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                              DEPARTMENT OF DEFENSE
               DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 12-08929
)
)
Applicant for Security Clearance )
Appearances
For Government: Pamela Benson, Esquire, Department Counsel
For Applicant: Pro se
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Decision
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WHITE, David M., Administrative Judge:
Applicant incurred delinquent debts when his career transition after a military
career coincided with the housing market crash. He has taken effective steps to address
the delinquencies, and has substantially resolved them. His long-term marriage to a
former citizen of the Philippines and her present connections to that country pose no
heightened risk. Former security concerns were mitigated. Based on a review of the
pleadings, testimony, and exhibits, eligibility for access to classified information is
granted. 
Statement of the Case
Applicant submitted a security clearance application on March 23, 2012. On
February 5, 2015, the Department of Defense Consolidated Adjudications Facility (DoD
CAF) issued a Statement of Reasons (SOR) to Applicant, detailing security concerns
under Guideline F (Financial Considerations), and Guideline B (Foreign Influence). 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 for Determining
See Tr. 15-18.1
See AE L.2
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Eligibility for Access to Classified Information, effective within the Department of
Defense after September 1, 2006. 
Applicant answered the SOR in writing (AR) on March 19, 2015, and requested a
decision on the administrative record without a hearing. While that process was taking
place, he changed his mind and requested to have a hearing before an administrative
judge.  Department Counsel was prepared to proceed on October 21, 2015. The case1
was assigned to me on October 29, 2015. The Defense Office of Hearings and Appeals
(DOHA) issued a Notice of Hearing on November 16, 2015, setting the hearing date for
December 8, 2015, and I convened the hearing as scheduled. The Government offered
Exhibits (GE) 1 through 4, which were admitted without objection; and Hearing Exhibit
(HE) I, a Government exhibit list. Applicant offered Exhibits (AE) A through K, which
were admitted without objection, and testified on his own behalf. I granted Applicant’s
several requests to leave the record open until February 2, 2016, for submission of
additional evidence.  DOHA received the transcript of the hearing (Tr.) on December 16,2
2015. On February 2, 2016, Applicant submitted AE L, which was admitted without
objection, and the record closed. 
Findings of Fact
Applicant is a 55-year-old employee of a defense contractor, where he has
worked since August 2006. He is a high school graduate, with about three years of
college courses but no degree. He honorably retired at pay grade E-7 in May 2006, after
serving in the U.S. Air Force for 24 years. He has held a security clearance since 1983,
in connection with his military service and current employment. He is married and has
two teenage children. (GE 1; AE C; Tr. 8-9, 28, 40-43.) 
Applicant admitted the factual allegations set forth in SOR ¶¶ 1.a, 1.c, 1.d, 1.e,
2.a, 2.b, and 2.c, with explanations and updated information. He denied the remaining
allegation in SOR 1.b, because, at the time, he was unable to determine who the
alleged creditor was or the origin of any underlying debt. (AR.) Applicant’s admissions
and explanations are incorporated in the following findings.
Applicant purchased a home in 2003 near the Air Force base where he served
his final tour on active duty, and planned to remain there with his family after his
retirement. However, with the beginning of the economic downturn in 2006 he was
unable to find local employment during the summer after he retired. That August, he
was offered a position with the major defense contractor for whom he still works, but
that required him to relocate to a distant city with substantially higher costs of housing
and living. This presented his only reasonable option for post-service employment, so
he accepted the offer and moved to the new location with his family. (GE 1; Tr. 28-29,
43, 48.)
Applicant and his wife had their income tax returns prepared by a CPA for all tax years involved, and paid3
all taxes due. (Tr. 54-57.)
