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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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------------------------ )       ISCR Case No. 14-05015
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Applicant for Security Clearance )
Appearances
For Government: Chris Morin, Esquire, Department Counsel
For Applicant: Pro se
September 3, 2015
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Decision
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MOGUL, Martin H., Administrative Judge:
On February 10, 2015, the Department of Defense (DoD) issued a Statement of
Reasons (SOR) detailing the security concerns under Guideline F  for Applicant. (Item
1.) 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 after September 1, 2006. 
 
On March 21, 2015, Applicant replied to the SOR (RSOR) in writing, and he
requested that his case be decided on the written record in lieu of a hearing. (Item 2.)
On May 14, 2015, Department Counsel issued the Department's written case. On June
12, 2015, a complete copy of the file of relevant material (FORM) was provided to
Applicant. In the FORM, Department Counsel offered six documentary exhibits. (Items
1-6.) Applicant was given the opportunity to file objections and submit material in
refutation, extenuation, or mitigation. A response was due on July 22, 2015. Applicant
submitted a two page letter, identified and entered into evidence without objection as
Item A. The case was assigned to this Administrative Judge on July 21, 2015. Based
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upon a review of the pleadings and exhibits, eligibility for access to classified
information is denied.
Findings of Fact
After a complete and thorough review of the evidence in the record, including
Applicant's RSOR, and the FORM, and upon due consideration of that evidence, I make
the following findings of fact: 
Applicant is 65 years old. He served in the United States Army and was a police
officer for 20 years before retiring. He is employed by a defense contractor, and he
seeks a DoD security clearance in connection with his employment in the defense
sector.
Guideline F, Financial Considerations
The SOR lists four allegations (1.a. through 1.d.) regarding financial difficulties,
specifically overdue debts totaling approximately $30,000, under Adjudicative Guideline
F. The debts will be discussed below in the same order as they were listed on the SOR:
1.a. This overdue debt is cited in the SOR for a collection account in the amount
of $14,343. In his RSOR, Applicant admitted this SOR allegation. He wrote that this was
a business account for the purchase of carpeting for his business. His explanation is
that he was charged a finance charge, which was contrary to his understanding that
there would be no finance charge. Ultimately, despite Applicant’s attempt to resolve this
dispute, it was never settled, and it has been sold to collection agency. (Item 2.) 
Applicant submitted a letter that he wrote to the creditor of this account on March
8, 2010, disputing this debt. While I find that Applicant does have a good-faith reason to
believe that he does not owe the entire amount demanded by the creditor, by his own
estimation he did owe at least $5,690. The credit reports also show that Applicant owes
a significant amount to this creditor, and there is no indication that Applicant disputed
this debt with the credit reporting agencies. (Items 5 and 6.) I find that this debt is still
outstanding.
1.b. This overdue debt is cited in the SOR for a collection account in the amount
of $7,032. In his RSOR, Applicant admitted this SOR allegation, writing that this debt is
from a personal credit card account, and he is currently working on paying this debt off.
(Item 2.) In Item A, Applicant’s Post-FORM letter, he wrote that this debt remains
unpaid, despite his previous contention in the RSOR that he is working to pay this debt
off. I find that this debt is still outstanding.
1.c. This overdue debt is cited in the SOR for a charged-off account in the
amount of $6,275. In his RSOR, Applicant denied this SOR allegation, contending that
he does not owe this debt because the creditor sent him a 2014 Form 1099-C,
“Cancellation of Debt,” which Applicant included with the RSOR. The 1099-C showed
that the creditor discharged the debt in the amount of $5,575.59. (Item 2.) Item 6 shows
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that this debt, was closed at the consumer’s request and is charged off, with the amount
owed $1,123. (Item 6.) No evidence was introduced to show what action, if any,
Applicant did to have this debt discharged, and if Applicant included the amount
discharged in his 2014 tax return. 
