DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
--------------------------------- )       ISCR Case No. 15-03202
)
)
Applicant for Security Clearance )
Appearances
For Government: Jeff A. Nagel, Department Counsel
For Applicant: Anna Russell, Personal Representative
July 8, 2016
______________
Decision
______________
LOKEY ANDERSON, Darlene D., Administrative Judge:
Applicant submitted his Electronic Questionnaire for Investigations Processing
(e-QIP) June 16, 2014.  (Government Exhibit 1.)  On November 18, 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
Applicant and recommended referral to an Administrative Judge to determine whether
clearance should be denied or revoked.
Applicant responded to the SOR on December 8, 2015, and requested an
administrative hearing before a Defense Office of Hearings and Appeals administrative
judge.  This case was assigned to the undersigned Administrative Judge on March 15,
2016.  A notice of hearing was issued on March 31, 2016, and the hearing was
scheduled for April 28, 2016.  At the hearing the Government presented six exhibits,
referred to as Government Exhibits 1 through 6, which were admitted without objection.
The Applicant presented eight exhibits, referred to as Applicant’s Exhibits A through H,
which were also admitted into evidence without objection.  He also testified on his own
2
behalf.  The record remained open until close of business on May 10, 2016, to allow the
Applicant to submit additional documentation.  Applicant submitted two Post-Hearing
Exhibits, referred to as Applicant’s Post-Hearing Exhibits A and B, which were admitted
without objection.  The official transcript (Tr.) was received on May 10, 2016.  Based
upon a review of the pleadings, exhibits, and testimony, eligibility for access to classified
information is granted.
 FINDINGS OF FACT
Applicant is 35 years old, and married with four children.  He has naval military
training, and a Bachelor’s degree in Information Technology.  Applicant is a Federal
contractor working for a defense contractor as a Service Desk Agent.  He 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 eight delinquent debts set forth in the SOR totaling approximately
$33,000.  Applicant admitted each of the allegations under this guideline.  Applicant’s
credit reports dated June 4, 2004; June 25, 2014; March 19, 2015; February 16, 2016;
and April 23, 2016, which includes information from all three credit reporting agencies,
indicates that Applicant was at one time indebted to each of the creditors listed in the
SOR.  (Government Exhibits 2, 3, 4, 5 and 6.)       
     
Applicant served on active duty in the United States Navy from August 2000 to
September 2012, for twelve years before he was honorably discharged.  He held a
security clearance without incident, and received a number of awards and
commendations, including Navy Achievement Medals, Good Conduct Medals, and Sea
Service Deployment Awards, among others.  (Tr. p. 58.)  During his military career, he
paid his bills on time and lived within his means.  In October 2012, the enlisted retention
board broke contracts with about 3,300 mid-career sailors for the purpose of military
downsizing.  Through no fault of his own, Applicant was one of the Sailors who was
abruptly discharged from the Navy.  He left the Navy in October 2012, and his financial
problems began.  
Applicant immediately contacted each of his creditors and explained to them
what had happened.  A number of debts became delinquent, including those listed in
the SOR.  In September 2013, he was hired by his current employer as a Service Desk
Agent.  In October 2014, he was promoted to his current position of Systems
3
Administrator.  Applicant testified that it took him almost two years working diligently to
get his delinquent debts resolved.
        
           1.a., a mortgage debt for an account that was 120 days overdue in the amount of
$24,595 with an outstanding balance of $349,822.  Applicant arranged with the lender to
make half of his mortgage payments during his financial hardship period from 2012 to
2014.  He started making full mortgage payments in 2014 that continue to the present.
He is current and in good standing with the lender.  (Applicant’s Exhibit H.)  Applicant’s
credit report dated 2014 and 2015, erroneously listed a double mortgage.  The error
reported on Applicant’s credit report has been addressed.  (Applicant’s Exhibit D.)          
1.b., a delinquent debt owed to a department store for a charged-off account in
the amount of $683.  Applicant has been paying them $56 on a monthly basis and
currently owes a total of about $130.  He plans to continue making payments until the
debt is paid in full.  (Tr. p. 38.)
   
 1.c., a delinquent debt owed on a military credit card for an account that was
charged off in the amount of $7,086.  The bill was initially paid through Applicant’s
garnishment of Applicant’s taxes.  When Applicant started working he asked them to
garnish his wages until the debt was paid in full.  The debt has been paid in full.  (Tr.p.
40, and Applicant’s Exhibit E.)            
1.d., a delinquent debt owed to a creditor for a collection account in the amount
of $115.  This medical bill was paid by TRICARE.  The debt has been paid in full.  (Tr. p.
42.)     
     
1.e., a delinquent debt owed to a creditor for a collection account in the amount
of $314.  This debt was for penalties related to Applicant’s truck payment that he paid in
full and was given the title.  (Tr. p. 48.)    
    
