DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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--------------------------------- )       ISCR Case No. 12-05959
)
)
Applicant for Security Clearance )
Appearances
For Government: Andrew H. Henderson, Department Counsel
For Applicant: Pro se
January 28, 2016
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Decision
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LOKEY ANDERSON, Darlene D., Administrative Judge:
The Applicant submitted his Electronic Questionnaire for Investigations
Processing (e-QIP) March 4, 2014.  (Government Exhibit 1.)  On July 10, 2015, the
Department of Defense (DoD), pursuant to Executive Order 10865 and Department of
Defense Directive 5220.6 (Directive), dated January 2, 1992, (as amended), issued a
Statement of Reasons (SOR) to the Applicant, which detailed reasons why the DoD
could not make the preliminary affirmative finding under the Directive that it is clearly
consistent with the national interest to grant or continue a security clearance for the
Applicant and recommended referral to an Administrative Judge to determine whether
clearance should be denied or revoked.
Applicant responded to the SOR on August 11, 2015, and he requested a
hearing before a Defense Office of Hearings and Appeals (DOHA) Administrative
Judge.  This case was assigned to this Administrative Judge on October 13, 2015.  A
notice of hearing was issued on October 15, 2015, and the hearing was scheduled for
November 18, 2015.  At the hearing the Government presented six exhibits, referred to
as Government Exhibits 1 through 6.  The Applicant did not present any exhibits, but
called one witness to testify on his behalf.  He also testified on his own behalf.
Applicant requested that the record remain open in order to submit additional
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documentation.  The record remained open until close of business on November 25,
2015.  Applicant submitted one Post-Hearing Exhibit which was admitted without
objection, and is referred to as Applicant’s Post-Hearing Exhibit A.  The official transcript
(Tr.) was received on November 30, 2015.  Based upon a review of the pleadings,
exhibits, and testimony, eligibility for access to classified information is denied.
 FINDINGS OF FACT
Applicant is 48 years old, has been married three times, and has five children
from these marriages.  He has a high school diploma, two years of trade school, and
one year of college.  He is employed with a defense contractor as an Electrician III and
is seeking to obtain a security clearance in connection with this employment.
The Government opposes Applicant's request for a security clearance, on the
basis of allegations set forth in the Statement of Reasons (SOR).  The following findings
of fact are entered as to each paragraph and guideline in the SOR:
Paragraph 1 (Guideline F - Financial Considerations)  The Government alleges that
Applicant is ineligible for clearance because he is financially overextended and at risk of
having to engage in illegal acts to generate funds.      
There are five delinquent debts set forth in the SOR totaling in excess of
$28,000.  Applicant denied each of the allegations under this guideline, except 1.c.  In
regard to 1c., he states that he has paid the debt.  Credit reports of the Applicant dated
March 19, 2014; February 21, 2014; and September 30, 2015, which includes
information from all three credit reporting agencies, reflect that except for 1.c. and 1.d.,
he remains indebted to the remaining three creditors listed in the SOR.  (Government
Exhibits 3, 4 and 5.)  Applicant has been employed with his current employer since
October 2013.     
Applicant’s history of financial problems go back as far as twenty-five years or
more.  Before addressing the allegations in the SOR, Applicant admitted to a series of
financial problems in the early 1990's related to driving on a suspended driver’s license,
and failures to appear for warrants.  His wages were also garnished for child support
arrears in 1995.  In 1996, he purchased a truck and within 24 hours determined that it
was a lemon and returned it to the dealer.  The creditor ultimately charged off $9,000 as
a result of this transaction.  
Turning to the SOR, in 2003, he and his second wife owned three properties.
They lived in one property, and had renters, subsidized by a government program, who
helped pay the mortgages on the other two properties.  When Applicant and his wife
separated in 2011, she moved into one of the properties and he into another. They
continued to spend money that they did not have.  They incurred delinquent debts that
they could not pay.     
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1.a., A delinquent debt in the approximate amount of $5,066 for a judgment
entered against the Applicant for attorney fees and a rental deposit.  Applicant
explained that he and his second wife separated in March 2011.  They entered into an
unofficial agreement at the kitchen table that she would live and take care of one house,
and he would live and take care of one of the rentals.  After the tenant moved, the
Applicant learned from his wife that the rental property was in very poor condition.  The
water heater had been damaged, there were broken or missing window screens, there
was animal urine and feces stains and odors, and a flea infestation.  The tenant had
failed to abide by the lease agreement that prohibited pets without the prior written
consent of the landlord.  The carpets and flooring had to be completely replaced.
Applicant and his wife decided not to refund the tenant’s deposit.  
In October 2012, Applicant learned that there was a default judgment entered
against him.  Applicant did nothing to overturn the default judgment.  Applicant stated
that he thought his wife was solely responsible for the rental property since the court
awarded the property to her in April 2011.  The judgment remains outstanding.
Applicant submitted a copy of the actual residential lease agreement entered into
between the parties in 2005, which names the Applicant as the only landlord.  It states
that the tenant is responsible for all damage to the property, and that the tenant is not
entitled to her rental deposit in the event that she damages the property.  It also details
the specific damage done to the property.  (Applicant’s Post-Hearing Exhibit A.)    
