DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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----------------------------------                   )     ISCR Case No. 15-01085
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Applicant for Security Clearance )
Appearances
For Government: Braden M. Murphy, Esq., Department Counsel
For Applicant: Pro se
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 Decision
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WESLEY, Roger C., Administrative Judge:
Based upon a review of the pleadings and exhibits, I conclude that Applicant did
not mitigate security concerns regarding his finances. Eligibility for access to classified
information is denied. 
 
History of the Case
On November 12, 2015, the Department of Defense (DOD) Consolidated
Adjudication Facility (CAF) issued a Statement of Reasons (SOR) detailing reasons
why DOD adjudicators could not make the affirmative determination of eligibility for
granting a security clearance, and recommended referral to an administrative judge to
determine whether a security clearance should be granted, continued, denied, or
revoked. The action was taken under Executive Order 10865 (E.O. 10865),
Safeguarding Classified Information within Industry (February 20, 1960), as amended;
DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review
Program (January 2, 1992), as amended (Directive); and the Adjudicative Guidelines
(AGs) implemented by the DOD on September 1, 2006.
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Applicant responded to the SOR on December 8, 2015, and elected to have his
case decided on the basis of the written record. Applicant received the Government’s
File of Relevant Material (FORM) on February 11, 2016 and did not respond to the
FORM. The case was assigned to me on August 16, 2016.
Summary of Pleadings
 
Under Guideline F, Applicant allegedly accumulated seven delinquent debts
(mostly student loans) exceeding $22,000. Allegedly, each of the listed delinquent debts
remains outstanding. 
In his response to the SOR, Applicant admitted each of the allegations in the
SOR, with explanations. He claimed to have been promised a raise from his employer
and intends to pay his student loan debts. He claimed to have paid off one of his two
remaining debts (creditor 1.f) and has enough put aside to pay off the other non-student
loan debt (creditor 1.e).
Background
Applicant is a 26-year-old software engineer for a defense contractor who seeks
a security clearance. The allegations covered in the SOR and admitted by Applicant are
adopted as relevant and material findings. Additional findings follow. 
Applicant has never been married and has no children. (Item 4) He earned a
bachelor’s degree in May 2012 and claimed no military service.
Applicant has worked for his current employer as a software engineer since
2012. (Item 4) Between 2007 and 2012, he was a full-time college student and worked
in the local public school system as a part-time after-school instructor. (Item 4) He has
never held a security clearance.
Finances
Between 2007 and 2010, Applicant accumulated a number of delinquent federal
student loan debts. Altogether, he accrued over $21,000 in student loan debts that
became delinquent and were referred for collection. (Items 5-7) He obtained these
loans to finance his education. Since his graduation from college, he has not made
enough income to fund his student loan payments. With his promised raise, he hopes
to be able to address his student loans. (Items 3 and 6) 
To date, Applicant has provided no evidence of his addressing his student loans
debt.  Before his student loans can be restored to rehabilitation status, Applicant must
establish a payment plan with the Department of Education (DOE) and make enough
agreed-on payments to satisfy the DOE’s rehabilitation criteria. Applicant has not
documented any payments on his delinquent student loans.
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Applicant’s remaining two debts listed in the SOR with creditors 1.e ($903) and
creditor 1.l ($61.00) are relatively small debts that Applicant claims to have either paid
(i.e., creditor 1.f), or is prepared to pay (i.e., creditor 1.e).(Item 3) Applicant has
provided no evidence to date, however, of payment of either of these two debts. Nor did
he provide any evidence of financial counseling, budgeting, character references,
performance evaluations, or evidence of community and civic contributions, either as
attachments to his answer or in response to the FORM.
Policies
The AGs list guidelines to be used by administrative judges in the decision-making
process covering DOHA cases. These guidelines take into account factors that could
create a potential conflict of interest for the individual applicant, as well as considerations
that could affect the individual’s reliability, trustworthiness, and ability to protect classified
information. These guidelines include "[c]onditions that could raise a security concern
and may be disqualifying” (disqualifying conditions), if any, and many of the "[c]onditions
that could mitigate security concerns.” 
The AGs must be considered before deciding whether or not a security clearance
should be granted, continued, denied, or revoked. The guidelines do not require
administrative judges to place exclusive reliance on the enumerated disqualifying and
mitigating conditions in the guidelines in arriving at a decision. Each of the guidelines is to
be evaluated in the context of the whole person in accordance with AG ¶ 2(c). 
In addition to the relevant AGs, administrative judges must take into account the
pertinent considerations for assessing extenuation and mitigation set forth in AG ¶ 2(a) of
the AGs, which are intended to assist the judges in reaching a fair and impartial
commonsense decision based upon a careful consideration of the pertinent guidelines
within the context of the whole person. The adjudicative process is designed to examine
a sufficient period of an applicant’s life to enable predictive judgments to be made about
whether the applicant is an acceptable security risk. 
When evaluating an applicant’s conduct, the relevant guidelines are to be
considered together with the following AG ¶ 2(a) factors: (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 chances; (7) the motivation for the conduct; (8) the potential for
pressure, coercion, exploitation, or duress; and (9) the likelihood of continuation or
recurrence.
Viewing the issues raised and evidence as a whole, the following individual
guideline is pertinent in this case:
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Financial Considerations
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.  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 ¶ 18.
Burden of Proof
By virtue of the principles and policies framed by the AGs, a decision to grant
or continue an applicant's security clearance may be made only upon a threshold
finding that to do so is clearly consistent with the national interest.  Because the
Directive requires administrative judges to make a commonsense appraisal of the
evidence accumulated in the record, the ultimate determination of an applicant's
eligibility for a security clearance depends, in large part, on the relevance and
materiality of that evidence. See United States, v. Gaudin, 515 U.S. 506, 509-511
(1995).  As with all adversarial proceedings, the judge may draw only those inferences
which have a reasonable and logical basis from the evidence of record. 
The Government's initial burden is twofold: (1) it must prove by substantial
evidence any controverted facts alleged in the SOR, and (2) it must demonstrate that
the facts proven have a material bearing to the applicant's eligibility to obtain or
maintain a security clearance. The required materiality showing, however, does not
require the Government to affirmatively demonstrate that the applicant has actually
mishandled or abused classified information before it can deny or revoke a security
clearance. Rather, the judge must consider and weigh the cognizable risks that an
applicant may deliberately or inadvertently fail to safeguard classified information.
Once the Government meets its initial burden of proof of establishing admitted
or controverted facts, the evidentiary burden shifts to the applicant for the purpose of
establishing his or her security worthiness through evidence of refutation, extenuation,
or mitigation.  Based on the requirement of  Exec. Or. 10865 that all security
clearances be clearly consistent with the national interest, the applicant has the
ultimate burden of demonstrating his or her clearance eligibility. “[S]ecurity-clearance
determinations should err, if they must, on the side of denials.” See Department of the
Navy v. Egan, 484 U.S. 518, 531 (1988). 
Analysis  
Applicant is a fully employed software engineer for a defense contractor, and
he has accumulated delinquent debts exceeding $22,000. His listed debts are
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comprised of five delinquent student loan debts exceeding $21,000 and two smaller
consumer debts approximating $964. While Applicant claims to have addressed one
of his listed debts (creditor 1.e), and is in a position to address his remaining debts, he
provided no documentation to verify his claims. As matters stand, Applicant has made
no verifiable payments on any of the listed debts in the SOR that can be validated and
approved.
Applicant’s collective accumulation of delinquent debts warrant the application
of two of the disqualifying conditions (DC) of the Guidelines. DC ¶ 19(a), “inability or
unwillingness to satisfy debts,” and DC ¶19(c), “a history of not meeting financial
obligation.” Applicant has not addressed any of his covered debts that can be verified
to date.
Applicant’s pleading admissions with respect to his accumulation of
unaddressed delinquent debts covered in the SOR negate the need for any
independent proof (see McCormick on Evidence, § 262 (6th ed. 2006)). Each of
Applicant’s listed filing lapses and debts are fully documented in his credit reports.
Some judgment problems persist over Applicant’s insufficiently explained accrual of
mortgage debts with his principal lender and other consumer creditors. To date, he
has taken no verifiable corrective steps to resolve his delinquencies and demonstrate
he acted responsibly in addressing his listed debts. See ISCR Case 03-01059 at 3
(App. Bd. Sep. 24, 2004). 
                                         