1.d. This overdue debt is cited in the SOR for a collection account in the amount
of $3,103. In his RSOR, Applicant admitted this SOR allegation, writing that this debt is
from a personal credit card account, and he is currently working on paying this debt off.
(Item 2.) In Item A, Applicant wrote that this debt remains unpaid, again despite his
previous contention in the RSOR that he is working to pay this debt off. I find that this
debt is still outstanding.
Applicant wrote in his RSOR that his overdue debts began in 2007 when he put
his home up for sale with the intention of buying a new home. Shortly after he signed a
contract to construct his new home, the housing market crashed and he was in a
position of holding two mortgages. During the same period, the thrift store in which he
worked, and that he had founded in 2005, was also hurt by the falling economy, and he
was forced to take a reduced salary. Ultimately the store closed in December 2012.
Applicant and his wife used their credit cards to pay for their mortgages and their living
expenses, hoping that the economy would improve. By mid 2009, they were unable to
make their payments and their credit cards became delinquent. (Item 2.)
Applicant wrote that prior to his accounts becoming overdue in 2009, he was
current with all of his bills and had an excellent credit rating. Finally, he averred that he
has not incurred any new delinquencies since 2009, and he has rented out one of his
homes and he remained current on both of his mortgages with no late or missed
payment on either. (Item 2.)
The Government has established all of Applicant’s debts through Applicant’s
RSOR, and the credit reports. (Items 5 and 6.) No evidence was introduced to establish
that since the SOR was issued on February 10, 2015, Applicant has contacted any of
the creditors, made any payment plans, or resolved or reduced any of these overdue
debts. 
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 and mitigating conditions, which are useful 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.
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 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. . . .” The
applicant has the ultimate burden of persuasion as to obtaining a favorable clearance
decision. 
A person who applies 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.
Section 7 of Executive Order 10865 provides that adverse 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.” See also EO 12968, Section 3.1(b) (listing multiple
prerequisites for access to classified or sensitive information).
Analysis
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. 
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The guideline notes several conditions that could raise security concerns and
could potentially apply in this case.  Under AG ¶ 19(a), “an inability or unwillingness to
satisfy debts,” is potentially disqualifying. Similarly under AG ¶ 19(c), “a history of not
meeting financial obligations” may raise security concerns. I find that both of these
disqualifying conditions apply to Applicant in this case. The evidence has established
that Applicant accumulated significant delinquent debt, much of it several years old,
which has not been satisfied. 
AG ¶ 20 provides conditions that could mitigate security concerns from financial
difficulties. Under AG ¶  20(b), it may be mitigating 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.” As
reviewed above, Applicant explained his financial difficulties occurred, in part, because
of the poor economy which hurt Applicant’s business and forced him to have two
mortgages. However, despite Applicant’s expressed intention to resolve his significant
overdue debts, and the fact that the debt listed on the SOR as 1.c. may be resolved, no
evidence was introduced to establish that Applicant has been responsible in taking any
steps to resolve, or even reduce, any of the four overdue SOR debts. Therefore, I find
that this mitigating condition is not a factor for consideration in this case.
Since there is no evidence that Applicant has initiated a good-faith effort to repay
overdue creditors, I do not find that AG ¶  20(d) is applicable. Finally, I do not find any
other mitigating condition applies to this case. Therefore, I find Guideline F against
Applicant.
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 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.      
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I considered the potentially disqualifying and mitigating conditions in light of all
the facts and circumstances surrounding this case. Based on all of the reasons cited
above as to why the disqualifying conditions apply and no mitigating conditions are
applicable, I find that the record evidence leaves me with significant questions and
doubts as to Applicant’s eligibility and suitability for a security clearance under the
whole-person concept. For all these reasons, I conclude Applicant has not mitigated the
security concerns under the whole-person concept. 
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. - 1.d.: Against  Applicant
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.
                                              
Martin H. Mogul
Administrative Judge