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     DEPARTMENT OF DEFENSE 
  DEFENSE OFFICE OF HEARINGS AND APPEALS 
In the matter of: ) 
) 
) ISCR Case No. 16-00844 
) 
) 
Applicant for Security Clearance ) 
Appearances 
For Government: Aubrey De Angelis, Esq., Department Counsel 
For Applicant: Pro se 
May 5, 2017 
______________ 
Decision 
______________ 
GOLDSTEIN, Jennifer I., Administrative Judge: 
Applicant is alleged to be delinquent on three debts, in a total exceeding 
$46,000. He has resolved one debt. Applicant failed to introduce documentation to show 
that his history of financial delinquencies does not cast doubt on his current judgment. 
Eligibility for access to classified information is denied.  
Statement of the Case 
On September 15, 2015, Applicant submitted a signed Electronic Questionnaires 
for Investigations Processing (e-QIP.) On September 16, 2016, the Department of 
Defense issued a Statement of Reasons (SOR) to Applicant detailing security concerns 
under Guideline F, Financial Considerations. The action was taken under Executive 
Order (EO) 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 (AG) effective September 1, 2006.  
 
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Applicant answered the SOR on October 5, 2016 (Answer), and requested a 
hearing before an administrative judge. The case was assigned to me on November 8, 
2016. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing 
on November 22, 2016, scheduling the hearing for January 9, 2017. The hearing was 
convened as scheduled. The Government offered Exhibits (GE) 1 through 6, which 
were admitted without objection. Applicant testified and submitted six exhibits (AE) 
marked AE A through AE F. Department Counsel had no objections to AE A through AE 
F, and they were admitted.1 The record was left open until January 23, 2017, for receipt 
of additional documentation. On January 18, 2017, the Government submitted 
additional exhibits via mail and email, marked GE 7 through GE 9. Applicant objected to 
GE 7 through GE 9 because “the exhibits should have been placed at the court hearing 
and for [Applicant] to review them.” As a result of Applicant’s objection, the closure of 
the record was extended to February 1, 2017, to give Applicant time to review GE 7 
through GE 9, and to present any post-hearing exhibits in response. On January 31, 
2017, Applicant presented a two-page letter, marked AE G. The Government had no 
objection to AE G. GE 7 through GE 9, and AE G were then admitted into the record 
and the record closed. DOHA received the transcript of the hearing (Tr.) on January 17, 
2017.  
 
Findings of Fact 
 
 Applicant is 47 years old. He has been an employee of a government contractor 
since 2015. He worked for the predecessor of his current employer from 2005 to 2015. 
He has worked a second job at a restaurant chain since 1997. Applicant is married, and 
has an adult daughter. His wife is employed. (Tr. 23, 33-35.) 
 
 As alleged in the SOR, Applicant was delinquent on three debts, in a total 
exceeding $46,000. Applicant denied the SOR allegations in ¶¶ 1.a, 1.b, and 1.c. His 
debts are identified in the credit reports entered into evidence. (Answer; GE 3; GE 4; 
GE 5; GE 6.) After a thorough and careful review of the pleadings, exhibits, and 
testimony, I make the following findings of fact.  
 
 Applicant attributes his current financial delinquencies to events beyond his 
control. He testified that he has had to help his divorced mother and father financially 
due to each of their medical conditions. He also helped his daughter and grandson 
financially. Applicant’s high blood pressure has caused him additional financial pressure 
because his medicine is costly. (AE G; Tr. 23-25.) 
 
 Applicant is indebted to a medical creditor on a collection account in the amount 
of $118, as alleged in SOR ¶ 1.a. Applicant testified that he paid this debt. He submitted 
a letter dated September 29, 2016, as proof this debt is resolved. (AE F.) However, the 
account numbers on that letter do not match the account numbers listed in the credit 
report entries reflecting this debt. Applicant testified he would submit further 
                                                          
1 Parts of AE F are in Spanish. Applicant was advised that only English sections would be admitted into 
evidence. Applicant was afforded the opportunity to provide translations of any of the Spanish sections 
that he wanted to submit into the record with post- hearing documentation. He provided nothing further in 
this regard. (Tr. 22-23.) 
 
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documentation with matching account numbers, but failed to present anything further. 
This debt is unresolved. 
 
 Applicant was indebted on a delinquent mortgage account in the approximate 
amount of $804, as alleged in SOR ¶ 1.b. Applicant testified that the creditor made a 
mistake in submitting this account to the credit reporting agencies, as it was never late. 
He contested the debt, and it was corrected. GE 6 reflects this debt is current. It is 
resolved. (GE 5; GE 6; AE C; AE F.) 
 
 Applicant is indebted on a delinquent mortgage account in the approximate 
amount of $45,253, as alleged in SOR ¶ 1.c. He first bought this property in 1998 for 
$15,000. He paid for it in full. In approximately 2003, he obtained a loan against the 
property in the amount of $85,000, so that he could pay bills. In 2005, his payment on 
the loan increased from $575 per month to $2,500 per month. (GE 2.) He was unable to 
afford this higher rate. Applicant received a Notice of Trustee Sale on this property, 
dated February 2011. (AE F.) He failed to take further action on this debt because he 
thought it was foreclosed upon at that time. (GE 7.) He disputed the entry on his credit 
report and learned that the foreclosure was never perfected. (AE F.) Applicant testified 
that he had not paid property tax on the property with the delinquent mortgage since 
approximately 2011. He has not visited the property (despite owning other units in the 
same complex) and does not know if it is vacant. As of August 11, 2016, Applicant owed 
$52,445 on this debt. (AE F.) He testified that when he learned it was still in his name, 
he contacted the creditor and is now going through the loan modification process. He 
presented a “loss mitigation” application from the creditor. The current status of that 
application was not provided. He has not made any payments on this debt. This debt is 
unresolved. (GE 2; GE 7; AE D; Tr. 31-33, 59.) 
 
