DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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                                                                      )                                                             
        ------------------------------------                   )         ISCR  Case No.  15-00304         
                                                             )
)
Applicant for Security Clearance )
Appearances
For Government: Eric Borgstrom, Esq., Department Counsel
For Applicant: Pro se  
_____________
 Decision
  ______________
WESLEY, Roger C., Administrative Judge:
Based upon a review of the pleadings, exhibits, and testimony, I conclude that
Applicant failed to mitigate the security concerns regarding his financial considerations.
Eligibility for access to classified information is denied. 
 
Statement of Case
On July 1, 2015, the Department of Defense (DOD) Consolidated Adjudications
Facility (CAF) issued a Statement of Reasons (SOR) detailing reasons why DoD
adjudicators could not make the affirmative determination of eligibility for a security
clearance, and recommended referral to an administrative judge to determine whether a
security clearance should be granted, continued, denied, or revoked. The action was
taken under Executive Order 10865, Safeguarding Classified Information Within
Industry (February 20, 1960), as amended; DOD Directive 5220.6, Defense Industrial
Personnel Security Clearance Review Program (January 2, 1992), as amended
(Directive); and the Adjudicative Guidelines (AGs) implemented by DoD on September
1, 2006.  
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Applicant responded to the SOR on July 24, 2015, and requested a hearing. The
case was assigned to me on October 20, 2015. The case was scheduled for hearing on
November 19, 2015. At the hearing, the Government's case consisted of five exhibits
(GEs 1-5). Applicant relied on one witness (himself) and ten exhibits (AEs A-L). The
transcript (Tr.) was received on December 2, 2015.     
Summary of Pleadings
Under Guideline F, Applicant allegedly accumulated 16 delinquent debts
exceeding $36,000.  Allegedly, these debts remain outstanding.
In his response to the SOR, Applicant admitted most of the allegations with
explanations. He denied any debts owed to creditors covered in subparagraph 1.I
(disputed account that he claims belongs to his father) and subparagraphs 1.n and 1.o
(duplicates of subparagraphs 1.g and 1.h, respectively). Applicant claimed he
experienced  extended periods of unemployment in 2007-2008 and loss of income
between 2010 and 2014 due to a layoff and forced reliance on part-time jobs and
unemployment income. He claimed he paid off a previous judgment (not included in the
SOR) and is paying down another creditor listed in the SOR under subparagraph 1.m.
      Findings of Fact
Applicant is a 46-year-old program analyst of a defense contractor who seeks a
security clearance. The allegations covered in the SOR and admitted by Applicant are
incorporated and adopted as relevant and material findings. Additional findings follow.
Background
Applicant married in May 1995 and legally separated from his spouse in May 2002.
(GE 1; Tr. 56) Applicant has no children from his marriage. He was never officially
divorced from his spouse and filed a property settlement agreement in 2002 covering the
past ten years. He has no children from this marriage. He has been living with his
significant other as cohabitants; they have a seven-year old son from this relationship.
(GE 1; Tr. 56-58, 64,81) 
Applicant earned a bachelor’s degree from a recognized university in 1991. (GE 1
and AE C; Tr. 59)   He claimed no military service. 
Applicant has worked for his current employer since August 2013 as a program
analyst. (GE 1 and AE C) He has held a part-time position as a basketball coach since
2008. (AE C) Between December 2011 and August 2013, he held no full-time
employment position and relied on his income from his part-time employment and
unemployment insurance. (GE 1 and AE C; Tr. 59-62) Between December 2010 and
December 2011, Applicant worked as a personal banker for a local bank and was relieved
of his duties with the bank for a cited customer data violation (consistently disputed by
Applicant (GE 1; Tr. 51) Before joining this local bank, he worked for various financial
institutions over the course of two and a half years. (GE 1 and AE C; Tr. 68-70) He was
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unemployed for a period between May 2007 and January 2008 following a corporate
layoff from a firm that was downsizing. (GE 1 and AEs C and J; Tr. 50-52) Before his
layoff from this firm, he worked for this firm as a territory manager for about six months
spanning between November 2006 and May 2007.(GE 1; Tr. 59-61)
Finances
Between 2008 and 2013, Applicant was limited to part-time employment, except
for a brief period in 2010-2011, and struggled to pay his bills. (GEs 1-5 and AE C) During
this time, he accumulated delinquent debts with a host of creditors (mostly credit card
debts). 