1.b., A delinquent debt related to the judgment described above filed in 2011 on
behalf of the tenant for her rental deposit.  Applicant’s credit report indicates a separate
judgment filed by the tenant against the Applicant in 2011, for the approximate amount
of $3,217.  Applicant states that he believes this is for the rental deposit that was not
returned to the tenant.  Applicant believes this debt to be his wife’s responsibility.  The
judgment remains outstanding.  
             
1.c., A delinquent debt owed to a cable company was sent to collection in the
amount of $575.  Applicant submitted a letter from the creditor indicating that the debt
was settled on July 28, 2015, for the amount of $287.67.  (See Applicant’s Post-Hearing
Exhibit A.)
1.d., A delinquent debt owed to a water company for an account that has been
placed for collection in the amount of $624 is no longer owing.  Applicant contends that
he paid off the account and returned all empty bottles.  He states that all fees and
penalties accumulated after the account was closed.  (Tr. p. 56.)  Applicant submitted
an e-mail correspondence from the creditor indicating that the debt was settled for
$290.35 on November 18, 2015.  (See Applicant’s Post-Hearing Exhibit A.)  
1.e., A debt owed to a resort company on a mortgage account that is past due in
the approximate amount of $5,185.  This account is in foreclosure status with a total
loan balance of $20,965.  Applicant explained that in 1994 he and his wife purchased a
time share in Las Vegas.  He tried to back out of the transaction but the creditor would
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not accept his cancellation.  He states that the creditor will now accept $10,000 to settle
the matter.  The debt remains outstanding.  
Applicant’s credit reports show a history of delinquent mortgage accounts not
listed in the SOR.  Two of the three homes owned by the Applicant and his wife were
foreclosed upon or short sold.  There are also two recent medical bills sent to collection.
One in 2015 in the amount of $1,572, the other one was sent to collections in 2013 in
the amount of $192.  Applicant initially stated that he had no knowledge of these debts.
(Tr. p. 41)   He later testified that he had paid off the debt.  (Tr. p. 74.)    
Applicant is now separated from his third wife and is supporting his two minor
sons.  He explained that she was diagnosed with cancer and went through post-
traumatic stress, and rejected him and the children.  She moved out in February 2015.
Applicant’s current supervisor, who has worked with the Applicant off and on over
the course of three years, testified that Applicant’s work product is phenomenal.
Applicant is considered to be responsible and trustworthy, and is a valuable asset to
company.  He is recommended for a security clearance.  (Applicant’s Tr. pp.  84 - 86.) 
 POLICIES
Enclosure 2 of the Directive sets forth adjudication policies divided into
"Disqualifying Factors" and "Mitigating Factors."  The following Disqualifying Factors
and Mitigating Factors are found to be applicable in this case:
Guideline F (Financial Considerations)
18.  The Concern.  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. 
Conditions that could raise a security concern:
19.(a) inability or unwillingness to satisfy debts; and
19.(c) a history of not meeting financial obligations. 
Condition that could mitigate security concerns:
20.(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
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medical emergency, or a death, divorce, or separation), and the individual acted
responsibly under the circumstances.
In addition, as set forth in Enclosure 2 of the Directive at pages 18-19,  in
evaluating the relevance of an individual’s conduct, the Administrative Judge should
consider the following general factors:
a.  The nature, extent, and seriousness of the conduct and surrounding
circumstances;
     b.  The circumstances surrounding the conduct, to include knowledgeable
participation;
c.  The frequency and recency of the conduct;
d.  The individual’s age and maturity at the time of the conduct;
e.  The extent to which participation is voluntary;
f.  The presence or absence of rehabilitation and other permanent behavior
changes;
g.  The motivation for the conduct; 
h. The potential for pressure, coercion, exploitation or duress; and
 i.  The likelihood of continuation or recurrence.
The eligibility criteria established in the DoD Directive identify personal
characteristics and conduct, which are reasonably related to the ultimate question,
posed in Section 2 of Executive Order 10865, of whether it is “clearly consistent with the
national interest” to grant an Applicant’s request for access to classified information.
The DoD Directive states, “The adjudicative process is an examination of a
sufficient period of a person’s life to make an affirmative determination that the person is
an acceptable security risk.  Eligibility for access to classified information is predicated
upon the individual meeting these personnel security guidelines.  The adjudicative
process is the careful weighing of a number of variables known as the whole-person
concept.  Available, reliable information about the person, past and present, favorable
and unfavorable should be considered in reaching a determination.” The Administrative
Judge can draw only those inferences or conclusions that have reasonable and logical
basis in the evidence of record.  The Judge cannot draw inferences or conclusions
based on evidence, which is speculative or conjectural in nature.  Finally, as
emphasized by President Eisenhower in Executive Order 10865, “Any determination
under this order . . . 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.”
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CONCLUSIONS
In the defense industry, the security of classified industrial secrets is entrusted to
civilian workers who must be counted upon to safeguard such sensitive information
twenty-four hours per day, seven days per week.  The Government is therefore
appropriately concerned when available information indicates that an Applicant for
clearance may be involved in instances of financial irresponsibility, which demonstrates
poor judgment or unreliability.
