DEPARTMENT OF DEFENSE
                DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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[NAME REDACTED] )       ISCR Case No. 14-04517
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Applicant for Security Clearance )
Appearances
For Government: Pamela C. Benson, Esq., Department Counsel
For Applicant: Pro se
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Decision
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MALONE, Matthew E., Administrative Judge:
Applicant did not mitigate the security concerns about his history of
indebtedness. His request for access to classified information is denied.
Statement of the Case
On January 15, 2014, Applicant submitted an Electronic Questionnaire for
Investigations Processing (e-QIP) to obtain or renew eligibility for access to classified
information as required for his job with a defense contractor. During his background
investigation, Applicant was interviewed on April 3, 2015, by a Government investigator.
After reviewing the completed background investigation, Department of Defense (DOD)
adjudicators could not determine that it is clearly consistent with the national interest for
Applicant to have access to classified information.1
On November 9, 2015, DOD issued a Statement of Reasons (SOR) alleging
facts that raise security concerns addressed under Guideline F (Financial
Considerations).  On December 23, 2015, Applicant responded to the SOR and2
requested a decision without a hearing. On March 11, 2016, Department Counsel for
the Defense Office of Hearings and Appeals (DOHA) issued a File of Relevant Material
 Required by Executive Order 10865, as amended, and by the Directive.1
 See Directive, Enclosure 2. See also 32 C.F.R. § 154, Appendix H (2006).2
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(FORM)  in support of the SOR. Applicant received the FORM on April 2, 2016, and3
was advised he had 30 days from the date of receipt to submit additional information in
response to the FORM. The record closed after Applicant did not submit additional
information before the May 2, 2016 deadline. The case was assigned to me on
February 10, 2017.
Findings of Fact
Under Guideline F, the Government alleged that Applicant owes $116,563 for
three delinquent debts (SOR 1.b - 1.d); and that in February 2005, he filed a Chapter 7
bankruptcy petition through which he received a discharge of debt in May 2005 (SOR
1.a). In response, Applicant admitted all of the allegations. In his e-QIP, Applicant
disclosed the tax debt alleged at SOR 1.b and the mortgage-related debt alleged at
SOR 1.d. A credit report and bankruptcy records obtained during his background
investigation further document all of the SOR allegations. Applicant also discussed his
financial problems during his April 2015 interview. (FORM, Items 1 - 6) In addition to the
facts thus established, I make the following findings of fact.
Applicant is a 35-year-old employee of a defense contractor, where he has
worked since April 2013. Between 2003 and 2009, he worked as an independent
contractor and was responsible for paying income tax through estimated quarterly
payments. He also was required to file annual returns to account for his income and
taxes. Between 2003 and 2009, Applicant did not pay his taxes or file his returns. He
filed his returns in 2010 when he was trying to obtain federal employment. In 2011, a
federal tax lien was entered against him for $63,698 in past-due taxes. He claims he
has been paying $230 each month through a repayment plan with the IRS, but he
provided no corroborating documentation of that claim. (FORM, Items 2, 3, and 6)
Applicant bought a house in August 2004 for $145,000. In late 2005, he cashed
out the value equity of the house by refinancing his mortgage for $200,000. He did not
realize the new mortgage had an adjustable rate until the monthly payment increased
by $100 in 2007. He stopped paying the mortgage for two or three months to get the
lender to consider a modification he could afford. A new loan was issued and Applicant
resumed making payments. In 2011, Applicant rented the house to a friend because
Applicant had to move to another state. However, by late 2012 or early 2013, the house
was empty, damaged, and unmarketable. The lender would not approve a short-sale
because Applicant was still current on the mortgage. Applicant stopped paying the
mortgage and the property eventually went into foreclosure. Applicant has not provided
any information about the disposition of the property or what he has done to address
any remaining mortgage obligation. (FORM, Items 2 and 6)
In February 2005, Applicant filed for Chapter 7 bankruptcy protection. He did so
to address debts he had incurred because he was living beyond his means. His petition
reported $345,991 in liabilities against $300,365 in assets. His debts were discharged in 
May 2005. (FORM, Items 2 and 6)
Policies
Each security clearance decision must be a fair, impartial, and commonsense
determination based on examination of all available relevant and material information,4
 See Directive, Enclosure 3, Section E3.1.7. The FORM included five exhibits (Items 1 - 5) proffered in3
support of the Government’s case.