1.f., a delinquent debt owed to a creditor for a collection account in the amount of
$228.  This was a parking ticket paid through garnishment of Applicant’s state tax
refund.  (Tr. p. 47.)  
1.g., a delinquent debt owed to a creditor for a collection account in the amount
of $22.   This was a penalty for not paying the parking ticket and speeding ticket, paid
through garnishment of Applicant’s state tax refund.  (Tr. p. 47.)
1.h., a delinquent debt owed to a creditor for a collection account in the amount
of $546.  This speeding ticket was paid through garnishment of Applicant’s state tax
refund.  (Tr. p. 47, and Applicant’s Exhibits F and G.)     
Applicant’s financial statement indicates that his current monthly gross income is
$5,600.  His wife’s gross income is $3,750.  He receives disability benefits in the
amount of $1,600 monthly.  (Tr. p. 31.)  Together they earn approximately $105,000
4
annually.  (Applicant’s Exhibits A, B, and C.)  After paying their regular monthly
expenses of $4,580, they have $1,020 left in discretionary income. 
Applicant’s performance evaluation for the period from January 2015 through
December 2015, indicates that he “met expectations” overall.  (Applicant’s Post-Hearing
Exhibit A.)
Letters of recommendation from the Applicant’s operations manager and his
program manager, who is his direct supervisor, indicate that Applicant is
knowledgeable, honest, hard-working, punctual, polite, and simply an overall exemplary
employee.  He is a person with high morals who does an excellent job and has nothing
but glowing reports from the government customers for his professional performance.
(Applicant’s Post-Hearing Exhibit B.)
 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. 
Conditions 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
medical emergency, or a death, divorce or separation), and the individual acted
responsibly under the circumstances; 
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; and 
5
20.(d) the individual initiated a good-faith effort to repay overdue creditors or
otherwise resolve debts.
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;
    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 behavioral
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 that is speculative or conjectural in nature.  Finally, as emphasized
by President Eisenhower in Executive Order 10865, “Any 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.”
6
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 Applicant
has been financially irresponsible (Guideline F).  This evidence indicates poor judgment,
unreliability and untrustworthiness on the part of Applicant.  Because of the scope and
nature of Applicant's conduct, I conclude there is a nexus or connection with his security
clearance eligibility.
The evidence shows that Applicant was a career Sailor, in good standing, when
in 2012, he was abruptly discharged due to military downsizing.  He was not employed
until September 2013.  During his period of unemployment from September 2012 to
September 2013,  many of his debts became delinquent.  Since September 2013, he
has worked hard to resolve his debts.  All of his delinquent debts, except one, have
been paid in full or otherwise resolved.  His only outstanding debt is owed to a
department store for about $130, and he is making regular monthly payments of $56 to
resolve it.       
      
Under the particular circumstances of this case, Applicant has met his burden of
proving that he is worthy of a security clearance.  He has a concrete understanding of
his financial responsibilities and has sufficiently addressed his delinquent debts in the
SOR.  Thus, it can be said that he has made a good-faith effort to resolve his past-due
indebtedness.  He has shown that he is or has been reasonably, responsibly, or
prudently addressing his financial situation.  Thus, Applicant has demonstrated that he
can properly handle his financial affairs.  He must continue to completely resolve his
delinquent indebtedness.  He must continue to demonstrate a history and pattern of
financial responsibility, including the fact he has not acquired any new debt that he is
unable to pay.  Considering all of the evidence, Applicant has introduced persuasive
evidence in rebuttal, explanation, or mitigation that is sufficient to overcome the
Government's case. 
7
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.  However, in this case, Mitigation Conditions 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; 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; and 20.(d) the
individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debt
are also applicable.  Applicant has acted reasonably and responsibly, and he has made
a good-faith effort to satisfy his delinquent debts.  In fact, he has shown that he is
financially responsible.  Accordingly, I find for 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 good judgement, trustworthiness,
reliability, candor, a willingness to comply with rules and regulations, and/or other
characteristics indicating that the person may properly safeguard classified information.
  
I have considered all of the evidence presented.  It does 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 overcome the Government's case opposing his request for a security clearance.
Accordingly, the evidence supports a finding for Applicant as to the factual and
conclusionary allegations expressed in Paragraph 1 of the SOR.  
    FORMAL FINDINGS
Formal findings For or Against the applicant on the allegations in the SOR, as
required by Paragraph 1.25 of Enclosure 3 of the Directive are:
Paragraph 1:  For Applicant.
    Subpara.    1.a. For Applicant.
Subpara.    1.b. For Applicant.
Subpara.    1.c. For Applicant.
Subpara.    1.d. For Applicant.
Subpara.    1.e. For Applicant.
Subpara.    1.f. For Applicant.
Subpara.    1.g. For Applicant.
Subpara.    1.h. For Applicant.
8
DECISION
In light of all the circumstances presented by the record in this case, it is clearly
consistent with the national interest to grant or continue a security clearance for
Applicant. Eligibility for access to classified information is granted.
  Darlene Lokey Anderson
Administrative Judge