Item 2.1
Item 1.2
1
                                                                     
                              DEPARTMENT OF DEFENSE
               DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 15-01737
)
)
Applicant for Security Clearance )
Appearances
For Government: Carroll J. Connelley, Esq., Department Counsel
For Applicant: Pro se
______________
Decision
______________
WHITE, David M., Administrative Judge:
Applicant defaulted on three mortgage loans, failing to make more than $212,000
in agreed payments, and incurred more than $9,700 in delinquent consumer debt over
the past seven years despite continuous employment. He demonstrated neither
sufficient explanation for these debts, 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 August 22,
2011.  On October 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
Item 1.3
Department Counsel submitted five Items in support of the SOR allegations. Item 3 is the summary of an4
interview from the OPM Report of Investigation. It was neither attested to nor adopted by Applicant, and no
witness authenticated the document. Accordingly, it is inadmissible per Directive ¶ E3.1.20 and will not be
considered in determining Applicant’s eligibility for a security clearance. There is no relevant information
contained in Item 3 that would reasonably support mitigation of the unresolved debts alleged in the SOR, and
the relevant adverse information is cumulative with the information contained in Items 1, 2, 4, and 5. 
Item 2.5
Item 1.6
2
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 that came into effect in the
Department of Defense on September 1, 2006. 
Applicant submitted a written response to the SOR on December 21, 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
February 4, 2016. The Defense Office of Hearings and Appeals (DOHA) provided a
complete copy of the File of Relevant Material (FORM)  to Applicant on February 10,4
2016. The FORM was received by Applicant on February 29, 2016, 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 during the time provided, did not object to
its consideration, and did not request additional time to respond. At some point between
April 19, 2016, when Applicant’s case file was forwarded to the DOHA Hearing Office
for adjudication, and April 25, 2016, DOHA received an undated response to the FORM
with additional material from Applicant. Department Counsel entered no objection to the
consideration of this late response, and it is admitted into evidence as Applicant’s
Exhibit (AE) A. I received the case assignment on September 9, 2016.
Findings of Fact
Applicant is 56 years old. He graduated from college with a bachelor’s degree in
May 1983, was commissioned as an Army officer, and served on active duty until June
1986. He then served in the Army Reserve until October 2000, when he returned to
active commissioned service and reached the rank of colonel. Since submission of his
SF-86 in 2011, he has retired from active duty and seeks to renew his security
clearance in connection with his employment by a defense contractor.  5
In his response to the SOR, Applicant admitted the allegations in SOR ¶¶ 1.a
through 1.d, with explanations. Applicant’s admissions are incorporated in the following
findings.6
Item 1; Item 2; Item 4; Item 5.7
Item 1; Item 2; Item 5. AE A. 8
Item 1; Item 5; AE A.9
Item 1; Item 4; Item 5; AE A. 10
3
Applicant owns two houses. He and his wife occupy their residence in state A,
which they purchased in 2005. They rent out their former residence in state B, which
they purchased in 2001 while Applicant was stationed at a nearby Army installation.
Both houses were purchased with mortgage loans that are now delinquent, as
described below.7
SOR ¶ 1.a concerns the first mortgage loan on Applicant’s current residence in
state A. He opened this Veterans Affairs (VA) loan in May 2005, borrowing $284,700.
He stopped making payments toward this loan in September 2009 because he was
experiencing “financial challenges” including mortgage payments on his former
residence, children in college, and his wife being between jobs. As of February 3, 2015,
he was delinquent in the amount of $126,102 on this loan, under which he had agreed
to make monthly payments of $1,550. He delayed foreclosure proceedings by trying to
negotiate a loan modification while continuing to live in the residence without making
loan payments. On January 20, 2016, the lender approved a Trial Period Plan calling for
Applicant to make three monthly payments of $3,473 in March through May of 2016. He
provided no evidence of payments, or of his ability to make these increased mortgage
payments, pursuant to this proposal.  8
SOR ¶ 1.b concerns the first mortgage loan on Applicant’s former residence in
state B. He borrowed $126,000 from the original lender in April 2004, agreeing to make
monthly payments of $384 per month. He stopped making payments toward this loan in
February 2013, and was delinquent in the amount of $15,105 as of February 3, 2015.
He entered into an agreement with the lender in late 2015 calling for monthly payments
of $881.30, and provided proof that he made one such payment during January 2016.
The outstanding balance on this loan after that payment was $138,3128.   9
SOR ¶ 1.c concerns a second mortgage loan on Applicant’s residence in state A
that he also opened in May 2005. It was charged-off in the amount of $71,150 after he
stopped making payments in August 2009. He offered no evidence of progress toward
resolving this admitted debt.10
SOR ¶ 1.d concerns a charge account that Applicant opened in January 2006.
He stopped making payments to this creditor in August 2011, and the account was
charged off in the amount of $6,579. Applicant provided an account statement, dated
January 21, 2016, from the collection agency currently holding this debt. The statement
showed that he agreed to a $50 withdrawal from his bank account on January 30, 2016,
Item 1; Item 4; Item 5; AE A. 11
4
and reported a balance due that had grown to $9,770. No evidence of past payments
toward this debt was provided.  11
 
Applicant provided no evidence establishing his current income or household
budget. He offered no evidence of financial counseling, of savings or retirement
investments, or of 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
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.”
5
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. 
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 is seriously delinquent on three mortgage loans and a consumer loan,
toward which he stopped making payments between 2009 and 2013. These
delinquencies arose despite his continuous employment during that time, and he offered
no evidence of ability to resolve them. His pattern and history of financial irresponsibility
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; 
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(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 admitted that he incurred four major delinquencies over the past seven
years. He provided evidence of offers from his two first mortgage loan creditors calling
for him to make monthly payments of $3,473 and $881 toward loans that he said he
could not afford to pay when the monthly payments were $1,550 and $384, respectively.
He offered no proof that he would be able to meet these greatly increased monthly
payments. Instead, he incurred $212,357 in delinquencies on loans secured by those
properties over the past seven years, while also incurring almost $10,000 in delinquent
consumer debt. He offered proof of paying less than $900 toward any of these debts,
despite being offered repeated opportunities to do so, and did not show responsible
action toward his obligations under the circumstances of his wife’s loss of employment.
Accordingly, the record is insufficient to establish mitigation under any of the foregoing
conditions.  
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. 
7
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
caused the financial problems underlying the security concerns expressed in the SOR.
His delinquent mortgage and consumer debts arose over the past seven years. 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
Subparagraphs 1.a through 1.d: 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