It is the Government’s responsibility to present substantial evidence to support
the finding of a nexus, or rational connection, between the Applicant’s conduct and the
holding of a security clearance.  If such a case has been established, the burden then
shifts to the Applicant to go forward with evidence in rebuttal, explanation or mitigation,
which is sufficient to overcome or outweigh the Government’s case.  The Applicant
bears the ultimate burden of persuasion in proving that it is clearly consistent with the
national interest to grant him or her a security clearance.
In this case the Government has met its initial burden of proving that the
Applicant has been financially irresponsible (Guideline F).  This evidence indicates poor
judgment, unreliability and untrustworthiness on the part of the Applicant.  Because of
the scope and nature of the Applicant's conduct, I conclude there is a nexus or
connection with his security clearance eligibility.
The evidence shows that Applicant resolved two of the five delinquent debts set
forth in the SOR.  He remains indebted for the larger debts totaling an amount in excess
of $28,000.  Admittedly, there were circumstances that occurred that were beyond the
Applicant’s control that contributed to his financial problems.  Namely, a tenant that
damaged his property.  However, he did nothing to pursue the matter.  He simply
ignored the situation.  Instead, the tenant filed suit against him for failing to return her
rental deposit.  It also appears that her attorney’s sought a judgment against the
Applicant for the tenant’s attorney fees.  Without more, both judgments entered by the
court are valid, and Applicant is held responsible to pay them.  In addition, there is no
evidence in the record to show that he changed his lifestyle or his spending habits, or
that he has worked to resolve the debts listed in the SOR.         
Applicant’s history of excessive indebtedness, without sufficient mitigation,
demonstrates a pattern of unreliability and poor judgment.  Applicant failed to provide
proof of payment, receipts, or any documentation to demonstrate that he resolved his
delinquent debts.  There is nothing in the record to show that Applicant can live within
his means.  Without more, the Applicant has failed to establish that he is fiscally
responsible.  Furthermore, there is no evidence that he has received credit counseling
to help him set a budget and learn to live within it, or that his finances are under control.
Under the particular circumstances of this case, Applicant has not met his burden
of proving that he is worthy of a security clearance.  He does not have a concrete
understanding of his financial responsibilities and has not sufficiently addressed his
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delinquent debts in the SOR.  Thus, it cannot be said that he has made a good-faith
effort to resolve his past due indebtedness.  He has not shown that he is or has been
reasonably, responsibly or prudently addressing his financial situation.  Applicant has
not demonstrated that he can properly handle his financial affairs or that he is fiscally
responsible.  His debts are significant.  Assuming that he demonstrates a history and
pattern of fiscal responsibility, including the fact he has not acquired any new debt that
he is unable to pay, he may be eligible for a security clearance sometime in the future.
However, he is not eligible now.  Considering all of the evidence,  Applicant has not
introduced persuasive evidence in rebuttal, explanation or mitigation that is sufficient to
overcome the Government's case. 
Under Guideline F (Financial Considerations), Disqualifying Conditions 19.(a)
inability or unwillingness to satisfy debts; and 19.(c) a history of not meeting financial
obligations, apply.  It can be argued that Mitigation Condition 20.(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 applies,
because of his tenant situation.  However, this mitigating condition is not controlling.
Applicant did not act responsibly under the circumstances.  He ignored the situation and
continued to spend money he did not have.  He has still not set up any payment plans
to resolve his delinquent debts.  Applicant could benefit from intense financial
counseling. In this case, none of the mitigating conditions are applicable.  Accordingly, I
find against the Applicant under Guideline F (Financial Considerations).    
I have also considered the “whole-person concept” in evaluating Applicant’s
eligibility for access to classified information.  Under the particular facts of this case, the
totality of the conduct set forth above, when viewed under all of the guidelines as a
whole, support a whole-person assessment of poor judgement, untrustworthiness,
unreliability, a lack of candor, an unwillingness to comply with rules and regulations,
and/or other characteristics indicating that the person may not properly safeguard
classified information.
  
I have considered all of the evidence presented.  It does not mitigate the negative
effects of his history of financial indebtedness and the effects that it can have on his
ability to safeguard classified information.  On balance, it is concluded that Applicant
has not overcome the Government's case opposing his request for a security clearance.
Accordingly, the evidence supports a finding against Applicant as to the factual and
conclusionary allegations expressed in Paragraph 1 of the SOR.  
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    FORMAL FINDINGS
Formal findings For or Against the Applicant on the allegations in the SOR, as
required by Paragraph 25 of Enclosure 3 of the Directive are:
Paragraph 1:  Against the Applicant.
    Subpara.    1.a. Against the Applicant.
Subpara.    1.b. Against the Applicant.
Subpara.    1.c. For the Applicant.
Subpara.    1.d. For the Applicant.
Subpara.    1.e. Against the Applicant.
DECISION
In light of all the circumstances presented by the record in this case, it is not
clearly consistent with the national interest to grant or continue a security clearance for
the Applicant.
  Darlene Lokey Anderson
Administrative Judge