DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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) ISCR Case No. 15-02787     
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Applicant for Security Clearance
Appearances
For Government: Andrew H. Henderson, Esq. Department Counsel
For Applicant: Arran S. Treadway, Esq.
                                                                            
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Decision
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LYNCH, Noreen, A., Administrative Judge:
The Department of Defense (DOD) issued a Statement of Reasons (SOR) to
Applicant alleging security concerns arising under Guideline F (Financial
Considerations). The SOR was dated November 23, 2015. The action was taken under
Executive Order (EO) 10865, Safeguarding Classified Information within Industry
(February 20, 1960), as amended; DOD 5220.6, Defense Industrial Personnel Security
Clearance Review Program (January 2, 1992), as amended (Directive); and the
Adjudicative Guidelines (AG) implemented in September 2006. 
Applicant timely answered the SOR and requested a decision based on the
written record in lieu of a hearing. Department Counsel submitted a File of Relevant
Material, (FORM), dated March 21, 2016.  Applicant received the FORM on March 24,1
The Government submitted five items for the record.      1
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2016. Applicant responded to the FORM through Counsel. The case was assigned to
me on November 8, 2016. Based on a review of the case file, eligibility for access to
classified information is granted. 
Findings of Fact
In her answer to the SOR, Applicant denied allegations 1.a through 1.c. She
provided detailed explanations for the four allegations under Guideline F (Financial
Considerations).
Applicant is a 58-year-old administrative specialist for a defense contractor. She
is three times divorced with two adult children. She worked and attended college and
obtained her undergraduate degree in 2013. Applicant has worked for her current
employer since 1981, where she has held a security clearance since at least 1982.
(Item 2) She completed a security clearance application in October 2014.
Financial Considerations
The SOR alleges four delinquent debts including a collection account and three
charged-off accounts. (Items 6 and 8) The delinquent debts totaled about $20,000.
(Item 1)
In her 2014-2015 investigative interview, Applicant stated that her financial
problems began when her father died in 2001 and she “received his home as a gift.”
She tried to maintain that home on her own. She had tenants in her father’s home but
the tenants were not consistent with rent payments. Eventually, she could not maintain
both homes. She also fell behind in payments on her own home.  In 2011, her father’s
house was foreclosed and the account was satisfied. She has not had any issues since
the foreclosure. However, she incurred delinquent accounts. In the interview, Applicant
described other non-SOR accounts that were settled or resolved. (Item 3) The credit
bureau reports (Items 4 and 5) reflect the vast majority of accounts are noted as “pays
as agreed.”
As to SOR allegation 1.a, $10,507 (charged-off account), Applicant provided
information that the debt was discharged in 2011. She provided a 1099-C form
(cancellation of Debt, dated April 2011). Although she was not legally obligated to pay
the debt, she opted to pay the debt, which was the result of a credit card. Applicant has
spoken with the company to make arrangements to settle. (Item 3)
 
As to SOR allegation 1.b, $2,384 (2014 charged-off account), Applicant
addressed the debt in 2014. She contacted the company and voluntarily  entered into a
repayment agreement. After paying $74 a month, the account was paid in 2015. She
provided proof of payment. (Item 1)
As to SOR allegation 1.c, $1,720 (charged-off account), Applicant contacted the
company in 2014 and made payment arrangements. The account was paid in 2015.
(Item 1)
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As to SOR allegation 1.d, $5,302 (collection account) Applicant denied any
indebtedness. She believes that her ex-husband had access to the account and may
have charged items. She had no information about the account and it was not on her
credit report.
Applicant submitted information pertaining to her 35 year career, including letters
of recommendation, awards, performance evaluations, and certificates of appreciation
for leadership and development. She received awards for “Exceptional Support” and
individual “spot” awards for continued excellence throughout the years. Her
performance evaluations reflect an impeccable record of loyalty and reliability. In 2014,
she obtained a certificate of completion for financial counseling. (Response to FORM)
In addition, Applicant submitted documentation that she volunteers regularly for
the city attorney’s office in their dispute resolution program. Her pastor of 25 years
considers her a person of good moral character. (Response to FORM)
A former professor wrote noting that during Applicant’s time of crisis, she
performed responsibly. She told the professor about a personal emergency and alerted
her team classmates so that the schedule could be adjusted to successfully complete
the course project. 
The Director of her company wrote a letter stating that he has known Applicant
for about 20 years. She has exhibited a positive attitude and high quality leadership
skills. 
Policies
When evaluating an applicant’s suitability for a security clearance, an administrative
judge must consider the adjudicative guidelines (AG). In addition to brief introductory
explanations for each guideline, the adjudicative guidelines list potentially disqualifying
conditions and mitigating conditions. These guidelines are not inflexible rules of law.
Instead, recognizing the complexities of human behavior, they are applied in conjunction
with the factors listed in the adjudicative process. An administrative judge’s overarching
adjudicative goal is a fair, impartial, and commonsense decision. Under AG ¶ 2(c), this
process is a conscientious scrutiny of a number of variables known as the “whole-person
concept.” An 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 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.
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The Government must present evidence to establish controverted facts alleged in
the SOR. An applicant is responsible for presenting “witnesses and other evidence to
rebut, explain, extenuate, or mitigate facts admitted by applicant or proven by
Department Counsel. . . .”  The burden of proof is something less than a preponderance2
of evidence.  The ultimate burden of persuasion is on the applicant.  3 4
A person seeking access to classified information enters into a fiduciary
relationship with the Government based on 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 classified information. Such
decisions entail a certain degree of legally permissible extrapolation of potential, rather
than actual, risk of compromise of classified information.
 
