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                             DEPARTMENT OF DEFENSE
               DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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------------------------- )       ISCR Case No. 14-04773
)
Applicant for Security Clearance )
Appearances
For Government: Jeff Nagel, Esquire, Department Counsel
For Applicant: Pro se
November 12, 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 October 4, 2013. (Government Exhibit 1.)  On November 21, 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 January 15, 2015 (Answer), and
requested a hearing before an administrative judge. Department Counsel was prepared
to proceed on April 6, 2015. This case was assigned to me on April 13, 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 15, 2015. The Government offered
Government Exhibits 1 through 5, which were admitted without objection. Applicant
testified on his own behalf, and he submitted Applicant Exhibits A through L, which were
also admitted without objection. DOHA received the transcript of the hearing (Tr.) on
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June 23, 2015. Based upon a review of the pleadings, exhibits, and testimony, eligibility
for access to classified information is granted.
Findings of Fact
Applicant is 61 and divorced. He is employed by a defense contractor as a
consultant 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
admitted in part and denied in part the sole allegation in the SOR under this Paragraph.
He also submitted additional information to support his request for a security clearance.
Applicant retired from the United States Navy in 2004 after 20 years of honorable
service. He started work for his current employer almost immediately. He has had a
security clearance for approximately 30 years, without a problem. (Government Exhibit
1 at Sections 13A and 15; Tr. 26-28; 43-44.)
The single allegation in the SOR (1.a) alleges that Applicant owes $193,609 to a
mortgage company on a foreclosed condominium. Applicant and his now ex-wife were
married in 1985, separated in 2011, and are now divorced. His ex-wife had a job in the
real estate industry. In 2006 they decided to buy the condominum at issue, as a rental
property and potential second home, with an adjustable rate mortgage (ARM). They
were able to afford this condominium, and a house that was their primary residence,
when both were working. When the housing market began to collapse in 2007-8 they
were affected more than most because his wife lost much of her income. Therefore, the
Applicant had to pay for both properties with only his income. Eventually, the payments
became too much. (Tr. 28-30.)
Applicant and his wife were able to conduct a short sale on their primary
residence. However, the mortgage company was not willing to cooperate with their
attempts to complete a short sale on their second home. Applicant states, “At that point
I felt like I was drowning.” The mortgage company foreclosed on this house in
September 2008. (Applicant Exhibit I; Tr. 30-32.)
As stated, Applicant and his wife separated in 2011. The mortgage company
forwarded subsequent written communications to her address only. Applicant did not
receive Applicant Exhibits A, B, and C until the day before his hearing. Applicant Exhibit
A is a mortgage statement dated February 1, 2014, showing no principal owing.
Applicant Exhibits B and C are Form 1099s indicating that the mortgage company had
cancelled the remaining debt after the foreclosure sale. These forms are dated January
It is noted that the two most recent credit reports in the record, from April and June 2015 respectively, do not1
show any debt to this creditor. (Government Exhibits 4 and 5.)
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6, 2014. (Tr. 36-39.) Applicant does not owe anything to the mortgage company. This
debt is resolved.1
Applicant’s current financial situation is stable, as shown by the most recent
credit reports in the file. He is able to pay his monthly debts. Applicant stated that as a
result of his financial issues in the 2007-2008 time frame he is more aware of his
finances. Applicant has paid off his student loans, which he used to acquire a Master’s
in Business Administration. He has taken financial counseling courses. Applicant has
recently been pre-approved by a credit union for a mortgage loan in the amount of
$290,000. (Government Exhibits 4 and 5; Applicant Exhibits D, E, and F; Tr. 35-36, 40-
41, 44.)
Mitigation
Applicant submitted documentation showing that he is a respected employee and
person. Applicant Exhibits G and H are annual performance assessments. They show
his “Overall Competency Assessment Rating” to be “Exceeds.” (Tr. 22-23.) 
Applicant’s supervisor has known Applicant since 2004. They have worked side
by side for the last four years. He provided a letter that states, “[Applicant’s] personal
conduct, values and characteristics meet the highest standards.” (Applicant Exhibit J;
Tr. 39.)
A friend of Applicant’s for 25 years submitted a letter. He is a retired senior
Federal law enforcement official, who held a security clearance. The writer was fully
aware of the financial situation that overcame Applicant and his wife. He fully supports
Applicant’s request for continued access to classified information. (Applicant Exhibit K;
Tr. 39-40.)
Finally, a married couple who have known Applicant over 25 years also provided
a letter. In recommending Applicant for a position of trust they state, “We are both in
positions which require constant vigilance for security and professionalism. We have full
faith and confidence in [Applicant’s] ability to maintain a high level of integrity as
expected for someone with his experience and background.” (Applicant Exhibit L.)
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.
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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
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).  
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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
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 a mortgage that he 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. The housing crisis affected Applicant’s ability to pay this mortgage, which
resulted in the mortgage company foreclosing and selling the property. In 2014 the
mortgage company decided to forgive the debt and provided Applicant’s ex-wife with a
Form 1099. She finally provided the form to Applicant the night before his hearing. The
form shows that there is no debt owed to the creditor. Based on the particular facts of
this case, I find that Applicant has “initiated a good-faith effort to repay overdue creditors
or otherwise resolve debts,” as required by AG ¶ 20(d).
Applicant has received financial counseling. In addition, as found above, 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). Paragraph 1
is found for Applicant.
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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 are 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
Subparagraph 1.a: 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