 1.) She testified that this garnishment followed a judgment
concerning these loans, and when she learned that her son had not been making the
payments she brought them current to end the garnishment. She further testified that
her son had since obtained new employment and resumed payments on these loans,
which are now in a current status. The documentation she provided contradicts this
version of events. The last documented payment toward either of these loans occurred
in July 2010, and they were charged off by the original lender and placed with the
current creditor for collection in May 2011. (AE G; GE 3; GE 5. See also GE 2 at 7.) On
May 14, 2014, that creditor obtained a $29,462 default judgment against Applicant and
her son with respect to the debt alleged in SOR ¶ 1.a, with post-judgment interest
accruing at the rate of 12% per annum thereafter. No evidence of any payment toward
this judgment was offered, nor was any evidence of either loan having been
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rehabilitated or in a current status. Applicant’s January 2015 credit report reflects an
outstanding balance due of $17,496 on the SOR ¶ 1.b debt; and interest on this debt is
accruing at just under 5%. These debts are not resolved. (AE G; AE H, Part 2; GE 3; Tr.
80-83.)
The SOR erroneously alleges, in SOR ¶ 1.c, that Applicant owes a deficiency
balance of $87,727 to the mortgage lender who foreclosed on the home she owned
from February 2007 until August 2012. That creditor elected to use the state’s non-
judicial foreclosure procedure, which precludes pursuit of any deficiency debt after
resale of the real estate serving as security for the mortgage loan. Applicant bought the
home in question in February 2007 for $288,500. She borrowed the entire purchase
price in her first mortgage loan, which required monthly principal and interest payments
of $2,022. She could not afford these payments, together with the associated escrow
and other home ownership costs, and stopped making her mortgage payments in March
2009. She continued to live in the home until November 2010, when she resumed living
in W’s home where she had also lived after her 1995 divorce from her husband and
from August 2005 to February 2007. (GE 1; GE 5; AE E; AE F; AE H, Part 3.) The
creditor foreclosed and sold the home in August 2012 for $301,219; at which time she
owed $373,052 with late fees and interest. Applicant’s mortgage payments, late fees,
and interest were delinquent by $79,646 in April 2012 (GE 5 at 13); and $87,727 in May
2013 (GE 2 at 47; GE 3 at 3.) After Applicant moved back into W’s home, but before the
foreclosure sale, W arranged for at least one tenant to rent the home for payments of
$500 per month. (GE 2 at 4.) Applicant and W describe her choice to stop paying her
mortgage obligations as a decision to “strategically default”; implying without further
explanation that this describes more responsible conduct than some other type of
default while continuing to occupy or rent out the property for three and a half years
without paying for it. (Tr. 104; AE H at 43.)
A $396 charged-off credit card debt is alleged in SOR ¶ 1.d. The several record
credit reports reflect that this account, which is one among several accounts Applicant
had with the same bank, was opened in July 2003 and became delinquent in March
2011. (GE 2 at 37-38; GE 3 at 2; GE 4 at 3; GE 5 at 5.) On May 23, 2012, she told an
investigator from the Office of Personnel Management (OPM) that this was a closed
account that was charged when her second son overdrew an associated account, and
that if she was still able she planned to satisfy this debt. (GE 2 at 7-8.) In her November
2014 answer to the SOR, she said that she had no knowledge of the account. She
stated during her testimony that she was still working to identify and possibly dispute the
debt. (Tr. 71.) In her post-hearing submission, she provided information showing
payments toward other accounts with the creditor bank, but no evidence that the alleged
delinquency was resolved. She concluded, “I can continue to follow up on this account
to resolve it.” (AE H, Part 4.) It remains unresolved.
During the six years that Applicant attended schools pursuing her associate’s
and bachelor’s degrees, she took out numerous student loans from various sources.
The three student loan debts alleged in SOR ¶¶ 1.e through 1.g were placed for
collection by the original creditors in September and October 2010. They involve a total
SOR ¶ 1.e erroneously alleges $6,195 instead of the correct amount of $6,159. (GE 3 at 2; Tr. 74.)1
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of $17,136  in delinquencies. Applicant provided voluminous documentation of1
payments she has made toward some of her other student loans, but no evidence of
payment or other attempted resolution concerning these debts despite her claims,  in
her answer to the SOR and testimony, that they were all being paid as agreed. (AE C;
AE D; AE H, Part 5; Tr. 71-78.)   
