Item 3.1
Item 1.2
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                              DEPARTMENT OF DEFENSE
               DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 15-00209
)
)
Applicant for Security Clearance )
Appearances
For Government: Chris Morin, Esq., Department Counsel
For Applicant: Pro se
______________
Decision
______________
WHITE, David M., Administrative Judge:
Applicant’s creditors charged off two credit card debts and a home equity loan,
totaling more than $59,000. He demonstrated neither sufficient explanation for their
origin, nor changes to avoid recurring financial problems. Resulting security concerns
were not mitigated. Based on a review of the pleadings and exhibits, eligibility for
access to classified information is denied.
Statement of the Case 
Applicant submitted a security clearance application (SF-86) on December 10,
2012.  On August 19, 2015, the Department of Defense Consolidated Adjudications1
Facility (DoD CAF) issued a Statement of Reasons (SOR) to Applicant, detailing
security concerns under Guideline F (Financial Considerations).  The action was taken2
under Executive Order 10865, Safeguarding Classified Information Within Industry
Item 2.3
Department Counsel submitted five Items in support of the SOR allegations.4
Item 3.5
Item 2.6
Items 4 and 5. The amounts due were not alleged in the SOR, but are taken from Items 2 and 5.7
Items 2 and 5.8
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(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 that came into effect in the
Department of Defense on September 1, 2006. 
Applicant submitted a written response to the SOR on September 14, 2015, and
requested that his case be decided by an administrative judge on the written record
without a hearing.  Department Counsel submitted the Government’s written case on3
October 16, 2015. A complete copy of the File of Relevant Material (FORM)  was4
received by Applicant on November 2, 2015, and he was afforded an opportunity to file
objections and submit material in refutation, extenuation, or mitigation within 30 days of
his receipt of the FORM. Applicant submitted no additional material in response to the
FORM. I received the case assignment on February 4, 2016.
Findings of Fact
Applicant is 37 years old. He started work as a software engineer for a defense
contractor in 2000, shortly after earning his bachelor’s degree. He has held a security
clearance in connection with that employment since 2004. He has no military service.
He is married, with a ten-year-old daughter and seven-year-old twins.  5
In his response to the SOR, Applicant formally denied each allegation, explaining
that each debt had been charged off as alleged but had been forgiven.  The allegations6
concern two credit card accounts and one home equity line of credit. Their delinquency
and subsequent charged-off status are confirmed in the record credit reports dated
December 13, 2012, and December 8, 2014.7
SOR ¶ 1.a concerns a credit card account with a major bank that Applicant
opened in February 2001. The reported date of last activity on the account was August
2010, and it was charged off with balance due of $26,383. Applicant received a letter
from the creditor, dated January 17, 2014, stating that they were no longer attempting to
collect the debt and would issue an IRS Form 1099-C reporting the cancelled principal
balance (excluding interest and fees) of $23,590 to the IRS as income for tax year 2013.
Applicant provided no further information concerning the status of this account, or
whether he paid the Federal income taxes due on this sum.8
Items 2 and 5.9
Items 2, 4, and 5.10
Item 3 at 26-28.11
3
SOR ¶ 1.b concerns an account with a different major credit card company that
Applicant opened in October 2000. The reported date of last activity on the account was
March 2013, and it was charged off with a balance due of $6,819. Applicant received a
letter from a law firm with whom the debt had been placed for collection, dated April 29,
2015, stating that this account had been “settled in full.” However, Applicant neither
claimed to have paid this debt nor offered any documentation of the terms of this
settlement.  9
SOR ¶ 1.c concerns a home equity line of credit that Applicant opened in August
2006 with the lender holding the first mortgage on his home. He had brought his
payments current on this loan by November 2012, after it had been more than 120 days
delinquent as recently as September 2012. The reported date of last activity on this
account was March 2013, and it was charged off with a balance due of $25,857.
Applicant received a letter from the lender, dated June 2, 2014, stating that he had been
approved for full loan forgiveness of the charged-off amount and that he would be
issued an IRS Form 1099-C reporting that sum to the IRS as income for tax year 2014.