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Appellant rented the family’s former home in late 2006 while also having listed it
for sale, but due to the downturn in the housing market he was not able to get enough
rent to cover the mortgage expenses as the home was losing value. He received one
offer to purchase the home in 2007, but the prospective buyer failed to qualify for
financing. He discovered that the renters had caused substantial damage to the
property, and had to evict them during early 2008. Once he completed repairs on the
house, he was unable to find another renter in the depths of the housing crisis while it
remained listed for sale. Eventually, he was unable to continue making mortgage
payments on that home while also remaining current on his housing and living expenses
in the new location. A November 2009 credit report entry showed his first mortgage
payments to be past due in the amount of $10,602 as alleged in SOR ¶ 1.a. The lender
took possession of the home through foreclosure proceedings in February 2009. At the
time, the loan’s principal balance was $265,808 and the lender took possession of the
property for a fair market value of $150,000, leaving a remaining deficiency of $115,
808. The lender cancelled this deficiency debt effective March 2, 2009, and issued
Applicant and his wife an IRS Form 1099-C, which they filed with their income taxes for
that year.  This debt is fully resolved. (AR; AE D; AE H; AE K; Tr. 28-30, 43-47, 50-56.)3
The $1,801 debt alleged in SOR ¶ 1.b involved a department store credit card
that was issued in Applicant’s wife’s name. It became delinquent in 2009 and was
placed for collection with the alleged creditor in 2011. That creditor provided Applicant a
letter, dated December 7, 2015, acknowledging that the account had been paid in full
(for $2,524) and closed on May 10, 2013. (AE E; Tr 57-61.)
SOR ¶ 1.c alleges a judgment entered against Applicant in August 2009 for the
$19,396 balance due on a line of credit loan he and his wife had taken out against the
equity in their former home. Applicant documented that he has been consistently
making $650 monthly payments toward this debt, as agreed with the creditor, since
November 2009. The balance due has been reduced to about $13,500, and Applicant
intends to continue making monthly payments until the balance is reduced to the point
that he can negotiate a lump-sum payoff. (AR; AE F; Tr. 61-65.)
The $42,830 secured credit card (home equity line of credit) debt alleged in SOR
¶ 1.d was opened in May 2006 and became delinquent in January 2009. This loan was
also secured by equity that existed at the time in Applicant’s former home. On
December 11, 2013, the creditor (a major bank) discharged and cancelled this debt, and
issued IRS Forms 1099-C to Applicant and his wife. This form was filed with their 2013
Federal income tax return, and all applicable taxes were paid. (AR; AE G; Tr. 47-50, 56-
57.)
SOR ¶ 1.e alleges a $387 debt to a chain home and building supply store.
Applicant made several efforts to identify and resolve this debt with store personnel
before his hearing, but they were unable to identify it and declined to accept payment.
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The record was left open after his hearing to provide Applicant additional time to resolve
the status of this debt. After a customer service representative conducted an account
review, she told Applicant that the account was closed and considered non-recoverable.
It had been charged off after becoming delinquent in May 2009. He asked if he could
pay the debt anyway, and was provided instructions on where to send payment. On
February 1, 2016, the creditor finally cashed his $387 check to pay this debt in full. (AR;
GE 4; AE L; Tr. 65-67.)
Applicant has been working consistently to pay and otherwise resolve the
delinquent debts that he and his family accrued between his retirement in 2006 and the
foreclosure on their former home in 2009 after their attempts to maintain payments on it
until it could be sold were unsuccessful. They have incurred no new delinquencies, and
have paid all tax obligations on the canceled portions of the debts secured by their
former home that lost substantial equity in the housing crash. Applicant now earns
sufficient income to avoid future financial problems. (GE 4; AE K; Tr. 29-30, 41-42, 55-
57, 67-72.)
Applicant’s first Air Force duty station was in the Philippines. He met his wife
there in 1984 and they married in 1987. They spent the next 13 years of his Air Force
career assigned to overseas duty stations in Asia and Europe. His wife became a
naturalized U.S. citizen on December 3, 2014. In early 1991, Applicant’s wife bought a
house in the Philippines for $5,000. The house title is solely in her name, and Applicant
himself owns no assets outside the United States. They never occupied that house, but
her brother (a citizen of the Philippines) moved into the house and still lives there. The
estimated value of the house is now $10,000, and to Applicant’s knowledge his brother-
in-law doesn’t pay any rent for the house because his wife’s family is very poor. The
brother-in-law is a fisherman, and has no connection to the government there.
