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DEPARTMENT OF DEFENSE 
DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
 [REDACTED]   )  ISCR Case No. 15-07719 
 ) 
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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HESS, Stephanie C., Administrative Judge: 
 
On April 15, 2016, the Department of Defense (DOD) Consolidated Adjudications 
Facility (CAF) sent Applicant a Statement of Reasons (SOR) alleging concerns under the 
financial considerations guideline.1 Applicant answered the SOR and requested a hearing 
to establish his eligibility for access to classified information. 
                                                          
1 This action was taken under Executive Order (E.O.) 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) implemented by the Department of Defense on September 1, 2006. The 
AG were amended effective June 8, 2017. The hearing in this case was held under the AG implemented 
on September 1, 2006. However, the DOD implemented the amended AG on June 8, 2017, while this 
decision was pending. This decision will be decided based on the amended AG effective June 8, 2017. The 
outcome of this case would have been the same if decided based on the former AG.  
 
 
 
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 On January 12, 2017, I convened a hearing. After I received the transcript, I 
reviewed the record in its entirety, including Applicant’s post-hearing submissions. (AX E 
– AX J.) I then provided written notice to the parties of my intent to resolve the case 
through a summary disposition in Applicant’s favor. Department Counsel indicated that 
the Government had no objections. (See Appellate Exhibit I.)  
 
Applicant’s past financial problems were primarily attributable to matters beyond 
his control. Specifically, Applicant’s financial difficulties began in August 2005, when his 
rental house was destroyed by Hurricane Katrina. He received a disaster relief loan 
through the U.S. Small Business Administration (SBA) of $198,000 to rebuild the house. 
The rebuilding process took several years, largely due to a shortage of reputable building 
contractors. As a result of the region-wide hurricane damage, Applicant’s insurance on 
the house drastically increased, as did his property taxes. By the time Applicant’s house 
was completed in 2010, the Government had subsidized the construction of 
approximately 200 rental properties within a three-mile-radius of Applicant’s house. 
Additionally, plans to revitalize the community never materialized and the population did 
not rebound as projected. The over-recovery of the rental market and the overall lack of 
renters left Applicant unable to rent his house, yet responsible for the loan payments.  
In 2011, Applicant began contacting the SBA seeking loan forgiveness or 
modification, which was regularly being granted in neighboring areas. Between 2011 and 
2014, Applicant made numerous attempts to modify his loan, all of which were 
unsuccessful. He struggled to maintain the loan payments, occasionally making a partial 
payment or missing a payment. He attempted to sell the house, but could not due to 
decreased market value and an abundance of for-sale rental houses. Applicant lived with 
family members to reduce his financial outlay in order maintain his loan payments.  
In 2014, Applicant accepted employment in another state for a significant increase 
in salary. However, the greater cost of living, including rent for his apartment, consumed 
his increased wages, and he fell behind on his loan payments. The $176,502 debt alleged 
in SOR ¶ 1.a is for the balance owed on this loan. Ultimately, after never securing a renter, 
Applicant consulted an attorney who advised Applicant to file Chapter 13 bankruptcy, 
which he did in 2015 after completing the requisite financial counseling. (AX F.) The deed 
to Applicant’s rental house was surrendered to the SBA through the bankruptcy court. 
Applicant has been making $850 monthly payments since October 2016, totaling $7,650 
as of January 2017. (AX G.) He is in the most stable financial position of his life, and is 
readily able to maintain all his financial obligations. He is an active member of his church 
and community, is trusted and respected by his manager and co-workers, and has 
received numerous awards in his employment. He has been employed as a federal 
contractor since 1978.  (AX H; AX I; Tr. 37-42.)  
 Applicant’s history of financial problems does not create doubt about his current 
reliability, trustworthiness, good judgment, and ability to protect classified information. I 
weighed the evidence as a whole and gave due consideration to the whole-person 
 
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concept, including Applicant’s lengthy federal service. Accordingly, I conclude that 
Applicant met his burden of persuasion to show that it is clearly consistent with the 
national interest to grant his eligibility for access to classified information. Applicant’s 
request for a security clearance is granted. 
 
Formal Findings 
 
As required by section E3.1.25 of Enclosure 3 of the Directive, I make the following 
formal findings on the allegations in the SOR: 
  
 Paragraph 1, Guideline F (Financial Considerations): FOR APPLICANT 
 
  Subparagraph 1.a:     For Applicant 
 
Conclusion 
 
 I conclude that it is clearly consistent with the national interest to grant Applicant’s 
eligibility for a security clearance. Eligibility for access to classified information is granted. 
 
 
 
Stephanie C. Hess 
Administrative Judge