Applicant identified the delinquent $4,293 debt alleged in SOR ¶ 1.h as probably
being another student loan or possibly a home equity loan from her mortgage lender,
but the record credit reports reflect that it is the past-due balance from an unsecured
five-year $10,000 installment loan she obtained from that bank in March 2005 and
stopped paying in late 2008. Although she claimed it was being paid as agreed along
with her other student loans, she provided no evidence of payments or other actions to
resolve this debt. (AR; GE 2 at 40; GE 4 at 5; GE 5 at 6; AE H, Part 5; Tr. 84-86.)
Applicant has earned “highly effective” performance ratings, and received
numerous awards and certificates recognizing her professional achievements from her
current and former employer. She has worked continuously to obtain educational
credentials and technical training certifications, and her company has selected for a
number of overseas project teams. (AR; AE A; AE B; Tr. 42-44, 94.)
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 (DCs) and mitigating conditions (MCs), which are to be used 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
overarching adjudicative goal is a fair, impartial, and commonsense decision. According
to AG ¶¶ 2(a) and 2(c), the entire process is a conscientious scrutiny of applicable
guidelines in the context 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 the 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.
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Under Directive ¶ E3.1.14, the Government must present evidence to establish
controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, “[t]he 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.” Section 7
of Executive Order 10865 provides: “[a]ny 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.”
A person applying for access to classified information seeks to enter 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 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.
Analysis
Guideline F, Financial Considerations
The security concerns under the guideline for financial considerations are set out
in AG ¶ 18, which reads in pertinent part:      
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 record evidence potentially raises security concerns under two Guideline F
DCs, as set forth in AG ¶ 19: 
(a) inability or unwillingness to satisfy debts; and
(c) a history of not meeting financial obligations. 
Applicant has $70,825 in unresolved student loan, credit card, and installment
loan debts that became delinquent between 2008 and 2011, and remain unresolved.
She demonstrated neither the means nor any effort to resolve them, although she has
made payments toward other substantial indebtedness. She also defaulted on her home
mortgage loan in March 2009, but continued living in or renting out the house until it was
sold in foreclosure in August 2012, at which time she had failed to make more than
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$80,000 in previously agreed payments. These substantial debts raise security
concerns under DCs 19(a) and (c), thereby shifting the burden to Applicant to rebut,
extenuate, or mitigate those concerns.
The guideline includes five conditions in AG ¶ 20 that could mitigate security
concerns arising from Applicant’s financial difficulties:
(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 SOR-listed delinquent debts are recent and ongoing, without
indication that the circumstances under which they arose have changed. Her history of
financial irresponsibility goes back more than six years, with no demonstrated period of
meeting those voluntarily undertaken debt obligations despite working full time for her
current employer since August 2006. She therefore failed to establish substantial
mitigation under MC 20(a). 
Applicant also offered insufficient evidence to support significant mitigation under
MC 20(b). She voluntarily incurred all of the debt in question, and has been fully
employed during the period the payments became delinquent. This is not responsible
action under the circumstances.
Applicant provided no evidence of financial or credit counseling, and failed to
demonstrate substantial progress toward debt resolution or changes to bring her
financial situation under control. She no longer owes her mortgage lender more than
$80,000 in payments that she “strategically” chose not to make, but that history of
financial irresponsibility remains  a security concern in conjunction with her remaining
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unresolved debts. Accordingly, she did not establish mitigation  under MC 20(c) or (d)
with respect to any SOR allegations. MC 20(e) is not implicated because all debts of
concern are well documented in Applicant’s credit reports, and she offered no
documented proof of any basis to dispute them. 
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 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.   
I considered the potentially disqualifying and mitigating conditions in light of all
pertinent facts and circumstances surrounding this case. Applicant has incurred
substantial delinquent indebtedness that she has made no documented effort to repay.
Her significant delinquent debts remain outstanding, creating the ongoing potential for
pressure and duress. The evidence does not support a finding that continuation or
recurrence of financial problems are unlikely, or that behavioral changes demonstrate
rehabilitation. Applicant is a mature and experienced individual who is well-regarded at
work but is also accountable for her financial choices and irresponsibility. Overall, the
record evidence creates ongoing doubt as to Applicant’s present eligibility and suitability
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: AGAINST APPLICANT
Subparagraphs 1.a through 1.h: Against Applicant
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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.
                                              
DAVID M. WHITE
Administrative Judge