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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
------------------- )       ISCR Case No. 14-05286
)
Applicant for Security Clearance )
Appearances
For Government: 
Jeff Nagel, Esquire, Department Counsel
For Applicant: 
Alan Edmunds, Esquire
The Edmunds Law Firm
November 4, 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 January 21, 2013. (Government Exhibit 1.)  On December 16, 2014, the
Department of Defense issued a Statement of Reasons (SOR) detailing the security
concerns under Guideline F (Financial Considerations) regarding 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 20, 2015 (Answer), and
requested a hearing before an administrative judge. Department Counsel was prepared
to proceed on April 27, 2015. This case was assigned to me on May 4, 2015. The
Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on May 20,
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2015. I convened the hearing as scheduled on June 9, 2015. The Government offered
Government Exhibits 1 through 5, which were admitted without objection. Applicant
testified on his own behalf, called three additional witnesses, and submitted Applicant
Exhibits A through U, also without objection. Applicant asked that the record remain
open for the receipt of additional documents. Applicant submitted Applicant Exhibits V
through BB on July 1, 2015. They were admitted without objection. DOHA received the
transcript of the hearing (Tr.) on June 18, 2015. The record closed on July 2, 2015.
Based upon a review of the pleadings, exhibits, and testimony, eligibility for access to
classified information is granted.
Findings of Fact
Applicant is 56, and married. Applicant retired in 2000 after a very distinguished
24 years of military service. 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
admitted allegations 1.a and 1.b in the SOR. He denied the remaining allegations. He
also submitted additional information to support his request for a security clearance.
Before 2010 Applicant lived in State A. He and his wife were both employed and
their financial status was good. On July 22, 2010, Applicant’s wife’s mother and
grandmother were involved in a house fire in State B, which is across the country from
State A. The grandmother was killed in the fire, and Applicant’s wife’s mother was
severely burned. At her mother’s request, Applicant’s wife left her job in State A and
moved to State B to be with her parents. At around this time it was also discovered that
Applicant’s father-in-law was suffering from terminal cancer. The upshot of all of this
was a decrease in Applicant’s income by at least half, which caused the financial issues.
(Applicant Exhibit C; Tr. 52, 71-72.)
The SOR lists five delinquent debts, totaling approximately $376,751. The
existence and amount of the debts is supported by credit reports dated August 22,
2008; September 23, 2014; April 27, 2015; and June 9, 2015. (Government Exhibits 2,
3, 4, and 5.)
The current status of the debts is as follows:
1.a. Applicant admitted that he owed a mortgage company approximately
$344,638 in arrearages on a house in State A, with a total mortgage balance of
approximately $750,818. As stated above, in 2010 Applicant’s wife had to move from
State A to State B to help with the medical and personal care of her parents after the
fire that killed her grandmother. Beginning in early 2011, and proceeding to a month
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before the hearing, Applicant, and his wife have had protracted, and still unsuccessful,
negotiations with the mortgage holder. (Applicant Exhibits A, B, C, D, and E; Tr. 57-61,
73-74, 80-83.) 
Applicant states on page 2 of his Answer:
To date, we have submitted 4 letter of hardship, 8 short sale packages, we
have had realtors show the house 21 times, and had our lawyers provide
volumes of data for the . . . property. We are at a documented impasse for
this property as we cannot move forward because [the mortgage service
company] will not engage on any property over the $729,000 amount.
In addition, the mortgage service company refused to accept a deed in lieu of
foreclosure on the property. In fact, in an email dated September 1, 2011, Applicant’s
lawyer stated in regard to this refusal, “[Mortgage service company’s attorney] can not
explain his clients’ stupidity.” (Applicant Exhibit V; Tr. 83-84.)
In a letter dated January 4, 2013, Applicant wrote to the mortgage service
company, stating:
The property has been available for sale since October 2010 either via
short sale or via public auction. You have failed to take any action towards
the auction or the sale of the property in over three years. This is
irresponsible on your behalf to not at least try to liquidate the property
while still assessing fines upon us. 
(Applicant Exhibit A at 1.)
Finally, Applicant submitted documentation showing that the mortgage service
company was subject to a class-action lawsuit regarding irregularities in how it serviced
loans like his. Applicant believes that he was subject to fraudulent business practices by
the mortgage service company. (Applicant Exhibit W; Tr. 91-93.)
1.b. Applicant admitted that he was indebted to a cable television company in
the amount of $130 due to a billing error in connection with his move to State B.
Applicant showed proof of payment of this debt. This debt is resolved. (Applicant Exhibit
F; Tr. 53, 61, 74.)
1.c. Applicant denied that he owes $3,937 for a time share. Applicant is
disputing this debt, which he believed is the result of a communication mixup between
him and the company. He submitted documentation showing that there was an ongoing
discussion, from 2007 until 2011, between the company and Applicant in how to
proceed to pay this arrearage, or otherwise resolve the issue. Applicant wishes to
resolve this situation, but is unsure how to proceed. (Applicant Exhibit G; Tr. 61-63, 74-
75, 85-88.) This debt is not resolved, but is in dispute.
1.d. Applicant denied that he currently owes $27,533 for a time share.
Applicant stated that he and his wife never signed a binding contract with this company
Applicant submitted evidence that he had successfully owned and timely paid on another time share property.1
(Applicant Exhibit K; Tr. 64-65.)