Applicant’s listed debts are as follows; creditor 1.a ($1,196); creditor 1.b ($1,504);
creditor 1.c ($439); creditor 1.d ($796); creditor 1.e ($791); creditor 1.f ($1,013); creditor
1.g ($692); creditor 1.h ($487); creditor 1.i ($3,465); creditor 1.j ($7,591); creditor 1.k
($5,565); creditor 1.l ($2,527); creditor 1.m ($2,114); creditor 1.n ($692); creditor 1.o
($486); and creditor 1.p ($1,363). Altogether, these listed delinquent debts exceed
$36,000. (GEs 2-4) 
One of the listed debts in the SOR is a credit card debt with creditor 1.i. Applicant
claims this debt belongs to his father that he has never had a creditor 1.i credit card.
(Answer to SOR)  His claims are corroborated. Recent credit reports list Applicant as an
authorized user only. (HE 1 and GEs 4-5) On the basis of Applicant’s own accounts and
corroborating credit reports, inferences warrant that Applicant’s listed 1.I debt is not a
debt for which Applicant is legally responsible for. Four other listed debts (creditors 1.g
and 1.n and creditors 1.h and 1.o) appear to be duplicates. Applicant’s disputes with
these  creditors over duplication are accepted.
Applicant has addressed some of his admitted delinquent accounts since returning
to full-time employment in 2013. He has paid down his creditor 1.c account through a debt
assistance firm and is working with another debt counselor on paying other debts. (AEs B
and H; Tr. 54-55) And he has  paid off a non-listed judgment debt in 2015 in the amount
$2,600 by creditor garnishment over a four-week period in May 2014 for the whole
amount.  (AE G; Tr. 89-95)  However, to date, he has not addressed any of his other
listed debts. (Tr. 54) He also satisfied another non-SOR debt in October 2015 with a $619
payoff. (AE H; Tr. 41-42)
Applicant currently makes $49,000 a year from his current employer. He earns an
estimated $2,000 to $4,000 a year from his basketball coaching, and an additional $4,000
to $5,000 from other part-time employment. (AE L; Tr. 67, 76-77) Altogether, he earns
about $57,500 a year from combined income sources. (AE L; Tr. 67, 76-77)
Applicant assured that he is current with his taxes and monthly expenses. (Tr. 78-
79) Beginning in May 2014, he has worked with a debt counselor, albeit without any
written agreement. (AE B; Tr. 84-85) He also counseled with an attorney about his debts
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and the merits of pursuing bankruptcy. Out of concern for the costs of funding a
bankruptcy petition, he  has not elected to file for bankruptcy with her. (Tr. 83-84) 
Besides the listed SOR debt (creditor 1.c) he is paying down, he satisfied a
judgment entered against him in 2011. He satisfied the balance owing on this judgment
debt in 2015, after being garnished on the judgment for a number of months in 2014. (AE
G; Tr. 93-94) He satisfied another non-SOR debt in October 2015 with a $619 payoff. (AE
H; Tr. 41-42) 
With his limited resources, Applicant has encountered difficulties paying his other
debts. He has a 401(k) retirement account of only $4,500 and has already borrowed once
against the account to pay off a non-SOR debt. (AE H; Tr. 97-98) Currently, he is
committed to paying off one debt at a time and with his limited income, he can not be any
more specific. (Tr. 50) At this time, he has no established plan for addressing his
remaining debts in any definitive time frame.  (Tr. 108, 117-118)
Endorsements
Applicant is highly regarded by his manager who assigned him strong performance
evaluations and expressed the utmost trust in his handling of sensitive matters. (AE K)
Applicant’s manager noted his contributions to his community through his service as a
local basketball coach for various youth organizations. Other colleagues credited him
with being a highly trustworthy team member and proactive member of the community as
a women’s basketball coach. (AE K)  
Applicant’s documented performance evaluations for the past two rating years
credit him with exceeding expectations in all of the rating categories. (AE J) Specifically,
in this category rating, he is credit with consistently meting, and sometimes exceeding all
performance standards expectations relative to showing initiative and versatility, working
collaboratively, and having strong technical and interpersonal skills. (AE J) 
Policie  s                   
           The AGs list guidelines to be used by administrative judges in the decision-making
process covering security clearance cases. These guidelines take into account factors that
could create a potential conflict of interest for the individual applicant, as well as
considerations that could affect the individual’s reliability, trustworthiness, and ability to
protect classified information. These guidelines include "[c]onditions that could raise a
security concern and may be disqualifying” (disqualifying conditions), if any, and many of
the "[c]onditions that could mitigate security concerns.” 