 Applicant testified that he owns a total of eight properties. He claimed five of 
those properties are paid in full. He is making payments on three properties. He owned 
two other properties, which were foreclosed upon. Despite financial difficulties, he owns 
six vehicles, including a 2013 luxury vehicle; a 2014 sports car; and a 2016 truck. (GE 
8; GE 9; Tr. 36-39, 55-58.)  
 
 Applicant hired a credit counseling service to repair his credit. (AE A; AE B.) His 
“credit snapshot” provided by the credit counseling service is at a “damaging” level. (AE 
B.) Some of his negative accounts were disputed through the credit counseling service 
and have been removed from his credit report. (AE C.) His January 2017 credit report 
reflects his credit score as “needs work.” (AE C.)  
 
 Applicant provided a household budget showing monthly household expenses in 
his loan modification paperwork. It reflected a monthly income of $10,920 and monthly 
expenses of $9,520. (AE D.) 
 
 Applicant’s facility security officer (FSO) wrote a letter on Applicant’s behalf. It 
indicated Applicant has had no security incidents. The FSO finds Applicant to be 
trustworthy, honest, and forthcoming. (AE E.) 
  
 
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Policies 
 
 When evaluating an applicant’s suitability for a security clearance, the 
administrative judge must consider the AG. In addition to brief introductory explanations 
for each guideline, the adjudicative guidelines list potentially disqualifying conditions and 
mitigating conditions, 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, administrative judges apply the guidelines 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(c), the entire process is a conscientious 
scrutiny 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 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.  
 
Under Directive ¶ E3.1.14, the Government must present evidence to establish 
controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, the 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.” The 
applicant has the ultimate burden of persuasion to obtain a favorable clearance 
decision. 
  
 A person who seeks access to classified information enters 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. 
 
Section 7 of EO 10865 provides that adverse 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.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites 
for access to classified or sensitive information).  
 
 
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Analysis 
 
Guideline F, Financial Considerations 
 
The security concern for Financial Considerations is set out in 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 
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.  
 
 AG ¶ 19 describes two conditions that could raise security concerns and may be 
disqualifying in this case:  
 
(a) inability or unwillingness to satisfy debts; and 
 
(c) a history of not meeting financial obligations. 
 
 Applicant has a history of financial indebtedness documented by the credit 
reports in evidence, which substantiate all allegations. He failed to provide proof that he 
resolved two of his three delinquencies. The evidence raises security concerns under 
both disqualifying conditions, thereby shifting 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;  
 
(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 
 
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(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’s financial problems are ongoing. He has a long history of 
delinquencies. He has had two properties foreclosed upon in the past, and remains 
delinquent on one mortgage. Yet, since his default on the mortgage in subparagraph 1.c 
in 2011, he has purchased three new vehicles. He has not demonstrated that future 
financial problems are unlikely. Mitigation under AG ¶ 20(a) has not been established. 
 
 Applicant attributed his recent delinquencies to his expensive blood pressure 
medication; his parents’ costly health conditions; and helping out his daughter. These 
are circumstances beyond his control. However, he failed to establish that he acted 
reasonably or responsibly with respect to his debts. He has a monthly remainder of 
$1,400, but failed to document payments to either of his remaining creditors. He has not 
demonstrated that he addressed his debts in a responsible or timely manner. Full 
mitigation under AG ¶ 20(b) has not been established. 
 
 Applicant hired a credit counselor to dispute his debts. It is unclear as to whether 
that counseling service provided Applicant with any financial lessons on avoiding debt in 
the future. They rank his credit as “damaging.” Further, there are no clear indications 
that his financial problems are being resolved or are under control. Mitigation under AG 
¶¶ 20(c) or (d) has not been established. 
 
 Applicant contested the delinquency in SOR ¶ 1.b with the credit reporting 
agencies, because he was current on the debt. Applicant documented the entry was 
corrected on his credit report after he contested it. Mitigation under AG ¶ 20(e) has 
been established with respect to subparagraph SOR ¶ 1.b .  
 
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. 
 
 
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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 
facts and circumstances surrounding this case. I have incorporated my comments under 
Guideline F in my whole-person analysis. Some of the factors in AG ¶ 2(a) were 
addressed under that guideline, but some warrant additional comment. Applicant is 
trusted by his FSO. However, Applicant’s debts remain largely unresolved. While he 
was given the opportunity to document the status of his debts and provide translations 
to the documents in Spanish, he failed to produce further evidence of any actions on his 
remaining two delinquent accounts. Applicant owns approximately eight properties and 
six vehicles, and has the means to address his debts according to his budget. However, 
he has failed to do so. Overall, the record evidence leaves me with questions and 
doubts as to Applicant’s eligibility and suitability for a security clearance. For all these 
reasons, I conclude Applicant failed to mitigate the Financial Considerations security 
concerns.  
 
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 
 
  Subparagraph 1.a:    Against Applicant 
  Subparagraph 1.b:    For Applicant 
Subparagraph 1.c:    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. 
 
 
________________________ 
Jennifer I. Goldstein 
Administrative Judge