Applicant submitted evidence that he had successfully paid off a judgment he did not know about until he2
pulled his credit report. (Applicant Exhibits L and Y; Tr. 65-67.)
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in 2006. In fact, he submitted an email between Applicant and his wife in 2006 wherein
they discussed cancelling this contract. He submitted documentation showing that
written dispute letters concerning this debt were sent to the collection agent and the
credit bureaus in 2011, and again in 2015. (Applicant Exhibits H, I, J, and X; Tr. 56, 63-
64, 75-76, 88-91, 93.) This debt is not resolved, but is in dispute.1
1.e. Applicant denied owing $513 to a mobile telephone company. He
submitted documentation showing that the company’s collection agent stopped
collecting on the account stating, “You have no further financial obligation regarding this
account.” (Applicant Exhibit P; Tr. 56-57, 68-69.) This debt is resolved.
Applicant and his wife completed an intensive money and debt management
program run by a state consumer credit counseling service. Applicant’s current financial
situation is stable. He is able to pay his monthly debts, and have savings. (Applicant
Exhibits M, N, and Z; Tr. 67-68, 77-80.)2
Mitigation
As stated, Applicant had a long and distinguished military career. When he
retired he was a chief warrant officer. (Applicant Exhibits Q, R, S and BB; Tr. 48-51.)
Since his retirement he has had an equally successful career in the defense industry.
(Applicant Exhibit T.)
Three co-workers of Applicant testified. All the witnesses had knowledge of the
allegations in the SOR and of Applicant’s family situation. They recommend him for a
position of trust.
The first one has worked with Applicant for over two years. He testified,
“[Applicant] is probably one of the most honest, trustworthy Engineers I’ve ever worked
with.” (Applicant Exhibit U at 3; Tr. 24-28.) 
The second witness is senior to Applicant and provides input to his evaluations.
With regard to Applicant he stated, “[Applicant] is my right-hand man. He is the person
that I trust when I’m away and I don’t have to worry about anything else when I use
him.” (Applicant Exhibit U at 4-5; Tr. 30-36.)
The final witness is Applicant’s supervisor. He has known Applicant for five years.
He trusts Applicant and has a high respect for his ethics and abilities. Applicant ranks
high in the organization and his evaluations also show Applicant is above average,
exceeding expectations. (Tr. 37-46.)
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Applicant Exhibit U contains four other letters of recommendation. They are from
people who have known Applicant in the military, as well as in the defense industry. The
writers include a former service member who has known Applicant for 20 years, as well
as current and former Federal employees. All of them describe Applicant’s technical
ability and trustworthiness, as well as his reputation for honesty and integrity. Several
had intimate knowledge of Applicant’s issues with the mortgage service company
regarding his house in State A. 
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
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
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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
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 five 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. When informed of the two commercial debts in allegations 1.b and 1.e,
Applicant immediately resolved them. 
Applicant stated on page 88 of the Transcript that he wants to resolve this debt, since he realizes that he still3
owes it. He appears to have the financial means to do so.
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With regard to the three debts involving property, it is worthwhile to explore each
debt individually:
1.a. In 2010 Applicant was faced with a horrible situation. A house fire had
killed his wife’s grandmother and left her mother gravely hurt. An only child, Applicant’s
wife had to leave her job and move across the country. The loss of her income meant
that Applicant could no longer cover the costs of the mortgage. That began a long-term,
concerted attempt by Applicant to reach some resolution with the mortgage service
company and resolve the debt. Five years later, despite Applicant’s documented best
efforts, no resolution has been reached. There is also some evidence that Applicant
may be part of a class-action lawsuit, which may actually result in financial or other
restitution to him from the mortgage service company. What is obvious is that Applicant
has behaved responsibly, not simply allowing this sad situation to fester.
1.c. The situation involving the past-due time share debt for $3,937 is
somewhat confusing. Based on the documentation submitted by Applicant, it appears
that both he and the time share company had different ideas how to proceed. At one
point in 2011 Applicant repeatedly informed them that documentation to resolve the
situation, which the time share company stated was forthcoming, was not delivered. It
appears that at this point, given other situations in his life, Applicant simply gave up.
Under his particular circumstances in 2010 and 2011, I find that he behaved responsibly
with regard to this debt.3
1.d. Applicant vehemently denies that he owes any money to this time share
company, alleging that they are attempting to fraudulently obtain over $27,000 from him.
He submitted contemporaneous documentary information showing he and his wife did
not intend to enter into a contract with this company. He also showed that he has
submitted dispute letters to the creditor, as well as to the credit bureaus. He has
behaved responsibly with regards to this debt, and documented his legitimate basis to
dispute it.
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 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). Finally, with regard to the
two larger real-estate debts, “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,” as required by AG ¶ 20(e).
Applicant has acted in a way that shows good judgment, making the best he
could out of a very 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
ISCR Case No. 06-12930 at 2 (App. Bd. Mar. 17, 2008) (quoting ISCR Case No. 04-09684 at 2-3 (App. Bd.4
Jul. 6, 2006)).
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[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 of4
this case. Guideline F is found for 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 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 were primarily the result of circumstances beyond his control, have been
or are being 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.
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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.e.: For Applicant
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