Applicant, himself, has no assets in the Philippines. Department Counsel submitted no
request for administrative notice concerning the Philippines, and basically conceded that
changed circumstances since issuance of the SOR have mooted any foreign influence
concerns that may have existed in the past. (AR; AE J; Tr. 22, 72-74, 83.)      
Applicant submitted letters from two supervisors and a coworker describing their
high opinions of his character, trustworthiness, dedication, integrity, and judgment. (AE
B.) I found his testimony to be forthright, credible, and knowledgeable in all respects.  
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
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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.
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.
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The record evidence potentially raises 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 incurred some significant delinquencies after retiring from active duty in
2006 and relocating for his post-service employment. His former home went into
foreclosure, and two loan debts that had been secured by its equity were canceled while
a third was reduced to judgment. Two small consumer debts were also delinquent.
These facts provide substantial evidence under the foregoing DCs, thereby shifting the
burden to Applicant to mitigate resulting security concerns. The SOR allegations and
evidence do not support any other DC under this guideline. 
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; 
(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’s financial problems arose due to the unexpected crash of the housing
market and general economy starting in 2006, and his unplanned need to relocate for
post-service employment. He tried to sell his former home as it rapidly lost equity, and
rented it for over a year to help him afford his mortgage payments. However, the renters
badly damaged the home, and after evicting them he was unable to find new renters in
the deteriorating market. Applicant prioritized his spending to remain current on his
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housing and living expenses in his new location but was temporarily unable to meet all
his debt obligations. This unique confluence of major career change and severe
economic conditions began ten years ago, were largely beyond his control, and are
unlikely to recur. His actions were demonstrably responsible under the circumstances,
and do not cast doubt on his current reliability, trustworthiness, or judgment..Applicant
accordingly established substantial mitigation under AG ¶¶ 20(a) and (b). 
The home they were unable to rent or sell, after moving to obtain Applicant’s
current employment, went into foreclosure in 2009. The first mortgage lender canceled
the $115,808 deficiency remaining after taking possession, and another home equity
lender later canceled its $42,830 debt. Applicant lawfully paid all resulting taxes. A
different home equity lender obtained a $19,396 judgment against Applicant, toward
which he has been timely making agreed monthly payments since November 2009.
Applicant had repaid one of two small delinquent consumer debts almost two years
before issuance of the SOR, and had to convince the creditor involved in the other one
to accept payment after significant efforts to identify it. Accordingly, these clear
indications that the problems are resolved or under control, and Applicant’s good-faith
efforts to repay his creditors or otherwise resolve his former debts, establish additional
mitigation under AG ¶¶ 20(c) and (d).  
“An applicant is not required to show that [he] has completely paid off [his]
indebtedness, only that [he] has established a reasonable plan to resolve [his] debts
and has ‘taken significant actions to implement that plan.’” ISCR Case No. 06-12930 at
2 (App. Bd. Mar. 17, 2008) (quoting ISCR Case No. 04-09684 at 2-3 (App. Bd. Jul. 6,
2006)). Applicant has successfully established a meaningful track record of debt
resolution that continues to date, and has reestablished a solvent and responsible
financial situation.
Guideline B, Foreign Influence
AG ¶ 6 expresses the security concern regarding foreign influence:
Foreign contacts and interests may be a security concern if the individual
has divided loyalties or foreign financial interests, may be manipulated or
induced to help a foreign person, group, organization, or government in a
way that is not in U.S. interests, or is vulnerable to pressure or coercion by
any foreign interest. Adjudication under this Guideline can and should
consider the identity of the foreign country in which the foreign contact or
financial interest is located, including, but not limited to, such
considerations as whether the foreign country is known to target United
States citizens to obtain protected information and/or is associated with a
risk of terrorism.