These guidelines must be considered before deciding whether or not a security
clearance should be granted, continued, or denied. The guidelines do not require
administrative judges to place exclusive reliance on the enumerated disqualifying and
mitigating conditions in the guidelines in arriving at a decision. Each of the guidelines is to
be evaluated in the context of the whole person in accordance with AG ¶ 2(c). 
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In addition to the relevant AGs, administrative judges must take into account the
pertinent considerations for assessing extenuation and mitigation set forth in AG ¶ 2(a) of
the AGs, which are intended to assist the judges in reaching a fair and impartial
commonsense decision based upon a careful consideration of the pertinent guidelines
within the context of the whole person. 
The adjudicative process is designed to examine a sufficient period of an
applicant’s life to enable predictive judgments to be made about whether the applicant is
an acceptable security risk. The following AG ¶ 2(a) factors are pertinent: (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 chances; (7) the motivation for the conduct; (8) the potential for
pressure, coercion, exploitation, or duress; and (9) the likelihood of continuation or
recurrence.
 Viewing the issues raised and evidence as a whole, the following individual
guidelines are pertinent in this case:
Financial Considerations
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.  Compulsive gambling is a concern as it may lead to financial
crimes including espionage.  Affluence that cannot be explained by known
sources of income is also a security concern.  It may indicate proceeds
from financially profitable criminal acts.  AG ¶ 18.
Burden of Proof
By virtue of the principles and policies framed by the AGs, a decision to grant or
continue an applicant's security clearance may be made only upon a threshold finding
that to do so is clearly consistent with the national interest.  Because the Directive
requires administrative judges to make a commonsense appraisal of the evidence
accumulated in the record, the ultimate determination of an applicant's eligibility for a
security clearance depends, in large part, on the relevance and materiality of that
evidence. See United States, v. Gaudin, 515 U.S. 506, 509-511 (1995).  As with all
adversarial proceedings, the judge may draw only those inferences which have a
reasonable and logical basis from the evidence of record.  Conversely, the judge cannot
draw factual inferences that are grounded on speculation or conjecture.
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The Government's initial burden is twofold: (1) it must prove by substantial
evidence any controverted facts alleged in the SOR, and (2) it must demonstrate that
the facts proven have a material bearing to the applicant's eligibility to obtain or maintain
a security clearance. The required materiality showing, however, does not require the
Government to affirmatively demonstrate that the applicant has actually mishandled or
abused classified information before it can deny or revoke a security clearance. Rather,
the judge must consider and weigh the cognizable risks that an applicant may
deliberately or inadvertently fail to safeguard classified information.
Once the Government meets its initial burden of proof of establishing admitted or
controverted facts, the evidentiary burden shifts to the applicant for the purpose of
establishing his or her security worthiness through evidence of refutation, extenuation,
or mitigation.  Based on the requirement of Executive Order 10865 that all security
clearances be clearly consistent with the national interest, the applicant has the ultimate
burden of demonstrating his or her clearance eligibility. “[S]ecurity-clearance
determinations should err, if they must, on the side of denials.” See Department of the
Navy v. Egan, 484 U.S. 518, 531 (1988). 
Analysis  
Applicant is a highly regarded program analyst for his current employer since
joining his firm in 2013. Over the course of the previous five years he encountered
recurrent periods of unemployment and underemployment that hampered his ability pay
his bills in a timely way without any help from his wife or current cohabitant.  
Security concerns are raised over Applicant’s accumulation of delinquent debts
during the 2008-2013 period when he lacked consistent full-time employment.