Section 7 of Executive Order 10865 provides that decisions shall be “in terms of
the national interest and shall in no sense be a determination as to the loyalty of the
applicant concerned.”  “The clearly consistent standard indicates that security clearance5
determinations should err, if they must, on the side of denials.”  Any reasonable doubt6
about whether an applicant should be allowed access to sensitive information must be
resolved in favor of protecting such information.  The decision to deny an individual a7
security clearance does not necessarily reflect badly on an applicant’s character. It is
merely an indication that the applicant has not met the strict guidelines the President
and the Secretary of Defense established for issuing a clearance.
Analysis
Guideline F, Financial Considerations
AG ¶ 18 expresses the security concern pertaining to financial considerations:
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
 See also ISCR Case No. 94-1075 at 3-4 (App. Bd. Aug. 10, 1995).      2
 Department of the Navy v. Egan, 484 U.S. 518, 531 (1988).      3
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      4
 See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive      5
information), and EO 10865 § 7.
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      6
 Id.      7
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protect classified information. An individual who is financially over-
extended is at risk of having to engage in illegal acts to generate funds.
Compulsive gambling is a concern as it may lead to financial crimes
including espionage. Affluence that cannot be explained by known sources
of income is also a security concern. It may indicate proceeds from
financially profitable criminal acts.
AG ¶ 19 describes conditions that could raise a security concern and may be
disqualifying:
(a) inability or unwillingness to satisfy debts;
(b) indebtedness caused by frivolous or irresponsible spending and the
absence of any evidence of willingness or intent to pay the debt or
establish a realistic plan to pay the debt;
(c) a history of not meeting financial obligations;
(d) deceptive or illegal financial practices such as embezzlement,
employee theft, check fraud, income tax evasion, expense account fraud,
filing deceptive loan statements, and other intentional financial breaches of
trust;
(e) consistent spending beyond one's means, which may be indicated by
excessive indebtedness, significant negative cash flow, high debt-to-
income ratio, and/or other financial analysis;
(f) financial problems that are linked to drug abuse, alcoholism, gambling
problems, or other issues of security concern;
(g) failure to file annual Federal, state, or local income tax returns as
required or the fraudulent filing of the same;
(h) unexplained affluence, as shown by a lifestyle or standard of living,
increase in net worth, or money transfers that cannot be explained by
subject's known legal sources of income; and
(i) compulsive or addictive gambling as indicated by an unsuccessful
attempt to stop gambling, "chasing losses" (i.e. increasing the bets or
returning another day in an effort to get even), concealment of gambling
losses, borrowing money to fund gambling or pay gambling debts, family
conflict or other problems caused by gambling.
The Government produced credible evidence to establish the delinquent debts.
Consequently, the evidence is sufficient to raise disqualifying conditions ¶¶ 19(a) and
19(c).
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AG ¶ 20 provides conditions that could mitigate the security concerns:
(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;
(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; and
(f) the affluence resulted from a legal source of income.
Applicant had a period of financial instability when she inherited her deceased
father’s home. She tried to maintain that home and her own, but could not keep tenants.
She fell behind in bills. In 2011, she began to have delinquent accounts. She has also
been three times divorced and believes an ex-husband used one of her accounts
without her knowledge.
Applicant has a credit history of paying her bills.  Beginning in 2011, she
addressed her accounts. She provided documentation that either the debt was cancelled
or that she arranged payment plans and paid her charged-off accounts. She received
financial counseling in 2014. She maintained her professionalism at work. She acted
responsibly. I find that mitigating conditions AG ¶ 20 (a,b,c and d) apply in this case.
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 an applicant’s
conduct and all the 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
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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. As noted above, the
ultimate burden of persuasion is on the applicant seeking a security clearance. 
I considered the potentially disqualifying and mitigating conditions in light of all the
facts and circumstances surrounding this case, as well as the whole-person factors.
 
Applicant is 58 years old and has worked for 35 years with a security clearance.
She has an exemplary work history. She had a period of financial difficulty and was able
to address the delinquent debts. While they were not listed on the SOR, Applicant also
paid other bills and debts that she had incurred. She has been divorced and has two
adult children. She volunteers in the community. She has been a loyal and dedicated
employee for the same company. She has no listed security violations. Her employer,
pastor, friends, and colleagues praise her. She worked full time and attended college in
the evening and obtained her undergraduate degree. 
Applicant addressed her financial difficulties from a few years ago. The few
delinquent debts and the small amount of money in comparison to the many years of
responsible dealings in her finances convinces me that she is reliable and trustworthy. I
have no doubts about her ability to continue to safeguard classified information. She has
mitigated the financial considerations concerns, especially in light of the whole person.
Eligibility for continued security clearance is granted.
. Formal Findings
Formal findings for or against Applicant on the allegations set forth in the SOR, as
required by section E3.1.25 of Enclosure 3 of the Directive, are:
Paragraph 1, Guideline F: FOR APPLICANT
Subparagraphs 1.a-d: For Applicant
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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 a security clearance.
Clearance is granted. 
                                                     
NOREEN A. LYNCH.
Administrative Judge
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