Holding a security clearance involves a fiduciary relationship between the
Government and the clearance holder. Quite apart from any agreement the clearance
holder may have signed with the Government, the nature of the clearance holder’s
duties and access to classified information necessarily imposes important duties of
trust and candor on the clearance holder that are considerably higher than those
typically imposed on Government employees and contractors involved in other lines of
Government business.  See Snepp v. United States, 444 U.S. 507, 511 n.6 (1980). 
Inferentially, Applicant’s delinquent debts are attributable for the most part to
inadequate income. Without more information from Applicant about his debt
delinquencies and the status of any delinquencies on his delinquent student loan
debts and two consumer debts, more detailed assessments cannot be made. Based
on the documented materials in the FORM, no extenuating circumstances can be
credited to Applicant.
Whole-person assessment does not enable Applicant to surmount the
judgment questions raised by his accumulation of delinquent student loan debts and
two listed consumer accounts. Resolution of his listed delinquent accounts is a critical
prerequisite to his regaining control of his finances. Based on the limited information
provided by Applicant, the evidence of record does not permit Applicant to establish
judgment and trust levels sufficient to overcome security concerns associated with his
accumulation of past due federal taxes, adverse judgments, and delinquent consumer
debts.
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Taking into account all of the documented facts and circumstances surrounding
Applicant’s accrual of delinquent student loan and consumer accounts and lack of
documented resolution of them, it is still too soon to make safe predictions of
Applicant’s ability to satisfactorily resolve his debts. More time is needed to afford
Applicant the opportunity to make the necessary progress with his creditors to
facilitate conclusions that his finances are sufficiently stabilized to permit him access
to classified information. Allegations covered by subparagraphs 1.a through 1.g of
Guideline F are resolved unfavorably for Applicant. 
Formal Findings
In reviewing the allegations of the SOR and ensuing conclusions reached in the
context of the findings of fact, conclusions, conditions, and the factors listed above, I
make the following formal findings:
GUIDELINE F (FINANCIAL CONSIDERATIONS): AGAINST APPLICANT
   
Subparagraphs 1.a through 1.g:      Against Applicant
Conclusions
In light of all the circumstances presented by the record in this case, it is not
clearly consistent with the national interest to grant or continue Applicant’s security
clearance.  Clearance is denied.
                                          
Roger C. Wesley
Administrative Judge 
                                        
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