Applicant’s accrual of delinquent debts warrants the application of two of the
disqualifying conditions (DC) of the AGs:  DC ¶ 19(a), “inability or unwillingness to
satisfy debts,” and DC ¶ 19(c), “a history of not meeting financial obligations.”
Holding a security clearance involves the exercise of important fiducial
responsibilities, among which is the expectancy of consistent trust and candor.
Financial stability in a person cleared to access classified information is required
precisely to inspire trust and confidence in the holder of the clearance. While the
principal concern of a clearance holder’s demonstrated financial difficulties is
vulnerability to coercion and influence, judgment and trust concerns are also implicit in
financial cases.
Extenuating circumstances are present in connection with Applicant’s
accumulation of delinquent debts, attributable in part to his recurrent periods of
unemployment and underemployment. Applicant’s circumstances merit partial
application of MC ¶ 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.”
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Before his layoff in 2007, Applicant enjoyed good credit. With his reduced income
while unemployed and working part-time jobs, Applicant struggled to stay current with
his debts: some listed in the SOR as unpaid accounts, and some not included in the
SOR.  By 2013, he was delinquent on many of his debts and resigned to paying his
debts one debt at a time. To date, he has satisfied two non-SOR debts (inclusive of a
judgment debt that was garnished by the judgment holder). Of the listed SOR debts, he
has voluntarily paid down the debt owed to creditor 1.c. Two of the SOR listed debts
(i.e., creditors 1.n and 1.o) are duplicates of two other listed SOR debts and are
resolved favorably to Applicant. Similarly, probative evidence established that the listed
creditor 1.i debt does not belong to Applicant.
However, Applicant has been unable to address his remaining debts with his
limited income, or document his dispute with creditor 1.l. And his payment initiatives are
insufficient to fully satisfy the acting responsibly component of MC ¶ 20(d).  
To his credit, Applicant did pursue financial counseling with professional
counselors. Both answered questions about addressing his debts. For lack of income,
he never followed through with any formal agreements with these counseling firms.
Based on his limited counseling initiatives, MC ¶ 20(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,” has only limited application to Applicant’s
situation.
With a host of delinquent debts still unaddressed and the lack of any concrete
plan for paying his remaining debts, Applicant is unable to demonstrate the level of
financial progress required to meet the criteria established by the Appeal Board for
assessing an applicant’s efforts to rectify his financial condition with responsible efforts
considering his circumstances. See ISCR Case No. 08-06567 at 2-3 (App. Bd. Oct. 29,
2009). 
From a whole-person perspective, Applicant’s limited repayment efforts to date,
while encouraging, are still a work-in-progress and not substantial enough to overcome
security concerns associated with his accumulated delinquent debts over an extended
period of time (i.e, between 2008 and 2013). His contributions to the national defense
and his community are considerable and worthy of significant recognition when
assessing his trustworthiness and reliability. More substantial at this, though, are
security concerns about the state of his finances and the need for more documented
progress in the addressing of his debts.
Considering all of the circumstances surrounding Applicant’s accrual of
delinquent debts and the challenges remaining for Applicant to stabilize them to levels
reconcilable with minimum eligibility standards for holding a security clearance, more
time is needed for Applicant to address and resolve his remaining debts. Applicant’s
efforts to date in stabilizing his finances are insufficient to meet mitigation requirements
imposed by the guideline governing his finances. Unfavorable conclusions are
warranted with respect to the allegations covered by subparagraphs 1.a-1.b,1.d-1.h,
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and 1.j-1.m of Guideline F. Favorable conclusions are warranted with respect to the
allegations covered in subparagraphs 1.c, 1.i and 1.n-1.o.of the guideline. 
Formal Findings
In reviewing the allegations of the SOR and ensuing conclusions reached in the
context of the findings of fact, conclusions, conditions, and the factors listed above, I
make the following formal findings:
GUIDELINE F (FINANCIAL CONSIDERATIONS): AGAINST APPLICANT
Subparas. 1.a-1.b, 1.d-1.h, and 1.j-1.m:      Against Applicant
Subparas. 1.c, 1.i. and 1.n-1.o:                     For Applicant
Conclusions                                 
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 Applicant’s security
clearance.  Clearance is denied granted.
                                          
Roger C. Wesley
Administrative Judge 
                                        
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