Applicant provided no further information concerning the status of this account, why he
failed to pay it as agreed, or whether he paid the Federal income taxes due on this
income.10
On his December 2012 SF-86, Applicant disclosed the two delinquent credit card
accounts alleged in SOR ¶¶ 1.a and 1.b. He said that the reason(s) for, current status
of, and actions taken to resolve his financial issues were: 
Wife and Children unexpected medical issues. Medical issues of wife
cause her to go on medical leave and bring in no income while still having
to provide daycare for children. [Concerning ¶ 1.a:] Still being worked to
be paid off. Getting financial obligations together to start making payments
to resolve debt after new year. . . . Getting a budget worked out to start
making payments as wife medical issues are beginning to be resolved and
resuming work. [Concerning ¶ 1.b:] In agreement with [creditor] to payoff
with payments every month. Monthly payments are being made to
[creditor] to payoff.11
 
Applicant provided no evidence establishing his current income or household
budget. He offered no evidence of financial counseling, savings or retirement
investments, or other indicators of financial responsibility. The record lacks any
evidence concerning the quality of Applicant’s professional performance, the level of
responsibility his duties entail, or his track record with respect to handling sensitive
information and observation of security procedures. I was unable to evaluate his
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credibility, demeanor, or character in person since he elected to have his case decided
without a hearing.  
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 (DCs) and mitigating conditions (MCs), which are to be used 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
overarching adjudicative goal is a fair, impartial, and commonsense decision. According
to AG ¶¶ 2(a) and 2(c), the entire process is a conscientious scrutiny of applicable
guidelines in the context 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.
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 the 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, “[t]he 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.” Section 7
of Executive Order 10865 provides: “[a]ny 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.”
A person applying 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.
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Analysis
Guideline F, Financial Considerations
The security concerns under the guideline for financial considerations are set out
in AG ¶ 18, which reads in pertinent part:      
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. 
Department Counsel asserted, and the record evidence established, security
concerns under two Guideline F DCs, as set forth in AG ¶ 19: 
(a) inability or unwillingness to satisfy debts; and 
(c) a history of not meeting financial obligations.
Applicant admittedly failed to repay two credit card accounts and a home equity
line of credit, between 2010 and 2013. These debts totaled more than $59,000 and
were charged off by the creditors. They arose despite his continuous employment in his
current position throughout the period involved. His pattern and history of inability or
unwillingness to pay these substantial lawful debts raise security concerns under DCs
19(a) and (c), and shift the burden to Applicant to rebut, extenuate, or mitigate those
concerns. 
The guideline includes five conditions in AG ¶ 20 that could mitigate security
concerns arising from Applicant’s financial difficulties:
(a) the 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; 
(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;
(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; 
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(d) the individual initiated a good-faith effort to repay overdue creditors or
otherwise resolve debts; and
(e) 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.
Applicant incurred substantial delinquent debts over the past five years. He did
not demonstrate that delinquent indebtedness is unlikely to recur, or that his financial
situation is under control. He provided a letter stating that the debt alleged in SOR ¶ 1.b
was settled in full, so mitigation under AG ¶ 20(d) was established concerning that debt.
However, the creditors who charged off and cancelled the other two debts, totaling more
than $49,000, reported that amount as additional income for him in 2013 and 2014.
Applicant demonstrated neither the ability, nor any effort, to pay the resulting Federal
tax obligations. He failed to demonstrate how his wife’s and children’s medical
conditions contributed to his financial problems, or that he acted responsibly under such
circumstances. Applicant admitted incurring and formerly owing the debts alleged in the
SOR. Accordingly, the record is insufficient to establish mitigation under any of the
foregoing conditions. Department Counsel pointed out the absence of such updated
information in the FORM. Although Applicant was afforded the opportunity to address
those concerns by filing additional information, he chose not to do so. 
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 relevant 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.   
I considered the potentially disqualifying and mitigating conditions in light of all
pertinent facts and circumstances surrounding this case. Applicant is an accountable
and experienced adult, who is responsible for the voluntary choices and conduct that
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caused the financial problems underlying the security concerns expressed in the SOR.
His SOR-listed delinquent debts arose over the past decade, and were voluntarily
incurred. He enjoyed continuous employment throughout that period. He offered
insufficient evidence of financial counseling, rehabilitation, better judgment, or
responsible conduct in other areas of his life to offset resulting security concerns. The
potential for pressure, coercion, and duress from his financial situation remains
undiminished. Overall, the record evidence leaves me with substantial doubt as to
Applicant’s present eligibility and suitability for a security clearance. He did not meet his
burden to mitigate the security concerns arising from his financial considerations.
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
Subparagraph 1.a: Against Applicant
Subparagraph 1.b: For Applicant
Subparagraph 1.c: 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.
                                              
DAVID M. WHITE
Administrative Judge