 Directive. 6.3.4
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and consideration of the pertinent criteria and adjudication policy in the adjudicative
guidelines. Decisions must also reflect consideration of the factors listed in ¶ 2(a) of the
new guidelines. Commonly referred to as the “whole-person” concept, those factors are:
(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. 
The presence or absence of a disqualifying or mitigating condition is not
determinative of a conclusion for or against an applicant. However, specific applicable
guidelines should be followed whenever a case can be measured against them as they
represent policy guidance governing the grant or denial of access to classified
information. A security clearance decision is intended only to resolve whether it is
clearly consistent with the national interest  for an applicant to either receive or continue5
to have access to classified information. Department Counsel must produce sufficient
reliable information on which DOD based its preliminary decision to deny or revoke a
security clearance for an applicant. Additionally, Department Counsel must prove
controverted facts alleged in the SOR.  If the Government meets its burden, it then falls6
to the applicant to refute, extenuate, or mitigate the case for disqualification.  7
Because no one is entitled to a security clearance, applicants bear a heavy
burden of persuasion to establish that it is clearly consistent with the national interest for
them to have access to protected information.  A person who has access to such8
information enters into a fiduciary relationship with the Government based on trust and
confidence. Thus, there is a compelling need to ensure each applicant possesses the
requisite judgment, reliability, and trustworthiness of one who will protect the nation’s
interests as his or her own. The “clearly consistent with the national interest” standard
compels resolution of any reasonable doubt about an applicant’s suitability for access to
classified information in favor of the Government.9
Analysis
Financial Considerations
The Government met its burden of production in support of the allegations in the
SOR. The facts established herein raise a security concern addressed, in relevant part,
at AG ¶ 18 as follows:
Failure or inability to live within one's means, satisfy   debts, and meet
financial obligations may indicate poor self-control, lack of judgment, or
 See Department of the Navy v. Egan, 484 U.S. 518 (1988).5
 Directive, E3.1.14.6
 Directive, E3.1.15.7
 See Egan, 484 U.S. at 528, 531.8
 See Egan; Adjudicative Guidelines, ¶ 2(b).9
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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. 
More specifically, available information requires application of the disqualifying
conditions at AG ¶¶ 19(a) (inability or unwillingness to satisfy debts); 19(c) (a history of
not meeting financial obligations); and 19(g) (failure to file annual Federal, state, or local
income tax returns as required or the fraudulent filing of the same).
By contrast, the record does not support any of the mitigating conditions listed at
AG ¶ 20. Applicant deliberately failed to comply with his tax reporting and payment
obligations between 2003 and 2009. He did not present any information to support his
claim that he is repaying a large debt to the IRS for those tax years. In 2005, he filed for
Chapter 7 bankruptcy protection for a discharge of significant delinquent debt incurred
because he was living beyond his means. Applicant has continued to experience
financial problems over the ensuing decade, but has did not produce any information
that shows he acted responsibly in the face of those problems, that he as sought
professional financial assistance, or that he made any good-faith efforts to pay or
otherwise resolve his debts. Security concerns under this guideline are not mitigated.
 
In addition to my evaluation of the facts and application of the appropriate
adjudicative factors under Guideline F, I have reviewed the record before me in the
context of the whole-person factors listed in AG ¶ 2(a). This record raises significant
doubts about Applicant’s suitability for access to classified information. Applicant is not
required to be debt free; however, the Government is entitled to assurances that his
financial problems are not the result of poor judgment and that Applicant is trying to
resolve them to the best of his ability. Because Applicant has not shown this to be the
case, doubts remain about his judgment and reliability. Because protection of the
national interest is the principal focus of these adjudications, those doubts must be
resolved against the Applicant.
Formal Findings
Formal findings 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: AGAINST APPLICANT
Subparagraphs 1.a - 1.d: Against Applicant
Conclusion
In light of all available information, it is not clearly consistent with the national
interest for Applicant to have access to classified information. Applicant’s request for a
security clearance is denied.
                                            
MATTHEW E. MALONE
Administrative Judge
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