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                              DEPARTMENT OF DEFENSE
               DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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)       ISCR Case No. 15-00545
)
)
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 a number of delinquent debts after losing his well-paying
position as a mortgage loan officer when the market crashed. He has taken positive
steps to address the delinquencies, and has substantially resolved them. Resulting
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 June 8, 2012. On July
11, 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). 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 Eligibility for Access to Classified Information,
effective within the Department of Defense after September 1, 2006. 
See Tr. 7-8, 19-24.1
It was determined, and agreed by Department Counsel, that SOR ¶¶ 1.e and 1.o are duplicate allegations2
concerning the same delinquent debt that was reduced to a judgment. 
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Applicant answered the SOR in writing (AR) on September 14, 2015, and
requested a hearing before an administrative judge. Department Counsel was prepared
to proceed on November 3, 2015. The case was assigned to another administrative
judge, who scheduled a hearing for December 16, 2015. Applicant informed DOHA that
he was temporarily working in another part of the country, so the case was reassigned
to me on November 12, 2015. The Defense Office of Hearings and Appeals (DOHA)
issued a Notice of Hearing on November 19, 2015, setting the hearing date for
December 10, 2015, and I convened the hearing as scheduled. The Government
offered Exhibits (GE) 1 through 6, which were admitted without objection; and Hearing
Exhibit (HE) I, a Government exhibit list. Applicant offered Exhibits (AE) A through C,
which were admitted without objection, and testified on his own behalf. I granted
Applicant’s request to leave the record open until January 8, 2016, for submission of
additional evidence. DOHA received the transcript of the hearing (Tr.) on December 18,
2015. Applicant timely submitted AE D, which was admitted without objection, and the
record closed as scheduled. 
Findings of Fact
Applicant is a 51-year-old employee of a defense contractor, where he has
worked since March 2009. He is a high school graduate, with no military service. He has
only held a security clearance in connection with his current employment.  He is married1
and has three adult children, two of whom recently moved out of the family home. (GE
1; Tr. 6-8, 43-45.) 
Applicant admitted the factual allegations set forth in SOR ¶¶ 1.a and 1.r, with
explanations. He denied the remaining allegations in the SOR, also with explanations.
(AR.) Applicant’s admissions are incorporated in the following findings.
Applicant was earning a six-figure income as a mortgage company loan officer
from about 1997 until late 2006. His wife also worked with him as a loan processor until
2006, when the housing market collapse cost both of them their jobs. Applicant then
worked in a series of relatively low-wage jobs for a little more than two years until
obtaining his current employment as an engineering technician. His wife was diagnosed
with a serious chronic neurological disease in 2010, and has been unable to work since
then. (GE 1; Tr. 40-43.)
Due to Applicant’s, and his wife’s, unexpected loss of employment in 2006 and
the sharply reduced family income that followed for several years, the 18 debts  alleged2
in the SOR became delinquent. Having regained reasonable employment and desiring
to pay what he could to his creditors in a fair and lawful manner, Applicant filed a
Chapter 13 bankruptcy proceeding in June 2010. His Chapter 13 plan was confirmed in
February 2012, and completed on September 19, 2014. Having fully complied with all
Applicant had fully paid another medical debt to this creditor in May 2010, before filing bankruptcy. It does3
not appear, from record credit reports, that this is the same as the debt alleged in SOR ¶ 1.r. (See GE 3 at
21; GE 4 at 16.) 
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bankruptcy obligations, Applicant and his wife (with whom he filed the action) were
granted a Chapter 13 discharge on December 16, 2014. All of the debts alleged in the
SOR, except those described in SOR ¶¶ 1.a, 1.l, 1.m, and 1.r, were included and
resolved in this bankruptcy. (AR; AE B; AE C; AE D; Tr. 24-25, 45-49, 56-71, 73-75.)
The debt alleged in SOR ¶ 1.a is the first mortgage on Applicant’s home. It had
become delinquent and went into foreclosure in 2010, but Applicant was able to
negotiate a loan modification agreement with the lender in late 2012, which halted the
foreclosure proceedings. He has made every payment under this agreement since
December 2012, and the loan is currently in good standing with no late charges or
payments past due. (AR; AE A; Tr. 34-35, 51-55.) The two note loan debts alleged in
SOR ¶¶ 1.l and 1.m were not included in Applicant’s bankruptcy, but had been fully
repaid in 2007. (GE 6 at 6; AE D.)
The $1,403 collection account alleged in SOR ¶ 1.r involves a medical account
that arose when Applicant’s wife was hospitalized in 2010 for an operation. They had
medical insurance that covered most of the cost, and asked their bankruptcy lawyer to
include this cost share amount in their Chapter 13 bankruptcy. Applicant admitted that
the debt was apparently not successfully included in that proceeding due to his
attorney’s failure to properly amend the plan. He said that, although the creditor has not
made any attempt to collect this minor debt, he would make contact and arrange to
resolve it.  (AR; AE B; AE D; Tr. 46-47, 71-73.) 3
Applicant’s testimony was credible and knowledgeable concerning his financial
circumstances. He has successfully completed financial counseling, and demonstrated
his determination and ability to remain within his budget and avoid any future
delinquencies. (Tr. 75-78.)
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.
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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 a number of significant delinquencies after losing his lucrative
job as a mortgage loan officer in late 2006. He also fell significantly behind on his
mortgage loan payments. 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. He obtained several low paying jobs to
make ends meet until he obtained his current position. Acknowledging that he could not
repay all of his outstanding debt, he filed for Chapter 13 bankruptcy relief in order to
repay as much as the court determined to be appropriate while resolving those debts.
He negotiated a first mortgage loan modification in late 2012 to resolve pending
foreclosure proceedings, and has timely made all payments toward that debt. He
resolved all of the other SOR-listed debts through his bankruptcy, except for one minor
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medical collection account for his wife’s hospitalization that he erroneously thought had
been discharged, and the two note loans that he repaid in 2007. He has undergone
financial counseling, established a workable budget, and lives well within his means.
The debts alleged in SOR ¶¶ 1.e and 1.o are duplicate listings concerning a debt that
was also resolved through his bankruptcy. Applicant accordingly established substantial
mitigation under each of the foregoing provisions for security concerns arising from his
former delinquencies. 
“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 under a manageable budget plan.
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, who has accepted accountability for his debts and resolved all but
one of them. His positive 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.
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.s: 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