AG ¶ 7 describes conditions that could raise a security concern and may be
disqualifying. The SOR allegations and evidence in this case raised potential security
concerns under four foreign influence DCs: 
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(a) contact with a foreign family member, business or professional
associate, friend, or other person who is a citizen of or resident in a
foreign country if that contact creates a heightened risk of foreign
exploitation, inducement, manipulation, pressure, or coercion; 
(b) connections to a foreign person, group, government, or country that
create a potential conflict of interest between the individual’s obligation to
protect sensitive information or technology and the individual’s desire to
help a foreign person, group, or country by providing that information;
(d) sharing living quarters with a person or persons, regardless of
citizenship status, if that relationship creates a heightened risk of foreign
inducement, manipulation, pressure, or coercion; and
(e) a substantial business, financial, or property interest in a foreign
country, or in any foreign-owned or foreign-operated business, which
could subject the individual to heightened risk of foreign influence or
exploitation. 
Applicant’s wife was a citizen of the Philippines when they met in 1984, and
married in 1987, and served as a military spouse in duty stations around the world
throughout the remainder of his 24-year Air Force career. After they settled into their
post-service life, she became a naturalized U.S. citizen. In 1991 she purchased a
$5,000 home in the Philippines, in which her brother has lived ever since. He is a poor
fisherman, with no connection to the government, and cannot afford to pay for housing
on his own. The value of this house is about $10,000 and it represents the only asset
either Applicant or his wife owns outside the United States. Department Counsel did not
formally withdraw the SOR allegations under this guideline, but acknowledged that
changed circumstances significantly diminished their import and offered no evidence of
any heightened risk arising from the identity and nature of the country involved. I find
that Applicant’s relationship with his U.S. citizen wife, and her connections to the
Philippines, do not create a heightened risk of foreign exploitation, inducement,
manipulation, pressure, coercion, or influence under AG ¶¶ 7(a), (c), or (d). Similarly,
they create no potential for conflict of interest between Applicant’s obligation to protect
sensitive information or technology and his desire to help a foreign person, group, or
country under AG ¶ 7(b). 
AG ¶ 8 provides conditions that could mitigate security concerns. Those that
would obviously provide conclusive mitigation of any theoretical security concerns in this
case are:
(a) the nature of the relationships with foreign persons, the country in
which these persons are located, or the positions or activities of those
persons in that country are such that it is unlikely the individual will be
placed in a position of having to choose between the interests of a foreign
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individual, group, organization, or government and the interests of the
U.S.;
(b) there is no conflict of interest, either because the individual’s sense of
loyalty or obligation to the foreign person, group, government or country is
so minimal, or the individual has such deep and longstanding relationships
and loyalties in the U.S., that the individual can be expected to resolve any
conflict of interest in favor of the U.S. interest; and
(c) contact or communication with foreign citizens is so casual and
infrequent that there is little likelihood that it could create a risk for foreign
influence or exploitation.
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 a sincere and
mature individual, with a lifelong history of dedicated and loyal service to the United
States. He has accepted accountability for his former debts, and resolved all but the one
toward which he continues making agreed payments in a timely manner. His actions to
address both the sources and results of his indebtedness have substantially eliminated
the potential for pressure, coercion, or duress, and make continuation or recurrence of
significant financial problems unlikely. His longstanding but minimal contacts with the
Philippines also create no potential for pressure or exploitation. Overall, the record
evidence creates no doubt as to Applicant’s present eligibility and suitability 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
Paragraph 2, Guideline B: FOR APPLICANT
Subparagraphs 2.a through 2.c: 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’s eligibility for a security
clearance. Eligibility for access to classified information is granted.
                                              
DAVID M. WHITE
Administrative Judge